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                         REVOLVING CREDIT LOAN AGREEMENT



                             executed by and between



                               INTELLIGROUP, INC.,
                                 as the Borrower



                                       and



                         PNC BANK, NATIONAL ASSOCIATION,
                                  as the Lender







                             Dated: January 29, 1999





--------------------------------------------------------------------------------

<PAGE>
                                TABLE OF CONTENTS
                                -----------------

                                                                           Page
                                                                           ----

                                   ARTICLE I
                      DEFINITIONS; RULES OF INTERPRETATION AND
                          CONSTRUCTION; AND ACCOUNTING

    Section 1.01  Definitions................................................1
    Section 1.02  Rules of Interpretation and Construction..................17
    Section 1.03  Accounting Principles.....................................17

                                   ARTICLE II
               AMOUNT AND TERMS FOR THE REVOLVING CREDIT FACILITY

    Section 2.01  Revolving Credit Facility.................................18
    Section 2.02  Interest on the Revolving Credit Loans....................19
    Section 2.03  Fees......................................................22
    Section 2.04  Voluntary Prepayments.....................................23
    Section 2.05  Payments..................................................23
    Section 2.06  Special Provisions Governing Eurodollar Rate Loans........25
    Section 2.07  Increased Capital.........................................28
    Section 2.08. Authorized Officers of the Borrower.......................28
    Section 2.09  Taxes.....................................................29
    Section 2.10  Letter Of Credit..........................................30
    Section 2.11  Lender Not Liable.........................................31

                                  ARTICLE III
                     CONDITIONS TO THE REVOLVING CREDIT LOAN

    Section 3.01  Conditions Precedent to the Effectiveness of this
                  Loan Agreement............................................33
    Section 3.02. Conditions Precedent to All Revolving Credit Loans........34

                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES

    Section 4.01  Representations and Warranties on the Closing Date........35
    Section 4.02. Subsequent Funding Representations and Warranties.........41
    Section 4.03. SEC Filings...............................................41

                                   ARTICLE V
                               REPORTING COVENANTS

    Section 5.01  Statement of Accounting...................................41
    Section 5.02  Reporting and Information Requirements....................42

                                   ARTICLE VI
                              AFFIRMATIVE COVENANTS

    Section 6.01  Corporate Existence, etc..................................44
    Section 6.02  Corporate Powers, etc.....................................44
    Section 6.03  Compliance with Laws, etc.................................45
    Section 6.04  Payment of Taxes and Claims...............................45

                                       i
<PAGE>

    Section 6.05  Maintenance of Properties; Insurance......................45
    Section 6.06  Inspection of Property; Books and Records; Disclosure.....45
    Section 6.07  Litigation, Claims, etc...................................46
    Section 6.08  Maintenance of Licenses, Permits, etc.....................46
    Section 6.09  Continuation of or Change in Business.....................46
    Section 6.10  Additional Corporate Guarantors...........................46
    Section 6.11  Year 2000.................................................46
    Section 6.12  Further Acts..............................................47

                                  ARTICLE VII
                               NEGATIVE COVENANTS

    Section 7.01  Additional Liens..........................................47
    Section 7.02  Mergers, Consolidations, Acquisitions and Sales of Assets.48
    Section 7.03  Loans and Investments.....................................49
    Section 7.04  Indebtedness..............................................49
    Section 7.05  ERISA.....................................................50
    Section 7.06  Amendment of Articles of Incorporation or By-Laws.........51
    Section 7.07  Margin Regulations........................................51
    Section 7.08  Cancellation of Debt; Prepayment..........................51
    Section 7.09  Environmental Liabilities.................................51
    Section 7.10  Fiscal Year...............................................52
    Section 7.11  Guaranties................................................52
    Section 7.12  Change in Business........................................52
    Section 7.13  Other Negative Pledges....................................52

                                  ARTICLE VIII
                               FINANCIAL COVENANTS

    Section 8.01  Maximum Consolidated Cash Flow Leverage Ratio.............52
    Section 8.02  Minimum Consolidated Net Worth............................53
    Section 8.03  Capital Expenditures......................................53
    Section 8.04  Minimum Fixed Charge Coverage Ratio.......................53

                                   ARTICLE IX
                     EVENTS OF DEFAULT; RIGHTS AND REMEDIES

    Section 9.01  Events of Default.........................................53
    Section 9.02  Rights and Remedies.......................................55
    Section 9.03  Application of Proceeds...................................56
    Section 9.04  No Notices................................................56
    Section 9.05  Agreement to Pay Attorneys' Fees and Expenses.............56
    Section 9.06  No Additional Waiver Implied by One Waiver................56
    Section 9.07  Failure to Exercise Rights................................57
    Section 9.08  WAIVER OF JURY TRIAL......................................57
    Section 9.09  Remedies Cumulative.......................................57

                                    ARTICLE X
                                  MISCELLANEOUS

    Section 10.01.Expenses..................................................58
    Section 10.02.Indemnity.................................................58
    Section 10.03.Amendments and Waivers....................................59
    Section 10.04.Independence of Covenants.................................59

                                       ii
<PAGE>
    Section 10.05.Notices...................................................59
    Section 10.06 Survival of Warranties and Agreements.....................59
    Section 10.07 Marshaling; Recourse to Security; Payments Set Aside......60
    Section 10.08 Severability..............................................60
    Section 10.09 Governing Law.............................................60
    Section 10.10 Successors and Assigns....................................60
    Section 10.11 CONSENT TO JURISDICTION AND SERVICE OF PROCESS............60
    Section 10.12 Counterparts; Effectiveness; Inconsistencies..............61
    Section 10.13 Construction..............................................61
    Section 10.14 Entire Agreement..........................................61
    Section 10.15 Confidentiality...........................................61




                                      iii
<PAGE>

                             EXHIBITS AND SCHEDULES
                             ----------------------

                                    Exhibits
                                    --------

Exhibit "A"                  List of Eurodollar Affiliates
Exhibit "B"                  Form of Notice of Borrowing
Exhibit "C"                  Form of Notice of Conversion/Continuation
Exhibit "D"                  Form of Officer's Certificate
Exhibit "D1"                 Form of Compliance Certificate
Exhibit "E"                  Form of Revolving Credit Loan Note
Exhibit "F"                  Form of Opinion Letter of Borrower's Counsel

                                    Schedules
                                    ---------

Schedule 4.01(v)             Material Pending Actions, Suits, Proceedings,
                             Governmental Investigations or Arbitrations
Schedule 4.01(xii)           Material Environmental Disclosure
Schedule 4.01(xiii)          ERISA
Schedule 4.01(xxi)           Labor Unions/Collective Bargaining Agreements
Schedule 4.01(xxiii)         Material Contracts
Schedule 6.10                List of Corporate Guarantors
Schedule 7.01                Permitted Liens
Schedule 7.04                Existing Debt
Schedule 7.11                List of Contingent Obligations


                                       iv
<PAGE>
                         REVOLVING CREDIT LOAN AGREEMENT
                         -------------------------------

     THIS REVOLVING CREDIT LOAN AGREEMENT (hereinafter as it may be from time to
time amended, modified,  extended, renewed, refinanced and/or supplemented shall
be  referred  to as this "Loan  Agreement"),  is made this 29th day of  January,
1999, by and between

     INTELLIGROUP,  INC., a  corporation  duly  organized,  existing and in good
standing under the laws of the State of New Jersey,  having its principal office
located at 499 Thornall Street,  Edison, New Jersey 08837 (hereinafter  referred
to as the "Borrower"),

     AND

     PNC  BANK,  NATIONAL  ASSOCIATION,  a  national  banking  institution  duly
organized and validly  existing  under the laws of the United States of America,
having an office  located at Two Tower Center  Boulevard,  East  Brunswick,  New
Jersey 08816 (hereinafter referred to as the "Lender").

                              W I T N E S S E T H:
                              - - - - - - - - - -

     WHEREAS,  the Borrower has requested  that the Lender make available to the
Borrower a senior  unsecured  revolving  credit loan in the aggregate  principal
amount  of up  to  Thirty  Million  ($30,000,000.00)  Dollars  for  the  general
corporate  purposes of the  Borrower  and to finance  acquisitions  (hereinafter
referred to as the "Revolving Credit Facility"); and

     WHEREAS,  the  Lender  has  agreed to make the  Revolving  Credit  Facility
available  to the  Borrower,  subject to the terms,  conditions  and  provisions
hereinafter set forth; and

     NOW,  THEREFORE,   in  consideration  of  these  premises  and  the  mutual
representations,  covenants and agreements of the Borrower and the Lender,  each
party,  binding  itself and its  successors  and assigns,  does hereby  promise,
covenant and agree as follows:


                                    ARTICLE I
                    DEFINITIONS; RULES OF INTERPRETATION AND
                          CONSTRUCTION; AND ACCOUNTING
                          ----------------------------

     SECTION  1.01  DEFINITIONS.  The  following  terms,  as used  in this  Loan
Agreement,  shall have the  following  meanings,  unless the  context  expressly
indicates and requires otherwise:

     "Adjusted LIBO Rate" shall mean,  with respect to any Eurodollar  Rate Loan
for any Eurodollar Interest Period, an interest rate per annum (rounded upwards,
if  necessary,  to the next  highest  1/16 of 1%) equal to (i) the LIBO Rate for
such Eurodollar Interest Period multiplied by (ii) the Statutory Reserve Rate.
                                ---------- --

     "Affiliate" shall mean, with respect to a specified Person,  another Person
that directly or indirectly through one or more  intermediaries,  controls or is
controlled  by, or is under common


                                       1
<PAGE>
control with the Person specified.  For the purposes of the preceding  sentence,
"controls"  (including,  with  correlative  meanings,  the terms  "controlling",
"controlled  by" and "under common control  with"),  as used with respect to any
Person,  shall mean the  possession,  directly  or  indirectly,  of the power to
direct or cause the  direction  of the  management  and policies of such Person,
whether through the ownership of voting  securities or by contract or otherwise,
and in any case shall include direct or indirect  ownership  (beneficially or of
record) of, or direct or indirect  power to vote,  ten percent  (10%) or more of
the  outstanding  shares of any class of capital stock of such Person (or in the
case of a Person that is not a  corporation,  ten  percent  (10%) or more of any
class of equity interest).

     "Agreement of Guaranty"  shall mean any Agreement of Guaranty,  in form and
substance reasonably  acceptable to the Lender and to the Corporate  Guarantors,
dated the date of execution  thereof,  executed by the  Corporate  Guarantors in
favor of the Lender,  pursuant to which the Corporate  Guarantors have agreed to
unconditionally  guaranty,  on a joint and several basis,  the full,  prompt and
                            -- - ----- --- ------- -----
complete performance of all of the Borrower's duties,  covenants and obligations
under this Loan  Agreement,  the  Revolving  Credit Loan Note and the other Loan
Documents.  The term  "Agreement  of Guaranty"  shall also be deemed to mean and
refer  to all  amendments,  modifications,  extensions,  renewals,  refinancings
and/or  supplements to said agreement made and/or entered into subsequent to the
Closing  Date,   including,   without  limitation,   all  amendments  which  are
consummated  for the  purposes  of adding any new and/or  additional  Persons as
Corporate  Guarantors,  all as  provided  for  in  Section  6.10  of  this  Loan
                                                   -------------
Agreement.

     "Applicable  Index" shall have the meaning set forth in Section 2.03(ii) of
                                                             ----------------
this Loan Agreement.

     "Applicable  Margin" shall have the meaning set forth in Section 2.02(i)(b)
                                                              ------------------
of this Loan Agreement.

     "Authorized  Officer"  shall mean those  officers  of the  Borrower,  whose
signatures and incumbency shall have been certified to the Lender pursuant to an
Officer's  Certificate  delivered  on the  Closing  Date  or any  other  form of
resolution  or  certification  delivered to and approved by the Lender after the
Closing Date.

     "Bankruptcy  Code"  shall mean  shall  mean  Title 11 of the United  States
Bankruptcy  Code (11 U.S.C.  Section 101 et seq.), as amended from time to time,
                                         -- ---
or any successor statute.

     "Benefit  Plan" shall mean a defined  benefit  plan as defined in Section 3
(35) of ERISA (other than a Multiemployer Plan) in respect of which the Borrower
or an ERISA Affiliate is, or within the immediately preceding six (6) years was,
an "employer" as defined in Section 3(5) of ERISA.

     "Borrower" shall have the meaning ascribed and assigned to such term as set
forth in the preamble of this Loan Agreement.

     "Borrowing" shall mean a borrowing consisting of a Revolving Credit Loan or
Revolving Credit Loans made by the Lender to the Borrower on the same day.

                                       2
<PAGE>

     "Business  Day"  shall mean (i) for all  purposes  other than as covered by
clause (ii) below,  any day  excluding  Saturday,  Sunday and any day which is a
-----------
legal holiday under the laws of the State of New Jersey,  or is a day upon which
banking  institutions located in New Jersey are required or authorized by law or
other Governmental Action to remain closed and (ii) with respect to all notices,
determinations, fundings and payments in connection with a Eurodollar Rate Loan,
any day which is a Business Day described in clause (i) above, and which is also
                                             ----------
a day for trading by and between banks in the London interbank market.

     "Capital  Expenditures"  of any Person  shall  mean,  for any  period,  all
expenditures (whether paid in cash or accrued as liabilities during such period)
of such  Person  during  such  period  which  would  be  classified  as  capital
expenditures   in  accordance   with  GAAP   (including,   without   limitation,
expenditures for maintenance and repair which are  capitalized,  and Capitalized
Leases to the extent an asset is recorded in connection  therewith in accordance
with GAAP), but excluding capital assets acquired as part of an acquisition.

     "Capitalized  Lease" and  "Capitalized  Leases"  shall mean at any time any
lease  which is, or is  required  under GAAP to be,  capitalized  on the balance
sheet of the lessee at such time.

     "Capitalized Lease  Obligations" of any Person,  shall mean all obligations
of such  Person  to pay  rent or other  amounts  under  any  lease  (or  similar
arrangement  conveying  the  right to use) of real or  personal  property,  or a
combination  thereof,  which  obligations  are  required  to be  classified  and
accounted for as Capitalized  Leases, in accordance with GAAP, and the amount of
such  obligations  shall  be  the  capitalized   amount  thereof  determined  in
accordance with GAAP.

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

     "CERCLIS" shall mean the Comprehensive Environmental Response, Compensation
and Liability  Information  System List, as the same may be amended from time to
time.

     "Change in Control" shall mean (a) the  acquisition of ownership,  directly
or  indirectly,  beneficially  or of record,  by any Person or group (within the
meaning of the  Securities  Exchange Act of 1934 and the rules of the Securities
and Exchange  Commission  thereunder as in effect on the date hereof), of shares
representing  more than  twenty-five  (25%)  percent of the  aggregate  ordinary
voting power  represented  by the issued and  outstanding  capital  stock of the
Borrower; (b) occupation of a majority of the seats (other than vacant seats) on
the board of directors of the Borrower by Persons who were neither (i) nominated
by the board of directors of the  Borrower,  nor (ii)  appointed by directors so
nominated;  or (c) the acquisition of direct or indirect Control of the Borrower
by any Person or group. "Control" means the possession,  directly or indirectly,
of the power to direct or cause the direction of the management or policies of a
Person,  whether  through the ability to exercise  voting power,  by contract or
otherwise.

     "Claim"  or  "Claims"  shall mean any claim or demand,  by any  Person,  of
whatsoever

                                       3
<PAGE>
kind or nature for any alleged Liabilities and Costs, whether based in contract,
tort, implied or express warranty, strict liability,  criminal or civil statute,
permit, ordinance or regulation, common law or otherwise.

     "Closing  Date"  shall  mean the date upon  which  this Loan  Agreement  is
executed by the Lender and the Borrower, and the conditions set forth in Section
                                                                         -------
3.01  of  this  Loan   Agreement  have  been  completed  and  fulfilled  to  the
----
satisfaction of the Lender.

     "Code" means the Internal  Revenue Code of 1986, as amended,  any successor
statute of similar import, and regulations thereunder, in each case as in effect
from time to time. References to sections of the Code shall be construed also to
refer to any successor sections.

     "Commitment"  shall  mean,  at any  particular  time during the term of the
Revolving Credit Facility, the principal amount of the Revolving Credit Facility
which the  Lender has  committed  to make  available  to the  Borrower,  as said
principal amount may be permanently  reduced by the Borrower pursuant to Section
                                                                         -------
2.01(v) of this Loan  Agreement.  As of the Closing  Date,  the  initial  amount
-------
committed is $30,000,000.00.

     "Consolidated  Cash Flow  Leverage  Ratio"  shall mean with  respect to the
Borrower, the Corporate Guarantors and any Subsidiary,  on a consolidated basis,
as of any date of determination  thereof, the ratio of (i) Consolidated Debt, as
of such date of determination to (ii) Consolidated EBITDA for the period of four
(4) consecutive Fiscal Quarters immediately preceding said date of determination
taken together as one accounting period, calculated in accordance with GAAP.

     "Consolidated  Debt"  shall  mean,  as of any date of  determination,  with
respect to the Borrower, any of the Corporate Guarantors and any Subsidiary, the
aggregate  sum of the  following  items as such items  appear on a  consolidated
balance  sheet  of the  Borrower,  any  of  the  Corporate  Guarantors  and  any
Subsidiary  in accordance  with GAAP:  (i) the unpaid  principal  balance of all
indebtedness or liability for money borrowed or owed by the Borrower, any of the
Corporate  Guarantors  and/or any  Subsidiary  from time to time  (including any
renewals,  extensions and refinancings thereof), whether or not the indebtedness
was heretofore or hereafter created,  issued,  incurred,  assumed or guarantied;
(ii) the unpaid  principal  balance of all  indebtedness  or  liability  for the
deferred  purchase  price of property or services  incurred  (other than current
trade  liabilities  incurred in the  ordinary  course of business and payable in
accordance  with  customary  practices);  (iii) all  obligations as lessee under
leases which have been or should be recorded as Capitalized  Lease  Obligations;
and (iv) all obligations, contingent or otherwise relative to the face amount of
all  letters  of  credit  issued  for  the  Borrower,  Corporate  Guarantors  or
Subsidiaries' account, whether or not drawn.

     "Consolidated  EBITDA"  shall  mean  with  respect  to  the  Borrower,  the
Corporate  Guarantors  and  any  Subsidiary,  as of any  date  of  determination
thereof,  the amount  equal to the sum of (i)  Consolidated  Net Income for such
test period,  plus (ii) all gross interest  expense on Consolidated  Debt of the
              ----
Borrower,  the Corporate  Guarantors and any  Subsidiary,  for such test period,
plus (iii) all charges against income of the Borrower,  the Corporate Guarantors
----
and any  Subsidiary  for foreign,  federal,  state and local taxes for such test
period,  plus (iv) all depreciation

                                       4
<PAGE>
expense for such test period,  plus (v) all  amortization  expense for such test
                               ----
period plus (vi)  non-recurring  investment  banking,  legal and accounting fees
       ----
incurred in connection with permitted  acquisitions limited to the lesser of (A)
$1,000,000.00,  and (B) fifteen (15%)  percent of operating  income for any four
quarter measurement period, provided such fees are reported to the Lender at the
time the  financing  statements  are  provided  on a  separate  schedule  with a
reconciliation  to the applicable  expense line items,  plus (vii) all other net
                                                        ----
non-cash  charges for such test  period,  after  eliminating  therefrom  any (a)
extraordinary  items, (b) gains and losses from the sale of assets in connection
with  any   sale/leaseback   transaction  or  arrangement  and  (c)  results  of
discontinued operations, all as determined in accordance with GAAP.

     "Consolidated  Net Income"  shall mean with  respect to the  Borrower,  the
Corporate  Guarantors  and  any  Subsidiary,  as of any  date  of  determination
thereof, all amounts which, in accordance with GAAP, would be included under net
income  (after  the  payment  of  all  federal  and  state  income  taxes)  on a
consolidated income statement of the Borrower,  the Corporate Guarantors and any
Subsidiary for such test period.

     "Consolidated  Net  Worth"  shall  mean  as of any  date  of  determination
thereof,  the total  amount of the  stockholder's  equity of the  Borrower,  the
Corporate Guarantors and any Subsidiary which, in accordance with GAAP, would be
included as such on the consolidated balance sheet of the Borrower at such date.

     "Contingent  Obligation"  shall  mean as to any  Person  any  guarantee  of
payment or  performance  by such Person of any Debt or other  obligation  of any
other Person,  or any agreement to provide  financial  assurance with respect to
the financial condition, or the payment of the obligations of, such other Person
(including, without limitation, purchase or repurchase agreements, reimbursement
agreements  with  respect  to  letters  of  credit  or  acceptances,   indemnity
arrangements, grants of security interests to support the obligations of another
Person,  keepwell agreement and take-or-pay or through-put  arrangements)  which
has the effect of assuring or holding  harmless  any third  Person  against loss
with respect to one or more obligations of such third Person, provided, however,
                                                              --------  --------
that  the  term  Contingent   Obligation  shall  not  include   endorsements  of
instruments  for deposit or collection in the ordinary  course of business.  The
amount of any  Contingent  Obligation  of any  Person  shall be deemed to be the
lower of (a) an amount equal to the stated or determinable amount of the primary
obligation in respect of which such  Contingent  Obligation is made, and (b) the
maximum amount for which such contingently  liable Person may be liable pursuant
to the terms of the instrument embodying such Contingent Obligation, unless such
primary  obligation  and the maximum amount for which such  contingently  liable
Person may be liable are not stated or determinable, in which case the amount of
such Contingent  Obligation shall be such  contingently  liable Person's maximum
reasonably  anticipated  liability  in  respect  thereof  as  determined  by the
Borrower in good faith.

     "Contractual  Obligation"  shall  mean  with  respect  to any  Person,  any
provision of any securities issued by said Person or of any indenture, mortgage,
deed of trust, contract, undertaking, document, instrument or other agreement or
instrument  to  which  said  Person  is a  party  or by  which  it or any of its
properties  is  bound,  or to  which  it or  any of its  properties  is  subject
(including,  without limitation,  any restrictive covenant affecting said Person
or any of its properties).

                                       5
<PAGE>
     "Corporate  Guarantors"  shall mean a collective  reference to any majority
owned  domestic  and  foreign  operating  subsidiary  of the  Borrower,  whether
existing now or in the future,  made a Corporate  Guarantor  pursuant to Section
                                                                         -------
6.10 hereof.  Each of the  Corporate  Guarantors  may  sometimes be  hereinafter
----
referred to individually as a "Corporate Guarantor".

     "Customary Permitted Liens" shall mean

            (i)   Liens  (other than  Environmental  Liens and  any Lien imposed
under ERISA) for taxes,  assessments or charges of any Governmental Authority or
claims not yet due or which are being  contested  in good  faith by  appropriate
proceedings  and with respect to which  adequate  reserves or other  appropriate
provisions are being maintained in accordance with GAAP;

            (ii)  statutory   Liens  of   landlords   and   Liens  of  carriers,
warehousemen,  mechanics,  materialmen and other like Liens (other than any Lien
imposed under ERISA) imposed by Law,  including,  without  limitation,  Liens in
favor of any  Governmental  Authority  securing  progress  payments  made  under
government  contracts created in the ordinary course of business and for amounts
not  yet  due or  which  are  being  contested  in  good  faith  by  appropriate
proceedings which are sufficient to prevent imminent  foreclosure of such Liens,
are  promptly  instituted  and  diligently  conducted  and with respect to which
adequate  reserves  or other  appropriate  provision  are  being  maintained  in
accordance with GAAP;

            (iii) Liens  (other than any Lien imposed  under ERISA)  incurred or
deposits made in the ordinary course of business (including, without limitation,
surety  bonds  and  appeal  bonds) in  connection  with  workers'  compensation,
unemployment  insurance and other types of social security benefits and deposits
securing  liability  to insurance  carriers  under  insurance or  self-insurance
arrangements or to secure the performance of tenders,  bids, leases,  contracts,
statutory  obligations  and other similar  obligations or arising as a result of
progress  payments or deposits under  government  contracts  (including  foreign
government contracts);

            (iv)  easements (including, without limitation,  reciprocal easement
agreements  and  utility  agreements),   rights-of-way,   covenants,   consents,
reservations,  encroachments,  variations  and other  restrictions,  charges  or
encumbrances  (whether or not  recorded)  affecting  the use of real property or
impairing  the use  thereof  which are  imposed by law or arise in the  ordinary
course of  business  that do not  secure  any  monetary  obligations  and do not
materially  detract  from  the  value of the  affected  property  or  materially
interfere  with the  ordinary  conduct of  business  of the Person  owning  such
property; and

            (v)   extensions,  renewals or  replacements of any Lien referred to
in  paragraphs  (i)  through  (iv)  above,  provided  (a)  that,  in the case of
paragraphs  (i) through  (iii) above,  the  principal  amount of the  obligation
secured  thereby is not  increased and (b) that any such  extension,  renewal or
replacement is limited to the property originally encumbered thereby;  provided,
                                                                       --------
however,  to the extent that the amount of obligations  of the Borrower  arising
-------
from claims being  contested in good faith  secured by such Liens in  paragraphs
(i) and (ii) above exceeds $25,000.00 in the aggregate,  the Borrower shall have
set aside full cash reserves in the


                                       6
<PAGE>
amount of such obligations.

