Document:

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                                                                   EXHIBIT 10.31

                           LOAN AND SECURITY AGREEMENT

BORROWERS:   QUALMARK CORPORATION, A COLORADO CORPORATION
ADDRESS:     4580 FLORENCE STREET, DENVER, CO 80238

             QUALMARK ACG CORPORATION, A COLORADO CORPORATION
             4580 FLORENCE STREET, DENVER, CO 80238

DATE:        NOVEMBER 11, 2004

THIS LOAN AND SECURITY AGREEMENT is entered into on the above date between
PARTNERS FOR GROWTH, L.P. ("PFG"), whose address is 560 Mission Street, 3rd
floor, San Francisco, CA 94105 and the borrowers named above (jointly and
severally, "Borrower"), whose chief executive office is located at the above
address ("Borrower's Address"). The Schedule to this Agreement (the "Schedule")
being signed by the parties concurrently, is an integral part of this Agreement.
(Definitions of certain terms used in this Agreement are set forth in Section 7
below.)

1. LOANS.

     1.1 LOANS. PFG will make a loan to Borrower (the "Loan") in the amount
shown on the Schedule, provided no Default or Event of Default has occurred and
is continuing.

     1.2 INTEREST. All Loans and all other monetary Obligations shall bear
interest at the rate shown on the Schedule, except where expressly set forth to
the contrary in this Agreement. Interest shall be payable monthly, on the last
day of the month.

     1.3 FEES. Borrower shall pay PFG the fees shown on the Schedule, which are
in addition to all interest and other sums payable to PFG and are not
refundable.

     1.4 LOAN REQUESTS. To obtain a Loan, Borrower shall make a request to PFG
by facsimile or telephone. Loan requests may also be made by Borrower by email,
but the same shall not be deemed made until PFG acknowledges receipt of the same
by email or otherwise in writing. Loan requests received after 12:00 Noon
Pacific time will not be considered by PFG until the next Business Day. PFG may
rely on any telephone request for a Loan given by a person whom PFG believes in
good faith is an authorized representative of Borrower, and Borrower will
indemnify PFG for any loss PFG suffers as a result of that reliance.

     1.5 LATE FEE. If any payment of accrued interest for any month is not made
within three business days after the date a bill therefor is sent by PFG to
Borrower, or if any payment of principal or any other payment is not made within
three Business Days after the date due, Borrower shall pay PFG a late payment
fee equal to 5% of the amount of such late payment. The provisions of this
paragraph shall not be construed as PFG's consent to Borrower's failure to pay
any amounts when due, and PFG's acceptance of any such late payments shall not
restrict PFG's exercise of any remedies arising out of any such failure.

2. SECURITY INTEREST.

     2.1 GRANT OF SECURITY INTEREST. To secure the payment and performance of
all of the Obligations when due, each Borrower hereby grants to PFG a security
interest in all of the following (collectively, the "Collateral"): all right,
title and interest of Borrower in and to all of the following, whether now owned
or hereafter arising or acquired and wherever located: all Accounts; all
Inventory; all Equipment; all Deposit Accounts; all General Intangibles
(including without limitation all Intellectual Property); all Investment
Property; all Other Property; and any and all claims, rights and interests in
any of the above, and all guaranties and security for any of the above, and all
substitutions and replacements for, additions, accessions, attachments,
accessories, and improvements to, and proceeds (including proceeds of any
insurance policies, proceeds of
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PARTNERS FOR GROWTH                                  LOAN AND SECURITY AGREEMENT

proceeds and claims against third parties) of, any and all of the above, and all
Borrower's books relating to any and all of the above.

3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWER.

     In order to induce PFG to enter into this Agreement and to make Loans, each
Borrower represents and warrants to PFG as follows, and each Borrower covenants
that the following representations will continue to be true, and that Borrower
will at all times comply with all of the following covenants, throughout the
term of this Agreement and until all Obligations have been paid and performed in
full:

     3.1 CORPORATE EXISTENCE AND AUTHORITY. Borrower is and will continue to be,
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Borrower is and will continue to be qualified
and licensed to do business in all jurisdictions in which any failure to do so
would result in a Material Adverse Change. The execution, delivery and
performance by Borrower of this Agreement, and all other documents contemplated
hereby (i) have been duly and validly authorized, (ii) are enforceable against
Borrower in accordance with their terms (except as enforcement may be limited by
equitable principles and by bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to creditors' rights generally), and (iii) do not
violate Borrower's articles or certificate of incorporation, or Borrower's
by-laws, or any law or any material agreement or instrument which is binding
upon Borrower or its property, and (iv) do not constitute grounds for
acceleration of any material indebtedness or obligation under any agreement or
instrument which is binding upon Borrower or its property.

     3.2 NAME; TRADE NAMES AND STYLES. As of the date hereof, the name of
Borrower set forth in the heading to this Agreement is its correct name, as set
forth in its Articles or Certificate of Incorporation. Listed in the
Representations are all prior names of Borrower and all of Borrower's present
and prior trade names as of the date hereof. Borrower shall give PFG 30 days'
prior written notice before changing its name or doing business under any other
name. Borrower has complied, and will in the future comply, in all material
respects, with all laws relating to the conduct of business under a fictitious
business name, if applicable to Borrower.

     3.3 PLACE OF BUSINESS; LOCATION OF COLLATERAL. As of the date hereof, the
address set forth in the heading to this Agreement is Borrower's chief executive
office. In addition, as of the date hereof, Borrower has places of business and
Collateral is located only at the locations set forth in the Representations.
Borrower will give PFG at least 30 days prior written notice before opening any
additional place of business, changing its chief executive office, or moving any
of the Collateral to a location other than Borrower's Address or one of the
locations set forth in the Representations, except that Borrower may move
Collateral on a temporary basis as reasonably required and as is customary and
consistent with Borrower's ordinary course of business, and may maintain sales
offices in the ordinary course of business at which not more than a total of
$10,000 fair market value of Equipment is located.

     3.4 TITLE TO COLLATERAL; PERFECTION; PERMITTED LIENS.

          (a) Borrower is now, and will at all times in the future be, the sole
owner of all the Collateral, except for items of Equipment which are leased to
Borrower. The Collateral now is and will remain free and clear of any and all
liens, charges, security interests, encumbrances and adverse claims, except for
Permitted Liens. PFG now has, and will continue to have, a first-priority
perfected and enforceable security interest in all of the Collateral, subject
only to the Permitted Liens, and Borrower will at all times defend PFG and the
Collateral against all claims of others.

          (b) Borrower has set forth in the Representations all of Borrower's
Deposit Accounts, and Borrower will give PFG five Business Days advance written
notice before establishing any new Deposit Accounts and will cause the
institution where any such new Deposit Account is maintained to execute and
deliver to PFG a control agreement in form sufficient to perfect PFG's security
interest in the Deposit Account and otherwise satisfactory to PFG in its good
faith business judgment.

          (c) In the event that Borrower shall at any time after the date hereof
have any commercial tort claims against others, which it is asserting, and in
which the potential recovery exceeds $100,000, Borrower shall promptly notify
PFG thereof in writing and provide PFG with such information regarding the same
as PFG shall request (unless providing such information would waive the
Borrower's attorney-client privilege). Such notification to PFG shall constitute
a grant of a security interest in the commercial tort claim and all proceeds
thereof to PFG, and Borrower shall execute and deliver all such documents and
take all such actions as PFG shall request in connection therewith.

          (d) None of the Collateral now is or will be affixed to any real
property in such a manner, or with such intent, as to become a fixture. Borrower
is not and will not become a lessee under any real property lease pursuant to
which the lessor
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PARTNERS FOR GROWTH                                  LOAN AND SECURITY AGREEMENT

may obtain any rights in any of the Collateral (except such rights which may be
obtained after the date hereof, are reasonably acceptable to PFG and are
specifically subordinated to the security interest of PPFG) and no such lease
now prohibits, restrains, impairs or will prohibit, restrain or impair
Borrower's right to remove any Collateral from the leased premises. Whenever any
Collateral is located upon premises in which any third party has an interest,
Borrower shall, whenever requested by PFG, use commercially reasonable efforts
to cause such third party to execute and deliver to PFG, in form acceptable to
PFG, such waivers and subordinations as PFG shall specify in its good faith
business judgment. Borrower will keep in full force and effect, and will comply
with all material terms of, any lease of real property where any of the
Collateral now or in the future may be located.

     3.5 MAINTENANCE OF COLLATERAL. Borrower will maintain the Collateral in
good working condition (ordinary wear and tear excepted), and Borrower will not
use the Collateral for any unlawful purpose. Borrower will immediately advise
PFG in writing of any material loss or damage to the Collateral.

     3.6 BOOKS AND RECORDS. Borrower has maintained and will maintain at
Borrower's Address complete and accurate books and records, comprising an
accounting system in accordance with GAAP.

     3.7 FINANCIAL CONDITION, STATEMENTS AND REPORTS. All financial statements
now or in the future delivered to PFG have been, and will be, prepared in
conformity with GAAP and now and in the future will fairly present the results
of operations and financial condition of Borrower in all material respects, in
accordance with GAAP, at the times and for the periods therein stated. Between
the last date covered by any such statement provided to PFG and the date hereof,
there has been no Material Adverse Change.

     3.8 TAX RETURNS AND PAYMENTS; PENSION CONTRIBUTIONS. Borrower has timely
filed, and will timely file, all required tax returns and reports, and Borrower
has timely paid, and will timely pay, all foreign, federal, state and local
taxes, assessments, deposits and contributions now or in the future owed by
Borrower. Borrower may, however, defer payment of any of the foregoing which are
contested by Borrower in good faith, provided that Borrower (i) contests the
same by appropriate proceedings promptly and diligently instituted and
conducted, (ii) notifies PFG in writing of the commencement of, and any material
development in, the proceedings, and (iii) posts bonds or takes any other steps
required to keep the same from becoming a lien upon any of the Collateral.
Borrower is unaware of any claims or adjustments proposed for any of Borrower's
prior tax years which could result in additional taxes becoming due and payable
by Borrower. Borrower has paid, and shall continue to pay all amounts necessary
to fund all present and future pension, profit sharing and deferred compensation
plans in accordance with their terms, and Borrower has not and will not withdraw
from participation in, permit partial or complete termination of, or permit the
occurrence of any other event with respect to, any such plan which could
reasonably be expected to result in any liability of Borrower, including any
liability to the Pension Benefit Guaranty Corporation or its successors or any
other governmental agency.

     3.9 COMPLIANCE WITH LAW. Borrower has, to the best of its knowledge,
complied, and will comply, in all material respects, with all provisions of all
foreign, federal, state and local laws and regulations applicable to Borrower,
including, but not limited to, those relating to Borrower's ownership of real or
personal property, the conduct and licensing of Borrower's business, and all
environmental matters.

     3.10 LITIGATION. There is no claim, suit, litigation, proceeding or
investigation pending or (to best of Borrower's knowledge) threatened against or
affecting Borrower in any court or before any governmental agency (or any basis
therefor known to Borrower) which could reasonably be expected to result, either
separately or in the aggregate, in any Material Adverse Change. Borrower will
promptly inform PFG in writing of any claim, proceeding, litigation or
investigation in the future threatened or instituted against Borrower involving
any single claim of $50,000 or more, or involving $100,000 or more in the
aggregate.

     3.11 USE OF PROCEEDS. All proceeds of all Loans shall be used solely for
lawful business purposes. Borrower is not purchasing or carrying any "margin
stock" (as defined in Regulation U of the Board of Governors of the Federal
Reserve System) and no part of the proceeds of any Loan will be used to purchase
or carry any "margin stock" or to extend credit to others for the purpose of
purchasing or carrying any "margin stock."

     3.12 NO DEFAULT. At the date hereof, no Default or Event of Default has
occurred, and no Default or Event of Default will have occurred after giving
effect to any Loans being made concurrently herewith.

4. ADDITIONAL DUTIES OF BORROWER.

     4.1 FINANCIAL AND OTHER COVENANTS. Borrower shall at all times comply with
the financial and other covenants set forth in the Schedule.
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PARTNERS FOR GROWTH                                  LOAN AND SECURITY AGREEMENT

     4.2. REMITTANCE OF PROCEEDS. Subject to the rights of the Senior Lender,
all proceeds arising from the disposition of any Collateral shall be delivered,
in kind, by Borrower to PFG in the original form in which received by Borrower
not later than the following Business Day after receipt by Borrower, to be
applied to the Obligations in such order as PFG shall determine; provided that,
if no Default or Event of Default has occurred and is continuing, Borrower shall
not be obligated to remit to PFG (i) the proceeds of Accounts arising in the
ordinary course of business, or (ii) the proceeds of the sale of worn out or
obsolete Equipment disposed of by Borrower in good faith in an arm's length
transaction for an aggregate purchase price of $25,000 or less (for all such
transactions in any fiscal year), or (iii) the proceeds of the sale of other
assets not exceeding $50,000 in the aggregate in any fiscal year. Borrower
agrees that it will not commingle proceeds of Collateral with any of Borrower's
other funds or property, but will hold such proceeds separate and apart from
such other funds and property and in an express trust for PFG, except as set
forth above, and subject to the rights of the Senior Lender. Nothing in this
Section limits the restrictions on disposition of Collateral set forth elsewhere
in this Agreement.

     4.3 INSURANCE. Borrower shall, at all times insure all of the tangible
personal property Collateral and carry such other business insurance, with
insurers reasonably acceptable to PFG, in such form and amounts as PFG may
reasonably require and as are customary and in accordance with standard
practices for Borrower's industry and locations, and Borrower shall provide
evidence of such insurance to PFG. All such insurance policies shall name PFG as
an additional loss payee, and shall contain a lenders loss payee endorsement in
form reasonably acceptable to PFG. Upon receipt of the proceeds of any such
insurance, subject to the rights of the Senior Lender, PFG shall apply such
proceeds in reduction of the Obligations as PFG shall determine in its good
faith business judgment, except that, provided no Default or Event of Default
has occurred and is continuing, PFG shall release to Borrower insurance proceeds
with respect to Equipment totaling less than $250,000, which shall be utilized
by Borrower for the replacement of the Equipment with respect to which the
insurance proceeds were paid. PFG may require reasonable assurance that the
insurance proceeds so released will be so used. If Borrower fails to provide or
pay for any insurance, PFG may, but is not obligated to, obtain the same at
Borrower's expense. Borrower shall promptly deliver to PFG copies of all
material reports made to insurance companies.

     4.4 REPORTS. Borrower, at its expense, shall provide PFG with the written
reports set forth in the Schedule, and such other written reports with respect
to Borrower (including budgets, projections, operating plans and other financial
documentation), as PFG shall from time to time specify in its good faith
business judgment.

     4.5 ACCESS TO COLLATERAL, BOOKS AND RECORDS. At reasonable times, and on
two Business Days' notice, PFG, or its agents, shall have the right to inspect
the Collateral, and the right to audit and copy Borrower's books and records.
The foregoing inspections and audits shall be at Borrower's expense and the
charge therefor shall be $750 per person per day (or such higher amount as shall
represent PFG's then current standard charge for the same), plus reasonable
out-of-pocket expenses. Notwithstanding the foregoing, if no Default or Event of
Default has occurred and is continuing, Borrower shall not be required to
disclose to PFG any document or information (i) where disclosure is prohibited
by applicable law or any agreement binding on Borrower, or (ii) is subject to
attorney-client or similar privilege or constitutes attorney work product. If
Borrower is withholding any information under the preceding sentence, it shall
so advise PFG in writing, giving PFG a general description of the nature of the
information withheld.

     4.6 NEGATIVE COVENANTS. Except as may be permitted in the Schedule,
Borrower shall not, without PFG's prior written consent (which shall be a matter
of its good faith business judgment), do any of the following:

          (i) merge or consolidate with another corporation or entity (except
that QACG may merge into QualMark);

          (ii) acquire any assets, except in the ordinary course of business, or
make any Investments other than Permitted Investments;

          (iii) enter into any other transaction outside the ordinary course of
business;

          (iv) sell or transfer any Collateral (including without limitation and
sale or transfer of Collateral which is then leased back by Borrower), except
for (A) the sale of finished Inventory in the ordinary course of Borrower's
business, and except for the sale of obsolete or unneeded Equipment in the
ordinary course of business, (B) the sale of other assets not exceeding $50,000
in the aggregate in any fiscal year, (C) the making or Permitted Investments,
(D) the granting of Permitted Liens, and (E) the non-exclusive licensing of
Intellectual Property in the ordinary course of business;

          (v) store any Inventory or other Collateral with any warehouseman or
other third party, unless there is in place a bailee agreement in such form as
PFG shall specify in its good faith business judgment;

          (vi) sell any Inventory on a sale-or-return, guaranteed sale,
consignment, or other contingent basis;

     (vii) make any loans of any money or other assets, other than Permitted
Investments;
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PARTNERS FOR GROWTH                                  LOAN AND SECURITY AGREEMENT

          (viii) incur any Indebtedness, other than Permitted Indebtedness;

          (ix) guarantee or otherwise become liable with respect to the
obligations of another party or entity;

          (x) pay or declare any dividends on Borrower's stock (except for
dividends payable solely in stock of Borrower and dividends paid by QACG to
QualMark);

          (xi) redeem, retire, purchase or otherwise acquire, directly or
indirectly, any of Borrower's stock;

          (xii) engage, directly or indirectly, in any business other than the
businesses currently engaged in by Borrower or reasonably related thereto;

          (xiii) with respect to QualMark, cease to own 100% of QACG;

          (xiv) with respect to QualMark, permit a change in control of QACG; or

          (xv) dissolve or elect to dissolve (except that QACG may dissolve into
QualMark).

Transactions permitted by the foregoing provisions of this Section are only
permitted if no Default or Event of Default would occur as a result of such
transaction.

