Document:

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                                                                  Exhibit 99.6

                                 LOAN AGREEMENT

         This Loan Agreement (this "Agreement" or "Loan Agreement") is entered
into as of the 15th day of November, 1999 by and between Network Six, Inc., a
Rhode Island corporation with its principal place of business at 475 Kilvert
Street, Warwick, Rhode Island 02886 ("Borrower" or the "Company") and Fleet
National Bank, a Rhode Island financial institution with its principal place of
business at 111 Westminster Street, Providence, Rhode Island 02903 ("Lender").

         For good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:

                                    ARTICLE I
                   DEFINITIONS AND ACCOUNTING AND OTHER TERMS

         SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

         "ACCOUNT RECEIVABLE" means and includes any and all accounts, contract
rights, notes, drafts, acceptances and all forms of obligations or receivables
now or hereafter owed or belonging to the Borrower for inventory or other goods
sold by it or for services rendered by it in the ordinary course of business of
the Borrower, all guarantees or other security therefor, all right, title and
interest of the Borrower in the inventory or other goods which gave rise
thereto, including, but not limited to, the right of stoppage in transit, and
all rights of the Borrower earned or yet to be earned under contracts to sell
inventory or other goods or render services, and all proceeds thereof.

         "ADVANCE(S)" means each advance of proceeds of the Loan, including, but
not limited to future advances of the Credit Loan made or to be made by the
Lender pursuant to SECTION 2 of this Agreement.

         "AFFILIATE" means singly and collectively any Person (other than any
Subsidiary) which directly or indirectly, through one or more intermediaries,
controls or is controlled by, or is under common control with Borrower.

         "AGREEMENT" means this Loan Agreement.

         "A.M." means a time from and including 12 o'clock midnight to and
excluding 12 o'clock noon on any Business Day using Providence, Rhode Island
time.

         "BORROWED MONEY" means any obligation to repay money, including but not
limited to any indebtedness evidenced by promissory notes, bonds, debentures,
guaranties or similar obligations, the Loan, any Subordinated Debt and any
Indebtedness under any obligation under a

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conditional sale or other title retention agreement, the net aggregate rentals
under any Capitalized Lease Obligation or any lease that is the substantial
equivalent of the financing of the property so leased and any reimbursement
obligation for any standby letter of credit.

         "BORROWER" has the meaning assigned in the first paragraph of this
Agreement.

         "BUSINESS DAY" means any day other than a day on which banks in
Providence, Rhode Island are authorized or required to close.

         "CALCULATION AGENT" means Fleet National Bank or Fleet Treasury Group.

         "CAPITALIZED LEASE OBLIGATION" means all lease obligations which have
been or should be, in accordance with GAAP, capitalized on the books of the
lessee.

         "CASH EQUIVALENT INVESTMENTS" means any Investment in (i) direct
obligations of the United States or any agency, authority or instrumentality
thereof, or obligations guaranteed by the United States or any agency, authority
or instrumentality thereof, whether or not supported by the full faith and
credit of, a right to borrow from or the ability to be purchased by the United
States; (ii) commercial paper rated in the highest grade by a nationally
recognized statistical rating agency or which, if not rated, is issued or
guaranteed by any issuer with outstanding long-term debt rated A or better by
any nationally recognized statistical rating agency; (iii) demand and time
deposits with, and certificates of deposit and bankers acceptances issued by,
any office of the Lender or any other bank or trust company which is organized
under the laws of the United States or any state thereof and has capital,
surplus and undivided profits aggregating at least $500,000,000; (iv) any
short-term note which has a rating of MIG-2 or better by Moody's Investors
Service Inc. or a comparable rating from any other nationally recognized
statistical rating agency; (v) any municipal bond or other governmental
obligation (including, without limitation, any industrial revenue bond or
project note) which is rated A or better by any nationally recognized
statistical rating agency; or (vii) any repurchase agreement with any financial
institution described in clause (iii) above, relating to any of the foregoing
instruments and fully collateralized by such instruments. Each Cash Equivalent
Investment shall have a maturity of less than one year at the time of purchase;
provided that the maturity of any repurchase agreement shall be deemed to be the
repurchase date and not the maturity of the subject security and that the
maturity of any variable or floating rate note subject to prepayment at the
option of the holder shall be the period remaining (including any notice period
remaining) before the holder is entitled to prepayment.

         "CLOSING DATE" means the date on which all of the conditions precedent
set forth in SECTION 3.01(A) of this Agreement have been satisfied, and the
initial Credit Loan is made.

         "CODE" means the United States Internal Revenue Code and applicable
regulations promulgated thereunder, as amended from time to time.

         "COMMITMENT" or "CREDIT COMMITMENT" means the Lender's commitments to
make the

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Credit Loan as set forth in SECTION 2 hereof up to the maximum outstanding
amounts set forth therein.

         "COMMITMENT FEE" means Two Thousand Five Hundred Dollars ($2,500.00).

         "COMMONLY CONTROLLED ENTITY" means a Person, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 414(b) or (c) of the Code.

         "CONTROL" and the terms "controlling", "controlled by" and "under
common control with" mean the possession, directly or indirectly of the power to
vote ten percent or more of the securities or other equity interests having
ordinary voting power for the election of directors or other managers of a
Person or cause the direction of the management and policies of a Person,
whether through ownership of equity or other interests, by contract or
otherwise.

         "COST OF FUNDS RATE" means the rate per annum of interest which Lender
is required to pay, or is offering to pay, for wholesale liabilities, adjusted
for reserve requirements and such other requirements as may be imposed by
federal, state or local government and regulatory agencies, as determined by
Fleet Treasury Group.

         "CREDIT LIMIT" is defined in SECTION 2.01(A)(ii) below.

         "CREDIT LOAN" or "LOAN" means the revolving line of credit described
herein, and if the context so required, any Advance thereof.

         "CREDIT NOTE" or "NOTE" means the Credit Note in the stated maximum
principal amount of $1,000,000.00 of even date herewith and all amendments,
extensions, substitutions and/or replacements therefor.

         "DEFAULT" means an event or condition which with the giving of notice
or lapse of time or both would become an Event of Default.

         "DEFAULT CONDITION" means a condition in which either a Default or
Event of Default exists.

         "DOLLARS" and the sign "$" mean lawful money of the United States of
America.

         "ELIGIBLE ACCOUNTS RECEIVABLE" means any and all Accounts Receivable of
Borrower (less sales, excise or similar taxes, if any are included therein, and
less returns, discounts, credits and allowances of any nature at any time
issued, owing, granted, outstanding or available with respect thereto) that (a)
are bona fide and collectible, (b) are subject to a first priority perfected
security interest in favor of Lender, (c) evidence Indebtedness for goods
actually delivered or services actually performed in the ordinary course of
business of the Borrower, which goods or services have been accepted as
satisfactory, (d) have been outstanding for less than the Permitted

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Time and (e) are not as described below:

         (i)       all Accounts Receivable from any Person in which Borrower and
                   its stockholders, or any of them, have an equity interest or
                   from any Person who has an equity interest in Borrower;

         (ii)      any Account Receivable which is subject to any right of
                   set-off or other defense or claim denying liability in favor
                   of any account debtor;

         (iii)     all Accounts Receivable past due under the original terms of
                   sale and deemed by Lender, in its discretion, exercised in
                   good faith and in a commercially reasonable manner, to be
                   difficult to collect or uncollectible;

         (iv)      any Account Receivable arising out of sales to customers
                   having no place of business in the United States of America;

         (v)       (a) any Account Receivable outstanding for more than the
                   Permitted Time, or (b) any Account Receivable, regardless of
                   the length of time outstanding, fifty percent (50%) or more
                   of whose outstanding balance with Borrower has been
                   outstanding beyond the Permitted Time; provided, however,
                   that with respect to any Account Receivable referred to in
                   this subsection (v)(b), to the extent such Account Receivable
                   is payable at the time of and as a condition to COD shipments
                   of goods by Borrower to the account debtor in question, such
                   Account Receivable shall not be ineligible solely by virtue
                   of the application of this subsection (v)(b).

         (vi)      any Account Receivable with respect to which goods are placed
                   on consignment, guaranteed sale, "bill and hold" or other
                   terms by reason of which the payment by the account debtor
                   may be conditional until the time, if any, such payment
                   becomes unconditional;

         (vii)     any Government Receivable unless (a) as to United States of
                   America or state Government Receivables or local government
                   Government Receivables with a remaining unpaid balance of
                   $100,000 or more, Borrower fully complies with the federal
                   Assignment of Claims Act or any similar state or local law
                   and Lender has a first-priority perfected security interest
                   in such Government Receivables or (b) as to United States of
                   America or state Government Receivables or local government
                   Government Receivables with a remaining unpaid balance of
                   less than $100,000, Borrower makes a written request to
                   Lender asking Lender to include such Government Receivables
                   as Eligible Accounts Receivable, in which case Lender may
                   determine, in its sole and absolute discretion, that such
                   Government Receivables are Eligible Accounts Receivable if
                   Lender is satisfied that Lender has a first-priority
                   perfected security interest in such Government Receivables by
                   virtue of Borrower's compliance with the federal Assignment
                   of Claims Act or any similar state or local law;

         (viii)    any Account Receivable for which a set-off, defense,
                   warranty, claim, credit, allowance or adjustment is claimed
                   by the account debtor (except normal discount for prompt

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                   payment), or as to which the debtor thereof has complained as
                   to its liability thereon or returned any of the subject
                   goods;

         (ix)      any Account Receivable subject to any Lien or encumbrance
                   other than as permitted hereby;

         (x)       any Account Receivable owing by any Person which is insolvent
                   and/or the subject of any bankruptcy, receivership or other
                   insolvency proceeding;

         (xi)      any Account Receivable from account debtors in any state or
                   jurisdiction where Borrower is not registered or qualified to
                   do business and where such failure to qualify could prevent
                   collection of Accounts Receivable in such state or
                   jurisdiction;

         (xii)     any Account Receivable for which Borrower has established a
                   "reserve" or "sinking fund"; or

         (xiii)    any Account Receivable for which the account debtor has
                   agreed to make incremental or progress payments over the
                   period of time during which Borrower provides goods or
                   services, a portion of which is withheld by the account
                   debtor pending full completion of Borrower's obligations to
                   deliver goods or provide services, but only the extent of
                   such withholding shall not be an Eligible Account Receivable.

         "ELIGIBLE DATED ACCOUNTS" means Eligible Accounts Receivable which
provide for a specific payment date by the account debtor in question.

         "ELIGIBLE INVENTORY" means the Inventory of the Borrower as to which
all manufacturing and assembly processes have been completed and which is ready
for sale and delivery to a customer of the Borrower, and the raw materials
inventory of the Borrower, in each case, valued at the lower of cost or fair
market value in accordance with GAAP on a first-in-first-out basis, (a) to the
extent in Borrower's possession (and, without limiting the foregoing, not in
transit or on consignment), (b) as to which Borrower has valid and marketable
title free and clear of any prior Lien or other encumbrance except Liens to the
Lender, (c) which is not evidenced by any document or instrument, (d) which is
not obsolete or unsalable; and (e) in which Lender has acquired a security
interest.

         "ELIGIBLE UNDATED RECEIVABLES" means Eligible Accounts Receivable as to
which no specific required payment date by the account debtor in question is
specified.

         "ERISA" means the Employment Retirement Income Security Act of 1974 as
amended from time to time.

         "EVENTS OF DEFAULT" has the meaning assigned to that term in SECTION
6.01 of this Agreement.

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         "EXHIBIT" means, when followed by a letter, the exhibit attached to
this Agreement bearing that letter and by such reference fully incorporated in
this Agreement.

         "GAAP" means generally accepted accounting principles, consistently
applied, in effect from time to time in the United States of America.

         "GOVERNMENT RECEIVABLE" means any Account Receivable owing by the
United States of America, any country other then the United States of America,
any state or local government, or any agency, department or instrumentality
thereof.

         "GUARANTOR" means any Person who is, whether upon the execution of this
Loan Agreement or at any time thereafter, a guarantor or surety for the
Borrower's obligations under this Loan Agreement, including without limitation
the Borrower's obligations to repay the Credit Loan and pay all associated
interest, fees and COSTS."INDEBTEDNESS" means, for any Person, without
duplication, (i) all indebtedness or other obligations of said Person for
Borrowed Money or for the deferred purchase price of property or services, (ii)
all indebtedness or other obligations of any other Person ("Other Person") for
Borrowed Money or for the deferred purchase price of property or services, the
payment or collection of which said Person has guaranteed (except by reason of
endorsement of negotiable instruments for collection in the ordinary course of
business) or in respect of which said Person is liable, contingently or
otherwise, including without limitation, liable by way of agreement to purchase
or lease, to provide funds for payment, to supply funds to purchase, sell or
lease property or services primarily to assure a creditor of such Other Person
against loss or otherwise to invest in or make a loan to the Other Person, or
otherwise to assure a creditor of such Other Person against loss, (iii) all
indebtedness or other obligations of any Person for Borrowed Money or for the
deferred purchase price of property or services secured by (or for which the
holder of such indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in any property owned by said Person, whether or
not said Person has assumed or become liable for the payment of such
indebtedness or obligations, (iv) Capitalized Lease Obligations of said Person
and (v) all other liabilities or Obligations of said Person which would, in
accordance with GAAP, be classified as liabilities of such a Person including,
but not limited to, trade payables incurred in the ordinary course of business.

         "INVENTORY" means all of Borrower's Inventory (as defined in the
Uniform Commercial Code of the State), all goods, merchandise or other personal
property held by Borrower for sale or lease or to be furnished under contracts
of service and all right, title and interest of Borrower therein and thereto,
all raw materials, work or goods in process or materials or supplies of every
nature used, consumed or to be used or consumed in Borrower's business, all
packaging and shipping materials, and all proceeds and products of any of the
foregoing (including, without limitation, proceeds consisting of Accounts
Receivable, chattel paper, and insurance proceeds), whether now owned or
hereafter acquired by Borrower, and wherever located.

         "INVESTMENT" means any investment in any Person whether by means of a
purchase of, or any agreement or option to purchase, capital stock, notes,
bonds, debentures or other evidence of equity or Indebtedness and/or by means of
a capital or partnership contribution, loan, deposit,

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advance (or any agreement or option for any of the foregoing) or otherwise.

         "LIBOR" means the rate per annum (rounded upward, if necessary, to the
nearest 1/32 of one percent) as determined on the basis of the offered rates for
deposits in U.S. dollars, for a period of time comparable to the payment period
selected by Borrower in its Request which appears on the Telerate page 3750 as
of 11:00 a.m. London time on the day that is two London Banking Days preceding
the first day of such LIBOR Advance; provided, however, if the rate described
above does not appear on the Telerate System on any applicable interest
determination date, the LIBOR rate shall be the rate (rounded upwards as
described above, if necessary) for deposits in dollars for a period,
substantially equal to the interest period on the Reuters Page "LIBO" (or such
other page as may replace the LIBO Page on that service for the purpose of
displaying such rates), as of 11:00 a.m. (London Time), on the day that is two
(2) London Banking Days prior to the beginning of such interest period. "London
Banking Day" shall mean any date on which commercial banks are open for business
in London.

         If both the Telerate and Reuters system are unavailable, then the rate
for that date will be determined on the basis of the offered rates for deposits
in U.S. dollars for a period of time comparable to such LIBOR Advance which are
offered by four major banks in the London interbank market at approximately
11:00 a.m. London time, on the date that is two (2) London Banking Days
preceding the first day of such LIBOR Advance as selected by the Calculation
Agent. The principal London office of each of the four major London banks will
be requested to provide a quotation of its U.S. dollar deposit offered rate. If
at least two such quotations are provided, the rate for that date will be the
arithmetic mean of the quotations. If fewer than two quotations are provided as
requested, the rate for that date will be determined on the basis of the rates
quoted for loans in U.S. dollars to leading European banks for a period of time
comparable to such LIBOR Advance offered by major banks in New York City at
approximately 11:00 a.m. New York City time, on the day that is two London
Banking Days preceding the first day of such LIBOR Advance. In the event that
Lender is unable to obtain any such quotation as provided above, it will be
deemed that LIBOR cannot be determined and the requested Advance shall bear
interest at the Cost of Funds Rate. In the event that the Board of Governors of
the Federal Reserve System shall impose a Reserve Percentage with respect to
LIBOR deposits of Lender then for any period during which such Reserve
Percentage shall apply, LIBOR shall be equal to the amount determined above
divided by an amount equal to 1 minus the Reserve Percentage.

         "LIBOR ADVANCE" means any Advance for which Borrower selects, in the
applicable Request, the LIBOR Rate as the applicable interest rate.

         "LIBOR RATE" means an annual rate of interest equal to LIBOR for the
30, 60, 90, 120 or 180 day term selected by Borrower in its Request for a
particular Advance, plus three percent (3.00%).

         "LIEN" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other) or other security agreement
or arrangement of any kind or nature whatsoever amounting, in substance, to a
lien (including without limitation any

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conditional sale or other title retention agreement and any Capitalized Lease
Obligation having substantially the same economic effect as any of the
foregoing) or the filing of any financing statement under the applicable Uniform
Commercial Code or comparable law of any jurisdiction in respect of any of the
foregoing.

         "LOAN DOCUMENTS" means this Loan Agreement, the Credit Note, the
Security Instruments and any and all other documents, instruments or agreements
now or hereafter executed in connection herewith or therewith by Borrower and/or
any other Person.

