Document:

Exhibit 10(e)

[M&T Bank LOGO]                                       GENERAL SECURITY AGREEMENT
                                                                        New York

Debtor: SONO-TEK CORPORATION, a corporation organized under the laws of New York
Organizational Identification Number (if any): N/A

Chief executive office/residence: 2012 Route 9W, Milton, New York 12547

Secured Party: MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking
corporation with its principal banking office at One M&T Plaza, Buffalo, New
York 14240 Attention: Office of General Counsel

For good and valuable consideration, the receipt and sufficiency of which is
acknowledged, and intending to be legally bound, Debtor agrees with Secured
Party as follows:

1. Security Interests.

      1.l Grant. As security for the prompt and complete payment and performance
when due of all of the Obligations, Debtor does hereby grant to Secured Party a
continuing security interest ("Security Interest") in all personal property and
fixtures of Debtor, wherever located, whether now existing or owned or hereafter
arising or acquired, whether or not subject to the Uniform Commercial Code, as
the same may be in effect in the State of New York, as amended from time to
time, ("UCC") and whether or not affixed to any realty including (i) all
accounts, chattel paper, investment property, deposit accounts, documents,
equipment, farm products, general intangibles (including trademarks, service
marks, trade names, patents, copyrights, licenses and franchises), instruments,
inventory, money, letter of credit rights, causes of action (including tort
claims) and other personal property (including agreements and instruments not
constituting chattel paper or a document, general intangible or instrument);
(ii) all additions, accessions to, substitutions for, or replacements of the
foregoing; (iii) all proceeds and products of the foregoing including insurance
proceeds; and (iv) all business records and information relating to any of the
foregoing and any software or other programs for accessing and manipulating such
information (collectively, the "Collateral"). Debtor acknowledges and agrees
that, in applying the law of any jurisdiction that at any time enacts all or
substantially all of the uniform provisions of Revised Article 9 of the Uniform
Commercial Code (1999 Official Text), the foregoing collateral description
covers all assets of Debtor.

      1.2 Obligations. The term "Obligations" means any and all indebtedness or
other obligations of Debtor to Secured Party in any capacity, now existing or
hereafter incurred, however created or evidenced, regardless of kind, class or
form, whether direct, indirect, absolute or contingent (including obligations
pursuant to any guaranty, endorsement, other assurance of payment or otherwise),
whether joint or several, whether from time to time reduced and thereafter
increased, or entirely extinguished and thereafter reincurred, together with all
extensions, renewals and replacements thereof, and all interest, fees, charges,
costs or expenses which accrue on or in connection with the foregoing, including
any indebtedness or obligations (i) not yet outstanding but contracted for, or
with regard to which any other commitment by Secured Party exists; (ii) arising
prior to, during or after any pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding; (iii) owed by Debtor to others and which Secured
Party obtained, or may obtain, by assignment or otherwise; and (iv) payable
under this Agreement.

2. Covenants. Debtor covenants and agrees as follows:

      2.1 Perfection of Security Interest. Debtor shall execute and deliver to
Secured Party such financing statements, control agreements or other documents,
in form and content satisfactory to Secured Party, as Secured Party may from
time to time request to perfect and continue the Security Interest. Upon the
request of Secured Party, Debtor shall deliver to Secured Party any and all
instruments, chattel paper, negotiable documents or other documents evidencing
or constituting any part of the Collateral properly endorsed or assigned, in a
manner satisfactory to Secured Party. Until such delivery, Debtor shall hold
such portion of the Collateral in trust for Secured Party. Debtor shall pay all
expenses for the preparation, filing, searches and related costs in connection
with the grant and perfection of the Security Interest. Debtor authorizes (both
prospectively and retroactively) Secured Party to file financing statements, and
any continuations and amendments thereof, with respect to the Collateral without
Debtor's signature. A photocopy or other reproduction of any financing statement
or this Agreement shall be sufficient as a financing statement for filing in any
jurisdiction.

      2.2 Negative Pledge; Disposition of Collateral. Debtor shall not grant or
allow the imposition of any lien, security interest or encumbrance on, or
assignment of, the Collateral unless consented to in writing by Secured Party.
Debtor shall not make or permit to be made any sale, transfer or other
disposition of the Collateral; provided, however, prior to the occurrence of an
Event of Default, Debtor may in the ordinary course of business consistent with
its past practices and with prudent and standard practices used in the industry
that is the same or similar to that in which Debtor is engaged: (i) dispose of
any Collateral consisting of equipment that is obsolete or worn-out; (ii) sell
or exchange any Collateral consisting of equipment in connection with the
acquisition of other equipment that is at least as valuable as such equipment,
that Debtor intends to use for substantially the same purposes as such equipment
and that is not subject to any security interest or other lien or encumbrance;
(iii) collect Collateral consisting of accounts or assign such Collateral for
purposes of collection; or (iv) sell or lease Collateral consisting of
inventory. A sale, lease or other transfer of such Collateral consisting of
inventory in the ordinary course of Debtor's business does not include a
transfer in partial or complete satisfaction of any liability or obligation or
any bulk sale.

      2.3 Condition of Collateral; Impermissible Use. Debtor shall keep the
Collateral consisting of goods in good condition (other than ordinary wear and
tear) and shall not commit or permit damage or destruction to such Collateral.
Debtor shall not permit (i) the Collateral consisting of goods to be used in
such a manner that would violate any insurance policy or warranty covering the
Collateral or that would violate any applicable law of any governmental
authority (including any environmental law) now or hereafter in effect; (iii)
the Collateral consisting of goods to become fixtures on any real property on
which Secured Party does not have a first priority mortgage lien (unless Secured
Party has been provided with an acceptable landlord/mortgagee waiver) or become
an accession to any goods not included in the Collateral; or (iii) any goods
included in the Collateral to be placed in any warehouse that may issue a
negotiable document with regard to such goods.

      2.4 Modification to Collateral. Debtor shall not, without Secured Party's
prior written consent, grant any extension, compound, settlement for less than
full amount, release (in whole or in part), modification or cancellation of, or
substitution for, or credits or adjustments on Collateral consisting of
accounts, chattel paper, general intangibles, instruments, documents, investment
property, except that so long as no Event of Default is then in existence,

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Debtor may grant to account debtors, or other persons obligated with the
Collateral, extensions, credits, discounts, compromises or settlements in the
ordinary course of business consistent with its past practices and consistent
with prudent and standard practices used in the industries that are the same or
similar to those in which Debtor is engaged.

      2.5 Titled Goods. Debtor shall cause all goods included in the Collateral
to be properly titled and registered to the extent required by applicable law.
Upon the request of Secured Party, Debtor shall cause the interest of Secured
Party to be properly indicated on any certificate of title relating to such
goods and deliver to Secured Party each such certificate, and any additional
evidence of ownership, certificates of origin or other documents evidencing any
interest in such goods.

      2.6 Insurance. Debtor shall at its own expense, keep in force at all times
insurance covering damage to persons and against fire, flood, theft and all
other risks which the Collateral may be subject, all in such amounts, with such
deductibles and issued by such insurance company as shall be satisfactory to
Secured Party. Such insurance shall have all endorsements that Secured Party may
require and shall further (i) name Secured Party as an additional insured on the
casualty insurance and a lender's loss payable or mortgagee on the hazard
insurance; (ii) provide Secured Party with a minimum of thirty (30) days prior
written notice of any amendment or cancellation; and (iii) insure Secured Party
notwithstanding any act or neglect of Debtor or other owner of the property
described in such insurance. If Debtor fails to obtain the insurance as provided
herein, Secured Party may, but is not obligated, to obtain such insurance as
Secured Party may deem appropriate including, if it so chooses, "single interest
insurance" which will cover only Secured Party's interest in the Collateral.
Debtor shall pay to Secured Party for the cost of such insurance. Secured Party
shall have the option to hold insurance proceeds as part of the Collateral,
apply any insurance proceeds toward the Obligations or apply the insurance
proceeds towards repair or replacement of the item of Collateral in respect of
which such proceeds were received. Upon the request of Secured Party, Debtor
shall from time to time deliver to Secured Party such insurance policies, or
other evidence of such policies satisfactory to Secured Party and such other
related information Secured Party may request.

      2.7 Collateral Information. Debtor shall provide all information, in form
and substance satisfactory to Secured Party, that Secured Party shall from time
to time request to (i) identify the nature, extent, value, age and location of
any of the Collateral, or (ii) identify any account debtor or other party
obligated with respect to any chattel paper, general intangible, instrument,
investment property, document or deposit account included in the Collateral.

      2.8 Financial Information. Debtor shall furnish to Secured Party financial
statements in such form (e.g., audited, reviewed, compiled) and at such
intervals as Secured Party shall request from time to time plus any additional
financial information that Secured Party may request. All such financial
statements shall be in conformity with generally accepted accounting principles
consistently applied.

      2.9 Taxes; Licenses; Compliance with Laws. Before the end of any
applicable grace period, Debtor shall pay each tax, assessment, fee and charge
imposed by any governmental authority upon the Collateral, the ownership,
disposition or use of any of the Collateral, this Agreement or any instrument
evidencing any of the Obligations. Debtor shall maintain in full force and
effect each license, franchise or other authorization needed for any ownership,
disposition or use of the Collateral and the conduct of its business, operations
or affairs. Debtor shall comply with all applicable taw of any governmental
authority (including any environmental law), now or hereafter in effect,
applicable to the ownership, disposition or use of the Collateral or the conduct
of its business, operations or affairs.

      2.10 Records; Legend. Debtor shall maintain accurate and complete books
and records relating to the Collateral in conformity with generally accepted
accounting principles consistently applied. At Secured Party's request, Debtor
will legend, in form and manner satisfactory to Secured Party, its books and
records to indicate the Security Interest.

      2.11 Additional Collateral. If at any time the liquidation value of any of
the Collateral is unsatisfactory to Secured Party, then on demand of Secured
Party Debtor shall either immediately (i) furnish such additional collateral
satisfactory to Secured Party to be held by Secured Party as if originally
pledged hereunder and shall execute such additional security agreements,
financing statements or other agreements as requested by Secured Party (ii) or
repay the Obligations to bring the outstanding amount of the Obligations to
within a satisfactory relationship to the liquidation value of the Collateral.

