Document:

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                                                                    Exhibit 10.1

                           LOAN AND SECURITY AGREEMENT

                                     Between

                           THE A CONSULTING TEAM, INC.

                                       And

                          KELTIC FINANCIAL PARTNERS, LP

                              Dated: June 27, 2001

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                           LOAN AND SECURITY AGREEMENT

THIS LOAN AND SECURITY AGREEMENT made this 27`" day of June 2001, between THE A
CONSULTING TEAM, INC., a corporation organized and existing pursuant to the laws
of the State of New York, with its principal executive office and place of
business at 200 Park Avenue South, Suite 1501, New York, New York 10003
("Borrower"), and KELTIC FINANCIAL PARTNERS, LP, a Delaware limited partnership,
with a place of business at 555 Theodore Fremd Avenue, Suite C-209, Rye, New
York 10580 ("Lender").

                                    RECITALS:

A.    Borrower has requested that Lender extend a Four Million and 00/100 Dollar
($4,000,000.00) revolving credit facility to repay existing indebtedness of
Borrower and to provide Borrower with working capital support.

B.    Lender is willing to extend the credit facility on the terms and subject
to the conditions set forth in this Agreement.

                                   AGREEMENT:

1.    DEFINITIONS. As used herein, the following terms shall have the following
meanings (terms defined in the singular to have the same meaning when used in
the plural and vice versa):

1.1.  "Account Debtor" shall mean any Person who is or may become obligated
under or on account of any Receivable.

1.2.  "Advance" shall mean any loan or advance by Lender with respect to the
Revolving Loan.

1.3.  "Affiliate" shall mean any Person: (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is under
common control with, Borrower; (ii) which beneficially owns or holds 5% or more
of any class of the Voting Stock of Borrower; or (iii) 5a/o or more of the
Voting Stock of which is beneficially owned or held by Borrower; provided,
however, that T3 Media, Inc., Always-On Software, Inc., and Methoda, Ltd. shall
not be deemed to be Affiliates. For purposes hereof, "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of Voting Stock or other equity interests, by contract or otherwise.

1.4.  "Banking Day" shall mean any day on which commercial banks are not
authorized or required to close in New York State.

1.5.  "Blocked Account" shall mean the account established by Borrower at Fleet
Bank and held pursuant to the blocked account agreement among Borrower, Lender
and Fleet Bank into which payments of Receivables are deposited.

1.6.  "Borrower" shall mean The A Consulting Team, Inc.

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1.7.  "Borrower's knowledge" shall mean the knowledge of each of Borrower's
directors, officers and key employees after due inquiry under the circumstances.

1.8.  "Borrowing Base Certificate" shall mean a borrowing base certificate
substantially in the form of Exhibit "C" attached hereto.

1.9.  "Capital Expenditure" shall mean, as determined in accordance with
Generally Accepted Accounting Principles, the dollar amount of gross
expenditures (including obligations under capital leases) made or incurred for
fixed assets, real property, plant and equipment, and all renewals, improvements
and replacements thereto (but not repairs thereof) during any period.

1.10. "Collateral" shall mean all of the property and interests in property
described in Article 5 hereof, except as set forth in Article 5(J), and all
other personal Property of Borrower and interests of Borrower in personal
Property that now or hereafter secures the payment and performance of any of the
Obligations pursuant to any of the Loan Documents or otherwise, including,
without limitation, any proceeds and insurance proceeds of the foregoing.

1.11. "Contract Year" shall mean, during the term of the Loans, each consecutive
twelve (12) month period commencing on the date hereof and, in each case, ending
on the date which is one day prior to the applicable anniversary date hereof.

1.12. "Corporate Guarantor" shall mean any Affiliate of Borrower.

"Account" shall have the meaning given to such term in the Uniform Commercial
Code in effect from time to time in the State of New York.

1.14. "Default" shall mean an event or condition the occurrence of which would,
with the lapse of time or the giving of notice, or both, become an Event of
Default, whether or not Lender has declared an Event of Default to have
occurred.

1.15. "Core EBITDA" shall mean Borrower's total income (exclusive of any
income/loss attributable to T3 Media, Inc., Always-On Software, Inc., and
Methoda, Ltd. whether by ownership interest or otherwise) before interest
expense, taxes, depreciation and amortization (exclusive of any writeoffs
occurring after April 1, 2001 with respect to any assets other than trade
Receivables owned by Borrower on the date hereof), all calculated in accordance
with Generally Accepted Accounting Principles.

1.16. "Dilution" shall mean the reduction in value of Receivables due to
returns, allowances, cash discounts and other credits, expressed as a percentage
of the value of all Receivables.

1.17. Intentionally Omitted.

1.18. "Eligible Receivables" shall mean and include, only Receivables of
Borrower comprised of time and material invoices that are signed off on by the
Account Debtor, the records and accounts of which are located in compliance with
Section 7.14 hereof, that are otherwise acceptable to Lender in Lender's
discretion, arise out of sales in the ordinary course of business made by
Borrower to a Person which is not an Affiliate of Borrower nor an employee of
Borrower nor controlled by an Affiliate of Borrower, which are not in dispute
and which do not

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then violate any warranty with respect to Receivables set forth in Article 11 of
this Agreement. No Receivable shall be an Eligible Receivable if it is more than
ninety (90) days past original invoice date. While only Receivables of Borrower
comprised of time and material invoices that are signed off on by the Account
Debtor, shall constitute Eligible Receivables, Lender may treat any Receivable
as ineligible if

(a)   any Receivable arising out of an invoice for software, training,
maintenance, bill-in advance, progress billing and fixed price projects; or

(b)   any warranty contained in this Agreement with respect to Eligible
Receivables or any warranty with respect to such Receivable contained in this
Agreement has been breached; or

(c)   the Account Debtor or any Affiliate of the Account Debtor has disputed
liability, or made any claim with respect to any other Receivable due from such
customer or Account Debtor to Borrower, with respect to any Receivable which
Lender, in its discretion, deems material; or

(d)   the Account Debtor or any Affiliate of the Account Debtor has filed a case
for bankruptcy or reorganization under the Bankruptcy Code, or if any such case
under the Bankruptcy Code has been filed against the Account Debtor or any
Affiliate of the Account Debtor, or if the Account Debtor or any Affiliate of
the Account Debtor has assigned for the benefit of creditors, or if the Account
Debtor or any Affiliate of the Account Debtor has failed, suspended business
operations, become insolvent, or had or suffered a receiver or a trustee to be
appointed for all or a significant portion of its assets or affairs; or

(e)   if the Account Debtor is also a supplier to or creditor of Borrower or if
the Account Debtor has or asserts any right of any offset with respect to any
Receivable or asserts any claim or counterclaim against Borrower with respect to
any Receivable or otherwise; or

(f)   the sale is to an Account Debtor outside the United States or Canada,
unless the sale is on letter of credit, acceptance or other terms acceptable to
Lender; or

(g)   fifty percent (50%) or more of the accounts of any Account Debtor and its
Affiliates that would otherwise be treated as Eligible Receivables hereunder is
ineligible by reason of being more than ninety (90) days past original invoice
date, then all the accounts of such Account Debtor and its Affiliates may be
deemed ineligible by Lender hereunder; or

(h)   the total unpaid Receivables of the Account Debtor exceed: (i) twenty
percent (20%) of the net amount of all Receivables; or (ii) in the case of
Receivables due from Equiserv Inc. and Mellon Investor Services LLC, in which
case the total unpaid Receivables shall not exceed thirty percent (30%) of the
net amount of all such Receivables; or (iii) as otherwise agreed from time to
time, in any case of (i) or (ii), to the extent of such excess; or

(i)   it relates to a sale of goods or services to the United States of America
or any agency or department thereof, unless Borrower assigns its right to
payment of such Receivable to Lender, in form and substance satisfactory to
Lender, so as to comply with the Assignment of Claim Act of 1940, as amended; or

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(j)   it relates to intercompany sales, employee sales or any Receivable due
from an Affiliate of Borrower; or

(k)   it consists of a sale to an Account Debtor on consignment, bill and hold,
guaranteed sale, sale or return, sale on approval, payment plan, scheduled
installment plan, extended payment terms or any other repurchase or return
basis; or

(1)   the Account Debtor is located in a state in which Borrower is deemed to be
doing business under the laws of such state and which denies creditors access to
its courts in the absence of qualifications to transact business in such state
or of the filing of any reports with such state, unless Borrower has qualified
as a foreign corporation authorized to do business in such state or has filed
all required reports; or

(m)   the Receivable is evidenced by chattel paper or an instrument of any kind,
or has been reduced to judgment; or

(n)   the Receivable arises from a retail sale of goods to a Person who is
purchasing such goods primarily for personal, family or household purposes; or

(o)   if Lender believes, in its reasonable judgment, collection of such
Receivable is insecure or that such Receivable may not be paid by reason of the
Account Debtor's financial inability to pay.

1.19. "Environment" shall mean any water or water vapor, any land surface or
subsurface, air, fish, wildlife, biota and all other natural resources.

1.20. "Environmental Laws" shall mean all federal, state and local
environmental, land use, zoning, health, chemical use, safety and sanitation
laws, statutes, ordinances and codes relating to the protection of the
Environment and/or governing the use, storage, treatment, generation, G30
transportation, processing, handling, production or disposal of "hazardous
substances" and the rules, regulations, policies, guidelines, interpretations,
decisions, orders and directives of federal, state and local governmental
agencies and authorities with respect thereto.

1.21. "Equipment" shall mean all machinery, equipment, office machinery,
furniture, fixtures, conveyors, tools, materials storage and handling equipment,
molds, dies, stamps and other equipment of every kind and nature and wherever
situated now or hereafter owned by Borrower or in which Borrower may have any
interest (to the extent of such interest), together with all additions and
accessions thereto, all replacements and all accessories and parts therefor, 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.

1.22. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.

1.23. "Events of Default" shall have the meaning set forth in Article 19 of this
Agreement.

1.24. "Fiscal Year" shall mean with respect to any Person, a year of 365 or 366
days, as the case may be, ending on the last day of December in any calendar
year.

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1.25. Intentionally omitted.

1.26. "General intanObles" shall mean all general intangibles, including,
without limitation, all choses in action, causes of action, corporate or other
business records, deposit accounts, inventions, blueprints, designs, patents,
patent applications, trademarks, trademark applications, trade names, trade
secrets, good will, brand names, copyrights, registrations, licenses,
franchises, customer lists, tax refund claims, computer programs and software,
operational manuals, capitalized finance costs, origination fees, all equipment
formulations, manufacturing procedures, quality control procedures and product
specifications relating to products sold under patents, trademarks or copyrights
owned by Borrower or in which Borrower has an interest, the right to sue for all
past, present and future infringements of such patents, trademarks and
copyrights, all claims under guaranties, security interests or other security
held by or granted to Borrower to secure payment of any of the Receivables by an
Account Debtor, all rights to indemnification and all other intangible property
of every kind and nature (other than Receivables).

1.27. "Generally Accepted Accounting Principles" shall mean generally accepted
accounting principles consistently applied and maintained throughout the period
indicated and consistent with the prior financial practice of Borrower, except
for changes mandated by the Financial Accounting Standards Board or any similar
accounting authority of comparable standing. Whenever any accounting term is
used herein which is not otherwise defined, it shall be interpreted in
accordance with Generally Accepted Accounting Principles.

1.28. "Governmental Rules" shall have the meaning given to such term in Section
7.25 of this Agreement.

1.29. "Guarantors" shall mean, collectively, the Corporate Guarantor, if any,
the Individual Guarantor, the Support Guarantor and the Validity Guarantor.

1.30. "Inventory" shall have the meaning given to such term in the Uniform
Commercial Code in effect from time to time in the State of New York.

1.31. "Investment Property" shall have the meaning given to such term from time
to time in the State of New York.

1.32. "Indebtedness" shall mean and include all obligations for borrowed money
of any kind or nature, including funded debt and unfunded liabilities,
contingent obligations under letters of credit, and all obligations for the
acquisition or use of any fixed asset, including capitalized leases, or
improvements which are payable over a period longer than one year, regardless of
the term thereof or the person or persons to whom the same is payable.

1.33. "Individual Guarantor" shall mean, Shmuel BenTov.

1.34. Intentionally omitted.

1.35. "Liabilities" shall mean all of the following: (a) all items which in
accordance with Generally Accepted Accounting Principles would be included in
determining total liabilities as shown on the liability side of a consolidated
balance sheet of Borrower and Corporate

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Guarantor(s), if any, as at the date on which such liabilities are to be
determined, including, without limitation, capitalized lease obligations; (b)
all obligations of other Persons which Borrower or any Guarantor(s) have
guaranteed (such guaranties not to be given without Lender's prior written
consent); (c) all reimbursement obligations (contingent or otherwise) in
connection with letters of credit or letter of credit guarantees issued for the
account or upon the application of Borrower or any Guarantor(s); and (d) the
Obligations.

1.36. "LIBOR" shall mean the London Inter-Bank Offered Rate as quoted by
CitiBank, N.A. in New York City at 11:00 a.m. (New York time) based upon
CitiBank, N.A.'s or an affiliated agency's or branch's quotes to prime banks in
the London Inter-Bank Euro-currency Market for Eurodollar deposits.

1.37. "Lien" shall mean any interest in Property securing an obligation owed to,
or a claim by, a Person, whether such interest is based on the common law,
statute or contract, and including, but not limited to, the security interest,
security title or lien arising from a security agreement, mortgage, deed of
trust, deed to secure debt, encumbrance, pledge, conditional sale or trust
receipt or a lease, consignment or bailment for security purposes.

1.38. "Loan Documents" shall mean all documents and instruments to be delivered
by Borrower under this Agreement or in connection with the Loan or any other
indebtedness or obligation of Borrower to Lender or any Affiliate of Lender, as
the same may be amended, modified or supplemented from time to time.

1.39. "Loans" shall mean the loans and advances made by Lender hereunder,
including all Advances.

1.40. "Material Adverse Effect" shall mean any material adverse effect, as
determined in Lender's discretion, on (a) the business, assets, operations,
prospects or condition, financial or otherwise, of Borrower or any Guarantor;
(b) Borrower's or any Guarantor's ability to pay or perform the obligations in
accordance with their terms; (c) the value of the Collateral or the perfection
or priority of Lender's liens; (d) the validity or enforceability of this
Agreement or any of the Loan Documents; or (e) the practical realization of the
benefits, rights and remedies inuring to Lender hereunder or under the Loan
Documents.

1.41. "Maximum Facility" shall mean Four Million and 00/100 Dollars
($4,000,000.00).

1.42. "Obligations" shall mean and include all loans (including the Loans),
advances, debts, liabilities, obligations, covenants and duties owing by
Borrower to Lender or any Affiliate of Lender of any kind or nature, present or
future, whether or not evidenced by any note, guaranty or other instrument,
whether arising under this Agreement, the Loan Documents or under any other
agreement or by operation of law, 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), absolute or contingent, due or to become due, now due or hereafter
arising and however acquired, including, without limitation, all interest,
charges, expenses, commitment, facility, collateral management or other fees,
attorneys' fees and

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expenses, and any other sum chargeable to Borrower under this Agreement, the
Loan Documents or any other agreement with Lender.

1.43. "Notice of Borrowing" shall mean a written borrowing request substantially
in the form of Exhibit "D" attached hereto.

1.44. "Other Collateral" shall mean all Collateral other than Receivables.

1.45. "Person" shall mean an individual, partnership, limited liability company,
limited liability partnership, corporation, joint venture, joint stock company,
land trust, business trust or unincorporated organization, or a government or
agency or political subdivision thereof.

1.46. "Plan" shall mean an employee benefit plan or other plan now or hereafter
maintained for employees of Borrower and covered by Title IV of ERISA.

1.47. "Prime Rate" shall mean the greater of (a) the rate published in the
"Money Rates" column of The Wall Street Journal from time to time or, in the
event that The Wall Street Journal is not available at any time, such rate
published in another publication as determined by Lender or (b) LIBOR plus two
hundred and fifty (250) basis points per annum.

1.48. "Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.

1.49. "Receivables" shall mean and include all present and future accounts,
contract rights, promissory notes, chattel paper (whether tangible or
electronic), instruments, documents, letter of credit rights (whether or not the
letter of credit is evidenced by a writing) all tax refunds and rights to
receive tax refunds, bonds, certificates, rights to payment for the sale or
lease of equipment and policies of insurance and insurance proceeds, investment
securities, notes, instruments and deposit accounts, book accounts, credits and
reserves and all forms of obligations whatsoever owing, together with all
instruments, all documents of title representing any of the foregoing, and all
rights in any merchandise or goods which any of the same may represent, all
files and records with respect to any collateral or security given by Borrower
to Lender, together with all right, title, security and guaranties with respect
to each Receivable, including any right of stoppage in transit, whether now
owned or hereafter created or acquired by Borrower or in which Borrower now has
or hereafter acquires any interest.