         "MORTGAGED PROPERTY" means any real property mortgaged to secure the
Loan.

         "MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Title IV
of ERISA.

         "OFFICER'S CERTIFICATE" means a certificate signed by the President or
Executive Vice President or the Chief Financial Officer of the Borrower and
delivered to Lender.

         "OTHER LIABLE PARTY" means any Person now or hereafter liable,
absolutely, contingently, directly, indirectly or otherwise for all or any
portion of the obligations of Borrower as set forth herein or referred to
herein, including, without limitation, any Guarantor.

         "OVERADVANCE" means any Advance which is beyond the borrowing formula
limitations set forth in SECTION 2.01(A).

         "OVERLINE ADVANCE" means any Advance beyond the monetary limits set
forth in SECTION 2.01(A).

         "PBGC" means the Pension Benefit Guarantee Corporation established
pursuant to subtitle A of Title 4 of ERISA.

         "P.M." means a time from and including 12 o'clock noon on any Business
Day to the end of such Business Day using Providence, Rhode Island time.

         "PERMITTED TIME" means as to Eligible Undated Receivables, not more
than ninety (90) days from the date of the invoice in question; and as to
Eligible Dated Accounts, the earlier to occur of thirty (30) days beyond the
stated due date of such Eligible Dated Accounts or ninety (90) days beyond the
date of the invoice in question.

         "PERSON" means any person or entity including, but not limited to, any
individual, corporation, partnership, limited liability company, joint venture,
trust, trustee (in such capacity), unincorporated organization, or a government
or any agency or political subdivision thereof.

         "PLAN" means an employee benefit plan or other plan maintained for
employees of the Borrower or any Commonly Controlled Entity and covered by Title
IV of ERISA.

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         "PRIME RATE" means the variable per annum rate of interest so
designated from time to time by Lender 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.

         "PROPERTIES" means any real estate and related appurtenances, fixtures
and rights owned by the Borrower or otherwise occupied (pursuant to a lease or
otherwise) by the Borrower as one or more of its business premises.

         "REGISTERED AGENT" means Dana Gaebe, Esq., Gaebe & Kezirian, 128
Dorrance Street, Providence, Rhode Island 02903.

         "REPAYMENT DATE" means November 15, 2000 (such date, as may be extended
pursuant to SECTION 2.07 being hereinafter referred to as, the "Trigger Date").

         "REPORTABLE EVENT" shall have the meaning assigned to that term in
Title IV of ERISA.

         "REQUEST" means both a telephonic and a telecopied request for an
Advance of the Credit Loan in the form of Exhibit B attached hereto, or
containing the information required by Exhibit B, fully completed, received by
Lender from Borrower in accordance with this Agreement and which request shall
be, if telephonic, promptly confirmed in writing.

         "SAUGATUCK AGREEMENT" means an agreement anticipated to be entered into
by and between Borrower and Saugatuck Capital (a copy of which is to be
furnished to Lender by Borrower as soon as possible) pursuant to which Borrower
will issue Borrower's common stock to Saugatuck Capital in exchange for
Borrower's preferred stock currently held by Saugatuck Capital and Borrower will
issue a note to be subordinated in payment priority by an agreement in form and
substance satisfactory to Lender, to Saugatuck Capital not to exceed $750,000 in
amount representing prior dividends on Borrower's preferred stock which had been
declared but not paid; provided, however, that payments on the foregoing note
shall be payable in three equal installments payable over a period of not less
than two (2) years.

         "SECTION" means, when followed by a number, the section or subsection
of this Agreement bearing that number, unless the context indicates otherwise.

         "SECURITY INSTRUMENTS" means any and all mortgages, security
agreements, assignments, pledges, guarantees, and any and all other documents,
instruments and agreements now or hereafter providing security for the Loan,
and/or any other Indebtedness of the Borrower or any Guarantor to the Lender,
now existing or hereafter executed and/or delivered in connection with the Loan,
whether given by Borrower or any Guarantor, any subordination agreements
contemplated hereunder or now or hereafter executed in connection herewith;
title and casualty insurance policies providing coverage to Lender; UCC-I
financing statements or similar filings perfecting the above-referenced security
interests; all as executed, delivered to and accepted by Lender on or prior to
the Closing Date, as same may be amended in writing by Lender and the Borrower
as the case may be; and any other document, instrument or agreement now or
hereafter given as security for the Loan.

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         "SINGLE EMPLOYER PLAN" means any Plan which is not a Multiemployer
Plan.

         "STATE" means the State of Rhode Island.

         "SUBORDINATED DEBT" means any Indebtedness and obligations of the
Borrower subordinated to Borrower's Indebtedness in connection with the Loans by
virtue of a subordination agreement executed by the subordinated creditor and
Lender, and acceptable to Lender in form and substance.

         "SUBSIDIARY" means any corporation, if any of which more than fifty
percent (50%) of the outstanding capital stock having ordinary voting power to
elect a majority of the board of directors or other managers of such corporation
(irrespective of whether or not at the time capital stock of any other class or
classes of such corporation shall or might have voting power upon the occurrence
of any contingency) is at the time directly or indirectly owned by the Borrower
or its shareholders or by the Borrower, its shareholders and/or one or more
Subsidiaries or the management of which corporation is under control of the
Borrower, its shareholders and/or any other Subsidiary, directly or indirectly
through one or more Persons.

         "VARIABLE ADVANCE" means any Advance for which Borrower selects, in the
applicable Request, the Variable Rate as the applicable interest rate.

         "VARIABLE RATE" means an annual rate of interest equal to the Prime
Rate plus one-quarter of one percent (.25%).

         "YIELD MAINTENANCE FEE" means the 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
maturity date of the term chosen pursuant to the Request for the LIBOR Advance
as to which the prepayment is made, shall be subtracted from the "cost of funds"
component of the fixed rate 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 in the Request for the LIBOR Advance as to which the prepayment is made.
Said amount shall be reduced to present value calculated by using the number of
days remaining in the designated term and using the above-referenced United
States Treasury security rate and the number of days remaining in the term
chosen in the Request for the LIBOR Advance as to which the prepayment is made.
The resulting number shall be the yield maintenance fee due to Lender upon
prepayment of the fixed rate loan.

         If by reason of an Event of Default, Lender elects to declare any LIBOR
Advance to be immediately due and payable, then any Yield Maintenance Fee with
respect to that LIBOR Advance shall become due and payable in the same manner as
though Borrower had exercised its right of prepayment.

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         SECTION 1.02. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, and all financial
data submitted pursuant to this Agreement shall be prepared in accordance with
GAAP.

         SECTION 1.03. TERMS. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.

         SECTION 1.04. SUBSIDIARIES, AFFILIATES AND GUARANTOR. This Loan
Agreement contains references to "Subsidiaries". As of the date hereof, the
Borrower has no Subsidiaries. Each reference to Subsidiaries herein shall be
without meaning unless, until and during such time as such Subsidiary exists.
Nothing contained in this SECTION 1.04 shall be deemed to permit the creation,
acquisition, existence, sale, merger, dissolution, liquidation, termination of
existence or other action of or relating to any Subsidiary which would otherwise
violate the provisions of this Loan Agreement.

                                   ARTICLE II
                          AMOUNT AND TERMS OF THE LOANS

         SECTION 2.01.

         (A) UNDERTAKING TO LEND--CREDIT LOAN. During the period commencing on
the Closing Date and ending on the Business Day immediately prior to the
Repayment Date, Lender will make Advances to the Borrower of the Credit Loan on
a revolving basis subject in all respects to the terms and conditions of this
Agreement, including, but not limited to, the conditions precedent described in
Article III hereof; provided, however, the aggregate outstanding principal
balance of Advances shall not in any event exceed at any one time the Credit
Limit, which is defined as the lesser of (i) the sum of eighty percent (80%) of
Eligible Dated Accounts Receivable and eighty percent (80%) of Eligible Undated
Accounts Receivable or (ii) One Million Dollars ($1,000,000).

         The Credit Limit shall further be reduced by the amount of any letters
of credit issued and outstanding from time to time by Lender which have been
issued at the request of Borrower.

         Notwithstanding anything to the contrary set forth in this SECTION
2.01, Lender shall have the right, in its sole and uncontrolled discretion to
permit Overline Advances or additional Overadvances as Lender shall in its sole
and uncontrolled discretion deem appropriate. Lender shall have no obligation
whatsoever to permit such Overline Advances or additional Overadvances. In the
event that Lender does so permit such Overline Advances or additional
Overadvances, any such Advances shall be subject to all terms and conditions of
the Loan Documents and the obligation to repay such Advances shall be evidenced
by the Note, notwithstanding that (in the case of Overline Advances), under
certain circumstances, the outstanding principal balance of the Loan may exceed
the stated principal balance of the Note.

         (B) TERMINATION OF UNDERTAKING TO LEND. Notwithstanding anything to the
contrary

<PAGE>

set forth in this Agreement, and except as set forth in SECTION 2.07, Lender's
undertaking to make Advances shall terminate immediately on the Trigger Date or
at any time if there shall have occurred or there shall exist any Default
Condition.

         (C) REQUESTS FOR ADVANCES. The Borrower shall obtain an Advance with a
written Request by telecopy transmission in the form of Exhibit "B" attached
hereto, or, if permitted by Lender, by telephonic Request. Any request for an
Advance made by Borrower shall be in an amount which is an integral multiple of
one thousand dollars ($1,000.00). Borrower shall state in each and every Request
whether Borrower is selecting the Variable Rate or LIBOR Rate for such Advance
and, if Borrower selects the LIBOR Rate, Borrower must also choose a thirty
(30), sixty (60), ninety (90), one hundred twenty (120) or one hundred eighty
(180) day payment term for such Advance. The Borrower accepts all the risks
inherent in such Request. The Borrower further absolves the Lender from any and
all damages, loss and liabilities of whatsoever nature which may result from an
unauthorized telephonic or telecopied Request for an Advance, a defective
transmission, or a telephonic or telecopied Request which is misunderstood by
the Lender's employee who is the recipient of such Request, unless the Lender is
grossly negligent or commits willful misconduct in connection therewith. It is
further agreed that neither the Lender nor any of its directors, officers or
employees shall be under any duty to pass upon the validity, accuracy,
authorization, effectiveness, or genuineness of any telephonic or telecopied
Request, and the Lender and its directors, officers and employees shall be
entitled to assume that any such telephonic or telecopied instructions are
valid, effective, accurate, genuine and authorized. The Borrower will forward to
Lender "hard copy" written evidence of such Request by mailing on the same day
an original letter in form acceptable to Lender.

         (D) EVIDENCE OF THE LOAN. Each Advance made by Lender to Borrower under
this SECTION 2 and all payments made on account of the unpaid principal amount
thereof shall be recorded in Lender's internal records which may be introduced
in evidence in any court proceeding relating to this Agreement, the Loan or the
Note and shall be deemed presumptive evidence of the facts stated therein,
absent manifest error.

         SECTION 2.02. AUTOMATIC DEBIT. All payments, prepayments and other
charges to be made by Borrower under the Loans may be made by Lender by debiting
the demand deposit or other account(s) Borrower maintains with Lender without
notice to or consent of Borrower, or in such other reasonable manner as may be
designated by the Lender in writing to the Borrower. Nothing contained in this
SECTION 2.02 shall be deemed to relieve Borrower of the obligation to make
payments as required under the Note, which obligation is absolute.

         (A) INTEREST. Interest shall accrue and be paid on the Loan as provided
below and as further detailed in the Note:

         (i)       any Variable Advance shall bear interest at the Variable
                   Rate; and

         (ii)      any LIBOR Advance shall bear interest at the LIBOR Rate for
                   the applicable payment period which Borrower designates in
                   its Request for such LIBOR

<PAGE>

Advance.

         All computations of interest under the Credit Note and this Loan
Agreement shall be made on the basis of a three hundred sixty (360) day year and
the actual number of days elapsed.

         Upon Default or after maturity or after judgment has been rendered on
the Credit Note, or in the Event of Default as defined in Section 6.01 of the
Loan Agreement, Borrower's right to select pricing options shall cease and the
unpaid principal of all advances shall, at the option of the Lender, bear
interest at a rate which is four percent (4%) greater per annum than that which
would otherwise be applicable.

         (B) INCREASED COSTS - CAPITAL. If, after the date hereof, Lender shall
have reasonably determined that the adoption of any applicable law, governmental
rule, regulation or order regarding capital adequacy of banks or bank holding
companies, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by Lender with any policy, guideline, directive or request regarding capital
adequacy (whether or not having the force of law and whether or not failure to
comply therewith would be unlawful) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on the capital of Lender as a consequence of the obligations hereunder of Lender
to a level below that which Lender could have achieved but for such adoption,
change or compliance (taking into consideration the policies of Lender with
respect to capital adequacy immediately before such adoption, change or
compliance and assuming that the capital of Lender was fully utilized prior to
such adoption, change or compliance) by an amount reasonably deemed by Lender to
be material, the Borrower shall pay to Lender such additional amounts as shall
be sufficient to compensate Lender for such reduced return, each such payment to
be made by the Borrower within thirty (30) Business Days after each demand by
Lender. A certificate of Lender setting forth the amount to be paid to Lender
hereunder shall be presumptive evidence of the facts stated therein. In
determining such amount, Lender may use any reasonable averaging and attribution
methods. At the written request of Borrower, Lender shall provide Borrower with
a written explanation of the methods used in calculating such amount. Lender
will use its best efforts to inform the Borrower of any event occurring after
the date hereof which will require payments to be made under this SECTION
2.03(B) promptly after Lender becomes aware of such event, but the failure of
Lender so to inform the Borrower shall not affect any of the obligations of the
Borrower hereunder. Notwithstanding the foregoing provisions of this SECTION
2.03(B), the Borrower shall not be liable for any amounts relating to any
reduction of rate of return occurring more than ninety (90) days prior to
Borrower's receipt of written notice thereof from the Lender and shall not be
liable for any amount relating to any reduction of rate of return occurring in a
prior Borrower fiscal year.

         (C) LIMITATION ON INTEREST RATE. If there is a maximum limit imposed by
applicable law and such limit is applicable to this transaction, then in no
event, whether by reason of acceleration of maturity of the Indebtedness
evidenced hereby, by the Credit Note or otherwise, shall the amount paid or
agreed to be paid to Lender hereunder and deemed interest under applicable law
exceed the maximum rate of interest on the unpaid principal balance of the
Credit

<PAGE>

Note allowed by applicable law (the "Maximum Allowable Rate"), which shall mean
the law in effect on the date of the Note, except that if there is a change in
such law which results in a higher Maximum Allowable Rate being applicable to
the Note, then the Note shall be governed by such amended law from and after its
effective date. In the event that fulfillment of any provision of the Note, this
Agreement or the Security Instruments results in the interest rate under the
Credit Note being in excess of the Maximum Allowable Rate, the interest
obligation to be fulfilled shall automatically be reduced to eliminate such
excess. If, notwithstanding the foregoing, Lender or any successor holder of the
Credit Note receives an amount which under applicable law would cause the
interest rate under the Credit Note to exceed the Maximum Allowable Rate, the
portion thereof which would be excessive shall automatically be applied to and
be deemed a prepayment of the unpaid principal balance of, and other outstanding
non-interest charges under, the Credit Note, this Agreement and the Security
Instruments, and not a payment of interest.

         SECTION 2.04.     PAYMENTS AND PREPAYMENTS.

         (A) All or any portion of the unpaid principal balance of any Variable
Advance may be prepaid at any time, without premium or penalty of any kind. All
or any portion of the unpaid principal balance of any LIBOR Advance may be
prepaid at any time provided, however, that Borrower must also pay the Yield
Maintenance Fee associated with that LIBOR Advance or portion of LIBOR Advance
which is being prepaid.

         (B) All payments and prepayments of principal, fees, interest and any
other amounts owed from time to time under this Agreement and/or under the Note
shall be made to Lender at the address referred to in SECTION 8.07 in Dollars
and in immediately available funds prior to 1:00 o'clock P.M. (12:00 o'clock
P.M. on the last Business Day of each month) on the Business Day that such
payment is due provided that the Borrower hereby authorizes and instructs Lender
to charge against the Borrower's accounts, if any, with Lender on each date on
which a payment is due hereunder and under the Note an amount up to the
principal, interest and fees due and payable to the Lender hereunder and under
the Note and such charge shall be deemed payment hereunder and under the Note to
the extent that immediately available funds are then in such accounts. In
addition, the Borrower hereby irrevocably authorizes Lender, if and to the
extent payment of any installment of principal, interest and/or fees hereunder
and/or under the Note is not made when due, to charge against the Borrower's
accounts, if any, with Lender, an amount equal to the amount thereof not paid
when due. Any such payment or prepayment which is received by Lender in Dollars
and in immediately available funds after 1 o'clock P.M. on a Business Day (12
o'clock P.M. on the last Business Day of each month) shall be deemed received
for all purposes of this Agreement on the next succeeding Business Day except
that solely for the purpose of determining whether a Default Condition exists,
any such payment or prepayment if received by Lender prior to the close of
Lender's business on a Business Day shall be deemed received on such Business
Day. If the entire amount of any required principal and/or interest is not paid
in full within ten (10) days after the same is due, Borrower shall pay to the
Lender a late fee equal to five percent (5%) of the required payment.