     4.7 LITIGATION COOPERATION. Should any third-party suit or proceeding be
instituted by or against PFG with respect to any Collateral or relating to
Borrower, Borrower shall, without expense to PFG, make available Borrower and
its officers, employees and agents and Borrower's books and records, to the
extent that PFG may deem them reasonably necessary in order to prosecute or
defend any such suit or proceeding.

     4.8 CHANGES. Borrower agrees to notify PFG in writing of any changes in the
information set forth in the Representations.

     4.9 FURTHER ASSURANCES. Borrower agrees, at its expense, on request by PFG,
to execute all documents and take all actions, as PFG, may, in its good faith
business judgment, deem necessary or useful in order to perfect and maintain
PFG's perfected first-priority security interest in the Collateral (subject to
Permitted Liens), and in order to fully consummate the transactions contemplated
by this Agreement.

5. TERM.

     5.1 MATURITY DATE. This Agreement shall continue in effect until the
maturity date set forth on the Schedule (the "Maturity Date"), subject to
Sections 5.2 and 5.3 below.

     5.2 EARLY TERMINATION. This Agreement may be terminated prior to the
Maturity Date as follows: (i) if specifically permitted in the Schedule, by
Borrower, effective three Business Days after written notice of termination is
given to PFG; or (ii) by PFG at any time after the occurrence and during the
continuance of an Event of Default, without notice, effective immediately. If
this Agreement is terminated by Borrower (if permitted in the Schedule) or by
PFG under this Section 5.2, Borrower shall pay to PFG a prepayment fee in the
amount set forth in the Schedule. Any prepayment fee shall be due and payable on
the effective date of termination and thereafter shall bear interest at a rate
equal to the highest rate applicable to any of the Obligations.

     5.3 PAYMENT OF OBLIGATIONS. On the Maturity Date or on any earlier
effective date of termination, Borrower shall pay and perform in full all
Obligations, whether evidenced by installment notes or otherwise, and whether or
not all or any part of such Obligations are otherwise then due and payable.
Notwithstanding any termination of this Agreement, all of PFG's security
interests in all of the Collateral and all of the terms and provisions of this
Agreement shall continue in full force and effect until all Obligations have
been paid and performed in full; provided that PFG may, in its sole discretion,
refuse to make any further Loans after termination. No termination shall in any
way affect or impair any right or remedy of PFG, nor shall any such termination
relieve Borrower of any Obligation to PFG, until all of the Obligations have
been paid and performed in full. Upon payment and performance in full of all the
Obligations and termination of this Agreement, PFG shall promptly terminate its
financing statements with respect to the Borrower and deliver to Borrower such
other documents as may be required to fully terminate PFG's security interests.

6. EVENTS OF DEFAULT AND REMEDIES.

     6.1 EVENTS OF DEFAULT. The occurrence of any of the following events shall
constitute an "Event of Default" under this Agreement, and Borrower shall give
PFG immediate written notice thereof:

          (a) Any warranty, representation, statement, report or certificate
made or delivered to PFG by Borrower or any of Borrower's officers, employees or
agents, now or in the future, shall be untrue or misleading in a material
respect when made or deemed to be made; or
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PARTNERS FOR GROWTH                                  LOAN AND SECURITY AGREEMENT

          (b) Borrower shall fail to pay any Loan or any interest thereon or any
other monetary Obligation within three Business Days after the date due; or

          (c) Borrower shall fail to comply with any of the financial covenants
set forth in the Schedule, or shall breach any of the provisions of Section 4.6
hereof, or shall fail to perform any other non-monetary Obligation which by its
nature cannot be cured, or shall fail to permit PFG to conduct an inspection or
audit as provided in Section 4.5 hereof or shall fail to provide PFG with
reports required under Section 6 of the Schedule within one Business Day after
the date due; or

          (d) Borrower shall fail to perform any other non-monetary Obligation,
which failure is not cured within five Business Days after the date due; or

          (e) any levy, assessment, attachment, seizure, lien or encumbrance
(other than a Permitted Lien) is made on all or any part of the Collateral which
is not cured within 10 days after the occurrence of the same; or

          (f) any default or event of default occurs under any obligation
secured by a Permitted Lien, which is not cured within any applicable cure
period or waived in writing by the holder of the Permitted Lien; or

          (g) Borrower breaches any material contract or obligation, which has
resulted or reasonably may be expected to result in a Material Adverse Change;
or

          (h) Dissolution, termination of existence, insolvency or business
failure of Borrower; or appointment of a receiver, trustee or custodian, for all
or any part of the property of, assignment for the benefit of creditors by, or
the commencement of any proceeding by Borrower under any reorganization,
bankruptcy, insolvency, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, now or in the future in effect,
or Borrower shall generally not pay its debts as they become due, or Borrower
shall conceal, remove or transfer any part of its property, with intent to
hinder, delay or defraud its creditors, or make or suffer any transfer of any of
its property which may be fraudulent under any bankruptcy, fraudulent conveyance
or similar law; or

          (i) the commencement of any proceeding against Borrower or any
guarantor of any of the Obligations under any reorganization, bankruptcy,
insolvency, arrangement, readjustment of debt, dissolution or liquidation law or
statute of any jurisdiction, now or in the future in effect, which is not cured
by the dismissal thereof within 45 days after the date commenced; or

          (j) revocation or termination of, or limitation or denial of liability
upon, any guaranty of the Obligations or any attempt to do any of the foregoing,
or commencement of proceedings by any guarantor of any of the Obligations under
any bankruptcy or insolvency law; or

          (k) revocation or termination of, or limitation or denial of liability
upon, any pledge of any certificate of deposit, securities or other property or
asset of any kind pledged by any third party to secure any or all of the
Obligations, or any attempt to do any of the foregoing, or commencement of
proceedings by or against any such third party under any bankruptcy or
insolvency law; or

          (l) Borrower makes any payment on account of any indebtedness or
obligation which has been subordinated to the Obligations (other than as
permitted in the applicable subordination agreement), or if any Person who has
subordinated such indebtedness or obligations terminates or in any way limits
his subordination agreement; or

          (m) there shall be a change in the record or beneficial ownership of
an aggregate of more than 20% of the outstanding shares of stock of Borrower, in
one or more transactions, compared to the ownership of outstanding shares of
stock of Borrower in effect on the date hereof, without the prior written
consent of PFG; or

          (n) a Material Adverse Change shall occur.

PFG may cease making any Loans hereunder during any of the cure periods provided
above, and thereafter if an Event of Default has occurred and is continuing.

     6.2 REMEDIES. Upon the occurrence and during the continuance of any Event
of Default, and at any time thereafter, PFG, at its option, and without notice
or demand of any kind (all of which are hereby expressly waived by Borrower),
may do any one or more of the following: (a) Cease making Loans or otherwise
extending credit to Borrower under this Agreement or any other Loan Document;
(b) Accelerate and declare all or any part of the Obligations to be immediately
due, payable, and performable, notwithstanding any deferred or installment
payments allowed by any instrument evidencing or relating to any Obligation; (c)
Take possession of any or all of the Collateral wherever it may be found, and
for that purpose Borrower hereby authorizes PFG without judicial process to
enter onto any of Borrower's premises without interference to search for, take
possession of, keep, store, or remove any of the Collateral, and remain on the
premises or cause a custodian to remain on
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PARTNERS FOR GROWTH                                  LOAN AND SECURITY AGREEMENT

the premises in exclusive control thereof, without charge for so long as PFG
deems it necessary, in its good faith business judgment, in order to complete
the enforcement of its rights under this Agreement or any other agreement;
provided, however, that should PFG seek to take possession of any of the
Collateral by court process, Borrower hereby irrevocably waives: (i) any bond
and any surety or security relating thereto required by any statute, court rule
or otherwise as an incident to such possession; (ii) any demand for possession
prior to the commencement of any suit or action to recover possession thereof;
and (iii) any requirement that PFG retain possession of, and not dispose of, any
such Collateral until after trial or final judgment; (d) Require Borrower to
assemble any or all of the Collateral and make it available to PFG at places
designated by PFG which are reasonably convenient to PFG and Borrower, and to
remove the Collateral to such locations as PFG may deem advisable; (e) Complete
the processing, manufacturing or repair of any Collateral prior to a disposition
thereof and, for such purpose and for the purpose of removal, PFG shall have the
right to use Borrower's premises, vehicles, hoists, lifts, cranes, and other
Equipment and all other property without charge; (f) Sell, lease or otherwise
dispose of any of the Collateral, in its condition at the time PFG obtains
possession of it or after further manufacturing, processing or repair, at one or
more public and/or private sales, in lots or in bulk, for cash, exchange or
other property, or on credit, and to adjourn any such sale from time to time
without notice other than oral announcement at the time scheduled for sale. PFG
shall have the right to conduct such disposition on Borrower's premises without
charge, for such time or times as PFG deems reasonable, or on PFG's premises, or
elsewhere and the Collateral need not be located at the place of disposition.
PFG may directly or through any affiliated company purchase or lease any
Collateral at any such public disposition, and if permissible under applicable
law, at any private disposition. Any sale or other disposition of Collateral
shall not relieve Borrower of any liability Borrower may have if any Collateral
is defective as to title or physical condition or otherwise at the time of sale;
(g) Demand payment of, and collect any Accounts and General Intangibles
comprising Collateral and, in connection therewith, Borrower irrevocably
authorizes PFG to endorse or sign Borrower's name on all collections, receipts,
instruments and other documents, to take possession of and open mail addressed
to Borrower and remove therefrom payments made with respect to any item of the
Collateral or proceeds thereof, and, in PFG's good faith business judgment, to
grant extensions of time to pay, compromise claims and settle Accounts and the
like for less than face value; (h) Exercise any and all rights under any present
or future control agreements relating to Deposit Accounts or Investment
Property; and (i) Demand and receive possession of any of Borrower's federal and
state income tax returns and the books and records utilized in the preparation
thereof or referring thereto. All reasonable attorneys' fees, expenses, costs,
liabilities and obligations incurred by PFG with respect to the foregoing shall
be added to and become part of the Obligations, shall be due on demand, and
shall bear interest at a rate equal to the highest interest rate applicable to
any of the Obligations. Without limiting any of PFG's rights and remedies, from
and after the occurrence and during the continuance of any Event of Default, the
interest rate applicable to the Obligations shall be increased by an additional
four percent per annum (the "Default Rate").

     6.3 STANDARDS FOR DETERMINING COMMERCIAL REASONABLENESS. Borrower and PFG
agree that a sale or other disposition (collectively, "sale") of any Collateral
which complies with the following standards will conclusively be deemed to be
commercially reasonable: (i) Notice of the sale is given to Borrower at least
ten days prior to the sale, and, in the case of a public sale, notice of the
sale is published at least five days before the sale in a newspaper of general
circulation in the county where the sale is to be conducted; (ii) Notice of the
sale describes the collateral in general, non-specific terms; (iii) The sale is
conducted at a place designated by PFG, with or without the Collateral being
present; (iv) The sale commences at any time between 8:00 a.m. and 6:00 p.m.;
(v) Payment of the purchase price in cash or by cashier's check or wire transfer
is required; (vi) With respect to any sale of any of the Collateral, PFG may
(but is not obligated to) direct any prospective purchaser to ascertain directly
from Borrower any and all information concerning the same. PFG shall be free to
employ other methods of noticing and selling the Collateral, in its discretion,
if they are commercially reasonable.

     6.4 POWER OF ATTORNEY. Upon the occurrence and during the continuance of
any Event of Default, without limiting PFG's other rights and remedies, Borrower
grants to PFG an irrevocable power of attorney coupled with an interest,
authorizing and permitting PFG (acting through any of its employees, attorneys
or agents) at any time, at its option, but without obligation, with or without
notice to Borrower, and at Borrower's expense, to do any or all of the
following, in Borrower's name or otherwise, but PFG agrees that if it exercises
any right hereunder, it will do so in good faith and in a commercially
reasonable manner: (a) Execute on behalf of Borrower any documents that PFG may,
in its good faith business judgment, deem advisable in order to perfect and
maintain PFG's security interest in the Collateral, or in order to exercise a
right of Borrower or PFG, or in order to fully consummate all the transactions
contemplated under this Agreement, and all other Loan Documents; (b) Execute on
behalf of Borrower, any invoices relating to any Account, any draft against any
Account Debtor and any notice to any Account Debtor, any proof of claim in
bankruptcy, any Notice of Lien, claim of mechanic's, materialman's or other
lien, or assignment or satisfaction of mechanic's, materialman's or other lien;
(c) Take control in any manner of any cash or non-cash items of payment or
proceeds of Collateral; endorse the name of Borrower upon any instruments, or
documents, evidence of payment or Collateral that may come into PFG's
possession; (d) Endorse all checks and other forms of remittances received by
PFG; (e) Pay, contest or settle any lien, charge, encumbrance, security interest
and adverse claim in
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PARTNERS FOR GROWTH                                  LOAN AND SECURITY AGREEMENT

or to any of the Collateral, or any judgment based thereon, or otherwise take
any action to terminate or discharge the same; (f) Grant extensions of time to
pay, compromise claims and settle Accounts and General Intangibles for less than
face value and execute all releases and other documents in connection therewith;
(g) Pay any sums required on account of Borrower's taxes or to secure the
release of any liens therefor, or both; (h) Settle and adjust, and give releases
of, any insurance claim that relates to any of the Collateral and obtain payment
therefor; (i) Instruct any third party having custody or control of any books or
records belonging to, or relating to, Borrower to give PFG the same rights of
access and other rights with respect thereto as PFG has under this Agreement;
and (j) Take any action or pay any sum required of Borrower pursuant to this
Agreement and any other Loan Documents. Any and all reasonable sums paid and any
and all reasonable costs, expenses, liabilities, obligations and attorneys' fees
incurred by PFG with respect to the foregoing shall be added to and become part
of the Obligations, shall be payable on demand, and shall bear interest at a
rate equal to the highest interest rate applicable to any of the Obligations. In
no event shall PFG's rights under the foregoing power of attorney or any of
PFG's other rights under this Agreement be deemed to indicate that PFG is in
control of the business, management or properties of Borrower.

     6.5 APPLICATION OF PROCEEDS. All proceeds realized as the result of any
sale of the Collateral shall be applied by PFG first to the reasonable costs,
expenses, liabilities, obligations and attorneys' fees incurred by PFG in the
exercise of its rights under this Agreement, second to the interest due upon any
of the Obligations, and third to the principal of the Obligations, in such order
as PFG shall determine in its sole discretion. Any surplus shall be paid to
Borrower or other persons legally entitled thereto; Borrower shall remain liable
to PFG for any deficiency. If, PFG, in its good faith business judgment,
directly or indirectly enters into a deferred payment or other credit
transaction with any purchaser at any sale of Collateral, PFG shall have the
option, exercisable at any time, in its good faith business judgment, of either
reducing the Obligations by the principal amount of purchase price or deferring
the reduction of the Obligations until the actual receipt by PFG of the cash
therefor.

     6.6 REMEDIES CUMULATIVE. In addition to the rights and remedies set forth
in this Agreement, PFG shall have all the other rights and remedies accorded a
secured party under the Code and under all other applicable laws, and under any
other instrument or agreement now or in the future entered into between PFG and
Borrower, and all of such rights and remedies are cumulative and none is
exclusive. Exercise or partial exercise by PFG of one or more of its rights or
remedies shall not be deemed an election, nor bar PFG from subsequent exercise
or partial exercise of any other rights or remedies. The failure or delay of PFG
to exercise any rights or remedies shall not operate as a waiver thereof, but
all rights and remedies shall continue in full force and effect until all of the
Obligations have been fully paid and performed.

7. DEFINITIONS. AS USED IN THIS AGREEMENT, THE FOLLOWING TERMS HAVE THE
FOLLOWING MEANINGS:

     "Account Debtor" means the obligor on an Account.

     "Accounts" means all present and future "accounts" as defined in the
California Uniform Commercial Code in effect on the date hereof with such
additions to such term as may hereafter be made, and includes without limitation
all accounts receivable and other sums owing to Borrower.

     "Affiliate" means, with respect to any Person, a relative, partner,
shareholder, director, officer, or employee of such Person, or any parent or
subsidiary of such Person, or any Person controlling, controlled by or under
common control with such Person.

     "Business Day" means a day on which PFG is open for business.

     "Code" means the Uniform Commercial Code as adopted and in effect in the
State of California from time to time.

     "Collateral" has the meaning set forth in Section 2 above.

     "continuing" and "during the continuance of" when used with reference to a
Default or Event of Default means that the Default or Event of Default has
occurred and has not been either waived in writing by PFG or cured within any
applicable cure period.

     "Default" means any event which with notice or passage of time or both,
would constitute an Event of Default.

     "Default Rate" has the meaning set forth in Section 6.2 above.

     "Deposit Accounts" means all present and future "deposit accounts" as
defined in the California Uniform Commercial Code in effect on the date hereof
with such additions to such term as may hereafter be made, and includes without
limitation all general and special bank accounts, demand accounts, checking
accounts, savings accounts and certificates of deposit.
<PAGE>
PARTNERS FOR GROWTH                                  LOAN AND SECURITY AGREEMENT

     "Equipment" means all present and future "equipment" as defined in the
California Uniform Commercial Code in effect on the date hereof with such
additions to such term as may hereafter be made, and includes without limitation
all machinery, fixtures, goods, vehicles (including motor vehicles and
trailers), and any interest in any of the foregoing.

     "Event of Default" means any of the events set forth in Section 6.1 of this
Agreement.

     "GAAP" means generally accepted accounting principles consistently applied.

     "General Intangibles" means all present and future "general intangibles" as
defined in the California Uniform Commercial Code in effect on the date hereof
with such additions to such term as may hereafter be made, and includes without
limitation all Intellectual Property, payment intangibles, royalties, contract
rights, goodwill, franchise agreements, purchase orders, customer lists, route
lists, telephone numbers, domain names, claims, income tax refunds, security and
other deposits, options to purchase or sell real or personal property, rights in
all litigation presently or hereafter pending (whether in contract, tort or
otherwise), insurance policies (including without limitation key man, property
damage, and business interruption insurance), payments of insurance and rights
to payment of any kind.

