=========================



                            REVOLVING LOAN AGREEMENT

                                     between

                              SYNERGX SYSTEMS INC.

                                       And

                               HUDSON UNITED BANK

                            =========================



                             Dated: October 9, 2003

<PAGE>



                            REVOLVING LOAN AGREEMENT


     This  REVOLVING  LOAN  AGREEMENT  is made  this 9th day of  October,  2003,
between SYNERGX SYSTEMS INC. ("Borrower"),  a corporation organized and existing
pursuant to the laws of the State of Delaware having an address at 209 Lafayette
Drive,  Syosset, New York 11791 and HUDSON UNITED BANK ("Lender"),  a New Jersey
corporation,  with a place of business at 1000 MacArthur Boulevard,  Mahwah, New
Jersey 07430.

                              W I T N E S S E T H:



     WHEREAS,  Borrower has  requested  that Lender  extend a THREE  MILLION and
00/100  (3,000,000.00)  DOLLAR revolving credit facility,  the proceeds of which
will be used to repay existing  indebtedness to Citizens  Business Credit and to
provide Borrower with working capital.

     WHEREAS,  Lender is willing to extend the credit  facility on the terms and
subject to the conditions set forth in this Agreement.


                                    AGREEMENT

1.  DEFINITIONS.  As used herein,  the following  terms shall have the following
meanings  (terms  defined in the  singular to have the same meaning when used in
the plural and vice versa):

     1.1.  "Account Debtor" shall mean any Person who is or may become obligated
under or on account of any Receivable.

     1.2.  "Advance" shall mean any loan or advance made by Lender in connection
with the Revolving Loan.

     1.3.  "Affiliate"  shall mean any Person  which,  directly  or  indirectly,
through one or more  intermediaries  controls,  or is controlled by, or is under
common  control  with,  Borrower.  For  purposes  hereof,  "control"  means  the
possession,  directly  or  indirectly,  of the  power to  direct  or  cause  the
direction  of the  management  and  policies  of a Person,  whether  through the
ownership of voting stock or other equity interests, by contract or otherwise.

     1.4.  "Authenticate"  shall mean to sign or to execute or otherwise adopt a
symbol,  or encrypt or similarly  process a record in whole or in part, with the
present intent of the authenticating  person to identify the person and adopt or
accept a Record.

     1.5.  "Bank  Accounts"  shall have the meaning set forth in Section 5.23 of
this Agreement.


     1.6.  "Banking  Day" shall mean any day on which  commercial  banks are not
authorized or required to close in New Jersey.

     1.7. "Borrower" shall mean Synergx Systems Inc.

     1.8.  "Borrowing Base Certificate"  shall mean a borrowing base certificate
substantially in the form of Exhibit C attached hereto.

     1.9. "Code" shall mean the Internal Revenue Code of the United States.

     1.10. "Collateral" shall mean all of the Property and interests in Property
described in the General Security Agreement,  and all other personal property of
Borrower and  interests of Borrower in personal  property  that now or hereafter
secures the payment and performance of any of the Obligations pursuant to any of
the Loan Documents or otherwise including,  without limitation, any proceeds and
insurance proceeds of the foregoing.

     1.11.  "Debt"  shall  mean  Borrower's  total  liabilities   determined  in
accordance with GAAP excluding subordinated debt.

     1.12.  "Default"  shall mean an event or condition the  occurrence of which
would,  with the lapse of time or the giving of notice, or both, become an Event
of  Default,  whether  or not Lender  has  declared  an Event of Default to have
occurred.

     1.13.  ""Effective  Tangible Net Worth" shall mean the total  assets,  less
intangible  assets,  less due from Affiliates,  officers and shareholders,  less
total  liabilities  plus  subordinated  debt,  all as reflected on the financial
statements of Borrower submitted to Lender in accordance with Article 6.

     1.14. "Eligible Inventory" shall mean Inventory of Casey Systems Inc. which
has been  identified  and  described  on the monthly  reports to be submitted in
accordance  with Section 6.2, is  represented  by Borrower (by its acceptance of
Revolving Loans thereon) as meeting all of the following criteria on the date of
any  Revolving  Loan  based  thereon  and  thereafter  while any  Obligation  is
outstanding  and is in  all  other  respects  acceptable  to  Lender:  (a)  Such
Guarantor  is the sole owner of the  Inventory;  none of the  Inventory is being
held or shipped by such  Guarantor  on a  consignment  or approval  basis;  such
Guarantor  has not sold,  assigned or otherwise  transferred  all or any portion
thereof;  and none of the  Inventory  is subject to any claim,  lien or security
interest;  (b) If any of the Inventory is represented or covered by any document
of title,  instrument or chattel paper,  such Guarantor is the sole owner of all
such documents, instruments and chattel paper, all thereof are in the possession
of such  Guarantor  to the extent  that such  possession  is  necessary  for the
perfection  of Lender's  security  interest  therein  pursuant to the UCC,  none
thereof has been sold,  assigned or otherwise  transferred,  and none thereof is
subject  to any  claim,  lien or  security  interest  other  than the  foregoing
security interest in favor of Lender; and (c) The Inventory consists of saleable
non-obsolete  finished goods  manufactured  or acquired by such Guarantor in the
ordinary  course of such  Guarantor's  business,  as  conducted,  subject to its
contract or sole  possession and located in compliance with Section 5.15 of this
Agreement or at locations for which, if requested by Lender,  landlord or bailee
waivers  in form and  substance  approved  by  Lender,  have been  executed  and
delivered by such landlord or bailee to Lender.

     1.15.  "Eligible  Receivables"  shall mean and include only  Receivables of
Borrower  or a  Guarantor,  the  records  and  accounts  of which are located in
compliance  with  Section  5.14 of this  Agreement,  arise  out of  sales in the
ordinary course of such entity's business, made by Borrower to a Person which is
not an Affiliate of such entity's nor an employee of Borrower nor  controlled by
an Affiliate of Borrower.  No Receivable shall be an Eligible Receivable if more
than ninety (90) days have passed since the original  invoice date except in the
case of Casey  Systems  Inc.  such ninety  (90) day period  shall be one hundred
twenty (120) days and the Inventory  covered by such  Receivable were shipped to
the customer on or prior to the invoice date, or the date the services described
in such invoice were provided on or prior to the invoice date.  Lender may treat
any Receivable as ineligible if:

     (a) any  warranty  contained  in this  Agreement  with  respect to Eligible
Receivables  or any warranty with respect to such  Receivable  contained in this
Agreement or in the General Security Agreement has been breached in any material
respect; or

     (b) the Account  Debtor has  disputed  liability  with respect to more than
fifty (50) percent of the face amount thereof  (except that with respect to such
Receivable  the  undisputed  amount shall be considered  eligible  provided such
Receivable  would otherwise be considered an Eligible  Receivable),  or made any
claim with respect to such  Receivable  or with respect to any other  Receivable
due from such  customer  or  Account  Debtor  to  Borrower  or either  corporate
Guarantor, with respect to any Receivable which Lender, in its discretion, deems
material; or

     (c) the Account  Debtor has filed a case for  bankruptcy or  reorganization
under the  Bankruptcy  Code, or if any case under the  Bankruptcy  Code has been
filed  against  the  Account  Debtor,  or if the  Account  Debtor  has  made  an
assignment  for the benefit of creditors,  or if the Account  Debtor has failed,
suspended business operations,  become insolvent,  or had or suffered a receiver
or a trustee to be appointed for all or a  significant  portion of its assets or
affairs; or

     (d) if the Account  Debtor is also a supplier to or creditor of Borrower or
either corporate  Guarantor or if the Account Debtor has or asserts any right of
offset  with  respect to any  Receivable  or asserts  any claim or  counterclaim
against Borrower or either corporate Guarantor with respect to any Receivable or
otherwise in each case in excess of fifty (50) percent of the face amount of the
applicable   Receivable  (except  that  with  respect  to  such  Receivable  the
undisputed  amount shall be considered  eligible  provided such Receivable would
otherwise be considered an Eligible Receivable); or

     (e) the sale is to an Account Debtor outside the United States,  unless the
sale is  secured  by a  letter  of  credit,  an  acceptance  or on  other  terms
acceptable to Lender; or

     (f) it  relates  to a sale of goods or  services  to the  United  States of
America, or any agency or department thereof,  unless Borrower or the applicable
corporate  Guarantor  assigns its right to payment of such Receivable to Lender,
in  form  and  substance  satisfactory  to  Lender,  so as to  comply  with  the
Assignment of Claims Act of 1940, as amended; or

     (g) it relates to intercompany sales,  employee sales or any Receivable due
from an Affiliate of Borrower or other corporate Guarantor; or

     (h) it consists  of a sale to an Account  Debtor on  consignment,  bill and
hold in excess of  $200,000.00  in the  aggregate  outstanding  at any one time,
guaranteed  sale,  sale or return,  sale on approval,  payment  plan,  scheduled
installment  plan,  extended  payment  terms or any other  repurchase  or return
basis; or

     (i) the  Account  Debtor is  located  in a state in which  Borrower  or the
applicable  corporate Guarantor is deemed to be doing business under the laws of
such state and which  denies  creditors  access to its courts in the  absence of
qualifications  to  transact  business  in such  state or of the  filing  of any
reports with such state,  unless Borrower or the applicable  corporate Guarantor
has qualified as a foreign  corporation  authorized to do business in such state
or has filed all required reports; or

     (j) the  Receivable  is evidenced by chattel  paper or an instrument of any
kind which has not been  assigned or endorsed  and  delivered to Lender and such
endorsement is necessary to perfect the security interest in and to such chattel
paper or instrument granted by Borrower or the applicable corporate Guarantor in
favor of Lender  pursuant to the General  Security  Agreement or the  applicable
guaranty and security agreement; or

     (k) the Receivable arises from a sale of goods or services to an individual
who is  purchasing  such  goods  primarily  for  personal,  family or  household
purposes; or

     (l)  if  Lender  believes,  in  its  sole  and  absolute  discretion,  that
collection  of such  Receivable is insecure or that such  Receivable  may not be
paid by reason of the Account Debtor's financial inability to pay.

     1.16.  "Environment"  shall mean any water or water vapor, any land surface
or subsurface, air, fish, wildlife, biota and all other natural resources.

     1.17.  "Environmental  Laws"  shall  mean  all  federal,  state  and  local
environmental,  land use,  zoning,  health,  chemical use, safety and sanitation
laws,  statutes,  ordinances  and  codes  relating  to  the  protection  of  the
Environment   and/or  governing  the  use,   storage,   treatment,   generation,
transportation,  processing,  handling,  production  or disposal  of  "hazardous
substances" and the rules, regulations,  policies, guidelines,  interpretations,
decisions,  orders  and  directives  of  federal,  state and local  governmental
agencies and authorities with respect thereto.

     1.18.  "ERISA" shall mean the Employee  Retirement  Income  Security Act of
1974, as amended.  1.19. "Events of Default" shall have the meaning set forth in
Article 12 of this Agreement.

