Document:

LOAN AGREEMENT DATED MARCH 24, 2000 BETWEEN

                              VITECH AMERICA, INC.

                                       AND

                             GATEWAY COMPANIES, INC.

<PAGE>

                                 LOAN AGREEMENT

                  LOAN AGREEMENT dated as of March 24, 2000 between VITECH
AMERICA, INC., a corporation duly organized and validly existing under the laws
of the State of Florida (the "Borrower"), and GATEWAY COMPANIES, INC. (the
"Lender").

                  The Borrower has requested that the Lender make a loan to the
Borrower in the principal amount of $10,000,000, and the Lender is prepared to
make such loan upon the terms and conditions hereof. Accordingly, the parties
hereto agree as follows:

Section 1.        Definitions.

                  "Bankruptcy Code" shall mean 11 U.S.C.ss.101 et seq.

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

                  "Capital Lease Obligation" shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) property to the extent such
obligations are required to be classified and accounted for as a capital lease
on the balance sheet of such Person under generally accepted accounting
principles.

                  "Closing Date" shall mean the initial date on which the
conditions precedent to the making of the Loan hereunder shall have been
satisfied by the Borrower or waived by the Lender.

                  "Common Stock" shall mean common shares of the Borrower's
capital stock, no par value.

                  "Default" shall mean any Event of Default or any event or
condition specified in Section 8 hereof, which with the giving of notice or
lapse of time or both would constitute an Event of Default.

                  "Dollars" and "$" shall mean lawful currency of the United
States of America.

                  "Existing Loan Agreement" shall mean the Convertible Loan
Agreement dated as of September 16, 1999, between the Borrower and the Lender,
as the same shall be amended, modified and supplemented and in effect from time
to time.

                  "Indebtedness" shall mean, for any Person, (a) obligations
created, issued or incurred by such Person for borrowed money (whether by loan,
the issuance and sale of debt securities or the sale of property to another
Person subject to an understanding or agreement, to repurchase such property
from such Person); (b) obligations of such Person to pay the deferred purchase
or acquisition price of property or services, other than trade accounts payable
arising, and accrued expenses incurred, in the ordinary course of business so
long as such trade accounts payable are payable within 60 days of the date the
respective goods are delivered or the respective services are rendered; (c)
Indebtedness of others secured by a Lien on the property of such Person; (d)
obligations of such Person in respect of letters of credit or similar
instruments issued or accepted by banks and other financial institutions for
account of such Person; (e) Capital Lease Obligations of such Person, and (f)
Indebtedness of others guaranteed by such Person.

                  "Interest Payment Dates" shall mean June 24, 2000, September
24, 2000, December 24, 2000 and March 24, 2001.

                  "Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement, and the
filing of or agreement to give any financing statement or other similar form of
public notice under the laws of any jurisdiction).

                  "Loan" shall mean the loan made by the Lender to the Borrower
pursuant to Section 2 hereof.

                  "Loan Documents" shall mean, as in effect at any time, this
Agreement and the Note.

                  "Maturity Date" shall mean the date that is 12 months from the
Closing Date.

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<PAGE>

                  "Note" shall mean the promissory note provided for in Section
2 hereof and in substantially the form of Exhibit A hereto, and any note or
notes issued in exchange or substitution therefor.

                  "Option Extension" shall mean that certain letter agreement
between ITC.net and the Lender dated the date hereof amending such parties'
letter agreement dated September 16, 1999.

                  "Person" shall mean any individual, corporation, company,
voluntary association, partnership, limited liability company, partnership,
joint venture, trust, unincorporated organization or government (or any agency,
instrumentality or political subdivision thereof).

                  "Post-Default Rate" shall mean, in respect of any principal of
or interest on the Loan or any other amount payable by the Borrower under this
Agreement or the Note that is not paid when due (whether at stated maturity, by
acceleration, by optional or mandatory prepayment or otherwise), a rate per
annum during the period from and including the due date to but excluding the
date such amount is paid in full, equal to 15 percent.

Section 2.        The Loan.

                  2.01. Loan. On the terms and conditions set forth in this
Agreement, the Lender agrees to make a loan to the Borrower in Dollars in the
principal amount of $10,000,000, such loan to be made on the Closing Date in the
form of a single book-entry disbursement by the Lender.

                  2.02. Note. The Loan shall be evidenced by a single promissory
note of the Borrower in the form of Exhibit A hereto, dated the Closing Date,
payable to the order of the Lender in the principal amount of $10,000,000 and
otherwise duly completed.

                  2.03. Interest. The Borrower hereby promises to pay to the
order of the Lender interest on the unpaid principal amount of the Loan, for the
period from and including the date of the Loan to but excluding the date the
Loan shall be paid in full, at a rate per annum equal to ten percent.
Notwithstanding the foregoing, the Borrower hereby promises to pay interest at
the Post-Default Rate on the principal of the Loan and on any other amount
payable by Borrower to the Lender hereunder or under the Note that shall not be
paid in full when due (whether at stated maturity, by acceleration, by optional
or mandatory prepayment or otherwise), for the period from and including the due
date thereof to but excluding the date the same is paid in full. Accrued
interest on the Loan shall be payable quarterly in arrears on each Interest
Payment Date and upon the payment or prepayment thereof (but only on the
principal amount so paid or prepaid), except that interest payable at the
Post-Default Rate shall be payable from time to time upon demand and that the
amount due and payable to the Lender on the first Interest Payment Date
immediately succeeding the Closing Date shall be reduced by $24,986.68.

                  2.05. Principal. The Borrower hereby promises to pay the
entire outstanding principal amount of the Loan, and the Loan shall mature, on
the Maturity Date.

                  2.06 Conversion. The principal of and interest on the Loan
shall be convertible into shares of the Borrower's Common Stock on the terms and
conditions set forth in the Note.

Section 3.        Prepayments.

                  (a)      Voluntary Prepayments.

                           (i) The Borrower shall have the right to prepay the
Loan without premium or penalty in whole or in part (but subject to a minumum
amount of $100,000) on any Business Day, subject to this Section 3.

                           (ii) Each prepayment shall be pursuant to a notice
from the Borrower to the Lender given pursuant to Section 9.02 hereof, which
notice: shall specify the principal amount of the Loan to be prepaid and the
date of prepayment (which shall be a Business Day); shall be irrevocable when
and shall obligate the Borrower to prepay the Loan in the amount and on the date
specified therein; and shall be effective only if received by the Lender not
later than 1:00 p.m. New York time on a date falling not later than five
Business Days prior to the prepayment date specified therein.

                  (b)      Mandatory Prepayments.

                           Upon the payment or prepayment by the Borrower of any
Indebtedness other than Indebtedness under this Agreement, the Existing Loan
Agreement and the Borrower's 10% Convertible Debentures due May 21, 2001, the

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<PAGE>

Borrower shall prepay the the Loan in an amount equal to the amount of such
payment or prepayment, such prepayment to be made simultaneously with such
payment or prepayment of other Indebtedness and otherwise in accordance with
Section 4 hereof.

Section 4.        Payments; Computations; Etc.

                  4.01. Payments. All payments of principal, interest and other
amounts to be made by the Borrower under this Agreement or the Note shall be
made in Dollars, in immediately available funds, to the Lender no later than
1:00 p.m. New York time on the date on which such payment shall become due (each
such payment made after such time on such due date to be deemed to have been
made on the next succeeding Business Day). If a Default has occurred and is
continuing, the Lender may apply any such payment as it may elect in its
discretion. If the due date of any payment under this Agreement or the Note
would otherwise fall on a day that is not a Business Day, such date shall be
extended to the next succeeding Business Day and interest shall be payable for
any principal so extended for the period of such extension. Any amount of
principal not paid when due hereunder shall accrue interest at the Post-Default
Rate.

                  4.02. Computations. Interest shall be computed on the basis of
the actual days elapsed (including the first day but excluding the last day)
occurring in the period for which payable, relative to a year of 365 or 366
days, as the case may be.

Section 5.        Conditions Precedent.

                  5.01. Documents. The obligation of the Lender to make the Loan
hereunder is subject to the receipt by the Lender of the following documents on
or prior to March 27, 2000, each of which shall be satisfactory in form and
substance to the Lender:

                  (a) The Note, duly executed and delivered by the Borrower..

                  (b) A signed opinion of counsel to the Borrower in form
satisfactory to the Lender.

                  (c) Certified copies of the articles of incorporation and
bylaws of the Borrower.

                  (d) A Certificate of Good Standing of the Borrower certified
by the appropriate governmental officer.

                  (e) Evidence that the agent referred to in Section 9.08 has
been duly appointed and holds such appointment without reservation until a date
not earlier than six months after the Maturity Date.

                  (f) A receipt from the Borrower confirming application of the
proceeds of such Loan in accordance with its instructions.

                  (g) The Amendment, Waiver and Discharge dated the date hereof
and relating to the Existing Loan Agreement, duly executed and delivered by the
Borrower.

                  (h) The Option Extension, duly executed and delivered by
ITC.net.

                  (i) Such other documents or information as the Lender may
request.

                  5.02. Additional Conditions. The obligation of the Lender to
make the Loan hereunder is further subject to each of the following additional
conditions precedent:

                  (a) No Default shall have occurred and be continuing, either
immediately prior to the making of the Loan or after giving effect to such
making and the intended use thereof.

                  (b) The representations and warranties made by the Borrower in
Section 6 hereof shall be true and correct on and as of the date of the making
of the Loan with the same force and effect as if made on and as of such date
(or, if any such representation or warranty is expressly stated to have been
made as of a specific date, as of such specific date).

Section 6.        Representations and Warranties.

