THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT


         WHEREAS,  The Millbrook  Press Inc., a Delaware  corporation,  with its
chief  executive  office  located  at  2  Old  New  Milford  Road,   Brookfield,
Connecticut  06804  (referred to herein as  "Borrower")  entered into a Loan and
Security Agreement with People's Bank, a Connecticut  banking corporation with a
place of business  located at Bridgeport  Center,  850 Main Street,  Bridgeport,
Connecticut 06607 (referred to herein as "Lender") dated as of December 14, 1995
(the  Loan  and  Security  Agreement  being  herein  referred  to as  the  "Loan
Agreement"); and

         WHEREAS, Borrower and Lender entered into a First Amendment to Loan and
Security  Agreement  dated as of June 17, 1997  amending and  revising  Sections
2.1(a),  2.1(c),  2.6, 4.6, 6.13(a),  6.13(c) and 6.13(d) of the Loan Agreement;
and

         WHEREAS,  Borrower and Lender  entered into a Second  Amendment to Loan
and Security  Agreement dated as of June 10, 1998 amending and revising Sections
2.1(a), 2.1(c), 2.6(d), 3.3, 6.13(c) and 6.13(d) of the Loan Agreement; and

         WHEREAS,  Borrower and Lender  entered  into a Letter  Amendment to the
Loan and  Security  Agreement as amended by the First and Second  Amendments  to
Loan and Security  Agreement  dated  January 8, 1999 to provide  Borrower with a
LIBOR  interest  rate  option  and to  reduce  the  Interest  Rate on non  LIBOR
Obligations to the Reference Rate (the Loan and Security  Agreement,  as amended
by the First Amendment to Loan and Security Agreement,  the Letter Amendment and
the Second Amendment to Loan and Security  Agreement shall be referred to herein
as the "Amended Agreement"); and

         WHEREAS, Borrower and Lender have agreed to further amend the terms and
provisions  of the Amended  Agreement  effective as of the date stated herein by
the provisions set forth below;

         NOW,  THEREFORE,  Borrower and Lender hereby agree that effective as of
January , 2000, the Amended  Agreement  shall be further  amended to contain the
provisions  set  forth  below  and  the  applicable  provisions  of the  Amended
Agreement  shall be  superseded  to the extent  necessary  to give effect to the
provisions set forth below:

         1.  The  definitional   terms  "Debt  Service  Ratio",   "Obligations",
"Tangible Net Worth" and "Working  Capital"  shall be deleted in their  entirety
and the following inserted in lieu thereof:

             "Debt Service  Ratio" shall mean the ratio obtained by dividing (i)
Net Profit After Taxes plus all  non-recurring  items,  discretionary  expenses,
depreciation,  amortization,  interest  expense on Indebtedness  (other than the
Term  Promissory  Note-1  and Term  Promissory  Note-2),  less  dividends,  less
adjustments  to retained  earnings  (other than accrued and unpaid  dividends on
preferred  stock),  less internally  funded capital  expenditure  costs and less
other  adjustments  to income by (ii) all current  maturities  of long term debt
(other than the Term Promissory Note-1



<PAGE>

and Term  Promissory  Note-2) and interest on all  indebtedness  (other than the
Term Promissory  Note-1 and Term Promissory  Note-2) plus fees and costs paid to
People's and any other holder of Indebtedness.

             "Obligations" means all loans, advances, debts, principal, interest
(including any interest  that,  but for the  provisions of the Bankruptcy  Code,
would have accrued),  contingent  reimbursement  obligations  owing to People's,
premiums  (including Early  Termination  Premiums),  liabilities  (including all
amounts charged to Borrower's loan account pursuant to any agreement authorizing
People's to charge Borrower's loan account),  obligations, fees, lease payments,
guaranties,  covenants, and duties owing by Borrower to People's of any kind and
description (whether pursuant to or evidenced by the Loan Documents, by the Term
Promissory  Note-1  or the  Term  Promissory  Note-2  or by any  other  note  or
instrument or pursuant to any other agreement between People's and Borrower, and
irrespective  of whether for the payment of money),  whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
and including any debt,  liability,  or obligation owing from Borrower to others
that  People's  may have  obtained  by  assignment  or  otherwise,  and  further
including all interest not paid when due and all People's Expenses that Borrower
is required to pay or reimburse by the Loan Documents, by law, or otherwise.