<PAGE>

         (C) UNCONDITIONAL OBLIGATIONS AND NO DEDUCTIONS. The Borrower's
obligation to make all payments provided for in this Agreement and/or the Note
shall be unconditional. Each such payment shall be made without deduction for
any claim, defense or offset of any type, including, without limitation, any
withholdings and other deductions on account of income or other taxes and
regardless of whether any claims, defenses or offsets of any type exist.

         (D) (Intentionally Omitted).

         (E) PAYMENTS AND COLLECTIONS. (i) Borrower will cause its account
debtors for all Accounts Receivable to pay directly to a lock box controlled by
Lender, all checks, drafts, cash and other remittances that are proceeds of
Accounts Receivable. The Lender will credit all such payments (conditional upon
final collection) against principal, interest and other charges due in
connection with the Loan in such order as Lender shall determine.

         (ii)      Amounts shall be credited to the Loan as aforesaid on the
                   second business day following receipt of any item by Lender
                   at its main office.

         (iii)     Any check or any item received without endorsement shall be
                   deemed delivered and endorsed to Lender and Lender shall be
                   entitled to endorse such check on behalf of Borrower to
                   Lender pursuant to the power-of-attorney granted under
                   SECTION 8.03 hereof.

         SECTION 2.05. SETOFF. Borrower and any Guarantor hereby grant to Lender
a lien, security interest and right of setoff as security for all liabilities
and obligations to Lender, whether now existing or hereafter arising, and
whether existing under this Loan Agreement, the Credit Note or otherwise, upon
and against all deposits, credits, collateral and property, now or hereafter in
the possession, custody, safekeeping or control of Lender or any entity under
the control of Fleet Financial Group, Inc., or in transit to any of them. At any
time, without demand or notice, Lender may set off the same or any part thereof
and apply the same to any liability or obligation of Borrower and any Guarantor
even though unmatured and regardless of the adequacy of any other collateral
securing the Credit Loan. ANY AND ALL RIGHTS TO REQUIRE LENDER TO EXERCISE ITS
RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE CREDIT
LOAN, PRIOR TO EXERCISING ITS RIGHT TO SETOFF WITH RESPECT TO SUCH DEPOSITS,
CREDITS OR OTHER PROPERTY OF THE BORROWER OR ANY GUARANTOR, ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED. Lender agrees to promptly notify
the Borrower after any such setoff and application; provided that the failure to
give such notice shall not affect the validity of such setoff and application.
The rights of Lender under this SECTION 2.05 are in addition to all other rights
and remedies (including, without limitation, other rights of setoff) which
Lender may have.

         SECTION 2.06. USE OF CREDIT LOAN PROCEEDS. The proceeds of the Credit
Loan and all Advances thereunder shall be used for working capital needs of the
Borrower and/or to secure the repayment of letters of credit issued by Lender at
Borrower's request and for no other purposes whatsoever without the prior
written consent of Lender.

<PAGE>

         SECTION 2.07. RENEWAL. The Credit Note provides that it is payable on
the Repayment Date, which is November 15, 2000. Borrower recognizes and agrees
that all principal, interest and other charges due under the Credit Note shall
be payable in full on the Trigger Date, unless Lender, in its sole discretion
and in writing, elects not to exercise its repayment on the Trigger Date, in
which case the Trigger Date shall be extended for an additional period of one
(1) year. Any such extension of the Credit Note hereafter granted shall not be
deemed to establish a course of conduct or any obligation on the part of Lender
to extend the commitment for any additional periods.

         SECTION 2.08. PAYMENT FEES. Borrower shall pay the following fees in
connection with the Loan, payment of such fees to be secured by the Security
Instruments:

         a.        the Commitment Fee.

                                   ARTICLE III
                              CONDITIONS OF LENDING

         SECTION 3.01. CONDITIONS PRECEDENT TO THE CREDIT. The obligation of
Lender to make any and all Advances is subject to performance by the Borrower of
all of its obligations under this Agreement and the Security Instruments and to
the satisfaction of the conditions precedent that all legal matters incident to
the transactions contemplated hereby or incidental to the Loan or any Advance
shall be satisfactory to counsel for Lender and Lender shall have received on or
before the Closing Date or another date acceptable to Lender, fully executed
originals of the Note, this Agreement, the Security Instruments, such other
documents, instruments, agreements and information as Lender shall require
incident to the closing of the Loan including, but not limited to, the
following:

         (a)       Certificates from the secretary or assistant secretary of the
                   Borrower certifying as to the resolutions and/or consent
                   votes of the board of directors, shareholders and/or partners
                   of the Person in question (or other parties whose approval is
                   required) authorizing and approving those Loan Documents to
                   which such Person is a party and other matters contemplated
                   hereby and certifying as to the names and signatures of each
                   Person authorized to sign each Loan Document to be executed
                   and delivered by or on behalf of the Person. Lender may
                   conclusively rely on each such certificate until Lender shall
                   receive a subsequent certificate with respect to such Person
                   canceling or amending the prior certificate and submitting
                   the signatures of the officers named in such subsequent
                   certificate;

         (b)       Favorable opinions of counsel for the Borrower and each
                   Guarantor, reasonably acceptable to Lender and Lender's
                   counsel, as Lender shall require;

         (c)       Certificates (if issued by such authority) of the Secretary
                   of State or analogous governmental authority of each state or
                   nation in which the Borrower is

<PAGE>

                   incorporated or is required to be qualified to transact
                   business, dated reasonably near the Closing Date, stating
                   that the Borrower is duly organized or qualified and in good
                   standing as a corporation in such state or nation except for
                   those states in which Borrower's failure to qualify to
                   transact business would not have a material adverse effect on
                   Borrower or its finances and operations;

         (d)       A Request;

         (e)       All documents, instruments and agreements necessary to
                   terminate, cancel or discharge the documents, instruments and
                   agreements evidencing or securing any and all existing
                   Indebtedness for Borrowed Money of the Borrower, including,
                   without limitation, Borrower's Indebtedness with Prinvest,
                   other than as permitted by this Agreement;

         (f)       If requested by Lender, an Officer's Certificate in form
                   acceptable to Lender reflecting, the Borrower's compliance,
                   after giving effect to the Advance being requested, with the
                   financial covenants provided for herein as of the date of
                   Lender's request;

         (g)       True copies of any revisions to the financial statements,
                   forecasts and other information provided pursuant to this
                   Agreement;

         (h)       Current fire and extended coverage insurance policies (or
                   certificates thereof on ACCORD Form 27) in form and substance
                   and with coverage satisfactory to Lender including, without
                   limitation, that each such policy shall name Lender, as
                   mortgagee and/or loss payee, copies of liability policies
                   also in form and substance and with coverages satisfactory to
                   Lender including, without limitation, that each such policy
                   shall name Lender as additional insured, all in accordance
                   with the Security Instruments and evidence of such other
                   insurance as may be required by Lender (received by Lender as
                   of Closing Date);

         (i)       Borrower's confirmation, in form and substance satisfactory
                   to Lender, that Borrower's litigation with the State of
                   Hawaii has been settled, including provision of a true and
                   correct copy of an original, fully executed and binding
                   settlement agreement which has received any and all necessary
                   court approval; and

         (j)       Such other documents, instruments, agreements and information
                   relating to Borrower, its operations, any of the Properties
                   or any collateral as Lender shall reasonably request or as
                   are specified in a closing agenda furnished to Borrower's
                   Counsel by Lender in connection with the Loan Documents.

         (B) The obligation of Lender to make the Loan and each Advance is
subject to Borrower's performance of all of its obligations under this Agreement
and satisfaction of the

<PAGE>

following further conditions precedent:

         (a)       Immediately prior to and upon the making of each Advance, no
                   Event of Default or Default shall have occurred and be
                   continuing;

         (b)       The representations and warranties of the Borrower contained
                   in Article IV below are true and correct in all material
                   respects on and as of the date of each Advance except as such
                   representations and warranties may be altered as permitted by
                   the terms of this Loan Agreement . The Borrower's delivery of
                   the Credit Note to Lender and each of the Borrower's Requests
                   shall be deemed to be a representation and warranty by the
                   Borrower as of the date of such Advance as to the facts
                   specified in SECTION 3.01(B)(a) AND (b) and a restatement of
                   the representations and warranties contained in Article IV
                   below as of such date;

         (c)       Receipt by Lender of a Request delivered by a duly authorized
                   officer of the Borrower on behalf of the Borrower, stating
                   the amount of the Advance requested, whether the Advance will
                   be a Variable Advance or LIBOR Advance and, if a LIBOR
                   Advance, whether Borrower selects a thirty (30), sixty (60),
                   ninety (90), one hundred twenty (120) or one hundred eighty
                   (180) day payment period ; and

         (d)       That there exists no law or regulation by any governmental
                   authority having jurisdiction over Lender or Borrower which
                   would make it unlawful in any respect for Lender to fund such
                   portion of the Loan and there has been no material adverse
                   change to the financial condition or business of the Borrower
                   or the Guarantor.

                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES

         SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants to Lender that, after giving effect to the Loan
(or any Advance) and the application of the proceeds thereof (which
representations and warranties shall survive the making of the Loan) as follows:

         (A) ORGANIZATION AND EXISTENCE. Borrower and each Subsidiary is duly
organized, validly existing and in good standing under the laws of the state or
country or other jurisdiction of its incorporation or creation, is duly
qualified to do business and is in good standing in any state where such
qualification is required, except in those states in which Borrower's failure to
be qualified to do business would not have a material adverse effect on Borrower
or its finances or operations, and has all requisite power and authority to
conduct its business, to own its properties and to execute and deliver, and to
perform all of its obligations under this Agreement, the Security Instruments
and the Credit Note.

         (B) AUTHORIZATION AND ABSENCE OF DEFAULTS. The execution, delivery to
Lender and

<PAGE>

performance by the Borrower of this Agreement, the Security Instruments and the
Credit Note have been duly authorized by all necessary corporate action of
Borrower and governmental action and do not and will not: (i) require any
consent or approval of the shareholders or board of directors of the Borrower
which has not been obtained, (ii) violate any provision of any law, rule,
regulation of any governmental authority having jurisdiction (including, without
limitation, Regulations G, T, U, or X of the Board of Governors of the Federal
Reserve System), order, writ, judgment, injunction, decree, determination or
award presently in effect having applicability to the Borrower, any Subsidiary
or any Guarantor and/or the articles of incorporation or by-laws, or other
organizational documents of the Borrower, any Subsidiary or any Guarantor, (iii)
result in a breach of or constitute a default under any indenture or loan or
credit agreement or any other agreement, lease or instrument to which the
Borrower, any Subsidiary or any Guarantor is or are a party or parties or by
which it or they or its or their properties may be bound or affected; or (iv)
result in, or require, the creation or imposition of any Lien on any of its or
their respective properties. The Borrower, each Subsidiary and each Guarantor is
in compliance with each applicable law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award and any such indenture, agreement,
lease or instrument, except where the failure to be in compliance would not have
a material adverse effect on the Borrower, any Subsidiary and/or any Guarantor.

         (C) ACQUISITION OF CONSENTS. No authorization, consent, approval,
license, exemption of or filing or registration with any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, other than those which have been obtained, is or will be necessary to
the valid execution and delivery to Lender or performance by the Borrower, any
Subsidiary or any Guarantor of any of the Loan Documents.

         (D) VALIDITY AND ENFORCEABILITY. This Agreement and the Credit Note
constitute, and each of the Security Instruments to which the Borrower is a
party will constitute the legal, valid and binding obligations of the Borrower
or any Guarantor, enforceable in accordance with their respective terms and each
other document, instrument and agreement referred to in this Agreement to which
the Borrower or any Guarantor is a party is similarly legal, valid, binding and
enforceable against Borrower or any Guarantor party thereto; provided that the
enforceability of the documents, instruments and agreements referred to above is
subject to applicable bankruptcy or other laws affecting creditors rights
generally and general principles of equity.

         (E) FINANCIAL INFORMATION. Each of the financial statements and other
financial information and supporting schedules and data delivered to Lender in
connection with the application for and closing of the Loan was prepared in
accordance with GAAP applied on a consistent basis and fairly presents the
financial condition and results of operations for the companies being reported
on as of the date thereof and is complete and correct in all material respects.

         (F) NO LITIGATION. There are no actions, suits or proceedings pending
or, to the knowledge of the Borrower, threatened against or affecting the
Borrower, any Subsidiary or Affiliate and/or any Guarantor or any of their
properties before any court or governmental

<PAGE>

department, commission, board, bureau, agency or instrumentality, domestic or
foreign, which if determined adversely would draw into question the legal
existence of the Borrower, or any such Guarantor and/or the validity,
authorization and/or enforceability of this Agreement, any of the Security
Instruments, or Credit Note or any provision thereof; or could have a material
adverse effect on the financial condition, properties, or operations of the
Borrower or any Guarantor.

         (G) REGULATION U. Neither the Borrower, any Subsidiary or Affiliate nor
any Guarantor is engaged in the business of extending credit for the purpose of
purchasing or carrying "margin stock" within the meaning of Regulation U of the
Board of Governors of the Federal Reserve System (12 CFR, Part 221), or has any
present intention of acquiring any such margin stock or a "margin security"
within the meaning of Regulation G of the Board of Governors of the Federal
Reserve System (12 CFR, Part 207). None of the proceeds of the Loan will be used
directly or indirectly for the purpose of purchasing or carrying, or for the
purpose of reducing or retiring any Indebtedness which was originally incurred
to purchase or carry, any such margin security or margin stock or for any other
purpose which might constitute the transaction contemplated hereby a "purpose
credit" within the meaning of said Regulation G or Regulation U, or cause this
Agreement to violate any other regulation of the Board of Governors of the
Federal Reserve System or the Securities and Exchange Act of 1934, as amended,
or any rules or regulations promulgated under either said statute.

         (H) ABSENCE OF ADVERSE AGREEMENTS. Neither the Borrower, any Subsidiary
or Affiliate, nor any Guarantor is a party to any indenture, loan or credit
agreement or any lease or other agreement or instrument or subject to any
corporate restriction which would have a material adverse effect on the
business, properties, assets, operations or condition, financial or otherwise,
of the Borrower and/or any Guarantor or on the ability of the Borrower to carry
out its obligations under this Agreement, the Security Instruments or the Credit
Note.

         (I) TAXES. The Borrower (and all Subsidiaries and Affiliates) and each
Guarantor have filed all tax returns (federal, state and local) required to be
filed and paid all taxes shown thereon to be due, including interest and
penalties, or provided adequate reserves for payment thereof.

         (J) ERISA. Borrower and any commonly Controlled Entity do not maintain
or contribute to any Single Employer Plan which is not in substantial compliance
with ERISA and Title X of the Consolidated Omnibus Budget Reconciliation Act of
1986, as amended, or which has incurred any accumulated funding deficiency
within the meaning of Section 412 of the Code, or which has applied for or
obtained a waiver from the Internal Revenue Service of any minimum funding
requirement under Section 412 of the Code. Borrower and any Commonly Controlled
Entity have not incurred any liability to the PBGC in connection with any Plan
covering any employees of Borrower or any Commonly Controlled Entity in amount
exceeding Fifty Thousand and 00/100

<PAGE>

Dollars ($50,000.00) in the aggregate or ceased operations at any facility or
withdrawn from any Plan in a manner which could subject any of them to liability
under Section 4062(e), 4063 or 4064 of ERISA in amount exceeding Fifty Thousand
and 00/100 Dollars ($50,000.00) in the aggregate, and know of no fact or
circumstance which might give rise to any liability of Borrower or any Commonly
Controlled Entity to the PBGC under Title IV of ERISA in amount exceeding Fifty
Thousand and 00/100 Dollars ($50,000.00) in the aggregate. Borrower and any
Commonly Controlled Entity have not incurred any withdrawal liability in amount
exceeding Fifty Thousand and 00/100 Dollars ($50,000.00) in the aggregate
(including, but not limited, to any contingent or secondary withdrawal
liability) within the meaning of Sections 4201 and 4202 of ERISA to any
Multiemployer Plan and no event has occurred and there exists no condition or
set of circumstances, which presents a risk of the occurrence of any withdrawal
from or the partition, termination, reorganization or insolvency of any
Multiemployer Plan which could result in any liability to a Multiemployer Plan
in amount exceeding Fifty Thousand and 00/100 Dollars ($50,000.00) in the
aggregate.

         Full payment has been made of all amounts which Borrower and any
Commonly Controlled Entity are required to have paid as contributions to any
Plan under applicable law or under any Plan or any agreement relating to any
Plan to which Borrower or any Commonly Controlled Entity is a party. Borrower
and each Commonly Controlled Entity have made adequate provision for reserves to
meet contributions that have not been made because they are not yet due under
the terms of any Plan or related agreements.

         Neither Borrower nor any Commonly Controlled Entity has any knowledge,
nor do any of them have any reason to believe that any Reportable Event which
could result in a liability or liabilities of Fifty Thousand and 00/100 Dollars
($50,000.00) or more in the aggregate has occurred with respect to any Plan.

         (K) OWNERSHIP OF PROPERTIES. The Borrower owns all of its properties
and assets free and clear of all Liens, except those shown in the title policies
or UCC-11 or similar reports delivered to Lender in connection with the closing
of the Loan or any Advance and except for those permitted by SECTION 5.02(A).

