Document:

MASTER NOTE (Eurodollar/Prime Rate)
$ 6,000,000                            Date:   November 1, 2000

         FOR VALUE RECEIVED, the undersigned, promises to pay to the order of
EUROPEAN AMERICAN BANK (the "Bank"), on or before (the "Maturity Date"), the sum
of Dollars  ($),  or, if less,  the  aggregate  unpaid  principal  amount of all
advances  made by the Bank pursuant to the line of credit (each an "Advance" and
collectively, the "Advances"), not to exceed an aggregate amount at any one time
outstanding of Dollars ($), available to the undersigned  hereunder (the "Line")
together with interest thereon as set forth herein.

         Each Advance hereunder which is a Eurodollar Advance (as defined below)
shall bear  interest on the unpaid  principal  amount  thereof for the  Interest
Period  applicable  thereto at a rate per annum  equal to the  Reserve  Adjusted
Libor  determined for each Interest Period therefor in accordance with the terms
of this Note plus a margin of basis  points.  Each Advance which is a Prime Rate
Advance (as defined  below) shall bear interest on the unpaid  principal  amount
thereof from the date thereof  until  payment of such Prime Rate Advance in full
at a  fluctuating  rate per annum equal to the Prime Rate plus a margin of % per
annum.  The  undersigned  shall  notify  the Bank not later  than 12 noon  three
Business Days prior to each Advance hereunder which the undersigned  requests to
maintain at a rate of interest  based on Reserve  Adjusted  Libor (a "Eurodollar
Advance"),  and not  later  than 12 noon on the date of each  Advance  which the
undersigned  requests to maintain at a rate of interest  based on the Prime Rate
(a "Prime Rate  Advance").  All requests for Advances shall be  irrevocable  and
shall be in the  minimum  amount of $. Each  request by the  undersigned  for an
Advance  hereunder shall specify  whether the requested  Advance is a Eurodollar
Advance or a Prime Rate Advance, the proposed date to fund the Advance, and if a
Eurodollar Advance is requested, the Interest Period applicable thereto.

         Any  Eurodollar  Advance may be continued as a Eurodollar  Advance upon
expiration  of an Interest  Period with respect  thereto by  complying  with the
notice  provisions  contained in the  definition of Interest  Period;  provided,
however,  that no Eurodollar  Advance may be continued as such when any Event of
Default or event which upon notice,  passage of time or both would constitute an
Event of Default  has  occurred  and is  continuing  but shall be  automatically
converted  to a Prime Rate  Advance on the last date of the  Interest  Period in
effect when the Bank is notified of such default or Event of Default.

         The  undersigned  may elect  from time to time to  convert  outstanding
Eurodollar  Advances  to Prime Rate  Advances  by giving the Bank at least three
Business  Days prior  irrevocable  notice of such  election;  provided  that any
conversion  of a  Eurodollar  Advance  may be made  only on the  last  day of an
Interest  Period with respect  thereto.  The  undersigned may elect from time to
time to convert an  outstanding  Prime Rate Advance to a  Eurodollar  Advance by
giving the Bank  irrevocable  written  notice of such election not later than 12
noon,  three  Business  Days prior to the date of the  proposed  conversion  and
further  provided  that (i) the  conversion  shall be in the  minimum  principal
amount of $ and (ii) no Event of Default or event upon  notice,  passage of time
or both  would  constitute  an Event  of  Default  shall  have  occurred  and be
continuing.  Notwithstanding  the  foregoing,  no Advance may be converted to or
continued as a Eurodollar Advance if the Interest Period would extend beyond the
Maturity Date.