     "Debt"  shall mean with  respect to any  Person  the  aggregate  sum of the
following  items as such  items  appear  on a  balance  sheet of such  Person in
accordance with GAAP: (i) the unpaid  principal  balance of all  indebtedness or
liability for money borrowed or owed by such Person from time to time (including
any  renewals,   extensions  and  refinancings  thereof),  whether  or  not  the
indebtedness was heretofore or hereafter created, issued,  incurred,  assumed or
guarantied;  (ii) the unpaid principal  balance of all indebtedness or liability
for the deferred  purchase  price of property or services  incurred  (other than
current  trade  liabilities  incurred in the  ordinary  course of  business  and
payable in accordance with customary practices); (iii) all obligations as lessee
under  leases  which  have been or  should  be  recorded  as  Capitalized  Lease
Obligations;  and (iv) all obligations,  contingent or otherwise relative to the
face amount of all letters of credit issued for such Person's  account,  whether
or not drawn.

     "Default  Rate"  shall mean a rate of interest  equal to two hundred  basis
points  (2.0%)  above  the  Prime  Rate  then  in  effect  with  respect  to any
outstanding Revolving Credit Loans.

     "DOL" shall mean the United  States  Department  of Labor and any successor
department or agency.

     "Dollar",  "Dollars"  and the  symbol "$" shall  mean  lawful  money of the
United States of America.

     "Dollar  Equivalent"  means,  with  respect to any amount in Dollars,  such
amount.

     "Environment" shall mean all air, surface water, water, vapor, groundwater,
drinking  water  supply or land,  including  land  surface  or  subsurface,  and
includes all fish, wildlife, biota and all other natural resources.

     "Environmental  Approval"  and  "Environmental  Approvals"  shall  mean any
Governmental Action pursuant to or required under any Environmental Law.

     "Environmental  Concern Materials" shall mean (i) any flammable  substance,
explosive,  radioactive  material,  hazardous  material,  hazardous waste, toxic
substance,  solid waste,  pollution,  contaminate or any related  material,  raw
material,  substance,  product or by-product  of any  substance  specified in or
regulated or otherwise  affected by any  Environmental  Law  (including  but not
limited to any "hazardous  substance" as defined in any Environmental Law), (ii)
any toxic chemical or other substance from or related to industrial,  commercial
or institutional activities,  (iii) asbestos,  gasoline, diesel fuel, motor oil,
waste and used oil,  heating  oil and other  petroleum  products  or  compounds,
polychlorinated  biphenyls,  radon gas and  urea-formaldehyde and (iv) all other
substances or waste of any nature regulated pursuant to any Environmental Law.

     "Environmental  Law" and  "Environmental  Laws" shall mean any Law, whether
now existing or  subsequently  enacted or amended,  relating to (i) pollution or
protection  of the  Environment,  (ii)  exposure of Persons,  including  but not
limited to employees, to Environmental


                                       7
<PAGE>
Concern  Materials,  (iii)  protection  of the public health or welfare from the
effects of products,  by-products,  wastes, emissions, discharges or releases of
Environmental   Concern   Materials  or  (iv)  regulation  of  the  manufacture,
generation, use or introduction into commerce of Environmental Concern Materials
including their manufacture,  formulation,  packaging,  labeling,  distribution,
treatment,  transportation,  handling,  storage or disposal. Without limitation,
"Environmental  Law" shall include (a) any Environmental  Approval and the terms
and conditions thereof, (b) the following statutes: the Clean Air Act (42 U.S.C.
7401  et  seq.);  the  Comprehensive  Environmental  Response  Compensation  and
      --  ---
Liability Act of 1980 (42 U.S.C.  ss.9601 et seq.);  the Federal Water Pollution
                                          -- ---
Control Act (33 U.S.C.  ss.1251 et seq.); the Hazardous Material  Transportation
                                -- ---
Act (49  U.S.C.  ss.1801  et  seq.);  the  Federal  Insecticide,  Fungicide  and
                          --  ---
Rodenticide  Act (7 U.S.C.  ss.  136 et seq.);  the  Resource  Conservation  and
                                     -- ---
Recovery Act of 1976 (42 U.S.C.  ss.6901 et seq.)  (including  the Hazardous and
                                         -- ---
Solid Waste Amendments of 1984), the Toxic Substance  Control Act (15 U.S.C. ss.
2601 et seq.); the Federal  Occupational  Safety & Health Act of 1970 (29 U.S.C.
     -- ---
ss.651 et seq.) (including  ss.3101 of the Omnibus  Reconciliation Act of 1990),
       -- ---
and the regulations promulgated thereunder and all as amended from time to time;
and (c) any common  law  doctrine  (including,  without  limitation,  injunctive
relief and tort, such as negligence,  nuisance,  trespass and strict  liability)
that may impose  obligations  or  liabilities  for  personal  injury or property
damage due to, or  threatened  as a result of, the  presence  of or  exposure to
Environmental Concern Materials.

     "Environmental  Lien"  shall  mean  a Lien  in  favor  of any  Governmental
Authority for (i) any  liability  under any  Environmental  Laws or (ii) damages
arising from, or costs incurred by such Governmental Authority in response to, a
Release or threatened  Release of any  Environmental  Concern Materials into the
Environment.

     "ERISA" shall mean the Employee  Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute of similar import, together
with the  regulations  promulgated  thereunder  by the  United  States  Treasury
Department, the DOL and/or the PBGC.

     "ERISA  Affiliate"  shall  mean  each  trade or  business  (whether  or not
incorporated) which together with the Borrower and/or the Corporate  Guarantors,
is treated as a "single  employer"  under Section 414(b) and (c) of the Code or,
solely for  purposes of Section  302 of ERISA and  Section  412 of the Code,  is
treated as a "single employer" under Section 414 of the Code.

     "Eurodollar Affiliate" shall mean with respect to the Lender, the Affiliate
of the Lender, if any, set forth on Exhibit "A" attached to this Loan Agreement.
                                    -----------

     "Eurodollar  Interest Period" shall mean one or more periods of time during
which the  Borrower may select,  convert to or continue a Eurodollar  Rate Loan,
such funding period with respect to the Revolving Credit Facility,  to be either
a one, two, three or six month period(s),  subject to availability,  all as more
fully subject to the provisions of Section 2.06 of this Loan Agreement.
                                   ------------

     "Eurodollar  Interest  Payment  Date"  shall  mean,  with  respect  to  any
Eurodollar Rate Loan, the last day of each Eurodollar Interest Period applicable
to such Loan; provided, however,
              --------  -------

                                       8
<PAGE>
if an Eurodollar  Interest  Period  exceeds three  months,  then the  Eurodollar
Interest  Payment  Date shall also mean the last day of every third month during
said Eurodollar Interest Period.

     "Eurodollar  Interest Rate Determination Date" shall mean the date on which
the Lender  determines the Eurodollar Rate applicable to (i) a Borrowing or (ii)
the continuation or conversion of Eurodollar Rate Loans. The Eurodollar Interest
Rate  Determination Date shall be the second Business Day prior to the first day
of the Eurodollar Interest Period applicable to such Borrowing,  continuation or
conversion.

     "Eurodollar  Portion" of any Revolving  Credit Loans shall mean at any time
the  portion,  including  the whole,  of such  Revolving  Credit  Loans  bearing
interest at any time under the Adjusted LIBO Rate.

     "Eurodollar  Rate  Loan"  or  "Eurodollar  Rate  Loans"  shall  mean  those
Revolving Credit Loans  outstanding  which bear interest at a rate determined by
reference to the  Adjusted  LIBO Rate,  as provided for in Sections  2.02(i) and
                                                           -----------------
2.06 of this Loan Agreement.
----

     "Eurodollar  Rate Option" shall mean one of the interest rates available to
the Borrower as provided for and  described in Section  2.02(i)(a)  of this Loan
                                               -------------------
Agreement.

     "Eurodollar  Rate Taxes"  shall have the  meaning  ascribed to such term in
Section 2.06(vii)(a) of this Loan Agreement.
--------------------

     "Event of Default"  or "Events of Default"  shall mean any of the events of
default as defined and described in Section 9.01 of this Loan Agreement.
                                    ------------

     "FDIC"  shall  mean  the  Federal  Deposit  Insurance  Corporation  or  any
successor thereto.

     "Federal  Funds  Effective  Rate" for any day shall mean the rate per annum
(rounded  upward,  if  necessary,  to the nearest  1/100 of 1%) announced by the
Federal  Reserve Bank of New York,  (or any  successor) on such day as being the
weighted average of the rates on overnight federal funds  transactions  arranged
by Federal funds brokers on the previous  trading day, as computed and announced
by such Federal Reserve Bank (or any successor) in substantially the same manner
as such Federal  Reserve Bank  computes and  announces  the weighted  average it
refers  to as the  "Federal  Funds  Effective  Rate" as of the date of this Loan
Agreement;  provided,  that if such Federal Reserve Bank (or its successor) does
            --------
not announce such rate on any day, the "Federal Funds  Effective  Rate" for such
day shall be the  Federal  Funds  Effective  Rate for the last day on which such
rate was announced.

     "Federal  Reserve  Board"  shall mean the Board of Governors of the Federal
Reserve System or any governmental authority succeeding to its functions.

     "Fiscal Quarter" shall mean the four (4) thirteen (13) week periods of each
Fiscal Year which with respect to the First Fiscal  Quarter  begins on January 1
of each  Fiscal  Year and with  respect to the  Fourth  Fiscal  Quarter  ends on
December 31 of each Fiscal Year.

                                       9
<PAGE>
     "Fiscal Year" shall mean that period  commencing on January 1 and ending on
December 31 of the next  succeeding  year or such other  period as the  Borrower
and/or the  Corporate  Guarantors  may  designate  and the Lender may approve in
writing.

     "Funding Date" shall mean,  with respect to any Revolving  Credit Loan, the
date of the funding of such Revolving Credit Loan by the Lender.

     "Funding  Segment"  shall mean with respect to a Eurodollar  Rate Loan, the
entire  principal  amount  of such  Eurodollar  Portion  to which at the time in
question there is applicable a particular  Eurodollar  Interest Period beginning
on a  particular  day and  ending on a  particular  day and all Loans to which a
Prime Rate Option applies shall constitute one Funding Segment.  (By definition,
each such  Eurodollar  Portion is at all times composed of an integral number of
discreteFunding  Segments  and the sum of the  principal  amounts of all Funding
Segments of any such Eurodollar  Portion at any time equals the principal amount
of such Eurodollar Portion at such time.)

     "GAAP" shall mean generally accepted  accounting  principles,  consistently
applied,  in the United  States of America,  as in effect from time to time,  as
developed,  modified  and set forth in the opinions  and  pronouncements  of the
Accounting   Principles  Board,  the  American  Institute  of  Certified  Public
Accountants  and the  Financial  Accounting  Standards  Board,  or in such other
statements by such other Person as may be in general use by significant segments
of the accounting  profession,  which are applicable to the  circumstances as of
the date of  determination,  subject to the terms of  Section  1.03 of this Loan
                                                      -------------
Agreement.

     "Governmental Action" or "Governmental  Approvals" shall mean any approval,
order, consent, authorization, certificate, license, permit or validation of, or
exemption  or other  action by, or filing,  recording  or  registration  with or
notice to, any Governmental Authority.

     "Governmental  Authority" shall mean the government of the United States of
America,  any other nation or any political  subdivision thereof, or any agency,
authority,  bureau, central bank,  commission,  department or instrumentality of
either, or any court, tribunal,  grand jury or arbitrator,  in each case whether
foreign or domestic.

     "Indemnified Party" and "Indemnified Parties" shall mean the Lender and the
directors, officers, trustees, employees, agents and controlling shareholders of
the Lender.

     "Independent  Certified  Public  Accountant"  shall  mean  any  independent
certified public  accounting firm selected by the Borrower which accounting firm
is satisfactory to the Lender.

     "IRS" shall mean the Internal Revenue Service and any Person  succeeding to
the functions thereof.

     "Law" shall mean any law  (including  common law),  constitution,  statute,
treaty, convention,  regulation, rule, ordinance, code, order, injunction, writ,
decree or award of any Governmental Authority.

                                       10
<PAGE>
     "Lender"  shall have the meaning  ascribed and assigned to such term as set
forth in the preamble of this Loan Agreement.

     "Letter of Credit" shall mean all letters of credit issued by Lender or any
affiliate of Lender at the request of and for the account of the Borrower.

     "Letter of Credit  Obligations"  shall  mean,  at any time,  the sum of (i)
Reimbursement  Obligations  at such time for the Letter of Credit  plus (ii) the
                                                                   ----
dollar amount of the maximum  amount then available for drawing under the Letter
of Credit.

     "Liabilities   and  Costs"   shall  mean  all   liabilities,   obligations,
responsibilities,  losses,  damages,  punitive damages,  consequential  damages,
treble damages, costs and expenses (including,  without limitation,  attorneys',
experts'  and  consulting  fees  and  costs  of  investigation  and  feasibility
studies), fines, penalties and monetary sanctions, interest, direct or indirect,
known or unknown, absolute or contingent, past, present or future.

     "LIBO Rate" shall mean,  with respect to any  Eurodollar  Rate Loan for any
Eurodollar  Interest  Period,  the rate  appearing  on Page 3750 of the Telerate
Service  (or on any  successor  or  substitute  page  of  such  Service,  or any
successor  to  or  substitute  for  such  Service,   providing  rate  quotations
comparable  to  those  currently  provided  on such  page of  such  Service,  as
determined by the Lender from time to time for purposes of providing  quotations
of interest rates applicable to dollar deposits in the London interbank  market)
at  approximately  11:00 A.M.,  London time,  two (2) Business Days prior to the
commencement of such Eurodollar Interest Period, as the rate for dollar deposits
with a maturity comparable to such Eurodollar Interest Period. In the event that
such rate is not  available  at such time for any  reason,  then the "LIBO Rate"
                                                                      ---------
with respect to such Eurodollar  Rate Loan for such  Eurodollar  Interest Period
shall be the rate rounded upwards, if necessary,  to the next highest 1/16 of 1%
at which dollar deposits of $5,000,000.00 and for a maturity  comparable to such
Eurodollar  Interest Period are offered by major banks in immediately  available
funds in the London interbank market at approximately  11:00 A.M.,  London time,
two (2) Business  Days prior to the  commencement  of such  Eurodollar  Interest
Period.

     "Lien" and "Liens" shall mean with respect to any asset, any mortgage, deed
of trust, pledge, hypothecation,  assignment, deposit arrangement,  encumbrance,
lien (statutory or other) or preference,  priority,  security  interest or other
security  agreement of any kind or nature whatsoever  (including any conditional
sale or other  title  retention  agreement,  any  Capitalized  Lease  Obligation
involving substantially the same economic effect as any of the foregoing and the
filing  of  any  financing  statement  under  the  Uniform  Commercial  Code  or
comparable law of any jurisdiction).

     "Loan  Account"  shall have the  meaning  ascribed  to such term in Section
                                                                         -------
2.05(iv) hereof.
--------

     "Loan  Agreement" shall have the meaning ascribed and assigned to such term
as set forth in the preamble of this Loan Agreement.

     "Loan Documents" shall mean any and all agreements, documents, certificates
and

                                       11
<PAGE>
instruments executed by the Borrower, any of the Corporate Guarantors and/or any
other Person and  delivered by them to the Lender  pursuant to and in connection
with the Revolving Credit Facility,  including,  without  limitation,  this Loan
Agreement,  the  Revolving  Credit  Loan  Note,  the Pledge  Agreements  and the
Agreement of Guaranty, in each case as amended,  modified,  extended,  restated,
refinanced  and/or  supplemented  from  time  to  time in  accordance  with  the
provisions hereof or thereof.

     "Majority  Owned  Subsidiary"  shall mean any Subsidiary of the Borrower or
any of the  Corporate  Guarantors  in which more than fifty percent (50%) of the
voting capital stock of said Subsidiary is owned,  legally or  beneficially,  by
the Borrower or any such Corporate Guarantors.

     "Margin Stock" shall have the meaning ascribed and assigned to such term in
Regulation U.

     "Material Adverse Effect" shall mean a material adverse effect upon (i) the
business, assets,  financial  condition,   financial   performance,   prospects,
properties  or  operations  of  the  Borrower,  the  Corporate  Guarantors,  any
Subsidiary  and/or  any  Affiliate  taken as a whole,  (ii) the  ability  of the
Borrower  and/or any of the Corporate  Guarantors  to perform  their  respective
obligations  and  duties  under the Loan  Documents  or (iii)  the  rights of or
benefits available to the Lender under the Loan Documents.

     "Multiemployer Plan" shall mean an employee benefit plan defined in Section
4001(a)(3) of ERISA which is, or within the immediately  preceding six (6) years
was,  contributed  to by the  Borrower,  the  Corporate  Guarantors  or an ERISA
Affiliate.

     "Notice of  Borrowing"  shall mean,  with  respect to a proposed  Borrowing
pursuant  to Section  2.01(ii)  hereof,  a notice  substantially  in the form of
             -----------------
Exhibit "B" attached hereto and made a part thereof.
-----------

     "Notice of Conversion/Continuation"  shall mean, with respect to a proposed
conversion  or  continuation  of a  Revolving  Credit  Loan  pursuant to Section
                                                                         -------
2.02(iii) hereof, a notice in the form of Exhibit "C" attached hereto and made a
---------                                 -----------
part hereof.

     "Obligations"  shall mean all present and future Debt and other liabilities
of the Borrower and/or the Corporate  Guarantors due and owing to the Lender, or
any Person entitled to indemnification  pursuant to Section 10.02 hereof, or any
                                                    -------------
of their  respective  successors,  transferees  or  assigns,  of every  type and
description, whether or not evidenced by any note, guaranty or other instrument,
arising  under or in  connection  with this  Loan  Agreement  or any other  Loan
Document,  whether or not for the payment of money,  whether  direct or indirect
(including  those acquired by  assignment),  absolute or  contingent,  due or to
become due,  now existing or hereafter  arising and however  acquired.  The term
includes, without limitation, all interest,  charges, expenses, fees, attorneys'
fees and  disbursements  and any other sum chargeable to the Borrower and/or the
Corporate Guarantors under this Loan Agreement or any other Loan Document.

     "Officer's  Certificate" shall mean a certificate for the Borrower executed
by any of the

                                       12
<PAGE>
Authorized  Officers  of  the  Borrower,   including,  without  limitation,  the
president,  any  vice-president or the chief financial  officer,  in the form of
Exhibit "D" attached hereto and made a part hereof.
-----------

     "Operating  Lease" shall mean,  as applied to any Person,  any lease of any
property (whether real,  personal or any combination  thereof) by that Person as
lessee which is not a Capitalized Lease.

     "PBGC" shall mean the Pension Benefit Guaranty  Corporation referred to and
defined in ERISA and any Person  succeeding  to any or all of its  functions and
duties under ERISA.

     "Permits"  shall  mean any  permit,  approval,  authorization,  franchises,
license,  variance,  or permission required from a Governmental  Authority under
any applicable Requirement of Law.

     "Person" or "Persons" shall mean any natural person,  employee,  general or
limited  partnership,  corporation  (including  a business  trust),  joint stock
company,  limited liability company, trust,  unincorporated  association,  joint
venture,  company,  trust,  bank or other  organization,  whether or not a legal
entity or any other non-governmental entity, or any Governmental Authority.

     "Plan" shall mean any  employee  benefit plan within the meaning of Section
3(3) of ERISA  (other  than a  Multiemployer  Plan) of which the  Borrower,  the
Corporate  Guarantors or any ERISA  Affiliate  are, or within the preceding five
years were, an "employer" as that term is defined in Section 3(5) of ERISA.

     "Potential  Event of Default"  shall mean an event,  condition or situation
which with the giving of any required  notice and/or the passage of any required
grace or cure periods, or any combination of the foregoing,  would constitute an
Event of Default.

     "Prime  Rate" or "Prime  Lending  Rate"  shall mean for any day, a rate per
annum equal to the greater of (i) a fluctuating interest rate publicly announced
from time to time by the  Lender as its  prime  rate in effect at its  principal
office,  which  rate may not  necessarily  be the rate  actually  charged by the
Lender to its most creditworthy customers,  and (ii) the Federal Funds Effective
Rate plus fifty basis points (.50%).

     "Prime  Rate Loan" or "Prime Rate Loans"  shall mean all  Revolving  Credit
Loans  outstanding  which bear interest at a rate determined by reference to the
Prime Rate.

     "Prime Rate Option" shall mean the interest rate  available to the Borrower
as provided for and described in Section 2.02(i)(a) of this Loan Agreement.
                                 ------------------

     "Property"  shall  mean any real or  personal  property,  plant,  building,
facility, structure, underground storage tank, equipment or unit, or other asset
owned,  leased or operated by the  Borrower,  the Corporate  Guarantors,  any of
their Subsidiaries and/or Affiliates.

                                       13
<PAGE>
     "Rating  Matrix"  shall mean the  following  matrix upon which (i) interest
rates  described  in Section  2.02 hereof and (ii)  certain  fees  described  in
                     -------------
Section 2.03 hereof are determined on the basis of the  Borrower's  Consolidated
------------
Cash Flow Leverage Ratio:

                     (All Amounts Expressed in Basis Points)

      Consolidated Cash Flow       Applicable     Applicable
      Leverage Ratio               Index          Margin*
---------------------------------------------------------
I     less than 1.00 to 1          25.0            50.0

II    less than 1.50 to 1 but
      greater than or equal
      to 1.00 to 1                 25.0            75.0

III   less than 2.00 to 1 but
      greater than or equal
      to 1.50 to 1                 25.0           100.00

IV    less than or equal to
      2.50 to 1 but greater
      than 2.00 to 1               25.0           125.00

*    Any adjustment to the Eurodollar Rate Option as a result of a change to the
Consolidated  Cash Flow Leverage Ratio shall not take effect until the first day
of the subsequent Fiscal Quarter following the receipt of the calculation of the
Consolidated Cash Flow Leverage Ratio from the Borrower.

     "RCRA" shall mean the  Resource  Conservation  and Recovery  Act, 42 U.S.C.
ss.6901  et  seq.  and  any  successor  statute,  and  regulations   promulgated
         --  ---
thereunder.

     "Regulation D" shall mean Regulation D of the Federal Reserve Board, or any
successor statute or regulation thereto, as in effect from time to time.

     "Regulation T" shall mean Regulation T of the Federal Reserve Board, or any
successor statute or regulation thereto, as in effect from time to time.

     "Regulation U" shall mean Regulation U of the Federal Reserve Board, or any
successor statute or regulation thereto, as in effect from time to time.

     "Regulation X" shall mean Regulation X of the Federal Reserve Board, or any
successor statute or regulation thereto, as in effect from time to time.

     "Reimbursement  Obligations"  shall mean the  dollar  amount of any and all
unpaid reimbursement or repayment obligations of the Borrower owed to the Lender
pursuant to this Loan Agreement for amounts drawn under the Letter of Credit.

                                       14
<PAGE>
     "Release" shall mean release, spill, emission, leaking, pumping, injection,
deposit, disposal,  discharge,  dispersal, leaching or migration into the indoor
or outdoor Environment or into or out of any Property, including the movement of
Environmental  Concern  Materials  through or in the air,  soil,  surface water,
groundwater or Property.

     "Remedial  Action"  shall mean  actions  required to (i) clean up,  remove,
treat or in any other way address  Environmental Concern Materials in the indoor
or  outdoor  environment;  (ii)  prevent  the  Release  or threat of  Release or
minimize the further Release of Environmental  Concern  Materials so they do not
migrate or endanger or  threaten  to  endanger  public  health or welfare or the
indoor  or  outdoor  environment;  or (iii)  perform  pre-remedial  studies  and
investigations and post-remedial monitoring and care.

     "Reportable Event" shall have the meaning ascribed to, such term in Section
4043 of ERISA or regulations promulgated thereunder.

     "Requirements of Law" shall mean, as to any Person, the charter and by-laws
or other  organization or governing  documents of such Person, and any law, rule
or regulation,  Permit,  or  determination  of an arbitrator or a court or other
Governmental  Authority,  in each case applicable to or binding upon such Person
or any of its  property  or to  which  such  Person  or any of its  property  is
subject,  including,  without  limitation,  the  Securities  Act, the Securities
Exchange Act,  Regulations  U and X, and any  certificate  of occupancy,  zoning
ordinance,  building,  environmental  or  land  use  requirement  or  Permit  or
occupational safety or health law, rule or regulation.