         (L) ACCURACY OF REPRESENTATIONS AND WARRANTIES. None of the
representations or warranties set forth in this Agreement or in any document or
certificate furnished pursuant to this Agreement or in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary to make any statement of fact
contained herein or therein, in light of the circumstances under which it was
made, not misleading; except that unless provided otherwise, any such document
or certificate which is dated speaks as of the date stated and not the date
hereof.

         (M) NO INVESTMENT COMPANY. Neither the Borrower, any Guarantor nor any
Subsidiary is an "investment company" or to the best of their knowledge, a
company "controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.

         (N) SOLVENCY, ETC. After giving effect to the consummation of the loans
outstanding and to be made under this Agreement as of each time this
representation and warranty is given,

<PAGE>

the Borrower: (a) will be able to pay its debts as they become due, (b) will
have funds and capital sufficient to carry on its business and all businesses in
which it is about to engage, and (c) will own property having a value both at
fair valuation and at fair salable value in the ordinary course of the
Borrower's business greater than the amount required to pay its Indebtedness,
including for this purpose unliquidated and disputed claims. Borrower will not
be rendered insolvent by the execution and delivery of this Agreement, the Notes
or the Security Instruments and the consummation of any transactions
contemplated herein.

         (O) LICENSES, REGISTRATIONS, COMPLIANCE WITH LAWS, ETC. Each Borrower
and Subsidiary has all permits, governmental licenses, registrations and
approvals material to carrying out their respective businesses as presently
conducted and as required by law or the rules and regulations or any federal,
foreign governmental, state, county or local association, corporation or
governmental agency, body, instrumentality or commission having jurisdiction
over the Borrower or any Subsidiary, including, but not limited to, the United
States Environmental Protection Agency, the United States Department of Labor,
the United States Occupational Safety and Health Administration, the United
States Equal Employment Opportunity Commission and analogous and related state
and foreign agencies, except where failure to have such permits, license,
registrations and approvals would not have a material adverse effect on
Borrower. There is no violation or failure of compliance or allegation of such
violation or failure of compliance on the part of the Borrower with any of the
foregoing permits, licenses, registrations, approvals, rules or regulations and
there is no action, proceeding or investigation pending or to the knowledge of
the Borrower threatened nor has the Borrower received any notice of such which
might result in the termination or suspension of any such permit, license,
registration or approval, except with respect to such permits, licenses,
registrations and approvals the violation, failure of compliance, termination or
suspension of which would not have a material adverse effect on the Borrower.

         (P) PRINCIPAL PLACE OF BUSINESS: BOOKS AND RECORDS. The Borrower's
principal place of business and chief executive office is 475 Kilvert Street,
Warwick, Rhode Island 02806. All of the Borrower's books and records are kept at
such location.

         (Q) SUBSIDIARIES. The Borrower has no Subsidiaries.

                                    ARTICLE V
                            COVENANTS OF THE BORROWER

         SECTION 5.01. AFFIRMATIVE COVENANTS OF THE BORROWER OTHER THAN
REPORTING REQUIREMENTS. From the date hereof and thereafter for so long as any
portion of the Loan is outstanding, or the Borrower is indebted to Lender under
the Note, any of the Security Instruments and/or this Agreement, the Borrower
will (unless Lender shall otherwise consent in writing):

         (A) PAYMENT OF TAXES, ETC. Pay and discharge all taxes and assessments
and governmental charges or levies imposed upon it or upon its income or
profits, or upon any

<PAGE>

properties belonging to it, prior to the date on which penalties attach thereto,
and all lawful claims for the same which, if unpaid, might become a Lien upon
any of its properties, provided that (unless and until foreclosure, restraint,
sale or any similar proceeding shall have been commenced) the Borrower shall not
be required to pay any such tax, assessment, charge, levy or claim which is
being contested in good faith and by proper proceedings and for which proper
reserve acceptable to Lender or other provision has been made in accordance with
GAAP.

         (B) MAINTENANCE OF INSURANCE. Maintain insurance in accordance with the
Security Instruments and, to the extent not covered by any of the Security
Instruments, with responsible and reputable insurance companies or associations
in such amounts and covering such risks as are usually carried by companies
engaged in similar businesses and owning similar properties and in accordance
with the requirements of any governmental agency having jurisdiction. The
Borrower shall provide Lender with such evidence as Lender may request from time
to time as to the maintenance of all such insurance.

         (C) PRESERVATION OF EXISTENCE, ETC. Preserve and maintain in full force
and effect its corporate existence, rights, franchises and privileges in the
jurisdiction of its organization, preserve and maintain all licenses,
governmental approvals, trademarks, patents, trade secrets, copyrights and trade
names owned or possessed by it and which are necessary or, in its reasonable
business judgment, desirable in view of its business and operations or the
ownership of its properties.

         (D) COMPLIANCE WITH LAWS, ETC. Comply with the requirements of all
present and future applicable laws, rules, regulations and orders of any
governmental authority having jurisdiction over it and/or its business, except
where the failure to comply would not have a material adverse effect on the
Borrower or any Subsidiary.

         (E) VISITATION RIGHTS. Permit, during normal business hours, Lender or
any agents or representatives thereof, to examine and make copies of and
abstracts from the records and books of account of, and visit the properties of
the Borrower or any Subsidiary to discuss the affairs, finances and accounts of
the Borrower or any Subsidiary with any of its officers or employees and/or any
independent certified public accountant of the Borrower or any Subsidiary.
Without limiting the generality of the foregoing, Lender may, at its option,
conduct audits and field examination reviews on the books and records of
Borrower not to exceed four (4) times annually and more often after a Default
Condition if reasonably required by Lender, with the cost of all such
examinations and related expenses to be borne by Borrower at a maximum of $300
per inspection or such greater amount as shall be charged to Lender's other
similarly situated borrowers in the ordinary course of Lender's business.

         (F) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Keep adequate records and
books of account, in which complete entries will be made in accordance with GAAP
and with applicable requirements of any governmental authority having
jurisdiction, reflecting all financial transactions.

<PAGE>

         (G) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve all of their
properties necessary or useful in the proper conduct of its business, in good
working order and condition, ordinary wear and tear excepted, and in accordance
with each of the Security Instruments.

         (H) ACCOUNTING SYSTEM. Maintain a standard system of accounting in
accordance with GAAP and in accordance with the requirements of any governmental
authority having jurisdiction over the borrower.

         (I) OTHER DOCUMENTS, ETC. Pay, perform and fulfill all of its
obligations and covenants under each of the Security Instruments and any other
material document, instrument or agreement to which it is a party in accordance
with their respective terms, giving effect to any grace periods therein
specified unless such payment, performance or fulfillment would not be permitted
hereunder; provided, that with respect to documents, instruments and agreements
other than documents with or in favor of Lender, so long as Borrower is
contesting in good faith any alleged failure to pay, perform and fulfill such
obligations and covenants by proper proceedings and has made any proper reserve
or other provision in accordance with GAAP on account thereof and such alleged
failure has not resulted in any material adverse effect on Borrower any
Guarantor or any subsidiary and/or on Lender's interests under this Agreement,
the Credit Note and/or the Security Instruments, Borrower shall not be deemed in
violation of this SECTION 5.01(I).

         (J) OFFICER'S CERTIFICATES AND REQUESTS Provide each Officer's
Certificate required under this Agreement and each Request so that the
statements contained therein are accurate and complete in all material respects.

         (K) DEPOSITORY. Use Lender, or a bank designated by Lender, as the
principal depository of Borrower's funds.

         (L) CHIEF EXECUTIVE OFFICER. Maintain Kenneth Kirsch as chief executive
officer.

         (M) ADDITIONAL ASSURANCES. From time to time hereafter, execute and
deliver or cause to be executed and delivered, such certificate and documents
and take all such actions as Lender shall reasonably request for the purpose of
implementing or effectuating the provisions of the Loan Documents, and upon the
exercise by Lender of any power, right, privilege or remedy pursuant to the Loan
Documents which requires any consent, approval, registration, qualification or
authorization of any governmental authority or instrumentality, exercise and
deliver all applications, certifications, instruments and other documents and
papers that Lender may be so required to obtain.

         (N) FINANCIAL COVENANTS. (i) maintain a Ratio of Cash Flow plus taxes
actually paid to Debt Service tested quarterly with the first test done as of
December 31, 1999 for the quarter then ended, of not less than 1.25 to 1.00; and

         (ii)     maintain a ratio of Indebtedness (other than Subordinated
                  Debt) to Tangible

<PAGE>

                   Capital Base of not more than 2.0 to 1 tested quarterly, with
                   the first test done as of December 31, 1999 for the quarter
                   then ended based upon the audited financial statements of
                   Borrower referenced in 5.03(B) of this Agreement, provided,
                   however, that if Borrower executes the Saugatuck Agreement,
                   the ratio required hereunder shall be 1.3 to 1; and

         (iii)     maintain a Tangible Capital Base of not less than $2,000,000,
                   tested quarterly, with the first test done as of December 31,
                   1999 for the quarter then ended, provided, however, that if
                   Borrower executes the Saugatuck Agreement, the Tangible
                   Capital Base required hereunder shall be $2,800,000; and

         (iv)      for the purposes of this subsection, the term "Tangible
                   Capital Base" shall mean the total of stockholder's equity
                   plus Subordinated Debt minus (a) all assets which would be
                   classified as intangible assets under GAAP, including,
                   without limitation, goodwill, patents, trademarks, trade
                   names, copyrights, franchises and deferred charges, (b)
                   treasury stock and interests of less than fifty-one (51%)
                   percent of any other corporation or business entity, (c) cash
                   set apart in a "sinking" or other analogous fund established
                   for the purpose of redemption or other retirement of capital
                   stock, (d) reserves for depreciation, depletion, obsolescence
                   and/or amortization of properties and all other reserves or
                   appropriations of retained earnings, which, in accordance
                   with GAAP should be established in connection with Borrower's
                   business, and notes and/or other obligations due or
                   receivable from officers and/or stockholders of Borrower; and

         (v)       for purposes of this subsection, the following terms shall
                   have the following meanings. "Cash Flow" means, with respect
                   to Borrower, for any relevant accounting period: (i) earnings
                   before interest and taxes ("EBIT"); PLUS (ii) depreciation,
                   amortization and other non-cash changes (excluding
                   extraordinary write downs of assets), each to the extent
                   accrued in the relevant accounting period and actually
                   deducted in determining EBIT; MINUS (iii) distributions and
                   dividends; MINUS (iv) non-financed capital expenditures; and

         (vi)      "Debt Service" means, for any relevant accounting period, the
                   aggregate amount of scheduled principal and interest payments
                   due from Borrower with respect to Borrowed Money.

         SECTION 5.02. NEGATIVE COVENANTS OF THE BORROWER. From the date hereof
and thereafter for so long as any portion of the Loan is outstanding or the
Borrower is indebted to Lender under any of the Credit Note, any of the Security
Instruments and/or this Agreement, the Borrower will not, and will not cause or
permit any Subsidiary to, (without the prior written consent of Lender):

         (A) LIENS, ETC. Create, incur, assume or suffer to exist any Lien of
any nature, upon or with respect to any of its properties, now owned or
hereafter acquired, or assign as collateral or otherwise convey as collateral,
any right to receive income, except that the foregoing restrictions

<PAGE>

shall not apply to any Liens:

         (a)       for taxes, assessments or governmental charges or levies an
                   property if the same shall not at the time be delinquent or
                   thereafter can be paid without penalty or interest, or (if
                   foreclosure, distraint, sale or other similar proceedings
                   shall not have been commenced) are being contested in good
                   faith and by appropriate proceedings diligently conducted and
                   for which proper reserve acceptable to Lender has been made
                   in accordance with GAAP;

         (b)       imposed by law, such as carriers', warehousemen's and
                   mechanics Liens, bankers setoff rights and other similar
                   Liens arising in the ordinary course of business for sums not
                   yet due or being contested in good faith and by appropriate
                   proceedings diligently conducted and for which proper reserve
                   acceptable to Lender or other provision acceptable to Lender
                   has been made in accordance with GAAP;

         (c)       arising in the ordinary course of business out of pledges or
                   deposits under worker's compensation laws, unemployment
                   insurance, old age pensions, or other social security or
                   retirement benefits, or similar legislation;

         (d)       those set forth in form UCC-11 Reports or title policies or
                   reports delivered to and approved by Lender in connection
                   with the Loan;

         (e)       those now or hereafter granted pursuant to the Security
                   Instruments or otherwise now or hereafter granted to Lender
                   as collateral for the loans and obligations under Borrower's
                   other obligations arising in connection with or under this
                   Agreement; and

         (f)       incurred as purchase money mortgages or other Liens or
                   retained security titles of a conditional vendor in the
                   ordinary course of the Borrower's or any of its Subsidiary's
                   business on property acquired or held by the Borrower and/or
                   any such Subsidiary to secure the purchase price of such
                   property; provided that the Liens or other charges or
                   encumbrances permitted by this clause (f) shall at all times
                   be confined solely to the item of property so purchased and
                   shall secure an obligation which does not exceed the lower of
                   the fair market value or the cost of the item of property so
                   purchased and that any such obligations shall not otherwise
                   be prohibited by the terms of this Agreement; or

         (g)       incurred on Accounts Receivable to secure surety bonds issued
                   as a prerequisite to Borrower's ability to obtain the work
                   out of which the Accounts Receivable so encumbered arise.

         (B) ASSUMPTIONS, GUARANTIES, ETC., OF INDEBTEDNESS OF OTHER PERSONS.
Assume, guarantee, endorse or otherwise become directly or contingently liable
in connection with any obligation or Indebtedness of any other Person, except
guaranties by endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business;

         (C) DISSOLUTION, ETC. Dissolve, liquidate, wind up, merge or
consolidate with another

<PAGE>

Person or sell, assign, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or a substantial part of its
assets (whether now owned or hereafter acquired), or any of its or their
interests in real property;

         (D) CHANGE IN NATURE OF BUSINESS. Make any material change in the
nature of its business except changes of which Lender has been notified sixty
(60) days prior to such change and as to which Lender has not notified Borrower
in writing of its objection thereto.

         (E) OWNERSHIP. Cause or permit any change in the structure of the
classes of capital stock of the Borrower or any Subsidiary.

         (F) SALE AND LEASEBACK. Enter into any sale and leaseback arrangement
with any Person.

         (G) SALE OF ACCOUNTS, ETC. Sell, assign, discount or dispose in any way
of any accounts receivable, promissory notes or trade acceptances held by the
Borrower with or without recourse; provided, however, Borrower may settle or
compromise Accounts Receivable in the ordinary course of its business which are
not Eligible Accounts Receivable as long as any discount is disclosed to Lender
in the immediately following report furnished hereunder.

         (H) INDEBTEDNESS. Incur, create, become or be liable directly or
indirectly in any manner with respect to or permit to exist any Indebtedness
except:

         (i)       Indebtedness under this Agreement, any of the Security
                   Instruments and/or the Note;

         (ii)      Indebtedness with respect to trade obligations and other
                   normal accruals in the ordinary course of business not yet
                   due and payable in accordance with customary trade terms or
                   with respect to which the Borrower is contesting in good
                   faith the amount or validity thereof by appropriate
                   proceedings and then only to the extent such Person has set
                   aside on its books adequate reserves acceptable to Lender
                   therefor;

         (iii)     Indebtedness described on the most recent financial statement
                   of Borrower prior to the Closing Date;

         (iv)      Indebtedness permitted by SECTION 5.02(B);

         (v)       Indebtedness secured by Liens permitted under SECTION 5.02(A)
                   and Capitalized Lease Obligations (to the extent not included
                   in SECTION 5.02(A)) in an aggregate amount outstanding at any
                   time not in excess of one Hundred Fifty Thousand Dollars
                   ($150,000.00);

         (vi)      Indebtedness to the Small Business Loan Fund and Business
                   Development Company of

<PAGE>

                   Rhode Island existing as of the date hereof provided that
                   such Indebtedness is subordinated to the Lender's rights
                   under this Agreement and the Credit Note, which
                   subordinations shall be in a form and substance satisfactory
                   to and approved by Lender;

         (vii)     Indebtedness, not to exceed in the aggregate $75,000, for the
                   purposes of capital expenditures financed by Borrower; and

         (viii)    Indebtedness pursuant to the Saugatuck Agreement.

         (I) OTHER AGREEMENTS. Amend any of the terms or conditions of any
indenture, agreement, document, note or other instrument evidencing, securing or
relating to Indebtedness permitted hereunder, unless such amendment would not
have a material adverse effect on Borrower or its ability to comply with its
obligations under this Agreement and the other Loan Documents.

         (J) PREPAYMENT OF OTHER INDEBTEDNESS. Make any prepayment of any
principal of or interest on, or any prepayment, redemption, defeasance, sinking
fund payment, other repayment of principal or deposit with respect to any
Indebtedness permitted hereunder, except any repayment which (i) is made during
such time as no Default Condition shall exist; (ii) does not cause any Default
Condition; and (iii) does not have a material adverse effect on the Borrower's
ability to comply with its obligations under this Agreement and the other Loan
Documents.