         Interest  shall be  calculated  on the basis of a 360-day  year for the
actual  number of days  elapsed  and shall be  payable  on the first day of each
month  commencing  on the first such date to occur after the date the Advance is
made,  and on the  Maturity  Date.  All payments  hereunder  shall be payable in
immediately   available  funds  in  lawful  money  of  the  United  States.  The
undersigned  authorizes the Bank to charge any of the undersigned's accounts for
payments of  principal  or  interest.  Any payment of  principal  of or interest
payable  hereunder  which  is  not  paid  when  due,  whether  at  maturity,  by
acceleration,  or otherwise, shall bear interest from the date due until paid in
full at a rate per annum equal to three  percent (3%) above the interest rate in
effect with respect thereto.
________________________________
         This note  provides  that  interest  be paid  monthly  regardless  if a
Eurodollar Advance or Prime Rate Advance.
<PAGE>
         All  requests  for  advances  shall be  irrevocable  and shall be for a
minimum  of $ and must be  received  by the Bank no later than 12:00 noon on the
date of the proposed advance.  The Bank may act without liability upon the basis
of  telephonic  notice  believed  by the  Bank in  good  faith  to be  from  the
undersigned.  In each such  case,  the  undersigned  hereby  waives the right to
dispute  the  Bank's  record  of  the  terms  of  such  telephonic  notice.  The
undersigned  shall  immediately  confirm to the Bank in writing each  telephonic
notice.  All  advances  under  the Line  are at the  Bank's  sole  and  absolute
discretion  and the Bank, at its option and in its sole and absolute  discretion
and without notice to the undersigned, may decline to make any advance requested
by the undersigned.

         Subject to the terms and conditions hereof and the terms and conditions
set forth in any agreement in writing between the Bank and the undersigned,  the
undersigned  may borrow,  repay in whole or in part, and reborrow on a revolving
basis, up to the maximum amount of the Line.  Prime Rate Advances may be prepaid
without  premium  or  penalty  together  with  accrued  interest  thereon to and
including the date of  prepayment.  Eurodollar  Advances may be prepaid  without
premium  or  penalty  (except  as  provided  in the next  succeeding  paragraph)
together with accrued  interest thereon to and including the date of prepayment,
provided such prepayment date must be the last day of the then current  Interest
Period of such  Advance.  The Bank shall  maintain  its  records to reflect  the
amount and date of each advance and of each  payment of  principal  and interest
thereon.  All such records shall, absent manifest error, be conclusive as to the
outstanding principal amount hereof; provided, however, that the failure to make
any  notation  to the Bank's  records  shall not limit or  otherwise  affect the
obligations  of the  undersigned  to repay  each  advance  made by the Bank,  in
accordance with the terms hereof.

         The undersigned agrees to indemnify the Bank and hold the Bank harmless
from any loss or expense which the Bank may sustain or incur,  including without
limitation, interest or fees payable by the Bank to lenders of funds obtained by
it in order to maintain a Eurodollar Advance hereunder,  as a consequence of (a)
default by the undersigned in payment of the principal  amount of or interest on
a Eurodollar Advance, (b) default by the undersigned in making any prepayment of
a Eurodollar  Advance after the undersigned gives notice in accordance with this
Note and/or (c) the making of any payment of a Eurodollar Advance on a day which
is not the last day of the then applicable Interest Period with respect thereto.
When claiming  indemnification  under this paragraph,  the Bank shall provide to
the  undersigned a statement  explaining  the amount of any such loss or expense
which  statement  shall in the  absence of  manifest  error be  conclusive  with
respect to the undersigned.  The indemnity  obligations  hereunder shall survive
payment in full of the Note.

         As security  for the payment of this Note and of all other  obligations
and  liabilities  of the  undersigned  to the  Bank,  whether  now or  hereafter
existing,  joint, several,  direct,  indirect,  absolute,  contingent,  secured,
matured  or  unmatured,  the  undersigned  grants  to the Bank a right of setoff
against, a continuing  security interest in, and an assignment and pledge of all
moneys,  deposits  (general or special),  securities  and other  property of the
undersigned  and the  proceeds  thereof,  now or  hereafter  held by the Bank on
deposit, in safekeeping, in transit or otherwise, at any time credited by or due
from the Bank to the  undersigned,  or in which the  undersigned  shall  have an
interest.