     1.20. "Fiscal Year" shall mean with respect to any Person, a year of 365 or
366  days,  as the case may be,  ending  on the  last  day of  September  in any
calendar year.

     1.21.   "GAAP"  shall  mean  generally   accepted   accounting   principles
consistently  applied  and  maintained   throughout  the  period  indicated  and
consistent  with the prior  financial  practice of Borrower,  except for changes
mandated or permitted to be adopted by the Financial  Accounting Standards Board
or any  similar  accounting  authority  of  comparable  standing.  Whenever  any
accounting  term is used  herein  which is not  otherwise  defined,  it shall be
interpreted in accordance with GAAP.

     1.22.   "General  Security  Agreement"  shall  mean  the  general  security
agreement  dated the date hereof executed and delivered by Borrower to Lender as
the same may be amended, modified or supplemented from time to time.

     1.23.  "Governmental  Rules"  shall have the meaning  given to such term in
Section 5.24 of this Agreement.

     1.24.  "Guarantor"  shall mean Casey Systems Inc. and General Sound (Texas)
Company and any other Person who shall, at any time,  agree to be a guarantor or
surety for Borrower.

     1.25.  "Indebtedness"  shall mean and include all  obligations for borrowed
money of any kind or nature,  including  funded debt and  unfunded  liabilities,
contingent   obligations  under  guaranties  or  letters  of  credit,   and  all
obligations for the acquisition or use of any fixed asset, including capitalized
leases,  or  improvements  which are payable over a period longer than one year,
regardless  of the term  thereof  or the  Person or  Persons to whom the same is
payable and the Obligations.

     1.26.  "Inventory" shall have the meaning given to such term in the General
Security Agreement.

     1.27.  "Loan  Documents"  shall mean this Agreement,  the General  Security
Agreement and all other documents and instruments to be delivered by Borrower or
any other Person under or in connection with this Agreement or the Loans, as the
same may be amended, modified or supplemented from time to time.

     1.28.  "Loan Interest Rate" shall mean Lender's Prime Rate plus one quarter
of one (1/4) percentage point.

     1.29.  "Loans"  shall mean the loans and advances made by Lender under this
Agreement, including all Advances.

     1.30. Intentionally omitted

     1.31.  "Material  Adverse Effect" shall mean any material adverse effect on
(a) the  business,  assets,  operations,  prospects or  condition,  financial or
otherwise,  of Borrower  and the  Guarantors  taken as a whole;  (b)  Borrower's
ability to pay or perform the  Obligations in accordance  with their terms;  (c)
the value,  collectability  or salability of the Collateral  taken as a whole or
the perfection or priority of Lender's liens; (d) the validity or enforceability
of this Agreement or any of the Loan Documents; or (e) the practical realization
of the benefits,  rights and remedies inuring to Lender under this Agreement and
the other Loan Documents.

     1.32. "Maximum Facility" shall mean THREE MILLION and 00/100 (3,000,000.00)
Dollars.

     1.33.  "Notice of  Borrowing"  shall mean a  borrowing  request in a Record
substantially in the form of Exhibit B attached hereto.

     1.34. "Obligations" shall mean and include all loans (including the Loans),
advances,  debts,  liabilities,  obligations,  covenants  and  duties  owing  by
Borrower to Lender or any Affiliate of Lender of any kind or nature,  present or
future,  whether or not  evidenced  by any note,  guaranty or other  instrument,
whether  arising  under this  Agreement,  the other Loan  Documents or under any
other agreement or by operation of law, whether or not for the payment of money,
whether  arising by reason of an extension of credit,  opening,  guaranteeing or
confirming  of a letter of credit,  loan,  guaranty,  indemnification  or in any
other manner,  whether direct or indirect  (including those acquired by purchase
or  assignment),  absolute  or  contingent,  due or to  become  due,  now due or
hereafter arising and howsoever  acquired  including,  without  limitation,  all
interest,  charges,  expenses,  commitment,  facility,  collateral management or
other fees,  attorneys' fees and expenses,  consulting fees and expenses and any
other sum chargeable to Borrower under this Agreement,  the other Loan Documents
or any other agreement with Lender.

     1.35.  "Person" shall mean an individual,  partnership,  limited  liability
company, limited liability partnership,  corporation, joint venture, joint stock
company,  land  trust,  business  trust  or  unincorporated  organization,  or a
government or agency or political subdivision thereof.

     1.36.  "Plan"  shall  mean an  employee  benefit  plan or other plan now or
hereafter maintained for employees of Borrower or any subsidiary of Borrower and
covered by Title IV of ERISA

     1.37.  "Prime  Rate"  means  the  fluctuating  rate of  interest,  which is
determined  periodically,  announced  from time to time by Lender as its  "Prime
Rate".

     1.38.  "Property"  shall have the meaning set forth in the General Security
Agreement.

     1.39.  "Receivables"  shall  have the  meaning  set  forth  in the  General
Security Agreement.

     1.40.  "Record"  shall mean  information  that is  inscribed  on a tangible
medium or which is stored in an electronic or other medium and is retrievable in
perceivable  form. If Lender so specifies  with respect to a particular  type of
Record,  that type of  Record  shall be signed  or  otherwise  authenticated  by
Borrower.

     1.41.  "Reportable  Event" shall have the meaning  assigned to that term in
Title IV of ERISA.

     1.42.  "Revolving  Loan"  shall mean the  Advances  to be made by Lender to
Borrower pursuant to Section 2.1 of this Agreement, and all interest thereon and
all fees, costs and expenses payable by Borrower in connection therewith.

     1.43. "Revolving Note" shall mean, the promissory note substantially in the
form annexed  hereto as Exhibit A, to be given by Borrower to Lender to evidence
the Revolving Loan.

     1.44.  "Solvent"  shall  mean when used with  respect to any  Person,  such
Person (i) owns  property  the fair  value of which is  greater  than the amount
required to pay all of such Person's Indebtedness  (including contingent debts),
(ii) owns  property the present fair salable  value of which is greater than the
amount that will be required to pay the probable  liabilities  of such Person on
its then existing  Indebtedness  as such become  absolute and matured,  (iii) is
able to pay all of its Indebtedness as such Indebtedness  matures,  and (iv) has
capital sufficient to carry on its then existing business.

     1.45.  "Termination Date" shall mean the earlier of October 1, 2005, or the
date on which Lender terminates this Agreement  pursuant to Section 12.1 of this
Agreement.

     1.46.  "UCC"  means the Uniform  Commercial  Code as in effect from time to
time.

2. THE REVOLVING LOAN.

     2.1.  Advances.  Subject  to the terms  and  conditions  of this  Agreement
including,  without  limitation,  the  Maximum  Facility  and  relying  upon the
representations  and warranties set forth in this  Agreement,  for so long as no
Default or Event of Default shall have  occurred,  Lender shall make Advances to
Borrower on its request,  from time to time during the term of this Agreement in
an amount  ("Borrowing  Capacity") not to exceed at any one time outstanding the
lesser of: (a) THREE MILLION and 00/100  (3,000,000.00)  DOLLARS, or (b) the sum
of (i)  eighty  (80)  percent  of the face  amount of the  Guarantors'  Eligible
Receivables,  where less than  ninety  (90) days have  passed  since the invoice
date,  (ii) forty (40) percent of all the other  Eligible  Receivables  of Casey
Systems Inc. and (iii) the lesser of (A)  twenty-five  (25) percent of the Value
of Casey Systems Inc.'s Eligible Inventory or (B) $750,000.00 or such greater or
lesser  percentages  or amounts as Lender shall  determine from time to time, in
exercise of its good faith commercial judgment.

     Value  shall  mean  the  lower  of cost or the  fair  market  value of such
Inventory, as reflected on the books and records of Borrower.  Within the limits
of the  Borrowing  Capacity,  and subject to the  limitations  set forth in this
Agreement, Borrower may borrow, repay and reborrow Advances.

     2.2. Overline.  Borrower acknowledges that Lender has advised Borrower that
Lender does not intend to permit Borrower to incur Obligations at any time in an
outstanding  principal  amount  exceeding  either the Borrowing  Capacity or the
Maximum Facility;  however, it is agreed that should the Obligations of Borrower
to Lender  incurred  under the Loans or otherwise  exceed either then,  all such
Obligations  shall (a)  constitute  Obligations  under  this  Agreement,  (b) be
entitled to the benefit of all security and protection  under this Agreement and
the other Loan  Documents,  (c) be secured by the  Collateral and (d) be payable
immediately without notice or demand by Lender.

     2.3. Reserves.  The Borrowing Capacity shall be subject to such reserves as
Lender  shall deem  necessary  and  proper in  Lender's  good  faith  commercial
judgment.

     2.4.   Manner  of  Borrowing.   Each  Advance  shall  be  requested  in  an
Authenticated  Record sent via facsimile or electronic  transmission  including,
without  limitation,  via  e-mail  by a  Notice  of  Borrowing  executed  by  an
authorized  officer of  Borrower,  not later than 3:00 p.m.  Eastern Time on any
Banking Day on which an Advance is requested.  Provided that Borrower shall have
satisfied all conditions  precedent set forth in this  Agreement,  including the
reaffirmation  of the  representations  and warranties and covenants as required
under Article 10 of this Agreement, and Borrower shall have sufficient Borrowing
Capacity to permit an Advance under this  Agreement in  accordance  with Section
2.1 of this  Agreement,  Lender shall make the Advance to Borrower in the amount
requested in the Record by Borrower in immediately available funds for credit to
any account of Borrower (other than a payroll account) at Lender.

     2.5. Evidence of Borrower's  Obligations.  Borrower's obligation to pay the
principal of, and interest on, the Advances made to Borrower  shall be evidenced
by the Revolving Note executed by Borrower and delivered to Lender.

     2.6. Payment on Termination Date.(i) Notwithstanding anything herein to the
contrary,  the entire  outstanding  principal  balance  of the  Loans,  plus all
accrued and unpaid interest thereon and all fees and other amounts payable under
this Agreement and the Loan Documents,  shall be due and payable in full, on the
Termination Date.

3. LENDER'S COMPENSATION.

     3.1.  Interest on Advances.  Except as provided  below,  Borrower shall pay
interest  monthly,  in  arrears,  on the  first  day of each  month,  commencing
November 1, 2003 on the average daily unpaid  principal  amount of the Revolving
Loan  at  a  fluctuating  rate  which  is  equal  to  the  Loan  Interest  Rate.
Notwithstanding  the  foregoing,  on and  after  the  occurrence  of an Event of
Default,  Borrower  shall pay interest on the Revolving  Loan at a rate which is
three (3) percent per annum above the Prime Rate; provided, however, in no event
shall any interest to be paid under this  Agreement  or under any Loan  Document
exceed the maximum rate permitted by law.

