Document:

<PAGE>

                                                                    EXHIBIT 10.4

                           BOLT TECHNOLOGY CORPORATION

                           SEVERANCE COMPENSATION PLAN
                           ---------------------------

Defined Corporate Change
------------------------

     In the event of:

     (1)  the acquisition of beneficial ownership of 30% of the shares of the
     common stock of the Company by or for any person (as such term is defined
     in Section 14(d)(2) of the Securities Exchange Act of 1934), including for
     purposes of calculating such person's ownership all shares beneficially
     owned by the affiliates and associates (as such terms are defined in Rule
     12b-2 of said Act) of such person, or

     (2)  during any period of 24 consecutive months, individuals who at the
     beginning of such period constitute the Board of Directors of the Company
     cease for any reason to constitute a majority thereof, unless the election,
     or nomination for election by the Company's stockholders, of each new
     director was approved by a vote of at least two-thirds of the directors
     then still in office who were directors at the beginning of such period, or

     (3)  the Company's stockholders shall approve (a) the merger or
     consolidation of the Company with or into another corporation and the
     Company shall not be the surviving corporation or (b) an agreement to sell
     or otherwise dispose of all or substantially all of the Company's assets
     (including a plan of liquidation), or

     (4)  any other event of a nature that would be required to be reported in
     response to Item 5(f) of Schedule 14A of Regulation 14A promulgated under
     the aforesaid Act as in effect on December 19, 1985,

then, in the case of the employees designated by the Board as participating in
this Severance Compensation Plan, there shall be paid to each such employee
whose employment shall terminate (which shall include resignation) within the
24-month period following the date on which any of the above-described events
occurs a Special Severance Benefit in cash unless prior to such termination of
employment (a) this Plan shall have been amended to reduce or postpone payments,
(b) this Plan shall have been terminated, or (c) such employee's participation
in this Plan shall have ended. Shares shall be deemed to be beneficially owned,
for purposes hereof, if indirectly as well as directly owned or if a person has
the right to acquire or the right to vote such shares. Such payment shall be
made regardless of the reason for termination and shall be made within 10 days
of termination of employment.

<PAGE>

Special Severance Benefit
-------------------------

     The Special Severance Benefit shall be equal to a multiple (to be
determined by the Company's Executive Compensation Committee and set forth in
the Designation of Participation) of the sum of (a) such employee's annualized
base salary (calculated on the basis of amount received during the period
immediately prior to the time of the occurrence of the Defined Corporate
Change), (b) the average of such employee's bonuses in the three highest years
during the five-year period prior to the date of termination, and (c) the amount
of annual premiums, determined by the Company on an individual basis, for
medical insurance of the same nature and amount provided by the Company. The
Company shall from time to time notify the employee of such premium cost.

Limitation on Payment
---------------------

     Notwithstanding the foregoing, the amount of the Special Severance Benefit
shall be limited to the maximum amount which can be paid without having any
amount paid hereunder being treated as a "parachute payment" within the meaning
of Section 280G(b)(2) of the Internal Revenue Code of 1954, as the same may be
amended, after giving effect to all other payments of compensation described in
Section 280G(b)(2)(A)(i) and (ii).

Amendment or Termination
------------------------

     This Plan may not be amended or terminated nor may any employee who has
been designated as participating herein be treated as not so participating at
any time after any person has commenced a tender offer, proposed a merger or
otherwise communicated to the Company or the public its plan or intention to
acquire the 30% stock interest referred to in (1) above, under Defined Corporate
Change, or has filed proxies with the Company or taken any other steps designed
to change the composition of the Board as indicated in (2) above; provided,
however, that if the Board of Directors shall have supported the transaction
that will result in the occurrence of the Defined Corporate Change (e.g., by
voting to encourage the Company's stockholders to accept a tender offer or to
vote for a merger), this Plan may be amended or terminated at any time prior to
the actual occurrence of the Defined Corporate Change, including a termination
which is conditional upon such occurrence; and, furthermore, if at any time
before the composition of the Board shall have changed as set forth in (2)
above, under Defined Corporate Change, this Plan may be terminated
notwithstanding the actual acquisition of the 30% stock interest if the Board
shall then be supportive of the transaction.

Adopted December 19, 1985

                                      -2-

<PAGE>

                           BOLT TECHNOLOGY CORPORATION

                           SEVERANCE COMPENSATION PLAN

                          Designation of Participation
                          ----------------------------

        Referring to the Severance Compensation Plan (the "Plan") of Bolt
Technology Corporation (the "Company"), a copy of which is attached hereto, this
will evidence the designation of _________________ (the "Employee"), as a
participant in the Plan, effective ______________. Reference is made to the Plan
for the full statement of the defined terms used below.

     In the event of a "Defined Corporate Change", a "Special Severance Benefit"
shall be paid in cash equal to ______ times the amount specified in the Plan to
the Employee within 10 days of termination of employment (which shall include
resignation) if such termination occurs subsequent to such Defined Corporate
Change and prior to 24 months after such Defined Corporate Change, unless prior
to such termination of employment (a) the Plan shall have been amended, to
reduce or postpone payments, or terminated, or, (b) the Employee's participation
in the Plan shall have ended. The Company shall withhold from the Special
Severance Benefit the amount of federal, state, local and foreign taxes which it
in its sole discretion deems appropriate.

        Notwithstanding any provision in the Plan to the contrary, the Employee
shall not be entitled to receive the Special Severance Benefit in the event his
employment shall terminate by reason of his death, his disability or his
retirement.

        If any litigation shall be brought by the Employee to enforce or
interpret any provision contained in the Plan or herein, the Company hereby
indemnifies the Employee for his reasonable attorneys' fees and disbursements
incurred in any such litigation in which the Employee prevails, and hereby
agrees to pay pre-judgement interest on any money judgment obtained by the
Employee calculated at The Connecticut Bank and Trust Company prime interest
rate in

<PAGE>

effect from time to time from the date that payment to him should have been made
under the Plan. The indemnification hereby provided for shall be subject to the
"Limitation on Payment" provided for in the Plan.

        The Company's obligation to pay the Employee the Special Severance
Benefit shall be absolute and unconditional and shall not be affected by any
circumstances, including, without limitation, any set-off, counterclaim,
recoupment, defense or other right which the Company may have against him or
anyone else. The Employee shall not be obligated to seek other employment in
mitigation of the amount payable and the obtaining of such other employment
shall in no event effect any reduction of the Company's obligations to make
the payment required to be made under the Plan.

        Any provision under the Plan and hereunder which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability without
invalidating or affecting the remaining provisions, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

        IN WITNESS WHEREOF, this Designation has been executed and delivered by
a duly authorized officer of the Company in accordance with the terms and
provisions of the Plan.

                                        BOLT TECHNOLOGY CORPORATION

                                        BY
                                          _____________________________________

Acknowledged and Accepted:

_______________________
Employee

Attachment<PAGE>

                                                                    EXHIBIT 10.5

                            COMMERCIAL LOAN AGREEMENT

         THIS COMMERCIAL LOAN AGREEMENT is dated May 15, 2002, by and among BOLT
TECHNOLOGY CORPORATION, a Connecticut corporation with a principal office at
Four Duke Place, Norwalk, Connecticut 06854 (the "Borrower") and FLEET NATIONAL
BANK, a national banking association with an office located at One Landmark
Square, Stamford, CT 06901 ("Fleet").

                                    RECITALS

         A.   Borrower has requested that Fleet extend to Borrower a $1,500,000
revolving loan facility to be used for general working capital purposes and the
issuance of letters of credit.