                  The Borrower represents and warrants to the Lender, as of the
Closing Date and at any time reaffirmed pursuant to the terms hereof, that:

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                  6.01. Existence, Etc. The Borrower: (a) is a corporation duly
organized and validly existing under the laws of the State of Florida and (b)
has all requisite power and has all material governmental licenses,
authorizations, consents and approvals necessary (at the time the representation
is made) to own its assets and carry on its business as now being conducted.

                  6.02. Financial Condition. The balance sheet and financial
statements of the Borrower as at December 31, 1999 heretofore furnished to the
Lender are complete and correct and fairly present it financial condition as at
such date. Since the dates of said balance sheet and financial statements there
has been no material adverse change in the financial condition of the Borrower
or in the operations, or the business taken as a whole, of the Borrower from
that set forth therein, except as otherwise specifically disclosed to the Lender
in writing prior to the date hereof or as set forth in documents filed with the
United States Securities and Exchange Commission.

                  6.03. Litigation. There are no legal or arbitral proceedings
or any proceedings by or before any governmental or regulatory authority or
agency now pending or, to the knowledge of the Borrower, threatened against the
Borrower, in which there is a probability of an adverse decision that could
materially and adversely affect the financial condition of the Borrower or its
operations or business taken as a whole, except as otherwise specifically
disclosed to the Lender in writing prior to the date hereof.

                  6.04. No Breach. None of the execution and delivery of the
Loan Documents, the consummation of the transactions therein contemplated and
compliance with the terms and provisions thereof will conflict with or result in
a breach of, or require any consent under any applicable law or regulation, or
any order, writ, injunction or decree of any court or governmental authority or
agency, or any agreement or instrument to which the Borrower is a party or by
which it is bound or to which it is subject, or constitute a default under any
such agreement or instrument, or result in the creation or imposition of any
Lien upon any of the revenues or assets of the Borrower pursuant to the terms of
any such agreement or instrument.

                  6.05. Authority. The Borrower has all necessary authority to
execute, deliver and perform its obligations under the Loan Documents. The
execution, delivery and performance by the Borrower of the Loan Documents have
been duly authorized by all necessary action on its part, and this Agreement
constitutes, and the Note when executed and delivered will constitute, the
legal, valid and binding obligations of the Borrower, enforceable in accordance
with their respective terms.

                  6.06. Approvals. No authorizations, approvals or consents of,
and no filings or registrations with, any governmental or regulatory authority
or agency are necessary for the execution, delivery or performance by the
Borrower of the Loan Documents or for the validity or enforceability of any
thereof.

                  6.07. Employee Benefit Plans. The Borrower does not maintain
any employee benefit plan subject to the Employee Retirement Income Security Act
of 1974, other than as specifically disclosed to the Lender in writing prior to
the date hereof or as filed with the United States Securities and Exchange
Commission.

                  6.08. Taxes, Etc. The Borrower has filed all United States
federal and Florida state tax returns and all other tax returns that are
required to be filed by it and has paid all taxes due pursuant to such returns
or pursuant to any assessment received by such party, except such taxes, the
payment of which is not yet due, or which if due, is not yet delinquent or is
being contested in good faith or which has not been finally determined. The
charges, accruals and reserves on the books of the Borrower in respect of taxes
and other governmental charges are, in the opinion of the Borrower, adequate in
all respects.

Section 7.        Covenants of the Borrower.

                  The Borrower agrees that from the date hereof, until payment
in full of the Loan, all interest thereon and all other amounts payable by the
Borrower under the Loan Documents:

                  7.01. Information. The Borrower shall deliver to the Lender:

                  (a) promptly after the Borrower knows that any Default has
occurred, a notice of such Default, describing the same in detail;

                  (b) promptly after the Borrower knows that a material adverse
change in the financial condition of the Borrower has occurred, a notice of such
material adverse change, describing the same in detail; and

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<PAGE>

                  (c) from time to time such other information regarding the
business, affairs or financial condition of the Borrower as the Lender may
request.

                  7.02. Disposition of Assets. The Borrower will not sell or
otherwise transfer or permit the sale or transfer (in a single transaction or
series of related transactions) of all or substantially all of its assets.

                  7.03. Existence, Etc. The Borrower shall: preserve and
maintain its existence and all of its material rights and privileges; comply
with the requirements of all applicable laws, rules, regulations and orders of
governmental or regulatory authorities if failure to comply with such
requirements could materially and adversely affect the financial condition or
operations, or the business taken as a whole, of the Borrower; and pay and
discharge all taxes, assessments and governmental charges or levies imposed on
it or its income or profits or on any of its property prior to the date on which
penalties attach thereto, except for any such tax, assessment, charge or levy
the payment of which is being contested in good faith and by proper proceedings.

                  7.04. Liens. Except as set forth in Schedule 7.04, the
Borrower will not create or suffer to be created or to exist any Lien upon any
of its property.

                  7.05. Use of Proceeds of the Loan. The Borrower shall use the
proceeds of the Loan solely for the purposes mutually agreed by the Borrower and
the Lender.

                  7.06. Inspection. The Borrower shall permit any authorized
representative designated by the Lender, upon reasonable notice, to visit and
inspect any properties of the Borrower, and to examine its books and records
(and to make extracts and copies therefrom) and to discuss its affairs, finances
and accounts with its officers and its independent auditors (and the Borrower
hereby authorizes such auditors to release any information about it to the
Lender), all at such times and as often as may be requested.

                  7.07. Other Documents. The Borrower shall furnish to the
Lender such other documents relating to the Borrower as the Lender shall
reasonably request.

Section 8.        Events of Default.

                  If one or more of the following events or conditions (an
"Event of Default") shall occur and be continuing:

                  (a) The Borrower shall default in the payment when due
(whether at stated maturity or upon madatory or optional prepayment) of: (i) any
principal of or interest on the Loan or any other amount payable by it hereunder
or under the Note; (ii) any principal of or interest on the loan referred to in
the Existing Loan Agreement or any other amount payable by it thereunder or
under the note referred to therein; or (iii) any amount of securities and/or
cash payable by the Borrower to the Lender upon conversion of the principal of
or interest on the Loan as provided in the Note, or upon conversion of the loan
under the Existing Loan Agreement as provided in the note referred to therein;

                  (b) The Borrower shall default in the payment of any of its
other Indebtedness when due and payable pursuant to any other agreement;

                  (c) Any representation, warranty or certification made in any
of the Loan Documents or in any document furnished in connection herewith or
therewith by the Borrower shall prove to have been false or misleading as of the
time made or furnished in any material respect;

                  (d) The Borrower shall default in the performance of any of
its obligations under Section 7.01(a) (unless the Default giving rise to such
notice has been cured pursuant to the terms hereof), 7.02, 7.03, 7.04 or 7.05
hereof;

                  (e) The Borrower shall default in the performance of any of
its obligations (other than those previously described in clause (d) or covered
by another clause of this Section 8) hereunder and such default (if remediable)
shall continue unremedied for a period of 30 days;

                  (f) The Lender shall determine that a material adverse change
has occurred in the financial condition of the Borrower from the conditions set
forth in the most recent financial statements of the Borrower most recently
disclosed to the Lender;

                  (g) The Borrower shall: (i) apply for or consent to the
appointment of, or the taking of position by, a receiver, custodian, trustee or
liquidator of itself or of all or a substantial part of its property; (ii) make
a general assignment

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<PAGE>

for the benefit of its creditors; (iii) commence a voluntary case under the
Bankruptcy Code (as now or hereafter in effect); (iv) file a petition seeking to
take advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or readjustment of debts; (v) fail to
controvert in a timely and appropriate manner, or acquiesce in writing to, any
petition filed against it in any involuntary case under the Bankruptcy Code; or
(vi) take any action for the purpose of effecting any of the foregoing;

                  (h) A proceeding or case shall be commenced, without the
application or consent of the Borrower in any court of competent jurisdiction,
seeking (i) liquidation, reorganization, dissolution or winding-up, or the
composition or readjustment of debts of the Borrower; (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of the Borrower or of all
or any substantial part of the Borrower's assets; or (iii) similar relief in
respect of the Borrower under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered or an order for
relief against the Borrower shall be entered in an involuntary case under the
Bankruptcy Code;

                  (i) A final judgment or judgments for the payment of money
shall be rendered against the Borrower;

THEREUPON (i) in the case of an Event of Default, other than one referred to in
clause (g) or (h) of this Section 8, the Lender may, by notice to the Borrower,
declare the principal amount of, and the accrued interest on, the Loan and all
other amounts payable by the Borrower hereunder to be forthwith due and payable,
whereupon such amounts shall be immediately due and payable without presentment,
demand, protest or other formalities of any kind, all of which are hereby waived
by the Borrower; and (ii) in the case of the occurrence of an Event of Default
referred to in clause (g) or (h) of this Section 8, the principal amount of, and
the accrued interest on, the Loan and all other amounts payable by the Borrower
hereunder shall automatically become immediately due and payable without notice,
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by the Borrower.

Section 9.        Miscellaneous.

                  9.01. Waiver. No failure on the part of the Lender to exercise
and no delay in exercising, and no course of dealing with respect to any right,
power or privilege under this Agreement or the Note shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege under this Agreement or the Note preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
remedies provided herein and in the other Loan Documents are cumulative and not
exclusive of any remedies provided by law.

                  9.02. Notices. All notices and other communications provided
for herein shall be in writing and shall be delivered to the intended recipient
at the "Address for Notices" specified below or at such other address as shall
be designated by a party in a notice to each other party. All notices and other
communications hereunder shall be deemed to have been duly given, in the case of
hand delivery, when received, or in the case of mail, three Business Days after
the date deposited in the mail, addressed as aforesaid.

