EXECUTION COPY

                                CREDIT AGREEMENT

         This  CREDIT  AGREEMENT,  dated  as of June  2,  2000,  by and  between
CENTENNIAL  TECHNOLOGIES,  INC., a Delaware  corporation  (the  "BORROWER")  and
CITIZENS BANK OF MASSACHUSETTS, a Massachusetts bank (the "LENDER").

         In  consideration  of the mutual covenants  contained  herein,  and for
other good and valuable consideration,  the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

SECTION 1.        DEFINITIONS.

         All  capitalized  terms not  defined  herein but  defined in APPENDIX A
attached  hereto  shall  have the  meanings  given to such  terms in  APPENDIX A
attached  hereto.  All terms  defined  in this  Agreement  shall  also have such
defined  meanings when used in the other Financing  Documents or any certificate
or other document made or delivered pursuant hereto or thereto, unless otherwise
specified herein or therein.

         All  references in this Agreement to Sections,  Subsections,  Exhibits,
Schedules and Appendices refer to the Sections, Subsections, Exhibits, Schedules
and  Appendices of this  Agreement  unless  otherwise  indicated.  All Exhibits,
Schedules and Appendices  attached to this Agreement are incorporated herein and
made a part hereof.

SECTION 2.        THE LOANS.

     2.1 GENERAL.

     (a) Subject to the terms and conditions  hereof,  the Lender agrees to make
         revolving  credit loans  (hereinafter  referred to  collectively as the
         "LOANS" and each singly as a "LOAN") to the Borrower  from time to time
         during the Revolving Credit Period;  PROVIDED,  HOWEVER, that the Total
         Credit  Outstandings  (after giving  effect to all requested  Loans and
         Letters of Credit) shall not at any time exceed Four Million and 00/100
         Dollars  ($4,000,000.00)  (the "MAXIMUM AMOUNT").  During the Revolving
         Credit  Period,  the Borrower  may from time to time borrow,  repay and
         reborrow Loans, all in accordance with the terms and conditions hereof.

     (b) On the Closing  Date,  the  Borrower  shall  execute and deliver to the
         Lender a certain Revolving Credit Note of the Borrower, dated as of the
         Closing Date, from the Borrower, evidencing the Loans, substantially in
         the form of EXHIBIT A attached hereto (the "NOTE").

     2.2 BORROWING BASE.  Notwithstanding  any provision contained in any of the
Financing Documents to the contrary, the aggregate principal amount of the Loans
outstanding,  from  time to time,  shall  never  exceed  the  lesser  of  either
(hereinafter referred to as the "BORROWING BASE"):




PEABODY & ARNOLD, LLP
Counsellors at Law
<PAGE>

               (a) the Maximum Amount; or

               (b) Eighty Percent (80%) of the Eligible Accounts.

         Descriptions  or  determinations  by  the  Lender  regarding   Eligible
Accounts  are  intended  solely  for  credit  management  for  the  Loans.  Such
descriptions and  determinations  are not intended and shall not be construed as
any  determination  of actual value of any  Collateral nor shall the same affect
the security interests granted to the Lender under the Security  Documents.  The
Borrower shall be responsible  for all credit risks  concerning all Accounts and
Inventory of the Borrower.  Determinations and descriptions of eligibility shall
not alter in any way the status of Collateral as security for the Obligations.

     2.3  PROCEDURE  FOR  BORROWING.  When  making a request  for any Loan,  the
Borrower shall deliver to the Lender an irrevocable notice thereof (which notice
must be received by the Lender prior to 12:00 Noon,  Boston,  Massachusetts time
one Business Day prior to the  requested  Borrowing  Date),  specifying  (i) the
amount to be borrowed and (ii) the  requested  Borrowing  Date.  Each  borrowing
hereunder  shall be in an amount not less than Fifty Thousand and 00/100 Dollars
($50,000.00)  and in a  whole  multiple  of Five  Thousand  and  00/100  Dollars
($5,000.00) in excess thereof. Such borrowing will then be made available to the
Borrower by the Lender  crediting  the  Borrower's  loan account with the Lender
with the amount so borrowed on such Borrowing Date.

     2.4  USE OF  PROCEEDS.  The  proceeds  of the  Loans  shall  be used by the
Borrower  solely to finance  the general  working  capital  requirements  of the
Borrower and to refinance the Borrower's  indebtedness  to Intel  Corporation at
maturity.

     2.5 INTEREST RATE.  Each Loan shall bear interest at a rate per annum equal
to Prime Rate plus the Applicable Margin.

     2.6 PAYMENT OF LOANS.  On the Maturity  Date (or such earlier date on which
the Loans  become  due and  payable  pursuant  to  subsection  9.1),  the entire
outstanding  balance  of the Loans  (including  without  limitation,  all unpaid
principal,  all accrued but unpaid interest and all unpaid fees, charges,  costs
and expenses) shall be immediately  due and payable IN FULL.  Until the Maturity
Date (or such earlier date on which the Loans become due and payable pursuant to
subsection  9.1),  interest on the  outstanding  principal  balance of the Loans
shall be due and payable monthly,  in arrears,  on the last day of each calendar
month,  commencing  with the first calendar month ending after the Closing Date;
provided,  however,  any such interest accruing at the Default Rate shall be due
and payable on demand.

     2.7  COMMITMENT  FEE.  The  Borrower  agrees to pay to the Lender an annual
commitment fee calculated on the Maximum Amount at a rate per annum equal to the
Facility Fee Rate. The  commitment fee shall be payable  quarterly in arrears on
the last day of each  calendar  quarter  for the  calendar  quarter  then ending
commencing  on the first such date  following  the  Closing  Date,  with a final
payment on the Maturity Date or any earlier date on which the  commitment of the
Lender to make Loans shall terminate.

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<PAGE>

SECTION 3.        LETTERS OF CREDIT.

     3.1 GENERAL.

     (a) Subject to the terms and conditions  hereof, the Lender agrees to issue
         Letters of Credit  (the  "LETTERS  OF  CREDIT")  for the account of the
         Borrower on any Business Day during the Revolving Credit Period in such
         form as may be  approved  from  time to  time by the  Lender;  PROVIDED
         HOWEVER,  that the Maximum L/C Drawing  Amount  (after giving effect to
         all  requested  Letters of Credit)  shall not at any time  exceed  Five
         Hundred  Thousand  and  00/100  Dollars  ($500,000.00);   and  PROVIDED
         FURTHER,  HOWEVER,  that the Total Revolving Credit Outstandings (after
         giving effect to all  requested  Loans and Letters of Credit) shall not
         at any time exceed the Maximum Amount.

     (b) Each Letter of Credit shall:

              (i) be  denominated  in Dollars  and shall be a standby  letter of
         credit issued to support  obligations  of the  Borrower,  contingent or
         otherwise, in connection with the working capital and business needs of
         the Borrower and its  Subsidiaries  in the ordinary course of business;
         and

              (ii)  expire no later than the  earlier  of (A) five (5)  Business
         Days  prior  to the  Maturity  Date or (B) one year  after  the date of
         issuance thereof.

     (c) Each Letter of Credit  shall be subject to the Uniform  Customs and, to
         the extent not inconsistent therewith,  the laws of The Commonwealth of
         Massachusetts.

     (d) The Lender  shall not at any time be  obligated  to issue any Letter of
         Credit on behalf  of the  Borrower  hereunder  if such  issuance  would
         conflict with, or cause the Lender to exceed any limits imposed by, any
         Requirement of Law applicable to the Lender.

     3.2 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT. The Borrower may from time
to time request that the Lender  issue a Letter of Credit by  delivering  to the
Lender at its address  for notices  specified  herein an  Application  therefor,
completed  to the  satisfaction  of the  Lender,  and such  other  certificates,
documents  and other  papers and  information  as the Lender may  request.  Upon
receipt of any  Application,  the Lender will process such  Application  and the
certificates,  documents  and other  papers and  information  delivered to it in
connection  therewith in  accordance  with its  customary  procedures  and shall
promptly issue the Letter of Credit requested thereby (but in no event shall the
Lender be required to issue any Letter of Credit earlier than three (3) Business
Days  after  its  receipt  of  the  Application  therefor  and  all  such  other
certificates,  documents and other papers and information  relating  thereto) by
issuing the original of such Letter of Credit to the  beneficiary  thereof or as
otherwise may be agreed by the Lender and the Borrower. The Lender shall furnish
a copy of such Letter of Credit to the Borrower promptly  following the issuance
thereof.

     3.3 FEES AND CHARGES.  The Borrower  shall pay or reimburse  the Lender for
(i) an annual fee of one and one-half percent (1.50%) of the amount of each such
Letter of Credit to be  established by Lender,  payable  annually in advance and
(ii) such reasonable, normal and customary fees, commissions, costs and expenses
as are incurred by the Lender in issuing,  effecting payment under,  amending or
otherwise  administering  any Letter of Credit  substantially in accordance with
the  International  Banking Fees schedule  attached hereto as Appendix E, as the
same may be amended from time to time.


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<PAGE>

     3.4 REIMBURSEMENT OBLIGATION OF THE BORROWER.

     (a) The Lender shall notify the Borrower  promptly of each drawing  under a
         Letter of Credit.  The Borrower  agrees to reimburse the Lender on each
         date on which the Lender  first  notifies  the Borrower of the date and
         amount of a draft  presented under any Letter of Credit and paid by the
         Lender  for the  amount of (i) such  draft so paid and (ii) any  taxes,
         fees,  charges or other  costs or  expenses  incurred  by the Lender in
         connection  with  such  payment;   PROVIDED,   HOWEVER,  that  if  such
         notification  is provided by Lender after 3:00 p.m.,  reimbursement  by
         the Borrower  under this Section  3.4(a) shall be made on the following
         Business  Day.  Each such  payment  shall be made to the  Lender at its
         address  for  notices  specified  herein in lawful  money of the United
         States of America and in immediately available funds.

     (b) Interest  shall be payable on any and all amounts  remaining  unpaid by
         the  Borrower  under  subsection  3.4(a),  (i) from the date the  draft
         presented  under the  affected  Letter of Credit is paid to the date on
         which  the  Borrower  is  required  to pay  such  amounts  pursuant  to
         paragraph  (a) of this  subsection  at the  rate  which  would  then be
         payable on any Loan  hereunder  and (ii)  thereafter,  until payment in
         full at the Late Rate.

     (c) Each drawing  under any Letter of Credit shall  constitute a request by
         the  Borrower  to the Lender  for a Loan in the amount of such  drawing
         (but without any requirement  that the Borrower deliver to the Lender a
         prior notice of such request).  The Borrowing Date with respect to such
         borrowing shall be the date of such drawing.

     3.5 OBLIGATIONS ABSOLUTE.

     (a) The  obligations of the Borrower under this SECTION 3 shall be absolute
         and  unconditional  under any and all circumstances and irrespective of
         any set-off,  counterclaim or defense to payment which the Borrower may
         have or have had against the Lender,  or any beneficiary of a Letter of
         Credit.

     (b) The Borrower also agrees that the Lender shall not be responsible  for,
         and the Borrower's  Reimbursement  Obligations  under subsection 3.4(a)
         shall not be affected  by,  among  other  things,  (i) the  validity or
         genuineness of documents or of any  endorsements  thereon,  even though
         such documents shall in fact prove to be invalid, fraudulent or forged,
         or (ii) any dispute  between or among the Borrower and any  beneficiary
         of any  Letter of Credit or any  other  party to which  such  Letter of
         Credit  may be  transferred  or  (iii)  any  claims  whatsoever  of the
         Borrower  against any  beneficiary of such Letter of Credit or any such
         transferee.

     (c) The Lender shall not be liable for any error, omission, interruption or
         delay in  transmission,  dispatch or delivery of any message or advice,
         however  transmitted,  in connection with any Letter of Credit,  except
         for errors,  omissions,  interruptions or delays caused by the Lender's
         gross negligence or willful misconduct.

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<PAGE>

     (d) The  Borrower  agrees  that any  action  taken or omitted by the Lender
         under or in connection  with any Letter of Credit or the related drafts
         or  documents,  if done in the absence of gross  negligence  or willful
         misconduct  and in accordance  with the standards of care  specified in
         the Uniform Customs, and to the extent not inconsistent therewith,  the
         Uniform Commercial Code of The Commonwealth of Massachusetts,  shall be
         binding on the  Borrower  and shall not result in any  liability of the
         Lender to the Borrower.

SECTION 4. GENERAL PROVISIONS  REGARDING PAYMENTS AND INTEREST RATES AND LETTERS
           OF CREDIT.

     4.1 METHOD OF PAYMENT.  All payments (including  prepayments) to be made by
the  Borrower  hereunder,  whether on account of  principal,  interest,  fees or
otherwise, shall be made without set off or counterclaim and shall be made prior
to 12:00  Noon,  Boston,  Massachusetts  time,  on the due date  thereof  to the
Lender, at the Lender's office specified in subsection 11.4 (or such other place
as the Lender  may  specify in  writing  from time to time),  in Dollars  and in
immediately  available  funds.  Payments  received by the Lender after such time
shall be deemed to have been  received on the next  Business Day. If any payment
hereunder  becomes  due and  payable on a day other than a  Business  Day,  such
payment shall be extended to the next succeeding Business Day, and, with respect
to  payments  of  principal,  interest  thereon  shall  be  payable  at the then
applicable rate during such extension. The Borrower hereby authorizes the Lender
to charge or debit any deposit account of the Borrower with the Lender to affect
any payment due hereunder.

     4.2 PREPAYMENTS.

     (a) The Borrower may at any time and from time to time prepay the Loans, in
         whole or in part, without premium or penalty. Partial prepayments shall
         be in the aggregate  principal  amount of not less than Fifty  Thousand
         and  00/100  Dollars  ($50,000.00)  and in a  whole  multiple  of  Five
         Thousand and 00/100 Dollars  ($5,000.00) in excess thereof.  No partial
         prepayment  shall postpone or extend the date on which any principal or
         interest is otherwise due under any Loan hereunder.
     (b) All amounts  received for the  prepayment  of Loans shall be applied to
         the Obligations as follows, so long as no Event of Default has occurred
         and is continuing: first, to any fees, charges, costs and expenses then
         owed by the Borrower to the Lender and second,  to the unpaid principal
         balance of the Loans.  Upon the occurrence and during the  continuation
         of any Event of Default,  all amounts  received for the  prepayment  of
         Loans shall be applied to the  Obligations in such manner as the Lender
         may reasonably determine.

     4.3 DEFAULT RATE.

     (a) Notwithstanding  any provision contained in this Agreement or any other
         Financing  Document  to the  contrary,  if  there  shall  occur  and be
         continuing  any  Default  or Event of Default  under  Section 9 of this

                                      -5-
<PAGE>

         Agreement, any Loans then outstanding shall bear interest at a rate per
         annum (hereinafter referred to as the "DEFAULT RATE") which is equal to
         the interest  rate that would  otherwise be  applicable to a Loan under
         this Agreement, plus two percent (2%), from the date of such Default or
         Event of  Default  until  such  Default or Event of Default is cured to
         Lender's  sole  satisfaction  or waived by Lender in an  instrument  in
         writing (after as well as before judgment).

     (b) Notwithstanding  any provision contained in this Agreement or any other
         Financing  Document to the contrary,  in no event shall the amount paid
         or agreed to be paid by the Borrower (or any other  Person) as interest
         or as a  premium  on the  Loans or any  other  Obligations  exceed  the
         highest lawful rate permissible under any law applicable thereto.

     4.4  COMPUTATION  OF  INTEREST  AND  FEES.  Interest  and all fees  payable
hereunder  shall be  computed  daily on the basis of a year of 360 days and paid
for the actual  number of days for which due. Any change in the interest rate on
a Loan  resulting  from a change in the Prime Rate shall become  effective as of
the  opening of  business  on the day on which such  change  becomes  effective.
Interest under the Loans shall accrue on each day or part thereof (including any
day which is not a Business Day) that any principal is  outstanding  thereunder.
Each  determination  of an interest rate by the Lender pursuant to any provision
of this Agreement shall be conclusive and binding on the Borrower in the absence
of manifest error.

     4.5 LOAN  STATEMENTS.  All  advances by the Lender to or for the benefit of
the Borrower  pursuant to this Agreement shall be charged to the loan account or
accounts opened in the Borrower's  name on the Lender's  books.  The Lender will
periodically render to the Borrower statements of such loan account or accounts,
which shall, to the extent  permitted by applicable law,  constitute prima facie
evidence  of the  existence  and  amounts of the  outstanding  Loans;  PROVIDED,
HOWEVER, the failure of the Lender to render any such statement to the Borrower,
or any error  therein,  shall not in any  manner  affect the  obligation  of the
Borrower to repay (with  applicable  interest)  all of the Loans,  in accordance
with  the  terms  and  conditions  of this  Agreement  and the  other  Financing
Documents.

SECTION 5. CONDITIONS PRECEDENT.

     5.1  CONDITIONS TO  EFFECTIVENESS  AND INITIAL  EXTENSIONS  OF CREDIT.  The
effectiveness  of this  Agreement  and the  agreement  of the Lender to make the
initial  Extension  of  Credit  requested  to be  made by it is  subject  to the
satisfaction,  immediately  prior to or  concurrently  with the  making  of such
Extension of Credit on the Closing Date, of the following conditions precedent:

     (a) FINANCING  DOCUMENTS.  The Lender  shall have  received  the  following
         Financing Documents, each as duly executed by the parties thereto, with
         their  signatures   properly  witnessed  and  notarized  thereon  where
         indicated:  (i)  this  Agreement;  (ii)  the  Note  conforming  to  the
         requirements hereof; and (iii) the Security Agreement.

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<PAGE>

     (b) ACTIONS TO PERFECT  LIENS.  The Lender shall have received  evidence in
         form and  substance  reasonably  satisfactory  to it that all  filings,
         recordings and registrations, including, without limitation, the filing
         of duly executed financing  statements on form UCC-1 and filings of the
         Security  Documents at the United States  Patent and Trademark  Office,
         necessary  or, in the opinion of the Lender,  desirable  to perfect the
         Liens created by the Security  Documents shall have been completed (or,
         to the extent  that any such  filings,  recordings,  registrations  and
         other actions shall not have been completed,  arrangements satisfactory
         to the Lender for the completion thereof shall have been made).

     (c) PLEDGED  NOTES.  The Lender shall have  received  the original  note or
         notes referenced in Section 8.12(e).