         (K) DIVIDENDS, PAYMENTS AND DISTRIBUTIONS. Declare, except with respect
to Borrower's preferred stock outstanding as of the date hereof, or pay, except
with respect to the Saugatuck Agreement, any dividends or management or like
fees or make any other direct or indirect distribution of cash or property or
both to holders of its shares of capital stock or other equity interest or use
any of its assets for payment, purchase, retention, redemption, acquisition or
retirement of any shares of its capital stock or other equity interest, or set
aside or reserve assets for sinking or like funds for any of the foregoing
purposes or make any other distribution by reduction of capital or otherwise in
respect of any shares of any class of its capital stock or other equity interest
except for dividends in the form of Borrower's common stock.

         (L) SALES, ETC. Sell, assign, lease (as lessor) or turn over the
management of or otherwise dispose of or permit the disposal of any interest in
real or personal property or of any material asset other than (i) inventory in
the ordinary course of its business; (ii) equipment which is immediately
replaced with equipment of equal or greater value; or (iii) obsolete equipment
or equipment with no material value.

         (M) INVESTMENTS IN OR TO OTHER PERSONS. Take or commit to make any
Investment in or to any other Person other than (i) advances to employees for
reasonable and usual business expenses, (ii) Cash Equivalent Investments, (iii)
investments in accounts, contract rights and chattel paper (as defined in the
Uniform Commercial Code) and notes receivable, arising or acquired in the
ordinary course of business, (iv) investments by Subsidiaries in Borrower, (v)

<PAGE>

Investments by the Borrower or any Subsidiary in any Person (exclusive of
investments in Persons referred to in any other subsection of this SECTION
5.02(M) in an aggregate amount not to exceed one Hundred Thousand Dollars
($100,000), other Investments as to which the Lender shall have consented in
writing, which consent shall not be unreasonably withheld, and such Investments
existing as of the date hereof and shown on financial statements submitted to
the Lender prior to the Closing Date.

         (N) TRANSACTIONS. Engage in any transaction or enter into any material
agreement with any Person, including, but not limited to, any Subsidiary: (i) on
other than an arm's length basis or (ii) which would result in the occurrence of
a Default or Event of Default.

         (O) CHANGE OF FISCAL YEAR. Change its fiscal year, which fiscal year
currently ends December 31.

         (P) SUBORDINATION OF CLAIMS. Subordinate or permit to be subordinated
any present or future claim against or obligation of another Person, except as
ordered in a bankruptcy or similar creditors' remedy proceeding of such other
person.

         (Q) COMPLIANCE. With respect to Borrower and any Commonly Controlled
Entity, (a) terminate, or cease to have an obligation to contribute to, any
Multiemployer Plan so as to result in any material liability of the Borrower or
any Commonly Controlled Entity to PBGC or to any Multiemployer Plan, (b) engage
in any "prohibited transaction" (as defined in Section 4975 of the Code)
involving any Plan which would result in a material liability of the Borrower or
any Commonly Controlled Entity for an excise tax or civil penalty in connection
therewith, (c) incur or suffer to exist any material "accumulated funding
deficiency" (as defined in Section 302 of ERISA and Sections 412 and/or 418 of
the Code) of the Borrower or any Commonly Controlled Entity, whether or not
waived, involving any Single Employer Plan, (d) incur or suffer to exist any
Reportable Event or the appointment of a trustee or institution of proceedings
for appointment of a trustee for any Single Employer Plan if, in the case of a
Reportable Event, same continues unremedied for ten (10) days after notice of
such Reportable Event pursuant to Section 4043(a), (c) or (d) of ERISA is given,
if in the reasonable opinion of Lender any of the foregoing is likely to result
in a material liability of the Borrower or any Commonly Controlled Entity, (e)
allow or suffer to exist any event or condition, which presents a material risk
of incurring a material liability of the Borrower or any Commonly Controlled
Entity to PBGC by reason of termination of any such Plan, or (f) cause or permit
any Plan maintained by Borrower and/or any Commonly Controlled Entity to be out
of compliance with ERISA and/or Title X of the Consolidated Omnibus Budget
Reconciliation Act of 1986, as amended. For purposes of this SECTION 5.02(Q)
"material liability" shall be deemed to mean any liability of Fifty Thousand and
00/100 Dollars ($50,000.00) or more in the aggregate.

        SECTION 5.03. REPORTING REQUIREMENTS. From the date hereof and
thereafter for so long as any portion of the Loan is outstanding or the Borrower
is indebted to Lender under the Credit Note, any of the Security Instruments
and/or this Agreement, the Borrower and Guarantor will, unless Lender shall
otherwise consent in writing, furnish or cause to be furnished to Lender:

<PAGE>

         (A) As soon as possible and in any event upon acquiring knowledge of an
Event of Default or Default, continuing on the date of such statement, the
written statement setting forth details of such Event of Default or Default and
the action which the Borrower proposes to take with respect thereto;

         (B) As soon as practicable after the end of each fiscal year and in any
event within one hundred twenty (120) days thereafter, a balance sheet of the
Borrower as of the end of such year and the preceding year and statements of
income and of cash flows for each of the years then ending such balance sheets,
statements of income and cash flows at and for the year then ended are to be
prepared on an audited basis, by a firm of independent certified public
accountants selected by the Borrower and reasonably acceptable to Lender.
Additionally, such accountants shall certify that they have examined SECTION
5.01(N) and that no Default or Event of Default exists on account of Borrower's
failure to have been in compliance therewith on the date of such statements;

         (C) Within ninety (90) days after calendar year end, personal financial
statements together with all schedules, all in form acceptable to Lender with
respect to the Guarantor, if any;

         (D) Within forty-five (45) days of each quarter's end, financial
statements in form satisfactory to Lender, including, but not limited to, a
balance sheet and income statement, prepared by and certified to as correct by
the chief financial offer of the Borrower;

         (E) Within forty-five (45) days of each quarter's end, an accounts
receivable aging, accounts payable aging, work-in-progress and backlog report in
form satisfactory to Lender prepared and certified to by the Borrower's chief
financial officer;

         (F) Within fifteen (15) days of each month's end, a Borrowing Base
Certificate in the form of Exhibit A, supported by an accounts receivable aging
report, both of which shall be in form satisfactory to Lender and prepared and
certified to by the Borrower's Chief financial officer;

         (G) Such other information respecting the business, properties or the
condition or operations, financial or otherwise, of the Borrower, and/or any
Guarantor as Lender may from time to time reasonably request; and

         (H) Prompt written notice of any material adverse change in the
Borrower's or any Guarantor's conditions financial or otherwise, and an
explanation thereof and of the actions Borrower and/or such Guarantor propose to
take with respect thereto.

                                   ARTICLE VI
                                EVENTS OF DEFAULT

         SECTION 6.01. EVENTS OF DEFAULT. The Borrower shall be in default under
this Agreement, the Security Instruments and the Credit Note upon the occurrence
of any one or more of the

<PAGE>

following events:

         (A) if Borrower shall fail to make due and punctual payment of any
fees, principal, interest or other amounts payable under this Agreement as
provided in the Credit Note, within ten (10) days after the date when the same
is due and payable, whether at the due date thereof or at a date fixed for
prepayment, or if Borrower shall fail to make any such payment of fees,
interest, principal and/or any other amount under this Agreement or the Credit
Note on the date when such payment becomes due and payable by acceleration; or

         (B) if the Borrower or any Other Liable Party shall make an assignment
for the benefit of creditors, or shall fail generally to pay its or their debts
as they become due, or shall admit in writing its or their inability to pay its
debts as they become due or shall file a voluntary petition in bankruptcy, or
shall file any petition or answer seeking any reorganization, arrangement,
composition, adjustment, liquidation, dissolution or similar relief under the
present or any future federal bankruptcy laws or other similar applicable
federal, state or other statute, law or regulation, or shall seek or consent to
or acquiesce in the appointment of any trustee, receiver or liquidator for such
Person or of all or any substantial part of its or their properties, or if
corporate action shall be taken for the purpose of effecting any of the
foregoing; or

         (C) to the extent not described in SECTION 6.01(B): (i) the Borrower or
any other Liable Party shall be the subject of a bankruptcy proceeding, or (ii)
if any proceeding against any of them seeking any reorganization, arrangement,
composition, adjustment, liquidation, dissolution or similar relief under the
present or any future federal bankruptcy law or other applicable federal,
foreign, state or other statute, law or regulation shall be commenced, or (iii)
if any trustee, receiver or liquidator of any of them or of all or any
substantial part of any or all of their properties shall be appointed without
their consent or acquiescence; provided that in any of the cases described above
in this SECTION 6.01(C), such proceeding or appointment shall not be an Event of
Default if the Person in question shall cause such proceeding or appointment to
be discharged, vacated, dismissed or stayed within sixty (60) days after
commencement thereof; or

         (D) if final judgment or judgments aggregating more than $50,000 shall
be rendered against the Borrower or any other Liable Party and shall remain
undischarged, unstated or unpaid for an aggregate of thirty (30) days (whether
or not consecutive) after entry thereof except unless such judgment is being
contested by proper appeal proceedings in good faith and such Person has
established adequate reserves therefor; or

         (E) if the Borrower or any Other Liable Party shall default (after
giving effect to any applicable grace period) in the due and punctual payment of
the principal of or interest on any other Indebtedness (other than the Loans),
or if any other default shall have occurred and be continuing after any
applicable grace period under any mortgage, note or other agreement evidencing,
securing or providing for the creation of such Indebtedness, which results in
the acceleration of such Indebtedness or which permits, or with the giving of
notice would permit, any holder or holders of any such Indebtedness to
accelerate payment thereof; or

<PAGE>

         (F) if Borrower or any Other Liable Party shall fail to pay, perform or
observe any covenant or condition contained in, (or any "default" or "event of
default" shall occur under), this Agreement or in any of the other Loan
Documents to be observed or performed pursuant to the terms hereof, or thereof,
as the case may be, and such failure shall continue unremedied or unwaived: (i)
in the case of any covenant or condition contained in SECTION 5.03, for five (5)
Business Days, or (ii) in the case of any other covenant or condition for which
no other grace period is provided, for thirty (30) days. The grace periods
contained in this subsection (F) shall not be deemed to provide a grace period
for any Event of Default specifically listed elsewhere in this SECTION 6.01 or
in any of the other documents referred to above; or

         (G) if there shall be any attachment of any deposits or other property
of the Borrower or any Other Liable Party in the possession of Lender or any
attachment of any other property of Borrowers in an amount exceeding $50,000
which shall not be discharged or effectively stayed within thirty (30) days of
the date of such attachment; or

         (H) the dissolution, liquidation, termination of existence, death,
incompetence or incapacity of the Borrower or Guarantor; or

         (I) any material portion of any real (if any) or personal property
securing the Loan is materially damaged or destroyed by fire or otherwise unless
such loss is fully covered by insurance as required in the Loan Documents (as
determined by the Lender in its discretion, exercised in good faith) and
Borrower has notified Lender of such casualty immediately after the occurrence
thereof; or

         (J) the cancellation, lapse or termination of any insurance coverage
required to be maintained by Borrower under this Agreement or under any of the
Security Instruments; or

         (K) Borrower attempts or purports to assign this Agreement or any
advance made or to be made hereunder or any interest herein; or

         (L) except as permitted in SECTION 5.02(A) OR (L), any real or personal
property securing the Loan or any portion thereof or any direct or indirect
interest therein is conveyed, voluntarily encumbered or otherwise transferred in
any way without the prior written consent of Lender; or

         (M) breach or the proving false or misleading, in any material respect,
of any representation or warranty now or hereafter made to Lender by, on behalf
of, or for the benefit of Borrower or any other Liable Party, or contained in:

         (a)       this Agreement or any of the other Loan Documents; or

         (b)       any loan application, statement, financial statement,
                   certificate or other document, agreement or instrument
                   furnished, signed or executed in connection herewith by, on
                   behalf of, or for the benefit of Borrower or any Other Liable
                   Party; or

<PAGE>

         (N) any material adverse change in the financial condition of, or any
act or omission of Borrower or any Other Liable Party or any act or omission of
any officer, director, partner, member, manager or trustee of the Borrower or
any Other Liable Party which leads Lender reasonably to believe that performance
of any of the covenants, agreements, or conditions of this Agreement, or any
other Loan Document(s), is or may be substantially impaired; or

         (O) the merger or consolidation of the Borrower with any Person.

                                   ARTICLE VII
                               REMEDIES OF LENDER

         Upon the occurrence of any one or more of the Events of Default Lender
may, by notice to the Borrower, declare its undertaking to make Advances to be
terminated, whereupon the same shall forthwith terminate, and Lender may, by
notice to the Borrower, declare the entire unpaid principal amount of the Credit
Note, all Advances and all fees and interest accrued and unpaid thereon
including, without limitation, any applicable Yield Maintenance Fee with respect
to one or more outstanding LIBOR Loans, shall and/or under this Agreement,
and/or any of the Security Instruments and any and all other Indebtedness under
this Agreement, the Credit Note and/or any of the Security Instruments of the
Borrower to Lender and/or to any holder of all or any portion of the Credit Note
to be forthwith due and payable, whereupon the Credit Note, and all such accrued
fees and interest payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower;
provided, however that upon the occurrence of an Event of Default under SECTION
6.01(B) OR (C), all of the unpaid principal amounts of the Credit Note, all fees
and interest accrued and unpaid thereon and/or under this Agreement and/or under
the Security Instruments and any and all other such Indebtedness of the Borrower
to Lender and/or to any such holder shall thereupon be due and payable in full
without any need for Lender to make any such declaration or take any action and
Lender's understanding to make Advances shall simultaneously terminate.

                                  ARTICLE VIII
                                  MISCELLANEOUS

         SECTION 8.01.  CONSENT TO JURISDICTION AND SERVICE OF PROCESS.

         (A) Except to the extent prohibited by applicable law, the Borrower and
each Guarantor, if any, irrevocably:

         (i)       agrees that any suit, action, or other legal proceeding
                   arising out of this Agreement or any of the Loans may be
                   brought in the courts of record of the State or the courts of
                   the United States located in the State;

         (ii)      consents to the jurisdiction of each such court in any such
                   suit, action or proceeding; and

<PAGE>

         (iii)     waives any objection which it may have to the laying of venue
                   of such suit, action or proceeding in any of such courts.

         For such time as any of the Indebtedness of the Borrower to Lender
shall be unpaid in whole or in part and/or the Commitment is in effect, the
Borrower for itself and each of its Subsidiaries, irrevocably designates the
Registered Agent as their registered agent for service of process in the State
and, in the absence thereof, the Secretary of State of the State as its agent to
accept and acknowledge on its behalf service of any and all process in any such
suit, action or proceeding brought in any such court and agrees and consents
that any such service of process upon such agent and written notice of such
service to the Borrower and/or any Subsidiary by registered or certified mail
shall be taken and held to be valid personal service upon the Borrower and/or
any Subsidiary regardless of where the Borrower and/or any Subsidiary shall then
be doing business and that any such service of process shall be of the same
force and validity as if service were made upon it according to the laws
governing the validity and requirements of such service in each such state and
waives any claim of lack of personal service or other procedural error by reason
of any such service. Any notice, process, pleadings or other papers served upon
the aforesaid designated agent shall, within three (3) Business Days after such
service, be sent by certified or registered mail to the Borrower at its address
set forth in this Agreement and to said agent for service.

         SECTION 8.02. INDEMNIFICATION. The Borrower irrevocably agrees to and
does hereby indemnify and hold harmless Lender, its agents, employees,
directors, officers, attorneys, subsidiaries, affiliates and each Person, if
any, who controls Lender within the meaning of Section 15 of the Securities Act
of 1933, as amended, and their successors and assigns, and each and all and any
of them (the "Indemnified Parties"), against any and all losses, claims, actions
causes of action, damages or liabilities (including any amount paid in
settlement of any action commenced or threatened against any of the Indemnified
Parties), joint or several, to which they, or any of them, may become subject
under statutory law or at common law, arising out of the Loans, directly or
indirectly, including, but not limited to, third party claims naming Lender as a
defendant or other responsible party, governmental enforcement actions,
environmental liabilities, and to reimburse the Indemnified Parties for any
legal or other expenses reasonably incurred by it or them in connection with
investigating, preparing for or defending against any actions commenced or
threatened by a third party against any of the Indemnified Parties.

         Promptly upon receipt of notice of the commencement of any such action,
or information as to any threatened action, against any of the Indemnified
Parties in respect of which indemnity or reimbursement may be sought from the
Borrower on account of the agreement contained in this SECTION 8.02, notice
shall be given to the Borrower in writing of the commencement or threatening
thereof, together with a copy of all papers served, but the omission so to
notify the Borrower of any such action shall not release the Borrower from any
liability which it may have to such Indemnified Parties otherwise than on
account of the indemnity agreement contained in this SECTION 8.02.

         In case any such action shall be brought against any of the Indemnified
Parties, the Borrower shall be entitled to participate in (and, to the extent
that it shall wish, to select counsel

<PAGE>

and, to the extent required by Borrower's insurer, to direct) the defense
thereof at its own expense. Any of the Indemnified Parties shall have the right
to employ its or their own counsel in any such case, and the reasonable fees and
expenses of such counsel shall be at the expense of Borrower only if such
Indemnified Party employs its own counsel because such Indemnified Party
reasonably concludes that there are defenses available to it that are different
from or in addition to those available to the Borrower.

         The provisions of this SECTION 8.02 shall be effective to the fullest
extent permitted by law, and shall survive repayment of the Loan and discharge
of the Security Instruments.

