<PAGE>
                                                                EXHIBIT 10.3


                                 LOAN AGREEMENT


         THIS AGREEMENT (the "Agreement") is made and entered into this 1st day
of November, 2002, by and between Trimedia Entertainment Group, Inc., a Delaware
corporation (the "Borrower") and Gemini Growth Fund, LP, a Delaware limited
partnership (the "Lender").



                              W I T N E S S E T H :

         WHEREAS, the Borrower has requested that Lender make a loan to Borrower
of up to $250,000 (the "Loan"); and

         WHEREAS, Lender has agreed to make such a loan available to Borrower
upon the terms and conditions hereinafter set forth.

         NOW, THEREFORE, it is agreed as follows:


     SECTION 1.  Definitions.  All of the terms defined in this Agreement  shall
                -------------
have such defined meanings when used in the other Loan Documents (as hereinafter
defined) and any certificates,  reports or other documents or instruments issued
under or delivered  pursuant to this Agreement  unless the context shall require
otherwise.  For purposes of this  Agreement,  the following terms shall have the
following meanings:

     1.1  "Affiliate"  shall  mean an entity  that is a member of a  "controlled
group of  corporations"  (within the meaning of Section  414(b) of the  Internal
Revenue  Code),  an  "affiliated  service  group" (within the meaning of Section
414(m) of the Internal  Revenue  Code),  or a group of trades or business  under
common  control  (within the meaning of Section  414(c) of the Internal  Revenue
Code) that also includes the Borrower as a member.

     1.2  "Agreement"  shall  include  this  Agreement  as amended,  modified or
supplemented from time to time.

     1.3  "Authorized  Officer"  shall mean the Chief  Executive  Officer or the
President  of the  Borrower or such other  person  designated  in writing to the
Lender, who is authorized to act on behalf of the Borrower hereunder.

     1.4  "Business  Day"  means  a day  upon  which  banks  are  open  for  the
transaction of business of the nature required by this Agreement in Texas.

     1.5 "Capital  Expenditure":  means any payment made  directly or indirectly
for the purpose of acquiring or  constructing  fixed  assets,  real  property or
equipment  which in accordance  with GAAP would be added as a debit to the fixed
asset  account  of  the  Person  making  such  expenditure,  including,  without
limitation,  amounts paid or payable under any  conditional  sale or other title
retention  agreement or under any lease or other  periodic  payment  arrangement
which is of such a nature  that  payment  obligations  of the  lessee or obligor
thereunder would be required by generally accepted  accounting  principles to be
capitalized  and shown as  liabilities  on the  balance  sheet of such lessee or
obligor.

<PAGE>

     1.6 "Cash Flow"  means an amount  equal to (i) the  Borrower`  Consolidated
EBITDA,   minus   (ii)  the   Borrower`s   Consolidated   non-financed   Capital
Expenditures.

     1.7 "Capital Lease" means any lease of property  (real,  personal or mixed)
which,  in accordance with GAAP,  should be capitalized on the lessee`s  balance
sheet or for which the  amount of the asset and  liability  thereunder  as if so
capitalized should be disclosed in a note to such balance sheet.

     1.8 "Change of  Control"  means (a) a Change of  Ownership;  (b) during any
period of twelve consecutive  calendar months,  individuals who at the beginning
of such period constituted the board of directors of the Borrower (together with
any new  directors  whose  election by the board of directors of the Borrower or
whose  nomination for election by the shareholders of Borrower was approved by a
vote of at least  two-thirds  of the  directors  then still in office who either
were directors at the beginning of such period or whose  elections or nomination
for election was  previously so approved)  cease for any reason other than death
or  disability to  constitute a majority of the  directors  then in office.  For
purposes of this Agreement, neither the reincorporation of U.S. Patriot, Inc. to
a Delaware corporation, the merger with U.S. Patriot, Inc. into Borrower nor the
election  or  appointment  of  directors  in the next 90 days as a result of the
merger shall be deemed a Change of Control.

     1.9 "Change of Ownership"  means any person or group of persons (other than
the Lender  and/or the  shareholders  of the Borrower on the Closing  Date) that
shall have  acquired  beneficial  ownership  (within  the  meaning of Rule 13d-3
promulgated  by the  Securities  and Exchange  Commission  under the  Securities
Exchange Act of 1934, as amended) of forty percent (40%) or more  (computed on a
fully diluted  basis) of the issued and  outstanding  shares of capital stock of
Borrower  having the right to vote for the  election  of  directors  of Borrower
under ordinary circumstances.

     1.10 "Closing Date" means the date first set forth above.

     1.11 "Committed Amount" means the principal amount of $250,000 which Lender
has agreed to lend to Borrower as evidenced by the Convertible Note.

     1.12 "Common Stock" shall have the meaning as defined in Section 3.3.

     1.13 DELETED.

     1.14 "Consolidated EBITDA" means, for any Person for any period:

          (i) the  consolidated  net income of such Person and its  Consolidated
     Subsidiaries for such period (after Income Taxes), but excluding:

               (a) any gain arising from the sale of capital assets,

               (b) any gain arising from any write-up of assets,

                                        2
<PAGE>

               (c) earnings of any other Person, substantially all of the assets
          of  which  have  been  acquired  by such  Person  or its  consolidated
          Subsidiaries  in any  manner,  to the extent that such  earnings  were
          realized by such other Person prior to the date of such acquisition.

               (d)   earnings   of  any  Person  in  which  the  Person  or  its
          Consolidated Subsidiaries has an ownership interest (other than wholly
          owned Subsidiaries of such Person), unless such earnings have actually
          been received by the Person or its  Consolidated  subsidiaries  in the
          form of cash distributions,

               (e)  earnings of any Person to which  assets of the Person or its
          Consolidated   Subsidiaries  shall  have  been  sold,  transferred  or
          disposed of, or into which the Person shall have merged, to the extent
          that such earnings arise prior to the date of such transaction,

               (f) any gain arising from the  acquisition  of any  securities of
          such Person or any of its Consolidated subsidiaries, and

               (g) any extraordinary  gain realized by such Person or any of its
          Consolidated subsidiaries during such period.


          (ii) plus the following,  but only in each case to the extent incurred
     by the Borrower and its  Consolidated  Subsidiaries  during such period and
     deducted in the calculation above for such period,


               (a) all income and franchise taxes,

               (b) all Interest Expense,

               (c) all depreciation expense, and

               (d) all amortization expense.

     1.15 "Consolidated  Subsidiary" or "Consolidated  Subsidiaries"  means, for
any  Person,  any  Subsidiary  or other  entity the  accounts  of which would be
consolidated with those of such Person in its consolidated  financial statements
as of such date in accordance with GAAP.

     1.16 "Current  Assets" means, at any particular time, all amounts which, in
conformity  with GAAP,  would be  included as current  assets on a  consolidated
balance  sheet of the Borrower and its  Subsidiaries;  provided  however,  there
shall be excluded  therefrom (a) all prepaid  expenses of every type and nature,
(b) all amounts due from partners,  officers,  stockholders or other Affiliates,
and all loans due from employees, and (c) all deferred charges.

     1.17 "Current  Liabilities"  means,  at any  particular  time,  all amounts
(including  deferred taxes) which, in conformity with GAAP, would be included as
current  liabilities  on a  consolidated  balance  sheet of the Borrower and its
Subsidiaries.

     1.18  "Current  Ratio"  means  the  ratio  of  Current  Assets  to  Current
Liabilities.
                                        3
<PAGE>

     1.19 "Debt" means,  with respect to any Person on any date of determination
(without  duplication),  (i)  all  obligations  for  borrowed  money,  (ii)  all
obligations evidenced by bonds, debentures, notes or similar instruments,  (iii)
all  obligations  to pay the  deferred  purchase  price of  property or services
except trade accounts  payable  arising in the ordinary course of business which
are paid when due in accordance  with  ordinary-course  payment terms,  (iv) all
obligations  arising under acceptance  facilities or facilities for the discount
or sale of accounts  receivable,  (v) all direct or  contingent  obligations  in
respect  of  letters  of  credit,  (vi)  lease  obligations  (other  than  lease
obligations  with  respect to  operating  leases)  that have been (or under GAAP
should be)  capitalized  for financial  reporting  purposes,  (vii)  liabilities
secured  (or for  which the  holder of any  obligations  or  liabilities  has an
existing right,  contingent or otherwise, to be so secured) by any Lien existing
on  property  owned or  acquired  by that  Person  and  (viii)  all  guaranties,
endorsements and other contingent  obligations for liabilities or obligations or
the  maintenance  of financial  condition of others,  including  obligations  to
repurchase  or purchase  properties  or to  maintain  or cause to  maintain  any
financial condition.