     "Revolving Credit Facility" shall have the meaning ascribed and assigned to
such term as set forth in the first recital of this Loan Agreement.

     "Revolving Credit Loan" and "Revolving Credit Loans" shall have the meaning
ascribed and assigned to such term in Section 2.01(i) of this Loan Agreement.
                                      ---------------

     "Revolving  Credit Loan Note" shall mean that certain Revolving Credit Loan
Note in  substantially  the form  attached  hereto as  Exhibit  "E" with  blanks
                                                       ------------
appropriately  filled,  such note  payable  to the order of the Lender in a face
amount equal to the Revolving Credit Facility.

     "Revolving  Credit  Termination Date" shall mean the earlier of (i) January
29, 2002,  (ii) the date of termination of the Revolving  Credit Facility by the
Lender  pursuant to Section  9.02 of this Loan  Agreement  or (iii) the date the
                    -------------
Revolving Credit Facility is fully repaid and terminated by the Borrower.

     "SEC" shall mean the Securities and Exchange Commission.

     "Securities  Act" shall mean the  Securities Act of 1933, as amended to the
date hereof and from time to time hereafter, and any successor statute.

     "Securities  Exchange Act" shall mean the Securities  Exchange Act of 1934,
as amended to the date hereof  from time to time  hereafter,  and any  successor
statute.

                                       15
<PAGE>
     "Shareholder"  shall mean any  shareholder  of the Borrower,  the Corporate
Guarantors  or any  Subsidiary  or Affiliate  of the  Borrower or the  Corporate
Guarantors.

     "Single  Employer  Plan"  shall mean any Plan which is not a  Multiemployer
Plan under Title IV of ERISA.

     "Statutory  Reserve  Rate" shall mean a fraction  (expressed as a decimal),
the  numerator  of which is the number one and the  denominator  of which is the
number one minus the aggregate of the maximum reserve percentages (including any
           -----
marginal,  special,  emergency or supplemental  reserves) expressed as a decimal
established  by the Federal  Reserve  Board to which the Lender is subject  with
respect to the Adjusted LIBO Rate, for eurocurrency  funding (currently referred
to as  "Eurocurrency  Liabilities"  in Regulation D of the Board).  Such reserve
percentages   shall  include  those  imposed  pursuant  to  such  Regulation  D.
Eurodollar Rate Loans shall be deemed to constitute  eurocurrency funding and to
be  subject  to such  reserve  requirements  without  benefit  of or credit  for
proration,  exemptions or offsets that may be available from time to time to the
Lender  under such  Regulation D or any  comparable  regulation.  The  Statutory
Reserve Rate shall be adjusted  automatically on and as of the effective date of
any change in any reserve percentage.

     "Stock Pledge Agreement" shall mean the stock pledge  agreements  delivered
by Borrower to Lender contemporaneously herewith.

     "Structuring Fee" shall mean that certain  structuring fee in the amount of
$40,000.00 paid by the Borrower to the Lender as of the Closing Date ($15,000.00
of which was paid by the Borrower prior to the date hereof).

     "Subsidiary" or "Subsidiaries" shall mean with respect to any Person at any
date of  retention  (i) a  corporation  a majority of whose  capital  stock with
voting power, under ordinary circumstances,  to elect a majority of directors is
at the time, directly or indirectly, owned by said Person, (ii) any other Person
(other than a corporation) in which the said Person, directly or indirectly,  at
the date of  determination  thereof  has at least  majority  ownership  interest
and/or (iii) any entity whose net earnings (losses) or portions thereof would be
properly  included  and  consolidated  with  the net  earnings  of said  Person;
provided, however, that the term Subsidiary shall not include any entity that is
--------  -------
not reflected on the balance sheet of said Person due to inactivity  and lack of
material assets and liabilities.

     "Taxes"  shall have the meaning  ascribed  and assigned to such term as set
forth in Section 2.09 of the Loan Agreement.
         ------------

     "Termination Event" shall mean (i) any Reportable Event with respect to any
Benefit  Plan  described  in Section  4043 of ERISA and the  regulations  issued
thereunder for which the notice  requirements  have not been waived by the PBGC,
(ii) the  withdrawal  of the  Borrower,  the  Corporate  Guarantors  or an ERISA
Affiliate  from a Benefit Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001 (a)(2) of ERISA, (iii) the occurrence of an
obligation  arising  under  Section  4041 of ERISA of either the  Borrower,  the
Corporate


                                       16
<PAGE>
Guarantors  or an ERISA  Affiliate  to provide  affected  parties with a written
notice of an intent  to  terminate  a  Benefit  Plan in a  distress  termination
described  in Section  4041 (c) of ERISA,  (iv) the  institution  by the PBGC of
proceedings  to terminate  any Benefit  Plan,  (v) any event or condition  which
constitutes grounds under Section 4042 of ERISA for the appointment of a trustee
to administer a Benefit Plan, or (vi) the partial or complete  withdrawal of the
Borrower,  the Corporate  Guarantors or any ERISA Affiliate from a Multiemployer
Plan.

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

     "Year 2000 Problem" shall mean the risk that computer  applications used by
or for the benefit of the Borrower or any  Subsidiary may be unable to recognize
or perform properly  certain date sensitive  functions  involving  certain dates
prior to and any date after December 31, 1999.

     SECTION 1.02  RULES  OF  INTERPRETATION  AND  CONSTRUCTION.  In  this  Loan
Agreement unless the context otherwise clearly requires:

          (i)    Words importing  persons  mean and include firms, associations,
partnerships (including limited partnerships),  societies, trusts, corporations,
limited  liability  companies  or other  legal  entities,  including  public  or
governmental bodies, as well as natural persons; and

          (ii)   If  any  clause,  provision or  section of this Loan  Agreement
shall  bedetermined to be apparently  contrary to or conflicting  with any other
clause, provision or section of this Loan Agreement,  then the clause, provision
or section containing the more specific provisions shall control and govern with
respect to such apparent conflict.

     SECTION 1.03  ACCOUNTING PRINCIPLES.

          (i)    Except  as  otherwise  provided  in  this  Loan  Agreement  all
computations and  determinations  as to accounting or financial matters shall be
made,  and all  financial  statements  to be  delivered  pursuant  to this  Loan
Agreement shall be prepared,  in accordance  with GAAP (including  principles of
consolidation  where  appropriate),  and all accounting or financial terms shall
have the meanings  ascribed to such term by GAAP,  as  established  from time to
time.

          (ii)   Notwithstanding  the provisions of  Section 1.03(i) above,  the
                                                     ---------------
Borrower  and the  Lender  hereby  covenant  and  agree  that  for  purposes  of
calculating the financial covenants of the Borrower set forth in Article VIII of
                                                                 ------------
this Loan Agreement,  the covenants shall be tested applying GAAP in effect from
time to time. The Borrower shall furnish the Lender with the necessary financial
information  and  calculations  prepared  by the  Borrower  required in order to
ascertain  and  determine   compliance  or  non-compliance  with  the  financial
covenants set forth in Article VIII of this Loan Agreement.
                       ------------

          (iii)  All expenses of compliance with this Section 1.03 shall be paid
                                                      ------------
for by the

                                       17
<PAGE>
Borrower.


                                   ARTICLE II
               AMOUNT AND TERMS FOR THE REVOLVING CREDIT FACILITY
               --------------------------------------------------

     SECTION 2.01 REVOLVING CREDIT FACILITY.

          (i)    Availability. (a) Subject to the terms and conditions set forth
in this Loan  Agreement and provided no Event of Default shall have occurred and
be  continuing,  the Lender hereby agrees to make available to the Borrower from
time to time during the period from the Closing  Date to the  Business  Day next
preceding  the  Revolving  Credit  Termination  Date,   revolving  credit  loans
(hereinafter  each  individually  referred to as a  "Revolving  Credit Loan" and
collectively referred to as the "Revolving Credit Loans") in amounts which shall
not  exceed,  in the  aggregate  for all  Revolving  Credit  Loans  at any  time
outstanding,  the Commitment.  The Revolving  Credit Loans shall be evidenced by
the Revolving  Credit Loan Note.  The Lender is hereby  authorized to record the
date and amount of each  Revolving  Credit  Loan made by the Lender and the date
and amount of each  payment  or  prepayment  of  principal  thereof  made by the
Borrower on the schedule  annexed to and  constituting  a part of the  Revolving
Credit Loan Note, and any such recordation shall constitute prima facie evidence
of the accuracy of the information so recorded. If the outstanding amount of the
Revolving  Credit Loans shall exceed the amount of the Revolving Credit Facility
at any time, such excess shall be immediately due and payable to the Lender.

                 (b)  Revolving Credit Loans may be voluntarily prepaid pursuant
to Section 2.04 hereof and,  subject to the  provisions of this Loan  Agreement,
   ------------
any amounts so prepaid may be reborrowed,  up to the amount available under this
Section  2.01(i)  at the time of such  Borrowing,  until the  Business  Day next
----------------
preceding the Revolving Credit Termination Date. The Lender's commitment to make
Revolving  Credit  Loans  shall  expire,  and each  Revolving  Credit  Loan then
outstanding shall be repaid in full by the Borrower, no later than the Revolving
Credit Termination Date.

          (ii)   Notice of  Borrowing.  Whenever the Borrower  desires to borrow
under this Section  2.01,  the Borrower  shall deliver to the Lender a Notice of
           -------------
Borrowing no later than 11:00 A.M. (New York,  New York time) (a) at least three
(3)  Business  Days in advance  of the  proposed  Funding  Date in the case of a
Borrowing as a Eurodollar Rate Loan and (b) on the proposed  Funding Date in the
case of a Borrowing as a Prime Rate Loan  (provided  such Notice of Borrowing is
received by the Lender before 10:00 A.M.). The Notice of Borrowing shall specify
(1) the Funding Date (which shall be a Business Day) in respect of the Revolving
Credit Loan,  (2) the amount of the proposed  Borrowing  which shall not be less
than  $500,000.00,  (3) the intended use of the proceeds of such Borrowing,  (4)
the applicable interest rate option as described in Section 2.02(i) of this Loan
                                                    ---------------
Agreement and, if applicable,  (5) the Eurodollar  Interest  Period.  In lieu of
delivering the  above-described  Notice of Borrowing,  the Borrower may give the
Lender  telephonic  notice of any proposed  Borrowing by the time required under
this Section 2.01(ii); provided, however, that such notice shall be confirmed in
     ----------------  --------  -------
writing by  delivery  to the  Lender  promptly  (but in no event  later than the
Funding Date of the requested Revolving Credit

                                       18
<PAGE>
Loan) of a Notice of Borrowing. Any Notice of Borrowing (or telephonic notice in
lieu  thereof)   pursuant  to  this  Section   2.01(ii)  shall  be  irrevocable.
                                     ------------------

          (iii)  Making of Revolving  Credit  Loans.   The Lender shall make the
proceeds of such Revolving Credit Loan available to the Borrower in Edison,  New
Jersey on such  Funding  Date by 12:00 NOON (New York,  New York time) and shall
disburse such funds in Dollars and in immediately  available funds to an account
of the Borrower  maintained  with the Lender and  thereafter  to any  substitute
account, designated in writing by the Borrower in the Notice of Borrowing.

          (iv)   Use of Proceeds of Revolving  Credit Loans. The proceeds of the
Revolving Credit Loans shall be used by the Borrower for financing  acquisitions
and general corporate purposes. The proceeds of the Revolving Credit Loans shall
not be used for the issuance of any letters of credit or for the creation of any
bankers acceptances.

          (v)    Reduction  of  Revolving  Credit  Facility;   Revolving  Credit
Termination Date.

                 (a) The  Borrower  shall have the right,  at any time and  from
time to time, to terminate in whole or permanently reduce in part, the Revolving
Credit  Facility  in an amount  up to the  amount  of the  Commitment  minus the
                                                                       -----
aggregate  principal amount of the Revolving Credit Loans then outstanding.  Any
such  prepayment may be made by the Borrower  without  premium or fee, except as
                                                                       ------
provided  for in  Section  2.04 of  this  Loan  Agreement  with  respect  to the
                  -------------
prepayment of a Eurodollar  Rate Loan. The Borrower shall give not less than two
Business Days' prior express  written notice to the Lender  designating the date
(which shall be a Business Day) of such  termination or reduction and the amount
of any partial reduction. Such termination or partial permanent reduction of the
Revolving  Credit  Facility  shall be  effective  on the date  specified  in the
Borrower's notice. Any such partial permanent  reduction of the Revolving Credit
Facility shall be in an aggregate  minimum  principal  amount of $500,000.00 and
integral multiples of $500,000.00 in excess of that amount.

                 (b)  The Revolving Credit Facility shall expire without further
action on the part of the  Lender,  and all then  outstanding  Revolving  Credit
Loans shall be paid in full on the Revolving Credit Termination Date.

     SECTION 2.02 INTEREST ON THE REVOLVING CREDIT LOANS.

          (i)    Rates of  Interest.  (a) All  Revolving Credit Loans shall bear
interest  computed daily on the outstanding  principal  balance thereof from the
Funding Date until  repaid in full at one or more of the  interest  rate options
selected by the  Borrower  from  between the two (2)  interest  rate options set
forth below. Subject to the provisions of this Loan Agreement,  the Borrower may
select different options to apply  simultaneously  to different  portions of the
Revolving  Credit  Loans and may  select  different  Funding  Segments  to apply
simultaneously  to different  parts of the Eurodollar Rate Portion or Prime Rate
Portion of the  Revolving  Credit Loans.  Each  selection of a rate option shall
apply  separately and without overlap to the Revolving  Credit Loans as a class.
The aggregate number of Funding Segments applicable to the

                                       19
<PAGE>
Eurodollar Rate Portion and Prime Rate Portion of the Revolving  Credit Loans at
any time shall not exceed five (5).

          Interest Rate Options for Revolving Credit Loans:

                 (1)   Prime Rate Option:  A fluctuating rate per annum for eac
      day equal to the Prime Rate of the Lender, in effect from time to time; or

                 (2)   Eurodollar  Rate Option.  A fixed rate per annum for each
      day during a Eurodollar  Interest  Period equal to the Adjusted  LIBO Rate
      plus the  Applicable  Margin for such day.  The Lender  shall give  prompt
      ----
      notice to the Borrower of the Adjusted LIBO Rate determined or adjusted in
      accordance with the provisions hereof,  which  determination or adjustment
      shall be conclusive (absent manifest error) if made in good faith.

                 (b)   The Applicable  Margin  for  Eurodollar  Rate  Loans with
respect to the  Revolving  Credit  Facility for any day shall be the  applicable
amount  (expressed in basis points) set forth in the Rating Matrix  (hereinafter
referred to as the "Applicable Margin").

                 (c)   Notwithstanding  subsections (a) and (b) above,  interest
in respect of any  Revolving  Credit  Loan  shall not  exceed the  maximum  rate
permitted by applicable Law.

          (ii)   Interest Payments. Subject to Section 2.02(iv) hereof, interest
                                               ----------------
accrued on all Prime Rate Loans shall be payable by the  Borrower in arrears (a)
on the  last  day of each  quarter  during  the  term of  this  Loan  Agreement,
commencing  on the last day of the first  quarter next  following  the making of
each  such  Prime  Rate  Loan  and (b) at  maturity.  Interest  accrued  on each
Eurodollar  Rate Loan shall be payable by the  Borrower  in arrears  (1) on each
Eurodollar  Interest  Payment Date  applicable to that Loan, (2) upon prepayment
thereof in full or in part and (3) at maturity.

          (iii)  Conversion or  Continuation.  (a) Subject to the  provisions of
Section  2.06 hereof,  the Borrower  shall have the option (1) to convert at any
-------------
time all or any part of outstanding  Revolving  Credit Loans which comprise part
of the same  Borrowing and which,  in the  aggregate,  equal  $500,000.00  or an
integral  multiple of $500,000.00 in excess of that amount from Prime Rate Loans
to Eurodollar Rate Loans;  (2) only in connection with the provisions of Section
                               -------------------------------------------------
2.06(v),  to convert all or any part of outstanding  Revolving Credit Loans from
-------
Eurodollar  Rate  Loans to Prime Rate  Loans or (3) upon the  expiration  of any
Eurodollar  Interest Period  applicable to a Borrowing of Eurodollar Rate Loans,
to  continue  all or any  portion  of  such  Revolving  Credit  Loans  equal  to
$500,000.00  or an integral  multiple of $500,000.00 in excess of that amount as
Eurodollar Rate Loans of the same type, and the succeeding  Eurodollar  Interest
Period of such continued Revolving Credit Loans shall commence on the expiration
date of the Eurodollar  Interest Period applicable thereto;  provided,  however,
                                                             --------   -------
that no outstanding  Revolving  Credit Loan may be continued as, or be converted
into,  a Eurodollar  Rate Loan when any Event of Default or  Potential  Event of
Default has occurred and is continuing.

                 (b)  In the  event  the  Borrower  shall  elect to  convert  or
continue a


                                       20
<PAGE>
Revolving  Credit Loan under this Section 2.02 (iii), the Borrower shall deliver
                                  ------------------
a Notice of  Conversion/Continuation to the Lender no later than 11:00 A.M. (New
York, New York time) at least three (3) Business Days in advance of the proposed
conversion/continuation date in the case of a conversion to or a continuation of
a Eurodollar  Rate Loan. A Notice of  Conversion/Continuation  shall specify (1)
the proposed  conversion/continuation  date (which shall be a Business Day), (2)
the  amount of the  Revolving  Credit  Loan to be  converted/continued,  (3) the
nature  of the  proposed  conversion/continuation,  and  (4) in  the  case  of a
conversion  to, or  continuation  of, a  Eurodollar  Rate  Loan,  the  requested
Eurodollar Interest Period. In lieu of delivering the above-described  Notice of
Conversion/Continuation,  the Borrower may give the Lender  telephonic notice of
any proposed  conversion/continuation  by the time  required  under this Section
                                                                         -------
2.02(iii);  provided, however, that such notice shall be confirmed in writing by
---------   --------  -------
delivery  to the  Lender  promptly  (but in no event  later  than  the  proposed
conversion/continuation date) of a Notice of Conversion/Continuation.

                 (c)  Any Notice of  Conversion/Continuation  for conversion to,
or  continuation  of, a  Revolving  Credit  Loan (or  telephonic  notice in lieu
thereof)  shall be  irrevocable  and the  Borrower  shall be bound to convert or
continue in accordance therewith.

          (iv)   Default  Interest.   Notwithstanding   the   rate  of  interest
specified in Section  2.02(i) hereof and the payment dates  specified in Section
             ----------------                                            -------
2.02(ii)  hereof,  effective  immediately  upon the  occurrence  of any Event of
--------
Default under Section 9.01 of this Loan Agreement and for as long  thereafter as
              ------------
any such Event of Default  shall be  continuing,  the  principal  balance of all
Revolving  Credit  Loans  then  outstanding  and,  to the  extent  permitted  by
applicable  Law, any interest  payments on the  Revolving  Credit Loans not paid
when due, shall bear interest payable upon demand at the Default Rate.

          (v)    Computation of Interest.  Interest on (i) Eurodollar Rate Loans
shall be  computed  on the basis of the  actual  number of days  elapsed  in the
period during which interest accrues and a year of 360 days, and (ii) Prime Rate
Loans shall be computed on the basis of the actual number of days elapsed in the
period  during which  interest  accrues and a year of 365/366 days. In computing
interest on any Revolving  Credit Loan,  the date of the making of the Revolving
Credit Loan or the first day of a Eurodollar  Interest  Period,  as the case may
be,  shall be  included  and the date of  payment  or the  expiration  date of a
Eurodollar  Interest  Period,  as the case may be, shall be excluded;  provided,
                                                                       --------
however,  that if a Revolving  Credit Loan is repaid on the same day on which it
-------
is made, one day's interest shall be paid on that Revolving Credit Loan.

          (vi)   Changes;  Legal  Restrictions.   Except as  provided in Section
                                                                         -------
2.06(iv) hereof with respect to certain  determinations  on Eurodollar  Interest
--------
Rate  Determination  Dates,  in the event  that  after the date  hereof  (a) the
adoption of or any change in any law,  treaty,  rule,  regulation,  guideline or
determination  of a  court  or  Governmental  Authority  or  any  change  in the
interpretation or application thereof by a court or Governmental  Authority,  or
(b)  compliance  by the Lender  with any  request or  directive  (whether or not
having the force of law and whether or not the failure to comply therewith would
be  unlawful)  from  any  central  bank  or  other  Governmental   Authority  or
quasi-governmental authority:

                 (1)  does or may impose,  modify,  or hold  applicable,  in the



                                       21
<PAGE>
determination of a Lender, any reserve,  special deposit,  compulsory loan, FDIC
insurance,  capital allocation or similar requirement against assets held by, or
deposits or other  liabilities  in or for the account of,  advances or loans by,
commitments made, or other credit extended by, or any other acquisition of funds
by, the Lender or any applicable  lending office or Eurodollar  Affiliate of the
Lender  (except,  with respect to a Eurodollar Rate Loan, to the extent that the
Statutory Reserve Rate requirements are reflected in the definition of "Adjusted
LIBO Rate"); or

                 (2)  does or is  reasonably  likely to impose on the Lender any
other condition materially more burdensome in nature, extent or consequence than
those in existence as of the Closing Date;

and the result of any of the  foregoing is to increase the cost to the Lender of
making,  renewing or maintaining the Revolving  Credit Loans,  then, in any such
                                                               ----
case, the Borrower shall promptly pay to the Lender, upon demand, such amount or
amounts  (based  upon an  allocation  thereof  by the  Lender  to the  financing
transactions  contemplated  by this Loan  Agreement and effected by this Section
                                                                         -------
2.02(vi)) as may be necessary to compensate  the Lender for any such  additional
---------
cost  incurred  or reduced  amount  received.  The Lender  shall  deliver to the
Borrower a written  statement of the costs or  reductions  claimed and the basis
therefore,  and the  allocation  made by the Lender of such costs and reductions
shall be conclusive, absent manifest error, if made in good faith. If the Lender
subsequently  recovers any amount  previously  paid by the Borrower  pursuant to
this Section 2.02(vi),  the Lender shall,  within thirty (30) days after receipt
     ----------------
of such  refund  and to the  extent  permitted  by  applicable  Law,  pay to the
Borrower the amount of any such recovery.

     SECTION 2.03 FEES.

          (i)    Structuring  Fee.  The  Borrower  shall have paid to the Lender
the Structuring Fee, in full, as of the Closing Date.

          (ii)   Facility  Fee. The Borrower  shall pay to the Lender a facility
fee from and after the Closing Date until the  Obligations  are paid in full and
the Revolving  Credit  Facility is  terminated,  equal to the  Applicable  Index
multiplied  by the unused  portion of the  Commitment.  The facility fee payable
----------  --
under this Section 2.03(ii) shall be calculated and payable quarterly in arrears
           ----------------
on the last  Business  Day in each Fiscal  Quarter  beginning  after the Closing
Date. For the purposes of this Section  2.03(ii),  the  "Applicable  Index" with
                               ----------------
respect  to  the  Revolving  Credit  Facility  shall  be the  applicable  amount
(expressed in basis points) set forth in the Rating Matrix (hereinafter referred
to as the "Applicable Index").

          (iii)  Late  Charge Fee.   In the event that any  payment,  including,
without limitation,  interest or principal,  required to be made by the Borrower
under the Revolving  Credit Loan Note or under this Loan Agreement  shall not be
received by the Lender  within ten (10) days of when due, the Lender may charge,
and if so charged,  the  Borrower  shall pay, to the extent  permitted by law, a
late charge of ($0.05) for each dollar  ($1.00) of each  delinquent  payment for
the purpose of defraying the expense incident to the handling of such delinquent
payment, which late charge shall not exceed $1,500.00 per occurrence.

                                       22
<PAGE>
          (iv)   Letter of Credit Fee. The  Borrower  shall pay Lender the usual
and customary fees charged by Lender's  International  Department for letters of
credit.

          (v)    Payment  of  Fees.  The fees  described  in this  Section  2.03
                                                                   -------------
represent  compensation  for services  rendered and to be rendered  separate and
apart from the lending of money or the provision of credit,  and the  obligation
of the  Borrower to pay each fee  described  herein shall be in addition to, and
not in lieu of, the  obligation of the Borrower to pay interest,  other fees and
expenses otherwise described in this Loan Agreement.  Fees shall be payable when
due at the office of the  Lender in East  Brunswick,  New Jersey in  immediately
available  funds.  All fees  shall be  non-refundable  when  paid.  All fees and
expenses  specified or referred to in this Loan  Agreement  due and owing to the
Lender,  including,  without limitation,  those referred to in this Section 2.03
                                                                    ------------
and in Section 10.01 hereof,  shall bear interest,  if not paid when due, at the
       -------------
Default Rate (but not to exceed the maximum rate  permitted by applicable  Law),
and shall constitute Obligations.  All fees described in this Section 2.03 which
                                                              ------------
are  expressed  as a per annum charge  shall be  calculated  on the basis of the
actual number of days elapsed in a 360-day year.