      2.12 Notifications of Change. Immediately upon acquiring knowledge or
reason to know of any of the following, Debtor shall notify Secured Party of the
occurrence or existence of (i) any Event of Default; (ii) any event or
condition that, after notice, lapse of time or after both notice and lapse of
time, would constitute an Event of Default; (iii) any account or general
intangible that arises out of a contract with any governmental authority
(including the United States); (iv) any event or condition that has or (so far
as can be foreseen) will or might have any material adverse effect on the
Collateral (including a material loss destruction or theft of, or of any damage
to, the Collateral, material decline in value of the Collateral or a material
default by an account debtor or other party's performance of obligations with
respect to the Collateral), on Debtor or its business, operations, affairs or
condition (financial or otherwise).

      2.13 Lien Law. If any account or general intangible included in the
Collateral represents money owing pursuant to any contract for the improvement
of real property or for a public improvement for purposes of the Lien Law of the
State of New York (the "Lien Law"), Debtor shall (i) give Secured Party notice
of such fact; (ii) receive and hold any money advanced by Secured Party with
respect to such account or general intangible as a trust fund to be first
applied to the payment of trust claims as such term is defined in the Lien Law
(Section 71 or otherwise); and (iii) until such trust claim is paid, not use or
permit the use of any such money for any purpose other than the payment of such
trust claims.

      2.14 Protection of Collateral; Further Assurances. Debtor shall, at its
own cost, faithfully preserve, defend and protect the Security Interest as a
prior perfected security interest in the Collateral under the UCC and other
applicable law, superior and prior to the rights of all third parties (other
than those permitted pursuant to Section 3.1) and shall defend the Collateral
against all setoffs, claims, counterclaims, demands and defenses. At the request
of Secured Party, Debtor shall do, obtain, make, execute and deliver all such
additional and further acts, things, deeds, assurances and instruments as
Secured Party may deem necessary or advisable from time to time in order to
attach, continue, preserve, perfect or protect the Security Interest and Secured
Party's rights hereunder including obtaining waivers (in form and content
acceptable to Secured Party) from landlords, warehousemen and mortgagees. Debtor
hereby irrevocably appoints Secured Party, its officers, employees and agents,
or any of them, as attorneys-in-fact for Debtor with full power and authority in
the place and stead of Debtor and in the name of Debtor or its own name from
time to time in Secured Party's discretion, to perform all acts which Secured
Party deems appropriate to attach, continue, preserve or perfect and continue
the Security Interest, including signing for Debtor (to the extent such
signature may be required by applicable law) UCC-1 financing statements and
UCC-3 Statements of Change or to accomplish the purposes of this Agreement. This
power of attorney, being coupled with an interest, is irrevocable and shall not
be affected by the subsequent disability or incompetence of Debtor.

3. Representations and Warranties. Debtor represents, warrants and agrees as
follows:

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      3.1 Title. Debtor holds good and marketable title to the Collateral free
and clear from any security interest or other lien or encumbrance of any party,
other than the Security Interest or such liens, security interests or other
liens or encumbrances specifically permitted by Secured Party and set forth on
Exhibit A hereto ("Permitted Liens"). Debtor has not made any prior sale,
pledge, encumbrance, assignment or other disposition of any of the Collateral
except for the Permitted Liens.

      3.2 Authority. If Debtor is a business entity, it is duly organized,
validly existing and in good standing under the laws of the above named state of
organization. Debtor has the full power and authority to grant the Security
Interest and to execute, deliver and perform its obligation in accordance with
this Agreement. The execution and delivery of this Agreement will not (i)
violate any applicable law of any governmental authority or any judgment or
order of any court, other governmental authority or arbitrator; (ii) violate any
agreement governing Debtor or to which Debtor is a party; or (iii) result in a
security interest or other lien or encumbrance on any of its assets. Debtor's
certificate of incorporation, by-laws or other organizational documents do not
prohibit any term or condition of this Agreement. Each authorization, approval
or consent from, each registration and filing with, each declaration and notice
to, and each other act by or relating to, any party required as a condition of
Debtor's execution, delivery or performance of this Agreement (including any
shareholder or board of directors or similar approvals) has been duly obtained
and is in full force and effect. Debtor has the power and authority to transact
the business in which it is engaged and is duly licensed or qualified and in
good standing in each jurisdiction in which the conduct of its business or
ownership of property requires such licensing or such qualifications.

      3.3 Judgments and Litigation. There is no pending or threatened claim,
audit, investigation, action or other legal proceeding or judgment or order of
any court, agency or other governmental authority or arbitrator which involves
Debtor or the Collateral and which might have a material adverse effect upon the
Collateral, the Debtor, its business, operations, affairs or condition
(financial or otherwise), or threaten the validity of this Agreement or any
related document or action. Debtor will immediately notify Secured Party upon
acquiring knowledge of the foregoing.

      3.4 Enforceability of Collateral. Instruments, chattel paper, accounts or
documents which constitute any part of the Collateral are genuine and
enforceable in accordance with their terms, comply with the applicable law of
any governmental authority concerning form, content, manner of preparation and
execution, and all persons appearing to be obligated on such Collateral have
authority and capacity to contract and are in fact obligated as they appear to
be on such Collateral. There are no restrictions on any assignment or other
transfer or grant of the Security Interest by Debtor. Each sum represented by
Debtor from time to time as owing on accounts, instruments, deposit accounts,
chattel paper and general intangibles constituting any part of the Collateral by
account debtors and other parties with respect to such Collateral is the sum
actually and unconditionally owing by account debtors and other parties with
respect thereto at such time, except for applicable normal cash discounts. None
of the Collateral is subject to any defense, set-off, claim or counterclaim of a
material nature against Debtor except as to which Debtor has notified
Secured Party in writing.

      3.5 Location of Chief Executive Office, Records, Collateral. The locations
of the following are listed on page one of this Agreement or, if different or
additional, on Exhibit A hereto: (i) Debtor's residence, principal place of
business and chief executive office; (ii) the office in which Debtor maintains
its books or records relating to the Collateral; (iii) the facility (including
any storage facility) at which now owned or subsequently acquired inventory,
equipment and fixtures constituting any part of the Collateral shall be kept;
and (iv) the real property on which any crop included in the Collateral is
growing or is to be grown, or on which any timber constituting any part of the
Collateral is or is to be standing. Debtor will not effect or permit any change
in any of the foregoing locations (or remove or permit the removal of the
records or Collateral therefrom, except for mobile equipment included in the
Collateral which may be moved to another location for not more than thirty (30)
days) without thirty (30) days prior written notice to Secured Party and all
actions deemed necessary by Secured Party to maintain the Security Interest
intended to be granted hereby at all times fully perfected and in full force and
effect have been taken. All of the locations listed on page one or Exhibit A are
owned by Debtor, of if not, by the party(ies) identified on Exhibit A.

      3.6 Structure; Name. Debtor's organizational structure, state of
registration and organizational identification number (if any) are stated
accurately on page one of this Agreement, and its full legal name and any trade
name used to identify it are stated accurately on page one of this Agreement, or
if different or additional are listed on Exhibit A hereto. Debtor will not
change its name, any trade names or its identity, its organizational structure,
state of registration or organizational identification number without thirty
(30) days prior written notice to Secured Party. All actions deemed necessary by
Security Party to maintain the Security Interest intended to be granted hereby
at all times fully perfected and in full force and effect have been taken.

4. Performance and Expenditures by Secured Party. If Debtor fails to perform or
comply with any of the terms hereof, Secured Party, at its option, but without
any obligation so to do, may perform or comply, or otherwise cause performance
or compliance, with such terms including the payment or discharge of all taxes,
fees, security interest or other liens, encumbrances or claims, at any time
levied or placed on the Collateral. An election to make expenditures or to take
action or perform an obligation of Debtor under this Agreement, after Debtor's
failure to perform, shall not affect Secured Party's right to declare an Event
of Default and to exercise its remedies. Nor shall the provisions of this
Section relieve Debtor of any of its obligations hereunder with respect to the
Collateral or impose any obligation on Secured Party to proceed in any
particular manner with respect to the Collateral.

5. Duty of Secured Party. Secured Party's sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession shall
be to deal with it in the same manner as Secured Party deals with similar
property for its own account. Neither Secured Party nor its directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of the Collateral upon the request of
Debtor or any other person or to take any other action whatsoever with regard to
the Collateral. The powers conferred on Secured Party hereunder are solely to
protect Secured Party's interests in the Collateral and shall not impose any
duty upon any Secured Party to exercise any such powers. Secured Party shall be
accountable only for amounts that it actually receives as a result of the
exercise of its powers under this Agreement, and neither it nor its officers,
directors, employees or agents shall be responsible to Debtor for any act or
failure to act hereunder, except for its own gross negligence or wilful
misconduct.

6. Certain Rights and Remedies.

    6.1 Inspection; Verification. Secured Party, and such persons as it may
designate, shall have the right from time to time to (i) audit and inspect (a)
the Collateral, (b) all books and records related thereto (and make extracts and
copies from such records), and (c) the premises upon which any of the Collateral
or books and records may be located; (ii) discuss Debtor's business, operations,
affairs or condition (financial or otherwise) with its officers, accountants;
and (iii) verify the validity, amount, quality, quantity, value, condition and
status of, or any other matter relating to the Collateral in any manner and
through any medium Secured Party may consider appropriate (including

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contacting account debtors or third party possessing the Collateral for purpose
of making such verification). Debtor shall furnish all assistance and
information and perform any acts Secured Party may require regarding thereto.
Debtor shall bear the cost and expense of any such inspection and verification.

      6.2 Notification of Security Interest. Secured Party may notify any or all
account debtors and other person obligated with respect to the Collateral of the
Security Interest therein. Upon the request of Secured Party, Debtor agrees to
enter into such warehousing, lockbox or other custodial arrangement with respect
to any of the Collateral that Secured Party shall deem necessary or desirable.

