Document:

<PAGE>

                                     ITEM 1
                        THE FRANCHISOR, ITS PREDECESSORS
                                 AND AFFILIATES

 "Airsopure" or "we" means Airsopure International Group, Inc. the franchisor.
"You" means the person who buys the franchise. If the franchise owner is a
corporation or other entity, "you" refers only to the business entity which owns
the franchise unless we indicate otherwise. We do business under the same name
as our franchise company, "Airsopure." Airsopure is a wholly owned subsidiary of
Airtech International Group, a publicly traded company, on the NASDAQ/OTC BB
under the symbol AIRG. Additionally, Airsopure has an affiliate, Airsopure,
Inc., which may supply products to our franchise owners. The principal business
address for Airsopure International Group, Inc., Airsopure, Inc., and Airtech
International Group, Inc., is 15400 Knoll Trail, Suite 200, Dallas, Texas 75248.
Our agent for service of process is listed in this offering circular as Exhibit
B. Airsopure International Group, Inc. is a Nevada corporation which was
incorporated on January 5, 2000.

Airsopure grants franchises to individuals and business entities for the
operation of one or more retail/residential Airsopure Centers ("Airsopure
Center(s)" or "Center(s)"). Airsopure owns and operates one business of the type
being franchised. Airsopure offers no other types of franchises, and conducts no
other business than the franchising of Airsopure Centers.

Each Airsopure Center will be located in a retail center or office/showroom
space and occupy about 1,000-1,200 square feet. Your Center will be used to
showcase Airsopure air filtration products for retail sales, with office space
for your residential sales team and staff. Your Center will retail Airsopure
clean air filtration products to residential customers in your territory. Your
sales team will sell direct to customers in their homes, as well as conducting
retail sales in your Center. The market for air filtration products is
established and growing. As air quality in larger cities has declined,
respiratory problems and breathing related ailments have increased dramatically.
Air filtration and purification systems are well accepted and in wide use.
Airsopure has developed products using the latest technological advances to help
produce clean and purified air environments in homes. Customers are in all age
groups, and sales are not generally seasonal, but year around. There are no
specific state or federal regulations governing the sale of our products. There
are other existing competing products for air filtration and purification on the
retail market; however, we are not aware of any other franchise that is similar
to ours. Airsopure offers a "system" for operation of a complete business, not
just the sale of an individual product.

Airsopure is a new franchise offering. Airsopure opened its first company Center
as of February 1, 2000. Neither Airsopure, Inc., nor Airtech International
Group, Inc. has conducted a business or offered franchises of the type to be
operated by the Franchisee; although Airtech International Group, Inc. utilized
salesman to sell their indoor air filtration systems and supplies under the same
name Airsopure. Neither Airsopure nor Airtech International Group, Inc. have
offered franchises in other lines of business; however Airsopure, Inc., an
affiliate, offered and sold 18 franchises from April 1997 to December 1999, for
the sale of commercial building air filtration products. Airsopure, Inc. no
longer offers franchises.

                                     ITEM 2
                               BUSINESS EXPERIENCE

C. J. COMU, CHIEF EXECUTIVE OFFICER, SECRETARY AND DIRECTOR. Mr. Comu has served
as Chief Executive Officer, Secretary and Director of Airsopure International
Group, Inc. since its inception. He has also served as Chief Executive Officer
of Airtech International Group, Inc. from February 1995 to the present. From
1990 to February 1995 he was President and co-founder of Transworld Leasing
located in Dallas, Texas. Mr. Comu directs the overall operations and marketing
strategy for Airsopure and its franchisees.

JOHN POTTER, PRESIDENT AND DIRECTOR. John Potter is President and a Director of
Airsopure International Group, Inc. He was also co-founder of Airtech
International Group, Inc., in February 1995. Mr. Potter is primarily responsible
for manufacturing, operations oversight, marketing and new product development.

JAMES R. HALTER, ESQ., MBA, CPA, CHIEF FINANCIAL OFFICER, TREASURER AND
DIRECTOR. Mr. Halter is Chief Financial Officer, Treasurer and a Director of
Airsopure International Group, Inc. since its inception on January 5, 2000. He
was employed by Airtech International Group, Inc., beginning in October 1999, as
CFO and General Counsel. From January 1990 to October 1999, Mr. Halter owned his
own tax and business

                                       1
<PAGE>

consulting practice. Concurrently, from September 1996 to January 1999, he
attended and graduated from Case Western Reserve University School of Law, in
Cleveland, Ohio. Mr. Halter is assisting Airsopure with financial management and
strategic planning for the company and its franchisees.

STEPHEN W. HAMPTON, FRANCHISE SALES. Mr. Hampton was hired by Airtech
International Group, Inc., on November 1, 1999, to head the franchising efforts
of Airsopure International Group, Inc. Prior to that, Mr. Hampton was an
independent contractor, beginning in 1992, with PSA, Inc., a national
franchising and marketing company based in Dallas, Texas. Mr. Hampton consulted
and franchised 10 different companies while working with PSA. He did business as
President of Marketect, as a sub-contractor to PSA, Inc., for national and
international franchise sales. Mr. Hampton currently is responsible for all
franchise marketing efforts for Airsopure, domestically and internationally.

                                     ITEM 3
                                   LITIGATION

No litigation is required to be disclosed in this offering circular.

                                     ITEM 4
                                   BANKRUPTCY

No officer or director previously identified in Items 1 or 2 of this offering
circular has been involved as a debtor in proceedings under the US Bankruptcy
Code required to be disclosed in this Item.

                                     ITEM 5
                              INITIAL FRANCHISE FEE

You must pay a $25,000 lump sum franchise fee when you sign the Franchise
Agreement (Exhibit C). Airsopure will refund the entire amount if we do not
approve your application within 45 days. You must find a suitable Center site
within 90 days of signing the Franchise Agreement, unless we mutually agree
otherwise (see Item 11.C.). If we cannot agree on a Center location within 4
months we may at our sole discretion a) extend your search time, b) exchange
your territory, or c) terminate your Franchise and refund up to 70% of your
Franchise Fee. There are no refunds under any other circumstances.

--------------------------------------------------------------------------------
                                     ITEM 6
                                   OTHER FEES

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
        NAME OF FEE                     AMOUNT                       DUE DATE                       REMARKS
------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                             <C>                           <C>
Royalty                      5% Gross Sales                  7th of the month for the
                                                             previous month
------------------------------------------------------------------------------------------------------------------------
Local Advertising            2% Gross Sales                  7th of the month for the      Starts 60 days after opening,
                                                             previous month                you account for how you spent
                                                                                           money
------------------------------------------------------------------------------------------------------------------------
Advertising Fund             2% Gross Sales                  Begins January 2001           Regional, National Ads
                                                                                           Separate Fund
------------------------------------------------------------------------------------------------------------------------
Transfer                     $1000                           Payable date of sale or
                                                             transfer of your franchise
------------------------------------------------------------------------------------------------------------------------
Audit                        Cost of audit                   Upon demand                   Payable only if audit reveals
                                                                                           underpayment of at least 2%of
                                                                                           funds due
------------------------------------------------------------------------------------------------------------------------
Interest (1)                Lesser of Prime rate charged     Upon demand                   Payable on overdue amounts
                            by Bank of America plus 2%or                                   not paid by Due Date
                            maximum permitted by state law
------------------------------------------------------------------------------------------------------------------------
Renewal                     $1000                            Upon renewal date
------------------------------------------------------------------------------------------------------------------------
</TABLE>
All fees are imposed by and payable to Airsopure, except Local Advertising,
which you spend in your own territory, and account to Airsopure for such
approved expenditures. All fees are non-refundable.
(1) Interest begins from the date the payment was due.

                                       2
<PAGE>

                                     ITEM 7
                               INITIAL INVESTMENT

Your Estimated Initial Investment for one Center (see also Notes following
table):

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
          CATEGORY                    AMOUNT                PAYMENT              WHEN DUE               TO WHOM
-------------------------------------------------------------------------------------------------------------------------
<S>                           <C>                     <C>                  <C>                  <C>
Franchise Fee (1)             $25,000                 Lump Sum             Signing Agmt.        Airsopure
-------------------------------------------------------------------------------------------------------------------------
Training (2)                  $1,000-2,500            As Incurred          As Incurred          Airline, Hotel, etc.
-------------------------------------------------------------------------------------------------------------------------
Lease Deposits (3)            $1,000-3,000            Lump Sum             As Incurred          Landlord, utilities
-------------------------------------------------------------------------------------------------------------------------
Remodeling (4)                $1,000-7,000            As Incurred          As Incurred          Contractors, Landlord
-------------------------------------------------------------------------------------------------------------------------
Computer System (5)           $2,500-5,000            As Incurred          As Incurred          Vendors
-------------------------------------------------------------------------------------------------------------------------
Office Furnishings (6)        $2,500-4,000            As Incurred          As Incurred          Vendors
-------------------------------------------------------------------------------------------------------------------------
Showroom, Signs (7)           $2,500-5,000            As Incurred          As Incurred          Vendors
-------------------------------------------------------------------------------------------------------------------------
Open Inventory (8)            $5,000-10,000           As Incurred          As Incurred          Vendors
-------------------------------------------------------------------------------------------------------------------------
Office Supplies (9)           $500-1,000              As Incurred          As Incurred          Vendors
-------------------------------------------------------------------------------------------------------------------------
Marketing Mat'ls. (10)        $1,000-3,000            As Incurred          As Incurred          Vendors
-------------------------------------------------------------------------------------------------------------------------
Miscellaneous (11)            $500-1,500              As Incurred          As Incurred          Vendors
-------------------------------------------------------------------------------------------------------------------------
Initial Advertising (12)      $5,000-15,000           As Incurred          As Incurred          Media
-------------------------------------------------------------------------------------------------------------------------
Insurance (13)                $500-4,000              As Incurred          As Incurred          Insurance Agent
-------------------------------------------------------------------------------------------------------------------------
Professional Fees (14)        $500-1,500              As Incurred          As Incurred          Attorney, CPA
-------------------------------------------------------------------------------------------------------------------------
Software Fee (15)             $3,000                  Lump Sum             As Incurred          Vendor
-------------------------------------------------------------------------------------------------------------------------
Working Capital (16)          $12,500-25,000          As Incurred          As Incurred          Various
-------------------------------------------------------------------------------------------------------------------------
TOTAL                         $64,000-115,500
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

NOTES TO ITEM 7:

(l) See Item 5 for conditions when this fee is refundable. Airsopure does not
finance any fee.
(2) You pay transportation and boarding while in training. Expenses will vary
based on distance and level of your expenses.
(3) Lease costs and deposits may vary based on your choice of office/showroom.
(4) If your space requires improvements, you may need to purchase them from
landlord, contractors, or possibly negotiate them into your lease. Costs will
vary based on changes requested.
(5) You will purchase one computer system, with modem, printer, fax, internet
capability. We will specify configuration. You will use our software, or
approved vendor software, as available. You may purchase other computers if you
desire.
(6) You need regular office furniture, depending on size and layout of your
space, as well as plain paper fax, phone system (minimum 3 line), and copier
(optional).
(7) Showroom displays, graphics and equipment will vary based on size of your
space.
(8) Opening Inventory includes enough products to adequately begin your
marketing and sales efforts.
(9) We will supply you with a list of recommended supplies and stationery.
(10) Marketing materials include an opening supply of approved brochures and
other pieces in our marketing program from authorized vendors.
(11) Petty cash fund for unanticipated small miscellaneous expenses in opening
your office.
(12) We will assist you with designing a custom advertising program for your
office, including direct mail, flyers and other media and opening activities,
over the first 30-60 days.
(13) You will need general business insurance for the term of your franchise and
lease space. Rates will vary based on carrier, location, etc.
(14) If you incorporate, hire services of attorney or CPA, or accountant to help
set-up your business, you may be charged fees for such services. Charges and
services will vary.
(15) We may require you to purchase custom software, if we do, the fee will
include the first year's maintenance. There may be an annual fee thereafter for
updates and maintenance, although that fee is not yet known.
(16) The actual amount of working capital you will need may vary depending on
your Center, sales staff, marketing plan and other factors, as well as your
management and business skills.

The table above represents an estimate of your initial start-up expenses.
Airsopure cannot guarantee that you will not have additional expenses starting
the business. Your costs will depend on such factors as how much you follow our
system and procedures; your business and management skills; local economic
conditions and product acceptance; competition and your sales made during the
initial 60-90 day period. Airsopure has relied upon its own experience to
estimate these amounts. Review these figures

                                       3
<PAGE>

carefully with a business advisor before making any decision to purchase the
franchise.

Airsopure does not offer direct or indirect financing to franchisees for any
items or products.

                                     ITEM 8
                           RESTRICTIONS ON SOURCES OF
                             PRODUCTS AND SERVICES

PRODUCTS. You must purchase all air purification products from Airsopure, or its
affiliates. There are no other suppliers. These products are manufactured to
strict standards, incorporate trade secrets and are proprietary to Airsopure
and/or its affiliates. You are allowed to sell only products and services that
have been expressly authorized for sale in writing in the manner we specify. You
must not deviate from any of our specifications without our written consent. The
current product line for equipment and filters, and the services offered by
Airsopure are described in the confidential Operations Manual (also referred to
as the "Manual"). Airsopure or its affiliates will derive revenue from your
purchases of products. As this is a new offering, we do not have a precise basis
for estimating total revenues to Airsopure or its affiliates. Cost of products
will represent approximately 35% to 50% of suggested retail. Airsopure may
receive a portion of the wholesale cost, although that percentage has not yet
been set from our affiliate. We estimate that your initial purchases will
account for 7-8% of your initial investment, and perhaps 90% or more of all your
purchases while operating the business. You purchase all products at a wholesale
cost, and sell them at retail pricing. You have discretion as to the prices you
charge customers for your products although we recommend suggested retail
pricing. We may add, delete or modify products from time to time, for which you
will be notified in writing.

MARKETING MATERIALS. We are currently the only suppliers of marketing materials
in the system. These promotional materials are designed to promote sales within
the Airsopure product line for your benefit. If you desire to obtain promotional
materials or advertisements from other suppliers, you must submit the materials
to Airsopure for our approval in writing prior to use (Franchise Agreement
Section 10.01). We will determine whether such other suppliers can be approved
within 30 days, in writing to you, based on quality, pricing, delivery time, and
other factors. Our criteria are available in writing in our Manual.

COMPUTER HARDWARE CONFIGURATION AND SOFTWARE SPECIFICATION. We may specify
certain computer hardware in order to be compatible for polling and transferring
information from your computer system to ours. We use approved vendors, and may
approve others, provided they can demonstrate compatible configuration with our
system in a timely basis. We derive no revenue from these vendors. Computer
hardware approval criteria are available in writing in our Manual. The software
is in development, and if and when offered will be offered to all franchise
owners on the same basis. The software is owned by a third party company, and
customized for our use. If and when it is available, it will be a required
product for you to use, without exception,. We may derive no revenue from the
purchase of the software; however, if we do, it will be to offset the
development costs. Of the estimated $3,000 cost for software, up to 10% may go
to Airsopure for development costs. This will represent less than 1% of you
initial or ongoing expenses or purchases. Upgrades and maintenance costs will be
paid to a third party.

Airsopure relies totally upon its franchise network for the sale of its
products. You will derive some ongoing benefit from the purchase of products
from us, including maintaining your franchise, and sharing information and
techniques with other franchise owners. There is no quota for your sales.

--------------------------------------------------------------------------------

                                     ITEM 9
                            FRANCHISEE'S OBLIGATIONS

THIS TABLE LISTS YOUR PRINCIPAL OBLIGATIONS UNDER THE FRANCHISE AND OTHER
AGREEMENTS. IT WILL HELP YOU FIND MORE DETAILED INFORMATION ABOUT YOUR
OBLIGATIONS IN THESE AGREEMENTS AND IN OTHER ITEMS OF THIS OFFERING CIRCULAR.

                                       4
<PAGE>

<TABLE>
<CAPTION>
              --------------------------------------- ------------------------------ -------------------------
                            OBLIGATION                    SECTION IN FRANCHISE           ITEM IN OFFERING
                                                                AGREEMENT                    CIRCULAR
              --------------------------------------- ------------------------------ -------------------------
<S>                                                   <C>                            <C>
              Site selection and acquisitions/lease   Section 4                      Item 11
              --------------------------------------- ------------------------------ -------------------------
              The pre-opening purchases/leases        Section 5                      Items 7, 8
              --------------------------------------- ------------------------------ -------------------------
              Site development and other              Sections 4 and 5               Items 7, 8
              pre-opening requirements
              --------------------------------------- ------------------------------ -------------------------
              Initial and on-going training           Sections 5.C.                  Items 7, 11
              --------------------------------------- ------------------------------ -------------------------
              Opening                                 Sections 5 and 6               Items 7, 11
              --------------------------------------- ------------------------------ -------------------------
              Fees                                    Section 3                      Items 5, 6, 7
              --------------------------------------- ------------------------------ -------------------------
              Compliance with standards and           Sections 5, 6, 7, 8 and 9      Items 8, 11, 14
              policies/operating manual.
              --------------------------------------- ------------------------------ -------------------------
              Trademarks and proprietary              Section 7                      Items 13, 14
              information.
              --------------------------------------- ------------------------------ -------------------------
              Restrictions on products/services       Sections 5 and 6               Item 8
              offered
              --------------------------------------- ------------------------------ -------------------------
              Warranty and customer service           none                           none
              requirements
              --------------------------------------- ------------------------------ -------------------------
              Territorial development and sales       none                           none
              quotas
              --------------------------------------- ------------------------------ -------------------------
              On-going product/purchases              Section 6                      Item 8
              --------------------------------------- ------------------------------ -------------------------
              Maintenance, appearance and             Section 4 and 5                Items 16, 17
              remodeling requirements
              --------------------------------------- ------------------------------ -------------------------
              Insurance                               Section 11                     Items 7, 11
              --------------------------------------- ------------------------------ -------------------------
              Advertising                             Sections 7 and 10              Items 6, 11
              --------------------------------------- ------------------------------ -------------------------
              Indemnification                         Section 17                     Item 11
              --------------------------------------- ------------------------------ -------------------------
              Owner's participation/                  Section 5                      Item 15
              management/staffing
              --------------------------------------- ------------------------------ -------------------------
              Records and Reports                     Section 9                      Item 6
              --------------------------------------- ------------------------------ -------------------------
              Inspection and audit                    Section 9                      Items 6, 11
              --------------------------------------- ------------------------------ -------------------------
              Transfer                                Section 12                     Item 17
              --------------------------------------- ------------------------------ -------------------------
              Renewal                                 Section 2                      Item 17
              --------------------------------------- ------------------------------ -------------------------
              Post-termination obligations            Sections 15 and 16             Item 17
              --------------------------------------- ------------------------------ -------------------------
              Non-competition covenants               Section 16                     Item 17
              --------------------------------------- ------------------------------ -------------------------
              Dispute resolution                      Section 18                     Item 17
              --------------------------------------- ------------------------------ -------------------------
</TABLE>

                                     ITEM 10
                                    FINANCING

Airsopure does not offer direct or indirect financing. We do not offer any
notes, leases or any obligation.

                                     ITEM 11
                            FRANCHISOR'S OBLIGATIONS

Except as listed below, we need not provide any assistance to you.