     1.20  "Default" or "Event of Default" means the occurrence of all or any of
the events  specified in Section 7 and/or set forth in the Convertible  Note (as
defined below).

     1.21  "Indebtedness"  means with respect to any Person, all indebtedness of
such  Person  for  borrowed  money,  all  indebtedness  of such  Person  for the
acquisition of property other than purchases of products and  merchandise in the
ordinary  course of business,  indebtedness  secured by a lien,  pledge or other
encumbrance on the property of such Person whether or not such  indebtedness  is
assumed,  all  liability of such Person by way of  endorsements  (other than for
collection  or deposit in the ordinary  course of business);  all  guarantees of
Indebtedness  of any  other  Person by such  Person  (including  any  agreement,
contingent  or  otherwise,   to  purchase  any  obligation   representing   such
Indebtedness or property constituting security therefor, or to advance or supply
funds for such purpose or to maintain  working capital or other balance sheet or
income statement condition,  or any other arrangement in substance effecting any
of the foregoing); all leases and other items which in accordance with Generally
Accepted Accounting Principles are classified as liabilities on a balance sheet.

     1.22  "Interest  Expense"  means,  with  respect  to any Person and for any
period (without  duplication),  all interest on that Person`s Debt, whether paid
in cash or accrued as a  liability  and  payable in cash  during any  subsequent
period  (including,  without  limitation,  the  interest  component  of  Capital
Leases), as determined by GAAP.

     1.23  "Liabilities"  mean all liabilities,  obligations and indebtedness of
any and every kind and nature (including, without limitation, lease obligations,
accrued interest, charges, expenses,  attorneys` fees and other sums) chargeable
to the Borrower and made to or for the benefit of the Borrower,  whether arising
under this  Agreement or arising under the Note or any of the Loan  Documents of
the  Borrower,  whether  heretofore,  now or hereafter  owing,  arising,  due or
payable from Borrower to the Lender and however evidenced,  credited,  incurred,
acquired or owing, whether primary,  secondary,  direct,  contingent,  fixed, or
otherwise, including obligation of performance.

     1.24 "Liens" shall have the meaning set forth in Section 3.9.

                                        4
<PAGE>

     1.25 "Loan  Amount"  means the  principal  amount of up to  $250,000  which
Lender has agreed to lend Borrower at Lender`s sole option.

     1.26 "Loan  Documents"  means this  Agreement,  the  Convertible  Note, the
Pledge  Agreement,  the Warrant,  the  Security  Agreement,  and all  documents,
instruments,  certificates,  reports  and  all  other  written  matters  whether
heretofore,  now, or hereafter  executed by or on behalf of the Borrower  and/or
delivered to Lender in connection herewith.

     1.27  "Convertible  Note"  or  "Note"  means  one or  more  Senior  Secured
Promissory  Notes,  to be  executed  by the  Borrower  in favor  of the  Lender,
substantially in the form of Exhibit 1 attached hereto.

     1.28 "Material  Adverse Effect" shall have the meaning set forth in Section
3.1.

     1.29 "Net Income" or "Net Loss"  means,  with respect to any Person for any
period,  the net income or net loss of such Person determined in accordance with
GAAP,  after  payment  of  income  Taxes  but  excluding  any  extraordinary  or
non-recurring items.

     1.30  "Obligation"  shall  mean the  principal  amount  of the  Loan,  plus
fourteen percent (14%) interest per annum (subject to adjustment)  together with
such costs and  reimbursements  as may be due under the Loan  Agreement  and the
Note.

     1.31 "Pledge Agreement",  if any, means the pledge agreement of approximate
even date herewith executed by pledgor in favor of the Lender.

     1.32  "Registrable  Securities" shall mean (i) the Common Stock issued upon
conversion of the  Convertible  Notes,  or (ii) any Common Stock issued upon the
exercise of the Warrant,  right or other security which is issued in conjunction
with this  transaction by way of stock  dividend;  any other  distribution  with
respect to or in exchange for, or in replacement  of Common Stock;  stock split;
or in  connection  with  a  combination  of  shares,  recapitalization,  merger,
consolidation or other reorganization.

     1.33  "Person"  means an  individual,  partnership,  corporation,  business
trust, joint stock company,  trust,  unincorporated  organization,  association,
joint venture or a government or agency or political subdivision thereof.

     1.34  "Security   Agreement"  means  that  certain  Security  Agreement  of
approximate even date herewith executed by the Borrower in favor of the Lender.

     1.35  "Subsidiary"  means any corporation or limited  liability  company of
which at least a 50% of the outstanding securities having ordinary voting powers
for the election of Board of Directors  (or similar  governing  body) are at the
time owned by Borrower.  As used herein,  the term "Borrower" shall be deemed to
include all of Borrower`s Subsidiaries, if any.

     1.36  "Termination  Date" means the earlier of: (a) November 30, 2003;  (b)
the  date  of  the  occurrence  and  continuance  of an  Event  of  Default  (as
hereinafter defined);  (c) the date of repayment of the Loan Amount plus accrued
interest;  (d) the date of the  closing of a  secondary  public  offering by the



                                        5
<PAGE>

Borrower  and/or its  shareholders;  or (e) the date of the Change of Control of
the Borrower.

     1.37 "Warrant",  if any means that certain warrant of approximate even date
herewith executed by the Borrower in favor of the Lender.

     SECTION 2. Loan.
                ----

     2.1  Committed  Loan Amount.  Subject to the terms and  conditions  of this
          ----------------------
Agreement,  the Lender agrees to loan to the Borrower  $250,000  pursuant to the
terms of the Convertible Note and the other Loan Documents upon the execution of
this Agreement. The Lender shall provide such funds (via check or wire transfer)
to the Borrower  within five (5) business  days of receipt by the Lender of such
Loan  Documents  duly  executed by Borrower,  or within such  shorter  period as
Borrower and Lender mutually agree.  Nothing set forth herein shall prohibit the
Borrower from making  prepayments  without  penalty at any time and from time to
time (subject to prior  conversion  rights).  All provisions of the  Convertible
Note are incorporated herein by reference. Any conflicts between the Convertible
Note and this Loan Agreement  shall be resolved by reference to the  Convertible
Note. Upon execution of this Agreement,  contemporaneous with the funding of the
Loan, Borrower shall promptly pay to the order of the Lender a commitment fee in
the amount of 1% and an origination  fee of 4%. Such fees shall be applicable to
any further lending from Lender to Borrower.

     2.2 Payments of Interest and  Principal.  Interest on the Loan Amount shall
         -------------------
accrue at the rate of fourteen  percent (14%) per annum from the date of receipt
of funds by  Lender,  and shall be payable  via wire  transfer  in cash.  Unless
earlier  repaid in  accordance  with payment  provisions  set forth in the Note,
Borrower shall pay to Lender on the Termination Date the entire principal amount
of the outstanding  Convertible Notes, via wire transfer,  together with accrued
interest thereon and any fees then owed.

     2.3 Use of Proceeds. The proceeds of the Loan shall be used by the Borrower
        ----------------
in accordance with the provisions of Schedule 2.3 hereof.

