BUSINESS LOAN AGREEMENT

|----------------------------------------------------------------------|
|Principal|Loan |Maturity|Loan No.|Call|Colla-|Account|Officer|Initials|
|         |Date |        |        |    |teral |       |       |        |
|$800,000.|06-25|06-25   |0500006024|  |      |       |EW     |        |
|         |-1997|-2002   |        |    |      |       |       |        |
|----------------------------------------------------------------------|
|References in the shaded area are for Lender's use only and do not    |
|limit the applicability of this document to any particular loan or    |
|item.                                                                 |
|----------------------------------------------------------------------|

Borrower:  Blue Fish Clothing, Inc.    Lender:   CARNEGIE BANK, N.A.
           3 Sixth Street                        FLEMINGTON BRANCH
           Frenchtown, NJ  08825                 619 ALEXANDER ROAD
                                                 PRINCETON, NJ   08540
======================================================================

THIS BUSINESS LOAN AGREEMENT between Blue Fish Clothing, Inc. ("Borrower") 
and CARNEGIE BANK, N.A. ("Lender") is made and executed on the following 
terms and conditions.  Borrower has received prior commercial loans from 
Lender or has applied to Lender for a commercial loan or loans and other 
financial accommodations, including those which may be described on any 
exhibit or schedule attached to this Agreement.  All such loans and 
financial accommodations, together with all future loans and financial 
accommodations from Lender to Borrower, are referred to in this Agreement 
individually as the "Loan" and collectively as the "Loans."  Borrower 
understands and agrees that: (a) in granting, renewing, or extending any 
Loan, Lender is relying upon Borrower's representations, warranties, and 
agreements, as set forth in this Agreement; (b) the granting, renewing, or 
extending of any Loan by Lender at all times shall be subject to Lender's 
sole judgment and discretion; and (c) all such Loans shall be and shall 
remain subject to the following terms and conditions of this Agreement. 

TERM.  This Agreement shall be effective as of June 25, 1997 and shall 
continue thereafter until all Indebtedness of Borrower to Lender has been 
performed in full and the parties terminate this Agreement in writing.

DEFINITIONS.  The following words shall have the following meanings when 
used in this Agreement.  Terms not otherwise defined in this Agreement 
shall have the meanings attributed to such terms in the Uniform Commercial 
Code.  All references to dollar amounts shall mean amounts in lawful money 
of the United States of America.

     Agreement.  The word "Agreement" means this Business Loan Agreement, 
     as this Business Loan Agreement may be amended or modified from time 
     to time, together with all exhibits and schedules attached to this 
     Business Loan Agreement from time to time.

     Borrower.  The word "Borrower" means Blue Fish clothing, Inc.  The 
     word "Borrower" also includes, as applicable, all subsidiaries and 
     affiliates of Borrower as provided below in the paragraph titled 
     "Subsidiaries and Affiliates."

     CERCLA.  The word "CERCLA" means the Comprehensive Environmental 
     Response, Compensation, and Liability Act of 1980, as amended.  

     Collateral.  The word "Collateral" means and includes without 
     limitation all property and assets granted as collateral security for 
     a Loan, whether real or personal property, whether granted directly or 
     indirectly, whether granted now or in the future, and whether granted 
     in the form of a security interest, mortgage, deed of trust, 
     assignment, pledge, chattel mortgage, chattel trust, factor's lien, 
     equipment trust, conditional sale, trust receipt, lien, charge, lien 
     or title retention contract, lease or consignment intended as a 
     security device, or any other security or lien interest whatsoever, 
     whether created by law, contract, or otherwise.

     ERISA.  The word "ERISA" means the Employee Retirement Income Security 
     Act of 1974, as amended.

     Event of Default.  The words "Event of Default" mean and include 
     without limitation any of the Events of default set forth below in the 
     section titled "EVENTS OF DEFAULT." 

     Grantor.  The word "Grantor" means and includes without limitation 
     each and all of the persons or entities granting a Security Interest 
     in any Collateral for the Indebtedness, including without limitation 
     all Borrowers granting such a Security Interest.
  
     Guarantor.  The word "Guarantor" means and includes without limitation 
     each and all of the guarantors, sureties, and accommodation parties in 
     connection with any Indebtedness.

     Indebtedness.  The word "Indebtedness" means and includes without 
     limitation all Loans, together with all other obligations, debts and 
     liabilities of Borrower to Lender, or any one or more of them, as well 
     as all claims by Lender against Borrower, or any one or more of them; 
     whether now or hereafter existing, voluntary or involuntary, due or 
     not due, absolute or contingent, liquidated or unliquidated; whether 
     Borrower may be liable individually or jointly with others; whether 
     Borrower may be obligated as a guarantor, surety, or otherwise; 
     whether recovery upon such Indebtedness may be or hereafter may become 
     barred by any statute of limitations; and whether such Indebtedness may 
     be or hereafter may become otherwise unenforceable.

     Lender.  The word "Lender" means CARNEGIE BANK, N.A., its successors 
     and assigns.

     Loan.  The word "Loan" or "Loans" means and includes without 
     limitation any and all commercial loans and financial accommodations 
     from Lender to Borrower, whether now or hereafter existing, and 
     however evidenced, including without limitation those loans and 
     financial accommodations described herein or described on any exhibit 
     or schedule attached to this Agreement from time to time.

