<PAGE>

                                 PROMISSORY NOTE


Borrower:         MAGNAVISION CORPORATION
                  1725 Route 35
                  Wall, NJ 07719

Lender:           BSB BANK & TRUST COMPANY
                  Commercial Loan Department
                  P. O. Box 1056 (58-68 Exchange St.)
                  Binghamton, NY 13902

Principal Amount: $500,000.00
Initial Rate: 10.00%
Date of Note: July 3, 1998

PROMISE TO PAY. MAGNAVISION CORPORATION (referred to in this Note as "Borrower")
promises to pay to BSB BANK & TRUST COMPANY ("Lender"), or order, in lawful
money of the United States of America, the principal amount of Five Hundred
Thousand & 00/100 Dollars ($500,000.00) or so much as may be outstanding,
together with interest on the unpaid outstanding principal balance of each
advance. Interest shall be calculated from the date of each advance until
repayment of each advance.

PAYMENT. Borrower will pay this loan in one payment of all outstanding principal
plus all accrued unpaid interest on July 1, 2000. In addition, Borrower will pay
regular monthly payments of accrued unpaid interest beginning August 1, 1998,
and all subsequent interest payments are due on the some day of each month after
that. Borrower will pay Lender at Lender's address shown above or at such other
place as Lender may designate in writing. Unless otherwise agreed or required by
applicable law, payments will be applied first to accrued unpaid interest, then
to principal, and any remaining amount to any unpaid collection costs and late
charges.

VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an index which is the lowest Prime Rate as
quoted from time to time in the Wall Street Journal (the "Index"). Lender will
tell Borrower the current Index rate upon Borrower's request. Borrower
understands that Lender may make loans to other parties based on other rates as
well. The interest rate change will not occur more often than each day. The
Index currently is 8.50% per annum. The interest rate to be applied to the
unpaid principal balance of this Note will be at a rate equivalent to the Index,
plus 1.5% (the "Index Spread"), resulting in an initial rate of 10.00% per
annum.

NOTICE: In no event shall the interest rate at any time be higher than that
permitted under applicable law.

INDEX SPREAD ADJUSTMENT. Index Spread to be charged on Line of Credit shall be
subject to adjustment on an annual basis, at a date thirty (30) days following
the Lender's receipt of the Borrower's audited year end financial statement, in
accordance with the following grid:

       Debt Service Coverage Ratio                 Adjustment to Index Spread
   ------------------------------------------    ------------------------------
   Less than 2.0 times                                       0.00%
   Equal to 2.0 times but less than 3.0 times           0.50% reduction
   Equal to 3.0 times or more                           1.00% reduction

Debt Service Coverage Ratio shall be defined as (1) Borrower's net earnings
before interest paid to Bank, taxes, depreciation, and amortization, divided by
(2) all principal scheduled and interest projected to be paid by Borrower to
Lender in the Borrower's next following fiscal year.

LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged
4.000% of the unpaid portion of the regularly scheduled payment or $10.00,
whichever is greater.
<PAGE>

DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment within 5 days when due. (b) Borrower breaks
any promise Borrower has made to Lender contained in this Note or any agreement
executed contemporaneously herewith, or Borrower fails to comply with or to
perform when due, in any material respects, any other term, obligation,
covenant, or condition contained in this Note or any agreement executed
contemporaneously herewith. (c) Borrower defaults 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
Borrower's property or Borrower's ability to repay this Note or perform
Borrower's obligations under this Note or any of the Related Documents. (d) Any
representation or statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect either now or
at the time made or furnished. (e) Borrower becomes insolvent, a receiver is
appointed for any part of Borrower's property, Borrower makes an assignment for
the benefit of creditors, or any proceeding is commenced either by Borrower or
against Borrower under any bankruptcy or insolvency laws. (f) Any of the other
events described in this default section occurs with respect to any guarantor of
this Note.