1.50. "Reconciliation Report" shall mean a report in form satisfactory to
Lender, reconciling Borrower's month-end Receivable agings and Payable agings to
Borrower's monthly financial statements, and including bank reconciliations.

1.51. "Reportable Event" shall have the meaning assigned to that term in Title
IV of ERISA.

1.52. "Revolving Loan" shall mean the Advances to be made by Lender to Borrower
pursuant to Article 2 of this Agreement, and all interest thereon and all fees,
costs and expenses payable by Borrower in connection therewith.

1.53. "Revolving Advances" shall mean the Advances to be made by Lender to
Borrower pursuant to Section 2.1 of this Agreement.

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1.54. "Revolving Note" shall mean, the promissory note substantially in the form
annexed hereto as Exhibit "A", to be given by Borrower to Lender to evidence the
Revolving Advances.

1.55. "Solution Branches" shall mean those locations set forth under the heading
"Solution Branches" in Schedule 7.14 to this Agreement.

1.56. "Solvent" shall mean when used with respect to any Person, such Person (i)
owns property the fair value of which is greater than the amount required to pay
all of such Person's Indebtedness (including contingent debts), (ii) owns
property the present fair salable value of which is greater than the amount that
will be required to pay the probable liabilities of such Person on its then
existing Indebtedness as such become absolute and matured, (iii) is able to pay
all of its Indebtedness as such Indebtedness matures, and (iv) has capital
sufficient to carry on its then existing business.

1.57. "Support Guarantor" shall mean those Persons that execute and deliver
Validity and Support Agreements to Lender.

1.58. Intentionally Omitted.

1.59. "Termination Date" shall mean the earlier of the date which is three years
from the date hereof, or the date on which Lender terminates this Agreement
pursuant to Section 19.1 hereof or Borrower terminates this Agreement pursuant
to Section 18 hereof.

1.60. "This Agreement" shall include all written amendments, modifications and
supplements and shall refer to this Agreement as the same may be in effect at
the time such reference becomes operative.

1.61. "Validity Guarantor" shall mean Shmuel BenTov.

1.62. "Voting Stock" shall mean securities of any class or classes of a
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors (or
Persons performing similar functions).

2.    THE REVOLVING LOAN.

2.1.  Revolving Advances. Subject to the terms and conditions of this Agreement
and relying upon the representations and warranties set forth in this Agreement,
for so long as no Default or Event of Default exists, Lender shall lend to
Borrower on its request, a sum equal to the lesser of (a) Four Million and
00/100 Dollars ($4,000,000.00), and (b) up to seventy five percent (75%) of the
net face amount of Borrower's Eligible Receivables.

2.2.  Overline. Borrower acknowledges that Lender has advised Borrower that
Lender does not intend to permit Borrower to incur Obligations at any time in an
outstanding principal amount exceeding the Maximum Facility; however, it is
agreed that should the Obligations of Borrower to Lender incurred under the
Revolving Loan or otherwise exceed that figure or any other limitation herein
set forth, including without limitation, the borrowing formulas set forth in
Section 2.1 above, all such obligations shall (a) constitute Obligations under
this Agreement, (b) shall be entitled to the benefit of all security and
protection under this Agreement and all Loan

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Documents and secured by the Collateral and (c) shall be payable immediately
upon demand by Lender.

2.3.  Reserves. The borrowing limits set forth in Section 2.1 above and
otherwise herein, shall be subject to such reserves as Lender shall reasonably
deem necessary and proper in Lender's reasonable discretion. Reserves may be
established by Lender from time to time and in such manner (including reduction
of the rate of Revolving Advances) and for such reasons as Lender may determine
from time to time in Lender's reasonable discretion. Payments, deposits,
guaranties or indemnifications made by Lender under any reimbursement agreement,
guaranty or similar instrument made in respect of any such instrument may be
treated by Lender as Revolving Advances to Borrower hereunder.

2.4.  Manner of Borrowing.

(a)   Each Revolving Loan shall be requested in writing via facsimile by a
Notice of Borrowing executed by an authorized officer of Borrower, not later
than 11:00 a.m. Eastern Time on any Banking Day on which a Revolving Loan is
requested. Provided that Borrower shall have satisfied all conditions precedent
set forth in this Agreement, including the reaffirmation of the representations
and warranties and covenants as required under Section 17.2 hereof, and Borrower
shall have sufficient Collateral to permit a Revolving Advance hereunder in
accordance with Section 2.1 hereof, Lender shall make the Advance to Borrower in
the amount requested in writing by Borrower in immediately available funds for
credit to any account of Borrower (other than a payroll account) at a bank in
the United States of America as Borrower may specify (provided, however, that
Borrower shall pay Lender its usual and customary fees for such transfer).
Lender shall not be responsible for any failure of any amount so transferred to
be credited to any such account, unless such failure is due to Lender's gross
negligence or willful misconduct.

2.5.  Evidence of Borrower's Obligations. Borrower's obligation to pay the
principal of, and interest on, the Revolving Advances made to Borrower shall be
evidenced by the Revolving Note executed by Borrower and delivered to Lender.

2.6.  Payments. All payments with respect to the Obligations shall either be
charged by Lender to Borrower's account, charged as an advance or made by
Borrower to Lender in U.S. currency and without any defense, offset or
counterclaim of any kind, at 555 Theodore Fremd Avenue, Suite C-209, Rye, New
York 10580, or to such other address as Lender shall specify, by 12:00 noon New
York, New York time on the date when due. Whenever any payment to be made shall
otherwise be due on a day that is not a Banking Day, such payment shall be made
on the next succeeding Banking Day and such extension of time shall be included
in computing interest in connection with any such payment. Lender may make an
Advance to reimburse itself for any payments on the Obligations (including fees
and expenses payable by Borrower) which are not paid when due, without prior
notice or demand to Borrower, but which Lender agrees shall be reflected in the
monthly statements set forth in Section 9 of this Agreement. Prior to the
occurrence of an Event of Default, Lender shall give written notice to Borrower
of any legal, auditing, or accounting fees or expenses incurred by Lender (other
than such fees and expenses which are attributable to periods prior to the
closing hereof or which are attributable to the closing hereof, all of which
fees and expenses are due and payable at the time of closing),

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whereupon Borrower shall have thirty (30) days to make satisfactory payment of
such fees and expenses. If Borrower fails to pay such fees and expenses in full
within such thirty (30) day period, then Lender may, without further notice or
demand, make an Advance to reimburse itself for such fees and expenses;
provided, however, that, Borrower's right to review, object to and dispute such
fees and expenses shall not be effected thereby; provided, further, however,
that Borrower's right to review, object and dispute such fees and expenses shall
be exercised in accordance with Section 9 of this Agreement.

2.7.  Collections/Balance/Statements/etc.

(a)   Collection and Remittance.

(i)   Borrower covenants and agrees to open the Blocked Account over which
Lender shall have the sole power of withdrawal. All proceeds of Receivables
whether cash, checks, drafts, notes, acceptances or other forms of payment, if
received by Borrower, shall be received by Borrower in trust for Lender, and
Borrower agrees to deliver or cause to be delivered, such payments forthwith, in
the identical form in which received, to Lender or to the Blocked Account, as
Lender shall require from time to time.

(ii)  Collected funds in the Blocked Account shall be swept daily and the
proceeds deposited to an account of Lender or Borrower as Lender shall elect.

(b)   Determination of Balance of Revolving Loans. In determining the
outstanding balance of the Revolving Loans, (i) funds transferred from the
Blocked Account to the Lender's account at Fleet Bank, Account Name: Keltic
Financial Partners, LP; Account No. 9428395446, ABA #011900571 (or such other
account as Lender may direct from time to time), before 2 p.m. Eastern Time of a
Business Day will be credited on the second (2nd) Banking Day after such Banking
Day, and thereafter on the following Banking Day, as follows: (a) first, to the
outstanding principal balance of the Revolving Loan, and (b) second, to all
other Obligations in such order as Lender shall elect; (ii) any other form of
funds received by Lender will be credited on the Banking Day when Lender has
received notification that such funds are collected and available to Lender if
before 2 p.m. (Eastern Time), and thereafter on the following Banking Day; (iii)
all credits shall be conditional upon final payment to Lender in cash or solvent
credits of the items giving rise to them and, if any item is not so paid, the
amount of any credit given for it shall be charged to the balance of the
Revolving Loans whether or not the item is returned; and (iv) for the purpose of
computing interest on the Revolving Loans and other Obligations, interest shall
continue to accrue on the amount of any payment credited to a Borrower's
Revolving Loan balance by Lender for a period of two (2) Banking Days after the
date so credited. Subject to Lender's right, as set forth in Section 16.2, as
soon as available payment is received by Lender with respect to all credits, if
there are no outstanding Obligations hereunder, then Lender in accordance with
and subject to applicable law, will transfer upon Borrower's written request the
funds on deposit in the Blocked Account to Borrower's operating account.

2.8.  Payment on Termination Date. Notwithstanding anything herein to the
contrary, the entire outstanding principal balance of the Loans, plus all
accrued and unpaid interest thereon and all fees and other amounts payable under
this Agreement and the Loan Documents, shall be due and payable, in full, on the
Termination Date.

                                       11
<PAGE>

3.    LENDER'S COMPENSATION.

3.1.  Interest on Revolving Advances: Costs and Expenses. Borrower shall pay
interest monthly, in arrears, on the first day of each month, commencing July 1,
2001 on the average daily unpaid principal amount of the Revolving Advances made
to Borrower at a fluctuating rate which is equal to the Prime Rate plus two
percent (2.0%) per annum; provided, however, that so long as there is no Event
of Default hereunder and, (i) Borrower shall maintain Core EBITDA of not less
than $350,000.00 for each fiscal quarter, tested quarterly at the end of each
fiscal quarter, for a period of six (6) consecutive fiscal quarters, and (ii)
Dilution with respect to Receivables is less than four percent (4%), and (iii)
Receivables remaining unpaid in excess of 90 days from invoice date comprise
less than fifteen percent (15%) of all Receivables, then the average daily
unpaid principal amount of the Revolving Advances made to Borrower at a
fluctuating rate which is equal to the Prime Rate plus one and one half of one
percent (1.50%). Notwithstanding the foregoing, on and after the occurrence of
an Event of Default hereunder, Borrower shall pay interest on all Revolving
Advances at a rate which is three percent (3%) per annum above the interest rate
which would otherwise be in effect under this Agreement with respect to the
Revolving Advances; provided, however, in no event shall any interest to be paid
hereunder or under any Loan Document exceed the maximum rate permitted by law.

3.2.  Commitment and Closing Fee. Borrower shall have paid to Lender One Hundred
Ten Thousand and 00/100 Dollars ($110,000.00) commitment and closing fee.

3.3.  Facility Fee. Borrower shall pay to Lender monthly, in arrears, on the
first day of each month a facility fee in an amount equal to one percent (1.0%)
per annum of the Maximum Facility.

3.4.  Collateral Management Fee. Borrower shall pay to Lender monthly, in
arrears, on the first clay of each month, a collateral management fee in an
amount of Two Thousand and 00/ 100 Dollars ($2,000.00) per month; provided,
however, that so long as there is no Event of Default and, (i) Borrower shall
maintain Core EBITDA of not less than $350,000.00 for each fiscal quarter,
tested quarterly at the end of each fiscal quarter, for a period of six (6)
consecutive quarters, and (ii) Dilution with respect to Receivables is less than
four percent (4%), and (iii) Receivables remaining unpaid in excess of 90 days
from invoice date comprise less than fifteen percent (15%) of all Receivables,
then the collateral management fee shall be in an amount of One Thousand and 00/
100 Dollars ($1,000.00) per month. Notwithstanding the foregoing, on and after
the occurrence of an Event of Default hereunder, the collateral management fee
shall be increased by $1,000.00 per month over the otherwise applicable
collateral management fee.

3.5.  Field Examination Fees. Borrower shall promptly reimburse Lender for all
costs and expenses associated with periodic field examinations performed by
Lender and its agents, as deemed reasonably necessary by Lender; provided,
however, Lender agrees that so long as an Event of Default has not occurred and
is not continuing, Borrower shall not be required to reimburse Lender for the
costs and expenses associated with more than four (4) such field examinations
per calendar year. Lender shall use its best efforts to complete the on site
portion such field examinations within two (2) man days per field examination.

                                       12
<PAGE>

3.6.  Prepayment Premium. If Borrower prepays all or substantially all of the
principal of the Revolving Loans prior to the Termination Date other than from
funds internally generated in the ordinary course of business, including,
without limitation, by raising additional capital or any normal course payment
on the Loans that do not have the effect of a permanent reduction in the Loans,
Borrower shall pay to Lender at the time of such prepayment, a prepayment
premium in an amount equal to five percent (5.0%) of the Maximum Facility if the
prepayment is made on or before the date which is the first anniversary of the
date hereof, four percent (4.0%) of the Maximum Facility if the prepayment is
made after the first anniversary of the date hereof, but on or prior to the
second anniversary of the date hereof, and one percent (1.0%) of the Maximum
Facility if the prepayment is made after the second anniversary of the date
hereof, except that no prepayment premium shall be required in connection with:
(a) any prepayment required under Section 15.3 of this Agreement; or (b) so long
as there is no Event of Default hereunder, any termination of this Agreement by
Lender.

3.7.  Computation of Interest and Fees. All interest and fees hereunder shall be
computed on the basis of a year consisting of three hundred sixty (360) days for
the number of days actually elapsed.

3.8.  Payment of Interest and Fees. Interest and fees shall be payable
immediately when due, and shall be paid by Lender's making an Advance in the
amount of the interest and/or fee due against the Revolving Loan, but any
failure or delay by Lender in submitting any invoice for such interest or fee or
in the making of an advance against the Revolving Loan shall not discharge or
relieve Borrower of its obligation to make such interest or fee payment.

4.    APPLICATION OF PROCEEDS. The proceeds of the Revolving Advances shall be
used solely by Borrower to repay existing indebtedness to Citibank and for
working capital needed in the normal operation of Borrower's business, with
respect to T3 Media as more particularly set forth in Section 15.25 and for
closing Borrower's "solution branches".

5.    SECURITY INTEREST IN COLLATERAL. To secure the prompt payment and
performance of all of Borrower's Obligations to Lender, Borrower transfers and
assigns to Lender and grants to Lender a first priority Lien on and first
security interest in all of the following property and interests in property of
Borrower, whether now owned or existing or hereafter created, acquired or
arising and wheresoever located:

(a)   All Receivables;

(b)   All Inventory;

(c)   All Equipment;

(d)   All General Intangibles;

(e)   All Investment Property;

(f)   All Deposit Accounts;

                                       13
<PAGE>

(g)   All monies or other property of any kind, now or at any time or times
hereafter, in the possession or under the control of Lender or any Affiliate of
Lender or any representative, agent or correspondent of Lender;

(h)   All accessions to, substitutions for and all replacements, products and
cash and noncash proceeds of (a), (b), (c), (d), (e) (f) and (g) above,
including, without limitation, proceeds of and unearned premiums with respect to
insurance policies insuring any of the Collateral and claims against any Person
for loss of, damage to, or destruction of any or all of the Collateral; and

(i)   All books and records (including, without limitation, customer lists,
credit files, computer programs, printouts and other computer materials and
records) of Borrower pertaining to any of (a), (b), (c), (d), (e), (f) (g) or
(h) above.

(j)   "Collateral" shall not include any ownership interest of Borrower in T3
Media, Inc., Always-On Software, Inc. or Methoda, Ltd.

6.    RECOURSE TO SECURITY. Recourse to security shall not be required for any
Obligation hereunder.

7.    INDUCING REPRESENTATIONS. In order to induce Lender to make the Loans,
Borrower makes the following representations and warranties to Lender:

7.1.  Organization and Qualifications. Borrower is a corporation duly organized
and existing under the laws of the State of New York. Borrower is qualified to
do business in every jurisdiction where the nature of its business requires it
to be so qualified and where failure to so qualify might have a Material Adverse
Effect.

7.2.  Corporate Name and Address. During the preceding five (5) years, Borrower
has not been known as or used any corporate, fictitious or trade names, except
as set forth on Schedule 7.2 attached hereto. Borrower's executive office is at
the addresses set forth above.

7.3.  Corporate Structure. Borrower has no subsidiaries or Affiliates, except as
set forth on Schedule 7.3 attached hereto.

