SunTrust Bank
211 Perimeter Ctr Pkwy Ste 100
Atlanta, GA 30346
(770) 352-5200 "LENDER"


                          CONSTRUCTION LOAN AGREEMENT

BORROWER:       REGAN HOLDING CORPORATION

ADDRESS:        2090 MARINA AVE.

TELEPHONE NO.:

IDENTIFICATION NO.: 68-0211359-015

<TABLE>
<CAPTION>
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    Officer       Interest     Principal     Funding   Maturity     Customer        Loan
Identification      Rate         Amount       Date       Date        Number        Number
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<S>               <C>        <C>             <C>       <C>            <C>           <C>
     020892       VARIABLE   $2,700,000.00   10/27/03  10/27/04
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Address of Real Property Securing the Loner

560 TECHNOLOGY PARKWAY.
ROME, GEORGIA 30165
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</TABLE>


1.  DEFINITIONS.  In this Agreement,  the following words and phrases shall have
the following meanings:

1 1  "Architect"  shall  mean the person or entity  who has  prepared  Plans and
Specifications for the construction of the improvements;

1.2  "Assignment  of Lease"  shall  mean the  Assignments  of Rents  and  Leases
executed  by  Borrower  which  creates a first  lien on the leases of, and rents
from, the Property;

1.3 "Borrower" shall mean the borrower identified above;

1.4 "Code" shall mean the Uniform  Commercial  Code as currently  enacted in the
state where the Property is located;

1.5 "Completion  Date" shall mean the earlier of October 27, 2004 or the date of
issuance  of  a  Certificate  of  Occupancy  by  the  appropriate   governmental
authority;

1.6  "Construction  Budget" shall mean the estimated cost of the construction of
the Improvements in accordance with the Plans and  Specifications as approved by
Lender;

1.7 "Contractor" shall mean the general contractor hired by Borrower to complete
construction of the Improvements;

1.8 "Guarantor" shall mean any a accommodation  maker,  guarantor or other party
liable for the payment of Borrower's obligations under the Loan;

1.9  "Improvements"  shall  mean  the  proposed  structure(s)  to be  placed  or
constructed upon the property by Borrower,  the cost of which shall be funded in
whole or in part by periodic  disbursements  of the proceeds of the Loan,  which
proposed structure(s) is (are) more fully described in Schedule C hereto;

1.10 "Lender" shall mean the Lender identified above;

1.11 "Loan" shall mean the  construction  loan made by Lender to Borrower in the
principal amount described above;

1.12 "Loan Documents"  shall  collectively  mean the Promissory  Note,  Security
Instrument  (as defined  herein),  Security  Agreement,  Consent of  Contractor,
Consent of Architect,  the construction  schedule,  this Agreement and any other
instrument executed in connection with or evidencing the Loan;

1.13 "Plans and Specifications" shall mean the plans and specifications approved
by Lender pertaining to the construction of Improvements upon the Property;

1.14  "Premises"  shall  mean the  Property,  together  with  the  Improvements,
fixtures and personal property located thereon;

1.15 "Promissory Note" shall mean that certain  Promissory Note in the aggregate
principal  amount of the Loan  payable to the order of the  Lender,  executed by
Borrower, evidencing the Loan;

1.16 "Property" shall mean the real property and Improvements thereon located at
the address described above the legally described in Schedule A, attached hereto
and incorporated herein by reference;

1.17 "Security Agreement" shall mean that certain security agreement executed by
Borrower  that  creates a first lien on all  chattels,  furniture,  furnishings,
fixtures, machinery,  equipment,  appliance and other personal property owned by
Borrower and used or to he used in the operation of the Premises; and
<PAGE>

1.18 "Security  Instrument" shall mean the deed to secure debt, mortgage or deed
of trust which evidences a first lien on the Property and secures the Promissory
Note.

2. AMOUNTS AND TERMS OF LOAN.

2.1 Lender shall make the Loan to Borrower to construct the  Improvements on the
terms and  conditions set forth herein.  Borrower  agrees to execute and deliver
the Promissory Note. Advances under the Loan shall be made to Borrower or others
from  time to  time  pursuant  to the  terms  and  conditions  described  in the
Promissory  Note.  Interest  shall accrue on all sums  advanced from the date of
each  advance  at  the  rate  of  interest  described  in the  Promissory  Note.
Principal,  interest and any other sums owing under the Loan Documents  shall be
repaid to Lender in the manner described therein.

2.2  Borrower  agrees to pay to Lender a loan fee in the amount of  $5,000.00 on
the date of closing of the Loan.

3. COLLATERAL.

3.1 To secure  performance  of Borrower's  obligations to Lender under the Loan,
Borrower  agrees  promptly to execute  and deliver and cause to be executed  and
delivered  to Lender the Security  Instrument  Security  Agreements,  Consent of
Contractor, Consent of Architect, financing statements, title insurance or title
opinions and other appropriate documents deemed necessary or desirable by Lender
to provide Lender with the first lien and security interest on the Premises. The
Security  Instrument,  Security  Agreements,  financing  statements,  and  other
documents,  shall be in a form and  content  satisfactory  to Lender in its sole
discretion.

3.2 If required by Lender,  Borrower  agrees to execute and deliver to Lender an
Assignment  of Leases  in form and  content  satisfactory  to Lender in its sole
discretion.

3.3. As additional  collateral for the Loan,  Borrower hereby grants to Lender a
security  interest in and hereby  assigns  all of  Borrower's  right,  title and
interest in all monies,  instruments and deposit accounts of Borrower maintained
with Lender.

3.4 In the event  partial  releases  are to be  executed  by Lender from time to
time, Lender shall execute and deliver such partial releases upon the conditions
and under the terms described in the Security  Instrument.  However,  no partial
release  will be executed  by Lender if it would  otherwise  interfere  with the
development of the Property which remains encumbered by the Security  Instrument
or if Borrower is in default of any obligation  under this Agreement or the Loan
Documents.

4. DISBURSEMENT PROCEDURES.

4.1  Disbursement  of the Loan  shall he made by  Lender  for  construction  and
development costs in accordance with the approved  Construction Budget (covering
both  hard and soft  costs)  and the  approved  schedule  of  estimated  monthly
disbursements.

4.2 No extra work or changes in the Plans and Specifications or the Construction
Budget shall be ordered or authorized by Borrower  without a written  consent of
Lender.  If Lender approves of any extra work or changes,  Lender shall have the
right to  withhold  any  pending or future  disbursement  and may  require  that
Borrower pay the cost of these items from  Borrower's own funds and not from the
Loan proceeds.

4.3 At the time of any disbursement  request,  Borrower shall complete,  execute
and deliver to Lender a request for an advance on  Lender's  standard  form draw
request,  attached  hereto as Exhibit  1. Each  request  for an advance  must be
accompanied by evidence in form and content  satisfactory  to Lender,  which may
include,  but may not  necessarily  be  limited  to,  invoices  and  statements,
certificates,  affidavits,  title  endorsements and other declarations as Lender
may deem necessary of Borrower, Architect, Contractor, or title attorney, all of
which shall show:

         4.3.1    The value of the portion of the Improvements completed at that
                  time;

         4.3.2    That all outstanding claims for labor,  services and materials
                  through the previous draw request have been paid;

         4.3.3    That  there  are no liens  outstanding  against  the  Premises
                  except the lien  belonging  to Lender and  inchoate  liens for
                  property taxes not yet due; and

         4.3.4    That copies of all bills or statements  for expenses for which
                  the advance is requested are attached to such draw request.