             "Tangible  Net  Worth"  means,  as of the  date  any  determination
thereof is to be made, the difference  of: (a)  Borrower's  total  stockholder's
equity plus the remaining  principal amount  outstanding from time to time under
Term Promissory Note-1 and Term Promissory Note-2; minus (b) the sum of: (i) all
intangible assets of Borrower;  (ii) all of Borrower's  prepaid expenses;  (iii)
capitalized  costs for new Inventory titles and (iv) all amounts due to Borrower
from Affiliates, calculated on a consolidated basis.

             "Working  Capital"  means the  result of  subtracting  Consolidated
Current Liabilities  (exclusive of amounts included as liabilities from the Term
Promissory Note-1 and Term Promissory Note-2) from Consolidated Current Assets.

         2.  Section  2.1(a) of the  Amended  Agreement  shall be deleted in its
entirety and the following inserted in lieu thereof:

         2.1  Advances.  (a)  Subject  to  the  terms  and  conditions  of  this
Agreement,  People's agrees to make revolving  advances to Borrower in an amount
at any one time  outstanding  not to exceed the Borrowing  Base. For purposes of
this Agreement, "Borrowing Base", as of any date of determination, shall mean an
amount equal to (i) eighty percent (80%) of the amount of Eligible Accounts plus
(ii) an amount equal to the lowest of: (x) fifty  percent (50%) of the amount of
Eligible  Inventory,  (y) the amount of credit  availability  created by Section
2.1(a)  above  or  (z)  Three  Million  Seven  Hundred  Fifty  Thousand  Dollars
($3,750,000)  less (iii) the  principal  outstanding  under the Term  Promissory
Note-2 referenced in Section 2.1(e).

         3. A new Section  2.1(e) is hereby  added to the Amended  Agreement  to
contain the following terms:


                                       2
<PAGE>

             (e) Upon  execution  of this Second  Amendment to Loan and Security
Agreement,  People's  agrees to advance  the sum of  $964,000 to Borrower in the
form of two (2) Term Loan accommodations  denominated as Term Loan-1 which shall
be in the amount of  $600,000  and be  evidenced  by Exhibit A (Term  Promissory
Note-1) attached hereto and Term Loan-2 which shall be in the amount of $364,000
and be evidenced by Exhibit B (Term Promissory Note-2) attached hereto.

         4.  Section  2.3(a) of the  Amended  Agreement  shall be deleted in its
entirety and the following inserted in lieu thereof:

             (a) Interest  Rate.  All  Obligations,  other than those subject to
LIBOR fixed term  contracts and the  principal  balance  outstanding  under Term
Promissory Note-1,  shall bear interest,  on the average Daily Balance, at a per
annum rate equal to the Reference Rate. The principal balance  outstanding under
Term Promissory Note-1 shall bear interest,  on the average Daily Balance,  at a
per annum rate of two percentage points (2.0) in excess of the Reference Rate

         5.  Section  2.3(c) of the  Amended  Agreement  shall be deleted in its
entirety and the following inserted in lieu thereof:

         (c) Payments of Interest and Principal. Interest on all Obligations not
subject to LIBOR fixed term contracts shall be due and payable,  in arrears,  on
the first day of each month  during the term  hereof.  Interest  due under LIBOR
fixed term contracts shall be payable at the end of each such fixed term.