7.4.  Legally Enforceable Agreement. The execution, delivery and performance of
this Agreement, and each and all of the other Loan Documents and all and any
other instruments and documents to be delivered by Borrower or its Affiliates
hereunder and the creation of all Liens and security interests provided for
herein are within Borrower's corporate power, have been duly authorized by all
necessary or proper corporate action (including the consent of shareholders
where required), are not in contravention of any agreement or indenture to which
Borrower is a party or by which it is bound, or of the Certificate of
Incorporation or By-Laws of Borrower, and are not, to the best of Borrower's
knowledge, in contravention of any provision of law and the same do not, to the
best of Borrower's knowledge, require the consent or approval of any
governmental body, agency, authority or any other person which has not been
obtained and a copy thereof fizmished to Lender. The execution, delivery and
performance of the Guaranty to be delivered by the Guarantor is not, to the best
of Borrower's knowledge, in contravention of any provision of law and the same
does not require the consent or approval of any governmental

                                       14
<PAGE>

body, agency, authority or any other person which has not been obtained and a
copy thereof furnished to the Lender.

7.5.  Solvent Financial Condition. Borrower and Guarantor are each Solvent, as
defined in Section 1.56 hereof.

7.6.  Financial Statements. Borrower's filed SEC Form 10-K dated as of December
31, 2000, a copy of which has been delivered to Lender, fairly presents
Borrower's financial condition and results of operations as relevant and as of
such date and there have been no material adverse changes since such date.
Borrower has no material contingent liabilities, liabilities for taxes, unusual
forward or long-term commitments, or unrealized or unanticipated losses from any
unfavorable commitments which were not disclosed to Lender in such Form 10-K.

7.7.  Joint Ventures. Borrower is not engaged in any joint venture or
partnership with any other Person.

7.8.  Real Estate. Attached hereto as Schedule 7.8 is a list showing, to the
best of Borrower's knowledge, all real property owned or leased by Borrower.

7.9.  Patents, Trademarks, Copyrights and Licenses. To the best of Borrower's
knowledge, Borrower owns or has a valid license to use all the patents,
trademarks, service marks, trade names, copyrights and licenses, if any, which
are currently used by it in and are reasonably necessary for the present and
planned future conduct of its business without conflict with the rights of
others. To the best of Borrower's knowledge, all such licenses and other similar
rights (exclusive of licenses relating to normal office business software (e.g.
licenses for computer programs such as Word and Excel) that are used by Borrower
in its normal operations) with a value to Borrower in excess of $200,000.00 are
listed on Schedule 7.9 attached hereto and made a part hereof, if any.
Notwithstanding the foregoing, Borrower is aware of other users of the term
"TACT" and combinations including "A Consulting", which users may be able to
restrict Borrower's ability to establish or protect Borrower's right to use
these terms. Borrower has in the past been contacted by other users of the term
"TACT" alleging rights to the term. Borrower has completed filings with the U.S.
Patent and Trademark Office in order to protect certain marks, including "TACT"
and "The A Consulting Team".

7.10. Existing Business Relationship. There exists no actual or, to the best of
Borrower's knowledge, threatened termination, cancellation or limitation of, or
any materially adverse modification or change in, the business relationship of
Borrower with any customer or group of customers whose purchases individually or
in the aggregate are material to the operations of Borrower, or with any
supplier.

7.11. Investment Company Act: Federal Reserve Board Regulations. Borrower is not
an "investment company", or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company", as such terms are defined
in the Investment Company Act of 1940, as amended (15 U.S.C. ss.ss. 80(a)(1), et
se~lq.). The makings of the Revolving Loans hereunder by Lender, the application
of the proceeds and repayment thereof by Borrower and the performance of the
transactions contemplated by this Agreement will not violate any provision of
said Act, or any rule, regulation or order issued by the Securities and Exchange
Commission thereunder.

                                       15
<PAGE>

Borrower does not own any margin security as that term is defined in Regulation
U of the Board of Governors of the Federal Reserve System and the proceeds of
the borrowings made pursuant to this Agreement will be used only for the
purposes contemplated hereunder. None of the proceeds will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin security or for
the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry margin security or for any other purpose which
might constitute any of the loans under this Agreement a "purpose credit" within
the meaning of said Regulation U or Regulations T or X of the Federal Reserve
Board. Borrower will not take, or permit any agent acting on its behalf to take,
any action which might cause this Agreement or any document or instrument
delivered pursuant hereto to violate any regulation of the Federal Reserve
Board.

7.12. Tax Returns. Borrower and the Guarantors have filed or timely extended the
filing (late of all tax returns (Federal, state or local) required to be filed
and paid all taxes shown thereon to be due including interest and penalties or
has provided adequate reserves therefor. To the best of Borrower's knowledge, no
assessments have been made against Borrower or the Guarantors by any taxing
authority nor has any penalty or deficiency been made by any such authority. To
the best of Borrower's knowledge, no Federal income tax return of either
Borrower or any Guarantor is presently being examined by the Internal Revenue
Service nor are the results of any prior examination by the Internal Revenue
Service or any State or local tax authority being contested by Borrower.

7.13. Litigation. Except as disclosed in Schedule 7.13, no action or proceeding,
is now pending or, to the best of Borrower's knowledge, is threatened against
Borrower or any Guarantor at law, in equity or otherwise, before any court,
board, commission, agency or instrumentality of the Federal or state government
or of any municipal government or any agency or subdivision thereof, or before
any arbitrator or panel of arbitrators, and neither Borrower nor any Guarantor
has accepted liability for any such action or proceeding. Borrower has not
received notice of and, to the best of Borrower's knowledge, there is no
proceeding pending before any governmental agency (Federal, state or local) and,
to the best of Borrower's knowledge, no investigation has been commenced before
any such government agency the effect of which, if adversely decided, would
affect or impair Borrower's business or financial condition.

7.14. Receivables Locations. Annexed hereto as Schedule 7.14 is a list showing
all places at which Borrower maintains, or will maintain, records relating to
Receivables.

7.15. Inventory Locations. Annexed hereto as Schedule 7.15 is a list showing all
places where Borrower maintains, or will maintain, Inventory with, in the
aggregate, book value in excess of $50,000.00. Such list indicates whether the
premises are owned or leased by Borrower or whether the premises are the
premises of a warehouseman or other third party, and if owned by a third party,
the name and address of such third party.

7.16. Equipment List and Locations. Annexed hereto as Schedule 7.16 is a
computer printout from Borrower's books and records showing substantially all of
Borrower's Equipment (except for items of Equipment which in the aggregate do
not have material value), and describing the places where the same is located.
All Equipment is free and clear of all Liens and security interests voluntary
created by Borrower in favor of any Person other than Lender, except as set

                                       16
<PAGE>

forth on Schedule 7.16, and to the best of Borrower's knowledge, there are no
other Liens or security interests encumbering any Equipment.

7.17. Title Liens. Borrower has good and marketable title to the Receivables
and, to the best of Borrower's knowledge, the Other Collateral, as sole owner
thereof. There are no existing Liens voluntarily created by Borrower on any
property of Borrower, except for Liens in favor of Lender and Liens described in
Schedule 7.17 and, to the best of Borrower's knowledge, there are no other Liens
on any property of Borrower. Except as set forth on Schedule 7.17, none of the
Receivables and, to the best of Borrower's knowledge, none of the Other
Collateral is subject to any prohibition against encumbering, pledging,
hypothecating or assigning the same or requires notice or consent in connection
therewith.

7.18. Existing Indebtedness. Borrower has no existing Indebtedness except the
Indebtedness described in Schedule 7.18.

7.19. ERISA Matters. Borrower has no so-called "defined benefit" Plan and, with
respect to Borrower's so-called "defined contribution" Plan, Borrower has not
made any contributions thereunder, is not obligated to make any contributions
and has no outstanding obligations thereunder pursuant to the terms thereof. To
the best of Borrower's knowledge, Borrower has not engaged in any transaction
which would subject Borrower to tax, penalty or liability for prohibited
transactions imposed by ERISA or the Code.

To the best of Borrower's knowledge, Borrower has duly complied with, and its
facilities, business, leaseholds, equipment and other property are in compliance
in all respects with, the provisions of the federal Occupational Safety and
Health Act and all rules and regulations thereunder and all similar state and
local Governmental Rules. To the best of Borrower's knowledge, there are no
outstanding citations, notices or orders of non-compliance issued to Borrower or
relating to its facilities, business, leaseholds, equipment or other property
under any such Governmental Rules.

7.21. Environmental Matters. Except as disclosed in Schedule 7.21:

(a)   To the best of Borrower's knowledge, no property owned or used by Borrower
is or has been used for the generation, manufacture, refining, transportation,
treatment, storage, handling or disposal of any "hazardous substances" or
"hazardous wastes". The following are all of the Standard Industrial
Classification Codes applicable to the properties and operations of Borrower:
541519; (b) to the best of Borrower's knowledge, Borrower is in compliance with
all applicable Environmental Laws; (c) to the best of Borrower's knowledge,
there has been no contamination or release of hazardous substances at, upon,
under or within any property owned or leased by Borrower, and there has been no
contamination (as defined in any applicable Environmental Law) or release of
hazardous substances (as defined in any applicable Environmental Law) on any
other property that has migrated or threatens to migrate to any property owned
or leased by Borrower; (d) to the best of Borrower's knowledge, there are not
now and never have been above-ground or underground storage tanks at any
property owned or leased by Borrower; (e) to the best of Borrower's knowledge
there are no transformers, capacitors or other items of Equipment containing
polychlorinated biphenyls at levels in excess of 49 parts per million, violative
of any applicable Environmental Law, at any property owned or leased by
Borrower;

                                       17
<PAGE>

(1) to the best of Borrower's knowledge, no hazardous substances are present at
any property owned or leased by Borrower, nor will any hazardous substances be
present upon any such property or in the operation thereof by Borrower, in
proper storage containers; (g) to the best of Borrower's knowledge, all permits
and authorizations required under Environmental Laws for all operations of
Borrower have been duly issued and are in full force and effect, including but
not limited to those for air emissions, water discharges and treatment, storage
tanks and the generation, treatment, storage and disposal of hazardous
substances; (h) to the best of Borrower's knowledge, there are no past, pending
or threatened environmental claims against Borrower or any Property owned or
leased by Borrower; to the best of Borrower's knowledge, and there is no
condition or occurrence on any Property owned or leased by Borrower that could
be anticipated (1) to form the basis of an environmental claim against Borrower
or its properties or (2) to cause any property owned or leased by Borrower to be
subject to any restrictions on its ownership, occupancy or transferability under
any Environmental Law; (i) the representations and warranties set forth in this
Section 7.21 shall survive repayment of the Obligations and the termination of
this Agreement and the Loan Documents.

7.22. Labor Disputes. There are no pending or, to the best of Borrower's
knowledge, threatened labor disputes which could have a Material Adverse Effect.

7.23. Intellectual Property. To the best of Borrower's knowledge, Borrower owns
or has a valid license to use all necessary patents, trademarks, service marks,
copyrights and other intellectual property, if any, which are currently used by
it in and are reasonably necessary or useful in the operation of its business,
in each case free of any claims or infringements. Notwithstanding the foregoing,
Borrower is aware of other users of the term "TACT" and combinations including
"A Consulting", which users may be able to restrict Borrower's ability to
establish or protect Borrower's right to use these terms. Borrower has in the
past been contacted by other users of the term "TACT" alleging rights to the
term. Borrower has completed filings with the U.S. Patent and Trademark Office
in order to protect certain marks, including "TACT" and "The A Consulting Team".

7.24. Location of Bank and Securities Accounts. Schedule 7.24 hereto sets forth
a complete and accurate list of all deposit, checking and other bank accounts,
all securities and other accounts maintained with any broker dealer and all
other similar accounts maintained by Borrower, together with a description
thereof.

7.25. Compliance With Laws. Borrower is in compliance with all federal, state
and local governmental rules, ordinances and regulations ("Governmental Rules")
applicable to its ownership or use of properties or the conduct of its business,
except for violations or failures to comply, if any, which would not reasonably
be expected to have a Material Adverse Effect. Borrower has not received any
notice of violation of any of the foregoing.

7.26. No Other Violations. Borrower is not in violation of any term of its
Certificate of Incorporation or By-laws and, to the best of Borrower's
knowledge, no event or condition has occurred and is continuing which
constitutes or results in (or would constitute or result in, with the giving of
notice, lapse of time or other condition) (a) a breach of, or a default under,
any agreement, undertaking or instrument to which Borrower is a party or by
which it or any of its property may be affected, or (b) the imposition of any
Lien on any property of Borrower. To the

                                       18
<PAGE>

best of Borrower's knowledge, the Guarantor is not in breach or default under
any agreement, undertaking or instrument to which the Guarantor is a party or by
which he or his property may be affected, nor does any condition exist which
would constitute such a breach or default or result in the imposition of any
Lien on any Property of the Guarantor.

7.27. Survival of Representations and Warranties. Borrower covenants, warrants
and represents to Lender that all representations and warranties of Borrower
contained in this Agreement or any of the other Loan Documents shall be true at
the time of Borrower's execution of this Agreement and the other Loan Documents,
and Lender's right to bring an action for breach of any such representation or
warranty or to exercise any remedy hereunder based upon the breach of such
representation or warranty shall survive the execution, delivery and acceptance
hereof by Lender and the closing of the transactions described herein or related
hereto until the Obligations are finally and irrevocably paid in full. Lender
acknowledges and agrees that Borrower is not making any representation or
warranty to Lender with respect to those matters set forth on Schedule 7.27
hereto; provided, however, that Borrower represents and warrants that it knows
of no fact or circumstance, and it has not failed to disclose to Lender any fact
or circumstance known to it, that would make any such matters false or
materially misleading.

8.    FINANCIAL STATEMENTS AND INFORMATION; CERTAIN NOTICES TO LENDER. So long
as Borrower shall have any Obligations to Lender under this Agreement, Borrower
shall deliver to Lender, or shall cause to be delivered to Lender:

8.1.  Borrowing Base Certificate. Weekly (on or before Wednesday of each week as
of the preceding week end), and monthly (within two (2) days after the end of
each month) and contemporaneously with each request for an Advance, a
satisfactorily completed and executed Borrowing Base Certificate.

8.2.  Monthly Reports. Within twenty (20) days after the end of each month, an
accounts receivable aging and accounts payable aging and a Reconciliation Report
of Borrower for such month, all in form satisfactory to Lender, prepared by
Borrower and if Lender so requests, customer statements, sales journals, cash
receipts journals and detailed sales credit reports.

8.3.  Annual Financial Statements. Within ninety (90) days after the close of
each Fiscal Year, (a) a copy of the annual consolidating and consolidated
financial statements of Borrower consisting of balance sheets, statements of
operations and retained earnings and statements of cash flow audited by
independent certified public accountants and certified by such accountants, and
accompanied by such accountants' certification that, in the normal course of
their review, such accountants have become aware of no presently existing state
of facts constituting a Default or an Event of Default under this Agreement in
substantially the form of Schedule 8.3 hereof, (b) a copy of the annual
consolidating financial statements of Borrower in the same format as the annual
consolidated financial statements except that such consolidating statements
shall be prepared by management of Borrower in accordance with Generally
Accepted Accounting Principles and certified by the chief financial officer of
Borrower, and (c) a compliance certificate in the form attached as Exhibit D
hereto. In addition, Borrower shall deliver, or cause to be delivered, to
Lender, if and when issued, any management letters prepared by Borrower's

                                       19
<PAGE>

independent certified public accountants; provided that the consolidating
financial statements will not contain footnotes.

8.4.  Financial Statements. Within (a) forty-five (45) days after the end of
each first, second and third quarter, and (b) ninety (90) days after the end of
each fourth quarter of each Fiscal Year, consolidating and consolidated
financial statements of Borrower consisting of balance sheets, statements of
operations and retained earnings and statements of cash flow, prepared by
management of Borrower in accordance with Generally Accepted Accounting
Principles and certified by the chief financial officer of Borrower, together
with a compliance certificate in the form attached as Exhibit D hereto; provided
that the consolidating financial statements will not contain footnotes.

8.5.  Tax Returns. A copy of Borrower's federal income tax return, as and when
filed with the Internal Revenue Service.

8.6.  Projections. Within thirty (30) days prior to the end of each of
Borrower's fiscal years, financial projections for Borrower in form satisfactory
to Lender covering not less than a one (1) year period, commencing with the
succeeding fiscal year. If such projections are for a one (1) year period, then
such projections shall be prepared on a monthly basis. If such projections are
for more than a one (1) year period, then such projections shall be prepared on
a monthly basis with respect to first year thereof and on a quarterly basis
thereafter.