         B.   Fleet is willing to extend the loan facility to Borrower subject
to the terms and conditions contained herein.

                                    AGREEMENT

         In consideration of the Recitals, the terms and conditions contained in
 this Agreement, and other good and valuable consideration, Borrower and Fleet
agree as follows:

         I.   DEFINITIONS

         1.01 DEFINED TERMS. The following terms shall have the following
meanings when used in the Agreement:

              (a) "Affiliate", as applied to any Person, means any other Person
directly or indirectly through one or more intermediaries controlling,
controlled by, or under common control with, that Person. For the purposes of
this definition, "control" (including with correlative meanings, the terms
"controlling", "controlled by" and "under common control with"), as applied to
any Person, means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of the Person, whether
through the ownership of voting securities or by contract or otherwise.

              (b) "Agreement" shall mean this Commercial Loan Agreement as the
same from time to time may be amended, supplemented or modified.

              (c) "Debt Service Coverage Ratio" shall mean the ratio of (i) EBIT
to (ii) Interest.

                                      -1-

<PAGE>

              (d) "Default(s)" shall mean any of the events specified in Section
8.01 below, whether or not any requirement for the giving of notice, the lapse
of time, or both, has been satisfied.

              (e) "Dollars" and "$" shall mean lawful currency of the United
States of America payable in immediately available funds.

              (f) "Earnings Before Interest and Taxes ("EBIT")" shall mean, for
the applicable period, income from continuing operations before interest and tax
expense, determined in accordance with GAAP.

              (g) "ERISA" shall mean the Employee Retirement Income Security Act
of 1974 and all rules and regulations promulgated pursuant to said Act, as
amended from time to time.

              (h) "Event(s) of Default" shall mean any of the events specified
in Section 8.01 below, provided that any requirement for the giving of notice,
the lapse of time, or both, or any other condition, has been satisfied.

              (i) "GAAP" shall mean generally accepted accounting principles
applied in a manner consistent with that employed in the preparation of the
financial statements described in Section 6.01 below.

              (j) "Governmental Authority" shall mean any nation or government,
any state or other political subdivision, any entity exercising executive,
legislative, judicial, regulatory, or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled (through
stock or capital ownership or otherwise) by any of the foregoing.

              (k) "Guarantor" shall collectively mean Custom Products
Corporation and A-G Geophysical Products, Inc.

              (l) "Indebtedness" shall mean all obligations that in accordance
with GAAP should be classified as liabilities upon Borrower's balance sheet as
liabilities or reference to which should be made by footnotes to the balance
sheet.

              (m) "Intangible Assets" shall mean assets that in accordance with
GAAP are properly classifiable as intangible assets, including, but not limited
to, goodwill, franchises, licenses, patents, trademarks, trade names and
copyrights.

              (n) "Interest" shall mean, for the applicable period, all interest
paid or payable, including, but not limited to, interest paid or payable on
Indebtedness and on capital leases, determined in accordance with GAAP.

                                      -2-

<PAGE>

              (o) "Leverage Ratio" shall mean the ratio of Total Liabilities to
Tangible Net Worth.

              (p) "Lien" shall mean any mortgage, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, any conditional sale or other
title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction).

              (q) "Loan" shall mean the Revolving Loan made by Fleet to Borrower
pursuant to this Agreement.

              (r) "Loan Documents" shall mean this Agreement, the Note, and all
other documents or agreements executed in connection with this Agreement,
together with any amendments, supplements or modifications hereto or thereto
executed by the Borrower.

              (s) "Note" shall mean the Revolving Loan Note.

              (t) "Obligations" shall mean and include all loans, advances,
interest, indebtedness, liabilities, obligations, guaranties, covenants and
duties at any time owing by Borrower to Fleet of every kind and description
arising under this Agreement, the Note, and the other Loan Documents or arising
under any swap transactions for LIBOR Loans, whether or not evidenced by any
note or other instrument, whether or not for the payment of money, whether
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter, and all costs, expenses, fees, charges, expenses and attorneys',
paralegals', and professionals' fees reasonably incurred in connection with any
of the foregoing, or in any way connected with, involving or related to the
preservation, enforcement, protection, and defense of this Agreement, the Note,
the other Loan Documents, any related agreement, document or instrument, any
Lien, and the resulting rights and remedies.

              (u) "Person" shall mean any individual, corporation, limited
liability company, partnership, joint venture, trust, unincorporated
organization or any other juridical entity, or a government or state or any
agency or political subdivision thereof.

              (v) "Plan" shall mean any plan of a type described in Section
4021(a) of ERISA in respect of which Borrower is an "employer" as defined in
Section 3(5) of ERISA.

              (w) "Post Default Rate" shall mean at any time a rate of interest
equal to 4.0% per annum in excess of the rate that would be in effect on the
date of default.

              (x) "Prime Rate" shall mean the variable per annum rate of
interest so designated from time to time by Fleet as its "Prime Rate." The Prime
Rate is a reference rate and does not necessarily represent the lowest or best
rate being charged to any customer.

                                      -3-

<PAGE>

              (y)  "Reportable Event" shall mean any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder.

              (z)  "Revolving Loan" shall mean the Loan(s) made pursuant to
Section 2.01 below.

              (aa) "Revolving Loan Borrowing Date" shall mean the date(s) on
which a Revolving Loan is disbursed to Borrower.

              (ab) "Revolving Loan Maturity Date" shall mean May 14, 2003.

              (ac) "Revolving Loan Note" shall mean the note referred to in
Section 2.01 below.

              (ad) "Revolving Loan Commitment" shall mean the obligation of
Fleet to make Revolving Loans to Borrower during the Revolving Loan Commitment
Period pursuant to the terms of this Agreement as such Revolving Loan Commitment
is described in Section 2.01 below.

              (ae) "Revolving Loan Commitment Period" shall mean the period from
the date of this Agreement until the Revolving Loan Maturity Date.

              (af) "Subsidiary or Subsidiaries" of any Person shall mean any
corporation or corporations of which the Person or one or more of its
Subsidiaries, owns, directly or indirectly, at least a majority of the
securities having ordinary voting power for the election of directors.

              (ag) "Tangible Net Worth" shall mean Total Net Worth minus
Intangible Assets.

              (ah) "Total Assets" shall mean total assets determined in
accordance with GAAP.

              (ai) "Total Liabilities" shall mean total Indebtedness determined
in accordance with GAAP.

              (aj) "Total Net Worth" shall mean, for the applicable period, the
excess of Total Assets minus Total Liabilities.

         1.02 ACCOUNTING TERMS. Except as otherwise specifically set forth in
this Agreement, each accounting term used in this Agreement shall have the
meaning given to it under GAAP. Any dispute or disagreement between Borrower and
Fleet relating to the determination of GAAP shall, in the absence of manifest
error, be conclusively resolved for all purposes by the written opinion
delivered to Fleet, of independent accountants selected by

                                       -4-

<PAGE>

Borrower and approved by Fleet for the purposes of auditing the periodic
financial statements of Borrower.

         II.  LOAN FACILITY

         2.01 REVOLVING LOAN. Subject to the terms and conditions, and relying
upon the representations and warranties set forth in this Agreement, Fleet
agrees to make revolving loans (each a "Revolving Loan") to Borrower at any time
and from time to time until terminated as provided in Section 3.02 below, up to
the principal amount of the Revolving Loan Note. In addition to this Agreement,
the Revolving Loan shall be evidenced by the Commercial Revolving Promissory
Note of this date, a copy of which is attached as Exhibit "A" (the "Revolving
Loan Note").

