Document:

EXHIBIT 10.22

Amplicon Financial

                                                                       LEASE
5 HUTTON CENTRE DRIVE, SUITE 500 o SANTA ANA, CALIFORNIA 92707         AGREEMENT
714.751-7551 o 800.755-5055 o FACSIMILE 714.751-7557
                                                              ORDER NO. VL-00618
LESSEE
    Valuestar, Inc.

STREET                       CITY        STATE          COUNTY               ZIP
360 22nd Street, 2nd Floor   Oakland      CA            Alameda            94612

1.  AGREEMENT/'LEASE  Amplicon,  Inc. ("Amplicon") agrees to lease to Lessee the
hardware,  software and/or other equipment  ("Property")  described on the Lease
Schedule(s)  ("Schedule(s)")  referencing this Lease Agreement ("Agreement") and
Lessee agrees to lease from Amplicon the Property subject to the terms set forth
herein and on each Schedule(s) that the parties may from time to time enter into
with respect to this Agreement. Each Schedule identified as being a part of this
Agreement  incorporates  the terms of this Agreement and  constitutes a separate
lease agreement and is referred to herein as the "Lease".  The Lease is in force
and is binding upon Lessee and Amplicon upon signed acceptance by Amplicon.

2  UNFORM  COMMERCIAL  CODE  ACKNOWLEDGMENT:  Lessee  acknowledges  that  it has
received  and  approved  any written  "Supply  Contract"  covering  the Property
purchased  from the  Supplier  for lease and  Amplicon  has  informed or advised
Lessee,  either previously or by this Lease, of the following:  (i) the identity
of the Supplier, (ii) that Lessee may have rights under the Supply Contract; and
(iii) that Lessee may contact the Supplier for a description of any such rights.
This Lease is a "Finance Lease".  (The terms "Finance Lease",  "Supply Contract"
and  "Supplier" as used in this Lease have the meanings only as ascribed to them
under Division 10 of the California  Uniform  Commercial Code and have no effect
on any tax or  accounting  treatment  of the  Lease).  This  provision  survives
termination of the Lease.

3. NO  WARRANTIES:  AMPLICON  IS NOT  THE  MANUFACTURER,  DEVELOPER,  PUBLISHER,
DISTRIBUTOR,  LICENSOR OR  "SUPPLIER"  OF THE  PROPERTY  AND MAKES NO EXPRESS OR
IMPLIED WARRANTY OR REPRESENTATION AS TO FITNESS,  QUALITY,  DESIGN,  CONDITION,
CAPACITY, SUITABILITY, VALUE, MERCHANTABIUTY,  OR PERFORMANCE OF THE PROPERTY OR
THE  MATERIAL OR  WORKMANSHIP  THEREOF OR AGAINST  INTERFERENCE  BY LICENSORS OR
OTHER THIRD  PARTIES,  IT BEING  AGREED THAT THE  PROPERTY IS LEASED "AS IS" AND
THAT ALL SUCH RISKS ARE TO BE BORNE BY LESSEE  Lessee  selected the Property and
represents  that all the Property is suitable for  Lessee's  purposes.  Amplicon
assigns to Lessee  during the term of the Lease any warranty  rights it may have
received from the Supplier as a result of  Amplicon's  purchase of the Property.
If Lessee has any claims regarding the Property or any other matter arising from
Lessee's  relationship  with the  Supplier,  Lessee  must make them  against the
Supplier. This provision survives termination of the Lease.

4. AUTHORIZATION  DATE AND LEASE DURATION:  A Schedule commences and rent is due
beginning on the date that Lessee  certifies in writing to Amplicon  that all of
the Property has been received and accepted by Lessee as  installed,  tested and
ready for use, and Lessee authorizes  Amplicon in writing to disburse payment to
the  Supplier  ("Authorization  Date").  Unless and until Lessee  provides  such
written authorization, Amplicon will not disburse payment to Suppliers. The Term
of each Schedule is reflected on the Schedule and begins on the first day of the
calendar month following the Authorization Date. Lessee has the right to use the
Property at the specific locations shown on the Schedule throughout the duration
of this Lease in accordance with the provisions of this Lease.  The Term extends
for an  additional  twelve  month period  ("Extension  Term") at the rental rate
delineated on the Schedule unless Lessee provides to Amplicon  written notice of
Lessee's  election not to extend the Term at least one hundred eighty days prior
to the expiration of the Term.

5. Rentals:  The rent payable is shown on the  Schedule(s).  The monthly rent is
due to Amplicon,  in advance,  for each month or portion of a month beginning on
the  Authorization  Date and  continuing  for each  month  that this Lease is in
effect.  Rent for  portions  of a month  are  based on a daily  rental  equal to
ore-thirtieth  of the monthly  rent.  All RENTS SHALL BE PAID WITHOUT  NOTICE OR
DEMAND AND WITHOUT ABATEMENT,  DEDUCTION OR SETOFF OF ANY AMOUNT WHATSOEVER. THE
OPERATION  AND USE OF THE  PROPERTY  IS  SOLELY  AT THE RISK OF  LESSEE  AND THE
OBLIGATION  OF  LESSEE  TO PAY  ITEM  UNDER  THE  LEASE  SHALL BE  ABSOLUTE  AND
UNCONDITIONAL.  TO THE EXTENT  PERMITTED BY APPLICABLE LAW, LESSEE HEREBY WAIVES
THE  FOLLOWING  RIGHTS AND REMEDIES  CONFERRED  UPON LESSEE BY LAW: (l) RIGHT TO
CANCEL OR TERMINATE THIS LEASE,  (11) RIGHT TO REJECT THE PROPERTY,  (III) RIGHT
TO REVOKE ACCEPTANCE OF THE PROPERTY, (IV) RIGHT TO RECOVER DAMAGES FROM AMPICON
FOR ANY BREACH OF WARRANTY,  AND (V) RIGHT TO RECOVER ANY CONSEQUENTIAL  DAMAGES
WHATSOEVER.  Rents  will be paid to  Amplicon  unless  otherwise  instructed  in
writing by Amplicon or its assignee.

THIS LEASE AGREEMENT AND THE APPLICABLE SCHEDULE(S) CONTAIN THE ENTIRE AGREEMENT
BETWEEN AMPLICON AND LESSEE WITH RESPECT TO THE SUBJECT MATTER HEREOF. THE LEASE
CAN ONLY BE  MODIFIED  IN WRITING,  WITH SUCH  MODIFICATIONS  SIGNED BY A PERSON
AUTHORIZED TO SIGN AGREEMENTS ON BEHALF OF LESSEE AND BY AN AUTHORIZED SIGNER OF
AMPUCON. NO ORAL OR OTHER WRITTEN AGREEMENT'S, REPRESENTATIONS OR PROMISES SHALL
BE RELIED  UPON BY, OR BE BINDING  ON, THE  PARTIES  UNLESS  MADE A PART OF THIS
LEASE BY A WRITTEN  MODIFICATION  SIGNED BY AN AUTHORIZIZED SIGNER OF LESSEE AND
AMPLICON.

LESSEE:  Michael Kelly, ValueStar. Inc.      AMPLICON, INC.   Darren S. Higuchi
       --------------------------------                    ---------------------
                  (Signature)                                    (Signature)

This Lease is subject to acceptance by Amplicon's Finance Committee.  By signing
below,  the  signer  certifies  that he or she has read  this  Lease  Agreement,
INCLUDING THE REVERSE  SIDE,  has had an  opportunity  to discuss its terms with
Amplicon,  and is authorized  to sign an behalf of Lessee.  Until this Lease has
been signed by an authorized signer of Amplicon, it will constitute a firm offer
by Lessee.

              LESSEE/OFFEROR                             AMPLICON, INC.
OFFER:                                        ACCEPTANCE:

By.            /s/  Michael Kelly             By.       /s/ Darren S. Higuchi
             ---------------------------            ----------------------------
Name:          Michael J. Kelly               Name:     Darren S. Higuchi
             ---------------------------            ----------------------------
Title:         Secretary/Controller           Title:    Assistant Vice President
             ---------------------------            ----------------------------
Date:          March 20, 2000                 Date:     03/23/00
             ---------------------------            ----------------------------
                                                                        AMP-MM98

<PAGE>

6.  INDEMNITY:  Lessee  assumes  liability for, and agrees at its own expense to
indemnify and defend Amplicon. its employees,  officers,  directors and assigns,
from and against any and all claims, liabilities,  losses, damages, and expenses
(including  legal  expenses)  of  every  kind  or  nature  (including,   without
limitation,  claims  based  upon  strict  liability)  arising  out of  the  use,
condition  (including  latent and other defects,  whether or not discoverable by
Lessee or Amplicon), operation or ownership of any items of Property (including,
without limitation,  any claim for patent,  trademark or copyright infringement)
or for any interruptions of service, loss of business or consequential  damages.
These indemnities and assumptions survive the termination of this Lease.

7. PERFORMANCE OF LESSEE'S  OBLIGATI0NS BY AMPLICON:  If Lessee fails to perform
any of its obligations  under this Lease,  Amplicon may, at its option,  perform
them for Lessee without waiving Lessee's  default.  Any amount paid by Amplicon,
and any expense  (including  reasonable  attorneys' fees) or any other liability
incurred by Amplicon as a result of its performance of Lessee's obligations will
be payable by Lessee to Amplicon upon demand.

8. FURTHER ASSURANCES AND NOTICES:  Lessee's signing of this Lease constitutes a
firm offer.  In  consideration  of  Amplicon's  time and effort in reviewing and
acting on the offer,  Lessee  agrees  that its offer is  irrevocable  for twenty
business  days  after  Amplicon's  receipt  of  the  offer  and  of  all  credit
information  requested by Amplicon.  Amplicon's signing of the Lease,  including
the Schedule,  constitutes  acceptance of Lessee's offer.  Lessee agrees to sign
and provide any  documents,  which Amplicon  deems  necessary for  confirmation.
assignment and assurance of performance by Lessee of its  obligations  under the
Lease or for  perfection  of this  Lease  and the  Property  including,  but not
limited,  to the signing and filing of Uniform  Commercial  Code (UCC) Financing
Statements  (which Lessee agrees may be signed by Amplicon on Lessee's  behalf).
Lessee  authorizes  Amplicon to insert applicable dates as necessary to complete
all documentation for the Lease. Prior to Amplicon's acceptance of the Lease and
for the duration of the Lease,  Lessee agrees to promptly  provide Amplicon with
all credit  information  reasonably  requested  by Amplicon  including,  but not
limited to, comparative audited financial statements for the most current annual
and interim reporting  periods.  Lessee's failure to provide such information to
Amplicon is an event of default under the Lease. All notices to Amplicon must be
in writing and sent certified mail return receipt requested to the address shown
above or such other address as to which Lessee has been notified in writing.

9.  DEFAULT:  If rent or any other amount is not paid within ten days of its due
date,  Lessee agrees to pay a late charge equal to five percent (5%) (changed to
one and one half percent 1 1/2%) of the unpaid  amount.  Each month  thereafter,
past due amounts remaining unpaid hereunder shall bear interest at the lesser of
one and one half percent (1 1/2%) per month,  compounded  monthly or the maximum
rate allowed by law. An Event of Default shall occur if: (a) Lessee fails to pay
any rent or other payment under the Lease when due and the failure continues for
ten days;  (b)  Lessee  fails to  perform or  observe  any of the  covenants  or
obligations  in this Lease  other than  Lessee's  rental  obligations,  and such
failure is not cured within ten days after written notice has been provided; (c)
Lessee makes an assignment for the benefit of its creditors,  files any petition
or takes any action under any bankruptcy, reorganization or insolvency laws; (d)
an involuntary  petition is filed under any bankruptcy statute against Lessee or
any receiver,  trustee or custodian is appointed to take  possession of Lessee's
properties, unless such petition or appointment is set aside or withdrawn within
sixty days of said filing or appointment; (e) Lessee attempts to or does remove,
transfer, sell, sublicense, encumber, part with possession, or sublet any of the
Property;  (f) Lessee  attempts to assign or transfer this Lease or its interest
under the Lease or moves any of the Property from the  location(s)  set forth on
the Schedule without Amplicon's prior written consent: or (g) Lessee undergoes a
sale,  buyout,  change in control,  or change in ownership of any type,  form or
manner which, as judged solely by Amplicon,  results in a material deterioration
in Lessee's credit worthiness.