4.4 Subject to Paragraph 4.5 below, all disbursements  shall be made directly to
the Contractor  and applicable  subcontractors,  laborers and  materialmen  with
appropriate  lien  waivers  affixed  to each  check.  All  Loan  funds  shall be
considered  to be advanced to and received by Borrower upon their deposit in any
disbursement  account  or  direct  advance  by  Lender  to the  Contractor,  any
subcontractors,  laborers  or  materialmen,  or  charge  against  Loan  funds as
provided in Paragraph  4.5.  Interest on such funds shall be payable by Borrower
from and after such advance or receipt.

4.5  Notwithstanding  the  provisions of Paragraph 4.4 above,  Lender may elect,
without further notice to or authorization by Borrower, to use the Loan funds to
pay, as and when due, any Loan fees owing to Lender, accrued, unpaid interest on
the  Loan,  amounts  secured  by prior  liens on the  Property,  legal  fees and
expenses of Lender's  attorneys  which are payable by  Borrower,  and such other
sums as may be owing from time to time by Borrower to Lender with respect to the
Loan. On or before each interest payment date, Lender shall invoice Borrower for
the amount of the required interest  payment.  Borrower shall promptly make such
payments to Lender as and when due.  Notwithstanding  any of the  provisions  of
this  Paragraph,  Lender's  agreement  to make such advance for interest or loan
fees shall be subject to compliance  with the conditions  precedent set forth in
Paragraph 4.9 below.

4.6 If  Lender  at any time  determines  in good  faith  that the  amount of the
undisbursed  Loan  proceeds  shall not be  sufficient to pay fully for all costs
required  to  complete  the  Improvements  in  accordance  with  the  Plans  and
Specifications  as well as financing and development costs to be incurred by the
Borrower,  whether such  deficiency  is  attributable  to changes in the work or
construction or in the Plans and Specifications or to any cause, Lender may make
written demand on Borrower to deposit with Lender funds equal to the
<PAGE>

amount of the projected shortage. Borrower shall deposit the required funds with
Lender  within ten days after the date of Lender's  written  demand.  No further
disbursements  need to be made by Lender  until  those  funds are  deposited  by
Borrower  with  Lender.  Whenever  Lender  has any such  funds on  deposit,  all
disbursements  shall he made by Lender  first  from  those  fund  until they are
exhausted.

4.7  At no time and in no event shall Lender be obligated to disburse funds:

         4.7.1 In excess of the amount recommended by Lender's  architectural or
         engineering  representative,  who, at the option of Lender,  shall make
         periodic inspections of the Premises at Borrower's expense;

         47.2 If any  Event  of  Default  under  this  Agreement,  the  Security
         Instrument,  or any other Loan  Documents has occurred and has not been
         cured;

         4.7.3 If the  Improvements  have been damaged by fire or other casualty
         and Lender has not received insurance  proceeds  sufficient in the sole
         judgment of Lender to effect the  restoration  of the  Improvements  in
         accordance with Plans and  Specifications  and to permit the completion
         of the  improvements on or before the Completion Date described in this
         Agreement;

         4.7.4 For stored  materials until they are actually  incorporated  into
         the  improvements,  except on such conditions and such occasions as may
         be approved by Lender in its sole discretion;

         4.7.5 If Lender  believes  in good faith that the  priority of Lender's
         lien maybe adversely affected; or

         4.7.6 If the Lender concludes that the construction of the improvements
         has fallen behind any  construction  schedule  approved by Lender or if
         Lender  concludes  that  the  cost of  completing  construction  of the
         improvements at any time will exceed the amount  remaining  to be drawn
         under the Loan by a factor of more than ten percent (10%).

4.8 Lender  shall not be  required  to make the first  disbursement  of the Loan
until Borrower has fulfilled to Lender's satisfaction all conditions of Lender's
written loan commitment to Borrower and all of Lender's customary and reasonable
loan closing and post-loan closing  conditions for construction  loans have been
met, which include, but are not limited to, the follows:

         4.8.1.  Lenders has  received the executed  Loan  Documents  (including
         without  limitation the Promissory Note and Security  Instrument),  and
         the Security Instrument,  Security Agreement,  Assignment of Leases and
         financing statements have been duly recorded or filed, as applicable;

         4.8.2 After recordation of the Security  Instrument,  a title insurance
         company  acceptable  to Lender  must have  issued,  at the  expense  of
         Borrower,  an ALTA (or equivalent) Lender's extended coverage policy of
         title  insurance in an amount and form  satisfactory  to Lender subject
         only to  exceptions  approved by Lender in writing,  together  with any
         endorsements required by Lender;

         4.8.3. Lender's security interest in all personal property and fixtures
         upon the Premises as described in the Security Agreement must have been
         duly perfected and has a lien priority in all respects  satisfactory to
         Lender;

         4.8.4 If Lender so  requests,  an  environmental  questionnaire  and/or
         assessment in such form and scope satisfactory to Lender performed by a
         firm acceptable to lender has been delivered to Lender, Borrower hereby
         agrees to indemnify Lender for any violation of any environmental  laws
         which concern the Premises;

         4.8.5 The Plans and  Specifications  must have been  approved by Lender
         and any other persons or agencies  whose prior  approval is required by
         law or any  covenants,  conditions  or  restrictions  applicable to the
         Property,  and all insurance  policies,  executed general contracts and
         performance  and payment  bonds  required by Lender must be approved by
         Lender and be in full force and effect;

         4.8.6  Lender's  loan fee must have been paid upon  recordation  of the
         Security Instrument;

         4.8.7 Lender shall have received  executed  copies of all of Borrower's
         agreement with the Contractor and the Architect of the  construction of
         the improvements and approved same;

         4.8.8 If Borrower or any accommodation maker, guarantor, or other party
         liable  for the  payment  of  Borrower's  obligations  under  the  Loan
         (collectively  "Guarantors")  is a  partnership,  corporation,  limited
         liability  company or  non-profit  association,  such parties must have
         delivered  to Lender  one or more  opinions  of  counsel  in a form and
         content acceptable to Lender stating among other things that such party
         is duly  organized,  validly  existing  and is in good  standing in the
         jurisdiction  of  its   incorporation   or  organization  and  in  each
         jurisdiction  where its  failure  to so  qualify  would have a material
         adverse effect on its business,  operations or its ability to carry out
         its obligation under the Loan Document,  and has duly authorized by all
         requisite   corporate,   member/manager   or  partnership   action  the
         execution, delivery and performance of the Loan Documents;

         4.8.9 If  Borrower  or any  Guarantor  is a  partnership,  corporation,
         limited liability company or non-profit association,  such parties must
         have  delivered  to Lender  such  certified  copies of  directors'  and
         stockholder's  resolution,  partnership,  operating  or  joint  venture
         agreements,  etc., as maybe  necessary,  in the Lender's  judgment,  to
         authorize  and  support  the  execution  and delivery  of all documents
         contemplated by the Loan;

         4.8.10 Borrower has satisfied  Lender and the title  insurance  company
         issuing the policy required under Paragraph 4.8.2 that no work has been
         commenced prior the recordation of the Security Instrument; and

4.9 Lender shall not be required to make any subsequent  disbursement  under the
Loan if:
<PAGE>

         4.9.1  Lender  does  not  receive,   at  Borrower's  expense,  a  title
         endorsement,  satisfactory to Lender prior to any disbursement  stating
         that  such   disbursement   shall  have  priority  over  mechanic's  or
         materialmen's  liens or any other  intervening or subordinate  liens on
         the Property.