     3.2.  Commitment and Closing Fee.  Borrower shall have paid to Lender on or
before the date of this Agreement Seven Thousand Five Hundred and 00/100 Dollars
(7,500.00) as a commitment and closing fee, receipt of which is confirmed.

     3.3. Field Examination Fees.  Borrower shall promptly  reimburse Lender for
all reasonable out of pocket costs and expenses  associated  with periodic field
examinations as deemed necessary by Lender;  provided,  that so long as no Event
of Default  shall have  occurred,  Lender shall only  conduct one such  periodic
field  examination  during  any twelve  (12)  month  period and the cost of such
examination  shall not exceed  $7,500.00,  provided  Borrower and its  employees
fully cooperate with Bank's examiners.

     3.4.  Computation  of Interest  and Fees.  All interest and fees under this
Agreement  shall be computed on the basis of a year  consisting of three hundred
sixty (360) days for the number of days actually elapsed.

     3.5. Late Charge. Anything herein to the contrary  notwithstanding,  if any
scheduled  payment of interest or principal  due hereunder is received more than
ten (10) days after the date due,  there  shall be due a late charge of five (5)
percent of such payment

     3.6.  Payments.  All  payments  with  respect to the  Obligations  shall be
charged by Lender to Borrower's  demand account  deposit  maintained with Lender
without any defense, offset or counterclaim of any kind. Whenever any payment to
be made shall  otherwise be due on a day that is not a Banking Day, such payment
shall be made on the next  succeeding  Banking  Day and such  extension  of time
shall be included in computing  interest in  connection  with any such  payment.
Lender  may  make  an  Advance  to  reimburse  itself  for any  payments  on the
Obligations  (including  fees and expenses  payable by Borrower),  which are not
paid when due,  without  notice or demand to  Borrower.  Any delay or failure by
Lender in submitting any invoice for such interest or fee or in the making of an
Advance  against the Revolving  Loan shall not discharge or relieve  Borrower of
its obligation to make such interest or fee payment.

4. APPLICATION OF PROCEEDS. The proceeds of the Advances shall be used solely by
Borrower to repay existing indebtedness  incurred in connection  therewith,  for
general  business and working  capital  purposes,  and otherwise as permitted by
this Agreement and the other Loan Documents.

5.  INDUCING  REPRESENTATIONS.  In order to  induce  Lender  to make the  Loans,
Borrower makes the following representations and warranties to Lender:

     5.1.  Organization  and  Qualifications.  Borrower  is a  corporation  duly
organized and existing  under the laws of the State of Delaware.  Borrower's tax
identification  number  is  11-2941299,  and its  organizational  identification
number is 2176156.  Borrower is qualified  to do business in every  jurisdiction
where the failure to so qualify would cause a Material  Adverse  Effect,  either
individually or in the aggregate.

     5.2. Name and Address.  During the preceding  five (5) years,  Borrower has
not been known by any other corporate or fictitious name, except as set forth on
Schedule 5.2 attached hereto.  Borrower's principal office on the date hereof is
at the address set forth above.

     5.3.  Structure.  Borrower has no  subsidiaries  or  Affiliates on the date
hereof, except as set forth on Schedule 5.3 attached hereto.

     5.4. Legally Enforceable Agreement. The execution, delivery and performance
of this  Agreement,  each and all of the other Loan  Documents  and each and all
other  instruments  and documents to be delivered by Borrower or the  Guarantors
under  this  Agreement  and the  creation  of all liens and  security  interests
provided  for herein  are  within  Borrower's  corporate  power,  have been duly
authorized by all necessary or proper corporate action (including the consent of
shareholders  where  required),  are not in  contravention  of any  agreement or
indenture  to which  Borrower  is a party or by  which  it is  bound,  or of the
Certificate  of   Incorporation   or  By-Laws  of  Borrower,   and  are  not  in
contravention of any provision of law and the same do not require the consent or
approval of any governmental body,  agency,  authority or any other Person which
has not been  obtained  and a copy  thereof  furnished  to  Lender,  other  than
agreements that comprise  Collateral and that by their  respective terms may not
be pledged,  assigned or otherwise transferred and which, individually or in the
aggregate, are not material.

     5.5. Solvent Financial Condition. Borrower is Solvent.

     5.6. Financial Statements.  The unqualified audited financial statements of
Borrower  as of  September  30,  2002,  copies of which have been  delivered  to
Lender,  fairly present Borrower's financial condition and results of operations
as relevant  and as of such date and there has been no Material  Adverse  Effect
since such date. Borrower has no contingent liabilities,  liabilities for taxes,
unusual forward or long-term commitments,  or unrealized or unanticipated losses
from any  unfavorable  commitments  which were  required to be disclosed in such
financial statements but which were not disclosed.

     5.7.  Joint  Ventures.  On the date hereof,  Borrower is not engaged in any
joint venture or partnership with any other Person.

     5.8.  Real  Estate.  Attached  hereto as Schedule 5.8 is a list showing all
real property owned or leased by Borrower,  and if leased,  the correct name and
address of the landlord and the date and term of the applicable lease.

     5.9.  Patents,  Trademarks,  Copyrights  and  Licenses.  Borrower  owns  or
possesses all the patents,  trademarks,  service marks, trade names,  copyrights
and  licenses  necessary  for the  present  and  planned  future  conduct of its
business and, to the best of Borrower's knowledge, without any conflict with the
rights of others. All such registered patents,  registered  trademarks,  service
marks,  trade names,  registered  copyrights and licenses for the manufacture or
sale of products in the ordinary course of business  existing on the date hereof
are listed on Schedule 5.9 attached hereto, if any.

     5.10. Existing Business Relationship.  To the knowledge of Borrower,  there
exists no actual or threatened  termination,  cancellation  or limitation of, or
any adverse  modification  or change in, the business  relationship  of Borrower
with any supplier,  customer or group of customers which  individually or in the
aggregate would have a Material Adverse Effect.

     5.11.  Investment Company Act: Federal Reserve Board Regulations.  Borrower
is not an "investment  company",  or an "affiliated person" of, or "promoter" or
"principal  underwriter" for, an "investment company", as such terms are defined
in the Investment Company Act of 1940, as amended (15 U.S.C. ss.ss. 80(a)(1), et
seq.).  The making of the Loans under this Agreement by Lender,  the application
of the proceeds and  repayment  thereof by Borrower and the  performance  of the
transactions  contemplated  by this  Agreement will not violate any provision of
such Act, or any rule, regulation or order issued by the Securities and Exchange
Commission thereunder. Borrower does not own any margin security as that term is
defined in Regulation U of the Board of Governors of the Federal  Reserve System
and the proceeds of the Loans made pursuant to this  Agreement will be used only
for the purposes contemplated under this Agreement. None of the proceeds will be
used,  directly or  indirectly,  for the purpose of  purchasing  or carrying any
margin  security or for the purpose of  reducing  or retiring  any  Indebtedness
which was  originally  incurred to purchase or carry margin  security or for any
other purpose  which might  constitute  any of the Loans under this  Agreement a
"purpose  credit" within the meaning of such  Regulation U or Regulations T or X
of the Federal  Reserve  Board.  Borrower  will not take, or authorize any agent
acting on its behalf to take, any action which might cause this Agreement or any
document or instrument  delivered  pursuant  hereto to violate any regulation of
the Federal Reserve Board.

     5.12. Tax Returns.  Borrower and the Guarantors  have filed all tax returns
(Federal,  state or local) required to be filed and paid all taxes shown thereon
to be due  including  interest and penalties or has provided  adequate  reserves
therefor.  No assessments have been made against  Borrower or any Guarantor,  by
any taxing  authority  nor has any penalty or  deficiency  been made by any such
authority.  To the best of Borrower's knowledge, no Federal income tax return of
Borrower or any Guarantor,  is being examined on the date hereof by the Internal
Revenue  Service nor are the results of any prior  examination  by the  Internal
Revenue  Service or any State or local tax authority being contested on the date
hereof by Borrower or any Guarantor.

     5.13.  Litigation.  Except as  disclosed  in  Schedule  5.13,  no action or
proceeding  is now pending  or, to the  knowledge  of  Borrower,  is  threatened
against  Borrower or any Guarantor,  at law, in equity or otherwise,  before any
court,  board,  commission,  agency or  instrumentality  of the Federal or state
government or of any municipal  government or any agency or subdivision thereof,
or before any arbitrator or panel of  arbitrators,  which,  in any case,  would,
individually  or in the  aggregate,  have a Material  Adverse Effect and neither
Borrower  nor any  Guarantor,  has  accepted  liability  for any such  action or
proceeding.  There is no  proceeding  pending  before  any  governmental  agency
(Federal,  state  or  local)  and,  to the  best  of  Borrower's  knowledge,  no
investigation has been commenced before any such governmental  agency the effect
of which, if adversely decided, would,  individually or in the aggregate, have a
Material Adverse Effect.

     5.14.  Receivables  Locations.  Annexed  hereto as Schedule  5.14 is a list
showing all places at which Borrower  presently  maintains  records  relating to
Receivables on the date hereof.

     5.15.  Inventory  Locations.  Annexed  hereto  as  Schedule  5.15 is a list
showing all of Borrower's  Equipment  and the places where  Borrower on the date
hereof maintains  Inventory.  Such list indicates whether the premises are owned
or leased by Borrower or whether the premises are the premises of a warehouseman
or other third  party,  and if owned by a third  party,  the name and address of
such third party.

     5.16.  Equipment  Locations.  Annexed  hereto  as  Schedule  5.16 is a list
showing  all of the places  where  Borrower's  Equipment  is located on the date
hereof.  Such  list  indicates  whether  such  premises  are  owned or leased by
Borrower or whether the premises are the premises of another third party, and if
leased, the name and address of such third party.

     5.17.  Title/  Liens.  Borrower  has  good  and  marketable  title  to  the
Collateral as sole owner thereof. There are no existing liens on any Property of
Borrower,  except for (i) liens in favor of  Lender,  (ii)  liens  described  in
Schedule 5.17 and (iii) liens permitted by Section 9.5.

     5.18. Existing  Indebtedness.  Borrower has no existing Indebtedness except
the Indebtedness described in Schedule 5.18.

     5.19. ERISA Matters. The present value of all accrued vested benefits under
any Plan (calculated on the basis of the actuarial  evaluation for the Plan) did
not exceed as of the date of the most recent actuarial  evaluation for such Plan
the fair market  value of the assets of such Plan  allocable  to such  benefits.
Borrower is not aware of any information since the date of such evaluation which
would affect the  information  contained  therein.  Such Plan does not presently
have an accumulating funding deficiency,  as that term is defined in Section 302
of ERISA or Section 412 of the Code (whether or not waived), no liability to the
Pension Benefit Guaranty  Corporation  (other than required  premiums which have
become due and  payable,  all of which have been  paid) has been  incurred  with
respect to the Plan which would have a Material  Adverse  Effect,  and there has
not been any  Reportable  Event which presents a risk of termination of the Plan
by the Pension Benefit Guaranty  Corporation which would have a Material Adverse
Effect. Borrower has not engaged in any transaction which would subject Borrower
to tax, penalty or liability for prohibited transactions imposed by ERISA or the
Code which would have a Material Adverse Effect.