              Procedure For Revolving Loan Borrowing. Provided that the
Revolving Loan Commitment has not been terminated as provided in Section 3.02
below, during the Revolving Loan Commitment Period Borrower may borrow under the
Revolving Loan Commitment by giving Fleet irrevocable notice of a request for a
Revolving Loan, such irrevocable notice setting forth (A) the amount of the Loan
requested, which shall not be less than $25,000, and (B) the requested Borrowing
Date, (i) which date shall not be less than two (2) days with respect to a LIBOR
Loan, as such term is defined in the Note, or (ii) which date may be the same
date of such notice with respect to Prime Rate loans. Such notice must be
written (including, without limitation, via facsimile transmission) and shall be
sufficient if received by 2:00 p.m. (Eastern Standard Time) on the date on which
such notice is to be given. Unless notification is otherwise furnished by
Borrower to Fleet (in a manner consistent with the requirements of this Section
2.01(a)), Revolving Loans will be made by credits to Borrower's deposit account
maintained with Fleet. Advances under the Revolving Loan Note may be used for
issuance of commercial letters of credit for the account of the Borrower. All
commercial letters of credit shall be made available at standard issuance costs
and may have expiration dates of up to ninety (90) days after the Revolving Loan
Maturity Date.

         2.02 OTHER EVENTS.

              (a) In the event that, after the date hereof, any enactment of or
change in applicable law, regulation, condition, directive or interpretation
thereof (including any request, guideline or policy whether or not having the
force of law and including, without limitation, Regulation D promulgated by the
Board of Governors of the Federal Reserve System as now and from time to time
hereafter in effect) is made by any governmental authority charged with the
administration or interpretation thereof:

                  (i) subjects Fleet to a tax with respect to any Loan (other
than any tax measured by or based upon the overall net income of Fleet or any
branch or office thereof, imposed by the United States of America or by any
other jurisdiction in which Fleet is qualified to do business or any political
subdivision or taxing authority); or

                                      -5-

<PAGE>

                  (ii) imposes, modifies or deems applicable any reserve or
deposit requirements against any assets held by, deposits with or for the
account of, or loans or commitments by, an office of Fleet in connection with
payments by Fleet under this Agreement other than is currently in effect; or

                  (iv) imposes upon Fleet any other condition with respect to
any amount paid or payable to or by Fleet pursuant to this Agreement other than
is currently in effect;

and the result of any of the foregoing is to increase the cost to Fleet of
making the payment or maintaining its commitment or to reduce the amount of the
payment receivable by Fleet or to require Fleet to make the payment on or
calculated by reference to the gross amount of the sum received by it pursuant
to this Agreement, in each case by an amount which Fleet in its reasonable
judgment deems material, then:

                  (A)  Fleet shall promptly notify Borrower in writing of the
              happening of such event;

                  (B)  Fleet shall promptly deliver to Borrower a certificate
              stating the change which has occurred or the reserve requirements
              or other conditions which have been imposed on Fleet or the
              request, direction or requirement with which it has complied,
              together with the date thereof, the amount of such increased cost,
              reduction or payment and the way in which such amount has been
              calculated; and

                  (C)  Borrower shall have thirty (30) days after delivery of
              the certificate referred to in clause (B) above to either pay to
              Fleet such an amount or amounts as will reasonably compensate
              Fleet for such additional cost, reduction, or payment, or repay
              all advances under this Agreement and terminate its right to any
              future advances under this Agreement.

                  (b)  No failure on the part of Fleet to demand compensation
under subsection (a) above on any one occasion shall constitute a waiver of its
right to demand such compensation on any other occasion and no failure on the
part of Fleet to deliver any certificate in a timely manner shall in any way
reduce any obligations of Borrower to Fleet under this Section 2.02.

         III.     INTEREST, TERM, AND FEES

         3.01     INTEREST RATE.

                  (a) The Note shall bear, and Borrower promises to pay,
interest on the indebtedness on the terms and conditions set forth in the Note.

                  (b) All agreements between the Borrower and Fleet are hereby
expressly limited so that in no contingency or event whatsoever, whether by
reason of acceleration of maturity of the indebtedness evidenced hereby or
otherwise, shall the amount paid or agreed to

                                      -6-

<PAGE>

be paid to Fleet for the use or the forbearance of the indebtedness evidenced
hereby exceed the maximum permissible under applicable law. As used herein, the
term "applicable law" shall mean the law in effect as of the date hereof
provided, however, that in the event there is a change in the law which results
in a higher permissible rate of interest, then the Note shall be governed by
such new law as of its effective date. In this regard, it is expressly agreed
that it is the intent of the Borrower and Fleet in the execution, delivery, and
acceptance of the Note to contract in strict compliance with the laws of the
State of Connecticut from time to time in effect. If, under or from any
circumstances whatsoever, fulfillment of any provision hereof or of any of the
Loan Documents at the time of performance of such provision shall be due, shall
involve transcending the limit of such validity prescribed by applicable law,
then the obligation to be fulfilled shall automatically be reduced to the limits
of such validity, and if under or from circumstances whatsoever Fleet should
ever receive as interest an amount which would exceed the highest lawful rate,
such amount which would be excessive interest shall be applied to the reduction
of the principal balance evidenced hereby and not to the payment of interest.
This provision shall control every other provision of all agreements between the
Borrower and Fleet.

         3.02 TERM AND TERMINATION. Unless sooner terminated as a result of the
occurrence of an Event of Default, the Revolving Loan Commitment shall terminate
and be due and payable in full on the Revolving Loan Maturity Date. Upon
termination of the Revolving Loan Commitment, Borrower shall have no ability to
receive, and Fleet shall have no obligation to make any further advances under
the Revolving Loan Commitment. All of the rights, interest, and remedies of
Fleet and Obligations of Borrower under this Agreement and the other Loan
Documents shall survive termination of the Revolving Loan Commitment until all
of the Obligations of Borrower are fully satisfied.

         3.03 REPAYMENTS. All payments shall be applied first to the payment of
all fees, expenses and other amounts due to Fleet (excluding principal and
interest), then to accrued interest, and the balance on account of outstanding
principal; provided, however, that after demand or default, payments will be
applied to the Obligations of Borrower to Fleet as Fleet determines in its sole
discretion.

         3.04 PREPAYMENTS.

              (a) Prime Rate Loans. If the interest rate selected by the
Borrower is Fleet's Prime Rate, Borrower may prepay the Revolving Loan without
any penalty or premium.

              (b) Fixed Rate Loans. Borrower may prepay a LIBOR Loan only upon
at least three (3) Business Days prior written notice to Fleet (which notice
shall be irrevocable), and any such prepayment shall occur only on the last day
of the interest period for such LIBOR Loan. Borrower shall pay to Fleet, upon
request of Fleet, such amount or amounts as shall be sufficient (in the
reasonable opinion of Fleet) to compensate it for any loss, cost, or expense
incurred as a result of: (i) any payment of a LIBOR Loan on a date other than
the last day of the interest period for such Loan; (ii) any failure by Borrower
to borrow a LIBOR Loan on the date specified by Borrower's written notice; (iii)
any failure by Borrower to pay a LIBOR Loan on the date for

                                      -7-

<PAGE>

payment specified in Borrower's written notice. Without limiting the foregoing,
Borrower shall pay to Fleet a "yield maintenance fee" in an amount computed as
follows: The current rate for United States Treasury securities (bills on a
discounted basis shall be converted to a bond equivalent) with a maturity date
closest to the term chosen pursuant to the LIBOR Rate Election as to which the
prepayment is made, shall be subtracted from the LIBOR in effect at the time of
prepayment. If the result is zero or a negative number, there shall be no yield
maintenance fee. If the result is a positive number, then the resulting
percentage shall be multiplied by the amount of the principal balance being
prepaid. The resulting amount shall be divided by 360 and multiplied by the
number of days remaining in the term chosen pursuant to the LIBOR Rate Election
as to which the prepayment is made. Said amount shall be reduced to present
value calculated by using the above referenced United States Treasury securities
rate and the number of days remaining in the term chosen pursuant to the LIBOR
Rate Election as to which prepayment is made. The resulting amount shall be the
yield maintenance fee due to Fleet upon the prepayment of a LIBOR Loan. Each
reference in the paragraph to "LIBOR Rate Election" shall mean the election by
Borrower of the LIBOR Rate. If by reason of an Event of Default, Fleet elects to
declare the Note to be immediately due and payable, then any yield maintenance
fee with respect to a LIBOR Loan shall become due and payable in the same manner
as though Borrower had exercised such right of prepayment.