4.10 Lender shall not be obligated to make its final  disburse of Loan  proceeds
for the  improvements  hereto  unless and until the  following  conditions  are
satisfied:

         4.10.1  The  Lender   determines  that  the   Improvements   have  been
         substantially  completed by the Completion  Date in accordance with the
         Plans and Specifications. Completion must be verified to the reasonable
         satisfaction of Lender;

         4.10.2  Borrower has obtained for Lender,  at Borrower's  expense,  any
         title insurance endorsements to the title policy required by Lender;

         4.10.3  Borrower has obtained and  delivered to Lender for its approval
         copies of all temporary or permanent  certificates of occupancy for any
         portion of the Improvements and Lender has approved such certificates.

4.11 At the option of the Lender, each request for an advance shall be submitted
to Lender at least ten (10)  business  days  prior to the date of the  requested
advance.  All such  advances,  regardless  of to whom made,  shall  satisfy  the
obligations of Lender hereunder and shall be secured by the Security  Instrument
and other Loan Documents as fully as if made to Borrower.

4.12 Any waiver by Lender of any  condition  of  disbursement  must be expressly
made in writing.  The making of a  disbursement  prior to  fulfillment of one or
more conditions therefore shall not be construed as a waiver of such conditions,
and Lender reserves the right to require their  fulfillment  prior to making any
subsequent disbursements.

5.  COVENANTS OF  BORROWER.  Borrower  covenants  with and warrants to Lender as
follows:

5.1 Borrower shall provide Lender with a detailed  Construction  Schedule (which
shall be in such detail as Lender shall  require) prior to the execution of this
Agreement and shall meet all deadlines described herein. Borrower shall commence
construction of the Improvements within 10 days from the date of this Agreement.
Borrower shall  substantially  compete  construction by the Completion Date. All
construction work shall be performed in substantial compliance with the approved
Plans and  Specifications,  any change  orders  approved by Lender and with this
Agreement.  All construction work shall be completed  without liens,  claims, or
assessments  (actual  or  contingent)  asserted  against  the  Premises  for any
material, labor or other items furnished in connection therewith (except as such
liens,  claims or assessments  are insured or bonded to Lender's  satisfaction),
and all are in full compliance with all construction,  use, building, zoning and
other similar  requirements  of any  governmental  jurisdiction.  Borrower shall
provide Lender with  satisfactory  evidence of such  compliance  upon request by
Lender.

5.2  Borrower  agrees that no  modification  of or  amendments  to the Plans and
Specifications  shall be made without first obtaining the approval in writing of
Lender and all necessary governmental authorities.  In addition, Borrower agrees
to deposit  with Lender such  additional  sums or take such action as Lender may
require to ensure payment of the cost of any such changes.

5.3 Borrower shall not,  without the prior written consent of Lender,  mortgage,
convey,  transfer,  sell or otherwise dispose of or encumber its interest in the
Property  or any part thereof or the income to be derived therefrom.

5.4  Borrower  shall  comply with and keep in effect all  permits and  approvals
obtained from any governmental  bodies that relate to the lawful construction of
the  Improvements.  Burrower  shall  comply with all  existing  and future laws,
regulations,  orders and  requirements  of all  governmental,  judicial or legal
authorities  having  jurisdiction  over the Property or  Improvements.  Borrower
shall comply with all existing or future  recorded  restrictions  affecting  the
Property.  The  Improvements  shall be constructed  entirely on the Property and
shall not encroach upon or over any known easement or right-of-way, nor upon the
land of others, and when erected shall be wholly within any building restriction
lines.

5.5 Borrower  shall furnish from time to time upon request by Lender,  in a form
acceptable to Lender,  a correct list of the Contractors and all  subcontractors
employed  in  connection  with  construction  of the  Improvements  and true and
correct copies of all executed  contracts and  subcontracts.  Lender may contact
the Contractor or any  subcontractor  to verify any facts disclosed in the list,
and all contracts and subcontract  relating to construction of the  Improvements
must require the disclosure of the listed information to Lender.

5.6 No  materials,  equipment,  fixtures or  articles  of  personal  property of
Borrower placed in or on the Improvements  shall be purchased or installed under
any security  agreement or other agreement where the seller reserves or purports
to reserve title or the right to remove or repossess the items,  or the right to
consider such items as personal  property after their  incorporation in the work
of construction, unless authorized by Lender in writing; provided, however, this
paragraph is not intended to prevent  Borrower  from  granting a purchase  money
security  interest in computer  equipment or software acquired after the date of
this Agreement.

5.7  Lender  and its  agents  and  representative  shall  have the  right at any
reasonable  time to enter  the  Premises  and  inspect  he  construction  of the
Improvements  and all plans,  specifications,  change orders,  and other matters
pertaining thereto.  Lender shall also have the right to examine, copy and audit
the  books,  record,  accounting  data  and  other  documents  of  Borrower  and
Borrower's   Contractor   relating  to  the  property  or  construction  of  the
Improvements.  If Lender in good faith  determines that any work or materials do
not  conform  to  the  approved  Plans  and  Specifications  or  sound  building
practices,  or otherwise  depart form any other  requirements of this Agreement,
Lender may require the work to be stopped and withhold  disbursements  until the
matter is corrected.  In such event, Borrower shall promptly correct the work to
Lender's  satisfaction.  No  such  action  by  Lender  shall  affect  Borrower's
obligation  to complete the  Improvements  of any phase of  construction  by the
deadlines  designated in Paragraph  5.1. Any inspection or examination by Lender
of books and records of Borrower is for the sole purpose of protecting  Lender's
collateral and preserving  Lender's rights under this  Agreement.  No default of
Borrower  shall be waived by any  inspection  by Lender,  and no  inspection  by
Lender shall be construed  as a  representation  that there has been or shall be
compliance with the Plans and  specifications  or that construction is free from
defective materials or workmanship.
<PAGE>

5.8 Excluding only such liabilities,  claims,  damages,  costs and expenses that
are solely and proximately  caused by willful  misconduct or gross negligence by
Lender,  Borrower shall  indemnify and hold Lender harmless from and against all
liabilities, claims, damages, costs and expenses (including, but not limited to,
legal  fees,  costs,  and  expenses)  arising  out  of  or  resulting  from  the
construction of the Improvements.  Upon demand by Lender,  borrower shall defend
any action or proceeding brought against Lender. Lender may elect to conduct its
own defense at the expense of Borrower.  The provisions of this Paragraph  shall
survive the termination of this Agreement and repayment of the Loan.

5.9 If Borrower is a corporation,  limited liability company or partnership,  it
shall not  amend or modify or permit  any  amendment  or  modification  of,  its
Articles of Incorporation  or its partnership or operating  agreement during the
term of the Loan without the prior written  approval of Lender,  which  approval
shall not be unreasonably withheld.

5.10 Borrower  shall not without the prior written  consent of Lender (i) commit
any  default  under  the  terms of the  Construction  Contract  (as  hereinafter
defined), (ii) waive any of the obligations of the Contractor thereunder,  (iii)
do any act which would relieve the  Contractor  from its obligation to construct
the  Improvements  according to the Plans and  Specifications,  or (iv) make any
amendment to the  Construction  Contract  resulting in additional costs which by
themselves  or in  conjunction  with other  amendments  exceed the  Construction
Budget,  or (v) take  any  action  which  would  cause  the  costs of  competing
construction  of the  Improvements  to exceed  the  undisbursed  Loan funds by a
factor of more than ten percent (10.0%).