     (d) LIEN  SEARCHES.  The Lender shall have received the results of a recent
         search by a Person  reasonably  satisfactory to the Lender, of the UCC,
         judgment and tax lien filings which may have been filed with respect to
         personal  property of the Borrower and each of its  Subsidiaries in the
         jurisdictions  set forth in  APPENDIX B, and the results of such search
         shall be satisfactory to the Lender.

     (e) UCC-3  TERMINATION  STATEMENTS.  The Lender shall have  received  UCC-3
         termination  statements and any other instrument necessary to terminate
         the Liens granted by the Borrower to any Person  (other than  Permitted
         Liens) (or, to the extent that any such UCC-3 termination statements or
         any  other   instrument   shall  not  have  been  obtained  and  filed,
         arrangements  satisfactory  to the Lender for the  obtaining and filing
         thereof shall have been made).

     (f) SUBORDINATION   AGREEMENT.   The  Lender   shall  have   received   the
         Subordination  Agreement as duly executed by the parties thereto,  with
         their  signatures   properly  witnessed  and  notarized  thereon  where
         indicated.

     (g) CORPORATE PROCEEDINGS OF THE BORROWER. The Lender shall have received a
         copy of the  resolutions,  in form and  substance  satisfactory  to the
         Lender,  of the Board of Directors of the Borrower  authorizing (i) the
         execution,  delivery and  performance  of this  Agreement and the other
         Financing  Documents  to which it is a party,  (ii) the  Extensions  of
         Credit contemplated hereunder and (iii) the granting by it of the Liens
         created  pursuant  to the  Security  Documents  to which  Borrower is a
         party,  all as certified by the Secretary or an Assistant  Secretary of
         the Borrower as of the Closing Date, which certificate shall be in form
         and  substance  reasonably  satisfactory  to the Lender and shall state
         that the resolutions thereby certified have not been amended, modified,
         revoked or rescinded.

     (h) BORROWER  INCUMBENCY  CERTIFICATE.  The Lender  shall  have  received a
         certificate  of the  Borrower,  dated as of the Closing Date, as to the
         incumbency and signature of the officers of the Borrower  executing any
         Financing Document reasonably satisfactory in form and substance to the
         Lender,  executed  by the  President  or any  Vice  President  and  the
         Secretary or an Assistant Secretary of the Borrower.

     (i) CORPORATE PROCEEDINGS OF SUBSIDIARIES. The Lender shall have received a
         copy of the resolutions,  in form and substance reasonably satisfactory
         to the Lender,  of the Board of  Directors  of each  Subsidiary  of the
         Borrower authorizing (i) the execution, delivery and performance of the

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<PAGE>

         Financing  Documents to which it is a party and (ii) the granting by it
         of the Liens created pursuant to the Security  Documents to which it is
         a party, all as certified by the Secretary or an Assistant Secretary of
         each such Subsidiary as of the Closing Date, which certificate shall be
         in form and substance  reasonably  satisfactory to the Lender and shall
         state that the  resolutions  thereby  certified  have not been amended,
         modified, revoked or rescinded.

     (j) CORPORATE  DOCUMENTS.  The Lender shall have received true and complete
         copies of the Certificate of  Incorporation  and By-Laws of each of the
         Borrower and its  Subsidiaries,  as certified as of the Closing Date as
         complete and correct  copies  thereof by the  Secretary or an Assistant
         Secretary of the Borrower or such Subsidiary, whichever is applicable.

     (k) LEGAL  EXISTENCE,   GOOD  STANDING,   TAX  GOOD  STANDING  AND  FOREIGN
         QUALIFICATION CERTIFICATES. The Lender shall have received certificates
         of legal  existence,  good  standing,  tax good  standing  and  foreign
         qualification  for each of the  Borrower and its  Subsidiaries,  all of
         recent date issued by the appropriate Governmental Authorities.

     (l) INSURANCE.  The  Lender  shall  have  received  evidence  in  form  and
         substance satisfactory to it that all of the requirements regarding the
         maintenance of insurance (other than life insurance)  contained in this
         Agreement and the Security Documents shall have been satisfied.

     (m) LANDLORD'S CONSENT AND WAIVER OF LIEN. The Lender shall have received a
         landlord's  consent and waiver of lien from the Borrower's  landlord in
         Wilmington,  Massachusetts,  together with a true, correct and complete
         copy of the  Borrower's  real estate lease with such landlord  attached
         thereto. Such landlord's consent and waiver of lien must be in form and
         substance acceptable to the Lender.

     (n) BORROWING  BASE  CERTIFICATE;  AGING  REPORT.  The  Lender  shall  have
         received  (i)  a  Borrowing  Base   Certificate;   and  (ii)  a  report
         summarizing  all agings of Account and all Inventory,  in such form and
         with such detail or information  as the Lender may reasonably  request,
         all as completed and signed by a Responsible Officer of the Borrower.

     (o) LEGAL OPINION. The Lender shall have received an executed legal opinion
         of Goodwin, Procter & Hoar LLP, counsel to the Borrower,  covering such
         matters related to the transactions  contemplated by this Agreement and
         the other  Financing  Documents as the Lender may  reasonably  request.
         Such  legal  opinion  shall  be  in a  form  and  substance  reasonably
         acceptable to the Lender and its counsel.

     5.2 CONDITIONS TO EACH EXTENSION OF CREDIT.  The agreement of the Lender to
make any Extension of Credit  requested to be made by it on any date (including,
without limitation,  its initial Extension of Credit),  and the agreement of the
Lender to issue any Letter of Credit for which an Application  is presented,  is
subject to the satisfaction of the following conditions precedent:

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<PAGE>

     (a) REPRESENTATIONS  AND  WARRANTIES.   Each  of  the  representations  and
         warranties  made by the  Borrower  and the  other  Loan  Parties  in or
         pursuant to the  Financing  Documents  shall be true and correct in all
         material  respects  on and as of such date as if made on and as of such
         date,  except  to  the  extent  such   representations  and  warranties
         expressly relate to an earlier date in which case such  representations
         and warranties shall be true and correct in all material respects as of
         such earlier date.

     (b) NO DEFAULT.  No Default or Event of Default  shall have occurred and be
         continuing  on such date or after  giving  effect to the  Extension  of
         Credit requested to be made on such date.

     (c) BORROWING  REQUESTS AND APPLICATIONS.  The Lender shall have received a
         request  or  Application  for such  Loan or  Letter of Credit if and as
         required by this Agreement.

     (d) INITIAL  EXAMINATION.  The Lender  shall  have  completed  its  initial
         inspection  and  examination  of (i) the financial  records,  and other
         books  and  records  of the  Borrower  and its  Subsidiaries,  (ii) the
         property and facilities of the Borrower and its Subsidiaries, and (iii)
         customer,  supplier and  management  references of the Borrower and its
         Subsidiaries.  In connection  therewith,  the Borrower shall, and shall
         cause each of its  Subsidiaries  to, cooperate with Lender in arranging
         and  carrying  out  Lender's  initial  inspection  and  examination  by
         permitting  representatives  of Lender to visit and  inspect any of its
         properties  and  examine and make  abstracts  from any of its books and
         records  and  to  discuss  the  business,  operations,  properties  and
         financial  and other  conditions  of the Borrower and its  Subsidiaries
         with  officers and employees of the Borrower and its  Subsidiaries  and
         with its independent certified public accountants.

     (e) POST-CLOSING  LETTER.  The Borrower shall have provided the Lender with
         each of the items set forth in any  Post-Closing  Letter dated the date
         hereof in accordance  with the terms thereof.  Unless waived in writing
         by the Lender,  the  Borrower's  failure to fully  satisfy  each of the
         conditions  subsequent  set forth in said letter within the  applicable
         time periods,  shall  constitute a Default under Section 9.1(d) of this
         Agreement.

Each  borrowing  by and  Letter  of Credit  issued  on  behalf  of the  Borrower
hereunder shall constitute a  representation  and warranty by the Borrower as of
the date  thereof that the  conditions  contained in clauses (a) and (b) of this
subsection have been satisfied.

SECTION 6.        REPRESENTATIONS AND WARRANTIES.

         To induce the Lender to enter into this Agreement and to make the Loans
and issue in the Letters of Credit,  the Borrower hereby represents and warrants
to the Lender  that,  except as  otherwise  described  in the MASTER  DISCLOSURE
SCHEDULE attached hereto:

     6.1  FINANCIAL  CONDITION.  The  Borrower  has  furnished to the Lender the
audited financial reports for the years ended March 31, 1998, March 31, 1999 and
March 25, 2000 (collectively,  the "INITIAL FINANCIAL STATEMENTS").  The Initial
Financial  Statements  were  prepared  in  accordance  with  GAAP,  consistently
maintained and applied  throughout the periods covered thereby (except as may be
noted therein) and fairly present the financial condition of the Borrower on the
respective  dates thereof and the results of the  Borrower's  operations for the
respective periods covered thereby.

                                      -9-
<PAGE>

     6.2 NO CHANGE.  Since March 25, 2000,  (a) there has been no development or
event which has had or could  reasonably be expected to have a Material  Adverse
Effect,  (b)  there  has been no sale,  transfer  or  other  disposition  by the
Borrower of any  material  part of its  business or property  and no purchase or
other  acquisition  of any business or property  (including any Capital Stock of
the Borrower) material in relation to the financial condition of the Borrower on
March 25, 2000, and (c) no dividends or other  distributions have been declared,
paid or made upon the Capital Stock of the Borrower  (other than those dividends
and  distributions  permitted  pursuant to  subsection  8.11) nor has any of the
Capital Stock of the Borrower  been  redeemed,  retired,  purchased or otherwise
acquired for value by the Borrower. In addition,  the Borrower has furnished the
Lender with financial  projections  through the period ended March 31, 2000 (the
"Financial  Projections").  There  has been no  material  adverse  change in the
operations,  business,  property or condition  (financial  or  otherwise) of the
Borrower  and its  Subsidiaries  taken as a whole,  form  that set  forth in the
Financial Projections.

     6.3  EXISTENCE;  COMPLIANCE  WITH LAW. The Borrower (a) is duly  organized,
validly  existing and in good standing under the laws of the jurisdiction of its
organization,  (b) has the power and  authority to own and operate its property,
to lease the property it operates as lessee and to conduct the business in which
it is currently  engaged,  (c) is duly qualified or licensed to do business as a
foreign company and in good standing under the laws of each  jurisdiction  where
its  ownership,  lease or  operation  of property or the conduct of its business
requires such  qualification  except where the failure to be so qualified and/or
in good  standing,  in the aggregate  could not reasonably be expected to have a
Material  Adverse Effect and (d) is in compliance  with all  Requirements of Law
applicable  to such  Borrower or  Subsidiary,  as the case may be, except to the
extent  that the  failure  to comply  therewith  could  not,  in the  aggregate,
reasonably be expected to have a Material Adverse Effect.

     6.4 POWER;  AUTHORIZATION;  ENFORCEABLE  OBLIGATIONS.  The Borrower has the
power and  authority,  and the legal  right,  to make,  deliver  and perform the
Financing Documents to which it is a party and to borrow hereunder. The Borrower
has  taken  all  necessary  action  to  authorize  the  Loans on the  terms  and
conditions  of this  Agreement  and the Note  and to  authorize  the  execution,
delivery  and  performance  by it of the  Financing  Documents  to which it is a
party. No consent or authorization of, filing with, notice to or other act by or
in respect of, any Governmental  Authority or any other Person is required to be
obtained or made by the Borrower in connection  with the Loans hereunder or with
the  execution,  delivery or  performance  by the  Borrower  or the  validity or
enforceability  with respect to or against the Borrower,  as the case may be, of
the Financing Documents to which the Borrower is a party (other than the filings
of Uniform Commercial Code financing statements in order to perfect the security
interest  that  can be  perfected  by  such  filings).  Each  of  the  Financing
Documents,  when  executed and  delivered,  will  constitute a legal,  valid and
binding obligation of the Borrower,  enforceable against the Borrower, except as
such  enforceability  may  be  limited  by  applicable  bankruptcy,  insolvency,
reorganization,   moratorium  or  similar  laws  affecting  the  enforcement  of
creditors'  rights  generally  and  by  general  equitable  principles  (whether
enforcement is sought by proceedings in equity or at law).

                                      -10-
<PAGE>

     6.5 NO LEGAL BAR. The execution,  delivery and performance of the Financing
Documents,  the  Loans  hereunder  and the use of the  proceeds  thereof  by the
Borrower will not violate any  Requirement of Law or  Contractual  Obligation of
the Borrower or any of its  Subsidiaries  which could  reasonably be expected to
have a Material Adverse Effect and will not result in, or require,  the creation
or  imposition  of any  Lien on any of its or  their  respective  properties  or
revenues pursuant to any such Requirement of Law or Contractual Obligation other
than as contemplated in or permitted by the Financing Documents.

     6.6 NO MATERIAL LITIGATION.  No litigation,  investigation or proceeding of
or before  any  arbitrator  or  Governmental  Authority  is  pending  or, to the
knowledge of the  Borrower,  threatened by or against the Borrower or any of its
Subsidiaries or against any of their respective properties or revenues which has
a  reasonable  possibility  of  an  adverse  determination,   and  if  adversely
determined, could reasonably be expected to have a Material Adverse Effect.

     6.7 NO DEFAULT.  Neither the  Borrower  nor any of its  Subsidiaries  is in
default  under or with  respect  to any of its  Contractual  Obligations  in any
respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing hereunder.

     6.8  OWNERSHIP  OF  PROPERTY;  LIENS.  The  Borrower  has good  record  and
marketable title in fee simple to, or a valid leasehold  interest in, all of its
real property  except for such matters as do not have a Material  Adverse Affect
on  the  use of the  property  in the  conduct  of  the  business  as  currently
conducted,  and good title to, or a valid  leasehold  interest in, all its other
material property,  and none of such property is subject to any Lien (other than
Permitted  Liens).  Set forth on the MASTER  DISCLOSURE  SCHEDULE  is a true and
complete  list of all of real  property  owned or leased by the Borrower and its
Subsidiaries  as of the Closing  Date and all Liens  granted by the Borrower and
its Subsidiaries in respect of any real property owned or leased by it as of the
Closing Date.

     6.9 INTELLECTUAL  PROPERTY.  (a) To the knowledge of the Borrower,  each of
the  Borrower  and its  Subsidiaries  owns,  or is licensed to use, all material
patents,  trademarks  (registered or unregistered),  trade names, service marks,
assumed  names  and  copyrights  (such  items,  together  with all  applications
therefor and all other material  intellectual  property and proprietary  rights,
whether or not subject to statutory registration or protection,  of the Borrower
and any of its Subsidiaries that are used in or necessary for the conduct of the
business of the Borrower and its  Subsidiaries  being  collectively  referred to
herein as the "INTELLECTUAL PROPERTY") necessary for the conduct of its business
except for those the  failure to own or license  which could not  reasonably  be
expected  to have a  Material  Adverse  Effect  and (b) no claim  of  which  the
Borrower  has been given  notice has been  asserted and is pending by any Person
challenging  or  questioning  the use of any such  Intellectual  Property or the
validity  or  effectiveness  of any  such  Intellectual  Property,  nor does the
Borrower  know of any valid  basis for any such  claim,  except for such  claims
that,  in the  aggregate,  could not  reasonably  be expected to have a Material
Adverse Effect.

                                      -11-
<PAGE>

     6.10 TAXES.  The Borrower and its  Subsidiaries  have filed or caused to be
filed  all  tax  returns  which,  to the  knowledge  of  the  Borrower  and  its
Subsidiaries,  are  required to be filed and have paid all taxes shown to be due
and payable on said returns or on any assessments  made against it or any of its
property in respect of such periods and all other  material  taxes imposed on it
or any of its property by any  Governmental  Authority (other than any taxes the
amount or validity  of which are being  contested  in good faith by  appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of the  Borrower and its  Subsidiaries  and other than any
taxes  which in the  aggregate  would not have a  Material  Adverse  Effect)  in
respect of such periods.

     6.11 FEDERAL REGULATIONS. No part of the proceeds of any Loans will be used
for "purchasing" or "carrying" any "margin stock" within the respective meanings
of  each  of the  quoted  terms  under  Regulations  G, U or X of the  Board  of
Governors of the Federal  Reserve  System as now and from time to time hereafter
in effect. If requested by the Lender, the Borrower will furnish to the Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
U-1 referred to in said Regulation U.

     6.12  ERISA.  The  Borrower  and  each  Commonly  Controlled  Entity  is in
compliance  in all material  respects  with ERISA and the  provisions of the Tax
Code  applicable to any Plans.  Neither a Reportable  Event nor an  "accumulated
funding  deficiency"  (within  the  meaning  of  Section  412 of the Tax Code or
Section  302 of ERISA)  has  occurred  with  respect  to any Plan.  Neither  the
Borrower nor any Commonly  Controlled  Entity has incurred any  liability to the
PBGC  over  and  above  premiums  which  are  required  by law and  which  would
constitute  a Material  Adverse  Effect.  Neither the  Borrower nor any Commonly
Controlled  Entity has terminated any Plan in a manner which could result in the
imposition of a Lien on the property of any Borrower or its Subsidiaries.

     6.13 INVESTMENT  COMPANY ACT; OTHER  REGULATIONS.  Neither the Borrower nor
any of its  Subsidiaries  is an "investment  company"  within the meaning of the
Investment  Company  Act of 1940,  as  amended.  The  Borrower is not subject to
regulation  under any Federal or State  statute or  regulation  which limits its
ability to incur Indebtedness as contemplated herein.

     6.14  SUBSIDIARIES.  Set forth on the MASTER DISCLOSURE SCHEDULE is  a true
and complete list of all of the  Subsidiaries  of the Borrower as of the Closing
Date.

     6.15 ENVIRONMENTAL MATTERS. Except to the extent that the inaccuracy of any
of the  following  (or  the  circumstances  giving  rise  to  such  inaccuracy),
individually  or in the  aggregate,  could not  reasonably be expected to have a
Material Adverse Effect, and to the knowledge of the Borrower:

     (a) The facilities and properties owned, leased or operated by the Borrower
         or any of its  Subsidiaries  do not contain any Hazardous  Materials in
         amounts or concentrations  which (i) constitute a violation of, or (ii)
         could give rise to any liability under, any  Environmental Law or could
         interfere with the continued operation of the facilities and properties
         owned, leased or operated by the Borrower or any of its Subsidiaries or
         could reasonably be expected to impair the fair saleable value thereof.