         Upon the  occurrence and  continuance of any of the following  (each an
"Event  of  Default"):  (a)  default  in the  payment  when  due  of any  amount
hereunder; (b) filing by or against the undersigned of a petition commencing any
proceeding under any bankruptcy, reorganization,  rearrangement, readjustment of
debt,  dissolution or  liquidation  law or statute of any  jurisdiction,  now or
hereafter in effect;  (c) making by the  undersigned  of an  assignment  for the
benefit of  creditors;  (d)  petitioning  or  applying to any  tribunal  for the
appointment  of a custodian,  receiver or trustee for the  undersigned  or for a
substantial  part of its assets;  (e) death or incapacity of the undersigned (if
an individual); (f) entry of any judgment or order of attachment,  injunction or
governmental  tax lien or levy  issued  against the  undersigned  or against any
property of the undersigned; (g) consent by the undersigned to assume, suffer or
allow to  exist,  without  the prior  written  consent  of the  Bank,  any lien,
mortgage,  assignment  or other  encumbrance  on any of its  assets or  personal
property,  now owned or  hereafter  acquired,  except  those  liens,  mortgages,
assignments or other  encumbrances in existence on the date hereof and consented
to in writing by the Bank; (h) default in the punctual payment or performance of
this or any other obligation to the Bank or to any other lender at any time; (i)
the  existence or  occurrence  at any time of one or more  conditions  or events
which, in the sole opinion of the Bank, has resulted or is reasonably  likely to
result in a material  adverse  change in the  business,  properties or financial
condition of the  undersigned;  (j) failure on request to furnish any  financial
information or to permit inspection of the books and records of the undersigned;
(k) any warranty,  representation or statement in any application,  statement or
agreement  which  proves  false in any  material  respect,  (l)  default  in the
observance or performance of any covenant or agreement of the undersigned herein
or in any other agreement  between the Bank and the  undersigned;  or (m) any of
the foregoing  events (other than the event described in clause (a)) shall occur
with respect to any guarantor of the  undersigned's  obligations  hereunder then
this Note shall, at the sole option of the Bank,  become due and payable without
notice or demand; provided, however, if an event described in clause (b), clause
(c) or clause (d) above  occurs,  this Note shall  automatically  become due and
payable.

         Upon the occurrence and during the  continuance of an Event of Default,
the Bank shall be entitled to setoff against and apply to the payment hereof the
balance of any account or accounts  maintained  with the Bank by the undersigned
and to  exercise  any other  right or  remedy  granted  hereunder,  or under any
agreement between the undersigned and the Bank or available at law or in equity,
including,  but not limited to, the rights and remedies of a secured party under
the New York  Uniform  Commercial  Code.  The failure by the Bank at any time to
exercise any such right shall not be deemed a waiver  thereof,  nor shall it bar
the exercise of any such right at a later date.  Each and every right and remedy
granted to the Bank hereunder or under any agreement between the undersigned and
the Bank or available at law or in equity shall be cumulative  and not exclusive
of any other rights, powers, privileges or remedies, and may be exercised by the
Bank from time to time and as often as may be necessary in the sole and absolute
discretion of the Bank.

         The undersigned  agrees to pay, on demand,  all of the Bank's costs and
expenses,  including  reasonable  counsel  fees  (whether  in-house  or  outside
counsel),  in  connection  with the  collection  of any  amounts due to the Bank
hereunder or in connection  with the enforcement of the Bank's rights under this
Note.

         This Note shall be governed by and  construed  in  accordance  with the
laws of the State of New York,  without  giving effect to principles of conflict
or choice of laws.