         3.05 FACILITY FEE. The Borrower shall pay a fee on the unadvanced
portion of the Revolving Loan equal to three eighths of one (.375%) percentage
point per annum. This fee is calculated on a daily basis and shall be paid
quarterly in arrears on the first business day of the first month after such
quarter.

         IV.  CONDITIONS OF LENDING

         Borrower agrees that the Loan is subject to fulfillment by Borrower of
the following conditions precedent, all in form, scope and substance
satisfactory to Fleet and its counsel in their sole discretion:

              (a) Evidence of Corporate Action. Fleet shall have received
certified copies of all corporate action taken by Borrower to authorize the
execution, delivery, and performance of this Agreement, the Note, the other Loan
Documents, and the borrowings to be made hereunder, together with copies of
Borrower's Certificate of Incorporation and Bylaws, all amendments thereto, and
such other papers and documents as Fleet or its counsel may require.

              (b) Note. Fleet shall have received the duly executed Note drawn
to its order.

              (c) Guarantees. Fleet shall have received the duly executed
guaranty agreements from the Guarantor.

              (d) Opinion of Counsel. Borrower shall provide Fleet with an
opinion from its counsel in form and content reasonably satisfactory to Fleet
opining that, among other things, that the Loan Documents are valid, binding,
and enforceable against the Borrower, that the

                                      -8-

<PAGE>

Borrower is duly authorized to enter into the Loan Documents, and that to such
counsel's knowledge the Borrower's execution and delivery of the Loan Documents
is not in violation of any agreement to which the Borrower is a party, or any
order binding upon the Borrower.

              (e) Accounts Receivable Aging. Fleet shall have received a recent
accounts receivable aging for Borrower, Custom Products Corporation, and A-G
Geophysical Products, Inc. which shall be acceptable to Fleet in all respects.

              (f) Other. Fleet shall have received such other documents as it
deems necessary.

         V.   REPRESENTATIONS AND WARRANTIES

         Borrower represents and warrants to Fleet that:

              (a) Good Standing and Qualification. Borrower is a corporation
duly organized, validly existing, and in good standing under the laws of the
state or province, as the case may be, of its incorporation. Borrower has all
requisite corporate power and authority to own and operate its properties and to
carry on its business as presently conducted and is qualified to do business and
is in good standing as a foreign corporation in each jurisdiction wherein the
character of the properties owned or leased by it therein or in which the
transaction of its business therein makes such qualification necessary other
than jurisdictions in which failure to qualify would not have a material adverse
effect.

              (b) Corporate Authority. Borrower has full power and authority to
enter into and perform the obligations under this Agreement and to make the
borrowings contemplated, to execute and deliver the Note and the other Loan
Documents and to incur the obligations provided for, all of which have been duly
authorized by all necessary and proper corporate action. No other consent or
approval or the taking of any other action in respect of shareholders or of any
public authority is required as a condition to the validity or enforceability of
this Agreement, the Note, or any of the other Loan Documents. The execution and
delivery of this Agreement is for valid purposes and will not violate its
Certificate of Incorporation, By-Laws, or any other agreement to which it is a
party or by which it is bound.

              (c) Binding Agreements. This Agreement constitutes, and the Note
and the other Loan Documents delivered in connection herewith shall constitute,
valid and legally binding obligations of Borrower, enforceable in accordance
with their respective terms, except as enforcement may be limited by bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors' rights
generally.

              (d) Litigation. There are no actions, suits, proceedings or
investigations pending or, to the knowledge of the officers of Borrower,
threatened against Borrower before any court or administrative agency, which
either in any case or in the aggregate, if adversely determined, would
materially and adversely affect the financial condition, assets or operations of

                                      -9-

<PAGE>

Borrower or which question the validity of this Agreement, the Note, or any of
the other Loan Documents, or any action to be taken in connection with the
transaction contemplated hereby.

              (e) No Conflicting Law or Agreements. The execution, delivery, and
performance by Borrower of this Agreement, the Note, and the other Loan
Documents (i) do not violate any provision of the Certificate of Incorporation
or By-Laws of Borrower, (ii) do not violate any order, decree or judgment, or
any provision of any statute, rule, or regulation, in each case applicable to
Borrower, (iii) do not violate or conflict with, result in a breach of, or
constitute (with notice or lapse of time, or both) a default under any
shareholder agreement, stock preference agreement, mortgage, indenture, or
contract to which Borrower is a party, or by which any of its properties are
bound, and (iv) do not result in the creation or imposition of any lien, charge,
or encumbrance of any nature whatsoever upon any property or assets of Borrower
except as contemplated in this Agreement.

              (f) Taxes. With respect to all taxable periods of Borrower,
Borrower has filed all tax returns required to be filed by it and has paid all
Federal, state, municipal, franchise, and other taxes shown on such filed
returns and has reserved against the same, as required by GAAP, and Borrower
knows of no unpaid assessments against it.

              (g) Financial Statements. Borrower has delivered to Fleet its
company-prepared financial statements as of December 31, 2001. Such statements
fairly present the financial condition of Borrower as of the dates and for the
periods referred to therein and have been prepared in accordance with GAAP
applied on a consistent basis by Borrower throughout the periods involved. There
are no liabilities, direct or indirect, fixed or contingent, of Borrower as of
the date of the balance sheet which are not reflected therein or in the notes
thereto, other than liabilities or obligations not material in amount which are
not required to be reflected in corporate balance sheets prepared in accordance
with GAAP. There has been no material adverse change in the financial condition,
business, operations, affairs or prospects of Borrower since the date of such
financial statements.

              (h) Existence of Assets and Title Thereto. Borrower has good and
marketable title to its properties and assets, including the properties and
assets reflected in the financial statements referred to above. These properties
and assets are not subject to any mortgage, pledge, security interest, or other
recordable encumbrance except as reflected in the Borrower's financial
statements or those permitted under the terms of this Agreement, or as set forth
in Schedule 5(h), and none of the foregoing prohibit or interfere with ownership
of any of Borrower's assets or the operation of its business presently
conducted.

              (i) Regulations G, T, U, and X. The proceeds of the Loan will not
be used, directly or indirectly, for the purpose of purchasing or carrying any
margin stock in contravention of Regulations G, T, U, or X promulgated by the
Board of Governors of the Federal Reserve System.

                                      -10-

<PAGE>

              (j) Compliance. Borrower is not in default with respect to or in
violation of any order, writ, injunction or decree of any court or of any
Federal, state, provincial, municipal or other governmental department,
commission, board, bureau, agency, authority or official, or in violation of any
law, statute, rule or regulation to which it or its properties is or are
subject, where such default or violation would materially and adversely affect
the financial condition of Borrower. Borrower represents that it has not
received notice of any such default from any party. Borrower is not in default
in the payment or performance of any of its obligations to any third parties or
in the performance of any mortgage, indenture, lease, contract or other
agreement to which it is a party or by which any of its assets or properties are
bound where such default could have a material adverse effect.

              (k) Leases. Borrower enjoys quiet and undisturbed possession under
all leases under which it is operating, and all such leases are valid and
subsisting and Borrower is not in default under any of its leases where such
default could have a material adverse effect.