         In addition to the payments of interest  above  described,  payments of
principal  under Term  Promissory  Note-1 shall be made on the first day of each
month, commencing February 1, 2000 and continuing on the first day of each month
thereafter,  in amounts of $25,000 each with any remaining outstanding principal
balance due and  payable in full on January 1, 2002.  In addition to the monthly
principal  payments  due under Term  Promissory  Note-1,  Borrower  shall on the
earlier  of March 15,  2000 and  continuing  on each June 15,  September  15 and
December 15 thereafter or if earlier,  the date of Borrower's filing of its Form
10(QSB) or its Form 10(KSB) with the Securities and Exchange Commission for each
fiscal quarter commencing with the fiscal quarter ending on January 31, 2000 and
continuing  with the fiscal  quarters ending on April 30, July 31 and October 31
and thereafter  prepay the principal  amount  outstanding  under Term Promissory
Note-1 by an amount equal to the lesser of (i) $25,000 or (ii) such amount which
exceeds 2.0 times Borrower's Debt Service Ratio.

If not sooner paid, one lump sum payment of all outstanding principal under Term
Promissory Note-2 shall be due on January 1, 2002.
                                       3

<PAGE>

Borrower  hereby  authorizes  People's,  at its option,  without prior notice to
Borrower, to charge such interest, all People's Expenses (as and when incurred),
and all installments or other payments due under any note or other Loan Document
to  Borrower's  loan  account,  which  unpaid  amounts  thereafter  shall accrue
interest at the rate then applicable  hereunder.  Any interest not paid when due
shall be  compounded  by becoming a part of the  Obligations,  and such interest
shall thereafter accrue interest at the rate then applicable hereunder.

         6.  Section  2.3(d) of the  Amended  Agreement  shall be deleted in its
entirety and the following inserted in lieu thereof:

             (d)  Computation.  The  Reference  Rate  as of  the  date  of  this
Agreement  is eight and  one-half  percent  (8.50%) per annum.  In the event the
Reference Rate is changed from time to time  hereafter,  the applicable  rate of
interest hereunder automatically and immediately shall be increased or decreased
by an amount equal to such change in the Reference  Rate.  All interest and fees
chargeable  under the Loan  Documents  shall be computed on the basis of a three
hundred sixty (360) day year for the actual number of days elapsed.

         7. A new Section 2.6(d) shall be added to Amended  Agreement to contain
the following provision:

         (d) Term Loan Balance Fee. On the first day of each month following the
extension of Term Loan-1 under this Amended Agreement, and thereafter so long as
any principal amount is outstanding  under the Term Promissory  Note-1, a fee in
an  amount  equal  to one  (1.0%)  percent  per  annum of the  remaining  unpaid
principal balance shall be due and payable to People's.

         8.  Section  6.13 shall be deleted in its  entirety  and the  following
substituted in lieu therefor:

         6.13 Financial Covenants. Borrower shall maintain:

         (a) Current  Ratio. A ratio of  Consolidated  Current Assets divided by
Consolidated  Current Liabilities  (exclusive of Term Promissory Note-1 and Term
Promissory  Note-2)  of at least 1.50 to 1.0 at all times  measured  on a fiscal
quarter-end basis;

         (b)  Total  Liabilities  to  Tangible  Net  Worth  Ratio.  A  ratio  of
Borrower's  total  liabilities  (exclusive  of Term  Promissory  Note-1 and Term
Promissory  Note-2)  divided by  Tangible  Net Worth of not more than 2.0 to 1.0
during the term of this Agreement, measured on a fiscal quarter-end basis;

         (c) Tangible Net Worth.  Tangible Net Worth of at least  $4,500,000  at
all times measured on a fiscal quarter-end basis; and

                                       4
<PAGE>

         (d) Working Capital. Working Capital of not less than $3,750,000 at all
times measured on a fiscal quarter-end basis.

         (e) Debt Service Ratio. Borrower shall maintain a Debt Service Ratio of
not less than 2.0 to 1.0 during the term of this Agreement, measured on a fiscal
quarter-end basis.