5.11 Borrower  shall not without the prior written  consent of Lender (i) commit
any  default  under  the  terms  of the  Architect's  Contract  (as  hereinafter
defined),  (ii) waive any of the obligations of Architect  thereunder,  (iii) do
any act which would relieve the Architect from any  obligations  thereunder,  or
(iv) make an amendment to the Architect's Contract.

5.12 Borrower shall obtain such insurance or evidence of insurance as Lender may
require, including but not limited to, the following:

         5.12.1  Title  Insurance.  An ALTA (or  equivalent)  mortgagee's  title
         insurance  policy in amount,  form and substance and written by a title
         insurance  company  satisfactory to Lender and insuring the lien of the
         Security  Instrument as a first  priority lien on the Premises  subject
         only to the matters  listed in Schedule B to the  Security  instrument,
         the original of which policy shall be promptly delivered to Lender. The
         policy shall contain no exceptions  except those approved by Lender and
         shall include any disbursement  protection  provisions which Lender may
         require.

         5.12.2 An all peril builder's risk and liability insurance policy in an
         amount,  form and  substance  as Lender may require  and with  standard
         noncontributing  mortgage  clauses and standard  waiver of  subrogation
         clauses shall be promptly delivered to Lender.  This insurance shall be
         issued  by such  companies  as shall he  approved  by  Lender,  and the
         originals of such  policies  (together  with  appropriate  endorsements
         thereto,  evidence of payment of premiums thereon and written agreement
         by the  insurer or insurers  therein to give  Lender  thirty (30) days'
         prior  written  notice  of  intention  to  cancel)  shall  be  promptly
         delivered  to Lender.  Such  insurance  coverage  shall be kept in full
         force and effect at all times until  construction  of the  Improvements
         has been completed.

         5.12.3 An all-risk policy of casualty insurance,  and such other hazard
         insurance as Lender may  require,  with an agreed  amount  endorsement,
         standard  noncontributing  mortgage  clauses  and  standard  waiver  of
         subrogation clauses.  This insurance shall be in such amounts and forms
         including loss payee and other endorsements issued by such companies as
         shall  be  approved  by  Lender,  and the  originals  of such  policies
         together with appropriate endorsements thereto,  evidence of payment of
         premiums  thereon and  written  agreement  by the insurer and  insurers
         therein to give  Lender  thirty  (30)  days'  prior  written  notice of
         intention  to cancel)  shall be  promptly  delivered  to  Lender.  This
         insurance  shall  be  kept  in  full  force  and  effect  at all  times
         thereafter until the Loan has been paid in full.

         5.12.4 A certificate from an insurance company indicating that Borrower
         and Contractor are covered (at all times until the Promissory  Note has
         been  paid in full)  by  public  liability  and  workers'  compensation
         insurance  an that  Lender is named as  additional  insured  under such
         policy to the reasonable satisfaction of Lender.

5.13  Borrower  shall  cooperate  with Lender in  obtaining  the benefits of any
insurance or other  proceeds  lawfully or equitably  payable to it in connection
with the transactions  contemplated hereby and shall pay or reimburse Lender for
any  expenses  incurred in  connection  therewith  (including  the expense of an
independent   appraisal  in  case  of  for  or  other  casualty   affecting  the
Improvements).

5.14  Borrower  shall use the  proceeds  of the Loan  solely for the  purpose of
paying for the cost of  constructing  the  Improvements  and the other  purposes
described in this Agreement.

5.15 Borrower shall pay all of Lender's out-of-pocket costs (including,  but not
limited to, attorney' fees and legal expenses)  pertaining to the preparation of
the Loan Documents and the closing and  administration  of the Loan.  Additional
examples  of such costs are  architectural  and other  consultant  fees,  survey
costs,  appraisal coats, filing and recording expenses,  long distance telephone
charges,  hand delivery and telefax  charges,  overnight and other mall charges,
and similar items.

5.16 If and only if so directed by Lender,  Borrower  shall  promptly  erect and
maintain on a suitable site on the Premises a sign approved by Lender  regarding
the  financing of  Improvements  to the  Property.  Borrower  shall  prevent the
destruction  or removal  of such sign  without  the prior  written  approval  of
Lender.

5.17 Borrower shall permit no deviation from the Plans and Specifications  which
by itself or in  conjunction  with other changes or  deviations  would result in
additional  costs in  excess  of the  Construction  Budget  or cause the cost of
completing  construction of the Improvements to at any time exceed the amount of
undisbursed  Loan funds by a factor of more than ten percent (10.0%) without the
prior  written  approval of Lender,  which  approval  shall not be  unreasonably
withheld.

5.18 Borrower shall keep and maintain  property and accurate books,  records and
accounts  reflecting  all items of income and expense of Borrower in  connection
with the Premises and the construction  thereon and, upon the request of Lender,
shall make such books,  records and amounts  immediately  available to Lender or
its inspection or independent audit.
<PAGE>

5.19 Within ten (10) days after the date of filing same,  Borrower shall deliver
to Lender a photocopy of Borrower's  annual 10K filing with the  Securities  and
Exchange  Commission,  and such records shall he certified as accurate as of the
date of such filing.

5.20 Borrower shall  immediately  advise Lender in writing if Borrower  receives
any written  notice form any  laborers,  subcontractors  or  materialmen  to the
effect that such laborers, subcontractors or materialmen have not been paid when
due for any labor or materials  furnished in connection with the construction of
the Improvements.

5.21  Borrower  shall,  at Borrower's  expense,  furnish to Lender copies of all
environmental  assessments,  surveys,  certificates,  Plans and  Specifications,
appraisals,   title  and  other  insurance,  reports  and  other  documents  and
instruments pertaining to the Premises.

5.22  Borrower  shall  provide  promptly to Lender at  Borrower's  expense  such
reports of soil tests of the property as Lender may hereafter request.

5.23 Borrower and Contractor  shall not he entitled to store any materials on or
adjacent to the Property without first complying with all requirements which may
be imposed relating to the nature and manner of such storage.

5.24 At the time of the  making of any  advance  hereunder,  no Event of Default
shall have occurred,  nor shall any circumstance exist which, with the giving of
notice or the passage of time, or both, would constitute an Event of Default.

5.25  Borrower  and the  Property  are  and  shall  be in  compliance  with  all
environmental,  health and safety laws, rules and regulations and Borrower alone
is or shall be subject to any liability or obligation for remedial action in the
event of any action thereunder.  No investigation or inquiry by any governmental
authority is or shall be pending or, to the  knowledge  of Borrower,  threatened
against  Borrower  or the  Property  with  respect  to any  toxic  waste,  toxic
substance or Hazardous Material as defined herein. No Hazardous Materials are or
shall be located on or under  Borrower's  Property.  Borrower  has not caused or
permitted nor shall cause or permit any toxic or hazardous waste or substance to
be  stored,  transported,  or  disposed  of on or  under  or  released  from the
Property.  The term "Hazardous Materials" shall mean by substance,  material, or
waste which is or becomes regulated by any governmental authority including, but
not limited to: (i)  petroleum,  (ii)  friable or  non-friable  asbestos;  (iii)
polychlorinated biphenyls; (iv) those substances, materials or wastes designated
as a  "hazardous  substance"  pursuant  to Section 311 of the Clean Water Act or
listed  pursuant  to Section  307 of the Clean  Water Act or any  amendments  or
replacements  to these  statutes;  (v)  those  substances,  materials  or wastes
defined  as a  "hazardous  waste"  pursuant  to  Section  1004  of the  Resource
Conservation and Recovery Act or any amendments or replacements to that statute;
(vi) those  substances,  materials or wastes defined as a "hazardous  substance"
pursuant  to  Section   101  of  the   Comprehensive   Environmental   Response,
Compensation  and  Liability  Act, or any  amendments  or  replacements  to that
statute;  or (vii) those  substances,  materials or wastes defined as "hazardous
waste" or a "hazardous substance" pursuant to applicable state law.