      6.3 Application of Proceeds. Secured Party may apply the proceeds from the
sale, lease or other disposition or realization upon the Collateral to the
Obligations in such order and manner and at such time as Secured Party shall, in
its Sole discretion, determine. Debtor waives and agrees not to assert any
rights it may have or acquire under current Section 9-112 of the UCC (or any
subsequent amendment thereto). Debtor shall remain liable for any deficiency if
the proceeds of any sale, lease or other disposition or realization upon the
Collateral are insufficient to pay the Obligations. Any proceeds received by
Debtor from the Collateral after an Event of Default shall (i) be held by Debtor
in trust for Secured Party in the same medium in which received; (ii) not be
commingled with any assets of Debtor; and (iii) be delivered to Secured Party in
the form received, properly indorsed to permit collection. After an Event of
Default, Debtor shall promptly notify Secured Party of the return to or
repossession by Debtor of goods constituting part of the Collateral, and Debtor
shall hold the same in trust for Secured Party and shall dispose of the same as
Secured Party directs.

      6.4 Income and Proceeds of Instruments and Investment Property. Until the
occurrence of an Event of Default, Debtor reserves the right to request to
receive all cash income or cash distribution (whether in cash or evidenced by
check) payable on account of any instrument or investment property constituting
part of the Collateral (collectively, "Cash Distribution"). Until actually paid,
all rights in the foregoing shall remain subject to the Security Interest. Any
other income, dividend, distribution, increase in or profits (including any
stock issued as a result of any stock split or dividend, any capital
distributions and the like) on account of any instrument or investment property
constituting part of the Collateral and, upon the occurrence of an Event of
Default, all Cash Distributions, shall be delivered to Secured Party immediately
upon receipt, in the exact form received and without commingling with other
property which may be received by, paid or delivered to Debtor or for Debtor's
account, whether as an addition to, in discharge of, in substitution of, or in
exchange of the Collateral. Until delivery, such Collateral shall be held in
trust for Secured Party.

      6.5 Registered Holder of the Collateral. Secured Party shall have the
right to transfer to or register (with or without reference to this Agreement)
in the name of Secured Party or its nominee any investment property, general
intangible, instrument or deposit account constituting part of the Collateral so
that Secured Party or such nominee shall appear as the sole owner of record
thereof; provided, however, that so long as no Event of Default has occurred,
Secured Party shall deliver to Debtor all notices, statements or other
communications received by it or its nominee as such registered owner, and upon
demand and receipt of payment of necessary expenses thereof, shall give to
Debtor or its designee a proxy or proxies to vote and take all action with
respect to such Collateral. After the occurrence of any Event of Default, Debtor
waives all rights to be advised of or to receive any notices, statements or
communications received by Secured Party or its nominee as such record owner,
and agrees that no proxy or proxies given by Secured Party to Debtor or its
designee as aforesaid shall thereafter be effective.

7. Default.

      7.1 Events of Default. Any of the following events or conditions shall
constitute an "Event of Default": (i) failure by Debtor to pay when due (whether
at the stated maturity, by acceleration, upon demand or otherwise) the
Obligations, or any part thereof, or there occurs any event or condition which
after notice, lapse of time or after both notice and lapse of time will permit
acceleration of any Obligation; (ii) default by Debtor in the performance of any
obligation, term or condition of this Agreement or any other agreement with
Secured Party or any of its affiliates or subsidiaries (collectively,
"Affiliates"); (iii) failure by Debtor to pay when due (whether at the stated
maturity, by acceleration, upon demand or otherwise) any indebtedness or
obligation owing to any third party or any Affiliate, the occurrence of any
event which could result in acceleration of payment of any such indebtedness or
obligation or the failure to perform any agreement with any third party or any
affiliate; (iv) Debtor is dissolved, becomes insolvent, generally fails to pay
or admits in writing its inability generally to pay its debts as they become
due; (v) Debtor makes a general assignment, arrangement or composition agreement
with or for the benefit of its creditors or makes, or sends notice of any
intended, bulk sale; the sale, assignment, transfer or delivery of all or
substantially all of the assets of Debtor to a third party; or the cessation by
Debtor as a going business concern; (vi) Debtor files a petition in bankruptcy
or institutes any action under federal or state law for the relief of debtors or
seeks or consents to the appointment of an administrator, receiver, custodian or
similar official for the wind up of its business (or has such a petition or
action filed against it and such petition action or appointment is not dismissed
or stayed within forty-five (45) days); (vii) the reorganization, merger,
consolidation or dissolution of Debtor (or the making of any agreement
therefor); (viii) the death or judicial declaration of incompetency of Debtor,
if an individual; (ix) the entry of any judgment or order of any court, other
governmental authority or arbitrator against Debtor; (x) falsity, omission or
inaccuracy of facts submitted to Secured Party or any Affiliate (whether in a
financial statement or otherwise); (xi) an adverse change in the Collateral,
Debtor, its business, operations, affairs or condition (financial or otherwise)
from the status shown on any financial statement or other document submitted to
Secured Party, and which change Secured Party determines will have a material
adverse affect on (a) Debtor, its business, operations or condition (financial
or otherwise), or (b) the ability of Debtor to pay or perform the Obligations;
(xii) any pension plan of Debtor fails to comply with applicable law or has
vested unfunded liabilities that, in the opinion of Secured Party, might have a
material adverse effect on Debtor's ability to repay its debts; (xiii) any
indication or evidence received by Secured Party that Debtor may have directly
or indirectly been engaged in any type of activity which, in Secured Party's
discretion, might result in the forfeiture or any property of Debtor to any
governmental authority; (xiv) the occurrence of any event described in Section
7.1(i) through and including 7.1(xiii) with respect to any endorser, guarantor
or any other party liable for, or whose assets or any interest therein secures,
payment of any of the Obligations; or (xv) Secured Party in good faith deems
itself insecure with respect to payment or performance of the Obligations.

      7.2 Rights and Remedies Upon Default. Upon the occurrence of any Event of
Default, Secured Party without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law) to or upon Debtor or any other person (all and each of which
demands, presentments, protests, advertisements and notices are hereby waived),
may exercise all rights and remedies of a secured party under the UCC, under
other applicable law, in equity or otherwise or available under in this
Agreement including:

      7.2.1 Obligations Immediately Due; Termination of Lending. Secured Party
      may declare all or any part of any Obligations not payable on demand to be
      immediately due and payable without demand or notice of any kind. All or
      any part of any Obligations whether or not payable on demand, shall be
      immediately due and payable automatically upon the occurrence of an Event
      of Default in Section 7.1 (vi) above. The provisions hereof are not
      intended in any way to affect any rights of Secured Party with respect to
      any Obligations which may now or hereafter be payable on demand. Secured
      Party may terminate any obligation it may have to grant any additional
      loan, credit or other financial accommodation to Debtor.

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      7.2.2 Access to Collateral. Secured Party, or its agents, may peaceably
      retake possession of the Collateral with or without notice or process of
      law, and for that purpose may enter upon any premises where the Collateral
      is located and remove the same. At Secured Party's request, Debtor shall
      assemble the Collateral and deliver it to Secured Party or any place
      designated by Secured Party, at Debtor's expense.

      7.2.3 Sell Collateral. Secured Party shall have the right to sell, lease
      or otherwise dispose of the Collateral in one or more parcels at public or
      private sale or sales upon such terms and conditions as it may deem
      advisable and at such prices as it may deem best, for cash or on credit or
      for future delivery without assumption of any credit risk. Each purchaser
      at any such sale shall hold the property sold absolutely, free from any
      claim or right on the part of Debtor. Debtor hereby waives (to the extent
      permitted by law) all rights of redemption, stay and appraisal which
      Debtor now has or may at any time in the future have under any applicable
      law now existing or hereafter enacted. Secured Party shall have the right
      to use Debtor's premises and any materials or rights of Debtor (including
      any intellectual property rights) without charge for such sales or
      disposition of the Collateral or the completion of any work in progress
      for such times as Secured Party may see fit. Without in any way requiring
      notice to be given in the following time and manner, Debtor agrees that
      with respect to any notice by Secured Party of any sale, lease or other
      disposition or realization or other intended action hereunder or in
      connection herewith, whether required by the UCC or otherwise, such notice
      shall be deemed reasonable and proper if given at least five (5) days
      before such action in the manner described below in the Section entitled
      "Notices".

      7.2.4 Collect Revenues. Secured Party may either directly or through a
      receiver (i) demand, collect and sue on any Collateral consisting of
      accounts or any other Collateral including notifying account debtors or
      any other persons obligated on the Collateral to make payment on the
      Collateral directly to Secured Party; (ii) file any claim or to take any
      other action or proceeding in any court of law or equity or otherwise
      deemed appropriate by Secured Party with respect to the Collateral or to
      enforce any other right in respect of the Collateral; (iii) take control,
      in any manner, of any payment or proceeds from the Collateral; (iv)
      prosecute or defend any suit, action or proceeding brought against Debtor
      with respect to the Collateral; (v) settle, compromise or adjust any and
      all claims arising under the Collateral or, to give such discharges or
      releases as Secured Party may deem appropriate; (vi) receive and collect
      all mail addressed to Debtor, direct the place of delivery thereof to any
      location designated by Secured Party; to open such mail; to remove all
      contents therefrom; to retain all contents thereof constituting or
      relating to the Collateral; (vii) execute, sign or endorse any and all
      claims, endorsements, assignments, checks or other instruments with
      respect to the Collateral; or (viii) generally, use, sell, transfer,
      pledge and make any agreement with respect to or otherwise deal with any
      of the Collateral; and Debtor hereby irrevocably appoints Secured Party,
      its officers, employees and agents, or any of them, as attorneys-in-fact
      for Debtor with full power and authority in the place and stead of Debtor
      and in the name of Debtor or in its own name from time to time in Secured
      Party's discretion, to take any and all appropriate action Secured Party
      deems necessary or desirable to accomplish any of the foregoing or
      otherwise to protect, preserve, collect or realize upon the Collateral or
      to accomplish the purposes of this Agreement. Debtor revokes each power of
      attorney (including any proxy) heretofore granted by Debtor with regard to
      the Collateral. This power of attorney, being coupled with an interest, is
      irrevocable and shall not be affected by the subsequent disability or
      incompetence of Debtor.