A. PRE-OPENING OBLIGATIONS

Before you open your franchised business, we will:
1) Designate a geographic area to be your designated territory (your "Exclusive
Territory") prior to your execution of the Franchise Agreement (Franchise
Agreement Paragraph C of Recitals and Section 1.01);
2) Provide you, on loan, one copy of Airsopure's Operations Manual (Franchise
Agreement Section 8.01);
3) Evaluate your request of the proposed location for the Center within 7
working days from receipt of your written request for approval, provided you
have met the listed criteria for office/showroom locations in the Operations
Manual (Franchise Agreement Section 4.01.A);
4) Within four months of your signing your Franchise Agreement, provide an
initial training program for you as described below (Franchise Agreement Section
4.01.C.); and
5) Provide you with specifications for inventory, supplies and equipment in the
Operations Manual (Franchise Agreement Section 4.01.B).

B. CONTINUING OBLIGATIONS

1. During the operation of the Center, we will:

A.) Provide daily advisory assistance by telephone for the first two weeks after
you begin operation

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of the Center (Franchise Agreement Section 4.02.A);
B.) Provide continuing consultation and advisory assistance to you in the manner
and at such time as we deem advisable concerning the operation, advertising and
promotion of the Center (Franchise Agreement Section 4.02.B);
C.) Provide you with any updates, revisions and amendments to the Operations
Manual (Franchise Agreement Section 4.02.C. and 8.03.);
D.) Assist you with product management and inventory controls (Franchise
Agreement Section 4.02.D and Section 6);
E.) Provide you at Airsopure's sole discretion such continuing training programs
as we deem appropriate (Franchise Agreement Section 4.02.E.); and
F.) Defend you at our expense against any third-party claim or lawsuit involving
your use of the Airsopure trademarks as long as you have used the Airsopure
trademarks as the Franchise Agreement requires (Franchise Agreement 7.05).

2. Advertising Program

A.) Local Advertising. Airsopure requires you to spend at least 2% of your Gross
Sales on approved local advertising, including direct mail, flyers, Yellow
Pages-Registered Tradmark- ads and other media, beginning with the date you open
your Center (Franchise Agreement Section 10.04.). You do not send these funds to
Airsopure. You may develop advertising materials for your own use at your cost,
but Airsopure must approve the advertising materials in advance in writing
before use (Franchise Agreement Section 10.01). You must account to us for the
advertising you place each month, in writing, as part of your quarterly
advertising plan.

B.) Advertising Fund. Airsopure may at its discretion provide placement of
advertising for the benefit of the entire Airsopure system, beginning January 1,
2001, unless Airsopure, in its sole discretion delays the start date (Franchise
Agreement Section 3.01D). You must pay this 2% of Gross Sales monthly to
Airsopure when the Fund is activated. There is no plan for an advertising
council. Airsopure will make all marketing decisions regarding this Fund. Most
of the advertising will be placed on a regional or national basis, typically by
management of Airsopure or by Airsopure's public relations company. Airsopure
anticipates that most of its advertising will be created by an outside
advertising agency.

Airsopure reserves the right to use the monthly fees collected for the
Advertising Fund to place advertising in regional and/or national media
(including broadcast, print or other media). All amounts contributed to the
Advertising Fund are used to promote the products sold by franchisees and are
not used to sell additional franchises. Any amount remaining in the Advertising
Fund at the end of a fiscal year may be spent in subsequent fiscal years. An
accounting of the Advertising Fund expenditures is available to you upon request
following the close of each fiscal year (May 31) (Franchise Agreement Section
10.03.A.). No Advertising Fund fees will be spent for the solicitation of
franchise sales. (See also Items 6, 8 and 9 of this offering circular.)

2. Computer Hardware and Software

Airsopure requires that you use and maintain a standard computer package of
hardware and software. You will purchase a Windows 2000 compatible system,
Pentium II based, with modem and sufficient memory to handle normal business
activities, and a color inkjet printer. Software programs will include
off-the-shelf accounting, lead management, word processing and graphics programs
(Microsoft Office 2000) to be used by all franchisees. We reserve the right to
require your use of customized software developed by a third party company
specifically for our franchisees, although such software has not been developed.
When such software is made available to all franchisees, you will be required to
install and use this software. We may impose a reasonable training fee paid to a
third party to train you (and your staff) on this software. You will be
obligated to use this software for lead, sales and product tracking and
accounting purposes. We estimate that such software may cost up to $3,000 to
purchase, and up to several hundred dollars per year for support and upgrades
from a third party. We will have independent modem access to your lead, sales
and product data; however, we will not access your financial records other than
as noted, unless we have your permission or we have notified you in writing that
you are being audited by us, within 24 hours of such notification.

We are not obligated by the Franchise Agreement or any other agreement to
provide any other supervision, assistance or services in connection with the
ongoing operation of the franchised business. Any duty or obligation imposed on
us by the Franchise Agreement or otherwise may be

                                       6
<PAGE>

performed by any of our designees, employees or agents, as we may direct (See
also Item 6.).
You will be given an opportunity to review the Franchise Operations Manual
before you sign the Franchise Agreement.

C. YOUR CENTER LOCATION

Airsopure assigns you an Exclusive Territory (See Item 12.) in which you must
find an acceptable Center location in an retail office/showroom facility. We
must approve your proposed Center location, based on the location meeting
certain criteria including lease costs, terms, size and configuration,
visibility, traffic count, proximity within your territory to your prospective
customers, and other factors. Once you find at least 3 qualified sites, we will
approve one of these sites within 7 days. You must find a suitable Center site
within 90 days of signing the Franchise Agreement, unless we mutually agree
otherwise. If we mutually cannot agree on a Center location, within 4 months, we
may at our sole discretion a) extend your search time, b) exchange your
territory, or c) terminate your Franchise and refund up to 70% of your Franchise
Fee.

D. OPENING TIME FRAME

The typical length of time from the date you sign the Franchise Agreement until
the date you open a Center for business is 4 to 5 months or sooner, depending on
your ability to find a suitable Center location for approval, and other factors.

E. TRAINING PROGRAM

We will conduct our Indoor Air Quality (IAQ) Specialist and Center management
training program at out Dallas, Texas offices and/or our company-owned Center
facility in Dallas. You will learn all facets of the Airsopure Center business
from air diagnostics to product sales and business management techniques. We
will conduct such training programs on an as needed basis throughout the year,
based upon the number of franchisees to be trained and available trainers'
schedules. Training will be supervised by John Potter (See Item 2.), and will
also include industry trade specialists, as well as qualified advertising and
air purification equipment professionals as guest lecturers. All instructors
work for us, are approved vendors or approved consultants.

You will be responsible for travel, lodging, salary and personal expenses for
yourself and one of your employees during the 5 day training program. The
initial training is mandatory, and you and your employee must complete it to our
satisfaction. If neither of you completes the training within 90 days after
signing the Franchise Agreement, or if either of you fails the training, at our
sole option we may a) require you or your employee to retake the training, b)
require you to find an acceptable replacement for you or your employee for
training, or c) terminate your Franchise and refund up to 60% of your Franchise
Fee.

  New Product courses, marketing and sales updates and additional field training
will be required of you and/or your employee from time to time, as required
uniformly of all franchisees. These additional training sessions will be solely
at your cost for travel and lodging, unless otherwise mutually agreed.

--------------------------------------------------------------------------------
The Operations Manual will be used for reference during the training program. As
of the date of this offering circular, the Initial Training required by
Airsopure before opening your Center consists of the following:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
          SUBJECT               TIME             HOURS OF          HOURS OF             INSTRUCTOR
                                BEGUN            CLASSROOM        ON-THE-JOB
                                                 TRAINING          TRAINING
-----------------------------------------------------------------------------------------------------------
<S>                         <C>                  <C>               <C>           <C>
Orientation                 Monday                   1                 0         CJ Comu
                                                                                 J Potter
-----------------------------------------------------------------------------------------------------------
The Market                  Monday                   1                 0         J Potter
-----------------------------------------------------------------------------------------------------------
The Product & Service       Monday                   1                 2         Cliff Spicer
-----------------------------------------------------------------------------------------------------------
Field Application           Monday                   4                 2         John Harris
                                                                                 S Hampton
-----------------------------------------------------------------------------------------------------------
Manufacturing               Tuesday                  0                 2         C Spicer
Warehousing
-----------------------------------------------------------------------------------------------------------
Product Knowledge           Tuesday                  1                 1         J Potter
-----------------------------------------------------------------------------------------------------------
Advertising                 Tuesday                  4                 2         S Hampton
                                                                                 Direct Mail Speaker
-----------------------------------------------------------------------------------------------------------

                                       7
<PAGE>

-----------------------------------------------------------------------------------------------------------
Administration              Wednesday                1                 4         Susan Potter
-----------------------------------------------------------------------------------------------------------
Computer system             Wednesday                4                 4         S Potter, Guest
-----------------------------------------------------------------------------------------------------------
Sales Marketing             Thursday                 2                 6         S Hampton
-----------------------------------------------------------------------------------------------------------
Sales Marketing             Friday                   2                 6         S Hampton
-----------------------------------------------------------------------------------------------------------
Totals                      5 Days                  21                29
-----------------------------------------------------------------------------------------------------------
</TABLE>

                                     ITEM 12
                                    TERRITORY

You will be granted an Exclusive Territory for the operation of your franchised
Center, with a minimum population base of 500,000, as defined by zip codes or
other common boundaries. You are granted one Center location within your
Exclusive Territory. You may relocate your Center, at your sole expense, within
your territory upon 30 days prior notice to us in writing stating the reasons
for such relocation. Airsopure will not franchise or operate company-owned
Centers within your Exclusive Territory using our names, logos or marks. We may
franchise or operate company-owned Centers outside your Exclusive Territory
using our names, logos or marks. You may not advertise or sell Airsopure
products utilizing either the World Wide Web (internet) or through printed
catalogues. Any sales outside your territory must be first approved in writing
or by facsimile by Airsopure. We will not solicit or accept sales within your
territory without notifying you in writing, and arranging nominal compensation
to you which we solely determine appropriate.

Airsopure, Inc., an affiliate of Airsopure, has in the past licensed outlets for
the sales of similar products, although these products were primarily for
commercial application, and not directed at the residential market. While
Airsopure, Inc. is not granting any franchises or other licenses for such
outlets, these existing outlets may, from time to time, sell similar products
within your Exclusive Territory. In such case Airsopure will notify you in
writing, and arrange compensation to you which we solely determine appropriate.
Airtech International Group, Inc. also reserves the right in the future to grant
and make marketing arrangements with other companies for the marketing of
similar products which may be sold under a different trademark, but not the same
trademark as being granted in this franchise. If this happens in the future,
although there is no set timetable, Airsopure will notify you in writing, and
arrange compensation to you which we solely determine appropriate.

Unless you have executed a separate Development Agreement, you may not acquire
additional franchises within your territory. There is no minimum sales quota.
You maintain rights to your territory even though the population increases.

                                     ITEM 13
                                   TRADEMARKS

We grant you the right to operate your Center under the name and trademark
"Airsopure." By "trademark," we mean trademarks, trade names, service marks and
logos used to identify your franchised business, especially the name "Airsopure"
and its design logo, and the service mark "The Essence of Clean Air." Airsopure,
Inc. was granted a trademark on the Principal Register with the United States
Patent and Trademark Office for "Airsopure" on November 9, 1999, Registration
Number 2,291,477. Airsopure has a Trademark License Agreement (Exhibit E) with
Airsopure, Inc. granting Airsopure the right to use and franchise others to use
the names, logos and trade dress for Airsopure.

You must follow our rules when you use Airsopure's trademark. You cannot use our
trademark as part of your corporate legal name or with modifying words, designs
or symbols except for those which we license to you. You may not use our
trademark in connection with the sale of an unauthorized product or in a manner
not authorized in writing by us.

You must notify us immediately when you learn about an infringement of or
challenge to your use of our trademark, and you must cooperate with Airsopure in
defending or settling any litigation. We will take the action we deem necessary
to preserve and protect the ownership and validity of the trademark. Airsopure
will defend and indemnify you in legal proceedings involving the licensed
trademark filed by third parties alleging infringement provided that you have
used Airsopure's trademark as authorized by the Franchise Agreement. We reserve
the right to substitute different trademarks for use in identifying the
"Airsopure" system without liability to you.

                                       8
<PAGE>

We do not know of any infringing uses of our name or trademarks that could
materially affect your use of Airsopure's trademark.

                                     ITEM 14
                 PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION

There are no patents or copyrights currently registered or which we have applied
for which are material to the franchise, but you can use the proprietary
information in our Operations Manual. Although we have not filed an application
for a copyright registration for the Operations Manual, we claim a copyright and
the information is proprietary. Section 8., of the Franchise Agreement describes
the restrictions on your use of our Operations Manual and your obligation to
maintain the contents of the Operations Manual in confidence. All new air
purification products, including those under current testing will have patents
filed with the US Patent and Trademark Office at our discretion.

We have no obligation under the Franchise Agreement to defend the above
described copyrights or to defend you in any litigation relating to these
materials, and you have no obligation to report infringement of these to us. We
will take such action as we deem appropriate, and we have the right to control
all litigation involving these copyrights/patents.

                                     ITEM 15
                        OBLIGATION TO PARTICIPATE IN THE
                             ACTUAL OPERATION OF THE
                               FRANCHISE BUSINESS

You must personally supervise the Center or hire a fully-trained full time
manager to devote his/her full time and best efforts to run the Center. The
manager must sign a written agreement to maintain confidentiality of the
proprietary information described in Item 14 and to comply with the covenants
not to compete described in Item 17.

If you are a corporation, the individual who owns controlling interest in the
corporation must sign a personal guarantee (Exhibit F) of all of the
corporation's obligations to Airsopure.

                                     ITEM 16
                            RESTRICTIONS ON WHAT THE
                              FRANCHISEE MAY SELL

You must offer and sell only those products and services that Airsopure have
been approved (see Items 8 and 9). You must offer all products that Airsopure
designates as required for all franchisees. These required products and services
currently include air purification equipment and air filters. Airsopure has the
right to add additional authorized products and services that you are required
to offer. There are no limits on Airsopure's right to do so, except that the
investment required by a franchisee (for new display equipment, supplies and
open inventory) will not exceed $10,000 per year. You are restricted within your
territory with respect to the customers to whom you may provide products and
services (see Item 12).

--------------------------------------------------------------------------------

                                     ITEM 17
              RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION

This table lists certain important provisions of the franchise and related
agreements. You should read the provisions in the agreements attached to this
offering circular.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
               PROVISION                  SECTION IN FRANCHISE                         SUMMARY
                                                AGREEMENT
---------------------------------------------------------------------------------------------------------------------
<S>                                      <C>                     <C>
a. Terms of the franchise                2                       10 years
---------------------------------------------------------------------------------------------------------------------
b. Renewal or extension of               2                       2 renewal terms of 10 years, subject to
the term                                                         contractual requirements
---------------------------------------------------------------------------------------------------------------------
c. Requirements for you to               2                       Notice, good standing, training, upgrade
renew or extend                                                  business, sign release and new agreement, pay fees
---------------------------------------------------------------------------------------------------------------------
d. Termination by you                    None                    None
---------------------------------------------------------------------------------------------------------------------
e. Termination by Airsopure without      None                    None
cause
---------------------------------------------------------------------------------------------------------------------
f. Termination by Airsopure with         14                      Can terminate only if you default
---------------------------------------------------------------------------------------------------------------------

                                       9
<PAGE>

---------------------------------------------------------------------------------------------------------------------
cause
---------------------------------------------------------------------------------------------------------------------
g. "Cause" defined--defaults             14                      You have 30 days to cure: failure to make
which can be cured                                               payments, submit reports, maintain standard or
                                                                 follow procedures; legal violations; or any other
                                                                 default not listed in Section 14.01.A.
---------------------------------------------------------------------------------------------------------------------
h. "Cause" defined--defaults             14                      Includes insolvency; conviction of felony;
which cannot be cured                                            unauthorized transfer; disclosure of confidential
                                                                 information; failure to complete training;
                                                                 falsified records and reports; repeated defaults
                                                                 even if cured; other
---------------------------------------------------------------------------------------------------------------------
i. Your obligations on                   15 and 16               Includes complete identification; payment of
termination/non-renewal                                          amounts due; return of proprietary information;
                                                                 cessation of operation; (also see r. below)
---------------------------------------------------------------------------------------------------------------------
j. Assignment of the contract by         12                      No restriction on our right to assign
Airsopure
---------------------------------------------------------------------------------------------------------------------
k. "Transfer" by you--                   12                      Includes transfer of the contract or assets or
definition                                                       ownership change
---------------------------------------------------------------------------------------------------------------------
l. Our approval of transfer by           12                      We have the right to approve all
you                                                              transfers but will not unreasonably
                                                                 withhold approval

---------------------------------------------------------------------------------------------------------------------
m. Conditions for our approval           12                      Includes payment of amounts due; no
                                                                 defaults; release signed; new franchisee
                                                                 qualifies and signs new agreement;
                                                                 upgrade business; training; transfer fees
                                                                 (see also r. below)
---------------------------------------------------------------------------------------------------------------------
n. Our right of first refusal to         12                      We can match any offer for your
acquire your business                                            business
---------------------------------------------------------------------------------------------------------------------
o. Our option to purchase your           12                      Upon expiration or termination we have
business                                                         the right to acquire certain assets
---------------------------------------------------------------------------------------------------------------------
p. Your death or disability              12                      Franchise may be transferred to heirs or
                                                                 to approved third party within 6 months
                                                                 with Airsopure Approval
---------------------------------------------------------------------------------------------------------------------
q. Non-competition covenants             13                      No involvement in competing business
during the term of the franchise
---------------------------------------------------------------------------------------------------------------------
r. Non-competition covenants             16                      No competing business for two years
                                                                 within 25 miles of Designated Territory
                                                                 or any other Airsopure franchise
---------------------------------------------------------------------------------------------------------------------
s. Modification of the                   18                      No modifications generally but
agreement                                                        Operations Manual and products subject
                                                                 to change

---------------------------------------------------------------------------------------------------------------------
t. Integration/merger clause             18                      Only the terms of the Franchise
                                                                 Agreement is binding (subject to state
                                                                 law).  Any other promises may not be enforceable.
---------------------------------------------------------------------------------------------------------------------
u. Dispute resolution by                 19                      Non-binding mediation prior to other legal actions
arbitration or mediation                                         by either party
---------------------------------------------------------------------------------------------------------------------
v. Choice of forum                       18                      Litigation must be in Texas
---------------------------------------------------------------------------------------------------------------------
w. Choice of law                         18                      Texas law applies
---------------------------------------------------------------------------------------------------------------------
</TABLE>

These states have statutes which may supersede the Franchise Agreement in your
relationship with us including the areas of termination and renewal of your
franchise: ARKANSAS [Stat. Section 70-807], CALIFORNIA [Bus. & Prof. Code
Sections 20000-20043], CONNECTICUT [Gen. Stat. Section 42-133e et seq.],
DELAWARE [Code, tit.], HAWAII [Rev. Stat. Section 482E-1], ILLINOIS [Rev. Stat.
Chapter 121 _ par 1719-1720], INDIANA [Stat. Section 23-2-2.7], IOWA [Code
Sections 523H.1-523H.17, MICHIGAN [Stat. Section 19.854 (27)], MINNESOTA [Stat.
Section 80C.14], MISSISSIPPI [Code Section 75-24-51, MISSOURI [Stat. Section
407.400], NEBRASKA [Rev. Stat. Section 87-401],

                                       10
<PAGE>

NEW JERSEY [Stat. Section 56:10-1], SOUTH DAKOTA [Codified Laws Section
37-5A-51], VIRGINIA [Code 3.1-557-574-13.1-564], WASHINGTON [Code Section
19.100.180], WISCONSIN (Stat. Section 135.03]. These and other states may have
court decisions which may supersede the Franchise Agreement in your relationship
with us, including the areas of termination and renewal of your franchise. SEE
APPENDIX "A" REGARDING CERTAIN PROVISIONS OF CALIFORNIA LAW.