     SECTION 2.04 VOLUNTARY PREPAYMENTS.

          (i)    Eurodollar  Rate Loans.  The Borrower may, at any time and from
time to time,  upon the giving of at least two (2) Business  Days' prior express
written notice to the Lender,  voluntarily  prepay any  Eurodollar  Rate Loan in
whole or in part, in an aggregate  minimum amount of $500,000.00 and in integral
multiples of $500,000.00, subject to the following: (a) any principal prepayment
of a  Eurodollar  Rate Loan shall be  accompanied  by the  payment of all unpaid
accrued interest due and owing on said Eurodollar Rate Loan and (b) the Borrower
shall pay to the Lender all amounts  described in Section  2.06(vi) of this Loan
                                                  -----------------
Agreement.

          (ii)   Prime Rate Loans.  The Borrower  may, at any time and from time
to time,  upon the  giving  of at least one (1)  Business  Day's  prior  express
written notice to the Lender, voluntarily prepay any Prime Rate Loan in whole or
in part, without premium or fee; provided,  however, any principal prepayment of
                                 --------   -------
a Prime  Rate Loan shall be  accompanied  by the  payment of all unpaid  accrued
interest due and owing on said Prime Rate Loan.

          (iii)  Prepayments  in Full.   Notwithstanding  any  provision of this
Section 2.04 to the contrary, in the event that any prepayments of any Revolving
------------
Credit Loans are made in connection with the termination of this Loan Agreement,
such  prepayments  shall be made only upon five (5) Business Days' prior express
written notice to the Lender.

     SECTION 2.05 PAYMENTS.

          (i)    Manner and Time of Payment. All payments of principal, interest
and fees hereunder payable to the Lender,  including,  without  limitation,  all
payments in  connection  with  Revolving  Credit  Loans,  shall be made  without
condition  or  reservation  or right,  in Dollars and in  immediately  available
funds,  delivered  to the Lender  not later than 12:00 NOON (New York,  New York
time) on the date due,  to such  account  of the Lender in East  Brunswick,  New
Jersey,  as the Lender may  designate.  Funds  received by the Lender after that
time and date shall be

                                       23
<PAGE>
deemed to have been paid on the next  succeeding  Business Day. The Lender shall
send a  monthly  and/or  quarterly  invoice,  as  applicable,  to  the  Borrower
reflecting  the  accrued  interest  due and  owing  and all fees  due and  owing
hereunder.  The Borrower hereby agrees that on the Business Day that any payment
of principal, interest and fees are due, the Lender shall automatically charge a
demand deposit  account of the Borrower,  which account shall be maintained with
the Lender at all times  throughout the term of the Revolving  Credit  Facility.
The  Borrower's  authorization  of the  Lender to  charge  such  account  having
sufficient funds on deposit shall constitute payment of the amount so authorized
notwithstanding  the  Lender's  failure to charge said  account.  Any failure or
delay by the Lender in submitting  invoices for interest and fee payments  shall
not  discharge or relieve the Borrower of the  obligation  to make such payments
into the demand deposit account.

          (ii)   Apportionment of Payments.   So long as there does not exist an
Event of  Default,  all  payments  of  principal  and  interest  in  respect  of
outstanding  Revolving  Credit Loans,  all payments of the fees described herein
and all  payments in respect of any other  Obligation  shall be allocated by the
Lender as it may be entitled  thereto as provided  herein.  After the occurrence
and during the  continuance  of an Event of  Default,  the Lender  shall,  after
providing notice to the Borrower that payments and proceeds shall be so applied,
apply all  payments  remitted  to the Lender  and all  amounts  received  by the
Lender,  subject to the  provisions of this Loan  Agreement,  (a) first,  to pay
Obligations in respect of any fees,  expense  reimbursements or indemnities then
due and owing to the Lender from the Borrower;  (b) second,  to pay interest due
in respect of Revolving  Credit Loans;  (c) third, to pay or prepay principal of
Revolving  Credit  Loans and (d)  fourth,  to the  ratable  payment of all other
Obligations.

          (iii)  Payments on Non-Business Days.  Whenever any payment to be made
by the  Borrower  hereunder  shall be  stated  to be due on a day which is not a
Business Day,  payments  shall be made on the next  succeeding  Business Day and
such  extension of time shall be included in the  computation  of the payment of
interest  hereunder and of any of the fees specified in Section 2.03 hereof,  as
                                                        ------------
the case may be.

          (iv)   Lender's  Accounting.  The Lender shall maintain a loan account
(hereinafter  referred to as the "Loan  Account") on its books in which shall be
recorded (a) the principal  amount of Revolving Credit Loans owing to the Lender
from time to time; (b) all other  appropriate  debits and credits as provided in
this  Loan  Agreement,   including,  without  limitation,  all  interest,  fees,
expenses,  charges and other  Obligations;  and (c) all payments of  Obligations
made by the  Borrower  or for the  Borrower's  account.  All entries in the Loan
Account  shall be made in  accordance  with the  Lender's  customary  accounting
practices as in effect from time to time.  The Lender will render a statement of
the Loan Account upon the request of the Borrower. Each and every such statement
shall be deemed final,  binding and conclusive upon the Borrower in all respects
as to  all  matters  reflected  therein  (absent  manifest  error),  unless  the
Borrower,  within  ten (10)  days  after the date such  statement  is  rendered,
delivers to the Lender  written  notice of any objection  which the Borrower may
have to any such statement.  In that event, only those items expressly  objected
to  in  such  notice   shall  be  deemed  to  be   disputed  by  the   Borrower.
Notwithstanding  the  foregoing,  the  Lender's  entries  in  the  Loan  Account
evidencing  Revolving Credit Loans and other financial  accommodations made from
time to time shall be final,  binding and conclusive  upon the Borrower  (absent
manifest  error) as to the existence and amount of the


                                       24
<PAGE>
Obligations  recorded in the Loan Account.  The Lender,  in its discretion,  may
charge any or all interest, fees and expenses incurred by the Borrower hereunder
to the Loan Account.

     SECTION  2.06  SPECIAL   PROVISIONS   GOVERNING   EURODOLLAR   RATE  LOANS.
Notwithstanding other provisions of this Loan Agreement to the contrary, if any,
the following  provisions  shall govern with respect to Eurodollar Rate Loans as
to the matters described below:

          (i)    Amount of  Eurodollar  Rate Loans.   Each Eurodollar Rate  Loan
shall be for a minimum  amount  of  $500,000.00  and in  integral  multiples  of
$500,000.00 in excess of that amount.

          (ii)   Determination of Eurodollar  Interest Period.  By giving notice
as set forth in  Sections  2.01(ii)  and  2.02(iii)  hereof  (with  respect to a
                 ----------------------------------
conversion into or a continuation of Eurodollar Rate Loans),  the Borrower shall
have the option, subject to the other provision of this Section 2.06, to specify
                                                        ------------
a Eurodollar  Interest Period to apply to the Borrowing of Eurodollar Rate Loans
described  in  such  notice,  subject  to  availability.  The  determination  of
Eurodollar Interest Periods shall be subject to the following provisions:

                 (a)  In the case of immediately  successive Eurodollar Interest
Periods  applicable to a Borrowing of  Eurodollar  Rate Loans,  each  successive
Eurodollar Interest Period shall commence on the day on which the next preceding
Eurodollar Interest Period expires;

                 (b)  If any Eurodollar  Interest Period would otherwise  expire
on a day which is not a Business Day, the  Eurodollar  Interest  Period shall be
extended to expire on the next succeeding Business Day; provided,  however, that
                                                        --------   -------
if any such Eurodollar  Interest Period  applicable to a Borrowing of Eurodollar
Rate Loans would otherwise  expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in that month,  then
that  Eurodollar  Interest  Period  shall  expire on the  immediately  preceding
Business Day;

                 (c)  The Borrower may not select a Eurodollar  Interest  Period
for any Revolving  Credit Loan which  terminates later than the Revolving Credit
Termination Date;

                 (d)  The Borrower may not select a Eurodollar  Interest  Period
with respect to any portion of principal of a Eurodollar Rate Loan which extends
beyond a date on which the  Borrower is required to make a scheduled  payment of
any portion of principal,  it being  understood  and agreed that any  Eurodollar
Rate Loan whose  Eurodollar  Interest  Period  ends less than one month prior to
such required  principal  payment date shall be deemed converted to a Prime Rate
Loan as of the last day of such  Eurodollar  Interest  Period  for  purposes  of
determining  whether any portion of  principal  of any  Eurodollar  Rate Loan is
required in order to make a mandatory payment of principal;

                 (e)  There shall be no more than five (5)  Eurodollar  Interest
Periods under this Loan  Agreement in effect at any one time under the Revolving
Credit Facility; and

                 (f)  If any Eurodollar  Interest  Period  commences on the last
Business


                                       25
<PAGE>
Day  of a  calendar  month  (or  on a day  for  which  there  is no  numerically
corresponding day in the last calendar month of such Eurodollar Interest Period)
then said  Eurodollar  Interest Period shall end on the last Business Day of the
last calendar month of such Eurodollar Interest Period.

          (iii)  Determination of Interest Rate. As soon as practicable  after
12:00  NOON  (New  York,  New  York  time)  on  any  Eurodollar   Interest  Rate
Determination  Date,  the Lender shall  determine  (which  determination  shall,
absent manifest error, be  presumptively  correct) the interest rate which shall
apply to the  Eurodollar  Rate  Loans for which an  interest  rate is then being
determined for the applicable Eurodollar Interest Period and shall promptly give
notice  thereof  (in  writing  or by  telephone  confirmed  in  writing)  to the
Borrower.

          (iv)   Interest Rate  Unascertainable,  Inadequate or Unfair. If, with
respect  to any  Eurodollar  Interest  Period,  the Lender  determines  that (a)
deposits in Dollars (in the  applicable  amounts)  are not being  offered in the
relevant market for such Eurodollar Interest Period, (b) adequate and reasonable
means do not exist for  ascertaining  the Adjusted LIBO Rate,  (c) a contingency
has  occurred  which  materially  and  adversely  affects  the London  interbank
Eurodollar  market or (d) the effective cost to the Lender of funding a proposed
Funding Segment of the Eurodollar  Portion from a corresponding  source of funds
shall exceed the Eurodollar Rate, applicable to such Funding Segment, the Lender
shall forthwith give notice thereof to the Borrower,  whereupon until the Lender
notifies the Borrower that the  circumstances  giving rise to such suspension no
longer exist,  (1) the right of the Borrower to elect to have  Revolving  Credit
Loans bear interest based upon the Adjusted LIBO Rate shall be suspended and (2)
each outstanding  Eurodollar Rate Loan shall be converted into a Prime Rate Loan
on the  last  day of the  then  current  Eurodollar  Interest  Period  therefor,
notwithstanding any prior election by the Borrower to the contrary.

          (v)    Illegality.  (a) In the event that on any date the Lender shall
have determined (which  determination shall, absent manifest error, be final and
conclusive and binding upon all parties) that the making or  continuation of any
Eurodollar  Rate Loan has become  unlawful by  compliance  by the Lender in good
faith with any Law,  of any  Governmental  Authority  (whether or not having the
force of Law and whether or not failure to comply  therewith would be unlawful),
then, and in any such event, the Lender shall promptly give notice (by telephone
promptly confirmed in writing) to the Borrower.

                 (b)  Upon the  giving  of the  notice  referred  to in  Section
                                                                         -------
2.06(v)(a)  hereof,  (1) the  Borrower's  right to request of the Lender and the
----------
Lender's   obligation  to  make  Eurodollar  Rate  Loans  shall  be  immediately
suspended,  and the Lender shall make a Revolving  Credit  Loan,  as part of any
requested  Borrowing of Eurodollar Rate Loans, as a Prime Rate Loan, which Prime
Rate Loan shall, for all purposes,  be considered a part of such Borrowing,  and
(2) if the  affected  Eurodollar  Rate Loan or Loans are then  outstanding,  the
Borrower shall  immediately  (or, if permitted by applicable  Law, no later than
the date permitted  thereby,  upon at least one Business Day's written notice to
the Lender) convert each such Revolving Credit Loan into a Prime Rate Loan.

                 (c)  In the  event  that  the  Lender  determines  at any  time
following its giving of the notice  referred to in Section 2.06 (iv) and Section
                                                   -----------------     -------
2.06(v)(a) hereof that the Lender
----------


                                       26
<PAGE>
may lawfully make  Eurodollar Rate Loans of the type referred to in such notice,
the Lender shall promptly give notice (by telephone confirmed in writing) to the
Borrower of that determination, whereupon the Borrower's right to request of the
Lender,  and the Lender's  obligation  to make,  Eurodollar  Rate Loans shall be
restored.

          (vi)   Compensation. In addition to such amounts as are required to be
paid  by the  Borrower  pursuant  to  Sections  2.02(iv),  2.02(vi),  2.03(iii),
                                      ------------------------------------------
2.04(i),  2.06(vii),  2.07 and 2.09 hereof,  the Borrower  shall  compensate the
-----------------------------------
Lender,  upon  demand,  for all losses,  expenses  and  liabilities  (including,
without limitation, any loss or expense incurred by reason of the liquidation or
reemployment  of  deposits  or other  funds  required  by the  Lender to fund or
maintain  the  Lender's  Eurodollar  Rate  Loans)  which  losses,  expenses  and
liabilities the Lender may sustain (a) if for any reason a Borrowing, conversion
or  continuation  of  Eurodollar  Rate Loans does not occur on a date  specified
therefor in a Notice of Borrowing or a Notice of Conversion/Continuation or in a
telephonic  request for  borrowing  or  conversion/continuation  or a successive
Eurodollar  Interest  Period does not commence  after  notice  therefor is given
pursuant to Section  2.02(iii)  hereof,  (b) if any  prepayment of an Eurodollar
            ------------------
Rate Loan (including,  without  limitation,  any prepayment  pursuant to Section
                                                                         -------
2.04  hereof)  occurs  for any reason on a date which is not the last day of the
----
applicable  Eurodollar  Interest  Period,  (c) as a consequence  of any required
conversion of a Eurodollar  Rate Loan to a Prime Rate Loan as a result of any of
the events  indicated  in Section  2.06(v) on a day other than the last day of a
                          ----------------
Eurodollar  Interest Period, or (d) as a consequence of any other failure by the
Borrower to repay  Eurodollar Rate Loans when required by the terms of this Loan
Agreement.  The Lender shall  deliver to the Borrower a written  statement as to
such losses,  expenses and liabilities which statement shall be conclusive as to
such amounts in the absence of manifest error.

          (vii)  Eurodollar Rate Tax. The Borrower agrees that:

                 (a)  the  Borrower  will  pay,  prior  to  the  date  on  which
penalties attach thereto,  all present and future income, stamp and other taxes,
levies, or costs and charges whatsoever imposed,  assessed,  levied or collected
on or in respect of a Revolving  Credit Loan solely as a result of the  interest
rate being  determined by reference to the Eurodollar  Rate or the provisions of
this  Loan  Agreement   relating  to  the  Eurodollar  Rate  or  the  recording,
registration, notarization or other formalization of any thereof or any payments
of  principal,  interest or other  amounts  made on or in respect of a Revolving
Credit  Loan  made to the  Borrower  when the  interest  rate is  determined  by
reference  to the  Eurodollar  Rate (all such taxes,  levies,  costs and charges
being  hereinafter  collectively  called  "Eurodollar  Rate  Taxes");  provided,
                                                                       --------
however,  that  Eurodollar  Rate Taxes shall not include net income or franchise
-------
taxes imposed by any  jurisdiction.  Promptly after the date on which payment of
any such  Eurodollar  Rate Tax is due pursuant to  applicable  law, the Borrower
will, at the request of the Lender,  furnish to the Lender evidence, in form and
substance  satisfactory to the Lender,  that the Borrower has met its obligation
under this Section 2.06(vii); and
          ------------------

                 (b)  the  Borrower  will  indemnify  the  Lender  against,  and
reimburse the Lender on demand for, any Eurodollar Rate Taxes paid by the Lender
in respect of a Revolving Credit Loan made to the Borrower, as determined by the
Lender in its sole  discretion.  The Lender shall  provide the Borrower with (1)
appropriate receipts for any payments or

                                       27
<PAGE>
reimbursements  made by the  Borrower  pursuant  to this clause (b) and (2) such
information  as may  reasonably  be  required  to  indicate  the  basis for such
Eurodollar  Rate  Taxes;  provided,  however,  that if the  Lender  subsequently
recovers,  or  receives  a net tax  benefit  with  respect  to,  any  amount  of
Eurodollar Rate Taxes  previously paid by the Borrower  pursuant to this Section
                                                                         -------
2.06(vii)(b),  the Lender  shall,  within thirty (30) days after receipt of such
------------
refund,  and to the extent  permitted by applicable law, pay to the Borrower the
amount of any such recovery or permanent net tax benefit.

          (viii) Booking of  Eurodollar Rate Loans.   The Lender may make, carry
or  transfer  Eurodollar  Rate Loans at, to, or for the  account  of, any of its
branch offices,  agencies or the office of an Affiliate of the Lender; provided,
                                                                       --------
however,  the Lender  shall not be entitled to receive any greater  amount under
-------
Section 2.02(vi) or Section  2.06(vii) hereof as a result of the transfer of any
----------------    ------------------
such  Revolving  Credit Loan than the Lender  would be  entitled to  immediately
prior  thereto  unless (a) such transfer  occurred at a time when  circumstances
giving  rise to the claim  for such  greater  amount  did not exist and were not
reasonably  foreseeable  in the view of the Lender and (b) such claim would have
arisen even if such transfer had not occurred.

          (ix)   Affiliates  Not  Obligated.   No Eurodollar  Affiliate or other
Affiliate of the Lender shall be deemed a party to this Loan  Agreement or shall
have any rights, liability or obligation under this Loan Agreement.

     SECTION 2.07 INCREASED  CAPITAL.  If either (i) the  introduction of or any
change in or in the  interpretation  of any Law or regulation or (ii) compliance
by the Lender  with any  guideline  or request  from any  central  bank or other
Governmental  Authority  (whether  or not having the force of law and whether or
not the failure to comply  therewith  would be unlawful) made  subsequent to the
date hereof  affects or would affect the amount of capital  required or expected
to be maintained by the Lender or any corporation controlling the Lender and the
Lender  determines that the amount of such capital is increased by or based upon
the  existence of the Lender's  commitment  to make  Revolving  Credit Loans and
other  commitments of this type,  then, upon demand by the Lender,  the Borrower
shall  immediately  pay to the  Lender,  from time to time as  specified  by the
Lender,  additional  amounts sufficient to compensate the Lender in the light of
such  circumstances,  to the extent that the Lender  determines such increase in
capital to be allocable to the existence of the Lender's  commitment to fund the
Revolving  Credit  Facility.  A certificate as to such amounts  submitted to the
Borrower by the Lender,  shall,  in the absence of manifest error, be conclusive
and binding for all purposes.

     SECTION 2.08 AUTHORIZED OFFICERS OF THE BORROWER. The Borrower shall notify
the Lender in writing of the names of the officers and  employees  authorized to
request  Revolving  Credit  Loans and shall  provide  the Lender with a specimen
signature of each such Authorized Officer.  The Lender shall be entitled to rely
conclusively on such officer's or employee's authority to request such Revolving
Credit  Loans until the Lender  receives  written  notice to the  contrary.  The
Lender  shall have no duty to verify the  authenticity  of the  signature on any
written  Notice of  Borrowing  or Notice of  Conversion/Continuation  and,  with
respect to an oral request for such a Revolving  Credit  Loan,  the Lender shall
have no duty to verify the identity of any Person representing himself as one of
the  officers  or  employees  authorized  to make such  request on behalf of the
Borrower.  The Lender  shall not incur any  liability  to the Borrower in acting


                                       28
<PAGE>
upon any telephonic  notice  referred to above which the Lender believes in good
faith to have been given by a duly Authorized Officer or other Person authorized
to borrow on behalf of the Borrower or for otherwise  acting in good faith under
this Section 2.08.
     ------------

     SECTION 2.09 TAXES.

          (i)    Payments Net of Taxes,  All payments made by the Borrower under
this Loan  Agreement or any other Loan Document shall be made free and clear of,
and without reduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions
or  withholdings,  now or  hereafter  imposed,  levied,  collected,  withheld or
assessed  by any  Governmental  Authority,  and  all  liabilities  with  respect
thereto, excluding

                 (a)  in the  case of the  Lender,  income  or  franchise  taxes
imposed on the Lender by the jurisdiction  under the laws of which the Lender is
organized or any political subdivision or taxing authority thereof or therein or
as a result of a  connection  between  the Lender and any  jurisdiction  and the
transactions contemplated hereby; and

                 (b)  in the  case of the  Lender,  income  or  franchise  taxes
imposed by any  jurisdiction in which the Lender's lending offices which make or
book Revolving Credit Loans, are located or any political  subdivision or taxing
authority  thereof or therein (all such  non-excluded  taxes,  levies,  imposts,
deductions,  charges or withholdings being hereinafter  called "Taxes").  If any
Taxes are  required to be withheld or deducted  from any amounts  payable to the
Lender under this Loan Agreement or any other Loan Document,  the Borrower shall
pay the  relevant  amount of such Taxes and the amounts so payable to the Lender
shall be increased to the extent necessary to yield to the Lender (after payment
of all Taxes) interest or any such other amounts payable  hereunder at the rates
or in the amounts specified in this Loan Agreement and the other Loan Documents.
Any foreign lender (Any lender that is organized  under the laws other than that
in which the  Borrower is  incorporated.  For the  purposes  herein,  the United
States of  America,  each State  thereof and the  District of Columbia  shall be
deemed to  constitute  a single  jurisdiction)  that is entitled to an exemption
from or reduction of withholding tax under the law of the  jurisdiction in which
the Borrower is located,  or any treaty to which such  jurisdiction  is a party,
with respect to payments under this Agreement shall deliver to Borrower,  at the
time or times prescribed by applicable law, such properly completed and executed
documentation  prescribed  by  applicable  law or  reasonably  requested  by the
Borrower as will permit such  payments to be made  without  withholding  or at a
reduced  rate.  Whenever  any Taxes are paid by the  Borrower  with  respect  to
payments made in connection with this Loan Agreement or any other Loan Document,
as promptly as possible  thereafter,  the Borrower  shall send to the Lender for
its own account a certified copy of an original official receipt received by the
Borrower showing payment thereof.

          (ii)   Indemnity. The Borrower  hereby  indemnifies the Lender for the
full  amount  of all  Taxes  attributable  to  payments  by or on  behalf of the
Borrower  hereunder or under any of the other Loan Documents,  any Taxes paid by
the Lender, any present or future claims,  liabilities or losses with respect to
or resulting  from any  omission to pay or delay in paying any Taxes  (including
any  incremental  Taxes,  interest or penalties  that may become  payable by the

                                       29
<PAGE>
Lender as a result of any failure to pay such Taxes),  whether or not such Taxes
were correctly or legally asserted.  Such  indemnification  shall be made within
thirty (30) days from the date the Lender makes written demand therefor.

     SECTION 2.10 LETTER OF CREDIT (a) Subject to the terms and  conditions  set
forth in this Loan Agreement and provided no Event of Default has occurred or is
continuing,  the Lender agrees to issue,  for the account of the  Borrower,  the
Letter of Credit. Any and all Reimbursement Obligations in respect of the Letter
of Credit shall constitute  financial  accommodations under the Revolving Credit
Loan.  The Letter of Credit shall be subject to the Uniform  Customs and, to the
extent not inconsistent therewith, the Laws of the State of New Jersey.

          (b)    In  addition  to  being  subject to  the  satisfaction  of  the
conditions  precedent  contained in Article III hereof,  the  obligation  of the
                                    -----------
Lender to issue the Letter of Credit is subject to the  satisfaction  in full of
the following conditions:

                 (1)  the  Borrower  shall have  delivered  to the  Lender  such
      documents and materials as the Lender may reasonably require and the terms
      of the Letter of Credit shall be  reasonably  satisfactory  to the Lender;
      and

                 (2)  as of the date of issuance,  no order,  judgment or decree
      of any court,  arbitrator or  Governmental  Authority shall purport by its
      terms to enjoin or restrain  the Lender from  issuing the Letter of Credit
      and no Law  applicable to the Lender and no request or directive  (whether
      or not  having the force of Law and  whether or not the  failure to comply
      therewith  would  be  unlawful)  from  any  Governmental   Authority  with
      jurisdiction  over the Lender  shall  prohibit or request  that the Lender
      refrain from the  issuance of letters of credit  generally or the issuance
      of the Letter of Credit.