                  Addresses for Notices:

                  If to the Borrower:

                  Vitech America, Inc.
                  8807 Northwest 23rd Street
                  Miami, FL  33172
                  Attn:    Edward Kelly
                  Fax:     (305) 477-1379
                  Phone:   (305) 477-1161

                  If to the Lender:

                  Gateway Companies, Inc.
                  4545 Towne Centre Court
                  San Diego, CA  92121
                  Attn:    General Counsel
                  Fax:     (619) 799-3413
                  Phone:   (619) 799-3419

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<PAGE>

                  9.03. Expenses, Etc. The Borrower agrees to pay on demand (a)
all costs and expenses of the Lender, including counsels' fees, in connection
with the preparation, execution, delivery, operation and enforcement of the Loan
Documents; (b) all expenses of the Lender, including counsels' fees, in
connection with any actual or proposed waiver or amendment requested by the
Borrower to any of the foregoing, whether or not such waiver or amendment shall
become effective; and (c) all transfer, stamp, documentary or other similar
taxes, assessments or charges levied by any governmental or revenue authority in
respect of any of the foregoing or any other document referred to herein.

                  9.04. Amendments, Etc. Any provision of this Agreement may be
modified or waived by an instrument or instruments in writing signed by the
Borrower and the Lender.

                  9.05. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns except that the Borrower may not assign its rights or
delegate its obligations hereunder or under the Note without the prior consent
of the Lender.

                  9.06. Counterparts. This Agreement may be executed in
counterparts.

                  9.07. GOVERNING LAW; WAIVER OF JURY TRIAL.

                  (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.

                  (b) EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM ESTABLISHED BY THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT AND ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT ENTERED INTO
IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

                  9.08. Jurisdiction and Consent to Suit.

                  (a) Any proceeding to enforce this Agreement or the Note may
be brought in any state or federal court of competent jurisdiction in the State
of New York. The Borrower hereby irrevocably waives any present or future
objection to any such venue, and irrevocably consents and submits
unconditionally to the non-exclusive jurisdiction for itself and in respect of
any of its property of any such court. The Borrower further agrees that final
judgment against it in any such action or proceeding arising out of or relating
to this Agreement or the Note, shall be conclusive and may be enforced in any
other jurisdiction within or outside the United States of America by suit on the
judgment, a certified or exemplified copy of which shall be conclusive evidence
of the fact and of the amount of its obligation.

                  (b) Prior to the Closing Date, the Borrower shall irrevocably
designate and appoint an agent satisfactory to the Lender for service of process
in The City of New York, New York as its authorized agent to receive, accept,
and forward on its behalf service of process in any such proceeding, and shall
provide the Lender with evidence of the prepayment in full of the fees of such
agent. The Borrower agrees that service of process, writ, judgment, or other
notice of legal process upon said agent shall be deemed and held in every
respect to be effective personal service upon it. The Borrower shall maintain
such appointment (or that of a successor satisfactory to the Lender)
continuously in effect at all times while the Borrower is obligated under this
Agreement or the Note. Nothing herein shall affect the Lender's right to serve
process in any other manner permitted by applicable law.

                  9.09. Severability. If any terms or provisions of this
Agreement or application thereof to any person or circumstance shall to any
extent by invalid or unenforceable, the remainder of this Agreement, or the
application of such terms or provisions to persons or circumstances other than
those as to which it is invalid or unenforceable, shall not be affected thereby,
and each term and provision of this agreement shall be valid and enforceable to
the fullest extent permitted by law.

                  9.10. Entire Agreement. Other than as provided in Section 7.05
hereof, this Agreement and the other Loan Documents constitute the entire
agreement between the parties with respect to the subject matter hereof.

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<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this Loan
Agreement to be duly executed as of the day and year first above written.

                                           VITECH AMERICA, INC.

                                           By: /s/ Edward Kelly
                                               ------------------
                                                 Name: Edward Kelly
                                                 Title: Chief Financial Officer

                                           GATEWAY COMPANIES, INC.

                                           By: /s/ John Todd
                                               ---------------
                                                 Name: John Todd
                                                 Title: Chief Financial Officer

                                       8

<PAGE>

Exhibit A
to Loan Agreement

                                 PROMISSORY NOTE

$10,000,000                                                       March 24, 2000

                  FOR VALUE RECEIVED, VITECH AMERICA, INC. a Florida corporation
(the "Borrower"), hereby unconditionally promises to pay to the order of GATEWAY
COMPANIES, INC. (the "Lender"), at its head office at 4545 Towne Centre Court,
San Diego, CA 92121, the principal sum of TEN MILLION DOLLARS ($10,000,000) (or
such lesser amount as shall equal the unpaid principal amount of the Loan made
by the Lender to the Borrower under the Loan Agreement referred to below), in
lawful money of the United States of America and in immediately available funds,
on or before March 24, 2001 (the "Maturity Date") and as provided in the Loan
Agreement referred to below, and to pay interest on the unpaid principal amount
of the Loan, in like money and funds at such office, for the period commencing
on the date of the Loan until the Loan shall be paid in full, at the rate per
annum of ten percent (10%) and on the dates provided in such Loan Agreement.

                  This Promissory Note is the Note referred to in the Loan
Agreement dated as of the date hereof between the Borrower and the Lender (as in
effect from time to time, the "Loan Agreement"), and evidences the Loan made
thereunder. Unless otherwise defined herein, capitalized terms used in this
Promissory Note have the respective meanings assigned to them in the Loan
Agreement.

         Unless all or part of the principal amount of the Loans is converted to
the Borrower's Common Stock by the Lender on or before the Maturity Date as
provided for herein, all outstanding principal of the Loan and accrued interest
thereon shall be due and payable, and the Loan shall mature, on the Maturity
Date.
                  Conversion: Subject to the terms and conditions of this
Promissory Note, upon the occurrence and during the continuance of an Event of
Default, at the option and upon demand of the Lender the outstanding principal
of the Loan plus all interest accrued thereon is convertible, in whole or in
part, into Common Stock of the Borrower as follows:

                  1. Mechanics of Conversion. The Lender shall notify the
Borrower in writing (the "Conversion Notice"), in the manner prescribed in
Section 9.02 of the Loan Agreement, of its desire to convert all or part of the
aggregate amount of principal of the Loan or interest accrued thereon, as
applicable, into Common Stock of the Borrower. The Conversion Notice shall
specify (i) the aggregate amount of principal of the Loan and/or interest
accrued thereon to be converted (the "Conversion Amount"), and (ii) the name(s)
which should appear on the stock certificate(s) to be issued by the Borrower
which represent the Common Stock acquired by the Lender upon conversion.

                  2. Common Stock Issuable Upon Conversion. Within three (3)
Business Days of receipt of a Conversion Notice, the Borrower shall issue to the
Lender that number of shares of Common Stock of the Lender, no par value,
determined by dividing the Conversion Amount by a price (the "Conversion Price")
determined from time to time and subject to adjustment as set forth in this
Promissory Note. For purposes hereof, the Conversion Price as of any date of
determination shall be the average of the VWACS during the thirty (30)
consecutive Trading Days immediately preceding such date of determination. For
purposes hereof, "VWACS" shall mean the weighted daily average bid price per
share of the Common Stock on the Nasdaq National Market ("NASDAQ") or on the New
York Stock Exchange, American Stock Exchange or the Nasdaq SmallCap Market
(each, a "Subsequent Market") as reported by Bloomberg Information Services,
Inc., or its successors to its function of reporting prices, and "Trading Day"
shall mean (i) a day on which the Common Stock is traded on the NASDAQ or on
such Subsequent Market on which the Common Stock is then listed or quoted, as
the case may be, or (ii) if the Common Stock is not listed on the NASDAQ or on a
Subsequent Market, a day on which the Common Stock is traded in the
over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the
Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common
Stock is quoted in the over-the-counter market as reported by the National
Quotation Bureau Incorporated (or any similar organization or agency succeeding
its functions of reporting prices); provided, however, that in the event the
Common Stock is not listed or quoted as set forth in (i), (ii) or (iii) hereof,
then "Trading Day" shall mean any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the State of
New York are authorized or required by law or other government action to close.

                  a. Adjustment for Stock Splits and Combinations. If, during
     any period of 30 Trading Days referenced in determination of a Conversion
     Price, the Borrower effects a subdivision of its outstanding Common Stock,
     the VWACS for such Trading Days prior to such subdivision shall be
     proportionately decreased to account for subdivision. Conversely, if during
     any period of 30 Trading Days referenced in determination of a Conversion
     Price,

                                       9
<PAGE>

     the Borrower combines the outstanding shares of Common Stock into a
     smaller number of shares, the VWACS for such Trading Days prior to such
     combination shall be proportionately increased.

                  b. Adjustment for Common Stock Dividends and Distributions.
     If. during any period of 30 Trading Days referenced in determination of a
     Conversion Price, the Borrower makes, or fixes a record date for the
     determination of holders of Common Stock entitled to receive, a dividend or
     other distribution payable in additional shares of Common Stock, in each
     such event the VWACS for such Trading Days prior to the date of such
     issuance or record date shall be proportionately decreased, by multiplying
     each such VWACS by a fraction (i) the numerator of which is the total
     number of shares of Common Stock issued and outstanding immediately prior
     to the time of such issuance or the close of business on such record date,
     and (ii) the denominator of which is the total number of shares of Common
     Stock issued and outstanding immediately prior to the time of such issuance
     or the close of business on such record date plus the number of shares of
     Common Stock issuable in payment of such dividend or distribution.

                  c. Adjustment for Reclassification, Exchange and Substitution.
     If, during any period of 30 Trading Days referenced in determination of a
     Conversion Price, the Common Stock issuable upon the conversion of the
     principal of and/or interest on the Loan is changed into the same or a
     different number of shares of any class or classes of stock, whether by
     recapitalization, reclassification or otherwise (other than a
     reorganization, merger, consolidation or sale of assets provided for
     elsewhere in this Section 2), in any such event the holder of this
     Promissory Note shall have the right thereafter to convert the principal of
     and/or interest on the Loan into the kind and amount of stock and other
     securities and property receivable upon such recapitalization,
     reclassification or other change by holders of the maximum number of shares
     of Common Stock into which the principal of and/or interest on the Loan
     could have been converted immediately prior to such recapitalization,
     reclassification or change, all subject to further adjustment as provided
     herein or with respect to such other securities or property by the terms
     thereof.