                                     ITEM 18
                                 PUBLIC FIGURES

We do not use any public figure to promote our franchise.

                                     ITEM 19
                                 EARNINGS CLAIMS

Airsopure does not furnish or authorize its salespersons to furnish any oral or
written information concerning the actual or potential sales, cost, income or
profits anticipated from operation of an Airsopure Center. Actual results will
vary from Center to Center, and we cannot estimate the results of any particular
franchise.

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
                                     ITEM 20
                                 LIST OF OUTLETS

                 FRANCHISED CENTER STATUS SUMMARY FOR YEAR 1999

----------------------------------------------------------------------------------------------------------------------
    STATE       TRANSFERS     CANCELED OR         NOT         REACQUIRED      LEFT THE      TOTAL       FRANCHISES
                               TERMINATED       RENEWED           BY           SYSTEM     FROM LEFT      OPERATING
                                                              AIRSOPURE        OTHER       COLUMNS      AT YEAR END
----------------------------------------------------------------------------------------------------------------------
<S>             <C>           <C>               <C>           <C>             <C>         <C>           <C>
    Texas           0              0               0              0              0            0              0
----------------------------------------------------------------------------------------------------------------------
    Totals          0              0               0              0              0            0              0
----------------------------------------------------------------------------------------------------------------------
</TABLE>

Note: All numbers are as of December 31 for each year. Airsopure is a new
franchise offering. There were not any franchises operating or sold in 1999.

                  STATUS OF COMPANY OWNED CENTERS FOR YEAR 1999

<TABLE>
<CAPTION>
    ----------------------------- ---------------------------- --------------------------- ----------------------------
               STATE                    CENTERS CLOSED               CENTERS OPENED               TOTAL CENTERS
                                          DURING YEAR                 DURING YEAR                   OPERATING
                                                                                                   AT YEAR END
    ----------------------------- ---------------------------- --------------------------- ----------------------------
<S>                               <C>                          <C>                         <C>
    Texas                                      0                           0                            0
    ----------------------------- ---------------------------- --------------------------- ----------------------------
    Totals                                     0                           0                            0
    ----------------------------- ---------------------------- --------------------------- ----------------------------
</TABLE>

                    PROJECTED OPENINGS AS OF FEBRUARY 1, 2000

<TABLE>
<CAPTION>
 ---------------------------------------------------------------------------------------------------------------
       STATE             FRANCHISE AGREEMENTS          PROJECTED FRANCHISED            PROJECTED COMPANY
                      SIGNED BUT CENTER NOT OPEN      NEW CENTERS IN THE NEXT          OWNED OPENINGS IN
                                                            FISCAL YEAR                 NEXT FISCAL YEAR
 ---------------------------------------------------------------------------------------------------------------
<S>                   <C>                             <C>                              <C>
 Arizona                          0                              1                             0
 ---------------------------------------------------------------------------------------------------------------
 California                       0                              1                             0
 ---------------------------------------------------------------------------------------------------------------
 Colorado                         0                              1                             0
 ---------------------------------------------------------------------------------------------------------------
 Florida                          0                              1                             0
 ---------------------------------------------------------------------------------------------------------------
 Georgia                          0                              1                             0
 ---------------------------------------------------------------------------------------------------------------
 New Jersey                       0                              1                             0
 ---------------------------------------------------------------------------------------------------------------
 Texas                            0                              1                             1
 ---------------------------------------------------------------------------------------------------------------
 Totals                           0                              7                             1
 ---------------------------------------------------------------------------------------------------------------
</TABLE>

                  ITEM 21                   FINANCIAL STATEMENTS

                                       11
<PAGE>

Exhibit D is the audited financial statement for Airsopure International Group,
Inc., as of February 1, 2000, although the fiscal year for Airsopure ends on May
31.

                                     ITEM 22
                                    CONTRACTS

The following documents and contracts are part of this offering circular as
Exhibits:

State Administrators                        Exhibit A
Agents for Service of Process               Exhibit B
Franchise Agreement                         Exhibit C
Financial Statement                         Exhibit D
Trademark License Agreement                 Exhibit E
Personal Guarantee                          Exhibit F
Confidentiality Agreement                   Exhibit G
Development Agreement                       Exhibit H

                                     ITEM 23
                                     RECEIPT

The last two pages of this Offering Circular are detachable Receipts
acknowledging receipt of this Offering Circular (one for your records, one for
ours).

                                       12
<PAGE>

                                   EXHIBIT E
                           TRADEMARK LICENSE AGREEMENT

This Trademark License Agreement ("License Agreement") is made and entered into
effective as of (although not necessarily on ) January 1, 2000 by and between
Airsopure, Inc., a Texas corporation with its principal place of business at
15400 Knoll Trail, Ste. 200, Dallas, TX 75248 ("AI"), and Airsopure
International Group, Inc., a Nevada corporation with its principal place of
business at 15400 Knoll Trail, Ste. 200, Dallas, TX 75248 ("AIGI").

WHEREAS, AI has developed and acquired valuable rights and goodwill in certain
trade names and service marks including the name and mark "Airsopure", the
service mark attached hereto as Attachment A, and all logos, insignias, and
trade dress associated therewith.

WHEREAS, AI owns the trademark on file with the United States Patent and
Trademark Office for the national registration of the service mark "Airsopure"
and all goodwill associated therewith.

WHEREAS, the above-described trade name, trademark, service mark, logo,
insignia, trade dress, registrations, and applications, together with all
goodwill and rights associated therewith, are hereinafter sometimes collectively
referred to as the "Marks".

WHEREAS, AI desires to grant AIGI a non-exclusive license to use and sublicense
the Marks in connection with the business to be conducted by AIGI and its
sublicensees, subject to AI's right to control the standard of services offered
under the Marks and subject to AI's right to utilize the Marks for its own
account.

NOW, THEREFORE, for and in consideration of the sum of $10.00 and other good and
valuable consideration, the receipt and sufficiency of which are acknowledged
and confessed: AI and AIGI hereby agree as follows:

1. AI hereby grants to AIGI the perpetual prepaid right to use the Marks on a
worldwide basis under the terms and conditions set forth herein. The license
hereby granted shall be non-exclusive; save and except that AI reserves the
right to use the Marks for its own account in accordance with Paragraph 7
hereof. AIGI hereby accepts such license and agrees to be bound by and subject
to the terms and conditions hereof.

2. In order to protect the goodwill associated with the Marks, and in order to
prevent any deception to the public, AIGI shall insure that all services
provided under the Marks shall conform to such standards and specifications as
to quality as may be prescribed by AI and approved by AIGI from time to time. AI
and AIGI agree that the license of the Marks shall be limited to the promotion
and operation of Airsopure Centers by AIGI or its licensees, the promotion,
marketing, and selling of Airsopure franchises by AIGI or its sublicensees, and
any other use necessary or incident thereto. Any other use of the Marks shall
require the prior written consent of AI, which consent shall not be unreasonably
withheld.

3. AI specifically authorizes AIGI to sublicense the Marks to third parties
which own and operate "Airsopure" Centers in retail outlets pursuant to
Franchise Agreements entered into with AIGI. AIGI agrees that it shall
diligently monitor its sublicensees' use of the Marks in order to insure that
all service provided under said Marks conforms to such standards and
specifications as to quality which may be prescribed by AI and approved by AIGI.
AI specifically acknowledges that the restrictions on the use of the Marks set
forth in AIGI's franchising program comply with AI's standards and
specifications. AIGI agrees to notify AI in writing of any unauthorized use of
the Marks by any third parties.

4. AIGI acknowledges that AI is the sole owner of the Marks and that all
goodwill arising from the use of said Marks by AIGI shall inure to the benefit
of AI. AI shall have the right to inspect and observe the uses made by AIGI or
its sublicenses of the Marks, and AIGI agrees to supply AI upon request,
specimens of its use of the Marks.

5. AI will maintain in good standing and police the Marks against any infringing
use. At the request of AIGI, AI will file suit or take appropriate legal action
against infringing third parties and/or defend the Marks against conflicting
claims asserted by third parties. AI shall give AIGI prompt written notice of
any third party claim asserted or of any infringing use by any third party with
respect to the Marks, shall consult with AIGI with respect to policing or
defending the Marks, and shall allow AIGI to participate in and become a party
to any litigation or proceeding relating to the Marks.

6. AI represents and warrants to AIGI that it will diligently maintain a
federally registered service mark for Airsopure.

7. AI warrants and represents to AIGI that its use of the Marks will be limited
to the geographical areas in which neither AIGI nor any licensee of AIGI is
operating a Airsopure Center. AI agrees that it shall not utilize the Marks nor
further license the use of the Marks in any location or locations which is
within the assigned territory of any licensee of AIGI under a validly existing
Franchise Agreement, unless AIGI makes arrangements with such licensee.

8. Any party alleging a default thereunder shall give the defaulting party
written notice detailing with specificity the nature of the default and
affording the defaulting party a thirty (30) day period in which to cure such
default. In the event the defaulting party fails to cure such default within
such thirty (30) day period, the defaulting party shall have the right to
terminate this License by written notice to the nondefaulting party and/or
pursue such relief or remedies as may be available at law or in equity. Upon
termination of this License, the rights of AIGI or its licenses to use the Marks
shall be modified as follows: (i) AIGI shall no

                                       1
<PAGE>

longer be entitled to utilize or license to new franchisees the right to use the
Marks, (ii) AI shall be entitled to use and license to third parties the right
to use the Marks, (iii) AIGI shall, at AI's request, assign to AI AIGI's right,
title and interest in and to all Franchise Agreements with franchisees; and (iv)
any then existing franchisee of AIGI to whom the right to utilize the Marks has
been licensed may continue to utilize the Marks until the expiration of the term
of its Franchise Agreement and any renewal or option periods available or
afforded to such franchisee at law or by agreement.

9. Any notice required or permitted to be given hereunder shall be delivered by
United States Mail via certified mail, return receipt requested, addressed to
the appropriate party at the address for such party set forth hereinabove, and
shall be deemed received five (5) days following deposit in a regularly
maintained receptacle for the United States mail, postage prepaid, and delivered
as aforesaid. Either party may change their address by notice hereunder.

10. This License, and the rights and obligations of the parties hereunder, shall
continue for an indefinite term unless and until the parties otherwise agree in
writing.

11. Except for AIGI's right to license the Marks to franchisees, neither party
shall have the right to assign or transfer its rights, duties, privileges and
obligations hereunder without the prior consent of the other party.

12. Each party hereby represents and warrants to the other that the parties
executing this License on their behalf are duly authorized to enter into this
License and that, upon full execution, this License will constitute the legal
and binding agreement of the parties, enforceable in accordance with its terms.

13. This License shall be governed by and construed in accordance with the laws
of the United States of America and the State of Texas and shall be performable
in Dallas County, Texas.

14. Subject to the restrictions against assignment and transfer as set forth
herein, this License shall inure to the benefit of, and shall be binding upon,
the parties hereto and their respective successors and assigns.

15. This License may be modified only by mutual agreement in writing signed by
the parties hereto.

IN WITNESS WHEREOF, the parties hereto have executed this License Agreement as
of the day and year first above set forth.

AIRSOPURE, INC.,
a Texas corporation

By: C.J. Comu (SIGNATURE ON FILE)
    ---------
Title: Chairman

AIRSOPURE INTERNATIONAL GROUP, INC.,
a Nevada corporation

By:  JOHN POTTER  (SIGNATURE ON FILE)
     -----------
Title: President

                                    EXHIBIT A

                                  SERVICE MARK
                                   [GRAPHIC]

                                       2<PAGE>   1
                                                                   EXHIBIT 10.25

                      AMENDED AND RESTATED CREDIT AGREEMENT

                           Dated as of March 14, 2000

                                     between

                       TRANSACT TECHNOLOGIES INCORPORATED

                                       and

                               FLEET NATIONAL BANK
<PAGE>   2
                  AMENDED AND RESTATED CREDIT AGREEMENT dated as of March 14,
2000 between TRANSACT TECHNOLOGIES INCORPORATED, a Delaware corporation (the
"Borrower" and sometimes referred to herein as "TransAct"), and FLEET NATIONAL
BANK, a national banking association organized under the laws of the United
States of America (the "Bank").

                  WHEREAS, the Borrower and the Bank have previously entered
into a Credit Agreement dated as of January 29, 1998, as previously amended,
(the "Original Credit Agreement"); and

                  WHEREAS, the parties hereto intend that this Amended and
Restated Credit Agreement amend and restate the Original Credit Agreement in its
entirety; and

                  WHEREAS, the Borrower desires that the Bank extend credit as
provided herein and the Bank is prepared to extend such credit.

                  NOW THEREFORE, in consideration of the foregoing, which is
incorporated by reference, and other valuable consideration, receipt of which is
acknowledged, the parties, intending to be legally bound, agree as follows:

                    ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS

                  Section 1.1. Definitions. As used in this Agreement, the
following terms have the following meanings (terms defined in the singular to
have a correlative meaning when used in the plural and vice versa):

                  "Acceptable Acquisition" means any Acquisition: (i) which has
been either (A) approved by the Board of Directors of the corporation, or
governing body of any other business entity, which is the subject of such
Acquisition or (B) recommended by such Board or governing body to the
shareholders of such corporation or equity owners of such other business entity;
and (ii) with respect to which the following conditions are satisfied:

                           (a) no Default or Event of Default exists or would
result from such Acquisition;

                           (b) the company or assets acquired involve
substantially the same or similar line of business as the Borrower;

                           (c) the Borrower demonstrates that, on a combined
basis with the acquired assets and/or entity, in accordance with GAAP, it would
have been in compliance with the financial covenants contained in Article 8 on a
trailing four quarters pro forma basis as of the end of the immediately
preceding fiscal quarter; and will be in such compliance prospectively on a pro
forma basis for the next succeeding four fiscal quarters;

                           (d) the Borrower remains as a surviving entity;
<PAGE>   3
                           (e) the total aggregate consideration for all such
Acquisitions (not including reasonable fees and expenses payable by the Borrower
in connection therewith) does not exceed $400,000; and

                           (f) the Bank obtains a perfected security interest in
the acquired assets or in the assets of the acquired company, subject only to
Liens permitted by Section 7.3 hereof.

                  "Acquisition" means any transaction pursuant to which the
Borrower (a) acquires greater than 5% of the equity securities (or warrants,
options or other rights to acquire such securities) of any Person, (b) causes or
permits any Person to be merged into the Borrower, in any case pursuant to a
merger, purchase of assets or any reorganization providing for the delivery or
issuance to the holders of such Person's then outstanding securities, in
exchange for such securities, of cash or securities of the Borrower, or a
combination thereof, or (c) purchases all or substantially all of the business
or assets of any Person.

                  "Affiliate" means any Person: (a) which directly or indirectly
controls, or is controlled by, or is under common control with, the Borrower or
any of their respective Subsidiaries; (b) which directly or indirectly
beneficially owns or holds five percent or more of any class of voting stock of
the Borrower or any of their respective Subsidiaries; (c) five percent or more
of the voting stock of which is directly or indirectly beneficially owned or
held by the Borrower or any of their respective Subsidiaries; or (d) which is a
partnership in which the Borrower or any of their respective Subsidiaries is a
general partner. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise.

                  "Agreement" means this Amended and Restated Credit Agreement,
as amended or supplemented from time to time. References to Articles, Sections,
Exhibits, Schedules and the like refer to the Articles, Sections, Exhibits,
Schedules and the like of this Agreement unless otherwise indicated.

                  "Banking Day" means, a day on which commercial banks settle
payments in (i) New York or London if the payment obligation is calculated by
reference to any LIBO Rate, or (ii) New York, if the payment obligation is
calculated by reference to the Prime Rate.

                  "Borrowing" means any Loan requested by the Borrower
hereunder.

                  "Borrowing Base" means an amount equal to the sum of (a) 85%
of Eligible Receivables (80% from and after December 31, 2000), plus (b) 30% of
Eligible Inventory, provided, however, in no event shall the aggregate amount
under clause (b) exceed $4,000,000, plus (c) $2,000,000 (as an overadvance
allowance) (the "Overadvance"), which Overadvance amount will be reduced by
$500,000 on the last day of each of

                                       2
<PAGE>   4
September, October, November and December, 2000 and will also be reduced dollar
for dollar by the amount of any new equity sold by or contributed to the
Borrower. Unless the Bank shall otherwise determine, the Borrowing Base as of
any date shall be the Borrowing Base set forth on the most current Borrowing
Base Certificate certified and delivered by the Borrower to the Bank. If, at any
time, the Borrowing Base shall exceed the Commitment, for purposes of this
Agreement the Borrowing Base shall be deemed to be equal to the Commitment. The
Bank reserves the right to modify the percentages of Eligible Receivables and
Eligible Inventory against which it will lend under the Borrowing Base formula
above, based on the results of any field examinations of the Borrower conducted
by the Bank.

                  "Borrowing Base Certificate" means a certificate substantially
in the form of Exhibit B hereto or such other form agreed to in writing by the
Bank and the Borrower.

                  "Capital Expenditures" shall mean, in respect of any relevant
period, the dollar amount of gross expenditures (including obligations under
Capital Leases) made for fixed assets, real property, plant and equipment, and
all renewals, improvements and replacements thereto (but not repairs thereof)
incurred during such period, as determined in accordance with GAAP.

                  "Capital Lease" means any lease which has been or should be
capitalized on the books of the lessee in accordance with GAAP.

                  "Change of Control" means any one or more of the following
events:

                           (a) the failure by Bart Shuldman or Richard Cote to
remain active in the day to day senior management of TransAct; or

                           (b) the stockholders of any Borrower shall approve a
plan or proposal for the acquisition of, merger, liquidation or dissolution of
the Borrower, or a sale of more than 25% of its assets in one or a series of
related transactions; or

                           (c) a Person or group of Persons acting in concert
(other than the direct or indirect beneficial owners of the capital stock of any
Borrower as of the date of this Agreement) shall, as a result of a tender or
exchange offer, open market purchases, privately negotiated purchases or
otherwise, have become the direct or indirect beneficial owner (within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended from
time to time) of securities of the Borrower representing 15% or more of the
combined voting power of the outstanding voting securities for the election of
directors or shall have the right to elect a majority of the board of directors
of the Borrower.

                  "Closing Date" means the date this Agreement has been executed
by the Borrower and the Bank.

                  "Code" means the Internal Revenue Code of 1986, as amended
from time to time.

                                       3
<PAGE>   5
                  "Commitment" means the obligation of the Bank to make the
Revolving Loans under this Agreement in the aggregate principal amount of up to
$13,000,000, as such amount may be limited or reduced pursuant to Article 2 or
otherwise modified from time to time.

                  "Consolidated Subsidiary" means any Subsidiary whose accounts
are or are required to be consolidated with the accounts of a Person in
accordance with GAAP.

                  "Current Assets" of any Person at any time means all cash,
Receivables and Inventory of such Person.

                  "Current Funded Bank Debt" means, with respect to any Person,
all Debt of such Person for money borrowed, other than Subordinated Debt.

                  "Current Liabilities" means all liabilities of a Person
treated as current liabilities in accordance with GAAP, including without
limitation (a) all obligations payable on demand or within one year after the
date in which the determination is made and (b) installment and sinking fund
payments required to be made within one year after the date on which
determination is made, but excluding all such liabilities or obligations which
are renewable or extendible at the option of such Person to a date more than one
year from the date of determination.