     (b) The Borrower and its Subsidiaries,  together with all of the facilities
         and  properties  owned,  leased  or  operated  by the  Borrower  or its
         Subsidiaries,  are in compliance,  and to the knowledge of the Borrower

                                      -12-
<PAGE>

         and its  Subsidiaries  have in the last three years been in  compliance
         with all applicable  Environmental  Laws and  applicable  Environmental
         Permits, and the Borrower and its Subsidiaries  reasonably believe that
         they will be able to comply with all applicable  Environmental  Laws in
         the future and renew or obtain all Environmental  Permits necessary for
         their operations in the future.

     (c) Neither the  Borrower  nor any of its  Subsidiaries  has  received  any
         written  notice  of  violation,   alleged  violation,   non-compliance,
         liability or potential  liability  regarding  environmental  matters or
         compliance with Environmental Laws with regard to any of the facilities
         and properties owned,  leased or operated by the Borrower or any of its
         Subsidiaries or the business of the Borrower and its Subsidiaries,  nor
         to the  knowledge  of the Borrower or any of its  Subsidiaries  is such
         notice being threatened.

     (d) Hazardous  Materials have not been  transported,  disposed of, emitted,
         discharged, or otherwise released or threatened to be released, nor has
         their  disposal  been  arranged  for, (i) by the Borrower or any of its
         Subsidiaries  in  violation  of, or (ii) in a manner  or to a  location
         which could reasonably be expected to give rise to liability under, any
         applicable  Environmental  Law; nor have any Hazardous  Materials  been
         generated,  treated, stored, emitted,  discharged or otherwise released
         or  threatened to be released or disposed of at, on or under any of the
         facilities and properties owned,  leased or operated by the Borrower or
         any of its  Subsidiaries  in  violation  of, or in a manner  that could
         reasonably be expected to give rise to liability  under, any applicable
         Environmental Law.

     (e) No judicial  proceeding or  governmental  or  administrative  action is
         pending  or,  to  the   knowledge   of  the  Borrower  or  any  of  its
         Subsidiaries,  threatened,  under  any  Environmental  Law to which the
         Borrower or any  Subsidiary  is or to the  knowledge of the Borrower or
         any of its  Subsidiaries  will be named as a party,  nor are  there any
         consent decrees or other decrees, consent orders, administrative orders
         or other  orders,  or other  administrative  or  judicial  requirements
         outstanding under any Environmental Law with respect to the Borrower or
         any of its Subsidiaries, or any of the facilities and properties owned,
         leased or operated by the Borrower or any of its Subsidiaries.

     6.16  SOLVENCY.  As of  the  Closing  Date,  after  giving  effect  to  the
transactions contemplated to occur on the Closing Date, each of the Borrower and
its Subsidiaries is Solvent.

     6.17 YEAR 2000 PROBLEM. The Borrower and its Subsidiaries have reviewed the
areas within their businesses and operations  which could be adversely  affected
by, and have developed or are developing a program to address on a timely basis,
the "Year 2000 Problem"  (i.e. the risk that computer  applications  used by the
Borrower  or any of its  Subsidiaries  may be unable to  recognize  and  perform
properly date-sensitive  functions involving certain dates prior to and any date
after  December  31,  1999).  Based upon such review,  the  Borrower  reasonably
believes  that the "Year  2000  Problem"  will not have any  Materially  Adverse
Effect.

     6.18  OWNERSHIP OF BORROWER.  The classes of Capital  Stock,  the number of
authorized shares of Capital Stock, the number of outstanding  shares of Capital
Stock and the par values or other  designations  of the  Capital  Stock or other
Equity  Interests  of the  Borrower  are  correctly  set  forth  in  the  MASTER
DISCLOSURE  SCHEDULE.  All of the  outstanding  shares of Capital Stock or other
Equity  Interests of the Borrower  are duly and validly  issued,  fully paid and
nonassessable,  and none of such issued and outstanding  shares of Capital Stock

                                      -13-
<PAGE>

or  Equity  Interests  has been  issued in  violation  of, or  subject  to,  any
preemptive or subscription rights.  Except as set forth in the MASTER DISCLOSURE
SCHEDULE,  there are no: (a) outstanding shares of Capital Stock or other Equity
Interests or other securities convertible into or exchangeable for Capital Stock
or other  beneficial  interests of the Borrower,  or (b)  outstanding  rights of
subscription,  warrants,  calls,  options,  contracts or other agreements of any
kind, issued, made or granted to or with any Person under which the Borrower may
be obligated to issue, sell, purchase,  retire or redeem or otherwise acquire or
dispose of any shares of Capital  Stock or other Equity  Interest or  beneficial
interests of the Borrower.

     6.19 SUBSIDIARY ASSETS. None of the Subsidiaries of the Borrower has assets
in excess of $200,000.00.  In the aggregate,  the Borrower's Subsidiaries do not
have assets in excess of $250,000.00.

SECTION 7.        AFFIRMATIVE COVENANTS.

         The Borrower  hereby  covenants and agrees that, so long as any Loan or
Letter of Credit is  outstanding,  or the Lender has any  obligation to make any
Loans or issue any Letters of Credit, that:

     7.1  FINANCIAL  STATEMENTS.  The Borrower  shall  furnish to the Lender the
following financial statements:

     (a) As soon as available,  but in any event within one hundred twenty (120)
         days after the end of each fiscal year of the  Borrower,  a copy of the
         audited consolidated balance sheet of the Borrower and its consolidated
         Subsidiaries  as at the end of such fiscal year and the related audited
         consolidated  statements  of income and  retained  earnings and of cash
         flows for such fiscal year,  setting forth in each case in  comparative
         form the figures for the  previous  year,  reported on without a "going
         concern" or like qualification or exception, or a qualification arising
         out of the  scope  of the  audit,  by Ernst & Young  LLP or such  other
         independent certified public accountants reasonably satisfactory to the
         Lender; and

     (b) As soon as available,  but in any event not later than  forty-five (45)
         days after the end of each  calendar  month of each  fiscal year of the
         Borrower   (other  than  that  of  the   twelfth   such   month),   the
         management-prepared  consolidated balance sheet of the Borrower and its
         consolidated  Subsidiaries  as at the end of such month and the related
         management-prepared  consolidated  statements  of income  and  retained
         earnings  and of  cash  flows  of the  Borrower  and  its  consolidated
         Subsidiaries  for such month and the portion of the fiscal year through
         the end of such month,  setting forth in each case in comparative  form
         the figures for the previous year,  certified by a Responsible  Officer
         of the  Borrower  as  being  fairly  stated  in all  material  respects
         (subject to normal year-end audit adjustments).

All such  financial  statements  shall be complete  and correct in all  material
respects and shall be prepared in reasonable  detail and in accordance with GAAP
applied  consistently  throughout the periods  reflected  therein and with prior
periods (except as approved by such accountants or Responsible  Officer,  as the
case may be, and disclosed therein).

                                      -14-
<PAGE>

     7.2  CERTIFICATES;  OTHER  INFORMATION.  The Borrower  shall furnish to the
Lender the following certificates and other information:

     (a) concurrently with the delivery of the financial  statements referred to
         in subsection 7.1(a), a certificate of the independent certified public
         accountants  reporting  on such  financial  statements  stating that in
         making the examination  necessary therefor no knowledge was obtained of
         any breach of any of the  financial  covenants set forth in Section 8.1
         of this Agreement, except as specified in such certificate;

     (b) concurrently with the delivery of the financial  statements referred to
         in subsection 7.1(a) and 7.1(b), a Compliance Certificate,  in the form
         attached  hereto as  APPENDIX C and  incorporated  herein by  reference
         ("COMPLIANCE  CERTIFICATE"),  as completed  and signed by a Responsible
         Officer of the Borrower;

     (c) while any Loans or Letters of Credit  are  outstanding,  not later than
         twenty  (20)  days  after the close of each  calendar  month,  a report
         summarizing all agings of all Accounts and a Borrowing Base Certificate
         in the form attached  hereto as APPENDIX D and  incorporated  herein by
         reference   ("BORROWING  BASE  CERTIFICATE"),   all  as  completed  and
         certified by a Responsible  Officer of the  Borrower,  and in such form
         and with such  detail  or  information  as the  Lender  may  reasonably
         request, from time to time; and

     (d) annually,  within  thirty days after the end of each fiscal year of the
         Borrower,  a  management-prepared  financial budget,  including planned
         capital expenditures, for the upcoming fiscal year of the Borrower.

         The  Borrower  shall,  and shall  cause  each of its  Subsidiaries  to,
furnish to the Lender promptly,  such additional financial and other information
concerning the Borrower or any of its  Subsidiaries  or any of the Collateral as
the Lender may from time to time reasonably request.

     7.3 PAYMENT OF OBLIGATIONS. The Borrower shall, and shall cause each of its
Subsidiaries  to, pay,  discharge or otherwise  satisfy at or before maturity or
before  they  become  delinquent,  as the  case  may  be,  all  of the  material
obligations of the Borrower or such Subsidiary,  whichever is applicable, except
as  contemplated  by this  Agreement or where the amount or validity  thereof is
currently being contested in good faith by appropriate  proceedings and reserves
in conformity  with GAAP with respect thereto have been provided on the books of
the Borrower or any of its Subsidiaries, as the case may be.

     7.4 CONDUCT OF BUSINESS AND  MAINTENANCE OF EXISTENCE.  The Borrower shall,
and shall cause each of its  Subsidiaries to: (a) continue to engage in business
of  the  same  general  type  as now  conducted  by  Borrower  and  each  of its
Subsidiaries;  (b)  preserve,  renew  and  keep in full  force  and  effect  its
existence and take all reasonable action to maintain all rights,  privileges and
franchises  necessary or desirable in the normal conduct of its business  except
as  otherwise  permitted  pursuant  to  subsection  8.8;  and (c)  comply in all
material  respects with all  Contractual  Obligations  and  Requirements of Law,
except  where (i) any such  Contractual  Obligation  is being  contested in good
faith,  a  bona  fide  dispute  exists  with  respect  to any  such  Contractual

                                      -15-
<PAGE>

Obligation  or  failure  to  comply  therewith  could  not,  in  the  aggregate,
reasonably  be expected  to have a Material  Adverse  Effect,  and (ii) any such
Requirement  of Law is being  contested  in good faith and the failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.

     7.5 MAINTENANCE OF PROPERTY; INSURANCE. The Borrower shall, and shall cause
each of its  Subsidiaries  to: (a) keep all property  material to the conduct of
its business in good working order and  condition;  (b) maintain  insurance with
financially sound and reputable  insurance companies on such of its property and
in at least such amounts and against at least such risks as are usually  insured
against in the same general  area by companies  engaged in the same or a similar
business;  and (c) furnish to the Lender, upon written request, full information
as to the insurance carried.

     7.6 INSPECTION OF PROPERTY;  BOOKS AND RECORDS;  DISCUSSIONS.  The Borrower
shall,  and shall cause each of its  Subsidiaries  to: (a) keep proper financial
records  in  conformity  with  GAAP  and all  Requirements  of Law;  (b)  permit
representatives  of the Lender to visit and  inspect any of its  properties  and
examine and make  abstracts  from any of its books and records at any reasonable
time,  upon  reasonable  notice,  and as often  as may  reasonably  be  desired;
PROVIDED,  HOWEVER,  that so long as no Event of  Default  has  occurred  and is
continuing,  such  inspections  shall be limited to one (1)  inspection per each
fiscal year of the Borrower and provided  further that the costs and expenses of
the initial inspection and examination by Lender under Section 5.2(d),  shall be
borne by Lender;  and (c) permit,  upon reasonable notice during normal business
hours,  representatives  of the  Lender to  discuss  the  business,  operations,
properties   and  financial  and  other   condition  of  the  Borrower  and  its
Subsidiaries  with officers and  employees of the Borrower and its  Subsidiaries
and with its independent certified public accountants.

     7.7 NOTICES.  The Borrower shall,  and shall cause each of its Subsidiaries
to, give prompt notice to the Lender of:

     (a) the occurrence of any Default or Event of Default;

     (b) any (i) default or event of default under any Contractual Obligation of
         the  Borrower  or  any  of  its   Subsidiaries   or  (ii)   litigation,
         investigation  or  proceeding  which may exist at any time  between the
         Borrower or any of its  Subsidiaries  and any  Governmental  Authority,
         which in  either  case,  if not  cured,  or  resolved  or if  adversely
         determined,  as the case may be, could reasonably be expected to have a
         Material Adverse Effect;

     (c) any  litigation  or  proceeding  affecting  the  Borrower or any of its
         Subsidiaries  in which the amount  involved is not covered by insurance
         or in which  injunctive or similar relief is sought which, if adversely
         determined,  could  reasonably  be expected to have a Material  Adverse
         Effect;

     (d) the  following  events,  as soon as  possible  and in any event  within
         thirty  (30)  days  after  the  Borrower  knows or has  reason  to know
         thereof:  (i) the  occurrence or expected  occurrence of any Reportable
         Event  with  respect  to any  Plan,  a  failure  to make  any  required
         contribution  to a Plan,  the creation of any Lien in favor of the PBGC

                                      -16-
<PAGE>

         or a Plan or (ii) the  institution  of proceedings or the taking of any
         other  action by the PBGC or the  Borrower or any  Commonly  Controlled
         Entity  with  respect  to the  withdrawal  from,  or  the  termination,
         reorganization or insolvency of, any Plan; and

     (e) any  development or event which could  reasonably be expected to have a
         Material Adverse Effect.

         Each  notice  pursuant to this  subsection  shall be  accompanied  by a
statement of a  Responsible  Officer  setting  forth  details of the  occurrence
referred to therein and stating what action the  Borrower  proposes to take with
respect thereto.

     7.8  ENVIRONMENTAL  LAWS. The Borrower  shall,  and shall cause each of its
Subsidiaries to:

     (a) comply with,  and use  reasonable  efforts to ensure  compliance by all
         tenants and subtenants, if any, with, all applicable Environmental Laws
         and obtain and comply with and maintain,  and use reasonable efforts to
         ensure that all tenants and subtenants,  if any, obtain and comply with
         and maintain,  any and all Environmental Permits required by applicable
         Environmental Laws; and

     (b) Conduct and complete all investigations, studies, sampling and testing,
         and  all   remedial,   removal  and  other   actions   required   under
         Environmental  Laws and  promptly  comply  with all  lawful  orders and
         directives  of all  Governmental  Authorities  regarding  Environmental
         Laws,  except to the extent that the same are being  contested  in good
         faith by appropriate  proceedings and the pendency of such  proceedings
         could not be reasonably expected to have a Material Adverse Effect.

     7.9 MAINTENANCE OF LIENS OF THE SECURITY DOCUMENTS. The Borrower shall, and
shall cause each of its Subsidiaries to, promptly,  upon the reasonable  request
of  the  Lender,  at  the  sole  cost  and  expense  of  the  Borrower  and  its
Subsidiaries,   execute,  acknowledge  and  deliver,  or  cause  the  execution,
acknowledgement  and delivery of, and thereafter  register,  file or record,  or
cause  to be  registered,  filed or  recorded,  in an  appropriate  governmental
office,  any  document or  instrument  supplemental  to or  confirmatory  of the
Security  Documents or otherwise  reasonably  deemed by the Lender  necessary or
desirable for the continued  validity,  perfection  and priority of the Liens on
the Collateral covered thereby.

     7.10  PLEDGE  OF AFTER  ACQUIRED  PROPERTY.  If at any time  following  the
Closing Date, the Borrower or any of its Subsidiaries  shall acquire property of
any  nature  whatsoever  having a value in excess of Fifty  Thousand  and 00/100
Dollars  ($50,000.00) which is intended by the terms of the applicable  Security
Document  to be,  but is not,  subject  to the  Liens  created  by the  Security
Documents,  the Borrower shall, or shall cause the relevant  Subsidiaries to, as
soon as possible  and in no event later than thirty (30) days after the relevant
acquisition  date and, to the extent  permitted by applicable  law, grant to the
Lender a first  priority  (subject to Permitted  Liens) Lien on such property as
collateral  security for the Obligations  pursuant to  documentation  reasonably
satisfactory  in form and substance to the Lender;  PROVIDED,  HOWEVER,  that if
such acquired  property is real estate,  the Lender may, in its sole discretion,
consent to the granting of a Lien in its favor that is not a first priority Lien

                                      -17-
<PAGE>

on such property. The Borrower, at its sole expense, shall execute,  acknowledge
and  deliver,  or cause the  execution,  acknowledgement  and  delivery  of, and
thereafter register,  file or record in an appropriate  governmental office, any
document or instrument (including legal opinions, title insurance,  consents and
corporate  documents) and take all such actions  reasonably deemed by the Lender
to be necessary or desirable to ensure the creation,  priority and perfection of
such Lien.

     7.11 NEW  SUBSIDIARIES.  The  Borrower  shall  cause,  at its sole cost and
expense, each new Subsidiary of the Borrower created or acquired on or after the
date hereof, promptly upon such creation or acquisition,  to execute and deliver
to the Lender the following  agreements  and  documents,  which  agreements  and
documents shall be in form and substance reasonably  satisfactory to the Lender:
(a) an instrument  (it being  acknowledged  and agreed that an instrument in the
form  attached  as  Exhibit A to the  Subsidiary  Guaranty  shall  satisfy  this
requirement)  pursuant to which such new  Subsidiary  shall be become a party to
the Subsidiary Guaranty as a guarantor thereunder;  (b) a security agreement (it
being   acknowledged   and  agreed  that  such  security   agreement   shall  be
substantially in the same form as the Subsidiary Security Agreement-All Assets),
pursuant to which,  such  Subsidiary  shall grant to the Lender a first priority
perfected security interest in all of its assets in order to secure the full and
prompt payment and performance of the Obligations; (c) any and all UCC financing
statements  which the Lender deems necessary and appropriate in order to perfect
its first  priority  perfected  security  interests in all of the assets of such
Subsidiary;  and (d) such other  agreements,  documents,  financing  statements,
instruments,  opinions and certificates and completion of such other matters, as
the Lender may reasonably deem necessary or appropriate.

     7.12 DEPOSITORY  ACCOUNTS.  The Borrower shall, and shall cause each of its
Subsidiaries  to,  maintain  the Lender as its primary  bank for all  depository
accounts.