         (f) Development Costs of New Titles. Borrower shall during each rolling
12 month period during the term of this Agreement limit its costs of development
of new titles to cash flow in excess of 1.25 times the Debt  Service  Ratio plus
additional paid in equity.


         9. Lender has  requested  and  Borrower  has agreed to execute the Term
Promissory  Note-1  and the Term  Promissory  Note-2 to  evidence  the term loan
advances under Section 2.1(e) which Term  Promissory  Notes shall be in the form
attached hereto as Exhibit A and Exhibit B.

         10. Except as herein  amended,  all of the terms and  provisions of the
Amended Agreement shall remain in full force and effect.

         11.  Except  as set  forth in  Exhibit C  attached  hereto,  all of the
representations  and warranties made by the Obligors in Section 5 of the Amended
Agreement  are true and  correct on the date  hereof as if made on and as of the
date  hereof,  except  to the  extent  that  any  of  such  representations  and
warranties related by their terms to a prior date.

         12.  Borrower  and Lender  agree that this Third  Amendment to Loan and
Security  Agreement  has been  prepared by the mutual effort of both parties and
that in the event of a conflict or  interpretive  question  with  respect to any
term,  provision  or  section  contained  in this  Third  Amendment  to Loan and
Security  Agreement or the First or Second  Amendments or Letter Amendment to or
the December 14, 1995 Loan and Security Agreement,  that this Third Amendment to
Loan and Security Agreement shall not be construed more strictly against any one
party than any other party;  it being agreed that both  Borrower and Lender have
equally negotiated the terms hereof and thereof.

                                       5
<PAGE>

         13.  The  revisions  and  amendments  recited  herein  shall not become
effective  and shall be of no force or effect until  Borrower has executed  this
Third  Amendment to Loan and Security  Agreement  and the original  form of Term
Promissory  Note-1 and Term Promissory Note-2 and provided Lender with a current
certificate  of the  Secretary  of Borrower  attesting  to the  adoption  and/or
passage of  applicable  corporate  resolutions  authorizing  and  approving  the
revisions and amendments  contained in this Third Amendment to Loan and Security
Agreement  which such  certificate  shall also  contain  an  acceptable  form of
incumbency  certificate  attesting  to the current  officers  and  directors  of
Borrower.

         The date of  execution  of this Third  Amendment  to Loan and  Security
Agreement by Borrower is January 31, 2000.


LENDER:                                      BORROWER:

PEOPLE'S BANK                                THE MILLBROOK PRESS INC.




By:_________________________              By:__________________________

Title:_____________________               Title:_______________________


<PAGE>

                                    EXHIBIT A
                             TERM PROMISSORY NOTE-1



January 31, 2000

         FOR VALUE RECEIVED, at the earlier of January 1, 2002 or the occurrence
of an Event of Default under a Loan and Security  Agreement  dated  December 14,
1995, as amended from time to time (hereinafter referred to as the "Agreement"),
the undersigned,  The Millbrook Press Inc., a Delaware corporation  (hereinafter
referred to as "Debtor"),  with its chief executive  office located at 2 Old New
Milford Road, Brookfield,  Connecticut 06804 hereby promises to pay to the order
of People's  Bank, a Connecticut  banking  corporation  with a place of business
located at Bridgeport  Center,  850 Main Street,  Bridgeport,  Connecticut 06607
(hereinafter  referred to as  "Lender")  in such coin and currency of the United
States which shall be legal tender in payment of all debts and dues,  public and
private,  at the time of payment,  the  principal  sum of Six  Hundred  Thousand
Dollars  ($600,000),  or so much thereof as shall have been  advanced and remain
outstanding  and due,  together  with  interest  from January , 2000 at the rate
hereinafter set forth.

         This Secured  Promissory Note represents a term loan extended to Debtor
on this date.