                  "Debt" means, with respect to any Person: (a) indebtedness of
such Person for borrowed money; (b) indebtedness for the deferred purchase price
of property or services (except trade payables in the ordinary course of
business); (c) Unfunded Benefit Liabilities of such Person; (d) the face amount
of any outstanding letters of credit issued for the account of such person; (e)
obligations arising under acceptance facilities; (f) guaranties, endorsements
(other than for collection in the ordinary course of business) and other
contingent obligations to purchase, to provide funds for payment, to supply
funds to invest in any Person, or otherwise to assure a creditor against loss,
including any contingent obligations under swaps, derivatives, currency
exchanges and similar transactions; (g) obligations secured by any Lien on
property of such Person; and (h) obligations of such Person as lessee under
Capital Leases.

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

                  "Default Rate" means, with respect to the principal of any
Loan and, to the extent permitted by law, 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 or otherwise), a rate per annum during the
period from and including the due date, to, but excluding the date on which such
amount is paid in full equal to four percentage points above the Prime Rate as
in effect from time to time plus the applicable Margin (provided that, if the
amount so in default is principal of a LIBOR Loan and the due date thereof is a
day other than the last day of the Interest Period therefor, the "Default Rate"
for such

                                       4
<PAGE>   6
principal shall be, for the period from and including the due date and to but
excluding the last day of the Interest Period therefor, 4% above the interest
rate for such Loan as provided in Section 2.10 hereof and, thereafter, the rate
provided for above in this definition).

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

                  "EBIT" means, for any Person, for any period, earnings before
Interest Expense and taxes for such Person determined in accordance with GAAP.

                  "EBITDA" means, for any Person, for any period, earnings
before Interest Expense, taxes, depreciation, amortization and extraordinary
items for such Person determined in accordance with GAAP.

                  "Eligible Inventory" means, as of any date of determination
thereof, all Inventory (valued at the lower of cost or its net realizable value
as determined using GAAP) owned by the Borrower, but excluding (a) all Inventory
in which the Bank does not have a first perfected security interest, subject to
no other Lien prior to or on a parity with such security interest, (b) all
Inventory for which warehouse receipts or documents of title have been issued,
unless the same are delivered to the Bank, (c) all work-in-progress, any reserve
for obsolete Inventory and any finished Inventory units housed at customer
locations, and (d) all other Inventory which is determined by the Bank, in the
exercise of its reasonable judgment, to be ineligible for any other reason
generally accepted in the commercial finance business as a reason for
ineligibility. Notwithstanding the preceding sentence, "Eligible Inventory"
shall not include any Inventory not located at premises owned by or leased to or
contracted to the Borrower, unless such Inventory is in transit (and insured) or
the Borrower has made a formal financing statement filing against the consignee
of such Inventory and has given any party claiming of record a security interest
in such consignee's Inventory, or other assets that might include such
Inventory, notice of the Borrower's consignment arrangements with such consignee
or has taken equivalent protective steps satisfactory to the Bank.

                  "Eligible Receivables" means, as of any date of determination
thereof, all Receivables of the Borrower net of the Borrower's customary
reserves, discounts, credits, returns, rebates, allowances or set-offs,
excluding the following:

                  (i) any Receivable unpaid for 90 or more days from the date of
the original invoice;

                  (ii) any Receivable evidenced by chattel paper or an
instrument of any kind unless such chattel paper or instrument is pledged and
delivered to the Bank or unless the total amount of such Receivables at any one
time does not exceed 5% of total Eligible Receivables at such time;

                                       5
<PAGE>   7
                  (iii) any Receivable which is owed by an account debtor which
is insolvent or the subject of any bankruptcy or insolvency proceedings of any
kind or of any other proceeding or action, which might have an adverse effect on
the business of such account debtor;

                  (iv) all Receivables deemed uncollectable by the Borrower or
turned over to collection agencies or outside collection attorneys;

                  (v) any Receivable which is not a valid, legally enforceable
obligation of the account debtor or is subject to any present or contingent, or
any fact exists which is the basis for any future, offset or counterclaim or
other defense on the part of such account debtor;

                  (vi) any Receivable not evidenced by an invoice or other
documentation in form reasonably acceptable to the Bank;

                  (vii) any Receivable which arises out of any transaction
between (A) the Borrower and (B) any Subsidiary or any Affiliate;

                  (viii) any Receivable which is subject to any provision
prohibiting its assignment or requiring notice not theretofor given of or
consent not theretofor obtained to such assignment;

                  (ix) all Receivables arising out of or in connection with
advance billings of a customer's requirements of supplies over a period of time;

                  (x) all Receivables that do not conform to the representations
and warranties contained in Article 2 of the Security Agreement;

                  (xi) all Receivables in which the Bank does not have a first
perfected security interest, subject to no other Lien prior to or on a parity
with such security interest;

                  (xii) all Receivables from an account debtor if more than 50%
of the aggregate Dollar amount of invoices billed with respect to such account
debtor is more than 90 days past due according to the original terms of payment;

                  (xiii) any Receivable which is owed by an account debtor who
has disputed liability or made any claim with respect to any other account due
from such account debtor to the Borrower, except the foregoing exclusion shall
not apply to any account debtor unless and until such disputed amounts equal or
exceed twenty percent (20%) of the aggregate Dollar amount of accounts due from
such account debtor; and

                  (xiv) any Receivable which is determined by the Bank, in the
exercise of its reasonable judgment, to be ineligible for any other reason
generally accepted in the commercial finance business as a reason for
ineligibility.

                                       6
<PAGE>   8
                  "Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.

                  "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, including any rules and regulations
promulgated thereunder.

                  "ERISA Affiliate" means any corporation or trade or business
which is a member of any group of organizations (i) described in section 414(b)
or (c) of the Code of which any Borrower is a member, or (ii) solely for
purposes of potential liability under section 302(c)(11) of ERISA and section
412(c)(11) of the Code and the lien created under section 302(f) of ERISA and
section 412(n) of the Code, described in section 414(m) or (o) of the Code of
which any Borrower is a member.

                  "Event of Default" has the meaning given such term in Section
9.1.

                  "Facility Documents" means this Agreement, the Note, the
Guaranty, the Security Agreement and each of the documents, certificates or
other instruments referred to in Article 4 hereof as well as any other document,
instrument or certificate to be delivered by the Borrower in connection with
this Agreement or in connection with the documents, certificates or instruments
referred to in Article 4, including documents delivered in connection with any
Borrowing.

                  "Forfeiture Proceeding" means any action, proceeding or
investigation affecting the Parent or any of its Subsidiaries or Affiliates
before any court, governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or the receipt of notice by any such party
that any of them is a suspect in or a target of any governmental inquiry or
investigation, which may result in an indictment of any of them or the seizure
or forfeiture of any of their property.

                  "Funded Debt" means, with respect to any Person, all Debt
(senior and subordinated) of such Person for money borrowed, including Capital
Lease obligations.

                  "GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time, applied on a basis
consistent with those used in the preparation of the financial statements
referred to in Section 5.5 (except for changes concurred in by the Borrower's
independent public accountants).

                                       7
<PAGE>   9
                  "Guaranty" shall mean that certain Amended and Restated
Guaranty dated as of the date hereof from each of the Guarantors to the Bank.

                  "Guarantors" shall mean, collectively, TransAct.Com, Inc., a
Delaware corporation, Ithaca Peripherals Limited, a United Kingdom corporation,
and TransAct Technologies International Ltd, a Barbados corporation, and each of
whom may sometimes be referred to individually as a "Guarantor".

                  "Interest Coverage Ratio" means, with respect to any Person,
for any period, the ratio of (i) EBIT, to (ii) Interest Expense plus any
preferred stock dividends.

                  "Interest Expense" shall mean, with respect to any Person, for
any period, the sum, for such Person in accordance with GAAP, of (a) all
interest on Debt that is accrued as an expense during such period (including,
without limitation, imputed interest on Capital Lease obligations), plus (b) all
amounts paid, accrued or amortized as an expense during such period in respect
of interest rate protection agreements, minus (c) all amounts received or
accrued as income during such period in respect of interest rate protection
agreements.

                  "Interest Period" means with respect to any LIBOR Loan, the
period commencing on the date such Loan is made, converted from another type of
Loan or renewed, as the case may be, and ending, as the Borrower may select
pursuant to Section 2.11, on the numerically corresponding day in the first,
second, third, sixth (or if available through the Bank, the ninth or twelfth)
calendar month thereafter, provided that each such Interest Period which
commences on the last Banking Day of a calendar month (or on any day for which
there is no numerically corresponding day in the appropriate subsequent calendar
month) shall end on the last Banking Day of the appropriate calendar month.

                  "Inventory" means all inventory, now or hereafter owned and
wherever located, of the Borrower, including (without limitation) raw materials,
work-in-process, finished goods, supplies and packaging materials.

                  "Lending Office" means the lending office of the Bank set
forth on the signature page.

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

                                       8
<PAGE>   10
(London Time), on the day that is two (2) London Banking Days prior to the
beginning of such interest period.

                  If both the Telerate and Reuters system are unavailable, then
the rate for that date will be determined on the basis of the offered rates for
deposits in U.S. dollars for a period of time comparable to such LIBOR Loan
which are offered by four major banks in the London interbank market at
approximately 11:00 a.m. London time, on the day that is two (2) London Banking
Days preceding the first day of such LIBOR Loan as selected by the Bank. The
principal London office of each of the four major London banks will be requested
to provide a quotation of its U.S. dollar deposit offered rate. If at least two
such quotations are provided, the rate for that date will be the arithmetic mean
of the quotations. If fewer than two quotations are provided as requested, the
rate for that date will be determined on the basis of the rates quoted for loans
in U.S. dollars to leading European banks for a period of time comparable to
such LIBOR Loan offered by major banks in New York City at approximately 11:00
a.m. New York City time, on the day that its two London Banking Days preceding
the first day of such LIBOR Loan. In the event that Bank is unable to obtain any
such quotation as provided above, it will be deemed that LIBOR pursuant to a
LIBOR Loan cannot be determined.

                  In the event that the Board of Governors of the Federal
Reserve System shall impose a Reserve Requirement with respect to LIBOR deposits
of the Bank then for any period during which such Reserve Requirement shall
apply, LIBO Rate shall be equal to the amount determined above divided by an
amount equal to 1 minus the Reserve Requirement.

                  "LIBOR Loan" means any Loan when and to the extent the
interest rate therefor is determined on the basis of the definition "LIBO Rate."

                  "Lien" means any lien (statutory or otherwise), security
interest, mortgage, deed of trust, priority, pledge, negative pledge, charge,
conditional sale, title retention agreement, financing lease or other
encumbrance or similar right of others, or any agreement to give any of the
foregoing.

                  "Loan" means any of the Revolving Loans, and "Loans" means all
of the Revolving Loans.

                  "Margin" means the percentage points to be added to the Bank's
Prime Rate or the then applicable LIBO Rate, in each case based on the then
prevailing Interest Coverage Ratio of the Borrower, on a consolidated basis (the
applicable ratio for each quarter will be the ratio determined as of the last
day of the previous quarter and will be calculated on a rolling four quarters
basis, with the first such calculation to be made in respect of the quarter
ending December 31, 1999, as follows:

                                       9
<PAGE>   11
<TABLE>
<CAPTION>

                                                                           LIBOR MARGIN
                                                                           (PERCENTAGE        PRIME RATE MARGIN
                   INTEREST COVERAGE RATIO OF THE BORROWER                   POINTS)         (PERCENTAGE POINTS)
                   ---------------------------------------                   -------         -------------------
<S>                                                                        <C>               <C>
              Greater than or equal to 6.00                                    1.50                 0.00
              Greater than or equal to 5.00, but less than 6.00                1.75                 0.00
              Greater than or equal to 4.00, but less than 5.00                2.00                 0.00
              Less than 4.00                                                   2.25                 0.00
</TABLE>

Notwithstanding the foregoing, for the period commencing on February 1, 2000,
the date on which the Overadvance became available to the Borrower, and ending
on the date the Overadvance is either terminated, cancelled or repaid in full,
the Margin added to the Prime Rate shall be 75 basis points and the Margin added
to the LIBO Rate shall be 300 basis points.

                  "Multiemployer Plan" means a Plan defined as such in section
3(37) of ERISA to which contributions have been made by the Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA.

                  "Net Income (Loss)" of any Person for any period means the net
income (loss) of such Person for such period determined in accordance with GAAP.

                  "Net Worth" means, with respect to any Person, at any time,
the stockholders' equity of such Person and its Consolidated Subsidiaries
determined on a consolidated basis in accordance with GAAP.

                  "Note" means the Revolving Note.

                  "Notice of Borrowing" shall mean the notice of each Borrowing
described in Section 2.8 and in the form of Exhibit C hereto.

                  "Overadvance" shall have the meaning given thereto under the
definition of "Borrowing Base".

                  "PBGC" means the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.

                  "Person" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture, governmental authority or other entity of whatever nature.

                  "Plan" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by any Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA, other than a
Multiemployer Plan.

                                       10
<PAGE>   12
                  "Prime Rate" means that rate of interest from time to time
announced by the Bank at its office located at 111 Westminster Street,
Providence, Rhode Island 02903, which rate may not be the Bank's lowest or best
rate.

                  "Prime Rate Loan" means any Loan when and to the extent the
interest rate therefor is determined in relation to the Prime Rate.

                  "Receivables" means all accounts owing to a Person arising out
of or in connection with the bona fide sale or lease of goods or services in the
ordinary course of business.

                  "Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as the same may be amended or supplemented from time
to time.

                  "Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System as the same may be amended or supplemented from time
to time.

                  "Regulatory Change" means any change after the date of this
Agreement in United States federal, state, municipal or foreign laws or
regulations (including without limitation Regulation D) or the adoption or
making after such date of any interpretations, directives or requests applying
to a class of banks including the Bank of or under any United States, federal,
state, municipal or foreign laws or regulations (whether or not having the force
of law) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.

                  "Reserve Requirement" means, for any Interest Period for any
LIBOR Loan, the average maximum rate at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained during such
Interest Period under Regulation D by member banks of the Federal Reserve System
in Boston with deposits exceeding $1,000,000,000 against "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting the effect
of the foregoing, the Reserve Requirement shall reflect any other reserves
required to be maintained by such member banks by reason of any Regulatory
Change against (i) any category of liabilities which includes deposits by
reference to which the LIBO Rate for LIBOR Loans is to be determined as provided
in the definition of "LIBO Rate" in this Section 1.1 or (ii) any category of
extensions of credit or other assets which include LIBOR Loans.

                  "Revolving Credit Termination Date" means May 31, 2002;
provided that if such date is not a Banking Day, the Revolving Credit
Termination Date shall be the next succeeding Banking Day (or, if such next
succeeding Banking Day falls in the next calendar month, the next preceding
Banking Day) or (b) the earlier date of termination of the Commitment pursuant
to Section 9.2.

                  "Revolving Loan" means any loan made by the Bank pursuant to
Section 2.1(a), and "Revolving Loans" means all of such loans.

                                       11
<PAGE>   13
                  "Revolving Note" means the promissory note of the Borrower in
the form of Exhibit A hereto evidencing the Revolving Loans made by the Bank
hereunder and all promissory notes delivered in substitution or exchanged
therefor, as amended or supplemented from time to time.

                  "Security Agreement" means the Amended and Restated Security
Agreement dated as of the date hereof by the Borrower in favor of the Bank.

                  "Senior Liabilities" means for any Person at any time, all
Debt, other than contingent liabilities and Subordinated Debt.

                  "Subordinated Debt" means Funded Debt of a Person subordinated
to the Loans on terms satisfactory to the Bank.

                  "Subsidiary" means, with respect to any Person, any
corporation or other entity of which at least a majority of the securities or
other ownership interests having ordinary voting power (absolutely or
contingently) for the election of directors or other persons performing similar
functions are at the time owned directly or indirectly by such Person.

                  "Tangible Net Worth" means, at any date of determination
thereof, the excess of total assets of a Person over total liabilities of such
Person, excluding, however, from the determination of total assets: loans and
advances to officers and non-consolidated Affiliates, goodwill, trademarks,
patents, organizational costs, unamortized debt discounts and expenses and other
like intangible assets as defined by GAAP.

                  "Total Liabilities" means all liabilities of a Person which
would be classified as such on a balance sheet in accordance with GAAP.

                  "Unfunded Benefit Liabilities" means, with respect to any
Plan, the amount (if any) by which the present value of all benefit liabilities
(within the meaning of section 4001(a)(16) of ERISA) under the Plan exceeds the
fair market value of all Plan assets allocable to such benefit liabilities, as
determined on the most recent valuation date of the Plan and in accordance with
the provisions of ERISA for calculating the potential liability of the Borrower
or any ERISA Affiliate under Title IV of ERISA.

                  Section 1.2. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP, and all
financial data required to be delivered hereunder shall be prepared in
accordance with GAAP.

                  Section 1.3. Currency Equivalents. For all purposes of this
Agreement, all amounts denominated in a currency other than Dollars shall be
converted into the Dollar equivalent of such amounts. The equivalent in another
currency of an amount in Dollars shall be determined at the rate of exchange
quoted by Fleet National Bank in Boston at 9:00 a.m. (Boston time) on the date
of determination, to prime banks in Boston for the spot

                                       12
<PAGE>   14
purchase in the Boston foreign exchange market of such amount of Dollars with
such other currency.

                              ARTICLE 2. THE CREDIT

                  Section 2.1. The Loans.

                           (a) Subject to the terms and conditions of this
Agreement, the Bank agrees to make revolving loans (the "Revolving Loans") to
the Borrower from time to time from and including the date hereof to and
including the Revolving Credit Termination Date, up to but not exceeding in the
aggregate principal amount at any one time outstanding the amount of the
Commitment, and provided that the aggregate outstanding principal amount of
Revolving Loans shall at no time exceed the Borrowing Base. The Revolving Loans
may be outstanding as Prime Rate Loans or LIBOR Loans (each a "type" of Loan).
The Revolving Loans shall be due and payable on the Revolving Credit Termination
Date. Each type of Loan shall be made and maintained at the Bank's Lending
Office for such type of Loan.

                  Section 2.2. The Note. The Revolving Loans shall be evidenced
by a promissory note in favor of the Bank in the form of Exhibit A, dated the
date of this Agreement, duly completed and executed by the Borrower.

                  Section 2.3 Purpose. The Borrower shall use the proceeds of
the Revolving Loans for general corporate purposes, including working capital,
leasehold improvements, equipment needs, and to finance Acceptable Acquisitions,
but shall not be used to repurchase shares of the common stock of TransAct in
open-market transactions or otherwise. No proceeds of the Revolving Loans shall
be used to directly or indirectly fund the needs of any Subsidiary of the
Borrower if such Subsidiary is not also a Borrower hereunder. No proceeds of the
Revolving Loans shall be used for the purpose, whether immediate, incidental or
ultimate, of buying or carrying "margin stock" within the meaning of Regulation
U.

                  Section 2.4 Borrowing Procedures. The Borrower shall give the
Bank notice of each Borrowing to be made hereunder as provided in Section 2.8.
Not later than 1:00 p.m. Hartford, Connecticut time on the date of such
Borrowing, the Bank shall, subject to the conditions of this Agreement, make the
amount of the Loan to be made by it on such day available to the Borrower, in
immediately available funds, by the Bank crediting an account of the Borrower
designated by the Borrower and maintained with the Bank at the Lending Office.

                  Section 2.5 Prepayments and Conversions.

                           (a) Optional Prepayments and Conversions. The
Borrower shall have the right to make prepayments of principal, or to convert
one type of Loan into

                                       13
<PAGE>   15
another type of Loan, at any time or from time to time; provided that: (i) the
Borrower shall give the Bank notice of each such prepayment or conversion as
provided in Section 2.8; and (ii) LIBOR Loans may be prepaid or converted only
on the last day of an Interest Period for such Loans.