      7.2.5 Setoff. Secured Party may place an administrative hold on and set
      off against the Obligations any property held in a deposit or other
      account with Secured Party or any of its Affiliates or otherwise owing by
      Secured Party or any of its Affiliates in any capacity to Debtor. Such
      set-off shall be deemed to have been exercised immediately at the time
      Secured Party or such Affiliate elects to do so.

8. Expenses. Debtor shall pay to Secured Party on demand all costs and expenses
(including all reasonable fees and disbursements of all counsel retained for
advice, suit, appeal or other proceedings or purpose and of any experts or
agents it may retain), which Secured Party may incur in connection with (i) the
administration of this Agreement, including any administrative fees Secured
Party may impose for the preparation of discharges, releases or assignments to
third-parties; (ii) the custody or preservation of, or the sale, lease or other
disposition or realization on the Collateral; (iii) the enforcement and
collection of any Obligations or any guaranty thereof; (iv) the exercise,
performance, enforcement or protection of any of the rights of Secured Party
hereunder; or (v) the failure of Debtor to perform or observe any provisions
hereof. After such demand for payment of any cost, expense or fee under this
Section or elsewhere under this Agreement, Debtor shall pay interest at the
highest default rate specified in any instrument evidencing any of the
Obligations from the date payment is demanded by Secured Party to the date
reimbursed by Debtor. All such costs, expenses or fees under this Agreement
shall be added to the Obligations.

9. Indemnification. Debtor shall indemnify Secured Party and its Affiliates and
each officer, employee, accountant, attorney and other agent thereof (each such
person being an "Indemnified Party") on demand, without any limitation as to
amount, against each liability, cost and expense (including all reasonable fees
and disbursements of all counsel retained for advice, suit, appeal or other
proceedings or purpose, and of any expert or agents an Indemnified Party may
retain) heretofore or hereafter imposed on, incurred by or asserted against any
Indemnified Party (including any claim involving any allegation of any violation
of applicable law of any governmental authority (including any environmental law
or criminal law)), however asserted and whether now existing or hereafter
arising, arising out of any ownership, disposition or use of any of the
Collateral; provided, however, the foregoing indemnity shall not apply to
liability, cost or expense solely attributable to an Indemnified Party's gross
negligence or willful misconduct. This indemnity agreement shall survive the
termination of this Agreement. Any amounts payable under this or any other
section of this Agreement shall be additional Obligations secured hereby.

10. Miscellaneous.

      10.1 Notices. Any demand or notice hereunder or under any applicable law
pertaining hereto shall be in writing and duly given if delivered to Debtor (at
its address on the Secured Party's records) or to the Secured Party (at the
address on page one and separately to the Secured Party officer responsible for
Debtor's relationship with the Secured Party). Such notice or demand shall be
deemed sufficiently given for all purposes when delivered (i) by personal
delivery and shall be deemed effective when delivered, or (ii) by mail or
courier and shall be deemed effective three (3) business days after deposit in
an official depository maintained by the United States Post Office for the
collection of mail or one (1) business day after delivery to a nationally
recognized overnight courier service (e.g., Federal Express). Notice by e-mail
is not valid notice under this or any other agreement between Debtor and the
Secured Party.

      10.2 Governing Law; Jurisdiction. This Agreement has been delivered to and
accepted by the Secured Party and will be deemed to be made in the State of New
York. This Agreement will be interpreted in accordance with the laws of the
State of New York excluding its conflict of laws rules. DEBTOR HEREBY
IRREVOCABLY CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT
IN THE STATE OF NEW YORK IN A COUNTY OR JUDICIAL DISTRICT WHERE THE SECURED
PARTY MAINTAINS A BRANCH AND CONSENTS THAT THE SECURED PARTY MAY EFFECT ANY
SERVICE OF PROCESS IN THE MANNER AND AT DEBTOR'S ADDRESS SET FORTH ABOVE FOR
PROVIDING NOTICE OR DEMAND; PROVIDED THAT NOTHING CONTAINED IN THIS AGREEMENT
WILL PREVENT THE SECURED PARTY FROM BRINGING ANY ACTION, ENFORCING ANY AWARD OR
JUDGMENT OR EXERCISING ANY RIGHTS AGAINST DEBTOR INDIVIDUALLY, AGAINST ANY
SECURITY OR AGAINST ANY PROPERTY OF DEBTOR WITHIN ANY OTHER COUNTY, STATE OR
OTHER FOREIGN OR DOMESTIC JURISDICTION. Debtor acknowledges and agrees that the
venue provided above is the most convenient forum for both the Secured

                                        5
<PAGE>

Party and Debtor. Debtor waives any objection to venue and any objection based
on a more convenient forum in any action instituted under this Agreement.

      10.3 Security Interest Absolute. All rights of Secured Party hereunder,
the Security Interest and all obligations of Debtor hereunder shall be absolute
and unconditional irrespective of (i) any filing by or against Debtor of any
petition in bankruptcy or any action under federal or state law for the relief
of debtors or the seeking or consenting to of the appointment of an
administrator, receiver, custodian or similar officer for the wind up of its
business; (ii) any lack of validity or enforceability of any agreement with
respect to any of the Obligations, (iii) any change in the time, manner or place
of payment of, or in any other term of, all or any of the Obligations, or any
other amendment or waiver of or any consent to any departure from any agreement
or instrument with respect to the Obligations, (iv) any exchange, release or
non-perfection of any lien or any release or amendment or waiver of or consent
under or departure from any guarantee, securing or guaranteeing all or any of
the Obligations, or (v) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, Debtor in respect of the Obligations or
this Agreement. If, after receipt of any payment of all or any part of the
Obligations, Secured Party is for any reason compelled to surrender such payment
to any person or entity, because such payment is determined to be void or
voidable as a preference, impermissible setoff, or a diversion of trust funds,
or for any other reason, such payment shall be reinstated as part of the
Obligations and this Agreement shall continue in full force notwithstanding any
contrary action which may have been taken by Secured Party in reliance upon such
payment, and any such contrary action so taken shall be without prejudice to
Secured Party's rights under this Agreement and shall be deemed to have been
conditioned upon such payment having become final and irrevocable.

      10.4 Remedies Cumulative; Preservation of Rights. The rights and remedies
herein are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies which Secured Party may have under
other agreements now or hereafter in effect between Debtor and Secured Party, at
law (including under the UCC) or in equity. No failure or delay of Secured Party
in exercising any power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. Debtor expressly disclaims any reliance on any course of dealing
or usage of trade or oral representation of Secured Party including
representations to make loans to Debtor. No notice to or demand on Debtor in any
case shall entitle Debtor to any other or further notice or demand in similar or
other circumstances.

      10.5 Joint and Several; Successors and Assigns. If there is more than one
Debtor, each of them shall be jointly and severally liable for all amounts,
which become due, and the performance of all obligations under this Agreement
and the term "Debtor" shall include each as well as all of them. This Agreement
shall be binding upon Debtor and upon its heirs and legal representatives, its
successors and assignees, and shall inure to the benefit of, and be enforceable
by, Secured Party, its successors and assignees and each direct or indirect
assignee or other transferee of any of the Obligations; provided, however, that
this Agreement may not be assigned by Debtor without the prior written consent
of Secured Party.

      10.6 Waivers; Changes in Writing. No course of dealing or other conduct,
no oral agreement or representation made by Secured Party or usage of trade
shall operate as a waiver of any right or remedy of Secured Party. No waiver of
any provision of this Agreement or consent to any departure by Debtor therefrom
shall in any event be effective unless made specifically in writing by Secured
Party and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No modification to any provision
of this Agreement shall be effective unless made in writing in an agreement
signed by Debtor and Secured Party.

      10.7 Interpretation. Unless the context otherwise clearly requires,
references to plural includes the singular and references to the singular
include the plural; the word "or" has the inclusive meaning represented by the
phrase" and/or"; the word "including", "includes" and "include" shall be deemed
to be followed by the words "without limitation"; and captions or section
headings are solely for convenience and not part of the substance of this
Agreement. Any representation, warranty, covenant or agreement herein shall
survive execution and delivery of this Agreement and shall be deemed continuous.
Each provision of this Agreement shall be interpreted as consistent with
existing law and shall be deemed amended to the extent necessary to comply with
any conflicting law. If any provision nevertheless is held invalid, the other
provisions shall remain in effect. Debtor agrees that in any legal proceeding, a
photocopy of this Agreement kept in Secured Party's course of business may be
admitted into evidence as an original. Terms not otherwise defined in this
Agreement shall have the meanings attributed to such terms in the UCC.

      10.8 Waiver Of Jury Trial. DEBTOR AND SECURED PARTY HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY DEBTOR AND
SECURED PARTY MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW OR IN EQUITY, IN
CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTIONS RELATED HERETO. DEBTOR
REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF SECURED PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SECURED PARTY WILL NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE THIS JURY TRIAL WAIVER. DEBTOR ACKNOWLEDGES
THAT SECURED PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE PROVISIONS OF THIS SECTION.

Dated: December 21, 2004

SONO-TEK CORPORATION

By: /s/ Christopher L. Coccio
    -------------------------------------
    Christopher L. Coccio, President

                           FOR SECURED PARTY USE ONLY

Authorization Confirmed: /s/ Ellen R. O'Leary
                         -------------------------------------------------------
             (if required per Credit Policy Manual Section 4.15.10, paragraph 1)

Borrower: SONO-TEK CORPORATION    Obligor #: 9965718819

                                        6
<PAGE>

                                 ACKNOWLEDGMENT

STATE OF NEW YORK  )
                   : SS.
COUNTY OF ULSTER   )

      On the 21st day of December, in the year 2004, before me, the undersigned,
a Notary Public in and for said State, personally appeared CHRISTOPHER L.
COCCIO, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within said
instrument and acknowledged to me that he/she executed the same in his/her
capacity, and that by his/her signature on the instrument, the individual, or
the person upon behalf of which the individual acted, executed the instrument.