     7.13 INTER-COMPANY RECEIVABLES. The Borrower shall, and shall cause each of
its Subsidiaries to, pledge and assign in favor of the Lender all  Inter-Company
receivables, whether such receivables are undocumented,  documented by contract,
documented  only on the books and records of the Borrower  and/or the Subsidiary
or evidenced by a promissory note or other instrument.

SECTION 8.        NEGATIVE COVENANTS.

         The Borrower  hereby  covenants and agrees that, so long as any Loan or
Letter of Credit is  outstanding,  or the Lender has any  obligation to make any
Loans or issue any Letters of Credit, that:

     8.1      FINANCIAL COVENANTS.

     (a) RATIO OF CONSOLIDATED EBITDA TO CONSOLIDATED DEBT SERVICE. The Borrower
         shall not  permit,  and shall  cause  each of its  Subsidiaries  not to
         permit, for any period of four consecutive  fiscal quarters,  the ratio
         of Consolidated EBITDA for such period to Consolidated Debt Service for
         such period to be less than 1.25 to 1.00.

     (b) RATIO OF CONSOLIDATED  TOTAL  LIABILITIES TO CONSOLIDATED  TANGIBLE NET
         WORTH.  The  Borrower  shall not  permit,  and shall  cause each of its
         Subsidiaries not to permit,  for any period of four consecutive  fiscal
         quarters,  the ratio of Consolidated  Total Liabilities for such period
         to  Consolidated  Tangible Net Worth for such period to be greater than
         1.50 to 1.00.

                                      -18-
<PAGE>

     (c) MAINTENANCE OF CONSOLIDATED  TANGIBLE NET WORTH. The Borrower shall not
         permit,  and shall cause each of its  Subsidiaries  not to permit,  the
         Consolidated  Tangible  Net  Worth  at the  end of any  fiscal  quarter
         commencing with the fiscal quarter ended March 31, 2000 to be less than
         an amount  equal to the sum of (i) Eleven  Million  and 00/100  Dollars
         ($11,000,000.00)  plus (ii) one hundred  percent (100%) of the proceeds
         of any debt or equity  security  issuances made by the Borrower  during
         such fiscal quarter.

     (d) LIMITATION ON CONSOLIDATED NET LOSSES. The Borrower shall not have, and
         shall cause each of its  Subsidiaries not to have, any Consolidated Net
         Losses,  for any two consecutive  fiscal  quarters  commencing with the
         fiscal quarter ending March 31, 2000.

         Notwithstanding  any  provision  contained  in  this  Agreement  to the
contrary herein,  for purposes of making all calculations in connection with the
covenants  contained in this  subsection  8.1, all accounting  terms used herein
shall be interpreted and all accounting  determinations  hereunder shall be made
in accordance  with GAAP  consistently  applied as in effect on the date of this
Agreement.  In the event of any material  difference at any time between GAAP in
effect on the date of this  Agreement and GAAP from time to time in effect,  the
Compliance  Certificate  required  pursuant to subsection 7.2(b) shall include a
reconciliation   of  the  calculations   required  thereby  with  the  financial
statements being delivered with such Compliance Certificate.

     8.2 LIMITATION ON CHANGES IN FISCAL YEAR. The Borrower shall not, and shall
not permit any of its Subsidiaries to, change the fiscal year of the Borrower or
any of its Subsidiaries.

     8.3 LIMITATION ON CAPITAL  EXPENDITURES.  The Borrower shall not, and shall
not  permit  any  of its  Subsidiaries  to,  make  or  commit  to  make  Capital
Expenditures in the aggregate for the Borrower and its  Subsidiaries  during any
of the fiscal years of the Borrower set forth below, in excess of the amount set
forth opposite such fiscal year below:

========================================= ======================================
            Fiscal Year                                   Amount
----------------------------------------- --------------------------------------
                2000                                    $700,000.00
----------------------------------------- --------------------------------------
                2001                                   $1,000,000.00
----------------------------------------- --------------------------------------
   2002 (until the Maturity Date)                      $1,000,000.00
========================================= ======================================

provided that (i) Capital Expenditures with respect to each fiscal year shall be
calculated with respect to the period beginning on January 1, 2000 and ending on
December 31, 2000;  (ii)  Capital  Expenditures  permitted to be made during any
fiscal year (and not carried  over from a prior fiscal year) and not made during
such fiscal year may be carried  over and  expended  during the next  succeeding
fiscal year; and (iii) Capital Expenditures made during any fiscal year shall be
first deemed made in respect of amounts  carried over from the prior fiscal year
and then deemed made in respects of amounts permitted for such fiscal year.

                                      -19-
<PAGE>

8.4 LIMITATION ON INDEBTEDNESS.  The Borrower shall not, and shall cause each of
its  Subsidiaries  not  to,  create,  incur,  assume  or  suffer  to  exist  any
Indebtedness, except:

     (a) Indebtedness   to  the  Lender  arising  under  any  of  the  Financing
         Documents;

     (b) Subordinated Debt;

     (c) Purchase Money  Indebtedness of the Borrower or any of its Subsidiaries
         not to exceed the  aggregate  sum of One  Hundred  Thousand  and 00/100
         Dollars ($100,000.00);

     (d) Indebtedness  with  respect to  Capitalized  Lease  Obligations  of the
         Borrower or any of its  Subsidiaries not to exceed the aggregate sum of
         One Million and 00/100 Dollars ($1,000,000.00);

     (e) current  liabilities  which  are  incurred  in the  ordinary  course of
         business and which are not incurred  through (i) the borrowing of money
         or (ii) the  obtaining  of credit  except for credit on an open account
         basis  customarily  extended and in fact  extended in  connection  with
         normal purchases of goods and services;

     (f) Indebtedness with respect to taxes,  assessments,  governmental charges
         or levies  which  are  being  contested  in good  faith by  appropriate
         proceedings,  provided that adequate  reserves with respect thereto are
         maintained on the books of the Borrower or its Subsidiaries, a the case
         may be, in conformity with GAAP; and

     (g) Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to
         the Borrower or any other Subsidiary,  so long as such Indebtedness (i)
         is  subordinated in right of payment to all  Obligations;  and (ii) has
         terms and conditions as the Lender may reasonably require.

     8.5 LIMITATION ON CONTINGENT LIABILITIES. The Borrower shall not, and shall
not permit any of its Subsidiaries to, assume,  guarantee,  endorse or otherwise
become directly or contingently liable (including without limitation,  liable by
way of  agreement,  contingent  or  otherwise  to purchase or provide  funds for
payment,  to supply funds to or  otherwise  invest in any debtor or otherwise to
assure any creditor against any loss) in connection with any Indebtedness of any
other Person, except for: (a) liabilities to the Lender arising under any of the
Financing  Documents;  and (b)  guarantees  made in the  ordinary  course of the
business by the Borrower of obligations of any Subsidiary, which obligations are
otherwise permitted under this Agreement.

     8.6  LIMITATION ON LIENS.  The Borrower shall not, and shall not permit any
of its Subsidiaries to, create,  incur,  assume or suffer to exist any Lien upon
any of its  property,  assets  or  revenues,  whether  now  owned  or  hereafter
acquired,  except for the following  (hereinafter  referred to  collectively  as
"PERMITTED LIENS"):

     (a) Liens created pursuant to the Security Documents;

     (b) Liens for taxes not yet due or which are being  contested in good faith
         by  appropriate  proceedings,  provided  that  adequate  reserves  with
         respect  thereto  are  maintained  on the books of the  Borrower or its
         Subsidiaries, as the case may be, in conformity with GAAP;

                                      -20-
<PAGE>

     (c) statutory landlords' liens and carriers',  warehousemen's,  mechanics',
         materialmen's,  repairmen's or other like Liens arising in the ordinary
         course of business  for sums which are not overdue for a period of more
         than  sixty  (60) days or which are being  contested  in good  faith by
         appropriate proceedings;

     (d) judgment  Liens  created by or resulting  from any  litigation or legal
         proceeding if released or bonded within thirty (30) days of the date of
         creation  thereof,  unless such  litigation or legal  proceeding  could
         reasonably be expected to have a Material Adverse Effect;

     (e) pledges  or  deposits  in  connection   with   workers'   compensation,
         unemployment  insurance  and  other  social  security  legislation  and
         deposits  securing  liability to insurance  carriers under insurance or
         self-insurance arrangements;

     (f) deposits to secure the performance of bids, trade contracts (other than
         for borrowed money), leases,  statutory obligations,  surety and appeal
         bonds,  performance  bonds  and  other  obligations  of a  like  nature
         incurred in the ordinary course of business;

     (g) Liens  consisting of easements,  zoning  restrictions,  flowage rights,
         rights-of-way,   covenants,  conditions,  restrictions,   reservations,
         licenses,   agreements  and  other  similar  matters,   which,  in  the
         aggregate,  are not  substantial in amount and which do not in any case
         materially  detract  from the use of the  property  subject  thereto or
         materially  interfere with the ordinary  conduct of the business of the
         Borrower or such Subsidiary;

     (h) Liens to secure  Indebtedness  for Purchase Money  Indebtedness  to the
         extent that such  Indebtedness  is permitted under  subsection  8.4(c);
         PROVIDED,  HOWEVER, that (i) each such Lien is given only to secure the
         purchase  price of the property  which is the subject of such  Purchase
         Money Indebtedness,  does not extend to any other property and is given
         at the time of acquisition of the property; and (ii) the Purchase Money
         Indebtedness  secured thereby does not exceed the lesser of the cost of
         such property or its fair market value at the time of acquisition;

     (i) Liens in favor of lessors under  Capitalized  Leases to the extent that
         the Capitalized Lease Obligations  thereunder is Indebtedness permitted
         under subsection 8.4(d); PROVIDED, HOWEVER, that each such Lien extends
         only to the property  which is subject of such  Capitalized  Lease,  is
         given  only to secure  the  Capitalized  Lease  Obligations  under such
         Capitalized  Lease,  and is  given  at the  commencement  date  of such
         Capitalized Lease; and

     (j) Liens in existence on the date hereof  listed on the MASTER  DISCLOSURE
         SCHEDULE; PROVIDED, HOWEVER, that no such Lien encumbers any additional
         property  after the  Closing  Date and that the amount of  Indebtedness
         secured thereby shall not subsequently be increased.

                                      -21-
<PAGE>

     8.7 LIMITATION ON NEGATIVE  PLEDGES.  The Borrower shall not, and shall not
permit any of its  Subsidiaries  to,  enter  into with any Person any  agreement
(other than this Agreement and the other Financing Documents) which prohibits or
limits the ability of the Borrower or any of its Subsidiaries to create,  incur,
assume or suffer to exist any Lien upon any of its property, assets or revenues,
whether now owned or hereafter  acquired,  or which prohibits or limits loans or
dividends by any of the Subsidiaries to the Borrower.

     8.8  LIMITATION ON FUNDAMENTAL  CHANGES.  The Borrower shall not, and shall
not permit any of its Subsidiaries  to, enter into any merger,  consolidation or
amalgamation,   or  liquidate,  wind  up  or  dissolve  itself  (or  suffer  any
liquidation  or  dissolution),  or convey,  sell,  lease,  assign,  transfer  or
otherwise  dispose of, all or  substantially  all of its  property,  business or
assets,  or make  any  material  change  in its  present  method  of  conducting
business, except:

     (a) any  Subsidiary of the Borrower may be merged or  consolidated  with or
         into the Borrower  (provided  that the Borrower shall be the continuing
         or surviving  corporation) or with or into any one or more wholly owned
         Subsidiaries of the Borrower (provided that the wholly owned Subsidiary
         or Subsidiaries shall be the continuing or surviving corporation);

     (b) any wholly  owned  Subsidiary  may sell,  lease,  transfer or otherwise
         dispose  of any or all of its assets  (upon  voluntary  liquidation  or
         otherwise) to the Borrower or any other wholly owned  Subsidiary of the
         Borrower; and

     (c) pursuant to any sale of assets expressly permitted by subsection 8.9.

     8.9  LIMITATION  ON SALE OF ASSETS.  The Borrower  shall not, and shall not
permit any of its  Subsidiaries to, convey,  sell,  lease,  assign,  transfer or
otherwise dispose of any of its property, business or assets (including, without
limitation, receivables and leasehold interests), whether now owned or hereafter
acquired,  or, in the case of any  Subsidiary,  issue or sell any shares of such
Subsidiary's  Capital Stock to any Person (other than the Borrower or any wholly
owned  Subsidiary,  and subject to the  provisions  of the Security  Documents),
except:

     (a) the conveyance, sale, lease, assignment,  transfer or other disposition
         of Obsolete  Property or surplus  property  in the  ordinary  course of
         business;

     (b) the sale of inventory in the ordinary course of business;

     (c) the sale or discount for fair value,  without  recourse and  consistent
         with sound  business  practices of accounts  receivable  arising in the
         ordinary  course of  business  in  connection  with the  compromise  or
         collection thereof;

     (d) the  license  of  Intellectual  Property  in  the  ordinary  course  of
         business;

     (e) leases or  subleases of property not  materially  interfering  with the
         ordinary  course of conduct of the  business  of the  Borrower  and its
         Subsidiaries;

     (f) the sale or  transfer  of  property  and  assets to the  extent  and as
         permitted by subsection 8.8(b); and

                                      -22-
<PAGE>

     8.10 LIMITATION ON SALES AND LEASEBACKS.  The Borrower shall not, and shall
not permit any of its  Subsidiaries  to,  enter  into any  arrangement  with any
Person  providing  for the leasing by the Borrower or any  Subsidiary of real or
personal property which has been or is to be sold or transferred by the Borrower
or such Subsidiary to such Person or to any other Person to whom funds have been
or are to be advanced by such Person on the security of such  property or rental
obligations of the Borrower or such Subsidiary (a "SALE/LEASEBACK TRANSACTION").

     8.11 RESTRICTED PAYMENTS.  The Borrower shall not, and shall not permit any
of its  Subsidiaries  to, declare or pay any dividend on, or make any payment on
account of, or set apart assets for a sinking or other  analogous  fund for, the
purchase, redemption, defeasance, retirement or other acquisition of, any shares
of any class of Capital Stock of the Borrower or any of its  Subsidiaries or any
warrants or options to purchase any such shares of Capital Stock, whether now or
hereafter outstanding, or make any other distribution in respect thereof, either
directly or  indirectly,  whether in cash or property or in  obligations  of the
Borrower or any of its Subsidiaries (such declarations, payments, setting apart,
purchases, redemptions, defeasances, retirements, acquisitions and distributions
being herein called "RESTRICTED PAYMENTS"),  except that, so long as no Event of
Default, or event which with the passage of time, the giving of notice, or both,
would  constitute  an Event of  Default,  has  occurred  or is  continuing,  any
Subsidiary may declare and pay dividends to the Borrower or any  Subsidiary,  to
the extent and as provided under the Security Documents.

     8.12 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. The Borrower shall not,
and shall  not  permit  any of its  Subsidiaries  to,  make any  advance,  loan,
extension of credit or capital  contribution  to, or purchase any stock,  bonds,
notes,  debentures or other securities of, or any assets constituting a business
unit of, or make any other investment in, any Person (an "INVESTMENT"), except:

     (a) investments in Cash Equivalents;

     (b) securities held by the Borrower or any of its Subsidiaries prior to the
         Closing Date and listed on the Master Disclosure Schedule;

     (c) Investments by the Borrower in any  Subsidiary  and  Investments by any
         such Subsidiary in the Borrower or in any other  Subsidiary;  provided,
         however,  that such loans,  advances or contributions  shall not at any
         time exceed $250,000.00 in the aggregate or $200,000.00 with respect to
         any single Subsidiary;

     (d) extensions of trade credit and  endorsements of negotiable  instruments
         and other negotiable documents in the ordinary course of business; and

     (e) loans and advances to employees and directors of the Borrower or any of
         its  Subsidiaries  for the  purchase of Capital  Stock of the  Borrower
         under the Borrower's  existing  stock,  option,  and  restricted  stock
         plans, and for travel,  entertainment and relocation  expenses,  all in
         the ordinary course of business in an aggregate amount for the Borrower
         and its  Subsidiaries  not to exceed  Twenty Five  Thousand  and 00/100
         Dollars  ($25,000.00)  at  any  time  outstanding;   PROVIDED  HOWEVER,
         Borrower may make loans,  not to exceed the aggregate  principal amount
         of Four  Hundred  Thousand  Dollars  and  00/100  ($400,000.00)  to Mr.

                                      -23-
<PAGE>

         Michael  Hone;  PROVIDED  FURTHER  that  any  promissory  note or notes
         evidencing  such  loan(s) to Mr. Hone shall be pledged in favor of, and
         delivered to, the Lender.

     8.13 LIMITATION ON TRANSACTIONS  WITH  AFFILIATES.  The Borrower shall not,
and shall not  permit any of its  Subsidiaries  to,  enter into any  transaction
(including,  without  limitation,  any  purchase,  sale,  lease or  exchange  of
property  or the  rendering  of any  service)  with any  Affiliate  unless  such
transaction is (a) otherwise permitted under this Agreement; (b) in the ordinary
course of the Borrower's or such  Subsidiary's  business;  and (c) upon fair and
reasonable  terms no less favorable to the Borrower or such  Subsidiary,  as the
case may be, than it would obtain in a comparable arm's length  transaction with
a Person  which  is not an  Affiliate;  PROVIDED,  HOWEVER,  that the  foregoing
restriction shall not prohibit (i) any employment  agreement entered into by the
Borrower or any of its Subsidiaries in the ordinary course of business; (ii) any
issuance of securities in connection with employment arrangements, stock options
and stock ownership plans of the Borrower entered into in the ordinary course of
business; (iii) transactions between the Borrower and its Subsidiaries; and (iv)
the transactions  contemplated by the agreements listed on the MASTER DISCLOSURE
SCHEDULE.

     8.14 LIMITATION ON LINES OF BUSINESS. The Borrower shall not, and shall not
permit any of its Subsidiaries  to, enter into any business,  either directly or
through any  Subsidiary,  except for those  businesses in which the Borrower and
its  Subsidiaries  are  engaged  on the  date of this  Agreement  or  which  are
reasonably related thereto.