     5.20.  O.S.H.A.  Borrower  has  duly  complied  with,  and its  facilities,
business,  leaseholds,  Equipment  and other  property are in  compliance in all
respects with, the provisions of the federal  Occupational Safety and Health Act
and all  rules  and  regulations  thereunder  and all  similar  state  and local
Governmental  Rules.  There are no outstanding  citations,  notices or orders of
non-compliance  issued to  Borrower or  relating  to its  facilities,  business,
leaseholds,  Equipment or other property under any such Governmental Rules which
would, individually or in the aggregate, have a Material Adverse Effect.

     5.21. Environmental Matters. Except as disclosed in Schedule 5.21,

     (a) No  Property  owned or used by  Borrower  is or has  been  used for the
generation, manufacture, refining, transportation,  treatment, storage, handling
or disposal of any "hazardous  substances" or "hazardous wastes".  The following
are  all of the  Standard  Industrial  Classification  Codes  applicable  to the
properties and operations of Borrower: 3669, 3699 and 7382;

     (b) Borrower is in compliance with all applicable Environmental Laws;

     (c) there has been no contamination or release of hazardous  substances at,
upon,  under or within any Property  owned or leased by Borrower,  and there has
been no  contamination  (as  defined  in any  applicable  Environmental  Law) or
release of hazardous substances (as defined in any applicable Environmental Law)
on any other  Property that has migrated or threatens to migrate to any Property
owned or leased by Borrower;

     (d) there  are not now and never  have  been  above-ground  or  underground
storage tanks at any Property owned or leased by Borrower;

     (e) there  are no  transformers,  capacitors  or other  items of  Equipment
containing  polychlorinated  biphenyls  at  levels  in  excess  of 49 parts  per
million, violative of any applicable Environmental Law, at any Property owned or
leased by Borrower;

     (f) no hazardous  substances are present at any Property owned or leased by
Borrower, nor will any hazardous substances be present upon any such Property or
in the operation thereof by Borrower;

     (g) all permits and  authorizations  required under  Environmental Laws for
all  operations  of  Borrower  have been duly  issued  and are in full force and
effect,  including but not limited to those for air emissions,  water discharges
and treatment, storage tanks and the generation, treatment, storage and disposal
of hazardous substances;

     (h) there are no past, pending or threatened  environmental  claims against
Borrower or any Property owned or leased by Borrower;  and there is no condition
or  occurrence  on any  Property  owned or  leased  by  Borrower  that  could be
anticipated (1) to form the basis of an environmental  claim against Borrower or
its  properties  or (2) to cause any Property  owned or leased by Borrower to be
subject to any restrictions on its ownership, occupancy or transferability under
any Environmental Law;

     (i) no  portion  of any  Property  owned or  leased  by  Borrower  contains
asbestos-containing material that is or threatens to become friable;

     (j) the representations and warranties set forth in this Section 5.21 shall
survive  repayment of the  Obligations and the termination of this Agreement and
the other Loan Documents

     5.22.  Labor  Disputes.  There are no pending or, to Borrower's  knowledge,
threatened labor disputes which could have a Material Adverse Effect.

     5.23. Location of Bank and Securities Accounts.  Annexed hereto as Schedule
5.23 hereto sets forth a complete and accurate list of all deposit, checking and
other bank  accounts,  all securities  and other  accounts  maintained  with any
broker dealer and all other similar accounts  maintained by Borrower on the date
hereof (collectively, "Bank Accounts"), together with a description thereof.

     5.24.  Compliance  With Laws.  Borrower is in compliance  with all Federal,
state and local governmental  rules,  ordinances and regulations  ("Governmental
Rules")  applicable  to its ownership or use of properties or the conduct of its
business.

     5.25. No Other Violations.  Borrower is not in violation of any term of its
Certificate of  Incorporation  or By-laws and no event or condition has occurred
or is continuing which  constitutes or results in (or would constitute or result
in, with the giving of notice,  lapse of time or other  condition)  (a) a breach
of, or a default  under,  any  agreement,  undertaking  or  instrument  to which
Borrower is a party or by which it or any of its Property may be affected, which
would have a Material  Adverse Effect,  or (b) the imposition of any lien on any
Property of Borrower.

     5.26.  Survival of  Representations  and  Warranties.  Borrower  covenants,
warrants and  represents to Lender that all  representations  and  warranties of
Borrower  contained in this  Agreement or in any other Loan  Documents  shall be
true in all  material  respects  at the  time of  Borrower's  execution  of this
Agreement and the other Loan  Documents,  and Lender's  right to bring an action
for breach of any such  representation  or warranty  or to  exercise  any remedy
under this Agreement  based upon the breach of such  representation  or warranty
shall survive the execution,  delivery and  acceptance  hereof by Lender and the
closing  of the  transactions  described  herein  or  related  hereto  until the
Obligations are finally and irrevocably paid in full.

6. FINANCIAL  STATEMENTS AND INFORMATION;  CERTAIN NOTICES TO LENDER. So long as
Borrower  shall have any  Obligations to Lender under this  Agreement,  Borrower
shall deliver to Lender, or shall cause to be delivered to Lender:

     6.1.  Borrowing Base  Certificate.  Monthly (within fifteen (15) days after
the end of each  month)  and at  Lender's  option,  contemporaneously  with each
request, a completed and executed Borrowing Base Certificate.

     6.2. Monthly Reports. Within fifteen (15) days after the end of each month,
an accounts  receivable aging, and an inventory  designation  statement,  all in
form  approved  by Lender,  prepared  by  Borrower  together  with a  compliance
certificate in the form of Exhibit D attached hereto.

     6.3.  Annual  Financial  Statements.  Within  ten (10) of  filing  with the
Securities and Exchange  Commission (the "S.E.C.") a complete signed copy of its
10-KSB  report as required by the S.E.C.,  the  consolidated  and  consolidating
balance  sheet,  statements  of income and  retained  earnings and cash flows of
Borrower and Guarantors as of the last day of and for such fiscal  period,  each
statement  to be prepared in  accordance  with GAAP and  certified  by a firm of
independent  certified public  accountants  satisfactory to Lender.  The firm of
Marcum & Kliegman LLP is  acceptable  to Lender.  If Bank is able to obtain this
financial  information  through EDGAR,  Borrower will not be obligated to supply
Bank with a physical copy of same.

     6.4. Quarterly  Financial  Statements.  Within ten (10) days of filing with
the S.E.C., a complete copy of its 10-QSB report as required by the S.E.C.,  the
consolidated balance sheet,  statements if income and retained earnings and cash
flows of Borrower and Guarantors, as of the last day of and for such quarter and
for the  portion of the fiscal  year then  elapsed,  each such  statement  to be
prepared  by  management  and  certified  to be true and  accurate  by the Chief
Financial Office of Borrower, in each case as having been prepared in accordance
with GAAP. If Bank is able to obtain this financial  information  through EDGAR,
Borrower will not be obligated to supply Bank with a physical copy of same.

     6.5.  Schedules.  Monthly,  by the 15th day of each month,  a schedule  and
aging of accounts receivable and account payable, and an inventory report.

     6.6.  Insurance.  Annually,  within thirty (30) days of the renewal date of
such  insurance  policy,  evidence of insurance in form and content  approved by
Lender and otherwise in compliance with Section 8.6 of this Agreement,  together
with a copy of the original insurance policy.

     6.7. Notice of Adverse Business Developments. Promptly after becoming aware
of  the  existence  of  an  Adverse  Business  Development  including,   without
limitation, the following:

     (a) any  dispute  that may  arise  between  Borrower  and any  governmental
regulatory body or law enforcement  authority,  including any action relating to
any tax  liability of Borrower or any Guarantor  which if adversely  determined,
would have, individually or in the aggregate, a Material Adverse Effect;

     (b) any labor controversy resulting in or threatening to result in a strike
or work stoppage against Borrower or any Guarantor;

     (c) any proposal by any public  authority  to exercise  its eminent  domain
powers to acquire the assets or business of Borrower or any Guarantor;

     (d) the  location  of any  Collateral  other  than at  Borrower's  place of
business or as permitted under this Agreement;

     (e) any proposed or actual change of Borrower's  or any  Guarantor's  name,
identity, state of organization or corporate structure; or

     (f) any other matter which has resulted or may result in a Material Adverse
Effect.

     (g) In each case,  Borrower  will  provide  Lender with  telephonic  notice
followed  by notice in a Record  specifying  and  describing  the nature of such
Default,  Event of Default or development or information,  and such  anticipated
effect.

     6.8. Other  Information.  Such other  information  respecting the financial
condition  of  Borrower  or any  Guarantor,  or any  Property of Borrower or any
Guarantor  in which  Lender  may  have a lien as  Lender  may from  time to time
request.  Borrower  authorizes  Lender to communicate  directly with  Borrower's
independent  certified public  accountants and authorizes  those  accountants to
disclose to Lender any and all financial statements and other information of any
kind that they may have with respect to Borrower and its business and  financial
and other affairs.  Lender shall treat  information so obtained as confidential.
On or before  the date of this  Agreement,  Borrower  shall  deliver to Lender a
letter  addressed  to such  accountants  instructing  them to  comply  with  the
provisions  of this  Section  6.8 which  letter  shall be  acknowledged  by such
accountants.

7.  ACCOUNTING.  Lender may account monthly to Borrower.  Each and every account
shall be deemed final, binding and conclusive upon Borrower in all respects,  as
to all matters  reflected  therein,  unless  Borrower,  within fifteen (15) days
after the date the account was  rendered,  delivers to Lender notice in a Record
of any objections  which Borrower may have to any such account and in that event
only those items  expressly  objected  to in such  notice  shall be deemed to be
disputed by Borrower.  If Borrower  disputes the  correctness  of any statement,
Borrower's  notice  shall  specify  in detail the  particulars  of its basis for
contending that such statement is incorrect.

8. AFFIRMATIVE  COVENANTS.  Borrower represents and warrants that, so long as it
shall have any Obligations to Lender under this Agreement, Borrower will:

     8.1.  Business and  Existence.  Preserve and maintain  Borrower's  separate
existence and rights, privileges and franchises.

     8.2. Trade Names.  Transact business in Borrower's  and/or  Guarantor's own
name  other than for the  tradenames  set forth on  Schedule  5.9 and cause each
Guarantor to invoice all of such Guarantor's Receivables in Guarantor's own name
unless  Borrower shall have provided thirty (30) days prior notice in writing to
Lender of the use of a new or additional name by Borrower or any Guarantor.

     8.3.   Transactions   with   Affiliates.   Whenever   Borrower  engages  in
transactions  with  any  of  Borrower's  Affiliates,  conduct  the  same  on  an
arms-length basis or other basis more favorable to Borrower.