     Note.  The word "Note" means and includes without limitation 
     Borrower's promissory note or notes, if any, evidencing Borrower's 
     Loan obligations in favor of Lender, as well as any substitute, 
     replacement or refinancing note or notes therefor.

     Permitted Liens.  The words "Permitted Liens" mean: (a) liens and 
     security interests secured indebtedness owed by Borrower to Lender; 
     (b) liens for taxes, assessments, or similar charges either not yet 
     due or being contested in good faith; (c) liens of materialmen, 
     mechanics, warehousemen, or carriers, or other like liens arising in 
     the ordinary course of business and securing obligations which are not 
     yet delinquent; (d) purchase money liens or purchase money security 
     interests upon or in any property acquired or held by Borrower in the 
     ordinary course of business to secure indebtedness outstanding on the 
     date of this Agreement or permitted to be incurred under the paragraph 
     of this Agreement titled "Indebtedness and Liens;" (e) liens and 
     security interests which, as of the date of this Agreement, have been 
     disclosed to any approved by the Lender in writing; and (f) those 
     liens and security interests which in the aggregate constitute an 
     immaterial and insignificant monetary amount with respect to the net 
     value of Borrower's assets.

     Related Documents.  The words "Relating Documents" mean and include 
     without limitation all promissory notes, credit agreements, loan 
     agreements, environmental agreements, guaranties, security agreements, 
     mortgages, deeds of trust, and all other instruments, agreements and 
     documents, whether now or hereafter existing, executed in connection 
     with the Indebtedness.

     Security Agreement.  The words "Security Agreement" mean and include 
     without limitation any agreements, promises, covenants, arrangements, 
     understandings or other agreements, whether created by law, contract, 
     or otherwise, evidencing, governing, representing, or creating a 
     Security Interest.

     Security Interest.  The words "Security Interest" mean and include 
     without limitation any type of collateral security, whether in the 
     form of a lien, charge, mortgage, deed of trust, assignment, pledge, 
     chattel mortgage, chattel trust, factor's lien, equipment trust, 
     conditional sale, trust receipt, lien or title retention contract, 
     lease or consignment intended as a security device, or any other 
     security or lien interest whatsoever, whether created by law, 
     contract, or otherwise.

     SARA.  The word "SARA" means the Superfund Amendments and 
     Reauthorization Act of 1986 as now or hereafter amended.

CONDITIONS PRECEDENT TO EACH ADVANCE.  Lender's obligation to make the 
initial Loan Advance and each subsequent Loan Advance under this Agreement 
shall be subject to the fulfillment to Lender's satisfaction of all of the 
conditions set forth in this Agreement and in the Related Documents.

     Loan Documents. Borrower shall provide to Lender in form satisfactory 
     to Lender the following documents for the Loan:  (a) the Note, 
     (b) Security Agreements granting to Lender security interests in the 
     Collateral, (c) Financing Statements perfecting Lender's Security 
     Interests; (d) evidence of insurance as required below; and (e) any 
     other documents required under this Agreement or by Lender or its 
     counsel, including without limitation any guaranties described below.

     Borrower's Authorization.  Borrower shall have provided in form and 
     substance satisfactory to Lender properly certified resolutions, duly 
     authorizing the execution and delivery of this Agreement, the Note and 
     the Related Documents, and such other authorizations and other 
     documents and instruments as Lender or its counsel, in their sole 
     discretion, may require.

     Payment of Fees and Expenses.  Borrower shall have paid to Lender all 
     fees, charges, and other expenses which are then due and payable as 
     specified in this Agreement or any Related Document.

     Representations and Warranties.  The representations and warranties 
     set forth in this Agreement, in the Related Documents, and in any 
     document or certificate delivered to Lender under this Agreement are 
     true and correct.

     No Event of Default.  There shall not exist at the time of any advance 
     a condition which would constitute an Event of Default under this 
     Agreement.

REPRESENTATIONS AND WARRANTIES.  Borrower represents and warrants to 
Lender, as of the date of this Agreement, as of the date of each 
disbursement of Loan proceeds, as of the date of any renewal, extension or 
modification of any Loan, and at all times any Indebtedness exists:

     Organization.  Borrower is a corporation which is duly organized, 
     validly existing, and in good standing under the laws of the 
     Commonwealth of Pennsylvania and is validly existing and in good 
     standing in all states in which Borrower is doing business.  Borrower 
     has the full power and authority to own its properties and to transact 
     the businesses in which it is presently engaged or presently proposes 
     to engage.  Borrower also is duly qualified as a foreign corporation 
     and is in good standing in all states in which the failure to so 
     qualify would have a material adverse effect on its businesses or 
     financial condition.  

     Authorization.  The execution, delivery, and performance of this 
     Agreement and all Related Documents by Borrower, to the extent to be 
     executed, delivered or performed by Borrower, have been duly 
     authorized by all necessary action by Borrower; do not require the 
     consent or approval of any other person, regulatory authority or 
     governmental body; and do not conflict with, result in a violation of, 
     or constitute a default under (a) any provision of its articles of 
     incorporation or organization, or bylaws, or any agreement or other 
     instrument binding upon Borrower or (b) any law, governmental 
     regulation, court decree, or order applicable to Borrower.