     2.4 Conversion.       Terms found in the Convertible Note.
         ----------

     SECTION 3. Representations and Warranties. In order to induce the Lender to
enter  into  this  Agreement  and to  make  the  Loan  available,  the  Borrower
represents   and   warrants  to  the  Lender  as  of  the  Closing  Date  (which
representations  and  warranties  shall  survive the  delivery of the  documents
mentioned herein, and the termination of this Agreement) as follows:

     3.1 Organization.
         -------------
          (a) The Borrower and each  Subsidiary,  if any, is a corporation  duly
     organized,  validly  existing  and in good  standing  under the laws of the
     jurisdiction  of its  respective  formation,  has  the  power  to  own  its
     respective  properties  and to carry on its  respective  businesses  as now
     being conducted and is duly qualified to do business in every  jurisdiction
     in the United  States of America for which the failure to so qualify  would
     have a material impact on the financial condition,  operations, business or
     prospects of the Borrower ("Material Adverse Effect").
                                        6
<PAGE>

          (b) Schedule  3.1 sets forth true and complete  copies of the Articles
              -------------
     of  Incorporation  and  Bylaws,  as in  effect on the date  hereof,  of the
     Borrower and all other corporate  formation and governing documents of each
     of the Subsidiaries.  Except as set forth in Schedule 3.1(b),  the Borrower
     does not own or control, directly or indirectly, any equity interest in any
     corporation, company, limited liability company, association,  partnership,
     limited partnership, joint venture or other entity.

     3.2  Power  and  Authority.  The  Borrower  is duly  authorized  under  all
          ---------------------
applicable  provisions of law, its Articles of Incorporation,  and its Bylaws to
execute,  deliver and perform this Agreement, the Convertible Note and the other
Loan  Documents to which it is a party,  and all other action on the part of the
Borrower  required for the lawful  execution,  delivery and performance  thereof
have been duly taken. This Agreement and the other Loan Documents,  if any, upon
the due execution and delivery thereof,  are valid and enforceable  instruments,
obligations or agreements of the parties,  in accordance  with their  respective
terms,  except as to  enforcement  of creditors  rights  generally.  Neither the
execution of this Agreement and the Loan  Documents,  nor the  fulfillment of or
compliance  with their  provisions  and terms,  conflicts  with,  or has or will
result in a breach of the terms,  conditions or  provisions  of, or constitute a
violation of or default under: (a) any applicable law,  regulation,  order, writ
or decree;  or (b) any agreement or instrument to which the Borrower is a party,
or create any lien,  charge or encumbrance upon any of the property or assets of
any of them pursuant to the terms of any agreement or instrument to which any of
them is a party or by which any of them are bound  except  those in favor of the
Lender expressly created hereunder.

     3.3  Capitalization.  As of the date hereof, the total number of authorized
          --------------
shares of common stock of the Borrower (the "Common  Stock") is  100,000,000  of
which 1 share is  issued  and  outstanding  and the total  number of  authorized
shares of preferred stock of the Borrower (the "Preferred Stock") is 20,000,0000
shares,no sharesof which are issued and outstanding.  Borrower does not have any
authorized  shares of preferred  stock.  The outstanding  capitalization  of the
Borrower  as of the date hereof is set forth in  Schedule  3.3  annexed  hereto.
Except as otherwise disclosed in Schedule 3.3, there are no warrants, options or
preemptive  rights  authorized  or  outstanding  with  respect  to  any  of  the
Borrower`s capital stock. The Borrower shall not issue any derivative securities
without the express  written  consent of the Lender.  Following  the merger with
U.S. Patriot,  Inc. with the Borrower,  each share of U.S. Patriot,  Inc. common
stock and preferred stock, as the case may be, will be converted into and become
one validly issued, fully paid and non-assessable share of Borrower common stock
or preferred stock, as the case may be.

     3.4 Stock Ownership. The stockholders, which are reflected on Schedule 3.3,
         ---------------
are holders of all of the issued and  outstanding  Common  Stock and,  except as
contemplated  by the Loan Documents and Schedule 3.3, there are no  commitments,
agreements  or  undertakings  with respect to the issuance of any equity or debt
securities of the Borrower.

     3.5 Material Liabilities.  The sole outstanding material liabilities of the
         --------------------
Borrower are set forth on Schedule 3.5 annexed hereof.

     3.6 Proceeds of  Convertible  Note.  The Borrower shall use the proceeds of
         ------------------------------
the Convertible Note solely for those purposes set forth on Schedule 2.3 hereof.

                                        7
<PAGE>

3.7      Registration  Rights.  Except as set forth in Schedule 3.7, there are
         --------------------
no  registration  rights  agreements with respect to anyof the Borrower`s
capital stock.

     3.8 Material Agreements.  Except for those agreements set forth on Schedule
        --------------------
3.8 hereof,  there are no other  material  agreements to which the Borrower is a
party.


     3.9 Title to  Assets.  Except  as set forth on  Schedule  3.9  hereof,  the
        ------------------
Borrower has good and marketable title to all of its properties and assets,  all
of  which  are  free  and  clear  of any  and  all  liens,  mortgages,  pledges,
encumbrances  or  charges  of  any  kind  or  nature  whatsoever  (collectively,
"Liens").


     3.10 Litigation.  There are no pending or threatened actions or proceedings
         ------------
before any court,  any state,  provincial  or federal  regulatory  body,  or any
self-regulatory  organization  arbitrator or governmental or administrative body
or agency which would have a Material  Adverse  Effect or in any way  materially
affect or call into  question  the power and  authority of the Borrower to enter
into or perform this Agreement and the Loan Documents.

     3.11 Taxes. The Borrower has filed all income tax returns (if any) required
         -------
to be filed by it and all taxes due thereon have been paid,  and no  controversy
in respect of  additional  income  taxes,  municipal,  state or federal,  of the
Borrower is pending or threatened.

     3.12 Agreements or Restrictions Affecting the Borrower. The Borrower is not
         --------------------------------------------------
a party to or  otherwise  bound by any  contract or  agreement or subject to any
restrictions   which  would  have  Material  Adverse  Effect  or  restricts  the
Borrower`s  ability to enter into this Agreement or any of the other of the Loan
Documents  or the  Borrower`s  ability to effect the  transactions  contemplated
therein and herein.

     3.13 Governmental Approval. No approval of any federal, state, municipal or
          ---------------------
other local governmental authorities is necessary to carry out the terms of this
Agreement and the Loan  Documents,  and no consents or approvals are required in
the making or performance of this Agreement and the Loan Documents.

     3.14 Board of Directors. The Board of Directors of the Borrower consists of
          -------------------
Chris Schwartz.  Following the merger with U.S. Patriot,  the Board of Directors
shall be expanded  to include  such  number of  directors  required by the rules
promulgated by the Securities and Exchange Commission.

     3.15 No Untrue Statements. None of this Agreement or the Loan Documents nor
          ---------------------
any other agreements, reports, schedules, certificates or instruments heretofore
or  simultaneously  with the  execution of this  Agreement  delivered to Lender,
contains any misrepresentation or untrue statement of fact or omits to state any
fact necessary to make any of such agreements, reports, schedules,  certificates
or instruments not misleading.

     3.16 Employee Benefit Plans.
          ----------------------

         (a) Borrower has disclosed to Lender in writing prior to the execution
of the Agreement and has listed on Schedule 3.16 all Borrower Benefit Plans. If
there are any such plans, attached,to Schedule 3.16 are correct and complete

                                        8
<PAGE>

copies, in each case of all Borrower Benefit Plans. For purposes of this
Agreement, "Borrower Benefit Plans" means all pension, retirement,
profit-sharing, deferred compensation, stock option, employee stock ownership,
severance pay, vacation, bonus, or other incentive plan, all other written
employee agreements or programs, all medical, vision, dental, or other health
plans, all life insurance plans, and all other employee benefit plans or fringe
benefit plans, including, without limitation, "employee benefit plans" as that
term is defined in Section 3(3) of ERISA maintained by, sponsored in whole or in
part by, or contributed to by, the Borrower or any of its Affiliates for the
benefit of managers, members, employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries and under which
managers, members, employees, retirees, dependents, spouses, directors,
independent contractors, or other beneficiaries are eligible to participate. Any
of the Borrower Benefit Plans which is an "employee welfare benefit plan," as
that term is defined in Section 3(l) of ERISA, or an "employee pension benefit
plan," as that term is defined in Section 3(2) of ERISA, is referred to herein
as a "Borrower ERISA Plan." Any Borrower ERISA Plan which is also a "defined
benefit plan" (as defined in Section 414(j) of the Internal Revenue Code or
Section 3(35) of ERISA) is referred to herein as a "Borrower Pension Plan."
Neither Borrower nor any Affiliate has an "obligation to contribute" (as defined
in ERISA Section 4212) to a "multiemployer plan" (as defined in ERISA Sections
4001(a)(3) and 3(37)(A)). Each "employee pension benefit plan," as defined in
Section 3(2) of ERISA, ever maintained by the Borrower or any Affiliate that was
intended to qualify under Section 401(a) of the Internal Revenue Code and with
respect to which any Affiliate has any liability, is disclosed as such in
Schedule 3.16.