                           (b) Mandatory Prepayments. The Borrower shall
immediately repay the excess by which the aggregate principal amount of all
outstanding Revolving Loans exceeds the Commitment or the Borrowing Base. In
addition, amounts outstanding as Loans will be reduced by 100% of the net cash
proceeds from any sale by the Borrower of any material assets outside of the
normal course of business or from any new issuances of stock otherwise permitted
under this Agreement. In addition, upon the occurrence of any Change of Control,
the Borrower shall immediately, at the option of and upon demand by the Bank,
repay all outstanding amounts under the Loans. In addition, to the extent any
Overadvance remains outstanding from and after September 30, 2000, the Borrower
shall make principal repayments of $500,000 each on the last day of September,
October, November and December (or such lesser amount in the final payment as is
necessary to repay the Overadvance in full), together with accrued interest
thereon, until full repayment of the Overadvance. Each such prepayment in
accordance with the foregoing provisions shall be applied first to any expenses
incurred by the Bank, second to any interest due on the amount prepaid, and last
to the outstanding principal amount of the Loans prepaid, in each case in such
manner as the Bank in its discretion shall determine.

                           (c) Yield Maintenance Fee. If, at any time (i) the
interest rate on any Loan is a fixed rate, and (ii) the Bank in its sole
discretion should determine that current market conditions can accommodate a
prepayment request, the Borrower shall have the right at any time and from time
to time to prepay the Loan in whole (but not in part), and the Borrower shall
pay to the Bank a yield maintenance fee in an amount computed as follows: The
current rate for United States Treasury securities (bills on a discounted basis
shall be converted to a bond equivalent) with a maturity date closest to the
maturity date of the term chosen pursuant to the Fixed Rate Election as to which
the prepayment is made, shall be subtracted from the "cost of funds" component
of the fixed rate in effect at the time of prepayment. If the result is zero or
a negative number, there shall be no yield maintenance fee. If the result is a
positive number, then the resulting percentage shall be multiplied by the amount
of the principal balance being prepaid. The resulting amount shall be divided by
360 and multiplied by the number of the days remaining in the term chosen
pursuant to the Fixed Rate Election as to which the prepayment is made. Said
amount shall be reduced to present value calculated by using the number of days
remaining in the designated term and using the above-referenced United States
Treasury security rate and the number of days remaining in the term chosen
pursuant to the Fixed Rate Election as to which the prepayment is made. The
resulting amount shall be the yield maintenance fee due to the Bank upon
prepayment of the fixed rate Loan. Each reference in this paragraph to "Fixed
Rate Election" shall mean the election by Borrower pursuant to Section 2.11
hereof. If by reason of an Event of Default the Bank elects to declare such Loan
to be immediately due and payable, then any yield maintenance fee with respect
to

                                       14
<PAGE>   16
the Loan shall become due and payable in the same manner as though Borrower had
exercised such right of prepayment.

                  Section 2.6 Late Charges. Payments not received within 10 days
of the due date therefor will be subject to a one-time charge equal to 5% of the
amount overdue.

                  Section 2.7 Changes of Commitment. The Borrower shall have the
right to reduce or terminate the amount of the unused portion of the Commitment
at any time or from time to time, provided that: (i) the Borrower shall give
notice of each such reduction or termination to the Bank as provided in Section
2.8; and (ii) each partial reduction shall be in an aggregate amount at least
equal to $500,000 (and integral multiples of $100,000 in excess thereof). Once
reduced or terminated, such Commitment may not be reinstated. The Borrower shall
further have the right to cancel and terminate the availability of the
Overadvance, upon 2 Banking Days notice to the Bank, after which the Overadvance
may not be reinstated.

                  Section 2.8 Certain Notices. Notice by the Borrower to the
Bank of each Borrowing pursuant to Section 2.4, and each prepayment or
conversion pursuant to Section 2.5(a), and each reduction or termination of the
Commitment pursuant to Section 2.7 shall be irrevocable and shall be effective
only if received by the Bank not later than 12:00 noon Hartford, Connecticut
time, and (a) in the case of Borrowings and prepayments of, conversions into and
(in the case of LIBOR Loans) renewals of (i) Prime Rate Loans, given one Banking
Day prior thereto; and (ii) LIBOR Loans, given two Banking Days prior thereto;
and (b) in the case of reductions or termination of the Commitments, given three
Banking Days prior thereto. Each such Notice of Borrowing shall be in the form
of Exhibit C hereto, shall be accompanied by a Borrowing Base Certificate, and
shall specify the Loans to be borrowed, prepaid, converted or renewed and the
amount (subject to Section 2.9) and type of the Loans to be borrowed, or
converted, or renewed or prepaid and the date of the Borrowing or prepayment, or
conversion or renewal (which shall be a Banking Day). Each such notice of
reduction or termination shall specify the amount of the Commitment to be
reduced or terminated. In addition to the foregoing, the Borrower shall deliver
a Borrowing Base Certificate to the Bank on the date hereof.

                  Section 2.9 Minimum Amounts. Except for Borrowings which
exhaust the full remaining amount of the unused portion of the Commitment or
prepayments or conversions which result in the prepayment or conversion of all
Loans, as the case may be, of a particular type, each Borrowing, optional
prepayment, conversion and renewal of principal of Loans of a particular type
shall be in an amount at least equal to (a) $100,000 with respect to Prime Rate
Loans, and (b) $500,000 and integral multiples of $100,000 in excess thereof
with respect to LIBOR Loans (borrowings, prepayments, conversions or renewals of
or into Loans of different types or, in the case of LIBOR Loans, having
different Interest Periods at the same time hereunder to be deemed separate
borrowings, prepayments, conversions and renewals for the purposes of the
foregoing, one for each type of Interest Period).

                                       15
<PAGE>   17
                  Section 2.10 Interest.

                           (a) Interest shall accrue on the outstanding and
unpaid principal amount of each Loan for the period from and including the date
of such Loan to but excluding the date such Loan is due at the following rates
per annum: (i) for Prime Rate Loans, at a variable rate per annum equal to the
Prime Rate plus the Margin and; (ii) for LIBOR Loans, at a fixed rate equal to
the LIBO Rate plus the Margin, for the period from and including the first day
of the Interest Period therefore to but excluding the last day of such Interest
Period. If the principal amount of any Loan and any other amount payable by the
Borrower hereunder or under the Note shall not be paid when due (at stated
maturity, by acceleration or otherwise), interest shall accrue on such amount to
the fullest extent permitted by law from and including such due date to but
excluding the date such amount is paid in full at the Default Rate for such type
of Loan.

                           (b) The interest rate on Prime Rate Loans shall
change immediately when the Prime Rate changes (without notice or demand of any
kind) and interest on each such Loan shall be calculated on the basis of a year
of 360 days for the actual number of days elapsed. Interest on each LIBOR Loan
shall be calculated on the basis of a year of 360 days for the actual number of
days elapsed.

                           (c) Accrued interest on all types of Loans shall be
due and payable in arrears upon any payment of principal and (i) for each Prime
Rate Loan, on the last day of each calendar month, commencing March 31, 2000,
and (ii) for each LIBOR Loan, on the last day of the Interest Period with
respect thereto (but in no event less frequently than every 90 days), and on the
Revolving Credit Termination Date; provided that interest accruing at the
Default Rate shall be due and payable from time to time on demand of the Bank.

                  Section 2.11 Interest Periods; Renewals.

                           (a) In the case of each LIBOR Loan, the Borrower
shall select an Interest Period of any duration in accordance with the
definition of Interest Period in Section 1.1, subject to the following
limitations: (i) no Interest Period may extend beyond the Revolving Credit
Termination Date; (ii) notwithstanding clause (i) above, no Interest Period
shall have a duration less than one month, and if any such proposed Interest
Period would otherwise be for a shorter period, such Interest Period shall not
be available; (iii) if an Interest Period would end on a day which is not a
Banking Day, such Interest Period shall be extended to the next Banking Day; and
(iv) no more than five Interest Periods may be outstanding at any one time.

                           (b) Upon notice to the Bank as provided in Section
2.8, the Borrower may renew any LIBOR Loan on the last day of the Interest
Period therefor as the same type of Loan with an Interest Period of the same or
different duration in accordance with the limitations provided above. If the
Borrower shall fail to give notice to the Bank of

                                       16
<PAGE>   18
such a renewal, such LIBOR Loan shall automatically become a Prime Rate Loan on
the last day of the current Interest Period.

                  Section 2.12 Fees.

                           (a) Commitment Fee. During the period ending on the
Revolving Credit Termination Date, there will be a per annum commitment fee
payable on the average unused daily availability under the Commitment, payable
quarterly in arrears on the first Banking Day after the end of each quarter and
calculated on a 360 day year for actual days elapsed. The commitment fee rate
will vary based on the then prevailing Interest Coverage Ratio of the Borrower,
on a consolidated basis (the applicable ratio for such quarter will be the ratio
determined as of the last day of the previous quarter and will be calculated on
a rolling four quarters basis, with the first such calculation to be made in
respect of the quarter ending December 31, 1999, as follows:

<TABLE>
<CAPTION>
                              Interest Coverage Ratio OF THE BORROWER                COMMITMENT FEE
<S>                                                                                  <C>
                         Greater than or equal to 6.00                                   0.375%
                         Greater than or equal to 5.00, but less than 6.00               0.375%
                         Greater than or equal to 4.00, but less than 5.00                0.50%
                         Less than 4.00                                                   0.50%
</TABLE>

                           Notwithstanding the foregoing, for the period
commencing on February 1, 2000, the date on which the Overadvance is available
to the Borrower, and ending on the date the Overadvance is either terminated,
cancelled or repaid in full, the commitment fee will equal 0.75%.

                           (b) Facility Fee. The Borrower shall pay to the Bank,
on the Closing Date, a $25,000 facility fee in respect of the Commitment.

                  Section 2.13 Payments Generally. All payments under this
Agreement or the Note shall be made in Dollars in immediately available funds
not later than 1:00 p.m. Hartford, Connecticut, time on the relevant dates
specified above (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Banking Day) at the Lending
Office of the Bank. The Bank may (but shall not be obligated to) debit the
amount of any such payment which is not made by such time to any ordinary
deposit account of the Borrower with the Bank. Until the Bank and the Borrower
otherwise agree, the Bank shall debit the Borrower's account number 9368994710
with the Bank for the amount of any payment required hereunder, but the Bank may
also debit any ordinary deposit account of the Borrower if the amount in account
number 9368994710 is insufficient to make any required payment. The Borrower
shall, at the time of making each payment under this Agreement or the Note,
specify to the Bank the principal or other amount payable by the Borrower under
this Agreement or the Note to which such payment is to be applied (and in the
event that it fails to so specify, or if a Default or Event of Default has
occurred and is continuing, the Bank may apply such

                                       17
<PAGE>   19
payment as it may elect in its sole discretion). If the due date of any payment
under this Agreement or the Note would otherwise fall on a day which is not a
Banking Day, such date shall be extended to the next succeeding Banking Day and
interest shall be payable for any principal so extended for the period of such
extension.

                  ARTICLE 3. YIELD PROTECTION; ILLEGALITY; ETC.

                  Section 3.1. Additional Costs.

                           (a) The Borrower shall pay to the Bank from time to
time on demand such amounts as the Bank may determine to be necessary to
compensate it for any costs which the Bank determines are attributable to its
making or maintaining any LIBOR Loans under this Agreement or the Note or its
obligation to make any such Loans hereunder, or any reduction in any amount
receivable by the Bank hereunder in respect of any such Loans or such obligation
(such increases in costs and reductions in amounts receivable being herein
called "Additional Costs"), resulting from any Regulatory Change which: (i)
changes the basis of taxation of any amounts payable to the Bank under this
Agreement or the Note in respect of any of such Loans (other than taxes imposed
on the overall net income of the Bank or of its Lending Office for any of such
Loans by the jurisdiction in which the Principal Office or such Lending Office
is located); or (ii) imposes or modifies any reserve, special deposit, deposit
insurance or assessment, minimum capital, capital ratio or similar requirements
relating to any extensions of credit or other assets of, or any deposits with or
other liabilities of, the Bank (including any of such Loans or any deposits
referred to in the definition of "LIBO Rate" in Section 1.1); or (iii) imposes
any other condition affecting this Agreement or the Note (or any of such
extensions of credit or liabilities). The Bank will notify the Borrower of any
event occurring after the date of this Agreement which will entitle the Bank to
compensation pursuant to this Section 3.1(a) as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation.

                           (b) Without limiting the effect of the foregoing
provisions of this Section 3.1, in the event that, by reason of any Regulatory
Change, the Bank either (i) incurs Additional Costs based on or measured by the
excess above a specified level of the amount of a category of deposits or other
liabilities of the Bank which includes deposits by reference to which the
interest rate on LIBOR Loans is determined as provided in this Agreement or a
category of extensions of credit or other assets of the Bank which includes
LIBOR Loans or (ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets which it may hold, then, if the Bank so elects
by notice to the Borrower, the obligation of the Bank to make or renew, and to
convert Loans of any other type into, Loans of such type hereunder shall be
suspended until the date such Regulatory Change ceases to be in effect, and the
Borrower shall on the last day(s) of the then current Interest Period(s) for the
outstanding Loans of such type, either prepay such Loans or convert such Loans
into another type of Loan in accordance with Section 2.5.

                                       18
<PAGE>   20
                           (c) Without limiting the effect of the foregoing
provisions of this Section 3.1 (but without duplication), the Borrower shall pay
to the Bank from time to time on request such amounts as the Bank may determine
to be necessary to compensate the Bank for any costs which it determines are
attributable to the maintenance by it or any of its affiliates pursuant to any
law or regulation of any jurisdiction or any interpretation, directive or
request (whether or not having the force of law and whether in effect on the
date of this Agreement or thereafter) of any court or governmental or monetary
authority of capital in respect of its Loans hereunder or its obligation to make
Loans hereunder (such compensation to include, without limitation, an amount
equal to any reduction in return on assets or equity of the Bank to a level
below that which it could have achieved but for such law, regulation,
interpretation, directive or request). The Bank will notify the Borrower if it
is entitled to compensation pursuant to this Section 3.1(c) as promptly as
practicable after it determines to request such compensation.

                           (d) Determinations and allocations by the Bank for
purposes of this Section 3.1 of the effect of any Regulatory Change pursuant to
subsections (a) or (b), or of the effect of capital maintained pursuant to
subsection (c), on its costs of making or maintaining Loans or its obligation to
make Loans, or on amounts receivable by, or the rate of return to, it in respect
of Loans or such obligation, and of the additional amounts required to
compensate the Bank under this Section 3.1, shall be conclusive, provided that
such determinations and allocations are made on a reasonable basis; provided,
however, that the Bank shall provide ninety days' notice of any additional
amounts required to compensate the Bank under this Section 3.1 (the
"Adjustment"), and the Borrower may thereafter attempt to negotiate the amount
of the Adjustment in good faith with the Bank within ninety days of the day on
which the Borrower is so notified. If the Borrower and the Bank are unable to
agree on the amount of the Adjustment within such ninety-day period, then the
amount of the Adjustment shall be the amount set forth in the aforementioned
notice from the Bank to the Borrower. Whatever the final Adjustment may be, if
the Bank shall still have any Loans outstanding to the Borrower upon the
expiration of such ninety-day period, then the Adjustment shall be effective
retroactive to the date on which the Borrower first received notice of the
Adjustment. The Bank shall not be obligated to offer LIBO Rates with respect to
Interest Periods commencing during the period following any such notice and
prior to agreement by the Bank and the Borrower as to the amount of the
Adjustment.

                  Section 3.2. Limitation on Types of Loans. Anything herein to
the contrary notwithstanding, if the Bank determines (which determination shall
be conclusive) that:

                           (a) quotations of interest rates for the relevant
deposits referred to in the definition of "LIBO Rate" in Section 1.1 are not
being provided in the relevant amounts or for the relevant maturities for
purposes of determining the rate of interest for any LIBOR Loans as provided in
this Agreement; or

                                       19
<PAGE>   21
                           (b) the relevant rates of interest referred to in the
definition of "LIBO Rate" in Section 1.1 upon the basis of which the rate of
interest for any LIBOR Loans is to be determined do not adequately cover the
cost to the Bank of making or maintaining such Loans; then the Bank shall give
the Borrower prompt notice thereof, and so long as such condition remains in
effect, the Bank shall be under no obligation to make or renew Loans of such
type or to convert Loans of any other type into Loans of such type and the
Borrower shall, on the last day(s) of the then current Interest Period(s) for
the outstanding Loans of the affected type, either prepay such Loans or convert
such Loans into another type of Loans in accordance with Section 2.5.

                  Section 3.3. Illegality. Notwithstanding any other provision
in this Agreement, in the event that it becomes unlawful for the Bank or its
Lending Office to (a) honor its obligation to make or renew LIBOR Loans
hereunder or convert Loans of any type into Loans of such type, or (b) maintain
LIBOR Loans hereunder, then the Bank shall promptly notify the Borrower thereof
and the Bank's obligation to make or renew LIBOR Loans and to convert other
types of Loans into Loans of such type hereunder shall be suspended until such
time as the Bank may again make, renew or convert and maintain such affected
Loans and the Borrower shall, on the last day(s) of the then current Interest
Period for the outstanding LIBOR Loans, as the case may be (or on such earlier
date as the Bank may specify to the Borrower), either prepay such Loans or
convert such Loans into another type of Loans in accordance with Section 2.5.

                  Section 3.4. Certain Compensation. The Borrower shall pay to
the Bank, upon the request of the Bank, such amount or amounts as shall be
sufficient (in the reasonable opinion of the Bank) to compensate it for any
loss, cost or expense which the Bank determines is attributable to:

                           (a) any payment, prepayment, conversion or renewal of
a LIBOR Loan on a date other than the last day of an Interest Period for such
Loan (whether by reason of acceleration or otherwise); or

                           (b) any failure by the Borrower to borrow, convert
into or renew a LIBOR Loan to be made, converted into or renewed by the Bank on
the date specified therefor in the relevant notice under Section 2.4, 2.5 or
2.11, as the case may be.

         Without limiting the foregoing, such compensation shall include an
amount equal to the excess, if any, of: (i) the amount of interest which
otherwise would have accrued on the principal amount so paid, prepaid, converted
or renewed or not borrowed, converted or renewed for the period from and
including the date of such payment, prepayment or conversion or failure to
borrow, convert or renew to but excluding the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow, convert
or renew, to but excluding the last day of the Interest Period for such Loan
which would have commenced on the date specified therefor in the relevant
notice) at the applicable rate of interest for such Loan provided for herein;
over (ii) with respect to a LIBOR Loan, the amount of interest (as reasonably
determined by the Bank) the Bank would have bid in the

                                       20
<PAGE>   22
London interbank market for Dollar deposits for amounts comparable to such
principal amount and maturities comparable to such period. A determination of
the Bank as to the amounts payable pursuant to this Section 3.4 shall be
conclusive absent manifest error.