     8.4. Taxes. Pay and discharge all taxes,  assessments,  government  charges
and levies imposed upon  Borrower,  Borrower's  income or Borrower's  profits or
upon any  Property  belonging to Borrower  prior to the date on which  penalties
attach  thereto,  except  where  the  same  may be  contested  in good  faith by
appropriate   proceedings,   if  necessary,   being  diligently  conducted,   or
appropriate  reserves  therefore  have been  established.  Borrower will pay all
costs to be paid on taxes, assessments or governmental charges levied, assessed,
imposed or payable  upon or with  respect to the  Inventory,  Equipment or other
Collateral  or any part  thereof  except where the same may be contested in good
faith, by appropriate proceedings,  if necessary,  being diligently conducted or
appropriate reserves therefore have been established.

     8.5. Compliance with Laws. Comply with all Governmental Rules applicable to
Borrower including,  without limitation,  all laws and regulations regarding the
collection,  payment and deposit of employees'  income,  unemployment and Social
Security taxes.

     8.6.  Maintain  Properties:  Insurance.  Safeguard and protect all Property
used in the conduct of Borrower's  business and keep all of Borrower's  Property
insured with insurance companies licensed to do business in the states where the
Property is located  against loss or damage by fire or other risk under extended
coverage  endorsement and against theft,  burglary,  and pilferage together with
such  other  hazards  as Lender  may from time to time  reasonably  request,  in
amounts usually carried on similar Property by similar  companies.  If requested
by Lender, Borrower shall deliver complete,  certified to be true copies of each
insurance  policy or policies or certificates of insurance to Lender  containing
endorsements in form  satisfactory to Lender naming Lender as lender/loss  payee
with reference to the foregoing credit  insurance and hazard insurance  insuring
the Collateral, and as additional insured with respect to the foregoing required
insurance  other  than  credit  insurance  and  hazard  insurance  insuring  the
Collateral,  and providing that the insurance shall not be canceled,  amended or
terminated  except upon thirty (30) days' prior  written  notice to Lender.  All
insurance  proceeds  received  by Lender  shall be  retained by Lender and shall
promptly be applied to the payment of such portion of the  Obligations as Lender
may  determine in Lender's sole  discretion;  provided,  that if no  Obligations
shall then be outstanding,  Lender shall, within three (3) Banking Days, deliver
such proceeds,  in kind, to Borrower.  Borrower shall promptly  notify Lender of
any event or  occurrence  causing a material  loss or a material  decline in the
value of Property or the existence of an event justifying a material claim under
any insurance and the estimated amount thereof.

     8.7.  Business  Records.  Keep  adequate  records and books of account with
respect to Borrower's  business  activities in which proper  entries are made in
accordance   with  sound   bookkeeping   practices   reflecting   all  financial
transactions  of Borrower;  and Borrower  shall  maintain its primary  operating
account with Lender.

     8.8. Litigation.  Give Lender prompt notice of any suit at law or in equity
against Borrower  involving money or property except where the uninsured portion
of such claim would be less than  $100,000.00.  8.9.  Damage or  Destruction  of
Collateral.  Maintain  or  cause to be  maintained  the  Collateral  and all its
Properties in good  condition and repair at all times,  preserve the  Collateral
and all its other  Properties  from loss,  damage,  or destruction of any nature
whatsoever and provide Lender with prompt notice in a Record of any  destruction
or substantial  damage to any Collateral  subject to Lender's  security interest
and of the occurrence of any condition or event which has caused,  or may cause,
loss or depreciation in the value of any Collateral.

     8.10.  Name  Change.  Provide  Lender  with not fewer than thirty (30) days
notice in an  Authenticated  Record prior to any proposed  change of name or the
creation of any subsidiary.

     8.11.  Access to Books and  Records.  Provide  Lender with such reports and
with such access,  upon reasonable  advance notice and during  Borrower's normal
business  hours,  to Borrower's  books and records and permit Lender to copy and
inspect  such  reports and books and records all as Lender  deems  necessary  or
desirable to enable  Lender to monitor the credit  facilities  extended  hereby.
Upon reasonable  advance  notice,  Lender may examine and inspect the Inventory,
Equipment or other  Collateral  and may examine,  inspect and copy all books and
records  with  respect  thereto at any time during  Borrower's  normal  business
hours.  Borrower  shall  maintain  records  respecting  Inventory,  including  a
perpetual  inventory,  and all  other  Collateral  at all  times  that are full,
accurate and complete in all material respects.

     8.12. Solvent. Continue to be Solvent.

     8.13.  Compliance  With  Environmental  Laws.  Comply  with all  applicable
Environmental Laws.

     8.14.  Compliance  with ERISA and other  Employment  Laws.  Comply with all
applicable  provisions  of ERISA  and the  Internal  Revenue  Code of  1986,  as
amended,  and any other applicable  laws,  rules or regulations  relating to the
compensation of employees and funding of employee pension plans.

     8.15.  Depository Account Requirement.  Maintain its operating account with
Lender and make Lender its primary bank of account. In addition,  throughout the
term of the  Loans,  Borrower  shall  maintain  average  collected  non-interest
bearing  balances in one or more accounts with Lender in a minimum amount of not
less than  $125,000.00  determined on a quarterly basis on October 1st,  January
1st, April 1st and July 1st. If Borrower fails to maintain such minimum  average
collected balance for any quarter,  Borrower shall pay Lender a fee of $2,000.00
for each such quarter.

     8.16.  Delivery of Documents.  Notify Lender if any proceeds of Receivables
shall include,  or any of the  Receivables  shall be evidenced by, notes,  trade
acceptances  or  instruments  or  documents,  or if any  Inventory is covered by
documents of title or chattel paper, whether or not negotiable,  and if required
by Lender, in order to perfect its security interest in and to such Property or,
after the occurrence of an Event of Default and in connection  with the exercise
of the  rights  and  remedies  of  Lender  pursuant  to the  Loan  Documents  or
applicable  law, to realize the full value of such  Property,  promptly  deliver
them to Lender appropriately endorsed. Borrower waives protest regardless of the
form of the  endorsement.  If  Borrower  fails  to  endorse  any  instrument  or
document, Lender is authorized to endorse it on Borrower's behalf.

     8.17. Securities and Exchange Commission. File any and all reports required
to be filed with the Securities and Exchange Commission under the Securities Act
of 1933 or the  Securities  and  Exchange Act of 1934 as amended as and when due
(after  taking into account  such  extensions  as shall be available  under such
laws).

     8.18. Insurance on Guarantors' Property.  Cause each Guarantor to safeguard
and protect all of its  Property,  used in the conduct of its  business and keep
all of its Property insured with insurance  companies licensed to do business in
the states where the Property is located against loss or damage by fire or other
risk under  extended  coverage  endorsement  and against  theft,  burglary,  and
pilferage  together  with such  other  hazards  as Lender  may from time to time
reasonably  request,  in amounts usually carried on similar  Property by similar
companies. All insurance proceeds received by Lender shall be retained by Lender
and  shall  immediately  be  applied  to the  payment  of  such  portion  of the
Obligations as Lender may determine in Lender's sole discretion;  provided, that
if no  Obligations  shall then be  outstanding,  Lender shall,  within three (3)
Banking  Days,  deliver  such  proceeds,  in kind,  to Borrower on behalf of the
Guarantor  incurring  the  particular  insured loss.  Borrower  shall cause each
Guarantor  to  promptly  notify  Lender  of any  event or  occurrence  causing a
material loss or a material decline in the value of Guarantor's  Property or the
existence of an event  justifying a material  claim under any  insurance and the
estimated amount thereof.

9. NEGATIVE  COVENANTS.  So long as Borrower shall have any Obligation to Lender
under  this  Agreement  and  unless  Lender  has first  consented  thereto in an
Authenticated Record, Borrower shall not:

     9.1. Indebtedness. Create, incur, assume or suffer to exist, voluntarily or
involuntarily,  any Indebtedness,  except (i) Obligations to Lender,  (ii) trade
debt incurred in the ordinary  course of  Borrower's  business;  (iii)  purchase
money  financing and equipment  leases for new equipment which together with all
purchase  money  financing  and  equipment  leases  for  new  equipment  of  all
Guarantors does not exceed in the aggregate  $200,000.00 in any Fiscal Year; and
(iv) existing Indebtedness described on Schedule 5.18.

     9.2.  Mergers;   Consolidations;   Acquisitions.  Enter  into  any  merger,
consolidation,  reorganization or  recapitalization  with any other Person other
than a Guarantor,  or acquire all or any  substantial  part of the Properties of
any Person except (i) a Guarantor, or (ii) where the cost of any such merger(s),
consolidation(s)   or   acquisition(s)  in  any  Fiscal  Year  does  not  exceed
$500,000.00 in the aggregate  (unless the costs of such acquisition is paid from
the proceeds of newly  issued  capital  stock by  Borrower)  and Borrower is the
surviving  entity;  or  take  any  steps  in  contemplation  of  dissolution  or
liquidation;  except for Guarantors and other subsidiaries of Borrower who shall
become  Guarantors and who shall grant Lender a security  interest in all of its
assets,  conduct  any part of its  business  through any  corporate  subsidiary,
unincorporated  association  or other  Person other than for  independent  sales
representatives  and agents and other similar Persons engaged by Borrower in the
ordinary course of business,  or other than upon not less than thirty (30) days'
written notice to Lender and,  further  provided such Person becomes a Guarantor
and provides Lender with a security  interest in all of its assets;  acquire the
stock or assets of any  Person,  whether by merger,  consolidation,  purchase of
stock or otherwise  where the cost of any such  merger(s),  consolidation(s)  or
acquisition(s)  in any Fiscal Year does not exceed  $500,000.00 in the aggregate
(unless the costs of such  acquisition is paid from the proceeds of newly issued
capital stock by Borrower).

     9.3.  Sale or  Disposition.  Sell or  dispose of all or any  Properties  or
interest  therein or grant any Person an option to  acquire  any such  Property,
provided,  however,  that the foregoing shall not prohibit sales of Inventory in
the ordinary course of Borrower's  business,  or the sale of obsolete,  worn out
Property  or  Property  no longer  used in the  ordinary  course  of  Borrower's
business.

     9.4. Defaults.  Permit the landlord of the leased premises of 209 Lafayette
Drive located in Syosset,  New York, or any other landlord of any other premises
leased by Borrower or any  Guarantor,  to declare a default under any lease with
respect to such leased  premises while Inventory of Borrower or any Guarantor is
stored at such leased  premises,  which default remains uncured after any stated
cure period or for a period in excess of thirty  (30) days from its  occurrence,
whichever is less,  unless such  default is being  contested by Borrower in good
faith (and by appropriate proceedings if such proceedings are required to make a
good faith contest) and such good faith contest is being  diligently  conducted.