     Financial Information.  Each financial statement of Borrower supplied 
     to Lender truly and completely disclosed Borrower's financial 
     condition as of the date of the statement, and there has been no 
     material contingent obligations except as disclosed in such financial 
     statements.

     Legal Effect.  This Agreement constitutes, and any instrument or 
     agreement required hereunder to be given by Borrower when delivered 
     will constitute, legal, valid and binding obligations of Borrower 
     enforceable against Borrower in accordance with their respective 
     terms.

     Properties.  Except as contemplated by this Agreement or as previously 
     disclosed in Borrower's financial statements or in writing to Lender 
     and as accepted by Lender, and except for property tax liens for taxes 
     not presently due and payable, Borrower owns and has good title to all 
     of Borrower's properties free and clear of all Security Interests, and 
     has not executed any security documents or financing statements 
     relating to such properties.  All of Borrower's properties are titled 
     in Borrower' s legal name, and Borrower has not used, or filed a 
     financing statement under, any other name for at least the last five 
     (5) years.

     Hazardous Substances.  The terms "hazardous waste," "hazardous 
     substances," "disposal," "releases," and "threatened release," as used 
     in this Agreement, shall have the same meanings as set forth in the 
     "CERCLA," "SARA," the Hazardous Materials Transportation Act, 49 
     U.S.C. Section 1801, et seq., the Resource Conservation and Recovery 
     Act, 42 U.S.C. Section 6901, et seq., the New Jersey Industrial Site 
     Recovery Act, NJSA Section 13:1K-6 ("ISRA"), the New Jersey Spill 
     Compensation and Control Act, NJSA 58:10-23.11 et seq., or other 
     applicable state or Federal laws, rules, or regulations adopted 
     pursuant to any of the foregoing.  Except as disclosed to and 
     acknowledged by lender in writing, Borrower represents and warrants 
     that: (a) During the period of Borrower's ownership of the properties, 
     there has been no use, generation, manufacture, storage, treatment, 
     disposal, release or threatened release of any hazardous waste or 
     substance by any person on, under, about or from any of the 
     properties. (b) Borrower has no knowledge of, or reason to believe 
     that there has been (i) any use, generation, manufacture, storage, 
     treatment, disposal, release, or threatened release of any hazardous 
     waste or substance on, under, about or from the properties by any 
     prior owners or occupants of any of the properties, or (ii) any actual 
     or threatened litigation or claims of any kind by any person relating 
     to such matters. (c) Neither Borrower nor any tenant, contractor, 
     agent or other authorized user of any of the properties shall use, 
     generate, manufacture, store, treat, dispose of, or release any 
     hazardous waste or substance on, under, about or from any of the 
     properties; and any such activity shall be conducted in compliance 
     with all applicable federal, state and local laws, regulations, and 
     ordinances including without limitation those laws, regulations and 
     ordinances described above.  Borrower authorizes Lender and its agents 
     to enter upon the properties to make such inspections and tests as 
     Lender may deem appropriate to determine compliance of the properties 
     with this section of the Agreement.  Any inspections or tests made by 
     Lender shall be at Borrower's expenses and for Lender's purposes only 
     and shall not be construed to create any responsibility or liability 
     on the part of Lender to Borrower or to any other person.  The 
     representations and warranties contained herein are based on 
     Borrower's due diligence in investigating the properties for hazardous 
     waste and hazardous substances.  Borrower hereby (a) releases and 
     waives any future claims against Lender for indemnity or contribution 
     in the event Borrower becomes liable for cleanup or other costs under 
     any such laws, and (b) agrees to indemnify and hold harmless Lender 
     against any and all claims, losses, liabilities, damages, penalties, 
     and expenses which Lender may directly or indirectly sustain or suffer 
     resulting from a breach of this section of the Agreement or as a 
     consequence of any sue, generation, manufacture, storage, disposal, 
     release or threatened release occurring prior to Borrower's ownership 
     or interest in the properties, whether or not the same was or should 
     have been known to Borrower.  The provisions of this section of the 
     Agreement, including the obligation to indemnify, shall survive the 
     payment of the Indebtedness and the termination or expiration of this 
     Agreement and shall not be affected by Lender's acquisition of any 
     interest in any of the properties, whether by foreclosure or 
     otherwise.

     Litigation and Claims.  No litigation, claim, investigation, 
     administrative proceeding or similar action (including those for 
     unpaid taxes) against Borrower is pending or threatened, and no other 
     event has occurred which may materially adversely affect Borrower's 
     financial condition or properties, other than litigation, claims, or 
     other events, if any, that have been disclosed to and acknowledged by 
     Lender in writing.
     
     Taxes.  To the best of Borrower's knowledge, all tax returns and 
     reports of Borrower that are or were required to be filed, have been 
     filed, and all taxes, assessments and other governmental charges have 
     been paid in full, except those presently being or to be contested by 
     Borrower in good faith in the ordinary course of business and for 
     which adequate reserves have been provided.

     Lien Priority.  Unless otherwise previously disclosed to Lender in 
     writing, Borrower has not entered into or granted any Security 
     Agreements, or permitted the filing or attachment of any Security 
     Interests on or affecting any of the Collateral directly or indirectly 
     securing repayment of Borrower's Loan and Note, that would be prior or 
     that may in any way be superior to Lender's Security Interests and 
     rights in and to such Collateral.