         THE UNDERSIGNED HEREBY  IRREVOCABLY  SUBMITS TO THE JURISDICTION OF ANY
FEDERAL  OR  STATE  COURT  IN THE  STATE  OF NEW  YORK  IN ANY  ACTION,  SUIT OR
PROCEEDING  BROUGHT AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS NOTE OR
ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND CONSENTS TO THE PLACING OF VENUE
IN THE  COUNTY  OF  NASSAU  OR OTHER  COUNTY  PERMITTED  BY LAW.  TO THE  EXTENT
PERMITTED BY  APPLICABLE  LAW, THE  UNDERSIGNED  HEREBY WAIVES AND AGREES NOT TO
ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE,  IN ANY SUCH SUIT, ACTION OR
PROCEEDING ANY CLAIM THAT IT IS NOT PERSONALLY  SUBJECT TO THE  JURISDICTION  OF
SUCH COURTS,  THAT THE SUIT,  ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM,  THAT THE VENUE OF THE SUIT,  ACTION OR PROCEEDING  IS IMPROPER,  OR THAT
THIS NOTE OR ANY OTHER  DOCUMENT  OR  INSTRUMENT  REFERRED  TO HEREIN MAY NOT BE
LITIGATED IN OR BY SUCH COURTS.  TO THE EXTENT  PERMITTED BY APPLICABLE LAW, THE
UNDERSIGNED  AGREES NOT TO SEEK AND HEREBY WAIVES THE RIGHT TO ANY REVIEW OF THE
JUDGMENT  OF ANY SUCH  COURT BY ANY  COURT OF ANY OTHER  NATION OR  JURISDICTION
WHICH  MAY BE  CALLED  UPON  TO  GRANT  AN  ENFORCEMENT  OF SUCH  JUDGMENT.  THE
UNDERSIGNED  AGREES THAT  SERVICE OF PROCESS MAY BE MADE UPON IT BY CERTIFIED OR
REGISTERED  MAIL TO ITS ADDRESS SET FORTH BELOW OR SUCH OTHER  ADDRESS  THAT THE
UNDERSIGNED  SHALL HAVE NOTIFIED THE BANK IN WRITING OR ANY METHOD AUTHORIZED BY
THE LAWS OF THE STATE OF NEW YORK.  EXCEPT AS PROHIBITED BY LAW, THE UNDERSIGNED
HEREBY  WAIVES  ANY  RIGHT  IT MAY  HAVE TO A TRIAL  BY JURY IN  RESPECT  OF ANY
LITIGATION  DIRECTLY OR INDIRECTLY  ARISING OUT OF, UNDER OR IN CONNECTION  WITH
THIS NOTE.

         Neither the undersigned nor any affiliate of the undersigned  shall use
any portion of the proceeds of the Loans,  nor have any Letter of Credit issued,
either  directly or  indirectly,  for the purpose of purchasing  any  securities
underwritten by ABN AMRO Inc., an affiliate of the Bank.

         The undersigned and the Bank hereby agree and acknowledge  that any and
all  information   relating  to  the  undersigned  which  is  furnished  by  the
undersigned  to the  Bank  (or to any  affiliate  of the  Bank),  and  which  is
non-public, confidential or proprietary in nature, shall be kept confidential by
the Bank or such affiliate in accordance with applicable law; provided, however,
that such information and other credit  information  relating to the undersigned
may be  distributed  by the Bank or such  affiliate  (a) to the  Bank's  or such
affiliate's directors, officers, employees,  attorneys,  affiliates,  attorneys,
auditors and regulators, and (b) upon the order of a court or other governmental
agency having jurisdiction over the Bank or such affiliate,  to any other party.
The undersigned and the Bank further agree that this provision shall survive the
termination of this Note.

         The Bank shall not, by any act, delay, omission or otherwise, be deemed
to  have  waived  any  of its  rights  and/or  remedies  hereunder.  No  change,
amendment, modification, termination, waiver, or discharge, in whole or in part,
of any provision of this Note shall be effective unless in writing and signed by
the Bank,  and if so given by the Bank,  shall be effective only in the specific
instance in which given.  The  undersigned  acknowledges  that this Note and the
undersigned's  obligations  under this Note are, and shall at all times continue
to be,  absolute and  unconditional  in all respects,  and shall at all times be
valid and enforceable  irrespective of any other  agreements or circumstances of
any nature  whatsoever  which might otherwise  constitute a defense to this Note
and  the  obligations  of the  undersigned  under  this  Note.  The  undersigned
absolutely,  unconditionally  and irrevocably waives any and all right to assert
any set-off, counterclaim or crossclaim of any nature whatsoever with respect to
this Note or the undersigned's obligations hereunder.

         In the event any one or more of the  provisions  contained in this Note
should be  invalid,  illegal or  unenforceable  in any  respect,  the  validity,
legality and enforceability of the remaining  provisions  contained herein shall
not in any way be affected or impaired thereby.

         The undersigned hereby waives presentment, demand for payment, protest,
notice of dishonor,  and any and all other notices or demands in connection with
the delivery, acceptance, performance, default, or enforcement of this Note.

         As used herein the following terms shall have the following meanings:

         "Bank" shall be deemed to include the Bank,  its successors and assigns
and any holder hereof.