     9.5.  Limitations  on Liens.  Suffer  any lien,  encumbrance,  mortgage  or
security interest on any of its Property, except (i) purchase money liens on new
equipment securing not more than $200,000.00 in the aggregate in any Fiscal Year
less the  aggregate  amount  of  purchase  money  financing  secured  by  liens,
encumbrance,  mortgage or liens on any Property of any Guarantor; (ii) liens for
taxes,  assessments  and other  governmental  charges not yet due and payable or
which  are being  contested  as  contemplated  by this  Agreement  and for which
adequate reserves have been established;  (iii) liens of lessors, landlords, and
carriers, vendors, warehousemen, mechanics, laborers, repairmen, materialmen and
the like  incurred in the  ordinary  course of business for sums not yet due and
payable or which are being  contested  as  contemplated  by this  Agreement  and
which,  individually or in the aggregate,  are not material; (iv) liens incurred
or deposits  made in the  ordinary  course of business  (1) in  connection  with
workers'  compensation,   unemployment  insurance  and  other  types  of  social
security,  (2) to secure the  performance  of  tenders,  statutory  obligations,
surety and appeal bonds, bids, leases, performance bonds, purchase, construction
or sales  contracts  and  similar  obligations,  in each case to the  extent not
incurred or made in connection with the borrowing of money,  which  individually
or in the  aggregate,  are not  material;  (v)  other  deposits  made to  secure
liability  to  insurance  carriers  under  insurance   arrangements;   (vi)  any
attachment  or judgment  lien,  unless the  judgment  it secures is not,  within
thirty (30) days  discharged  or appealed;  (vii) as to real  property  owned by
Borrower,  leases or  subleases  granted  to others,  easements,  rights-of-way,
restrictions,  and other similar charges and encumbrances granted,  entered into
or created in the ordinary course of business and which do not,  individually or
in the aggregate, present a reasonable, likelihood of a Material Adverse Effect;
and (viii) such liens as appear on Schedule 5.17 attached hereto, if any.

     9.6. INTENTIONALLY LEFT BLANK.

     9.7.  Borrower's  Name and Offices.  Transfer  Borrower's  chief  executive
office or  change  its  organizational  name or office  where it  maintains  its
records (including  computer printouts and programs) with respect to Receivables
or any other Collateral, except on not less than thirty (30) days' prior written
notice to Lender.

     9.8.  Fiscal  Year.  Change its Fiscal  Year except on not less than thirty
(30) days' prior written notice to Lender.

     9.9.  Change of  Management.  Promptly  notify  Lender by an  Authenticated
Record,  if the chief  financial  officer is other than John A.  Poserina or the
chief executive officer is other than Daniel S. Tamkin.

     9.10.  Guaranties;  Contingent  Liabilities.  Assume,  guarantee,  endorse,
contingently agree to purchase or otherwise become liable upon the obligation of
any Person  other than a  Guarantor,  except by the  endorsement  of  negotiable
instruments  for deposit or collection or similar  transactions  in its ordinary
course of business as currently conducted.

     9.11. Removal of Collateral.  Remove, or cause or permit to be removed, any
of the Collateral or other  Property from the premises where such  Collateral or
Property is currently located and as set forth on Schedule 5.14, 5.15 or 5.16 of
this  Agreement,  except on not less than thirty (30) days' prior written notice
to Lender and except for sales of Inventory in the ordinary course of business.

     9.12. Transfer of Notes or Accounts.  Sell, assign,  transfer,  discount or
otherwise  dispose of any Receivables or any promissory note or other instrument
payable  to it with  or  without  recourse  except  in the  ordinary  course  of
business.

     9.13. Settlements.  Compromise,  settle or adjust any claim relating to any
Receivable  in excess of $50,000.00  unless  Borrower has  sufficient  Borrowing
Capacity   to   cover   such   compromise,   settlement   and   adjustment   and
contemporaneously  therewith  Borrower provides Lender an updated Borrowing Base
Certificate showing such compromise, settlement or adjustment.

     9.14.  Change of Business.  Cause or permit a material change in the nature
of its business as conducted on the date of this Agreement.

     9.15.  Change  of  Accounting  Practices.  Change  its  present  accounting
principles  or  practices  in any  respect,  except,  upon notice to Lender in a
Record, as may be required or by changes in, or permitted by GAAP.

     9.16.  Inconsistent  Agreement.  Enter into any  agreement  containing  any
provision which would be violated by the  performance of Borrower's  Obligations
or other  obligations  under this  Agreement  or any other Loan  Document if the
result thereof would,  individually or in the aggregate,  be a Material  Adverse
Effect.

     9.17. INTENTIONALLY LEFT BLANK.

     9.18.  Investments.  Make any investment in any Person  including,  without
limitation,  in any  Affiliates  or form  any  Affiliates  or  subsidiaries  not
existing on the date  hereof,  except (a) as  permitted  by Section 9.2. and the
other  sections  of  this  Agreement,  and (b)  investments  in  cash  and  cash
equivalents,  and, to the extent not included in the  foregoing,  the following:
(i)  direct  obligations  of the  United  States  or any  agency  thereof,  (ii)
commercial  paper of a domestic  issuer rated highest by one of the major rating
agencies, and (iii) stock, obligations and securities received in the settlement
of debts created in the ordinary course of business not in excess of $100,000.00
in the aggregate at any one time outstanding.

     9.19.  Effective Tangible Net Worth.  Permit Borrower's  Effective Tangible
Net Worth to be less than:

                      Amount                            Time Period

                   4,500,000.00*                     2003 to October 2005

*which number shall increase  effective as of September 30, 2003 and each fiscal
year in an amount equal to twenty-five  (25) percent of Borrower's net profit as
set forth in the financial statements referred to in Section 6.3.

     9.20.  Debt to Effective  Tangible  Net Worth.  Permit  Borrower's  Debt to
Effective Tangible Net Worth Ratio for the periods set forth below to be greater
than the levels set forth below, tested quarterly:

                   Ratio                              Time Period

                   1.5 to 1.0                       2003 to October 2005

Borrower  acknowledges  that in the event Lender  agrees to renew the  Revolving
Loan beyond the  Termination  Date of the Revolving  Loan,  Lender  reserves the
right to impose revised,  new and additional financial covenants relating to the
Loans.

10. CONDITIONS TO ADVANCES.

Lender's Right to Take Certain Actions.  Lender's obligation to make any Advance
is subject to the  condition  that,  as of the date of the Advance,  no Event of
Default  shall have occurred and that the  representations  and  warranties  set
forth in Article 5 of this Agreement and the  representations  and covenants set
forth in the  other  Loan  Documents  continue  to be true and  complete  in all
material  respects  (provided,  that as to  representations  and warranties that
relate to a particular time or date, such  representations  and warranties shall
continue to be true and correct in all material  respects as of such  particular
time or date).  Borrower's acceptance of each Advance under this Agreement shall
constitute a  confirmation  of the foregoing.  If requested by Lender,  Borrower
shall further  confirm such matters by delivery of a Record dated the day of the
Advance and signed by an authorized officer of Borrower.

11.  TERM.  Unless  sooner  terminated  by Lender  pursuant to the terms of this
Agreement,  the period during which the Revolving Loan shall be available  shall
initially  be a period  commencing  on the date  hereof  and  concluding  on the
Termination Date.

12. EVENTS OF DEFAULT.

     12.1.  Defaults.  Upon  the  happening  of  any  of  the  following  events
(individually, an "Event of Default," collectively, "Events of Default"):

     (a) if Borrower  shall fail to make any payment when due on any  Obligation
under this  Agreement or any other Loan Document and such failure shall continue
for a period of five (5) days; or

     (b) if Borrower  shall fail to maintain the  insurance  required by Section
8.6 or Section 8.18 of this Agreement; or

     (c) if Borrower shall fail to comply with any term, condition,  covenant or
warranty of or in this Agreement other than the failure to pay any Obligation or
to maintain  insurance in  compliance  with Section 8.6 and Section 8.18 of this
Agreement,  and,  except where there is a specific  grace and/or  notice  period
provided with respect to such  failure,  the  continuance  of such failure for a
period in excess of fifteen (15) days after notice thereof is given by Lender to
Borrower; or

     (d) if  Borrower  or any  Guarantor  shall  fail to  comply  with any term,
condition, covenant, warranty or representation contained in any other agreement
between Lender and Borrower and/or any Guarantor; or

     (e) if  Borrower  shall  cease to be Solvent,  make an  assignment  for the
benefit of its creditors,  call a meeting of its creditors to obtain any general
financial accommodation,  suspend business or if any case under any provision of
the Bankruptcy Code including provisions for reorganizations, shall be commenced
by or against Borrower (and if commenced against  Borrower,  such case shall not
have  been  discharged  or  dismissed   within   forty-five  (45)  days  of  its
commencement) or if a receiver, trustee or equivalent officer shall be appointed
for all or any of the Properties of Borrower; or

     (f) if any statement or representation contained in any financial statement
or certificate  delivered by Borrower to Lender shall be false,  in any material
respect, when made; or

     (g) if any federal or state tax lien is filed of record against Borrower or
any Guarantor and is not bonded or discharged within thirty (30) days of filing,
unless such lien is being contested by Borrower in good faith and, if necessary,
by  appropriate   proceedings  diligently  conducted,  or  appropriate  reserves
therefore have been established and which, individually or in the aggregate, are
not material; or

     (h) intentionally omitted; or

     (i) if a  judgment  shall be  entered  against  Borrower  in any  action or
proceeding and shall not be stayed,  vacated,  bonded, paid or discharged within
thirty (30) days of entry,  except a judgment (i) where the uninsured portion of
the claim  together  with the  uninsured  portion of all  judgments  against all
Guarantors is less than $100,000.00 in the aggregate and the insurance companies
has accepted liability for the insured portion of such judgments in writing;  or
(ii) where Borrower has Borrowing Capacity in excess of the uninsured portion of
the claim  together  with the  uninsured  portion of all  judgments  against all
Guarantors and has promptly notified Lender of such judgment with such uninsured
position reserved by Lender against the Borrowing Capacity; or

     (j) if any  obligation  of Borrower in respect of any  Indebtedness  (other
than the  Obligations to Lender) in an amount in excess of $100,000.00  shall be
declared  to be or shall  become due and  payable  prior to its stated  maturity
unless contested in good faith and such contest diligently prosecuted; or

     (k) upon the happening of any Reportable  Event which  constitutes  grounds
for the  termination  of any Plan,  or if a  trustee  shall be  appointed  by an
appropriate  United  States  District  Court  or other  court or  administrative
tribunal to administer any Plan, or if the Pension Benefit Guaranty  Corporation
shall  institute  proceedings  to terminate  any Plan or to appoint a trustee to
administer  any Plan,  and,  in each case,  such event,  individually  or in the
aggregate, would result in a Material Adverse Effect; or

     (l) upon the  occurrence  and  continuance  of any Material  Adverse Effect
which impairs Lender's security,  increases Lender's risks or impairs Borrower's
ability to perform under this Agreement or under the other Loan Documents; or

     (m) upon the happening of any of the events  described in Subsections  12.1
(d), (e), (f), (g), (i), (j), (k), (l) or (m) with respect to any Guarantor,  if
any, or if any such Guarantor purports to terminate its guaranty.  (n) Then, and
in any such event,  Lender may terminate this Agreement  without prior notice or
demand to Borrower  or may demand  payment in full of all  Obligations  (whether
otherwise then payable on demand or not) without  terminating this Agreement and
shall, in any event, be under no further  responsibility to extend any credit or
afford any financial accommodation to Borrower,  whether under this Agreement or
otherwise.