/s/ BONNIE BROCCO
--------------------
Notary Public

                                BONNIE BROCCO
                     Notary Public in the State of New York
                       Resident in and for Ulster County
                       Commission Expires December 22, 06
                                    #4881280

                                    Exhibit A

1. Permitted Liens (ss. 3.1)

2. Residence, principal place of business or chief executive office (ss. 3.5(i))

      2012 Route 9W. Milton, New York 12547, Ulster County.

3. Address (including county) of each place of business or location where the
   Collateral of the undersigned will be kept (ss. 3.5)

            2012 Route 9W, Milton, New York 12547, Ulster County, owned by
            William Woodward

4. Trade Name, "Doing Business As" Name or Assumed Name (ss. 3.6)

                           FOR SECURED PARTY USE ONLY

Authorization Confirmed: /s/ Ellen R. O'Leary
                         -------------------------------------------------------
             (if required per Credit Policy Manual Section 4.15.10, paragraph 1)

Borrower: SONO-TEK CORPORATION    Obligor #: 9965718819

                                        7Exhibit 10(f)

[M&T Bank LOGO]
                                                                  EQUIPMENT LINE
                                                                CREDIT AGREEMENT
                                                                        New York

March 24,2005

BORROWER: SONO-TEK CORPORATION, a corporation organized under the laws of
New York

Address of residence/chief executive office: 2012 Route 9W, Milton, New York
12547

BANK: MANUFACTURERS AND TRADERS TRUST COMPANY, a New York banking corporation
      with its principal banking office at One M&T Plaza, Buffalo, New York
      14240 Attention: Office of General Counsel

The Bank and the Borrower, intending to be legally bound, agree as follows:

I. DEFINITIONS.

      a.    Capital Expenditures. The term "Capital Expenditures" means, for any
            fiscal year, the aggregate of all expenditures (whether paid in cash
            or accrued as liabilities, and including expenditures for
            obligations under any lease with respect to which Borrower's
            obligations thereunder should, in accordance with G.A.A.P., be
            capitalized and reflected as a liability on the balance sheet of
            Borrower) by Borrower during such period that are required by
            G.A.A.P. to be included in or reflected by the property, plant or
            equipment or similar fixed asset accounts on the balance sheet of
            Borrower.

      b.    Cash Flow. The term "Cash Flow" means the sum of (i) net income
            after tax, dividends and distributions, plus (ii) depreciation
            expense and amortization, plus (iii) Interest Expense, all
            determined in accordance with G.A.A.P.

      c.    Cash Flow Coverage. The term "Cash Flow Coverage" means the ratio of
            Cash Flow to the sum of (i) the current portion of all Long Term
            Debt as specified in the financial statement dated twelve (12)
            months prior, plus (ii) Interest Expense, all determined in
            accordance with G.A.A.P.

      d.    Credit. The term "Credit" means any and all credit facilities and
            any other financial accommodations made by the Bank in favor of the
            Borrower whether now or hereafter in existence.

      e.    Current Assets. The term "Current Assets" means, at any time, the
            aggregate amount of all current assets, including, but not limited
            to, cash, cash equivalents, marketable securities, receivables
            maturing within twelve (12) months from such time, and inventory
            (net of LIFO Reserve), but excluding prepaid expenses and officer,
            stockholder, employee and related entity advances and receivables,
            all as determined in accordance with G.A.A.P.

      f.    Current Liabilities. The term "Current Liabilities" means, at any
            time, the aggregate amount of all liabilities and obligations which
            are due and payable on demand or within twelve (12) months from such
            time, or should be properly reflected as attributable to such twelve
            (12) month period in accordance with G.A.A.P.

      g.    Current Ratio. The term "Current Ratio" means the ratio of Current
            Assets to Current Liabilities.

      h.    Equipment Line of Credit. The term "Equipment Line of Credit" means
            the credit facility extended to the Borrower by the Bank pursuant to
            Section 2 of this Agreement.

      i.    G.A.A.P. The term "G.A.A.P." means, with respect to any date of
            determination, generally accepted accounting principles as used by
            the Financial Accounting Standards Board and/or the American
            Institute of Certified Public Accountants consistently applied and
            maintained throughout the periods indicated.

      j.    Interest Expense. The term "Interest Expense" means all finance
            charges reflected on the income statement as interest expense for
            all obligations of Borrower to any person, including, but not
            limited to, Bank, as shown on the balance sheet in accordance with
            G.A.A.P.

      k.    Long Term Debt. The term "Long Term Debt" means all obligations of
            Borrower to any person, including, but not limited to, the
            Obligations, payable more than twelve (12) months from the date of
            their creation, which in accordance with G.A.A.P. are shown on the
            balance sheet as a liability (excluding reserves for deferred income
            taxes) for the period then ended.

      l.    Maximum Line of Credit Amount. The term "Maximum Line of Credit
            Amount" means $150,000.00.

      m.    Obligations. The term "Obligations" means any and all indebtedness
            or other obligations of the Borrower to the Bank in any capacity,
            now existing or hereafter incurred, however created or evidenced,
            regardless of kind, class or form, whether direct, indirect,
            absolute or contingent (including obligations pursuant to any
            guaranty, endorsement, other assurance of payment or otherwise),
            whether joint or several, whether from time to time reduced and
            thereafter increased, or entirely extinguished and thereafter
            reincurred, together with all extensions, renewals and replacements
            thereof, and all interest, fees, charges, costs or expenses which
            accrue on or in connection with the foregoing, including any
            indebtedness or obligations (i) not yet outstanding but contracted
            for, or with regard to which any other commitment by the Bank
            exists; (ii) arising prior to, during or after any pendency of any
            bankruptcy, insolvency, receivership or other similar proceeding,
            regardless of whether allowed or allowable in such proceeding; (iii)
            owed by the Borrower to others and which the Bank obtained, or may
            obtain, by assignment or otherwise; and (iv) payable under this
            Agreement.

      n.    Quick Ratio. The term "Quick Ratio" means the ratio of Current
            Assets less inventory (net of LIFO Reserve), to Current Liabilities.

      o.    Subordinated Debt. The term "Subordinated Debt" means all
            indebtedness of the Borrower which has been formally subordinated to
            payment and collection of the Obligations.

      p.    Subsidiary. The term "Subsidiary" means any corporation or other
            business entity of which at least fifty percent (50%) of the voting
            stock or other ownership interest is owned by the Borrower directly
            or indirectly through one or more Subsidiaries. If the Borrower has
            no Subsidiaries, the provisions of this Agreement relating to the
            Subsidiaries shall be disregarded, without affecting the
            applicability of such provisions to the Borrower alone.

                                        1
<PAGE>

      q.    Tangible Net Worth. The term "Tangible Net Worth" means the
            aggregate assets of Borrower excluding all intangible assets,
            including, but not limited to, goodwill, licenses, trademarks,
            patents, copyrights, organization costs, appraisal surplus, officer,
            stockholder, related entity and employee advances or receivables,
            mineral rights and the like, less liabilities, plus Subordinated
            Debt, all determined in accordance with G.A.A.P. (except to the
            extent that under G.A.A.P. "tangible net worth" excludes leasehold
            improvements which are included in "Tangible Net Worth" as defined
            herein).

      r.    Total Liabilities. The term "Total Liabilities" means the aggregate
            amount of all assets of the Borrower less the sum of shareholder
            equity and Subordinated Debt (if any), as shown on the balance sheet
            in accordance with G.A.A.P.

      s.    Transaction Documents. The term Transaction Documents" means this
            Agreement and all documents, instruments or other agreements by the
            Borrower in favor of the Bank in connection (directly or indirectly)
            with the Obligations, whether now or hereafter in existence,
            including promissory notes, security agreements, guaranties and
            letter of credit reimbursement agreements.

      t.    Working Capital. The term "Working Capital" means that amount which
            is equal to the excess of Current Assets over Current Liabilities.

2. BASIC TERMS OF THE EQUIPMENT LINE OF CREDIT.

      a.    Advances. Subject to the continued compliance of Borrower with this
            Agreement and all other accompanying Transaction Documents and the
            continued absence of any default by Borrower or any indorser,
            guarantor or any other party liable for, or whose assets or any
            interest therein secures payment of any of the Obligations, Bank may
            advance to Borrower, for use by Borrower as hereafter provided, such
            sums as Borrower may request, but which shall not exceed in the
            aggregate at any one time outstanding the Maximum Line of Credit
            Amount. Borrower shall not request any advance of proceeds of the
            Equipment Line of Credit which exceeds the Maximum Line of Credit
            Amount. Even if the aggregate amount of advances made and
            outstanding under the Equipment Line of Credit shall at any time and
            for any reason exceed the Maximum Line of Credit Amount, Borrower
            shall nevertheless be liable for the entire amount outstanding with
            interest thereon in accordance with this Agreement and all
            accompanying Transaction Documents, and Borrower shall be
            responsible for observance of, performance of and compliance with
            all of the terms, covenants and provisions hereof and thereof.
            Advances under the Equipment Line of Credit shall be evidenced by
            separate term notes, in form and substance acceptable to Bank. The
            Equipment Line of Credit shall be utilized for purposes of making
            equipment and/or vehicle acquisitions. Within such limitations and
            subject to all of the terms and conditions set forth herein and in
            the other accompanying Transaction Documents, Borrower may borrow,
            repay and reborrow funds under the Equipment Line of Credit in
            accordance with the terms and conditions of this Agreement. Nothing
            contained in this Agreement shall be construed as obligating Bank to
            make any particular loan or advance to Borrower, and Borrower is not
            relying upon Bank to make or continue to make advances for any
            purpose whatsoever. All such loans or advances remain within the
            discretion of Bank.

      b.    Advance Procedure. With respect to each advance and all matters and
            transactions in connection therewith, Borrower hereby irrevocably
            authorizes Bank to accept, rely upon, act upon and comply with any
            oral or written instructions, requests, confirmation and orders of
            any employee or representative of Borrower who is so authorized or
            designated as a signer of loan documents under the provisions of
            Borrower's most recent resolutions or similar documents on file with
            Bank. Borrower acknowledges that the transmission between Borrower
            and Bank of any such instructions, requests, confirmations and
            orders involves the possibility or errors, omissions, mistakes and
            discrepancies and agrees to adopt such internal measures and
            operational procedures as may be necessary to protect its interests.
            By reason thereof, Borrower hereby assumes all risk of loss and
            responsibility for, releases and discharges Bank from any and all
            responsibility or liability for, and agrees to indemnify, reimburse
            on demand and hold Bank harmless from, any and all claims, actions,
            damages, losses, liability and expenses by reason of, arising out
            of, or in any way connected with or related to: (i) Banks accepting,
            relying and acting upon, complying with or observing any such
            instruction, request, confirmation or order: or (ii) any such error,
            omission, mistake, or discrepancy, provided such error, omission,
            mistake or discrepancy is not the result of negligence on the part
            of Bank.