                  d. Reorganizations, Mergers, Consolidations or Sales of
     Assets. If, during any period of 30 Trading Days referenced in
     determination of a Conversion Price, there is a capital reorganization of
     the Common Stock (other than a recapitalization, subdivision, combination,
     reclassification, exchange or substitution of shares provided for elsewhere
     in this Section 2), as a part of such capital reorganization, provision
     shall be made so that the holder of this Promissory Note shall thereafter
     be entitled to receive upon conversion of the principal of and/or interest
     on the Loan the number of shares of stock or other securities or property
     of the Borrower to which a holder of the number of shares of Common Stock
     deliverable upon conversion would have been entitled on such capital
     reorganization, subject to adjustment in respect of such stock or
     securities by the terms thereof. In any such case, appropriate adjustment
     shall be made in the application of the provisions of this Section 2 with
     respect to the rights of the holder of this Promissory Note after the
     capital reorganization to the end that the provisions of this Section 2
     (including adjustment of the Conversion Price then being determined and the
     number of shares issuable upon conversion of the principal of and/or
     interest on the Loan) shall be applicable after that event and be as nearly
     equivalent as practicable.

                  e. Sale of Shares Below Conversion Price.

                     (i) If, during any period of 30 Trading Days referenced in
determination of a Conversion Price, the Borrower issues or sells, or is deemed
by the express provisions of this subsection f to have issued or sold,
Additional Shares of Common Stock (as defined in subsection (iv) below)), other
than as a dividend or other distribution on any class of stock as provided in
Sections 2(b) or 2(c) above, and other than a subdivision or combination of
shares of Common Stock as provided in Section 2(a) above, for an Effective Price
(as defined in subsection f(iv) below) less than the average of the VWACS during
the ten (10) consecutive Trading Days immediately preceding such date of
issuance or sale, then and in each such case the VWACS for such Trading Days
prior to such issuance or sale shall be decreased, as of the opening of business
on the date of such issuance or sale, to a price equal to the Effective Price
for the Additional Shares of Common Stock.

                     (ii) For the purpose of making any adjustment required
under this Section 2(e), the consideration received by the Borrower for any
issue or sale of securities shall (A) to the extent it consists of cash, be
computed at the net amount of cash received by the Borrower after deduction of
any underwriting or similar commissions, compensation or concessions paid or
allowed by the Borrower in connection with such issue or sale but without
deduction of any expenses payable by the Borrower, (B) to the extent it consists
of property other than cash, be computed at the fair value of that property as
determined in good faith by the Board of Directors, and (C) if Additional Shares
of Common Stock, Convertible Securities (as defined in subsection e(iii) below)
or rights or options to purchase either Additional Shares of Common Stock or
Convertible Securities are issued or sold together with other stock or
securities or other assets of the Borrower for a consideration which covers
both, be computed as the portion of the consideration so received that may be

                                       10
<PAGE>

reasonably determined in good faith by the Board of Directors to be allocable to
such Additional Shares of Common Stock, Convertible Securities or rights or
options.

                     (iii) For the purpose of the adjustment required under this
Section 2(e), if the Borrower issues or sells any (i) stock or other securities
convertible into Additional Shares of Common Stock (such convertible stock or
securities being herein referred to as "Convertible Securities") or (ii) rights
or options for the purchase of Additional Shares of Common Stock or Convertible
Securities, and if the Effective Price of such Additional Shares of Common Stock
is less than the average of the VWACS during such referenced Trading Days prior
to the date of issuance or sale, in each case the Borrower shall be deemed to
have issued at the time of the issuance of such rights or options or Convertible
Securities the maximum number of Additional Shares of Common Stock issuable upon
exercise or conversion thereof and to have received as consideration for the
issuance of such shares an amount equal to the total amount of the
consideration, if any, received by the Borrower for the issuance of such rights
or options or Convertible Securities, plus, in the case of such rights or
options, the minimum amounts of consideration, if any, payable to the Borrower
upon the exercise of such rights or options, plus, in the case of Convertible
Securities, the minimum amounts of consideration, if any, payable to the
Borrower (other than by cancellation of liabilities or obligations evidenced by
such Convertible Securities) upon the conversion thereof; provided that if in
the case of Convertible Securities the minimum amounts of such consideration
cannot be ascertained, but are a function of antidilution or similar protective
clauses, the Borrower shall be deemed to have received the minimum amounts of
consideration without reference to such clauses; provided further that if the
minimum amount of consideration payable to the Borrower upon the exercise or
conversion of rights, options or Convertible Securities is reduced over time or
on the occurrence or non-occurrence of specified events other than by reason of
antidilution adjustments, the Effective Price shall be recalculated using the
figure to which such minimum amount of consideration is reduced; provided
further that if the minimum amount of consideration payable to the Borrower upon
the exercise or conversion of such rights, options or Convertible Securities is
subsequently increased, the Effective Price shall be again recalculated using
the increased minimum amount of consideration payable to the Borrower upon the
exercise or conversion of such rights, options or Convertible Securities. No
further adjustment of the VWACS for the relevant Trading Days, as adjusted upon
the issuance of such rights, options or Convertible Securities, shall be made as
a result of the actual issuance of Additional Shares of Common Stock on the
exercise of any such rights or options or the conversion of any such Convertible
Securities. If any such rights or options or the conversion privilege
represented by any such Convertible Securities shall expire without having been
exercised, the VWACS as adjusted upon the issuance of such rights, options or
Convertible Securities shall be readjusted to the VWACS for the relevant Trading
Days which would have been in effect had an adjustment been made on the basis
that the only Additional Shares of Common Stock so issued were the Additional
Shares of Common Stock, if any, actually issued or sold on the exercise of such
rights or options or rights of conversion of such Convertible Securities, and
such Additional Shares of Common Stock, if any, were issued or sold for the
consideration actually received by the Borrower upon such exercise, plus the
consideration, if any, actually received by the Borrower for the granting of all
such rights or options, whether or not exercised, plus the consideration
received for issuing or selling the Convertible Securities actually converted,
plus the consideration, if any, actually received by the Borrower (other than by
cancellation of liabilities or obligations evidenced by such Convertible
Securities) on the conversion of such Convertible Securities; provided that such
readjustment shall not apply to prior conversions of the principal of or
interest on the Loan.

                     (iv) "Additional Shares of Common Stock" shall mean all
shares of Common Stock issued by the Borrower or deemed to be issued pursuant to
this Section 2(e), whether or not subsequently reacquired or retired by the
Borrower other than (A) shares of Common Stock issued upon conversion of the
principal of and/or interest on the Loan; (B) shares of Common Stock and/or
options, warrants or other Common Stock purchase rights and the Common Stock
issued pursuant to such options, warrants or other rights (as adjusted for any
stock dividends, combinations, splits, recapitalizations and the like) after the
Closing Date to employees, officers or directors of, or consultants or advisors
to the Borrower or any subsidiary pursuant to stock purchase or stock option
plans (such plans being approved by at least one of the non-employee directors
of the Borrower) or other arrangements that are approved by the Board of
Directors of the Borrower (including at least one of the non-employee directors
of the Borrower); and (C) shares of Common Stock issued pursuant to the exercise
of options, warrants or convertible securities outstanding as of the Closing
Date. The "Effective Price" of Additional Shares of Common Stock shall mean the
quotient determined by dividing the total number of Additional Shares of Common
Stock issued or sold, or deemed to have been issued or sold by the Borrower
under this Section 2(e), into the aggregate consideration received, or deemed to
have been received by the Borrower for such issue under this Section 2(e), for
such Additional Shares of Common Stock.

                  (f) Adjustment following Event of Default. Upon the occurrence
     and during such time as any Event of Default shall have occurred and shall
     continue unremedied or unwaived, the Conversion Price shall, subject to
     other or additional adjustments as provided in this Section 2, be equal to
     the lesser of (1) $9.75 and (2) the product of (x) 0.88 multiplied by (y)
     the average of the lowest ten (10) VWACS during the thirty (30) consecutive
     Trading Days

                                       11
<PAGE>

     immediately preceding the relevant date of conversion.

                  g. Certificate of Adjustment. In each case of determination of
     or adjustment to the Conversion Price for the number of shares of Common
     Stock or other securities issuable upon conversion of the principal of
     and/or interest on the Loan, the Borrower, at its expense, shall compute
     such adjustment or readjustment in accordance with the provisions hereof
     and prepare a certificate showing such adjustment or readjustment, and
     shall mail such certificate pursuant to the notice provisions of Section
     9.02 of the Loan Agreement. The certificate shall set forth such adjustment
     or readjustment, showing in detail the facts upon which such adjustment or
     readjustment is based.