     Binding Effect.  This Agreement, the Note, all Security Agreements 
     directly or indirectly securing repayment of Borrower's Loan and Note 
     and all of the Related Documents are binding upon Borrower as well as 
     upon Borrower's successors, representations and assigns, and are 
     legally enforceable in accordance with their respective terms.

     Commercial Purposes.  Borrower intends to use the Loan proceeds solely 
     for business or commercial related purposes.

     Employee Benefit Plans.  Each employee benefit plans as to which 
     Borrower may have any liability complies in all material respects with 
     all applicable requirements of law and regulations, and (i) no 
     Reportable Event nor Prohibited Transaction (as defined in ERISA) has 
     occurred with respect o any such plan, (i) Borrower has not withdrawn 
     from any such plan or initiated steps to do so, (iii) no steps have 
     been taken to terminate any such plan, and (iv) there are no unfunded 
     liabilities other than those previously disclosed to Lender in 
     writing.

     Location of Borrower's Offices and Records.  Borrower's place of 
     business, or Borrower's chief executive office, if Borrower has more 
     than one place of business, is located at 3 Sixth Street, Frenchtown, 
     NJ 08825.  Unless Borrower has designated otherwise in writing this 
     location is also the office or offices where Borrower keeps its 
     records concerning the Collateral.

     Information.  All information heretofore or contemporaneously herewith 
     furnished by Borrower to lender for the purposes of or in connection 
     with this Agreement or any transaction contemplated hereby is, and all 
     information hereafter furnished by or on behalf of Borrower to Lender 
     will be, true and accurate in every material respect on the date as of 
     which such information is dated or certified; and none of such 
     information is or will be incomplete by omitting to state any material 
     fact necessary to make such information not misleading.

     Survival of Representations and Warranties.  Borrower understands and 
     agrees that Lender, without independent investigation, is relying upon 
     the above representations and warranties in making the above 
     referenced Loan to Borrower.  Borrower further agrees that the 
     foregoing representations and warranties shall be continuing in nature 
     and shall remain in full force and effect until such time as 
     Borrower's Indebtedness shall be paid in full, or until this Agreement 
     shall be terminated in the manner provided above, whichever is the 
     last to occur.

AFFIRMATIVE COVENANTS.  Borrower covenants and agrees with Lender that, 
while this Agreement is in effect, Borrower will: 

     Litigation.  Promptly inform Lender in writing of (a) all material 
     adverse changes in Borrower's financial condition, and (b) all 
     existing and all threatened litigation, claims, investigations, 
     administrative proceedings or similar actions affecting Borrower or 
     any Guarantor which could materially affect the financial condition of 
     Borrower or the financial condition of any Guarantor. 

     Financial Records.  Maintain its books and records in accordance with 
     generally accepted accounting principles, applied on a consistent 
     basis, and permit Lender to examine and audit Borrower's books and 
     records at all reasonable times. 

     Financial Statements.  Furnish Lender with, as soon as available, but 
     in no event later than ninety (90) days after the end of each fiscal 
     year, Borrower's balance sheet and income statement for the year ended, 
     audited by a certified public accountant satisfactory to Lender.  All 
     financial reports required to be provided under this Agreement shall 
     be prepared in accordance with generally accepted accounting 
     principles, applied on a consistent basis, and certified by Borrower 
     as being true and correct.

     Additional Information.  Furnish such additional information and 
     statements, lists of assets and liabilities, agings of receivables and 
     payables, inventory schedules, budgets, forecasts, tax returns, and 
     other reports with respect to Borrower's financial condition and 
     business operations as Lender may request from time to time.

     Insurance.  Maintain fire and other risk insurance, public liability 
     insurance, and such other insurance as Lender may require with respect 
     to Borrower's properties and operations, in form, amounts, coverages 
     and with insurance companies reasonably acceptable to Lender.  
     Borrower, upon request of Lender, will deliver to Lender from time to 
     time the policies or certificates of insurance in form satisfactory to 
     lender, including stipulations that coverages will not be canceled or 
     diminished without at least thirty (30) days' prior written notice to 
     Lender.  Each insurance policy also shall include an endorsement 
     providing that coverage in favor of Lender will not be impaired in any 
     way by any act, omission or default of Borrower or any other person.  
     In connection with all policies covering assets in which Lender holds 
     or is offered a security interest for the Loans, Borrower will provide 
     Lender with such loss payable or other endorsements as Lender may 
     require.  

     Insurance Reports.  Furnish to Lender, upon request of Lender, reports 
     on each existing insurance policy showing such information as Lender 
     may reasonably request, including without limitation the following: 
     (a) the name of the insurer; (b) the risks insured; (c) the amount of 
     the policy; (d) the properties insured; (e) the then current property 
     values on the basis of which insurance has been obtained, and the 
     manner of determining those values; and (f) the expiration date of the 
     policy.  In addition, upon request of Lender (however not more often 
     than annually), Borrower will have an independent appraiser 
     satisfactory to Lender determine, as applicable, the actual cash value 
     or replacement cost of any Collateral.  The cost of such appraisal 
     shall be paid by Borrower.

     Guaranties.  Prior to disbursement of any Loan proceeds, furnish 
     executed guaranties of the Loans in favor of Lender, executed by the 
     guarantor named below, on Lender's forms, and in the amount and under 
     the conditions spelled out in those guaranties.