10. REMEDIES: Upon an Event of Default, Amplicon may exercise at its sole option
any one or more of the remedies  permitted by law,  including but not limited to
the following:  (a) through legal action,  enforce  performance by Lessee of the
applicable  covenants and  obligations of this Lease or recover  damages for the
breach of those covenants or  obligations;  (b) terminate the Lease and Lessee's
rights under the Lease; (c) by notice in writing to Lessee,  recover all amounts
due on or before the date Amplicon  declared this Lease to be in default,  plus,
as liquidated damages for the loss of a bargain and not as a penalty, accelerate
and declare to be immediately due and payable all rentals and other sums payable
under the Lease without any presentment,  demand, protest or further notice (all
of which are hereby  expressly  waived by Lessee),  at which time the same shall
become  immediately  due and payable;  and (d) take immediate  possession of the
Property,  or any part of the Property,  from Lessee free from claims by Lessee.
In  the  case  of  Software,  it  is  agreed  that  Lessee's  unauthorized  use,
disclosure,  or transfer of the Software will cause Amplicon significant damages
which,  at the time the parties enter the Lease,  are  impossible to quantify or
predict.  Therefore,  if Lessee is found to be using (in any  manner) all or any
portion of the  Software  after the  termination  of this Lease,  or if Supplier
terminates a license of Lessee's right to use the Software for an alleged breach
of the use, disclosure,  or transfer restrictions imposed on Lessee, the parties
hereby agree that liquidated  damages shall be payable  immediately by Lessee to
Amplicon  in an amount  which is equal to two times the amount  paid by Amplicon
for the Software. The exercise of any of the foregoing remedies by Amplicon will
not constitute a termination of this Lease unless Amplicon so notifies Lessee in
writing.  If Amplicon  repossesses  the Property,  Amplicon may rent or sell the
Property  in such a manner  and at such  times as  Amplicon  may  determine  and
without notice to Lessee. In the event Amplicon rents the Property,  any rentals
received by Amplicon for the remaining  Term(s) of the Schedule shall be applied
to the payment of: (i) all costs and expenses (including  reasonable  attorneys'
fees) incurred by Amplicon in enforcing its remedies under this Lease,  and (ii)
the rentals for the  remainder of the Term(s) and all other sums then  remaining
unpaid  under this  Lease.  All  rentals  received  by  Amplicon  for the period
commencing  after the remaining  Term(s)  shall be retained by Amplicon.  Lessee
will remain  liable to Amplicon to the extent that the  aggregate  amount of the
sums  referred to in clauses  (i) and (ii) above  exceed the  aggregate  rentals
received by Amplicon under such agreements for the remaining Term(s)  applicable
to the Property covered by such agreements. In the event that Amplicon sells the
Property, the proceeds will be applied to the sum of: (1) all costs and expenses
(including  reasonable  attorneys'  fees)  incurred by Amplicon in enforcing its
remedies  under this Lease and in  disposing  of the  Property,  (2) the rentals
accrued under this Lease, but unpaid up to the time of such disposition, (3) any
and all other sums other than rentals then owing to Amplicon by Lessee under the
Lease,  and (4) the  stipulated  value as would be  determined in the event of a
Casualty  Occurrence (as defined in the terms and conditions to the Schedule) on
the date of the Property's disposition.  The remaining balance of such proceeds,
if any, will be applied first to reimburse  Lessee for any sums  previously paid
by Lessee as liquidated  damages (as set forth in (c) above),  and any remaining
amounts will be retained by Amplicon.  Lessee will remain  liable to Amplicon to
the extent  that the  aggregate  amount of the sums  referred  to in clauses (1)
through (4) above exceeds the proceeds  received by Amplicon in connection  with
the disposition of the Property.  Amplicon's remedies under this Lease shall not
be deemed exclusive.  Waiver of any default or breach of this Lease shall not be
construed as a waiver of subsequent or continuing defaults or breaches.

11. DISPUTE  RESOLUTION:  THE PARTIES AGREE THAT ALL DISPUTES,  WHETHER BASED IN
TORT OR CONTRACT, RELATING TO OR ARISING OUT OF THIS LEASE (COLLECTIVELY, "LEASE
DISPUTES")  WILL  BE  SUBMITTED  TO THE  ORANGE  COUNTY,  CALIFORNIA  OFFICE  OF
ENDISPUTE, INC., DBA J-A-M-S/ENDISPUTE ("JAMS") FOR A TRIAL OF ALL ISSUES OF LAW
AND FACT  CONDUCTED  BY A  RETIRED  JUDGE  OR  JUSTICE  FROM THE  PANEL OF JAMS,
APPOINTED  PURSUANT  TO A  GENERAL  REFERENCE  UNDER  CALIFORNIA  CODE OF  CIVIL
PROCEDURE  SECTION  638(1) (OR ANY  AMENDMENT,  ADDITION  OR  SUCCESSOR  SECTION
THERETO)  UNLESS AMPLICON OR ITS ASSIGNEE  SELECTS AN ALTERNATIVE  FORUM. IF THE
PARTIES  ARE  UNABLE TO AGREE ON A MEMBER OF THE JAMS  PANEL,  THEN ONE SHALL BE
APPOINTED BY THE PRESIDING JUDGE OF THE CALIFORNIA SUPERIOR COURT FOR THE COUNTY
OF ORANGE.  IN THE EVENT THAT JAMS IN THE COUNTY OF ORANGE CEASES TO EXIST, THEN
THE PARTIES  AGREE THAT ALL LEASE  DISPUTES  WILL BE FILED AND  CONDUCTED IN THE
CALIFORNIA  SUPERIOR  COURT FOR THE COUNTY OF  ORANGE,  UNLESS  AMPLICON  OR ITS
ASSIGNEE SELECTS AN ALTERNATIVE  FORUM.  LESSEE AGREES TO SUBMIT TO THE PERSONAL
JURISDICTION  OF THE CALIFORNIA  SUPERIOR COURT FOR ALL LEASE  DISPUTES.  LESSEE
WANES ITS RIGHTS TO A JURY TRIAL IN ANY ACTION  ARISING  OUT OF OR  RELATING  TO
THIS LEASE.  If any party to this Lease  brings any action to enforce any of the
terms,  or to recover for any breach,  then the prevailing  party is entitled to
recover from the other party reasonable attorneys' fees and costs, including all
JAMS-related costs and costs of collection  (including judgment  enforcement and
collection costs).

12. MISCELLANEOUS:  All agreements,  representations and warranties contained in
this  Lease,  or in any  document  or  certificate  delivered  pursuant to or in
connection  with this Lease,  shall  expressly  survive the  termination of this
Lease. If any provision of this Lease is determined by competent authority to be
unenforceable,  such determination shall not invalidate the remaining provisions
of the Lease.  To the extent  permitted by  applicable  law,  Lessee  waives any
provision of law which renders any provision hereof  prohibited or unenforceable
in any  respect.  This Lease has been  entered  into and shall be  performed  in
California and, therefore,  THIS LEASE SHALL BE CONSTRUED IN ACCORDANCE WITH AND
SHALL  BE  GOVERNED  BY THE  LAWS  OF THE  STATE  OF  CALIFORNIA  (EXCLUSIVE  OF
PRINCIPLES  OF CONFLICT OF LAWS).  Time is of the essence of this Lease and each
provision thereof.

<PAGE>
Amplicon Financial

                                                                        LEASE
5 HUTTON CENTRE DRIVE, SUITE 500 o SANTA ANA, CALIFORNIA 92707          SCHEDULE
714.751-7551 o 800.755-5055   FACSIMILE 714.751-7557
                                                                         NO.  01

 LESSEE                                                 CONTACT
       Valuestar, Inc.                                  Michael J. Kelly
 STREET                                                 PHONE NO.
       360 22nd Street, 2nd Floor                       (510) 808-1300
 CITY                 STATE     COUNTY       ZIP        FACSIMILE NO.
       Oakland        CA        Alameda      94612      510 808-1400

  A. This  Schedule  is issued  with  respect to the Lease         dated
  Agreement  Order No.  VL_00618                                  03/23/00

  All of the terms of the Lease Agreement are incorporated into this Schedule as
  if fully  reflected on the Schedule.  The terms of this Schedule and the Lease
  Agreement combine to form an individual Lease with an independent Term.

  B. Any  Deposit  under this  Schedule  shall be  returned  to Lessee  (without
  interest  thereon) if Amplicon does not accept this Schedule.  Upon acceptance
  of this Lease by Amplicon any such Deposit shall be applied to the rent due in
  the last month of the Term unless otherwise specified herein.

  C. Term (months):   Twenty-four (24)

  D. Deposit:         $ 24,864.00

  E. Monthly Rent:    $ 24,864.00

  F Property:         Total Property Cost: $592,000.00

                  Quantity       Property Description           Serial #

   Property to consist of Davox Call Center Software and Related Softcosts to be
   more fully described on Exhibit "A" to related documents at a later date.

  G. AT THE  EXPIRATION  OF THE TERM OR, IF EXTENDED,  AT THE  EXPIRATION OF THE
  EXTENSION  TERM LESSEE SHALL:  (I) PURCHASE ALL, BUT NOT LESS THAN ALL, OF THE
  PROPERTY  FOR A PRICE  EQUAL TO 10 % OF THE TOTAL COST PAID BY  AMPLICON  WITH
  RESPECT TO THE PROPERTY,  PLUS ALL APPLICABLE  SALES/USE TAXES THEREON AND ALL
  ACCRUED BUT UNPAID INTEREST,  TAXES, PENALTIES AND/OR OTHER SUMS DUE UNDER THE
  LEASE;  (II)  PROMPTLY  RETURN ALL, BUT NOT LESS THAN ALL, OF THE PROPERTY AND
  LEASE REPLACEMENT  PROPERTY FROM AMPLICON WHICH HAS A COST EQUAL TO OR GREATER
  THAN THE ORIGINAL TOTAL COST OF THE PROPERTY; OR (III) EXTEND THE SCHEDULE FOR
  A PERIOD OF ONE ADDITIONAL  YEAR AT THE RENTAL RATE  DELINEATED  HEREIN.  WITH
  RESPECT  TO  OPTION  (ll),  LESSEE  AND  AMPLICON  SHALL  EACH  HAVE  ABSOLUTE
  DISCRETION  REGARDING  THEIR  AGREEMENT OR LACK OF AGREEMENT TO THE TERMS OF A
  LEASE FOR REPLACEMENT  PROPERTY.  IF LESSEE HAS NOT ELECTED OPTION (I) OR (II)
  BY THE END OF THE TERM OR, IF EXTENDED,  THE EXTENSION TERM, THEN OPTION (lll)
  SHALL PREVAIL.  THEREAFTER, THIS LEASE WILL CONTINUE SUBJECT TO TERMINATION BY
  EITHER  LESSEE OR AMPLICON AT THE END OF ANY MONTH,  PROVIDED AT LEAST  NINETY
  DAYS' PRIOR WRITTEN NOTICE IS DELIVERED TO THE OTHER PARTY

THE  INDIVIDUAL  SIGNING BELOW  CERTIFIES  THAT HE OR SHE HAS READ THIS SCHEDULE
(INCLUDING  THE  TERMS ON THE  REVERSE  SIDE) AND THE  LEASE  AGREEMENT,  AND IS
AUTHORIZED TO SIGN THIS SCHEDULE ON BEHALF OF LESSEE.