8.7.  Customer Lists. Semiannually, a list of all of Borrower's customers and
vendors, including the addresses, telephone and facsimile numbers which lists
shall be delivered within thirty (30) days after each second fiscal quarter and
within thirty (30) days after the each fiscal year end.

Annually, within thirty (30) days of the renewal date of such insurance policy,
evidence of insurance in form and content satisfactory to Lender and otherwise
in compliance with Section 14.6 hereof, together with the original insurance
policy.

8.9.  Notice of Event of Default and Adverse Business Developments. Immediately
after becoming aware of the existence of a Default or any Event of Default under
this Agreement or after becoming aware of any developments or other information
which is likely to (i) materially adversely affect Borrower's business,
prospects, profits or condition (financial or otherwise) or its ability to
perform this Agreement, or (ii) adversely affect any of Borrower's properties,
including, without limitation, the following:

(a)   any substantial dispute that may arise between Borrower and any
governmental regulatory body or law enforcement authority, including any action
relating to any tax liability of Borrower;

(b)   all litigation against Borrower where the amount claimed in any one suit
or action is $250,000 or more and all litigation where the amount claimed in the
aggregate is $500,000 or more except when the same is fully covered by insurance
and the insurer accepts liability therefor;

                                       20
<PAGE>

(c)   any labor controversy resulting in or threatening to result in a strike or
work stoppage against Borrower;

any proposal by any public authority to acquire the assets or business of
Borrower;

(e)   the location of any Collateral other than at Borrower's place of business
or as permitted under this Agreement;

(f)   any proposed or actual change of Borrower's name, identity or corporate
structure; and

(g)   any other matter which has resulted or may result in a Material Adverse
Effect.

In each case, Borrower will provide Lender with telephonic or telegraphic notice
specifying and describing the nature of such Default, Event of Default or
development or information, and such anticipated effect, which telephonic or
telegraphic notice shall be promptly confirmed in writing within three (3)
Banking Days; and

8.10. Other Information. Such other information respecting the financial
condition of Borrower or any property of Borrower in which Lender may have a
Lien as Lender may, from time to time, reasonably request. Borrower authorizes
Lender to communicate directly with Borrower's independent certified public
accountants and authorizes those accountants to disclose to Lender any and all
financial statements and other information of any kind that they may have with
respect to Borrower and its business and financial and other affairs. Borrower
shall deliver a letter addressed to such accountants instructing them to comply
with the provisions of this Section 8.10. Lender shall treat all non-public
documents and information marked "Confidential" ("Confidential Information") so
obtained or provided by Borrower or its agents, representatives or certified
public accountants as confidential and will hold and will cause its respective
employees, agents and representatives to hold in confidence all such
Confidential Information concerning Borrower, its Affiliates, Always-On
Software, Inc., Methoda, Ltd., and T3 Media except: (i) when Lender is required
to disclose pursuant to Governmental Rules, (ii) when Lender is compelled to
disclose by judicial or administrative process, (iii) when deemed necessary by
Lender in its discretion to enforce this Agreement or any of the other Loan
Documents, and (iv) in connection with the sale of participations in or the
assignment of all or any part of Lender's interest in the Loans. Lender will not
release or disclose such Confidential Information to any other person, except
its auditors, attorneys, financial advisors and other consultants, advisors,
agents and representatives. If the transactions contemplated by this Agreement
are not consummated, such confidence shall be maintained and, if requested by or
on behalf of Borrower, Lender will, and will use all reasonable efforts to cause
its auditors, attorneys, financial advisors and other consultants, agents and
representatives to, return to Borrower or destroy, at Borrower's cost and
expense, all copies of all such Confidential Information.

9.    ACCOUNTING. Lender shall account monthly to Borrower. Each and every
account shall be deemed final, binding and conclusive upon Borrower in all
respects, as to all matters reflected therein, unless Borrower, within thirty
(30) days after the date the account was rendered, delivers to Lender written
notice of any objections which they may have to any such account and in that
event only those items expressly objected to in such notice shall be deemed

                                       21
<PAGE>

to be disputed by Borrower. If Borrower disputes the correctness of any
statement, Borrower's notice shall specify in detail the particulars of its
basis for contending that such statement is incorrect.

10.   Intentionally omitted.

11.   WARRANTIES WITH RESPECT TO RECEIVABLES. Borrower represents and warrants
to Lender that each Receivable created by it (i) will be free and clear of liens
and encumbrances in favor of any Person other than Lender, except as otherwise
permitted hereunder, (ii) will cover a bona fide sale and delivery of
merchandise usually dealt in by Borrower in the ordinary course of their
business or will cover the rendition of services by Borrower to customers of a
kind ordinarily rendered in the ordinary course of Borrower's business, (iii)
will be for a liquidated amount from a customer competent to contract therefor,
(iv) is not subject to renegotiation, except in the ordinary course of
Borrower's business consistent with Borrower's past practice, (v) is not subject
to any prepayment or credit and will not be subject to any deduction, offset,
counterclaim, lien or other condition other than in the ordinary course of
Borrower's business, and (vi) is generally enforceable in accordance with its
terms. Borrower further represents and warrants that all services to be
performed by Borrower in connection with each Receivable have been performed.

12.   SPECIAL PROVISIONS WITH RESPECT TO RECEIVABLES AND RELATED MATTERS.

12.1. Confirmatory Written Assignments. Promptly after the creation of any
Receivable, if Lender shall so request, Borrower shall execute and deliver
confirmatory written assignments to Lender of Eligible Receivables, but the
failure to execute or deliver any schedule or assignment shall not affect or
limit any Lien or other right of Lender in and to any Receivable. Borrower shall
cause all of its invoices to be printed and to bear consecutive numbers, and to
issue its invoices in such consecutive numerical order. On Lender's request
therefor, Borrower shall also furnish to Lender copies of invoices to customers
and employee timesheets. Borrower will also furnish Lender with such other
documents and instruments as Lender may request in connection with any
Receivables, including detailed monthly agings. Borrower shall deliver to Lender
the originals of all letters of credit, notes, and instruments in its favor and
such endorsements or assignments as Lender may request. If Borrower shall fail
to deliver to Lender any Receivables, financial or any other report with respect
to the Collateral required to be delivered by Borrower pursuant to Sections 8, 9
and 10 of this Agreement within ten (10) days after the dates set forth therein,
then Borrower agrees to pay to Lender a fee of fifty dollars ($50.00) per day,
beginning on the date that next follows the date required for delivery of such
report and continuing through the date that Borrower delivers said report for
each report and/or document that Borrower fails to deliver to Lender under this
Agreement.

12.2. Notice of Certain Events. Borrower will notify Lender of all disputes,
returns and of all claims asserted with respect to (i) any Receivables which
disputes or claims exceed $50,000 per occurrence, and (ii) any Receivables
(other than Eligible Receivables) which disputes or claims exceed $150,000 per
occurrence. Borrower shall promptly report each such return, repossession or
recovery of merchandise to Lender, advising it of the location thereof and
providing it with a

                                       22
<PAGE>

description of such goods and their location. Borrower shall not settle or
adjust any dispute or claim, or grant any discount (except ordinary trade
discounts and volume discounts), credit or allowance or accept any return of
merchandise, without Lender's consent, except for credits, discounts or
allowances on Receivables in an aggregate amount not to exceed (i) $150,000 per
calendar month, and (ii) $400,000 per calendar quarter. Upon the occurrence of
and during the continuance of an Event of Default for a period of in excess of
two (2) months, Lender may settle or adjust disputes or claims directly with
customers or Account Debtors of Borrower for amounts and upon terms which it
considers advisable. Where a Borrower receives Collateral of any kind or nature
by reason of transactions between itself and its customers or Account Debtors,
it will hold the same on Lender's behalf, subject to Lender's instructions, and
as property forming part of the Receivables. Where a Borrower sells to a
customer or Account Debtor which also sells to it or which may have other claims
against it, Borrower will so advise Lender, promptly upon being notified of such
order.

12.3. Communication with Account Debtors. Borrower authorizes Lender, before an
Event of Default, without the consent of Borrower, to communicate directly only
with Account Debtors or customer's accounts payable departments, by whatever
means Lender shall elect, for the purpose of verifying the information supplied
by Borrower to Lender with respect to Receivables only. Borrower authorizes
Lender, upon the occurrence of an Event of Default, without the consent of
Borrower, to communicate directly with customers or Account Debtors of Borrower
by whatever means Lender shall elect for the purpose of verifying the
information supplied by Borrower to Lender with respect to Receivables. Upon
Lender's request, before or after the occurrence of an Event of Default,
Borrower shall provide Lender with a list of the addresses of each of their
Account Debtors.

13.   SPECIAL PROVISIONS RELATING TO EQUIPMENT.

13.1. Equipment List. Annexed hereto as Schedule 7.16 is a computer printout
from Borrower's books and records showing substantially all of Borrower's
present Equipment. All Equipment hereafter acquired will be kept at the location
or locations shown, if shown, on said Schedule or at the locations where located
on the date hereof, unless Borrower shall have first advised Lender of its
intention to maintain a plant or offices at some other location and obtained
Lender's prior written consent thereto to keeping the Equipment at such other
location; provided, however, Lender's prior written consent shall not be
required with respect to (i) the relocation of Equipment from the locations set
forth on Schedule 7.16 to the residences of employees, provided that the type
and amount of Equipment so relocated is consistent with a "home office" and
provided that such relocation shall not cause a Material Adverse Effect; and
(ii) the relocation of Equipment between the locations set forth on Schedule
7.16, provided that such relocation shall not cause a Material Adverse Effect.

13.2. Borrower's Obligations With Respect to Equipment. Borrower shall keep all
of their Equipment in a good state of repair, and will make all repairs and
replacements when and where necessary, will not waste or destroy Equipment or
any part thereof, and will not be negligent in the care, or use, thereof.
Borrower shall keep accurate lists and records reflecting its Equipment and
shall retain copies of all warranties, manuals and manufacturers' or vendors'
requirements with respect thereto. All Equipment shall be used in accordance
with law and prudent business practice and the manufacturer's instructions and
shall be kept separate from and shall not be

                                       23
<PAGE>

annexed or affixed to or become part of the realty except where Lender first
consents in writing thereto.

14.   AFFIRMATIVE COVENANTS. Borrower represents and warrants that, so long as
it shall have any Obligations to Lender hereunder, Borrower will:

14.1. Business and Existence. Preserve and maintain such Borrower's separate
corporate existence and rights, privileges and franchises in connection
herewith.

14.2. Trade Names. Transact business in Borrower's own name and invoice all of
Borrower's Receivables in Borrower's own name.

14.3. Transactions with Affiliates. Whenever Borrower engages in transactions
with any of Borrower's Affiliates, conduct the same, with respect to the
payment obligations thereof, on an arms-length basis or other basis more
favorable to Borrower.

14.4. Taxes. Pay and discharge all taxes, assessments, government charges and
levies imposed upon Borrower, Borrower's income or Borrower's profits or upon
any property belonging to Borrower prior to the date on which penalties attach
thereto, except where the same may be contested in good faith by appropriate
proceedings.

14.5. Compliance with Laws. Substantially comply with all Governmental Rules
applicable to Borrower, including, without limitation, all laws and regulations
regarding the collection, payment and deposit of employees' income, unemployment
and Social Security taxes; provided, however, that Borrower shall not be in
default as a result of its failure to comply with a Governmental Rule if such
failure would not reasonably be expected to result in a Material Adverse Effect.

14.6. Maintain Properties: Insurance. Safeguard and protect all property used in
the conduct of Borrower's business and keep all of Borrower's property insured
with insurance companies licensed to do business in the states where the
property is located against loss or damage by fire or other risk usually insured
against by other owners or users of such properties in similar businesses under
extended coverage endorsement and against theft, burglary, and pilferage
together with such other hazards as Lender may from time to time request, in
amounts satisfactory to Lender. Borrower shall deliver the policy or policies of
such insurance or certificates of insurance to Lender. All such insurance shall
contain endorsements in form satisfactory to Lender naming Lender as lender loss
payee and providing that the insurance shall not be canceled, amended or
terminated except upon thirty (30) days' prior notice to Lender and showing
Lender as an additional party insured as its interest may appear. All insurance
proceeds received by Lender shall be retained by Lender for application to the
payment of such portion of the Obligations as Lender may determine in Lender's
discretion. Borrower shall promptly notify Lender of any event or occurrence
causing a loss or decline in value of property insured or the existence of an
event justifying a claim under any insurance and the estimated amount thereof if
the amount of any such loss, decline in value or claim exceeds $250,000.00 in
the aggregate.

14.7. Business Records. Keep adequate records and books of account with respect
to Borrower's business activities in which proper entries are made in accordance
with sound bookkeeping practices reflecting all financial transactions of such
Borrower.

                                       24
<PAGE>

14.8. Litigation. Give Lender prompt notice of any suit at law or in equity
against itself involving money or property valued in excess of Two Hundred Fifty
Thousand Dollars ($250,000) except where the same is fully covered by insurance
and the insurer accepts liability therefor, and of any investigation or
proceeding before or by any administrative or governmental agency the effect of
which would be to prohibit or materially limit or restrict the manner in which
Borrower presently conducts its respective business or to declare any substance
contained in any product manufactured or distributed by Borrower to be
dangerous.

14.9. Damage or Destruction of Collateral. Maintain or cause to be maintained
the Collateral and all its other assets and properties in good condition and
repair at all times, preserve the Collateral and all its other assets and
properties from loss, damage, or destruction of any nature whatsoever and
provide Lender with prompt written notice of (i) any destruction or substantial
damage to any Collateral evidencing or relating to Receivables and of the
occurrence of any condition or event which has caused, or may cause, loss or
depreciation in the value of any Receivables, and (ii) any material destruction
or substantial damage to any Other Collateral and of the occurrence of any
material condition or event which has caused, or may cause, loss or depreciation
in the value of any Other Collateral.

14.10. Name Change. Provide Lender with (i) not fewer than thirty (30) days
written notice prior to any proposed change of name, and (ii) contemporaneous
written notice of the creation of any subsidiary.

14.11. Access to Books and Records. Provide Lender with such reports and with
such access upon three (3) days prior written notice (unless an Event of Default
has occurred, in which case no notice shall be required), during normal business
hours, to Borrower's books and records and permit Lender to copy and inspect
such reports and books and records all as Lender reasonably deems necessary or
desirable to enable Lender to monitor the credit facilities extended hereby;
provided, however, that Lender shall use reasonable efforts to avoid disrupting
Borrower's ordinary business operations, particularly during periods when (i)
Borrower is preparing filings for submission to the U.S. Securities and Exchange
Commission, and (ii) Borrower's auditors are present and auditing Borrower's
books and records.

14.12. Solvent. Continue to be Solvent, as defined in Section 1.56 hereof.

14.13. Compliance With Environmental Laws. Comply in all material respects with
all applicable Environmental Laws.

14.14. Compliance with ERISA and other Employment Laws. Comply in all material
respects with all: (a) applicable provisions of ERISA and the Internal Revenue
Code of 1986, as amended ("Code"); and (b) any other applicable laws, rules or
regulations relating to the compensation of employees and funding of employee
pension plans.

14.15. Proceeds of Collateral. Forthwith upon receipt, pay to Lender all
proceeds of Collateral, whereupon such proceeds shall be applied to the
Obligations in an order and manner as shall be determined in the discretion of
Lender.

14.16. Delivery of Documents. Notify Lender if any proceeds of Receivables shall
include, or any of the Receivables shall be evidenced by, notes, trade
acceptances or instruments or

                                       25
<PAGE>

documents, or if any Inventory is covered by documents of title or chattel
paper, whether or not negotiable, and if required by Lender, immediately deliver
them to Lender appropriately endorsed. Borrower waives protest regardless of the
form of the endorsement. If Borrower fails to endorse any instrument or
document, Lender is authorized to endorse it on Borrower's behalf provided
Lender has provided Borrower with notice of such endorsement, except for checks
and wire transfer authorizations for which Lender shall not be required to give
such notice.

14.17. United States Contracts. If any of the Eligible Receivables arises out of
a contract with the United States or any of its departments, agencies or
instrumentalities, immediately notify Lender, and if required by Lender, execute
any necessary instruments in order that all money due or to become due under
such contract shall be assigned to Lender and proper notice of the assignment
given under the Federal Assignment of Claims Act.

14.18. Accounting System. Maintain an accounting system whereby Receivables
aging shall be formatted alphabetically by Account Debtor and coded to identify
all invoices that are not for time and material, including, without limitation,
fixed price, software, business solutions, training, employee placement and
bill-in advance, the foregoing to Lender's satisfaction.