         "Business  Day" means (a) a day other than a Saturday,  Sunday or other
day on which  commercial  banks in New York, New York are authorized or required
by law to close and (b) relative to the date of (i) continuing an Advance as, or
converting  an Advance  to, a  Eurodollar  Advance,  (ii)  making any payment or
prepayment  of principal of or payment of interest on a Eurodollar  Advance,  or
(iii) the  undersigned  giving any notice  (or the  number of  Business  Days to
elapse  prior to the  effectiveness  thereof)  in  connection  with  any  matter
referred to in (b)(i) or (b)(ii),  any day on which dealings in U.S. dollars are
carried on in the London interbank eurodollar market.

         "Eurocurrency  Reserve  Requirement"  means for any day as applied to a
Eurodollar Advance, the aggregate (without  duplication) of the rates (expressed
as a decimal fraction) of reserve requirements in effect on such day (including,
without limitation,  basic, supplemental,  marginal and emergency reserves under
any regulations of the Board of Governors of the Federal Reserve System or other
governmental  authority having jurisdiction with respect thereto),  as from time
to time hereafter in effect,  dealing with reserve  requirements  prescribed for
eurocurrency  funding  (currently  referred to as "Eurocurrency  Liabilities" in
Regulation D of such Board) maintained by a member bank of such system.

         "Interest Period" with respect to any Eurodollar Advance means:

                  (a) Initially, the period commencing on the date such
Eurodollar Advance is made and ending one, two or three months thereafter; and

                  (b) thereafter,  each period commencing on the last day of the
next preceding  Interest Period applicable to such Eurodollar Advance and ending
one,  two  or  three  months  thereafter,  as  selected  by the  undersigned  by
irrevocable  written  notice to the Bank not less than three (3)  Business  Days
prior to the last day of the then current  Interest  Period with respect to such
Eurodollar  Advance;  provided,  however,  that all of the foregoing  provisions
relating to Interest Periods are subject to the following:

                  (i) if any Interest Period pertaining to a Eurodollar  Advance
would  otherwise end on a day which is not a Business  Day, the Interest  Period
shall be extended to the next succeeding  Business Day unless the result of such
extension would be to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the immediately preceding Business
Day;

                  (ii) if the undersigned  shall fail to give notice as provided
in  clause  (b)  above,  the  undersigned  shall  be  deemed  to have  requested
conversion  of the  affected  Eurodollar  Advance to a Prime Rate Advance on the
last day of the then current Interest Period with respect thereto;

                  (iii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar  month at the end of such Interest  Period) shall end on the
last Business Day of a calendar month; and

                  (iv) no Interest  Period may be selected which ends later than
the Maturity Date.

         "Prime Rate" shall mean a fluctuating  rate per annum equal to the rate
of interest publicly  announced by the Bank at its principal office from time to
time as its Prime Rate.  Any change in the Prime Rate shall be  effective on the
date such change is announced by the Bank.

         "Reserve Adjusted Libor" shall mean with respect to the Interest Period
pertaining  to a  Eurodollar  Advance,  the rate per annum equal to the quotient
(rounded  upwards to the next higher 1/16 of one percent) of (a) the annual rate
of interest at which dollar  deposits of an amount  comparable  to the amount of
such Loan and for a period equal to the Interest Period  applicable  thereto are
offered to the Bank in the London interbank  market at approximately  11:00 a.m.
(London time) on the second Business Day prior to the beginning of such Interest
Period,  divided by (b) a number  equal to 1.00 minus the  Eurocurrency  Reserve
Requirement.

         "Undersigned"  shall  mean,  if this  Note is  signed  by more than one
party,  unless otherwise stated herein,  shall mean the "undersigned and each of
them" and each  undertaking  herein  contained  shall be their joint and several
undertaking.  The Bank may proceed against one or more of the undersigned at one
time or from time to time as it elects in its sole and absolute discretion.