         Interest  on all  advances  of  principal  remaining  from time to time
unpaid  shall be paid by Debtor to Lender at the  Reference  Rate plus 2 percent
per annum and after the  occurrence  and during the  continuance  of an Event of
Default at the rate of interest stated in Section 2.3(b) of the Agreement.

         So long as no Event of Default shall have occurred under the Agreement,
the  principal  and  interest  shall be due and  payable on the dates and in the
manner set forth in Section 2.3(c) of the Agreement.

         Debtor,  for  itself  and its  legal  representatives,  successors  and
assigns,  expressly waives presentment,  protest, notice of dishonor,  notice of
nonpayment,  notice of maturity, notice of protest,  presentment for the purpose
of  accelerating  maturity,  diligence  in  collection,  and the  benefit of any
exemption under the homestead  exemption laws, if any, or any other exemption or
insolvency laws, and consents that Lender may release or surrender,  exchange or
substitute any real estate and/or personal property or other collateral security
now held or which may  hereafter  be held as  security  for the  payment of this
Note,  and may extend  the time for  payment  or  otherwise  modify the terms of
payment of any part or the whole of the debt evidenced hereby.

         This Note has been issued pursuant to the Agreement  between Debtor and
Lender of even date herewith,  and all of the terms, covenants and conditions of
said  Agreement  (including  all  schedules  thereto) and all other  instruments
evidencing  and/or securing the  indebtedness  hereunder are hereby made part of
this Note and are deemed  incorporated herein in full. Any default in any of the
conditions,  covenants,  obligations  or agreements  contained in said Agreement
(and all schedules  attached thereto) or any other  instruments  securing and/or
evidencing  this  indebtedness  shall  constitute a default  under this Note and
shall entitle  Lender to accelerate the entire  indebtedness  hereunder and take
such other action as may be provided for in said Agreement.


<PAGE>

         This Note and all transactions  hereunder and/or evidenced herein shall
be governed by,  construed and enforced in accordance with the laws of the State
of Connecticut.

DEBTOR  ACKNOWLEDGES  ITS  UNDERSTANDING  THAT  LENDER MAY HAVE  RIGHTS  AGAINST
DEBTOR, NOW OR IN THE FUTURE, IN ITS CAPACITY AS SECURED PARTY,  CREDITOR, OR IN
ANY OTHER CAPACITIES.  SUCH RIGHTS MAY INCLUDE THE RIGHT TO DEPRIVE DEBTOR OF OR
AFFECT THE USE OF OR  POSSESSION OR ENJOYMENT OF DEBTOR'S  PROPERTY;  AND IN THE
EVENT  LENDER  DEEMS IT  NECESSARY  TO EXERCISE  ANY OF SUCH RIGHTS PRIOR TO THE
RENDITION  OF A FINAL  JUDGMENT  AGAINST  DEBTOR,  OR  OTHERWISE,  DEBTOR MAY BE
ENTITLED TO NOTICE AND/OR  HEARING  UNDER THE LAWS OF THE STATE OF  CONNECTICUT,
(TO DETERMINE WHETHER OR NOT LENDER HAS A PROBABLE CAUSE TO SUSTAIN THE VALIDITY
OF LENDER  CLAIM),  PRIOR TO THE EXERCISE BY LENDER OF ANY SUCH  RIGHTS.  DEBTOR
EXPRESSLY  AGREES THAT THIS AGREEMENT  REPRESENTS A COMMERCIAL  TRANSACTION  AND
WAIVES ANY RIGHT UNDER TITLE 52 SECTION 278 OF THE CONNECTICUT GENERAL STATUTES,
AS  AMENDED,  TO NOTICE OF ANY REQUEST  FOR A  PREJUDGMENT  REMEDY OR HEARING TO
WHICH  DEBTOR MAY BE  ENTITLED;  PROVIDED,  HOWEVER,  THAT THIS WAIVER SHALL NOT
INCLUDE A WAIVER OF SUCH  RIGHTS AS  DEBTOR  SHALL  HAVE TO PRIOR  NOTICE OF THE
PROPOSED DISPOSITION OF COLLATERAL BY LENDER.  SPECIFICALLY AND WITHOUT LIMITING
THE GENERALITY OF THE  FOREGOING,  DEBTOR  RECOGNIZES  THAT LENDER HAS AND SHALL
CONTINUE TO HAVE AN REASONABLE RIGHT TO EFFECT COLLECTION OF THE COLLATERAL WITH
RESPECT TO WHICH  LENDER  HOLDS A SECURITY  INTEREST  WITHOUT THE  NECESSITY  OF
ACCORDING  TO DEBTOR ANY PRIOR  NOTICE OR  HEARING.  THIS SHALL BE A  CONTINUING
WAIVER AND REMAIN IN FULL  FORCE AND  EFFECT SO LONG AS DEBTOR IS  OBLIGATED  TO
LENDER.