                  h. Notices of Record Date. Upon (i) any taking by the Borrower
     of a record of the holders of any class of securities for the purpose of
     determining the holders thereof who are entitled to receive any dividend or
     other distribution, or (ii) any consolidation or merger of the Borrower
     with or into any other corporation or other entity or other capital
     reorganization of the Borrower, any reclassification or recapitalization of
     the capital stock of the Borrower, any merger or consolidation of the
     Borrower with or into any other corporation, or any sale, lease or other
     disposition of all or substantially all of the assets of the Borrower or
     any voluntary or involuntary dissolution, liquidation or winding up of the
     Borrower, the Borrower shall deliver notice to the holder of this
     Promissory Note (pursuant to the provisions of Section 9.02 of the Loan
     Agreement) at least fifteen (15) days prior to the record date specified
     therein a notice specifying (A) the date on which any such record is to be
     taken for the purpose of such dividend or distribution and a description of
     such dividend or distribution, (B) the date on which any such
     reorganization, reclassification, transfer, consolidation, merger, sale,
     lease, dissolution, liquidation, winding up or other disposition is
     expected to become effective, and (C) the date, if any, that is to be fixed
     as to when the holders of record of Common Stock (or other securities)
     shall be entitled to exchange their shares of Common Stock (or other
     securities) for securities or other property deliverable upon such
     reorganization, reclassification, transfer, consolidation, merger, sale,
     lease, dissolution, liquidation, winding up or other disposition.

                  i. Fractional Shares. No fractional shares of Common Stock
     shall be issued upon conversion of the principal of and interest on the
     Loan. If, in the aggregate, any conversion would result in the issuance of
     any fractional share, the Borrower shall, in lieu of issuing the fractional
     share, pay cash equal to the product of such fraction multiplied by the
     Common Stock's fair market value (as determined by the closing price of the
     Common Stock on the principal securities exchange or market on which it is
     then being listed) on the date of conversion.

                  j. Reservation of Stock Issuable Upon Conversion. The Borrower
     shall at all times reserve and keep available out of its authorized but
     unissued shares of Common Stock, solely for the purpose of effecting the
     conversion of the principal of and/or interest on the Loan, such number of
     its shares of Common Stock as shall from time to time be sufficient to
     effect the conversion of all outstanding principal of and accrued but
     unpaid interest on the Loan. If at any time the number of authorized but
     unissued shares of Common Stock shall not be sufficient to effect a
     conversion of principal of and accrued but unpaid interest on the Loan, the
     Borrower will take such corporate action as may, in the opinion of its
     counsel, be necessary to increase its authorized but unissued shares of
     Common Stock to such number of shares as shall be sufficient for such
     purpose.

                  k. No Dilution or Impairment. Without the consent of the
     holder of this Promissory Note, the Borrower shall not amend its articles
     of incorporation (except as necessary to comply with the terms of the Loan
     Agreement or the Convertible Loan Agreement) or participate in any
     reorganization, transfer of assets, consolidation, merger, dissolution,
     issue or sale of securities or take any other voluntary action, for the
     purpose of avoiding or seeking to avoid the observance or performance of
     any of the terms to be observed or performed hereunder by the Borrower, but
     shall at all times in good faith assist in carrying out all such action as
     may be reasonably necessary or appropriate in order to protect the
     conversion rights of the holder of this Promissory Note against dilution or
     other impairment.

                  Upon the occurrence of an Event of Default, the principal
hereof and accrued interest hereon shall become, or may be declared to be,
forthwith due and payable in the manner, upon the conditions and with the effect
provided in the Loan Agreement.

                  The transfer of this Promissory Note may be registered on the
books maintained for that purpose by or on behalf of the Borrower.

         None of the terms or provisions of this Promissory Note may be amended,
modified or waived except by a written agreement duly executed on behalf of the
Lender and the Borrower and specifically setting forth the provision so amended,
modified or waived. No course of dealing between the Lender and the Borrower
shall operate as a waiver of any right of any holder hereof and no delay on the
part of the holder hereof in exercising any right hereunder shall so operate.

                                       12
<PAGE>

         The Borrower hereby waives presentment and demand for payment, notice
of dishonor, protest and notice of protest of this Promissory Note, and shall
pay all costs of collection when incurred, including, without limitation,
reasonable attorneys' fees, costs and other expenses.

         The Borrower may prepay all or any part of the principal amount of the
Loan evidenced by this Promissory Note as provided in the Loan Agreement. Notice
by the Borrower to the Lender of intent to effect such prepayment shall
represent a bona-fide prepayment commitment under this Promissory Note, with the
prepayment amount set forth therein deemed due and payable by the Borrower on
the prepayment date set forth in the notice.

                  THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

                                                      VITECH AMERICA, INC.

                                                      By  /s/  Edward Kelly
                                                      -----------------
                                                      Name:  Edward Kelly

                                       13April 19, 2000

Decorator Industries, Inc.
10011 Pines Boulevard, Suite 201
Pembroke Pines, Florida 33024-6167

Gentlemen:

         This letter constitutes an agreement by and between COMERICA BANK, a
Michigan banking corporation (herein called "Bank"), and DECORATOR INDUSTRIES,
INC., a Pennsylvania corporation, (herein called "Company"), pertaining to
certain loans and other credit which Bank has made and/or may from time to time
hereafter make available to Company.

         In consideration of all present and future loans, advances and other
credit from time to time made available by Bank to or in favor of Company,
including, without limitation, a Five Million Dollar ($5,000,000.00) revolving
line of credit (herein called "Revolving Line") as evidenced by a Promissory
Note of even date maturing July 19, 2002 (herein called "Maturity Date"), made
available by Bank to Company, and in consideration of all present and future
liabilities, obligations and indebtedness of Company to Bank, howsoever created,
evidenced, existing or arising, whether direct or indirect, absolute or
contingent, joint or several, now or hereafter existing or arising, or due or to
become due (herein collectively called the "Liabilities"), Company represents,
warrants, covenants and agrees as follows:

         1. Each loan, advance or other extension of credit made by Bank to or
otherwise in favor of Company shall be evidenced by and subject to a promissory
note or other agreement or evidence of indebtedness acceptable to Bank, in each
case, executed and delivered by Company unto Bank. The funding and disbursement
of any loan or advance, and the extension of any other credit, to or in favor of
Company shall be subject to the execution and/or delivery unto Bank of such
documents, instruments, agreements, opinions and certificates as Bank may
reasonably require, and shall be further subject to the satisfaction of such
other conditions and requirements as Bank, and its counsel, may from time to
time require (any and all notes, instruments, documents and agreements at any
time evidencing, governing, securing or otherwise relating to any of the
Liabilities are herein collectively called the "Loan Documents").

         2. Provided that no Default or Event of Default under the Loan
Documents has occurred and is continuing, Company may, by written notice to the
Bank prior to June 19, 2002, thirty (30) days before the maturity, but not
before May 20 2002, sixty (60) before maturity, request that the Bank extend the
Maturity Date of the Revolving Line for an additional one year period. The
Maturity Date for the Revolving Line shall be extended for an additional year
only if Bank approves such extension. Bank shall notify Company of an approval
and extension and in the event Bank does not approve an extension of the
Maturity Date, the Revolving Line shall terminate on the Maturity Date.

                                                                     Exhibit 10Y
                                                                     -----------
<PAGE>

         3. Company hereby represents and warrants, and such representations and
warranties shall be deemed to be continuing representations and warranties
during the entire life of this Agreement, and thereafter, so long as any
Liabilities remain unpaid and outstanding:

         (a)      It is a corporation duly organized, validly existing and in
                  good standing under the laws of the State of its
                  incorporation, it is duly qualified and authorized to do
                  business in each jurisdiction where the character of its
                  assets or the nature of its activities makes such
                  qualification necessary, and it has the legal power and
                  authority to own its properties and assets and to carry out
                  its business as now being conducted in each such jurisdiction
                  wherein such qualification is necessary; execution, delivery
                  and performance of this Agreement, and any and all other Loan
                  Documents to which Company is a party or by which it is
                  otherwise bound, are within Company's corporate powers and
                  authorities, have been duly authorized by all requisite
                  corporate or other necessary or appropriate action, and are
                  not in contravention or violation of law or the terms of
                  Company's Articles of Incorporation or Bylaws, and do not
                  require the consent or approval of any governmental body,
                  agency or authority; and this Agreement, and any other Loan
                  Documents contemplated hereby, when executed, issued and/or
                  delivered by Company, or by which Company is otherwise bound,
                  will be valid and binding and legally enforceable against
                  Company in accordance with their terms.

         (b)      The execution, delivery and performance of this Agreement and
                  any other Loan Documents required under or contemplated by
                  this Agreement to which Company is a party or by which it is
                  otherwise bound, and the issuance of this Agreement and any
                  such other Loan Documents by Company, and the borrowings and
                  other transactions contemplated hereby and thereby, are not in
                  contravention or violation of the unwaived terms of any
                  indenture, agreement or undertaking to which Company is a
                  party or by which it or any of its property or assets is
                  bound, and will not result in the creation or imposition of
                  any lien or encumbrance of any nature whatsoever upon any of
                  the property or assets of Company, except to or in favor of
                  Bank.

         (c)      No litigation or other proceeding before any court or
                  administrative agency is pending, or, to the knowledge of
                  Company or any of its officers, is threatened against Company,
                  the outcome of which could materially impair Company's
                  financial condition or its ability to carry on its business or
                  its ability to pay and perform its liabilities and obligations
                  hereunder or otherwise in respect of the Liabilities.

         (d)      There are no security interests in, liens, mortgages, or other
                  encumbrances on any of Company's property or assets, except
                  Permitted Encumbrances (as hereinafter defined).

         (e)      There exists no Event of Default (as hereinafter defined), or
                  any condition or event which, with the giving of notice or the
                  passage of time, or both, would constitute an Event of Default
                  (any such condition or event is herein called a "Default")
                  under any of the Liabilities.

                                        2                            Exhibit 10Y
                                                                     -----------

<PAGE>

         (f)      The most recent financial statements with respect to Company
                  delivered to Bank fairly present the financial condition of
                  Company as of the date thereof and for the period(s) covered
                  thereby in accordance with generally accepted accounting
                  principles consistently applied ("GAAP"), and since October 2,
                  1999, there has been no material adverse change in the
                  condition (financial or otherwise) of Company.