          (c)    In connection with the Letter of Credit:

                 (1)  the Borrower  shall  unconditionally  reimburse the Lender
      for  drawings  under the Letter of Credit  within  thirty (30) days of the
      date when a draw has been made under said  Letter of Credit,  irrespective
      of any claim, set-off,  defense or other right which the Borrower may have
      at any time against the Lender,  except with respect to the Lender's gross
      negligence or willful misconduct; and

                 (2)  to the extent  any  Reimbursement  Obligation  is not paid
      when due, such Reimbursement  Obligation shall be deemed to be a Revolving
      Credit Loan in the amount of such Reimbursement Obligation; and

                 (3)  any Reimbursement Obligation with respect to the Letter of
      Credit shall bear interest from the date of the relevant drawing under the
      Letter of Credit at the  interest  rate set forth  herein,  until  paid in
      full; and

                                       30
<PAGE>
                 (4)  If the Letter of Credit has not been  presented  for honor
      on or before the Revolving Credit  Termination Date,  notwithstanding  the
      occurrence of the Revolving  Credit  Termination Date and the satisfaction
      of  all  other  obligations  under  the  Loan  Documents,  the  Borrower's
      obligations under the Loan Documents shall continue until all amounts paid
      by the Lender  under the Letter of Credit  have been  reimbursed  (and all
      other  obligations  under the Loan Documents have been  satisfied) and the
      liens granted under and pursuant to the Loan  Documents  shall continue to
      secure  such Letter of Credit  Obligations;  provided,  however,  that the
                                                   --------   -------
      Lender may release the liens under the Loan  Documents  (but not the other
      obligations  thereunder)  upon  (i)  the  deposit  by the  Borrower  in an
      interest-bearing cash collateral account opened by the Lender of an amount
      in cash or cash  equivalents  equal to the  amount of the Letter of Credit
      Obligations to collateralize the Reimbursement Obligations with respect to
      the Letter of Credit or (ii) an indemnification agreement from a financial
      institution   or  "back-up"   letter  of  credit  issued  by  a  financial
      institution  all in form  and  substance  reasonably  satisfactory  to the
      Lender.  Notwithstanding,  the payment of all other  obligations under the
      Loan Documents,  the Reimbursement  Obligations associated with the Letter
      of Credit shall accrue interest at the Prime Rate until such Reimbursement
      Obligations have been satisfied in full.

                 (5)   With  respect  to  any  Reimbursement  Obligation,   such
      Reimbursement  Obligation  shall:  (A) be  payable  by the  Borrower  upon
      demand,  (B) be deemed  to be a  Revolving  Credit  Loan as  described  in
      Section 2.1 herein,  and (C) bear interest from the date of payment by the
      Lender at the Prime Rate set forth herein, until paid in full.

          (d)    No action  taken or omitted to be taken by the  Lender under or
in connection  with the Letter of Credit (except in connection with the Lender's
gross negligence or willful misconduct) shall put the Lender under any resulting
liability to the Borrower or relieve the Borrower of its  obligations  hereunder
to  reimburse  the  Lender for the  Reimbursement  Obligations.  In  determining
whether to pay under the Letter of Credit,  the Lender shall have no  obligation
to the  Borrower  other  than to  confirm  that  any  documents  required  to be
delivered under the Letter of Credit appear to have been delivered and that they
appear on their face to comply with the requirements of the Letter of Credit.

          (e)    The Borrower  unconditionally  agrees to pay to the  Lender the
amount of any and all  Reimbursement  Obligations,  interest  and other  amounts
payable  to the Lender  under or in  connection  with the Letter of Credit  upon
demand by the Lender, irrespective of any claim, set-off, defense or other right
which the Borrower may have at any time against the Lender or any other Person.

     SECTION  2.11  LENDER NOT LIABLE.  (a) In  addition  to amounts  payable as
elsewhere provided in the Loan Documents, the Borrower hereby agrees to protect,
indemnify,  pay and save  the  Lender  harmless  from  and  against  any and all
liabilities  and  costs  which  the  Lender  may  incur  or be  subject  to as a
consequence, direct or indirect, of (1) the issuance of the Letter of

                                       31
<PAGE>
Credit  (other  than as a result of the  Lender's  gross  negligence  or willful
misconduct,  as  determined  by the  final  judgment  of a  court  of  competent
jurisdiction)  or (2) the  failure  of the  Lender to honor a drawing  under the
Letter  of  Credit  as a result  of any act or  omission,  whether  rightful  or
wrongful,  of any present or future de jure or de facto  Governmental  Authority
(all such acts or omissions hereinafter referred to as the "Governmental Acts").

          (b)    As between the  Borrower and the Lender, subject to the  second
to the last sentence of this subparagraph (b), the Borrower assumes all risks of
                             ----------------
the acts and omissions of, or misuse of such Letter of Credit by the beneficiary
of,  such  Letter  of  Credit.  In  furtherance  and  not in  limitation  of the
foregoing,  the Lender  shall not be  responsible:  (1) for the form,  validity,
sufficiency,  accuracy, genuineness or legal effect of any document submitted by
the Borrower or the  beneficiary  in  connection  with the  application  for and
issuance  of the Letter of Credit,  even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged; (2) for
the validity or  sufficiency  of any instrument  transferring  or assigning,  or
purporting to transfer or assign, the Letter of Credit or the rights or benefits
thereunder  or  proceeds  thereof,  in whole or in part,  which  may prove to be
invalid or ineffective for any reason; (3) for failure of the beneficiary of the
Letter of Credit to comply duly with  conditions  required in order to draw upon
the Letter of Credit;  (4) for  errors,  omissions,  interruptions  or delays in
transmission or delivery of any messages, by mail, cable,  telegraph,  telex, or
other similar form of teletransmission  or otherwise,  whether or not they be in
cipher; (5) for errors in interpretation of technical terms; (6) for any loss or
delay in the transmission or otherwise of any document required in order to make
a drawing  under the Letter of Credit or of the  proceeds  thereof;  (7) for the
misapplication by the beneficiary of the Letter of Credit of the proceeds of any
drawing  under the Letter of Credit and (8) for any  consequences  arising  from
causes  beyond the  control of the Lender  including,  without  limitation,  any
Governmental Acts. None of the above shall affect, impair or prevent the vesting
of any of the  rights or powers  of the  Lender  under  this  subparagraph  (b);
provided,  however,  the  Borrower  may have a claim  against  the Lender to the
--------   -------
extent of any direct,  but not  consequential,  damages suffered by the Borrower
that were caused by the Lender's  willful  misconduct  or gross  negligence.  In
furtherance  and not in  limitation  of the  foregoing,  the  Lender  may accept
documents that appear on their face to be in order,  without  responsibility for
further investigation, regardless of any notice or information to the contrary.

          (c)    In furtherance  and  extension  and  not in  limitation  of the
specific  provisions  hereinabove set forth,  any action taken or omitted by the
Lender under or in connection  with the Letter of Credit in accordance  with the
written  directions of the Borrower,  or any related  certificates,  if taken or
omitted in good faith,  shall not, in the absence of an express violation of the
standards set forth in the Uniform Customs and subsequent revisions thereof, put
the Lender under any resulting liability to the Borrower or relieve the Borrower
of any of its obligations hereunder to any such Person.


                                       32
<PAGE>
                                   ARTICLE III
                    CONDITIONS TO THE REVOLVING CREDIT LOANS
                    ----------------------------------------

     SECTION  3.01  CONDITIONS  PRECEDENT  TO THE  EFFECTIVENESS  OF  THIS  LOAN
AGREEMENT.  This Loan Agreement shall become  effective on the Closing Date when
the following  conditions  precedent have been  satisfied  (unless waived by the
Lender or unless the deadline for delivery has been extended by the Lender):

          (i)    Certain  Documents. The Lender shall have received on or before
the  Closing  Date all of the  following,  all of  which,  except  as  otherwise
specifically described below, shall be in form and substance satisfactory to the
Lender:

                 (a)   this  Loan  Agreement  together  with  all  Exhibits  and
Schedules attached hereto;

                 (b)   a Notice of  Borrowing  pursuant to Section  2.01  hereof
                                                           -------------
dated the Closing Date executed by the Borrower;

                 (c)   the Revolving Credit Loan Note;

                 (d)   the Stock Pledge Agreement;

                 (e)   the opinions of counsel to the Borrower substantially in
the form of Exhibit "F" attached hereto;
            -----------

                 (f)   a certificate of the Secretary or Assistant  Secretary of
the Borrower dated the Closing Date certifying (1) the names and true signatures
of the incumbent officers of the Borrower authorized to sign this Loan Agreement
and all other Loan  Documents  executed by the Borrower in  connection  with the
Revolving Credit  Facility,  (2) the By-Laws of the Borrower as in effect on the
date of such  certification  and (3) the resolutions of the Borrower's  Board of
Directors  approving and authorizing the execution,  delivery and performance of
this Loan Agreement and all other Loan Documents;

                 (g)   the Certificate  of  Incorporation  of the  Borrower,  as
amended,  modified or supplemented to the Closing Date, shall be certified to be
true,  correct and complete by the applicable  Secretary of State as of a recent
date prior to the Closing Date;

                 (h)   Good Standing Certificate  for the Borrower  certified by
the Secretary of State of the State of New Jersey;

                 (i)   a certificate  of  the  Chief  Financial  Officer  of the
Borrower  certifying  that such financial  information  (including any annual or
quarterly  financial  statements of the  Borrower) as the Lender may  reasonably
request are true and accurate;

                 (j)   evidence of  payment in  full of all  existing  Debt owed
by the Borrower to the Lender pursuant to that Loan and Security Agreement dated
January 22, 1997

                                       33
<PAGE>
and termination of such credit facility; and

                 (k)   such   additional   documentation   as   the  Lender  may
reasonably require.

          (ii)   Fees and Expenses  Paid.  The  Borrower  shall have paid to the
Lender,  for its own account,  all fees and expenses due and payable  under this
Loan Agreement on the Closing Date.

          (iii)  Representations and Warranties.  All of the representations and
warranties  of the  Borrower  contained  in  subsections  (i) through  (xxii) of
Section  4.01  hereof and in any other Loan  Document  (other  than for  changes
-------------
permitted or contemplated  by this Loan Agreement)  shall be true and correct in
all material  respects on and as of the Closing Date as though made on and as of
that date (except any such  representations and warranties stated to be given on
a specific date other than the Closing Date).

          (iv)   No Default.  No Event of Default or Potential  Event of Default
hereunder  or  under  the  other  Loan  Documents  shall  have  occurred  and be
continuing on the Closing Date.

          (v)    No Injunction.  No Requirements of Law shall  prohibit,  and no
order, judgment or decree of any Governmental Authority shall and, except as set
forth on Schedule  4.01(v) hereto,  no litigation shall be pending or threatened
         -----------------
which in the judgment of the Lender would enjoin, prohibit,  restrain, impose or
result in the imposition of any material adverse condition upon the consummation
of the transactions contemplated hereby.

          (vi)   Consents.   The Borrower  shall have  received all consents and
authorizations required pursuant to any material Contractual Obligation with any
other Person and shall have  obtained all  consents and  authorizations  of, and
effected all notices to and filings with, any  Governmental  Authority,  in each
case, as may be necessary to allow it lawfully to execute,  deliver and perform,
in all material  respects,  its  obligations  under this Loan  Agreement and the
other Loan Documents.

          (vii)  No Material Adverse Change.   No adverse change deemed material
by the Lender,  in its sole opinion,  shall have occurred  since the date of the
most recent annual  audited  financial  report of the Borrower  delivered to the
Lender  through the Closing Date, as to the condition  (financial or otherwise),
operations,  performance or properties of the Borrower, individually or taken as
a whole.

     SECTION  3.02  CONDITIONS  PRECEDENT TO ALL  REVOLVING  CREDIT  LOANS.  The
obligation of the Lender to make any Revolving  Credit Loan requested to be made
by it on any Funding Date is subject to the following conditions precedent as of
such date:

          (i)    Notice of Borrowing.  With respect to a request for a Revolving
Credit Loan, the Lender shall have  received in  accordance with the  provisions
of Section 2.01(ii) hereof, on or before any Funding Date, an original Notice of
   ----------------
Borrowing duly executed by an Authorized Officer of the Borrower.

                                       34
<PAGE>
          (ii)   Additional Matters.   As of the Funding Date for any  Revolving
Credit Loan:

                 (a)  Representations and Warranties. All of the representations
and warranties of the Borrower contained  in subsections  (i) through  (xxii) of
Section 4.01 hereof and in any other Loan Document  (other than  representations
------------
and warranties which expressly speak only of a different date and other than for
changes  permitted or  contemplated  by this Loan  Agreement)  shall be true and
correct in all material respects;

                 (b)  No  Default.  No Event of Default  or  Potential  Event of
Default shall have occurred and be continuing or would result from the making of
the requested Revolving Credit Loan;

                 (c)  No Injunction.  No Requirement of Law or regulations shall
prohibit,  and no order, judgment or decree of any Governmental Authority shall,
and,  except as set forth on Schedule  4.01(v)  hereto,  no litigation  shall be
                             -----------------
pending or  threatened  which in the  reasonable  judgment  of the Lender  would
enjoin, prohibit,  restrain,  impose or result in the imposition of any material
adverse  condition  upon the  Lender  from  making  the  Revolving  Credit  Loan
requested to be made on the Funding Date; and

                 (d)  No  Material  Adverse  Change.  No adverse  change  deemed
material by the  Lender,  in its sole  opinion,  shall have  occurred  after the
Closing  Date  as  to  the  condition  (financial  or  otherwise),   operations,
performance or properties of the Borrower, individually or taken as a whole.

          Each  submission  by  the  Borrower  to  the  Lender  of a  Notice  of
Borrowing  with  respect to a Revolving  Credit Loan and the  acceptance  by the
Borrower of the proceeds of each such Revolving Credit Loan made hereunder shall
constitute a representation  and warranty by the Borrower as of the Funding Date
in respect of such Revolving  Credit Loan that all the  conditions  contained in
this Section 3.02 have been satisfied.
     ------------

                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES
                         ------------------------------

     SECTION 4.01  REPRESENTATIONS  AND WARRANTIES ON THE CLOSING DATE. In order
to induce the  Lender to enter into this Loan  Agreement,  the  Borrower  hereby
represents  and warrants to the Lender that the following  statements  are true,
correct and complete on and as of the Closing Date:

          (i)  Organization; Corporate Powers. The Borrower (a) is a corporation
duly  organized,  validly  existing and in good  standing  under the Laws of the
State of New  Jersey,  (b) is duly  qualified  to conduct  business as a foreign
corporation and in good standing under the Laws of each jurisdiction in which it
owns or leases real property or in which the nature of its business  requires it
to be so qualified where the failure to obtain such  qualification is reasonably
likely to result in a Material  Adverse Effect,  and (c) has all requisite power
and authority to own, operate

                                       35
<PAGE>
and  encumber  its  property and assets and to conduct its business as presently
conducted and as proposed to be conducted in  connection  with and following the
consummation of the actions contemplated by the Loan Documents.

          (ii)   Authority.  (a) The Borrower has the requisite  corporate power
and  authority  (1) to execute,  deliver and perform each of the Loan  Documents
executed by it, or to be executed by it and (2) to file the Loan Documents filed
by it, or to be filed by it, with any appropriate Governmental Authority.

                 (b)  The execution, delivery and performance (or filing, as the
case may be) of each of the Loan  Documents to which the Borrower is a party and
the  consummation  of the  transactions  contemplated  thereby,  have  been duly
authorized  by the Board of Directors  of the Borrower and no further  corporate
proceedings  on the  part of the  Borrower  are  necessary  to  consummate  such
transactions.

                 (c)  Each of the Loan  Documents  to which  the  Borrower  is a
party has been duly executed and delivered (or filed, as the case may be) by the
Borrower and constitutes its legal,  valid and binding  obligation,  enforceable
against it in accordance with its terms.

          (iii)  No  Conflict.   The  execution  and delivery by the Borrower of
each  Loan  Document  to which it is party  and the  performance  of each of the
transactions  contemplated thereby do not and will not (a) constitute a tortious
interference  with any  Contractual  Obligation  of the Borrower or (b) conflict
with or violate the Borrower's  Certificate of  Incorporation  or By-Laws or (c)
conflict  with,  result in a breach of or constitute  (with or without notice or
lapse of time or both) a default  under any  Requirement  of Law or,  subject to
clause (a) above,  Contractual Obligation of the Borrower or require termination
of any Contractual Obligation,  the consequences of which conflict or default or
termination  would have or is reasonably  likely to result in a Material Adverse
Effect or (d)  result in or  require  the  creation  or  imposition  of any Lien
whatsoever  upon any of the  Properties  or assets of the  Borrower  (other than
Liens permitted pursuant to Section 7.01(ii) hereof) or (e) require any approval
                            ----------------
of stockholders.

          (iv)   Governmental Consents. The execution,  delivery and performance
of each Loan Document  (and the  transactions  contemplated  thereby) do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by any Governmental Authority, except filings, consents
or notices which have been, or will in due course, be made, obtained or given.

          (v)    Litigation;  Adverse  Effects.   (a) Except  as  set  forth  in
Schedule  4.01(v)  attached  hereto,  there  is  no  action,  suit,  proceeding,
-----------------
governmental investigation or arbitration,  at law or in equity, or before or by
any  Governmental  Authority,  pending,  or, to the  knowledge of the  Borrower,
threatened  against  the  Borrower  or any  Property  of the  Borrower  which is
reasonably  likely to (1) result in any Material Adverse Effect,  (2) materially
and  adversely  affect the ability of the  Borrower  to perform its  obligations
under the Law,  any  Contractual  Obligation  and/or the Loan  Documents  or (3)
materially  and  adversely  affect the  ability of the  Borrower  to perform its
Obligations or the Lender's ability to enforce such Obligations.

                                       36
<PAGE>
                 (b)  The Borrower is not (1) in violation of any applicable Law
which violation has or is reasonably likely to have a Material Adverse Effect or
(2)  subject  to or in  default  with  respect  to  any  final  judgment,  writ,
injunction,  decree,  rule or regulation of any court or Governmental  Authority
which has or is reasonably likely to have a Material Adverse Effect. There is no
action, suit,  proceeding or investigation  pending or, to the best knowledge of
the  Borrower,  threatened  against or affecting  the Borrower  challenging  the
validity or the enforceability of any of the Loan Documents.

          (vi)   No Material  Adverse  Change.  Since  September  30,  1998,  no
material adverse change in, the condition  (financial or otherwise),  operations
or  performance  of the  Borrower or the ability of the  Borrower to perform its
Obligations under the Loan Documents and the transactions  contemplated  thereby
has occurred.

          (vii)  Payment of Taxes.   All  returns  and  reports of the  Borrower
required to be filed, have been timely filed (or appropriate  extensions of time
for the filing of same have been timely requested),  and all taxes, assessments,
fees and other governmental charges thereupon and upon their Properties, assets,
income and franchises  which are shown on such returns as being due and payable,
have been paid when due and payable  (other than the amount or validity of which
are currently being contested in good faith by appropriate  proceedings and with
respect to which  reserves  in  conformity  with GAAP have been set aside on the
books of the Borrower or its Subsidiaries, as the case may be). The Borrower has
no  knowledge  of any  proposed  tax  assessment  against the  Borrower  that is
reasonably  likely to result in a Material  Adverse  Effect,  which is not being
actively  contested  in good  faith  by the  Borrower  and  which  has not  been
disclosed in writing to the Lender.

          (viii) Performance.    The   Borrower  is   not  in   default  in  the
performance,  observance or fulfillment of any of the obligations,  covenants or
conditions  contained in any  Contractual  Obligation  applicable  to it, and no
condition exists which,  with the giving of notice or the lapse of time or both,
would  constitute a default  under such  Contractual  Obligation  in, each case,
except where the consequences,  direct or indirect, of such default or defaults,
if any,  would not have or are not  reasonably  likely  to result in a  Material
Adverse Effect.

          (ix)   Accurate  and  Complete  Disclosure.  The  representations  and
warranties of the Borrower or any other Person  contained in the Loan Documents,
and all certificates and other documents  delivered to the Lender, in connection
herewith and therewith,  do not contain any untrue  statement of a material fact
or omit to state a  material  fact  necessary  in  order to make the  statements
contained herein or therein, in light of the circumstances under which they were
made, not misleading.

          (x)    Requirements of Law.   The  Borrower has no actual knowledge of
any  non-compliance  with respect to all  Requirements  of Law applicable to the
Borrower and its business which  non-compliance  could reasonably be expected to
result in a Material Adverse Effect.

          (xi)   Patents,  Trademarks,  Permits,  Etc.   The Borrower  owns,  is
licensed or otherwise  has the lawful right to use, or has all permits and other
governmental   approvals,   patents,   trademarks,   trade  names,   copyrights,
technology, know-how and processes used in or


                                       37
<PAGE>
necessary  for the conduct of its  business  as  currently  conducted  which are
material to its condition (financial or otherwise),  operations and performance,
taken as a whole.  The use of such  permits  and other  governmental  approvals,
patents, trademarks, trade names, copyrights, technology, know how and processes
by the Borrower  does not infringe on the rights of any Person,  subject to such
claims  and  infringements  and does  not,  in the  aggregate,  give rise to any
liability  on the part of the  Borrower  which  has or is  reasonably  likely to
result in a Material Adverse Effect.

          (xii)  Environmental   Matters.   Except  as  disclosed  in   Schedule
                                                                        --------
4.01(xii) attached hereto and only in all material respects and to the knowledge
---------                 --- ---- -- --- -------- --------
of the Borrower,  (a) the operations of the Borrower  comply with all applicable
environmental,   health  and  safety  Requirements  of  Law  including,  without
limitation,  all  Environmental  Laws;  (b)  the  Borrower's  present  and  past
Properties  and  operations  are not the subject of any order from or  agreement
with  any   Governmental   Authority  or  private   party  or  any  judicial  or
administrative proceeding or investigations respecting any environmental, health
or safety Requirements of Law, and are not the subject of any Remedial Action or
other Liabilities and Costs arising from the Release or threatened Release of an
Environmental  Concern Material into the  Environment;  (c) the Borrower has not
filed any  notice  under  any  Requirement  of Law  indicating  past or  present
treatment,  storage or disposal of an Environmental  Concern  Material;  (d) the
Borrower  has not  filed any  notice  under any  applicable  Requirement  of Law
reporting a Release of an  Environmental  Concern Material into the Environment;
(e) there is not now,  nor has there ever  been,  on or in the  Property  of the
Borrower  any  generation,  treatment,  recycling,  storage or  disposal  of any
Environmental Concern Material;  (f) the Borrower has not received any notice or
claim to the effect that it is or may be liable to any Person as a result of the
Release or  threatened  Release of an  Environmental  Concern  Material into the
Environment, or as a result of exposure to asbestos or to cotton dust, which may
result in any liability;  (g) no Environmental Lien has attached to any Property
of the  Borrower;  (h) the  Borrower has not entered  into any  negotiations  or
agreements with any Person (including, without limitation, the prior owner(s) of
any Property owned or leased by the Borrower) relating to any Remedial Action or
environmentally  related  Claim and (i) the Borrower has no material  contingent
liabilities  in  connection  with  any  Release  or  threatened  Release  of any
Environmental Concern Material into the Environment.