5.26 Borrower has not violated and shall not violate any federal,  state, county
or municipal statute, regulation or ordinance which may materially and adversely
affect  its  respective  business  operations  or  financial  condition  or  the
Property.  No Event of Default  (or  circumstance  which,  with  response or the
passage of time or both,  would  constitute  an Event of Default)  has  occurred
under this Agreement or the Loan Documents.

5.27 Additional Covenants of Borrower:


6.  REPRESENTATIONS  AND WARRANTIES.  Borrower represents and warrants to Lender
that:

6.1 Borrower's social security number or federal taxpayer  identification number
is: 680211359

6.2 Borrower's Residency. Borrower is [ ] an individual(s) and a resident of the
State of  __________________________  [X] a Corporation duly organized,  validly
existing  and in good  standing  under the laws of the State of  California  and
licensed to conduct  business in all of the  jurisdictions in which its business
is conducted.

6.3 Borrower's chief executive office, chief place of business, office where its
business records are located, or residence is the address identified on page one
of this  Agreement.  Borrower's  other  executive  offices,  places of business,
locations of its business  records,  or  domiciles  are  described on Schedule D
attached  hereto  and  incorporated  herein by this  reference.  Borrower  shall
immediately  advise  Lender  in  writing  on any  change in or  addition  to the
foregoing addresses.

6.4 Borrower  shall not become a party to any  restructuring  of its business or
participate in any  consolidation,  merger,  liquidation or dissolution  without
providing Lender with thirty-(30) days prior written notice thereof.

6.5  Borrower  shall  notify  Lender  of the  nature of any  intended  change of
Borrower's name, or the use of any trade name, and when such change or use shall
become effective.

6.6  Borrower  possesses  and shall  possess  good and  marketable  title to the
Property  and any and all  Improvements  thereon free and clear of all liens and
encumbrances  except for the lien for general  real estate taxes for the current
calendar  year,  the lien and  security  interest  belonging  to Lender  and any
permitted  deeds to  secure  debt,  mortgages  or deeds of trust  and any  other
permitted exceptions to title as described in Schedule B hereto.

6.7 All tax returns and reports of the Borrower required by law to be filed have
been duly filed, and all taxes, assessments, and other governmental charges upon
Borrower or upon its  properties  or assets or income  which are due and payable
have been paid and shall continue to be so paid.

6.8 All financial statements  previously delivered to Lender by Borrower and the
Guarantors  are  true  and  correct  in all  respects,  have  been  prepared  in
accordance  with  generally  accepted   accounting   principles  and  accurately
represent  the  financial  condition  of Borrower and the  Guarantors  as of the
respective  dates  thereof.  No  materially  adverse  change has occurred in the
financial  condition  reflected  in any  such  financial  statements  since  the
respective  dates  thereof,  and no  additional  borrowings  have  been  made by
Borrower since that date thereof other than this Loan.
<PAGE>

6.9  Borrower  and  Contractor  have  entered  into  a  contract  ("Construction
Contract")  whereby  Contractor  has agreed to  construct  the  Improvements  in
accordance  with the  Plans  and  Specifications  and to pay for all  labor  and
materials  used in connection  with such  construction,  and (I) Lender has been
provided a copy of the Construction Contract and any amendments or modifications
thereto,  (ii)  there are in  existence  no  defaults  or  grounds  for  default
thereunder,  (iii) the  Construction  Contract is in full force and effect,  and
(iv) Contractor has obtained all necessary building permits.

6.10  Borrower  and  Architect  have  entered  into  a  contract   ("Architect's
Contract")  relating to the  design,  construction,  supervision  of work on and
inspection of the Improvements,  and (I) Lender has been provided with a copy of
the Architect's Contract and any amendments or modifications thereto, (ii) there
are in  existence  no default or grounds for default  thereunder,  and (iii) the
Architect's Contract in full force and effect.

6.11 The Loan  Documents  are in all  respects  the legal,  valid,  binding  and
enforceable obligation of the Borrower in accordance with their respective terms
and  conditions,  and grant Lender a duly  perfected  first lien on and security
interest in the Premises.

6.12 No chattel mortgage, bill of sale, security agreement,  financing statement
or other title  retention  agreement  (except those executed in favor of Lender)
has been or shall be executed with respect to any personal property,  chattel or
fixture used in conjunction with the  construction,  operation or maintenance of
the Improvements without the prior written consent of Lender; provided, however,
the  consent of Lender  shall not be required  for  Borrower to grant a purchase
money  security  interest in computer  equipment or software  acquired after the
date of this Agreement.

6.13  All  public  utility  services  necessary  for  the  construction  of  the
Improvements and the operation thereof for their intended purposes are available
within  boundaries of the Property,  including water supply,  storm and sanitary
sewer facilities, and natural gas, electric and telephone facilities.

6.14 The  Premises  are not now  damaged  or  injured  as a result  of any fire,
explosion, accident, flood or other casualty.

6.15 Any brokerage  commissions  due in connection with the purchase by Borrower
of the Property have been paid in full, and any such  commissions  coming due in
the future shall be promptly paid by Borrower. Borrower shall indemnity and hold
Lender harmless from any liability, claim or loss, including attorney's fees and
legal  expenses,  arising  by  reason of the  claim of any  person  for any such
brokerage  commissions.  This provision  shall survive the repayment of the Loan
made in connection  herewith and shall continue in full force and effect so long
as the possibility of such liability, claim or loss exists.

6.16  Notwithstanding  any  provision of any  document or agreement  pursuant to
which  Borrower  is formed or any  provision  of any  other  agreement  to which
Borrower  may be or become a party,  until  all of  Borrower's  indebtedness  to
Lender under the Loan  Documents has been paid in full,  Borrower  shall make no
disbursement of funds from the rental or sale of any part of the Premises to any
of Borrower's officers,  stockholders or similar persons or to any other person,
whether by way of debt repayment,  return of capital, dividend,  distribution of
income or otherwise, without the prior written consent of Lender.

6.17 Borrower has the right and is duly  authorized  to execute,  enter into and
perform its obligations under the Construction  Contract,  Architect's Contract,
the Agreement and the other Loan Documents. Borrower's execution and performance
of its obligations under the Construction Contract, this Agreement and the other
Loan  Documents  does not and  shall not  conflict  with the  provisions  of any
statute,  regulation,  ordinance, rule of law, contract or other agreement which
may now or hereafter be binding on Borrower.

6.18 No  action or  proceeding  is or shall be  pending  or  threatened  against
Borrower.  No action or  proceeding  is or shall be pending or  threatened  that
might result in any material or adverse change in Borrower's business operations
or financial condition or materially affect the Premises.

6.19  Borrower has not violated  and shall not violate any  applicable  federal,
state, county or municipal statute, regulation or zoning or other ordinance, any
environmental  laws, or any land use laws which  materially and adversely affect
its business operations or financial condition or the Premises.

6.20 Borrower  represents that  construction of the Improvements to the Premises
has not yet begun as of the effective date of this Agreement.

6.21 The foregoing  representations  and warranties  will be true at the date of
the first  disbursement and at the dates of all subsequent  disbursements of the
Loan proceeds.

