Document:

<PAGE>
                                                                   Exhibit 10.27

                                 PROMISSORY NOTE

<TABLE>
<CAPTION>
------------------ ------------- -------------- ---------- ---------- -------------- ---------- ------------
Principal          Loan Date     Maturity       Loan No    Call/Coll  Account        Officer    Initials
------------------ ------------- -------------- ---------- ---------- -------------- ---------- ------------
<S>                <C>           <C>            <C>        <C>        <C>            <C>        <C>
$250,000.00        12-19-2001    03-15-2002                           8000249413
------------------ ------------- -------------- ---------- ---------- -------------- ---------- ------------
</TABLE>

References in the shaded area are for lender's use only and do not limit the
applicability of this document to any particular loan or item. Any item above
containing "***" has been omitted due to text length limitations.

<TABLE>
<S>               <C>                                         <C>
------------------------------------------------------------------------------------------------------------
Borrower:         Empyrean Bioscience, Inc.                   Lender:  The Huntington National Bank
                  23800 Commerce Park Rd. Suite A                      Cleveland Commercial Lending
                  Cleveland, OH  44122                                 P.O. Box 1558 - HZ0325
                                                                       Columbus, OH  43272-4195
------------------------------------------------------------------------------------------------------------
Principal Amount: $250,000.00       Initial Rate:  5.750%     Date of Note: 12/19/2001
</TABLE>

PROMISE TO PAY. Empyrean Bioscience, Inc. ("Borrower") promises to pay to THE
HUNTINGTON NATIONAL BANK ("Lender"), or order, in lawful money of the United
States of America, the principal amount of Two Hundred Fifty Thousand & 00/100
Dollars ($250,000.00) together with interest on the unpaid outstanding principal
balance from December 19, 2001, until paid in full.

PAYMENT. Borrower will pay this loan in one principal payment of $250,000.00
plus interest on March 15, 2002. This payment due on March 15, 2002, will be for
all principal and all accrued interest not yet paid. Unless otherwise agreed or
required by applicable law, payments will be applied first to accrued unpaid
interest, then to principal, and any remaining amount to any unpaid collection
costs and late charges. The annual interest rate for this Note is computed on a
365/360 basis; that is, by applying the ratio of the annual interest rate over a
year of 360 days, multiplied by the outstanding principal balance, multiplied by
the actual number of days the principal balance is outstanding. Borrower will
pay Lender at Lender's address shown above or at such other place as Lender may
designate in writing.

VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from
time to time based on changes in an index which is the Lender's Prime Commercial
Rate. As used herein, Prime Commercial Rate shall mean the rate established by
the Lender from time to time based on its consideration of economic, money
market, business and competitive factors, and it is not necessarily the Lender's
most favored rate. Subject to any maximum or minimum interest rate limitation
specified herein or by applicable law, any variable rate of interest on the
obligation evidenced hereby shall change automatically without notice to the
undersigned immediately with each change in the Prime Commercial Rate (the
"Index"). The Index is not necessarily the lowest rate charged by Lender on its
loans and is set by Lender in its sole discretion. If the Index becomes
unavailable during the term of this loan, Lender may designate a substitute
index after notifying Borrower. Lender will tell Borrower the current Index rate
upon Borrower's request. The interest rate change will not occur more often than
each day. Borrower understands that Lender may make loans based on other rates
as well. The Index currently is 4.750% per annum. The interest rate to be
applied to the unpaid principal balance of this Note will be at a rate of 1.000
percentage points over the Index, resulting in an initial rate of 5.750% per
annum. NOTICE: Under no circumstances will the interest rate on this Note be
more than the maximum rate allowed by applicable law.

PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance charges
are earned fully as of the date of the loan and will not be subject to refund
upon early payment (whether voluntary or as a result of default), except as
otherwise required by law. Except for the foregoing, Borrower may pay without
penalty all or a portion of the amount owed earlier than it is due. Early
payments will not, unless agreed to by Lender in writing, relieve Borrower of
Borrower's obligation to continue to make payments under the payment schedule.
Rather, early payments will reduce the principal balance due. Borrower agrees
not to send Lender payments marked "paid in full", "without recourse", or
similar language. If Borrower sends such a payment, Lender may accept it without
losing any of Lender's rights under this

<PAGE>

Note, and Borrower will remain obligated to pay any further amount owed to
Lender. All written communications concerning disputed amounts, including any
check or other payment instrument that indicates that the payment constitutes
"payment in full" of the amount owed or that is tendered with other conditions
or limitations or as full satisfaction of a disputed amount must be mailed or
delivered to: The Huntington National Bank, Commercial Customer Support, 7450
Huntington Park Drive - HZ0326 Columbus, OH 43235.

LATE CHARGE. If a payment is 11 days or more late, Borrower will be charged
5.000% of the regularly scheduled payment.

INTEREST AFTER DEFAULT. Upon default, including failure to pay upon final
maturity, Lender, at its option, may, if permitted under applicable law,
increase the variable interest rate on this Note to 4.000 percentage points over
the Index. The interest rate will not exceed the maximum rate permitted by
applicable law.

DEFAULT. Each of the following shall constitute an event of default ("Event of
Default") under this Note:

         Payment Default. Borrower fails to make any payment when due under this
         Note.

         Other Defaults. Borrower fails to comply with or to perform any other
         term, obligation, covenant or condition contained in this Note or in
         any of the related documents or to comply with or to perform any term,
         obligation, covenant or condition contained in any other agreement
         between Lender and Borrower.

         False Statements. Any warranty, representation or statement made or
         furnished to Lender by Borrower or on Borrower's behalf under this Note
         or the related documents is false or misleading in any material
         respect, either now or any the time made or furnished or becomes false
         or misleading at any time thereafter.

         Insolvency. The dissolution or termination of Borrower's existence as a
         going business, the insolvency of Borrower, the appointment of a
         receiver for any part of Borrower's property, any assignment for the
         benefit of creditors, any type of creditor workout, or the commencement
         of any proceeding under any bankruptcy or insolvency laws by or against
         Borrower.

         Creditor or Forfeiture Proceedings. Commencement of foreclosure or
         forfeiture proceedings, whether by judicial proceeding, self-help,
         repossession or any other method, by any creditor of Borrower or by any
         governmental agency against any collateral securing the loan. This
         includes a garnishment of any of Borrower's accounts, including deposit
         accounts, with Lender. However, this Event of Default shall not apply
         if there is a good faith dispute by Borrower as to the validity or
         reasonableness of the claim which is the basis of the creditor or
         forfeiture proceeding and if Borrower gives Lender written notice of
         the creditor or forfeiture proceeding and deposits with Lender monies
         or a surety bond for the creditor or forfeiture proceeding, in an
         amount determined by Lender, in its sole discretion, as being an
         adequate reserve or bond for the dispute.

         Events Affecting Guarantor. Any of the preceding events occurs with
         respect to any Guarantor of any of the indebtedness or any Guarantor
         dies or becomes incompetent, or revokes or disputes the validity of, or
         liability under, any guaranty of the indebtedness evidenced by this
         Note.

         Change in Ownership. Any change in ownership of twenty-five percent
         (25%) or more of the common stock of Borrower.

         Adverse Change. A material adverse change occurs in Borrower's
         financial condition, or Lender believes the prospect of payment or
         performance of this Note is impaired.

         Insecurity. Lender in good faith believes itself insecure.

<PAGE>

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, and then
Borrower will pay that amount.

ATTORNEYS' FEES; EXPENSES. Lender may hire or pay someone else to help collect
this Note if Borrower does not pay. Borrower will pay Lender that amount. This
includes, subject to any limits under applicable law, Lender's attorneys' fees
and Lender's legal expenses, whether or not there is a lawsuit, including
attorneys' fees, expenses for bankruptcy proceedings (including efforts to
modify or vacate any automatic stay or injunction), and appeals. If not
prohibited by applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law.