          (xiii) ERISA.    The   Borrower  and   all  ERISA  Affiliates  are  in
compliance  with  ERISA  and  any and all  regulations  promulgated  thereunder.
Neither the Borrower nor any ERISA  Affiliate  maintains or  contributes  to any
Plan other than a Plan listed on Schedule 4.01(xiii) attached hereto.  Except as
                                 -------------------
otherwise provided on Schedule  4.01(xiii),  each Plan which is intended to be a
                      --------------------
qualified  plan has been  determined  by the IRS to be qualified  under  Section
401(a),  and each trust  related to any such Plan has been so  determined  to be
exempt from  federal  income tax under  Section  501(a) of the Code prior to its
amendment  by the Tax  Reform  Act of 1986,  and such  Plan and  trust are being
operated in all material  respects in compliance with and will be timely amended
in  accordance  with  the  Tax  Reform  Act  of  1986  and  the  Omnibus  Budget
Reconciliation  Act  of  1987  as  interpreted  by the  regulations  promulgated
thereunder. Except as otherwise provided on Schedule 4.01(xiii) attached hereto,
                                            -------------------
neither the Borrower nor any ERISA  Affiliate  maintains or  contributes  to any
employee  welfare benefit plan within the meaning of Section 3(l) of ERISA which
provides  lifetime  benefits  to  retirees  other than as may be required by the
Consolidated  Omnibus  Budget   Reconciliation  Act  of  1985,  as  amended  and
interpreted by

                                       38
<PAGE>
regulations promulgated  thereunder.  No material accumulated funding deficiency
(as defined in Section 302(a)(2) of ERISA and Section 412(a) of the Code) exists
in respect to any  Benefit Plan.  The Borrower and any  ERISA  Affiliate and any
fiduciary  of  any  Plan  (a)  have  not  engaged  in  a  nonexempt  "prohibited
transaction"  described  in Section 406 of ERISA or Section 4975 of the Code and
(b) have not taken any action which would  constitute or result in a Termination
Event with respect to any Plan such that actions  under (a) or (b) or both would
result in a material obligation to pay money. Neither the Borrower nor any ERISA
Affiliate  have  incurred  any  material  liability  to the PBGC  which  remains
outstanding. Schedule B to the most recent annual report filed with the IRS with
respect  to each  Benefit  Plan and  furnished  to the  Lender is  complete  and
accurate.  Except as provided on Schedule 4.01(xiii) attached hereto,  since the
                                 -------------------
date of each such Schedule B, there has been no change in the funding  status or
financial condition of the Benefit Plan relating to such Schedule B. Neither the
Borrower  nor any ERISA  Affiliate  have  failed to make a required  installment
under  subsection  (m) of Section 412 of the Code or any other payment  required
under Section 412 of the Code on or before the due date for such  installment or
other  payment.  Neither the  Borrower nor any ERISA  Affiliate  are required to
provide  security to a Plan under  Section  401(a)(29) of the Code due to a Plan
amendment  that results in an increase in current  liability  for the plan year.
Neither the Borrower nor any ERISA  Affiliate are now  contributing or have ever
contributed to or been obligated to contribute to any Multiemployer Plan, and no
employees or former  employees of the Borrower and or any ERISA  Affiliate  have
been covered by any  Multiemployer  Plan in respect of their  employment  by the
Borrower and or any ERISA Affiliate,  and, accordingly,  the representations and
warranties in this subsection (xiii) do not apply to Multiemployer Plans.
                   -----------------

          (xiv)  Assets  and  Properties.   Substantially  all of the assets and
properties  owned by,  leased to or used by the Borrower in its business (a) are
in good operating  condition and repair  (ordinary wear and tear excepted),  (b)
are  free  and  clear  of any  known  defects  (except  such  defects  as do not
substantially  interfere with the continued use thereof in the conduct of normal
operations)  and (c) are able to serve the function for which they are currently
being  used,  in each  case  where  the  failure  of  such  asset  to meet  such
requirements  would not have or is not reasonably likely to result in a Material
Adverse Effect.

          (xv)   Insurance.  The Borrower  maintains with financially  sound and
reputable  insurers,  not related to or affiliated with the Borrower,  insurance
with respect to its Properties and business,  insured against such  liabilities,
casualties  and  contingencies  and in such types and amounts as is customary in
the case of  corporations  engaged in the same or a similar  business  or having
similar properties similarly situated.

          (xvi)  Title to Property.   The Borrower has good and marketable title
in fee simple to all Property  owned or purported to be owned by it,  including,
without  limitation,  all property  reflected in the most recent audited balance
sheet referred to in Section  4.01(xvii) hereof or submitted pursuant to Article
                     -------------------                                 -------
V (except as sold or otherwise  disposed of in the  ordinary  course of business
-
after the date of such balance sheet), in each case free and clear of all Liens,
other than Customary Permitted Liens.

          (xvii) Audited  Financial  Statements.   The  Borrower  has heretofore
furnished  to the Lender a  consolidated  balance  sheet of the Borrower and its
Subsidiaries dated as of

                                       39
<PAGE>
December 31, 1997, and the related statements of income,  cash flows and changes
in stockholders' equity for the Fiscal Year then ended, as examined and reported
on by its Independent Certified Public Accountant,  who delivered an unqualified
opinion in respect  thereof.  Such  financial  statements  (including  the notes
thereto)  present  fairly  the  financial  condition  of the  Borrower  and  its
Subsidiaries as of the end of such Fiscal Year and the results of its operations
and its cash flows for the Fiscal Year then ended,  all in conformity  with GAAP
(except as approved by such  accountants and as disclosed  therein) and complied
with as to form in all material respects with the applicable published rules and
regulations of the SEC.

          (xviii) Interim  Financial  Statements.   The  Borrower has heretofore
furnished to the Lender interim  consolidated balance sheets of the Borrower and
its  Subsidiaries  as of the end of its third Fiscal  Quarter of the Fiscal Year
beginning September 30, 1998, together with the related statements of income and
cash flows for the  applicable  fiscal  periods  ending on each such date.  Such
financial  statements present fairly the financial condition of the Borrower and
its  Subsidiaries as of the end of such Fiscal Quarters and the results of their
operations  and their cash  flows for the  fiscal  periods  then  ended,  all in
conformity  with  GAAP  (except  to the  extent  set  forth in the notes to said
financial   statements),   subject  to  normal  and  recurring   year-end  audit
adjustments  and  complied  with as to form in all  material  respects  with the
applicable published rules and regulations of the SEC.

          (xix)   Absence  of  Undisclosed  Liabilities.   The  Borrower  has no
liability or  obligation  of any nature  whatever  (whether  absolute,  accrued,
contingent  or  otherwise,  whether or not due),  unusual  forward or  long-term
commitments or unrealized or anticipated  losses from  unfavorable  commitments,
except (a) as disclosed in the financial statements referred to in Sections 4.01
                                                                   -------------
(xvii) and (xviii)  hereof,  (b) matters that,  individually or in the aggregate
------     -------
could not result in a Material  Adverse Effect and (c)  Contractual  Obligations
incurred in the ordinary course of the Borrower's business.

          (xx)    Margin Regulations.  No part of the proceeds of the  Revolving
Credit  Facility  will be used for the purpose of buying or carrying  any Margin
Stock,  or to extend  credit to others for the purpose of buying or carrying any
Margin Stock. The Borrower is not engaged in the business of extending credit to
others for the purpose of buying or  carrying  Margin  Stock.  The making of any
Revolving  Credit Loan and the use of proceeds of any such Revolving Credit Loan
will not violate or conflict with the  provisions of Regulation T, U or X of the
Federal  Reserve  Board,  as amended  from time to time.  The Borrower is not an
"investment   company"  registered  or  required  to  be  registered  under  the
Investment  Company Act of 1940, as amended,  nor is the Borrower  controlled by
such company.

          (xxi)   Labor  Matters.   Except  as set forth on  Schedule  4.01(xxi)
                                                             -------------------
attached  hereto,  the Borrower is not a party to any labor union or  collective
bargaining  agreements and is in material  compliance  with all applicable  Laws
respecting employment and employment practices,  including,  without limitation,
laws, regulations,  and judicial and administrative decisions relating to wages,
hours, conditions of work, collective bargaining,  health and safety, payment of
social security,  payroll,  withholding and other taxes, worker's  compensation,
insurance  requirements,  as well as requirements of ERISA and the  Consolidated
Omnibus Budget Reconciliation Act.

                                       40
<PAGE>
          (xxii)  Year 2000 Problem.   Borrower  reasonably  anticipates that it
will,  on a timely  basis,  successfully  resolve the Year 2000  Problem for all
material computer applications used by it and, if unable to successfully resolve
all or part of the Year 2000 Problem, the Year 2000 Problem will not result in a
Material Adverse Effect.

          (xxiii) Material Contracts.   Schedule 4.01(xxiii) lists all  material
contracts  relating to the business  operations  of the  Borrower and  Corporate
Guarantors.  All such material contracts are valid, binding and enforceable upon
the Borrower and/or  Corporate  Guarantors and each of the other parties thereto
in accordance with their respective  terms, and there is no default  thereunder,
to the Borrower's and/or Corporate Guarantors' knowledge.

     SECTION 4.02 SUBSEQUENT FUNDING REPRESENTATIONS AND WARRANTIES. In order to
induce the Lender to enter into this Loan Agreement and to make Revolving Credit
Loans,  the  Borrower  hereby  represents  and  warrants  to the Lender that the
statements  set forth in  sections  (i) through  (xxiii) of Section  4.01 hereof
                                                            -------------
(except to the extent that such statements (i) are made expressly only as of the
Closing Date or (ii) other than for changes  permitted or  contemplated  by this
Loan Agreement),  are true,  correct and complete in all material respects after
the Closing Date on and as of the Funding Date in respect of each Borrowing.

     SECTION 4.03 SEC FILINGS.  Borrower has heretofore delivered to Lender true
and complete  copies of (i)  Amendment No. 3 to Form SB-2, as filed with the SEC
on August 30, 1996, Form SB-2, as filed with the SEC on June 13, 1997, Amendment
No. 1 to Form SB-2,  as filed with the SEC on June 17, 1997, a Prospectus  dated
September  27,  1996,  and a Prospectus  dated June 26,  1997,  all filed by the
Borrower,  and (ii) all other reports or registration  statements filed with the
SEC, in each case as filed with the SEC.  Borrower has filed all required forms,
reports and  documents  with the SEC, all of which were  prepared in  accordance
with the requirements of the Securities Act and the Securities Exchange Act.


                                    ARTICLE V
                               REPORTING COVENANTS

     On and after the Closing Date and so long as the Borrower shall have any
Obligation  hereunder,  unless the Lender shall give its prior  express  written
consent to the effect otherwise, then:

     SECTION 5.01 STATEMENT OF ACCOUNTING.  The Borrower shall,  and shall cause
each of its Subsidiaries and Affiliates, as applicable,  (i) to make and to keep
books,  records and accounts which, in reasonable detail,  accurately and fairly
reflect their  respective  transactions  and  dispositions  of their  respective
assets and (ii) to maintain a system of internal  accounting controls sufficient
to  provide  reasonable   assurances  that  (a)  transactions  are  executed  in
accordance with management's general or specific authorization, (b) transactions
are recorded as necessary (1) to permit  preparation of financial  statements in
conformity with GAAP and any other accounting  principles applicable thereto and
(2) to maintain  accountability  for assets and (c) the recorded  accountability
for assets is compared  with the existing  assets at  reasonable  intervals  and
appropriate action is taken with respect to any differences.

                                       41
<PAGE>
     SECTION 5.02  REPORTING AND  INFORMATION  REQUIREMENTS.  The Borrower shall
deliver  or  cause  to be  delivered  to  the  Lender  the  following  financial
statements,  data,  reports  and  information,  at the  Borrower's  own cost and
expense:

          (i)    Annual  "Audited"  Consolidated  Financial  Statements  of  the
Borrower, the Corporate Guarantors and any Subsidiary. As soon as available, but
in any event within  ninety (90) days after the close of each Fiscal Year of the
Borrower,  "audited"  consolidated and consolidating  statements of income and a
statement of cash flows and a  consolidated  statement of retained  earnings for
the Borrower,  the Corporate  Guarantors and any Subsidiary for such Fiscal Year
and a  consolidated  and  consolidating  balance  sheet  of  the  Borrower,  the
Corporate Guarantors and any Subsidiary as of the close of such Fiscal Year, and
notes to each, all in reasonable  detail,  setting forth in comparative form the
corresponding  figures for the preceding Fiscal Year. Such financial  statements
shall  be  accompanied  by  an  opinion  of  the  Independent  Certified  Public
Accountant,  which opinion shall be signed by such Independent  Certified Public
Accountant.  The  opinion of such  accountants  shall be free of  exceptions  or
qualifications  not acceptable to the Lender,  and in any event shall be free of
any  exception or  qualification  which is of "going  concern" or like nature or
which  relates to a more  limited  scope of  examination  and shall be otherwise
acceptable  to the Lender.  In addition to the delivery of the annual  "audited"
consolidated  financial  statements,  the  Borrower  shall  also  deliver to the
Lender,  at the same time,  an  "unaudited"  management  prepared  consolidating
statement  of income and  retained  earnings  for the  Borrower,  the  Corporate
Guarantors and any Subsidiary for such Fiscal Year and a  consolidating  balance
sheet for the Borrowers , the Corporate  Guarantors and any Subsidiary as of the
close of such Fiscal  Year,  all  prepared  and  certified  to the Lender by the
Borrower's chief accounting officer in his capacity as an Authorized Officer.

          (ii)   Quarterly Management Prepared Consolidated Financial Statements
of the  Borrower,  the  Corporate  Guarantors  and  any  Subsidiary.  As soon as
available,  but in any event within forty-five (45) days after the close of each
of the  first  three  Fiscal  Quarters  of each  Fiscal  Year  of the  Borrower,
"unaudited"  management  prepared  consolidated and consolidating  statements of
income and a statement  of cash flows and  consolidated  statements  of retained
earnings and balance sheets for the Borrower,  the Corporate  Guarantors and any
Subsidiary for such Fiscal Quarter and for the period from the beginning of such
Fiscal Year to the end of such Fiscal Quarter,  and an "unaudited"  consolidated
and consolidating  balance sheet of the Borrower,  the Corporate  Guarantors and
any Subsidiary as of the close of such Fiscal Quarter,  all in reasonable detail
and with all  notes  and  supporting  schedules  to the  extent  required  to be
included  in  Borrower's  10-Q  or  10-QSB,  as  applicable,  setting  forth  in
comparative  form the  corresponding  figures  for the  corresponding  dates and
periods during the preceding  Fiscal Year, and certified by the Chief  Financial
Officer of the Borrower in his capacity as an  Authorized  Officer as presenting
fairly in all material  respects,  the financial  position of the Borrower,  the
Corporate  Guarantors  and any Subsidiary as of the end of such dates and fiscal
periods and the results of their  operations and the changes in their  financial
position and cash flows for such fiscal periods, in conformity with GAAP applied
in a manner consistent with that of the most recent audited financial statements
furnished  to the  Lender,  subject  to  normal  and  recurring  year-end  audit
adjustments.

                                       42
<PAGE>
          (iii)  Compliance  Certificates.   Together with each  delivery of any
financial statement pursuant to this Section 5.02(i) and Section 5.02(ii) above,
                                     ------------------------------------
an Officer's  Certificate of the Borrower  substantially  in the form of Exhibit
                                                                         -------
"D"  attached  hereto,  (a) stating  that the officer  signatory  thereto in his
---
capacity as an Authorized  Officer has reviewed the terms of this Loan Agreement
and the principal Loan  Documents,  and has made, or caused to be made under his
supervision,  a review in reasonable detail of the transactions and condition of
the Borrower,  taken as a whole,  during the  accounting  period covered by such
financial  statements,  and that such  review has not  disclosed  the  existence
during or at the end of such  accounting  period,  and that the signer  does not
have knowledge of the existence as at the date of the Officer's Certificate,  of
any condition or event which  constitutes an Event of Default or Potential Event
of Default, or, if any such condition or event existed or exists, specifying the
nature and period of  existence  thereof and what action the Borrower has taken,
is taking and proposes to take with  respect  thereto and (b)  demonstrating  in
reasonable detail compliance,  during and at the end of such accounting periods,
with the financial covenants contained in Article VIII of this Loan Agreement.
                                          ------------

          (iv)   Accountant's  Certificate.   Each set of  financial  statements
delivered  pursuant  to  Section  5.02(i)  hereof  shall  be  accompanied  by  a
                         ----------------
certificate  or  report  dated  the  date of such  financial  statements  by the
Independent  Certified Public Accountant who certified such financial statements
stating in substance  that they have  reviewed  this Loan  Agreement and that in
making the  examination  necessary  for their  certification  of such  financial
statements  they did not become aware of any Event of Default or Potential Event
of Default,  or if they did become so aware,  such  certificate  or report shall
state the nature and period of existence thereof. Such Accountant's  Certificate
shall not be required in connection with the delivery of the Borrower's 10-Q and
such Accountant's  Certificate shall be deemed to be acceptable to the Lender if
contained within the notes to such financial statements.

          (v)    Other Reports and  Information.  Promptly  upon their  becoming
available to the Borrower and in respect of those that are  material,  a copy of
                          --- -- ------- -- ----- ---- ---  --------
(a)  all  reports,   financial  statements  and  other  information  distributed
generally  by the Borrower to its  stockholders,  bondholders  or the  financial
community,  (b) all  accountants'  management  letters  pertaining to, all other
reports  submitted by accountants in connection with any audit of, and all other
material reports from outside accountants with respect to, the Borrower, and (c)
all reports submitted to Governmental  Authorities  and/or with respect to Plans
under ERISA,  except as prepared in the normal course of the Borrower's business
and where no material adverse action with respect thereto would result.

          (vi)   Further Information. The Borrower shall promptly furnish to the
Lender any business, financial or other information concerning the Borrower, the
Corporate  Guarantors,  any Subsidiaries  and/or any Affiliates which the Lender
may reasonably request from time to time in a form acceptable to the Lender.

          (vii)  Notice of Event of Default;  Notice of Material Adverse Change.
Promptly upon becoming aware of any Event of Default, Potential Event of Default
or  the   commencement,   existence   or  threat  of  any  action,   proceeding,
investigation  or arbitration  against or affecting the Borrower,  the Corporate
Guarantors, any Subsidiaries and/or any Affiliates which, if adversely

                                       43
<PAGE>
decided,  would result in a Material  Adverse  Effect on the  business,  assets,
operations or financial condition of the Borrower, the Corporate Guarantors, any
Subsidiary  and/or  any  Affiliate  taken as a whole,  or on the  ability of the
Borrower and/or the Corporate  Guarantors to perform their obligations under the
Loan  Documents,  the Borrower  shall give the Lender  written  notice  thereof,
together with a written statement of the President or Chief Financial Officer of
the Borrower in his capacity as an Authorized  Officer setting forth the details
thereof and any action with respect thereto taken or contemplated to be taken by
the Borrower.

          (viii) Notice  of Pension-Related Events.  The Borrower shall give the
Lender written notice within fifteen (15) days after the Borrower, any Corporate
Guarantors or an ERISA  Affiliate  knows,  has reason to know or receives notice
concerning (a) the occurrence of any Termination  Event; (b) the occurrence of a
non-exempt  prohibited  transaction  (as  defined  in  Section  406 of ERISA and
Section 4975 of the Code) or (c) any other ERISA-related event or action.

          (ix)   SEC Documents.  As soon as available,  true and complete copies
of any report or statement mailed by the Borrower to its stockholders  generally
or filed by the Borrower with the SEC subsequent to the date hereof.

          (x)    Business Plans, Financial Projections.  Within thirty (30) days
of the end of  Borrower's  Fiscal  Year,  Borrower  shall submit to the Lender a
Board of Directors  approved plan (including a projected  balance sheet,  income
statement and  statement of cash flow) of the Borrower,  which shall include the
Corporate  Guarantors and  Subsidiaries for the upcoming Fiscal Year in form and
substance as shall be reasonably satisfactory to Lender.


                                   ARTICLE VI
                              AFFIRMATIVE COVENANTS
                              ---------------------

     The Borrower  covenants  and agrees that, on and after the Closing Date and
until  payment in full of all of the  Obligations,  unless the Lender shall give
its prior express written consent to the effect otherwise, then:

     SECTION 6.01 CORPORATE EXISTENCE, ETC.  The Borrower shall, and shall cause
the Corporate  Guarantors to, do or cause to be done all things necessary (i) to
maintain their respective  status as a corporation duly organized,  existing and
in  good  standing  under  the  laws  of  their   respective   jurisdiction   of
incorporation,  and (ii) to preserve  and to keep in full force and effect their
respective  rights and franchises unless the failure to maintain such rights and
franchises  would not result in a Material  Adverse  Effect.  The Borrower shall
promptly provide the Lender with a complete  up-to-date list of all Subsidiaries
and Affiliates of the Borrower and the Corporate Guarantors.

     SECTION 6.02 CORPORATE POWERS, ETC. The Borrower shall, and shall cause the
Corporate  Guarantors to, do or cause to be done all things necessary to qualify
and remain  qualified  to conduct  business  in each  jurisdiction  in which the
nature of their  respective  businesses or the ownership of their  properties or
both requires them to be so qualified.  The Borrower shall, and

                                       44
<PAGE>
shall  cause the  Corporate  Guarantors  to,  do or cause to be done all  things
necessary to transact business in their own names and shall invoice all accounts
in their own name.

     SECTION 6.03 COMPLIANCE WITH LAWS, ETC. The Borrower shall, and shall cause
the Corporate  Guarantors  (i) to comply with all  Requirements  of Law, and all
restrictive covenants affecting them or their businesses,  properties, assets or
operations  and (ii) to  obtain  as  needed  all  Permits  necessary  for  their
operations,  and maintain  such Permits in good  standing,  except to the extent
non-compliance  with this  Section  6.03 would not result in a Material  Adverse
                           -------------
Effect.

     SECTION 6.04 PAYMENT OF TAXES AND CLAIMS.  The  Borrower  shall,  and shall
cause  the  Corporate  Guarantors  to,  pay or cause  to be paid (i) all  taxes,
assessments and other governmental  charges imposed upon them or on any of their
respective  properties  or  assets  or in  respect  of any of  their  respective
franchises,  business, income or property before any penalty or interest accrues
thereon and (ii) all Claims (including,  without  limitation,  claims for labor,
services,  materials  and  supplies),  for sums material in the aggregate to the
Borrower  and the  Corporate  Guarantors,  which have become due and payable and
which by Law have or may become a Lien (other than a Customary  Permitted  Lien)
upon their  Property,  prior to time when any  penalty or fine shall be incurred
with respect thereto;  provided,  however,  that no such taxes,  assessments and
governmental  charges  referred to in clause (i) above or Claims  referred to in
                                      ----------
clause (ii) above need be paid if being  contested in good faith by  appropriate
-----------
proceedings  promptly  instituted  and  diligently  conducted  and  if  adequate
reserves shall have been set aside therefor in accordance with GAAP.

     SECTION 6.05 MAINTENANCE OF PROPERTIES;  INSURANCE. The Borrower shall, and
shall cause the Corporate  Guarantors to,  maintain or cause to be maintained in
good repair, working order and condition,  excepting ordinary wear and tear, all
of their  respective  Properties  material to their  operations and will make or
cause to be made all appropriate  repairs,  renewals and  replacements  thereof,
consistent with past practice. The Borrower shall, and shall cause the Corporate
Guarantors,  to maintain or cause to be maintained  with  financially  sound and
reputable insurers reasonably  acceptable to the Lender,  insurance policies and
programs  currently  in place  and in full  force and  effect  or  substantially
similar programs or policies and amounts or other programs, policies and amounts
acceptable  to the  Lender.  Not later  than  thirty  (30) days  later  than the
renewal,  replacement  or material  modification  of any policy or program,  the
Borrower  shall deliver or cause to be delivered to the Lender a certificate  of
insurance setting forth for each such policy or program:  (i) the amount of such
policy,  (ii) the risks  insured  against by such policy,  (iii) the name of the
insurer and each insured  party under such policy and (iv) the policy  number of
such policy.

     SECTION 6.06 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCLOSURE.  Except
for  information  and records  which the Borrower may not under  applicable  Law
disseminate or disclose to the Lender,  the Borrower shall,  and shall cause the
Corporate Guarantors, any Subsidiary and any Affiliate to, permit any authorized
representative(s) designated by the Lender to visit, to conduct a field audit or
to otherwise inspect any of the Borrower's Properties, including their financial
and accounting records,  and to make copies and take extracts therefrom,  and to
discuss the Borrower's,  the Corporate  Guarantors',  any  Subsidiaries' and any
Affiliate's   affairs,   finances  and  accounts  with  the  Lender's  officers,
employees, representatives or


                                       45
<PAGE>
independent  certified  public  accountants,  upon reasonable  notice and during
normal  business  hours.  Each such visitation and inspection by or on behalf of
the Lender shall be at the Lender's own cost and expense, provided,  however, if
an Event of Default has occurred or is continuing,  the Lender may do any of the
foregoing at the Borrower's  expense  without notice and during normal  business
hours.

     SECTION 6.07  LITIGATION,  CLAIMS,  ETC.,  The Borrower  shall  provide the
Lender  with (i) a  litigation  status  report,  in a form  satisfactory  to the
Lender,  with respect to any new litigation  (whether at law or in equity) which
is asserted  against the Borrower,  the  Corporate  Guarantors,  any  Subsidiary
and/or  any  Affiliate  involving  potential  claims in excess of  $1,000,000.00
promptly after the close of each Fiscal Quarter;  (ii) notice of any suit at law
or in equity or claim brought or asserted  against the  Borrower,  the Corporate
Guarantors, any Subsidiary and/or any Affiliate, promptly after learning thereof
with respect to any suit or claim  involving  money or property valued in excess
of $500,000.00 or any such suits or claims which in the aggregate  involve money
                                                 ----------------
or property  valued in excess of  $1,000,000.00;  and (iii) prompt notice of any
investigation or proceeding before or by any Governmental Authority,  the effect
of which is reasonably likely to result in a Material Adverse Effect.

     SECTION 6.08  MAINTENANCE OF LICENSES, PERMITS, ETC.,   The Borrower shall,
and shall  cause the  Corporate  Guarantors  to, (i)  maintain in full force and
effect  all  Permits  or  other  rights  necessary  for the  operation  of their
businesses,  except where the failure to obtain any of the  foregoing  would not
result in or is not reasonably likely to result in a Material Adverse Effect and
(ii) notify the Lender in  writing,  promptly  after  learning  thereof,  of the
suspension,  cancellation,  revocation or discontinuance of or of any pending or
threatened  action  or  proceeding  seeking  to  suspend,   cancel,   revoke  or
discontinue any Permit where the result thereof could  reasonably be expected to
result in a Material Adverse Effect.