              (l) Pension Plans. No fact, including but not limited to any
"Reportable Event", as that term is defined in Section 4043 of ERISA, as the
same may be amended from time to time exists in connection with any Plan of
Borrower which might constitute grounds for termination of any such Plan by the
Pension Benefit Guaranty Corporation or for the appointment by the appropriate
United States District Court of a Trustee to administer any such Plan. No
"Prohibited Transaction" as defined by ERISA exists or will exist upon the
execution and delivery of this Agreement or the performance by the parties
hereto of their respective duties and obligations hereunder. Borrower agrees to
do all acts including, but not limited to, making all contributions necessary to
maintain compliance with ERISA and agrees not to terminate any such Plan in a
manner or do or fail to do any act which could result in the imposition of a
lien on any property of any of Borrower pursuant to Section 4068 of ERISA.
Borrower has not incurred any withdrawal liability under the Multiemployer
Pension Plan Amendment Act of 1980. Borrower has no unfunded liability in
contravention of ERISA.

              (m) Contingent Liabilities. Borrower is not a party to any
suretyship, guarantyship, or other similar type agreement; and it has not
offered its endorsement to any individual, concern, corporation or other entity
or acted or failed to act in any manner which would in any way create a
contingent liability that does not appear in the financial statements referred
to above.

              (n) Union Contracts and Pension Plans. Borrower is not a party to
any collective bargaining, union or pension plan agreement.

              (o) Licenses. Borrower has all material licenses, permits,
approvals, and other authorizations required by any government, agency or
subdivision thereof, or from any licensing entity necessary for the conduct of
its business, all of which Borrower represents to be current, valid and in full
force and effect.

                                      -11-

<PAGE>

              (p) Financial Information. All financial information submitted by
Borrower to Fleet, whether previously or in the future, is and will be true and
correct in all material respects, and is and will be complete insofar as may be
necessary to give Fleet a true and accurate knowledge of the subject matter.

              (q) Environmental Health and Safety Laws. Borrower has not
received any notice, order, petition, or similar document in connection with or
arising out of any violation or possible violation of any environmental health
or safety law, regulation or order which remains uncured, and Borrower knows of
no basis for any such violation or threat thereof for which it may become
liable.

              (r) Parent, Affiliate or Subsidiary Corporations. Except as set
forth on attached Schedule 5(r), Borrower has no parent corporation and has no
domestic or foreign Affiliate or Subsidiary corporations.

         VI.  COVENANTS

         6.01 FINANCIAL REPORTING. Borrower covenants and agrees that from the
date hereof until payment in full of all Obligations and the termination of this
Agreement, Borrower shall furnish to Fleet the following:

              (a) within ninety (90) days after the end of each fiscal year, its
annual 10-K financial report together with its unqualified audited financial
statements prepared on a consolidated and consolidating basis by an independent
certified public accountant, reasonably acceptable to Fleet, showing the
operations and financial condition of Borrower at the close of such year. Such
statements shall be prepared in conformity with GAAP and applied on a basis
consistent with the preceding period.

              (b) within forty-five (45) days after the end of each quarter of
each year, its 10-Q financial report for the quarter and period then ending
together with a Certificate of Compliance of Borrower in the form of the
attached Exhibit B and certified by the Borrower's President and Chief Financial
Officer.

              (c) promptly upon Fleet's written request from time to time, such
other information about the financial condition and operations of Borrower as
Fleet may reasonably request in such form as shall be satisfactory to Fleet.

         6.02 AFFIRMATIVE COVENANTS. Borrower covenants and agrees from the date
hereof until payment in full of all obligations and termination of this
Agreement, Borrower shall:

              (a) Insurance and Endorsement. Keep its properties and business
insured against fire and other hazards (so-called "All Risk" coverage) in
amounts and with companies reasonably satisfactory to Fleet covering such risks
as are herein set forth; maintain public liability coverage, against claims for
personal injuries or death; and maintain all worker's

                                      -12-

<PAGE>

compensation, employment or similar insurance as may be required by applicable
law. All insurance shall be in amounts, contain such terms, be in such form, be
for such periods, and be written by carriers duly licensed by the state of
Connecticut, all of which shall be reasonably satisfactory to Fleet. Without
limiting the generality of the foregoing, such insurance must provide that it
may not be canceled without thirty (30) days prior written notice to Fleet. In
the event of failure to provide and maintain insurance as so provided, Fleet
may, at its option, provide such insurance and charge the amount to the
Revolving Loan. Borrower shall furnish to Fleet certificates or other
satisfactory evidence of compliance with the foregoing insurance provisions.

              (b) Taxes and Other Liens. Comply with all statutes and government
regulations and pay all taxes, assessments, governmental charges or levies, or
claims for labor, supplies, rent and other obligations made against it or its
property which, if unpaid, might become a lien or charge against Borrower or its
properties, except liabilities being contested in good faith and against which,
if requested by Fleet, Borrower shall set up reserves in amounts and in form
reasonably satisfactory to Fleet.

              (c) Place of Business. Maintain its chief place of business and
chief executive offices at the address set forth in the beginning of this
Agreement.

              (d) Inspections. After reasonable notice and during normal
business hours, allow Fleet by or through any of its officers, attorneys,
accountants, or other agents designated by Fleet, to enter the offices and
plants of Borrower or its subsidiaries to examine or inspect any of the
properties, books, and records or extracts therefrom, to make copies of such
books and records or extracts therefrom, and to discuss the affairs, finances,
and accounts with Borrower all at such reasonable times and for such purpose as
Fleet or any representatives of Fleet may reasonably require.

              (e) Litigation. Advise Fleet of the commencement or threat of
litigation, including arbitration proceedings and any proceedings before any
governmental agency, which is instituted against Borrower and is reasonably
likely to have a material adverse effect upon the condition, financial,
operating, or otherwise, of Borrower.

              (f) Maintain Existence. Maintain its corporate existence and
comply with all applicable statutes, rules, and regulations where failure to
comply could have a material adverse effect.

              (g) Maintain Assets. Maintain its properties in good repair,
working order, and operating condition. Borrower shall immediately notify Fleet
of any event causing material loss in the value of its assets overall.

              (h) ERISA. Comply in all material respects with ERISA. Borrower
shall provide Fleet with any information Fleet may reasonably request in
connection with any ERISA plan maintained by Borrower.

                                      -13-

<PAGE>

              (i) Notice of Certain Events. Give prompt written notice to Fleet
of:

                  (i)   any dispute that arises between Borrower and any
         governmental regulatory body or law enforcement agency, if said dispute
         is reasonably likely to have a material adverse effect on the
         condition, financial, operating, or otherwise of Borrower;

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

                  (iii) any proposal by any public authority to acquire all or a
         material portion of the assets or business of Borrower;

                  (iv)  any proposed or actual change of the name of Borrower;
         and

                  (v)   any other matter which has resulted or is likely to
         result in a material adverse change in the financial condition or
         operations of Borrower.

              (j) Defaults. Give prompt written notice to Fleet upon the
occurrence of any Default or of any event which, but for giving of notice or
passage of time or both, would constitute an Event of Default, signed by the
president or chief financial officer of Borrower describing such occurrence and
the steps, if any, being taken to cure the Default.

              (k) Compliance with Law. Comply with any and all Federal, state,
and local laws affecting its business, including, but not limited to, payment of
all Federal, state and provincial taxes.

              (l) Officers and Directors. Promptly notify Fleet in writing upon
any changes or additions to any of Borrower's officers or directors.

              (m) Operating Account. Maintain its primary operating accounts
with Fleet.