                         ARTICLE 4. CONDITIONS PRECEDENT

                  Section 4.1. Documentary Conditions Precedent. The obligation
of the Bank to make the Loans is subject to the conditions precedent that the
Bank shall have received on or before the date of such Borrowing each of the
following, in form and substance satisfactory to the Bank and its counsel:

                           (a) the Note duly executed by the Borrower;

                           (b) the Security Agreement duly executed by the
Borrower together with (i) acknowledgment copies of the financing statements
(UCC-1) duly filed under the Uniform Commercial Code of all jurisdictions
necessary or, in the opinion of the Bank, desirable to perfect the security
interest created by the Security Agreement; (ii) certified copies of requests
for information (Form UCC-11) identifying all of the financing statements on
file with respect to the Borrower in all jurisdictions referred to under (i),
including the financing statements filed by the Bank against the Borrower,
indicating that no party claims an interest in any of the Collateral (as defined
in the Security Agreement);

                           (c) the Guaranty duly executed by the Guarantors;

                           (d) a certificate of the Secretary or Assistant
Secretary of the Borrower and each Guarantor, dated the Closing Date, attesting
to all corporate action taken by the Borrower or such Guarantor, including
resolutions of its Board of Directors authorizing the execution, delivery and
performance of the Facility Documents to which it is a party and each other
document to be delivered pursuant to this Agreement and certifying copies of the
Certificate of Incorporation and by-laws of the Borrower or such Guarantor;

                           (e) a certificate of the Secretary or Assistant
Secretary of the Borrower and each Guarantor, dated the Closing Date, certifying
the names and true signatures of the officers of the Borrower or such Guarantor
authorized to sign the Facility Documents to which it is a party and the other
documents to be delivered by the Borrower or such Guarantor under this
Agreement;

                           (f) a certificate of a duly authorized officer of the
Borrower and each Guarantor, dated the Closing Date, stating that the
representations and warranties in Article 5 of this Agreement, and Article 2 of
the Security Agreement, and in each other Facility Document, are true and
correct on such date as though made on and as of such date and that no event has
occurred and is continuing which constitutes a Default or Event of Default;

                                       21
<PAGE>   23
                           (g) an Environmental Indemnification Agreement duly
signed by the Borrower in form and substance satisfactory to the Bank;

                           (h) a certificate of good standing for the Borrower
and each Guarantor from the Secretary of the State of the state in which the
Borrower or such Guarantor is incorporated and each other jurisdiction in which
the Borrower or such Guarantor is qualified to do business;

                           (i) payment by the Borrower to the Bank of the
facility fee as required by Section 2.12(b), and all other expenses and fees
incurred by the Bank;

                           (j) a favorable opinion of counsel for the Borrower,
dated the Closing Date, in form and substance reasonably satisfactory to the
Bank;

                           (k) copies of all instruments evidencing any
Subordinated Debt of the Borrower and a satisfactory review of the same;

                           (l) evidence of liability and property insurance
coverage satisfactory to the Bank and naming the Bank as a loss payee and an
additional insured;

                           (m) evidence of no material adverse change in the
business, management, operations, properties, prospects or condition (financial
or otherwise) of the Borrower or any of their respective Subsidiaries since the
date of the commitment letter; and

                           (n) evidence of the absence of any change in market
conditions which, in the Bank's opinion, would materially impair a financial
institution's ability to fund Loans of this type.

                  Section 4.2. Additional Conditions Precedent. The obligation
of the Bank to make the Loans pursuant to a Borrowing which increases the amount
outstanding hereunder (including the initial Borrowing) shall be subject to the
further conditions precedent that on the date of such Borrowing:

                           (a) the following statements shall be true:

                                    (i) the representations and warranties
contained in Article 5 herein, and in Article 2 of the Security Agreement, and
in each other Facility Document, are true and correct on and as of the date of
such Loan as though made on and as of such date; and

                                    (ii) no Default or Event of Default has
occurred and is continuing, or would result from such Loan; and

                                       22
<PAGE>   24
                                    (iii) there has been no material adverse
change in the business, management, operations, properties, prospects or
condition (financial or otherwise) of any Borrower or any of their respective
Subsidiaries since the Closing Date;

                           (b) the Bank shall have received such approvals,
opinions or documents as the Bank may reasonably request.

                  Section 4.3. Deemed Representations. Each Notice of Borrowing
hereunder and acceptance by the Borrower of the proceeds of such Borrowing shall
constitute a representation and warranty that the statements contained in
Section 4.2(a) are true and correct both on the date of such notice and, unless
the Borrower otherwise notifies the Bank prior to such Borrowing, as of the date
of such Borrowing.

                    ARTICLE 5. REPRESENTATIONS AND WARRANTIES

                  The Borrower hereby represents and warrants that:

                  Section 5.1. Incorporation, Good Standing and Due
Qualification. Each of the Borrower and its Subsidiaries is duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its assets and to
transact the business in which it is now engaged or proposed to be engaged, and
is duly qualified as a foreign corporation and in good standing under the laws
of each other jurisdiction in which such qualification is required.

                  Section 5.2. Corporate Power and Authority; No Conflicts. The
execution, delivery and performance by the Borrower of the Facility Documents to
which it is a party have been duly authorized by all necessary corporate action
and do not and will not: (a) require any consent or approval of its
stockholders; (b) contravene its charter or by-laws; (c) violate any provision
of, or require any filing (other than the filing of the financing statements
contemplated by the Security Agreement), registration, consent or approval
under, any law, rule, regulation (including, without limitation, Regulation U),
order, writ, judgment, injunction, decree, determination or award presently in
effect having applicability to the Borrower or any of its Subsidiaries or
Affiliates; (d) result in a breach of or constitute a default or require any
consent under any indenture or loan or credit agreement or any other agreement,
lease or instrument to which the Borrower is a party or by which it or its
properties may be bound or affected; (e) result in, or require, the creation or
imposition of any Lien (other than as created under the Security Agreement),
upon or with respect to any of the properties now owned or hereafter acquired by
the Borrower; or (f) cause the Borrower (or any Subsidiary or Affiliate, as the
case may be) to be in default under any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or any such indenture,
agreement, lease or instrument.

                  Section 5.3. Legally Enforceable Agreements. Each Facility
Document to which the Borrower is a party is, or when delivered under this
Agreement will be, a legal, valid and binding obligation of the Borrower
enforceable against the Borrower in

                                       23
<PAGE>   25
accordance with its terms, except to the extent that such enforcement may be
limited by applicable bankruptcy, insolvency and other similar laws affecting
creditors' rights generally.

                  Section 5.4. Litigation. There are no actions, suits or
proceedings pending or, to the knowledge of the Borrower, threatened, against or
affecting the Borrower or any of its Subsidiaries before any court, governmental
agency or arbitrator, which may, in any one case or in the aggregate, materially
adversely affect the financial condition, operations, properties or business of
the Borrower or any such Subsidiary or of or the ability of the Borrower to
perform its obligation under the Facility Documents to which it is a party.

                  Section 5.5. Financial Statements. The consolidated and
consolidating balance sheet of the Borrower and its Consolidated Subsidiaries as
at December 31, 1998, and the related consolidated and consolidating income
statement and statements of cash flows and changes in stockholders' equity of
the Borrower and its Consolidated Subsidiaries for the fiscal year then ended,
and the accompanying footnotes, together with the opinion thereon as to the
consolidated statements, of Pricewaterhouse Coopers, independent certified
public accountants, and the interim consolidated and consolidating balance sheet
of the Borrower and its Consolidated Subsidiaries as at September 25, 1999, and
the related consolidated and consolidating income statement and statements of
cash flows and changes in stockholders' equity for the nine-month period then
ended, copies of which have been furnished to the Bank, are complete and correct
and fairly present the financial condition of the Borrower and its Consolidated
Subsidiaries as at such dates and the results of the operations of the Borrower
and its Consolidated Subsidiaries for the periods covered by such statements,
all in accordance with GAAP consistently applied (subject to year-end
adjustments in the case of the interim financial statements). There are no
liabilities of the Borrower or any of its Consolidated Subsidiaries, fixed or
contingent, which are material but are not reflected in the financial statements
or in the notes thereto, other than liabilities arising in the ordinary course
of business since September 25, 1999. No information, exhibit or report
furnished by the Borrower to the Bank in connection with the negotiation of this
Agreement contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statement contained therein not
materially misleading. Since September 25, 1999, there has been no material
adverse change in the condition (financial or otherwise), business, operations
or prospects of the Borrower or any of its Subsidiaries.

                  Section 5.6. Ownership and Liens. The Borrower and each of its
Consolidated Subsidiaries has title to, or valid leasehold interests in, all of
its properties and assets, real and personal, including the properties and
assets, and leasehold interests reflected in the financial statements referred
to in Section 5.5 (other than any properties or assets disposed of in the
ordinary course of business), and none of the properties and assets owned by the
Borrower or any of its Subsidiaries and none of its leasehold interests is
subject to any Lien, except as disclosed in such financial statements or as may
be permitted hereunder and except for the Lien created by the Security
Agreement.

                                       24
<PAGE>   26
                  Section 5.7. Taxes. The Borrower and each of its Subsidiaries
has filed all tax returns (federal, state and local) required to be filed and
has paid all taxes, assessments and governmental charges and levies thereon to
be due, including interests and penalties.

                  Section 5.8. ERISA. Each Plan, and, to the best knowledge of
the Borrower, each Multiemployer Plan, is in compliance in all material respects
with, and has been administered in all material respects in compliance with, the
applicable provisions of ERISA, the Code and any other applicable federal or
state law, and no event or condition is occurring or exists concerning which the
Borrower would be under an obligation to furnish a report to the Bank in
accordance with Section 6.8(k) hereof. As of the most recent valuation date for
each Plan, each Plan was "fully funded," which for purposes of this Section 5.8
shall mean that the fair market value of the assets of the Plan is not less than
the present value of the accrued benefits of all participants in the Plan,
computed on a Plan termination basis. To the best knowledge of the Borrower, no
Plan has ceased being fully funded as of the date these representations are made
with respect to any Loan under this Agreement.

                  Section 5.9. Subsidiaries and Ownership of Stock. Schedule 5.9
is a complete and accurate list of the Subsidiaries of the Borrower, showing the
jurisdiction of incorporation or organization of each Subsidiary and showing the
percentage of the Borrower's ownership of the outstanding stock or other
interest of each the Subsidiary. All of the outstanding capital stock or other
interest of each such Subsidiary has been validly issued, is fully paid and
nonassessable and is owned by the Borrower free and clear of all Liens.

                  Section 5.10. Credit Arrangements. Schedule 5.10 is a complete
and correct list of all credit agreements, indentures, purchase agreements,
guaranties, Capital Leases and other investments, agreements and arrangements
presently in effect providing for or relating to extensions of credit (including
agreements and arrangements for the issuance of letters of credit or for
acceptance financing) in respect of which the Borrower or any of its
Subsidiaries is in any manner directly or contingently obligated; and the
maximum principal or face amounts of the credit in question, outstanding and
which can be outstanding, are correctly stated, and all Liens of any nature
given or agreed to be given as security therefor are correctly described or
indicated in such Schedule.

                  Section 5.11. Operation of Business. The Borrower and each of
its Subsidiaries possesses all licenses, permits, franchises, patents,
copyrights, trademarks and trade names, or rights thereto, to conduct its
business substantially as now conducted and as presently proposed to be
conducted, and neither the Borrower nor any of its Subsidiaries is in violation
of any valid rights of others with respect to any of the foregoing.

                  Section 5.12. Hazardous Materials. The Borrower and each of
its Subsidiaries have obtained all permits, licenses and other authorizations
which are required under all Environmental Laws, except to the extent failure to
have any such permit, license

                                       25
<PAGE>   27
or authorization would not have a material adverse effect on the consolidated
financial condition, operations, business or prospects of the Borrower and its
Consolidated Subsidiaries. The Borrower and each of its Subsidiaries are in
compliance with the terms and conditions of all such permits, licenses and
authorizations, and are also in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in any applicable Environmental Law or in any
regulation, code, plan, order, decree, judgment, injunction, notice or demand
letter issued, entered, promulgated or approved thereunder, except to the extent
failure to comply would not have a material adverse effect on the consolidated
financial condition, operations, business or prospects of the Borrower and its
Consolidated Subsidiaries.

                  In addition, except as set forth in Schedule 5.12 hereto:

                           (a) No notice, notification, demand, request for
information, citation, summons or order has been issued, no complaint has been
filed, no penalty has been assessed and no investigation or review is pending or
threatened by any governmental or other entity with respect to any alleged
failure by the Borrower or any of its Subsidiaries to have any permit, license
or authorization required in connection with the conduct of the business of the
Borrower or any of its Subsidiaries or with respect to any generation,
treatment, storage, recycling, transportation, release or disposal, or any
release as defined in 42 U.S.C. s/s 9601(22) ("Release") of any substance
regulated under Environmental Laws ("Hazardous Materials") generated by the
Borrower or any of its Subsidiaries.

                           (b) Neither the Borrower nor any of its Subsidiaries
has handled any Hazardous Material, other than as a generator, on any property
now or previously owned or leased by the Borrower or any of its Subsidiaries to
an extent that it has, or may reasonably be expected to have, a material adverse
effect on the consolidated financial condition, operations, business or
prospects taken as a whole of the Borrower and their Consolidated Subsidiaries;
and

                                    (i) to the best of its knowledge, no PCB is
or has been present at any property now or previously owned or leased by the
Borrower or any of its Subsidiaries;

                                    (ii) to the best of its knowledge, no
asbestos is or has been present at any property now or previously owned or
leased by the Borrower or any of its Subsidiaries;

                                    (iii) there are no underground storage tanks
for Hazardous Materials, active or abandoned, at any property now or previously
owned or leased by the Borrower or any of its Subsidiaries;

                                    (iv) no Hazardous Materials have been
Released, in a reportable quantity, where the a quantity has been established by
statute, ordinance, rule,

                                       26
<PAGE>   28
regulation or order, at, on or under any property now or previously owned by the
Borrower or any of its Subsidiaries.

                           (c) Neither the Borrower nor any of its Subsidiaries
has transported or arranged for the transportation of any Hazardous Material to
any location which is listed on the National Priorities List under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), listed for possible inclusion on the National Priorities
List by the Environmental Protection Agency in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLIS") or on any similar
state or foreign list or which is the subject of federal, state, foreign or
local enforcement actions or other investigations which may lead to claims
against the Borrower or any of its Subsidiaries for clean-up costs, remedial
work, damages to natural resources or for personal injury claims, including, but
not limited to, claims under CERCLA.

                           (d) No Hazardous Material generated by the Borrower
or any of its Subsidiaries has been recycled, treated, stored, disposed of or
Released by the Borrower or any of its Subsidiaries at any location other than
those listed in Schedule 5.12 hereto.

                           (e) No oral or written notification of a Release of a
Hazardous Material has been filed by or on behalf of the Borrower or any of its
Subsidiaries and no property now or previously owned or leased by the Borrower
or any of its Subsidiaries is listed or proposed for listing on the National
Priority List promulgated pursuant to CERCLA, on CERCLIS or on any similar state
or foreign list of sites requiring investigation or clean-up.

                           (f) There are no Liens arising under or pursuant to
any Environmental Laws on any of the real property or properties owned or leased
by the Borrower or any of its Subsidiaries, and no government actions have been
taken or are in process which could subject any of such properties to such Liens
and neither the Borrower nor any of its Subsidiaries would be required to place
any notice or restriction relating to the presence of Hazardous Materials at any
property owned by it in any deed to such property.

                           (g) There have been no environmental investigations,
studies, audits, tests, reviews or other analyses conducted by or which are in
the possession of the Borrower or any of its Subsidiaries in relation to any
property or facility now or previously owned or leased by the Borrower or any of
its Subsidiaries which have not been made available to the Bank.

                  Section 5.13. No Default on Outstanding Judgments or Orders.
The Borrower and each of its Subsidiaries has satisfied all judgments and
neither such Borrower nor any of its Subsidiaries is in default with respect to
any judgment, writ, injunction, decree, rule or regulation of any court,
arbitrator or federal, state, municipal or

                                       27
<PAGE>   29
other governmental authority, commission, board, bureau, agency or
instrumentality, domestic or foreign.

                  Section 5.14. No Defaults on Other Agreements. Neither the
Borrower nor any of its Subsidiaries is a party to any indenture, loan or credit
agreement or any lease or other agreement or instrument or subject to any
charter or corporate restriction which could have a material adverse effect on
the business, properties, assets, operations or conditions, financial or
otherwise, of such Borrower or any of its Subsidiaries, or the ability of the
Borrower to carry out its obligations under the Facility Documents to which it
is a party. Neither the Borrower nor any of its Subsidiaries is in default in
any respect in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement or instrument
material to its business to which it is a party.

                  Section 5.15. Labor Disputes and Acts of God. Neither the
business nor the properties of the Borrower or of any of its Subsidiaries are
affected by any fire, explosion, accident, strike, lockout or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God or of the public
enemy or other casualty (whether or not covered by insurance), materially and
adversely affecting such business or properties or the operation of the Borrower
or such Subsidiary.

                  Section 5.16. Governmental Regulation. Neither the Borrower
nor any of its Subsidiaries is subject to regulation under the Public Utility
Holding Company Act of 1935, the Investment Company Act of 1940, the Interstate
Commerce Act, the Federal Power Act or any statute or regulation limiting its
ability to incur indebtedness for money borrowed as contemplated hereby.

                  Section 5.17. Partnerships. Neither the Borrower nor any of
its Subsidiaries is a partner in any partnership.

                  Section 5.18. No Forfeiture. Neither the Borrower nor any of
its Subsidiaries or Affiliates is engaged in or proposes to be engaged in the
conduct of any business or activity which could result in a Forfeiture
Proceeding and no Forfeiture Proceeding against any of them is pending or
threatened.

                                       28
<PAGE>   30
                  Section 5.19. Solvency.

                           (a) The present fair salable value of the assets of
the Borrower after giving effect to all the transactions contemplated by the
Facility Documents and the funding of all Commitment hereunder exceeds the
amount that will be required to be paid on or in respect of the existing debts
and other liabilities (including contingent liabilities) of the Borrower and its
Subsidiaries as they mature.

                           (b) The property of the Borrower does not constitute
unreasonably small capital for the Borrower to carry out its business as now
conducted and as proposed to be conducted, including the capital needs of the
Borrower.

                           (c) The Borrower does not intend to, nor does it
believe that it will, incur debts beyond its ability to pay such debts as they
mature (taking into account the timing and amounts of cash to be received by the
Borrower, and of amounts to be payable on or in respect of debt of the
Borrower). The cash available to the Borrower, after taking into account all
other anticipated uses of the cash of the Borrower, is anticipated to be
sufficient to pay all such amounts on or in respect of debt of the Borrower when
such amounts are required to be paid.

                           (d) The Borrower does not believe that final
judgments against it in actions for money damages will be rendered at a time
when, or in an amount such that, the Borrower will be unable to satisfy any such
judgments promptly in accordance with their terms (taking into account the
maximum reasonable amount of such judgments in any such actions and the earliest
reasonable time at which such judgments might be rendered). The cash available
to the Borrower after taking into account all other anticipated uses of the cash
of the Borrower (including the payments on or in respect of debt referred to in
paragraph (c) of this Section 5.19), is anticipated to be sufficient to pay all
such judgments promptly in accordance with their terms.

                        ARTICLE 6. AFFIRMATIVE COVENANTS

                  So long as the Note shall remain unpaid or the Bank shall have
the Commitment under this Agreement, the Borrower shall:

                  Section 6.1. Maintenance of Existence. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, their corporate
existence and good standing in the jurisdiction of their incorporation, and
qualify and remain qualified, and cause each of its Subsidiaries to qualify and
remain qualified, as a foreign corporation in each jurisdiction in which such
qualification is required.

                  Section 6.2. Conduct of Business. Continue, and cause each of
its Subsidiaries to continue, to engage in an efficient and economical manner in
a business of the same general type as conducted by it on the date of this
Agreement.

                                       29
<PAGE>   31
                  Section 6.3. Maintenance of Properties. Maintain, keep and
preserve, and cause each of its Subsidiaries to maintain, keep and preserve, all
of their properties (tangible and intangible), necessary or useful in the proper
conduct of their business in good working order and condition, ordinary wear and
tear excepted.

                  Section 6.4. Maintenance of Records. Keep, and cause each of
its Subsidiaries to keep, adequate records and books of account, in which
complete entries will be made in accordance with GAAP, reflecting all financial
transactions of the Borrower and its Subsidiaries.