     SECTION 6.09  CONTINUATION  OF OR CHANGE IN  BUSINESS.  Except as permitted
pursuant to Section  7.02,  the Borrower  shall,  and shall cause the  Corporate
            -------------
Guarantors to continue to engage in their respective businesses substantially as
conducted  and operated  during the present and preceding  Fiscal Year,  and the
Borrower  shall,  and shall cause the Corporate  Guarantors to not engage in any
other business.

     SECTION 6.10 ADDITIONAL CORPORATE GUARANTORS. The Borrower shall cause each
domestic and foreign  operating (i) Majority Owned  Subsidiary or (ii) Affiliate
in which the  Borrower is the owner  (whether  legal or  beneficial  and whether
direct or indirect) of at least fifty percent  (50%) or more of the  authorized,
issued  and  outstanding  common  stock  of said  Affiliate,  or  other  form of
ownership  interest in the event the  Affiliate is not a  corporation,  which is
acquired  or formed  after the  Closing  Date,  to enter  into and  execute  the
Agreement of Guaranty,  thereby  becoming a Corporate  Guarantor.  Schedule 6.10
                                                                   -------------
contains a current list of Corporate Guarantors as of the date hereof.

     SECTION 6.11 YEAR 2000. The Borrower shall, and shall cause each Subsidiary
to,  take all action  necessary  to assure  that such  Borrower's  and each such
Subsidiary's  computer-based  systems  are  able  to  effectively  process  data
including  dates prior to, on, and after January 1, 2000 such that there will be
no Material Adverse Effect.  At the request of the Lender, the Borrower

                                       46
<PAGE>
shall provide the Lender with assurance  reasonably  acceptable to the Lender of
the Borrower's or any  Subsidiary's  capabilities  with respect to the Year 2000
Problem.

     SECTION 6.12 FURTHER ACTS.  Within forty-five (45) days of the date hereof,
the Borrower shall take, at its own expense, all actions necessary to deliver to
Lender,  opinions of counsel  and the  Agreements  of  Guaranty of  Intelligroup
Australia Pty Limited and  Intelligroup  Singapore  Private Ltd.,  acceptable in
form and substance to Lender, with respect to the Agreements of Guaranty stating
that, among other things, the Agreements of Guaranty constitute the legal, valid
and binding  obligations of each Corporate  Guarantor,  enforceable against such
party in accordance with its terms, the Corporate  Guarantors have all requisite
corporate power and authority to perform their  obligations under the Agreements
of Guaranty and neither the performance of the Corporate Guarantors' obligations
or  consummation of the  transaction  under the Loan Documents  resulted or will
result in a breach of any certificate of  incorporation or by-laws or comparable
document or any rules, regulations or local law to which any Corporate Guarantor
is subject.  Further,  the Borrower shall take all actions  necessary within the
above time, to deliver the original  certificates  of stock to be pledged to the
Lender in  accordance  with the  Pledge  Agreements  executed  contemporaneously
herewith along with all instruments and agreements to effect transfer thereof to
Lender.  Failure of the  Borrower to comply with the terms of this  Section 6.12
may, at the Lender's sole  discretion,  result in an Event of Default  hereunder
and the Lender may avail itself of such rights and remedies provided herein


                                   ARTICLE VII
                               NEGATIVE COVENANTS
                               ------------------

     The Borrower  covenants  and agrees that, on and after the Closing Date and
until  payment in full of all of the  Obligations,  unless the Lender shall give
its prior written consent to the effect otherwise, then:

     SECTION 7.01 ADDITIONAL LIENS. The Borrower shall not, and shall not permit
any of the Corporate Guarantors to, directly or indirectly create, incur, assume
or  permit  to exist  any  Lien on or with  respect  to any of their  respective
Properties except:

                  (i)   Liens, if any, created under the Loan Documents;

                  (ii)  Any  interest  or  title of a  lessor  or  secured  by a
lessor's interest under any lease permitted by this Loan Agreement;

                  (iii) Liens existing on the date of this Loan Agreement as set
forth on Schedule  7.01 and Liens  existing  on the date of this Loan  Agreement
securing  the  existing  Debt (as set forth on Schedule  7.04)  permitted  to be
                                               --------------
secured  (but said Liens may not be renewed,  extended or increased in principal
amount);

                  (iv)  Customary Permitted Liens;

                  (v)   Purchase  money   Liens  securing  Debt  (including  the
interest of a

                                       47
<PAGE>
lease under a  Capitalized  Lease)  permitted  pursuant to Section 7.04(iv); and
                                                           ---------------

                  (vi)  Liens on the property or assets of a  corporation  which
becomes a Subsidiary  after the date hereof securing Debt permitted by paragraph
7.04(vii),  provided  that (1) such Liens  existed at the time such  corporation
became a Subsidiary and were not created in anticipation of the acquisition, (2)
any such Lien does not by its terms cover any  property or assets after the time
such corporation  becomes a Subsidiary which were not covered  immediately prior
thereto,  and (3) any such Lien does not by its terms secure any Debt other than
Debt  existing  immediately  prior  to  the  time  such  corporation  becomes  a
Subsidiary.

     SECTION 7.02 MERGERS, CONSOLIDATIONS, ACQUISITIONS AND SALES OF ASSETS.

          (i)    The Borrower (a) will not consolidate  or merge with any Person
 
or acquire the stock or assets of any Person  whether by merger,  consolidation,
purchase of stock or otherwise, and (b) will not, and will not permit any of the
Corporate  Guarantors  to,  sell,  otherwise  dispose  of or  lease  all  or any
substantial  part (as  defined  in  paragraph  (ii)  below) of the assets of the
Borrower and the Corporate Guarantors taken as a whole, provided, however, that
                                                        --------  -------
any Corporate  Guarantor may sell,  otherwise  dispose of or lease its assets to
the Borrower or any other Corporate Guarantor;  and provided,  further, that the
Borrower may  consolidate,  merge or acquire (by way of acquisitions of stock or
other equity  interests  or transfer of property)  any other entity or may sell,
otherwise  dispose of or lease all or  substantially  all of such  assets if (1)
either (A) in the case of a merger or  consolidation,  the Borrower shall be the
surviving  or  continuing  corporation,  or (B)  the  corporation  formed  by or
resulting  from  such  merger  or  consolidation,  if not the  Borrower,  or the
corporation to which such assets shall have been sold,  otherwise disposed of or
leased,  shall be a corporation  organized  under the laws of the United States,
any state of the United  States or the District of Columbia and shall  expressly
assume  the  obligations  of the  Borrower  hereunder  and such  Persons  are in
substantially  the same  business as the  Borrower,  and (2) at the time of such
consolidation, merger, acquisition or such sale, disposition or lease and before
or after giving  effect  thereto,  on a pro forma basis,  no Event of Default or
Potential Event of Default shall have occurred and be continuing.

          (ii)   As used in this Section  7.02,  a sale,  other  disposition  or
                                 -------------
lease of assets shall be deemed to cover a  "substantial  part" of the assets of
the Borrower and the Corporate Guarantors only if, on a pro forma basis, the net
book value of such assets  when added to the net book value of all other  assets
sold,  otherwise  disposed  of or  leased  by the  Borrower  and  the  Corporate
Guarantors during any Fiscal Year of such sale, other disposition or lease, on a
consolidated basis exceeds twenty-five (25%) percent of the consolidated assets.
                   -------

          (iii)  Not  less than  fifteen  (15) days prior to the funding of each
such acquisition, the Borrower shall deliver to Lender a certificate from one of
the Authorized  Officers certifying that after giving effect to such acquisition
and the incurrence of any  indebtedness  hereunder and permitted by Section 7.04
                                                                    ------------
in connection  therewith,  on a pro forma basis,  as if the acquisition and such
incurrence  of  indebtedness  had  occurred on the first day of the twelve month
period ending on the last day of the Borrower's most recently  completed  Fiscal
Quarter,  the Borrower  would have been in compliance  with all of the covenants
contained  in this  Agreement,  including,  without  limitation,  the  financial
covenants set forth in Article 8.

                                       48
<PAGE>
Such  certificate  shall include a spread sheet  containing the calculations for
such  financial  covenants  and a  pro  forma  consolidated  balance  sheet  and
statement  of  earnings  and  retained  earnings  after  giving  effect  to such
acquisition  along  with all  documentation  evidencing  the  nature and type of
indebtedness in conjunction with such acquisition.

     SECTION  7.03 LOANS AND  INVESTMENTS.  Borrower  shall  not,  and shall not
permit any of the Corporate  Guarantors at any time to purchase,  acquire or own
any stock,  bonds, notes or securities of, or any partnership  interest (whether
general  or  limited)  in,  or any  other  interest  in,  or  make  any  capital
contribution  to, any other  Person,  or become a joint  venture  partner in any
joint venture (provided that Borrower may make joint venture  investments not to
exceed an  aggregate  of  $1,000,000.00  at any one time),  or agree,  become or
remain liable to do any of the foregoing, except for: (a) debt securities having
a maturity of not more than one year issued or  guaranteed  by the United States
government  or by an agency or  instrumentality  thereof;  (b)  certificates  of
deposit, bankers acceptances and time deposits, which in each case mature within
one year from the date of  purchase  thereof  and  which are  issued by a lender
acceptable to Lender; (c) commercial paper maturing in two hundred-seventy (270)
days or less from the date of  issuance  which,  at the time of  acquisition  by
Borrower either (i) is accorded the highest rating by Standard and Poor's Rating
Group or Moody's  Investor's  Service,  Inc.,  or (ii) is issued by Lender,  (d)
direct   obligations   of  the  United  States  of  America  or  any  agency  or
instrumentality  of the United  States of America,  the payment or  guarantee of
which  constitutes  a full faith and credit  obligation  of the United States of
America,  in  each  case  maturing  in 12  months  or  less  from  the  date  of
acquisition,  provided that the amounts  otherwise  permitted under this section
shall not exceed $5,000,000.00  outstanding at any time and shall be approved by
a majority of the Board of Directors of the  Borrower,  (e)  extensions of trade
credit to customers in the ordinary course of business, (f) loans to officers of
the Borrower in an aggregate  principal  amount  outstanding  at any time not to
exceed  $250,000.00,  (g) loans and advances to employees of the Borrower or its
Subsidiaries for travel,  entertainment and relocation  expenses in the ordinary
course of business in an aggregate  amount for the Borrower and its Subsidiaries
not to exceed $250,000.00 at any one time outstanding,  (h) Capital Stock of any
Subsidiary,   (i)  loans  and  advances  by  the  Company  to  its  wholly-owned
Subsidiaries,  and (j) loans by the Borrower to its employees in connection with
management  incentive  plans in an aggregate  amount not to exceed  $250,000.00,
provided that the aggregate amount of such loans outstanding at any time may not
exceed $250,000.00.

     SECTION 7.04 INDEBTEDNESS. The Borrower shall not, and shall not permit any
of its Subsidiaries to create, incur, assume or suffer to exist any Debt except:

          (i)    Debt under the Loan Documents;

          (ii)   Existing  Debt as set forth on  Schedule  7.04  (including  any
                                                 --------------
extensions,  renewals or modifications  thereof provided there is no increase in
the  amount  thereof or other  significant  change in the terms  thereof  unless
otherwise specified on Schedule 7.04);
                       -------------

          (iii)  Debt  which   is  subordinated  to  the  Obligations  on  terms
approved by the Lender in writing;

                                       49
<PAGE>
          (iv)   additional  Debt secured by  purchase money security  interests
having an aggregate principal amount not to exceed $2,500,000.00 at any time;

          (v)    other Debt having an  aggregate principal  amount not to exceed
$3,000,000.00 at any time provided the Debt allowed in this Subsection (v) shall
not be on terms more  favorable than the material terms set forth herein and the
Borrower shall have availability under the Revolving Credit Facility equal to at
all times, the amount of such outstanding Debt;

          (vi)   Debt  consisting of unsecured  overdraft  facilities to foreign
Subsidiaries not to exceed $500,000.00 in the aggregate outstanding at any time;
and

          (vii)  Debt of a  Person  which  becomes a  Subsidiary  after the date
hereof, provided that:

                 (1)  such  Debt  existed  at the  time  such  Person  became  a
Subsidiary and was not created in anticipation of such acquisition;

                 (2)  immediately after giving effect to the acquisition of such
Person by the Borrower or its  Subsidiaries,  no  Potential  Event of Default or
Event of Default shall occur and be continuing;

                 (3)  the  remaining  amount of all such Debt does not exceed in
the aggregate (collectively for all such Persons which became a Subsidiary after
the date hereof) ten (10%) percent of the Consolidated Net Worth of the Borrower
and Subsidiaries;

                 (4)  liens  securing  such  Debt (if any)  shall not  extend to
cash, marketable securities,  accounts receivable,  inventory,  work in process,
contracts receivable,  patents,  trademarks, notes receivable or any such assets
of such Person that would be properly categorized as current assets according to
GAAP;

                 (5)  such  Debt  is  not  guaranteed  by the  Borrower  or  any
Subsidiaries;

                 (6)  such  Debt is  not  payable  to  selling  shareholders  or
Persons owned by or controlled by selling  shareholders  or other Persons unless
subordinated to Lender on terms approved by Lender in writing; and

                 (7)  such Debt would not be subject to acceleration of maturity
or cause an Event of Default under  existing loan  documents as a result of such
acquisition by the Borrower.

     SECTION 7.05 ERISA.   The  Borrower  shall not, and shall not permit any of
ERISA  Affiliates  to, do any of the  following  to the extent  that such act or
failure to act would  result in the  aggregate,  after  taking into  account any
other such acts or failures to act, in a  obligation  to pay a sum of money that
is material to the business of the Borrower and/or the Corporate Guarantors:

                                       50
<PAGE>
          (i)    Engage,  or  permit  an  ERISA  Affiliate  to  engage,  in  any
prohibited  transaction described in Section 406 of ERISA or Section 4975 of the
Code for which a class exemption is not available or a private exemption has not
been obtained from the DOL;

          (ii)   Permit to exist any accumulated  funding deficiency (as defined
in Section 302 of ERISA and Section 412 of the Code), whether or not waived;

          (iii)  Fail,  or permit an  ERISA  Affiliate  to fail,  to pay  timely
required  contributions  or annual  installments  due with respect to any waived
funding deficiency to any Plan;

          (iv)   Terminate,  or permit an  ERISA  Affiliate  to  terminate,  any
Benefit Plan which would result in any liability of the Borrower,  the Corporate
Guarantors or an ERISA Affiliate under Title IV of ERISA; or

          (v)    Fail, or  permit  any  ERISA  Affiliate  to  fail, to  pay  any
required  installment  under section (m) of Section 412 of the Code or any other
payment  required  under  Section  412 of the Code on or before the due date for
such installment or other payment.

     SECTION  7.06  AMENDMENT  OF ARTICLES  OF  INCORPORATION  OR  BY-LAWS.  The
Borrower  shall not, and shall not permit the  Corporate  Guarantors  to, amend,
modify or supplement  their  respective  articles of  incorporation  or By-Laws,
except upon at least ten (10) Business Days' prior express written notice to the
Lender.

     SECTION 7.07 MARGIN REGULATIONS.  The Borrower shall not permit any portion
of the proceeds of any Revolving  Credit Loans extended to be used in any manner
which might cause the extension of credit or the application of such proceeds to
violate  Regulation  U or  Regulation X or any other  regulation  of the Federal
Reserve Board or to violate the Securities  Exchange Act or the Securities  Act,
in each case as in effect  on the date or dates of such  Borrowing,  such use of
proceeds, such creation or such issuance.

     SECTION 7.08 CANCELLATION OF DEBT; PREPAYMENT.  The Borrower shall not, and
shall not permit the Corporate  Guarantors to, cancel any Claim or Debt,  except
for  adequate  consideration  and in the  ordinary  course  of their  respective
businesses,  or to  prepay  any  long-term  Debt;  provided,  however,  that the
                                                   --------   -------
foregoing shall not prohibit the prepayment of the Obligations.

     SECTION 7.09 ENVIRONMENTAL  LIABILITIES.  The Borrower shall not, and shall
not permit the Corporate  Guarantors to, become subject to any  Liabilities  and
Costs which the Lender deems has or is likely to have a Material  Adverse Effect
arising  out of or  related  to (i) the  Release  or  threatened  Release at any
location of any  Environmental  Concern  Material into the  Environment,  or any
Remedial Action in response thereto,  or (ii) any violation of any Environmental
Law, or any health or safety Requirement of Law; provided that this Section 7.09
                                                 -------- ----      ------------
shall not be violated so long as (a) the Borrower shall have notified the Lender
of the  assertion  of such  liability  or required  expenditures  promptly  upon
receiving  written  notice  of such  assertion,  (b)  the  Borrower  shall  have
continued to furnish the Lender with such  information  concerning such asserted
liability or required expenditure as the Lender shall have reasonably requested,
or


                                       51
<PAGE>
as otherwise  provided  herein,  (c) the Borrower  shall be diligently  pursuing
indemnification  for such  liability  or required  expenditures  from any Person
which has an obligation to provide such  indemnification,  and (d) the Lender is
satisfied  that the  imposition  of such  liability  during the  pendency of the
Borrower's pursuit of indemnification  will not materially impair the Borrower's
ability to perform its financial obligations under this Loan Agreement.

     SECTION 7.10 FISCAL YEAR.  The Borrower shall not, and shall not permit the
Corporate  Guarantors  to, change their  respective  Fiscal Year or permit their
respective Fiscal Year to end on a day other than December 31st.

     SECTION 7.11  GUARANTIES.  The Borrower shall not, and shall not permit the
Corporate  Guarantors  to assume,  guaranty,  endorse or  otherwise be or become
directly or contingently responsible or liable, for any Contingent Obligation of
any Person, except for:

          (i)   Contingent Obligations existing on the Closing Date as described
on Schedule 7.11(i) attached hereto;
   ----------------

          (ii)   Contingent Obligations by endorsement of negotiable instruments
for deposit or  collection  or similar  transactions  in the ordinary  course of
business; and

          (iii)  Contingent  Obligations  incurred  in  the  ordinary  course of
business after the date hereof in an aggregate amount not to exceed  $750,000.00
at any time outstanding.

     SECTION  7.12 CHANGE IN  BUSINESS.  The  Borrower  shall not, and shall not
permit the  Corporate  Guarantors  to cause or permit a  material  change in the
nature  or  scope of their  businesses  as  conducted  on the  Closing  Date and
businesses  directly  related to such  businesses  and their  primary  source of
revenue shall be derived from information  technology and management consulting,
software development and associated services and products.

     SECTION 7.13 OTHER NEGATIVE PLEDGES.  The Borrower shall not, and shall not
permit the Corporate Guarantors to incur, create or permit to exist any negative
pledge in any other  agreement  entered  into  between the Borrower or Corporate
Guarantor(s)  with any other  Person  except  where the  Borrower  or  Corporate
Guarantor may enter into an agreement in connection  with any Lien  permitted by
this  Agreement when such  prohibition  or limitation is by its terms  effective
only against the assets subject to such Lien.


                                  ARTICLE VIII
                               FINANCIAL COVENANTS
                               -------------------

     The Borrower  covenants  and agrees that, on and after the Closing Date and
until  payment in full of all the  Obligations  unless the Lender shall give its
prior written consent to the effect otherwise, then:

     SECTION 8.01 MAXIMUM  CONSOLIDATED  CASH FLOW LEVERAGE RATIO.  The Borrower
shall  maintain a  Consolidated  Cash Flow Leverage  Ratio equal to or less than
2.50 to 1.0 for the


                                       52
<PAGE>
period of four (4) consecutive Fiscal Quarters  immediately  preceding said date
of determination taken together as one accounting period.

     SECTION 8.02 MINIMUM  CONSOLIDATED NET WORTH. The Borrower shall maintain a
Consolidated  Net  Worth  as of  not  less  than  ninety  (90%)  percent  of the
Consolidated  Net Worth as of September  30, 1998,  plus fifty (50%)  percent of
                                                    ----
positive net income commencing October 1, 1998 and thereafter at the end of each
Fiscal Year, to be not less than Consolidated Net Worth of the prior Fiscal Year
plus fifty (50%) percent of positive net income for such Fiscal Year.

     SECTION 8.03 CAPITAL  EXPENDITURES.  The Borrower  shall not enter into any
agreement  to purchase  and/or pay for, or become  obligated  to pay for capital
expenditures, long term leases, Capital Leases or sale lease-backs, in an amount
at any time outstanding aggregating in excess of $5,000,000.00 during any Fiscal
Year, provided however, on a one (1) year carry-forward  basis, the Borrower may
incur Capital Expenditures not to exceed $8,000,000.00 during any Fiscal Year.

     SECTION 8.04 MINIMUM FIXED CHARGE  COVERAGE  RATIO.  The Borrower shall not
cause or permit the ratio, calculated on the basis of a rolling four quarters of
(a) Consolidated  EBITDA to (b) the sum of cash income tax expense plus interest
                                                                   ----
expense (including,  without  limitation,  the interest component of Capitalized
Lease  Obligations),  plus scheduled  principal  payments under any indebtedness
                      ----
(including,  without  limitation,  the principal  component of Capitalized Lease
Obligations  but  excluding  principal  payments,  if any,  due under  this Loan
Agreement), plus dividends or distributions paid or declared to be less than 1.4
            ----
to 1.0 as at the end of each Fiscal Quarter.


                                   ARTICLE IX
                     EVENTS OF DEFAULT; RIGHTS AND REMEDIES
                     --------------------------------------

     SECTION  9.01 EVENTS OF DEFAULT.  The  occurrence  of any of the  following
events  with  the  passing  of any  applicable  notice  and cure  periods  shall
constitute an "Event of Default" under this Loan Agreement (hereinafter referred
to as an "Event of Default"):

          (i)    any representation  or warranty  made by the Borrower or any of
the  Corporate  Guarantors  or any  other  Person  in any of the Loan  Documents
furnished in connection with the Revolving Credit Facility,  shall prove to have
been false,  incorrect or misleading in any substantial and material  respect on
the date as of which made;

          (ii)   the  Borrower  shall  have  failed to make any  payment  of any
installment  of interest on the  Revolving  Credit Loan Note more than three (3)
days after its due date;

          (iii)  the  Borrower  shall   have  failed  to  make  any  payment  of
principal on the Revolving Credit Loan Note on its due date;

          (iv)   the  Borrower  or any of the  Corporate  Guarantors  shall have
failed to duly observe or perform any  covenant,  condition  or  agreement  with
respect to the payment of moneys

                                       53
<PAGE>
on their part which is to be observed or performed  pursuant to the terms of the
Loan Documents,  other than the payment of principal and interest which shall be
governed by (ii) and (iii) above,  and such default shall have remained  uncured
for a period of fifteen (15) days after written  notice  thereof to the Borrower
or such Corporate Guarantors by the Lender;

          (v)    the  Borrower or any of the  Corporate  Guarantors  shall  have
failed to duly observe any of the financial  covenants set forth in Article VIII
                                                                    ------------
hereof as of any date of determination;

          (vi)   the  Borrower  or any of the  Corporate  Guarantors  shall have
failed to duly  observe or perform any  covenant,  condition or agreement on the
part of the Borrower or such  Corporate  Guarantors  to be observed or performed
pursuant  to the terms of the Loan  Documents  other than the  payment of moneys
which  shall be governed by Section  9.01 (ii),  (iii) and (iv) above,  and such
                            -----------------------------------
default  shall  have  remained  uncured  for a period of thirty  (30) days after
written  notice  thereof to the  Borrower or such  Corporate  Guarantors  by the
Lender;

          (vii)  the  Borrower or any of the  Corporate  Guarantors  shall  have
applied  for or  consented  to the  appointment  of a  custodian,  receiver,  or
liquidator of all or a substantial part of their respective  assets; a custodian
shall have been appointed with or without  consent of the Borrower and/or any of
the Corporate  Guarantors;  the Borrower and/or any of the Corporate  Guarantors
shall  generally  not be paying their  respective  Debts as they become due; the
Borrower  and/or  any of the  Corporate  Guarantors  shall  have  made a general
assignment for the benefit of their  respective  creditors;  the Borrower and/or
any of the  Corporate  Guarantors  shall  have  filed a  voluntary  petition  in
bankruptcy,  or a petition or an answer seeking reorganization or an arrangement
with their respective creditors, or shall have taken advantage of any insolvency
law,  or shall have filed an answer  admitting  the  material  allegations  of a
petition in bankruptcy,  reorganization or insolvency proceeding;  a petition in
bankruptcy  shall  have  been  filed  against  the  Borrower  and/or  any of the
Corporate  Guarantors  and shall not have been  dismissed  for a period of sixty
(60)  consecutive  days,  or an order for relief  shall have been entered by the
appropriate  bankruptcy  court against the Borrower  and/or any of the Corporate
Guarantors under the Bankruptcy Code; or an order, judgment or decree shall have
been entered without the application, approval or consent of the Borrower and/or
any  of  the  Corporate  Guarantors  by  any  court  of  competent  jurisdiction
appointing a receiver,  trustee,  custodian or liquidator of the Borrower and/or
any of the Corporate  Guarantors  of a  substantial  part of its assets and such
order,  judgment or decree shall have  continued  unstayed and in effect for any
period of sixty (60) consecutive days;

          (viii) writ of execution or  attachment or any  similar  process shall
be  issued  or  levied  against  all or any  part of or  interest  in any of the
Properties  of  the  Borrower  and/or  any of the  Corporate  Guarantors  or any
judgment involving monetary damages shall be entered against the Borrower and/or
any of the Corporate  Guarantors  which shall become a lien on the Borrower's or
any of said Corporate Guarantor's  Properties or any portion thereof or interest
therein  and such  execution,  attachment  or similar  process is not  released,
bonded, satisfied,  vacated or stayed within thirty (30) days after its entry or
levy,  and said writ of execution,  attachment,  levy or judgment  shall involve
monetary damages aggregating more than $1,000,000.00;

                                       54
<PAGE>
          (ix)   seizure or foreclosure of any of the Properties of the Borrower
and/or any of the  Corporate  Guarantors  pursuant to process of law or by legal
self-help,  involving  monetary  damages  aggregating  more than  $1,000,000.00,
unless said seizure or  foreclosure  is stayed or bonded within thirty (30) days
after the occurrence of same;

          (x)    the voluntary  permanent  closing  of  business  or  ceasing of
operations of the Borrower and/or any of the Corporate Guarantors;

          (xi)   default by the Borrower and/or any of the Corporate  Guarantors
in any  of  the  terms  or  conditions  of any  agreement  (excluding  the  Loan
Documents)  covering  the payment of borrowed  money from the Lender  and/or any
other  creditor  (which with respect to any other creditor shall be in an amount
involving not less than  $1,000,000.00),  which default has been declared by the
Lender or said other creditor,  and said Debt with respect to any other creditor
shall have been accelerated;

          (xii)  the  occurrence  of a  Reportable  Event  with  respect to  the
Borrower and/or any of the Corporate Guarantors; or

          (xiii) a Change in Control shall occur.