     "good faith business judgment" means honesty in fact and good faith (as
defined in Section 1201 of the Code) in the exercise of PFG's business judgment.

     "including" means including (but not limited to).

     "Indebtedness" means (a) indebtedness for borrowed money or the deferred
purchase price of property or services (other than trade payables arising in the
ordinary course of business), (b) obligations evidenced by bonds, notes,
debentures or other similar instruments, (c) reimbursement obligations in
connection with letters of credit, and (d) capital lease obligations.

     "Intellectual Property" means all present and future: (a) copyrights,
copyright rights, copyright applications, copyright registrations and like
protections in each work of authorship and derivative work thereof, whether
published or unpublished, (b) trade secret rights, including all rights to
unpatented inventions and know-how, and confidential information; (c) mask work
or similar rights available for the protection of semiconductor chips; (d)
patents, patent applications and like protections including without limitation
improvements, divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same; (e) trademarks, servicemarks, trade styles,
and trade names, whether or not any of the foregoing are registered, and all
applications to register and registrations of the same and like protections, and
the entire goodwill of the business of Borrower connected with and symbolized by
any such trademarks; (f) computer software and computer software products; (g)
designs and design rights; (h) technology; (i) all claims for damages by way of
past, present and future infringement of any of the rights included above; and
(j) all licenses or other rights to use any property or rights of a type
described above.

     "Inventory" means all present and future "inventory" as defined in the
California Uniform Commercial Code in effect on the date hereof with such
additions to such term as may hereafter be made, and includes without limitation
all merchandise, raw materials, parts, supplies, packing and shipping materials,
work in process and finished products, including without limitation such
inventory as is temporarily out of Borrower's custody or possession or in
transit and including any returned goods and any documents of title representing
any of the above.

     "Investment" means any beneficial ownership interest in any Person
(including any stock, partnership interest or other equity or debt securities
issued by any Person), and any loan, advance or capital contribution to any
Person.

     "Investment Property" means all present and future investment property,
securities, stocks, bonds, debentures, debt securities, partnership interests,
limited liability company interests, options, security entitlements, securities
accounts, commodity contracts, commodity accounts, and all financial assets held
in any securities account or otherwise, and all options and warrants to purchase
any of the foregoing, wherever located, and all other securities of every kind,
whether certificated or uncertificated.

     "Loan Documents" means, collectively, this Agreement, the Representations,
and all other present and future documents, instruments and agreements between
PFG and Borrower, including, but not limited to those relating to this
Agreement, and all amendments and modifications thereto and replacements
therefor.

     "Material Adverse Change" means any of the following: (i) a material
adverse change in the business, operations, or financial or other condition of
the Borrower, or (ii) a material impairment of the prospect of repayment of any
portion of the Obligations; or (iii) a material impairment of the value or
priority of PFG's security interests in the Collateral.

     "Obligations" means all present and future Loans, advances, debts,
liabilities, obligations, guaranties, covenants, duties and indebtedness at any
time owing by Borrower to PFG, whether evidenced by this Agreement or any note
or other instrument or document or other written representation, undertaking,
consent or agreement of Borrower, whether arising from an
<PAGE>
PARTNERS FOR GROWTH                                  LOAN AND SECURITY AGREEMENT

extension of credit, opening of a letter of credit, banker's acceptance, loan,
guaranty, indemnification or otherwise, whether direct or indirect (including,
without limitation, those acquired by assignment and any participation by PFG in
Borrower's debts owing to others), absolute or contingent, due or to become due,
including, without limitation, all interest, charges, expenses, fees, attorney's
fees, expert witness fees, audit fees, collateral monitoring fees, closing fees,
facility fees, termination fees, minimum interest charges and any other sums
chargeable to Borrower under this Agreement or under any other Loan Documents.

     "Other Property" means the following as defined in the California Uniform
Commercial Code in effect on the date hereof with such additions to such term as
may hereafter be made, and all rights relating thereto: all present and future
"commercial tort claims" (including without limitation any commercial tort
claims identified in the Representations), "documents", "instruments",
"promissory notes", "chattel paper", "letters of credit", "letter-of-credit
rights", "fixtures", "farm products" and "money"; and all other goods and
personal property of every kind, tangible and intangible, whether or not
governed by the California Uniform Commercial Code.

     "Payment" means all checks, wire transfers and other items of payment
received by for credit to Borrower's outstanding Obligations.

     "Permitted Indebtedness" means, collectively for QualMark and QACG:

          (i) the Loans and other Obligations; and

          (ii) Indebtedness existing on the date hereof and shown on Exhibit A
hereto;

          (iii) Subordinated Debt;

          (iv) Indebtedness owing to Senior Lender not to exceed the Senior Debt
Limit specified in the Schedule;

          (v) other Indebtedness secured by Permitted Liens;

          (vi) reimbursement obligations in respect of letters of credit in an
aggregate face amount outstanding not to exceed $300,000 at any time
outstanding, which has been reported to PFG in writing, and, in the case of
reimbursement obligations to the Senior Lender in respect of letters of credit
which do not exceed the Senior Debt Limit (taking into account all other
Indebtedness to Senior Lender).

     "Permitted Investments" are:

          (i) Investments (if any) shown on the Exhibit A and existing on the
date hereof;

          (ii) marketable direct obligations issued or unconditionally
guaranteed by the United States or its agency or any State maturing within 1
year from its acquisition;

          (iii) commercial paper maturing no more than 1 year after its creation
and having the highest rating from either Standard & Poor's Corporation or
Moody's Investors Service, Inc; and

          (iv) bank certificates of deposit issued maturing no more than 1 year
after issue.

     "Permitted Liens" means the following:

          (i) purchase money security interests in specific items of Equipment;

          (ii) leases of specific items of Equipment;

          (iii) liens for taxes not yet payable;

          (iv) additional security interests and liens consented to in writing
by PFG, which consent may be withheld in its good faith business judgment. PFG
will have the right to require, as a condition to its consent under this
subparagraph (iv), that the holder of the additional security interest or lien
sign an intercreditor agreement on PFG's then standard form, acknowledge that
the security interest is subordinate to the security interest in favor of PFG,
and agree not to take any action to enforce its subordinate security interest so
long as any Obligations remain outstanding, and that Borrower agree that any
uncured default in any obligation secured by the subordinate security interest
shall also constitute an Event of Default under this Agreement;

          (v) security interests being terminated substantially concurrently
with this Agreement;

          (vi) liens of materialmen, mechanics, warehousemen, carriers, or other
similar liens arising in the ordinary course of business and securing
obligations which are not delinquent;
<PAGE>
PARTNERS FOR GROWTH                                  LOAN AND SECURITY AGREEMENT

          (vii) liens incurred in connection with the extension, renewal or
refinancing of the indebtedness secured by liens of the type described above in
clauses (i) or (ii) above, provided that any extension, renewal or replacement
lien is limited to the property encumbered by the existing lien and the
principal amount of the indebtedness being extended, renewed or refinanced does
not increase;

          (viii) liens in favor of customs and revenue authorities which secure
payment of customs duties in connection with the importation of goods;

          (ix) statutory, common law or contractual liens of depository
institutions or institutions holding securities account (including rights of
set-off) securing only customary charges and fees in connection with such
accounts; and

          (x) liens in favor of Senior Lender securing an amount not in excess
of the Senior Debt Limit.

     "Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
government, or any agency or political division thereof, or any other entity.

     "QualMark" means Qualmark Corporation.

     "QACG" means Qualmark ACG Corporation, the wholly-owned Subsidiary of
QualMark.

     "Representations" means the written Representations and Warranties provided
by Borrower to PFG referred to in the Schedule.

     "Senior Lender" has the meaning set forth in Section 8 of the Schedule.

     "Subordinated Debt" means debt incurred by Borrower subordinated to
Borrower's debt to PFG (pursuant to a subordination agreement entered into
between PFG, Borrower and the subordinated creditor), on terms acceptable to PFG
in its absolute discretion.

     "Subsidiary" means (a) any corporation of which more than 50% of the issued
and outstanding equity securities having ordinary voting power to elect a
majority of the Board of Directors of such corporation is at the time directly
or indirectly owned or controlled by Borrower, (b) any partnership, joint
venture, or other association of which more than 50% of the equity interest
having the power to vote, direct or control the management of such partnership,
joint venture or other association is at the time directly or indirectly owned
and controlled by Borrower, (c) any other entity included in the financial
statements of Borrower on a consolidated basis.

     Other Terms. All accounting terms used in this Agreement, unless otherwise
indicated, shall have the meanings given to such terms in accordance with GAAP,
consistently applied. All other terms contained in this Agreement, unless
otherwise indicated, shall have the meanings provided by the Code, to the extent
such terms are defined therein.

8. GENERAL PROVISIONS.

     8.1 CONFIDENTIALITY. PFG agrees to use the same degree of care that it
exercises with respect to its own proprietary information, to maintain the
confidentiality of any and all proprietary, trade secret or confidential
information provided to or received by PFG from the Borrower, which indicates
that it is confidential, including business plans and forecasts, non-public
financial information, confidential or secret processes, formulae, devices and
contractual information, customer lists, and employee relation matters, provided
that PFG may disclose such information (i) to its officers, directors,
employees, attorneys, accountants, affiliates, participants, prospective
participants, assignees and prospective assignees, and such other Persons to
whom PFG shall at any time be required to make such disclosure in accordance
with applicable law or legal process, and (ii) in its good faith business
judgment in connection with the enforcement of its rights or remedies after an
Event of Default, or in connection with any dispute with Borrower or any other
Person relating to Borrower. The confidentiality agreement in this Section
supersedes any prior confidentiality agreement of PFG relating to Borrower.

     8.2 INTEREST COMPUTATION. In computing interest on the Obligations, all
Payments received after 12:00 Noon, Pacific Time, on any day shall be deemed
received on the next Business Day.

     8.3 PAYMENTS. All Payments may be applied, and in PFG's good faith business
judgment reversed and re-applied, to the Obligations, in such order and manner
as PFG shall determine in its good faith business judgment.

     8.4 MONTHLY ACCOUNTINGS. PFG shall provide Borrower monthly with an account
of advances, charges, expenses and payments made pursuant to this Agreement.
Such account shall be deemed correct, accurate and binding on Borrower and an
account stated (except for reverses and reapplications of payments made and
corrections of errors discovered by PFG), unless Borrower notifies PFG in
writing to the contrary within 60 days after such account is rendered,
describing the nature of any alleged errors or omissions.
<PAGE>
PARTNERS FOR GROWTH                                  LOAN AND SECURITY AGREEMENT

     8.5 NOTICES. All notices to be given under this Agreement shall be in
writing and shall be given either personally, or by reputable private delivery
service, or by regular first-class mail, or certified mail return receipt
requested, or by fax to the most recent fax number a party has for the other
party (and if by fax, sent concurrently by one of the other methods provided
herein), addressed to PFG or Borrower at the addresses shown in the heading to
this Agreement, or at any other address designated in writing by one party to
the other party. All notices shall be deemed to have been given upon delivery in
the case of notices personally delivered, or at the expiration of one Business
Day following delivery to the private delivery service, or two Business Days
following the deposit thereof in the United States mail, with postage prepaid,
or on the first business day of receipt during business hours, U.S. Pacific
Time, in the case of notices sent by fax, as provided herein.

     8.6 SEVERABILITY. Should any provision of this Agreement be held by any
court of competent jurisdiction to be void or unenforceable, such defect shall
not affect the remainder of this Agreement, which shall continue in full force
and effect.

     8.7 INTEGRATION. This Agreement and such other written agreements,
documents and instruments as may be executed in connection herewith are the
final, entire and complete agreement between Borrower and PFG and supersede all
prior and contemporaneous negotiations and oral representations and agreements,
all of which are merged and integrated in this Agreement. There are no oral
understandings, representations or agreements between the parties which are not
set forth in this Agreement or in other written agreements signed by the parties
in connection herewith.

     8.8 WAIVERS; INDEMNITY. The failure of PFG at any time or times to require
Borrower to strictly comply with any of the provisions of this Agreement or any
other Loan Document shall not waive or diminish any right of PFG later to demand
and receive strict compliance therewith. Any waiver of any default shall not
waive or affect any other default, whether prior or subsequent, and whether or
not similar. None of the provisions of this Agreement or any other Loan Document
shall be deemed to have been waived by any act or knowledge of PFG or its agents
or employees, but only by a specific written waiver signed by an authorized
officer of PFG and delivered to Borrower. Borrower waives the benefit of all
statutes of limitations relating to any of the Obligations or this Agreement or
any other Loan Document, and Borrower waives demand, protest, notice of protest
and notice of default or dishonor, notice of payment and nonpayment, release,
compromise, settlement, extension or renewal of any commercial paper,
instrument, account, General Intangible, document or guaranty at any time held
by PFG on which Borrower is or may in any way be liable, and notice of any
action taken by PFG, unless expressly required by this Agreement. Borrower
hereby agrees to indemnify PFG and its affiliates, subsidiaries, parent,
directors, officers, employees, agents, and attorneys, and to hold them harmless
from and against any and all claims, debts, liabilities, demands, obligations,
actions, causes of action, penalties, costs and expenses (including reasonable
attorneys' fees), of every kind, which they may sustain or incur based upon or
arising out of any of the Obligations, or any relationship or agreement between
PFG and Borrower, or any other matter, relating to Borrower or the Obligations;
provided that this indemnity shall not extend to damages resulting from the
indemnitee's own gross negligence or willful misconduct. Notwithstanding any
provision in this Agreement to the contrary, the indemnity agreement set forth
in this Section shall survive any termination of this Agreement and shall for
all purposes continue in full force and effect.

     8.9 NO LIABILITY FOR ORDINARY NEGLIGENCE. Neither PFG, nor any of its
directors, officers, employees, agents, attorneys or any other Person affiliated
with or representing PFG shall be liable for any claims, demands, losses or
damages, of any kind whatsoever, made, claimed, incurred or suffered by Borrower
or any other party through the ordinary negligence of PFG, or any of its
directors, officers, employees, agents, attorneys or any other Person affiliated
with or representing PFG, but nothing herein shall relieve PFG from liability
for its own gross negligence or willful misconduct.

     8.10 AMENDMENT. The terms and provisions of this Agreement may not be
waived or amended, except in a writing executed by Borrower and a duly
authorized officer of PFG.

     8.11 TIME OF ESSENCE. Time is of the essence in the performance by Borrower
of each and every obligation under this Agreement.

     8.12 ATTORNEYS' FEES AND COSTS. Borrower shall reimburse PFG for all
reasonable attorneys' fees and all filing, recording, search, title insurance,
appraisal, audit, and other reasonable costs incurred by PFG, pursuant to, or in
connection with, or relating to this Agreement (whether or not a lawsuit is
filed), including, but not limited to, any reasonable attorneys' fees and costs
PFG incurs in order to do the following: prepare and negotiate this Agreement
and all present and future documents relating to this Agreement; obtain legal
advice in connection with this Agreement or Borrower; enforce, or seek to
enforce, any of its rights; prosecute actions against, or defend actions by,
Account Debtors; commence, intervene in, or defend any action or proceeding;
initiate any complaint to be relieved of the automatic stay in bankruptcy; file
or prosecute any probate claim, bankruptcy claim, third-party claim, or other
claim; examine, audit, copy, and inspect any of the Collateral or any of
Borrower's books and records; protect, obtain possession of, lease, dispose of,
or otherwise enforce PFG's security interest in, the Collateral; and otherwise
represent PFG in any litigation relating to Borrower. If either PFG or Borrower
files any lawsuit
<PAGE>
PARTNERS FOR GROWTH                                  LOAN AND SECURITY AGREEMENT

against the other predicated on a breach of this Agreement, the prevailing party
in such action shall be entitled to recover its reasonable costs and attorneys'
fees, including (but not limited to) reasonable attorneys' fees and costs
incurred in the enforcement of, execution upon or defense of any order, decree,
award or judgment. All attorneys' fees and costs to which PFG may be entitled
pursuant to this Paragraph shall immediately become part of Borrower's
Obligations, shall be due on demand, and shall bear interest at a rate equal to
the highest interest rate applicable to any of the Obligations.

     8.13 BENEFIT OF AGREEMENT. The provisions of this Agreement shall be
binding upon and inure to the benefit of the respective successors, assigns,
heirs, beneficiaries and representatives of Borrower and PFG; provided, however,
that Borrower may not assign or transfer any of its rights under this Agreement
without the prior written consent of PFG, and any prohibited assignment shall be
void. No consent by PFG to any assignment shall release Borrower from its
liability for the Obligations.

     8.14 JOINT AND SEVERAL LIABILITY. If Borrower consists of more than one
Person, their liability shall be joint and several, and the compromise of any
claim with, or the release of, any Borrower shall not constitute a compromise
with, or a release of, any other Borrower.

     8.15 LIMITATION OF ACTIONS. Any claim or cause of action by Borrower
against PFG, its directors, officers, employees, agents, accountants or
attorneys, based upon, arising from, or relating to this Loan Agreement, or any
other Loan Document, or any other transaction contemplated hereby or thereby or
relating hereto or thereto, or any other matter, cause or thing whatsoever,
occurred, done, omitted or suffered to be done by PFG, its directors, officers,
employees, agents, accountants or attorneys, shall be barred unless asserted by
Borrower by the commencement of an action or proceeding in a court of competent
jurisdiction by the filing of a complaint within one year after the first act,
occurrence or omission upon which such claim or cause of action, or any part
thereof, is based, and the service of a summons and complaint on an officer of
PFG, or on any other person authorized to accept service on behalf of PFG,
within thirty (30) days thereafter. Borrower agrees that such one-year period is
a reasonable and sufficient time for Borrower to investigate and act upon any
such claim or cause of action. The one-year period provided herein shall not be
waived, tolled, or extended except by the written consent of PFG in its sole
discretion. This provision shall survive any termination of this Loan Agreement
or any other Loan Document.