         (b) Borrower has attached to Schedule 3.16 correct and complete copies
of the following documents: (i) all trust agreements or other funding
arrangements for such Borrower Benefit Plans (including insurance contracts),
and all amendments thereto; (ii) with respect to any such Borrower Benefit Plans
or amendments, all determination letters, rulings, opinion letters, information
letters, or material advisory opinions issued by the Internal Revenue Service,
the United States Department of Labor, or the Pension Benefit Guaranty
Corporation after December 31, 1994; (iii) annual reports or returns, audited or
unaudited financial statements, actuarial valuations and reports, and summary
annual reports prepared for any Borrower Benefit Plan with respect to the most
recent plan year; and (iv) the most recent summary plan descriptions and any
material modifications thereto.

         (c) All Borrower Benefit Plans are in material compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any other applicable
laws, the breach or violation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on the Borrower.
Each Borrower ERISA Plan currently maintained by Borrower which is intended to
be qualified under Section 401(a) of the Internal Revenue Code has received a
favorable determination letter from the Internal Revenue Service, and Borrower
is not aware of any circumstances which will or could reasonably result in
revocation of any such favorable determination letter. Each trust created under
any Borrower ERISA Plan, which is an "employee pension benefit plan" as defined
in Section 3(2) of ERISA, has been determined to be exempt from tax under
Section 501(a) of the Internal Revenue Code and Borrower is not aware of any
circumstance which will or could reasonably result in revocation of such
exemption. With respect to each Borrower Benefit Plan to the best knowledge of
Borrower, no event has occurred which will or could reasonably give rise to a
loss of any intended tax consequences under the Internal Revenue Code or to any
tax under Section 511 of the Internal Revenue Code that is reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect on Borrower.
                                        9
<PAGE>

There is no material pending or, to the best knowledge of the Borrower,
threatened litigation relating to any Borrower ERISA Plan.

         (d) No Affiliate has engaged in a transaction with respect to any
Borrower Benefit Plan that, assuming the taxable period of such transaction
expired as of the date of this Agreement, would subject any Affiliate to a
material tax or penalty imposed by either Section 4975 of the Internal Revenue
Code or Section 502(i) of ERISA in amounts which are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Borrower. Neither
Borrower nor, to the best of Borrower`s knowledge, any administrator or
fiduciary of any Borrower Benefit Plan (or any agent of any of the foregoing)
has engaged in any transaction, or acted or failed to act in any manner which
could subject Borrower to any direct or indirect liability (by indemnity or
otherwise) for breach of any fiduciary, co-fiduciary, or other duty under ERISA,
where such liability, individually or in the aggregate, is reasonably likely to
have a Material Adverse Effect on the Borrower. To its best knowledge, no oral
or written representation or communication with respect to any aspect of the
Borrower Benefit Plans has been made to employees of the Borrower or any
Affiliate which is not in accordance with the written or otherwise preexisting
terms and provisions of such plans, where any liability with respect to such
representation or disclosure is reasonably likely to have a Material Adverse
Effect on Borrower.

         (e) Since the date of the most recent actuarial valuation, there has
been (i) no material change in the financial position or funded status of any
Borrower Pension Plan, (ii) no change in the actuarial assumptions with respect
to any Borrower Pension Plan, and (iii) no increase in benefits under any
Borrower Pension Plan as a result of plan amendments or changes in applicable
Law, any of which is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Borrower. No Borrower Pension Plan has
an "accumulated funding deficiency" within the meaning of Section 412 of the
Internal Revenue Code or Section 302 of ERISA. All contributions with respect to
a Borrower Pension Plan have or will be timely made and there is no lien or
expected to be a lien under Internal Revenue Code Section 412(n) or ERISA
Section 302(f) or tax under Internal Revenue Code Section 4971. Neither the
Borrower nor any Affiliate has provided, or is required to provide, security to
a Borrower Pension Plan pursuant to Section 401(a)(29) of the Internal Revenue
Code. All premiums required to be paid under ERISA Section 4006 have been timely
paid by Borrower, except to the extent any failure would not have a Material
Adverse Effect on Borrower.

         (f) No liability under Title IV of ERISA has been or is expected to be
incurred by the Borrower or any Affiliate with respect to any defined benefit
plan currently or formerly maintained by any of them that has not been satisfied
in full (other than liability for Pension Benefit Guaranty Corporation premiums,
which have been paid when due), except to the extent any failure would not have
a Material Adverse Effect on Borrower.

         (g) The Borrower and any Affiliate have no obligations for retiree
health and retiree life benefits under any of the Borrower Benefit Plans other
than with respect to benefit coverage mandated by applicable Law.

         (h) Except as disclosed in Schedule 3.16(h), neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated

                                       10
<PAGE>

hereby will, by themselves, (1) result in any payment (including, without
limitation, severance, unemployment compensation, golden parachute, or
otherwise) becoming due to any manager, director or any employee of the Borrower
or Affiliate under any Borrower Benefit Plan or otherwise, (2) increase any
benefits otherwise payable under any Borrower Benefit Plan, or (3) result in any
acceleration of the time of payment or vesting of any such benefit.

         (i) Except as set forth in the Schedule 3.16, Borrower does not
                                        --------------
maintain or otherwise pay for life insurance policies (other than group term
life policies on employees) with respect to any manager, director, officer or
employee. Schedule 3.16 lists each such insurance policy and includes a copy of
         --------------
each agreement with a party other than the insurer with respect to the payment,
funding or assignment of such policy. To the best of Borrower`s knowledge,
neither Borrower nor any Borrower Pension Plan or Borrower Benefit Plan owns any
individual or group insurance policies issued by an insurer which has been found
to be insolvent or is in rehabilitation pursuant to a state proceeding.

     SECTION 4. Conditions Precedent to Making Loan.
                ------------------------------------

         The Lender shall not be obligated to make the Loan until all of the
following conditions have been satisfied by proper evidence, execution and/or
delivery to the Lender of the following items, all in form, and substance
reasonably satisfactory to the Lender:

     (a)  The Convertible Note;

     (b)  This Agreement;

     (c)  Pledge Agreement,  Patent & Trademark  Filing,  and Delivery of Master
          pledging  and  securing  intellectual  property of the motion  picture
          "Snipes".

     (d)  A Security Agreement and UCC-1 for the Borrower and any Subsidiary;


     (e)  Guaranty of U.S. Patriot Inc. and 1025 Investments, Inc.

     (f)  Subordination by certain Lenders with Liens on Snipes.