3. REPRESENTATIONS AND WARRANTIES. The Borrower makes the following
representations and warranties and any "Additional Representations and
Warranties" on the schedule attached hereto and made part hereof (the
"Schedule"), all of which shall be deemed to be continuing representations and
warranties as long as this Agreement is in effect:

      a.    Good Standing; Authority. The Borrower and each Subsidiary (if
            either is not an individual) is duly organized, validly existing and
            in good standing under the laws of the jurisdiction in which it was
            formed. The Borrower and each Subsidiary is duly authorized to do
            business in each jurisdiction in which failure to be so qualified
            might have a material adverse effect on its business or assets and
            has the power and authority to own each of its assets and to use
            them in the ordinary course of business now and in the future.

      b.    Compliance. The Borrower and each Subsidiary conducts its business
            and operations and the ownership of its assets in compliance with
            each applicable statute, regulation and other law, including
            environmental laws. All approvals, including authorizations,
            permits, consents, franchises, licenses, registrations, filings,
            declarations, reports and notices (the "Approvals") necessary for
            the conduct of the Borrower's and each Subsidiary's business and for
            the Credit have been duly obtained and are in full force and effect.
            The Borrower and each Subsidiary is in compliance with the
            Approvals. The Borrower and each Subsidiary (if either is not an
            individual) is in compliance with its certificate of incorporation,
            by-laws, partnership agreement, articles of organization, operating
            agreement or other applicable organizational or governing document
            as may be applicable to the Borrower or a Subsidiary depending on
            its organizational structure ("Governing Documents"). The Borrower
            and each Subsidiary is in compliance with each agreement to which it
            is a party or by which it or any of its assets is bound.

      c.    Legality. The execution, delivery and performance by the Borrower of
            this Agreement and all related documents, including the Transaction
            Documents, (i) are in furtherance of the Borrower's purposes and
            within its power and authority; (ii) do not (A) violate any statute,
            regulation or other law or any judgment, order or award of any
            court, agency or other governmental authority or of any arbitrator
            with respect to the Borrower or any Subsidiary or (B) violate the
            Borrower's or any Subsidiary's Governing Documents (if either is not
            an individual), constitute a default under any agreement binding on
            the Borrower or any Subsidiary or result in a lien or encumbrance on
            any assets of the Borrower or any Subsidiary; and (iii) if the
            Borrower or any Subsidiary is not an individual, have been duly
            authorized by all necessary organizational actions.

      d.    Fiscal Year. The fiscal year of the Borrower is the calendar year
            unless the following blank states otherwise: year ending
            ____________.

                                       2
<PAGE>

      e.    Title to Assets. The Borrower and each Subsidiary has good and
            marketable title to each of its assets free of security interests,
            mortgages or other liens or encumbrances, except as set forth on the
            Schedule titled "Permitted Liens" or pursuant to the Bank's prior
            written consent.

      f.    Judgments and Litigation. There is no pending or threatened claim,
            audit, investigation, action or other legal proceeding or judgment,
            order or award of any court, agency or other governmental authority
            or arbitrator (any, an "Action") which involves the Borrower, its
            Subsidiaries or their respective assets and might have a material
            adverse effect upon the Borrower or any Subsidiary or threaten the
            validity of the Credit, any Transaction Document or any related
            document or action.

      g.    Full Disclosure. Neither this Agreement nor any certificate,
            financial statement or other writing provided to the Bank by or on
            behalf of the Borrower or any Subsidiary contains any statement of
            fact that is incorrect or misleading in any material respect or
            omits to state any fact necessary to make any such statement not
            incorrect or misleading. The Borrower has not failed to disclose to
            the Bank any fact that might have a material adverse effect on the
            Borrower or any Subsidiary.

4. AFFIRMATIVE COVENANTS. So long as this Agreement is in effect, the Borrower
will comply with any "Additional Affirmative Covenant" contained in the Schedule
and shall:

      a.    Financial Statements and Other Information. Promptly deliver to the
            Bank (i) within sixty (60) days after the end of each of its first
            three fiscal quarters, an unaudited consolidating and consolidated
            financial statement of the Borrower and each Subsidiary as of the
            end of such quarter, which financial statement shall consist of
            income and cash flows for the quarter, for the corresponding quarter
            in the previous fiscal year and for the period from the end of the
            previous fiscal year, with a consolidating and consolidated balance
            sheet as of the quarter end all in such detail as the Bank may
            request; (ii) within ninety (90) days after the end of each fiscal
            year, consolidating and consolidated statements of the Borrower's
            and each Subsidiary's income and cash flows and its consolidating
            and consolidated balance sheet as of the end of such fiscal year,
            setting forth comparative figures for the preceding fiscal year and
            to be (check applicable box, if no box is checked the financial
            statements shall be audited):

               |X| audited           |_| reviewed            |_| compiled

            by an independent certified public accountant acceptable to the
            Bank; all such statements shall be certified by the Borrower's chief
            financial officer to be correct and in accordance with the
            Borrower's and each Subsidiary's records and to present fairly the
            results of the Borrower's and each Subsidiary's operations and cash
            flows and its financial position at year end; and (iii) with each
            statement of income, a certificate executed by the Borrower's chief
            executive and chief financial officers or other such person
            responsible for the financial management of the Borrower (A) setting
            forth the computations required to establish the Borrower's
            compliance with each financial covenant, if any, during the
            statement period, (B) stating that the signers of the certificate
            have reviewed this Agreement and the operations and condition
            (financial or other) of the Borrower and each of its Subsidiaries
            during the relevant period and (C) stating that no Event of Default
            occurred during the period, or if an Event of Default did occur,
            describing its nature, the date(s) of its occurrence or period of
            existence and what action the Borrower has taken with respect
            thereto. The Borrower shall also promptly provide the Bank with
            copies of all annual reports, proxy statements and similar
            information distributed to shareholders, partners or members, and
            copies of all filings with the Securities and Exchange Commission
            and the Pension Benefit Guaranty Corporation, and shall provide, in
            form satisfactory to the Bank, such additional information, reports
            or other information as the Bank may from time to time reasonably
            request regarding the financial and business affairs of the Borrower
            or any Subsidiary. If the Borrower is an individual, the Borrower
            shall provide annually a personal financial statement in form and
            detail acceptable to the Bank and such other financial information
            as the Bank may from time to time reasonably request.

      b.    Accounting; Tax Returns and Payment of Claims. The Borrower and each
            Subsidiary will maintain a system of accounting and reserves in
            accordance with generally accepted accounting principles, has filed
            and will file each tax return required of it and, except as
            disclosed in the Schedule, has paid and will pay when due each tax,
            assessment, fee, charge, fine and penalty imposed by any taxing
            authority upon it or any of its assets, income or franchises, as
            well as all amounts owed to mechanics, materialmen, landlords,
            suppliers and the like in the normal course of business.

      c.    Inspections. Promptly upon the Bank's request, the Borrower will
            permit, and cause its Subsidiaries to permit, the Banks officers,
            attorneys or other agents to inspect its and its Subsidiary's
            premises, examine and copy its records and discuss its and its
            Subsidiary's business, operations and financial or other condition
            with its and its Subsidiary's responsible officers and independent
            accountants.

      d.    Operating Accounts. Maintain, and cause its Subsidiaries to
            maintain, all bank accounts with the Bank.

      e.    Changes in Management and Control. If the Borrower is not an
            individual, immediately upon any change in the identity of the
            Borrower's chief executive officers or in its beneficial ownership,
            the Borrower will provide to the Bank a certificate executed by its
            senior individual authorized to transact business on behalf of the
            Borrower, specifying such change.

      f.    Notice of Defaults and Material Adverse Changes. Immediately upon
            acquiring reason to know of (i) any Event of Default, (ii) any event
            or condition that might have a material adverse effect upon the
            Borrower or any Subsidiary or (iii) any Action, the Borrower will
            provide to the Bank a certificate executed by the Borrower's senior
            individual authorized to transact business on behalf of the
            Borrower, specifying the date(s) and nature of the event or the
            Action and what action the Borrower or its Subsidiary has taken or
            proposes to take with respect to it.

      g.    Insurance. Maintain its, and cause its Subsidiaries to maintain,
            property in good repair and will on request provide the Bank with
            evidence of insurance coverage satisfactory to the Bank, including
            fire and hazard, liability, workers' compensation and business
            interruption insurance and flood hazard insurance as required.

      h.    Further Assurances. Promptly upon the request of the Bank, the
            Borrower will execute, and cause its Subsidiaries to execute, and
            deliver each writing and take each other action that the Bank deems
            necessary or desirable in connection with any transaction
            contemplated by this Agreement.