     8.16 PARAGRAPH HEADINGS; CONSTRUCTION. Paragraph headings are only used in
this Agreement for convenience. Borrower and PFG acknowledge that the headings
may not describe completely the subject matter of the applicable paragraph, and
the headings shall not be used in any manner to construe, limit, define or
interpret any term or provision of this Agreement. This Agreement has been fully
reviewed and negotiated between the parties and no uncertainty or ambiguity in
any term or provision of this Agreement shall be construed strictly against PFG
or Borrower under any rule of construction or otherwise. The defined term
"Borrower" shall mean, as the context requires, each of QualMark and QACG
severally, and QualMark and QACG jointly.

     8.17 GOVERNING LAW; JURISDICTION; VENUE. This Agreement and all acts and
transactions hereunder and all rights and obligations of PFG and Borrower shall
be governed by the laws of the State of California. As a material part of the
consideration to PFG to enter into this Agreement, Borrower (i) agrees that all
actions and proceedings relating directly or indirectly to this Agreement shall,
at PFG's option, be litigated in courts located within California, and that the
exclusive venue therefor shall be San Francisco County; (ii) consents to the
jurisdiction and venue of any such court and consents to service of process in
any such action or proceeding by personal delivery or any other method permitted
by law; and (iii) waives any and all rights Borrower may have to object to the
jurisdiction of any such court, or to transfer or change the venue of any such
action or proceeding.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
PARTNERS FOR GROWTH                                  LOAN AND SECURITY AGREEMENT

     8.18 MUTUAL WAIVER OF JURY TRIAL. BORROWER AND PFG EACH HEREBY WAIVE THE
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON, ARISING OUT OF,
OR IN ANY WAY RELATING TO, THIS AGREEMENT OR ANY OTHER PRESENT OR FUTURE
INSTRUMENT OR AGREEMENT BETWEEN PFG AND BORROWER, OR ANY CONDUCT, ACTS OR
OMISSIONS OF PFG OR BORROWER OR ANY OF THEIR DIRECTORS, OFFICERS, EMPLOYEES,
AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH PFG OR BORROWER, IN ALL
OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.

BORROWER:                               PFG:

QUALMARK CORPORATION                    PARTNERS FOR GROWTH, L.P.

BY /s/ CHARLES JOHNSTON                 BY /s/ DONALD CAMPBELL
   ----------------------------------      -------------------------------------
   PRESIDENT OR VICE PRESIDENT          NAME: DONALD CAMPBELL
                                        TITLE: MANAGER, PARTNERS FOR GROWTH, LLC
                                               ITS GENERAL PARTNER

BY /s/ ANTHONY SCALESE
   ----------------------------------
   SECRETARY OR ASS'T SECRETARY

BORROWER:

QUALMARK ACG CORPORATION

BY /s/ CHARLES JOHNSTON
   ----------------------------------
   PRESIDENT OR VICE PRESIDENT

BY /s/ ANTHONY SCALESE
   ----------------------------------
   SECRETARY OR ASS'T SECRETARY
<PAGE>
PARTNERS FOR GROWTH

                                   SCHEDULE TO

                           LOAN AND SECURITY AGREEMENT

BORROWER:   QUALMARK CORPORATION, A COLORADO CORPORATION
ADDRESS:    4580 FLORENCE STREET, DENVER, CO 80238

            QUALMARK ACG CORPORATION, A COLORADO CORPORATION
            4580 FLORENCE STREET, DENVER, CO 80238

DATE:       NOVEMBER 12, 2004

This Schedule forms an integral part of the Loan and Security Agreement between
PARTNERS FOR GROWTH, L.P. and the above-Borrowers of even date. Defined terms
used in this Schedule have the meanings set forth herein and in the Loan and
Security Agreement.

<TABLE>
<S>                                <C>
1. LOAN (Section 1.1):

     (a) LOAN:                     The Loan shall consist of (i) a term loan in
                                   the amount of $1,000,000, which shall be
                                   disbursed in its entirety, less the amount
                                   required to discharge the Chase Lien (as
                                   defined in Schedule Section 8(f)), on the
                                   Date hereof (the "Initial Advance"); and (ii)
                                   at QualMark's option, subject to the terms
                                   and conditions of the Agreement and this
                                   Schedule, up to an additional $1,000,000
                                   principal borrowing upon the same terms and
                                   with the same Maturity Date as the Initial
                                   Advance (the "Additional Advance").
                                   QualMark's right to request the Additional
                                   Advance is expressly subject, inter alia, to
                                   there being no Event of Default by Borrowers
                                   outstanding and uncured. Principal and any
                                   accrued but unpaid interest is due and
                                   payable on the Maturity Date.

     (b) CONDITION TO ADDITIONAL   In addition to PFG's reasonable determination
         ADVANCE:                  that at the time of such request there is no
                                   Event of Default outstanding and uncured,
                                   QualMark's right to request the Additional
                                   Advance is expressly conditioned upon PFG's
                                   determination that Borrowers (on a
                                   consolidated basis) have achieved at least
                                   $500,000 in EBITDA (as defined below) in each
                                   of 3 consecutive calendar quarters during the
                                   term of the Loan, or such other dollar
                                   thresholds as PFG may in its discretion then
                                   agree.

     (c) PRINCIPAL REPAYMENT /     The principal amount of the Loan shall be
         PREPAYMENT:               repaid on the Maturity Date, on which date
                                   the entire unpaid principal balance of the
                                   Loan plus any and all accrued and unpaid
                                   interest shall be paid. Borrower may not
                                   prepay the Loan.

     (d) CONVERSION:               (i) At any time prior to the Maturity Date,
                                   PFG may at its option convert the Initial
                                   Advance (or any part thereof) into the
                                   (registered or unregistered, as the case may
                                   be) Common Stock of QualMark ("PFG
                                   Conversion") at $1.66 (the "Conversion
                                   Price"). The Conversion Price is subject to
                                   adjustment for stock splits, combinations,
                                   reclassifications and similar transactions.

                                   (ii) At any time prior to the Maturity Date,
                                   PFG may at its option convert any outstanding
                                   Additional Advance (or any part thereof) into
                                   the Common Stock of QualMark at a per share
                                   price equal to the lesser of (i) the
                                   Conversion Price, or (ii) 110% of the closing
                                   price quoted on the OTC Bulletin Board (or
                                   such other
</TABLE>
<PAGE>
PARTNERS FOR GROWTH                      SCHEDULE TO LOAN AND SECURITY AGREEMENT

<TABLE>
<S>                                <C>
                                   exchange as QualMark's Common Stock may be
                                   listed from time to time) for QualMark's
                                   Common Stock over the 10-trading-day period
                                   before PFG gives written notice of its
                                   conversion (the "Additional Advance
                                   Conversion Price"). The Additional Advance
                                   Conversion Price is subject to adjustment for
                                   stock splits, combinations, reclassifications
                                   and similar transactions.

                                   (iii) The effective date of PFG Conversion
                                   (whether under (i) or (ii), above, or both)
                                   shall be the date the notice of conversion is
                                   given by PFG and QualMark shall deliver the
                                   Common Stock issuable upon conversion upon
                                   exercise of PFG Conversion within 3 business
                                   days of such effective date.

     (e) QUALMARK -INITIATED       QualMark may upon 30 days' written notice
         CONVERSION:               effect the conversion of the principal amount
                                   of the Initial Advance and any Additional
                                   Advance then outstanding ("Borrower
                                   Conversion Option"). The QualMark Conversion
                                   is subject to the following conditions and
                                   limitations: (i) At the time QualMark notices
                                   a Borrower Conversion Option, there shall not
                                   have occurred and be continuing any Event of
                                   Default under the Loan which has not, for the
                                   purposes of the Borrower Conversion Option,
                                   been waived by PFG; and (ii) The Borrower
                                   Conversion Option may only be exercised after
                                   the expiry of 3 years from the date hereof;
                                   and (iii) The Borrower Conversion Option may
                                   only be exercised if and when the OTC
                                   Bulletin Board-quoted closing price of
                                   QualMark's Common Stock for each day in a
                                   period of 20 consecutive trading days prior
                                   to QualMark's notice of exercise has exceeded
                                   300% of the Conversion Price (as defined in
                                   Schedule Section 1(d)(i) above) with respect
                                   to the conversion of the Initial Advance, and
                                   300% of the Additional Advance Conversion
                                   Price (as defined in Schedule Section
                                   1(d)(ii) above) with respect to the
                                   conversion of the Additional Advance.

2. INTEREST.

     INTEREST RATE                 The Loan shall bear interest at a rate equal
     (Section 1.2):                to eight percent (8%) per annum (the "Initial
                                   Rate"). Interest shall be calculated on the
                                   date hereof and thereafter on a calendar
                                   quarterly basis assuming a 360-day year and a
                                   year of twelve months of 30 days each for the
                                   actual number of days elapsed. Accrued
                                   interest for each month shall be payable
                                   monthly, on the last day of each calendar
                                   month.

     INTEREST RATE RESET:          So long as Borrower is in full compliance
                                   with the terms of the Loan, upon the first
                                   day of the month following each anniversary
                                   that the Loan (or any part thereof) is
                                   outstanding, the Initial Rate shall be
                                   reduced 2.083 basis points for each penny
                                   that the average closing price of QualMark's
                                   Common Stock over the 20-trading-day period
                                   preceding each such anniversary exceeds the
                                   Conversion Price. In no event shall the
                                   interest rate payable in respect of the Loan
                                   be less than 1.75%. For example, if the Loan
                                   is executed on November 15, 2004, the
                                   Conversion Price is $1.66, and the average
                                   price of the Common Stock during the
                                   20-trading-day period before December 1, 2005
                                   is $1.75, then the interest rate applicable
                                   to the Loan from December 1, 2005 until
                                   December 1, 2006 would be 7.72921% (8% -
                                   (0.02083 x (1.75-1.66))). Subsequent interest
                                   rate resets may be made on an annual basis
                                   thereafter. Notwithstanding any Interest Rate
                                   Resets effected hereunder, however, if there
                                   shall occur an Event of Default which remains
                                   uncured after any applicable cure periods,
                                   the interest rate payable hereunder shall be
                                   the Default Rate set forth in the Loan
                                   Agreement plus the Initial Rate.

3. FEES (Section 1.3):
</TABLE>
<PAGE>
PARTNERS FOR GROWTH                      SCHEDULE TO LOAN AND SECURITY AGREEMENT

<TABLE>
<S>                                <C>
     Loan Fee:                     2% of the Initial Advance ($20,000) and 2% of
                                   any Additional Advance, as and when drawn.

4. MATURITY DATE                   November 11, 2009
  (Section 5.1):

5. FINANCIAL COVENANTS /           Borrower shall at all times equal or exceed
   AMORTIZATION TRIGGER            100% of the EBITDA forecast set forth below,
   (Section 4.1):                  as measured on a calendar quarterly basis
                                   commencing with the first calendar quarter of
                                   2005, or such modified EBITDA plan as PFG and
                                   Borrower may otherwise mutually agree in
                                   writing (the "EBITDA Plan"). If Borrower
                                   should at any time fail to achieve 100% of
                                   EBITDA Plan (the "Amortization Trigger"), PFG
                                   may, at its sole option, elect to amortize
                                   all or (at PFG's sole option) part of the
                                   Loan over a 30-month period in even principal
                                   payments and Borrower shall thereafter
                                   commence to make monthly payments of
                                   principal and interest on the Loan in
                                   conformity with the amortization schedule
                                   notified by PFG.
                                   2005 EBITDA Plan

                                   Q1 - 2005   $135,000
                                   Q2 - 2005   $102,000
                                   Q3 - 2005   $195,000
                                   Q4 - 2005   $165,000

                                   For 2006 and beyond, quarterly EBITDA target
                                   will be negotiated between Borrower and PFG
                                   on a good faith basis and determined in PFG's
                                   reasonable discretion based on the financial
                                   plan approved by QualMark's Board of
                                   Directors for such subsequent periods.

CERTAIN DEFINITIONS:               "EBITDA" means Borrower's earnings before
                                   interest, taxes, depreciation, amortization
                                   and any non-cash charges to earnings directly
                                   related to required accounting treatment of
                                   options and similar employee incentives.

6. REPORTING.                      Borrower shall provide PFG with the
   (Section 4.4):                  following:

                                   (a)  Monthly unaudited consolidated financial
                                        statements, as soon as available, and in
                                        any event within 20 days after the end
                                        of each month.

                                   (b)  Compliance Certificates, in such form
                                        and at such times as PFG shall
                                        reasonably specify, signed by the Chief
                                        Financial Officer of Borrower,
                                        certifying that as of the end of each
                                        calendar quarter, Borrower was in full
                                        compliance with all of the terms and
                                        conditions of this Agreement, and
                                        setting forth calculations showing its
                                        EBITDA performance for such period.

                                   (c)  Annual financial statements, as soon as
                                        available, and in any event within 120
                                        days following the end of Borrower's
                                        fiscal year, certified by, and together
                                        with an unqualified opinion of,
                                        independent certified public accountants
                                        acceptable to PFG. If Borrower files a
                                        form 10-K with the Securities and
                                        Exchange Commission or otherwise
                                        publishes its current financial
                                        information in the public domain and the
                                        same is readily available
</TABLE>
<PAGE>
PARTNERS FOR GROWTH                      SCHEDULE TO LOAN AND SECURITY AGREEMENT

<TABLE>
<S>                                <C>
                                        within said period, the foregoing
                                        reporting requirement will be deemed
                                        satisfied.

                                   (d)  As and when information previously
                                        provided would no longer be true,
                                        complete and accurate, an update to the
                                        Representations (Schedule Section 7,
                                        below).

                                   (e)  Copies of all reports and statements
                                        provided by Borrower to the Senior
                                        Lender at the same time the same are
                                        provided to the Senior Lender.

7. BORROWER INFORMATION:

                                   Borrower represents and warrants that the
                                   information set forth in the Representations
                                   and Warranties of the Borrower dated November
                                   11, 2004, previously submitted to PFG (the
                                   "Representations") is true and correct as of
                                   the date hereof.

8. ADDITIONAL PROVISIONS

                                   (a)  SENIOR LENDER.

                                        (1)  Senior Lender. As used herein,
                                             "Senior Lender" means Silicon
                                             Valley Bank, and "Senior Loan
                                             Documents" means that certain Loan
                                             and Security Agreement dated as of
                                             November 8, 2004, between QualMark
                                             and Silicon Valley Bank.

                                        (2)  Senior Debt Limit. Borrower shall
                                             not permit the total Indebtedness
                                             of Borrower to Senior Lender to
                                             exceed $2,450,000 at any time
                                             outstanding (the "Senior Debt
                                             Limit"), including, but not limited
                                             to, monies borrowed by Borrower,
                                             interest on loans due from
                                             Borrower, fees and expenses for
                                             which Borrower is obligated, sums
                                             due from Borrower in connection
                                             with issuance of commercial letters
                                             of credit, overdrafts, issuance of
                                             forward contracts for foreign
                                             exchange reserve, and any other
                                             direct or indirect financial
                                             accommodation Senior Lender may
                                             provide to Borrower).

                                        (3)  Senior Loan Documents. Borrower
                                             represents and warrants that it has
                                             provided PFG with true and complete
                                             copies of all existing Senior Loan
                                             Documents, and Borrower covenants
                                             that it will, in the future,
                                             provide PFG with true and complete
                                             copies of any future Senior Loan
                                             Documents, including without
                                             limitation any amendments to any
                                             existing Senior Loan Documents.

                                   (b)  DEPOSIT ACCOUNTS. Concurrently, QualMark
                                        and QACG (as defined in Schedule Section
                                        8(e)) shall cause the banks and other
                                        institutions where its Deposit Accounts
                                        are maintained to enter into control
                                        agreements with PFG, in form and
                                        substance satisfactory to PFG in its
                                        good faith business judgment and
                                        sufficient to perfect PFG's security
                                        interest in said Deposit Accounts,
                                        subject to the security interest of the
                                        Senior Lender. Said control agreements
                                        shall permit PFG, in its discretion, to
                                        withdraw from said Deposit Accounts
                                        accrued interest on the Obligations
                                        monthly (subject to the rights of the
                                        Senior Lender).
</TABLE>
<PAGE>
PARTNERS FOR GROWTH                      SCHEDULE TO LOAN AND SECURITY AGREEMENT

<TABLE>
<S>                                <C>
                                   (c)  SUBORDINATION OF INSIDE DEBT AND ALL
                                        OTHER THIRD PARTY DEBT NOT CONSTITUTING
                                        PERMITTED INDEBTEDNESS. All present and
                                        future indebtedness of Borrower to its
                                        officers, directors and shareholders
                                        ("Inside Debt") shall, at all times, be
                                        subordinated to the Obligations pursuant
                                        to a subordination agreement on PFG's
                                        standard form. Borrower represents and
                                        warrants that there is no Inside Debt
                                        presently outstanding, except as set
                                        forth in Exhibit A to this Schedule.
                                        Prior to incurring any Inside Debt in
                                        the future, Borrower shall cause the
                                        person to whom such Inside Debt will be
                                        owed to execute and deliver to PFG a
                                        subordination agreement on PFG's
                                        standard form. In addition, all present
                                        and future indebtedness to any third
                                        party, if not Permitted Indebtedness,
                                        shall be at all times subordinated to
                                        the Obligations pursuant to a
                                        subordination agreement on PFG's
                                        standard form.