     (g)  Unanimous  consent of the Board of  Directors  of the Borrower and all
          Subsidiaries,  certified  by the  Secretary  of the Borrower as of the
          Closing  Date,  approving  or  otherwise  ratifying  the  transactions
          contemplated  by  this  Agreement,  and  approving  the  form  of this
          Agreement and the Loan Documents, and authorizing execution, delivery,
          and performance thereof;

     (h)  Specimen  signatures  of the officer of the  Borrower  and  Subsidiary
          executing  this  Agreement  and the Loan  Documents,  and the  officer
          authorized  to  borrow  under  the Loan  Documents,  certified  by the
          Secretary of the Borrower or Subsidiary;

     (i)  A copy of the Articles of  Incorporation,  certified by an official of
          the Borrower`s  jurisdiction of formation or incorporation and further
          certified  by the  Secretary  of Borrower  not to have been altered or
          amended since certification by such official; and a copy of the Bylaws
          of the Borrower, certified as true and correct by the Secretary of the
          Borrower;

                                       11
<PAGE>

     (j)  Such  other  instruments,   documents  or  items  as  the  Lender  may
          reasonably request;

     (k)  No Event of Default shall have  occurred and be continuing  under this
          Agreement,  the Convertible Note or any other Loan Document, nor shall
          the  Borrower be in default  under any other  document or agreement to
          which it is a party or by which it or any of its  properties or assets
          are bound; and

     (l)  Payment of the  origination  and commitment fees referenced in Section
          2.1 hereof.

     SECTION 5. Affirmative  Covenants.  The Borrower covenants that, so long as
              -------------------------
any portion of the  Liabilities  remains unpaid and unless the Lender  otherwise
consents in writing, it will:

     5.1  Taxes  and  Liens.  Promptly  pay,  or cause to be  paid,  all  taxes,
         ------------------
assessments  and other  governmental  charges  which may  lawfully  be levied or
assessed upon the income or profits of the Borrower, or upon any property, real,
personal or mixed, belonging to the Borrower, or upon any part thereof, and also
any lawful claims for labor, material and supplies which if unpaid, might become
a lien or charge  against any such  property;  provided,  however,  the Borrower
shall not be required to pay any such tax, assessment,  charge, levy or claim so
long as the validity thereof shall be actively contested in good faith by proper
proceedings; but provided further that any such tax, assessment, charge, levy or
claim shall be paid or bonded in a manner  satisfactory to the Lender  forthwith
upon the commencement of proceedings to foreclose any lien securing the same.

     5.2 Business and Existence.  Do or cause to be done all things necessary to
         ----------------------
preserve  and to keep in full  force and effect any  licenses  necessary  to the
business of the Borrower,  its corporate existence and rights of its franchises,
trade names,  trademarks,  and permits  which are  reasonably  necessary for the
continuance of its business;  and continue to engage principally in the business
currently operated by the Borrower.

     5.3 Insurance and Properties.  Keep its business and properties  insured at
         -------------------------
all times with responsible  insurance companies and carry such types and amounts
of insurance as are required by all federal,  state and local governments in the
areas  which  Borrower  does  business  and as are  usually  carried by entities
engaged  in the  same or  similar  business  similarly  situated.  In  addition,
Borrower shall maintain in full force and effect policies of liability insurance
in amounts at least equal to that currently in effect.

     5.4 Maintain Property.  Maintain its property in good order and repair and,
         ------------------
from time to time, make all needed and proper repairs,  renewals,  replacements,
additions  and  improvements  thereto,  so that the  business  carried on may be
properly and  advantageously  conducted at all times in accordance  with prudent
business  management,  and maintain  annually  adequate reserves for maintenance
thereof.

                                       12
<PAGE>

     5.5 True Books.  Keep true books of record and account in which full,  true
         ----------
and correct  entries will be made of all of its dealings and  transactions,  and
set aside on its books such  reserves as may be required by  Generally  Accepted
Accounting  Principles,   consistently  applied,  with  respect  to  all  taxes,
assessments,  charges,  levies and claims referred to in Section 5.1 hereof, and
with respect to its business in general, and include such reserves in interim as
well as year-end financial statements.

     5.6 Pay Indebtedness to Lender and Perform Other  Covenants.  (a) Make full
         -------------------------------------------------------
and timely payment of the principal of and interest on the Convertible  Note and
all other  indebtedness  of the Borrower to the Lender,  whether now existing or
hereafter  arising,  including the payment of fees; and (b) duly comply with all
terms and covenants contained in this Agreement, the Convertible Note, the other
Loan  Documents  and any other  instruments  and  documents  given to the Lender
pursuant to this Agreement.

     5.7 Right of Inspection. Permit any person designated by the Lender, at the
        --------------------
Lender`s  expense,  to  visit  and  inspect  any of the  properties,  books  and
financial reports of the Borrower, all at such reasonable times upon forty-eight
(48) hours prior notice to Borrower,  and as often as the Lender may  reasonably
request, provided the Lender does not interfere with the daily operations of the
Borrower.

     5.8 Observance of Laws.  Conform to and duly observe all laws,  regulations
         ------------------
and other valid  requirements  of any  regulatory  authority with respect to the
conduct of its business.

     5.9  Borrower`s  Knowledge  of Default.  Upon an officer or director of the
          ---------------------------------
Borrower  obtaining  knowledge of, or threat of, an Event of Default  hereunder,
cause such  officer to  promptly,  within no more than ten (10)  business  days,
deliver to the Lender notice thereof  specifying the nature thereof,  the period
of existence thereof, and what action the Borrower proposes to take with respect
thereto.

     5.10 Notice of  Proceedings.  Upon an officer or  director of the  Borrower
         ------------------------
obtaining  knowledge of any material  litigation,  dispute or proceedings  being
instituted  or  threatened  against  the  Borrower,  or  any  attachment,  levy,
execution or other process being instituted  against any assets of the Borrower,
cause such officer to promptly, within no more than ten (10) business days, give
the  Lender  written  notice  of such  litigation,  dispute,  proceeding,  levy,
execution or other process.

     5.11  Payment  of  Lender`s  Expenses.  If at any time or times  hereafter,
           --------------------------------
Lender employs counsel in connection with the execution and  consummation of the
transactions contemplated by this Agreement or to commence, defend or intervene,
file a petition,  complaint,  answer,  motion or other pleading,  or to take any
action in or with respect to any suit or  proceeding  (bankruptcy  or otherwise)
relating to this Agreement or any other Loan Document,  or any other  agreement,
guaranty,  Convertible Note,  instrument or document  heretofore,  now or at any
time or times  hereafter  executed by Borrower and  delivered  to Lender,  or to
enforce any rights of Lender hereunder whether before or after the occurrence of
any Event of Default, or to collect any of the Liabilities,  then in any of such
events,  all of the reasonable  attorneys` fees arising from such services,  and



                                       13
<PAGE>

any  expenses,  costs  and  charges  relating  thereto,  shall  be  part  of the
Liabilities,  payable on demand.  In connection the initial loan  documentation,
counsel fees shall fees shall not exceed $5,000.

     5.12 Lender`s Representative. Borrower hereby grants to a representative of
          ------------------------
the Lender the right to attend and observe all Meetings of the Borrower`s  Board
of Directors  held during the period  commencing  on the Closing Date and for so
long as any Liabilities are due and owing to Lender, provided that said designee
is reasonably acceptable to the Board of Directors of the Borrower. The Borrower
shall  cause  such  designee  to  receive  written  notice  of all  meetings  of
Borrower`s  Board of  Directors as if such  designee was a member of  Borrower`s
Board of Directors. Lender`s designee shall be reimbursed for all reasonable and
customary out of pocket expenses relating to his service on the Board and or any
Committee thereof, and shall receive such compensation,  if any, all as shall be
commensurate with  reimbursements  and payments  received by other  non-employee
directors.  Borrower hereby agrees to provide  Lender`s  designee with a copy of
all written  consents of Borrower`s  Board of Directors within ten business days
after the date of any such consent. If this loan is still outstanding six months
from the date of funding, Lender shall have the right to nominate two members to
the Borrower`s Board of Directors,  and Borrower shall take all action necessary
to get such nominees elected immediately.  Lender`s  representative on the Board
shall be paid reasonable and customary director`s fees, expenses and options and
shall be insured under a D & O policy acceptable to Lender.