         6.03 NEGATIVE COVENANTS. Borrower covenants and agrees that from the
date hereof until payment in full of all Obligations and termination of this
Agreement, Borrower shall not without the prior written consent of Fleet:

              (a) Encumbrances. Incur or permit to exist any lien, mortgage,
charge, or other encumbrance against any of its properties or assets, whether
now owned or hereafter acquired, including the Collateral, except: (i) liens
required or expressly permitted by this Agreement; (ii) pledges or deposits in
connection with or to secure worker's compensation, unemployment, or liability
insurance; and (iii) tax liens which are being contested in good faith and in
compliance with this Agreement provided, however, that Borrower shall be
entitled to enter into lease financing arrangements in an aggregate amount not
in excess of $100,000 for the

                                      -14-

<PAGE>

capitalized leasing of equipment including, without limitation, telephones and
telephone systems, and computers and computer systems and manufacturing
equipment.

              (b) Limitation on Indebtedness. Create, incur, or guaranty any
indebtedness or obligation, borrow money from, or issue or sell any obligations
of Borrower to any lender or Person other than Fleet, Custom Products
Corporation, A-G Geophysical Products, Inc., and except in the ordinary course
of business.

              (c) Contingent Liabilities. Assume, guaranty, endorse or otherwise
become liable upon the obligations of any person, firm or corporation, or enter
into any purchase or option agreement or other arrangement having substantially
the same effect as such a guarantee, except by the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business and except with respect to Custom Products Corporation and
A-G Geophysical Products, Inc.

              (d) Consolidation or Merger. Merge into or consolidate with or
into any corporation or entity.

              (e) Loans, Advances, Investments. Use the proceeds of the Loan,
either directly or indirectly, to make or permit to exist any loans or advances
to (other than in the ordinary course of business), or purchase any stock, other
than securities or evidences of indebtedness, or make or permit to exist any
investment, including without limitation the acquisition of stock of a
corporation, or acquire any interest whatsoever in, any other person or entity.

              (f) Sale and Lease of Assets. Sell, lease, or otherwise dispose of
any of its assets, except in the ordinary course of business.

              (g) Prohibited Transfers. Except with respect to Custom Products
Corporation and A-G Geophysical Products, Inc., transfer, in any manner, either
directly or indirectly, any cash, property, or other assets to any parent or any
Affiliate or Subsidiary, and except for any sales made in the ordinary course of
business and for fair consideration on terms no less favorable than if such sale
had been an arms-length transaction between Borrower and an unaffiliated entity.

              (h) Use of Proceeds. Except with respect to Custom Products
Corporation and A-G Geophysical Products, Inc., apply any of the proceeds from
the Loan to any Affiliate or Subsidiary.

              (i) Leasebacks. Lease any real estate or other capital asset from
any lessor who shall have acquired such property from Borrower.

              (j) Business Operations. Engage in any business other than the
business in which it is currently engaged or a business reasonably related
thereto.

                                      -15-

<PAGE>

              (k) Investment, Loans. Guarantees, Revolving Loans. Except with
respect to Custom Products Corporation and A-G Geophysical Products, Inc., or
otherwise in the ordinary course of business, lend or advance money, credit or
property to any Person, or invest in (by capital contribution, creation of
subsidiaries or otherwise), or purchase or repurchase the stock or indebtedness,
or all or a substantial part of the assets of properties, of any Person, or
enter into any exchange of securities with any Person, or guaranty, assume,
endorse, or otherwise become responsible for (directly or indirectly or by any
instrument having the effect of assuring any Person's payment or performance or
capability) the indebtedness, performance, obligations, stock, or dividends of
any Person, or agree to do any of the foregoing, or permit or suffer any
Subsidiary to do so, except:

                  (i)   endorsement of negotiable instruments for deposit or
              collection in the ordinary course of business;

                  (ii)  investments representing the indebtedness of any Person
              owing as a result of the sale of goods by Borrower or Borrower'
              Subsidiaries in the ordinary course of business;

                  (iii) the extension of credit to customers in the ordinary
              course of business.

              (l) Immigration. Hire any employee in violation of any law or
regulating immigration and naturalization.

         6.04 FINANCIAL COVENANTS. Borrower agrees and covenants that from the
date hereof until payment in full and performance of all Obligations, it shall
not:

              (a) Minimum Debt Service Coverage Ratio. Permit its Debt Service
Coverage Ratio to be less than 3.00 to 1.00 at any time. This covenant shall be
tested quarterly on a rolling four quarters basis.

              (b) Maximum Leverage. Permit its Leverage Ratio to be greater than
2.00 to 1.00 at any time. This covenant shall be tested quarterly.

              (c) Quarterly and Annual Losses: Permit its net income, as defined
by GAAP, to be less than one dollar ($1.00) in any two consecutive quarters or
for any fiscal year.

         VII. GRANT OF COLLATERAL

              THIS SECTION INTENTIONALLY DELETED.

                                      -16-

<PAGE>

         VIII.    DEFAULT

         8.01     EVENTS OF DEFAULT. The Obligations shall, at the option of
Fleet, become immediately due and payable in full without notice or demand
unless otherwise provided in this Agreement upon the occurrence of any of the
following events (collectively, "Events of Default" and individually, an "Event
of Default"):

                  (a) failure of Borrower to pay any installment of principal or
interest or any other Obligation arising under this Agreement, the Note, or the
other Loan Documents when due;

                  (b) breach of any of the Obligations by Borrower including,
without limitation, any covenant, representation, or warranty contained in this
Agreement, or of Borrower's failure to perform any act, duty or obligation as
required by this Agreement or any of the other Loan Documents which breach or
failure is not cured within ten (10) days written notice from Fleet to Borrower;

                  (c) the making by Borrower of any material misrepresentation
of a material fact to Fleet;

                  (d) insolvency (failure of Borrower to pay its debts as they
mature or when the fair value of Borrower's assets is less than its liabilities)
of Borrower, or business failure, appointment of a receiver or custodian, or
assignment for the benefit of creditors or the commencement of any proceedings
under any bankruptcy or insolvency law by or against Borrower for the
Obligations; appointment of a committee of creditors or liquidating banks, or
offering of a composition or extension to creditors by, for or of Borrower;
however, if an involuntary bankruptcy petition is filed, an Event of Default
shall occur if the petition is not dismissed within ninety (90) days of filing;

                  (e) the loss, revocation or failure to renew any license,
permit, or franchise right now held or hereafter acquired by Borrower which
materially affects the ability of the Borrower to continue its operations as
presently conducted;

                  (f) a default, after any applicable notice and cure period, in
any other Loan Document or other agreements between Fleet and Borrower;

                  (g) the filing of any lien or security interest not permitted
under this Agreement, voluntary or involuntary, against any of the Borrower's
assets, which in the case of an involuntary lien is not bonded or discharged of
record within thirty (30) days of filing;

                  (h) dissolution or termination of existence of Borrower;

                  (i) failure by Borrower to pay or perform any other
Indebtedness in excess of $100,000 when due after any applicable cure period, or
if any such other Indebtedness shall be

                                      -17-

<PAGE>

accelerated, or if there shall exist any default under any instrument, document
or agreement governing, evidencing or securing such other Indebtedness;

                  (j) a material adverse change in the condition, financial or
otherwise, of Borrower as determined by Fleet in its reasonable discretion;

Upon the happening of any one or more Events of Default, any requirements upon
Fleet to make further Revolving Loans shall terminate. Borrower expressly waives
any presentment, demand, protest, notice of protest or other notice of any kind.
Fleet may proceed to enforce the rights of Fleet whether by suit in equity or by
action at law, whether for specific performance of any covenant or agreement
contained in this Agreement, the Note, or any other Loan Documents, or in aid of
the exercise of any power granted in either this Agreement, the Note, or the
other Loan Documents, or it may proceed to obtain judgment or any other relief
whatsoever appropriate to the enforcement of such rights, or proceed to enforce
any legal or equitable right which it may have by reason of the occurrence of
any Event of Default.