                                   (d)  OTHER DEBT FINANCING--RIGHT OF FIRST
                                        REFUSAL. QualMark hereby grants PFG a
                                        right of first refusal to provide any
                                        future debt financing which would
                                        require the subordination of the
                                        Obligation. Prior to entering into any
                                        agreement with any other Person to
                                        provide QualMark with such debt
                                        financing, QualMark shall advise PFG in
                                        writing of the proposed terms of the
                                        same and provide PFG with copies of all
                                        proposal letters, commitment letters,
                                        proposed loan documents and other
                                        documents relating to the other
                                        financing, and PFG shall have 10 days
                                        after receipt of all of the foregoing to
                                        agree in writing to provide debt
                                        financing to QualMark on the same terms
                                        and conditions. If PFG does not do so,
                                        QualMark may proceed to obtain the debt
                                        financing from the other Person (the
                                        "New Lender") on the terms and
                                        conditions advised to PFG, but in the
                                        event of a change in any of the material
                                        proposed terms, QualMark shall again
                                        give PFG the right of first refusal to
                                        provide the debt financing on such
                                        changed terms as provided above. If PFG
                                        declines to participate in such noticed
                                        debt financing and QualMark proceeds
                                        with such financing with the New Lender,
                                        PFG shall, at its sole option, either
                                        (i) subordinate the Obligations to the
                                        lien of the New Lender in respect of
                                        such debt financing (and to the extent
                                        thereof only), or (ii) request Borrower
                                        to pay and discharge all Obligations. If
                                        PFG elects to have its Obligations paid
                                        by Borrower, QualMark shall,
                                        contemporaneously with such payment,
                                        issue PFG a warrant to purchase that
                                        number of shares of Common Stock into
                                        which the Initial Advance and Additional
                                        Advance (if outstanding) would have
                                        converted if then converted under the
                                        terms of Sections (d)(i) and (d)(ii) of
                                        this Schedule (the "Warrant"). The
                                        Warrant shall expire on the Maturity
                                        Date, shall be exercisable at the
                                        Conversion Price and shall permit "net
                                        exercise", as such term is customarily
                                        used in warrant transactions.

                                   (e)  CROSS-GUARANTY. Concurrently, QualMark
                                        shall cause QualMark ACG Corporation,
                                        its wholly-owned Subsidiary ("QACG"), to
                                        execute and deliver to PFG a Continuing
                                        Guaranty with respect to all of the
                                        Obligations applicable to QualMark, and
                                        certified resolutions or other evidence
                                        of authority with respect to the
                                        execution and delivery of such Guaranty,
                                        all pursuant to documentation acceptable
                                        to PFG in its good faith business
                                        judgment. Throughout the term of this
                                        Agreement QualMark shall cause QACG to,
                                        and QACG shall, maintain such Continuing
                                        Guaranty in full force and effect.
                                        Concurrently, QualMark shall execute and
                                        deliver to PFG a Continuing Guaranty
                                        with respect to all of the Obligations
                                        applicable to QACG. Throughout the term
                                        of this Agreement QualMark shall
                                        maintain such Continuing Guaranty in
                                        full force and effect.
</TABLE>
<PAGE>
PARTNERS FOR GROWTH                      SCHEDULE TO LOAN AND SECURITY AGREEMENT

<TABLE>
<S>                                <C>

                                   (f)  USE OF PROCEEDS; ACG ACQUISITION; DIRECT
                                        REMITTANCE BY PFG. The proceeds of the
                                        Loan are to be used for general working
                                        capital purposes. Notwithstanding the
                                        foregoing, Borrower represents that (i)
                                        a portion of the proceeds of the Loan,
                                        are anticipated to be used shortly after
                                        the date hereof to acquire certain
                                        assets and associated operating
                                        liabilities of ACG Dynamics, Inc. (the
                                        "ACG Assets") pursuant to the terms of
                                        that certain draft Asset Purchase
                                        Agreement delivered to PFG on November
                                        9, 2004 (the "Asset Purchase
                                        Agreement"), (ii) Borrower has organized
                                        QACG, to acquire the ACG Assets, (iii)
                                        the ACG Assets are subject to a lien in
                                        favor of J.P. Morgan Chase Bank (the
                                        "Chase Lien"), and (iv) there are no
                                        other liens on the ACG Assets other than
                                        liens disclosed in Exhibit A to this
                                        Schedule. PFG consents to the purchase
                                        of the ACG Assets, the formation of a
                                        new wholly-owned Subsidiary, QACG to
                                        purchase the ACG Assets and carry on the
                                        business associated therewith, and the
                                        use of Loan proceeds to consummate the
                                        purchase of ACG Assets upon terms
                                        materially consistent with the terms of
                                        the Asset Purchase Agreement. PFG shall
                                        directly remit up to a maximum of
                                        $160,434.08, and Borrower consents to
                                        PFG's direct payment of such amount, to
                                        J.P. Morgan Chase Bank to discharge the
                                        Chase Lien. If PFG shall receive notice
                                        from Borrower that it will not conclude
                                        the purchase of ACG Assets as
                                        contemplated in the Asset Purchase
                                        Agreement, upon Borrower request, PFG
                                        shall promptly remit the Loan proceeds
                                        withheld for such purpose to Borrower
                                        and Borrower shall use such proceeds for
                                        general working capital purposes.

                                   (g)  OTHER AFFILIATES. Borrower represents
                                        and warrants that, except for QACG,
                                        Borrower does not have any other direct
                                        or indirect Subsidiaries. Except for
                                        QACG, Borrower shall not have any other
                                        direct or indirect Subsidiaries, except
                                        Subsidiaries which have executed and
                                        delivered to PFG a Continuing Guaranty
                                        with respect to all of the Obligations,
                                        and a Security Agreement granting PFG a
                                        security interest in all of their
                                        assets, and certified resolutions or
                                        other evidence of authority with respect
                                        to the execution and delivery of such
                                        Guaranty and Security Agreement, all
                                        pursuant to documentation acceptable to
                                        PFG in its good faith business judgment,
                                        all of which continues in full force and
                                        effect.

                                   (h)  INTELLECTUAL PROPERTY SECURITY
                                        AGREEMENTS. QualMark and QACG are
                                        concurrently executing and delivering to
                                        PFG Intellectual Property Security
                                        Agreements. Borrower shall provide PFG
                                        with the Exhibits to all such Security
                                        Agreements of Borrower and QACG which
                                        list their respective trademarks and
                                        patents, within 15 days after the date
                                        hereof. None of Borrower or QACG have
                                        any copyrights registered with the
                                        United States Copyright Office.

                                   (i)  PIGGYBACK REGISTRATION RIGHTS. QualMark
                                        undertakes to provide PFG with the
                                        piggyback registration rights set forth
                                        in Exhibit B in respect of QualMark
                                        Common Stock issued upon exercise of
                                        PFG's conversion rights under Schedule
                                        Section 1(d) and with respect to Common
                                        Stock issuable pursuant to the exercise
                                        of a Warrant under Schedule Section
                                        8(d), as the case may be.
</TABLE>
<PAGE>
PARTNERS FOR GROWTH                      SCHEDULE TO LOAN AND SECURITY AGREEMENT

Borrower:                               PFG:

QualMark Corporation                    PARTNERS FOR GROWTH, L.P.

BY /s/ CHARLES JOHNSTON                 By /s/ Donald Campbell
   ----------------------------------      -------------------------------------
   PRESIDENT OR VICE PRESIDENT          Name: Donald Campbell
                                        Title: Manager, Partners for Growth, LLC
                                               Its General Partner

BY /s/ ANTHONY SCALESE
   ----------------------------------
   SECRETARY OR ASS'T SECRETARY

Borrower:

QualMark ACG Corporation

BY /s/ CHARLES JOHNSTON
   ----------------------------------
   PRESIDENT OR VICE PRESIDENT

BY /s/ ANTHONY SCALESE
   ----------------------------------
   SECRETARY OR ASS'T SECRETARY
<PAGE>
                    EXHIBIT A TO LOAN AND SECURITY AGREEMENT

Section 7--"Permitted Indebtedness"--Other Existing Permitted Indebtedness:

1.   "Indebtedness" disclosed on QualMark's Form 10QSB dated September 30, 2004
     and provided to PFG.

2.   Equipment Leases:

     QUALMARK CORPORATION

     Lease dated July 8, 2004, Dell Computers, for computer servers and related
     software, with approximately $26,000 remaining

     Lease dated December 12, 2001, Hewlett Packard, for computer server and
     related software, with approximately $3,000 remaining

     Lease dated May 3, 2003, Inter-tel, for internal telephone equipment and
     related software, with approximately $28,000 remaining.

     Continuing operating lease, Pitney Bowes, for postage machine, with
     approximately $150 per quarter payments.

     QUALMARK ACG CORPORATION

     Lease dated December 3, 2002, Konica, for a copy machine, with
     approximately $2,000 remaining.

     Lease dated August 27, 2003, Fleet, for internal telephone system and
     related software, with approximately $6,000 remaining.

     Continuing operating lease, Pitney Bowes, for postage machine, with
     approximately $50 per quarter payments.

Section 8 - "Inside Debt":

     NONE

Section 7--"Permitted Investments"--Other Existing Permitted Investments:

1.   The acquisition of the ACG Assets generally upon the terms set forth in
     that certain draft Asset Purchase Agreement dated November 12, 2004.
<PAGE>
1. PIGGYBACK REGISTRATION RIGHTS.

1.1 Piggyback Rights. If (but without any obligation to do so) QualMark (the
"Company") proposes to register any of its equity securities under the United
States Securities Act of 1933 (the "Act") in connection with the public offering
of such shares (other than (i) a registration relating solely to the sale of
securities to participants in a Company equity option or share rights or share
purchase plan, (ii) a registration relating to a corporate reorganization or
other transaction under Rule 145 of the Act, or (iii) a registration relating to
the offer and sale of debt securities, (iv) a registration on any registration
form that does not permit secondary sales, or (v) a registration on any form
that does not include substantially the same information as would be required to
be included in a registration statement covering the sale of the Common Stock
issuable upon conversion of the PFG Loan or exercise of the Warrant (under
Schedule Section 8(d), as applicable (the "Conversion Stock"), the Company
shall, at such time, promptly give PFG written notice of such registration. Upon
the written request of PFG given within ten (10) business days after mailing of
such notice by the Company, the Company shall, subject to the provisions of
Section 1.4 of this Exhibit C, use all commercially reasonable efforts to cause
a registration statement to become effective, which includes all of the
Conversion Stock that PFG requests to be registered by such notice and for which
PFG (or its individual members) is then the shareholder of record (or would be
the shareholder of record upon conversion of the PFG Loan or exercise of the
Warrant, as applicable).

1.2 Right to Terminate Registration. The Company shall have the right to
terminate or withdraw any registration initiated by it under this Section 1
prior to the effectiveness of such registration whether or not PFG has elected
to include securities in such registration.

1.3 Expenses of Registration. PFG shall bear its pro rata portion of
registration expenses.

1.4 Underwriting Requirements. In connection with any offering involving an
underwriting of Common Stock of the Company, the Company shall not be required
under this Section to include any of the Conversion Stock in such underwriting
unless PFG accepts the terms of the underwriting as agreed upon between the
Company and the underwriters selected by it (or by other persons entitled to
select the underwriters) and enters into an underwriting agreement in customary
form with an underwriter or underwriters selected by the Company. If the total
amount of securities, including Conversion Stock, requested by shareholders or
other securities holders to be included in such offering exceeds the amount of
securities sold other than by the Company that the underwriters determine in
their sole discretion is compatible with the success of the offering, then the
Company shall be required to include in the offering only that number of such
securities, including Conversion Stock, that the underwriters determine in their
sole discretion will not jeopardize the success of the offering (the securities
so included to be apportioned pro rata among the selling shareholders, including
PFG, according to the total amount of securities entitled to be included therein
owned by each selling shareholder or in such other proportions as may be
mutually agreed to by such selling shareholders).

1.5 Information from PFG. It shall be a condition precedent to the obligations
of the Company to take any action pursuant to this Section 1 with respect to the
Conversion Stock that PFG shall furnish to the Company such information
regarding itself and its individual members, the Conversion Stock held by PFG or
its members, and the intended method of disposition of such securities as shall
be reasonably required to effect the registration of the Conversion Stock.

1.6 No Delay of Registration. PFG shall not have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result
of any controversy that might arise with respect to the interpretation or
implementation of this Section 1.

2. INDEMNIFICATION

In the event any shares of Conversion Stock are included in a registration
statement under Section 1 of this Exhibit C:

2.1 The Company Indemnity. To the extent permitted by law, the Company will
indemnify, defend and hold harmless PFG, its partners or officers, directors,
shareholders, legal counsel and accountants for PFG, any underwriter (as defined
in the Act) for PFG and each person, if any, who controls PFG or underwriter,
within the meaning of the Securities Act or the Securities Exchange Act of 1934,
as amended (the "Exchange Act") (each an "Indemnified Person"), against any
losses, claims, damages or liabilities (joint or several) to which they may
become subject under the Securities Act, the Exchange Act or any state
securities laws, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"): (i) any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be stated therein,
or necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities laws or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities laws in
connection with such registration; and the Company will
<PAGE>
reimburse each Indemnified Person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action as such expenses are incurred; provided
however that the indemnity agreement contained in this Section 2.1 shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the Company
(which consent shall not be unreasonably withheld), nor shall the Company be
liable in any such case for any such loss, claim, damage, liability or action to
the extent that it arises out of or is based upon a Violation that occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by any Indemnified Person; provided
further, however, that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Indemnified Person
from whom the person asserting any such losses, claims, damages or liabilities
purchased Conversion Stock in the offering, if a copy of the prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Indemnified
Person to such person, if required by law so to have been delivered, at or prior
to the written confirmation of the sale of the shares to such person, and if the
prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage or liability.

2.2 PFG Indemnity. To the extent permitted by law, PFG and each of them will
jointly and severally indemnify, defend and hold harmless the Company, each of
its directors, each of its officers, each of its partners, each person, if any,
who controls the Company within the meaning of the Securities Act, legal counsel
and accountants for the Company, any underwriter, any other shareholder selling
securities in such registration statement and any controlling person of any such
underwriter or other shareholder, against any losses, claims, damages or
liabilities (joint or several) to which any of the foregoing persons may become
subject, under the Securities Act, the Exchange Act or any state securities
laws, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation (but excluding
clause (iii) of the definition thereof), in each case to the extent (and only to
the extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by PFG expressly for use in connection with such
registration; and PFG will reimburse any person intended to be indemnified
pursuant to this Section 2.2 for any legal or other expenses reasonably incurred
by such person in connection with investigating or defending any such loss,
claim, damage, liability or action; provided however that the indemnity
agreement contained in this Section 2.2 shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of PFG (which consent shall not be
unreasonably withheld).

2.3 Prompt Notice Required. Promptly after receipt by an indemnified party under
this Section 2 of actual knowledge of the commencement of any action (including
any governmental action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under this Section 2,
deliver to the indemnifying party a written notice of the commencement thereof
and the indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided however that an indemnified party
(together with all other indemnified parties that may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
2 to the extent of such prejudice, but the omission to so deliver written notice
to the indemnifying party will not relieve it of any liability that it may have
to any indemnified party otherwise than under this Section 2.3.

2.4 Alternative Relief. If the indemnification provided for in this Section 2 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any loss, liability, claim, damage or expense referred to
herein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of and the
relative benefits received by the indemnifying party on the one hand and of the
indemnified party on the other in connection with the statements or omissions
that resulted in such loss, liability, claim, damage or expense, as well as any
other relevant equitable considerations, provided that no person guilty of fraud
shall be entitled to contribution. The relative fault of the indemnifying party
and of the indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission. The relative benefits received by the
<PAGE>
indemnifying party and the indemnified party shall be determined by reference to
the net proceeds and underwriting discounts and commissions from the offering
received by each such party.

2.5 Underwriting Agreement. Notwithstanding the foregoing, to the extent that
the provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are
in conflict with the foregoing provisions of this Section 2, the provisions in
the underwriting agreement shall control.

2.6 Survival. The obligations of the Company and PFG under this Section 2 shall
survive the completion of any offering of the Conversion Stock in a registration
statement under Section 1 of this Exhibit C.

3. ASSIGNMENT

The rights to cause the Company to register Conversion Stock pursuant to Section
1 of this Exhibit C may be assigned (but only with all related obligations) by
PFG to a transferee or assignee of such securities provided; (a) the Company is,
within a reasonable time after such transfer, furnished with written notice of
the name and address of such transferee or assignee and the securities with
respect to which such registration rights are being assigned and (b) such
transferee or assignee agrees in writing to be bound by and subject to the terms
and conditions of the Agreement.

4. TERMINATION OF REGISTRATION RIGHTS

PFG shall not be entitled to exercise any right provided for in Section 1 of
this Exhibit C after such time at which all Conversion Stock of the relevant
holder can be sold in any three (3) month period without registration in
compliance with Rule 144 of the Act.<PAGE>
                                                                   EXHIBIT 10.32

                            ASSET PURCHASE AGREEMENT

     AGREEMENT dated November 12, 2004, among QualMark ACG Corporation, a
Colorado corporation ("Purchaser"), QualMark Corporation, a Colorado corporation
("Parent"), and ACG Dynamics, Inc., a Connecticut corporation ("Seller").

     WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to
purchase from Seller, substantially all the assets of Seller, upon the terms
hereinafter set forth; and

     WHEREAS, Purchaser is a wholly-owned subsidiary of Parent, which has agreed
to take some actions on behalf of Purchaser, and which also has some rights and
obligations under this Agreement (Parent and Purchaser are collectively referred
to herein as "QualMark").

     NOW, THEREFORE, in consideration of the covenants set forth herein and in
reliance on the representations and warranties contained herein, the parties
hereto hereby agree as follows:

     Section 1. Purchase and Sale of Assets.