         The provisions of this SECTION 8.02 shall not be deemed to require
Borrower to indemnify and hold harmless any Indemnified Party with respect to
any gross negligence or willful misconduct on the part of such Indemnified
Party.

         SECTION 8.03. POWER OF ATTORNEY. Borrower hereby grants to Lender a
power of attorney, and appoints Lender as its attorney-in-fact, such appointment
being irrevocable and coupled with an interest, to pay, perform or observe or
otherwise take any action for or on behalf of Borrower which Borrower is
required to pay, perform, observe or take hereunder or under any other Loan
Documents or as may be otherwise required in order for Lender to fully assure
itself of its rights hereunder, including, without limitation, the right to
affix Borrower's endorsement to any or all checks or drafts paid to the lock box
referenced in Section 2.04(E) of this Agreement, under any of the Loan Documents
or under applicable law. Borrower hereby ratifies and approves all actions taken
by Lender in accordance with the foregoing.

         SECTION 8.04. DELAY OR OMISSION NOT WAIVER. No delay by Lender in
exercising or failure by Lender to exercise any right or remedy accruing upon
any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein. Every right and
remedy given by this Agreement or by law to Lender may be exercised from time to
time, and as often as may be deemed expedient, by Lender.

         SECTION 8.05. WAIVER OF STAY OR EXTENSION LAWS. Each of the Borrower
and Guarantor covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, or plead or in any manner whatsoever claim or take
the benefit or advantage of, any stay or extension law wherever enacted, now or
at any time hereafter in force, which may affect the covenants or the
performance of this Agreement; and (to the extent that it may lawfully do so)
hereby expressly waives all benefit and advantage of any such law and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to Lender, but will suffer and permit the execution of every such power
as though no such law had been enacted.

         SECTION 8.06. AMENDMENT, ETC. No amendment, modification, termination,
or waiver of any provision of this Agreement, or of the Credit Note nor consent
to any departure by the Borrower therefrom or consent hereunder or thereunder,
shall in any event be effective unless the same shall be in a written notice
given to the Borrower by Lender. Any amendment or modification of this Agreement
must be signed by the Borrower and Lender.

<PAGE>

         SECTION 8.07. ADDRESSES FOR NOTICES, ETC. All notices, requests,
demands and other communications provided for hereunder (other than those which,
under the terms of this Agreement, may be given by telephone, which shall be
effective when received verbally) shall be in writing and personally delivered,
sent by certified mail, return receipt requested or sent by Federal Express or
other overnight courier, and delivered to the applicable party at the addresses
indicated below. Each notice shall be effective upon the earlier to occur of (i)
actual receipt, if personally delivered or otherwise received, (ii) the next
Business Day after deposit if sent by overnight courier or (iii) if deposited in
the United States mail, certified, return receipt requested, the earlier of
three (3) Business Days after such deposit and the date of receipt, as disclosed
on the return receipt. Rejection or other refusal to accept or the inability to
deliver because of changed address of which no notice was given shall be deemed
to be receipt of the notice sent. By giving at lease thirty (30) days' prior
written notice thereof, Lender or Borrower shall have the right, from time to
time and at any time during the term of the Loan to change their respective
addresses and each shall have the right to specify as its address any other
address within the United States of America. For the purposes of this Loan
Agreement, the address for notices shall be as follows:

<PAGE>

                   If to the Borrower:

                   Network Six, Inc.
                   475 Kilvert Street
                   Warwick, Rhode Island 02886
                   Attn:  Kenneth Kirsch
                   President and CEO
                   Phone:  (401) 732-9000
                   Fax:  (401) 732-9009

                   With copies to:

                   Gaebe & Kezirian
                   128 Dorrance Street
                   Providence, Rhode Island 02903
                   Attn:  Dana Gaebe, Esq.
                   Phone: (401) 331-0800
                   Fax:   (401) 861-2260

                   If to Lender:

                   Fleet National Bank
                   Mail Stop:  RI MO 254
                   111 Westminster Street
                   Providence, Rhode Island  02903

                   Attention:  Robert Kent, Vice President
                   Phone:  (401) 278-3604
                   Fax:  (401) 278-6587

                   With a copy to:

                   Moses & Afonso, Ltd.
                   170 Westminster Street, Suite 201
                   Providence, Rhode Island  02903
                   Attn:  Antonio Afonso, Jr., Esq.
                   Phone:  (401) 453-3600
                   Fax:  (401) 453-3604

Requests, certificates, items provided pursuant to SECTION 5.03, other than
subsection 5.03(A), and other routine mailings or notices need not be
accompanied by a copy to legal counsel for Lender or the Borrower.

         SECTION 8.08. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on
demand all reasonable costs and expenses (including without limitation
reasonable attorneys' fees) incurred

<PAGE>

by Lender in connection with the preparation and enforcement of this Agreement,
the Security Instruments, the Note and the other instruments and documents to be
delivered under this Agreement and any amendments to this Agreement or in
connection with any amendments, waivers or consents of or under this Agreement,
any of the Security Instruments, the Note or any other such instruments and
documents. In addition, the Borrower shall pay on demand any and all stamp and
other taxes and fees payable or determined to be payable in connection with the
execution and delivery of this Agreement, the Security Instruments, the Note,
the Loan Documents and the other instruments and documents to be delivered
hereunder and agrees to save Lender harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes or fees.

         SECTION 8.09. PARTICIPATION. "Lender shall have the unrestricted right
at any time and from time to time, and without the consent of or notice to
Borrower or any Guarantor, to grant to one or more banks or other financial
institutions (each, a "Participant") participating interests in Lender's
obligation to lend hereunder and/or any or all of the loans held by Lender
hereunder. In the event of any such grant by Lender of a participating interest
to a Participant, whether or not upon notice to Borrower, Lender shall remain
responsible for the performance of its obligations hereunder and Borrower shall
continue to deal solely and directly with Lender in connection with Lender's
obligations hereunder.

         Lender may furnish any information concerning Borrower in its
possession from time to time to prospective Participants, provided that Lender
shall require any such prospective Participant to agree in writing to maintain
the confidentiality of such information.

         SECTION 8.10. BINDING EFFECT; ASSIGNMENT; SURVIVAL.

         (A) Lender shall have the 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 Loan Documents as Lender shall
deem necessary to effect the foregoing. In addition, at the request of Lender
and any such Assignee, Borrower shall issue one or more new promissory notes, as
applicable, to any such Assignee and, if Lender has retained any of its rights
and obligations hereunder following such assignment, to Lender, which new
promissory notes shall be issued in replacement of, but not in discharge of, the
liability evidenced by the promissory note held by Lender prior to such
assignment and shall reflect the amount of the respective commitments and loans
held by such Assignee and Lender after giving effect to such assignment. Upon
the execution and delivery of appropriate assignment documentation, amendments
and any other documentation required by Lender in connection with such
assignment, and the payment by Assignee of the purchase price agreed to by
Lender, and such Assignee, such Assignee shall be a party to this Agreement and
shall have all of the rights and obligations of Lender hereunder (and under any
and all other Loan Documents) to the extent that such rights and obligations
have been assigned by Lender pursuant to the assignment documentation between
Lender and such Assignee, and Lender shall be released from its obligations
hereunder and thereunder to a corresponding extent.

<PAGE>

(B) This Agreement shall be binding upon and inure to the benefit of the
Borrower and Lender and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights hereunder or any interest
herein without the prior written consent of Lender. This Agreement and all
covenants, representations and warranties made herein and/or in any
certificates, or documents or instruments now or hereafter delivered pursuant
hereto shall survive the making of the Loan, and the execution and delivery of
the Loan Documents and shall continue in effect so long as any amounts payable
under or in connection with this Agreement, any of the Security Instruments
and/or any of the Note or the other Loan Documents by the Borrower to the Lender
remains unpaid or Lender's undertaking to make Advances remains outstanding;
provided, however, that SECTION 8.02 (and any provisions specifically described
in the Security Instruments or other Loan Documents) shall survive and remain in
full force and effect after termination of this Agreement and repayment in full
of all amounts payable under or in connection with this Agreement, the other
Loan Documents and any other such Indebtedness.

         SECTION 8.11. ACTUAL KNOWLEDGE. For the purposes of this Agreement,
Lender shall not be deemed to have actual knowledge of any fact or state of
facts unless the senior loan officer or any other officer responsible for the
Borrower's account established pursuant to this Agreement, shall, in fact, have
actual knowledge of such fact or stated facts or unless written notice of such
facts shall have been received by Lender in accordance with SECTION 8.07.

         SECTION 8.12. REFERENCES JOINT AND SEVERAL. All obligations of Borrower
hereunder and under the Loan Documents are joint and several, and all references
to "Borrower" or "Borrowers" hereunder shall be deemed to refer to each of
Borrowers, all of Borrowers and any of Borrowers, if more than one Borrower
exists. All obligations of Guarantor hereunder and under the Loan Documents are
joint and several, and all references to "Guarantor" or "Guarantors" hereunder
shall be deemed to refer to each of Guarantors, all of Guarantors and any of
Guarantors, if more than one Guarantor exists.

         SECTION 8.13. GOVERNING LAW. This Loan Agreement shall be governed by
the laws of the State, without resort to the State's conflict of laws rules.

         SECTION 8.14. SEVERABILITY. The provisions of this Agreement and the
other Loan Documents are severable. Any provision of this Agreement or the other
Loan Documents which is prohibited or unenforceable will be ineffective to the
extent of such prohibition or unenforceability without invalidating or modifying
the remaining provisions of this Agreement of the other Loan Documents. Any such
prohibited or unenforceable provision will be reformed to the extent necessary
to make it enforceable in a manner carrying out the intention of the parties as
nearly as is possible.

         SECTION 8.15. REMEDIES CUMULATIVE. The remedies which are set forth in
this Agreement and the other Loan Documents available to Lender under applicable
law are not exclusive, and either party will be entitled cumulatively to
exercise any remedies for breach of this Agreement and the other Loan Documents
available under applicable law and the election of one remedy will not be deemed
to exclude other remedies.

<PAGE>

         SECTION 8.16. WAIVER OF JURY TRIAL. BORROWER AND LENDER 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
THIS LOAN AGREEMENT 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. THIS WAIVER CONSTITUTES A
MATERIAL INDUCEMENT FOR LENDER TO ACCEPT THIS LOAN AGREEMENT AND MAKE THE LOAN.

         SECTION 8.17. CONFLICTING DOCUMENTS. If there is any conflict or
inconsistency between the terms of this Agreement and the terms of any other
Loan Documents, the terms of this Agreement will control so long as it remains
in effect, unless such other agreement is executed or consented to by all
parties hereto in writing, and such agreement expressly amends, modifies or
replaces this Agreement.

         SECTION 8.18. NO THIRD PARTY BENEFICIARY. This Agreement and the other
Loan Documents are for the sole benefit of the parties hereto and are not
intended to confer any rights or benefits on any other Person.

         SECTION 8.19. ENTIRE AGREEMENT. This Agreement and any exhibits and
schedules attached hereto constitute the entire agreement and understanding
between the parties hereto in respect of the subject matter hereof and supersede
any prior or contemporaneous agreement or understanding between the parties,
written or oral, which relates to the subject matter hereof.

         SECTION 8.20. ASSIGNMENT TO FEDERAL RESERVE. Lender may at any time
pledge all or any portion of its rights under the Loan Documents including any
portion of the Credit 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 shall release Lender from its obligations under any
of the Loan Documents.

         SECTION 8.21. REPLACEMENT OF CREDIT NOTE. Upon receipt of an affidavit
of Lender as to the loss, destruction or mutilation of the Credit 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 Credit 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.

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a sealed instrument by their respective officers thereunto duly
authorized, as of the date first above written.

In the Presence of:                NETWORK SIX, INC.

/s/ Illegible                      By: /s/ Dorothy M. Cipolla
-----------------                     ------------------------
                                   Print Name:   Dorothy M. Cipolla
                                   Print Title:  TREASURER

                                   FLEET NATIONAL BANK

/s/ Illegible                      By: /s/ Robert R. Kent, Vice President
-----------------                     ----------------------------------
                                       Robert R. Kent, Vice President

<PAGE>

                                    EXHIBIT A

                           BORROWING BASE CERTIFICATE

Borrower:  Network Six, Inc.

Date:
     --------------------------

1.       TOTAL ACCOUNTS RECEIVABLE   $
                                      -----------------------

2.       LESS RECEIVABLES THAT ARE
         NOT ELIGIBLE RECEIVABLES    ($                       )
                                      -----------------------

3        EQUAL TOTAL ELIGIBLE ACCOUNTS RECEIVABLE:  $
                                                     -----------------

4.       X 80% EQUAL MAXIMUM ADVANCES UNDER
           LOAN AGREEMENT                           $
                                                     -----------------

5.       LESS TOTAL ADVANCES OUTSTANDING
                 AS OF TODAY'S DATE                 ($                 )
                                                     -----------------

6.       TOTAL AMOUNT OF AVAILABLE ADVANCES          $
                                                     -----------------

         The undersigned acknowledges that Fleet National Bank is relying on
this Certificate in the granting of Advances under the Loan Agreement by and
between Network Six, Inc. and Fleet National Bank, dated as of November 15,
1999, and hereby certifies that the information contained in this Certificate is
accurate as of the date written above.

                                   Network Six, Inc.

                                   By:
                                      -------------------------------
                                   Print Name:
                                   Print Title:
                                   Duly authorized

<PAGE>

                                    EXHIBIT B
              REQUEST FOR LOAN ADVANCE AND INTEREST RATE SELECTION/
                                 PAYDOWN REQUEST

BORROWER:          Network Six, Inc.         DATE:
                                                  -------------------------

LOAN #:

CHECKING #:       [                         ]

Select one:  ADVANCE                   PAYDOWN                **

If requesting an Advance, select the interest rate:

INTEREST _____ Variable Rate (Prime Rate + 0.25%)    _____ 90-day LIBOR Rate
RATE:    _____ 30-day LIBOR Rate                     _____ 120-day LIBOR Rate
         _____ 60-day LIBOR Rate                     _____ 180-day LIBOR Rate

AMOUNT:  $                                   **

If requesting an Advance, the amount must be an integral multiple of $1,000.00

**If making a paydown of a LIBOR Rate Loan, the amount remitted to the Bank must
include any applicable Yield Maintenance Fee due under Section 2.04 of the Loan
Agreement by and between Borrower and Fleet National Bank ("Bank"), dated as of
November 15, 1999 (the "Loan Agreement"). Please contact the Bank to obtain the
applicable amount of the Yield Maintenance Fee.

THE UNDERSIGNED ACKNOWLEDGES THAT, IF BORROWER IS REQUESTING AN ADVANCE IN THIS
REQUEST, THE BANK IS RELYING ON THIS REQUEST AND THE INFORMATION CONTAINED
HEREIN IN MAKING SUCH ADVANCE. THE UNDERSIGNED CERTIFIES THAT, AS OF THE DATE OF
THIS REQUEST, ALL OF THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THE LOAN
AGREEMENT ARE AND CONTINUE TO BE TRUE, CORRECT AND NOT MISLEADING AND THAT
BORROWER IS NOT IN DEFAULT OF ANY COVENANT CONTAINED IN THE LOAN AGREEMENT OR
OTHERWISE IN DEFAULT AS DEFINED IN THE LOAN AGREEMENT.

Network Six, Inc.

BY:
   Print Name:
   Print Title:
   Authorized Signatory

BORROWER INSTRUCTIONS:       To borrow or pay down on loan:

                             1.   Complete and sign the above form.

                             2.   Telephone the request to Robert Kent, Vice
                                  President or such other individual as Lender
                                  may designate in writing to Borrower from time
                                  to time at (401) 278-3604.