                  Section 6.5. Maintenance of Insurance. Maintain, and cause
each of its Subsidiaries to maintain, insurance with financially sound and
reputable insurance companies or associations in such amounts and covering such
risks as are usually carried by companies engaged in the same or similar
business and similarly situated, which insurance may provide for reasonable
deductibility from coverage thereof.

                  Section 6.6. Compliance with Laws. Comply, and cause each of
its Subsidiaries to comply, in all respects with all applicable laws, rules,
regulations and orders, such compliance to include, without limitation, paying
before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property.

                  Section 6.7. Right of Inspection. At any reasonable time and
from time to time, permit the Bank or any agent or representative thereof, to
examine and make copies and abstracts from the records and books of account of,
and visit the properties of, the Borrower and any of its respective
Subsidiaries, and to discuss the affairs, finances and accounts of the Borrower
and any such Subsidiary with any of its officers and directors and the
Borrower's independent accountants. The Bank shall have the right to perform an
annual field audit of the Borrower and the Borrower shall reimburse the Bank for
the reasonable costs of such annual field audit.

                  Section 6.8. Reporting Requirements. Furnish to the Bank:

                           (a) as soon as available and in any event within 90
days after the end of each fiscal year of the Borrower, a consolidated and
consolidating balance sheet of the Borrower and their respective Consolidated
Subsidiaries as of the end of such fiscal year and a consolidated and
consolidating income statement and statements of cash flows and changes in
stockholders' equity and working capital of the Borrower and their respective
Consolidated Subsidiaries for such fiscal year, all in reasonable detail and
stating in comparative form the respective consolidated and consolidating
figures for the corresponding date and period in the prior fiscal year and all
prepared in accordance with GAAP and as to the consolidated statements
accompanied by an opinion thereon acceptable to the Bank by Pricewaterhouse
Coopers or other independent accountants of national standing selected by the
Borrower;

                                       30
<PAGE>   32
                           (b) as soon as available and in any event within 45
days after the end of each fiscal quarter of the Borrower, a true and complete
copy of TransAct's Report on Form 10-Q;

                           (c) as soon as available and in any event within 45
days after the end of each fiscal quarter, a consolidating balance sheet of the
Borrower and their respective Consolidated Subsidiaries as of the end of such
month and a consolidating income statement and statements of cash flows and
changes in stockholders' equity and working capital, of the Borrower and its
respective Consolidated Subsidiaries for the period commencing at the end of the
previous fiscal year and ending with the end of such month, all in reasonable
detail and stating in comparative form the consolidating figures for the
corresponding date and period in the previous fiscal year and all prepared in
accordance with GAAP and certified by the Chief Accounting Officer or Chief
Financial Officer of the Borrower (subject to year-end adjustments);

                           (d) promptly upon receipt thereof, copies of any
reports, inclusive of any management letters, submitted to any Borrower or any
of its Subsidiaries by independent certified public accountants in connection
with examination of the financial statements of the Borrower or any such
Subsidiary made by such accountants;

                           (e) promptly at the end of each fiscal quarter, a
certificate of the Chief Accounting Officer or Chief Financial Officer of the
Borrower (i) certifying that to the best of his knowledge no Default or Event of
Default has occurred and is continuing or, if a Default or Event of Default has
occurred and is continuing, a statement as to the nature thereof and the action
which is proposed to be taken with respect thereto, and (ii) with computations
demonstrating compliance with the covenants contained in Articles 7 and 8;

                           (f) as soon as available and in any event within 90
days after the end of each fiscal year of TransAct, a true and complete copy of
TransAct's Report on Form 10-K;

                           (g) as soon as available and in any event within 90
days after the end of each fiscal year of the Borrower, management's projected
financial statements inclusive of a balance sheet, an income statement and a
statement of cash flow (supported by key assumptions) for each upcoming fiscal
year, prepared on a quarter-by-quarter basis;

                           (h) simultaneously with the delivery of the projected
financial statements referred to in Section 6.8(g), a copy of the Borrower's
business plan for each upcoming fiscal year;

                           (i) simultaneously with the delivery of the annual
financial statements referred to in Section 6.8(a), a certificate of the
independent public accountants who audited such statements to the effect that,
in making the examination necessary for the audit of such statements, they have
obtained no knowledge of any condition or event which constitutes a Default or
Event of Default, or if such accountants shall have obtained

                                       31
<PAGE>   33
knowledge of any such condition or event, specifying in such certificate each
such condition or event of which they have knowledge and the nature and status
thereof;

                           (j) promptly after the commencement thereof, notice
of all actions, suits and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting the Borrower or any of its Subsidiaries which, if determined
adversely to the Borrower or such Subsidiary, could have a material adverse
effect on the financial condition, properties or operations of the Borrower or
such Subsidiary;

                           (k) as soon as possible and in any event within five
days after the occurrence of each Default or Event of Default a written notice
setting forth the details of such Default or Event of Default and the action
which is proposed to be taken by the Borrower with respect thereto;

                           (l) as soon as possible, and in any event within ten
days after the Borrower knows or has reason to know that any of the events or
conditions specified below with respect to any Plan or Multiemployer Plan have
occurred or exist, a statement signed by a senior financial officer of the
Borrower setting forth details respecting such event or condition and the
action, if any, which the Borrower or its ERISA Affiliate proposes to take with
respect thereto (and a copy of any report or notice required to be filed with or
given to PBGC by the Borrower or an ERISA Affiliate with respect to such event
or condition):

                                    (i) any reportable event, as defined in
section 4043(b) of ERISA, with respect to a Plan, as to which PBGC has not by
regulation waived the requirement of section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event (provided that a failure
to meet the minimum funding standard of section 412 of the Code or section 302
of ERISA including, without limitation, the failure to make on or before its due
date a required installment under section 412(m) of the Code or section 302(e)
of ERISA, shall be a reportable event regardless of the issuance of any waivers
in accordance with section 412(d) of the Code) and any request for a waiver
under section 412(d) of the Code for any Plan;

                                    (ii) the distribution under section 4041 of
ERISA of a notice of intent to terminate any Plan or any action taken by the
Borrower or an ERISA Affiliate to terminate any Plan;

                                    (iii) the institution by PBGC of proceedings
under section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Borrower or any ERISA
Affiliate of a notice from a Multiemployer Plan that such action has been taken
by PBGC with respect to such Multiemployer Plan;

                                       32
<PAGE>   34
                                    (iv) the complete or partial withdrawal from
a Multiemployer Plan by the Borrower or any ERISA Affiliate that results in
liability under section 4201 or 4204 of ERISA (including the obligation to
satisfy secondary liability as a result of a purchaser default) or the receipt
of the Borrower or any ERISA Affiliate of notice from a Multiemployer Plan that
it is in reorganization or insolvency pursuant to section 4241 or 4245 of ERISA
or that it intends to terminate or has terminated under section 4041A of ERISA;

                                    (v) the institution of a proceeding by a
fiduciary of any Multiemployer Plan against the Borrower or any ERISA Affiliate
to enforce section 515 of ERISA, which proceeding is not dismissed within 30
days;

                                    (vi) the adoption of an amendment to any
Plan that pursuant to section 401(a)(29) of the Code or section 307 of ERISA
would result in the loss of tax-exempt status of the trust of which such Plan is
a part if the Borrower or an ERISA Affiliate fails to timely provide security to
the Plan in accordance with the provisions of said Sections;

                                    (vii) any event or circumstance exists which
may reasonably be expected to constitute grounds for the Borrower or any ERISA
Affiliate to incur liability under Title IV of ERISA or under sections
412(c)(11) or 412(n) of the Code with respect to any Plan; and

                                    (viii) the Unfunded Benefit Liabilities of
one or more Plans increase after the date of this Agreement in an amount which
is material in relation to the financial condition of the Borrower and its
Subsidiaries, on a consolidated basis; provided, however, that such increase
shall not be deemed to be material so long as it does not exceed during any
consecutive 2-year period $200,000;

                           (m) promptly after the request of the Bank, copies of
each annual report filed pursuant to section 104 of ERISA with respect to each
Plan (including, to the extent required by section 104 of ERISA, the related
financial and actuarial statements and opinions and other supporting statements,
certifications, schedules and information referred to in section 103) and each
annual report filed with respect to each Plan under section 4065 of ERISA;
provided, however, that in the case of a Multiemployer Plan, such annual reports
shall be furnished only if they are available to the Borrower or an ERISA
Affiliate;

                           (n) promptly after the furnishing thereof, copies of
any statement or report furnished to any other party pursuant to the terms of
any indenture, loan or credit or similar agreement and not otherwise required to
be furnished to the Bank pursuant to any other clause of this Section 6.8;

                           (o) promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports which the
Borrower or any of its Subsidiaries

                                       33
<PAGE>   35
sends to its stockholders, and copies of all regular, periodic and special
reports, and all registration statements which the Borrower or any of its
Subsidiary files with the Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or with any national securities
exchange;

                           (p) as soon as available, and in any event within 15
days of the end of each fiscal month, a Borrowing Base Certificate and an aging
schedule with respect to Receivables of the Borrower with names of all account
debtors and an aging schedule with respect to payables of the Borrower, all as
of the end of such calendar month and certified by the Chief Accounting Officer
or Chief Financial Officer of the Borrower. In addition to the foregoing, for
the period commencing on the date hereof and ending on the date on which the
Overadvance is either terminated, cancelled or repaid in full, the Borrower
shall furnish a Borrowing Base Certificate to the Bank within 5 business days of
the end of each week;

                           (q) promptly after the commencement thereof or
promptly after the Borrower knows of the commencement or threat thereof, notice
of any Forfeiture Proceeding; and

                           (r) such other information respecting the condition
or operations, financial or otherwise, of the Borrower or any of its
Subsidiaries as the Bank may from time to time reasonably request.

                  Section 6.9. Operating Accounts. Maintain, and cause each of
its Subsidiaries to maintain, all United States operating accounts at the Bank.

                          ARTICLE 7. NEGATIVE COVENANTS

                  So long as the Note shall remain unpaid or the Bank shall have
the Commitment under this Agreement, the Borrower shall not:

                  Section 7.1. Debt. Create, incur, assume or suffer to exist,
or permit any of its Subsidiaries to create, incur, assume or suffer to exist
any Debt, except:

                           (a) Debt of the Borrower under this Agreement or the
Note;

                           (b) Debt described in Schedule 5.10, including
renewals, extensions or refinancings thereof, provided that the principal amount
thereof does not increase; and

                           (c) Debt of the Borrower or any of its Subsidiaries
secured by purchase money Liens permitted by Section 7.3.

                  Section 7.2. Guaranties, Etc. Assume, guaranty, endorse or
otherwise be or become directly or contingently responsible or liable, or permit
any of its Subsidiaries to assume, guarantee, endorse or otherwise be or become
directly or indirectly responsible or

                                       34
<PAGE>   36
liable (including, but not limited to, an agreement to purchase any obligation,
stock, assets, goods or services or to supply or advance any funds, assets,
goods or services, or an agreement to maintain or cause such Person to maintain
a minimum working capital or net worth or otherwise to assure the creditors of
any Person against loss) for the obligations of any Person, except guaranties by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business.

                  Section 7.3. Liens. Create, incur, assume or suffer to exist,
or permit any of its Subsidiaries to create, incur, assume or suffer to exist,
any Lien, upon or with respect to any of its properties, now owned or hereafter
acquired, except:

                           (a) Liens for taxes or assessments or other
government charges or levies if not yet due and payable or if due and payable if
they are being contested in good faith by appropriate proceedings and for which
appropriate reserves are maintained;

                           (b) Liens imposed by law, such as mechanic's,
materialmen's, landlord's, warehousemen's and carrier's Liens, and other similar
Liens, securing obligations incurred in the ordinary course of business which
are not past due for more than 30 days, or which are being contested in good
faith by appropriate proceedings and for which appropriate reserves have been
established;

                           (c) Liens under workers' compensation, unemployment
insurance, social security or similar legislation (other than ERISA);

                           (d) Liens, deposits or pledges to secure the
performance of bids, tenders, contracts (other than contracts for the payment of
money), leases (permitted under the terms of this Agreement), public or
statutory obligations, surety, stay, appeal, indemnity, performance or other
similar bonds, or other similar obligations arising in the ordinary course of
business;

                           (e) judgment and other similar Liens arising in
connection with court proceedings; provided that the execution or other
enforcement of such Liens is effectively stayed and the claims secured thereby
are being actively contested in good faith and by appropriate proceedings;

                           (f) easements, rights-of-way, restrictions and other
similar encumbrances which, in the aggregate, do not materially interfere with
the occupation, use and enjoyment by the Borrower or any such Subsidiary of the
property or assets encumbered thereby in the normal course of its business or
materially impair the value of the property subject thereto;

                           (g) Liens securing obligations of such a Subsidiary
to the Borrower or another such Subsidiary;

                           (h) Liens set forth on Schedule 7.3, provided the
Debt secured by such Liens is permitted by Section 7.1;

                                       35
<PAGE>   37
                           (i) purchase money Liens on any property hereafter
acquired or the assumption of any Lien on property existing at the time of such
acquisition, or a Lien incurred in connection with any conditional sale or other
title retention agreement or a Capital Lease; provided that:

                                    (i) any property subject to any of the
foregoing is acquired by the Borrower or any such Subsidiary in the ordinary
course of its business and the Lien on any such property is created
contemporaneously with such acquisition or such property is acquired pursuant to
an Acceptable Acquisition and is subject to a pre-existing purchase money Lien;

                                    (ii) the obligation secured by any Lien so
created, assumed or existing shall not exceed 80 percent of the lesser of cost
or fair market value as of the time of acquisition of the property covered
thereby to the Borrower or any such Subsidiary acquiring the same;

                                    (iii)each such Lien shall attach only to the
property so acquired and fixed improvements thereon; and

                                    (iv) the obligations secured by such Lien
are permitted by the provisions of Section 7.1; and

                  Section 7.4. Leases. Create, incur, assume or suffer to exist,
or permit its Subsidiaries to create, incur, assume or suffer to exist, any
obligation as lessee for the rental or hire of any real or personal property,
except: (a) leases existing on the date of this Agreement and any extensions or
renewals thereof; (b) leases (other than Capital Leases) which do not in the
aggregate require the Borrower and its Subsidiaries on a consolidated basis to
make payments (including taxes, insurance, maintenance and similar expense which
the Borrower or any Subsidiary is required to pay under the terms of any lease)
in any fiscal year of the Borrower in excess of $250,000; (c) Capital Leases
permitted by Section 7.3.

                  Section 7.5. Investments. Make, or permit any of its
Subsidiaries to make, any loan or advance to any Person or purchase or otherwise
acquire, or permit any such Subsidiary to purchase or otherwise acquire, any
capital stock, assets, obligations or other securities of, make any capital
contribution to, or otherwise invest in, or acquire any interest in, any Person,
except: (a) direct obligations of the United States of America or any agency
thereof with maturities of one year or less from the date of acquisition; (b)
commercial paper of a domestic issuer rated at least "A-1" by Standard & Poor's
Corporation or "P-1" by Moody's Investors Service, Inc.; (c) certificates of
deposit with maturities of one year or less from the date of acquisition issued
by any commercial bank operating within the United States of America having
capital and surplus in excess of $500,000,000; (d) for stock, obligations or
securities received in settlement of debts (created in the ordinary course of
business) owing to the Borrower or any such Subsidiary and (e) Acceptable
Acquisitions.

                                       36
<PAGE>   38
                  Section 7.6. Dividends. Declare or pay any dividends,
purchase, redeem, retire or otherwise acquire for value any of its capital stock
now or hereafter outstanding, or make any distribution of assets to its
stockholders as such whether in cash, assets or in obligations of the Borrower,
or allocate or otherwise set apart any sum for the payment of any dividend or
distribution on, or for the purchase, redemption or retirement of any shares of
its capital stock, or make any other distribution by reduction of capital or
otherwise in respect of any shares of its capital stock or permit any of its
Subsidiaries to purchase or otherwise acquire for value any stock of any
Borrower or another such Subsidiary, except that: (a) the Borrower may declare
and deliver dividends and make distributions payable solely in common stock of
the Borrower; (b) the Borrower may purchase or otherwise acquire shares of its
capital stock by exchange for or out of the proceeds received from a
substantially concurrent issue of new shares of its capital stock; (c) any
Subsidiary may declare and deliver dividends and make distributions to the
Borrower; and (d) the Borrower may make cash dividends in respect of preferred
stock so long as such dividends do not exceed a maximum of $280,000 per year.

                  Section 7.7. Sale of Assets. Sell, lease, assign, transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease, assign,
transfer or otherwise dispose of, any of its now owned or hereafter acquired
assets (including, without limitation, shares of stock and indebtedness of such
Subsidiaries, receivables and leasehold interests); except: (a) for inventory
disposed of in the ordinary course of business; (b) the sale or other
disposition of assets no longer used or useful in the conduct of its business;
and (c) that any such Subsidiary may sell, lease, assign or otherwise transfer
its assets to the Borrower.

                  Section 7.8. Stock of Subsidiaries, Etc. Sell or otherwise
dispose of any shares of capital stock of any of its Subsidiaries or permit any
such Subsidiary to issue any additional shares of its capital stock, except
directors' qualifying shares.

                  Section 7.9. Transactions with Affiliates. Enter into any
transaction, including, without limitation, the purchase, sale or exchange of
property or the rendering of any service, with any Affiliate or permit any of
their respective Subsidiaries to enter into any transaction, including, without
limitation, the purchase, sale or exchange of property or the rendering of any
service, with any Affiliate, except in the ordinary course of and pursuant to
the reasonable requirements of the Borrower's or such Subsidiary's business and
upon fair and reasonable terms no less favorable to the Borrower or such
Subsidiary than it would obtain in a comparable arms' length transaction with a
Person not an Affiliate, and except as set forth on Schedule 7.9.

                  Section 7.10. Mergers, Etc. Merge or consolidate with, or
sell, assign, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to, any Person, or acquire all or substantially all
of the assets or the business of any Person (or enter into any agreement to do
any of the foregoing), or permit any of their respective Subsidiaries to

                                       37
<PAGE>   39
do so except that any such Subsidiary may merge into or transfer assets to the
Borrower, and except for Acceptable Acquisitions.

                  Section 7.11. No Activities Leading to Forfeiture. Neither the
Borrower nor any of its Subsidiaries or Affiliates shall engage in or propose to
be engaged in the conduct of any business or activity which could result in a
Forfeiture Proceeding.

                  Section 7.12. Capital Expenditures. Make Capital Expenditures,
on a consolidated basis, in excess of $4,000,000 in any fiscal year.

                  Section 7.13. New Subsidiaries. Form any new Subsidiary,
unless such Subsidiary executes a guaranty agreement substantially in the form
of the Guaranty.

                         ARTICLE 8. FINANCIAL COVENANTS

                  So long as the Note shall remain unpaid or the Bank shall have
the Commitment under this Agreement:

                  Section 8.1. Minimum Net Worth. The Borrower, on a
consolidated basis, shall maintain at all times, as measured at the end of each
fiscal quarter, commencing December 31, 1999, a Net Worth of not less than the
sum of (i) $11,500,000 plus (ii) 100% of the net cash proceeds of any new equity
investment in the Borrower.

                  Section 8.2. Maximum Leverage Ratio. The Borrower, on a
consolidated basis, shall maintain at all times, as measured at the end of each
fiscal quarter, commencing December 31, 1999, a ratio of Total Liabilities to
Tangible Net Worth of not greater than 2.75 to 1.0.