     5.13  Financial  Reporting.  The Borrower  shall provide to Lender  audited
          ----------------------[
annual  financial  statements,  audited  by  mutually  agreed  upon  independent
certified public accounting firm. Said financial statements shall be prepared in
accordance with Generally Accepted Accounting Principles,  consistently applied,
and shall be delivered to Lender  within ninety (90) days after the close of the
Borrower`s fiscal year. The report of the auditor that accompanies the financial
statements shall not contain any  qualifications or limitations.  The Borrower`s
fiscal  year ends on  December  31, and shall not be changed  without  the prior
written  consent of the Lender.  The Borrower shall provide to Lender  unaudited
monthly financial statements (including month to date and year to date actual to
prior  periods)  and a report  in the  form of  Exhibit  2,  both  presented  in
accordance with Generally Accepted Accounting Principles ("GAAP"),  consistently
applied, and shall be delivered to Lender within twenty-five (25) days after the
close of the  Borrower`s  month.  Borrower  shall also deliver any other reports
reasonably  requested by Lender. If the reports are not delivered within 25 days
of the month or request date,  whichever is  applicable,  then the Borrower will
pay a late fee of $250 per day until the report is delivered.  Lender shall keep
all non public  financial  statements  and other reports  deleivered by Borrower
confindential.

     5.14 Financial  Covenants.  As of the date hereof and until the Termination
          ---------------------
Date, the Borrower must maintain the following ratios:


         (a) Cash Interest Coverage. Until the Termination Date, the Borrower
shall maintain a Consolidated EBITDA ratio, based on any of the Borrower`s
quarterly financial statements (as determined on the last day of each fiscal
quarter for the immediately preceding quarter), of 2.0 or greater. The
Consolidated EBITDA ratio is defined as Consolidated EBITDA divided by Interest
Expense (Consolidated EBITDA / Interest Expense).


                                       14
<PAGE>

         (b) Cash Flow Coverage Ratio. The ratio of (a) the Borrower`s Cash Flow
to (b) the sum of (i) the Borrower`s consolidated Interest Expense plus (ii) the
Borrower`s scheduled payments of principal (including the principal component of
Capital Leases) to be paid during the 12 months following any date of
determination shall at all times exceed 1.5 to 1.0. Compliance with the ratio
will be tested as of the last day of each month, with Cash Flow and Interest
Expense being calculated for the twelve months then ended.

         (c) Current Ratio. The Borrower will at all times maintain a Current
Ratio of not less than 1.5 to 1.0. The Current Ratio shall be calculated and
tested quarterly as of the last day of each fiscal quarter of the Borrower.

         (d) Actual versus Budget. The Borrower shall on a quarterly basis
achieve 75 percent of its budgeted revenue and income. Budget numbers shall be
those delivered to Lender contemporaneously herewith and then on an annual
calendar basis.

         5.15 Certificate of Covenant Compliance On the last day of each March,
              ----------------------------------
June, October and December, the Borrower will issue a Certificate of Covenant
Compliance, executed by either the Chief Executive Officer or Chief Financial
Officer in the form of Schedule 5.15 attached hereto. If the Borrower is not in
compliance with the covenants specified in Sections 5 and 6 herein, the Borrower
will modify the Certificate of Covenant Compliance by stating the exception and
providing a detailed explanation of the non-compliance.


     SECTION 6. Negative  Covenants.  The Borrower covenants and agrees that, so
                --------------------
long as any  portion  of the  Liabilities  remains  unpaid and unless the Lender
otherwise gives its prior written consent, it will not, directly or indirectly:

     6.1 Mortgages,  Liens, Etc. Incur,  create,  assume or permit to exist, any
         -----------------------
mortgage,  pledge, security interest,  encumbrance,  lien or charge of any kind,
including  liens  arising  under  conditional  sales  or other  title  retention
agreements  upon any of its assets or properties of any character  other than in
the  ordinary  course of  business,  without  the prior  written  consent of the
Lender.

     6.2 Capital  Expenditures.  Make or become  committed to make,  directly or
         ---------------------
indirectly, any capital expenditures (including written limitation,  capitalized
leases)  amounting to in excess of $50,000 in the  aggregate,  without the prior
written consent of the Lender.

     6.3 Loans and Investments. Lend or advance money, credit or property to any
         ---------------------
Person,  or invest in (by capital  contribution  or  otherwise),  or purchase or
repurchase the stock or indebtedness  or assets or properties of any Person,  or
agree to do any of the foregoing, other than in the ordinary course of business,
without the prior written consent of the Lender.

     6.4  Guarantees.  Assume,  endorse or otherwise  become or remain liable in
          ------------
connection  with the  obligations  (including  accounts  payable)  of any  other
Person, other than in the ordinary course of business.

     6.5 Sale of Assets,  Dissolution,  Etc. Transfer,  sell,  assign,  lease or
         ----------------------------------
otherwise  dispose  of  any of its  properties  or  assets,  or  any  assets  or

                                       15
<PAGE>

properties  necessary or desirable for the proper  conduct of its  business,  or
transfer,  sell,  assign or otherwise  dispose of any of its  Convertible  Note,
accounts,  or  contract  rights  to any  Person,  or  change  the  nature of its
business,  wind-up,  liquidate  or dissolve,  or agree to any of the  foregoing,
other than in the ordinary course of business, without the prior written consent
of the Lender.

     6.6  Acquisition  of Assets.  Permit the purchase,  acquisition or lease of
          ----------------------
assets of any Person or Persons,  other than in the ordinary course of business,
without the prior written consent of Lender.

     6.7 Compensation. The Borrower must not increase the compensation of any of
         ------------
its  officers  or  consultants  making  more than  $100,000  per year,  hire any
relative of any officer, director or shareholder of the Borrower, or pay a bonus
to any such person.

     6.8  Indebtedness.   Incur,   create,   assume  or  permit  to  exist,  any
          -------------
indebtedness  or  obligation  or enter  into or  extend  or amend  any  material
agreement or lease in excess of $100,000,  without the prior written  consent of
Lender.

     6.9 Subsidiaries. Establish or form a partially or wholly owned subsidiary.
         ------------

     SECTION 7. Events of Default.
                 -----------------

     7.1 Defaults.  Each of the following  shall  constitute an Event of Default
         ---------
(an "Event of Default") hereunder: (a) the failure to pay when due any principal
or interest  hereunder or under the Convertible Note and the continuance of such
failure  for a period  of ten  (10)  business  days  thereafter;  (b) any  other
violation  by the Borrower of any recital,  funding  condition,  representation,
warranty,  covenant or agreement  contained  in this  Agreement or in any of the
Loan  Documents;  or any  violation  by the  Borrower  of any  recital,  funding
condition,  representation,  warranty,  covenant or  agreement  contained in any
other  document or  agreement  to which the Borrower and the Lender are parties;
(c) any change in the majority of the Board of Directors or of the management or
in the control of the Borrower which is not contemplated in Section 5.12 or 3.14
herein or previously  approved by the advance written consent of the Lender; (d)
execution of any  agreement,  letter,  memorandum  of  understanding  or similar
document  relating to the transfer,  disposition or sale of all or substantially
all of the assets of the Borrower to anyone  without the approval of the Lender;
(e)  an  assignment  for  the  benefit  of  creditors  by the  Borrower;  (f) an
application  for the appointment of a receiver or liquidator for the Borrower or
any of its material  assets;  (g) an issuance of an attachment or the entry of a
judgment  against  the  Borrower  in excess  of  $50,000;  (h) a default  by the
Borrower with respect to any other  indebtedness in excess of $50,000 due to the
Lender;  (i) the  making or  sending  of a notice of  intended  bulk sale by the
Borrower;  (l)  the  issuance  of  a  determination  by  a  court  of  competent
jurisdiction that one or more Loan Documents or one or more material  provisions
of any Loan Document is unenforceable,  or the issuance of an injunction against
the  enforcement of any such Loan Document or material  provision;  (m) upon the
reasonable  determination  by the Lender that there has been a Material  Adverse
Effect;  and (n) the  occurrence of an Activity  Event of Default (as defined in
Section 8.6  herein).  Upon the  occurrence  of any of the  foregoing  Events of
Default,  the Convertible  Note and the Loan will be considered to be in default
and the entire unpaid principal sum hereof, together with accrued interest, will
at the option of the holder thereof become  immediately due and payable in full.
Upon  the  occurrence  of an  Event  of  Default,  the  Borrower  agrees  to pay

                                       16
<PAGE>

reasonable  collection costs and expenses,  including reasonable attorneys` fees
and  interest  (cash only,  not stock) at the lesser of: (i) 18% per annum (cash
only, not stock) or (ii) the maximum rate allowed under applicable law, from the
date of the default at the maximum rate  permitted by law computed on the unpaid
principal balance.