7. EVENT OF DEFAULT.  An Event of Default  shall occur under this  Agreement and
the other Loan Documents if:

7.1 Borrower or any  Guarantor  falls to pay any amount under this  Agreement or
the other Loan Documents or any other indebtedness to Lender when due;

7.2 Borrower or any  Guarantor  fails to perform any  obligation or breaches any
warranty or  covenant  to Lender  contained  in this  Agreement,  the other Loan
Documents, or any other present or future agreement;

7.3  Borrower  or any  Guarantor  provides  or causes  any  false or  misleading
signature or representation or warranty to be provided to Lender;

7.4  Borrower  or any  Guarantor  allows or causes the  Premises  to be damaged,
destroyed, lost or stolen in any material respect;

7.5  Construction of the Improvements is halted prior to the Completion Date for
any period of twenty (20) consecutive days for any cause;

7.6  Construction  of the  Improvements  is abandoned or is not  completed on or
before the Completion Date for any cause;
<PAGE>

7.7 Any lien for labor, services,  materials,  or otherwise is filed against the
Premises;

7.8 Lender  believes in good faith that the  financial  condition of Borrower or
any Guarantor has undergone a material  adverse change or that the prospects for
the successful and profitable  sale of the  Improvements  upon  completion  have
materially declined;

7.9  Without  first  having  obtained  the written  consent of Lender,  Burrower
transfers,  sells,  conveys,  encumbers  or  assigns  all or any  portion of the
Premises;

7.10 If Borrower is a corporation,  partnership,  limited  liability  company or
joint venture,  the controlling  interest in Borrower or any constituent  entity
thereof is transferred,  sold or assigned  without the prior written approval of
Lender;

7.11 If the  Improvements  are partially or totally damaged or destroyed by fire
or any other cause and Lender believes in good faith that the Improvements shall
not be completed on or before the Completion Date;

7.12 Any Guarantor  seeks to revoke,  terminate or otherwise limit its liability
to Lender;

7.13 Any  litigation is filed against  Borrower or any Guarantor with respect to
the Premises  which,  if adversely  determined,  could  materially  impair their
ability to perform  their  respective  obligations  under the Loan  Documents or
impair the value of the Premises;

7.14 Borrower or any Guarantor  permits the entry or service of any garnishment,
judgment, tax levy, attachment or lien against them or any Guarantor,  or any of
their property;

7.15 Borrower or any Guarantor dies, becomes legally  incompetent,  is dissolved
or  terminated,  ceases to operate its  business,  becomes  insolvent,  makes an
assignment  for  the  benefit  of  creditors,  or  becomes  the  subject  of any
bankruptcy, insolvency or debtor rehabilitation.

7.16  Borrower or any Guarantor  causes  Lender to deem itself  insecure in good
faith for any reason; or

7.17 Lender reasonably  believes that one or more Events of Default described in
this Paragraph 7 have occurred and Borrower,  after Lender's  request,  fails to
provide evidence reasonably  satisfactory to Lender that such Event or Events of
Default have not in fact occurred.

8.  RIGHTS OF LENDER ON EVENT OF  DEFAULT.  Upon the  occurrence  of an Event of
Default under this  Agreement,  Lender shall be entitled to exercise one or more
of the following remedies without notice or demand:

8.1 To exercise  any of the rights and remedies  described in this  Agreement or
the other Loan Documents;

8.2 To declare the principal  amount plus accrued  interest  under this Note and
all other present and future obligations of Borrower immediately due and payable
in full;

8.3 To  terminate  the  agreements  of the  Lender to extend  credit of any kind
hereunder,  whereupon  the  commitment  and  obligation  of the  Lender  to make
disbursements or make loans hereunder shall terminate;

8.4 To enter into  possession of the Premises and take all actions  necessary in
its judgement to complete  construction  of the  Improvements in accordance with
the Plans and  Specifications.  Lender shall also have the right to make changes
in the Plans and  Specifications,  work or materials as it may deem  appropriate
and to enter into, modify or terminate any contractual arrangements,  subject to
Lender's right at any time to discontinue  work without  liability.  Such action
shall be taken at the sole risk, cost and expense of Borrower.  Lender shall not
assume  liability to Borrower or any other person or entity for  completing  the
Improvements or for the manner of quality of  construction of the  Improvements.
Borrower irrevocably appoints Lender as its attorney-in-fact, with full power of
substitution,  to  complete  the  Improvements,  at the  option  of  Lender,  in
Borrower's name. Lender shall have the right to disburse any portion of the Loan
not previously disbursed, and to use any other funds of Borrower,  including any
funds held in escrow accounts,  to the extent necessary or desirable to complete
or finish  construction of the Improvements and to pay, compromise or settle all
existing or future bills and claims that are or may be or become  liens  against
the  Premises,  or may be  necessary  or  desirable  for the  completion  of the
Improvements  or the  clearance of title of the  Premises.  All sums expended by
Lender in completing  construction shall be considered to have been disbursed to
the Borrower, and Borrower and all Guarantors shall be liable thereof. Such sums
shall be secured by the Security  Instrument,  Security  Agreement and any other
documents  securing the Loan. In the event such sums exceed the principal amount
of the Promissory Note, the amount of the excess funds shall be considered to be
an  additional  Loan to Borrower  bearing  interest at the rate  provided in the
Promissory  Note and  shall be  secured  by the  Security  Instrument,  Security
Agreement and any other documents securing the Loan; and

8.5 To exercise  all other rights  available  to Lender under any other  written
agreement or law or in equity.

Lender's rights are cumulative and may be exercised together, separately, and in
any order.  Lender may, at its option,  appoint a receiver without bond, without
first bringing suit on Borrower's  obligations and without meeting any statutory
conditions  regarding  receivers,  it being intended that Lender shall have this
contractual right to appoint a receiver.

9. ASSIGNMENT OF CONTRACTS TO LENDER.  Borrower hereby conditionally  assigns to
Lender all of its interest in and to the Plans and Specifications along with all
studies,  data and drawings  prepared by or for Borrower and the  contracts  and
agreements  relating to the Plans and  Specifications  or to the construction of
the  Improvements.  Lender shall not assume any obligations under such contracts
and  agreements  unless it agrees  otherwise  in writing.  Lender shall have the
right  to take  over  and use at any time the  labor,  materials,  supplies  and
equipment contracted for, by or on behalf of Borrower,  including such equipment
and supplies that have  theretofore  been delivered to the Premises or stored in
any  facility  for  incorporation  into  the  Improvements,  all in the sole and
absolute discretion of the Lender.
<PAGE>

10. ACTIONS.  Lender shall have the right, but not the obligation,  to commence,
appear in and defend any action or proceeding which might affect the Premises or
its  rights,  duties or  liabilities  under  this  Agreement  or the other  Loan
Documents.   Borrower   shall   reimburse   Lender  upon  demand  for   Lender's
out-of-pocket costs, expenses and legal fees and disbursements incurred in those
actions or proceedings.

11.  APPLICATION  OF PAYMENTS.  Whether or not a default has occurred under this
Agreement,  all payments made by or on behalf of Borrower and all credits due to
Borrower  from the  disposition  of the  Premises  or  otherwise  may be applied
against  the  amounts  paid by  Lender  (including  attorneys'  fees  and  legal
expenses) in connection with the exercise of its rights or remedies described in
the Agreement and any interest thereon and then to the payment of the Borrower's
Obligations to Lender under the Loan Documents in whatever order Lender chooses.