14.19. Validity Guaranty. At all times during the term hereof, Borrower shall
cause an authorized officer of Borrower (e.g. president, chief executive
officer, etc.), such officer's authority to be evidenced by appropriate
corporate resolutions and otherwise acceptable to Lender in all respects, to be
bound under a validity and support agreement in favor of Lender, such validity
and support agreement to be in substantially the same form as the Validity and
Support Agreement delivered or about to be delivered by Shmuel Bentov on the
date hereof.

14.20 TACT Software. Borrower shall cause TACT Software Inc. to refrain from
conducting future business and to winddown the operations of TACT Software Inc.
and Borrower shall not permit TACT Software Inc. to hold any material assets.

15.   NEGATIVE COVENANTS. So long as Borrower shall have any Obligations to
Lender hereunder and unless Lender has first consented thereto in writing,
Borrower shall not:

15.1. Indebtedness. Create, incur, assume or suffer to exist, voluntarily or
involuntarily, any Indebtedness, except (i) Obligations to Lender, (ii) trade
debt incurred in the ordinary course of Borrower's business; (iii) purchase
money financing and equipment leases not to exceed Seven Hundred Fifty Thousand
Dollars ($750,000) in any fiscal year; and (iv) existing Indebtedness described
on Schedule 7.18.

15.2. Mergers: Consolidations: Acquisitions. Enter into any merger,
consolidation, reorganization or recapitalization with any other Person except
for such mergers, consolidations, reorganizations and recapitalizations that (i)
have been disclosed to and consented to by Lender in writing, such consent not
to be unreasonably withheld, and (ii) do not have a Material Adverse Effect;
take any formal steps to dissolve or to liquidate all or substantially all of
Borrower's assets except for such liquidations that have been disclosed to and
consented to by Lender in writing; conduct any part of its business through any
corporate subsidiary, unincorporated association or other entity not disclosed
on Schedule 15.2; acquire the stock or assets of any Person, whether by merger,
consolidation, purchase of stock or otherwise except for mergers,

                                       26
<PAGE>

consolidations, purchases of stock or otherwise that have been disclosed to and
consented to by Lender; or acquire all or any substantial part of the properties
of any Person except for acquisitions that have been disclosed to and consented
to by Lender.

15.3. Sale or Disposition. Sell or dispose of all or any portion of its assets
(as that term is defined in accordance with Generally Accepted Accounting
Principles) or grant any Person an option to acquire any such assets: provided,
however, that the foregoing shall not prohibit (a) sales of Inventory in the
ordinary course of business; (b) the sale of Equipment that is of a de minimus
value and of no further use in the operations of Borrower's business; (c) as
required by Governmental Rules; (d) in transactions relating to T3 Media, Inc.,
subject to the provisions of Section 15.25 hereof, (e) the closure of any of
Borrower's existing Solution Branches (provided that Lender receives prompt
written notice of any such closures), and (t) as required by contractual
obligations existing on the date hereof in an amount not to exceed $500,000.00,
or as otherwise provided for in this Agreement; so long as there are no Events
of Default hereunder and the proceeds of any such sales are applied to any
overline or overadvance, then to unpaid interest, fees and expenses, then to the
outstandings under the Revolving Loan. The foregoing to the contrary
notwithstanding, in no event shall Borrower sell, assign or transfer its
Receivables (except as it relates to the existing indebtedness of T3 Media, Inc.
to Borrower that has been disclosed to Lender as of the date hereof).

15.4. Defaults. Permit any landlord, mortgagee, trustee under deed of trust or
lienholder to declare a default under any lease, mortgage, deed of trust or lien
on real estate owned or leased by Borrower, which default remains uncured for a
period in excess of thirty (30) days from its occurrence, unless such default is
being contested by Borrower in good faith by appropriate proceedings being
diligently conducted.

15.5. Limitations on Liens. Suffer (i) any Lien, encumbrance, mortgage or
security interest on any Receivables, or (ii) any Lien, encumbrance, mortgage or
security interest on any of Borrower's other property which Lien, encumbrance,
mortgage or security interest remains undischarged or unsatisfied for a period
in excess of thirty (30) days after Borrower receives notification of its
existence, except:

(a)   Liens at any time granted in favor of Lender;

(b)   Liens for taxes not yet due or being contested, but only if such Lien does
not have a Material Adverse Effect;

(c)   Liens securing the claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons for labor, materials, supplies or
rentals incurred in the ordinary course of Borrower's business, but only if the
payment thereof is not at the time required and only if such Liens are junior in
priority to the Liens in favor of Lender;

(d)   Liens resulting from deposits made in the ordinary course of business in
connection with workmen's compensation, unemployment insurance, social security
and other like laws;

(e)   such other Liens as appear on Schedule 7.17 attached hereto, if any.

                                       27
<PAGE>

15.6. Dividends and Distributions. Pay any cash dividends, make any capital
distribution in cash or other property or return of capital, or purchase or
redeem any of its stock or other securities, or retire any of its stock, or take
any action which would have an effect equivalent to any of the foregoing, except
that Borrower may pay stock dividends and make noncash stock splits.

15.7. Borrower's Name and Offices. Transfer Borrower's chief executive office or
change its company name or office where it maintains records (including computer
printouts and programs) with respect to Receivables, except upon not less than
thirty (30) days advance written notice to Lender and after the delivery to
Lender of financing statements in form and content satisfactory to Lender;
provided, however, in no event shall such Transfer be permitted if it shall
render unperfected or otherwise impair Lender's security interest in the
Collateral.

15.8. Sales Terms. Sell merchandise on the basis of any of the following: a sale
in which payment in full is not due within ninety (90) days of the original
invoice date; a bill-andhold sale; a consignment sale; a sale and return;
"guaranteed sale" (i.e., one in which a vendor guarantees resale by vendee or
agrees to accept return of the goods); or any other sale pursuant to which
vendor agrees to accept the return of the goods, or to exchange the same upon
the happening of any event other than failure to conform with quality
specifications except where Lender has been first advised of such proposed
transaction and consented thereto; provided, however, that (i) the foregoing
restrictions shall apply only to Eligible Receivables, and (ii) Borrower shall
notify Lender in writing if more than ten percent (10%) of Borrower's
Receivables (excluding Eligible Receivables) arise from sales made on any of the
foregoing bases.

15.9. Fiscal Year. Change its Fiscal Year.

15.10. Intentionally omitted.

15.11. Intentionally omitted.

15.12. Guaranties: Contingent Liabilities.

(a)   Assume, guarantee, endorse, contingently agree to purchase or otherwise
become liable upon the obligation of any Person, except by the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business, except for contractual obligations existing on the
date hereof and Borrower represents the maximum aggregate liability thereunder
is not more than $100,000.00, and, except for the indebtedness of T3 Media Inc.
to Borrower, in an amount of up to $800,000.00, or

(b)   Agree to maintain the working capital or net worth of any Person or to
make investments in any Person (except for short-term investments of excess cash
as herein permitted, and except for the indebtedness of T3 Media, Inc. to
Borrower existing at March 31, 2001 that has been disclosed to Lender or as
contemplated in Section 15.25 hereof).

15.13. Removal of Collateral. Remove, or cause or permit to be removed, any of
the Collateral or other assets from the premises where such Collateral is
currently located and set forth on

                                       28
<PAGE>

Schedule 7.15 hereof, except for sales of Inventory in the ordinary course of
business or unless otherwise expressly permitted under the terms of this
Agreement.

15.14. Transfer of Notes or Accounts. Sell, assign, transfer, discount or
otherwise dispose of any Eligible Receivables or any promissory note or other
instrument payable to it with or without recourse, except as it relates to the
indebtedness of T3 Media, Inc. to Borrower existing as of March 31, 2001 that
has been disclosed to Lender and such additional indebtedness permitted pursuant
to Section 15.25 hereof.

15.15. Settlements. Compromise, settle or adjust any claim relating to any of
the Collateral, except as it relates to the indebtedness of T3 Media, Inc. to
Borrower existing as of March 31, 2001 that has been disclosed to Lender, and
subject to the exceptions set forth in Section 15.25 hereof.

15.16. Modification of Governing Documents. Make or permit any change,
alteration or modification of its Certificate of Incorporation or By-laws which
would result in a Material Adverse Effect, or make any other change, alteration
or modification thereto except upon prompt written notice to Lender.

15.17. Change of Business. Cause or permit a material change in the nature of
its business as conducted on the date of this Agreement.

15.18. Change of Accounting Practices. Change its present accounting principles
or practices in any respect, except as may be required by changes in GAAP.

15.19. Inconsistent Agreement. Enter into any agreement containing any provision
that would be violated by the performance of the Obligations or such Borrower's
obligations under any document delivered or to be delivered by it in connection
with this Agreement or any Loan Document.

15.20. Loan or Advances. Make any loans or advances to any Person, except loans
or advances to employees or shareholders of Borrower in an aggregate amount of
up to $25,000.00 outstanding at anytime, except for the indebtedness of T3
Media, Inc. to Borrower existing as of March 31, 2001 that has been disclosed to
Lender or as contemplated in Section 15.25 hereof.

15.21. Investments. Make any investment in any person, firm or corporation,
including, without limitation, in any Affiliates or from any Affiliates or
subsidiaries not existing on the date hereof; except that Borrower may make such
investments to such persons, firms or corporations in the aggregate amount of up
to $500,000 provided that Borrower is in compliance with the Core EBITDA
covenant set forth in Section 15.23 for two (2) consecutive quarters, and except
for the investments permitted pursuant to Section 15.25 hereof. The foregoing to
the contrary notwithstanding, the Borrower shall not make any investment in or
loan any money to TACT Software Inc., except loans of up to $25,000.00
outstanding at anytime.

15.22. Intentionally Omitted.

15.23. Core EBITDA. Shall maintain Core EBITDA of no less than the amounts set
forth below, tested quarterly at the end of each calendar quarter during the
periods set forth below:

                                       29
<PAGE>

Amount                   Time Period
------------------------------------

$[1,600,000.00]          For the quarter ending June 30, 2001

$[800,000.00]            From July 1, 2001 through and including September 30,
                           2001

$-0-                     From October 1, 2001 through and including December 31,
                           2001

$100,000.00              From January 1, 2002 through and including March 31,
                           2002

$200,000.00              From January 1, 2002 through and including June 30,
                           2002

$400,000.00              From January 1, 2002 through and including September
                           30, 2002

$900,000.00              From January 1, 2002 through and including December 31,
                           2002 and for each calendar quarter thereafter

$300,000.00              At all times after December 31, 2002 for each calendar
                           quarter thereafter

15.24. Capital Expenditures. (a) Capital Expenditures shall not exceed the
levels set forth below, during the periods set forth below:

Amount                   Time Period
------------------------------------

$750,000.00              Per calendar year commencing on January 1, 2001

$400,000.00              For the period from January 1, 2004 through and
                           including the Termination Date.

(b)   No carry forward to subsequent calendar years shall be permitted in the
event that Borrower's Capital Expenditures for a given calendar year are less
than the maximum amount set forth above for such period.

15.25. T3 Media, Inc. Investments. (a) Make loans or cash advances to or
otherwise make investments in T3 Media, Inc. (collectively, "T3 Media
Investments") in excess of the levels set forth below, during the periods set
forth below:

                                       30
<PAGE>

Amount                   Time Period
------------------------------------

$1,300,000.00            For the period from January 1, 2001 through and
                           including December 31, 2001

$275,000.00              For the period from January 1, 2002 through and
                           including December 31, 2002

$125,000.00              For the period from January 1, 2003 through and
                           including December 31, 2003

$0.00                    For the period from January 1, 2004 through and
                           including the Termination Date.

(b)   No carryforward to subsequent periods shall be permitted in the event that

Borrower's T3 Media, Inc. Investments for a given period are less than the
maximum amount set forth above for such period.

(c)   The assumption by Borrower of any obligations of T3 Media, Inc. existing
at March 31, 2001 and disclosed to Lender, shall not constitute T3 Media
Investments for the purposes of this Section; provided, however, all such T3
Media Investments shall otherwise be subject to all of the terms and conditions
of this Agreement.

(d)   Borrower shall not make any additional loans to or cash advances to or
otherwise make investments in Always On or Methoda.

16.   FURTHER RIGHTS OF LENDER.

16.1. Lender's Right to Take Certain Actions. Borrower shall do all things and
shall deliver all instruments requested by Lender to protect or perfect any
security interest, mortgage or Lien given hereunder or in connection herewith
including, without limitation, financing statements under the Uniform Commercial
Code and all documents and instruments necessary under the

Federal Assignment of Claims Act. Upon the occurrence of an Event of Default and
in the event that Lender requests, Borrower shall instruct its Account Debtors
to remit payments directly to

Lender or to Lender's designee. Lender may examine, inspect and copy or make
extracts from all property and all books and records of Borrower at any time and
all such property and all books and records shall be kept confidential in
accordance with the requirements of Section 8.10 of this Agreement subject to
the limitations set forth in Section 14.11. Borrower authorizes Lender to
execute alone any financing statements or other documents or instruments that
Lender may require to perfect, protect or establish any Lien or security
interest granted to Lender by Borrower and further authorizes Lender to sign
Borrower's name on the same. Borrower appoints such person or persons as Lender
may designate as Borrower's attorney-in-fact to

                                       31
<PAGE>

endorse the name of Borrower on any checks, notes, drafts or other forms of
payment or security that may come into the possession of Lender or any Affiliate
of Lender, to sign Borrower's name on invoices or bills of lading, drafts
against customers, notice of assignment, verifications and schedules and,
generally, and all such property and all books and records shall be kept
confidential in accordance with the requirements of Section 8.10 of this
Agreement, to do all things necessary to carry out this Agreement. Such
attorney-in-fact may notify the Post Office authorities to change the address of
delivery of mail to an address designated by Lender, and open and dispose of
mail addressed to Borrower. The powers granted herein, being coupled with an
interest, are irrevocable, and Borrower approves and ratifies all acts of the
attorney-in-fact, provided, however, that such powers shall automatically
terminate upon the indefeasible repayment in full of the Indebtedness. Neither
Lender nor the attorney-in-fact shall be liable for any act or omission, error
in judgment or mistake of law so long as the same is not willful or grossly
negligent. Lender agrees that it shall endeavor to give Borrower prompt written
notice of any such actions but Lender's failure to give any such notice shall
not impair or restrict Lender's rights hereunder.

16.2. Lender's Right to Perform Borrower's Obligations. In the event that
Borrower shall fail to purchase or maintain insurance, or to pay any tax,
assessment, government charge or levy, except as the same may be otherwise
permitted hereunder, or in the event that any lien, encumbrance or security
interest prohibited hereby shall not be paid in full or discharged pursuant to
the terms of this Agreement, or in the event that Borrower shall fail to perform
or comply with any other covenant, promise or Obligation to Lender hereunder or
under any Loan Document, Lender may, but shall not be required to, perform, pay,
satisfy, discharge or bond the same for the account of Borrower, and all monies
so paid by Lender, including actual attorneys' fees and reasonable expenses,
shall be treated as an Advance hereunder to Borrower. Lender agrees that it
shall endeavor to give Borrower prompt written notice of any such actions but
Lender's failure to give any such notice shall not impair or restrict Lender's
rights hereunder.

16.3. Lender's Right of Set-Off. Lender may, at any time upon the occurrence of
an Event of Default hereunder and without any further notice to Borrower,
set-off or apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by, or any other Indebtedness at any time
owing by Lender or any Affiliate of Lender or any participant in Lender's loans,
to Borrower to or for the credit or the account of Borrower against any
Obligation irrespective of whether any demand has been made hereunder or whether
such Obligation is mature. The rights given hereunder are cumulative with all of
the other rights and remedies of Lender, including other rights of set-off,
under this Agreement, any other agreement or by operation of law or otherwise
and shall also constitute a security interest in such deposits. Lender agrees
that it shall endeavor to give Borrower prompt written notice of any such
actions but Lender's failure to give any such notice shall not impair or
restrict Lender's rights hereunder.