     SECTION 8. SBIC Provisions.  The Borrower acknowledges that the Lender is a
                ----------------
small business  investment  company licensed by the United States Small Business
Administration,   and  makes  the  following  representations,   warranties  and
covenants to Lender:

     8.1 Small  Business  Concern.  The Borrower  represents and warrants to the
         -------------------------
Lender that the Borrower,  taken together with its "affiliates" (as that term is
defined  in 13 C.F.R.  ss.121.103),  is a "Small  Business  Concern"  within the
meaning of 15 U.S.C.  ss.662(5),  that is Section  103(5) of the Small  Business
Investment Act of 1958, as amended (the "Act"), and the regulations  thereunder,
including 13 C.F.R.  ss.107, and meets the applicable size eligibility  criteria
set forth in 13 C.F.R.  ss.121.301(c)(1)  or the industry  standard covering the
industry in which the  Borrower is  primarily  engaged as set forth in 13 C.F.R.
ss.121.301(c)(2).  Neither the  Borrower nor any of its  subsidiaries  presently
engages  in any  activities  for which a small  business  investment  company is
prohibited from providing funds by the SBIC Act, including 13 C.F.R. ss.107.

     8.2 Small Business Administration  Documentation.  On or before the Closing
          --------------------------------------------
Date, Lender shall have received SBA Form 480 (Size Status  Declaration) and SBA
Form 652 (Assurance of Compliance) which have been completed and executed by the
Borrower,  and SBA Form 1031 (Portfolio Finance Report),  Parts A and B of which
have been completed by the Borrower (the "SBA Documents").

     8.3 Inspection. The Borrower will permit the Lender or its representatives,
         -----------
at  Borrower`s  expense,  and  examiners  of the SBA to visit  and  inspect  the
properties  and  assets of the  Borrower,  to examine  its books of account  and
records,  and to discuss the Borrower`s affairs,  finances and accounts with the
Borrower`s officers,  senior management and accountants,  all at such reasonable
times as may be requested by the Lender or SBA.

     8.4  Informational  Covenant.  Within  sixty (60) days after the end of the
          -----------------------
fiscal year of the Borrower,  the Borrower will furnish or cause to be furnished
to Lender information  required by the SBA concerning the economic impact of the
Lender`s  investment,  for (or as of the end of)each fiscal year,  including but
not limited to,  board  minutes,  information  concerning  full-time  equivalent
employees;  Federal, state and local income taxes paid; gross revenue; source of
revenue growth;  after-tax profit and loss; and Federal,  state and local income
tax  withholding.  Such  information  shall be  forwarded  by Borrower on a form
provided by the Lender.  The Borrower also will furnish or cause to be furnished
to the  Lender  such other  information  regarding  the  business,  affairs  and
condition  of the  Borrower  as the  Lender  may  from  time to time  reasonably
request.

     8.5 Use of Proceeds. Subject to Section 2.3, the Borrower certifies that it
         ----------------
will use the  proceeds  from the Loan for the  purposes  and in the  amounts set
forth on Schedule 2.3. The Borrower will deliver to the Lender from time to time
promptly following the Lender`s request, a written report,  certified as correct
by an officer,  verifying  the purposes and amounts for which  proceeds from the
Loan have been  disbursed.  Subject to Section 2.3, the Borrower  will supply to


                                       17
<PAGE>

the Lender such additional  information  and documents as the Lender  reasonably
requests with respect to its use of proceeds, and will permit the Lender to have
access to any and all  Borrower  records and  information  and  personnel as the
Lender deems  necessary to verify how such proceeds have been or are being used,
and to assure that the  proceeds  have been used for the  purposes  specified on
Schedule 2.3.

     8.6 Activities and Proceeds.
         ------------------------

         (a) Neither the Borrower nor any of its affiliates (as defined in
above) will engage in any activities or use directly or indirectly the proceeds
from the Loan for any purpose for which a small business investment company is
prohibited from providing funds by the SBIC Act, including 13 C.F.R. ss.107.

         (b) Without obtaining the prior written approval of the Lender, the
Borrower will not change within one (1) year of the Closing Date the Borrower`s
business activity from that described on Schedule 8.6 to a business activity
which a small business investment company is prohibited from providing funds by
the SBIC Act. The Borrower agrees that any such changes in its business activity
without such prior written consent of the Lender will constitute a material
breach of the obligations of the Borrower under this Agreement and the Loan
Documents (an "Activity Event of Default").

     SECTION 9. Miscellaneous.
               ---------------
     9.1 Registration Rights.
         -------------------

         (a) Registrable Securities shall be fully registered and freely
tradeable within 180 days from the closing of the Loan. If the Borrower for any
reason fails to have the Registrable Securities fully registered within 180 days
from closing of the Loan, then, at the option of Lender, for each full calendar
month that the Registrable Securities are not fully registered, Borrower shall
issue 0.1 % of its common shares then outstanding computed on a fully diluted
basis per day until the shares are registered.

         (b) If at any time after the date hereof, the Borrower shall file a
registration statement relating to any of its securities, it will notify the
Holder in writing and, upon the Holder`s request, will include the offer and
sale of Registrable Securities in such registration statement. In the event that
the Borrower fails include Registrable Securities in a piggy back statement as
required herein, the Borrower shall give notice demanding a registration and 105
days after the notice the Borrower shall prepare and file a registration
statement with the SEC with respect to such Registrable Securities. If the
Borrower fails to file within said time period, then, at the option of Lender,
for each full calendar month that the Registrable Securities are not fully
registered, Borrower shall Borrower shall issue 0.1 % of its common shares then
outstanding computed on a fully diluted basis per day until the shares are
registered.

         (c) Whenever required to include Registrable Securities in any
registration or to effect the registration of any Registrable Securities
pursuant to this Agreement, the Borrower shall, as expeditiously as reasonably
possible prepare and file with the SEC a registration statement with respect to

                                       18
<PAGE>

such Registrable Securities and use its absolute best lawful efforts to cause
such registration statement to become effective, and use its absolute best
efforts to keep such registration statement effective until all such Registrable
Securities have been distributed. In addition, the Borrower shall use its best
lawful efforts to register and qualify the securities covered by such
registration statement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably requested by the Holders, provided that the
Borrower shall not be required in connection therewith or as a condition thereto
to qualify as a broker-dealer in any states or jurisdictions or to do business
or to file a general consent to service of process in any such states or
jurisdictions.

         (d) All expenses, other than underwriting discounts and commissions
incurred in connection the registrations contemplated herein, including, without
limitation, all registration, filing and qualification fees, printers` and
accounting fees, fees and disbursements of counsel for the Borrower, and the
reasonable fees and disbursements of one counsel for the selling Holders, shall
be borne by the Borrower.

         (e) Subject to the terms and conditions of this Agreement and the
Convertible Notes, the right to cause the Borrower to register Registrable
Securities pursuant to this Agreement may be assigned by Holder to any
transferee or assignee of such securities; provided that said transferee or
assignee is a transferee or assignee of at least five percent (5%) of the
Registrable Securities.

     9.2  Computation  of  Interest  and Payment and  Prepayment  of  Principal.
          ---------------------------------------------------------------------
Interest on the Convertible Note shall be computed on the basis of a year of 365
days. If any principal amount under the Convertible Note becomes due and payable
on other than a Business Day, the maturity thereof shall be extended to the next
succeeding  Business Day and interest on such principal  shall be payable at the
then applicable rate during such extension period.