     8.15 LIMITATION ON SUBSIDIARY  ASSETS.  In addition to without limiting the
provisions  of Section  8.12(c)  above,  the  Borrower  shall not, and shall not
permit any of its  Subsidiaries to, increase the assets of any Subsidiary of the
Borrower to an amount in excess of  $250,000.00 in the aggregate or an amount in
excess of $200,000.00 with respect to any single Subsidiary.

SECTION 9.        EVENTS OF DEFAULT.

     9.1  EVENTS  OF  DEFAULT;  ACCELERATION.  If any of  the  following  events
("EVENTS OF DEFAULT" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, "DEFAULTS") shall occur:

     (a) the  Borrower  shall  fail  to pay  any  principal  of any  Loan or any
         Reimbursement  Obligation when due in accordance with the terms of this
         Agreement and the other Financing Documents; or the Borrower shall fail
         to pay any interest on any Loan, or any other amount payable hereunder,
         within five (5) days after any such  interest or other  amount  becomes
         due in  accordance  with the  terms  of this  Agreement  and the  other
         Financing Documents; or

     (b) any  representation  or warranty made or deemed made by the Borrower or
         any other Loan Party herein or in any other Financing Document or which
         is  contained  in any  certificate,  document  or  financial  or  other
         statement  furnished by it at any time under or in connection with this
         Agreement or any such other Financing Document shall prove to have been
         incorrect in any  material  respect on or as of the date made or deemed
         made; or

                                      -24-
<PAGE>

     (c) the  failure by the  Borrower  or any other  Loan  Party to  punctually
         perform,  observe,  comply with or satisfy any  covenant,  agreement or
         condition  contained in (i) SECTION 7 or SECTION 8 of this Agreement or
         (ii)  Section  4.1,  5.4,  5.5,  5.6(a)-(d)  of  each  of the  Security
         Agreements or the last paragraph of Section 5.8 of each of the Security
         Agreements of each of the Security Agreements; or

     (d) the  Borrower or any  Subsidiary  shall  default in the  observance  or
         performance of any other  agreement  contained in this Agreement or any
         other  Financing  Document  (other than as provided in  paragraphs  (a)
         through  (c)  of  this  Section),   and  such  default  shall  continue
         unremedied  for a period of thirty  (30) days after the  earlier of (i)
         the date on which a Responsible Officer of the Borrower first learns of
         such default or (ii) the date on which  written  notice  thereof  shall
         have been given to the Borrower by the Lender; or

     (e) the  Borrower or any  Subsidiary  shall fail to pay when due (after any
         applicable  period of grace) any  Indebtedness  of the Borrower or such
         Subsidiary  (other than (i) Indebtedness  comprising of the Obligations
         and (ii) Subordinated Debt), which together with all such other due but
         unpaid Indebtedness, exceeds the sum of One Hundred Thousand and 00/100
         Dollars  ($100,000.00),  or shall fail (after any applicable  period of
         grace) to observe or perform any term, covenant or agreement evidencing
         or securing such Indebtedness,  which shall remain uncured or unwaived,
         and which permits the acceleration of such Indebtedness, or any default
         or event of  default  shall  have been  declared  under  any  agreement
         relating to such Indebtedness; or

     (f) the  Borrower or any other Loan Party shall (i) apply for or consent to
         the  appointment  of,  or the  taking  of  possession  by, a  receiver,
         custodian,  trustee, liquidator or similar official of itself or of all
         or a substantial part of its property, (ii) be generally not paying its
         debts as such debts become due, (iii) make a general assignment for the
         benefit of its  creditors,  (iv)  commence a  voluntary  case under the
         United States  Bankruptcy  Code, as amended from time to time, (v) take
         any action or commence any case or proceeding under any law relating to
         bankruptcy,  insolvency,  reorganization,  winding-up or composition or
         adjustment  of  debts,  or any other law  providing  for the  relief of
         debtors,  (vi) fail to contest in a timely or  appropriate  manner,  or
         acquiesce  in  writing  to,  any  petition   filed  against  it  in  an
         involuntary  case under the United States  Bankruptcy  Code, as amended
         from time to time or other law, (vii) take any action under the laws of
         its jurisdiction of incorporation or organization similar to any of the
         foregoing,  or (viii)  take any  corporate  action  for the  purpose of
         effecting any of the foregoing; or

     (g) a  proceeding  or case shall be  commenced  against the Borrower or any
         other Loan Party, without the application or consent of the Borrower or
         such Loan Party,  in any court of competent  jurisdiction,  seeking (i)
         the   liquidation,   reorganization,   dissolution,   winding   up,  or
         composition or  readjustment  of its debts,  (ii) the  appointment of a
         trustee, receiver, custodian, liquidator or the like of it or of all or
         any substantial part of its assets,  or (iii) similar relief in respect
         of  it,   under   any   law   relating   to   bankruptcy,   insolvency,
         reorganization, winding-up or composition or adjustment of debts or any
         other law providing for the relief of debtors,  and such  proceeding or
         case shall  continue  undismissed,  or  unstayed  and in effect,  for a
         period of ninety (90) days;  or an order for relief shall be entered in

                                      -25-
<PAGE>

         an involuntary case under the United States Bankruptcy Code, as amended
         from time to time,  against the  Borrower  or any other Loan Party;  or
         action  under  the  laws  of  the   jurisdiction  of  incorporation  or
         organization  of the Borrower or any other Loan Party similar to any of
         the foregoing  shall be taken with respect to the Borrower or any other
         Loan Party and shall  continue  unstayed  and in effect for a period of
         ninety (90) days; or

     (h) (i) the  Borrower or any Commonly  Controlled  Entity shall fail to pay
         when due any amount that it shall have become liable to pay to the PBGC
         or to a Plan  under  Title IV of ERISA,  unless (A) such  liability  is
         being contested in good faith by appropriate proceedings,  the Borrower
         or such Commonly Controlled Entity, as the case may be, has established
         and is  maintaining  adequate  reserves in accordance  with GAAP and no
         lien shall have been filed to secure such  liability or (B) which would
         not have a  Material  Adverse  Effect;  (ii) the PBGC  shall  institute
         proceedings  under Title IV of ERISA to terminate or to cause a trustee
         to be  appointed  to  administer  any such  Plan or  Plans;  or (iii) a
         condition  shall exist by reason of which the PBGC would be entitled to
         obtain  a decree  adjudicating  that  any  such  Plan or Plans  must be
         terminated; or

     (i) one or more judgments or decrees shall be entered  against the Borrower
         or any of its Subsidiaries  involving individually a liability of Fifty
         Thousand and 00/100 Dollars  ($50,000.00) (not paid or fully covered by
         insurance) or in the  aggregate a liability  (not paid or fully covered
         by insurance) of One Hundred Thousand and 00/100 Dollars  ($100,000.00)
         or more, and all such judgments or decrees shall not have been vacated,
         discharged,  stayed or bonded  pending  appeal  within thirty (30) days
         from the entry thereof; or

     (j) service  of any  process  upon the  Lender,  seeking to attach by Lien,
         levy, mesne, trustee or other process, any funds of the Borrower or any
         of its Subsidiaries on deposit with, or in possession or control of the
         Lender; or

     (k) if any of the Financing Documents  (including the Subsidiary  Guaranty)
         (or any provision  contained  therein) shall be cancelled,  terminated,
         revoked,  curtailed or rescinded  otherwise than in accordance with the
         terms thereof or with the express prior written  agreement,  consent or
         approval  of the  Lender,  or any  action at law,  suit or in equity or
         other legal proceeding to cancel, revoke, curtail or rescind any of the
         Financing  Documents shall be commenced by or on behalf of the Borrower
         or any of its officers,  director or stockholders,  or any Governmental
         Authority of competent jurisdiction shall make a determination that, or
         issue a judgment,  order,  decree or ruling to the effect that,  any of
         the Financing  Documents  (including the  Subsidiary  Guaranty) (or any
         provision  contained  therein) is illegal,  invalid or unenforceable in
         accordance with the terms thereof; or

     (l) any of the Security  Documents shall, at any time after their execution
         and  delivery  for any  reason,  cease to create a valid and  perfected
         first  priority  security  interest  in and  to  all of the  Collateral
         pledged or granted thereunder; or

                                      -26-
<PAGE>

     (m) a material portion of the property of the Borrower and its Subsidiaries
         (whether or not  Collateral) is damaged by fire or other  casualty,  or
         otherwise lost or stolen,  the restoration or replacement cost of which
         property exceeds,  in the aggregate,  the amount of insurance  proceeds
         readily  available for such  restoration or replacement,  and such loss
         would have a Material Adverse Effect; or

     (n) any default shall exist and remain  unwaived or uncured with respect to
         any of the  Subordinated  Debt if,  as a result  of such  default,  any
         holder  of the  Subordinated  Debt,  is  entitled  to  cause  any  such
         Subordinated  Debt to become due prior to its stated date of  maturity;
         or

     (o) any of the provisions with respect to subordination of the Subordinated
         Debt under the  Subordination  Agreement  ceases to be  enforceable  in
         accordance  with its  terms  (save  and  except  for any  choice of law
         provisions,  the invalidity of which shall not be deemed to be an Event
         of Default);

then, and in any such event,  so long as the same may be continuing,  the Lender
may,  by notice in writing  to the  Borrower,  declare  all  amounts  owing with
respect to this Agreement,  the Notes and the other  Financing  Documents to be,
and they shall thereupon  forthwith become,  immediately due and payable without
presentment,  demand,  protest  or other  notice of any  kind,  all of which are
hereby expressly waived by the Borrower; provided that in the event of any Event
of Default specified in subsection 9.1(f) or subsection 9.1(g), all such amounts
shall  become  immediately  due  and  payable   automatically  and  without  any
requirement of notice from the Lender.

     9.2 TERMINATION OF COMMITMENT.  If any one or more of the Events of Default
specified in  subsection  9.1(f) or  subsection  9.1(g) shall occur,  any unused
portion of the credit  hereunder shall forthwith  terminate and the Lender shall
be relieved of all further  obligations  to make Loans to the  Borrower.  If any
other Event of Default shall have occurred and be continuing, the Lender may, by
notice to the Borrower,  terminate the unused  portion of the credit  hereunder,
and upon such notice  being given such  unused  portion of the credit  hereunder
shall  terminate  immediately  and the Lender  shall be  relieved of all further
obligations to make Loans. No termination of the credit  hereunder shall relieve
the Borrower of any of the Obligations.

SECTION 10.       RIGHTS AND REMEDIES.

     10.1 RIGHTS AND REMEDIES.  In case any one or more of the Events of Default
shall have occurred and be continuing,  and whether or not the Lender shall have
accelerated the maturity of the Loans pursuant to subsection 9.1, the Lender, if
owed any amount with respect to the Loans may proceed to protect and enforce its
rights by suit in equity, action at law or other appropriate proceeding, whether
for the specific  performance  of any  covenant or  agreement  contained in this
Agreement and the other Loan Documents or any  instrument  pursuant to which the
Obligations  to the Lender are  evidenced,  including as permitted by applicable
law the obtaining of the ex parte appointment of a receiver, and, if such amount
shall have become  due,  by  declaration  or  otherwise,  proceed to enforce the
payment thereof or any other legal or equitable right of the Lender.

                                      -27-
<PAGE>

10.2  SETOFF.  Regardless  of the  adequacy of any of the  Collateral,  upon the
occurrence and during the  continuance of any Event of Default,  any deposits or
other sums credited by or due from the Lender to the Borrower and any securities
or other property of the Borrower in the possession of the Lender may be applied
to or set off by the Lender against the payment of  Obligations  and any and all
other liabilities, direct, or indirect, absolute or contingent, due or to become
due, now existing or hereafter arising, of the Borrower to the Lender.

     10.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no delay in
exercising,  on the part of the Lender,  any right,  remedy,  power or privilege
hereunder  or under the other  Financing  Documents  shall  operate  as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege  hereunder  preclude  any other or  further  exercise  thereof  or the
exercise of any other right, remedy, power or privilege.  The rights,  remedies,
powers and  privileges  herein  provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.

     10.4 DISTRIBUTION OF COLLATERAL PROCEEDS.  In the event that, following the
occurrence  or during  the  continuance  of any  Event of  Default,  the  Lender
receives any monies in connection  with the  enforcement  of any of the Security
Documents,  or  otherwise  with  respect  to  the  realization  upon  any of the
Collateral,  such monies shall be distributed  for  application as follows:  (a)
first,  to the  Obligations  in such  order  or  preference  as the  Lender  may
determine; (b) second, upon payment and satisfaction in full or other provisions
for payment in full satisfactory to the Lender of all of the Obligations, to the
payment of any obligations required to be paid pursuant to ss.9-504(l)(c) of the
UCC; and (c) third, the excess,  if any, shall be returned to the Borrower or to
such other Persons as are entitled thereto.

SECTION 11.       MISCELLANEOUS.

     11.1 SURVIVAL OF  COVENANTS.  Except for those which by their terms survive
termination  of  the  Financing  Documents,  all  agreements,   representations,
covenants  and  warranties  made by the  Borrower  and  any  Loan  Party  in the
Financing  Documents shall remain in full force and effect until all Obligations
to the Lender  have been paid in full and  satisfied,  notwithstanding  the fact
that Loans may, from time to time, be in a zero or credit position.

     11.2 PRIOR DISCUSSIONS;  AMENDMENTS IN WRITING; COUNTERPARTS. The Financing
Documents  incorporate all discussions and  negotiations  among the Lender,  the
Borrower  and the other Loan Parties and either  express or implied,  concerning
the  Obligations,  notwithstanding  any  custom,  usage  or  oral  agreement  or
understanding to the contrary. This Agreement may be amended or modified only in
writing signed by the parties hereto,  and in the case of the Lender signed by a
duly authorized  officer thereof.  This Agreement may be executed in two or more
counterparts,  each of which shall constitute an original, but such counterparts
together  shall  constitute  one and the  same  instrument.  Any  proof  of this
Agreement shall require production of only one such counterpart.

     11.3  SEVERABILITY.  Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render  unenforceable such provision in any
other jurisdiction.

                                      -28-
<PAGE>

     11.4 NOTICES.  All notices,  requests and demands to or upon the respective
parties  hereto to be  effective  shall be in writing  (including  by  facsimile
transmission),  and, unless otherwise expressly provided herein, shall be deemed
to have  been duly  given  when  delivered  by hand,  or when sent by  facsimile
transmission  or by telex,  answer back  received,  or on the first Business Day
after delivery to any overnight delivery service,  freight prepaid, or three (3)
Business Days after being sent by certified or registered  mail,  return receipt
requested,  postage  prepaid,  and  addressed  as  follows  in the  case  of the
Borrower,  any  Subsidiary  and the Lender,  or to such other  address as may be
hereafter notified by the respective parties hereto:

 (a)  If to the Borrower
      or any Subsidiary, then:   Centennial Technologies, Inc.
                                 7 Lopez Road
                                 Wilmington, MA  01887
                                 Attention:  Richard J. Pulsifer, CFO
                                 Telecopier No: 978-988-7651

               with copies to:   Goodwin, Procter & Hoar LLP
                                 Exchange Place
                                 Boston, MA 02109
                                 Attention:  Raymond C. Zemlin, P.C.
                                 Telecopier No.: 617.523.1231
 (b)  If to the Lender, then:              Citizens Bank of Massachusetts
                                 28 State Street
                                 Boston, Massachusetts 02109
                                 Attention:  Victoria P. Lazzell, Vice President
                                 Telecopier No: 617.725.5693

               with copies to:   Peabody & Arnold LLP
                                 50 Rowes Wharf
                                 Boston, MA  02110
                                 Attention: Jennifer Post, Esq.
                                 Telecopier No:  617-951-2125

provided  that any notice,  request or demand to or upon the Lender  pursuant to
subsection 2.3, 3.2, 4.1 or 4.2 shall not be effective until received.

     11.5  EXPENSES.  The  Borrower  agrees to pay (a) the  reasonable  costs of
reproducing  this  Agreement,  the  other  Financing  Documents  and  the  other
agreements  and  instruments  mentioned  herein,  (b) any taxes  (including  any
interest and  penalties in respect  thereto)  payable by the Lender  (other than
taxes based upon the Lender's net income) on or with respect to the transactions
contemplated  by this Agreement (the Borrower  hereby  agreeing to indemnify the
Lender  with  respect   thereto),   (c)  the  reasonable   fees,   expenses  and
disbursements  of  counsel  to  the  Lender  incurred  in  connection  with  the

                                      -29-
<PAGE>

administration  or   interpretation   of  the  Financing   Documents  and  other
instruments mentioned herein, and amendments, modifications, approvals, consents
or  waivers  hereto  or  hereunder,   (d)  the  reasonable  fees,  expenses  and
disbursements  of the  Lender  incurred  by the  Lender in  connection  with the
administration  or   interpretation   of  the  Financing   Documents  and  other
instruments  mentioned  herein,  including  all  title  insurance  premiums  and
surveyor,  engineering and appraisal charges,  (e) all reasonable  out-of-pocket
expenses  (including  without limitation  reasonable  attorneys' fees and costs,
which  attorneys  may be employees  of the Lender,  and  reasonable  consulting,
accounting,  appraisal,  investment  banking and similar  professional  fees and
charges)  incurred by the Lender in connection  with (i) the  enforcement  of or
preservation of rights under any of the Financing Documents against the Borrower
or the  administration  thereof  after the  occurrence  of a Default or Event of
Default  (including  engineering  appraiser and investment  banking charges) and
(ii)  any  litigation,  proceeding  or  dispute  whether  arising  hereunder  or
otherwise, in any way related to the Lender's relationship with the Borrower and
(f) all reasonable  fees,  expenses and  disbursements of the Lender incurred in
connection with UCC searches, UCC filings or mortgage recordings.  The covenants
contained in this  subsection  shall survive  payment or satisfaction in full of
all other Obligations.