THIS  SCHEDULE  ALONG WITH THE LEASE  AGREEMENT  CONTAIN  THE  ENTIRE  AGREEMENT
BETWEEN  AMPLICON AND LESSEE WITH  RESPECT TO THE SUBJECT  MATTER  HEREOF.  THIS
AGREEMENT CAN ONLY BE MODIFIED IN WRITING,  WITH SUCH MODIFICATIONS  SIGNED BY A
PERSON  AUTHORIZED  TO SIGN  AGREEMENTS ON BEHALF OF LESSEE AND BY AN AUTHORIZED
SIGNER OF AMPLICON.  NO ORAL OR OTHER  WRITTEN  AGREEMENTS,  REPRESENTATIONS  OR
PROMISES SHALL BE RELIED UPON OR BE BINDING ON THE PARTIES UNLESS MADE A PART OF
THIS  LEASE BY A WRITTEN  MODIFICATION  SIGNED BY AN  AUTHORIZED  SIGNER OF BOTH
LESSEE AND AMPLICON.

              LESSEE/OFFEROR                           AMPLICON, INC.
 OFFER:                                    ACCEPTANCE:
           Valuestar, Inc.

 Signature:    /s/ Michael Kelly           Signature:   /s/ Darren S. Higuchi
            --------------------------                --------------------------
 Name:         Michael J. Kelly                         Darren S. Higuchi
            --------------------------                --------------------------
 Title:        Secretary/Controller        Title:       Assistant Vice President
            --------------------------                --------------------------
 Date:         March 20, 2000              Date:        03/23/00
            --------------------------                --------------------------

                                                                        Rev. AMP
                                                                            D/98
                                       8
<PAGE>

TERMS AND CONDITIONS
APPLICABLE TO THIS LEASE SCHEDULE

H. RIGHT TO INSPECT THE PROPERTY:  Amplicon may during reasonable business hours
enter upon any  premises  where the Property is located;  to confirm  compliance
with the terms of the Lease.

I. TAXES ON THE PROPERTY:  All fees,  assessments  and taxes (except those based
upon the net income of Amplicon)  which may now or  hereafter  become due or are
imposed upon the ownership,  sale,  possession and/or use of the Property are to
be paid by Lessee.  While Lessee will be responsible for payment of all personal
property taxes,  Amplicon will file all personal property tax returns.  Amplicon
is not  responsible  for  contesting  any  valuation  of, or tax imposed on, the
Property (but may do so strictly as an  accommodation to Lessee) and will not be
liable or accountable to Lessee  therefor.  Amplicon retains any and all federal
and state tax credits or benefits relating to the Property.

J. USE,  OPERATION AND  MAINTENANCE OF THE PROPERTY:  Lessee at its own expense,
will provide a suitable  place for the  operation of the  Property,  and keep in
force for the  duration of the Lease the best  standard  Supplier's  maintenance
agreement(s) which will cause the Supplier(s) to make all the necessary repairs,
adjustments,  and replacements in accordance with such maintenance  agreement(s)
and  entitle  Lessee  (through  Amplicon,  if  necessary)  to  obtain  available
enhancements, updates, upgrades and changes.

K. ADDITIONS AND MODIFICATIONS TO THE PROPERTY:  All additions and modifications
to the  Property  become  a part of the  Property  and are  owned  by  Amplicon.
Software,  as described  on any  Schedule(s),  includes all updates,  revisions,
upgrades,   new  versions,   enhancements,   modifications,   derivative  works,
maintenance fixes, translations,  adaptations, and copies of the foregoing or of
the  original  version  of the  Software  whether  obtained  from the  Supplier,
licensor or from any source whatsoever, and references in this Lease to Software
will be interpreted as references to any and all of the foregoing. All additions
and  modifications to the Property must be free and clear of any liens or rights
of other parties.

L. INSURING THE PROPERTY:  While the Property is in transit and for the duration
of the Lease. Lessee at its own expense shall maintain (i) comprehensive  public
liability  insurance (naming Amplicon or its assigns as additional  insured) for
bodily  injury  and  property  damage  resulting  from the  maintenance.  use or
transport  of the Property and (ii)  property  and  casualty  insurance  (naming
Amplicon  and/or its assigns as sole loss payee)  covering  all risks of loss or
damage to the Property from any cause whatsoever including,  without limitation,
fire and  theft.  All  insurance  will be from an  insurer(s)  and in a form and
amount  satisfactory to Amplicon.  Lessee shall deliver to Amplicon the original
policies or  certificates  of such  insurance  (and each renewal or  replacement
thereof)  and  evidence  of the  payment  of the  premiums  for  such  insurance
policies.   All  policies  will  provide  that  no   cancellation   or  material
modification  of such  insurance  shall be effective  without  thirty days prior
written notice to Amplicon.

M. RISK OF LOSS TO THE PROPERTY: While the Property is in transit and throughout
the duration of the Lease.  Lessee assumes all responsibility for loss or damage
or other Casualty Occurrence.  as defined herein, to the Property and shall hold
Amplicon harmless.  A Casualty  Occurrence occurs if, for any reason whatsoever,
any  of  the  Property  is  lost,  stolen,  requisitioned.  taken,  confiscated,
destroyed  or  irreparably  damaged  by any  cause  whatsoever.  In the  case of
Software.  the  erasure,  inoperability  or  other  incapacity  of the  Software
triggered by a preprogrammed  termination or limiting design or routine embedded
in the Software is also deemed a Casualty Occurrence. In the event of a Casualty
Occurrence  as to any  Property,  Lessee  will  immediately  inform  Amplicon in
writing.  On the next  succeeding  rental  payment date,  Lessee will (i) either
replace the Property  with  like-kind  Property,  free and clear of any liens or
rights of other  parties,  acceptable  to Amplicon or  Amplicon's  assignee  and
continue to pay all rentals  without  interruption as they come due, or (ii) pay
to  Amplicon  all past due  rentals  and other  amounts  then late or due and an
amount equal to the  stipulated  value as  determined  by the Casualty  Schedule
annexed to the Lease  ("Stipulated  Value").  When Lessee  makes this payment to
Amplicon,  the  rentals  cease to accrue  and the  Lease  with  respect  to that
Schedule ends. Insurance proceeds received by Amplicon as a result of a Casualty
Occurrence will be applied to reduce  Lessee's  obligation to pay the Stipulated
Value.

N.  OWNERSHIP OF THE PROPERTY:  Amplicon at all times retains  ownership,  title
and/or  control over Lessee's  right to use the Property in accordance  with the
terms of the  Lease.  Lessee  shall  protect  and  defend,  at its own  expense.
Amplicon's  title and/or rights in the Property against all claims and liens and
keep the Property  free and clear of all such claims and liens.  The Property is
and shall remain personal  property of Amplicon.  To the extent Software subject
to this  Lease  may also be the  subject  of a  license  agreement  between  the
Supplier and Lessee, Lessee acknowledges that the license to use the Software is
being  provided to Lessee  solely  because of  payments  made by Amplicon to the
Supplier  and,  accordingly,  Lessee agrees that Amplicon has an interest in the
license.  Lessee agrees that if it or any of its affiliates receives anything of
value from the Supplier (including without limitation. a trade-in, substitution,
discount or upgrade  allowance)  other than Lessee's  rights to use the Software
reflected on the  Schedule  for the  duration of this Lease,  Lessee will advise
Amplicon and pay to Amplicon an amount equal to such  additional  value obtained
by Lessee.  Lessee  agrees  that it will not  surrender,  transfer or modify the
license agreement without first obtaining the written consent of Amplicon.

O. RETURN OF PROPERTY:  If Lessee  elects to return the Property as provided for
in the Lease,  Lessee will discontinue the use of the Property,  pay to Amplicon
an  inspection,  refurbishment  and  restocking fee equal to five percent of the
Property's  original  cost,  and  immediately,  at its  own  expense,  ship  the
Property, with all manuals,  cables, cartons and packing materials as originally
furnished by Supplier, to a location within the United States in accordance with
the Property return instructions  provided by Amplicon. In the case of Software,
Lessee will destroy all intangible  Software items,  and deliver to Amplicon all
tangible items constituting  Software.  At Amplicon's request,  Lessee will also
certify in a written  form  acceptable  to Amplicon  that:  (i) all the tangible
Software has been delivered to Amplicon;  (ii) all intangible  records have been
destroyed;  (iii) Lessee has not retained the Software in any form;  (iv) Lessee
will not use the Software after termination and (v) Lessee has not received from
Supplier(s)  anything  of value  relating to or in exchange  for  Lessee's  use,
rental or possession of the Software during the duration of the Lease (including
a trade-in,  substitution or upgrade allowance).  Until Lessee has complied with
all of the requirements of this Section,  rent payment obligations will continue
from month to month at the rental rate delineated on the Schedule.

P. ASSIGNMENT OF LEASE AND/OR PROPERTY: AMPLICON MAY ASSIGN ANY OF ITS RIGHTS IN
THE LEASE  AND/OR  THE  PROPERTY  TO AN  ASSIGNEE  ("ASSIGNEE").  LESSEE  HEREBY
CONSENTS TO SUCH ASSIGNMENT AND FURTHER AGREES AS FOLLOWS: (1) ASSIGNEE DOES NOT
ASSUME  ANY OF THE  OBLIGATIONS  OF  AMPLICON  UNDER THE  LEASE;  (2) TO PAY ALL
ASSIGNED  MONIES DUE UNDER THE LEASE  UNCONDITIONALLY  WITHOUT OFFSET AND LESSEE
FURTHER AGREES THAT SUCH MONIES SHALL BE PAYABLE  NOTWITHSTANDING ANY DEFENSE OR
COUNTERCLAIM  WHATSOEVER  WHETHER BY REASON OF BREACH OF THE LEASE, THE EXERCISE
OF ANY RIGHT  HEREUNDER,  OR OTHERWISE,  WHICH LESSEE MAY NOW OR HEREAFTER  HAVE
AGAINST  AMPLICON  (LESSEE  RESERVES  ITS RIGHT TO ASSERT  ANY SUCH  DEFENSE  OR
COUNTERCLAIM DIRECTLY AGAINST AMPLICON);  (3) TO PROVIDE AMPLICON WITH A COPY OF
ANY NOTICES SENT BY LESSEE TO ASSIGNEE UNDER THE LEASE;  (4) THAT SUBJECT TO AND
WITHOUT  IMPAIRMENT OF LESSEE'S  LEASEHOLD RIGHTS IN AND TO THE PROPERTY COVERED
UNDER THE LEASE,  LESSEE SHALL HOLD SAID PROPERTY AND THE POSSESSION THEREOF FOR
THE  ASSIGNEE  TO THE  EXTENT OF THE  ASSIGNEE'S  RIGHTS  THEREIN,  AND (5) SUCH
ASSIGNMENT DOES NOT CHANGE LESSEE'S OBLIGATIONS UNDER THIS LEASE OR INCREASE THE
BURDEN  AND RISKS  IMPOSED  ON  LESSEE,  WITHOUT  THE PRIOR  WRITTEN  CONSENT OF
AMPLICON, LESSEE SHALL NOT ASSIGN THIS LEASE OR ITS INTEREST IN THE LEASE IN ANY
FORM OR MANNER  INCLUDING,  BUT NOT  LIMITED  TO, AN  ASSIGNMENT  DUE TO A SALE,
MERGER,  LIQUIDATION,  SUB-LEASE,  LEVERAGED  BUYOUT,  CHANGE  OF  OWNERSHIP  OR
CHANGE-IN-CONTROL.