17.   CONDITIONS PRECEDENT; CLOSING.

17.1. Conditions Precedent. As conditions precedent to the making of any Advance
hereunder, Borrower shall deliver to Lender, or shall cause to be delivered to
Lender the following documents duly executed and in form satisfactory to Lender
and its counsel:

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<PAGE>

(a)   the Revolving Note and each of the other Loan Documents duly executed and
delivered by the appropriate parties thereto;

(b)   appropriate company resolutions of Borrower;

(c)   the favorable written opinion of counsel to Borrower, such opinion to be
in form and substance satisfactory to Lender;

(d)   certificates evidencing all insurance coverages required by this
Agreement, (including, without limitation, credit insurance policies) together
with loss payee endorsements for all such coverages naming Lender as lender loss
payee;

(e)   a copy of Borrower's Certificate of Incorporation and By-laws and all
amendments thereto;

(f)   a Good Standing Certificate issued by the Secretary of State of the State
of New York and each other jurisdiction where the conduct of Borrower's business
activities or the ownership of its Properties necessitates qualification;

(g)   evidence that Borrower's franchise taxes payable to the New York State
Department of Taxation have been paid;

(h)   an initial Borrowing Base Certificate dated as of the date hereof,

(i)   all UCC financing statements required by Lender, each signed by the
applicable party;

(j)   a certificate, dated as of the date hereof and executed by an authorized
officer of Borrower, stating that, as of such date, no Event of Default or
Default exists and to such further effect as Lender or its counsel may require;

(k)   all UCC, tax lien and judgment searches deemed necessary by Lender in form
and substance satisfactory to Lender, which searches shall be obtained by
Lender;

(1)   payment of all fees and expenses which are payable to Lender, its counsel,
or to third-party providers of services related to the closing of this
transaction;

(m)   a guaranty of payment of the Obligations, in form and content satisfactory
to Lender executed and delivered by the Individual Guarantor;

(n)   a validity guaranty, in form and content satisfactory to Lender executed
and delivered by the Validity Guarantor;

(o)   a support guaranty, in form and substance satisfactory to Lender executed
and delivered by the Support Guarantor;

(p)   Such other documents, instruments, agreements, and information as Lender
or its counsel shall reasonably request.

17.2. Conditions to All Extensions of Credit.

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<PAGE>

(a)   Lender's obligations to advance any Loan is subject to the condition that,
as of the date of the advancing of such Loan, no Event of Default or Default
shall have occurred and be continuing and that the matters set forth in Sections
7, 10, 11 and 13 and the representations set forth in the Loan Documents
continue to be true and complete.

(b)   Borrower's acceptance of each Loan under this Agreement shall constitute a
confirmation, as of the date of the advancing of such Loan, of the matters set
forth in Sections 7, 10, 11 and 13, of the representations set forth in the Loan
Documents, and that no Default or Event of Default then exists. If requested by
Lender, Borrower shall further confirm such matters by delivery of a certificate
dated the day of the advancing of such Loan and signed by an authorized officer
of Borrower.

18.   TERM.

18.1. Revolving Loan Availability. Unless sooner terminated by Lender pursuant
to the terms of this Agreement, the period during which the Revolving Loan shall
be available shall initially be a period commencing on the date hereof and
concluding on the Termination Date.

18.2. Voluntary Termination. Borrower shall give Lender at least fifteen (15)
days' advance written notice ("Termination Notice") of Borrower's election to
terminate the availability of Revolving Loans hereunder prior to the Termination
Date. The Termination Notice shall be irrevocable and shall specify the
effective date of such termination, which effective date shall not be less than
fifteen (15) days after the giving of the Termination Notice and shall be in no
event later than the Termination Date.

19.   EVENTS OF DEFAULT.

19.1. Defaults. Upon the happening of any of the following events (collectively,
"Events of Default"):

(a)   if Borrower shall fail to make payment when due of any Obligation under
this Agreement or any Loan Document,

provided, however, that, for purposes of Borrower's obligation to make payment
of any Obligations to Lender comprised of Obligations to reimburse Lender for or
to pay field examination expenses and legal fees and expenses incurred by Lender
after the date hereof, no Event of Default shall be deemed to have occurred,
unless sixty (60) days have elapsed from the date of demand therefor by Lender;
provided that, Lender's right hereunder to charge such fees and expenses to
Borrower shall not be effected by the foregoing and in the event Lender so
charges Borrower for such fees and expenses any such incipient Event of Default
shall be deemed cured thereby; or

(b)   if Borrower shall fail to comply with any terms, conditions, covenant,
warranty or representation contained in Articles 11 or 15 of this Agreement; or

(c)   if Borrower shall fail to comply with any term, condition, covenant or
warranty of or in this Agreement, any other Loan Document or any other agreement
between Lender and

                                       34
<PAGE>

Borrower, other than in Articles 11 or 15 of this Agreement, and such failure
continues for a period in excess of twenty (20) days after notice thereof is
given by Lender to Borrower; or

(d)   if Borrower shall cease to be Solvent, make an assignment for the benefit
of its creditors, call a meeting of its creditors to obtain any general
financial accommodation, suspend business or if any case under any provision of
the Bankruptcy Code, including provisions for reorganizations, shall be
commenced by or against Borrower; or

(e)   if any statement or representation contained in any financial statement or
certificate delivered by Borrower to Lender shall be false, in any material
respect, when made; or

(f)   if any federal tax lien is filed of record against any Borrower or any
Guarantor and is not bonded or discharged within ten (10) days; or

(g)   if Borrower's independent public accountants shall refuse to deliver any
financial statement required by this Agreement within ten (10) days after
written demand by Lender for delivery of such financial statements; or

(h)   if a receiver, trustee or equivalent officer shall be appointed for all or
any of the assets of Borrower; or

(i)   if a judgment for more than One Hundred Thousand Dollars ($100,000) shall
be entered against Borrower in any action or proceeding and shall not be stayed,
vacated, bonded, paid, discharged or applied in good faith within twenty (20)
days, or in the case of a judgment against the Borrower relating to the T3
Permitted Indebtedness (as defined below) in which case five (5) days shall be
allowed to stay, vacate, bond, pay, discharge or apply in good faith; provided,
that, no Event of Default shall be deemed to have occurred in the case of any
judgment where the claim is covered by insurance and the insurance company has
accepted liability therefor; or

(j) if any obligation of Borrower in respect of Indebtedness shall be declared
to be or shall become due and payable prior to the stated maturity thereof or
such obligation shall not be paid as and when the same becomes due and payable;
or there shall occur any event or condition which constitutes an event of
default under any mortgage, indenture, instrument, agreement or evidence of
indebtedness relating to any obligation of Borrower in respect of any such
Indebtedness the effect of which is to permit the holder or the holders of such
mortgage, indenture, instrument, agreement or evidence of Indebtedness, or a
trustee, agent or other representative on behalf of such holder or holders, to
cause the Indebtedness evidenced thereby to become due prior to its stated
maturity; provided, that, the foregoing shall not include (a) Indebtedness to
Lender; (b) Indebtedness aggregating up to $800,000.00 owing by T3 Media, Inc.
and guarantied by Borrower ("T3 Permitted Indebtedness"), so long as, Borrower
gives Lender prompt notice of the acceleration thereof; or (c) Indebtedness
arising in connection with any real property lease obligations up to $50,000.00,
so long as no judgments are entered against Borrower as a result of Borrower's
failure to pay such Indebtedness; provided, that, subsection c (except for real
property lease obligations for real property located in New York) ; or

(k) upon the happening of any Reportable Event which Lender in its discretion
determines could reasonably be expected to constitute grounds for the
termination of any Plan, or if a trustee shall be appointed by an appropriate
United States District Court or other court of administrative

                                       35

<PAGE>

tribunal to administer any Plan, or if the Pension Benefit Guaranty Corporation
shall institute proceedings to terminate any Plan or to appoint a trustee to
administer any Plan; or

(1)   upon the occurrence and continuance of any Material Adverse Effect, which
in the sole and absolute opinion of Lender, impairs Lender's security or
increases its risks; or

(m)   if Shmuel BenTov ceases to own at least ten percent (10%) of the shares of
voting stock of or other ownership interests in Borrower; or

(n)   upon the happening of any of the events described in Sections 19.1 (d),
(e), (g), (h), (i) or

(j)   or if any Guarantor purports to terminate its guaranty or upon the death
of any Guarantor that is a natural person;

then and in any such event, Lender may terminate this Agreement without prior
notice or demand to Borrower or may demand payment of all Obligations (whether
otherwise then payable on demand or not) without terminating this Agreement and
shall, in any event, be under no further responsibility to extend any credit or
afford any financial accommodation to Borrower, whether under this Agreement or
otherwise.

19.2. Obligations Immediately Due. Upon the effective date of termination for
any reason, all of Borrower's Obligations to Lender, including but not limited
to the Loans, shall immediately become due and payable without further notice or
demand.

19.3. Continuation of Security Interests. Notwithstanding any termination, until
all Obligations of Borrower shall have been fully paid and satisfied, Lender
shall retain all security in and title to all existing and future Receivables,
General Intangibles, Inventory, Equipment, Fixtures, Investment Property, and
other Collateral held by Lender hereunder or under any other agreement and
Borrower shall continue to assign Receivables and consign Inventory to Lender
and continue to turn over collections to Lender.

20.   REMEDIES OF LENDER.

20.1. Rights Under Uniform Commercial Code. Upon the occurrence of any Event of
Default or upon any termination of this Agreement following an Event of Default,
then Lender shall have, in addition to all of its other rights under this
Agreement or otherwise (which rights shall be cumulative), all of the rights and
remedies of a secured party under the Uniform Commercial Code and shall have the
right to enter upon any premises where the Collateral is kept and peacetilly
retake possession thereof. Lender may, without demand, advertising or notice all
of which Borrower hereby waives (except as the same may be required by law),
sell, lease, dispose of, deliver and grant options to a third party to purchase,
lease or otherwise dispose of any and all Receivables, General Intangibles,
Inventory, Equipment, Fixtures, Investment Property or other security or
Collateral held by it or for its account at any time or times in one or more
public or private sales or other dispositions, for cash, on credit or otherwise,
as such prices and upon such terms as Lender, in its discretion, deems
advisable. Notice of any public sale shall be sufficient if it describes the
security or Collateral to be sold in general terms, stating the amounts thereof,
the nature of the business in which such Collateral was created and the location
and nature of the properties covered by the other security interests or
mortgages and the prior liens thereon, and is

                                       36
<PAGE>

published at least once in The Wall Street Journal not less than ten (10)
business days prior to the date of sale. If The Wall Street Journal is not then
being published, publication may be made in lieu thereof in any newspaper then
being circulated in the City of New York which Lender may elect. Notice of any
public sale shall be sufficient if it describes the security or Collateral to be
sold in general terms, stating the amounts thereof, the nature of the business
in which such Collateral was created and the location and nature of the
properties covered by the other security interests or mortgages and the prior
liens thereon. Without requiring notice to Borrower, all requirements of
reasonable notice under this Article shall be met if such notice is mailed,
postage prepaid, to Borrower at its address set forth above or such other
address as it may have, in writing, provided to Lender, at least ten (10) days
before the time of such sale or disposition. Lender may, if it deems it
reasonable, postpone or adjourn any sale of any Collateral from time to time by
an announcement at the time and place of the sale to be so postponed or
adjourned without being required to give a new notice of sale, provided,
however, that Lender shall provide Borrower with written notice of the time and
place of such postponed or adjourned sale. Lender may be the purchaser at any
such sale if it is public, and payment may be made, in whole or in part, in
respect of such purchase price by the application of Obligations due from
Borrower to Lender. Borrower shall be obligated for, and the proceeds of sale
shall be applied first to, the costs of retaking, refurbishing, storing,
guarding, insuring, preparing for sale, and selling the Collateral, including
the fees and disbursements of attorneys, auctioneers, appraisers and accountants
employed by Lender. Proceeds shall then be applied to the payment in whatever
order Lender may elect, of all Obligations of Borrower. Lender shall return any
excess to Borrower and Borrower shall remain liable for any deficiency.

20.2. Collections; Modification of Terms. Without limiting any rights Lender may
have pursuant to Section 20.1 above, upon the occurrence and during the
continuance of an Event of Default, Lender may demand, sue for, collect and give
receipts for any money, instruments or property payable or receivable on account
of or in exchange for any of the Collateral, or make any compromises it deems
necessary or proper, including without limitation, extending the time of
payment, permitting payment in installments, or otherwise modifying the terms or
rights relating to any of the Collateral, all of which may be effected without
notice to or consent by Borrower and without otherwise discharging or affecting
the Obligations, the Collateral or the security interest granted under this
Agreement or any of the Loan Documents.

20.3. Notification of Account Debtors. Without limiting any rights of Lender
pursuant to this Agreement or under applicable law, after a Default or Event of
Default has occurred, (i) Borrower, at the request of Lender, shall notify the
Account Debtors of Lender's security interest in Borrower's Receivables; and
(ii) Lender may notify the Account Debtors on any of the Receivables to make
payment directly to Lender, and Lender may endorse all items of payment received
by it that are payable to Borrower.

20.4. Insurance. Without limiting any rights of Lender pursuant to this
Agreement or under applicable law, after a Default or Event of Default has
occurred, Lender may file proofs of loss and claim with respect to any of the
Collateral with the appropriate insurer, and may endorse in its own and
Borrower's name any checks or drafts constituting insurance proceeds. Lender
agrees that it shall endeavor to give Borrower prompt written notice of any such
actions but Lender's failure to give any such notice shall not impair or
restrict Lender's rights hereunder.

                                       37
<PAGE>

20.5. Waiver of Rights by Borrower. Except as may be otherwise specifically
provided herein or in any other agreement between Lender and Borrower which may
be applicable, Borrower waives, to the extent permitted by law, any bonds,
security or sureties required by any statute, rule or otherwise by law as an
incident to any taking of possession by Lender of property subject to Lender's
Lien. Borrower authorizes Lender, upon the occurrence of an Event of Default, to
peacefully enter upon any premises owned by or leased to Borrower without
obligation to pay rent or for use and occupancy, through self help, without
judicial process and without having first given notice to Borrower or obtained
an order of any court.

20.6. Lender's Rights. Borrower agrees that Lender shall not have any obligation
to preserve rights to any Collateral against prior parties or to marshall any
Collateral of any kind for the benefit of any other creditor of Borrower or any
other person. After the occurrence of an Event of Default, Lender is hereby
granted a license or other right to use, without charge, Borrower's labels,
patents, copyrights, rights of use of any name, trade secrets, trade names,
trademarks and advertising matter, or any property of a similar nature, as it
pertains to the Collateral, in completing production of, advertising for sale,
and selling any Collateral and Borrower's rights under all licenses and any
franchise, sales or distribution agreements shall inure to Lender's benefit for
such purpose, subject to any limitations set forth in the relevant license(s),
franchise(s), sales or distribution agreements, including, without limitation,
limits on assignment rights.

21.   GENERAL PROVISIONS.

21.1. Rights Cumulative. Lender's rights and remedies under this Agreement shall
be cumulative and non-exclusive of any other rights or remedies which it may
have under any other agreement or instrument, by operation of law or otherwise.

21.2. Successors and Assigns. This Agreement is entered into for the benefit of
the parties hereto and their successors and assigns. It shall be binding upon
and shall inure to the, benefit of the said parties, their successors and
assigns. Lender shall have the right, upon written notice to Borrower, without
the necessity of any further consent or authorization by Borrower, to sell,
assign, securitize or grant participation in all, or a portion of, Lender's
interest in the Loans, to other financial institutions of the Lender's choice
and on such terms as are acceptable to Lender in its sole discretion, and Lender
shall give Borrower prompt written notice of any such assignments,
securitizations or participations.

21.3. Notice. Wherever this Agreement provides for notice to any party (except
as expressly provided to the contrary), it shall be given by messenger,
telegram, certified U.S. mail with return receipt requested, or nationally
recognized overnight courier with receipt requested, effective when received by
the corporate party to whom addressed, and shall be addressed as follows, or to
such other address as the party affected may hereafter designate:

If to Lender:     Keltic Financial Partners, LP

         Attn: Robert N. Laughlin, Managing Partner

         555 Theodore Fremd Avenue, Suite C-209

                                       38
<PAGE>

         Rye, New York 10580

With a copy to:   Phillips, Lytle, Hitchcock,

         Blaine & Huber LLP

         Attn: Christopher G. Dorman, Esq.

         437 Madison Avenue

         New York, New York 10022

If to Borrower:   The A Consulting Team, Inc.

         200 Park Avenue South, Suite 1501

         New York, New York 10003

         Attn: Shmuel BenTov

With a copy to:   The A Consulting Team, Inc. 200 Park Avenue South, Suite 1501
New York, New York 10003 Attn: Lori Stanley, Esq.

21.4. Strict Performance. The failure, at any time or times hereafter, to
require strict performance by Borrower of any provision of this Agreement shall
not waive, affect or diminish any right of Lender thereafter to demand strict
compliance and performance therewith. Any suspension or waiver by Lender of any
Event of Default by Borrower under this Agreement or any of the other Loan
Documents shall not suspend, waive or affect any other Event of Default by
Borrower under this Agreement or any of the other Loan Documents, whether the
same is prior or subsequent thereto and whether of the same or a different type.

21.5. Amendments. This Agreement and the other agreements to which it refers
constitute the complete agreement between the parties with respect to the
subject matter and may not be changed, modified, waived, amended or terminated
orally, but only by a writing signed by the party to be charged.