     11.6  INDEMNIFICATION.  The Borrower  agrees to indemnify and hold harmless
the Lender  from and  against  any and all  claims,  actions  and suits  whether
groundless or otherwise,  and from and against any and all liabilities,  losses,
damages and expenses of every nature and character arising out of this Agreement
or any of the other Financing Documents or the transactions  contemplated hereby
including, without limitation, (a) any actual or proposed use by the Borrower of
the proceeds of any of the Loans, (b) any actual or alleged  infringement of any
patent, copyright,  trademark,  service mark or similar right of the Borrower or
any  other  Loan  Party  comprised  in  the  Collateral,  (c)  all  liabilities,
obligations,  claims, damages, costs, losses and expenses (including court costs
and  attorney's  reasonable  fees and  expenses)  that the Lender may sustain or
incur by reason  of,  relating  to or  arising  out of the  preparation  of this
Agreement,  the defending or protecting of any Collateral or the priority of the
Lender's interest therein, or in collecting or enforcing the Obligations,  or in
enforcing  any of the Lender's  rights or  remedies,  or in the  prosecution  or
defense of any action or  proceeding  concerning  any matter  growing  out of or
connected  with  this  Agreement,  any of the  other  Financing  Documents,  the
Obligations, the Collateral, or on account of the Lender's relationship with the
Borrower  or any other  Loan  Party  (except  for such  claims  which  have been
determined  by a court  of  competent  jurisdiction  to have  arisen  out of the
Lender's actual bad faith,  willful  misconduct or gross negligence) or (d) with
respect to the Borrower or any other Loan Party and their respective  properties
and assets,  the violation of any  Environmental  Law, the  presence,  disposal,
escape, seepage, leakage, spillage,  discharge,  emission, release or threatened
release  of  any  Hazardous  Substances  or  any  action,  suit,  proceeding  or
investigation  brought or threatened  with respect to any  hazardous  Substances
(including,  but not limited to, claims with respect to wrongful death, personal
injury or damage to property), in each case including,  without limitation,  the
reasonable  fees and  disbursements  of counsel and allocated  costs of internal
counsel incurred in connection with any such investigation,  litigation or other
proceeding; PROVIDED HOWEVER that such indemnification shall not apply to claims
which have been  determined by a court of competent  jurisdiction to have arisen
out of the Lender's actual bad faith, willful misconduct or gross negligence. In
litigation,  or the preparation therefor, the Lender shall be entitled to select
its own counsel and, in addition to the foregoing indemnity, the Borrower agrees
to pay promptly the reasonable fees and expenses of such counsel. If, and to the
extent  that  the   obligations  of  the  Borrower  under  this  subsection  are
unenforceable  for any reason,  the Borrower  hereby  agrees to make the maximum

                                      -30-
<PAGE>

contribution  to the  payment  in  satisfaction  of such  obligations  which  is
permissible  under  applicable  law. The covenants  contained in this subsection
shall survive payment or satisfaction in full of all other Obligations.

     11.7  ACKNOWLEDGEMENTS.  The  Borrower  hereby  acknowledges  that  (a) the
Borrower has been advised by counsel in the negotiation,  execution and delivery
of this  Agreement  and the other  Financing  Documents;  (b) the  Lender has no
fiduciary  relationship  with  or  duty  to the  Borrower  arising  out of or in
connection with this Agreement or any of the other Financing Documents,  and the
relationship of the Lender, on one hand, and the Borrower, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor;  and (c)
no joint  venture  is  created  hereby or by the other  Financing  Documents  or
otherwise exists by virtue of the transactions  contemplated  hereby between the
Borrower and the Lender.

     11.8 SUCCESSORS AND ASSIGNS; ASSIGNMENTS AND PARTICIPATION.

     (a) SUCCESSORS AND ASSIGNS.  This Agreement shall be binding upon and inure
         to the  benefit  of the  Borrower,  the  Lender  and  their  respective
         successors  and  assigns,  except that the  Borrower  may not assign or
         transfer any of its rights or obligations under this Agreement.

     (b) ASSIGNMENTS.  The Lender shall have the unrestricted  right at any time
         or from time to time, and without the Borrower's consent, to assign all
         or any portion of its rights and  obligations  hereunder to one or more
         banks or other financial  institutions  (each, an "ASSIGNEE"),  and the
         Borrower  agrees that it shall execute,  or cause to be executed,  such
         documents,  including without limitation,  amendments to this Agreement
         and to any other  documents,  instruments  and  agreements  executed in
         connection  herewith as the Lender  shall deem  necessary to effect the
         foregoing.  In  addition,  at the  request  of the  Lender and any such
         Assignee, the Borrower shall issue one or more new promissory notes, as
         applicable,  to any such  Assignee and, if bank has retained any of its
         rights and  obligations  hereunder  following such  assignment,  to the
         Lender,  which new promissory  notes shall be issued in replacement of,
         but not in discharge of, the liability evidenced by the promissory note
         held by the  Lender  prior to such  assignment  and shall  reflect  the
         amount of the  respective  commitments  and loans held by such Assignee
         and the  Lender  after  giving  effect  to such  assignment.  Upon  the
         execution  and  delivery  of  appropriate   assignment   documentation,
         amendments  and any  other  documentation  required  by the  Lender  in
         connection with such assignment, and the payment by the Assignee of the
         purchase price agreed to by the Lender and such Assignee, such Assignee
         shall be a party to this Agreement and shall have all of the rights and
         obligations  of the  Lender  hereunder  (and  under  all  of the  other
         Financing  Documents)  to the extent that such  rights and  obligations
         have  been   assigned  by  the  Lender   pursuant  to  the   assignment
         documentation  between  the  Lender and such  Assignee,  and the Lender
         shall be released from its  obligations  hereunder and  thereunder to a
         corresponding   extent.  In  addition  to  the  foregoing   assignments
         permitted under this subsection,  the Lender may at any time pledge all
         or any  portion  of its  rights  under  this  Agreement  and the  other
         Financing  Documents to any Federal Reserve Bank as collateral security
         pursuant to  Regulation A of the Board of Governors  and any  Operating
         Circular issued by the Federal  Reserve Bank. No such assignment  shall
         release the Lender from its  obligations  under this  Agreement and the
         other Financing Documents.

                                      -31-
<PAGE>

     (c) PARTICIPATION. The Lender shall have the unrestricted right at any time
         and from time to time,  and  without  the  consent  of or notice to the
         Borrower, to grant to one or more banks or other financial institutions
         (each,  a  "PARTICIPANT")   participating  interests  in  the  Lender's
         obligation to lend hereunder and/or any or all of the loans held by the
         Lender  hereunder.  In the event of any such  grant by the  Lender of a
         participating interest to a Participant,  whether or not upon notice to
         the Borrower,  the Lender shall remain  responsible for the performance
         of its  obligations  hereunder and the Borrower  shall continue to deal
         solely and  directly  with the Lender in  connection  with the Lender's
         rights  and   obligations   hereunder.   The  Lender  may  furnish  any
         information concerning the Borrower in its possession from time to time
         to prospective Participants, provided that the Lender shall require any
         such  prospective  Participant  to agree in  writing  to  maintain  the
         confidentiality of such information.

     11.9 LOSS, THEFT, DESTRUCTION OR MUTILATION OF ANY NOTE. Upon receipt of an
affidavit  of an  officer of the Lender as to the loss,  theft,  destruction  or
mutilation of any Note or any other  Financing  Document  which is not of public
record,  and, in the case of any such loss,  theft,  destruction  or mutilation,
upon  cancellation of such Note or other Financing  Document,  the Borrower will
issue, in lieu thereof,  a replacement  note or other Financing  Document in the
same principal amount thereof and otherwise of like tenor.

     11.10 WAIVER OF JURY TRIAL.  THE BORROWER AND THE LENDER HEREBY WAIVE THEIR
RESPECTIVE  RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER FINANCING DOCUMENTS OR ANY OF
THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN, INCLUDING CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS.

     11.11 GOVERNING LAW;  JURISDICTION.  This Agreement and the other Financing
Documents  are  executed  and  delivered  under seal and shall be  construed  in
accordance with and governed by the laws of The  Commonwealth of  Massachusetts,
without  giving effect to the conflict of law provisions  thereof.  The Borrower
submits  itself  to  the  non-exclusive   jurisdiction  of  the  Courts  of  The
Commonwealth  of  Massachusetts  for all purposes  with respect to the Financing
Documents and the Borrower's relationship with the Lender.

            [THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]




                                      -32-
<PAGE>


         IN  WITNESS  WHEREOF,  the  parties  hereto  have  caused  this  Credit
Agreement to be duly executed and delivered  under seal by their proper and duly
authorized officers as of the day and year first above written.

WITNESS:                                CENTENNIAL TECHNOLOGIES, INC.



                                        By:
-------------------------------            -------------------------------------
Name:                                        Name:
                                             Title:
                                                 Its duly authorized officer
WITNESS:                                CITIZENS BANK OF MASSACHUSETTS



                                        By:
-------------------------------            -------------------------------------
Name:                                        Victoria P. Lazzell, Vice President



<PAGE>

                          COMMONWEALTH OF MASSACHUSETTS

Suffolk, ss.                                                      June ___, 2000

     Then   personally   appeared  the   above-named   ____________________   as
_______________ of Centennial Technologies, Inc., and acknowledged the foregoing
instrument to be  _________________  free act and deed and the free act and deed
of Centennial Technologies, Inc., before me.



                                                          Notary Public
                                                          My commission expires:
                                                          [AFFIX NOTARIAL SEAL]


                          COMMONWEALTH OF MASSACHUSETTS

Suffolk, ss.                                                      June ___, 2000

         Then personally  appeared the  above-named  Victoria P. Lazzell as Vice
President of Citizens  Bank of  Massachusetts,  and  acknowledged  the foregoing
instrument  to be her free  act and  deed and the free act and deed of  Citizens
Bank of Massachusetts, before me.



                                                          Notary Public
                                                          My commission expires:
                                                          [AFFIX NOTARIAL SEAL]


<PAGE>

________________________________________________________________________________


                                CREDIT AGREEMENT

                                (the "AGREEMENT")

                                 by and between

                         CITIZENS BANK OF MASSACHUSETTS
                                 (the "LENDER")

                                       and

                          CENTENNIAL TECHNOLOGIES, INC.
                                (the "BORROWER")

________________________________________________________________________________

                           MASTER DISCLOSURE SCHEDULE

         The Borrower  represents and warrants to the Lender that the statements
contained  in SECTION 6 and  SECTION 8 of the  Agreement  are true,  correct and
complete  as of the date of the  Agreement,  except as set forth in this  Master
Disclosure  Schedule (as the same may be  supplemented,  from time to time,  the
"MASTER  DISCLOSURE  SCHEDULE").  The Master Disclosure  Schedule is arranged in
sections  corresponding  to the  lettered  and  numbered  sections  contained in
SECTION 6 and SECTION 8 of the Agreement.



<PAGE>
________________________________________________________________________________

                                CREDIT AGREEMENT

                                (the "AGREEMENT")

                                 by and between

                         CITIZENS BANK OF MASSACHUSETTS
                                 (the "LENDER")

                                       and

                          CENTENNIAL TECHNOLOGIES, INC.
                                (the "BORROWER")
________________________________________________________________________________

                                   APPENDIX A

         1.  Definitions.  As used in the Agreement,  the following  terms shall
have the following meanings:

                  "ACCOUNTS": all "accounts" as that term is defined in the UCC,
         of the Borrower and its  Subsidiaries and to the extent not included in
         such definition,  shall also mean and include all accounts  receivable,
         book  debts,   notes,   drafts  and  other  forms  of   obligations  or
         indebtedness  now  owned  or  hereafter  received  or  acquired  by  or
         belonging or owing to the Borrower or any of its  Subsidiaries  whether
         arising out of personal  property owned or leased by any of them, Goods
         sold by any of them or  services  rendered  by any of them or from  any
         other  transaction,  whether  or not the  same  involves  the  lease of
         personal  property,  sale of Goods or  performance  of  services by the
         Borrower or any of its Subsidiaries (including, without limitation, any
         such  obligation or  indebtedness  which would be  characterized  as an
         account,   general  intangible  or  chattel  paper  under  the  Uniform
         Commercial Code in effect in any jurisdiction) and all of the rights of
         the Borrower or any of its  Subsidiaries  in, to and under all purchase
         orders now owned or  hereafter  received or acquired by any of them for
         Goods or services,  and all of the rights of the Borrower or any of its
         Subsidiaries  to  any  Goods   represented  by  any  of  the  foregoing
         (including  returned or repossessed  Goods and unpaid seller's  rights)
         and all  moneys  due or to  become  due to the  Borrower  or any of its
         Subsidiaries  under  all  contracts  for the sale of Goods  and/or  the
         performance   of   services  by  it  (whether  or  not  yet  earned  by
         performance),  in each  case  whether  now in  existence  or  hereafter
         arising or acquired including, without limitation, the right to receive
         the proceeds of said purchase  orders and contracts and all  collateral
         security and guarantees of any kind given by any Person with respect to
         any of the foregoing.

                  "ADJUSTMENT DATE": the first Business Day following receipt by
         the  Lender  of  both  (i)  the  financial  statements  required  to be
         delivered  pursuant to subsection 7.1(a) or 7.1(b), as the case may be,
         for the most recently  completed fiscal period and (ii) the certificate
         required to be delivered  pursuant to subsection 7.2(b) with respect to
         such fiscal period.

<PAGE>

                  "AFFILIATE":  as to any Person, any other Person (other than a
         Subsidiary)  which,  directly  or  indirectly,  is in  control  of,  is
         controlled  by, or is under  common  control  with,  such  Person.  For
         purposes of this  definition,  "control"  of a Person  means the power,
         directly  or  indirectly,  either  to  (a)  vote  10%  or  more  of the
         securities  having  ordinary voting power for the election of directors
         of such Person or (b) direct or cause the  direction of the  management
         and policies of such Person, whether by contract or otherwise.

                  "AGREEMENT":  this Credit Agreement, as amended,  supplemented
         or otherwise modified from time to time.

                  "APPLICABLE MARGIN": for each Loan, 0.00% initially;  PROVIDED
         HOWEVER,  that such margin shall be adjusted  within five business days
         subsequent  to the delivery by the Borrower to the Lender of Borrower's
         most recent fiscal period ended financial statements in accordance with
         Section 7.1 (a) and (b) and the certificate required by Section 7.2 (b)
         whereupon the  Applicable  Margin will be adjusted,  and thereafter the
         Applicable  Margin for all Loans will be adjusted,  on each  Adjustment
         Date based upon the ratio of (i) Total Consolidated  Liabilities at the
         last day of the quarter ended on the date of the  financial  statements
         relating to such Adjustment Date to (ii) the Consolidated  Tangible Net
         Worth for such period as determined from such financial statements,  to
         the Applicable  Margin set forth below opposite the level for which the
         ratio of Total  Consolidated  Liabilities to Consolidated  Tangible Net
         Worth as so determined  satisfies the corresponding  criteria set forth
         under  the  heading  "Ratio  of  Total   Consolidated   Liabilities  to
         Consolidated Tangible Net Worth" on the table below:

   -------------- -------------------------------------------- -----------------
       Level                       Ratio of                    Applicable
                        Total Consolidated Liabilities         Margin for Loans
                                      to
                        Consolidated Tangible Net Worth
   -------------- -------------------------------------------- -----------------
         I        >=1.00 x but <1.50 x                         0.50%
   -------------- -------------------------------------------- -----------------
        II        >=0.75 x but <1.00 x                         0.25%
   -------------- -------------------------------------------- -----------------
        III       >=0.50 x but <0.75 x                         0.00%
   -------------- -------------------------------------------- -----------------
        IV        >=0.25 x but <0.50 x                         minus 0.25%
   -------------- -------------------------------------------- -----------------


                  Notwithstanding the foregoing, in the event that the financial
         statements  required to be delivered  pursuant to subsection  7.1(a) or
         7.1(b), as applicable, and the related certificate required pursuant to
         subsection  7.2(b),  are not  delivered  when due,  then for the period
         commencing  on the next  Adjustment  Date to occur  subsequent  to such
         failure  through the date  immediately  following  on the date on which
         such financial  statements  and such related  certificate is delivered,
         the Applicable Margin shall be 0.50%.

                  "APPLICATION":  an application, in such form as the Lender may
         specify from time to time, to open a Letter of Credit.

                                      -2-
<PAGE>

                  "ASSET SALE":  as to any Person,  any voluntary or involuntary
         sale or other disposition  subsequent to the Closing Date of any assets
         or property of such Person.

                  "BOARD OF  GOVERNORS":  the Board of  Governors of the Federal
         Reserve  System and any  Governmental  Authority  which succeeds to the
         powers and functions thereof.

                  "BORROWER": as defined in the preamble to this Agreement.

                  "BORROWER  SECURITY  AGREEMENT  - ALL  ASSETS":  the  Borrower
         Security  Agreement - All Assets to be executed  and  delivered  by the
         Borrower,  substantially  in the form of  EXHIBIT B, as the same may be
         amended, supplemented or otherwise modified from time to time.

                  "BORROWING BASE":  as defined in subsection 2.2.

                  "BORROWING  DATE":  any  Business  Day  specified  in a notice
         pursuant  to  subsection  2.3 or 3.2 as a date on  which  the  Borrower
         requests  the  Lender  to make  Loans  or  issue  a  Letter  of  Credit
         hereunder.

                  "BUSINESS DAY": any day excluding Saturday, Sunday and any day
         which  is a  legal  holiday  under  the  laws  of The  Commonwealth  of
         Massachusetts, or is a day on which banking institutions located in The
         Commonwealth  of  Massachusetts  are  required  or  authorized  by  any
         Requirement of Law to be closed.

                  "CAPITAL  EXPENDITURES":  as to any Person for any period, the
         aggregate amount paid or accrued by such Person for the rental,  lease,
         purchase  (including  by way  of the  acquisition  of  securities  of a
         Person),  construction or use of any property  during such period,  the
         value or cost of which, in accordance  with GAAP,  would appear on such
         Person's consolidated balance sheet in the category of property,  plant
         or  equipment  at the  end of  such  period,  excluding  (a)  any  such
         expenditure  in  respect  of any  Replacement  Asset  and (b) any  such
         expenditure  made  to  restore,  replace  or  rebuild  property  to the
         condition  of such  property  immediately  prior to any  damage,  loss,
         destruction  or  condemnation  of such  property,  to the  extent  such
         expenditure  is made with  insurance  proceeds or  condemnation  awards
         relating to any such damage, loss,  destruction or condemnation and (c)
         any such expenditure in respect of a Capitalized Lease.

                  "CAPITAL STOCK": any and all shares, interests, participations
         or  other  equivalents  (however  designated)  of  capital  stock  of a
         corporation,  any and all  equivalent  ownership  interests in a Person
         (other  than a  corporation)  and any and all  warrants  or  options to
         purchase any of the foregoing.