         4. So long as Bank shall have any commitment or obligation, if any, to
make any loans or extend credit to or in favor of Company, and so long as any
Liabilities remain unpaid and outstanding, Company covenants and agrees that it
shall:

         (a)      Furnish to Bank, or cause to be furnished to Bank, in each
                  case, in form and detail and on a reporting basis satisfactory
                  to Bank, the following:

                  (i)      as soon as available, and in any event not later than
                           ninety (90) days after the close of each fiscal year
                           of Company, beginning with the fiscal year ending
                           December 30, 2000, audited financial statements of
                           Company, containing the balance sheet of Company as
                           of the close of each such fiscal year, statements of
                           income and retained earnings and a statement of cash
                           flows for each such fiscal year, and such other
                           comments and financial details as are usually
                           included in similar reports, including any management
                           letter(s). Such financial statements shall be
                           prepared in accordance with GAAP, shall be in such
                           detail as Bank may reasonably require, and shall be
                           reviewed by independent certified public accountants
                           of recognized standing selected by Company and
                           acceptable to Bank;

                  (ii)     as soon as available, and in any event not later than
                           sixty (60) days after the close of each fiscal year
                           of Company, beginning with the fiscal year ending
                           December 30, 2000, Borrower's annual projections,
                           including, but not limited to, Company's projections
                           for sales, net income, capital expenditures and
                           redemption of Company's stock;

                  (iii)    as soon as available, and in any event not later than
                           forty-five (45) days after and as of the close of
                           each fiscal quarter (except the fiscal year end) of
                           each fiscal year of Company, beginning with the
                           fiscal quarter ending April 1, 2000, financial
                           statements of Company, containing the balance sheet
                           of Company as of the close of each such fiscal
                           quarter, statements of income and retained earning
                           and a statement of cash flows for Company for such
                           fiscal quarter and for the portion of the fiscal year
                           of Company through the end of the fiscal quarter then
                           ending, and such other comments and financial details
                           as are usually included in similar reports. Such
                           financial statements shall be prepared by Company in
                           accordance with GAAP, and shall be certified as to
                           accuracy and fairness by an authorized officer of
                           Company;

                  (iv)     simultaneous with the delivery to Bank of the
                           respective financial statements required in
                           sub-sections (i) and (iii) above, quarterly
                           compliance certificates in form and detail
                           satisfactory to Bank, certified by an authorized
                           officer of

                                           3                         Exhibit 10Y
                                                                     -----------

<PAGE>

                           Company, certifying that, as of the date thereof, to
                           the best of each such authorized officer's knowledge,
                           no Default or Event of Default shall have occurred
                           and be continuing or exist, or if any Default or
                           Event of Default shall have occurred and be
                           continuing or exist, specifying, in detail, the
                           nature and period of existence thereof and any action
                           taken or proposed to be taken by Company in respect
                           thereof, and also certifying as to whether Company is
                           in compliance with the financial covenants contained
                           in Sections 3(g) through (i) of this Agreement (which
                           certificate shall set forth, in reasonable detail,
                           Company's calculations and the resultant ratios or
                           financial tests determined thereunder);

                  (v)      as soon as possible, and in any event within three
                           (3) Business Days after becoming aware of the
                           occurrence or existence of any Default or Event of
                           Default, or of any other condition or occurrence
                           which has had or could reasonably be expected to have
                           a materially adverse effect upon Company's business,
                           properties, or financial condition or upon Company's
                           ability to comply with its obligations hereunder, a
                           written statement of an authorized officer of Company
                           setting forth the details of such Default or Event of
                           Default, or such other condition or occurrence, and
                           the action which Company has taken or caused to be
                           taken, or proposes to take or cause to be taken with
                           respect thereto; and

                  (vi)     promptly, at such times as Bank may reasonably
                           require, in form and detail satisfactory to Bank,
                           such other information and reports as may be required
                           under the terms of any Loan Documents or as Bank may
                           reasonably request from time to time.

         (b)      Keep proper books of record and account in which full and
                  correct entries shall be made of all of its financial
                  transactions and its assets and businesses so as to permit the
                  presentation of financial statements (including, without
                  limitation, those financial statements to be delivered to Bank
                  pursuant to Section 3(a) above) prepared in accordance with
                  GAAP; and permit Bank, or its representatives, at reasonable
                  times and intervals, to visit all of Company's offices and to
                  make inquiries as to Company's respective financial matters
                  with its respective directors, officers, employees, and
                  independent certified public accountants.

         (c)      Permit Bank, through Bank's authorized attorneys, accountants
                  and representatives, to inspect, audit and examine Company's
                  books, accounts, records, ledgers and assets and properties of
                  every kind and description, wherever located, at all
                  reasonable times during normal business hours, upon written
                  request of Bank. Company agrees to reimburse Bank for all
                  reasonable costs and expenses incurred by Bank in connection
                  with such inspections, examinations and audits, and to pay to
                  Bank such fees as Bank may reasonably charge in respect of
                  such inspections, examinations and audits, or as otherwise
                  mutually agreed upon by Company and Bank if such inspections,
                  examinations and audits are conducted due to any Event of
                  Default by Company.

                                           4                         Exhibit 10Y
                                                                     -----------

<PAGE>

         (d)      The Company will maintain, with respect to its business and
                  properties, insurance at all times by insurance companies of
                  nationally recognized stature and responsibility which the
                  Company believes to be financially sound, of a character
                  usually insured by corporations engaged in the same or a
                  similar business similarly situated against loss or damage of
                  the kinds and in the amounts customarily insured against and
                  for by such corporations, and carry or cause to be carried,
                  with such insurers in customary amounts (with customary
                  deductibles), such other insurance, including public liability
                  insurance as is usually carried by corporations engaged in the
                  same or a similar business similarly situated: provided,
                  however, that all insurance maintained pursuant to this
                  paragraph shall be carried in amounts sufficient to prevent
                  the Company from incurring liability as a co-insurer under law
                  or the terms of the applicable policy or policies.

         (e)      Pay and discharge promptly when due: all taxes, assessments,
                  and governmental charges and levies imposed upon Company, its
                  income, or any of its properties, before the same shall become
                  delinquent; and provided, however, that none of the foregoing
                  need to be paid while the same is being contested in good
                  faith by appropriate proceedings diligently conducted so long
                  as adequate reserves shall have been established in accordance
                  with GAAP with respect thereto. The Company will file all
                  federal, state and local tax returns and all other tax reports
                  as required by law.

         (f)      Do or cause to be done all things necessary to preserve and
                  keep in full force and effect Company's corporate existence,
                  rights and franchises and comply with all applicable laws
                  where failure to do so has had or could reasonably be expected
                  to have a material adverse effect upon Company's business,
                  properties, or financial condition or upon Company's ability
                  to comply with its obligation hereunder; continue to conduct
                  and operate its business substantially as conducted and
                  operated during the present and preceding calendar year; at
                  all times maintain, preserve and protect all franchises and
                  trade names and preserve all the remainder of its property and
                  keep the same in good repair, working order and condition; and
                  from time to time make, or cause to be made, all needed and
                  proper repairs, renewals, replacements, betterments and
                  improvements thereto so that the business carried on in
                  connection therewith may be properly and advantageously
                  conducted at all times.

         (g)      Maintain, at all times, Net Income of not less than One
                  Million Dollars ($1,000,000.00).

                  For purposes of this Agreement, the Net Income shall be
                  calculated quarterly and shall be equal to the sum of
                  Company's Net Income for the immediately four preceding fiscal
                  quarters.

                  "Net Income" shall mean, as applied to any Person, the net
                  income (or net loss) of such Person for the period in question
                  after giving effect to deduction or provision for all
                  operating expenses, all taxes and reserves (including reserves
                  for deferred taxes) and all other proper deductions all
                  determined in accordance with GAAP.

                                           5                         Exhibit 10Y
                                                                     -----------

<PAGE>

                  "Person" shall mean any individual, corporation, partnership,
                  limited liability company, trust, incorporated or
                  unincorporated organization, joint venture, joint stock
                  company, government, or any agency or political subdivision
                  thereof, or any other entity of any kind.

         (h)      Maintain a Funded Debt to EBITDA Ratio of not more than 3.0 to
                  1.0.

                  For purposes of this Agreement, the Funded Debt to EBITDA
                  Ratio shall be calculated quarterly as of the end of each
                  fiscal quarter of Company, and shall be calculated based upon
                  and for the fiscal quarter of Company then ending. EBITDA
                  shall be calculated on a rolling four quarter basis.

                  "Funded Debt" shall mean all the sum of all funded debt of the
                  Company plus letter of credit obligations plus all capitalized
                  leases.

                  "EDITDA" shall mean earnings (or loss) from operations of the
                  Company for such period, after eliminating therefrom all
                  extraordinary non-recurring items of income (including gain on
                  the sale of assets and earnings from the sale of discontinued
                  business lines) and after all expenses and proper charges but,
                  before payment or provision for payment of interest, taxes,
                  depreciation and amortization, all determined in accordance
                  with GAAP, for the Company for period being measured.

         (i)      Maintain a Funded Debt to Capitalization Ratio of not more
                  than .50 to 1.0.

                  For purposes of this Agreement, the Funded Debt to
                  Capitalization Ratio shall be calculated quarterly as of the
                  end of each fiscal quarter of Company, and shall be calculated
                  based upon and for the fiscal quarter of Company then ending.

                  "Capitalization" shall mean the sum of Funded Debt plus Net
                  Worth.

                  "Net Worth" shall mean with respect to any Person, such
                  Person's total shareholders equity (including capital stock,
                  additional paid-in capital and retained earnings, after
                  deducting treasury stock) which would appear as such on a
                  balance sheet of such Person prepared in accordance with GAAP.