         In the event that the Bank shall have determined  (which  determination
shall be  conclusive  and  binding  upon the  undersigned)  that,  by  reason of
circumstances  affecting the London  interbank  market,  adequate and reasonable
means do not exist for ascertaining the Reserve Adjusted Libor for any requested
Interest  Period or with respect to the  continuation  of a  Eurodollar  Advance
beyond the expiration of the then current  Interest Period with respect thereto,
the Bank  shall  forthwith  give  notice  of such  determination,  confirmed  in
writing, to the undersigned. If such notice is given, any outstanding Eurodollar
Advance shall be converted,  on the last day of the then current Interest Period
with respect thereto, to a Prime Rate Advance. Such notice shall be withdrawn by
the Bank when the Bank shall determine that adequate and reasonable  means exist
for ascertaining Reserve Adjusted Libor.

         Notwithstanding  anything to the contrary  contained  elsewhere in this
Note, if any change after the date hereof in law, rule, regulation, guideline or
order or in the  interpretation  thereof by any governmental  authority  charged
with the administration  thereof, shall make it unlawful for the Bank to make or
maintain any Advance as a Eurodollar  Advance,  then,  by written  notice to the
undersigned,  the Bank may require that the Eurodollar Advance be converted to a
Prime Rate Advance,  whereupon  the  Eurodollar  Advance shall be  automatically
converted  to a  Prime  Rate  Advance  as of the  date  of  such  notice  to the
undersigned.

         In the event that any change in applicable law or regulation, or in the
interpretation   thereof  by  any  governmental   authority   charged  with  the
administration  thereof,  shall  impose  on or deem  applicable  to the Bank any
reserve  requirements  against this Note or the Line or impose upon the Bank any
other costs or assessments,  the undersigned  shall pay to the Bank on demand an
amount  sufficient to compensate the Bank for the additional cost resulting from
the maintenance or imposition of such reserves, costs or assessments.

         Any consents,  agreements,  instructions or requests  pertaining to any
matter in connection with this Note, signed by any one of the undersigned, shall
be binding  upon all of the  undersigned.  This Note  shall bind the  respective
successors, heirs or representatives of the undersigned.  This Note and the Line
shall not be  assigned  by the  undersigned  without  the Bank's  prior  written
consent.

         IN WITNESS WHEREOF, the undersigned has duly executed this Note the day
and year first above written.

Witness:       /s/ Richard Ohl
         ______________________________
                                         Gilman & Ciocia, Inc.

                                         By:     /s/ David D. Puyear
                                         ---------------------------------------
                                         Name:  David D. Puyear
                                         Title: Chief Financial Officer

Borrower's Address:
1311 Mamaroneck Ave., Suite 130
White Plains, NY 10605October 6, 2000

Gilman & Ciocia, Inc.
1311 Mamaroneck Avenue
White Plains, NY 10605

Re: $6,000,000 line of credit

Gentlemen:

         European  American  Bank  ("EAB")  is  pleased  to advise  you it holds
available for Gilman & Ciocia,  Inc. (the "Borrower"),  a corporation  organized
and in good  standing  under the laws of the State of New York, a line of credit
in the amount of  $6,000,000  (the "Line"),  subject to the following  terms and
conditions:

         1.       Description of the Line:
                  -----------------------

                  Loans  provided  under the Line  shall be  evidenced  by EAB's
standard  Master  Note (the  "Note")  in the  amount of the Line.  Each  advance
thereunder  shall bear  interest at a rate to be elected by the  Borrower at the
time of each request for an advance equal to either:

                  (i) Prime Rate Option.
                      -----------------  A floating  rate of  interest  equal to
3/4% in excess of EAB's Prime Rate (the rate of interest stated by EAB to be its
Prime  Rate in  effect  from time to time and  adjusted  when  said  Prime  Rate
changes) computed on the basis of actual days elapsed in a 360 day year; or

                  (ii) LIBOR Rate Option.
                       -----------------   A fixed rate of interest equal to the
Reserve Adjusted LIBOR, as such term is defined in the Note plus a margin of 275
basis points for interest periods of 30, 60 or 90 days.

                  Interest on the unpaid principal balance of the Note from time
to time outstanding shall be payable monthly in arrears  commencing on the first
day of the month  following the date of the first  advance  under the Note.  Any
advance under the Line made by EAB in its  discretion  shall be in an amount not
less than $250,000 for both Prime Rate and LIBOR Rate advances.