     1.1. Acquired Assets.

          (a) On the Closing Date (as hereinafter defined), Seller shall sell,
assign, transfer and deliver, unto Purchaser, and its successors and assigns
forever, free and clear of all Liens (as defined in Section 5.4 hereof) (other
than rights of third parties under contracts assigned pursuant to this
Agreement), all right, title, interest and claims in or to the business,
properties and assets of Seller or used in Seller's business other than the
Excluded Assets (hereinafter defined), together with the goodwill of Seller, all
as the same shall exist on the date hereof, together with any additions thereto
after the date of this Agreement, (hereinafter sometimes together referred to as
the "Acquired Assets"), including without limitation the following assets:

          (i) all machines, equipment, tools, dies, molds, furniture, fixtures,
     trucks, automobiles, other vehicles, office supplies, and all other
     tangible personal property, including without limitation that property (A)
     described on Schedule l.l(a)(i) hereto, (B) used or dedicated to use in the
     operations of the business of Seller, (C) located at the premises operated
     by Seller (except, with respect to clauses (A) through (C) above, property
     leased by Seller, which shall be delivered at the Closing subject to such
     leases);

          (ii) the contracts, promissory notes, leases of personal property and
     agreements listed on Schedule l.l(a)(ii) hereto, and all other contracts,
     leases, agreements, promissory notes and other evidences of indebtedness to
     Seller (the "Contracts");

          (iii) all intangible assets and all rights, interests and claims of
     Seller in, to or under all intangible assets (including without limitation
     Seller's name and any trademarks, trade names or service marks under which
     Seller has operated, any copyrighted or copyrightable material, patents,
     patent applications, trade secrets, drawings, designs, formulas, customers'
     records, customer lists, supplier lists, pricing information, employee
     records, choses in action, claims), together with any goodwill associated
     with any of the foregoing, and including without limitation the intangible
     assets described on Schedule 1.1(a)(iii) hereto;

          (iv) all inventories, raw materials (including inventories and raw
     materials on order but not received as of the Closing Date),
     work-in-progress, finished goods ("Inventory");
<PAGE>
          (v) all claims, demands, judgments, rights, choses in action, accounts
     receivable, bills and notes receivable, documents, instruments, credits and
     deferred items; and

          (vi) all books, records and files of Seller relating to the business
     and operations of Seller for all periods ending on or before the Closing
     Date.

          (b) From and after the Closing Date, Purchaser shall give to Seller
free and unrestricted access to the books, files and records relating to the
business and operations of Seller prior to the Closing transferred to Purchaser
pursuant to Section l.l(a) hereof, as Seller shall from time to time reasonably
request. Any access pursuant to this Section l.l(b) shall be conducted in such a
manner as not to interfere unreasonably with the operations of the business of
Purchaser after the Closing Date.

     1.2. Excluded Assets. The Acquired Assets do not include the assets
(hereinafter collectively referred to as the "Excluded Assets") of Seller as
follows: (a) inventory sold after the date hereof for fair value in the ordinary
course of business consistent with prior practice; (b) cash, cash equivalents
and securities; (c) real property, buildings and all appurtenances (with the
exception of trade fixtures); (d) minute books and stock transfer ledger of
Seller; (e) counterclaims and cross claims to the extent relating to any
liability against which Seller indemnifies QualMark hereunder; (f) insurance
claims and rights under insurance policies to the extent relating to any
liability against which Seller indemnifies QualMark hereunder; (g) rights of
Seller under this Agreement; (h) the tangible personal property at Seller's
facility owned by the shareholders of Seller and listed on Schedule 1.2 hereto;
- (i) and contracts of employment of Seller, and any employees of Seller, except
those particular employees whom Parent has agreed to employ, as specifically set
forth herein; (j) Seller's Prepaid Federal Tax account; and (k) Seller's
property tax escrow.

     Section 2. Liabilities and Excluded Liabilities.

          (a) Purchaser shall assume on the Closing Date and, effective as of
the Closing and contingent upon the occurrence of the Closing, shall discharge
in accordance with their terms (subject to any defenses or claimed offsets
asserted in good faith against the obligee to whom such liabilities, payments
and obligations are owed), all liabilities, payments or obligations of Seller
(absolute, contingent or otherwise) arising out of the business and operations
of Seller or the ownership or operation of the Acquired Assets, including,
without limitation:

          (j) the current accrued liabilities of Seller to the extent of the
     amount thereof correctly stated on the Closing Date Balance

          (k) Sheet to be provided by Seller to Purchaser pursuant to Section
     2(c) below; and

          (ii) the continuing obligations under the Contracts arising subsequent
     to the Effective Time of the Closing (as hereinafter defined) based on
     operations subsequent thereto.

          (b) It is the intention of the parties that Purchaser assume only the
current accrued liabilities of Seller to the extent of the amount thereof
correctly stated on the Closing Date Balance Sheet; therefore, any provision in
Section 2(a) above to the contrary notwithstanding, Purchaser is not assuming,
and shall have no obligation to pay, perform, discharge or satisfy, any of the
following items (collectively the "Excluded Liabilities"), as to all of which
Seller hereby retains liability:

          (i) Any liability not listed in Section 2(a) above.

          (ii) The liability of Seller under that term loan with Chase (the
     "Chase Term Loan").

          (iii) Any and all liabilities to employees of Seller, including
     without limitation employment contracts, workers' compensation awards,
     incentive compensation accrued, pension costs accrued, benefits accrued or
     claims payable pursuant to the benefit plans of Seller, payroll, payroll
     tax accruals, and income, franchise, excise, sales, use, personal, real
     property and employment taxes (or any other taxes or similar imposts) to
     the extent that they relate to
<PAGE>
     the period prior to the Effective Time of the Closing or to termination of
     the employment of such employees as a result of this Agreement;

          (iv) Any and all liabilities and obligations to the extent that they
     pertain principally to any of the Excluded Assets, including but not
     limited to any mortgages, deeds of trust or notes secured by real property;

          (v) Any accounts payables owing to any subsidiary, affiliate or equity
     interest owner of Seller;

          (vi) Liabilities or obligations arising by virtue of the sale and
     purchase pursuant to this agreement, including but not limited to any taxes
     owed by Seller as a result of this Agreement;

          (vii) Any and all liabilities related to the release of any hazardous
     or toxic substance or the violation of any environmental law relating to
     the operation of Seller's business prior to the Effective Time of the
     Closing;

          (viii) Any and all liabilities for OSHA and other worker safety
     matters, taxes, noncompliance with applicable laws or regulations, personal
     injury, death or property damage, relating to the operation of Seller's
     business prior to the Effective Time of the Closing; and

          (ix) Such other obligations and liabilities of Seller as are expressly
     stated herein to be the continuing responsibility of Seller.

          (c) Seller shall prepare and furnish to Purchaser on or about November
11, 2004 a balance sheet of Seller as of the end of business on November 11,
2004 (the "Closing Date Balance Sheet"), prepared from the books and records of
Seller in a manner consistent with the accounting principles and methods as
defined below in Section 5.3. Such Closing Date Balance Sheet shall be certified
by the President of Seller, and shall show a ratio as of the Closing Date of
Acquired Assets to Current Liabilities (the "Closing Current Ratio") of at least
2.9:1.

     Section 3. Consideration.

     3.1. Purchase Price. The purchase price (the "Purchase Price") for the
Acquired Assets, the Noncompetition Agreements and the other considerations to
be supplied by Seller and its equity interest owners hereunder shall be
$1,650,000, payable as follows: (a) $50,000 paid by Parent on behalf of
Purchaser on October 1, 2004, the receipt of which is hereby confirmed by
Seller; (b) $850,000, payable at Closing (hereinafter defined) by wire transfer
to the account of Seller (a portion of such amount shall be paid by wire
transfer to Seller's lender to pay off Seller's existing bank financing); and
(c) a number of shares of the Common Stock, no par value per share, of Parent
(the "Securities") equal to $750,000, divided by the average closing price of
Parent's Common Stock over the thirty (30) days of trading immediately preceding
November 10, 2004 (September 28, 2004, through November 9, 2004, inclusive),
subject to the conditions and restrictions set forth in Sections 3.2 and 3.3
below. At Closing, Seller and Purchaser shall confirm in writing the calculation
of the average closing price of Parent's Common Stock over the thirty (30) days
of trading immediately preceding November 10, 2004 and the number of Securities
to be issued.

     3.2 Restricted Securities. Seller has directed that the Securities be
issued to its equity interest owners in the following names and proportions: 40%
of the shares to Mr. Andrew Grimaldi, 40% of the shares to Mr. Ken Keys, and 20%
of the shares to Mr. Kevin Tierney. (Mssrs. Grimaldi, Keys and Tierney are
hereinafter referred to as the "Equity Owners") The Securities will be
unregistered and restricted, and will be stamped with a "restricted" legend
indicating that the Securities may not be resold unless they are registered with
the SEC or are exempt from the registration process. QualMark shall have no
obligation to register the Securities or remove such legend; however, at Closing
the Purchaser shall deliver (a) addressed to each Equity Owner, an opinion of
Parent's counsel, that, under securities laws as of the Closing Date, if the
Securities of such Equity Owner are held for a period of one year after the
Closing Date without transfer, and if Parent completes in timely fashion all of
its filings required under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), then such Equity Owner shall thereafter be able to transfer
such Securities under Securities and Exchange Commission Rule 144, subject to
all of the restrictions of such Rule 144, and (b) to each Equity Owner, a letter
from Parent's Chief Financial Officer stating that the Securities are being
issued as of November 15. 2004, that any applicable 1-year holding period will
end on November 15, 2005. Copies of the form of both such letters are attached
hereto and made a part hereof as Schedule 3.2. Parent shall engage its counsel
to assist the Equity
<PAGE>
Owners in the sale of the Securities under Rule 144 by issuing opinions to the
extent reasonably required by Equity Owners' brokers or Parent's transfer agent,
and by performing any related work, but Parent shall not be required to pay more
than $10,000 in the aggregate for such opinions and related work; provided,
however, that if Parent's counsel will not for any reason issue such opinions
for any sale, and Equity Owners' counsel will issue such opinions, then Parent
shall pay Equity Owners' counsel to issue such opinions, but, in no case, more
than $10,000 in the aggregate. Parent shall cooperate with Equity Owners and
take all commercially reasonable steps within its reasonable control to make
sure that the Securities are saleable under Rule 144 and shall not take any
action to obstruct or cause the transfer agent to obstruct any sale of the
Securities under Rule 144, if not prohibited by applicable law. Trading of the
Securities will also be subject to any applicable insider trading restrictions.
By their execution of this Agreement Seller and the Equity Owners acknowledge
the restrictions on the Securities and agree to abide by all Securities and
Exchange Commission regulations (including but not limited to Rule 144) with
respect to their trading of the Securities. Each Equity Owner individually
agrees to indemnify QualMark with respect to his own violation of such
restrictions and/or failure to abide by such regulations, but in no
circumstances shall the Seller or an Equity Owner be liable for any act or
omission of another Equity Owner. The provisions of this Section 3.2 shall
survive termination of this Agreement. Parent shall complete and file in a
timely fashion through December 31, 2006 all filings under the Exchange Act
necessary for the Purchaser to satisfy the current public information
requirement of Rule 144(c) under the Securities Act of 1933, as Amended.

     3.3 Notes and Purchaser's Option to Convert. Purchaser shall issue
promissory notes (the "Notes") in the form set forth in Schedule 3.3 payable to
the Equity Owners as follows: $300,000 to Mr. Andrew Grimaldi, $300,000 to Mr.
Ken Keys, and $150,000 to Mr. Kevin Tierney. The Notes will be transferable,
bear interest at the annual rate of 6.5%, and will be payable in equal monthly
installments of principal and interest, with the first such payment payable on
February 15, 2005, and the last such payment due on the fifth (5th) anniversary
of the Closing Date. Schedule 3.3 to this Agreement sets forth such payments to
made on each of the Notes. At Closing the Notes will be placed in escrow with
Seller's attorney under the Escrow Agreement set forth in Exhibit A. At any time
during the period of January 5, 2005 through January 15, 2005 Purchaser shall
have the option of recalling all the shares of the Securities issued in the
name(s) of all of the Equity Owners and exchanging them for the Note(s) issued
in the names of the corresponding Equity Owner(s). If the Securities are not
recalled by the Purchaser before January 16, 2005, the Escrow Agent shall return
the Notes to Purchaser on request of Purchaser. It is agreed by the parties
hereto and by the Equity Owners that this Section 3.3 shall survive the
termination of this Agreement and shall be specifically enforceable in a court
of equity.

     3.4 Allocation. Seller and Purchaser agree to enter into good-faith
discussions to determine, by the Closing, the allocated fair market value of the
Acquired Assets as follows:

                                        Accounts Receivable
                                        Inventory
                                        Furniture, Fixtures and Equipment
                                        Covenant not to Compete
                                        Customer List
                                        Goodwill

                                        TOTAL $1,650,000

     Such allocation shall be memorialized in a letter agreement between Seller
and Purchaser to be executed at Closing, and shall be binding on Purchaser and
Seller for all federal, state and local tax purposes. Purchaser and Seller shall
file with their respective federal income tax returns forms that shall reflect
such allocation.

     Section 4. Closing. Provided that the conditions in Sections 8 and 9 hereof
have been satisfied or waived, the consummation of the purchase and sale of the
Acquired Assets contemplated by this Agreement (the "Closing") shall, unless
another date or place is agreed to in writing by Seller and Purchaser, take
place at the offices of Akabas & Cohen, on November 15, 2004 (the "Closing
Date"). All references contained herein to "the Effective Time of the Closing"
shall be deemed to refer to the close of business on the date that the
consummation of the transaction contemplated hereby is completed.

     Section 5. Representations and Warranties of Seller. Seller represents and
warrants to QualMark as follows, and acknowledges and confirms that each such
representation and warranty shall be deemed to be material and
<PAGE>
that QualMark is relying upon such representations and warranties in connection
with the execution, delivery and performance of this Agreement, notwithstanding
any investigation made by QualMark or on its behalf.

     5.1. Organization and Good Standing.

          (a) Seller is a corporation duly organized, validly existing and in
good standing under the laws of the state of its incorporation and is qualified
to transact business and is in good standing as a foreign corporation in the
jurisdictions where it is required to qualify.

          (b) Seller has the power and authority (corporate and otherwise) to
own, lease and operate its properties and to carry on its business as now
conducted.

          (c) Seller has no subsidiaries or equity investments in any entities.

     5.2. Consents, Authorizations and Binding Effect.

          (a) Seller may execute, deliver and perform this Agreement without the
necessity of obtaining any consent, approval, authorization or waiver or giving
any notice or otherwise, except as set forth on Schedule 5.2 hereto.

          (b) This Agreement has been duly authorized, executed and delivered by
Seller and constitutes the legal, valid and binding obligation of Seller,
enforceable in accordance with its terms. The execution, delivery and
performance of this Agreement will not:

          (i) constitute a violation of the Certificate or Articles of
     Incorporation or the By-Laws, as amended, of Seller;

          (ii) conflict with, result in the breach of, constitute a default,
     with or without notice and/or lapse of time, under, result in being
     declared void or voidable any provision of, or result in any right to
     terminate or cancel any contract, lease, agreement, license, commitment or
     purchase order to which Seller or any of its properties is bound;

          (iii) constitute a violation of any statute, judgment, order, decree
     or regulation or rule of any court, governmental authority or arbitrator
     applicable or relating to Seller, the Acquired Assets or the business of
     Seller to be acquired by Purchaser pursuant hereto; or

          (iv) result in the acceleration of any debt or other obligation of
     Seller or the creation of any Lien (as defined in Section 5.4) upon any of
     the Acquired Assets.

     5.3. Financial Statements and Financial Condition.

          (a) Seller has maintained its books of account in accordance with
applicable laws, rules and regulations, and such books and records are and,
during the periods covered by the Financial Statements (hereinafter defined),
were correct and complete in all respects, and completely and accurately reflect
the transactions of Seller's business and the income, expenses, assets and
liabilities of Seller, including the nature thereof and the transactions giving
rise thereto.

          (b) Included in Schedule 5.3 are the reviewed balance sheets of Seller
as of September 30, 2003 and September 30, 2004, and the related unaudited
statements of income and of cash flows for the fiscal year ended each such
September 30th (collectively the "Financial Statements"). The reviewed balance
sheet of Seller as of September 30, 2004, is referred to in this Agreement as
the "Balance Sheet.

          (c) The Financial Statements have been prepared from the books of
account of Seller in accordance with GAAP, except for the valuation of
inventory, which has been valued according to the method described on Schedule
5.5 hereto, and present fairly the financial position of the business of Seller
as of the date of such
<PAGE>
statements and the results of operations of the business of Seller for the
periods covered thereby. The Financial Statements reflect all necessary
adjustments and reserves for losses and contingencies as of the date of such
statements.

          (d) Seller has no material liabilities (including, without limitation,
unasserted claims, whether known or unknown, matured or unmatured, absolute,
contingent or otherwise) that are required to be reflected, and are not
reflected or are in excess of the amount reflected, in the Balance Sheet or
notes thereto except those incurred since the date of the Balance Sheet in the
ordinary course of business, consistent with past practice, in arms' length
transactions with unrelated parties, and which do not have and cannot reasonably
be expected to have, in the aggregate, a material adverse effect on the
business, financial condition or prospects of Seller (a "Material Adverse
Effect").

     5.4. Title and Condition of Assets.

          (a) Except as otherwise disclosed on Schedule 5.4 hereto, Seller has,
and pursuant to this Agreement Seller will sell, transfer, assign and deliver to
Purchaser, good and marketable title to the Acquired Assets, free and clear of
liens, encumbrances, claims of third parties, security interests, mortgages,
pledges, agreements, options and rights of others of any kind whatsoever,
whether or not filed, recorded or perfected, and including, without limitation,
any conditional sale or title retention agreement or lease in the nature thereof
or any financing statements filed in any jurisdiction or any agreement to give
any such financing statements (hereinafter collectively referred to as "Liens"),
other than rights of third parties under leases of tangible personal property
disclosed on Schedule 5.4(a) hereto and liens for taxes not due and payable.

          (b) The equipment included in the Acquired Assets is in operating
condition and constitutes sufficient equipment necessary to operate the business
of Seller as conducted during the year prior to the date hereof. None of the
Acquired Assets has been affected by any fire, accident, act of God or any other
casualty that materially and adversely impairs its function in the business of
Seller. The business of Seller is not conducted under any restriction imposed
upon Seller, but not imposed upon other similar businesses in the locality where
its business is located.