         IN WITNESS  WHEREOF,  Debtor  has caused  this Note to be signed in its
corporate name by its duly authorized  corporate  officer and its corporate seal
to be hereto  affixed,  by order of its Board of  Directors  on the day and year
first above written.

THE MILLBROOK PRESS INC.

By__________________________
Title:______________________




<PAGE>
                                    EXHIBIT B
                             TERM PROMISSORY NOTE-2




January 31, 2000

         FOR VALUE RECEIVED, at the earlier of January 1, 2002 or the occurrence
of an Event of Default under a Loan and Security  Agreement  dated  December 14,
1995, as amended from time to time (hereinafter referred to as the "Agreement"),
the undersigned,  The Millbrook Press Inc., a Delaware corporation  (hereinafter
referred to as "Debtor"),  with its chief executive  office located at 2 Old New
Milford Road, Brookfield,  Connecticut 06804 hereby promises to pay to the order
of People's  Bank, a Connecticut  banking  corporation  with a place of business
located at Bridgeport  Center,  850 Main Street,  Bridgeport,  Connecticut 06607
(hereinafter  referred to as  "Lender")  in such coin and currency of the United
States which shall be legal tender in payment of all debts and dues,  public and
private,  at the time of payment,  the principal sum of Three Hundred Sixty Four
Thousand Dollars ($364,000),  or so much thereof as shall have been advanced and
remain  outstanding  and due,  together with interest from January , 2000 at the
rate hereinafter set forth.

         This Secured  Promissory Note represents a term loan extended to Debtor
on this date.

         Interest  on all  advances  of  principal  remaining  from time to time
unpaid  shall be paid by Debtor to  Lender at the  Reference  Rate and after the
occurrence  and  during  the  continuance  of an Event of Default at the rate of
interest stated in Section 2.3(b) of the Agreement.

         So long as no Event of Default shall have occurred under the Agreement,
the  principal  and  interest  shall be due and  payable on the dates and in the
manner set forth in Section 2.3(c) of the Agreement.

         Debtor,  for  itself  and its  legal  representatives,  successors  and
assigns,  expressly waives presentment,  protest, notice of dishonor,  notice of
nonpayment,  notice of maturity, notice of protest,  presentment for the purpose
of  accelerating  maturity,  diligence  in  collection,  and the  benefit of any
exemption under the homestead  exemption laws, if any, or any other exemption or
insolvency laws, and consents that Lender may release or surrender,  exchange or
substitute any real estate and/or personal property or other collateral security
now held or which may  hereafter  be held as  security  for the  payment of this
Note,  and may extend  the time for  payment  or  otherwise  modify the terms of
payment of any part or the whole of the debt evidenced hereby.