<PAGE>

                                  ADDENDUM "A"
                                       TO
                             LEASE SCHEDULE NO. _01
                                       TO
                       LEASE AGREEMENT ORDER NO. VL-00618

This Addendum is  supplemental  to and made a part of Lease  Agreement Order No.
VL-00618  dated  03/23/00  (the  "Agreement"),  Lease  Schedule(s)  No. 01 dated
03/23/00  and other  related  documents  under  the  Lease  and  Lease  Schedule
(collectively forming the "Lease").  The parties to the Lease include Valuestar,
Inc. ("Lessee") and Amplicon, Inc.

Capitalized  terms  used in this  Addendum  without  definition  shall  have the
meanings set forth in then Lease, unless specifically modified. This Addendum is
to be construed as supplemental to, and part of, the Lease.

Throughout  the  term  of  the  Lease,  as  security  for  Lessee's  obligations
hereunder,   Lessee  agrees  to  maintain  at  its  sole  cost  and  expense  an
unconditional  and irrevocable stand by letter of credit ("Letter of Credit") in
the  amount  of  Two-Hundred   Ninety-Six   Thousand  and  00/100  U.S.  Dollars
($296,000.00),  in  form,  substance,  and  issued  by a  bank  satisfactory  to
Amplicon,  Inc. Lessee agrees to obligate the issuer to notify Amplicon, Inc. in
writing at least ninety (90) days in advance of any date of  expiration  of such
Letter of Credit that such Letter of Credit has not been renewed. In addition to
the  provisions of Section 9 of the  Agreement,  it shall be an Event of Default
hereunder if Amplicon,  Inc. does not receive a satisfactory  replacement Letter
of Credit, at least sixty (60) days in advance of any expiration or cancellation
of any Letter of Credit issued  pursuant to this Lease. If there is any Event of
Default  under the  Lease,  Amplicon,  Inc.  may draw all or part of the  amount
available  under such  Letter of Credit,  and may pursue any or all of its other
remedies available.  Amplicon, Inc. may draw upon the Letter of Credit to obtain
payment of any amounts due and unpaid under the Lease.

In all other respects,  the terms and conditions of the Lease, as originally set
forth,  shall  remain in full force and effect.  The Lease sets forth the entire
and final  understanding  between the parties with respect hereto.  The terms of
this Addendum have been  negotiated  and jointly  drafted by Amplicon,  Inc. and
Lessee and,  therefore,  the language of the Addendum  shall not be construed in
favor or against  either party.  The  undersigned  represent  that they have the
authority to enter into this Lease,  and that the same shall be legally  binding
and enforceable on the respective principals.

IN WITNESS WHEREOF,  the parties hereto, by their authorized  signatories,  have
executed  this  Addendum  "A" at the  date  set  forth  below  their  respective
signatures.

           LESSEE:
           Valuestar, Inc.                            Amplicon, Inc.
           ---------------                            --------------

By:        /s/ Michael Kelly                 By:      /s/ Darren S. Higuchi
      ------------------------------               -----------------------------
Name:      Michael J. Kelly                  Name:    Darren S. Higuchi
      ------------------------------               -----------------------------
Title:     Secretary/Controller              Title:   Assistant Vice President
      ------------------------------               -----------------------------
Date:      March 20, 2000                    Date:    03/23/00
      ------------------------------               -----------------------------

<PAGE>

                                                                     INITIAL DSH

                                  ADDENDUM "A"
                                (Changed to "B")

                                 WITH RESPECT TO

                       LEASE AGREEMENT ORDER NO. VL-00618

                            AND LEASE SCHEDULE NO. 01

This Addendum is  supplemental  to and made a part of Lease  Agreement Order No.
VL-00618,  dated  03/23/00  (the  "Agreement"),  Lease  Schedule  No. 01,  dated
03/23/00 and other related  documents  under the  Agreement  and Lease  Schedule
(collectively  the "Lease").  The parties to the Lease include  Valuestar.  Inc.
("Lessee") and Amplicon, Inc. ("Amplicon").

Capitalized  terms  used in this  Addendum  without  definition  shall  have the
meanings set forth in the Lease, unless specifically modified.  This Addendum is
to be construed as supplemental to, and a part of, the Lease.

Lessee and Amplicon  acknowledge and agree that the Lease is hereby amended with
respect to Lease Schedule No. 01, as follows:

         On the front page of the Lease  Schedule,  delete  paragraph  G. in its
         entirety, and replace it with the following language:

         "G. AT THE EXPIRATION OF THE TERM, ONE FINAL PAYMENT OF $59,200.00 (10%
         OF  ORIGINAL  COST OF THE  PROPERTY),  PLUS ALL ACCRUED BUT UNPAID LATE
         CHARGES,  INTEREST,  TAXES,  PENALTIES  AND/OR OTHER SUMS DUE AND OWING
         UNDER THE  LEASE,  SHALL  BECOME  DUE,  OWING AND  PAYABLE BY LESSEE TO
         AMPLICON OR AMPLICON'S ASSIGNEE, IF APPLICABLE, FOR WHICH AMPLICON WILL
         PASS ITS TITLE IN THE PROPERTY TO LESSEE."

In all other  respects,  the terms and  conditions  of the Lease,  as originally
written,  shall  remain in full force and effect.  The Lease as amended  herein,
sets forth the entire and final  understanding  between the parties with respect
hereto.  The terms of this Addendum have been  negotiated and jointly drafted by
Amplicon and Lessee and,  therefore,  the language of the Addendum  shall not be
construed in favor or against either party. The undersigned  represent that they
have the  authority to enter into the Lease,  and that the same shall be legally
binding and enforceable on the respective principals.

IN WITNESS WHEREOF the parties hereto,  by their  authorized  signatories,  have
executed this Addendum at the date set forth below their respective signatures.

LESSEE:    Valuestar Inc.                               Amplicon, Inc.

BY:        /s/ Michael Kelly                  BY:      /s/ Darren S. Higuchi
        ---------------------------                 ----------------------------
NAME:      Michael J. Kelly                   NAME:     Darren S. Higuchi
        ---------------------------                 ----------------------------
TITLE:     Secretary/Controller               TITLE:    Assistant Vice President
        ---------------------------                 ----------------------------
DATE:      March 20, 2000                     DATE:     03/23/00
        ---------------------------                 ----------------------------EXHIBIT 10.23

                                                               Customer No. 1418

                       MASTER LOAN AND SECURITY AGREEMENT

                           THIS AGREEMENT  dated as of April 7, 2000, is made by
Valuestar, Inc. (the "Borrower"),  a California corporation having its principal
place of business  and chief  executive  office at 360 22nd  Street,  Suite 210,
Oakland, California 94612, in favor of Transamerica Business Credit Corporation,
a Delaware  corporation (the "Lender"),  having its principal office at Riverway
II, West Office Tower, 9399 West Higgins Road, Rosemont, Illinois 60018.

                  WHEREAS, the Borrower has requested that the Lender make Loans
to it from time to time; and

                  WHEREAS, the Lender has agreed to make such Loans on the terms
and conditions of this Agreement.

                  NOW, THEREFORE, in consideration of the premises and to induce
the Lender to extend  credit,  the  Borrower  hereby  agrees  with the Lender as
follows:

                  SECTION 1. DEFINITIONS.

                  As used herein,  the following  terms shall have the following
meanings,  and shall be equally applicable to both the singular and plural forms
of the terms defined:

Agreement shall mean this Master Loan and Security  Agreement  together with all
schedules and exhibits hereto, as amended,  supplemented,  or otherwise modified
from time to time.

Applicable  Law  shall  mean the laws of the  State of  Illinois  (or any  other
jurisdiction whose laws are mandatorily applicable  notwithstanding the parties'
choice of Illinois law) or the laws of the United  States of America,  whichever
laws  allow the  greater  interest,  as such laws now exist or may be changed or
amended or come into effect in the future.

Business Day shall mean any day other than a Saturday, Sunday, or public holiday
or the equivalent for banks in New York City.

Code shall have the meaning specified in Section 8(d).

Collateral shall have the meaning specified in Section 2.

Collateral  Access Agreement shall mean any landlord waiver,  mortgagee  waiver,
bailee letter,  or similar  acknowledgement  of any warehouseman or processor in
possession of any Equipment.

Effective Date shall mean the date on which all of the  conditions  specified in
Section 3.3 shall have been satisfied.

Equipment shall have the meaning specified in Section 2.

Event of Default shall mean any event specified in Section 7.

Financial Statements shall have the meaning specified in Section 6.1.

GAAP shall mean generally accepted accounting principles in the United States of
America, as in effect from time to time.

                                       1
<PAGE>

Loans shall mean the loans and  financial  accommodations  made by the Lender to
the Borrower in accordance with the terms of this Agreement and the Notes.

Loan Documents  shall mean,  collectively,  this Agreement,  the Notes,  and all
other present and future documents, agreements,  certificates,  instruments, and
opinions delivered by the Borrower under, in connection with or relating to this
Agreement, or any other present or future instrument or agreement between Lender
and Borrower, as each of the same may be amended, modified,  extended,  restated
or supplemented from time to time.

Material  Adverse  Change  shall mean,  with  respect to any Person,  a material
adverse change in the business,  prospects,  operations,  results of operations,
assets,  liabilities, or condition (financial or otherwise) of such Person taken
as a whole.

Material  Adverse  Effect  shall mean,  with  respect to any Person,  a material
adverse effect on the business,  prospects,  operations,  results of operations,
assets,  liabilities, or condition (financial or otherwise) of such Person taken
as a whole.

Note  shall  mean  each  Promissory  Note made by the  Borrower  in favor of the
Lender, as amended, supplemented, or otherwise modified from time to time.

Obligations  shall mean and include all loans  (including the Loans),  advances,
debts,  liabilities,  obligations,  covenants  and duties  owing by  Borrower to
Lender of any kind or nature, present or future, whether or not evidenced by the
Note or any note, guaranty or other instrument,  whether or not arising under or
in connection with, this Agreement, any other Loan Document or any other present
or future  instrument  or  agreement,  whether or not for the  payment of money,
whether  arising by reason of an extension of credit,  opening,  guaranteeing or
confirming  of a letter of credit,  loan,  guaranty,  indemnification  or in any
other  manner,   whether  direct  or  indirect   (including  those  acquired  by
assignment,  purchase,  discount or otherwise),  whether absolute or contingent,
due or to  become  due,  now  due or  hereafter  arising  and  however  acquired
(including  without limitation all loans previously made by Lender to Borrower).
The term includes, without limitation, all interest (including interest accruing
on or after a bankruptcy,  whether or not an allowed claim), charges,  expenses,
commitment,  facility,  closing and collateral management fees, letter of credit
fees, reasonable attorneys' fees, taxes and any other sum properly chargeable to
Borrower under this Agreement,  the other Loan Documents or any other present or
future agreement between Lender and Borrower.