12. REIMBURSEMENT OF AMOUNTS EXPENDED BY LENDER. Borrower shall reimburse Lender
for all  amounts  (including  attorneys'  fees and legal  expenses)  expended by
Lender in the  performance of any action required to be taken by Borrower or the
exercise  of any  right or remedy  belonging  to Lender  under  this  Agreement,
together with interest thereon at the lower of the highest rate described in any
promissory  note or credit  agreement  executed by Borrower or the highest  rate
allowed by law from the date of payment until the date of  reimbursement.  These
sums shall be payable upon demand and shall be secured by the liens and security
interests described in the Agreement and the other Loan Documents.

13.  TERMINATION.  This Agreement shall survive the making of the Loan and shall
remain in full force and effect  until  Lender  provides  Borrower  with written
notice of the termination hereof.

14.  ASSIGNMENT.  Borrower  shall not be  entitled  to assign any of its rights,
remedies or obligations  described in this  Agreement  without the prior written
consent of Lender which may be withheld by Lender in its sole discretion. Lender
shall be entitled to assign some or all of its rights and remedies  described in
this Agreement without notice to or any third party in any manner.

15.  MODIFICATION  AND WAIVER.  The  modification or waiver of any of Borrower's
obligations or Lender's  rights under this Agreement or the other Loan Documents
must be  contained  in a writing  signed by Lender.  Lender may  perform  any of
Borrower's  obligations  or delay or fail to exercise any of its rights  without
causing a waiver of those  obligations or rights. A waiver on one occasion shall
not constitute a waiver on any other occasion. Borrower's obligations under this
Agreement and the other Loan  Documents  shall not be affected if Lender amends,
compromises,  exchanges,  fails to  exercise,  impairs  or  releases  any  other
obligations  belonging to any borrower or Guarantor or any of its rights against
any borrower, Guarantor or collateral.

16.  SUCCESSORS AND ASSIGNS.  This Agreement  shall be binding upon and inure to
the benefit of Borrower  and Lender and their  respective  successors,  assigns,
trustees, receivers, administrators,  personal representatives, heirs, legatees,
and devisees.

17.  NOTICE.  Any  notice  or other  communication  to be  provided  under  this
Agreement  shall be in  writing  and  mailed  to the  parties  at the  addresses
described in this  Agreement or such other  address as the parties may designate
in writing form time to time.

18.  SEVERABILITY.  If any  provision of this  Agreement  violates the law or is
unenforceable, the rest of the Agreement shall remain valid.

19.  APPLICABLE  LAW. This Agreement  shall be governed by the laws of the state
indicated  in  Lender's  address.  Unless  applicable  law  provides  otherwise,
Borrower  consents to the  jurisdiction  of any court  selected by Lender in its
discretion located in that state.

20. COLLECTION COSTS. To the extent permitted by law, Borrower agrees to pay all
costs of collection,  including  attorney's  fees of 15 percent of the principal
and  interest  owing on the  indebtedness  if  collected  by law or  through  an
attorney at law.

21.  MISCELLANEOUS.  Borrower  and  Lender  agree  that time is of the  essence.
Borrower waives presentment,  demand for payment, notice of dishonor and protest
except as required by law. If there is more than one Borrower, their obligations
shall  be  joint  and  several.  This  Agreement  represents  the  complete  and
integrated understanding between Borrower and Lender regarding the terms hereof.

22.  RIGHTS  OF THIRD  PARTIES.  All  conditions  of the  obligations  of Lender
hereunder,  including the  obligation to make  advances,  are imposed solely and
exclusively  for the benefit of Lender and its successors and assigns.  No other
person  shall  have  standing  to require  satisfaction  of such  conditions  in
accordance  with their terms or be  entitled to assume that Lender will  require
strict  compliance  with any or all thereof.  No other person  shall,  under any
circumstance,  be deemed to be a beneficiary of such  conditions,  any or all of
which may be freely waived in whole or in part by Lender at any time in Lender's
sole discretion.  Lender makes no representations  and assumes no obligations to
Borrower or to any third party  concerning  the quality of the  construction  by
Borrower of the  Improvements  or the  absence  therefrom  of  defects.  In this
connection Borrower agrees to indemnify Lender from any liability, claim or loss
resulting  form the  disbursement  of the loan proceeds or from the condition of
the Premises,  whether  related to the quality of  construction or otherwise and
whether  arising  during  or after the term of the Loan.  This  provision  shall
survive the repayment of the Loan and shall continue in full force and effect so
long as the possibility of such liability, claim or loss exists.

23. JURY TRIAL WAIVER.  BORROWER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY
CIVIL ACTION ARISING OUT OF, OR BASED UPON, THIS AGREEMENT.

24. ADDITIONAL TERMS:

NOTWITHSTANDING  ANY OTHER  PROVISION  CONTAINED  IN ANY OTHER  SECTION  OF THIS
AGREEMENT,  THE FOLLOWING SHALL NOT BE CONSIDERED "EVENTS OF DEFAULT",  LENDER'S
CONSENT  WILL  NOT BE  REQUIRED  AND NO FEE  SHALL  BE  IMPOSED  FOR  ANY OF THE
FOLLOWING:

         (a)      A TRANSFER OF NOT MORE THAN 50% IN THE AGGREGATE OF THE SHARES
                  OF THE BORROWER;

         (b)      THE TRANSFER OF SHARES UPON THE DEATH OF A SHAREHOLDER;
<PAGE>

         (c)      THE TRANSFER OF SHARES FOR ESTATE  PLANNING  PURPOSES  INTO OR
                  FROM

         (d)      THE TRANSFER OF SHARES  PURSUANT TO AND  FOLLOWING  BORROWER'S
                  EQUITY SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED

PROVIDED,  HOWEVER,  THAT IN THE EVENT OF A TRANSFER OF SHARES  PURSUANT TO (A),
(B) SHALL REMAIN A MEMBER OF THE BOARD OF  DIRECTORS  AND  EXECUTIVE  OFFICER OF
SUCCESSOR TO BORROWER.

NOTWITHSTANDING ANY OTHER PROVISION CONTAINED IN ANY OTHER SECTION OF THIS AG???
SECURITY INTEREST SHALL NOT ACCRUE IN OR ATTACH TO THE FOLLOWING DEPOSIT ACCOUNT
THIRD PARTY SERVICING ACCOUNTS THAT BORROWER MAY OPEN OR MAINTAIN WITH LENDER:

Account Name                                            Account Number
------------                                            --------------

American National Insurance Company                       2000291282
American NatIonal Insurance Company                       2004000002
IL Annuity and Insurance Company                          2000283289
IL Annuity and Insurance Company                          2000291308
Transamerica Life Insurance                               2000291290
Transamerica Life Insurance                               2000283305
Legacy Marketing Group                                    2000283271
Investors Insurance Corporation                           2000307179
John Hancock Variable Life Insurance Company              2000299707


--------------------------------------------------------------------------------
BORROWER  ACKNOWLEDGES  THAT BORROWER HAS READ,  UNDERSTANDS  AND AGREES TO  THE
CONDITIONS OF THIS AGREEMENT.