          (c) Schedule 1.1(a)(i) hereto includes a complete and correct list and
a summary description of substantially all material tangible personal property
in the nature of machinery and equipment owned or leased by Seller and used in
connection with the business of Seller.

          (d) Schedule 1.1(a)(i) hereto includes a complete and correct list and
a summary description of substantially all material contracts used in connection
with the business of Seller. The Contracts are good and valid, and enforceable
in accordance with their terms. No consents or approvals are necessary to assign
to and vest in Purchaser all of Seller's interest in the Contracts, except the
Contracts listed on Schedule 5.4(d) hereto. Seller is not in material default
under any of the Contracts and has no knowledge of any material default by any
other party thereto.

     5.5. Inventories. The inventories of Seller reflected on the Balance Sheet
have been valued in Seller's reasonable determination of fair market value in
accordance with Schedule 5.5 hereof, and the value of obsolete materials and
materials of below standard quality has been written down.

     5.6. Receivables. The trade accounts and other receivables of Seller are
bona fide receivables and arose out of arms' length transactions, are recorded
correctly on the books and records of Seller, and are not subject to any
offsetting claims or adjustments, known to Seller, except to the extent of any
reserves therefor reflected on the Balance Sheet or added by Seller in the
ordinary course of business since the date of the Balance Sheet, consistent with
prior practice.

     5.7. Insurance.

          (a) Schedule 5.7 hereto sets forth (i) a list of all policies of
insurance maintained by Seller, including insurance providing benefits for
employees, in effect on the date hereof; (ii) a description of the coverage of
such policies; and (iii) the annual premiums therefor and the underwriter and
expiration dates thereof.

          (b) There are no claims pending or, to the best knowledge of Seller,
threatened under Seller's casualty or liability insurance policies, and no claim
has been made thereunder during the three years preceding the date hereof. All
premiums due and payable thereon have been paid, and all such policies are in
full force and effect in
<PAGE>
accordance with their respective terms. Such policies are underwritten by
financially sound and reputable insurers and constitute commercially reasonable
insurance coverage in respect of Seller's past practice and companies similarly
situated with Seller. There are no outstanding claims or liabilities, whether
fixed or contingent, known to Seller, under any medical reimbursement plan or
any other plan, policy or arrangement under which Seller acts as a self-insured.

     5.8. Litigation and Compliance.

          (a) There are no actions, suits, claims or proceedings or governmental
or administrative investigations pending or, to the best knowledge of Seller,
threatened, nor, to the best knowledge of Seller, is there any reasonable basis
for any such action, suit, claim or proceeding (i) by, against or otherwise
involving Seller, Seller's officers, directors, employees or agents, any of the
Acquired Assets or any asset or property of others leased or used by Seller
pursuant to an agreement to be assigned by Seller or (ii) which questions or
challenges the validity of this Agreement or any action taken or to be taken
pursuant to this Agreement.

          (b) Seller possesses all material permits, licenses and consents from
any governmental authority necessary to enable Seller to conduct the business,
taken as a whole, substantially as now conducted. Seller is in substantial
compliance with, is not in default or violation in any material respect under,
and has not been charged with or received any notice at any time of any
violation by Seller of, any statute, law, ordinance, regulation, decree or order
applicable to the business or operations of Seller.

          (c) Neither Seller nor any of the Acquired Assets or transactions
contemplated under this Agreement is subject to any judgment, order or decree
entered in any lawsuit or proceeding applicable to the business and operations
of Seller.

     5.9. Taxes.

          (a) Seller has, or on or before the Closing Date will have, duly filed
all tax reports and returns required to be filed in respect of its business and
operations and the Acquired Assets as of such date. All such tax reports and
returns are or will be complete, accurate and in compliance with all relevant
laws and regulations in all material respects, and none has been audited by any
governmental authority. Seller has, or on or before the Closing Date will have,
paid and discharged all federal, state, local and foreign taxes, interest,
penalties or other payments required, as the case may be, to be paid and then
currently due as shown on such tax reports and returns or otherwise in respect
of the Acquired Assets and the business, operations and employees of Seller as
of such date. To the best knowledge of Seller, no audit of Seller is planned or
threatened. Seller has withheld proper and accurate amounts from its employees'
compensation in substantial compliance with all withholding and similar
provisions of the IRS Code of 1986, as amended, and any other applicable law.

          (b) Seller has not received notice of any tax deficiency outstanding,
proposed or assessed against it, nor does Seller have any knowledge of any basis
for any tax deficiency or assessment, nor has Seller executed any waiver of any
statute of limitations on the assessment or collection of any tax. There are no
tax liens upon, pending against or, to the best knowledge of Seller, threatened
against any Acquired Assets.

     5.10. Employees. Schedule 5.10 hereto contains a list of all persons
receiving compensation from Seller and a description of all compensation
arrangements (including without limitation salaries and bonus compensation) and
employment agreements affecting them. No employee of any Seller is covered by
any collective bargaining agreement.

     5.11. ERISA. Included on Schedule 5.11 is a list of each employee benefit
plan (within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), written or oral employment or
consulting agreement, severance pay plan, employee relations policy, practice or
arrangement, agreements with respect to leased or temporary employees, vacation
plan or arrangement, sick plan, stock purchase plan, stock option plan, fringe
benefit plan, bonus plan and any deferred compensation agreement, plan or
program covering any present or former employee of Seller and which is, or at
any time was, sponsored or maintained by (or to which contributions are, were,
or at any time were required to have been, made by) Seller or any other
organization
<PAGE>
which is a member of a controlled group of organizations (within the meaning of
Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as
amended) of which each Seller is a member (the "Controlled Group").

     5.12. Contracts. Etc. All material contracts, leases, agreements, licenses,
commitments and orders to which Seller is a party or by which Seller or any of
its assets is bound relating in any way to the business of Seller ("Contracts")
are listed on Schedule l.l(a)(ii). All of the Contracts are in full force and
effect. To the knowledge of Seller, no party to any such Contract has committed
a material breach thereof that is continuing on the date hereof, and no party to
any such Contract is paying on the date hereof liquidated damages in lieu of
performance thereunder.

     5.13. Parent Stock. Seller is acquiring the Securities for investment
purposes, and not as a result of any advertisement, public meeting or other
public offering. Seller acknowledges that the Securities are not registered and
are restricted securities as defined in SEC Rule 144(a)(3)(i). Seller is aware
of the risks of an investment in securities, and Seller has no need for any
income from its investment in the Securities and can afford to lose its entire
investment. Seller acknowledges that QualMark has made no representation as to
the value of the Securities now or in the future. Seller or legal and financial
advisors available to Seller, has such knowledge and experience in financial and
business matters so that Seller is capable of assessing the merits and risks of
acquiring the Securities.

     5.14. Fraudulent Conveyances; Bankruptcy. Seller is not entering into this
Agreement with the intent to hinder, delay or defraud present or future
creditors. Seller is not now insolvent and is not, and has not been, involved in
any bankruptcy or similar proceeding.

     5.15. Other Information. The Schedules annexed hereto and the documents and
information with respect to Seller, the Acquired Assets and the business of
Seller that are required to be supplied to Purchaser pursuant to this Agreement
do not contain any statement which is false or misleading with respect to a
material fact.

     Section 6. Representations and Warranties of QualMark. QualMark represents
and warrants to Seller as follows, and acknowledges that Seller is relying upon
such representations and warranties in connection with the execution, delivery
and performance of this Agreement, notwithstanding any investigation made by
Seller or on its behalf.

     6.1. Authorizations and Binding Effect. Purchaser and Parent are duly
licensed to carry on their business as currently conducted in the State of
Colorado, and in each state in which QualMark currently is doing business. This
Agreement has been duly executed and delivered by Purchaser and Parent and
constitutes the legal, valid and binding obligation of such parties, enforceable
in accordance with its terms. The execution, delivery and performance of this
Agreement does not and will not:

          (i) conflict with, result in the breach of, constitute a default, with
     or without notice and/or lapse of time, result in being declared void or
     voidable any provision of, or result in any right to terminate or cancel
     any contract, lease or agreement to which QualMark or any of its properties
     is bound;

          (ii) constitute a violation of any statute, judgment, order, decree or
     regulation or rule of any court, governmental authority or arbitrator
     applicable or relating to QualMark; or

          (iii) result in the acceleration of any debt or other obligation of
     QualMark.

     6.2. Judgments. No judgments exist against QualMark or any of QualMark's
assets.
<PAGE>
     6.3. Litigation. No actions, suits, claims, proceedings or investigations
(whether or not purportedly on behalf of or against QualMark), including,
without limitation, the claims by Dr. Hobbs against the Purchaser in Civil
Actions Nos. 03-WY-0198 AJ (MJW) and 04-WY-1362-AJ (MJW) in the United States
District Court for the District Of Colorado and the United States Court of
Appeals for the Tenth Circuit, are pending or threatened against QualMark at law
or in equity that relate to the transactions contemplated by this Agreement or
that will prohibit QualMark from performing the obligations to be performed by
it hereunder.

     6.4. Parent Stock.

          (a) The Securities, when issued pursuant to the terms hereof, will
constitute the duly authorized, validly issued, fully paid and nonassessable
shares of Parent.

          (b) A description of each class of security authorized to be issued by
Parent, including the number authorized to be issued and the number actually
issued, is included in Schedule 6.4 hereto

          (c) The most recent Forms 10-QSB and 10-KSB, and any Forms 8-K filed
since the most recent 10-KSB, filed by Parent with the Securities and Exchange
Commission (the "34 Act Filings") are included in Schedule 6.4 hereto and are
true and correct in all material respects and do not omit to state any fact that
is necessary to prevent the disclosures therein from being misleading.

          (d) QualMark is in compliance with, is not in default or violation in
any respect under, and has not been charged with or received any notice at any
time of any violation by QualMark of, any securities law or regulation reporting
requirements.

     Section 7. Covenants.

     7.1. Access to Records and Properties of Seller. Between the date of this
Agreement and the Closing Date, Seller shall give to QualMark such access to the
premises, books and records of Seller as QualMark may from time to time
reasonably request. Any investigation pursuant to this Section 7.1 shall be
conducted in such manner as not to interfere unreasonably with the operation of
the business of Seller.

     7.2. Operation of Seller. From and after the date hereof Seller shall:

          (a) Operate Seller's business diligently and only in the usual,
ordinary manner and, to the extent consistent with such operation, (i) preserve
its current business organization intact, (ii) preserve its current
relationships with employees, customers, suppliers and all other persons having
business dealings with them and (iii) maintain in force the insurance policies
referred to in Section 5.7 hereof.

          (b) Maintain Seller's books, accounts and records in the usual and
ordinary manner, and in a manner that fairly and correctly reflects Seller's
income, expenses, assets and liabilities in accordance with generally accepted
accounting principles on a basis consistent with prior years.

          (c) Comply with all Federal, state, local and other governmental
(domestic or foreign) laws, statutes, ordinances, rules, regulations, orders,
writs, injunctions, decrees, awards or other requirements of any court or other
governmental or other authority applicable to them or their assets or to the
conduct of their business, and use best efforts to perform all obligations under
all contracts, agreements, licenses, permits and undertakings without default.

          (d) Not sell or dispose of any of the Acquired Assets and not acquire
any capital assets.

          (e) Not incur any indebtedness other than that incurred in the usual
and ordinary course of business.
<PAGE>
          (f) Not make any agreement, commitment or arrangement to take any
action inconsistent with the obligations under, or prohibited by, the foregoing
Subsection 7.2.

     7.3. Operation of QualMark. From and after the date hereof through the
Closing Date QualMark shall:

          (a) not issue any securities of any class, except the Securities to
Seller.

          (b) operate QualMark's business diligently and only in the usual,
ordinary manner and, to the extent consistent with such operation, preserve its
current business organization intact.

     7.4. Competing Transactions. Seller shall not take any action, directly or
indirectly, to negotiate, cause, promote, authorize or agree to any transaction
competing or interfering with any of the transactions contemplated by this
Agreement.

     7.5. Best Efforts to Satisfy Conditions and Notice. Seller and QualMark
shall each use its best efforts to cause the conditions to the obligations of
the other party to be satisfied to the extent that the satisfaction of such
conditions is in its or his control, including obtaining any necessary consents,
authorizations, and approvals. Seller and QualMark shall notify the other
promptly of any representation or warranty made by it herein that becomes untrue
prior to the Closing.

     7.6. Reserved.

     7.7. Reserved.

     7.8. Confidentiality; Announcements. The parties hereto shall keep in
strict confidence, and shall refrain from disclosing, except as strictly
necessary to accomplish the consummation of the transactions contemplated
hereunder, all information pertaining to the business of Seller and QualMark and
relating to this Agreement, including, without limitation, the terms of such
transaction. The parties agree to consult with each other and to coordinate with
one another prior to the issuance of any press release or similar public
announcement or communication. Provided, however, that neither party shall be
restrained from making any such disclosure as may be required by the Securities
Laws or other laws.

     Section 8. Conditions of Obligations of QualMark. The obligations of
QualMark to consummate the purchase and sale under this Agreement are subject to
the satisfaction of the following conditions, each of which may be waived by
QualMark.

     8.1. Representations and Warranties; Performance of Obligations.

          (a) The representations and warranties of Seller set forth in Section
5 hereof and in all agreements, documents and instruments executed and delivered
pursuant hereto or in connection with the Closing shall have been on the date
hereof and shall be on the Closing Date true and correct in all material
respects as though made on and as of the Closing Date.

          (b) Seller shall have performed the agreements and obligations
necessary to be performed by them under this Agreement prior to the Closing
Date. Without limiting the generality of the foregoing, Seller shall have
obtained all consents, waivers, approvals and authorizations, and shall have
given all notices to third parties, and discharged in full any Liens, necessary
to convey, sell, transfer, assign and deliver to Purchaser all of the Acquired
Assets and to vest in Purchaser all right, title, interest and claims of Seller
in, to, relating to or arising under the Acquired Assets free and clear of any
Liens.

          (c) Seller shall have delivered to Purchaser a certificate dated the
Closing Date and signed on behalf of Seller by an authorized officer or
representative certifying to the fulfillment of the conditions set forth in
subsections 8.l(a) and 8.1(b) above.
<PAGE>
          (d) The Closing Date Balance Sheet to be delivered on November 11,
2004, shall show a Closing Current Ratio (as defined in Section 2(c) above) of
at least 2.9:1.

     8.2. Transfer of Acquired Assets. Seller shall have delivered to Purchaser
the Acquired Assets and such bills of sale, assignments and other good and
sufficient instruments of transfer and conveyance, in form and substance
reasonably satisfactory to Purchaser and its counsel, as shall be effective to
vest in Purchaser, and to evidence the vesting in Purchaser of, good and
marketable title to the Acquired Assets as provided for herein.

     8.3. Seller's Goodstanding. Seller shall have provided Purchaser with a
copy of a short-form good-standing certificate of the state of its
incorporation, together with a copy of its charter and by-laws, as amended, and
the minutes of its board meeting (or, if applicable, executed consent of its
directors) approving this Agreement, each of the documents referred to herein
and the consummation of the transactions contemplated hereby.

     8.4. Lease, Noncompetition and Employment Agreements. Seller shall have
executed and delivered to Purchaser a lease for the premises at West Haven, CT,
in the form of Exhibit B attached hereto, and fully complied with its
obligations under Article 12 thereof. Seller shall have executed and delivered
to QualMark a noncompete agreement in the form of Exhibit C attached hereto.
Andrew Grimaldi shall have executed and delivered to QualMark a noncompetition
agreement in the form of Exhibit D attached hereto. Ken Keyes shall have
executed and delivered to QualMark a noncompetition agreement in the form of
Exhibit E attached hereto. Kevin Tierney shall have executed and delivered to
QualMark a noncompetition agreement in the form of Exhibit F attached hereto.
Purchaser shall have entered into an employment agreement with Andrew Grimaldi
in the form of Exhibit G attached hereto. Purchaser shall have entered into an
employment agreement with Ken Keys in the form of Exhibit H attached hereto.

     8.5. Chase Term Loan. Not later than the Closing Date, Seller shall fully
pay off all its obligations under the Chase Term Loan and provide Purchaser with
a copy of the duly-executed release of said indebtedness which Seller shall
cause to be promptly recorded.

     8.6. Opinion of Counsel. QualMark shall have received an opinion from
Seller's counsel, dated the Closing Date, to the effect that (i) Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Connecticut, (ii) Seller has all requisite corporate power and
authority to enter into and consummate the transactions contemplated by this
Agreement and related documents (the aforesaid documents hereinafter referred to
as the "Operative Documents") and (iii) the Operative Documents have been duly
executed and delivered by Seller and are the valid and binding obligations of
Seller, enforceable against Seller in accordance with their respective terms,
subject as to enforcement to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting the enforcement of creditors'
rights generally and the application of equitable principles.

     8.7. Ratification. This Agreement and the execution hereof by each of the
parties hereto shall have been ratified by their respective Boards of Directors.

     8.8. Other Matters. Seller shall have furnished, or caused to be furnished,
to QualMark, in form and substance satisfactory to QualMark, such certificates
and other evidence as QualMark may have reasonably requested as to the
satisfaction of the conditions contained in this Section 8 and as to such other
matters as QualMark may reasonably request.

     Section 9. Conditions of Obligations of Seller. The obligations of Seller
to consummate the sale and purchase under this Agreement are subject to the
satisfaction of the following conditions, each of which may be waived by Seller.

     9.1. Representations and Warranties; Performance of Obligations.

          (a) The representations and warranties of QualMark set forth in
Section 6 hereof and in all agreements, documents and instruments executed and
delivered pursuant hereto or in connection with the Closing shall have been and
be true and correct in all respects at all times commencing with the date of
this Agreement and ending with and on the Closing Date as though made on and as
of the Closing Date.
<PAGE>
          (b) QualMark shall have performed the agreements and obligations
necessary to be performed by it under this Agreement prior to the Closing Date.