If any default, other than a default in payment, is curable and if Borrower has
not been given a notice of a breach of the same provision of this Note within
the preceding twelve (12) months, it may be cured (and no event of default will
have occurred) if Borrower, after receiving written notice from Lender demanding
cure of such default: (a) cures the default within thirty (30) days; or (b) if
the cure requires more than thirty (30) 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.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon default, including failure
to pay upon final maturity, Lender, at its option, may also, if permitted under
applicable law, increase the variable interest rate on this Note to 4.000
percentage points over the Index Spread. The interest rate will not exceed the
maximum rate permitted by applicable law. Borrower agrees to pay all costs and
expenses incurred by Lender to collect this Note. This includes, subject to any
limits under applicable law, Lender's reasonable attorneys' fees and Lender's
legal expenses whether or not there is a lawsuit, including reasonable
attorneys' fees and legal expenses for bankruptcy proceedings (including efforts
to modify or vacate any automatic stay or injunction), appeals, and any
anticipated post-judgment collection services. If not prohibited by applicable
law, Borrower also will pay any court costs, in addition to all other sums
provided by law. This Note has been delivered to Lender and accepted by Lender
in the State of New York. If there is a lawsuit, Borrower agrees upon Lender's
request to submit to the jurisdiction of the courts of Broome County, the State
of New York. Lender and Borrower hereby waive the right to any jury trial in any
action, proceeding, or counterclaim brought by either Lender or Borrower against
the other. This Note shall be governed by and construed In accordance with the
laws of the State of New York.

RIGHT OF SETOFF. In addition to Lender's right of setoff arising by operation of
law, 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 and whether evidenced by a
certificate of deposit), 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
this Note against any and all such accounts.

COLLATERAL. This Note is secured by ALL ACCOUNTS, INVENTORY, EQUIPMENT, GENERAL
INTANGIBLES, NOW OWNED OR ACQUIRED LATER, TOGETHER WITH ALL PROCEEDS OF
COLLATERAL. If there is any inconsistency between the terms and conditions of
this Note and the terms and conditions of the collateral documents, the terms
and conditions of this Note shall prevail.
<PAGE>

LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under
this Note may be requested orally by Borrower or by an authorized person. Lender
may, but need not, require that all oral requests be confirmed in writing. All
communications, instructions, or directions by telephone or otherwise to Lender
are to be directed to Lender's office shown above. The following party or
parties are authorized to request advances under the line of credit until Lender
receives from Borrower at Lender's address shown above written notice of
revocation of their authority: _______________
______________________________________. Borrower agrees to be liable for all
sums either (a) advanced in accordance with the instructions of an authorized
person or (b) credited to any of Borrower's accounts with Lender. The unpaid
principal balance owing on this Note at any time may be evidenced by
endorsements on this Note or by Lender's internal records, including daily
computer print-outs. Lender will have no obligation to advance funds under this
Note if: (a) Borrower or any guarantor is in default under the terms of this
Note or any agreement that Borrower or any guarantor has with Lender, including
any agreement made in connection with the signing of this Note; (b) Borrower or
any guarantor ceases doing business or is insolvent; (c) any guarantor seeks,
claims or otherwise attempts to limit, modify or revoke such guarantor's
guarantee of this Note or any other loan with Lender; or (d) Borrower has
applied funds provided pursuant to this Note for purposes other than those
authorized by Lender.

YEAR 2000. Borrower warrants and represents that all software utilized by
Borrower in the conduct of Borrower's business will have appropriate
capabilities and compatibility for operation to handle calendar dates falling on
or after January 1, 2000, and all information pertaining to such calendar dates,
in the same manner and with the same functionality, in all material respects, as
the software does respecting calendar dates falling on or before December 31,
1999. Further, Borrower warrants and represents that the data-related user
interface functions, date-fields, and date-related program instructions and
functions of the software include the indication of the century. GENERAL
PROVISIONS. Lender may delay or forgo enforcing any of its rights or remedies
under this Note without losing them. Borrower and any other person who signs,
guarantees or endorses this Note, to the extent allowed by law, waive
presentment, demand for payment, protest and notice of dishonor. Upon any change
in the terms of this Note, and unless otherwise expressly stated in writing, no
party who signs this Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties agree that Lender
may renew or extend (repeatedly and for any length of time) this loan, or
release any party or guarantor or collateral; or impair, fail to realize upon or
perfect Lender's security interest in the collateral; and take any other action
deemed necessary by Lender without the consent of or notice to anyone. All such
parties also agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is made.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.

BORROWER:

         MAGNAVISION CORPORATION

         By:_____________________________