          Guarantor                              Amount

          Jennifer P. Barclay                    $800,000.00

     Other Agreements.  Comply with all terms and conditions of all other 
     agreements, whether now or hereafter existing, between Borrower and 
     any other party and notify Lender immediately in writing of any 
     default in connection with any other such agreements.

     Loan Proceeds.  Use all Loan proceeds solely for Borrower's business 
     operations, unless specifically consented to the contrary by Lender in 
     writing.

     Taxes, Charges and Liens.  Pay and discharge when due all of its 
     indebtedness and obligations, including without limitation all 
     assessments, taxes, governmental charges, levies and liens, of every 
     kind and nature, imposed upon Borrower or its properties, income, or 
     profits, prior to the date on which penalties would attach, and all 
     lawful claims that, if unpaid, might become a lien or charge upon any 
     of Borrower's properties, income, or profits.  Provided however, 
     Borrower will not be required to pay and discharge any such 
     assessment, tax, charge, levy, lien or claim so long as (a) the 
     legality of the same shall be contested in good faith by appropriate 
     proceedings, and (b) Borrower shall have established on its books 
     adequate reserves with respect to such contested assessment, tax, 
     charge, levy, lien, or claim in accordance with generally accepted 
     accounting practices.  Borrower, upon demand of Lender, will furnish 
     to Lender evidence of payment of the assessments, taxes, charges, 
     levies, liens and claims and will authorize the appropriate 
     governmental official to deliver to Lender at any time a written 
     statement of any assessments, taxes, charges, levies, liens and claims 
     against Borrower's properties, income, or profits. 

     Performance.  Perform and comply with all terms, conditions, and 
     provisions set forth in this Agreement and in the Related Documents in 
     a timely manner, and promptly notify Lender if Borrower learns of the 
     occurrence of any event which constitutes an Event of Default under 
     this Agreement or under any of the Related Documents. 

     Operations.  Maintain executive and management personnel with 
     substantially the same qualifications and experience as the present 
     executive and management personnel; provide written notice to Lender 
     to any change in executive and management personnel; conduct its 
     business affairs in a reasonable and prudent manner and in compliance 
     with all applicable federal, state and municipal laws, ordinances, 
     rules and regulations respecting its properties, charters, businesses 
     and operations, including without limitations, compliance with the 
     Americans With Disabilities Act and with all minimum funding standards 
     and other requirements of ERISA and other laws applicable to 
     Borrower's employee benefit plans.

     Inspection.  Permit employees or agents of Lender at any reasonable 
     time to inspect any and all Collateral for the Loan or Loans and 
     Borrower's other properties and to examine or audit Borrower's books, 
     accounts, and records and to make copies and memoranda of Borrower's 
     books, accounts, and records.  If Borrower now or at any time 
     hereafter maintains any records (including without limitation computer 
     generated records and computer software programs for the generation of 
     such records) in the possession of a third party, Borrower, upon 
     request of Lender, shall notify such party to permit Lender free 
     access to such records at all reasonable times and to provide Lender 
     with copies of any records it may request, all at Borrower's expense.

     Compliance Certificate.  Unless waived in writing by Lender, provide 
     Lender at least annually and at the time of each disbursement of Loan 
     proceeds with a certificate executed by Borrower's chief financial 
     officer, or other officer or person acceptable to Lender, certifying 
     that the representations and warranties set forth in this Agreement 
     are true and correct as of the date of the certificate and further 
     certifying that, as of the date of the certificate, no Event of 
     Default exists under this Agreement.

     Environmental Compliance and Reports.  Borrower shall comply in all 
     respects with all environmental protection federal, state and local 
     laws, statutes, regulations and ordinances; not cause or permit to 
     exist, as a result of an intentional or unintentional action or 
     omission on its part or on the part of any third party, on property 
     owned and/or occupied by Borrower, any environmental activity where 
     damage may result in the environment, unless such environmental 
     activity is pursuant to and in compliance with the conditions of a 
     permit issued by the appropriate federal, state or local governmental 
     authorities; shall furnish to Lender promptly and in any event within 
     thirty (30) days after receipt thereof a copy of any notice, summons, 
     lien, citation, directive, letter or other communication from any 
     governmental agency or instrumentality concerning any intention or 
     unintentional action or omission on Borrower's part in connection with 
     any environmental activity whether or not there is damage to the 
     environment and/or other natural resources.  

     Additional Assurances.  Make, execute and deliver to Lender such
     promissory notes, mortgages, deeds of trust, security agreements, 
     financing statements, instruments, documents and other agreements as 
     Lender or its attorneys may reasonably request to evidence and secure 
     the Loans and to perfect all Security Interests.

NEGATIVE COVENANTS.  Borrower covenants and agrees with Lender that while 
this Agreement is in effect, Borrower shall not, without the prior written 
consent of Lender:

        Indebtedness and Liens.  (a) Except for trade debt incurred in the 
    	normal course of business and indebtedness to Lender contemplated by 
    	this Agreement, create, incur or assume indebtedness for borrowed 
    	money, including capital leases, (b) except as allowed as a Permitted 
    	Lien, sell, transfer, mortgage, assign, pledge, lease, grant a 
    	security interest in, or encumber any of Borrower's assets, or (c) 
    	sell with recourse any of Borrower's accounts, except to Lender.