Permitted  Liens shall mean such of the  following  as to which no  enforcement,
collection,   execution,   levy,  or  foreclosure  proceeding  shall  have  been
commenced: (a) liens for taxes,  assessments,  and other governmental charges or
levies or the claims or demands of landlords, carriers, warehousemen, mechanics,
laborers, materialmen, and other like Persons arising by operation of law in the
ordinary course of business for sums which are not yet due and payable, or liens
which are being  contested in good faith by appropriate  proceedings  diligently
conducted  and with respect to which  adequate  reserves are  maintained  to the
extent  required  by GAAP;  (b)  deposits  or pledges  to secure the  payment of
worker's compensation, unemployment insurance, or other social security benefits
or obligations,  public or statutory obligations, surety or appeal bonds, bid or
performance  bonds,  or  other  obligations  of a like  nature  incurred  in the
ordinary course of business; (c) licenses,  restrictions, or covenants for or on
the use of the Equipment  which do not  materially  impair either the use of the
Equipment  in the  operation of the business of the Borrower or the value of the
Equipment;  and (d) attachment or judgment liens that do not constitute an Event
of Default.

Person shall mean any  individual,  sole  proprietorship,  partnership,  limited
liability  partnership,   joint  venture,  trust,  unincorporated  organization,
association, corporation, limited liability company, institution, entity, party,
or government (including any division,  agency, or department thereof),  and the
successors, heirs, and assigns of each.

Schedule shall mean each Schedule in the form of Schedule A hereto  delivered by
the Borrower to the Lender from time to time.

Solvent means, with respect to any Person,  that as of the date as to which such
Person's solvency is measured:

                                       2
<PAGE>

                  (a) the fair saleable  value of its assets is in excess of the
total amount of its liabilities  (including contingent  liabilities as valued in
accordance with GAAP) as they become absolute and matured;

                  (b) it has sufficient capital to conduct its business; and

                  (c) it is able generally to meet its debts as they mature.

Taxes shall have the meaning specified in Section 5.5.

                  SECTION 2.  CREATION OF  SECURITY  INTEREST;  COLLATERAL.  The
Borrower  hereby  assigns and grants to the Lender a continuing  general,  first
priority lien on, and security interest in, all the Borrower's right, title, and
interest  in  and  to  the  collateral  described  in  the  next  sentence  (the
"Collateral") to secure the payment and performance of all the Obligations.  The
Collateral  consists of all equipment  set forth on all the Schedules  delivered
from time to time under the terms of this Agreement (the "Equipment"),  together
with  all  present  and  future  additions,  parts,  accessories,   attachments,
substitutions,  repairs,  improvements, and replacements thereof or thereto, and
any and  all  proceeds  thereof,  including,  without  limitation,  proceeds  of
insurance  and all manuals,  blueprints,  know-how,  warranties,  and records in
connection therewith, all rights against suppliers,  warrantors,  manufacturers,
sellers,  or others in connection  therewith,  and together with all substitutes
for any of the foregoing.

                  SECTION 3. THE CREDIT FACILITY.

                           SECTION  3.1.  Borrowings.  Each Loan  shall be in an
amount not less than  $100,000,  and in no event shall the sum of the  aggregate
Loans made exceed the amount of the Lender's written  commitment to the Borrower
in effect from time to time.  Notwithstanding  anything  herein to the contrary,
the Lender  shall be obligated to make the initial Loan and each other Loan only
after  the  Lender,  in its sole  discretion,  determines  that  the  applicable
conditions for borrowing  contained in Sections 3.3 and 3.4 are  satisfied.  The
timing and financial  scope of Lender's  obligation to make Loans  hereunder are
limited as set forth in a  commitment  letter  executed by Lender and  Borrower,
dated as of March 21,  2000 and  attached  hereto as Exhibit A (the  "Commitment
Letter").

                           SECTION 3.2.  Application  of Proceeds.  The Borrower
shall not  directly  or  indirectly  use any  proceeds  of the Loans,  or cause,
assist,  suffer, or permit the use of any proceeds of the Loans, for any purpose
other  than  for  the  purchase,  acquisition,  installation,  or  upgrading  of
Equipment or the  reimbursement  of the Borrower for its purchase,  acquisition,
installation, or upgrading of Equipment.

                           SECTION 3.3. Conditions to Initial Loan.

                  (a) The  obligation  of the Lender to make the initial Loan is
subject to the  Lender's  receipt of the  following,  each dated the date of the
initial  Loan or as of an earlier  date  acceptable  to the Lender,  in form and
substance satisfactory to the Lender and its counsel:

                           (i) completed  requests for information (Form UCC-11)
                  listing  all  effective  Uniform   Commercial  Code  financing
                  statements  naming  the  Borrower  as debtor and all tax lien,
                  judgment,  and  litigation  searches  for the  Borrower as the
                  Lender shall deem necessary or desirable;

                           (ii) Uniform  Commercial  Code  financing  statements
                  (Form UCC-1) duly executed by the Borrower  (naming the Lender
                  as  secured  party  and the  Borrower  as  debtor  and in form
                  acceptable  for  filing in all  jurisdictions  that the Lender
                  deems necessary or desirable to perfect the security interests
                  granted  to it  hereunder)  and,  if  applicable,  termination
                  statements or other  releases duly filed in all  jurisdictions
                  that the Lender  deems  necessary  or desirable to perfect and
                  protect the priority of the security  interests  granted to it
                  hereunder in the Equipment related to such initial Loan;

                           (iii) a Note duly executed by the Borrower evidencing
                  the amount of such Loan;

                                       3
<PAGE>

                           (iv) a Collateral  Access  Agreement duly executed by
                  the lessor or mortgagee,  as the case may be, of each premises
                  where the Equipment is located;

                           (v) certificates of insurance  required under Section
                  5.4 of this  Agreement  together with loss payee  endorsements
                  for all such  policies  naming the Lender as lender loss payee
                  and as an additional insured;

                           (vi) a  certificate  of the Secretary or an Assistant
                  Secretary   of  the   Borrower   ("Secretary's   Certificate")
                  certifying (A) that attached to the Secretary's Certificate is
                  a true, complete,  and accurate copy of the resolutions of the
                  Board of Directors of the Borrower (or a unanimous  consent of
                  directors  in  lieu  thereof)   authorizing   the   execution,
                  delivery,  and performance of this  Agreement,  the other Loan
                  Documents,  and  the  transactions   contemplated  hereby  and
                  thereby,  and that such  resolutions  have not been amended or
                  modified since the date of such  certification and are in full
                  force  and  effect;  (B)  the  incumbency,   names,  and  true
                  signatures of the officers of the Borrower  authorized to sign
                  the Loan  Documents to which it is a party;  (C) that attached
                  to the  Secretary's  Certificate is a true and correct copy of
                  the Articles or Certificate of  Incorporation  of the Company,
                  as amended,  which Articles or  Certificate  of  Incorporation
                  have not been further modified,  repealed or rescinded and are
                  in full force and effect; (D) that attached to the Secretary's
                  Certificate  of the Borrower is a true and correct copy of the
                  Bylaws, as amended,  which Bylaws of the Company have not been
                  further modified,  repealed or rescinded and are in full force
                  and  effect;   and  (E)  that  attached  to  the   Secretary's
                  Certificate is a valid  Certificate of Good Standing issued by
                  the  Secretary  of  the  State  of  the  Borrower's  state  of
                  incorporation; and

                           (vii) such other  agreements  and  instruments as the
                  Lender deems necessary in its sole and absolute  discretion in
                  connection with the transactions contemplated hereby.

                  (b) There  shall be no  pending  or, to the  knowledge  of the
Borrower after due inquiry, threatened litigation, proceeding, inquiry, or other
action (i) seeking an injunction or other restraining order,  damages,  or other
relief with respect to the  transactions  contemplated  by this Agreement or the
other  Loan  Documents  or thereby  or (ii)  which  affects or could  affect the
business, prospects, operations, assets, liabilities, or condition (financial or
otherwise)  of the  Borrower,  except,  in the case of clause  (ii),  where such
litigation, proceeding, inquiry, or other action could not be expected to have a
Material Adverse Effect in the judgment of the Lender.

                  (c) The  Borrower  shall  have  paid  all  fees  and  expenses
required to be paid by it to the Lender as of such date.

                  (d) The  security  interests in the  Equipment  related to the
initial Loan granted in favor of the Lender under this Agreement shall have been
duly perfected and shall constitute first priority liens.

                           SECTION 3.4.  Conditions  Precedent to Each Loan. The
obligation of the Lender to make each Loan is subject to the satisfaction of the
following conditions precedent:

                  (a) the Lender shall have received the documents,  agreements,
and  instruments set forth in Section  3.3(a)(i)  through (v) applicable to such
Loan, each in form and substance  satisfactory to the Lender and its counsel and
each  dated the date of such Loan or as of an  earlier  date  acceptable  to the
Lender;

                  (b) the Lender shall have received a Schedule of the Equipment
related to such Loan, in form and substance  satisfactory  to the Lender and its
counsel,  and the  security  interests  in such  Equipment  related to such Loan
granted  in favor of the  Lender  under  this  Agreement  shall  have  been duly
perfected and shall constitute first priority liens;

                  (c)  all  representations  and  warranties  contained  in this
Agreement  and the other Loan

                                       4
<PAGE>

Documents  shall be true and  correct  on and as of the date of such  Loan as if
then made,  other than  representations  and warranties  that  expressly  relate
solely to an earlier  date,  in which case they shall have been true and correct
as of such earlier date;

                  (d) no Event of  Default  or event  which  with the  giving of
notice or the passage of time,  or both,  would  constitute  an Event of Default
shall have  occurred  and be  continuing  or would result from the making of the
requested Loan as of the date of such request; and

                  (e) the Borrower shall be deemed to have hereby reaffirmed and
ratified  all  security  interests,  liens,  and other  encumbrances  heretofore
granted by the Borrower to the Lender.

                  SECTION 4. THE BORROWER'S REPRESENTATIONS AND WARRANTIES.

                           SECTION 4.1. Good Standing; Qualified to do Business.
The Borrower (a) is duly organized, validly existing, and in good standing under
the laws of the State of its  organization,  (b) has the power and  authority to
own its  properties  and assets and to transact  the  businesses  in which it is
presently,  or proposes to be, engaged, and (c) is duly qualified and authorized
to do  business  and is in good  standing  in every  jurisdiction  in which  the
failure  to be so  qualified  could have a  Material  Adverse  Effect on (i) the
Borrower,  (ii) the Borrower's ability to perform its obligations under the Loan
Documents, or (iii) the rights of the Lender hereunder.

                           SECTION  4.2.  Due  Execution,  etc.  The  execution,
delivery, and performance by the Borrower of each of the Loan Documents to which
it is a party are within  the  powers of the  Borrower,  do not  contravene  the
organizational  documents,  if any, of the Borrower,  and do not (a) violate any
law  or  regulation,  or any  order  or  decree  of any  court  or  governmental
authority,  (b) conflict  with or result in a breach of, or constitute a default
under, any material indenture, mortgage, or deed of trust or any material lease,
agreement, or other instrument binding on the Borrower or any of its properties,
or (c) require  the  consent,  authorization  by, or approval of or notice to or
filing or registration  with any  governmental  authority or other Person.  This
Agreement  is, and each of the other Loan  Documents to which the Borrower is or
will be a party,  when delivered  hereunder or  thereunder,  will be, the legal,
valid, and binding obligation of the Borrower  enforceable  against the Borrower
in  accordance  with its  terms,  except as  enforceability  may be  limited  by
bankruptcy,  insolvency,  or similar laws affecting  creditors' rights generally
and by general principles of equity.