         8.02 SPECIFIC POWERS. Fleet may at any time, after the occurrence of an
Event of Default, at its sole discretion, exercise all other rights granted in
this Agreement and the other Loan Documents and do any and all things necessary
and proper to carry out the purposes contemplated in this Agreement, to carry
out the purposes contemplated in this Agreement, the other Loan Documents, and
any other agreement between the parties. Fleet and any person acting as its
attorney hereunder shall not be liable for any acts or omissions or for any
error of judgment or mistake of fact or law, except for bad faith, gross
negligence, and willful misconduct. Borrower agrees that the powers granted
hereunder, being coupled with an interest, shall be irrevocable so long as any
Obligation remains unsatisfied. Notwithstanding the foregoing, it is understood
that Fleet is under no duty to take the foregoing actions and that after having
made demand upon the account debtors of Borrower for payment.

         8.03 BORROWER'S INDEMNIFICATION. Fleet shall not, under any
circumstances or in any event whatsoever, have any liability for any error or
omission or delay of any kind occurring in the enforcement of any of its rights
and remedies available to it under this Agreement or pursuant to applicable law.
Borrower shall indemnify and hold harmless Fleet against and from any claim,
loss or damage arising out of such enforcement provided that Fleet acted in a
commercially reasonable manner.

         8.04 CUMULATIVE REMEDIES. The enumeration of Fleet's rights and
remedies set forth in this Section is not intended to be exhaustive, and the
exercise by Fleet of any right or remedy shall not preclude the exercise of any
other rights or remedies, all of which shall be cumulative and shall be in
addition to any other right or remedy given hereunder or under any other
agreement between the parties or which may now or hereafter exist in law or at
equity or by suit or otherwise. No delay or failure to take action on the part
of Bank in exercising any right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power, or
privilege preclude other or further exercise thereof or the exercise of any
other right, power or privilege or shall be construed to be a waiver of any
event of default. No

                                      -18-

<PAGE>

course of dealing between Borrower and Fleet or their employees shall be
effective to change, modify, or discharge any provision of this Agreement or to
constitute a waiver of any default.

         IX.  MISCELLANEOUS

         9.01 EXPENSES. Borrower shall pay on demand all expenses of Fleet in
connection with the preparation, administration, default, collection, waiver or
amendment of loan terms, or in connection with Fleet's exercise, preservation or
enforcement of any of its rights, remedies or options hereunder, including,
without limitation, reasonable fees of outside legal counsel, accounting,
consulting, brokerage or other similar professional fees or expenses, and any
fees or expenses associated with travel or other costs relating to any
appraisals or examinations conducted in connection with the loan or any
collateral therefor, and the amount of all such expenses shall if unpaid 30 days
after demand, until paid, bear interest at the rate applicable to principal
hereunder (including any default rate) and be an obligation secured by any
collateral.

         9.02 SET-OFF. The Borrower hereby grants to Fleet, a continuing lien,
security interest, and right of setoff as security for all liabilities and
obligations to Fleet, whether now existing or hereafter arising, upon and
against all deposits, credits, collateral, and property, now or hereafter in the
possession, custody, safekeeping or control of Fleet or any entity under the
control of FleetBoston Financial Corporation, or in transit to any of them. At
any time, without demand or notice (any such notice being expressly waived by
Borrower), Fleet may set off the same or any part thereof and apply the same to
any liability or obligation of the Borrower and any Guarantor even though
unmatured and regardless of the adequacy of any other collateral securing the
Loan. ANY AND ALL RIGHTS TO REQUIRE FLEET TO EXERCISE ITS RIGHTS OR REMEDIES
WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING
ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS, OR OTHER PROPERTY OF
THE BORROWER OR ANY GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY, AND
IRREVOCABLY WAIVED.

         9.03 COVENANTS TO SURVIVE. BINDING AGREEMENT. All covenants,
agreements, warranties, and representations made herein, in the Note, in the
other Loan Documents, and in all certificates or other documents of Borrower
shall survive the advances of money made by Fleet to Borrower and the delivery
of the Note, and the other Loan Documents. All such covenants, agreements,
warranties, and representations shall be binding upon Borrower and its
successors and assigns, and inure to the benefit of Fleet and its successors and
assigns, whether or not so expressed.

         9.04 CROSS-COLLATERALIZATION. All Collateral which Fleet may at any
time acquire from Borrower or from any other source in connection with
Obligations arising under this Agreement and the other Loan Documents shall
constitute collateral for each and every Obligation, without apportionment or
designation as to particular Obligations. All Obligations, however and whenever
incurred, shall be secured by all Collateral however and wherever acquired.
Fleet shall have the right, in its sole discretion, to determine the order in
which its

                                      -19-

<PAGE>

rights in or remedies against any Collateral are to be exercised and which type
of Collateral or which portions of Collateral are to be proceeded against and
the order of application of proceeds of Collateral as against particular
Obligations.

         9.05 CROSS-DEFAULT. The Loan shall be cross-defaulted with current and
future financing accommodations extended or to be extended by Fleet to Borrower
so that a default under any loan to Borrower shall be an Event of Default
hereunder and under all of the other loans extended by Fleet.

         9.06 AMENDMENTS AND WAIVERS. This Agreement, the Note, the other Loan
Documents, and any term, covenant, or condition hereof or thereof may not be
changed, waived, discharged, modified or terminated except by a writing executed
by the parties. The failure on the part of Fleet to exercise, or Fleet's delay
in exercising, any right, remedy or power hereunder or under the Note or the
other Loan Documents shall not preclude any other or future exercise thereof, or
the exercise of any other right, remedy or power.

         9.07 NOTICES. All notices, requests, consents, demands and other
communications shall be in writing and shall be mailed by registered or
certified first class mail or delivered by an overnight courier to the
respective parties to this Agreement as follows:

If to Borrower:         Bolt Technology Corporation
                        Four Duke Place
                        Norwalk, Connecticut 06854
                        Attention: Raymond M. Soto

If to the Bank:         Fleet National Bank
                        One Landmark Square
                        Stamford, Connecticut 06901
                        Attention: Charlene S. O'Connell

         9.08 TRANSFER OF INTEREST.

              (a) Fleet may at any time pledge all or any portion of its rights
under the Loan Documents including any portion of the Note to any of the twelve
(12) Federal Reserve Banks organized under Section 4 of the Federal Reserve Act,
12 U.S.C. Section 341. No such pledge or enforcement thereof shall release Fleet
from its obligations under any of the Loan Documents.

              (b) Fleet shall have the unrestricted right at any time and from
time to time, and without the consent of or notice to the Borrower (or any
Guarantor), to grant to one or more banks or other financial institutions (each,
a "Participant") participating interests in Fleet's obligation to lend hereunder
and/or any or all of the loans held by Fleet hereunder. In the event of any such
grant by Fleet of a participating interest to a Participant, whether or not upon
notice to Borrower, Fleet shall remain responsible for the performance of its
obligations hereunder and

                                      -20-

<PAGE>

Borrower shall continue to deal solely and directly with Fleet in connection
with Fleet's rights and obligations hereunder.