        Continuity of Operations.  (a) Engage in any business activities 
    	substantially different than those in which Borrower is presently 
    	engaged, (b) cease operations, liquidate, merge, transfer, acquire or 
    	consolidate with any other entity, change ownership, change its name, 
    	dissolve or transfer or sell Collateral out of the ordinary course of 
    	business, (c) pay any dividends on Borrower's stock (other than 
    	dividends payable in its stock), provided, however that 
    	notwithstanding the foregoing, but only so long as no Event of Default 
    	has occurred and is continuing or would result from the payment of 
    	dividends, if Borrower is a "Subchapter S Corporation" (as defined in 
    	the Internal Revenue Code of 1986, as amended), Borrower may pay cash 
    	dividends on its stock to its shareholders from time to time in 
    	amounts necessary to enable the shareholders to pay income taxes and 
    	make estimated income tax payments to satisfy their liabilities under 
    	federal and state law which arise solely from their status as 
    	Shareholders of a Subchapter S Corporation because of their ownership 
    	of shares of stock of Borrower, or (d) purchase or retire any of 
    	Borrower's outstanding shares or alter or amend Borrower's capital 
    	structure.
    
        Loans, Acquisitions and Guaranties.  (a) Loan, Invest in or 
    	advance money or assets, (b) purchase, create or acquire any interest 
    	in any other enterprise or entity, or (c) incur any obligation as 
    	surety or guarantor other than in the ordinary course of business.

CESSATION OF ADVANCES.  If Lender has made any commitment to make any Loan 
to Borrower, whether under this Agreement or under any other agreement, 
Lender shall have no obligation to make Loan Advances or to disburse Loan 
proceeds if: (a) Borrower or any Guarantor is in default under the terms of 
this Agreement or any of the Related Documents or any other agreement that 
Borrower or any Guarantor has with Lender; (b) Borrower or any Guarantor 
becomes insolvent, files a petition in bankruptcy or similar proceedings, 
or is adjudged a bankrupt; (c) there occurs a material adverse change in 
Borrower's financial condition, in the financial condition of any 
Guarantor, or in the value of any Collateral securing any Loan; or (d) any 
Guarantor seeks, claims or otherwise attempts to limit, modify or revoke 
such Guarantor's guaranty of the Loan or any other loan with Lender.

DEFAULT INTEREST RATE.  In the event of default, including failure to pay 
upon final maturity, Lender at its option, if permitted by applicable law, 
may increase interest rate on the Loan, for a period beginning thirty (30) 
days after written notice of such default and ending upon the curing of 
said noticed default, one half of one percent (.50%) for the first thirty 
(30) days of said default and increase an additional one half of one 
percent (.50%) during each thirty (30)  day period thereafter during which 
the noticed default continues.  Such default interest rates shall apply to 
the outstanding principal balance of the Loan.  Upon curing of the notice 
default, the interest rate on the Loan shall revert to the initially 
agreed-upon interest rate effective on the date on which the default is 
cured.

REQUEST FOR FINANCIALS.  Borrower and Guarantor(s) agree to provide signed 
financial statements and tax returns on an annual basis.  Failure to 
provide updated financial statements and tax returns shall be considered as 
a default of the Note.

RIGHT OF SETOFF.  Borrower grants to Lender a contractual possessory 
security interest in, and hereby assigns, conveys, delivers, pledges, and 
transfers to Lender all Borrower's right, title and interest in and to, 
Borrower's accounts with Lender (whether checking, savings, or some other 
account), including without limitation all accounts held jointly with 
someone else and all accounts Borrower may open in the future, excluding 
however all IRA and Keogh accounts, and all trust accounts for which the 
grant of a security interest would be prohibited by law.  Borrower 
authorizes Lender, to the extent permitted by applicable law, to charge or 
setoff all sums owing on the Indebtedness against any and all such 
accounts.

EVENTS OF DEFAULT.  Each of the following shall constitute an Event of 
Default under this Agreement:

        Default on Indebtedness.  Failure of Borrower to make any payment  
    	when due on the Loans.

        Other Defaults.  Failure of Borrower or any Guarantor to comply with  
    	or to perform when due any other term, obligation, covenant or condition 
    	contained in this Agreement or in any of the Related Documents, or 
    	failure of Borrower to comply with or to perform any other term, 
    	obligation, covenant or condition contained in any other agreement 
    	between Lender and Borrower.

        Default in Favor of Third Parties.  Should Borrower or any Guarantor 
    	default under any loan, extension of credit, security agreement, 
    	purchase or sales agreement, or any other agreement, in favor of any 
    	other creditor or person that may materially affect any of the 
    	Borrower's property or Borrower's or any Guarantor's ability to repay 
    	the Loans or perform their respective obligations under this Agreement 
    	or any of the Related Documents.

        False Statements.  Any warranty, representation or statement made or 
    	furnished to Lender by or on behalf of Borrower or any Guarantor under 
    	this Agreement or the Related Documents is false or misleading in any 
    	material respect at the time made or furnished, or becomes false or 
    	misleading at any time thereafter.

        Defective Collateralization.  This Agreement or any of the Related 
    	Documents ceases to be in full force and effect (including failure of 
    	any Security Agreement to create a valid and perfected Security 
    	Interest) at any time and for any reason.