                  In the event that an advance bears  interest at the Prime Rate
Option,  such advance may be prepaid,  in whole or in part, in increments of not
less that $250,000, without premium or penalty.

                  The  Borrower  agrees to  indemnify  EAB and hold EAB harmless
from any loss or expense that EAB may sustain or incur,  in accordance  with the
terms set forth in the Note  should  the  Borrower  make any  prepayment  of the
principal of an advance  hereunder  bearing interest at the LIBOR Rate or in the
event of a default by the Borrower in the payment or performance of any terms of
the Note or this line letter.

                  The  Borrower   acknowledges  and  agrees  that  the  Line  is
uncommitted and requests for advances or extensions of credit  thereunder  shall
be approved in the  discretion of EAB,  which may refuse to make an extension of
credit under the Line at any time without prior notice to the Borrower, and that
the  performance  or compliance by the Borrower of the  agreements  contained in
this letter,  or in any other document or agreement  evidencing or securing such
advances or extensions  of credit,  shall not obligate EAB to make an advance or
provide an extension of credit thereunder.

                  Subject to the terms and conditions  hereof, the Line shall be
available until October 30, 2001.

         2.       Guarantors:
                  ----------

                  Repayment  of all loans,  extensions  of credit and  financial
accommodations  provided under the Line together with interest and costs thereon
shall be  guaranteed,  jointly and  severally,  by James  Ciocia,  Michael Ryan,
Thomas Povinelli and Kathryn Travis (collectively,  the "Individual Guarantors")
and each  subsidiary  of the  Borrower  now or  hereafter  created  or  acquired
pursuant  to  EAB's  standard  Guarantee  of All  Liability  (the  "Guarantee").
Alternatively, in lieu of the guarantee(s) of such subsidiary(ies), the Borrower
may pledge and assign to EAB, as security for the Line, all of its right,  title
and  interest  in and to the  shares  of  capital  stock  it  owns  in all  such
subsidiaries pursuant to EAB's standard Pledge Agreement.

         3.       Purpose of the Line:
                  -------------------

                  The  purpose  of  the  Line  shall  be  used  to  support  the
Borrower's working capital needs.

         4.       Security for the Line:
                  ---------------------

                  The  Line  shall  be  secured  by a  first  priority  security
interest in all assets and personal property of the Borrower including,  without
limitation,   its  trademarks   pursuant  to  EAB's  standard  General  Security
Agreement,  duly filed UCC-1 Financing Statements and all documents necessary to
perfect EAB's security interest in the Borrower's trademarks.

         5.       Conditions Precedent:
                  --------------------

                  Prior to the Borrower's  initial  request for an advance under
the Line, it shall have provided to EAB, if it has not already done so:

          (i)  A copy of the  resolutions  passed  by the  Borrower's  Board  of
               Directors  certified by its  Secretary as being in full force and
               effect  authorizing  the  borrowing   described  herein  and  the
               execution  of all  documents  and  agreements  required by EAB to
               evidence and secure the Line;

          (ii) A certified copy of the certificate of incorporation of the
               Borrower; and

          (iii)Subordination  agreements,  in form and substance satisfactory to
               EAB,  pursuant to which the  Borrower  shall  subordinate  to the
               prior  payment  of all  amounts  due  under  the  Line,  its loan
               indebtedness  to its  officers  in the amount of  $1,000,000  and
               other creditors in an amount not less than $5,000,000.

         6.       Financial Reporting:
                  -------------------

               The Borrower shall provide to EAB:

          (i)  As soon as  available,  but in any event  within one hundred five
               (105) days after the last day of each fiscal year, the 10K Report
               of the  Borrower,  filed or to be filed with the  Securities  and
               Exchange Commission, which shall include statements of income and
               retained  earnings  and cash  flows for such  fiscal  year,  each
               prepared  in  accordance  with  generally   accepted   accounting
               principles  consistently  applied,  in  reasonable  detail,  such
               statements  to be  audited  by a firm  of  independent  certified
               public accountants satisfactory to EAB.

          (ii) As soon as  available,  but in any event  within  sixty (60) days
               after the end of each  fiscal  quarter,  copies of the 10Q Report
               filed or to be filed with the Securities and Exchange Commission.