          (c) QualMark shall have delivered to Seller a certificate dated the
Closing Date and signed on behalf of Purchaser by an authorized officer or
representative certifying to the fulfillment of the conditions set forth in
subsections 9.l(a) and 9.1(b) above.

     9.2. Purchase Price. Purchaser shall have delivered to Seller the portion
of the Purchase Price to be delivered on the Closing Date pursuant to Section 3
hereof.

     9.3. QualMark's Goodstanding. Purchaser and Parent shall each have provided
Seller with a copy of a short-form good-standing certificate of the state of
their incorporation, together with a copy of their charter and by-laws, as
amended, and the minutes of its board meeting (or, if applicable, executed
consent of its directors) approving this Agreement, each of the documents
referred to herein and the consummation of the transactions contemplated hereby.

     9.4. Employment Agreements. Purchaser and Andrew Grimaldi shall have
entered into an agreement with regard to his employment in the form of Exhibit G
attached hereto. Purchaser and Ken Keys shall have entered into an agreement
with regard to his employment in the form of Exhibit H attached hereto.

     9.5. Reserved.

     9.6. Financing. By October 31, 2004, Parent shall have obtained a bank
financing commitment that confirms execution of this Agreement and the bank's
agreement to wire into the account of Seller on behalf of Purchaser the $850,000
to be paid upon Closing.

     9.7. Opinion of Counsel. Seller shall have received an opinion from
QualMark's counsel, dated the Closing Date, to the effect that (i) Purchaser and
Parent iare corporations duly organized, validly existing and in good standing
under the laws of the State of Colorado, (ii) QualMark has all requisite
corporate power and authority to enter into and consummate the transactions
contemplated by this Agreement and each other Operative Document, (iii) The
Securities, when issued pursuant to the terms hereof, will constitute the duly
authorized, validly issued, fully paid and nonassessable shares of Parent, and
(iv) each of the Operative Documents has been duly executed and delivered by
Purchaser and/or QualMark and are the valid and binding obligations of such
parties, enforceable against them in accordance with their respective terms,
subject as to enforcement to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting the enforcement of creditors'
rights generally and the application of equitable principles.

     9.8. Ratification. This Agreement and the execution hereof by each of the
parties hereto shall have been ratified by their respective Boards of Directors.

     9.9. Other Matters. QualMark shall have furnished, or caused to be
furnished, to Seller, in form and substance satisfactory to Seller, such
certificates and other evidence as Seller may have reasonably requested as to
the satisfaction of the conditions contained in this Section 9 and as to such
other matters as Seller may reasonably request.

     Section 10. Survival of Representations and Warranties; Indemnifications.

     10.1. Survival. The representations, warranties and agreements made in
Sections 5 and 6 hereof and in the Schedules hereto by QualMark and Seller shall
remain operative and in full force for a period of twelve months after the
Closing Date, except with respect to Section 5.4(a) and with respect to tax
matters, as to which such representations and warranties shall continue to
survive for a period of any applicable statutes of limitation, regardless of any
investigation made by or on behalf of any party.

     10.2. Indemnification by Seller. Seller shall defend and indemnify QualMark
and its officers, employees and directors, from any and all losses, liabilities,
proceedings, claims, settlements, judgments, fines, assessments, damages and
expenses (including reasonable attorneys' fees and litigation expenses, whether
arising out of a third party claim or relating to recovering indemnifiable
damages from Seller) (collectively, the "indemnifiable damages") that
<PAGE>
QualMark may suffer or incur in whole or in part by reason of, or which may
arise out of: (i) the Excluded Liabilities; (ii) the inaccuracy of any of the
representations of Seller in this Agreement; (iii) the breach by Seller of any
of the covenants or warranties herein; (iv) any claim for payment of the Chase
Term Loan; and (v) those matters described in Section 3.2 hereof.

     10.3. Indemnification by QualMark. Purchaser and Parent shall each defend
and indemnify Seller and its officers, employees and directors, from any and all
"indemnifiable damages" that Seller may suffer or incur by reason of: (i) the
inaccuracy of any of their respective representations herein; and (ii) the
breach of any of their respective covenants or warranties herein. Purchaser
shall defend and indemnify Seller and its officers, employees and directors,
from any and all "indemnifiable damages" that Seller may suffer or incur by
reason of any claim for payment of any liability assumed by Purchaser pursuant
hereto. Parent shall defend and indemnify Seller and its officers, employees and
directors, from any and all "indemnifiable damages" that Seller may suffer or
incur by reason of the Hobbs Claim.

     10.4. Notice and Right to Defend Third Party Claims.

          (a) Promptly upon receipt of notice of any third party claim, demand
or assessment or the commencement of any suit, action or proceeding in respect
of which indemnity may be sought on account of an indemnity agreement contained
in this Section 10, the party seeking indemnification (the "Indemnitee") shall
notify in writing, within sufficient time to respond to such claim or answer or
otherwise plead in such action, the party or parties from whom indemnification
is sought (collectively, the "Indemnitors") thereof; provided, however, that
failure or delay to supply such notice shall not relieve Indemnitors of their
indemnification obligation hereunder except to the extent that Indemnitors are
actually prejudiced by such failure or delay.

          (b) In case any claim, demand or assessment is asserted or suit,
action or proceeding commenced against an Indemnitee (collectively a "Claim")
and it notifies the Indemnitors of the commencement thereof, if the Indemnitors
acknowledge their indemnification obligations therefor hereunder, then, the
Indemnitors together shall be entitled to participate therein, and, to the
extent that they may wish, collectively to assume the defense, conduct or
settlement thereof, with counsel satisfactory to the Indemnitee, whose consent
to the selection of counsel shall not unreasonably be withheld. After notice
from the Indemnitors to the Indemnitee of its election so to assume the defense,
conduct or settlement thereof, the Indemnitors shall not be liable to the
Indemnitee for any legal or other expenses subsequently incurred by the
Indemnitee in connection with the defense, conduct or settlement thereof;
provided, however, that if the Indemnitee has any separate defense from those of
the Indemnitors, the Indemnitee shall have the right to be represented by its
own counsel at the Indemnitors', expense. The Indemnitee shall have the right in
any event to participate in any such defense with its own counsel at its own
expense. The Indemnitee will cooperate with the Indemnitors in connection with
any such Claim and make personnel, books and records relevant to the Claim
available to the Indemnitors at Indemnitors' expense. In the event that the
Indemnitors fail timely to defend, contest or otherwise protect against any such
Claim, the Indemnitee shall have the right to defend, contest or otherwise
protect against the same and may make any compromise or settlement thereof and
recover the entire cost thereof from the Indemnitors, including, without
limitation, reasonable attorneys, fees, disbursements and all amounts paid as a
result of such Claim or compromise or settlement thereof.

          (c) Anything to the contrary herein notwithstanding, prior to finally
settling any such Claim, the Indemnitors shall give to the Indemnitee prompt
notice of their intention to settle same and the terms of such proposed
settlement and acknowledging their indemnification responsibility therefor
hereunder. If the Indemnitee shall object to such proposed settlement within 10
days, then the Indemnitee shall thereafter, at its sole expense, assume the
control and defense of such claim, suit, action, investigation or proceeding and
in such event the liability of the Indemnitors shall be limited to the amount
for which the same could have been settled as proposed by the Indemnitors. If
the Indemnitee does not object to the terms of the proposed settlement within
the aforesaid l0-day period, then the Indemnitors shall have the right to
consummate such proposed settlement upon the terms set forth in the aforesaid
notice.
<PAGE>
     10.5. Basket and Limitation of Liability. The foregoing indemnification
provisions shall be the exclusive remedy any party may have for breach of
representation, warranty, or covenant. Seller's liability under this Section 10
shall be subject to the following limitations:

          (a) Seller shall have no liability unless and until the aggregate
amount of claims for which Seller is obligated to indemnify pursuant to Section
10.2 above shall exceed $40,000, but if the amount of such claims for which
Seller is ultimately found to be obligated exceeds such $40,000, then Seller
shall be liable for all such amounts, including such initial $40,000.

          (b) Notwithstanding the foregoing, QualMark shall be entitled to
recover for, and the threshold amount set forth in paragraph 10.5(a) above shall
not apply as a threshold to, any and all claims or payments made with respect to
fraud, intentional misrepresentation, claims against individual Equity Holders
under Section 3.2, willful misconduct of Seller, or any violation of Seller's
warranty under Section 12 (Broker's Fees).

     10.6. Payment of Amounts Due. The amount of any indemnifiable damages
conceded or determined to be due from one party to the other, pursuant to any of
the provisions of this Section 10, shall be paid to other within five (5)
business days from the date so conceded or determined.

     Section 11. Further Actions. From time to time, as and when requested by
QualMark, Seller shall execute and deliver such documents and instruments and
shall take such further or other actions as QualMark may deem necessary or
desirable to carry out the intent and purposes of this Agreement, to convey,
transfer, assign and deliver to Purchaser, and its successors and assigns, the
Acquired Assets (or to evidence any of the foregoing) and to consummate and give
effect to the other transactions contemplated hereby. From and after the Closing
Date Purchaser shall have the right and authority to collect for its own account
all accounts receivable and other items that are included in the Acquired Assets
transferred to it and to endorse (for deposit only) with the name of Seller any
checks or drafts received by it with respect to accounts receivable or other
items that are included in the Acquired Assets. Purchaser and Seller agree to
establish procedures whereby any checks or drafts received by Seller or its
subsidiaries with respect to receivables or other items relating solely to the
Acquired Assets will be promptly delivered to or deposited for the credit of
Purchaser.

     Section 12. Broker's Fees. Each of Seller and QualMark represents and
warrants that it has not dealt with any broker or agent in regard to the
transactions contemplated herein other than Woodbridge Group, Inc. Seller shall
pay any commission due to Woodbridge Group, Inc., and otherwise each of Seller
and QualMark shall pay its own broker fees.

     Section 13. Expenses. Except as otherwise specifically provided herein,
Seller and QualMark shall bear their own, legal fees and other costs and
expenses with respect to the negotiation, execution and the delivery of this
Agreement and the consummation of the transactions hereunder, and the Acquired
Assets shall not be reduced or impaired by the payment or accrual of any such
costs and expenses of Seller.

     Section 14. Entire Agreement. This Agreement, which includes the Schedules
and Exhibits hereto and the other documents, agreements and instruments executed
and delivered pursuant to or in connection with this Agreement, contains the
entire agreement between Seller and Purchaser with respect to the transactions
contemplated by this Agreement and supersedes all prior arrangements or
understandings with respect thereto.

     Section 15. Construction.

          (a) The descriptive headings of this Agreement are for convenience
only and shall not control or affect the meaning or construction of any
provision of this Agreement.
<PAGE>
          (b) Each of the parties to this Agreement participated in the drafting
of this Agreement and the interpretation of any ambiguity contained in this
Agreement will not be affected by the claim that a particular party drafted any
provision hereof.

          (c) Any pronoun herein shall include all genders and/or the plural or
singular as appropriate from the context.

     Section 16. Notices. All notices or other communications that are required
or permitted hereunder shall be in writing and sufficient when delivered
personally or telecopied by confirmed facsimile if delivered or telecopied
during normal business hours, and if not, then on the next business day after
delivery or telecopying, or the day accepted or rejected by addressee after
mailing by registered or certified mail, return receipt requested, or the next
business day if sent by nationally recognized overnight courier providing for
signature on delivery, in each case postage prepaid, addressed as follows:

     If to Purchaser or Parent:

        Mr. Charles Johnston
        Chief Executive Officer
        QualMark Corporation
        4580 Florence St.
        Denver, CO 80238
        Fax: 303-254-8343

        And

        Mr. Anthony Scalese
        Chief Financial Officer
        QualMark Corporation
        4580 Florence St.
        Denver, CO 80238
        Fax: 303-254-8343

     with a copy to:

        Mark W. Reinhardt, Esq.
        440 Williams Street
        Denver, CO 80218
        Fax: 303-388-9766

     If to Seller:

        Andrew Grimaldi
        70 Blue Hills Road
        North Haven, CT 06473

        Ken Keys
        175 Shore Drive
        Branford, CT 06405

        Kevin Tierney
        26 Mill Road
        North Branford, CT 06471
<PAGE>
     with a copy to:

        Akabas & Cohen
        488 Madison Avenue, 11th Floor
        New York, NY 10022
        Attn: Seth A. Akabas, Esq.
        Fax (212) 308-8582

Any party may by notice change the address to which notice or other
communications to it are to be delivered or mailed.

     Section 17. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Connecticut applicable to
contracts entered into, executed and to be performed wholly in such state.

     Section 18. Assignability. This Agreement shall not be assignable otherwise
than by operation of law by any party hereto without the prior written consent
of the other parties, and any purported assignment without such prior written
consent shall be void, except that QualMark may assign this agreement to a
corporation controlling, controlled by or under common control with QualMark.

     Section 19. Waivers and Amendments. Any waiver of any term or condition of
this Agreement, or any amendment or supplementation of this Agreement, shall be
effective only if in writing executed by the party against whom such waiver,
amendment or supplementation is sought to be charged. A waiver of any breach or
failure to enforce any of the terms or conditions of this Agreement shall not in
any way affect, limit or waive a party's rights hereunder at any time to enforce
strict compliance thereafter with every term or condition of this Agreement.

     Section 20. Third Party Rights. Any other provision of this Agreement to
the contrary notwithstanding, this Agreement shall not create benefits for any
third party.

     Section 21. Illegalities. In the event that any provision contained in this
Agreement shall be determined to be invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability of any such
provision in every other respect and the remaining provisions of this Agreement
shall not, at the election of the party for whose benefit the provision exists,
be in any way impaired.

     Section 22. Termination; Effect of Termination.

     22.1. Termination. This Agreement may be terminated at any time prior to
the Closing:

          (a) by mutual consent of Purchaser, Parent and Seller;

          (b) by either QualMark or Seller (the "Non-Defaulting Party") if there
has been a material breach of any material representation or warranty, covenant
or agreement set forth in this Agreement on the part of the other party (the
"Defaulting Party"); provided, however, that the Non-Defaulting Party shall not
have the right to terminate this Agreement until after it has given written
notice to the Defaulting Party, in reasonable specificity, of the breach in
question and expressing the Non-Defaulting Party's intention so to terminate
this Agreement as a result thereof, and the Defaulting Party shall have
subsequently failed to cure such breach within thirty (30) days of the
Defaulting Party's receipt of said notice; it being agreed that the Closing Date
and the date specified in Section 4 shall be postponed to such date as is
necessary for the expiration of such thirty (30) day period. Furthermore, the
election of a party to close with knowledge of a breach or default by another
party hereto shall constitute a waiver of such breach or default; or
<PAGE>
          (c) by any party if the Closing shall not have occurred before
November 16, 2004 or at such other date as the parties shall agree upon in
writing, if at the time notice of such termination is given the Closing shall
not have occurred for any reason other than a material breach of this Agreement
by the terminating party; or

          (d) By QualMark if the Closing Date Balance Sheet does not show a
Closing Current Ratio (as defined in Section 2(c) above) of at least 2.9:1.

     22.2. Effect of Termination. In the event of termination of this Agreement
by any party as provided in Section 22.1, this Agreement shall forthwith become
null and void and there shall be no liability or obligation on the part of any
party hereto or their respective officers, directors or employees except with
respect to those provisions of this Agreement which will survive termination
hereof, and except to the extent that such termination results from the willful
breach (a "Willful Breach") in any material respect by a party hereto of any of
its representations, warranties, covenants or agreements set forth in this
Agreement.

     Section 23 Counterparts. This Agreement may be executed in multiple
counterparts all of which taken together shall constitute one and the same
instrument.

     IN WITNESS WHEREOF, each of the undersigned corporations has caused this
Agreement to be executed by its duly authorized officer, as of the date first
above written.

QUALMARK ACG CORPORATION                ACG DYNAMICS, INC.

By: /s/ Charles Johnston                 By: /s/ Andrew Grimaldi
    ---------------------------------       ------------------------------------
    Name:                                   Name:
          ---------------------------             ------------------------------
    Title:                                  Title:
           --------------------------              -----------------------------

QUALMARK CORPORATION

By: /s/ Charles Johnston
    ---------------------------------
    Name:
          ---------------------------
    Title:
           --------------------------

The Equity Owners (as to Section 3.2 only)

Mr. Andrew Grimaldi:
                     --------------------------

Mr. Ken Keys:
              ---------------------------------

Mr. Kevin Tierney:
                   ----------------------------
<PAGE>
LIST OF EXHIBITS, SCHEDULES AND CLOSING DELIVERIES

Exhibits

A: Escrow Agreement
B: Lease
C: Seller Noncompetition Agreement
D: Grimaldi Noncompetition Agreement
E: Keys Noncompetition Agreement
F: Tierney Noncompetition Agreement
G: Grimaldi Employment Agreement
H: Keys Employment Agreement

Schedules

1.1(a)(i):   tangible property
   (a)(ii):  contracts, etc.
   (a)(iii): intangible assets
1.2          excluded personal property
3.2          Form of Securities Letters
3.3          form of the Notes
5.3:         Financial Statements
5.4(a):      liens and exceptions to title
5.4(d):      contracts requiring approval
5.5:         valuation method for inventory
5.7:         insurance
5.10:        employees and compensation
5.11:        health, welfare, etc. plans
6.4:         QualMark's capital structure; SEC filings

Closing Deliveries

Seller:
        Good-standing Certificate
        Bill of Sale; Assignments
        Board and Shareholder Consents
        Proof of release of Chase loan
        Certificate of fulfillment of conditions
        Opinion of Counsel

QualMark:
          Purchase Price
          Securities
          The Notes (to escrow with Seller's counsel)
          Good-standing Certificate
          Board Consents
          Opinion of Counsel

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