21.6. Waiver. Borrower waives presentment, protest, notice of dishonor and
notice of protest upon any instrument on which it may be liable to Lender as
maker, endorser, guarantor or otherwise.

21.7. Conflict of Laws. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York; provided, however,
that if any of the Collateral shall be located in any jurisdiction other than
New York, the laws of such jurisdiction shall govern the method, manner and
procedure for foreclosure of Lenders' lien upon such Collateral and the
enforcement of Lenders' other remedies in respect of such Collateral to the
extent that the laws of such jurisdiction are different from or inconsistent
with the laws of New York.

                                       39
<PAGE>

21.8. Expenses. (a) Borrower agrees to pay (i) the actual attorneys' fees and
expenses of Lender's counsel arising from the negotiation and preparation of
this Agreement and the other Loan Documents and all reasonable expenses, costs,
charges and other fees of such counsel of Lender incurred in connection
therewith, and (ii) Lender's out-of-pocket expenses in connection with periodic
audits and appraisals performed by Lender.

(b)   If, at any time prior to the occurrence of an Event of Default, Lender
employs counsel for advice or other representation, or incurs legal expenses or
other costs or out-ofpocket expenses in connection with: (A) the administration
of this Agreement or any of the other Loan Documents and the transactions
contemplated hereby and thereby; (B) any litigation, contest, dispute, suit,
proceeding or action (whether instituted by Lender, Borrower or any other
Person) in any way relating to the Collateral, this Agreement or any of the
other Loan Documents or Borrower's affairs; (C) the perfection of any Lien on
the Collateral; (D) any attempt to enforce any rights or remedies of Lender
against Borrower or any other Person which may be obligated to Lender by virtue
of this Agreement or any of the other Loan Documents, including, without
limitation, the Account Debtors; or (E) any attempt to inspect, verify, protect,
preserve, restore, collect, sell, liquidate or otherwise dispose of or realize
upon the Collateral; then, in any such event, the actual attorneys' fees and
expenses arising from such services and all reasonable expenses, costs, charges
and other fees of such counsel of Lender or relating to any of the events or
actions described in this Section shall be payable by Borrower to Lender, and
shall be additional Obligations hereunder secured by the Collateral; provided,
however, such fees and expenses shall in no event exceed $20,000.00 per annum.

(c)   If, upon or after the occurrence of an Event of Default, Lender employs
counsel for advice or other representation, or incurs legal expenses or other
costs or out-of-pocket expenses in connection with any of the events or actions
set forth in subparagraphs (a) or (b) of this Section; then, in any such event,
the actual attorneys' fees and expenses arising from such services and all
reasonable expenses, costs, charges and other fees of such counsel or of Lender
relating to any of the events or actions described in subparagraphs (a) or (b)
of this Section, including, without limitation, the reasonable cost and expense
to Lender attributable to utilizing Lender's in-house staff for such purposes,
shall be payable by Borrower to Lender, and shall be additional Obligations
hereunder secured by the Collateral.

(d)   Additionally, if any taxes (excluding taxes imposed upon or measured by
the net income of Lender, but including any intangibles tax, stamp tax or
recording tax) shall be payable on account of the execution or delivery of this
Agreement, or the execution, delivery, issuance or recording of any of the other
Loan Documents, or the creation of any of the Obligations hereunder, by reason
of any existing or hereafter enacted federal or state statute, Borrower will pay
(or will promptly reimburse Lender for the payment of) all such taxes,
including, but not limited to, any interest and penalties thereon, and will
indemnify and hold Lender harmless from and against liability in connection
therewith.

(e)   Borrower shall also reimburse Lender for all other expenses incurred by
Lender in connection with the transactions contemplated under this Agreement or
the other Loan Documents, including, without limitation, fees in connection with
any bank account, the Blocked Account, wire charges, ACH Fees and other similar
costs and expenses; provided, however, that

                                       40
<PAGE>

Lender shall use commercially reasonable efforts to minimize the occurrence and
amount of such fees and expenses.

21.9. Reimbursements Charged to Revolving Loan. With respect to any amount
advanced by Lender and required to be reimbursed by Borrower pursuant to the
foregoing provisions of Section 21.8, it is hereby agreed that Lender may charge
any such amount to Borrowers' Revolving Loan on the dates such reimbursement is
made, subject to the provisions of Section 2.6 of this Agreement. Lender agrees
to provide Borrower notice of such charges in the monthly statement delivered to
Borrower pursuant to Section 9 of this Agreement. Borrower's obligations under
Section 21.8 shall survive termination of the other provisions of this
Agreement.

21.1.0. Waiver of Right to Jury Trial. Borrower waives the right to trial by
jury in the event of any action, suit, proceeding, counterclaim or other
litigation to which Lender and Borrower are parties in respect of any matter
arising under this Agreement or any other matter involving Borrower and Lender,
whether or not other persons are also parties thereto. Borrower acknowledges
that the foregoing waiver is a material inducement to Lender's entering into
this Agreement and that Lender is relying on the foregoing waiver in its future
dealings with Borrower. Borrower represents and warrants that they reviewed this
jury waiver provision with their legal counsel, and has made this waiver
knowingly and voluntarily.

22.   INDEMNIFICATION BY BORROWER/WAIVER OF CLAIMS.

22.1. Indemnification. Borrower hereby covenants and agrees to indemnify, defend
and hold harmless Lender and its officers, partners, employees and agents from
and against any and all claims, damages, liabilities, costs and expenses
(including with limitation, the fees and expenses of counsel) which may be
incurred by or asserted against Lender and/or its designated agents, and in
respect of any claims, damages, liabilities, costs and expenses resulting from
any breach by Borrower of any representation or warranty made by it herein or in
any other Loan Document or nonfulfillment of any agreement or covenant of
Borrower under this Agreement or in any other Loan Document, in connection with:

(a)   any investigation, action or proceeding arising out of or in any way
relating to this Agreement, any of the Loans, any of the Loan Documents, any
other agreement relating to any of the Obligations, any of the Collateral, or
any act or omission relating to any of the foregoing by Borrower or its
officers, directors, agents, consultants, advisors or employees; or

(b)   any taxes, liabilities, claims or damages relating to the Collateral or
Lender's liens thereon; or

(c)   the correctness, validity of genuineness of any instruments or documents
that may be released or endorsed to Borrower by Lender (which shall
automatically be deemed to be without recourse to Lender in any event), or the
existence, character, quantity, quality, condition, value or delivery of any
goods purporting to be represented by any such documents; or

(d)   any broker's commission, finder's fee or similar charge or fee in
connection with the Loans and the transactions contemplated in this Agreement,
provided, however, it is understood that Lender has incurred no such fee or
charge with respect to this transaction.

                                       41
<PAGE>

22.2. Savings Clause for Indemnification. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in Section 22.1 above may be
unenforceable because it is violative of any law or public policy, Borrower
shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of all matters referred to
under Section 22.1.

22.3. Waiver. To the extent permitted by applicable law, no claim may be made by
Borrower or any other Person against Lender or any of its Affiliates, partners,
officers, employees, agents, attorneys or consultants for any special, indirect,
consequential or punitive damages in respect of any claim for breach of
contract, tort or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement or any act, omission or event
occurring in connection therewith; and Borrower hereby waives, releases and
agrees not to sue upon any claim for any such special, indirect, consequential
or punitive damages, whether or not accrued and whether or not known or
suspected to exist in its favor. Neither Lender nor any of its Affiliates,
partners, officers, employees or agents shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement or
the transactions contemplated hereby, except for its or their own gross
negligence or willful misconduct.

23.   MISCELLANEOUS.

23.1. Entire Agreement; Amendments; Lender's Consent. This Agreement (including
the Exhibits and Schedules thereto) and the Loan Documents supersede, with
respect to their subject matter, all prior and contemporaneous agreements,
understandings, inducements or conditions between the respective parties,
whether express or implied, oral or written. No amendment or waiver of any
provision of this Agreement or any of the Loan Documents, nor consent to any
departure by Borrower therefrom, shall in any event be effective unless the same
shall be in writing and signed by Lender, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.

23.2. Cross Default; Cross Collateral. Borrower hereby agrees that (a) all other
agreements between Borrowers or either Borrower and Lender or any of Lender's
Affiliates are hereby amended so that a default under this Agreement is a
default under all such other agreements and a default under any one of the other
agreements is a default under this Agreement, and (b) the Collateral under this
Agreement secures the Obligations now or hereafter outstanding under all other
agreements between Borrower and Lender or any of Lender's Affiliates and the
Collateral pledged under any other agreement with Lender or any of its
Affiliates secures the Obligations under this Agreement.

23.3. Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one and the same agreement.

23.4. Severability of Provisions. Any provision of this Agreement or any of the
Loan Documents that is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or the Loan Documents or affecting the validity or enforceability of such
provision in any other jurisdiction.

                                       42
<PAGE>

23.5. Table of Contents: Headines. The table of contents and headings preceding
the text of this Agreement are inserted solely for convenience of reference and
shall not constitute a part of this Agreement or affect its meaning,
construction or effect.

23.6. Exhibits and Schedules. All of the Exhibits and Schedules to this
Agreement are hereby incorporated by reference herein and made a part hereof.

23.7. Consent to Jurisdiction. As part of the consideration for new value
received, and regardless of any present or future domicile or principal place of
business of Borrower or Lender, Borrower hereby consents and agrees that any
federal or state court located in any county, in New York State, shall have
jurisdiction to hear and determine any claims or disputes between Borrower and
Lender pertaining to this Agreement or to any matter arising out of or related
to this Agreement; provided, however, Lender may, at its option, commence any
action, suit or proceeding in any other appropriate forum or jurisdiction to
obtain possession of or foreclose upon any Collateral, to obtain equitable
relief or to enforce any judgment or order obtained by Lender against Borrower
or with respect to any Collateral, to enforce any other right or remedy under
this Agreement or to obtain any other relief deemed appropriate by Lender.
Borrower expressly submits and consents in advance to such jurisdiction in any
action or suit commenced in any such court, and Borrower hereby waives any
objection which Borrower may have based upon lack of personal jurisdiction,
improper venue or forum non conveniens and hereby consents to the granting of
such legal or equitable relief as is deemed appropriate by such court. Borrower
represents and warrants that it has reviewed this consent to jurisdiction
provision with its legal counsel, and has made this waiver knowingly and
voluntarily.

                                       43
<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their officers thereunto duly authorized on the day and year first above
written.

                                  KELTIC FINANCIAL PARTNERS, LP

                                      By: KELTIC FINANCIAL SERVICES LLC,
                                          its general partner

                                  By:  /s/ Robert N. Laughlin
                                       -----------------------------------------
                                       Robert N. Laughlin

                                  THE A CONSULTING TEAM, INC.

                                  By:  /s/ Shmuel Bentov
                                       -----------------------------------------
                                       Shmuel BenTov
                                       Chief Executive Officer

                                       44
<PAGE>

                                    EXHIBIT A

                                 REVOLVING NOTE

<PAGE>

                                 REVOLVING NOTE

$4,000,000.00                                                       New York, NY
                                                                   June 27, 2001

      FOR VALUE RECEIVED, THE A CONSULTING TEAM, INC., a New York corporation
with its principal executive office and place of business at 200 Park Avenue
South, Suite 1501, New York, NY 10003 ("Borrower"), promises to pay to the order
of KELTIC FINANCIAL PARTNERS, LP ("Lender"), at 555 Theodore Fremd Avenue, Suite
C-209, Rye, New York 10580 or at such other place as Lender may from time to
time in writing designate, the principal sum of each Revolving Advance made by
Lender to Borrower under that certain Loan and Security Agreement, dated of even
date herewith, between Borrower and Lender ("Loan Agreement"). The aggregate
unpaid principal balance hereof shall not exceed at any time the sum of FOUR
MILLION DOLLARS and 00/100 ($4,000,000.00). Capitalized terms used herein but
not otherwise defined shall have the meanings set forth in the Loan Agreement.
The entire unpaid principal balance hereof, together with the accrued interest
thereon and accrued late charges, if any, and all other sums due hereunder shall
be due and payable on the Termination Date.

      Borrower also promises to pay interest to Lender monthly, in arrears, on
the first day of each month commencing on July 1, 2001 on the average daily
unpaid principal balance of this Note at the rate set forth in Section 3.1 of
the Loan Agreement.

      This is the "Revolving Note" referred to in the Loan and Security
Agreement between the Borrower and Lender, dated of even date herewith, as the
same may be amended or supplemented from time to time ("Loan Agreement"), and is
entitled to the benefit of all of the terms and conditions and the security of
all of the security interests and liens granted by Borrower or any other person
to Lender pursuant to the Loan Agreement or any other Loan Document including,
without limitation, provisions regarding mandatory and optional prepayment
rights and premiums. Upon the occurrence of any Event of Default (after giving
effect to any applicable grace period), the entire unpaid principal amount owed
Lender hereunder shall, upon demand therefor, become immediately due and payable
at the option of the holder hereof without further notice or demand.

      Whenever any payment to be made under this Note shall be stated to be due
on a day other than a business day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall be included in the
computation of any interest then due and payable hereunder.

      The undersigned and all other parties who, at any time, may be liable
hereon in any capacity waive presentment, demand for payment, protest and notice
of dishonor of this Note. This Note may not be changed orally, but only by an
agreement in writing which is signed by the holder and the party or parties
against whom enforcement of any waiver, change, modification or discharge is
sought.

      IN WITNESS WHEREOF, the undersigned has executed this Note the day and
year first above written.

                                             THE A CONSULTING TEAM, INC.

                                             By: /s/ Shmuel BenTov
                                                 -------------------------------
                                                 Shmuel BenTov
                                                 Chief Executive Officer

                                       2
<PAGE>

                                   EXHIBIT B

                              NOTICE OF BORROWING

<PAGE>

                                   EXHIBIT B
                                   ---------

                          FORM OF NOTICE OF BORROWING

To:         Keltic Financial Partners, LP

Fax #:      (914) 921-1154

Attention:  Oleh Szczupak

From:

Date:

Re:         Request for cash advance

            This is to request a $_____________ loan advance pursuant to Section
2.1 of the Loan and Security Agreement dated June 27, 2001 between you and the
undersigned. Please wire funds to our operating account as we have instructed.
Please call the undersigned to confirm receipt of this fax at _____________.

            Thank you.

                                             The A Consulting Team, Inc.

                                             By:
                                                 -------------------------------
                                                                         (title)

                                       2
<PAGE>

                                                                  EXHIBIT C

                           BORROWING BASE CERTIFICATE

As of

BORROWER:

PREVIOUS DAY A/R

         Sales:   $

         Credits:

         Debits:

         Collections:

         Coll. Adj's:

ENDING A/R {      / / }

Ineligibles:      Past Due a/o-:

         Ineligible a/o-:  $

ELIGIBLE A/R:

A/R (4~ 75%:

TOTAL AVAILABLE COLLATERAL:

OUTSTANDING LOAN BALANCE AS OF

ADVANCE { / / }:

OUTSTANDING LOAN BALANCE AS OF

NET AVAILABILITY: $        -

I hereby certify in connection with the Loan and Security Agreement, dated as of

         , between

and Keltic Financial Partners, LP, that the information and each calculation set
forth above is to the best of my knowledge, true, correct and complete as of the
date hereof and are calculated in accordance with the Loan and Security
Agreement. Unless otherwise defined herein, all terms used herein shall have the
meanings ascribed to them in the Loan and Security Agreement.

<PAGE>

Prepared By:

 (Authorized Signature)

Dated:

                                       2
<PAGE>

                                    EXHIBIT D

                             COMPLIANCE CERTIFICATE

The A Consulting Team, Inc. ("Borrower") hereby certifies to KELTIC FINANCIAL
SERVICES, LP in accordance with the provisions of a Loan and Security Agreement
between Borrower and Lender dated the __ day of June and as the same from time
to time may be amended, supplemented or otherwise modified ("Agreement") that:

(i)   Borrower has complied in all respects with all the terms, covenants and
conditions of the Agreement which are binding upon them;

(ii)  there exists no Event of Default or Default as defined in the Agreement;

(iii) the representations and warranties contained in the Agreement are true in
all respects with the same effect as though such representations and warranties
had been made on the date hereof; and

WITNESS the signature of the undersigned duly authorized officer of Borrower

on -  ______

THE A CONSULTING TEAM, INC.

By

Name

Title

<PAGE>

                                  Schedule 7.2

                                   Tradenames

                                      TACT

                                American Catalyst

<PAGE>

                                  Schedule 7.3

                           Affiliates and Subsidiaries

                               TACT Software, Inc.

                                 T3 Media, Inc.

                            Always-On Software, Inc.