Dated:  October 27, 2003                    Lender: SUNTRUST BANK


                                            By: /s/ CHERYL GAINES
                                                --------------------------------
                                                CHERYL GAINES, VICE PRESIDENT


Borrower: REGAN HOLDING CORPORATION         Borrower:


/s/ STEVE TAYLOR, CFO
-----------------------------------         ------------------------------------
    STEVE TAYLOR, CFO

REGAN HOLDING CORPORATION                   Borrower:


/s/  ELIZABETH D'ORAZIO
-----------------------------------         ------------------------------------
Executive Assistant


                                [CORPORATE SEAL]
<PAGE>

                          CONSTRUCTION LOAN AGREEMENT


                                   SCHEDULE A


All that tract or parcel of land  situated,  lying and being in Land Lots 55, 56
and 90 of the 4th District and 4th Section of Floyd County,  Georgia,  and being
in the Third Ward of the City of Rome, and being more particularly  described as
follows:

START at a 1/2 inch iron pin found at the intersection of the west land lot line
of said Land Lot 56 with the northerly  right of way of Technology  Parkway (100
foot  right of way);  run thence  South 87  degrees 11 minutes 55 seconds  East,
along the  northerly  right of way line of  Technology  Parkway,  a distance  of
1584.9  feet to a 5/8-inch  iron pin  placed  and being the POINT OF  BEGINNING;
thence  from said  Point of  Beginning  running  North 02  degrees 45 minutes 20
seconds  East a distance  of 442.71 feet to a 5/8-inch  iron pin placed;  thence
South 85  degrees 54 minutes  20  seconds  East a distance  of 706.93  feet to a
5/8-inch  iron pin placed;  thence  running  Easterly and  Southerly,  along the
southerly and westerly  line of a proposed  road, an arc distance of 664.53 feet
(a chord distance of South 28 degrees 53 minutes 20 seconds East 560.15 feet) to
a 5/8 inch iron pin placed;  thence South 28 degrees 07 minutes 40 seconds West,
along the westerly line of said proposed roadway,  a distance of 50.59 feet to a
5/8-inch  iron  pin  placed,  which  point  is also  the  intersection  with the
northerly  right of way line of Technology  Parkway;  thence  running  Westerly,
along the northerly right of way line of Technology  Parkway, an arc distance of
471.42  feet (a chord  distance  of North 75 degrees 29 minutes 25 seconds  West
468.19 feet) to a 5/8-inch  iron pin placed;  thence North 87 degrees 08 minutes
00 seconds West, along the northerly right of way line of Technology  Parkway, a
distance of 520.57 feet to a 5/8-inch iron pin place which point is the Point of
Beginning. Being the same property shown as that certain plat of survey prepared
by Williams,  Sweitzer and Barnum, Inc. dated January 30, 2003, and last revised
April 14,  2003,  and  recorded  in Plat Book 28,  Page 242,  Floyd  County Deed
Records.

This  conveyance  is subject to all easements  and all  restrictions  of record,
including but not limited to that certain  declaration  of protective  covenants
and restrictions for Technology Parkway dated June 28, 2000 and recorded in Deed
Book 1593,  Page 944 and all matters as disclosed by that certain plat of survey
prepared by Williams, Sweitzer and Barnum, Inc. dated January 30, 2003, and last
revised  April 14, 2003,  and recorded in Plat Book 28, Page 242 and any and all
zoning ordinances effecting the property.
<PAGE>

                                   SCHEDULE B


         1.       Easement to Georgia  Power  Company  dated  December 15, 1952,
                  recorded  in Deed  Book  255,  Page  109,  Floyd  County  Deed
                  Records.

         2.       Declaration  of  Restrictive  Covenants  dated  April 4, 1994,
                  recorded  in Deed Book  1260,  Page  396,  Floyd  County  Deed
                  Records, and Corrective  Declaration of Restrictive  Covenants
                  dated September 3, 1996, recorded in Deed Book 1352, Page 135,
                  Floyd County Deed Records  establishes  wetlands buffers,  and
                  the  same  affects  and  restricts  the  use of  the  property
                  identified as Tract 4 therein.

         3.       Declaration  of  Protective  Covenants  and  Restrictions  for
                  Technology Parkway dated June 28, 2002, recorded July 20, 2002
                  in Deed Book 1593, Page 944, Floyd County Deed Records.

         4.       Right of Way Deed by Berry College,  Inc. to the City of Rome,
                  Georgia dated April 22, 2003, recorded in Deed Book 1776, Page
                  1106, Floyd County Deed Records, conveying 2.33 acres as shown
                  on that  certain  survey  for the  City of  Rome,  Georgia  by
                  Williams,  Sweitzer & Barnum,  Inc. and certified to by Robert
                  L. Moss, Georgia Registered Land Surveyor No. 1498.

         5.       Ten  (10')  foot  wide  utility  easement  and  other  matters
                  disclosed  on recorded  plat of  subdivision  in Plat Book 28,
                  Page 242, Floyd County Deed Records.

         6.       Thirty (30') foot wide easement dated July 16, 2003,  from The
                  Berry  College,  Inc. to Georgia  Power  Company to construct,
                  operate   and   maintain   continuously   poles,   wires   and
                  transformers along Technology  Parkway,  recorded September 8,
                  2003 in Deed Book 1822, Page 175, Floyd County Deed Records.

         7.       Thirty (30') foot wide easement dated July 16, 2003, from Rome
                  Floyd County Development Authority to Georgia Power Company to
                  construct,  operate and maintain continuously poles, wires and
                  transformers along Legacy Drive, recorded September 8, 2003 in
                  Deed Book 1822, Page 178, Floyd County Deed Records.


                                   SCHEDULE C

     Construction  of a 35,000  square  foot office  building  in on  Technology
Parkway in Berry Corporate Office Park in Rome, Georgia.


                                   SCHEDULE D


418 East Second Avenue
Rome, Georgia 30161

<PAGE>

                                   EXHIBIT 1


                                  DRAW REQUEST


                                               _________________________________
                                                                          (Date)

TO: ________________________

    ________________________

    ________________________


     You   are   hereby   requested   and   authorized   to  pay   the   sum  of
$_________________________ to  ______________________________  as a disbursement
of  loan  proceeds  under  our  Construction   Loan  Agreement  with  you  dated
______________________________.  Such  funds are to be  applied to pay for labor
and    materials    furnished    under   our    Construction    Contract    with
_________________________________________________ dated _______________________.


     The undersigned  hereby CERTIFIES that: (i) work is progressing on schedule
and in accordance with the Construction Contract and the Plans, (ii) there is no
Event of Default  under the  Construction  Loan  Agreement  or the  Construction
Contract,  and (iii) there are sufficient  undisbursed loan proceeds to complete
construction in accordance with the Construction Contract and the Plans.

BORROWER: REGAN HOLDING CORP.               BORROWER:


By:________________________________         ____________________________________

Title:_____________________________


BORROWER:                                   BORROWER:


___________________________________         ____________________________________


BORROWER:                                   BORROWER:


___________________________________         ____________________________________


                         FOR COMPELETION BY CONTRACTOR

                                               _________________________________
                                                                          (Date)

     The  undersigned,  as  Contractor  under  the  Construction  Contract  with
Borrowers signing above, does hereby, for good and valuable  consideration,  the
receipt and sufficiency of which are acknowledged, waive and release any and all
mechanic's and  materialmen's  liens which the  undersigned  has or to which the
undersigned may be entitled by reason of materials  furnished or labor performed
to ______________________________________________________________________, under
Construction  Contract,  and the  undersigned  does hereby CERTIFY that: (i) all
persons,  firms and  corporations  which have  furnished  material or labor with
respect  to this  Draw  Request,  (ii)  to date  the  undersigned  has  received
(exclusive  of the above  amount  requested by the  Borrowers)  the total sum of
$__________________________________ under the Construction Contract.


                                               _________________________________
                                               (Name of Contractor)

                                               _________________________________
                                               (Signature)

                                               _________________________________
                                               (Title if Contractor is
                                               Corporation, Limited Liability
                                               Company, or Partnership)