                             3.   Mail the original signed confirmation to:
                                           Robert Kent
                                           Vice President
                                           Fleet National Bank
                                           111 Westminster Street
                                           Providence, Rhode Island 02903EXHIBIT 4.1

                         MDSI MOBILE DATA SOLUTIONS INC.
                             1999 STOCK OPTION PLAN

1.   INTERPRETATION

1.1  Defined Terms - For the purposes of this Plan,  the  following  terms shall
     have the following meanings:

     (a)  "Associate"  shall  have  the  meaning  ascribed  to such  term in the
          Ontario Securities Act, as amended from time to time;

     (b)  "Board" means the Board of Directors of the Company;

     (c)  "Change in Control"  means the  acquisition,  directly or  indirectly,
          through one transaction or a number of transactions, by any Person, of
          an aggregate of more than fifty percent of the outstanding Shares;

     (d)  "Code"  means the United  States  Internal  Revenue  Code of 1986,  as
          amended from time to time;

     (e)  "Committee"  means a committee of the Board  appointed  in  accordance
          with  this  Plan,  or if no such  committee  is  appointed,  the Board
          itself;

     (f)  "Company"  means  MDSI  Mobile  Data  Solutions  Inc.,  a  corporation
          incorporated under the laws of Canada;

     (g)  "Date of  Grant"  means  the date on  which a grant  of an  Option  is
          effective;

     (h)  "Disability"  means  a  medically   determinable  physical  or  mental
          impairment  expected  to result  in death or to last for a  continuous
          period of not less than 12 months  which  causes an  individual  to be
          unable to engage in any substantial gainful activity;

     (i)  "Domestic  Relations  Successor"  means a person  entitled  to receive
          transfer of  ownership of an Option  pursuant to a Qualified  Domestic
          Relations Order;

     (j)  "Effective  Date"  means the  effective  date of this  Plan,  which is
          February 25, 1999;

     (k)  "Exchange  Act" means the United  States  Securities  Exchange  Act of
          1934, as amended;

     (l)  "Fair Market Value" means:

          (i)       where the Shares are listed for trading on a stock  exchange
                    or over the counter market,  the closing price of the Shares
                    on the stock  exchange or over the counter  market  which is
                    the principal  trading market for the Company's  Shares,  as
                    may be determined for such purpose by the Committee, or

          (ii)      where the  Shares  are not  listed  for  trading  on a stock
                    exchange  or over the  counter  market,  the value  which is
                    determined  by the  Committee  to be the  fair  value of the
                    Shares,  taking  into  consideration  all  factors  that the
                    Committee deems appropriate,  including, without limitation,
                    recent  sale and  offer  prices  of the  Shares  in  private
                    transactions negotiated at arm's length;

     (m)  "Guardian" means the guardian, if any, appointed for an Optionee;

<PAGE>

     (n)  "ISO"  means an Option  granted  to an  employee  of the  Company or a
          Related  Company that  qualifies as an  "incentive  stock  option" for
          purposes  of  section  422 of the Code  and is  therefore  subject  to
          favourable tax treatment under the Code;

     (o)  "ISO Optionee" means an Optionee to whom an ISO has been granted;

     (p)  "Modification"  means any change in the terms of an Option which gives
          the Optionee  additional  benefits  under the Option,  but such change
          shall not include a change in the terms of an Option:

          (i)       to make the  Option not  transferable  other than by will or
                    the laws of descent and distribution,

          (ii)      to make the Option  exercisable  only by the Optionee during
                    his lifetime,

          (iii)     in the case of an  Option  not  immediately  exercisable  in
                    full, to accelerate  the time within which the Option may be
                    exercised, or

          (iv)      attributable  to the issuance or  assumption of an Option by
                    reason of a corporate merger, consolidation,  acquisition of
                    property or stock, separation, reorganization or liquidation
                    if the new Option or  assumption  of the old Option does not
                    give the Optionee  additional benefits which he did not have
                    under the old Option;

     (q)  "Non-ISO" means an Option that is not an "incentive  stock option" for
          purposes of section 422 of the Code,  and is therefore  not subject to
          favourable tax treatment under the Code;

     (r)  "Non-ISO  Optionee"  means  an  Optionee  to whom a  Non-ISO  has been
          granted;

     (s)  "Option" means an option to purchase  Shares  granted  pursuant to the
          terms of this Plan;

     (t)  "Option  Agreement" means a written  agreement between the Company and
          an Optionee,  specifying  the terms of the Option being granted to the
          Optionee under the Plan;

     (u)  "Option  Price" means the exercise per Share for an Option which shall
          be  expressed  in  Canadian  funds  or in  the  United  States  dollar
          equivalent thereof;

     (v)  "Optionee" means a person to whom an Option has been granted;

     (w)  "Person" means a natural  person,  company,  government,  or political
          subdivision  or agency of a government;  and where two or more Persons
          act as a partnership,  limited  partnership,  syndicate or other group
          for the purpose of acquiring, holding or disposing of securities of an
          issuer, such syndicate or group shall be deemed to be a Person;

     (x)  "Plan" means this Stock Option Plan of the Company;

     (y)  "Qualified  Domestic  Relations Order" means a judgment or order which
          relates to the provision of child support, alimony payments or marital
          property rights to a spouse,  former spouse,  child or other dependent
          of an Optionee,  made pursuant to domestic relations law of a state of
          the United  States,  and which meets all the  requirements  of section
          414(p) of the Code;

     (z)  "Qualified Successor" means a person who is:

          (i)       entitled  to  ownership  of an  Option  upon the death of an
                    Optionee,  pursuant  to a will  or the  applicable  laws  of
                    descent and distribution upon death, or

<PAGE>

          (ii)      a Domestic Relations Successor of an Optionee;

     (aa) "Related  Company"  shall mean a company  which is an affiliate of the
          Company as the term  "affiliate"  is  defined  in Section  1(2) of the
          Ontario Securities Act, as amended from time to time;

     (bb) "Shares"  means the common shares  without par value in the capital of
          the Company;

     (cc) "Term"  means  the  period  of time  during  which  an  Option  may be
          exercised; and

     (dd) "Terminating Event" means:

          (i)       the dissolution or liquidation of the Company,

          (ii)      a merger or  consolidation  of the Company  with one or more
                    corporations  as a result  of which,  immediately  following
                    such  merger  or  consolidation,  the  shareholders  of  the
                    Company  as a group  will hold less than a  majority  of the
                    outstanding capital stock of the surviving corporation,

          (iii)     the sale or other disposition of all or substantially all of
                    the assets of the Company, or

          (iv)      a material  change in the capital  structure  of the Company
                    that is  deemed to be a  Terminating  Event by virtue of the
                    last  sentence of Section  11.1 of this Plan or by virtue of
                    Section 11.4 of this Plan.

2.   STATEMENT OF PURPOSE

2.1 Principal  Purposes - The principal  purposes of the Plan are to provide the
Company with the advantages of the incentive  inherent in share ownership on the
part of employees,  officers,  directors,  and  consultants  responsible for the
continued  success of the Company;  to create in such  individuals a proprietary
interest in, and a greater  concern for, the welfare and success of the Company;
to encourage  such  individuals  to remain with the Company;  and to attract new
employees, officers, directors and consultants to the Company.

2.2 ISOs and  Non-ISOs - Under this Plan,  the Company may grant  either ISOs or
Non-ISOs.  Each ISO granted  hereunder is intended to  constitute  an "incentive
stock  option",  for the purposes of section 422 of the Code,  and this Plan and
each such ISO is intended to comply with all of the  requirements of Section 422
of the Code and of all other  provisions  of the Code  applicable  to  incentive
stock options and to plans issuing the same. Each Non-ISO  granted  hereunder is
intended to constitute an Option that is not an "incentive stock option" for the
purposes  of  section  422 of the  Code,  and  that  does  not  comply  with the
requirements of Section 422 of the Code.

2.3 Benefit to  Shareholders - The Plan is expected to benefit  shareholders  by
enabling the Company to attract and retain  personnel of the highest  caliber by
offering such  personnel an opportunity to share in any increase in value of the
Shares resulting from their efforts.

3.   ADMINISTRATION

3.1 Board or  Committee  - The Plan shall be  administered  by the Board or by a
Committee appointed in accordance with Section 3.2 or 3.5(b) below.

3.2  Appointment  of  Committee - The Board may at any time appoint a Committee,
consisting of not less than two of its members, to administer the Plan on behalf
of the Board in  accordance  with such  terms  and  conditions  as the Board may
prescribe,  consistent  with this Plan.  Once  appointed,  the  Committee  shall
continue to serve until otherwise  directed by the Board. From time to time, the
Board may increase the size of the  Committee  and appoint  additional  members,

<PAGE>

remove  members (with or without  cause) and appoint new members in their place,
fill  vacancies  however  caused,  or remove all  members of the  Committee  and
thereafter directly administer the Plan.

3.3  Quorum  and  Voting - A majority  of the  members  of the  Committee  shall
constitute  a quorum,  and,  subject to the  limitations  in this Section 3, all
actions of the  Committee  shall  require  the  affirmative  vote of members who
constitute  a  majority  of such  quorum.  No member of the  Committee  who is a
director to whom an Option may be granted  may  participate  in the  decision to
grant  such  Option  (but any such  member may be  counted  in  determining  the
existence  of a quorum at any meeting of the  Committee in which action is taken
with respect to the granting of an Option to him).

3.4   Administration   of  Plan  upon   Registration  of  Equity   Securities  -
Notwithstanding  the  foregoing  provisions  of this Section 3, in the event the
Company is or becomes  subject to the  provisions  of Section 16 of the Exchange
Act, the Board shall attempt to provide for  administration of the Plan, insofar
as it relates to the participation of officers, directors or stockholders of the
Company who are subject to the reporting and liability  provisions of Section 16
of the  Exchange  Act,  in a manner  which shall  qualify  the grant,  exercise,
expiration or surrender of Options under this Plan for the treatment afforded by
Securities and Exchange  Commission Rule 16b-3, as amended from time to time, or
any successor rule or regulatory requirements.

3.5 Powers of Committee - Any Committee appointed under Section 3.2 or 3.4 above
shall have the authority to do the following:

     (a)  administer the Plan in accordance with its terms;

     (b)  determine all questions arising in connection with the administration,
          interpretation,  and application of the Plan,  including all questions
          relating to the value of the Shares;

     (c)  correct  any  defect,   supply  any   information   or  reconcile  any
          inconsistency  in the Plan in such  manner and to such extent as shall
          be deemed  necessary  or  advisable  to carry out the  purposes of the
          Plan;

     (d)  prescribe,  amend and rescind  rules and  regulations  relating to the
          administration of the Plan;

     (e)  determine   the  duration  and  purpose  of  leaves  of  absence  from
          employment  which may be granted to Optionees  without  constituting a
          termination of employment for purposes of the Plan;

     (f)  do the following with respect to the granting of Options:

          (i)       determine the employees,  officers, directors or consultants
                    to whom Options shall be granted,  based on the  eligibility
                    criteria set out in this Plan,

          (ii)      determine whether such Options shall be ISOs or Non-ISOs,

          (iii)     determine the terms and  provisions of the Option  Agreement
                    which shall be entered into with each  Optionee  (which need
                    not  be  identical  with  the  terms  of  any  other  Option
                    Agreement),

          (iv)      amend  the  terms and  provisions  of an  Option  Agreement,
                    provided the Committee obtains:

                    A.   the consent of the Optionee; and

                    B.   the approval of any stock exchange on which the Company
                         is listed,

          (v)       determine when Options shall be granted,

          (vi)      determine the number of Shares subject to each Option, and

<PAGE>

     (g)  make   all   other   determinations   necessary   or   advisable   for
          administration of the Plan.

3.6 Obtain Regulatory Approvals - In administering this Plan, the Committee will
obtain any  regulatory  approvals  which may be required  pursuant to applicable
securities laws or the rules of any stock exchange or over the counter market on
which the Shares are listed.

3.7 Administration by Committee - The Committee's  exercise of the authority set
out in Section 3.5 shall be  consistent  with the intent that ISOs issued  under
the Plan be  qualified  under the  terms of  Section  422 of the Code,  and that
Non-ISOs shall not be so qualified.  All determinations made by the Committee in
good faith on matters referred to in Section 3.5 shall be final,  conclusive and
binding  upon all  Persons.  The  Committee  shall have all powers  necessary or
appropriate  to  accomplish  its  duties  under  this  Plan.  In  addition,  the
Committee's  administration of the Plan shall in all respects be consistent with
the policies and rules of any stock exchange or over the counter market on which
the Shares are listed.

4.   ELIGIBILITY

4.1 Eligibility for ISOs - ISOs may be granted to any employee of the Company or
any Related  Company,  including  directors or officers who are employees of the
Company or any  Related  Company.  An  Optionee  who is not an  employee  of the
Company or any Related Company is not eligible to receive an ISO under the Plan.

4.2 Eligibility for Non-ISOs - Non-ISOs may be granted to any employee, officer,
director or consultant of the Company or any Related Company.

4.3 No Violation of Securities Laws - No Option shall be granted to any Optionee
unless  the  Committee  has  determined  that the grant of such  Option  and the
exercise  thereof by the  Optionee  will not violate the  securities  law of the
jurisdiction in which the Optionee resides.

5.   SHARES SUBJECT TO THE PLAN

5.1 Number of Shares - The  Committee,  from time to time,  may grant Options to
purchase an aggregate of up to 2,100,000 Shares, subject to regulatory approval,
to be made available from authorized,  but unissued,  Shares. In calculating the
foregoing  2,100,000  Shares,  the Committee shall include all Shares subject to
options  outstanding  prior to the Effective  Date of the Plan,  which as at the
Effective  Date,  comprises  1,569,249  Shares.  The maximum number of 2,100,000
Shares  shall be  adjusted,  where  necessary,  to take  account  of the  events
referred to in Section 11 hereof.

5.2 Decrease in Number of Shares  Subject to Plan - Upon  exercise of an Option,
the number of Shares  thereafter  available  under the Plan and under the Option
shall decrease by the number of Shares as to which the Option was exercised.

5.3 Expiry of Option - If an Option expires or terminates for any reason without
having been exercised in full,  the  unpurchased  Shares  subject  thereto shall
again be available for the purposes of the Plan.

5.4  Reservation  of Shares - The Company will at all times reserve for issuance
and keep  available  such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.

6.   OPTION TERMS

6.1 Option Agreement - With respect to each Option to be granted to an Optionee,
the Committee shall specify the following terms in the Option Agreement  between
the Company and the Optionee:

     (a)  whether such Option is an ISO or a Non-ISO;

<PAGE>

     (b)  the number of Shares  subject to  purchase  pursuant  to such  Option,
          provided  that the number of Shares  reserved  for issuance to any one
          person  pursuant  to  Options  does not  exceed 5% of the  outstanding
          Shares;

     (c)  the Date of Grant;

     (d)  the Term, provided that:

          (i)       the length of the Term shall in no event be greater than ten
                    years following the Date of Grant; and

          (ii)      if an ISO Option is granted to an  Optionee  who on the Date
                    of  Grant  beneficially  owns  more  than  10% of the  total
                    combined  voting  power  of all  classes  of  shares  of the
                    Company, the Term of the Option shall not exceed five years;

     (e)  the Option Price, provided that:

          (i)       the  Option  Price  shall not be less  than the Fair  Market
                    Value of the Shares on the Date of Grant; and

          (ii)      if an ISO Option is granted to an  Optionee  who on the Date
                    of  Grant  beneficially  owns  more  than  10% of the  total
                    combined  voting  power  of all  classes  of  shares  of the
                    Company or a Related Company, then the Option Price shall be
                    at least 110% of the Fair Market  Value of the Shares on the
                    Date of Grant;

     (f)  any  vesting  schedule  upon  which  the  exercise  of  an  Option  is
          contingent; provided that the Committee shall have complete discretion
          with  respect to the terms of any such  vesting  schedule,  including,
          without limitation, discretion to:

          (i)       allow  full and  immediate  vesting  upon the  grant of such
                    Option,

          (ii)      to permit partial vesting in stated percentage amounts based
                    on the length of the Term of such Option, and

          (iii)     to permit  full  vesting  after a stated  period of time has
                    passed from the Date of Grant; and

     (g)  such other terms and conditions as the Committee  deems  advisable and
          are consistent with the purposes of this Plan.

Amendments to Option Agreements are subject to regulatory approval, if required.

6.2 No Grant After Ten Years From  Effective  Date - No Option  shall be granted
under the Plan later than ten years from the Effective Date of the Plan.  Except
as expressly provided herein,  nothing contained in this Plan shall require that
the terms and conditions of Options granted under the Plan be uniform.

6.3 No Disposition  for Six Months - An Optionee who is subject to Section 16 of
the  Exchange Act shall not make any  disposition,  as that term is used by Rule
16b-3 under the Exchange  Act, of any Shares  issued upon  exercise of an Option
unless at least six months has  elapsed  between the Date of Grant of the Option
and the date of disposition of the Shares issued upon exercise of such Option.

<PAGE>

7.   LIMITATION ON GRANTS OF OPTIONS

7.1 Non-ISO if Exceed $100,000 (U.S.) - If the aggregate Fair Market Value of:

     (a)  Shares underlying Options which are ISOs which have been granted to an
          Optionee under this Plan, and

     (b)  Shares  underlying  incentive stock options which have been granted to
          such  Optionee  under any other  plan of the  Company  or any  Related
          Company,

which are  exercisable  for the  first  time  during a  calendar  year,  exceeds
$100,000 (U.S.),  as such amount may be adjusted from time to time under Section
422(d) of the Code,  then,  to the extent of such excess,  such Options shall be
treated as Non-ISOs.

7.2 ISO Optionee  Owning  Greater Than 10% of Voting  Securities - The Committee
may grant an ISO to an employee of the  Company or any Related  Company  who, at
the Date of  Grant,  owns  securities  of the  Company  or any  Related  Company
representing  more than 10% of the total combined voting power of all classes of
shares of the Company or any Related Company, only if:

     (a)  the  Option  Price is at least  110% of the Fair  Market  Value of the
          Shares at the Date of Grant; and

     (b)  the Term is five years or less.

8.   EXERCISE OF OPTION

8.1 Method of Exercise - Subject to any  limitations or conditions  imposed upon
an Optionee  pursuant to the Option  Agreement or Section 6 hereof,  an Optionee
may exercise an Option by giving  written  notice  thereof to the Company at its
principal place of business.

8.2  Payment of Option  Price - The  notice  described  in Section  8.1 shall be
accompanied  by full  payment of the  aggregate  Option  Price to the extent the
Option is so exercised,  and full payment of any amounts the Company  determines
must be  withheld  for tax  purposes  from the  Optionee  pursuant to the Option
Agreement. Such payment shall be:

     (a)  in lawful money (Canadian funds) by cheque;

     (b)  at the  discretion  of the  Committee  and if such form of  payment is
          permitted  under the corporate  laws then  governing  the Company,  by
          delivery of the Optionee's  personal recourse note bearing interest at
          a rate deemed appropriate by the Committee;

     (c)  at the  discretion  of the  Committee,  and subject to all  applicable
          securities laws,  through delivery by the Optionee and/or  withholding
          by the  Company,  of  Shares  having a market  value as of the date of
          exercise  equal to the cash  exercise  price  of the  Option  plus any
          amounts that the Company determines must be withheld from the Optionee
          for U.S. or Canadian  tax  purposes.  The market  value of each of the
          Shares on the date of delivery  shall be  determined  in good faith by
          the Committee,  which  determination shall be binding for all purposes
          hereunder; or

     (d)  at  the  discretion  of  the  Committee,  by  any  combination  of the
          consideration contemplated by Sections 8.2(a) to 8.2(c) above.