                                  Methoda, Ltd.

<PAGE>

                                  Schedule 7.8

                                   Real Estate

                                     Owned:

                                      None

                                     Leased:

                              200 Park Avenue South

                            New York, New York 10003

                           77 Brandt Avenue, Suite 320

                             Clark, New Jersey 07066

                              Two Lakeside Commons*

                          980 Hammond Drive, Suite 720

                             Atlanta, Georgia 30328

                        20 North Wacker Drive, Suite 3417

                            Chicago, Illinois 606312

                          Bay Colony, Corporate Center*

                         1050 Winter Street, Suite 1000

                          Waltham, Massachusetts 02451

* Borrower will no longer occupy these premises after July 31, 2001.

<PAGE>

                                  Schedule 7.9

                             Patents and Trademarks

                             Trademark Applications:

                     The A Consulting Team (No. 75/320,927)

                              TACT (No. 75/320,744)

                                   People Soft

                                   Trademarks:

                        TACT (Design) (Reg. No. 2244241)

<PAGE>

                                  Schedule 7.13

                                   Litigation

                                      None

                                  Schedule 7.14

                              Receivables Locations

                              200 Park Avenue South

                            New York, New York 10003

<PAGE>

                                  Schedule 7.15

                               Inventory Locations

                                      None

<PAGE>

                                  Schedule 7.16

                          Equipment List and Locations

                       (Schedule not filed with Form 10-Q)

<PAGE>

                                  Schedule 7.17

                                      Liens

                                      None

<PAGE>

                                  Schedule 7.18

                                  Indebtedness

                                      None

<PAGE>

                                  Schedule 7.24

                              List of Bank Accounts

                       (Schedule not filed with Form 10-Q)

<PAGE>

                                  Schedule 7.27

                                Excluded Matters

                                      NONE

                                  Schedule 10.4

                       List of Processors and Warehousemen

                                      None

<PAGE>

                                  SCHEDULE 8.3

                   Independent Auditors' Report on Compliance

      We have audited, in accordance with auditing standards generally accepted
in the United States, the balance sheet of The A Consulting Team, Inc. as of
December 31, 2001, and the related statements of operations, shareholders'
equity, and cash flows for the year then ended, and have issued our report
thereon dated March __, 2002.

      In connection with our audit, nothing came to our attention that caused us
to believe that the Company failed to comply with the terms, covenants,
provisions, or conditions of Article 15 of the Loan and Security Agreement
between Keltic Financial Partners, LP and the Company dated June __, 2001
insofar as they relate to accounting matters. However, our audit was not
directed primarily toward obtaining knowledge of such noncompliance.

      This report is intended solely for the information and use of the Company
and Keltic Financial Partners, LP and is not intended to be and should not be
used by anyone other than the specified parties.

March __, 2002<PAGE>

                                                                    Exhibit 10.2

                       GUARANTY OF PAYMENT AND PERFORMANCE

THIS GUARANTY dated June 27, 2001 (the "Guaranty") from SHMUEL BENTOV whose
address is 130 Carthage Road, Scarsdale, New York 10583 (the "Guarantor") to
KELTIC FINANCIAL PARTNERS, LP a Delaware limited partnership with a place of
business at 555 Theodore Fremd, Suite C-209, Rye, New York 10580 (the "Lender").

WITNESSETH:

WHEREAS, The A Consulting Team, Inc. ("Borrower") is, on the date hereof,
entering into a Loan and Security Agreement with Lender (as the same may be
amended from time to time, the "Loan Agreement"), pursuant to which Lender is
extending certain credit facilities (the "Credit Facilities") to Borrower and
the Guarantor is willing to enter into this Guaranty in order to induce the
Lender to extend the Credit Facilities;

NOW, THEREFORE, in consideration of the premises and of other good and valuable
consideration, the Guarantor agrees as follows:

                                    ARTICLE 1

                            COVENANTS AND AGREEMENTS

Section 1.1 Guaranty of Payment. The Guarantor irrevocably, absolutely and
unconditionally (and jointly and severally if there be more than one Guarantor)
guarantees to the Lender:

(A) The punctual payment of the Obligations.

(B) The full and prompt performance of any and all obligations of the Borrower
to Lender under the Loan Documents.

(C) Guarantor acknowledges that the Obligations are secured by collateral as set
forth in the Loan Agreement and by a Pledge Security Agreement ("Pledge
Agreement") dated of even date herewith from Guarantor to Lender.

Section 1.2 Obligations Unconditional. This Guaranty shall remain in full force
and effect until the Obligations and all sums due thereunder are finally and
irrevocably paid in full. The Guarantor's obligation hereunder shall not be
affected, modified or impaired by any state of facts or the happening from time
to time of any event, including, without limitation, any of the following,
whether or not with notice to or the consent of the Guarantor:

(A) Any lack of validity or enforceability of, or any defect in any Loan
Document or any other agreement or instrument relating thereto or any collateral
security for the Credit Facilities (the "Collateral").

<PAGE>

(B) any change (material or otherwise) in the time, manner, or place of payment
of the Loans (as such term is defined in the Loan Agreement) or performance of
any other obligations, covenants or agreements under or arising out of the Loan
Documents, or in any other term of any Loan Document, or any other amendment or
waiver of, or any consent to departure from, any Loan Document;

(C) any exchange, release or non-perfection of any Collateral, or any release or
amendment or waiver of or consent to departure from any other guaranty of the
Loans (as such term is defined in the Loan Agreement) or the loss, release,
sale, exchange, surrender or other change in any Collateral;

(D) Any present or future law or order of any government (de lure or de facto)
or of any agency thereof purporting to reduce, amend or otherwise affect any
Loan Document or any other obligation of the Borrower or any other obligor or to
any other terms of payment;

(E) Any failure, omission or delay on the part of the Lender to enforce, assert
or exercise any right, power or remedy conferred on the Lender in any Loan
Document or the failure to give notice to Guarantor of the occurrence of an
event of default under any Loan Document;

(F) Any other act, event or circumstance which might otherwise constitute a
defense available to, or a discharge of, Borrower, Guarantor or any other
person.

Section 1.3 Waiver by Guarantor. The Guarantor hereby waives: (A) notice of
acceptance of this Guaranty; (B) diligence, presentment and demand for payment
of the Loans; (C) protest and notice of protest, dishonor or default to the
Guarantor or to any other party with respect to the Loans; (D) any and all
notices to which the Guarantor might otherwise be entitled or any demand for
payment under this Guaranty; (E) any and all defenses to payment including,
without limitation, any defenses and counterclaims of the Guarantor or the
Borrower based upon fraud, negligence or the failure of any condition precedent
or claims of offset or defenses involving the invalidity, irregularity or
unenforceability of all or any part of the liabilities herein guaranteed or any
defense otherwise available to the Guarantor or the Borrower; or (F) until such
time as the Obligations are paid in full and the Lender has received all other
sums due under the terms of the Loan Documents, any and all rights of
subrogation, reimbursement, indemnity, exoneration, contribution or any other
claim which the Guarantor may now or hereafter have against the Borrower or any
other person directly or contingently liable for the Loans guaranteed hereunder,
or against or with respect to any of the Borrower's property (including, without
limitation, property collateralizing the Loans), arising from the existence or
performance of this Guaranty and whether or not such claim, right or remedy
arises in equity, under contract, by statute, under common law or otherwise.

Section 1.4 Nature of Guaranty. This Guaranty is a guaranty of payment and not
of collection and the Guarantor hereby waives the right to require that any
action be brought first against the Borrower or any other guarantor, or to
require any security, or to require that resort be made to any security or to
any balance of any deposit account or credit on the books of the Lender in favor
of the Borrower or of the Guarantor. The Guarantor fizrther agrees that the
obligations hereunder shall continue to be effective or reinstated, as the case
may be, if at any time payment or any part thereof of the Loans is rescinded or
must otherwise be restored by the Lender upon

                                       2

<PAGE>

the bankruptcy or reorganization of the Borrower, the Guarantor or otherwise.
The foregoing to the contrary notwithstanding, Lender agrees that it will allow
a period of up to six (6) months for the purpose of collecting repayment of the
Obligations from the Borrower or any other Person and/or by realizing on any
Collateral therefor (" Winddown Period") before Lender requires payment
hereunder from the Guarantor, such Winddown Period to commence on the date on
which Lender, for any reason, stops making Advances under Section 2.1 the Loan
Agreement. The reference to the term "Advances" in the preceding sentence shall
not be construed to include any loans, financial accommodations by Lender to
Borrower, or use of the Lender's cash collateral that are of a compulsory nature
such as a court ordered allowance for Borrower to use cash collateral or any
similar financial accommodation, loan or advance. Additionally, the Winddown
Period shall automatically lapse and the Lender may, immediately, without
notice, enforce this Guaranty if (a) Guarantor fails, upon the request of
Lender, to furnish Lender with an updated personal financial statement in form
and substance satisfactory to Lender, evidencing that Guarantor's financial
condition is such that Guarantor has the ability to make payment of Guarantor's
obligations hereunder (b) either Borrower or Guarantor shall: (i) take any
action to inhibit, interfere with, impede, including, without limitation,
preventing Lender from gaining access to the Collateral for the purpose of sale,
foreclosure or other disposition thereof, or otherwise fail to cooperate with
the Lender's efforts to obtain the indefeasible repayment, in full, of the
Obligations during the Winddown Period; (ii) transfer, sell or assign any of
their respective real or personal property, (1) in the case of Borrower, in
violation of the Loan Agreement, or (2) in the case of the Guarantor such that
Guarantor would not have the ability to make payment of Guarantor's obligations
hereunder; (iii) with respect to the Guarantor only, be subject to any action or
proceeding at law, in equity or otherwise, before any court, board, commission,
agency or instrumentality of the Federal or any state government or of any
municipal government or any agency or subdivision of any of the foregoing, or
before any arbitrator or panel of arbitrators, such that Guarantor would not
have the ability to make payment of Guarantor's obligations hereunder; (iv)
cease to be Solvent, make an assignment for the benefit of creditors, call a
meeting of creditors to obtain any general financial accommodation, suspend
business, be subject to the commencement of any case under any provision of the
Bankruptcy Code, including provisions for reorganizations by or against Borrower
or Guarantor; or (v) with respect to the Guarantor only, fail to otherwise
comply with the terms and conditions of any of the Loan Documents (except for
any noncompliance existing on the commencement of the Winddown Period which lead
to the acceleration of the Obligations), including, without limitation, the
obligation of the Guarantor to exercise its commercially reasonable efforts to
obtain maximum collections with respect to the Collateral as set forth in the
Validity and Support Agreement dated the date hereof by Guarantor in favor of
Lender, or (c) any Person shall challenge: (i) the Lender's right to receive
payment of the Obligations; or (ii) the validity or enforceabilty of Lender's
Liens on the Collateral or the priority thereof, such that in case of either (c)
(i) or (ii) above, there would be a Material Adverse Effect.

Section 1.5 Financial Statements. Guarantor agrees to deliver to Lender within
thirty (30) days after the end of each year, personal financial statements and
information applicable to the Guarantor on Lender's standard form or other form
acceptable to Lender.

<PAGE>

                                    ARTICLE 2

                                EVENTS OF DEFAULT

                                       3
<PAGE>

Section 2.1 Events of Default Defined. An "Event of Default" shall exist if any
of the following events occurs and is continuing: (A) the Guarantor fails to
perform or observe any covenant contained herein; or (B) the occurrence of an
Event of Default under the Loan Agreement or any other Loan Document.

Section 2.2 Remedies on Default. If an Event of Default exists, Lender may
proceed to enforce the provisions hereof and to exercise any other rights,
powers and remedies available to the Lender.

Section 2.3 Waiver and Notice.

(A) No remedy herein conferred upon or reserved to the Lender is intended to be
exclusive of any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy given
under this Guaranty now or hereafter existing at law or in equity or by statute.

(B) No delay or omission to exercise any right or power accruing upon the
occurrence of any Event of Default shall impair any such right or power or shall
be construed to be a waiver thereof, but any such right or power may be
exercised from time to time and as often as may be deemed expedient.

(C) In order to entitle the Lender to exercise any remedy reserved to it in this
Guaranty, it shall not be necessary to give any notice, other than such notice
as may be expressly required in this Guaranty.

                                    ARTICLE 3

                                  MISCELLANEOUS

Section 3.1 Governmental Law. This Guaranty shall be governed by and construed
in accordance with the laws of the State of New York without regard to
principles of conflicts of laws.

Section 3.2 Notices. Any notices required or permitted to be given hereunder
shall be in writing and shall be deemed to have been sufficiently given or
served for all purposes at the time of delivery in person, one day after
delivery to a nationally recognized overnight courier with receipt requested, or
four (4) business days after it is mailed certified mail postage prepaid, return
receipt requested as follows: to the parties at the addresses set forth at the
head of this Guaranty, or such other addresses as the parties may for themselves
designate in writing as provided herein for the purpose of receiving notices
hereunder.

Section 3.3 Entire Agreement; Amendments. This Guaranty and the Loan Documents
constitute the entire understanding between the Borrower, the Guarantor and
Lender and no amendment, change, modification, alteration or termination of this
Guaranty shall be made except upon the written consent of Lender and the
Guarantor.

Section 3.4 Assignment. This Guaranty is assignable by Lender in whole or in
part in conjunction with an assignment of the Loan Documents and any assignment
hereof or any transfer or assignment of the Loan Documents or portions thereof
shall operate to vest in any

                                       4
<PAGE>

such assignee the rights and powers, in whole or in part, as appropriate, herein
conferred upon and granted to Lender. This Guaranty shall inure to the benefit
of and be binding upon the permitted successors and assigns of each of the
parties hereto.

Section 3.5 Partial Invalidity. The invalidity or unenforceability of any one or
more phrases, sentences, clauses or sections in this Guaranty shall not affect
the validity or enforceability of the remaining portions of the Guaranty or any
part thereof.

Section 3.6 Submission to Jurisdiction. The Guarantor hereby irrevocably and
unconditionally agrees that any suit, action or proceeding arising out of or
relating to this Guaranty shall be brought in the state courts of the State of
New York or Federal courts sitting in New York City and waives any right to
object to jurisdiction within either of the foregoing forums by Lender. Nothing
contained herein shall prevent Lender from bringing any suit, action or
proceeding or exercising any rights against any security and against any
Guarantor personally, and against any property of the Guarantor, within any
other jurisdiction and the initiation of such suit, action or proceeding or
taking of such action in any such other jurisdiction shall in no event
constitute a waiver of the agreements contained herein with respect to the laws
of the State of New York governing the rights and obligations of the parties
hereto or the agreement of the Guarantor to submit to personal jurisdiction
within the State of New York.

Section 3.7 WAIVER OF JURY TRIAL. THE GUARANTOR AND THE BANK HEREBY IRREVOCABLY
WAIVE LL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS GUARANTY, THE OBLIGATIONS OR THE CREDIT
FACILITIES.

Section 3.8 Limitation. This Guaranty is limited to the amount of $1,000,000.00
(hereinafter referred to as the "Maximum Amount"), plus the sum of [^] all costs
and expenses, including attorneys fees and expenses, incurred in connection with
the enforcement hereof.

Section 3.9 Termination. (a) Provided that there is no Event of Default under
the Loan Agreement, (b) Borrower has a positive net income (exclusive of any
writeoffs occurring after April 1, 2001 with respect to any assets other than
trade Receivables owned by Borrower on the date hereof) for three (3)
consecutive fiscal quarters, (c) dilution with respect to Eligible Receivables
is less than three (3) percent, and (d) Eligible Receivables remaining unpaid in
excess of 90 days from invoice date comprise less than fifteen percent (15%) of
all Receivables, then upon the written request of Guarantor, Lender shall
terminate this Guaranty; provided, however, that the second sentence of Section
1.4 hereof and any other provisions of this Guaranty which by their terms
survive any termination, shall remain in full force and effect.

IN WITNESS WHEREOF, the Guarantor has executed this Guaranty as of the day and
year first above written.

                                            /s/ Shmuel Bentov
                                            ------------------------------------
                                                   SHMUEL BENTOV

                                       5
<PAGE>

STATE OF NEW YORK )

        ss.:

COUNTY OF NEW YORK )

On the 27th day of June in the year 2001, before me, the undersigned, a notary
public in and for said state, personally appeared Shmuel Bentov personally known
to me or proved to me on the basis of satisfactory evidence to be the individual
whose name is subscribed to the within instrument and acknowledged to me that
she executed the same in her capacity, and that by her signature on the
instrument, the individual, or the person upon behalf of which the individual
acted, executed the instrument.

                                           /s/ Illegible
                                           ------------------------------------

                                           Notary Public

                                       6

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