                           SECTION  4.3.  Solvency;  No Liens.  The  Borrower is
Solvent and will be Solvent upon the completion of all transactions contemplated
to occur hereunder  (including,  without limitation,  the Loan to be made on the
Effective Date); the security  interests  granted herein constitute and shall at
all times  constitute  the first and only  liens on the  Collateral  other  than
Permitted  Liens;  and  the  Borrower  is,  or will  be at the  time  additional
Collateral  is acquired by it, the absolute  owner of the  Collateral  with full
right to  pledge,  sell,  consign,  transfer,  and  create a  security  interest
therein,  free and  clear of any and all  claims  or liens in favor of any other
Person other than Permitted Liens.

                           SECTION 4.4. No Judgments,  Litigation.  No judgments
are outstanding against the Borrower nor is there now pending or, to the best of
the Borrower's  knowledge  after diligent  inquiry,  threatened any  litigation,
contested  claim, or  governmental  proceeding by or against the Borrower except
judgments  and  pending  or  threatened   litigation,   contested  claims,   and
governmental  proceedings  which  would not, in the  aggregate,  have a Material
Adverse Effect on the Borrower.

                           SECTION  4.5.  No  Defaults.  The  Borrower is not in
default or has not  received a notice of default  under any  material  contract,
lease,  or  commitment  to which it is a party  or by  which  it is  bound.  The
Borrower knows of no dispute regarding any contract,  lease, or commitment which
could have a Material Adverse Effect on the Borrower.

                           SECTION  4.6.  Collateral  Locations.   On  the  date
hereof,  each  item of the  Collateral  is  located  at the  place  of  business
specified in the applicable Schedule.

                                       5
<PAGE>

                           SECTION  4.7.  No  Events  of  Default.  No  Event of
Default has occurred and is continuing  nor has any event occurred  which,  with
the giving of notice or the passage of time, or both,  would constitute an Event
of Default.

                           SECTION 4.8. No Limitation on Lender's Rights. Except
as  permitted  herein,   none  of  the  Collateral  is  subject  to  contractual
obligations  that may  restrict or inhibit the  Lender's  rights or abilities to
sell or dispose of the Collateral or any part thereof after the occurrence of an
Event of Default.

                           SECTION   4.9.Perfection  and  Priority  of  Security
Interest.  This Agreement  creates a valid and, upon  completion of all required
filings  of  financing  statements  with the  appropriate  government  agencies,
perfected  first  priority and exclusive  security  interest in the  Collateral,
securing the payment of all the Obligations.

                           SECTION 4.10. Model and Serial Numbers. The Schedules
set forth the true and correct  model  number and serial  number of each item of
Equipment that constitutes Collateral.

                           SECTION   4.11.    Accuracy   and   Completeness   of
Information.  All data, reports, and information heretofore,  contemporaneously,
or hereafter  furnished by or on behalf of the Borrower in writing to the Lender
or for  purposes  of or in  connection  with this  Agreement  or any other  Loan
Document, or any transaction contemplated hereby or thereby, are or will be true
and  accurate  in all  material  respects  on the  date as of which  such  data,
reports,  and  information are dated or certified and not incomplete by omitting
to state any material fact necessary to make such data, reports, and information
not misleading at such time.  There are no facts now known to the Borrower which
individually or in the aggregate would reasonably be expected to have a Material
Adverse  Effect  and which  have not been  specified  herein,  in the  Financial
Statements,  or  in  any  certificate,   opinion,  or  other  written  statement
previously furnished by the Borrower to the Lender.

                           SECTION 4.12.  Price of  Equipment.  The cost of each
item of  Equipment  does not  exceed  the fair and usual  price for such type of
equipment  purchased in like  quantity and reflects all  discounts,  rebates and
allowances  for the  Equipment  (including,  without  limitation,  discounts for
advertising,  prompt payment,  testing, or other services) given to the Borrower
by the manufacturer, supplier, or any other person.

                  SECTION 5. COVENANTS OF THE BORROWER.

                           SECTION 5.1. Existence,  etc. The Borrower shall: (a)
retain its existence and its current yearly  accounting  cycle,  (b) maintain in
full  force  and  effect  all  material  licenses,  bonds,  franchises,  leases,
trademarks,  patents,  contracts, and other rights necessary or desirable to the
profitable  conduct  of its  business  unless  the  failure  to do so could  not
reasonably be expected to have a Material  Adverse  Effect on the Borrower,  (c)
continue in, and limit its  operations to, the same general lines of business as
those  presently  conducted by it, and (d) comply with all  applicable  laws and
regulations of any federal, state, or local governmental  authority,  except for
such laws and  regulations  the violations of which would not, in the aggregate,
have a Material Adverse Effect on the Borrower.

                           SECTION  5.2.  Notice  to  the  Lender.  As  soon  as
possible,  and in any event within five business days after the Borrower  learns
of the following, the Borrower will give written notice to the Lender of (a) any
proceeding  instituted or threatened to be instituted by or against the Borrower
in any federal, state, local, or foreign court or before any commission or other
regulatory body (federal,  state,  local, or foreign)  involving a sum, together
with the sum involved in all other similar proceedings,  in excess of $50,000 in
the aggregate,  (b) any contract that is terminated or amended and which has had
or could  reasonably  be  expected  to have a  Material  Adverse  Effect  on the
Borrower,  (c) the occurrence of any Material Adverse Change with respect to the
Borrower,  and (d) the  occurrence of any Event of Default or event or condition
which,  with  notice  or  lapse of time or both,  would  constitute  an Event of
Default, together with a statement of the action which the Borrower has taken or
proposes to take with respect thereto.

                                       6
<PAGE>

                           SECTION 5.3.  Maintenance  of Books and Records.  The
Borrower will maintain  books and records  pertaining to the  Collateral in such
detail,  form,  and  scope  as the  Lender  shall  require  in its  commercially
reasonable judgment. The Borrower agrees that the Lender or its agents may enter
upon the  Borrower's  premises at any time and from time to time  during  normal
business hours,  and at any time upon the occurrence and continuance of an Event
of Default, for the purpose of inspecting the Collateral and any and all records
pertaining thereto.

                           SECTION 5.4.  Insurance.  The Borrower  will maintain
insurance  on the  Collateral  under  such  policies  of  insurance,  with  such
insurance  companies,  in such  amounts,  and covering  such risks as are at all
times  reasonably  satisfactory  to the Lender.  All such policies shall be made
payable  to the  Lender,  in case of  loss,  under a  standard  non-contributory
"lender" or "secured  party" clause and are to contain such other  provisions as
the Lender may  reasonably  require to protect  the  Lender's  interests  in the
Collateral and to any payments to be made under such policies.  Certificates  of
insurance policies are to be delivered to the Lender,  premium prepaid, with the
loss payable  endorsement in the Lender's favor,  and shall provide for not less
than thirty  days' prior  written  notice to the Lender,  of any  alteration  or
cancellation of coverage. If the Borrower fails to maintain such insurance,  the
Lender may arrange for (at the Borrower's expense and without any responsibility
on the  Lender's  part for)  obtaining  the  insurance.  Unless the Lender shall
otherwise  agree with the  Borrower in writing,  the Lender  shall have the sole
right,  in the name of the  Lender or the  Borrower,  to file  claims  under any
insurance policies, to receive and give acquittance for any payments that may be
payable  thereunder,  and  to  execute  any  endorsements,  receipts,  releases,
assignments,  reassignments,  or other documents that may be necessary to effect
the collection, compromise, or settlement of any claims under any such insurance
policies.

                           SECTION 5.5. Taxes.  The Borrower will pay, when due,
all taxes,  assessments,  claims, and other charges ("Taxes") lawfully levied or
assessed  against the Borrower or the Collateral other than taxes that are being
diligently  contested in good faith by the Borrower by  appropriate  proceedings
promptly instituted and for which an adequate reserve is being maintained by the
Borrower in  accordance  with GAAP.  If any Taxes  remain  unpaid after the date
fixed for the payment thereof,  or if any lien shall be claimed therefor,  then,
without notice to the Borrower, but on the Borrower's behalf, the Lender may pay
such Taxes, and the amount thereof shall be included in the Obligations.

                           SECTION 5.6.  Borrower to Defend  Collateral  Against
Claims; Fees on Collateral.  The Borrower will defend the Collateral against all
claims and demands of all Persons at any time  claiming the same or any interest
therein.  The Borrower will not permit any notice creating or otherwise relating
to liens on the Collateral or any portion  thereof to exist or be on file in any
public office other than Permitted  Liens. The Borrower shall promptly pay, when
payable, all transportation,  storage, and warehousing charges and license fees,
registration  fees,  assessments,  charges,  permit fees, and taxes  (municipal,
state,  and federal)  which may now or hereafter be imposed upon the  ownership,
leasing, renting,  possession,  sale, or use of the Collateral, other than taxes
on or measured by the Lender's income and fees, assessments,  charges, and taxes
which are being  contested in good faith by appropriate  proceedings  diligently
conducted  and with respect to which  adequate  reserves are  maintained  to the
extent required by GAAP.

                           SECTION  5.7. No Change of  Location,  Structure,  or
Identity.  The Borrower will not (a) change the location of its chief  executive
office or establish any place of business other than those  specified  herein or
(b) move or permit the  movement  of any item of  Collateral  from the  location
specified in the  applicable  Schedule,  except that the Borrower may change its
chief executive  office and keep Collateral at other locations within the United
States  provided that the Borrower has delivered to the Lender (i) prior written
notice thereof and (ii) duly executed financing  statements and other agreements
and instruments (all in form and substance satisfactory to the Lender) necessary
or, in the opinion of the Lender,  desirable to perfect and maintain in favor of
the Lender a first priority security interest in the Collateral. Notwithstanding
anything to the contrary in the immediately preceding sentence, the Borrower may
keep  any  Collateral  consisting  of motor  vehicles  or  rolling  stock at any
location in the United States  provided that the Lender's  security  interest in
any such Collateral is conspicuously  marked on the certificate of title thereof
and the Borrower has complied with the provisions of Section 5.9.

                                       7
<PAGE>

                           SECTION 5.8. Use of Collateral; Licenses; Repair. The
Collateral  shall be operated by  competent,  qualified  personnel in connection
with the Borrower's business purposes,  for the purpose for which the Collateral
was designed and in accordance with applicable operating instructions, laws, and
government  regulations,  and the Borrower shall use every reasonable precaution
to prevent loss or damage to the  Collateral  from fire and other  hazards.  The
Collateral  shall not be used or operated  for  personal,  family,  or household
purposes.  The  Borrower  shall  procure  and  maintain  in effect  all  orders,
licenses,  certificates,  permits,  approvals, and consents required by federal,
state,  or local laws or by any  governmental  body,  agency,  or  authority  in
connection  with  the  delivery,   installation,   use,  and  operation  of  the
Collateral. The Borrower shall keep all of the Equipment in a satisfactory state
of repair and  satisfactory  operating  condition in  accordance  with  industry
standards,  and will make all repairs and replacements  when and where necessary
and practical.  The Borrower will not waste or destroy the Equipment or any part
thereof,  and will not be negligent in the care or use  thereof.  The  Equipment
shall not be  annexed or affixed  to or become  part of any realty  without  the
Lender's prior written consent.