                  "CAPITALIZED LEASE": any lease of property,  real or personal,
         the  obligations  of the  lessee in respect  of which are  required  in
         accordance  with  GAAP to be  capitalized  on a  balance  sheet  of the
         lessee.

                  "CAPITALIZED  LEASE  OBLIGATIONS":   as  to  any  Person,  the
         obligations  of such  Person  to pay rent or other  amounts  under  any
         Capitalized Leases; the amount of such obligations at any time shall be
         the  capitalized  amount thereof at such time  determined in accordance
         with GAAP.

                                      -3-
<PAGE>

                  "CASH  EQUIVALENTS":  (a)  securities  issued or directly  and
         fully  guaranteed  or insured by the United States  Government,  or any
         agency or instrumentality  thereof,  having maturities of not more than
         one  year  from  the  date  of  acquisition,   (b)  marketable  general
         obligations  issued by any state of the United States of America or any
         political  subdivision of any such state or any public  instrumentality
         thereof  maturing within one year from the date of acquisition  thereof
         and, at the time of acquisition thereof,  having a credit rating of "A"
         or better  from  either  Standard  & Poor's  Ratings  Group or  Moody's
         Investors  Service,  Inc.; (c) certificates of deposit,  time deposits,
         eurodollar   time   deposits,   overnight  bank  deposits  or  bankers'
         acceptances  having  maturities of not more than one year from the date
         of  acquisition  thereof of the Lender,  or of any domestic  commercial
         bank the  long-term  debt of which is rated at the time of  acquisition
         thereof  at least A or the  equivalent  thereof  by  Standard  & Poor's
         Ratings  Group,  or A or the  equivalent  thereof by Moody's  Investors
         Service, Inc., and having capital and surplus in excess of Five Hundred
         Million   and  00/100   Dollars   ($500,000,000.00),   (d)   repurchase
         obligations  with a term of not more  than  seven  days for  underlying
         securities  of the types  described in clauses (a), (b) and (c) entered
         into with any bank meeting the  qualifications  specified in clause (c)
         above, (e) commercial paper rated at the time of acquisition thereof at
         least A-2 or the equivalent  thereof by Standard & Poor's Ratings Group
         or P-2 or the equivalent thereof by Moody's Investors Service, Inc., or
         carrying an equivalent rating by a nationally recognized rating agency,
         if both of the two named rating  agencies cease  publishing  ratings of
         investments,  and in either case  maturing  within two hundred  seventy
         (270)  days  after  the  date of  acquisition  thereof  and  (f)  other
         investment instruments approved in writing by the Lender and offered by
         the Lender or by any financial institution which has a combined capital
         and  surplus of not less than One Hundred  Million  and 00/100  Dollars
         ($100,000,000.00).

                  "CLOSING DATE": the date on which the conditions precedent set
         forth in  subsection  5.1 shall be satisfied or waived (but in no event
         later than June 2, 2000).

                  "COLLATERAL":  all  assets of the Loan  Parties,  now owned or
         hereinafter  acquired,  upon which a Lien is purported to be created by
         any Security Document.

                  "COMMONLY  CONTROLLED  ENTITY":  an  entity,  whether  or  not
         incorporated,  which is under common  control with the Borrower  within
         the  meaning  of  Section  4001 of  ERISA  or is part of a group  which
         includes the Borrower and which is treated as a single  employer  under
         Section  414(b)  or (c) of the Tax  Code or,  solely  for  purposes  of
         determining  liability  under  Section  412 of the Tax  Code,  which is
         treated as a single employer under Section  414(b),  (c), (m) or (o) of
         the Tax Code.

                  "COMPLIANCE CERTIFICATE": as defined in subsection 7.2(b).

                  "CONSOLIDATED CASH DEBT SERVICE": for any period, Consolidated
         Debt Service paid in cash during such period.

                                      -4-
<PAGE>

                  "CONSOLIDATED  DEBT SERVICE":  for any period,  the sum of (i)
         the aggregate of interest, including payments in the nature of interest
         under Capitalized Leases and interest rate protection agreements,  paid
         or accrued (whether such interest is reflected as an item of expense or
         capitalized) or Indebtedness (but excluding Indebtedness owing to Intel
         Corporation), plus (ii) the aggregate amount of all mandatory scheduled
         payments,  prepayments  and sinking  fund  payments,  in each case with
         respect to principal  paid or accrued in respect of  Indebtedness  (but
         excluding  Indebtedness  owing to Intel  Corporation)  and  Capitalized
         Leases,  plus (iii) any dividends paid or payable (other than dividends
         paid or payable by a Subsidiary to the Borrower or another  Subsidiary)
         of Borrower and its Subsidiaries for such period,  all as determined on
         a consolidated basis in accordance with GAAP.

                  "CONSOLIDATED  EBITDA":  for any period,  the Consolidated Net
         Income for such period,  plus,  to the extent  deducted in  determining
         such Consolidated Net Income, (i) Consolidated  Interest Expense,  (ii)
         depreciation,  (iii)  depletion,  (iv)  amortization,  (v) all Federal,
         state,  local and  foreign  income  taxes  and (vi) all other  non-cash
         expenses,  minus, to the extent added in determining such  Consolidated
         Net Income, (i) unfinanced capital expenditures, (ii) distributions and
         dividends to shareholders,  (iii) cash paid for Federal,  State,  local
         and  foreign  income  taxes and (iv) any  non-cash  income or  non-cash
         gains,  all as determined on a  consolidated  basis in accordance  with
         GAAP.

                  "CONSOLIDATED NET INCOME":  for any period,  the net income of
         the Borrower and its  Subsidiaries  for such period as  determined on a
         consolidated  basis in accordance  with GAAP,  but  excluding  from the
         determination of Consolidated Net Income (without  duplication) (a) any
         extraordinary or non-recurring  gains or losses or gains or losses from
         Asset Sales, (b) effects of discontinued operations, (c) the income (or
         loss) of any Person in which any other Person  (other than the Borrower
         or any of its Subsidiaries) has a joint interest,  except to the extent
         of the amount of dividends or other distributions actually paid in cash
         to the Borrower or any of its  Subsidiaries  by such Person during such
         period and (e) the income (or loss) of any Person  accrued prior to the
         date it  becomes a  Subsidiary  of the  Borrower  or is merged  into or
         consolidated  with the Borrower or any of its  Subsidiaries or the date
         such  Person's  assets  are  acquired  by  the  Borrower  or any of its
         Subsidiaries.

                  "CONSOLIDATED  NET LOSS": for any period,  the net loss of the
         Borrower  and its  Subsidiaries  for such  period  as  determined  on a
         consolidated  basis in  accordance  with GAAP but  excluding  from such
         calculation  of  Consolidated   Net  Loss  any  goodwill   amortization
         expenses.

                  "CONSOLIDATED NET WORTH":  at any date of  determination,  all
         items  which  would,   in  accordance  with  GAAP,  be  included  under
         shareholders'  equity on a  consolidated  balance sheet of the Borrower
         and its Subsidiaries at such date of determination.

                  "CONSOLIDATED   TANGIBLE   NET   WORTH":   at  any   date   of
         determination,  all items which  would,  in  accordance  with GAAP,  be
         included under shareholders'  equity on a consolidated balance sheet of

                                      -5-
<PAGE>

         the Borrower and its Subsidiaries at such date of  determination  MINUS
         the amount of total intangible  assets of Borrower and its Subsidiaries
         on a  consolidated  basis  determined  in accordance  with GAAP.  Total
         intangible assets shall be deemed to include,  but shall not be limited
         to, good will, trademarks, tradenames, patents, patent rights, deferred
         expenses, and the excess of cost over book value of acquired businesses
         accounted for by the purchase method formulae.

                  "CONSOLIDATED TOTAL LIABILITIES": all Indebtedness of Borrower
         and its Subsidiaries  determined on a consolidated  basis in accordance
         with GAAP.

                  "CONTRACTUAL  OBLIGATION":  as to any Person, any provision of
         any security  issued by such Person or of any agreement,  instrument or
         other undertaking to which such Person is a party or by which it or any
         of its property is bound.

                  "DEFAULT":  as defined in subsection 9.1.

                  "DOLLARS"  and "$":  dollars in lawful  currency of the United
         States of America.

                  "ELIGIBLE  ACCOUNTS":  all Accounts  other than Accounts which
         are:  (a)  outstanding  more  than  ninety  (90)  days from the date of
         invoice or shipment  date,  whichever is earlier;  (b) based on payment
         terms other than those which are usual and customary to the business of
         the  Borrower  and its  Subsidiaries;  (c) owed by any  account  debtor
         located  outside the United  States of America;  (d) due from any past,
         present or future Affiliate of the Borrower or any of its Subsidiaries;
         (e) due from a Person who is the subject of a voluntary or  involuntary
         bankruptcy,  insolvency,  reorganization,  liquidation  or  other  debt
         relief  or  adjustment  proceeding,  including  an  assignment  for the
         benefit of its creditors; (f) due from any government entity subject to
         specific  legal  assignment  laws or  rules;  (g) due from any  account
         debtor which holds or is entitled to any claim, counterclaim, setoff or
         chargeback  or which has the right to return to the  Borrower or any of
         its  Subsidiaries  for credit or refund,  the goods giving rise to such
         account;  (h) due from  account  debtors  with  respect  to  which  the
         Borrower  or any of its  Subsidiaries  is an  account  debtor  ("contra
         accounts");  (i)  based  on  any  sale  made  on,  so-called,  "delayed
         shipping",  "bill and hold",  or  "dating"  basis more than thirty (30)
         days  past  due;  (j) due from a Person  who has  failed  to pay  other
         Accounts  due to Borrower  such that an  aggregate  of 25% of the total
         Accounts  owing  to  Borrower  by  such  Person  is then  and has  been
         outstanding more than ninety (90) days from date of invoice or shipment
         date,  which ever is  earlier;  (k) due from an employee of Borrower or
         any of its  Subsidiaries;  (l) due from  Persons who are not located in
         the United  States,  unless such  Account is insured or  supported by a
         Letter  of  Credit  upon  terms  satisfactory  to the  Bank in its sole
         discretion;  or (m)  determined  by the Lender,  in the exercise of its
         commercially  reasonable judgment, to be difficult to collect, to be of
         diminished  or uncertain  value,  or in which the Lender may not have a
         perfected  security interest pursuant to the provisions of the Security
         Documents.

                  "ENVIRONMENTAL  LAWS":  any and all foreign,  Federal,  state,
         local  or  municipal  laws,  rules,  orders,   regulations,   statutes,
         ordinances,  codes, decrees, requirements of any Governmental Authority
         or  other  Requirements  of  Law  (including  common  law)  regulating,

                                      -6-
<PAGE>

         relating to or imposing  liability or  standards of conduct  concerning
         protection  of human  health or the  environment,  as now or may at any
         time hereafter be in effect.

                  "ENVIRONMENTAL PERMITS": all permits, licenses, registrations,
         notifications,  exemptions,  and other  authorizations  required  under
         Environmental Laws.

                  "ERISA":  the Employee Retirement Income Security Act of 1974,
         as amended from time to time.

                  "EVENT OF DEFAULT":  as defined in subsection 9.1.

                  "EXTENSION  OF  CREDIT":  collectively,  (a) the making of any
         Loan by the  Lender,  (b) the  issuance  of any Letter of Credit by the
         Lender,  and (c) the  extension  of any  amounts  by  Lender  under the
         Foreign Exchange Guidance Line.

                  "FACILITY FEE RATE":  on the Maximum Amount 0.250%  initially;
         provided,  however,  such rate shall be adjusted  within five  business
         days  subsequent  to delivery  by Borrower to the Lender of  Borrower's
         most recent fiscal period ended financial statements in accordance with
         Section 7.1 (a) and (b),  and the  certificate  required by Section 7.2
         (b) whereupon the Facility Fee Rate shall be adjusted,  and thereafter,
         the Facility Fee Rate for the Maximum Amount will be adjusted,  on each
         Adjustment  Date  based  upon  the  ratio  of  (i)  Total  Consolidated
         Liabilities  at the  last day of the  quarter  ended on the date of the
         financial  statements to (ii) the  Consolidated  Tangible Net Worth for
         such  period as  determined  from  such  financial  statements,  to the
         Facility  Fee Rate set  forth  below  opposite  the level for which the
         ratio of Total  Consolidated  Liabilities to Consolidated  Tangible Net
         Worth as so determined  satisfies the corresponding  criteria set forth
         under  the  heading  "Ratio  of  Total   Consolidated   Liabilities  to
         Consolidated Tangible Net Worth" on the table below:

        ------------- -------------------------------------------- -------------
           Level                       Ratio of                    Facility Fee
                            Total Consolidated Liabilities         Rate
                                          to
                            Consolidated Tangible Net Worth
        ------------- -------------------------------------------- -------------
             I        >=1.00 x but <1.50 x                         0.500%
        ------------- -------------------------------------------- -------------
            II        >=0.75 x but <1.00 x                         0.250%
        ------------- -------------------------------------------- -------------
            III       >=0.50 x but <0.75 x                         0.250%
        ------------- -------------------------------------------- -------------
            IV        >=0.25 x but <0.50 x                         0.250%
        ------------- -------------------------------------------- -------------

                  "FINANCING DOCUMENTS":  this Agreement, any Notes, the Letters
         of Credit, the Applications,  the Security Documents, the Subordination
         Agreement,  the Foreign  Exchange  Guidance  Line and any and all other
         agreements, guaranties, instruments, documents, certificates, financing
         statements,   powers  of  attorney,   consents  and  filings,   whether
         heretofore,  now, or hereafter executed by or on behalf of the Borrower
         or any of its  Subsidiaries  or any other  Person and  delivered to the
         Lender in connection with the Loans,  all as may be amended,  modified,
         supplemented, restated or extended from time to time.

                                      -7-
<PAGE>

                  "FOREIGN  EXCHANGE  GUIDANCE  LINE":  The  Guidance  Line  for
         foreign exchange contracts in major non-U.S.  currencies  provided upon
         the Lender's  standard  foreign  exchange  guidance line  documents and
         agreements,  providing  an  aggregate  limit  of  one  million  dollars
         ($1,000,000)  and an  aggregate  assumed  risk  exposure of two hundred
         thousand  dollars  ($200,000)  consisting  of not more than one hundred
         thousand dollars ($100,000) for application to "forward  contracts" and
         not  more  than one  hundred  thousand  dollars  ($100,000)  for  daily
         settlements of any contracts in foreign currencies.

                  "GAAP": generally accepted accounting principles in the United
         States  of  America  in  effect  from  time  to  time  (subject  to the
         provisions of the last paragraph of subsection 8.1).

                  "GOVERNMENTAL AUTHORITY":  any nation or government, any state
         or  other  political  subdivision  thereof  and any  entity  exercising
         executive,   legislative,   judicial,   regulatory  or   administrative
         functions of or pertaining to government.

                  "HAZARDOUS  MATERIALS":  any petroleum (including crude oil or
         any fraction thereof) or petroleum products, polychlorinated biphenyls,
         urea-formaldehyde   insulation,    asbestos   and   asbestos-containing
         materials,  pollutants,  contaminants,  and  all  other  materials  and
         substances including but not limited to radioactive materials regulated
         pursuant to any  Environmental  Laws or that could  result in liability
         under any Environmental Law.

                  "INDEBTEDNESS":   of  any   Person   at  any   date,   without
         duplication,  (a) all indebtedness of such Person for borrowed money or
         for the  deferred  purchase  price of property or services  (other than
         current trade  liabilities  incurred in the ordinary course of business
         and payable in  accordance  with  customary  practices),  (b) any other
         indebtedness  of such  Person  which  is  evidenced  by a  note,  bond,
         debenture or similar  instrument,  (c) all  obligations  of such Person
         under Capitalized Leases, (d) all obligations of such Person in respect
         of acceptances issued or created for the account of such Person and (e)
         all  indebtedness  of others of the types  described in (a) through (d)
         above  secured by any Lien on any  property  owned by such  Person even
         though such Person has not assumed or otherwise  become  liable for the
         payment thereof (the amount of such  indebtedness  with respect to such
         Person being  deemed to be the lesser of the value of such  property or
         the amount of indebtedness of others so secured).

                  "INITIAL FINANCIAL STATEMENTS": as defined in subsection 6.1.

                  "INTEL   CORPORATION":    Intel   Corporation,    a   Delaware
         corporation.

                  "INTEL  SUBORDINATED  DEBT":  the  Subordinated  Debt which is
         described and defined in the Subordination Agreement.

                  "INTELLECTUAL PROPERTY":  as defined in subsection 6.9.

                                      -8-
<PAGE>

                  "INVENTORY":  all  "inventory" (as that term is defined in the
         UCC)  of the  Borrower  and its  Subsidiaries,  and to the  extent  not
         included  in such  definition,  shall  also  mean and  include  all raw
         materials  and  other  materials  and  supplies,   work-in-process  and
         finished  goods of the Borrower and its  Subsidiaries  and any products
         made or processed  therefrom  and all  substances,  if any,  commingled
         therewith or added thereto.

                  "INVESTMENT":  as defined in subsection 8.12.

                  "LATE RATE":  as defined in subsection 4.3.

                  "LENDER":  as defined in the preamble to this Agreement.

                  "LETTERS OF CREDIT":  as defined in subsection 3.1(a).

                  "LIEN":  any  mortgage,  pledge,  hypothecation,   assignment,
         deposit arrangement,  encumbrance, lien (statutory or other), charge or
         other security  interest or any preference,  priority or other security
         agreement or preferential  arrangement of any kind or nature whatsoever
         (including,  without  limitation,  any conditional  sale or other title
         retention agreement and any Capitalized Lease having  substantially the
         same economic effect as any of the foregoing).

                  "LOAN":  any  Revolving  Credit  Loan or any Letters of Credit
         (whether drawn or undrawn) issued.

                  "LOAN PARTIES": the Borrower or any Subsidiary which is now or
         hereafter becomes a party to any Financing Document.

                  "MATERIAL  ADVERSE  EFFECT" or "Material  Adverse  Change":  a
         material  adverse  effect or change  on (a) the  business,  operations,
         property or condition  (financial or otherwise) of the Borrower and its
         Subsidiaries  taken as a whole or (b) the validity or enforceability of
         this Agreement or any of the other Financing Documents or the rights or
         remedies of the Lender hereunder or thereunder.