5. NEGATIVE COVENANTS. As long as this Agreement is in effect, the Borrower
shall not violate, and shall not suffer or permit any of its Subsidiaries to
violate, any of the following covenants and any "Additional Negative Covenant"
on the Schedule. The Borrower shall not:

                                       3
<PAGE>

      a.    Indebtedness. Permit any indebtedness (including direct and
            contingent liabilities) not described on the Schedule titled
            "Permitted Indebtedness" except for trade indebtedness or current
            liabilities for salary and wages incurred in the ordinary course of
            business and not substantially overdue.

      b.    Guaranties. Become a guarantor, a surety, or otherwise liable for
            the debts or other obligations of another, whether by guaranty or
            suretyship agreement, agreement to purchase indebtedness, agreement
            for furnishing funds through the purchase of goods, supplies or
            services (or by way of stock purchase, capital contribution, advance
            or loan) for the purpose of paying or discharging indebtedness, or
            otherwise, except as an endorser of instruments for the payment of
            money deposited to its bank account for collection in the ordinary
            course of business and except as may be specified in the Schedule
            titled "Permitted Guaranties".

      c.    Liens. Permit any of its assets to be subject to any security
            interest, mortgage or other lien or encumbrance, except as set forth
            on the Schedule titled "Permitted Liens" and except for liens for
            property taxes not yet due; pledges and deposits to secure
            obligations or performance for workers' compensation, bids, tenders,
            contracts other than notes, appeal bonds or public or statutory
            obligations; and materialmen's, mechanics', carriers' and similar
            liens arising in the normal course of business.

      d.    Investments. Make any investment other than in FDIC insured deposits
            or United States Treasury obligations of less than one year, or in
            money market or mutual funds administering such investments, except
            as set forth on the Schedule titled "Permitted Investments".

      e.    Loans. Make any loan, advance or other extension of credit except as
            disclosed on the Schedule titled "Permitted Loans", except for
            endorsements of negotiable instruments deposited to the Borrower's
            deposit account for collection, trade credit in the normal course of
            business and intercompany loans approved in writing by the Bank.

      f.    Distributions. If the Borrower is not an individual, declare or pay
            any distribution, except for (i) dividends payable solely in stock
            and (ii) cash dividends paid to the Borrower by its Subsidiary.

      g.    Changes In Form. (i) Transfer or dispose of substantially all of its
            assets, (ii) acquire substantially all of the assets of any other
            entity, (iii) do business under or otherwise use any name other than
            its true name or (iv) make any material change in its business,
            structure, purposes or operations that might have a material adverse
            effect on the Borrower or any of its Subsidiaries. If the Borrower
            or any Subsidiary is not an individual, (i) participate in any
            merger, consolidation or other absorption or (ii) make, terminate or
            permit to be revoked any election pursuant to Subchapter S of the
            Internal Revenue Code.

6. FINANCIAL COVENANTS. During the term of this Agreement, the Borrower shall
not violate, and shall not suffer or permit any of its Subsidiaries to violate,
any of the following covenants (complete applicable financial covenant) or any
"Additional Financial Covenants" on the Schedule. For purposes of this Section,
if the Borrower has any Subsidiaries all references to the Borrower shall
include the Borrower and all of its subsidiaries on a consolidated basis. Unless
a different measurement period is specified, compliance for the financial
covenants shall be required at all times.

|_| a.   Borrower shall maintain Tangible Net Worth of not less than $_____,
         measured (select one: quarterly or annually) _____ as of each
         (select one: quarter or fiscal year) _____ end.

|_| b.   Borrower shall maintain a ratio of Total Liabilities to Tangible Net
         Worth of not greater than _____:_____, measured (select one: quarterly
         or annually) _____ as of each (select one: quarter or fiscal year)
         _____ end.

|_| c.   Borrower shall maintain a Current Ratio of not less than _____:_____,
         measured (select one: quarterly or annually) _____ as of each (select
         one: quarter or fiscal year) _____ end.

|_| d.   Borrower shall maintain Working Capital of not less than $_____,
         measured (select one: quarterly or annually) _____ as of each (select
         one: quarter or fiscal year) _____ end.

|_| e.   Borrower shall maintain Cash Flow Coverage of not less than
         _____:_____, measured for the previous four quarters as of each
         (select one: quarter or fiscal year) _____ end.

|_| f.   Without the prior written consent of Bank, Borrower shall not make
         any Capital Expenditures in excess of $_____ in the aggregate during
         any fiscal year of Borrower.

|_| g.   Borrower shall not pay or accrue during any fiscal year compensation
         (including but not limited to all salary, bonuses, consulting,
         management or other fees, rentals and other payments to any person
         owning or managing 5% or more of the Borrower or any relative or
         cohabitant of such a person, and to any entity under common control
         with or controlling the Borrower) exceeding $_____ in the aggregate.

|_| h.   Borrower shall not become obligated as lessee pursuant to operating
         leases exceeding $_____ in the aggregate during any fiscal year.

7. DEFAULT.

      a.    Events of Default. Any of the following events or conditions shall
            constitute an "Event of Default": (i) failure by the Borrower to pay
            when due (whether at the stated maturity, by acceleration, upon
            demand or otherwise) the Obligations, or any part thereof, or there
            occurs any event or condition which after notice, lapse of time or
            after both notice and lapse of time will permit acceleration of any
            Obligation; (ii) default by the Borrower in the performance of any
            obligation, term or condition of this Agreement, the other
            Transaction Documents or any other agreement with the Bank or any of
            its affiliates or subsidiaries (collectively, "Affiliates"); (iii)
            failure by the Borrower to pay when due (whether at the stated
            maturity, by acceleration, upon demand or otherwise) any
            indebtedness or obligation owing to any third party or any
            Affiliate, the occurrence of any event which could result in
            acceleration of payment of any such indebtedness or obligation or
            the failure to perform any agreement with any third party or any
            Affiliate; (iv) the Borrower is dissolved, becomes insolvent,
            generally fails to pay or admits in writing its inability generally
            to pay its debts as they become due; (v) the Borrower makes a
            general assignment, arrangement or composition agreement with or for
            the benefit of its creditors or makes, or sends notice of any
            intended, bulk sale; the sale, assignment, transfer or delivery of
            all or substantially all of the assets of the Borrower to a third
            party; or the cessation by the Borrower as a going business concern;
            (vi) the Borrower files a petition in bankruptcy or institutes any
            action under federal or state law for the relief of debtors or seeks
            or consents to the appointment of an administrator, receiver,
            custodian or similar official for the wind up of its business (or
            has such a petition or action filed against it and such petition
            action or appointment is not dismissed or stayed within forty-five
            (45) days); (vii) the reorganization, merger, consolidation or
            dissolution of the Borrower (or

                                       4
<PAGE>

            the making of any agreement therefor); (viii) the death or judicial
            declaration of incompetency of the Borrower, if an individual; (ix)
            the entry of any judgment or order of any court, other governmental
            authority or arbitrator against the Borrower; (x) falsity, omission
            or inaccuracy of facts submitted to the Bank or any Affiliate
            (whether in a financial statement or otherwise); (xi) an adverse
            change in the Borrower, its business, assets, operations, affairs or
            condition (financial or otherwise) from the status shown on any
            financial statement or other document submitted to the Bank or any
            Affiliate, and which change the Bank determines will have a material
            adverse affect on (a) the Borrower, its business, assets, operations
            or condition (financial or otherwise), or (b) the ability of the
            Borrower to pay or perform the Obligations; (xii) any pension plan
            of the Borrower fails to comply with applicable law or has vested
            unfunded liabilities that, in the opinion of the Bank, might have a
            material adverse effect on the Borrower's ability to repay its
            debts; (xiii) any indication or evidence received by the Bank that
            the Borrower may have directly or indirectly been engaged in any
            type of activity which, in the Bank's discretion, might result in
            the forfeiture or any property of the Borrower to any governmental
            authority; (xiv) the occurrence of any event described in Section
            7(a)(i) through and including 7(a)(xiii) with respect to any
            Subsidiary or to any endorser, guarantor or any other party liable
            for, or whose assets or any interest therein secures, payment of any
            of the Obligations; or (xv) the Bank in good faith deems itself
            insecure with respect to payment or performance of the Obligations.

      b.    Rights and Remedies Upon Default. Upon the occurrence of any Event
            of Default, the Bank without demand of performance or other demand,
            presentment, protest, advertisement or notice of any kind (except
            any notice required by law) to or upon the Borrower, any Subsidiary
            or any other person (all and each of which demands, presentments,
            protests, advertisements and notices are hereby waived), may
            exercise all rights and remedies under the Borrower's or its
            Subsidiaries' agreements with the Bank or its Affiliates, applicable
            law, in equity or otherwise and may declare all or any part of any
            Obligations not payable on demand to be immediately due and payable
            without demand or notice of any kind and terminate any obligation it
            may have to grant any additional loan, credit or other financial
            accommodation to the Borrower or any Subsidiary. All or any part of
            any Obligations whether or not payable on demand, shall be
            immediately due and payable automatically upon the occurrence of an
            Event of Default in Section 7(a)(vi) above. The provisions hereof
            are not intended in any way to affect any rights of the Bank with
            respect to any Obligations which may now or hereafter be payable on
            demand.

8. EXPENSES. The Borrower shall pay to the Bank on demand all costs and expenses
(including all fees and disbursements of counsel retained for advice, suit,
appeal or other proceedings or purpose and of any experts or agents it may
retain), which the Bank may incur in connection with (i) the administration of
the Obligations, including any administrative fees the Bank may impose for the
preparation of discharges, releases or assignments to third-parties; (ii) the
enforcement and collection of any Obligations or any guaranty thereof; (iv) the
exercise, performance, enforcement or protection of any of the rights of the
Bank hereunder; or (v) the failure of the Borrower or any Subsidiary to perform
or observe any provisions hereof. After such demand for payment of any cost,
expense or fee under this Section or elsewhere under this Agreement, the
Borrower shall pay interest at the highest default rate specified in any
instrument evidencing any of the Obligations from the date payment is demanded
by the Bank to the date reimbursed by the Borrower. All such costs, expenses or
fees under this Agreement shall be added to the Obligations.

9. TERMINATION. This Agreement shall remain in full force and effect until (i)
all Obligations outstanding, or contracted or committed for (whether or not
outstanding), shall be finally and irrevocably paid in full and (ii) all
Transaction Documents have been terminated by the Bank.

10. RIGHT OF SETOFF. If an Event of Default occurs, the Bank shall have the
right to set off against the amounts owing under this Agreement and the other
Transaction Documents any property held in a deposit or other account or
otherwise with the Bank or its Affiliates or otherwise owing by the Bank or its
Affiliates in any capacity to the Borrower, its subsidiary or any guarantor of,
or endorser of any of the Transaction Documents evidencing, the Obligations.
Such setoff shall be deemed to have been exercised immediately at the time the
Bank or such Affiliate elect to do so.