                           SECTION 5.9. Further  Assurances.  The Borrower will,
promptly upon request by the Lender, execute and deliver or use its best efforts
to obtain any document required by the Lender  (including,  without  limitation,
warehouseman or processor disclaimers,  mortgagee waivers, landlord disclaimers,
or subordination agreements with respect to the Obligations and the Collateral),
give any notices, execute and file any financing statements, mortgages, or other
documents  (all in form and  substance  satisfactory  to the  Lender),  mark any
chattel paper,  deliver any chattel paper or instruments to the Lender, and take
any other actions that are necessary or, in the opinion of the Lender, desirable
to perfect or continue  the  perfection  and the first  priority of the Lender's
security  interest  in the  Collateral,  to protect the  Collateral  against the
rights,  claims, or interests of any Persons,  or to effect the purposes of this
Agreement.  The  Borrower  hereby  authorizes  the  Lender  to file  one or more
financing or continuation statements, and amendments thereto, relating to all or
any part of the Collateral without the signature of the Borrower where permitted
by law. A carbon,  photographic,  or other reproduction of this Agreement or any
financing  statement  covering  the  Collateral  or any  part  thereof  shall be
sufficient  as a  financing  statement  where  permitted  by law.  To the extent
required  under this  Agreement,  the  Borrower  will pay all costs  incurred in
connection with any of the foregoing.

                           SECTION  5.10.  No  Disposition  of  Collateral.  The
Borrower will not in any way  hypothecate or create or permit to exist any lien,
security  interest,  charge,  or  encumbrance on or other interest in any of the
Collateral,  except  for the lien  and  security  interest  granted  hereby  and
Permitted  Liens  which are  junior  to the lien and  security  interest  of the
Lender, and the Borrower will not sell, transfer,  assign, pledge,  collaterally
assign,  exchange,  or otherwise dispose of any of the Collateral.  In the event
the Collateral, or any part thereof, is sold, transferred,  assigned, exchanged,
or otherwise disposed of in violation of these provisions, the security interest
of the Lender shall continue in such Collateral or part thereof  notwithstanding
such  sale,  transfer,  assignment,  exchange,  or  other  disposition,  and the
Borrower will hold the proceeds thereof in a separate account for the benefit of
the Lender.  Following  such a sale, the Borrower will transfer such proceeds to
the Lender in kind.

                           SECTION 5.11. No Limitation on Lender's  Rights.  The
Borrower will not enter into any contractual  obligations  which may restrict or
inhibit  the  Lender's  rights or  ability to sell or  otherwise  dispose of the
Collateral or any part thereof.

                           SECTION 5.12.  Protection of Collateral.  Upon notice
to the  Borrower  (provided  that if an Event of  Default  has  occurred  and is
continuing the Lender need not give any notice), the Lender shall have the right
at any time to make any  payments  and do any  other  acts the  Lender  may deem
necessary  to protect  its  security  interests  in the  Collateral,  including,
without limitation, the rights to satisfy, purchase,  contest, or compromise any
encumbrance,  charge,  or lien which, in the reasonable  judgment of the Lender,
appears to be prior to or superior to the security  interests granted hereunder,
and appear in, and  defend  any action or  proceeding  purporting  to affect its
security  interests  in, or the value of, any of the  Collateral.  The  Borrower
hereby  agrees to  reimburse  the Lender for all  reasonable  payments  made and
expenses   incurred  under  this  Agreement   including  fees,   expenses,   and
disbursements  of attorneys and  paralegals  (including  the allocated  costs of
in-house counsel) acting for the Lender, including any of the foregoing payments
under,  or  acts  taken  to  protect  its  security  interests  in,  any  of the
Collateral,  which amounts shall be secured under this Agreement,  and agrees it
shall be bound by any payment made or act taken by the Lender  hereunder  absent
the Lender's gross  negligence or willful  misconduct.  The Lender shall have no
obligation to make any of the foregoing payments or perform any of the foregoing
acts.

                                       8
<PAGE>

                           SECTION  5.13.  Delivery of Items.  The Borrower will
(a) promptly  (but in no event later than two  Business  Days) after its receipt
thereof,  deliver to the Lender any  documents or  certificates  of title issued
with  respect to any property  included in the  Collateral,  and any  promissory
notes,  letters of credit or  instruments  related to or otherwise in connection
with any property  included in the Collateral,  which in any such case come into
the possession of the Borrower, or shall cause the issuer thereof to deliver any
of the same directly to the Lender, in each case with any necessary endorsements
in favor of the Lender and (b) deliver to the Lender as soon as available copies
of any and all press  releases and other  similar  communications  issued by the
Borrower.

                           SECTION  5.14.  Solvency.  The Borrower  shall be and
remain Solvent at all times.

                           SECTION 5.15. Fundamental Changes. The Borrower shall
not (a) amend or modify its name,  unless the  Borrower  delivers  to the Lender
thirty (30) days prior to any such proposed  amendment or  modification  written
notice of such  amendment  or  modification  and  within  ten days  before  such
amendment or modification  delivers  executed Uniform  Commercial Code financing
statements  (in form and substance  satisfactory  to the Lender) or (b) merge or
consolidate  with any other  entity or make any  material  change in its capital
structure,  in each case without the Lender's prior written  consent which shall
not be unreasonably withheld.

                           SECTION 5.16. Additional  Requirements.  The Borrower
shall take all such further  actions and execute all such further  documents and
instruments as the Lender may reasonably request.

                  SECTION  6.  FINANCIAL  STATEMENTS.   Until  the  payment  and
satisfaction  in full of all  Obligations,  the  Borrower  shall  deliver to the
Lender the following financial information:

                           SECTION 6.1. Annual Financial Statements.  As soon as
available,  but not later than 120 days after the end of each fiscal year of the
Borrower and its  consolidated  subsidiaries,  the  consolidated  balance sheet,
income statement,  and statements of cash flows and shareholders  equity for the
Borrower and its consolidated subsidiaries (the "Financial Statements") for such
year, reported on by independent certified public accountants without an adverse
qualification; and

                           SECTION 6.2. Quarterly Financial Statements.  As soon
as  available,  but not  later  than 60 days  after the end of each of the first
three fiscal  quarters in any fiscal year of the  Borrower and its  consolidated
subsidiaries,  the Financial Statements for such fiscal quarter, together with a
certification  duly executed by a responsible  officer of the Borrower that such
Financial  Statements  have been prepared in accordance with GAAP and are fairly
stated in all material respects (subject to normal year-end audit adjustments).

                  SECTION 7. EVENTS OF  DEFAULT.  The  occurrence  of any of the
following events shall constitute an Event of Default hereunder:

                           (a) the  Borrower  shall fail to pay within  five (5)
business days of when due any amount  required to be paid by the Borrower  under
or in connection with any Note and this Agreement;

                           (b) any  representation  or  warranty  made or deemed
made by the  Borrower  under or in  connection  with any  Loan  Document  or any
Financial  Statement shall prove to have been false or incorrect in any material
respect when made;

                           (c) the Borrower shall fail to perform or observe (i)
any of the terms,  covenants or agreements contained in Sections 5.4, 5.7, 5.10,
5.14, or 5.15 hereof or (ii) any other term, covenant, or agreement contained in
any Loan  Document  (other than the other  Events of Default  specified  in this
Section 7) and such failure  remains  unremedied for the earlier of fifteen days
from (A) the date on which the Lender has given the Borrower  written  notice of
such failure and (B) the date on which the Borrower knew or should have known of
such failure;

                           (d) any  provision of any Loan  Document to which the
Borrower  is a party  shall for any reason  cease to be valid and binding on the
Borrower, or the Borrower shall so state;

                                       9
<PAGE>

                           (e)   dissolution,   liquidation,   winding   up,  or
cessation of the Borrower's  business,  failure of the Borrower generally to pay
its debts as they mature,  admission in writing by the Borrower of its inability
generally  to pay its debts as they  mature,  or  calling  of a  meeting  of the
Borrower's creditors for purposes of compromising any of the Borrower's debts;

                           (f) the  commencement  by or against the  Borrower of
any  bankruptcy,  insolvency,  arrangement,  reorganization,   receivership,  or
similar  proceedings under any federal or state law and, in the case of any such
involuntary  proceeding,  such  proceeding  remains  undismissed or unstayed for
forty-five  days  following  the  commencement  thereof,  or any  action  by the
Borrower is taken authorizing any such proceedings;

                           (g) an  assignment  for the benefit of  creditors  is
made by the Borrower,  whether  voluntary or  involuntary,  the appointment of a
trustee,  custodian,  receiver,  or similar official for the Borrower or for any
substantial property of the Borrower,  or any action by the Borrower authorizing
any such proceeding;

                           (h) the Borrower  shall default in (i) the payment of
principal or interest on any  indebtedness  in excess of $50,000 (other than the
Obligations)  beyond the period of grace, if any,  provided in the instrument or
agreement under which such  indebtedness was created;  or (ii) the observance or
performance  of  any  other   agreement  or  condition   relating  to  any  such
indebtedness or contained in any instrument or agreement  relating  thereto,  or
any other event shall occur or condition  exist,  the effect of which default or
other event or condition is to cause, or to permit the holder or holders of such
indebtedness to cause, with the giving of notice if required,  such indebtedness
to become due prior to its stated maturity;

                           (i) the  Borrower  suffers  or  sustains  a  Material
Adverse Change;

                           (j) any tax lien,  other than a  Permitted  Lien,  is
filed of record against the Borrower and is not bonded or discharged within five
Business Days;

                           (k) any judgment which has had or could reasonably be
expected to have a Material  Adverse  Effect on the Borrower  and such  judgment
shall not be stayed, vacated, bonded, or discharged within sixty days;

                           (l) any material covenant,  agreement, or obligation,
as  determined in the sole  discretion  of the Lender,  made by the Borrower and
contained  in or  evidenced  by any of the  Loan  Documents  shall  cease  to be
enforceable, or shall be determined to be unenforceable,  in accordance with its
terms;  the Borrower  shall deny or disaffirm the  Obligations  under any of the
Loan  Documents  or any liens  granted  in  connection  therewith;  or any liens
granted on any of the  Collateral  in favor of the Lender shall be determined to
be void, voidable,  or invalid, or shall not be given the priority  contemplated
by this Agreement; or

                           (m)  there  is a  change  in  more  than  35%  of the
ownership  of any equity  interests  of the  Borrower on the date hereof or more
than 35% of such  interests  become  subject to any  contractual,  judicial,  or
statutory lien, charge, security interest, or encumbrance.

                  SECTION  8.  REMEDIES.  If any  Event of  Default  shall  have
occurred and be continuing:

                           (a) The Lender may,  without  prejudice to any of its
other rights under any Loan Document or Applicable Law,  declare all Obligations
to be immediately  due and payable  (except with respect to any Event of Default
set  forth  in  Section  7(f)  hereof,  in  which  case  all  Obligations  shall
automatically  become  immediately  due and  payable  without  necessity  of any
declaration) without presentment, representation, demand of payment, or protest,
which are hereby expressly waived.

                           (b) The Lender may take  possession of the Collateral
and, for that purpose may enter,  with the aid and  assistance  of any person or
persons,  any  premises  where the  Collateral  or any part hereof is, or may be
placed, and remove the same.

                                       10
<PAGE>

                           (c) The  obligation  of the  Lender,  if any, to make
additional Loans or financial  accommodations  of any kind to the Borrower shall
immediately terminate.