     SECTION 9.02 RIGHTS AND REMEDIES.

          (i)    Acceleration. Upon the occurrence and during the continuance of
any Event of Default described in the foregoing  Section  9.01(vii) hereof,  the
                                                 ------------------
Revolving Credit Facility shall automatically and immediately  terminate and the
unpaid  principal  amount of any and all  accrued  interest  and fees due on the
Revolving Credit Loans outstanding shall  automatically  become  immediately due
and payable,  with all additional interest from time to time accrued thereon and
without  presentment,  demand,  or  protest  or other  requirements  of any kind
(including,   without   limitation,   valuation  and  appraisement,   diligence,
presentment, notice of intent to demand or accelerate and of acceleration),  all
of which are hereby expressly waived by the Borrower,  and the obligation of the
Lender to make any Revolving  Credit Loans hereunder shall thereupon  terminate.
Upon the  occurrence  and during the  continuance  of any other Event of Default
described  in Section  9.01  above,  the  Lender  may by  written  notice to the
              -------------
Borrower,  (a)  declare  that  the  Revolving  Credit  Facility  is  terminated,
whereupon  the  obligation  of the  Lender to make any  Revolving  Credit  Loans
hereunder shall immediately  terminate,  and/or (b) declare the unpaid principal
amount of and any and all accrued and unpaid  interest on the  Revolving  Credit
Loans to be, and the same shall  thereupon be,  immediately due and payable with
all  additional   interest  from  time  to  time  accrued  thereon  and  without
presentment,  demand,  or protest or other  requirements of any kind (including,
without limitation, valuation and appraisement,  diligence,  presentment, notice
of intent to demand or accelerate and of acceleration),  all of which are hereby
expressly waived by the Borrower.

          (ii)   Rights Under Loan Documents. Upon the occurrence and during the
continuance  of any Event of  Default,  the Lender  may take any  lawful  action
against  the  Borrower  and/or any of the  Corporate  Guarantors  to collect the
payments then due and thereafter to become


                                       55
<PAGE>
due under the Loan Documents,  including,  without limitation,  the Agreement of
Guaranty.

          (iii)  Set-off.  Upon the occurrence and during the continuance of any
Event of  Default,  without  notice  or other  action  (any  such  notice  being
expressly  waived by the  Borrower) the Lender may set-off any money owed by the
Lender in any  capacity to the  Borrower or any  Property of the Borrower in the
possession of the Lender against any of the monetary obligations of the Borrower
to the Lender under the Loan  Documents,  and the Lender shall be deemed to have
exercised such right of set-off and to have made a charge against any such money
or property immediately, even though the actual book entries may be made at some
time subsequent thereto.

     SECTION 9.03 APPLICATION OF PROCEEDS.

          (i)    All payments and proceeds received  under  Section 9.02 of this
                                                            ------------
Loan Agreement shall be applied in the following order of priority:

                 (a) First,  to the payment of all  reasonable  fees,  costs and
expenses  (including  reasonable  attorney's fees and expenses)  incurred by the
Lender and/or its agents or  representatives  in connection with the realization
of such payments or proceeds;

                 (b) Next,  to  the  payment  in full of all  unpaid  principal,
accrued  interest  and other sums,  if any,  due and owing  under the  Revolving
Credit Facility; and,

                 (c) Next, the  balance, if any, of such payments,  proceeds, or
amounts to the  Borrower,  or, if otherwise  determined  by a court of competent
jurisdiction, to whomever may be entitled thereto.

          (ii)   If the amount of the proceeds received in Section 9.03(i) above
                                                           ---------------
shall be insufficient to satisfy in full the amounts  referred to in clauses (a)
and (b)  above,  then the  Borrower  shall  remain  and be  liable  for any such
deficiency.

     SECTION  9.04 NO NOTICES.  In order to entitle  the Lender to exercise  any
remedy  available to it under Section 9.02 of this Loan Agreement,  it shall not
                              ------------
be necessary for the Lender to give any notice, other than such notice as may be
required expressly in this Loan Agreement or by applicable law.

     SECTION  9.05  AGREEMENT  TO PAY  ATTORNEYS'  FEES AND  EXPENSES.  Upon the
occurrence  and during the  continuance  of an Event of Default,  as a result of
which the Lender shall require and employ  attorneys or incur other expenses for
the  collection  of  payments  due  or to  become  due  or  the  enforcement  or
performance  or  observance  of any  obligation  or agreement on the part of the
Borrower contained herein, the Borrower shall, on demand, pay to the Lender, the
reasonable fees of such attorneys and such other expenses so incurred by them.

     SECTION 9.06 NO ADDITIONAL  WAIVER IMPLIED BY ONE WAIVER.  In the event any
agreement  contained in this Loan Agreement  should be breached by any party and
thereafter  waived by the other  parties,  such  waiver  shall be limited to the
particular breach so waived and


                                       56
<PAGE>
shall not be deemed to waive any other breach hereunder.

     SECTION 9.07 FAILURE TO EXERCISE  RIGHTS.  Nothing herein  contained  shall
impose  upon the  Lender any  obligation  to enforce  any  terms,  covenants  or
conditions  contained  in this  Loan  Agreement  and the other  Loan  Documents.
Failure of the  Lender,  in any one or more  instances,  to insist  upon  strict
performance  by the Borrower of any terms,  covenants or conditions of this Loan
Agreement  and the other Loan  Documents,  shall not be considered or taken as a
waiver or  relinquishment  by the  Lender  of its  right to  insist  upon and to
enforce in the future,  by  injunction or other  appropriate  legal or equitable
remedy,  strict  compliance  by the Borrower  with all the terms,  covenants and
conditions of this Loan Agreement and the other Loan  Documents.  The consent of
the Lender to any act or omission by the Borrower shall not be construed to be a
consent to any other or subsequent  act or omission or to waive the  requirement
for the Lender's consent to be obtained in any future or other instance.

     SECTION 9.08 WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER HEREBY WAIVE
ANY AND ALL  RIGHTS  THAT THEY MAY NOW OR  HEREAFTER  HAVE UNDER THE LAWS OF THE
UNITED STATES OF AMERICA OR ANY STATE,  TO A TRIAL BY JURY OF ANY AND ALL ISSUES
ARISING  EITHER  DIRECTLY OR INDIRECTLY IN ANY ACTION OR PROCEEDING  BETWEEN THE
BORROWER,  THE  LENDER OR THEIR  SUCCESSORS  AND  ASSIGNS,  OUT OF OR IN ANY WAY
CONNECTED WITH THIS LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS.  IT IS INTENDED
THAT  SAID  WAIVER  SHALL  APPLY  TO  ANY  AND  ALL  DEFENSES,   RIGHTS,  AND/OR
COUNTERCLAIMS IN ANY ACTION OR PROCEEDING. THE BORROWER AND THE LENDER RECOGNIZE
THAT ANY DISPUTE  ARISING IN CONNECTION  WITH THE REVOLVING  CREDIT  FACILITY IS
LIKELY TO BE COMPLEX AND  CONSEQUENTLY  THEY WISH TO STREAMLINE AND MINIMIZE THE
COST OF THE DISPUTE  RESOLUTION  PROCESS BY AGREEING TO WAIVE THEIR  RIGHTS TO A
JURY TRIAL.

     SECTION  9.09  REMEDIES  CUMULATIVE.  No remedy  herein  conferred  upon or
reserved  to the  Lender is  intended  to be  exclusive  of any other  remedy or
remedies;  but each and every such remedy shall be  cumulative,  and shall be in
addition to every other remedy given hereunder,  or now or hereafter existing at
law or in equity or by  statute.  No express or implied  waiver by the Lender of
any Event of Default hereunder shall in any way be, or construed to be, a waiver
of any future or subsequent  Event of Default.  No delay or omission to exercise
any right or power  accruing upon any Event of Default  continuing as aforesaid,
shall impair any such right or power or shall be construed to be a waiver of any
such Event of Default, or acquiescence  therein;  and every such right and power
may be exercised from time to time and as often as may be deemed expedient.


                                       57
<PAGE>
                                    ARTICLE X
                                  MISCELLANEOUS
                                  -------------

     SECTION 10.01 EXPENSES.

          (i)   Generally. The Borrower covenants and agrees upon demand to pay,
or reimburse the Lender for, all the Lender's  reasonable  external  legal costs
and expenses  (but not internal  legal costs and  expenses) and all internal and
external  audit,  appraisal,  valuation and  investigation  expenses and for all
other  reasonable  out-of-pocket  costs and  expenses  of every  type and nature
(including,  without limitation, the reasonable fees, expenses and disbursements
of Reed Smith Shaw & McClay LLP and any other external attorneys retained by the
Lender, auditors, accountants, appraisers, insurance and environmental advisers,
and  other  consultants)  incurred  by the  Lender  in  connection  with (a) the
administration  of  this  Loan  Agreement,  the  other  Loan  Documents  and the
Revolving Credit Facility  including  consultation  with attorneys in connection
therewith and in connection with the amendment,  waiver or consents  required or
requested hereunder and (b) the protection,  collection or enforcement of any of
the Obligations.  For the purposes of this Section, the legal fees of counsel to
the Lender for the  preparation  and negotiation of the Loan Documents shall not
exceed $30,000.00 plus reasonable costs.

          (ii)  After  Default.   The Borrower  further  covenants and agrees to
pay,  or  reimburse  the  Lender  for all  reasonable  out-of-pocket  costs  and
expenses, including, without limitation, reasonable external attorneys' fees and
disbursements,  and  costs  of  settlement  incurred  by the  Lender  after  the
occurrence  and during the  continuance  of an Event of Default (a) in enforcing
any Obligation or exercising or enforcing any other right or remedy available by
reason of such Event of  Default,  (b) in  connection  with any  refinancing  or
restructuring of the credit  arrangements  provided under this Loan Agreement in
the nature of a "work-out" or in any insolvency or bankruptcy proceeding, (c) in
commencing,  defending or intervening in any litigation or in filing a petition,
complaint, answer, motion or other pleadings in any legal proceeding relating to
the Borrower  and/or any of the Corporate  Guarantors  and related to or arising
out of the transactions  contemplated thereby or by any of the Loan Documents or
(d) in taking  any other  action in or with  respect  to any suit or  proceeding
(whether in bankruptcy or otherwise).

     SECTION  10.02  INDEMNITY.  The Borrower  further  covenants  and agrees to
defend, protect,  indemnify,  and hold harmless the Indemnified Parties from and
against  any and  all  liabilities,  obligations,  losses,  damages,  penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature whatsoever  (including,  without  limitation,  the reasonable fees and
disbursements  of counsel for the  Indemnified  Parties in  connection  with any
investigative,  administrative  or  judicial  proceeding,  whether  or  not  the
Indemnified  Parties shall be designated a party thereto),  imposed on, incurred
by, or asserted against the Indemnified  Parties  (whether  direct,  indirect or
consequential  and whether based on any Federal or state Laws or other statutory
regulations,  including, without limitation,  securities and commercial laws and
regulations,  under  common  law or at  equity,  or on  contract  or  otherwise,
including any liability and costs under Federal,  state or local  environmental,
health or safety laws, regulations, or common law principles, arising from or in
connection  with the past,  present  or future  environmental  condition  of the
Property or the Release or threatened Release of any

                                       58
<PAGE>
Environmental  Concern  Material into the Environment  from the Property) in any
manner  relating  to or  arising  out of this Loan  Agreement  or the other Loan
Documents,  or any act, event or transaction  related or attendant thereto,  the
making of and  participation in the Revolving Credit Facility and the management
of such Revolving Credit Loans or the use or intended use of the proceeds of the
Revolving Credit Facility hereunder  (collectively,  the "Indemnified Matters");
provided,  however,  that the  Borrower  shall  not have  any  obligation  to an
--------   -------
Indemnified  Party  hereunder  with  respect  to  (a)  matters  for  which  such
Indemnified Party has been compensated  pursuant to or for which an exemption is
provided in Section 2.06 and Section 2.07 hereof or any other  provision of this
            ------------     ------------
Loan  Agreement  and (b)  Indemnified  Matters  caused by or resulting  from the
willful  misconduct or gross negligence of that Indemnified Party, as determined
by a court of  competent  jurisdiction.  To the extent that the  undertaking  to
indemnify,  pay and hold  harmless  set forth in the  preceding  sentence may be
unenforceable  because it is violative of any law or public policy, the Borrower
shall  contribute  the maximum  portion which it is permitted to pay and satisfy
under applicable law, to the payment and satisfaction of all Indemnified Matters
incurred by the Indemnified Parties.

     SECTION 10.03  AMENDMENTS AND WAIVERS.  No amendment or modification of any
provision  of this  Loan  Agreement  shall  be  effective  without  the  written
agreement of the Lender and the Borrower,  and no  termination  or waiver of any
provision of this Loan  Agreement,  or consent to any  departure by the Borrower
therefrom,  shall in any event be effective  without the written  concurrence of
the  Lender,  which the Lender  shall have the right to grant or withhold at its
sole discretion.

     SECTION 10.04 INDEPENDENCE OF COVENANTS.  All covenants  hereunder shall be
given  independent  effect so that if a  particular  action or  condition is not
permitted  by any of such  covenants,  the fact that it would be permitted by an
exception to, or be otherwise  within the limitations of, another covenant shall
not avoid the occurrence of an Event of Default or Potential Event of Default if
such action is taken or condition exists.

     SECTION 10.05 NOTICES.  Unless otherwise specifically provided therein, any
notice or other communication  herein required or permitted to be given shall be
in  writing  and  may be  personally  served,  or  sent  by  confirmed  telecopy
transmission,  nationally  recognized overnight courier service or United States
mail and shall be deemed to have been given when  delivered in person or by said
courier service,  or upon receipt of a confirmed  telecopy  transmission  during
normal  business  hours or four (4)  Business  Days after  deposit in the United
States  mail  (registered  or  certified,  with  postage  prepaid  and  properly
addressed).  Notices to the Lender  pursuant  to Article II hereof  shall not be
                                                 ----------
effective until received by the Lender.  For the purposes hereof,  the addresses
of the parties hereto (until notice of a change thereof is delivered as provided
in this  Section  10.05)  shall be as set forth below each  party's  name on the
         ---------------
signature  pages hereof,  or, as to each party,  at such other address as may be
designated  by such party in a written  notice to the other party.  A failure to
send the requisite copies does not invalidate an otherwise  properly sent notice
to the Borrower and/or the Lender.

     SECTION  10.06  SURVIVAL OF  WARRANTIES  AND  AGREEMENTS.  All  agreements,
representations  and  warranties  made herein shall  survive the  execution  and
delivery of this Loan Agreement and the other Loan Documents.

                                       59
<PAGE>
     SECTION 10.07  MARSHALING;  RECOURSE TO SECURITY;  PAYMENTS SET ASIDE.  The
Lender shall not be under any  obligation  to marshal any assets in favor of the
Borrower,  any of the Corporate  Guarantors or any other Person or against or in
payment of any or all of the Obligations. To the extent that the Borrower and/or
any of the Corporate Guarantors make a payment or payments to the Lender, or the
Lender  enforces its rights and remedies  under the Loan  Documents or exercises
its right of  set-off,  and such  payment or  payments  or the  proceeds of such
enforcement  or  set-off  or any  part  thereof  are  subsequently  invalidated,
declared to be  fraudulent  or  preferential,  set aside  and/or  required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, state
or  federal  law,  common  law or  equitable  cause,  then to the extent of such
recovery,  the obligation or part thereof  originally  intended to be satisfied,
and all  Liens,  right and  remedies  therefor  (to the extent  permissible  and
practicable under the law and the circumstances), shall be revived and continued
in  full  force  and  effect  as if  such  payment  had  not  been  made or such
enforcement or set-off had not occurred.

     SECTION 10.08  SEVERABILITY.  In case any provision in or obligation  under
this Loan  Agreement  or the other Loan  Documents  shall be held to be invalid,
illegal  or  unenforceable  in any  jurisdiction,  the  validity,  legality  and
enforceability  of the  remaining  provisions  or  obligations  under  the  Loan
Agreement  or the  other  Loan  Documents  shall not in any way be  affected  or
impaired  thereby.  The  invalidating,   illegality  or  unenforceability  of  a
particular  provision  in  a  particular  jurisdiction  shall  not  render  such
provision invalid, illegal or unenforceable in any other jurisdiction.

     SECTION 10.09  GOVERNING LAW. This Loan Agreement shall be governed by, and
shall be construed and enforced in accordance with, the laws of the State of New
Jersey.

     SECTION 10.10  SUCCESSORS  AND ASSIGNS.  This Loan  Agreement and the other
Loan  Documents  shall be binding upon the parties  hereto and their  respective
successors and assigns. The Borrower's Obligations hereunder may not be assigned
to any Person  without the prior  express  written  consent of the  Lender.  The
Lender may assign,  transfer, sell, participate or convey all or any part of the
Revolving  Credit  Facility to any Person  without the consent of the  Borrower,
provided such assignment,  transfer,  sale, participation or conveyance shall be
in minimum  amounts of  $5,000,000.00.  The Lender agrees to promptly notify the
Borrower  in  writing of any sale or  participation  by the Lender of all or any
part of the Revolving Credit Facility.

     SECTION 10.11 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.  ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST THE BORROWER WITH RESPECT TO THIS LOAN AGREEMENT AND
THE  REVOLVING  CREDIT LOAN NOTE MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE OF NEW JERSEY, AND BY EXECUTION AND DELIVERY
OF THIS LOAN AGREEMENT,  THE BORROWER ACCEPTS, FOR ITSELF AND IN CONNECTION WITH
ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY,  THE NONEXCLUSIVE JURISDICTION OF
THE AFORESAID COURTS,  AND IRREVOCABLY  AGREES TO BE BOUND BY ANY FINAL JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS LOAN


                                       60
<PAGE>
AGREEMENT AND THE REVOLVING CREDIT LOAN NOTE FROM WHICH NO APPEAL HAS BEEN TAKEN
OR IS AVAILABLE.  THE BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF
ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
OF COPIES  THEREOF BY  REGISTERED OR CERTIFIED  MAIL,  POSTAGE  PREPAID,  TO ITS
NOTICE ADDRESS  SPECIFIED ON THE SIGNATURE PAGES HEREOF,  SUCH SERVICE TO BECOME
EFFECTIVE  TEN (10)  DAYS  AFTER  SUCH  MAILING.  THE  BORROWER  AND THE  LENDER
IRREVOCABLY WAIVE ANY OBJECTION (INCLUDING WITHOUT LIMITATION,  ANY OBJECTION OF
THE LAYING OF VENUE OR BASED ON THE  GROUNDS OF FORUM NON  CONVENIENS)  WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING  WITH
RESPECT TO THIS LOAN  AGREEMENT OR ANY OTHER LOAN  DOCUMENT IN ANY  JURISDICTION
SET FORTH ABOVE.  NOTHING  HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY
OTHER  MANNER  PERMITTED  BY LAW OR SHALL LIMIT THE RIGHT OF ANY LENDER TO BRING
PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.

     SECTION  10.12  COUNTERPARTS;  EFFECTIVENESS;  INCONSISTENCIES.  This  Loan
Agreement and any amendments,  waivers, consents, or supplements may be executed
in counterparts, each of which when so executed and delivered shall be deemed an
original,  but all such  counterparts  together shall constitute but one and the
same instrument.  This Loan Agreement and each of the other Loan Documents shall
be construed to the extent  reasonable to be consistent one with the other,  but
to the extent that the terms and  conditions of this Loan Agreement are actually
inconsistent  with the terms and  conditions of any other Loan  Documents,  this
Loan Agreement shall govern.

     SECTION 10.13 CONSTRUCTION. The parties acknowledge that each party and its
counsel have  reviewed and revised this Loan  Agreement and that the normal rule
of construction  to the effect that any  ambiguities are to be resolved  against
the  drafting  party shall not be employed  in the  interpretation  of this Loan
Agreement or any amendments or exhibits hereto.

     SECTION 10.14 ENTIRE  AGREEMENT.  This Loan Agreement,  taken together with
all of the  other  Loan  Documents  and all  certificates  and  other  documents
delivered by the  Borrower or any other Person to the Lender,  embody the entire
agreement and supersede all prior agreements,  written and oral, relating to the
subject matter hereof.

     SECTION  10.15  CONFIDENTIALITY.  All  information  furnished to the Lender
under this  Agreement  shall be received and  maintained by the Lender in strict
confidence  and in  accordance  with  applicable  Law,  and the Lender shall not
disseminate  said  information  to any Person,  except where  required by and in
accordance with applicable Law or where contemplated by the Loan Documents.  The
Lender agrees that it shall not take any action or omit to take any action which
would cause or result in the violation of Law (including without limitation, any
export control law) by the Borrower.


                                       61
<PAGE>
     IN WITNESS  WHEREOF,  the parties hereto have caused this Loan Agreement to
be executed and delivered by their proper and duly authorized corporate officers
as  appropriate,  and the Borrower has caused its corporate  seal to be hereunto
affixed and attested  pursuant to the resolution of its Board of Directors,  all
on the day and year first hereinabove written.

ATTEST:                                  INTELLIGROUP, INC., as Borrower


By: /s/John F. Cinque                    By: /s/Ashok Pandey
   ----------------------------------       ------------------------------------
                                             Ashok Pandey, Co-Chairman

                                         NOTICE ADDRESS:
                                         ---------------
           [SEAL]                        Intelligroup, Inc.
                                         499 Thornall Street
                                         Edison, New Jersey  08837
                                         Attn: Rod Dorsey
                                         Facsimile No.: (732) 362-2100

                                         WITH A COPY TO:
                                         ---------------
                                         Buchanan Ingersoll
                                         500 College Road East
                                         Princeton, New Jersey  08540
                                         Attn:  David J. Sorin, Esq.
                                         Facsimile No. (609) 520-0360

                                         PNC BANK, NATIONAL ASSOCIATION,
                                         as Lender


                                         By: /s/ Edward D. Harrington
                                            ------------------------------------
                                            Edward D. Harrington, Vice President

                                         NOTICE ADDRESS:
                                         ---------------
                                         PNC Bank, National Association
                                         Two Tower Center Boulevard
                                         East Brunswick, New Jersey  08837
                                         Attn:  Edward D. Harrington,
                                                Vice President
                                         Facsimile No.:  (732) 220-3629

                                         WITH A COPY TO:
                                         ---------------
                                         Reed Smith Shaw & McClay LLP
                                         136 Main Street, Suite 250
                                         Princeton Forrestal Village
                                         Princeton, New Jersey 08540
                                         Attn:  James A. Dempsey, Esq.
                                         Facsimile No.: (609) 951-0824