                  "MATURITY  DATE":  initially,  the  date  of  July  31,  2002;
         provided,  however,  such date may be  extended  at the  Lender's  sole
         discretion;  provided  further,  however,  that nothing herein shall be
         construed to be a  commitment,  undertaking  or obligation of Lender to
         extend  the  Maturity  Date or make an  Extension  of Credit  after the
         Maturity Date.

                  "MAXIMUM AMOUNT": as defined in subsection 2.1(a).

                  "MAXIMUM L/C DRAWING  AMOUNT":  the maximum  aggregate  amount
         from time to time that beneficiaries may draw under outstanding Letters
         of Credit.

                  "NET  PROCEEDS":  the aggregate cash proceeds  received by the
         Borrower or any Subsidiary (including any cash payments received by way
         of deferred  payment of  principal  pursuant  to a note or  installment
         receivable or purchase price  adjustment  receivable or otherwise,  but
         only as and when received) in respect of:

                                      -9-
<PAGE>

                           (a)  any issuance of Capital Stock; and

                           (b)  any  Asset  Sale   (excluding  any  proceeds  of
                  insurance received upon any casualty or loss);

         in each case net of (without  duplication),  (i) the amount required to
         repay any Indebtedness  (other than the Loans) secured by a Lien on any
         assets of the Borrower or its Subsidiaries  that are collateral for any
         such debt securities or loans that are sold or otherwise disposed of in
         connection  with  such  Asset  Sale,   (ii)  the  reasonable   expenses
         (including  legal  fees and  brokers'  and  underwriters'  commissions,
         lenders' fees or credit  enhancement  fees, in any case,  paid to third
         parties or, to the extent  permitted  hereby,  Affiliates)  incurred in
         effecting  such  issuance  or  sale  and  (iii)  any  taxes  reasonably
         attributable  to such sale and reasonably  estimated by the Borrower or
         its Subsidiaries to be actually payable.

                  "NOTE":  as defined in subsection 2.1(b).

                  "OBLIGATIONS":  all Indebtedness,  obligations and liabilities
         of the  Borrower  or any and  all of its  Subsidiaries  to the  Lender,
         individually or collectively, now existing or hereafter arising, direct
         or  indirect,  joint or  several,  absolute or  contingent,  matured or
         unmatured, liquidated or unliquidated, secured or unsecured, arising by
         contract, operation of law or otherwise, arising or incurred under this
         Agreement or any of the other Financing  Documents or in respect of any
         of the Loans or the Note, the Letters of Credit or other instruments at
         any time evidencing any thereof.

                  "OBSOLETE  PROPERTY":  any  property of the Borrower or any of
         its Subsidiaries which is obsolete,  outdated or worn out or the useful
         life of which has ended,  in each case in the good faith  determination
         of the Borrower or any applicable Subsidiary.

                  "PARTICIPANT":  as defined in subsection 11.8(c)

                  "PBGC": the Pension Benefit Guaranty  Corporation  established
         pursuant  to  Subtitle  A of  Title IV of  ERISA  and any  Governmental
         Authority which succeeds to the powers and functions thereof.

                  "PERMITTED LIENS": as defined in subsection 8.6.

                  "PERSON": an individual,  partnership,  corporation,  business
         trust,  joint  stock  company,   limited  liability   company,   trust,
         unincorporated  association,  joint venture,  Governmental Authority or
         other entity of whatever nature.

                  "PLAN":  at a particular time, any employee benefit plan which
         is covered by ERISA and in respect of which the  Borrower or a Commonly
         Controlled  Entity is (or, if such plan were  terminated  at such time,
         would under  Section  4069 of ERISA be deemed to be) an  "employer"  as
         defined in Section 3(5) of ERISA.

                  "PRIME  RATE":  for any day, a rate equal to the variable rate
         of interest  per annum,  most  recently  announced by the Lender at its
         headquarters  in Boston,  Massachusetts,  as its "base  rate," with the

                                      -10-
<PAGE>

         understanding  that the  Lender's  "base  rate" is one of its  interest
         rates and serves as a basis upon which  effective rates of interest are
         calculated for loans making reference thereto and may not be the lowest
         of the Lender's  interest rates.  Any change in the Prime Rate shall be
         effective as of the effective  date stated in the  announcement  by the
         Lender of such change.

                  "PURCHASE MONEY  INDEBTEDNESS":  any Indebtedness  incurred by
         the Borrower or any of its  Subsidiaries,  whichever is applicable,  in
         connection  with  the  acquisition  by  the  Borrower  or  any  of  its
         Subsidiaries,   whichever  is  applicable,  of  any  real  or  personal
         property.

                  "REIMBURSEMENT OBLIGATION":  the obligation of the Borrower to
         reimburse the Lender  pursuant to  subsection  3.4(a) for amounts drawn
         under Letters of Credit.

                  "REPLACEMENT  ASSET": any property acquired by the Borrower or
         any of its  Subsidiaries  subsequent to the Closing Date which replaces
         Obsolete  Property  of the  same  type  and  utility  as  the  property
         acquired.

                  "REPORTABLE  EVENT":  any of the  events  set forth in Section
         4043(b) of ERISA,  other  than those  events as to which the thirty day
         notice  period is waived under  subsections  .13, .14, .16, .18, .19 or
         .20 of PBGC Reg. Section 2615.

                  "REQUIREMENT  OF LAW": as to any Person,  the  Certificate (or
         Articles)  of  Incorporation  (or  Organization)  and  By-Laws or other
         organizational  or governing  documents  of such  Person,  and any law,
         treaty, rule or regulation or determination of an arbitrator or a court
         or other Governmental  Authority, in each case applicable to or binding
         upon such Person or any of its  property or to which such Person or any
         of its property is subject.

                  "RESPONSIBLE  OFFICER":  as to any Person, the chief executive
         officer and the  president of such Person or, with respect to financial
         matters, the chief financial officer of such Person or, in either case,
         such other executive officers as may be designated from time to time by
         such Person in writing to the Lender.

                  "RESTRICTED PAYMENTS":  as defined in subsection 8.11.

                  "REVOLVING  CREDIT  PERIOD":  the  period  from and  after the
         Closing Date to and  including the Maturity Date or any earlier date on
         which the  obligation of the Lender to make Loans shall  terminate,  as
         provided herein

                  "SALE/LEASEBACK TRANSACTION":  as defined in subsection 8.10.

                  "SECURITY  AGREEMENT":  the Borrower Security  Agreement - All
         Assets.

                  "SECURITY DOCUMENTS": collectively, the Security Agreement and
         all other security agreements, pledge agreements, financing statements,
         assignments,  mortgages,  agreements,  documents and instruments now or
         hereafter  delivered  to the  Lender  granting  a Lien on any  asset or
         assets of any  Person  to  secure  the  Obligations  or to  secure  any
         guarantee of any such Obligations and,  including,  without limitation,
         any such document delivered pursuant to subsections 7.10 and 7.11.

                                      -11-
<PAGE>

                  "SOLVENT":  when used with respect to any Person,  means that,
         as of any date of  determination,  (a) the amount of the "present  fair
         saleable  value" of the assets of such  Person  will,  as of such date,
         exceed the amount that will be required to pay all "liabilities of such
         Person, contingent or otherwise", as of such date (as such quoted terms
         are  determined in accordance  with  applicable  federal and state laws
         governing  determinations  of the  insolvency of debtors) as such debts
         become absolute and matured,  (b) such Person will not have, as of such
         date, an unreasonably small amount of capital with which to conduct its
         business,  and (c) such  Person  will be able to pay its  debts as they
         mature,  taking  into  account  the timing of and amounts of cash to be
         received  by such  Person and the  timing of and  amounts of cash to be
         payable on or in respect of indebtedness  of such Person;  in each case
         after  giving  effect to (A) as of the  Closing  Date the making of the
         extensions  of  credit  to be  made  on  the  Closing  Date  and to the
         application of the proceeds of such extensions of credit and (B) on any
         date after the Closing  Date,  the making of any extension of credit to
         be made on such date,  and to the  application  of the proceeds of such
         extension of credit. For purposes of this definition,  (i) "debt" means
         liability  on a  "claim",  and  (ii)  "claim"  means  any (x)  right to
         payment,   whether  or  not  such  a  right  is  reduced  to  judgment,
         liquidated,   unliquidated,   fixed,  contingent,  matured,  unmatured,
         disputed,  undisputed,  legal  equitable,  secured or  unsecured or (y)
         right to an equitable  remedy for breach of  performance if such breach
         gives  rise to a right to  payment,  whether  or not  such  right to an
         equitable remedy is reduced to judgment, fixed, contingent,  matured or
         unmatured, disputed, undisputed, secured or unsecured.

                  "SUBORDINATED  DEBT":  collectively,  the  Intel  Subordinated
         Debt, and any and all other  Indebtedness,  liabilities and obligations
         of the  Borrower  to any  Person  (other  than  the  Lender)  which  is
         subordinated  to the  Obligations  upon terms and conditions  which are
         reasonably satisfactory to the Lender.

                  "SUBORDINATION  AGREEMENT":  the Subordination Agreement to be
         executed and delivered by Borrower and Intel Corporation, substantially
         in the form of EXHIBIT C, as the same may be amended,  supplemented  or
         otherwise modified from time to time.

                  "SUBORDINATION  AGREEMENTS":  collectively,  the Subordination
         Agreement,  and any other  subordination  agreement  (or  provision) by
         which the  Subordinated  Debt is subordinated  to the Obligations  upon
         terms and conditions which are reasonably satisfactory to the Lender.

                  "SUBSIDIARY": as to any Person, a corporation,  partnership or
         other  entity  of which  shares of stock or other  ownership  interests
         having  ordinary voting power (other than stock or such other ownership
         interests  having  such  power  only by  reason of the  happening  of a
         contingency)  to elect a majority  of the board of  directors  or other
         managers of such  corporation,  partnership  or other entity are at the
         time  owned,  or the  management  of  which  is  otherwise  controlled,
         directly or indirectly through one or more intermediaries,  or both, by
         such  Person.   Unless  otherwise   qualified,   all  references  to  a
         "Subsidiary"  or to  "Subsidiaries"  in this Agreement shall refer to a
         Subsidiary or Subsidiaries of the Borrower.

                                      -12-
<PAGE>

                  "TAX CODE": the Internal Revenue Code of 1986, as amended from
         time to time.

                  "TOTAL WORKING CAPITAL OUTSTANDINGS":  at any time, the sum of
         (i) the  aggregate  outstanding  principal  balance of the Loans at the
         time and (ii) the Maximum L/C Drawing Amount at the time.

                  "UCC":  the  Uniform  Commercial  Code as from time to time in
         effect in The Commonwealth of Massachusetts.

                  "UNIFORM  CUSTOMS":  the  Uniform  Customs  and  Practice  for
         Documentary Credits (1993 Revision),  International Chamber of Commerce
         Publication No. 500, as the same may be amended from time to time.

         2. USE OF TERMS.  The use of the singular of terms which are defined in
the plural  shall mean and refer to any one of them;  and  pronouns  used herein
shall be deemed to include the singular and the plural and all genders.  The use
of the  connective  "or" is not intended to be exclusive;  the term "may not" is
intended to be prohibitive and not permissive; use of "includes" and "including"
is intended to be interpreted as expansive and amplifying and not as limiting in
any way.

         The words  "hereof",  "herein"  and  "hereunder"  and words of  similar
import when used in this Agreement  shall refer to this Agreement as a whole and
not to any  particular  provision  of this  Agreement.  All  references  in this
Agreement to Articles,  Sections,  Exhibits,  Schedules and Appendices  refer to
Articles,  Sections, Exhibits, Schedules and Appendices of this Agreement unless
otherwise  indicated.  All Exhibits,  Schedules and Appendices  attached to this
Agreement are incorporated herein and made a part hereof.




                                      -13-
<PAGE>



________________________________________________________________________________

                                CREDIT AGREEMENT

                                (the "AGREEMENT")

                                 by and between

                         CITIZENS BANK OF MASSACHUSETTS
                                 (the "LENDER")

                                       and

                          CENTENNIAL TECHNOLOGIES, INC.
                                (the "BORROWER")
________________________________________________________________________________

                                  LIEN SEARCHES

                                   APPENDIX B



<PAGE>
                                                                      APPENDIX C

                        [FORM OF COMPLIANCE CERTIFICATE]

                             COMPLIANCE CERTIFICATE

         Reference  is hereby made to a certain  Credit  Agreement,  dated as of
June ___, 2000 (as the same may be amended, modified, supplemented,  extended or
restated,  from time to time, the "CREDIT  AGREEMENT") by and between CENTENNIAL
TECHNOLOGIES, INC., a Delaware corporation (the "BORROWER") and CITIZENS BANK OF
MASSACHUSETTS,  a  Massachusetts  savings bank (the  "LENDER").  All capitalized
terms not  defined  herein but  defined in the Credit  Agreement  shall have the
meanings given to such terms in the Credit Agreement.

         The  undersigned  hereby  certifies  that  he or she  is a  Responsible
Officer of the Borrower  and as such,  is  authorized,  for and on behalf of the
Borrower,  to execute and deliver this  Compliance  Certificate to the Lender in
accordance  with  the  provisions  of  the  Credit  Agreement.  Pursuant  to the
provisions of subsection 7.2(b) of the Credit Agreement,  the undersigned hereby
certifies to the Lender as follows:

                  1.  Each of the  representations  and  warranties  made by the
         Borrower and its Subsidiaries in or pursuant to the Financing Documents
         are true and  correct in all  material  respects  on and as of the date
         hereof,  as if made on and as of the  date  hereof,  except  (a) to the
         extent  such  representations  and  warranties  expressly  relate to an
         earlier date in which case such representations and warranties shall be
         true and correct in all material  respects as of such earlier date, and
         (b) as follows:

                           [Describe divergences, if any]

                  2. Since the end of the last fiscal  quarter of the  Borrower,
         no Material Adverse Change has occurred except:

                           [Describe, if any]

                  3. Except as set forth in the certificates attached hereto and
         except as  heretofore  disclosed  to the Lender in previous  Compliance
         Certificates,  there  has  been no  change  (i) in the  Certificate  of
         Incorporation or By-laws of the Borrower,  or (ii) in the incumbency of
         the officers of the Borrower  whose  signatures  have  heretofore  been
         certified to the Lender.

                  4. The financial statements submitted herewith (if any) are in
         compliance with the applicable provisions of subsections 7.1 and 7.2 of
         the Credit Agreement.

                  5. The  undersigned  has reviewed or caused to be reviewed all
         of the  Financing  Documents,  and based  upon such  review  and to the
         knowledge  of the  undersigned,  no  Default  or Event of  Default  has
         occurred  and is  continuing  as of the date hereof (or if  applicable,
         will occur after giving effect to the making of the Loans  requested to
         be made on the date hereof), except as follows:

                           [Describe Defaults or Events of Default]

<PAGE>

                  6.   Attached   hereto   as   Appendix   A  are   calculations
         demonstrating that, based upon the financial statements of the Borrower
         and its Subsidiaries  submitted herewith (if any), the Borrower and its
         Subsidiaries  were in  compliance  as of the  date  of  such  financial
         statements  with all financial  covenants set forth in subsections  8.1
         and 8.3 of the Credit Agreement to be measured as of such date,  except
         as noted on Appendix A attached hereto.

                  7. Any changes in the chief  executive  office and chief place
         of  business  of the  Borrower  or any of its  Subsidiaries  which have
         occurred and/or any additional  locations at which any of the Inventory
         or equipment are kept, notice of which has not yet been provided to the
         Lender,  in accordance  with the provisions of the Security  Documents,
         are set forth below:

                           [Describe]

         EXECUTED under seal as of this ________ day of ________________, _____.


                                            CENTENNIAL TECHNOLOGIES, INC.


                                            By:
                                               ---------------------------------
                                                  Name:
                                                  Title:
                                                     Its duly authorized officer






                                      -2-
<PAGE>
                                                                      APPENDIX D

                      [FORM OF BORROWING BASE CERTIFICATE]

                           BORROWING BASE CERTIFICATE

         Reference  is hereby made to a certain  Credit  Agreement,  dated as of
June 2, 2000 (as the same may be amended,  modified,  supplemented,  extended or
restated,  from time to time, the "CREDIT  AGREEMENT") by and between CENTENNIAL
TECHNOLOGIES, INC., a Delaware corporation (the "BORROWER") and CITIZENS BANK OF
MASSACHUSETTS,  a  Massachusetts  savings bank (the  "LENDER").  All capitalized
terms not  defined  herein but  defined in the Credit  Agreement  shall have the
meanings given to such terms in the Credit Agreement.

         The  undersigned  hereby  certifies  that  he or she  is a  Responsible
Officer of the Borrower  and as such,  is  authorized,  for and on behalf of the
Borrower,  to execute and deliver this Borrowing Base  Certificate to the Lender
in  accordance  with the  provisions  of the Credit  Agreement.  Pursuant to the
provisions  of subsection  7.2(c)(i) of the Credit  Agreement,  the  undersigned
hereby  certifies  to the Lender  that the  following  is a fair,  accurate  and
complete report of the Revolving Credit Borrowing Base as of ______________ (the
"RELEVANT DATE"):

1.   ELIGIBLE ACCOUNTS:

(a)  Total Accounts,  per the attached  accounts  receivable      $
     aging, as of the Relevant Date                               --------------

(b)  Accounts  that  are  not  Eligible   Accounts  per  the      $
     attached schedule                                            --------------

(c)  Total Eligible Accounts                                      $
     (Line 1(a) minus Line 1(b))                                  --------------

2.       REVOLVING CREDIT BORROWING BASE - AVAILABILITY:

(a)  80% of all Eligible Accounts (i.e. Line 1(c))                $
                                                                  --------------

(b)  Maximum Revolving Credit Amo                                 $4,000,000.00
                                                                  --------------

(c)  Lesser of either Line 2(a) or 2(b)                           $
                                                                  --------------
(d)  Principal  balance of Revolving  Credit Loans as of the
     Relevant Date                                                $
                                                                  --------------
(e)  Balance available for borrowing as of the Relevant Date
     (Line 2(c) minus Line 2(d))                                  $
                                                                  --------------

<PAGE>

        EXECUTED under seal as of this ________ day of __________________, ____.


                                            CENTENNIAL TECHNOLOGIES, INC.


                                            By:
                                               ---------------------------------
                                                  Name:
                                                  Title:
                                                     Its duly authorized officer







                                       2