         (j)      Take all actions and fulfill all conditions necessary to
                  maintain any and all plans in substantial compliance with
                  applicable requirements of ERISA, the Code, and all applicable
                  foreign law, if any, until such Plans are terminated, and the
                  liabilities discharged thereof, in accordance with applicable
                  law. No domestic Pension Plan (other than a Multiemployer
                  plan) will incur any accumulated funding deficiency (within
                  the meaning of Section 412 of the Code), and no foreign
                  Pension Plan will be in violation of any funding requirement
                  imposed by applicable foreign law, which deficiency or
                  violation would or would be reasonably likely to, materially
                  adversely affect the business, earnings, prospects,
                  properties, or condition (financial or otherwise) of the
                  Borrower.

                                           6                         Exhibit 10Y
                                                                     -----------

<PAGE>

                  "Plan" shall mean any "employee benefit plan" (within the
                  meaning of Section 3 (3) of ERISA) that the Company maintains,
                  contributes to, or is obligated to contribute to for the
                  benefit of employees or former employees of the Company.

                  "Pension Plan" shall mean any Plan that is an "employee
                  pension benefit plan" within the meaning of Section 3 (2) of
                  ERISA.

                  "ERISA" shall mean the Employee Retirement Income Security Act
                  of 1974, as amended from time to time, and any successor
                  statute, together with the rules and regulations thereunder.

                  "Code" shall mean the Internal Revenue Code of 1986, as
                  amended from time to time, and any successor statute, together
                  with the rules and regulations thereunder.

                  "Multiemployer Plan" shall mean any Plan that is a
                  "multiemployer plan" within the meaning of Section 4001(a)(3)
                  of ERISA.

         (k)      Comply in all material respects with all applicable
                  Environmental Laws, and maintain all material permits,
                  licenses and approvals required under applicable Environmental
                  Laws, where the failure to do so could have a material adverse
                  effect upon the business, operations, condition (financial or
                  otherwise) performance or properties of Company, or could have
                  a material adverse effect upon the ability of Company to
                  perform its obligations under this Agreement or any of the
                  other Loan Documents, or could materially adversely affect the
                  enforceability of this Agreement or any of the other Loan
                  Documents; and promptly provide to Bank, immediately upon
                  receipt thereof, copies of any material correspondence,
                  notice, pleading, citation, indictment, complaint, order,
                  decree, or other document from any source asserting or
                  alleging a violation of any Environmental Laws by Company, or
                  of any circumstance or condition which requires or may require
                  a financial contribution by Company, or a clean-up, removal,
                  remedial action or other response by or on behalf of Company
                  under applicable Environmental Law(s), or which seeks damages
                  or civil, criminal, or punitive penalties from Company for any
                  violation or alleged violation of any Environmental Law(s) by
                  Company. Company hereby indemnifies, saves and holds Bank, and
                  any of Bank's past, present and future officers, directors,
                  shareholders, employees, representatives and consultants,
                  harmless from any and all losses, damages, suites, penalties,
                  costs, liabilities and expenses (including, without
                  limitation, reasonable legal expenses and attorneys' fees)
                  incurred or arising out of any claim, loss or damage of any
                  property, injuries to or death of any persons, contamination
                  of or adverse effects on the environment, or other violation
                  of any applicable Environmental Law(s), in any case, caused by
                  Company, or in any way related to any property owned or
                  operated by Company, or due to any acts of Company, or any of
                  its officers, directors, shareholders, employees, consultants
                  and/or representations; provided, however, that the foregoing
                  indemnification shall not be applicable, and Company shall not
                  be liable for any such losses, damages, suits, penalties,
                  costs, liabilities or expenses, to the extent (but only to the
                  extent) the

                                           7                         Exhibit 10Y
                                                                     -----------

<PAGE>

                  same arise or result from any gross negligence or willful
                  misconduct of Bank or any of its agents or employees.

                  "Environmental Laws" shall mean all laws, codes, ordinances,
                  rules, regulations, orders, decrees and directives issued by
                  any federal, state, local, foreign or other governmental or
                  quasi-governmental authority or body (or any agency,
                  instrumentality or political subdivision thereof) pertaining
                  to hazardous or toxic materials, including, without
                  limitation, any hazardous materials or wastes, toxic
                  substances, flammable, explosive or radioactive materials,
                  asbestos, and/or other similar materials; any so-called
                  "superfund" or "superlien" law pertaining to hazardous or
                  toxic materials on or about any property at any time owned,
                  leased or otherwise used by Company, or any portion thereof,
                  including, without limitation, those relating to soil,
                  surface, subsurface groundwater conditions and the condition
                  of the ambient air; and any other federal, state, foreign or
                  local statute, law, ordinance, code, rule, regulation, order
                  or decree regulating, relating to, or imposing liability or
                  standards of conduct concerning, any hazardous, toxic,
                  radioactive, flammable or dangerous waste, substance or
                  material, as now or at any time hereafter in effect.

         5. So long as Bank shall have any commitment or obligation, if any, to
make any loans or extend credit to or in favor of Company, and so long as any
Liabilities remain unpaid and outstanding, Company covenants and agrees that it
shall not, without the prior written consent of Bank:

         (a)      Create, incur, assume or suffer to exist any mortgage, pledge,
                  encumbrance, security interest, lien or charge of any kind
                  upon any of its property or assets (including, without limit,
                  any charge upon property purchased or acquired under a
                  conditional sales or other title retaining agreement or lease
                  required to be capitalized under GAAP), whether now owned or
                  hereafter acquired, other than the following (collectively,
                  "Permitted Encumbrances"):

                  (i)      liens, mortgages, security interests and encumbrances
                           to or in favor of Bank;

                  (ii)     liens for taxes, assessments or other governmental
                           charges incurred in the ordinary course of business
                           and for which no interest, late charges or penalties
                           which in aggregate do not exceed Fifty Thousand
                           Dollars ($50,000.00), are attaching or which are
                           being contested in good faith by appropriate
                           proceedings diligently pursued and, if requested by
                           Bank, bonded in an amount and manner satisfactory to
                           Bank;

                  (iii)    liens, not delinquent, created by statute in
                           connection with workers' compensation, unemployment
                           insurance, social security, old age pensions (subject
                           to the applicable provisions of this Agreement) and
                           similar statutory obligations;

                                           8                         Exhibit 10Y
                                                                     -----------

<PAGE>

                  (iv)     liens in favor of mechanics, materialmen, carriers,
                           warehousemen or other like statutory or common law
                           liens securing obligations incurred in good faith in
                           the ordinary course of business that are not yet due
                           and payable;

                  (v)      minor encumbrances or imperfections of title
                           consisting of existing or future zoning restrictions,
                           existing recorded rights-of-way, existing recorded
                           easements, existing recorded private restriction or
                           existing or future public restrictions on the use of
                           real property, none of which (individually or in the
                           aggregate) materially impairs, or would materially
                           impair, the present or future use of such property in
                           the operation of the business for which it is used,
                           or would be violated in any material respect by any
                           existing or proposed structure or land use or would
                           have a material adverse effect on the sale or lease
                           of such property, or render title thereto
                           unmarketable;

                  (vi)     purchase money security interests to secure purchase
                           money indebtedness permitted under Section 5(b)(iv)
                           of this Agreement, so long as such purchase money
                           security interests (A) arise substantially
                           contemporaneously with the purchase or acquisition of
                           the respective property or assets encumbered by and
                           subject to such purchase money security interests,
                           (B) do not at any time encumber any property or
                           assets other than the respective property or assets
                           financed by the respective purchase money
                           indebtedness, and (C) secure only the respective
                           purchase money indebtedness incurred to finance the
                           purchase or acquisition of such property or assets;

                  (vii)    any liens and encumbrances existing as of the date of
                           this Agreement, as more particularly identified in
                           Schedule 5(a) attached hereto, and

                  (viii)   any other liens agreed or consented to, in writing,
                           by Bank.

         (b)      Incur, create, assume or permit to exist any indebtedness or
                  liability on account of deposits or advances or any
                  indebtedness or liability for borrowed money, or any other
                  indebtedness or liability evidenced by notes, bonds,
                  debentures or similar obligations, or any other indebtedness
                  whatsoever, except for (i) the Liabilities, (ii) Subordinated
                  Debt, (iii) existing indebtedness to the extent set forth on
                  attached Schedule 5(b) attached hereto, (iv) purchase money
                  indebtedness not to exceed Five Hundred Thousand Dollars
                  ($500,000.00) in aggregate principal amount each fiscal year
                  of Company incurred to finance Company's purchase or
                  acquisition of capital assets (whether pursuant to a loan,
                  capital lease or otherwise); (v) unsecured trade indebtedness
                  incurred and paid in the ordinary course of business of
                  Company or another Person acquired by Company; (vi) contingent
                  indebtedness to the extent permitted by Section 5(d) of this
                  Agreement, (vii) indebtedness secured by Permitted
                  Encumbrances, and (viii) lease obligations (whether in respect
                  of capitalized leases, operating leases or otherwise), not
                  otherwise disclosed in Schedule 5(b) attached hereto, (ix)
                  Funded Indebtedness incurred for the acquisition of corporate
                  real estate.

                                           9                         Exhibit 10Y
                                                                     -----------

<PAGE>

         (c)      Make loans, advances or extensions of credit to any Person,
                  except, without duplication, (i) employees of Company in an
                  unpaid principal amount not to exceed One Hundred Thousand
                  Dollars ($100,000.00), in aggregate, at any time, (ii) sales
                  on open account in the ordinary course of business, and (iii)
                  other loans, advances and extensions of credit in the ordinary
                  course of business in an unpaid principal amount not to exceed
                  Two Hundred Fifty Thousand Dollars ($250,000.00), in
                  aggregate, at any time.