        Insolvency.  The dissolution or termination of Borrower's existence as 
    	a going business, the Insolvency of Borrower, the appointment of a 
    	receiver for any part of Borrower's property, any assignment for the 
    	benefit of creditors, any type of creditor workout, or the 
    	commencement of any proceeding under any bankruptcy or insolvency laws 
    	by or against Borrower.

        Creditor or Forfeiture Proceedings.  Commencement of foreclosure or 
    	forfeiture proceedings, whether by judicial proceeding, self-help, 
    	repossession or any other method, by any creditor of Borrower, any 
    	creditor of any Guarantor against any collateral securing the 
    	Indebtedness, or by any governmental agency.  This includes a 
    	garnishment, attachment, or levy on or of any of Borrower's deposit 
    	accounts with Lender.  However, this Event of Default shall not apply 
    	if there is a good faith dispute by Borrower or Guarantor, as the case 
    	may be, as to the validity or reasonableness of the claim which is the 
    	basis of the creditor of forfeiture proceeding, and if Borrower or 
    	Guarantor gives Lender written notice of the creditor of forfeiture 
    	proceeding and furnishes reserves or a surety bond for the creditor of 
    	forfeiture proceeding satisfactory to Lender.

        Events Affecting Guarantor.  Any of the preceding events occurs with 
    	respect to any Guarantor of any of the Indebtedness or any Guarantor 
    	dies or becomes incompetent, or revokes or disputes the validity of, 
    	or liability under, any Guaranty of the Indebtedness.  Lender, at its 
    	option, may, but shall not be required to, permit the Guarantor's 
    	estate to assume unconditionally the obligations arising under the 
    	guaranty in a manner satisfactory to Lender, and in doing so, cure the 
    	Event of Default.

        Change in Ownership.  Any change in ownership of twenty-five percent 
    	(25%) or more of the common stock of Borrower.

        Adverse Change.  A material adverse change occurs in Borrower's 
    	financial condition, or Lender believes the prospect of payment or 
    	performance of the Indebtedness in impaired.

        Right to Cure.  If any default, other than a Default on Indebtedness, 
    	is curable and if Borrower or Guarantor, as the case may be, has not 
    	been given a notice of a similar default within the preceding twelve 
    	(12) months, it may be cured (and no Event of Default will have 
    	occurred) if Borrower or Guarantor, as the case may be, after receiving 
    	written notice from Lender demanding cure of such default:  (a) cures 
    	the default within fifteen (15) days; or (b) if the cure requires more 
    	than fifteen (15) days, immediately initiates steps which Lender deems 
    	in Lender's sole discretion to be sufficient to cure the default and 
    	thereafter continues and completes all reasonable and necessary steps 
    	sufficient to produce compliance as soon as reasonably practical.

EFFECT OF AN EVENT OF DEFAULT.  If any Event of Default shall occur, except 
where otherwise provided in this Agreement or the Related Documents, all 
commitments and obligations of Lender under this Agreement or the Related 
Documents or any other agreement immediately will terminate and, at 
Lender's option, all Indebtedness immediately will become due and payable, 
all without notice of any kind to Borrower, except that in the case of an 
Event of Default of the type described in the "Insolvency" subsection 
above, such acceleration shall be automatic and not optional.  In addition, 
Lender shall have all the rights and remedies provided in the Related 
Documents or available at law, in equity, or otherwise.  Except as may be 
prohibited by applicable law, all of Lender's rights and remedies shall be 
cumulative any may be exercised singularly or concurrently.  Election by 
obligation of Borrower or of any Guarantor shall not affect Lender's right to 
declare a default and to exercise its rights and remedies.

MISCELLANEOUS PROVISIONS.  The following miscellaneous provisions are a 
part of this Agreement:

        Amendments.  This Agreement, together with any Related Documents, 
    	constitutes the entire understanding and agreement of the parties as 
    	to the matters set forth in this Agreement.  No alteration of or 
    	amendment to this Agreement shall be effective unless given in writing 
    	and signed by the party or parties sought to be charged or bound by 
    	the alteration or amendment.

        Applicable Law.  This Agreement has been delivered to Lender and 
    	accepted by Lender in the State of New Jersey.  If there is a lawsuit, 
    	Borrower agrees upon Lender's request to submit to the jurisdiction of 
    	the courts of HUNTERDON County, the State of New Jersey.  This 
    	Agreement shall be governed by and construed in accordance with the 
    	laws of the State of New Jersey.

        Caption Headings.  Caption headings in this Agreement are for 
    	convenience purposes only and are not to be used to interpret or 
    	define the provisions of this Agreement.

        Consent to Loan Participation.  Borrower agrees and consents to 
    	Lender's sale or transfer, whether now or later, of one or more 
    	participation interests in the Loans to one or more purchasers, 
    	whether related or unrelated to Lender.  Lender may provide, without 
    	any limitation whatsoever, to any one or more purchasers, or potential 
    	purchasers, any information or knowledge Lender may have about 
    	Borrower or about any other matter relating to the Loan, and Borrower 
    	hereby waives any rights to privacy it may have with respect to such 
    	matters.  Borrower additionally waives any and all notices of sale of 
    	participation interests, as well as all notices of any repurchase of 
    	such participation interests.  Borrower also agrees that the 
    	purchasers of any such participation interests will be considered as 
    	the absolute owners of such interests in the Loans and will have all 
    	the rights of offset or counterclaim that it may have now or later 
    	against Lender or against any purchaser of such a participation 
    	interest and unconditionally agrees that either Lender or such 
    	purchaser may enforce Borrower's obligation under the Loans 
    	irrespective of the failure or insolvency of any holder of any 
    	interest in the Loans.  Borrower further agrees that the purchaser of 
    	any such participation interests may enforce its interests 
    	irrespective of any personal claims or defenses that Borrower may have 
    	against Lender.