8.3  Issuance of  Certificates  - As soon as  practicable  after  exercise of an
Option in accordance with Sections 8.1 and 8.2 hereof, the Company shall issue a
certificate  or  certificates  evidencing  the Shares with  respect to which the
Option  has  been  exercised.   Until  the  issuance  of  such   certificate  or
certificates,  no right to vote or receive  dividends  or any other  rights as a
shareholder  shall  exist  with  respect  to such  Shares,  notwithstanding  the
exercise of the Option. No

<PAGE>

adjustment  will be made for a dividend or other right for which the record date
is prior to the date the certificate is issued, except as provided by Section 11
hereof.

9.   TRANSFERABILITY OF OPTIONS

9.1  Non-Transferable  - Except as provided otherwise in this Section 9, Options
are non-assignable and non-transferable.

9.2 Death of  Optionee - If the  employment  of an  Optionee  as an  employee or
consultant of the Company or any Related Company, or the position of an Optionee
as a director or officer of the Company or any Related Company,  terminates as a
result of his or her death,  any Options held by such Optionee shall pass to the
Qualified Successor of the Optionee, and

     (a)  in the case of an ISO, shall be exercisable by the Qualified Successor
          for a period of six months following such death, and

     (b)  in the  case of a  Non-ISO,  shall  be  exercisable  by the  Qualified
          Successor for a period of 12 months following such death,

provided  that in no case  shall the Term of the Option  extend  beyond 10 years
from the Date of Grant.

9.3  Disability of Optionee - If the employment of an Optionee as an employee or
consultant of the Company or any Related Company, or the position of an Optionee
as a director or officer of the Company or any Related Company, is terminated by
the Company or any Related Company by reason of such Optionee's Disability,  any
Option held by such Optionee that could have been exercised immediately prior to
such  termination of service shall be  exercisable  by such Optionee,  or by his
Guardian,  for a period of one year following the termination of service of such
Optionee.

9.4  Disability  and Death of  Optionee  - If an  Optionee  who has ceased to be
employed  by the  Company or any  Related  Company by reason of such  Optionee's
Disability dies within six months after the termination of such employment,  any
Option held by such Optionee that could have been exercised immediately prior to
his or her death shall pass to the  Qualified  Successor of such  Optionee,  and
shall be exercisable by the Qualified Successor:

     (a)  in the case of an ISO, for a period of six months  following the death
          of such Optionee, and

     (b)  in the case of a  Non-ISO,  for a period  of 12 months  following  the
          death of such Optionee,

provided  that in no case  shall the Term of the Option  extend  beyond 10 years
from the Date of Grant.

9.5 Vesting - Options held by a Qualified Successor or exercisable by a Guardian
shall,  during  the  period  prior to  their  termination,  continue  to vest in
accordance with any vesting schedule to which such Options are subject.

9.6  Unanimous  Agreement  - If two or more  persons  constitute  the  Qualified
Successor or the Guardian of an Optionee, the rights of such Qualified Successor
or such Guardian shall be exercisable only upon the unanimous  agreement of such
persons.

9.7  Deemed  Non-Interruption  of  Employment  -  Employment  shall be deemed to
continue  intact  during any  military or sick leave or other bona fide leave of
absence if the  period of such leave does not exceed 90 days or, if longer,  for
so long as the Optionee's right to reemployment  with the Company or any Related
Company is  guaranteed  either by statute or by contract.  If the period of such
leave exceeds 90 days and the Optionee's reemployment is not so guaranteed, then
his or her employment shall be deemed to have terminated on the ninety-first day
of such leave.

<PAGE>

10.  TERMINATION OF OPTIONS

10.1 Termination of Options - To the extent not earlier  exercised or terminated
in accordance with section 9 above, an Option shall terminate at the earliest of
the following dates:

     (a)  the  termination   date  specified  for  such  Option  in  the  Option
          Agreement;

     (b)  where the Optionee's  position as an employee,  consultant or director
          of the Company or any Related  Company is  terminated  for just cause,
          the date of such termination for just cause;

     (c)  where the Optionee's position as an employee,  consultant,  officer or
          director of the Company or any Related Company terminates for a reason
          other than the Optionee's  Disability,  death, or termination for just
          cause,  30 days after such date of  termination,  or upon the Optionee
          making written  application to the Committee and receiving the written
          consent of the Committee, which consent may be given at the discretion
          of the  Committee,  no later  than the  original  expiry  date of such
          Option when it was granted;

     (d)  the date of any sale,  transfer,  assignment or hypothecation,  or any
          attempted sale, transfer, assignment or hypothecation,  of such Option
          in violation of Section 9.1 above; and

     (e)  the date  specified in Section 11.2 below for such  termination in the
          event of a Terminating Event.

10.2 Lapsed Options - If Options are  surrendered,  terminated or expire without
being  exercised  in whole or in part,  new Options may be granted  covering the
Shares  not  purchased  under  such  lapsed  Options.  If  an  Option  has  been
surrendered  in  connection  with the  regranting  of a new  Option  to the same
Optionee on different  terms than the original  Option granted to such Optionee,
then the new Option is subject to  approval  of the stock  exchange on which the
Shares are listed.

11.  ADJUSTMENTS TO OPTIONS

11.1 Alteration in Capital Structure - If there is a material  alteration in the
capital structure of the Company resulting from a recapitalization, stock split,
reverse stock split, stock dividend, or otherwise, the Committee shall make such
adjustments to this Plan and to the Options then outstanding  under this Plan as
the  Committee   determines   to  be   appropriate   and  equitable   under  the
circumstances,  so that the  proportionate  interest  of the holder of each such
Option shall, to the extent practicable,  be maintained as before the occurrence
of such event. Such adjustments may include,  without limitation (a) a change in
the number or kind of shares of the Company  covered by such Options,  and (b) a
change in the Option  Price  payable  per  share;  provided,  however,  that the
aggregate Option Price applicable to the unexercised portion of existing Options
shall not be altered,  it being intended that any adjustments  made with respect
to such Options shall apply only to the price per share and the number of shares
subject thereto.  For purposes of this Section 11.1, neither (i) the issuance of
additional shares of stock of the Company in exchange for adequate consideration
(including services), nor (ii) the conversion of outstanding preferred shares of
the  Company  into  Shares  shall be deemed to be  material  alterations  of the
capital structure of the Company. If the Committee determines that the nature of
a material alteration in the capital structure of the Company is such that it is
not practical or feasible to make appropriate adjustments to this Plan or to the
Options granted  hereunder,  such event shall be deemed a Terminating  Event for
the purposes of this Plan.

11.2 Terminating Events - Subject to Section 11.3, all Options granted under the
Plan shall terminate upon the occurrence of a Terminating Event.

11.3 Notice of Terminating  Event - The Committee shall give notice to Optionees
not less than thirty days prior to the consummation of a Terminating Event. Upon
the giving of such  notice,  all  Options  granted  under the Plan shall  become
immediately  exercisable,  notwithstanding  any contingent  vesting provision to
which such Options may have otherwise been subject.

<PAGE>

11.4 Corporate  Reorganization - In the event of a reorganization  as defined in
this  Section  11.4 in which  the  Company  is not the  surviving  or  acquiring
corporation,  or in which the Company is or becomes a wholly-owned subsidiary of
another corporation after the effective date of the reorganization,  then unless
provision is made by the acquiring corporation for the assumption of each Option
granted under this Plan, or the substitution of an option therefor, such that no
Modification  of any such Option  occurs,  all Options  granted  under this Plan
shall terminate and such event shall be deemed a Terminating Event. For purposes
of this Section 11.4,  reorganization shall mean any statutory merger, statutory
consolidation, sale of all or substantially all of the assets of the Company, or
sale,  pursuant to an agreement  with the Company,  of securities of the Company
pursuant to which the Company is or becomes a wholly-owned subsidiary of another
corporation after the effective date of the reorganization.

11.5  Acceleration on Change of Control - Upon a Change in Control,  all Options
shall become  immediately  exercisable,  notwithstanding  any contingent vesting
provisions to which such Options may have otherwise been subject.

11.6  Acceleration  of Date of Exercise - The Committee  shall have the right to
accelerate the date of exercise of any installment of any Option; provided that,
without the consent of the Optionee  with respect to any Option,  the  Committee
shall not  accelerate  the date of any  installment  of any Option granted to an
employee  as an ISO (and not  previously  converted  into a Non-ISO  pursuant to
Section  13  below)  if such  acceleration  would  violate  the  annual  vesting
limitation  contained in Section 422(d) of the Code, as described in Section 7.1
above.

11.7  Determinations  to be Made By Committee - Adjustments  and  determinations
under this Section 11 shall be made by the Committee,  whose decisions as to the
adjustments or determination which shall be made, and the extent thereof,  shall
be final, binding, and conclusive.

11.8 Effect of a Take-over If a bona fide offer (the "Offer") for Shares is made
to an Optionee or to shareholders  generally or to a class of shareholders which
includes the  Optionee,  which  Offer,  constitutes  a take-over  bid within the
meaning of section 89(1) of the Ontario  Securities Act, as amended from time to
time, the Company shall, immediately upon receipt of notice of the Offer, notify
each Optionee of full particulars of the Offer,  whereupon any Option held by an
Optionee  may be  exercised  in whole or in part by the Optionee so as to permit
the Optionee to tender the Shares  received upon such  exercise  (the  "Optioned
Shares") to the Offer. If:

     (a)  the Offer is not completed within the time specified therein; or

     (b)  all of the Optioned  Shares  tendered by the Optionee  pursuant to the
          Offer are not taken up and paid for by the offeror pursuant thereto;

the Optioned Share or, in the case of clause (b) above, the optioned Shares that
are not taken up and paid for,  may be returned  by the  Optionee to the Company
and  reinstated  as  authorized  but  unissued  shares and with  respect to such
returned  Optioned Shares,  the Option shall be reinstated as if it had not been
exercised.  If any  Optioned  Shares  are  returned  to the  Company  under this
Section,  the Company  shall refund the exercise  price to the Optionee for such
Optioned Shares.

12.  TERMINATION AND AMENDMENT OF PLAN

12.1  Termination of Plan - Unless earlier  terminated as provided in Section 11
above or in Section 12.2 below, the Plan shall terminate on, and no Option shall
be  granted  under the Plan on or after,  the date  which is ten years  from the
Effective Date of the Plan.

12.2 Power of  Committee to Terminate or Amend Plan - Subject to the approval of
any stock exchange on which the Company is listed,  the Committee may terminate,
suspend  or amend the  terms of the Plan;  provided,  however,  that,  except as
provided  in Section 11 above,  the  Committee  may not do any of the  following
without  obtaining,  within 12  months  either  before or after the  Committee's
adoption of a resolution  authorizing  such action,  approval by the affirmative
votes of the  holders of a  majority  of the voting  securities  of the  Company
present,  or  represented,  and  entitled  to vote  at a  meeting  duly  held in
accordance with the applicable  corporate laws, or by the written consent of the
holders of a majority of the securities of the Company entitled to vote:

<PAGE>

     (a)  increase the aggregate  number of Shares which may be issued under the
          Plan;

     (b)  materially modify the requirements as to eligibility for participation
          in the Plan,  or change the  designation  of the employees or class of
          employees eligible to receive ISOs under the Plan;

     (c)  materially  increase the benefits  accruing to participants  under the
          Plan; or

     (d)  make any  change in the terms of the Plan  that  would  cause the ISOs
          granted  hereunder to lose their  qualification  as  "incentive  stock
          options" under Section 422 of the Code;

however,  the  Committee  may amend  the  terms of the Plan to  comply  with the
requirements  of any  applicable  regulatory  authority,  without  obtaining the
approval of its shareholders.

12.3 No Grant During  Suspension  of Plan - No Option may be granted  during any
suspension,  or  after  termination,  of  the  Plan.  Amendment,  suspension  or
termination of the Plan shall not, without the consent of the Optionee, alter or
impair any rights or obligations under any Option previously granted.

13.  CONVERSION OF ISOs INTO NON-ISOs

13.1  Conversion  of ISOs into  Non-ISOs  - At the  written  request  of any ISO
Optionee,  the  Committee  may in its  discretion  take such  actions  as may be
necessary to convert such  Optionee's  ISOs (or any  installments or portions of
installments  thereof)  that have not been  exercised on the date of  conversion
into Non-ISOs at any time prior to the  expiration  of such ISOs,  regardless of
whether the  Optionee is an employee of the Company or a Related  Company at the
time of such  conversion.  Such  actions  include,  but shall not be limited to,
extending  the  exercise  period  of such  ISOs,  provided,  however,  that such
exercise  period shall in no event exceed 10 years  following  the Date of Grant
without approval of The Toronto Stock Exchange.  At the time of such conversion,
the Committee,  with the consent of the Optionee,  may impose such conditions on
the exercise of the resulting  Non-ISOs as the Committee in its  discretion  may
determine,  provided that such conditions are consistent with this Plan. Nothing
in the Plan  shall  be  deemed  to give  any  Optionee  the  right to have  such
Optionee's  ISOs  converted into Non-ISOs,  and no such  conversion  shall occur
until and unless the Committee takes appropriate action. The Committee, with the
consent of the Optionee,  may also terminate any portion of any ISO that has not
been exercised at the time of such conversion.

14.  CONDITIONS PRECEDENT TO ISSUANCE OF SHARES

14.1  Compliance with Laws - Shares shall not be issued pursuant to the exercise
of any  Option  unless the  Shares  are fully  paid and  non-assessable  and the
exercise of such Option and the issuance and delivery of such Shares comply with
all relevant provisions of law, including, without limitation, the United States
Securities  Act  of  1933,  as  amended,  any  applicable  state  or  provincial
securities or corporate laws, the rules and regulations  promulgated thereunder,
and the  requirements  of any stock  exchange  upon which the Shares may then be
listed or otherwise traded.

14.2  Representations by Optionee - As a condition  precedent to the exercise of
any Option,  the Company may require the Optionee to represent  and warrant,  at
the time of exercise,  that the Shares are being  purchased  only for investment
and without any present  intention to sell or distribute  such Shares if, in the
opinion of counsel for the Company,  such  representations  and  warranties  are
required by any applicable law.

14.3  Regulatory  Approval to Issuance of Shares - The  Company's  inability  to
obtain authority from any regulatory body having  jurisdiction,  which authority
is deemed by the  Company's  counsel to be necessary to the lawful  issuance and
sale of any Shares  hereunder,  shall relieve the Company of any liability  with
respect to the failure to issue or sell such Shares.

<PAGE>

15.  USE OF PROCEEDS

15.1 Use of Proceeds - Proceeds from the sale of Shares  pursuant to the Options
granted  and  exercised  under the Plan shall  constitute  general  funds of the
Company and shall be used for general corporate purposes.

16.  NOTICES

16.2 Notices - All notices,  requests, demands and other communications required
or permitted to be given under this Plan and the Options granted under this Plan
shall be in writing and shall be either  served  personally on the party to whom
notice is to be given,  in which case  notice  shall be deemed to have been duly
given on the date of such  service;  telefaxed,  in which case  notice  shall be
deemed to have been duly given on the date the telefax is sent; or mailed to the
party  to whom  notice  is to be  given,  by first  class  mail,  registered  or
certified, return receipt requested, postage prepaid, and addressed to the party
at his or its most recent  known  address,  in which case such  notice  shall be
deemed to have been duly given on the tenth postal  delivery day  following  the
date of such mailing.

17.  MISCELLANEOUS PROVISIONS

17.1 No  Obligation  to Exercise -  Optionees  shall be under no  obligation  to
exercise Options granted under this Plan.

17.2 No  Obligation  to Retain  Optionee - Nothing  contained in this Plan shall
obligate  the  Company  or any  Related  Company  to  retain an  Optionee  as an
employee,  officer,  director, or consultant for any period, nor shall this Plan
interfere  in any way with the right of the  Company or any  Related  Company to
reduce such Optionee's compensation.

17.3 Binding  Agreement - The provisions of this Plan and each Option  Agreement
with an Optionee shall be binding upon such Optionee and the Qualified Successor
or Guardian of such Optionee.

17.4 Use of Terms - Where the  context  so  requires,  references  herein to the
singular  shall  include  the  plural,  and  vice  versa,  and  references  to a
particular gender shall include either or both genders.

17.5 Headings - The headings used in this Plan are for  convenience of reference
only and  shall  not in any way  affect  or be used in  interpreting  any of the
provisions of this Plan.

17.6 No  Representation  or Warranty - The Company  makes no  representation  or
warranty as to the future market value of any Shares  issued in accordance  with
the provisions of this Share Option Plan.

Date approved by the Board of Directors of the Company:       February 25, 1999
                                                              -----------------

                                       /s/ M. Greg Beniston
                                       M. Greg Beniston, Secretary

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