         (d)      Guarantee or otherwise, directly or indirectly, in any way be
                  or become responsible for obligations of any other Person,
                  whether by agreement to purchase the indebtedness of any other
                  Person, agreement for the furnishing of funds to any other
                  Person through the furnishing of goods, supplies or services,
                  by way of stock purchase, capital contribution, advance or
                  loan, for the purpose of paying or discharging (or causing the
                  payment or discharge of) the indebtedness of any other Person,
                  or otherwise, except (i) guaranties in favor of Bank; and (ii)
                  the endorsement of negotiable instruments in the ordinary
                  course of business for deposit or collection.

         (e)      Subordinate any indebtedness due to it from a Person to
                  indebtedness of other creditors of such Person.

         (f)      Sell, lease (as lessor), transfer or otherwise dispose of
                  properties and assets, except as to the sale of inventory and
                  equipment in the ordinary course of business; change its name,
                  consolidate with or merge into any other corporation, permit
                  any other corporation to merge into it except as set forth in
                  Section 5(k) hereof, enter into any reorganization or
                  recapitalization, or reclassify its capital stock, or enter
                  into any sale-leaseback transaction.

         (g)      Allow any fact, condition or event to occur or exist with
                  respect to any employee pension or profit sharing plan
                  established or maintained by it which might constitute grounds
                  for termination of any such plan or for the court appointment
                  of a trustee to administer any such plan; or permit any such
                  plan to be the subject of termination proceedings (whether
                  voluntary or involuntary) from which termination proceedings
                  there may result in a liability of Company to the PBGC which,
                  in the opinion of Bank, will have a materially adverse effect
                  upon the operations, business, property, assets, financial
                  condition or credit of Company.

         (h)      Furnish Bank with any certificate or other document that
                  contains any untrue statement of a material fact or omits to
                  state a material fact necessary to make such certificate or
                  document not misleading in light of the circumstances under
                  which it was furnished.

         (i)      Apply any of the proceeds of any loan. advance or other
                  extension of credit by Bank to or in favor of Company, to the
                  purchase or carrying of any "margin stock" within the meaning
                  of Regulation U of the Board of Governors of the Federal
                  Reserve System, or any regulations, interpretations or rulings
                  thereunder.

                                          10                         Exhibit 10Y
                                                                     -----------

<PAGE>

         (j)      Make Capital Expenditures, excluding acquisitions of real
                  property, shall not exceed One Million Five Hundred Thousand
                  Dollars ($1,500,000.00), annually.

                  Capital Expenditures shall mean with respect to any Person,
                  all expenditures made and liabilities incurred for the
                  acquisition of assets which are not, in accordance with GAAP,
                  treated as expense items for such person in the year made or
                  incurred or as a prepaid expense applicable to a future year
                  or years.

         (k)      Shall not participate in any Acquisition of any Person,
                  individually or in the aggregate, in excess of Five Million
                  Dollars ($5,000,000.00).

                  Acquisition shall mean as applied to any business unit or
                  investment, means the acquiring or acquisition of such
                  business unit or investment by purchase, exchange, issuance of
                  stock or other securities, or by merger, reorganization or any
                  other method.

                  6. An "Event of Default" shall be deemed to have occurred or
exist under this Agreement upon the occurrence and/or existence of any of the
following conditions or events:

         (a)      Company shall fail to pay the principal of or interest on or
                  shall otherwise fail to pay any other amount owing by Company
                  to Bank, when due, under any of the Liabilities, and such
                  default in payment shall continue unremedied or uncured beyond
                  any applicable period of grace provided with respect thereto,
                  if any, in the relevant Loan Document(s);

         (b)      any representation, warranty, certification or statement made
                  or deemed to have been made by Company herein, or by any
                  Person(s) (including, without limit, Company) in any
                  certificate, financial statement or other document or
                  agreement delivered by or on behalf of Company in connection
                  with the Liabilities or any of the Loan Documents, shall prove
                  to be untrue in any material respect;

         (c)      Company shall fail to observe or perform any condition,
                  covenant or agreement of Company, set forth in Section 4(a)
                  hereof, for a period exceeding fifteen (15) days;

         (d)      Company shall fail to observe or perform any condition,
                  covenant or agreement of Company, set forth in Section 5
                  hereof, for a period exceeding five (5) days;

         (e)      Company shall fail to observe or perform any condition,
                  covenant or agreement of Company set forth herein;

         (f)      Company shall fail to observe or perform any condition,
                  covenant or agreement of Company set forth in any other Loan
                  Document (other than as provided in subparagraphs (a) and (c)
                  above), and such default shall remain unremedied or uncured
                  beyond any applicable period of grace or cure, if any,
                  provided with respect thereto;

                                          11                         Exhibit 10Y
                                                                     -----------

<PAGE>

         (g)      if there shall be any change, for any reason whatsoever, in
                  the management, including, but not limited to, the termination
                  of employment or title of William A. Bassett as Chairman and
                  CEO, or control of Company which, in the reasonable discretion
                  of Bank, could have a material adverse effect upon the
                  business, operations or condition (financial or otherwise) of
                  Company;

         (h)      whenever Bank, in good faith, deems the prospect of payment or
                  performance of any of the Liabilities to be impaired; or

         (i)      upon the occurrence or existence of any "Default" or "Event of
                  Default", as the case may be, set forth in any other Loan
                  Document.

                  7. Upon the occurrence and at any time during the continuance
or existence of any Event of Default, Bank may give notice to Company declaring
all outstanding Liabilities to be due and payable, whereupon all such
Liabilities then outstanding shall immediately become due and payable, without
further notice or demand, and any commitment or obligation, if any, on the part
of Bank to make loans or otherwise extend credit to or in favor of Company shall
immediately terminate. Further, upon the occurrence or at any time during the
continuance or existence of any Event of Default hereunder, Bank may collect,
deal with and dispose of all or any part of any security in any manner permitted
or authorized by the Michigan Uniform Commercial Code or other applicable law
(including public or private sale), and after deducting expenses (including,
without limitation, reasonable attorneys' fees and expenses), Bank may apply the
proceeds thereof in part or full payment of any of the Liabilities, whether due
or not, in any manner or order Bank elects. In addition to the foregoing, upon
the occurrence and at any time during the continuance or existence of any Event
of Default hereunder, Bank may exercise any and all rights and remedies
available to it as a result thereof, whether by agreement, by law, or otherwise.

                  8. Company hereby acknowledges and agrees that Company's
compliance with the terms and conditions set forth herein, and the absence of
any Event of Default hereunder, shall not, in any way whatsoever, limit,
restrict or otherwise affect or impair Bank's right or ability to make demand
for payment of any or all of the Liabilities which may be on a demand basis at
any time in Bank's sole and absolute discretion, with or without reason or
cause, and the existence of any Event of Default hereunder shall not be the sole
reason or basis for enabling Bank to make demand for payment of all or any part
of such Liabilities.

                  9. No forbearance on the part of the Bank in enforcing any of
its rights or remedies under this Agreement or any other Loan Document, nor any
renewal, extension or rearrangement of any payment or covenant to be made or
performed by Company hereunder or any such other Loan Document, shall constitute
a waiver of any of the terms of this Agreement or such Loan Document or of any
such right or remedy.

                  10. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Michigan.

                  11. All covenants, agreements, representations and warranties
by or on behalf of Company made in connection with this Agreement and any other
Loan Documents shall survive the

                                          12                         Exhibit 10Y
                                                                     -----------

<PAGE>

borrowing hereunder or thereunder and shall be deemed to have been relied upon
by Bank. All statements contained in any certificate or other document delivered
to Bank at any time by or on behalf of Company pursuant hereto shall constitute
representations and warranties by Company.

                  12. Company agrees that it will pay all costs and expenses
incurred by Bank in connection with the preparation of this Agreement and any
other Loan Documents contemplated hereby, including, without limitation,
reasonable attorneys' fees and distributions of counsel for the Bank.

                  13. This Agreement shall inure to the benefit of and shall be
binding upon the parties hereto and their respective successors and assigns;
provided, however, that Company shall not assign or transfer any of its rights
or obligations hereunder or otherwise in respect of any of the Liabilities
without the prior written consent of Bank.

                  14. COMPANY AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY
JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR
CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVE ANY RIGHT
TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE LIABILITIES.

If the foregoing is acceptable to Company, please indicate such with the
authorized signature(s) of Company as provided below.

                                                          Very truly yours,

                                                          COMERICA BANK

                                                          By: /s/ Michael Orzco
                                                              ------------------

                                                          Its: Vice President
                                                               -----------------

ACCEPTED AND AGREED:

DECORATOR INDUSTRIES, INC.

By: /s/ Michael K. Solomon
    ------------------------

Its:  Vice President
     --------------------

Dated:   April 19, 2000
       -----------------------

                                          13                         Exhibit 10Y
                                                                     -----------

<PAGE>

                                  SCHEDULE 4(a)
                             Permitted Encumbrances

1.       UCC Financing Statement filed in the State of Indiana on March 25, 1999
         with Key Bank National Association as Secured Party and Decorator
         Industries, Inc. as Debtor covering all of debtor's equipment and
         fixtures, including but not limited to machinery, parts, tools,
         fixtures, furniture and accessories wherever located in Indiana,
         together with all attachments, additions and accessions thereto, and
         added and substituted parts, equipment and repairs now or hereafter
         placed upon such property.

                                          14                         Exhibit 10Y
                                                                     -----------

<PAGE>

                                  SCHEDULE 4(b)
                             Permitted Indebtedness

<TABLE>
<CAPTION>
                                                                              Total Amount Due
                                                                              ----------------
<S>      <C>                                                                    <C>
1.       Pennsylvania Industrial Financing Authority                            $163,037.00

2.       Pennsylvania Economic Development Financing Authority                  $300,000.00

3.       Indiana Development Financing Authority                                $1,455,000.00

</TABLE>

                                          15                         Exhibit 10Y
                                                                     -----------

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