     12.2.  Obligations  Immediately  Due.  Upon  the  Termination  Date for any
reason, all of Borrower's  Obligations to Lender including,  but not limited to,
the Loans shall  immediately  become due and payable  without  further notice or
demand.

     12.3. Continuation of Security Interests.  Notwithstanding any termination,
until all  Obligations  of  Borrower  shall have been fully paid and  satisfied,
Lender  shall  retain  all  security  in and title to all  existing  and  future
Receivables,  General Intangibles,  Inventory,  Equipment,  Fixtures, Investment
Property,  and other  Collateral  held by  Lender  under  the  General  Security
Agreement or under any other Loan Document.

13. REMEDIES OF LENDER.  Upon the occurrence of any Event of Default or upon any
termination of this Agreement, then Lender shall have, in addition to all of its
other rights under this Agreement all of the rights and remedies provided in the
General Security Agreement.

14. GENERAL PROVISIONS.

     14.1. Rights Cumulative.  Lender's rights and remedies under this Agreement
shall be  cumulative  and  non-exclusive  of any other rights or remedies  which
Lender may have under any other agreement or instrument,  by operation of law or
otherwise.

     14.2.  Successors  and  Assigns.  This  Agreement  is entered  into for the
benefit of the parties  hereto and their  successors  and  assigns.  It shall be
binding upon and shall inure to the benefit of the parties, their successors and
assigns.  Lender  shall have the right,  without  the  necessity  of any further
consent or  authorization  by Borrower,  to sell,  assign,  securitize  or grant
participation in all, or a portion of, Lender's  interest in the Loans, to other
financial  institutions  of  the  Lender's  choice  and  on  such  terms  as are
acceptable to Lender in its sole discretion.

     14.3.  Notice.  Wherever  this  Agreement  provides for notice to any party
(except as expressly provided to the contrary),  it shall be given by messenger,
facsimile,  certified  U.S. mail with return  receipt  requested,  or nationally
recognized  overnight  courier with  receipt  requested,  effective  when either
received  or  receipt  rejected  by the  party to whom  addressed,  and shall be
addressed  as  follows,  or to such  other  address  as the party  affected  may
hereafter designate:

(a)   If to Lender:   Hudson United Bank 530 High
                      Mountain Road North Haledon, New Jersey
                      07508 Attention: David Yanagisawa
                                  Sr. Vice President Tel: (973)
                      636-6024 Fax: (973) 636-6071

With a copy to:       Poff & Bowman LLC
                      1600 Route 208 North
                      Hawthorne, New Jersey 07507
                      Attention:  Clinton A. Poff
                      Tel: (973) 636-9770
                      Fax: (973) 636-9777

If to Borrower:       Synergx Systems Inc.
                      209 Lafayette Drive
                      Syosset, New York 11791
                      Attn: John A. Poserina,
                            Chief Financial Officer
                      Tel: 516-433-4700
                      Fax: 516-433-1131

With a copy to:       Dennis P. McConnell, Esq.
                      Dolgenos Newman and Cronin
                      96 Spring Street, 8th Floor
                      New York, New York 10012
                      Tel: (212) 925-2800
                      Fax: (212) 925-0690

     14.4. Strict Performance.  The failure, at any time or times hereafter,  to
require strict  performance by Borrower of any provision of this Agreement shall
not waive,  affect or diminish any right of Lender  thereafter  to demand strict
compliance and performance therewith.  Any suspension or waiver by Lender of any
Default or Event of Default by Borrower  under this  Agreement or any other Loan
Document  shall not  suspend,  waive or affect  any  other  Default  or Event of
Default by Borrower under this Agreement or any other Loan Document, whether the
same is prior or subsequent thereto and whether of the same or a different type.

     14.5. Waiver. Borrower waives presentment,  protest, notice of dishonor and
notice of  protest  upon any  instrument  on which it may be liable to Lender as
maker, endorser, guarantor or otherwise.

     14.6.  Construction  of Agreement.  The parties hereto agree that the terms
and  language  of this  Agreement  were the result of  negotiations  between the
parties, and, as a result, there shall be no presumption that any ambiguities in
this Agreement shall be resolved  against either party. Any controversy over the
construction  of this  Agreement  shall be decided  mutually  without  regard to
events of authorship or negotiation.

     14.7.  Expenses.  If, at any time or times prior or  subsequent to the date
hereof,  regardless  of whether  or not a Default  or an Event of  Default  then
exists  or  any  of the  transactions  contemplated  under  this  Agreement  are
concluded, Lender employs counsel for advice or other representation,  or incurs
legal expenses, or consulting fees and expenses, or other costs or out-of-pocket
expenses in connection with:

     (A) the  negotiation  and  preparation  of this Agreement or any other Loan
Document,  or any amendment of or  modification  of this  Agreement or any other
Loan Document;

     (B) intentionally left blank;

     (C) periodic audits and appraisals performed by Lender;

     (D) any litigation,  contest,  dispute, suit, proceeding or action (whether
instituted  by Lender,  Borrower or any other Person) in any way relating to the
Collateral, this Agreement or any other Loan Document or Borrower's affairs;

     (E) the perfection of any lien on the Collateral;

     (F) any  attempt  to  enforce  any  rights or  remedies  of Lender  against
Borrower or any other  Person which may be obligated to Lender by virtue of this
Agreement or any other Loan Document including,  without limitation, the Account
Debtors; or

     (G) any attempt to inspect, verify, protect,  preserve,  restore,  collect,
sell, liquidate or otherwise dispose of or realize upon the Collateral; then, in
any such event,  the reasonable  attorneys' fees and expenses  arising from such
services  and all  reasonable  expenses,  costs,  charges and other fees of such
counsel of Lender or relating to any of the events or actions  described in this
Section  14.7 shall be payable by  Borrower to Lender,  and shall be  additional
Obligations under this Agreement secured by the Collateral. Additionally, if any
taxes (excluding taxes imposed upon or measured by the net income of Lender, but
including any  intangibles  tax, stamp tax or recording tax) shall be payable on
account of the  execution  or  delivery  of this  Agreement,  or the  execution,
delivery,  issuance or recording of any other Loan Document,  or the creation of
any of the  Obligations  under  this  Agreement,  by reason of any  existing  or
hereafter enacted federal or state statute,  Borrower will pay (or will promptly
reimburse Lender for the payment of) all such taxes  including,  but not limited
to, any interest and  penalties  thereon,  and will  indemnify,  defend and hold
Lender harmless from and against any liability in connection therewith. Borrower
shall also reimburse Lender for all other reasonable expenses incurred by Lender
in connection  with the  transactions  contemplated  under this Agreement or the
other Loan Documents.

     14.8.  Reimbursements Charged to Revolving Loan. With respect to any amount
advanced by Lender and  required to be  reimbursed  by Borrower  pursuant to the
foregoing provisions of Section 14.7, it is hereby agreed that Lender may charge
any such amount to Borrowers'  Revolving Loan on the dates such reimbursement is
made. Borrower's obligations under Section 14.7 shall survive termination of the
other provisions of this Agreement.

     14.9. Waiver of Right to Jury Trial.

     A. Borrower and Lender  recognize that in matters  related to the Loans and
this Agreement,  and as it may be subsequently modified and/or amended, any such
party may be entitled to a trial in which  matters of fact are  determined  by a
jury (as opposed to a trial in which such matters are determined by a federal or
state judge).  By execution of this Agreement,  Lender and Borrower will give up
their  respective  right to a trial by jury.  Borrower  and Lender  each  hereby
expressly acknowledge that this waiver is entered into to avoid delays, minimize
trial  expenses,  and streamline the legal  proceedings in order to accomplish a
quick resolution of claims arising under or in connection with the Note and this
Agreement.

     B.  WAIVER OF JURY  TRIAL.  TO THE MAXIMUM  EXTENT NOT  PROHIBITED  BY LAW,
BORROWER AND LENDER EACH HEREBY KNOWINGLY,  VOLUNTARILY AND INTENTIONALLY WAIVES
ANY RIGHT THAT  BORROWER OR LENDER MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY
LITIGATION,  DIRECTLY OR  INDIRECTLY,  AT ANY TIME ARISING OUT OF, UNDER,  OR IN
CONNECTION  WITH THE  LOAN,  THIS  AGREEMENT,  OR ANY  TRANSACTION  CONTEMPLATED
THEREBY OR HEREBY, BEFORE OR AFTER MATURITY.

     C.   CERTIFICATIONS.   BORROWER   HEREBY   CERTIFIES   THAT   NEITHER   ANY
REPRESENTATIVE  NOR  AGENT OF  LENDER  NOR  LENDER'S  COUNSEL  HAS  REPRESENTED,
EXPRESSLY  OR  OTHERWISE,  OR IMPLIED  THAT  LENDER  WOULD NOT,  IN THE EVENT OF
LITIGATION,  SEEK TO ENFORCE THE FOREGOING  WAIVER.  BORROWER  ACKNOWLEDGES THAT
LENDER HAS BEEN INDUCED TO ENTER INTO THE  TRANSACTION  BY, AMONG OTHER  THINGS,
THE MUTUAL WAIVERS AND CERTIFICATION HEREIN.

     14.10.  Indemnification  by  Borrower/Waiver  of  Claims.  Borrower  hereby
covenants and agrees to indemnify,  defend (with counsel selected by Lender) and
hold harmless  Lender and its officers,  partners,  employees,  consultants  and
agents  from and against any and all  claims,  damages,  liabilities,  costs and
expenses  (including,  without  limitation,  the  actual  fees and  expenses  of
counsel)  which may be incurred by or asserted  against Lender or any such other
Person in connection with:

     (a) any  investigation,  action or proceeding  arising out of or in any way
relating to this Agreement,  any of the Loans,  any of the other Loan Documents,
any other agreement  relating to any of the Obligations,  any of the Collateral,
or any act or omission relating to any of the foregoing; or

     (b) any taxes, liabilities, claims or damages relating to the Collateral or
Lender's liens thereon; or

     (c) the correctness,  validity or genuineness of any instrument or document
that  may  be  released  or  endorsed  to  Borrower  by  Lender   (which   shall
automatically be deemed to be without  recourse to Lender in any event),  or the
existence,  character,  quantity,  quality,  condition, value or delivery of any
goods purporting to be represented by any such documents; or

     (d) any  broker's  commission,  finder's  fee or  similar  charge or fee in
connection with the Loans and the transactions contemplated in this Agreement.