11. MISCELLANEOUS.

      a.    Notices. Any demand or notice hereunder or under any applicable law
            pertaining hereto shall be in writing and duly given if delivered to
            Borrower (at its address on the Bank's records) or to the Bank (at
            the address on page one and separately to the Bank officer
            responsible for Borrower's relationship with the Bank). Such notice
            or demand shall be deemed sufficiently given for all purposes when
            delivered (i) by personal delivery and shall be deemed effective
            when delivered, or (ii) by mail or courier and shall be deemed
            effective three (3) business days after deposit in an official
            depository maintained by the United States Post Office for the
            collection of mail or one (1) business day after delivery to a
            nationally recognized overnight courier service (e.g., Federal
            Express). Notice by e-mail is not valid notice under this or any
            other agreement between Borrower and the Bank.

      b.    Generally Accepted Accounting Principles. Any financial calculation
            to be made, all financial statements and other financial information
            to be provided, and all books and records, system of accounting and
            reserves to be kept in connection with the provisions of this
            Agreement, shall be in accordance with generally accepted accounting
            principles consistently applied during each interval and from
            interval to interval; provided, however, that in the event changes
            in generally accepted accounting principles shall be mandated by the
            Financial Accounting Standards Board or any similar accounting body
            of comparable standing, or should be recommended by Borrower's
            certified public accountants, to the extent such changes would
            affect any financial calculations to be made in connection herewith,
            such changes shall be implemented in making such calculations only
            from and after such date as Borrower and the Bank shall have amended
            this Agreement to the extent necessary to reflect such changes in
            the financial and other covenants to which such calculations relate.

      c.    Indemnification. If after receipt of any payment of all, or any part
            of, the Obligations, the Bank is, for any reason, compelled to
            surrender such payment to any person or entity because such payment
            is determined to be void or voidable as a preference, an
            impermissible setoff, or a diversion of trust funds, or for any
            other reason, the Transaction Documents shall continue in full force
            and the Borrower shall be liable, and shall indemnify and hold the
            Bank harmless for, the amount of such payment surrendered. The
            provisions of this Section shall be and remain effective
            notwithstanding any contrary action which may have been taken by the
            Bank in reliance upon such payment, and any such contrary action so
            taken shall be without prejudice to the Banks rights under the
            Transaction Documents and shall be deemed to have been conditioned
            upon such payment having become final and irrevocable. The
            provisions of this Section shall survive the termination of this
            Agreement and the Transaction Documents.

      d.    Further Assurances, From time to time, the Borrower shall take, and
            cause its Subsidiaries to take, such action and execute and deliver
            to the Bank such additional documents, instruments, certificates,
            and agreements as the Bank may reasonably request to effectuate the
            purposes of the Transaction Documents.

                                       5
<PAGE>

      e.    Cumulative Nature and Non-Exclusive Exercise of Rights and Remedies.
            All rights and remedies of the Bank pursuant to this Agreement and
            the Transaction Documents shall be cumulative, and no such right or
            remedy shall be exclusive of any other such right or remedy. In the
            event of any unreconcilable inconsistencies, this Agreement shall
            control. No single or partial exercise by the Bank of any right or
            remedy pursuant to this Agreement or otherwise shall preclude any
            other or further exercise thereof, or any exercise of any other such
            right or remedy, by the Bank.

      f.    Governing Law; Jurisdiction. This Agreement has been delivered to
            and accepted by the Bank and will be deemed to be made in the State
            of New York. This Agreement will be interpreted in accordance with
            the laws of the State of New York excluding its conflict of laws
            rules. BORROWER HEREBY IRREVOCABLY CONSENTS TO THE EXCLUSIVE
            JURISDICTION OF ANY STATE OR FEDERAL COURT IN THE STATE OF NEW YORK
            IN A COUNTY OR JUDICIAL DISTRICT WHERE THE BANK MAINTAINS A BRANCH
            AND CONSENTS THAT THE BANK MAY EFFECT ANY SERVICE OF PROCESS IN THE
            MANNER AND AT BORROWER'S ADDRESS SET FORTH ABOVE FOR PROVIDING
            NOTICE OR DEMAND; PROVIDED THAT NOTHING CONTAINED IN THIS AGREEMENT
            WILL PREVENT THE BANK FROM BRINGING ANY ACTION, ENFORCING ANY AWARD
            OR JUDGMENT OR EXERCISING ANY RIGHTS AGAINST BORROWER INDIVIDUALLY,
            AGAINST ANY SECURITY OR AGAINST ANY PROPERTY OF BORROWER WITHIN ANY
            OTHER COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC JURISDICTION.
            Borrower acknowledges and agrees that the venue provided above is
            the most convenient forum for both the Bank and Borrower. Borrower
            waives any objection to venue and any objection based on a more
            convenient forum in any action instituted under this Agreement.

      g.    Joint and Several; Successors and Assigns. If there is more than one
            Borrower, each of them shall be jointly and severally liable for all
            amounts, which become due, and the performance of all obligations
            under this Agreement, and the term "the Borrower" shall include each
            as well as all of them. This Agreement shall be binding upon the
            Borrower and upon its heirs and legal representatives, its
            successors and assignees, and shall inure to the benefit of, and be
            enforceable by, the Bank, its successors and assignees and each
            direct or indirect assignee or other transferee of any of the
            Obligations; provided, however, that this Agreement may not be
            assigned by the Borrower without the prior written consent of the
            Bank.

      h.    Waivers; Changes In Writing. No failure or delay of the Bank in
            exercising any power or right hereunder shall operate as a waiver
            thereof, nor shall any single or partial exercise of any such right
            or power, or any abandonment or discontinuance of steps to enforce
            such a right or power, preclude any other or further exercise
            thereof or the exercise of any other right or power. The Borrower
            expressly disclaims any reliance on any course of dealing or usage
            of trade or oral representation of the Bank (including
            representations to make loans to the Borrower) and agrees that none
            of the foregoing shall operate as a waiver of any right or remedy of
            the Bank. No notice to or demand on the Borrower in any case shall
            entitle the Borrower to any other or further notice or demand in
            similar or other circumstances. No waiver of any provision of this
            Agreement or consent to any departure by the Borrower therefrom
            shall in any event be effective unless made specifically in writing
            by the Bank and then such waiver or consent shall be effective only
            in the specific instance and for the purpose for which given. No
            modification to any provision of this Agreement shall be effective
            unless made in writing in an agreement signed by the Borrower and
            the Bank.

      i.    Interpretation. Unless the context otherwise clearly requires,
            references to plural includes the singular and references to the
            singular include the plural; references to "individual" shall mean a
            natural person and shall include a natural person doing business
            under an assumed name (e.g., a "DBA"); the word "or" has the
            inclusive meaning represented by the phrase "and/or"; the word
            "including", "includes" and "include" shall be deemed to be followed
            by the words "without limitation"; and captions or section headings
            are solely for convenience and not part of the substance of this
            Agreement. Any representation, warranty, covenant or agreement
            herein shall survive execution and delivery of this Agreement and
            shall be deemed continuous. Each provision of this Agreement shall
            be interpreted as consistent with existing law and shall be deemed
            amended to the extent necessary to comply with any conflicting law.
            If any provision nevertheless is held invalid, the other provisions
            shall remain in effect. The Borrower agrees that in any legal
            proceeding, a photocopy of this Agreement kept in the Bank's course
            of business may be admitted into evidence as an original.

      j.    Waiver of Jury Trial. THE BORROWER AND THE BANK HEREBY KNOWINGLY,
            VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT TO TRIAL BY JURY THE
            BORROWER AND THE BANK MAY HAVE IN ANY ACTION OR PROCEEDING, IN LAW
            OR IN EQUITY, IN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTIONS
            RELATED HERETO. THE BORROWER REPRESENTS AND WARRANTS THAT NO
            REPRESENTATIVE OR AGENT OF THE BANK HAS REPRESENTED, EXPRESSLY OR
            OTHERWISE, THAT THE BANK WILL NOT, IN THE EVENT OF LITIGATION, SEEK
            TO ENFORCE THIS JURY TRIAL WAIVER. THE BORROWER ACKNOWLEDGES THAT
            THE BANK HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
            OTHER THINGS, THE PROVISIONS OF THIS SECTION.

Acknowledgment. Borrower acknowledges that it has read and understands all the
provisions of this Agreement, including the Governing Law, Jurisdiction and
Waiver of Jury Trial, and has been advised by counsel as necessary or
appropriate.

Date: March 24, 2005

TIN # 14-1568099

SONO-TEK CORPORATION

By: /s/ Christopher L. Coccio
    --------------------------------------
    Christopher L. Coccio, President

Witness: /s/ Ellen R. O'Leary
         ---------------------------------
         (Signature)

         Ellen R. O'Leary
         ---------------------------------
         (Typed Name)

                                       6
<PAGE>

ACCEPTED:

Date: March 24, 2005

MANUFACTURERS AND TRADERS TRUST COMPANY

By: /s/ Ellen R. O'Leary
    --------------------------------------
    Ellen O'Leary, Vice President

                                 ACKNOWLEDGMENT

STATE OF NEW YORK          )
                           :  SS.
COUNTY OF ULSTER           )

      On the 24th day of March, in the year 2005, before me, the undersigned, a
Notary Public in and for said State, personally appeared CHRISTOPHER L. COCCIO,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within said instrument and
acknowledged to me that he/she executed the same in his/her capacity, and that
by his/her signature on the instrument, the individual, or the person upon
behalf of which the individual acted, executed the instrument.

/s/ Claudine Y. Corda
---------------------------------------------
Notary Public

                                 [NOTARY STAMP]

                               FOR BANK USE ONLY
Authorization Confirmed:
                         -------------------------------------------------------
             (if required per Credit Policy Manual Section 4.15.10, paragraph 1)

                                       7
<PAGE>

                                    SCHEDULE

Additional Representations and Warranties (ss. 3)

Additional Affirmative Covenants (ss. 4)

Permitted Indebtedness (ss. 5(a))

Permitted Guaranties (ss. 5(b))

Permitted Liens (ss. 5(c))

Permitted Investments (ss. 5(d))

Permitted Loans (ss. 5(e))

Additional Financial Covenants (ss. 6)

                                        8

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