         This Note has been issued pursuant to the Agreement  between Debtor and
Lender of even date herewith,  and all of the terms, covenants and conditions of
said  Agreement  (including  all  schedules  thereto) and all other  instruments
evidencing  and/or securing the  indebtedness  hereunder are hereby made part of
this Note and are deemed  incorporated herein in full. Any default in any of the
conditions,  covenants,  obligations  or agreements  contained in said Agreement
(and all schedules  attached thereto) or any other  instruments  securing and/or
evidencing  this  indebtedness  shall  constitute a default  under this Note and
shall entitle  Lender to accelerate the entire  indebtedness  hereunder and take
such other action as may be provided for in said Agreement.

         This Note and all transactions  hereunder and/or evidenced herein shall
be governed by,



<PAGE>

construed and enforced in accordance with the laws of the State of Connecticut.

DEBTOR  ACKNOWLEDGES  ITS  UNDERSTANDING  THAT  LENDER MAY HAVE  RIGHTS  AGAINST
DEBTOR, NOW OR IN THE FUTURE, IN ITS CAPACITY AS SECURED PARTY,  CREDITOR, OR IN
ANY OTHER CAPACITIES.  SUCH RIGHTS MAY INCLUDE THE RIGHT TO DEPRIVE DEBTOR OF OR
AFFECT THE USE OF OR  POSSESSION OR ENJOYMENT OF DEBTOR'S  PROPERTY;  AND IN THE
EVENT  LENDER  DEEMS IT  NECESSARY  TO EXERCISE  ANY OF SUCH RIGHTS PRIOR TO THE
RENDITION  OF A FINAL  JUDGMENT  AGAINST  DEBTOR,  OR  OTHERWISE,  DEBTOR MAY BE
ENTITLED TO NOTICE AND/OR  HEARING  UNDER THE LAWS OF THE STATE OF  CONNECTICUT,
(TO DETERMINE WHETHER OR NOT LENDER HAS A PROBABLE CAUSE TO SUSTAIN THE VALIDITY
OF LENDER  CLAIM),  PRIOR TO THE EXERCISE BY LENDER OF ANY SUCH  RIGHTS.  DEBTOR
EXPRESSLY  AGREES THAT THIS AGREEMENT  REPRESENTS A COMMERCIAL  TRANSACTION  AND
WAIVES ANY RIGHT UNDER TITLE 52 SECTION 278 OF THE CONNECTICUT GENERAL STATUTES,
AS  AMENDED,  TO NOTICE OF ANY REQUEST  FOR A  PREJUDGMENT  REMEDY OR HEARING TO
WHICH  DEBTOR MAY BE  ENTITLED;  PROVIDED,  HOWEVER,  THAT THIS WAIVER SHALL NOT
INCLUDE A WAIVER OF SUCH  RIGHTS AS  DEBTOR  SHALL  HAVE TO PRIOR  NOTICE OF THE
PROPOSED DISPOSITION OF COLLATERAL BY LENDER.  SPECIFICALLY AND WITHOUT LIMITING
THE GENERALITY OF THE  FOREGOING,  DEBTOR  RECOGNIZES  THAT LENDER HAS AND SHALL
CONTINUE TO HAVE AN REASONABLE RIGHT TO EFFECT COLLECTION OF THE COLLATERAL WITH
RESPECT TO WHICH  LENDER  HOLDS A SECURITY  INTEREST  WITHOUT THE  NECESSITY  OF
ACCORDING  TO DEBTOR ANY PRIOR  NOTICE OR  HEARING.  THIS SHALL BE A  CONTINUING
WAIVER AND REMAIN IN FULL  FORCE AND  EFFECT SO LONG AS DEBTOR IS  OBLIGATED  TO
LENDER.

         IN WITNESS  WHEREOF,  Debtor  has caused  this Note to be signed in its
corporate name by its duly authorized  corporate  officer and its corporate seal
to be hereto  affixed,  by order of its Board of  Directors  on the day and year
first above written.

THE MILLBROOK PRESS INC.

By__________________________
Title:______________________


<PAGE>

                                    EXHIBIT C
                  EXCEPTIONS TO WARRANTIES AND REPRESENTATIONS