                  Section 8.3. Maximum Debt to Cash Flow Ratio. The Borrower, on
a consolidated basis, shall maintain a ratio of total Funded Debt to EBITDA, of
not more than 3.5 to 1.0 in respect of the twelve month period ending March 25,
2000 and the twelve month period ending June 24, 2000, and thereafter such ratio
shall be not more than 2.75 to 1.0 at all times, as measured at the end of each
fiscal quarter, commencing on September 23, 2000 for the twelve month period
then ended (a rolling-twelve month calculation measured as of the end of each
successive quarter).

                  Section 8.4. Minimum Interest Coverage Ratio. The Borrower, on
a consolidated basis, shall maintain Interest Coverage Ratio of not less than
3.0 to 1.0 as measured at the end of each quarter, commencing September 23,
2000, on a cumulative basis (i.e. year-to-date) for the period January 1, 2000
through September 23, 2000, and the measurement of this covenant will return to
a rolling-four quarters calculation (measured as of the end of each successive
quarter) commencing with the determination as of December 31, 2000 for the
twelve month period then ending and for each quarter thereafter.

                                       38
<PAGE>   40
                  Section 8.5. EBITDA. The Borrower, on a consolidated basis,
shall maintain EBITDA of not less than $1,200,000 in respect of the six month
period ending June 24, 2000.

                  All financial convenants set forth in this Article 8 shall be
determined or measured based on the financial statements of the Borrower and its
Consolidated Subsidiaries described in Section 6.8 hereof.

                          ARTICLE 9. EVENTS OF DEFAULT

                  Section 9.1. Events of Default. Any of the following events
shall be an "Event of Default":

                           (a) the Borrower shall: (i) fail to pay the principal
of the Note as and when due and payable; or (ii) fail to pay interest on the
Note or any fee or other amount due hereunder as and when due and payable;

                           (b) any representation or warranty made or deemed
made by the Borrower in this Agreement or in any other Facility Document or
which is contained in any certificate, document, opinion, financial or other
statement furnished at any time under or in connection with any Facility
Document shall prove to have been incorrect in any material respect on or as of
the date made or deemed made;

                           (c) the Borrower shall: (i) fail to perform or
observe any term, covenant or agreement contained in Section 2.3 or Articles 7
or 8; or (ii) fail to perform or observe any term, covenant or agreement on its
part to be performed or observed (other than the obligations specifically
referred to elsewhere in this Section 9.1) in any Facility Document and such
failure shall continue for 20 consecutive days;

                           (d) the Borrower, or any of its respective
Subsidiaries: (i) shall generally not, or be unable to, or shall admit in
writing its inability to, pay its debts as such debts become due; or (ii) shall
make an assignment for the benefit of creditors, petition or apply to any
tribunal for the appointment of a custodian, receiver or trustee for it or a
substantial part of its assets; or (iii) shall commence any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or hereafter in
effect; or (iv) shall have had any such petition or application filed or any
such proceeding shall have been commenced against it, in which an adjudication
or appointment is made or order for relief is entered, or which petition,
application or proceeding remains undismissed for a period of 30 days or more;
or shall be the subject of any proceeding under which its assets may be subject
to seizure, forfeiture or divestiture (other than a proceeding in respect of a
Lien permitted under Section 7.3(b)); or (v) by any act or omission shall
indicate its consent to, approval of or acquiescence in any such petition,
application or proceeding or order for relief or the appointment of a custodian,
receiver or trustee for all or any substantial part of its property;

                                       39
<PAGE>   41
or (vi) shall suffer any such custodianship, receivership or trusteeship to
continue undischarged for a period of 30 days or more;

                           (e) one or more judgments, decrees or orders for the
payment of money in excess of $100,000 in the aggregate shall be rendered
against the Borrower, or any of its respective Subsidiaries and such judgments,
decrees or orders shall continue unsatisfied and in effect for a period of 30
consecutive days without being vacated, discharged, satisfied or stayed or
bonded pending appeal;

                           (f) any event or condition shall occur or exist with
respect to any Plan or Multiemployer Plan concerning which the Borrower is under
an obligation to furnish a report to the Bank in accordance with Section 6.8(h)
hereof and as a result of such event or condition, together with all other such
events or conditions, the Borrower or any ERISA Affiliate has incurred or in the
opinion of the Bank is reasonably likely to incur a liability to a Plan, a
Multiemployer Plan, the PBGC or a section 4042 Trustee (or any combination of
the foregoing) which is material in relation to the financial position of the
Borrower and its Subsidiaries, on a consolidated basis; provided, however, that
any such amount shall not be deemed to be material so long as all such amounts
do not exceed in the aggregate during any consecutive 2-year period $200,000;

                           (g) the Unfunded Benefit Liabilities of one or more
Plans have increased after the date of this Agreement in an amount which is
material (as specified in Section 9.1(g) hereof);

                           (h) (A) any Forfeiture Proceeding shall have been
commenced or the Borrower shall have given the Bank written notice of the
commencement of any Forfeiture Proceeding as provided in Section 6.8 or (B) the
Bank has a good faith basis to believe that a Forfeiture Proceeding has been
threatened or commenced;

                           (i) there shall be any material adverse change in the
condition (financial or otherwise), business, management, operations, properties
or prospects of the Borrower and its respective Subsidiaries since the Closing
Date; or

                           (j) the Security Agreement shall at any time after
its execution and delivery and for any reason cease: (A) to create a valid and
perfected first priority security interest in and to the property purported to
be subject to such agreement; or (B) to be in full force and effect or shall be
declared null and void, or the validity or enforceability thereof shall be
contested by the party thereto, or such party shall deny it has further
liability or obligation thereunder or such party shall fail to perform any of
its obligations thereunder.

                  Section 9.2. Remedies. If any Event of Default shall occur and
be continuing, the Bank shall have the right, by notice to the Borrower, (a) to
declare the Commitment to be terminated, whereupon the same shall forthwith
terminate, and (b) to declare the outstanding principal of the Note, all
interest thereon and all other amounts

                                       40
<PAGE>   42
payable under this Agreement and the Note or any one of them to be forthwith due
and payable, whereupon the Note, all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower; provided that, in the case of an Event of Default referred to in
Section 9.1(d) or Section 9.1(i)(A) above, the Commitment shall be immediately
terminated, and the Note, all interest thereon and all other amounts payable
under this Agreement shall be 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.

                            ARTICLE 10. MISCELLANEOUS

                  Section 10.1. Amendments and Waivers. Except as otherwise
expressly provided in this Agreement, any provision of this Agreement may be
amended or modified only by an instrument in writing signed by the Borrower and
the Bank, and any provision of this Agreement may be waived by the Borrower and
the Bank. No failure on the part of the Bank to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof or preclude
any other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.

                  Section 10.2. Usury. All agreements between the Borrower, the
Guarantors and the Bank are hereby expressly limited so that in no contingency
or event whatsoever, whether by reason of acceleration of maturity of the
indebtedness evidenced by the Note or otherwise, shall the amount paid or agreed
to be paid to the Bank for the use or the forbearance of the indebtedness
evidenced by the Note exceed the maximum permissible under applicable law. As
used herein, the term "applicable law" shall mean the law in effect as of the
date hereof provided, however that in the event there is a change in the law
which results in a higher permissible rate of interest, then the Note shall be
governed by such new law as of its effective date. In this regard, it is
expressly agreed that it is the intent of the Borrower and the Bank in the
execution, delivery and acceptance of the Note to contract in strict compliance
with the laws of the State of Connecticut from time to time in effect. If, under
or from any circumstances whatsoever, fulfillment of any provision hereof or of
any of the Facility Documents at the time of performance of such provision shall
be due, shall involve transcending the limit of such validity prescribed by
applicable law, then the obligation to be fulfilled shall automatically be
reduced to the limits of such validity, and if under or from circumstances
whatsoever the Bank should ever receive as interest an amount which would exceed
the highest lawful rate, such amount which would be excessive interest shall be
applied to the reduction of the principal balance evidenced hereby and not to
the payment of interest. This provision shall control every other provision of
all agreements between the Borrower, the Guarantors and the Bank.

                  Section 10.3. Expenses. The Borrower shall reimburse the Bank
on demand for all reasonable costs, expenses and charges (including, without
limitation,

                                       41
<PAGE>   43
telephone, telex, courier expenses, printing costs, reasonable fees and charges
of external legal counsel for the Bank and reasonable costs allocated after the
Closing Date by its internal legal department) incurred by the Bank in
connection with the preparation, negotiation, execution, delivery, filing,
recording, performance, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of this
Agreement, the Note or any Facility Document (subject to a limit of $10,000,
plus disbursements, for the fees of external counsel in preparing the Facility
Documents). The Borrower agrees to indemnify the Bank and its directors,
officers, employees and agents from, and hold each of them harmless against, any
and all losses, liabilities, claims, damages or expenses incurred by any of them
arising out of or by reason of any investigation or litigation or other
proceedings (including any threatened investigation or litigation or other
proceedings) relating to any actual or proposed use by the Borrower or any of
its respective Subsidiaries of the proceeds of the Loans, including, without
limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation or litigation or other proceedings (but
excluding any such losses, liabilities, claims, damages or expenses incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified).

                  Section 10.4. Survival. The obligations of the Borrower under
Section 10.3 shall survive the repayment of the Loans and the termination of the
Commitment.

                  Section 10.5. Assignment; Participations. This Agreement shall
be binding upon, and shall inure to the benefit of, the Borrower, the Bank and
their respective successors and assigns, except that the Borrower may not assign
or transfer its rights or obligations hereunder. The Bank may assign, or sell
participations in, all or any part of any Loan to another bank or other entity,
in minimum amounts of $5,000,000, in which event (a) in the case of an
assignment, upon notice thereof by the Bank to the Borrower, the assignee shall
have, to the extent of such assignment (unless otherwise provided therein), the
same rights, benefits and obligations as it would have if it were the Bank
hereunder; and (b) in the case of a participation, the participant shall have no
rights under the Facility Documents. The agreement executed by the Bank in favor
of the participant shall not give the participant the right to require the Bank
to take or omit to take any action hereunder except action directly relating to
(i) the extension of a payment date with respect to any portion of the principal
of or interest on any amount outstanding hereunder allocated to such
participant, (ii) the reduction of the principal amount outstanding hereunder or
(iii) the reduction of the rate of interest payable on such amount or any amount
of fees payable hereunder to a rate or amount, as the case may be, below that
which the participant is entitled to receive under its agreement with the Bank.
The Bank may furnish any information concerning the Borrower in the possession
of the Bank from time to time to assignees and participants (including
prospective assignees and participants); provided that the Bank shall require
any such prospective assignee or such participant (prospective or otherwise) to
agree in writing to maintain the confidentiality of such information. The Bank
shall have the right at any time to pledge all or any portion of its rights
under the Loans or this Agreement or the Note to any of the twelve (12) Federal
Reserve Banks organized under Section 4 of the Federal Reserve Act, 12 U.S.C.
Section 341. No such

                                       42
<PAGE>   44
pledge or enforcement thereof shall release the Bank from its obligations under
any of the Facility Documents.

                  Section 10.6. Notices. Unless the party to be notified
otherwise notifies the other party in writing as provided in this Section, and
except as otherwise provided in this Agreement, notices shall be delivered in
person or sent by overnight courier, facsimile, ordinary mail, cable or telex
addressed to such party at its "Address for Notices" on the signature page of
this Agreement. Notices shall be effective: (a) on the day on which delivered to
such party in person, (b) on the first Banking Day after the day on which sent
to such party by overnight courier, (c) if given by mail, 48 hours after deposit
in the mails with first-class postage prepaid, addressed as aforesaid, and (d)
if given by facsimile, cable or telex, when the facsimile, cable or telex is
transmitted to the facsimile, cable or telex number as aforesaid; provided that
notices to the Bank shall be effective upon receipt.

                  Section 10.7. Setoff. The Borrower hereby grants to the Bank,
a lien, security interest and right of setoff as security for all liabilities
and obligations to the Bank, whether now existing or hereafter in the
possession, custody, safekeeping or control of the Bank or any entity under the
control of Fleet Boston Corporation, or in transit to any of them. At any time,
without demand or notice, the Bank may set off the same or any part thereof and
apply the same to any liability or obligation of the Borrower even though
unmatured and regardless of the adequacy of any other collateral securing the
Loans. ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES
WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOANS, PRIOR TO
EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER
PROPERTY OF THE BORROWER OR ANY GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND
IRREVOCABLY WAIVED.

                  SECTION 10.8. JURISDICTION; IMMUNITIES. THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY CONNECTICUT STATE OR UNITED
STATES FEDERAL COURT SITTING IN CONNECTICUT OVER ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE NOTE, AND THE BORROWER
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH CONNECTICUT STATE OR FEDERAL
COURT. THE BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS
IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO THE
BORROWER AT ITS ADDRESS SPECIFIED IN SECTION 10.6. THE BORROWER AGREES THAT A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. THE BORROWER FURTHER WAIVES ANY OBJECTION TO VENUE IN SUCH
STATE AND ANY OBJECTION TO AN ACTION OR PROCEEDING IN SUCH STATE ON THE BASIS OF
FORUM NON CONVENIENS.

                                       43
<PAGE>   45
THE BORROWER FURTHER AGREES THAT ANY ACTION OR PROCEEDING BROUGHT AGAINST THE
BANK SHALL BE BROUGHT ONLY IN CONNECTICUT STATE OR UNITED STATES FEDERAL COURT
SITTING IN CONNECTICUT. THE BORROWER WAIVES ANY RIGHT IT MAY HAVE TO JURY TRIAL.

                           (a) Nothing in this Section 10.8 shall affect the
right of the Bank to serve legal process in any other manner permitted by law or
affect the right of the Bank to bring any action or proceeding against the
Borrower or its property in the courts of any other jurisdictions.

                           (b) To the extent that the Borrower has or hereafter
may acquire any immunity from jurisdiction of any court or from any legal
process (whether from service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, the Borrower hereby irrevocably waives such immunity in respect
of its obligations under this Agreement and the Note.

                  Section 10.9. Table of Contents; Headings. Any table of
contents and the headings and captions hereunder are for convenience only and
shall not affect the interpretation or construction of this Agreement.

                  Section 10.10. Severability. The provisions of this Agreement
are intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.

                  Section 10.11. Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall constitute one and
the same instrument, and any party hereto may execute this Agreement by signing
any such counterpart.

                  Section 10.12. Integration. The Facility Documents set forth
the entire agreement between the parties hereto relating to the transactions
contemplated thereby and supersede any prior oral or written statements or
agreements with respect to such transactions.

                  SECTION 10.13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
CONNECTICUT.

                  Section 10.14. Confidentiality. The Bank agrees (on behalf of
itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with safe and sound banking practices, any nonpublic information
supplied to it by the Borrower pursuant to this Agreement which is

                                       44
<PAGE>   46
identified by the Borrower as being confidential at the time the same is
delivered to the Bank, provided that nothing herein shall limit the disclosure
of any such information (i) to the extent required by statute, rule, regulation
or judicial process, (ii) to counsel for the Bank, (iii) to bank examiners,
auditors or accountants, (iv) in connection with any litigation to which the
Bank is a party or (v) to any assignee or participant (or prospective assignee
or participant) so long as such assignee or participant (or prospective assignee
or participant) agrees to maintain the confidentiality of such information; and
provided finally that in no event shall the Bank be obligated or required to
return any materials furnished by the Borrower.

                  Section 10.15. Treatment of Certain Information. The Borrower
(a) acknowledges that services may be offered or provided to it (in connection
with this Agreement or otherwise) by the Bank or by one or more of its
subsidiaries or affiliates and (b) acknowledges that information delivered to
the Bank by the Borrower may be provided to each such subsidiary and affiliate.

                  SECTION 10.16. COMMERCIAL WAIVER. THE BORROWER ACKNOWLEDGES
THAT THE LOANS EVIDENCED BY THE NOTE ARE FOR COMMERCIAL PURPOSES AND WAIVES ANY
RIGHT TO NOTICE AND HEARING UNDER SECTIONS 52-278a THROUGH 52-278n OF THE
CONNECTICUT GENERAL STATUTES AS NOW OR HEREAFTER AMENDED AND AUTHORIZES THE
ATTORNEY OF THE BANK, OR ANY SUCCESSOR THERETO, TO ISSUE A WRIT OF PREJUDGMENT
REMEDY WITHOUT COURT ORDER. FURTHER, THE BORROWER HEREBY WAIVES, TO THE EXTENT
PERMITTED BY LAW, THE BENEFITS OF ALL VALUATION, APPRAISEMENTS, HOMESTEAD,
EXEMPTION, STAY, REDEMPTION AND MORATORIUM LAWS NOW IN FORCE OR WHICH MAY
HEREAFTER BECOME LAWS. EACH BORROWER ACKNOWLEDGES THAT IT MAKES THESE WAIVERS
AND THE WAIVERS CONTAINED IN SECTION 10.8 KNOWINGLY, VOLUNTARILY AND ONLY AFTER
EXTENSIVE CONSIDERATION OF THE RAMIFICATIONS OF THESE WAIVERS WITH ITS
ATTORNEYS.

                  SECTION 10.17. WAIVER OF JURY TRIAL BECAUSE DISPUTES ARISING
IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND
ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE BORROWER AND
THE BANK WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN
ARBITRATION RULES), THE BORROWER AND THE BANK DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
BORROWER AND THE BANK HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY
DISPUTE, WHETHER IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH,
RELATED TO, OR INCIDENTAL TO, THIS

                                       45
<PAGE>   47
AGREEMENT OR ANY OF THE OTHER FACILITY DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

                  Section 10.18 Independence of Covenants. All covenants
hereunder shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitations of, another
covenant shall not avoid the occurrence of a Default or Event of Default if such
action is taken or condition exists.

                  Section 10.19 Time of the Essence. Time and punctuality shall
be of the essence with respect to this instrument, but no delay or failure of
the Bank to enforce any of the provisions herein contained and no conduct or
statement of the Bank shall waive or affect any of the Bank's rights hereunder.

                  Section 10.20 Reference to and Effect on the Facility
Documents.

                           (a) Upon the effectiveness of this Agreement, on and
after the date hereof each reference in the Facility Documents to the Credit
Agreement or the Note, shall mean and be a reference to this Credit Agreement as
amended and restated hereby or the Note as amended and restated in connection
with the execution and delivery of this Agreement.

                           (b) The execution, delivery and effectiveness of this
Agreement shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of the Bank under any of the Facility Documents, nor
constitute a waiver of any provision of any of the Facility Documents.

                  Section 10.21 Replacement Promissory Note. Upon receipt of an
affidavit of an officer of the Bank as to the loss, theft, destruction or
mutilation of the Note or any other security document which is not of public
record, and, in the case of any such loss, theft, destruction or mutilation,
upon surrender and cancellation of the Note or other security document, the
Borrower will issue, in lieu thereof, a replacement Note or other security
document in the same principal amount thereof and otherwise of like tenor.

                                       46
<PAGE>   48
                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.

                                   TRANSACT TECHNOLOGIES INCORPORATED

                                   By  /s/  Richard L. Cote
                                     -------------------------------------------
                                            Richard L. Cote
                                            Title: Executive Vice President and
                                                 Chief Financial Officer

                                   Address for Notices to Borrower:
                                   7 Laser Lane
                                   Wallingford, Connecticut 06492

                                   FLEET NATIONAL BANK

                                   By  /s/  W. Lincoln Schoff, Jr.
                                     -------------------------------------------
                                            W. Lincoln Schoff, Jr.
                                            Director

                                   Address for Notices and Lending Office:
                                   One Landmark Square
                                   Stamford, Connecticut 06901
                                   Attn: W. Lincoln Schoff, Jr.
                                        Director
                                   Facsimile No.: (203) 964-4850

                                       47

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