        Costs and Expenses.  Borrower agrees to pay upon demand all of 
    	Lender's expenses, including without limitation attorneys' fees, 
    	incurred in connection with the preparation, execution, enforcement, 
    	modification and collection of this Agreement or in connection with 
    	the Loans made pursuant to this Agreement.  Lender may pay someone 
    	else to help collect the Loans and to enforce this Agreement, and 
    	Borrower will pay that amount.  This includes, subject to any limits 
    	under applicable law, Lender's attorneys' fees and Lender's legal 
    	expenses, whether or not there is a lawsuit, including attorneys' fees 
    	for bankruptcy proceedings (including efforts to modify or vacate any 
    	automatic stay or injunction), appeals, and any anticipated post-
    	judgment collection services.  Borrower also will pay any court costs, 
    	in addition to all other sums provided by law.
  
        Notices.  All notices required to be given under this Agreement shall 
    	be given in writing, may be sent by telefacsimile, and shall be 
    	effective when actually delivered or when deposited with a nationally 
    	recognized overnight courier or deposited in the United States mail, 
    	first class, postage prepaid, addressed to the party to whom the 
    	notice is to be given at the address shown above.  Any party may 
    	change its address for notices under this Agreement by giving formal 
    	written notice to the other parties, specifying that the purpose of 
    	the notice is to change the party's address.  To the extent permitted 
    	by applicable law, if there is more than one Borrower, notice to any 
    	Borrower will constitute notice to all Borrowers.  For notice 
    	purposes, Borrower will keep Lender informed at all times of 
    	Borrower's current address(es).

        No Joint Venture or Partnership.  The relationship of Borrower and 
    	Lender created by this Agreement is strictly that of debtor-creditor, 
    	and nothing contained in this Agreement or in any of the Related 
        Documents shall be deemed or construed to create a partnership or 
        joint venture between Borrower and Lender.

        Severability.  If a court of competent jurisdiction finds any 
    	provision of this Agreement to be invalid or unenforceable as to any 
    	person or circumstance, such finding shall not render that provision 
    	invalid or unenforceable as to any other persons or circumstances.  If 
    	feasible, any such offending provision shall be deemed to be modified 
    	to be within the limits of enforceability or validity; however, if the 
    	offending provision cannot be so modified, it shall be stricken and 
    	all other provisions of this Agreement in all other respects shall 
    	remain valid and enforceable.

        Subsidiaries and Affiliates of Borrower.  To the extent the context of 
    	any provisions of this Agreement makes it appropriate, including 
    	without limitation any representation, warranty or covenant, the word 
    	"Borrower" as used herein shall include all subsidiaries and 
    	affiliates of Borrower.  Notwithstanding the foregoing however, under 
    	no circumstances shall this Agreement be construed to require Lender 
    	to make any Loan or other financial accommodation to any subsidiary or 
    	affiliate of Borrower.

        Successors and Assigns.  All covenants and agreements contained by or 
    	on behalf of Borrower shall bind its successors and assigns and shall 
    	inure to the benefit of Lender, its successors and assigns.  Borrower 
    	shall not, however, have the right to assign its rights under this 
    	Agreement or any interest therein, without the prior written consent 
    	of Lender.

        Survival.  All warranties, representations, and covenants made by 
    	Borrower in this Agreement or in any certificate or other instrument 
    	delivered by Borrower to Lender under this Agreement shall be 
    	considered to have been relied upon by Lender and will survive the 
    	making of the Loan and delivery to Lender of the Related Documents, 
    	regardless of any investigation made by Lender or on Lender's behalf.

        Time is of the Essence.  Time is of the essence in the performance of 
    	this Agreement.

        Waiver.  Lender shall not be deemed to have waived any rights under 
    	this Agreement unless such waiver is given in writing and signed by 
    	Lender.  No delay or omission on the part of Lender in exercising any 
    	right shall operate as a waiver of such right or any other right.  A 
    	waiver by Lender of a provision of this Agreement shall not prejudice 
    	or constitute a waiver of Lender's right otherwise to demand strict 
    	compliance with that provision or any other provision of this 
    	Agreement.  No prior waiver by Lender, nor any of Lender's rights or 
    	of any obligations of Borrower or of any Grantor as to any future 
    	transactions.  Whenever the consent of Lender is required under this 
    	Agreement, the granting of such consent by Lender in any instance 
    	shall not constitute continuing consent in subsequent instances where 
    	such consent is required, and in all cases such consent may be granted 
    	or withheld in the sole discretion of Lender.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN 
AGREEMENT, AND BORROWER AGREES TO ITS TERMS.  THIS AGREEMENT IS DATED AS OF 
JUNE 25, 1997.

BORROWER:

Blue Fish Clothing, Inc.



By:_____________________________
   Jennifer P. Barclay, Chairman

ATTEST:

                                       (Corporate Seal)
________________________________
Secretary or Assistant Secretary

LENDER:

CARNEGIE BANK, N.A.


By:_____________________________
   Authorized Officer