              (c) Fleet shall have the unrestricted right at any time or from
time to time, and without Borrower's or any Guarantor's consent, to assign all
or any portion of its rights and obligations hereunder to one or more banks or
other financial institutions (each, an "Assignee"), and Borrower and each
Guarantor agrees that it shall execute, or cause to be executed, such documents,
including without limitation, amendments to this Agreement and to any other
documents, instruments and agreements executed in connection herewith as Fleet
shall deem necessary to effect the foregoing. In addition, at the request of
Fleet and any such Assignee, Borrower shall issue one or more new promissory
notes, as applicable, to any such Assignee and, if Fleet has retained any of its
rights and obligations hereunder following such assignment, to Fleet, which new
promissory notes shall be issued in replacement of, but not in discharge of, the
liability evidenced by the promissory note held by Fleet prior to such
assignment and shall reflect the amount of the respective commitments and loans
held by such Assignee and Fleet after giving effect to such assignment. Upon the
execution and delivery of appropriate assignment documentation, amendments and
any other documentation required by Fleet in connection with such assignment,
and the payment by Assignee of the purchase price agreed to by Fleet, and such
Assignee, such Assignee shall be a party to this Agreement and shall have all of
the rights and obligations of Fleet hereunder (and under any and all other
guaranties, documents, instruments and agreements executed in connection
herewith) to the extent that such rights and obligations have been assigned by
Fleet pursuant to the assignment documentation between Fleet and such Assignee,
and Fleet shall be released from its obligations hereunder and thereunder to a
corresponding extent.

              (d) Fleet may furnish any information concerning Borrower in its
possession from time to time to prospective Assignees and Participants, provided
that Fleet shall require any such prospective Assignee or Participant to agree
in writing to maintain the confidentiality of such information.

         9.09 SECTION HEADINGS, SEVERABILITY, ENTIRE AGREEMENT. Section and
subsection headings have been inserted herein for the convenience of Fleet only
and shall not be construed as part of this Agreement. Every provision of this
Agreement, the Note, and the other Loan Documents is intended to be severable;
if any term or provision of this Agreement, the Note, the other Loan Documents,
or any other document delivered in connection herewith shall be invalid,
illegal, or unenforceable for any reason whatsoever, the validity, legality, and
enforceability of the remaining provisions hereof or thereof shall not in any
way be affected or impaired thereby. All Exhibits and Schedules to this
Agreement shall be deemed to be part of this Agreement. This Agreement, the
other Loan Documents, and the Exhibits and Schedules attached hereto and thereto
embody the entire agreement and understanding between Borrower and Fleet and
supersede all prior agreements and understandings relating to the subject matter
hereof unless otherwise specifically reaffirmed or restated herein.

                                      -21-

<PAGE>

         9.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which, when so executed and delivered shall be an
original, and it shall not be necessary when making proof of this Agreement to
produce or account for more than one counterpart.

         9.11 GOVERNING LAW; CONSENT TO JURISDICTION. This Agreement and the
other Loan Documents, and all transactions, assignments and transfers hereunder
and thereunder, and all the rights of the parties, shall be governed as to
validity, construction, enforcement and in all other respects by the laws of the
State of Connecticut. Borrower agrees that the Superior Court for the Judicial
District of Stamford or the United States District Court for the District of
Connecticut at Bridgeport shall have jurisdiction to hear and determine any
claims or disputes pertaining to the financing transactions of which this
Agreement is a part and to any matter arising or in any way related to this
Agreement or any other agreement between Fleet and Borrower. Borrower expressly
submits and consents in advance to such jurisdiction in any action or
proceeding.

         9.12 FURTHER ASSURANCES/REPLACEMENT DOCUMENTS. Upon receipt of an
affidavit of an officer of Fleet as to the loss, theft, destruction or
mutilation of the Note or any other security document which is not of public
record, and, in the case of any such loss, theft, destruction, or mutilation,
upon surrender and cancellation of such Note or other security document,
Borrower will issue, in lieu thereof, a replacement Note or other security
document in the same principal amount thereof and otherwise of like tenor.

         9.13 PREJUDGMENT REMEDY WAIVER; WAIVERS. BORROWER ACKNOWLEDGES THAT THE
LOAN AND SECURITY INTERESTS EVIDENCED HEREBY ARE COMMERCIAL TRANSACTIONS AND
WAIVES ITS RIGHT TO NOTICE AND HEARING UNDER CHAPTER 903a OF THE CONNECTICUT
GENERAL STATUTES, OR AS OTHERWISE ALLOWED BY ANY STATE OR FEDERAL LAW WITH
RESPECT TO ANY PREJUDGMENT REMEDY WHICH FLEET MAY DESIRE TO USE, AND FURTHER
WAIVES DILIGENCE, DEMAND, PRESENTMENT FOR PAYMENT, NOTICE OF NONPAYMENT,
PROTEST, AND NOTICE OF ANY RENEWALS OR EXTENSIONS. BORROWER ACKNOWLEDGES THAT IT
MAKES THIS WAIVER KNOWINGLY, WILLINGLY AND VOLUNTARILY, AND WITHOUT DURESS, AND
ONLY AFTER EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH ITS
ATTORNEYS.

         9.14 JURY TRIAL WAIVER. BORROWER AND FLEET (BY ACCEPTANCE OF THE NOTE)
MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A
TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN
CONNECTION WITH THE NOTE OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED
IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT
LIMITATION, ANY COURSE OF CONDUCT, COURSE OF

                                      -22-

<PAGE>

DEALINGS, STATEMENTS OR ACTIONS OF FLEET RELATING TO THE ADMINISTRATION OF THE
LOAN OR ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE THAT NEITHER PARTY WILL
SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW, BORROWER HEREBY
WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES. BORROWER CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF FLEET HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT FLEET WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THIS WAIVER
CONSTITUTES A MATERIAL INDUCEMENT FOR FLEET TO ACCEPT THE NOTE AND MAKE THE
LOAN.

                                      -23-

<PAGE>

         The parties have executed this Agreement on May 15, 2002.

Signed in the presence of:                  BOLT TECHNOLOGY CORPORATION

/s/ Barbara A. Young
-------------------------------
                                        By: /s/ Raymond M. Soto
                                            -------------------------------
/s/ Seth L. Cooper                          Raymond M. Soto
-------------------------------             Its President, duly authorized

                                            FLEET NATIONAL BANK

/s/ Barbara A. Young
-------------------------------
                                        By: /s/ Andrew H. Harris
/s/ Seth L. Cooper                          --------------------------------
-------------------------------             Andrew H. Harris
                                            Its Senior Vice President

                                      -24-

<PAGE>

STATE OF CONNECTICUT )
                     ) ss:
COUNTY OF FAIRFIELD  )

         On this the 15th day of May, 2002, before me, the undersigned
officer, personally appeared Raymond M. Soto who acknowledged himself to be the
President of Bolt Technology Corporation, a Connecticut corporation, and that
he, as such officer, being authorized so to do, executed the foregoing
instrument for the purposes therein contained and acknowledged the same to be
his free act and deed individually and as such officer, and the free act and
deed of the corporation.

         IN WITNESS WHEREOF, I hereunto set my hand.

                                    /s/ Barbara A. Young
                                    -----------------------------------
                                    Commissioner of the Superior Court

STATE OF CONNECTICUT )
                     ) ss:
COUNTY OF FAIRFIELD  )

         On this the 15th day of May, 2002, before me, the undersigned
officer, personally appeared Andrew H. Harris who acknowledged herself to be a
Senior Vice President of FLEET NATIONAL BANK, a national banking association,
and that she, as such officer, being authorized so to do, executed the foregoing
instrument for the purposes therein contained and acknowledged the same to be
her free act and deed individually and as such officer, and the free act and
deed of the national banking association.

         IN WITNESS WHEREOF, I hereunto set my hand.

                                   /s/ Seth L. Cooper
                                   ------------------------------
                                   Commissioner of the Superior Court

List of Exhibits and Schedules

         Exhibit A                 Revolving Loan Note
         Exhibit B                 Form of Certificate of Compliance

         Schedule 5(h)             Permitted Encumbrances
         Schedule 5(r)             Affiliate Organizations

                                      -25-

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