     14.11.  Savings  Clause  for  Indemnification.   To  the  extent  that  the
undertaking to indemnify, pay and hold harmless set forth in Section 14.10 above
may be  unenforceable  because  it is  violative  of any law or  public  policy,
Borrower shall  contribute the maximum  portion which it is permitted to pay and
satisfy  under  applicable  law to the payment and  satisfaction  of all matters
referred to under Section 14.10.

     14.12.  Waiver.  To the extent permitted by applicable law, no claim may be
made by Borrower or any other Person  against  Lender or any of its  Affiliates,
partners, officers, employees, agents, attorneys or consultants for any special,
indirect,  consequential  or punitive damages in respect of any claim for breach
of contract,  tort or any other theory of liability arising out of or related to
the  transactions  contemplated by this Agreement or the other Loan Documents or
any act,  omission or event  occurring  in  connection  therewith;  and Borrower
hereby  waives,  releases  and  agrees  not to sue upon any  claim  for any such
damages,  whether or not accrued and whether or not known or  suspected to exist
in its favor.  Neither  Lender nor any of its  Affiliates,  partners,  officers,
employees, agents, attorneys or consultants shall be liable for any action taken
or omitted to be taken by it or them under or in connection  with this Agreement
or the  transactions  contemplated  hereby,  except  for its or their  own gross
negligence or willful misconduct.

     14.13.  Entire  Agreement;  Amendments;  Lender's  Consent.  This Agreement
(including  the Exhibits  and  Schedules  thereto) and the other Loan  Documents
supersede,  with respect to their subject matter, all prior and  contemporaneous
agreements,  understandings,  inducements  or conditions  between the respective
parties,  whether express or implied, oral or written. No amendment or waiver of
any provision of this Agreement or any other Loan  Document,  nor consent to any
departure by Borrower therefrom, shall in any event be effective unless the same
shall be in a Record  Authenticated  by Lender,  and then such waiver or consent
shall be effective  only in the specific  instance and for the specific  purpose
for which given.

     14.14.  Execution in  Counterparts.  This  Agreement may be executed in any
number of counterparts,  each of which when so executed shall be deemed to be an
original and all of which taken together  shall  constitute but one and the same
agreement.

     14.15.  Severability of Provisions.  Any provision of this Agreement or any
of  the  other  Loan  Documents  that  is  prohibited  or  unenforceable  in any
jurisdiction  shall,  as to such  jurisdiction,  be ineffective to the extent of
such  prohibition  or  unenforceability   without   invalidating  the  remaining
provisions  of this  Agreement  or the other Loan  Documents  or  affecting  the
validity or enforceability of such provision in any other jurisdiction.

     14.16.  Table of  Contents;  Headings.  The table of contents  and headings
preceding the text of this  Agreement  are inserted  solely for  convenience  of
reference  and shall  not  constitute  a part of this  Agreement  or affect  its
meaning,  construction  or effect.  14.17.  Exhibits and  Schedules.  All of the
Exhibits and Schedules to this  Agreement are hereby  incorporated  by reference
herein and made a part hereof.

15. GOVERNING LAW; CONSENT TO JURISDICTION.

     (A) THIS AGREEMENT WAS  NEGOTIATED IN THE STATE OF NEW JERSEY,  AND MADE BY
LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW JERSEY,  AND THE PROCEEDS OF
THE REVOLVING NOTE DELIVERED  PURSUANT  THERETO WERE DISBURSED FROM THE STATE OF
NEW JERSEY, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL  RELATIONSHIP TO THE
PARTIES AND TO THE UNDERLYING  TRANSACTION EMBODIED HEREIN, AND IN ALL RESPECTS,
INCLUDING MATTERS OF CONSTRUCTION,  VALIDITY AND PERFORMANCE, THIS AGREEMENT AND
THE  OBLIGATIONS  ARISING  HEREUNDER  SHALL BE  GOVERNED  BY, AND  CONSTRUED  IN
ACCORDANCE  WITH,  THE LAWS OF THE STATE OF NEW JERSEY  APPLICABLE  TO CONTRACTS
MADE AND PERFORMED IN SUCH STATE AND ANY  APPLICABLE LAW OF THE UNITED STATES OF
AMERICA, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF
SUCH STATE, THE LAW OF THE STATE OF NEW JERSEY SHALL GOVERN THE VALIDITY AND THE
ENFORCEABILITY  OF ALL LOAN DOCUMENTS AND ALL OF THE INDEBTEDNESS OR OBLIGATIONS
ARISING HEREUNDER OR THEREUNDER.  TO THE FULLEST EXTENT PERMITTED BY LAW, LENDER
AND BORROWER HEREBY  UNCONDITIONALLY  AND IRREVOCABLY  WAIVE ANY CLAIM TO ASSERT
THAT THE LAW OF ANY OTHER JURISDICTION  GOVERNS THIS AGREEMENT AND THE REVOLVING
NOTE,  AND THIS  AGREEMENT  AND THE  REVOLVING  NOTE  SHALL BE  GOVERNED  BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY.

     (B) ANY LEGAL SUIT,  ACTION OR PROCEEDING  AGAINST LENDER OR BORROWER,  ANY
GUARANTOR OR OTHER PARTY TO THIS TRANSACTION  ARISING OUT OF OR RELATING TO THIS
AGREEMENT  SHALL BE  INSTITUTED  IN THE SOLE  OPTION OF LENDER IN ANY FEDERAL OR
STATE COURT LOCATED IN NEW JERSEY,  AND LENDER AND BORROWER  WAIVE ANY OBJECTION
WHICH IT MAY NOW OR  HEREAFTER  HAVE TO THE  LAYING  OF VENUE OF ANY SUCH  SUIT,
ACTION OR PROCEEDING,  AND LENDER AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER SHALL
DESIGNATE FROM TIME TO TIME AN AUTHORIZED AGENT HAVING AN OFFICE IN THE STATE OF
NEW  JERSEY TO ACCEPT  AND  ACKNOWLEDGE  ON ITS  BEHALF  SERVICE  OF ANY AND ALL
PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT,  ACTION OR  PROCEEDING  AND AGREES
THAT SERVICE OF PROCESS  UPON SUCH AGENT AT SUCH  ADDRESS AND WRITTEN  NOTICE OF
SUCH SERVICE ON SUCH BORROWER MAILED OR DELIVERED TO SUCH BORROWER IN THE MANNER
PROVIDED  HEREIN SHALL BE DEEMED IN EVERY RESPECT  EFFECTIVE  SERVICE OF PROCESS
UPON SUCH  BORROWER IN ANY SUCH SUIT,  ACTION OR  PROCEEDING IN THE STATE OF NEW
JERSEY. BORROWER (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGE OF ADDRESS
OF ITS AUTHORIZED  AGENT  HEREUNDER,  (II) MAY AT ANY TIME AND FROM TIME TO TIME
DESIGNATE  A  SUBSTITUTE  AUTHORIZED  AGENT WITH AN OFFICE IN NEW JERSEY  (WHICH
OFFICE SHALL BE  DESIGNATED  AS THE ADDRESS FOR SERVICE OF  PROCESS),  AND (III)
SHALL PROMPTLY  DESIGNATE  SUCH A SUBSTITUTE IF ITS  AUTHORIZED  AGENT CEASES TO
HAVE AN  OFFICE IN NEW  JERSEY  OR IS  DISSOLVED  WITHOUT  LEAVING A  SUCCESSOR.
BORROWER   REPRESENTS  AND  WARRANTS  THAT  IT  HAS  REVIEWED  THIS  CONSENT  TO
JURISDICTION  PROVISION  WITH  ITS  LEGAL  COUNSEL,  AND HAS  MADE  THIS  WAIVER
KNOWINGLY AND VOLUNTARILY.


     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed by their officers  thereunto duly  authorized on the day and year first
above written.






WITNESS:                                    SYNERGX SYSTEMS INC.




                                            by:
-----------------------------------------       -------------------------------
Dennis P. McConnell, Esq.                       Name:  Daniel S. Tamkin
                                                Title: Chief Executive Officer




WITNESS:                                    HUDSON UNITED BANK




                                    _____   by:
-----------------------------------------       -----------------------------
Clinton A. Poff, Esq.                           Name:  David S. Yanagisawa
                                                Title: Senior Vice President




<PAGE>



                                    EXHIBIT A

                                 REVOLVING NOTE

<PAGE>



                                    EXHIBIT B

A.  FORM OF NOTICE OF BORROWING

Hudson United Bank
1000 MacArthur Boulevard
Mahwah, New Jersey 07430

Re: Request for loan/advance

     The undersigned requests a $__________ loan advance pursuant to Section 2.1
of the Revolving Loan Agreement dated October 9, 2003 between Hudson United Bank
and the undersigned (the "Loan  Agreement").  Capitalized  terms used herein and
not otherwise  defined  herein shall have the meanings given to them in the Loan
Agreement.

     Please deposit the requested  loan advance to our operating  account number
_________.  Please  call  the  undersigned  to  confirm  receipt  of this fax at
____________.

     Thank you.



                         SYNERGX SYSTEMS INC.




                         by:___________________________
                          Name:  Daniel S. Tamkin
                          Title: Chief Executive Officer






<PAGE>




                                    EXHIBIT C


                           BORROWING BASE CERTIFICATE






<PAGE>




                                    EXHIBIT D



                             COMPLIANCE CERTIFICATE

Synergx  Systems Inc.  ("Borrower")  hereby  certifies to HUDSON  UNITED BANK in
accordance  with the provisions of a Revolving Loan Agreement  between  Borrower
and Lender dated the 9th day of October  2003, as the same from time to time may
be amended, supplemented or otherwise modified (the "Agreement") that:

A.  General (i) Borrower  has  complied in all  material  respects  with all the
terms,  covenants and  conditions of the Agreement  which are binding upon them;
(ii) no Event of Default as defined in the  Agreement  has  occurred;  (iii) the
representations  and  warranties  contained  in the  Agreement  are  true in all
material  respects  with the same  effect as  though  such  representations  and
warranties had been made on the date hereof except for those representations and
warranties that relate to a particular time or date, which  representations  and
warranties are true and correct in all material  respects as of such  particular
time or date; and

B.  Financial  Covenants A. As of the date hereof or, from such period as may be
designated below, the computations,  ratios and calculations as set forth below,
are true and  correct:  (a)  Effective  Tangible Net Worth (b) Debt to Effective
Tangible Net Worth

WITNESS the signature of the undersigned duly authorized  officer of Borrower on
_____________, 20__.





                                                     SYNERGX SYSTEMS INC.




                                                 By____________________________
                                                 Name:  Daniel S. Tamkin
                                                 Title: Chief Executive Officer