Each of the financial  statements specified in Sections (i) and (ii) above shall
be  accompanied  by a  certificate  signed by the  president or chief  financial
officer of the Borrower to the effect that such  statements  fairly  present the
financial  condition of the Borrower as of the balance sheet date and results of
the operations of the Borrower for the period(s)  then ended in accordance  with
generally accepted accounting principles consistently applied.

          (iii)Within one  hundred  twenty  (120) days after the last day of the
               2000 calendar  year,  the personal  financial  statements of each
               Individual Guarantor, on EAB's standard form.

          (iv) Such other  financial or  additional  information  as EAB may
               from time to time request.

         7.       Special Requirements:
                  --------------------

                  a.       The Borrower agrees to maintain:

          (i)  a  capital  base (the sum of  capital  surplus,  earned  surplus,
               capital  stock  and  such  other  items  as are  allowable  under
               generally   accepted   accounting   principles  and  subordinated
               liabilities minus deferred charges, intangibles,  receivables due
               from stockholders,  officers or affiliates and treasury stock) in
               an amount not less than  $7,250,000  at December 31, 2000 and not
               less than $9,000,000 at June 30, 2001 increasing incrementally at
               each fiscal year end thereafter by $1,500,000.

          (ii) a  maximum  leverage  ratio  (the  ratio of total  unsubordinated
               liabilities  to capital  base) of not greater  than 1.5 to 1.0 at
               June 30, 2001.

          (iii)a debt  service  coverage  ratio,  the ratio of  earnings  before
               interest,  taxes, depreciation and amortization to the sum of the
               current  portion  of all  long  term  indebtedness  and  interest
               expense  on all  indebtedness  of not less than 2.0 to 1.0 at the
               end of each fiscal quarter.

          b.  The  Borrower  shall  maintain  hazard  insurance  on  its
inventory and equipment with a financially sound and reputable insurance company
in such amounts as are necessary to cover not less than the replacement  cost of
such  inventory  and  covering  such risks as are usually  carried by  companies
engaged in the same or similar business which insurance policy shall be endorsed
to name EAB lender loss payee.

          c. The  Borrower  agrees  not to  pay or  accrue  any  dividends  or
distributions to any of its shareholders or officers in any fiscal year, without
the prior written consent of EAB.

          d. The Line shall be supported by negative pledge agreements,  in form
and  substance  satisfactory  to EAB,  pursuant  to which the  Borrower  and the
Individual  Guarantors  shall agree not to create or permit to exist without the
prior written consent of EAB, any mortgages, encumbrances or liens on any of the
primary residences of the Individual  Guarantors,  except those encumbrances and
mortgages  which are in  existence  and of public  record on the date hereof and
advised to EAB.

         8.       Annual Clean-up:
                  ---------------

                  The  Borrower  covenants  and agrees  that for a period of not
less than thirty (30)  consecutive  days at any one time prior to the expiration
of the Line, there shall be no loans outstanding thereunder.

         9.       Administration Fee/Legal Fees:
                  -----------------------------

                  In order to compensate EAB for costs attributable to EAB's due
diligence review of the Borrower's  financial condition and business operations,
including,  without  limitation,  any credit and financial analysis conducted by
EAB to determine  whether the Line shall be made available to the Borrower,  the
Borrower agrees to pay EAB upon the acceptance hereof an  administration  fee of
$25,000.  In addition,  the Borrower shall reimburse EAB for all expenses of its
in-house or outside counsel incurred in connection with the documentation of the
Line including, without limitation, the drafting,  negotiating and filing of all
documents required to evidence or secure the Line.

         10.      Acceptance:
                  ----------

                  If the foregoing is acceptable,  please so indicate by signing
and returning this letter  together with the  administration  fee before October
18, 2000, the date this letter will otherwise expire, unless extended in writing
by EAB.

                                                Very truly yours,
                                                EUROPEAN AMERICAN BANK

                                               By:    /s/ Richard Ohl
                                                  ______________________________
                                                      Richard Ohl
                                                      Vice President
Agreed and Accepted this
1st day of November, 2000

GILMAN & CIOCIA, INC.

By:     /s/ David D. Puyear
   -----------------------------
Name:   David D. Puyear
Title:  Chief Financial Officer

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