     9.3 Waiver of Default.  The Lender may, by written  notice to the Borrower,
          ---------------
at any time and from  time to time,  waive any  default  in the  performance  or
observance  of any  condition,  covenant  or other  term  hereof or any Event of
Default  which shall have  occurred  hereunder  and its  consequences.  Any such
waiver  shall be for such  period  and  subject to such  conditions  as shall be
specified in any such notice.  In the case of any such waiver,  the Borrower and
the Lender shall be restored to their former  position and rights  hereunder and
under the other Loan  Documents,  and any Event of  Default  so waived  shall be
deemed to be cured and not  continuing;  but no such waiver  shall extend to any
subsequent or other Event of Default, or impair any right consequent thereon.

     9.4 Amendments and Waivers. The Lender and the Borrower may, subject to the
        -----------------------
provisions of this  section,  from time to time,  enter into written  agreements
supplemental  hereto for the purpose of adding any  provisions to this Agreement
or the other Loan  Documents  or changing or waiving in any manner the rights or
requirements  of the  Lender  or of the  Borrower  hereunder.  Any such  written
supplemental agreement or waiver shall be binding upon the Borrower and Lender.

     9.5 Notices.  Except in cases where it is expressly  herein  provided  that
         --------
such notice,  request or demand is not effective  until received by the party to
whom  it is  addressed,  all  notices,  requests  and  demands  to or  upon  the

                                       19
<PAGE>

respective  parties  hereto under this  Agreement  and all other Loan  Documents
shall be deemed to have been given or made when  deposited in the mail,  postage
prepaid by registered or certified mail, return receipt requested,  addressed as
follows or to such other  address as may be hereafter  designated  in writing by
the respective parties.


                  The Borrower:             Trimedia Entertainment Group, Inc.
                                            101 Charles Drive
                                            Bryn Mawr PA 19010
                                            Attention:  Chris Schwartz
                                            Phone:  (610) 660-5906
                                            Fax  (610) 660-5905


                  The Lender:               Gemini Growth Fund, LP
                                            700 Gemini
                                            Houston, Texas 77058
                                            Attention:  Larry St. Martin
                                            Phone:  (281) 488-8484
                                            Fax:  (281) 488-8404

     9.6 No Waiver; Cumulative Remedies. No waiver of any provision hereof shall
         ------------------------------
be deemed to operate  as a waiver of any other  provision  hereof.  In the event
that the  Borrower  shall be deemed to have waived any  provision  hereof at any
time,  such waiver shall not be deemed to have  extended to any other  provision
hereof at the time such waiver was deemed to have occurred or at any other time.
No failure to exercise and no delay in  exercising,  on the part of Lender,  any
right,  power or privilege  hereunder,  shall operate as a waiver  thereof;  nor
shall any single or partial exercise of any right, power or privilege  hereunder
preclude  any other or further  exercise  thereof or the  exercise  of any other
right, power or privilege.  The rights and remedies herein and in the other Loan
Documents  provided are  cumulative  and not exclusive of any rights or remedies
provided by law.

     9.7 Survival of Agreements. All agreements,  representations and warranties
         ----------------------
made herein shall survive the  execution and delivery of this  Agreement and the
other  Loan  Documents  and the making and  renewal of loans  hereunder  and the
termination of this Agreement and the other Loan Documents.

     9.8 Governing Law. This Agreement and the legal relations among the parties
         --------------
hereto  shall be governed by and  construed in  accordance  with the laws of the
State of Texas  without  regard to its  conflicts of law  doctrine.  Each of the
parties hereto irrevocably consents to the jurisdiction of the federal and state
courts located in Dallas County, the State of Texas.

     9.9  Enforceability of Agreement.  Should any one or more of the provisions
         -----------------------------
of this Agreement be determined to be illegal or unenforceable as to one or more
of the parties,  all other  provisions  nevertheless  shall remain effective and
binding on the parties hereto, up to the full amount permitted by law.

     9.10 Usury Savings Clause.  Notwithstanding  any other provision herein, in
          ---------------------
the event that the aggregate  interest  rate charged  under the Loan  Documents,
including  all charges or fees in connection  therewith  deemed in the nature of
interest,  exceeds the maximum legal rate,  then the Lender shall have the right

                                       20
<PAGE>

to make such adjustments as are necessary to reduce the aggregate  interest rate
to the maximum legal rate. The Borrower waives any right to prior notice of such
adjustment  and further  agrees that such  adjustment  may be made by the Lender
subsequent to notification from the Borrower that the aggregate interest charged
exceeds the maximum legal rate.  There are no unwritten oral  agreement  between
Borrower and Lender.

     9.11  Execution  of  Counterparts.  This  Agreement  may be executed in any
           ----------------------------
number of  counterparts,  each of which  shall be deemed  to be an  original  as
against  any party  whose  signature  appears  thereon,  and all of which  shall
together constitute one and the same instrument.

     9.12  Stamp  or  Other  Taxes.  The  Borrower  agrees  to pay  any  and all
           ------------------------
documentary,  intangible  stamp or excise  taxes  now or  hereafter  payable  in
respect to this  Agreement  and the other  Loan  Documents  or any  modification
thereof,  and shall hold the Lender harmless with respect thereto.  The Borrower
further  agrees  that Lender may deduct  from any  account of the  Borrower  the
amount of any such documentary or intangible stamp or tax payable,  the decision
of the Lender as to the amount thereof to be conclusive, absent manifest error.

     9.13 Intentionally deleted

     9.14 Fees and  Expenses.  The Borrower  shall  reimburse the Lender for all
         --------------------
past and future fees and expenses  (including but not limited to the origination
and commitment fee, reasonable  out-of-pocket costs, legal expenses (as detailed
above),  offering fees,  advisory and consulting fees,  travel and communication
expenses, and reproduction costs) incurred in connection with the Loan Documents
("Fees and Expenses").  Fees and Expenses  incurred  through the Closing Date by
the Borrower will be netted  against the initial  proceeds  received  under this
Agreement.  Fees and Expenses  incurred after the Closing Date shall promptly be
paid by the Borrower upon receipt from Lender of an invoice  itemizing such Fees
and Expenses.  Fees and Expenses  incurred  hereof to an affiliate of the Lender
shall be included with the Borrower`s Liabilities.

     9.15  Assignability.  This  Agreement  shall  inure to the  benefit  and be
           -------------
binding upon the parties  hereto and their  respective  successors and permitted
assigns.  This Agreement and the  Convertible  Note will not be  assignable,  in
whole or in part,  by the  Borrower,  without the prior  written  consent of the
Lender.  This Agreement may be assigned or transferred,  in whole or in part, by
the Lender upon written  notice to the  Borrower.  A change in control of either
party shall be deemed to be an  assignment.  Any purported  assignment  effected
without such consent shall be null and void.

     9.16 Complete  Agreement.  This Agreement  constitutes the entire agreement
         --------------------
between the parties and supersedes all agreements, representations,  warranties,
statements, promises and understanding, whether oral or written, with respect to
the subject matter hereof.


                            [SIGNATURE PAGE FOLLOWS]


                                       21
<PAGE>




         IN WITNESS WHEREOF, the Borrower and the Lender have caused this
Agreement to be duly executed by their duly authorized officers, all as of the
day and year first above written.

WITNESS:                          GEMINI GROWTH FUND, LP
                                  By: GEMINI GROUP, LLC, its
                                      GENERAL PARTNER

______________________________    By:_________________________
Name:                               Scott Cook, Authorized Member





WITNESS:                          Trimedia Entertainment Group, Inc



______________________________    By:  __________________________
Name:                                 Chris Schwartz
                                      President





                                       22
<PAGE>


                                   ATTACHMENTS
                                  -------------

Exhibit 1             Form of Convertible Note
Exhibit 2             Financial Summary


Schedule 2.3          Use of Proceeds
Schedule 3.1          Organization
Schedule 3.1(b)       Subsidiaries
Schedule 3.3          Outstanding Equity Rights
Schedule 3.5          Material Liabilities
Schedule 3.8          Material Agreements
Schedule 3.16         Employee Benefit Plans
Schedule 5.15         Certificate of Covenant Compliance
Schedule 8.6          Business Activity


                                       23
<PAGE>