                           (d)  The  Lender  may  exercise  in  respect  of  the
Collateral,  in addition to other rights and remedies provided for herein (or in
any Loan Document) or otherwise  available to it, all the rights and remedies of
a secured  party  under the  applicable  Uniform  Commercial  Code (the  "Code")
whether or not the Code  applies  to the  affected  Collateral  and also may (i)
require the  Borrower  to, and the  Borrower  hereby  agrees that it will at its
expense and upon  request of the Lender  forthwith,  assemble all or part of the
Collateral  as directed by the Lender and make it  available  to the Lender at a
place to be  designated  by the Lender  that is  reasonably  convenient  to both
parties and (ii) without notice except as specified  below,  sell the Collateral
or any part thereof in one or more parcels at public or private  sale, at any of
the Lender's offices or elsewhere,  for cash, on credit, or for future delivery,
and upon such other terms as the Lender may deem  commercially  reasonable.  The
Borrower  agrees that, to the extent notice of sale shall be required by law, at
least ten days'  notice to the Borrower of the time and place of any public sale
or the  time  after  which  any  private  sale  is to be made  shall  constitute
reasonable  notification.  The Lender shall not be obligated to make any sale of
Collateral  regardless  of notice of sale  having  been  given.  The  Lender may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor,  and such sale may, without further notice, be made at
the time and place to which it was so adjourned.

                           (e) All  cash  proceeds  received  by the  Lender  in
respect of any sale of,  collection  from, or other  realization upon all or any
part of the  Collateral  may, in the  discretion  of the Lender,  be held by the
Lender as collateral for, or then or at any time thereafter  applied in whole or
in part by the Lender against,  all or any part of the Obligations in such order
as the Lender shall elect. Any surplus of such cash or cash proceeds held by the
Lender and  remaining  after the full and final  payment of all the  Obligations
shall be paid over to the  Borrower or to such other  Person to which the Lender
may be required  under  applicable  law,  or  directed  by a court of  competent
jurisdiction, to make payment of such surplus.

                  SECTION 9. MISCELLANEOUS PROVISIONS.

                           SECTION 9.1.  Notices.  Except as otherwise  provided
herein,  all  notices,  approvals,  consents,  faxes,  correspondence,  or other
communications  required  or  desired  to be given  hereunder  shall be given in
writing and shall be delivered by overnight courier,  hand delivery,  facsimile,
or certified or registered  mail,  postage  prepaid,  if to the Lender,  then to
Transamerica  Technology Finance Division,  76 Batterson Park Road,  Farmington,
Connecticut  06032,  Attention:  Legal Department,  with a copy to the Lender at
Riverway II, West Office  Tower,  9399 West  Higgins  Road,  Rosemont,  Illinois
60018, Attention:  Legal Department,  and if to the Borrower, then to Valuestar,
Inc., 360 22nd Street,  Suite 210, Oakland,  California 94612,  Attention:  Loan
Administration,  or such other address as shall be designated by the Borrower or
the Lender to the other  party in  accordance  herewith.  All such  notices  and
correspondence shall be effective when received.

                           SECTION 9.2. Headings. The headings in this Agreement
are for  purposes  of  reference  only and  shall  not  affect  the  meaning  or
construction of any provision of this Agreement.

                           SECTION 9.3. Assignments. The Borrower shall not have
the right to assign any Note or this  Agreement or any interest  therein  unless
the Lender shall have given the Borrower prior written  consent and the Borrower
and its  assignee  shall have  delivered  assignment  documentation  in form and
substance  satisfactory  to the  Lender in its sole  discretion.  The Lender may
assign its rights and delegate its obligations under any Note or this Agreement.

                           SECTION 9.4. Amendments,  Waivers, and Consents.  Any
amendment or waiver of any  provision of this  Agreement  and any consent to any
departure  by the  Borrower  from  any  provision  of this  Agreement  shall  be
effective  only by a writing signed by the Lender and shall bind and benefit the
Borrower and the Lender and their respective successors and assigns, subject, in
the case of the Borrower, to the first sentence of Section 9.3.

                                       11
<PAGE>

                           SECTION 9.5. Interpretation of Agreement.  Time is of
the essence in each provision of this Agreement of which time is an element. All
terms not  defined  herein or in a Note shall have the  meaning set forth in the
applicable Code,  except where the context otherwise  requires.  To the extent a
term or  provision of this  Agreement  conflicts  with any Note,  or any term or
provision  thereof,  and is not dealt with  herein with more  specificity,  this
Agreement  shall  control  with  respect to the  subject  matter of such term or
provision.  Acceptance of or  acquiescence  in a course of performance  rendered
under this Agreement  shall not be relevant in  determining  the meaning of this
Agreement  even though the accepting or  acquiescing  party had knowledge of the
nature of the performance and opportunity for objection.

                           SECTION  9.6.  Continuing  Security  Interest.   This
Agreement  shall create a continuing  security  interest in the  Collateral  and
shall (i) remain in full force and effect until the indefeasible payment in full
of the  Obligations,  (ii) be binding upon the Borrower and its  successors  and
assigns and (iii)  inure,  together  with the rights and  remedies of the Lender
hereunder,  to the benefit of the Lender and its  successors,  transferees,  and
assigns.

                           SECTION 9.7.  Reinstatement.  To the extent permitted
by law, this Agreement and the rights and powers granted to the Lender hereunder
and under the Loan Documents  shall continue to be effective or be reinstated if
at any time any amount  received by the Lender in respect of the  Obligations is
rescinded  or must  otherwise  be  restored  or  returned by the Lender upon the
insolvency,  bankruptcy,  dissolution,  liquidation,  or  reorganization  of the
Borrower  or upon the  appointment  of any  receiver,  intervenor,  conservator,
trustee,  or similar  official for the Borrower or any  substantial  part of its
assets, or otherwise, all as though such payments had not been made.

                           SECTION   9.8.    Survival   of    Provisions.    All
representations,  warranties,  and  covenants of the Borrower  contained  herein
shall survive the execution and delivery of this Agreement,  and shall terminate
only upon the full and final  payment  and  performance  by the  Borrower of the
Obligations secured hereby.

                           SECTION 9.9. Indemnification.  The Borrower agrees to
indemnify  and hold  harmless the Lender and its  directors,  officers,  agents,
employees, and counsel from and against any and all costs, expenses,  claims, or
liability  incurred by the Lender or such Person  hereunder  and under any other
Loan  Document  or in  connection  herewith or  therewith,  unless such claim or
liability shall be due to willful  misconduct or gross negligence on the part of
the Lender or such Person.

                           SECTION 9.10.  Counterparts;  Telecopied  Signatures.
This Agreement may be executed in  counterparts,  each of which when so executed
and delivered shall be an original,  but both of which shall together constitute
one and the same instrument. This Agreement and each of the other Loan Documents
and any notices  given in  connection  herewith or therewith may be executed and
delivered by telecopier or other facsimile  transmission all with the same force
and effect as if the same was a fully  executed and  delivered  original  manual
counterpart.

                           SECTION 9.11. Severability.  In case any provision in
or obligation  under this Agreement or any Note or any other Loan Document shall
be  invalid,  illegal,  or  unenforceable  in any  jurisdiction,  the  validity,
legality,  and enforceability of the remaining provisions or obligations,  or of
such provision or obligation in any other jurisdiction,  shall not in any way be
affected or impaired thereby.

                           SECTION 9.12.  Delays;  Partial Exercise of Remedies.
No delay or omission of the Lender to  exercise  any right or remedy  hereunder,
whether before or after the happening of any Event of Default,  shall impair any
such right or shall operate as a waiver thereof or as a waiver of any such Event
of Default.  No single or partial  exercise by the Lender of any right or remedy
shall  preclude  any other or further  exercise  thereof,  or preclude any other
right or remedy.

                           SECTION 9.13. Entire Agreement.  The Borrower and the
Lender agree that this Agreement, the Schedule hereto, and the Commitment Letter
are the complete and exclusive  statement and agreement between the parties with
respect to the  subject  matter  hereof,  superseding  all  proposals  and prior
agreements,  oral or written, and all other  communications  between the parties
with respect to the subject matter

                                       12
<PAGE>

hereof. Should there exist any inconsistency between the terms of the Commitment
Letter and this Agreement, the terms of this Agreement shall prevail.

                           SECTION  9.14.  Setoff.  In  addition  to and  not in
limitation  of all rights of offset  that the  Lender may have under  Applicable
Law, and whether or not the Lender has made any demand or the Obligations of the
Borrower have matured,  the Lender shall have the right to appropriate and apply
to the  payment  of the  Obligations  of the  Borrower  all  deposits  and other
obligations  then or thereafter  owing by the Lender to or for the credit or the
account of the Borrower.

                           SECTION 9.15.  WAIVER OF JURY TRIAL. THE BORROWER AND
THE  LENDER  IRREVOCABLY  WAIVE  ALL  RIGHT  TO  TRIAL  BY JURY  IN ANY  ACTION,
PROCEEDING,  OR COUNTERCLAIM  ARISING OUT OF OR RELATING TO THIS AGREEMENT,  ANY
OTHER LOAN DOCUMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

                           SECTION   9.16.    GOVERNING   LAW.   THE   VALIDITY,
INTERPRETATION,  AND  ENFORCEMENT  OF THIS  AGREEMENT  SHALL BE  GOVERNED BY AND
CONSTRUED IN ACCORDANCE  WITH THE LAWS OF THE STATE OF ILLINOIS  WITHOUT  GIVING
EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.

                           SECTION 9.17.  Venue;  Service of Process.  ANY LEGAL
ACTION OR PROCEEDING  WITH RESPECT TO THIS  AGREEMENT OR ANY OTHER LOAN DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS  SITUATED IN COOK  COUNTY,
OR OF THE UNITED STATES OF AMERICA FOR THE NORTHERN  DISTRICT OF ILLINOIS,  AND,
BY EXECUTION AND DELIVERY OF THIS  AGREEMENT,  THE BORROWER  HEREBY  ACCEPTS FOR
ITSELF  AND IN RESPECT  OF ITS  PROPERTY,  GENERALLY  AND  UNCONDITIONALLY,  THE
JURISDICTION OF THE AFORESAID COURTS. THE BORROWER HEREBY IRREVOCABLY WAIVES, IN
CONNECTION  WITH ANY SUCH ACTION OR PROCEEDING,  (a) ANY  OBJECTION,  INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON  CONVENIENS,  THAT IT MAY NOW OR HEREAFTER  HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS AND (b) THE RIGHT
TO  INTERPOSE  ANY  NONCOMPULSORY  SETOFF,  COUNTERCLAIM,  OR  CROSS-CLAIM.  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 THE BORROWER AT THE
ADDRESS FOR IT SPECIFIED IN SECTION 9.1 HEREOF.  NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE LENDER TO SERVE PROCESS IN ANY OTHER MANNER  PERMITTED BY LAW OR TO
COMMENCE  LEGAL  PROCEEDINGS  OR OTHERWISE  PROCEED  AGAINST THE BORROWER IN ANY
OTHER  JURISDICTION,  SUBJECT IN EACH  INSTANCE  TO THE  PROVISIONS  HEREOF WITH
RESPECT TO RIGHTS AND REMEDIES.

                                       13
<PAGE>

                  IN WITNESS WHEREOF,  the undersigned  Borrower has caused this
Agreement to be duly  executed and  delivered by its proper and duly  authorized
officer as of the date first set forth above.

                                       VALUESTAR, INC.

                                       By:  /s/ Michael Kelly
                                          Name: Michael Kelly
                                          Title:  Controller

                                       Federal Tax ID No.: 94-3144764

Accepted as of the
7th day of April, 2000

TRANSAMERICA BUSINESS CREDIT CORPORATION

By:  /s/ Gary P. Moro
   Name: Gary P. Moro
   Title:   Senior Vice President

                                       14
<PAGE>

                                   Schedule A

                                       to

                           Loan and Security Agreement

Other Places of Business and Locations of Collateral (Section 4.16):

Prior Names of Obligor (Section 4.7):

Prior Trade Names of Obligor (Section 4.7):

Existing Trade Names of Obligor (Section 4.7):

Federal Tax ID (Section 4.7):

                                       15

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