JURY WAIVER. Lender and Borrower hereby waive the right to any jury trial in any
action, proceeding, or counterclaim brought by either Lender or Borrower against
the other.

GOVERNING LAW. This Note will be governed by, construed and enforced in
accordance with federal law and the laws of the State of Ohio. This Note has
been accepted by Lender in the State of Ohio.

CONFESSION OF JUDGMENT. Borrower hereby irrevocably authorizes and empowers any
attorney-at-law, including an attorney hired by Lender, to appear in any court
of record and to confess judgment against Borrower for the unpaid amount of this
Note as evidenced by an affidavit signed by an officer of Lender setting forth
the amount then due, attorneys' fees plus costs of suit, and to release all
errors, and waive all rights of appeal. If a copy of this Note, verified by an
affidavit, shall have been filed in the proceeding, it will not be necessary to
file the original as a warrant of attorney. Borrower waives the right to any
stay of execution and the benefit of all exemption laws now or hereafter in
effect. No single exercise of the foregoing warrant and power to confess
judgment will be deemed to exhaust the power, whether or not any such exercise
shall be held by any court to be invalid, voidable, or void; but the power will
continue undiminished and may be exercised from time to time as Lender may elect
until all amounts owing on this Note have been paid in full. Borrower waives any
conflict of interest that an attorney hired by Lender may have in acting on
behalf of Borrower in confessing judgment against Borrower while such attorney
is retained by Lender. Borrower expressly consents to such attorney acting for
Borrower in confessing judgment.

DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $15.00 if Borrower
makes a payment on Borrower's loan and the check or preauthorized charge with
which Borrower pays is later dishonored.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a
right of setoff in all Borrower's accounts with Lender (whether checking,
savings, or some other account). This includes all accounts Borrower holds
jointly with someone else and all accounts Borrower may open in the future.
However, this does not include any IRA or Keogh accounts, or any trust accounts
for which setoff would be prohibited by law. Borrower authorizes Lender, to the
extent permitted by applicable law, to charge or setoff all sums owing on the
debt against any and all such accounts.

FINANCIAL STATEMENTS. Borrower agrees to furnish from time to time on the
request of the Lender true and complete financial statements and such other
information as the Lender may reasonably require.

PROCESSING FEE. Borrower shall pay to Lender on the date of this Note a
processing fee in the amount of $0.00. Lender and Borrower agree that the fee
shall be fully earned by Lender on the date of this Note.

PRIOR NOTE. This note is in renewal and replacement of a certain Promissory Note
dated September 11, 2001, in the original principal amount of 250,000.00
executed and delivered by Borrower and Lender.

SUCCESSOR INTERESTS. The terms of this Note shall be binding upon Borrower, and
upon Borrower's heirs, personal representatives, successors and assigns, and
shall inure to the benefit of lender and its successors and assigns.

GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will
not affect the rest of the Note. Borrower does not agree or intend to pay, and
Lender does not agree or intend to contract for,

<PAGE>

charge, collect, take, reserve or receive (collectively referred to herein as
"charge or collect"), any amount in the nature of interest or in the nature of a
fee for this loan, which would in any way or event (including demand,
prepayment, or acceleration) cause Lender to charge or collect more for this
loan than the maximum Lender would be permitted to charge or collect by federal
law or the law of the State of Ohio (as applicable). Any such excess interest or
unauthorized fee shall, instead of anything stated to the contrary, be applied
first to reduce the principal balance of this loan, and when the principal has
been paid in full, be refunded to Borrower. Lender may delay or forgo enforcing
any of its rights or remedies under this Note without losing them. Borrower and
any other person who signs, guarantees or endorses this Note, to the extent
allowed by law, waive presentment, demand for payment, and notice of dishonor.
Upon any change in the terms of this Note, and unless otherwise expressly stated
in writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such
parties agree that Lender may renew or extend (repeatedly and for any length of
time) this loan or release any party or guarantor or collateral; or impair, fail
to realize upon or perfect Lender's security interest in the collateral; and
take any other action deemed necessary by Lender without the consent of or
notice to anyone. All such parties also agree that Lender may modify this loan
without the consent of or notice to anyone other than the party with whom the
modification is made. The obligations under this Note are joint and several.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

--------------------------------------------------------------------------------
NOTICE: FOR THIS NOTICE "YOU" MEANS THE BORROWER AND "CREDITOR" AND "HIS" MEANS
LENDER.

WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROMYOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,
OR ANY OTHER CAUSE.
--------------------------------------------------------------------------------

BORROWER:

EMPYREAN BIOSCIENCE, INC.

By: /s/ Brenda K. Brown
    ---------------------------------
    Brenda K. Brown, Vice President/
    CFO of Empyrean Bioscience, Inc.<PAGE>
                                                                   Exhibit 10.28

                                                                  EXECUTION COPY

                  RESTATED REIMBURSEMENT AND SECURITY AGREEMENT

                  REIMBURSEMENT AND SECURITY AGREEMENT dated January 16, 2002,
made by EMPYREAN BIOSCIENCE, INC., a Delaware corporation with its principal
place of business at 23800 Commerce Park Rd., Suite A, Cleveland, Ohio 44122
(the "Premises"), (hereinafter referred to as the "Grantor") and RICHARD C.
ADAMANY and VICKY L. ADAMANY, husband and wife, BENNETT S. RUBIN, and JILL G.
OKUN, husband and wife, and THE BENNETT S. RUBIN TRUST UNDER TRUST AGREEMENT
DATED NOVEMBER 2, 1994 AMENDED AND RESTATED UNDER DECLARATION OF TRUST DATED
AUGUST 11, 2000 and LAWRENCE D. BAIN and KATHY BAIN, husband and wife, and UPTIC
INVESTMENTS CORP. (collectively, "Secured Party"), with the principal
residence/office (addresses set forth opposite their signatures, below).

                              W I T N E S S E T H:
                              --------------------

                  WHEREAS, pursuant to a Promissory Note, dated November 16,
2000 (the "Note") Grantor borrowed from Huntington National Bank (including its
successors and assigns, "Bank"), under a revolving line of credit, a principal
amount of One Million Dollars ($1,000,000.00) (the "Loan");

                  WHEREAS, a condition to Bank's willingness to make the Loan to
the Grantor was that each of the married couples and entities comprising Secured
Party (each a "Secured Party Member") execute in favor of Bank a personal
guaranty of the Note and Grantor's obligations to Bank thereunder (collectively,
the "Guaranty");

                  WHEREAS, as an inducement for Secured Party to give the
Guaranty to Bank and in consideration of the benefit to the Grantor from Bank's
extension of the Loan to the Grantor based, in part, upon such personal
guaranty, the Grantor committed to Secured Party that it would reimburse,
indemnify and hold harmless Secured Party in the event that Secured Party was
required to perform under the Guaranty and agreed to grant a security interest
in the fixed assets, accounts, and inventory, contract rights, trademarks and
general intangible assets of the Grantor to Secured Party as security for such
obligations (the "Original Security Agreement");

                  WHEREAS, the Original Security Agreement cannot presently be
located and is assumed to be lost; and

                  WHEREAS, as a confirmation of their intent to continue to
abide by the terms of the Original Security Agreement, Grantor and Secured Party
now desire to restate the terms and conditions of the Original Security
Agreement and to abide by such terms and conditions as are hereinafter set
forth.

                  NOW, THEREFORE, in consideration of the premises, the Grantor
and Secured Party hereby agree as follows:

                  1. REIMBURSEMENT UNDERTAKING. Grantor hereby agrees to
reimburse and indemnify each Secured Party Member for, and hold harmless each
such Secured Party Member from, (i) any and all payments made by such Secured
Party (a) pursuant to the Guaranty and/or (b) with respect to any obligations of
the Grantor to Bank under the Loan Documents (together, the "Guaranteed
Obligations") and (ii) any and all expenses (including, but not limited to all
attorneys fees and court costs) which such Secured Party Member may reasonably
incur in connection with investigating, defending or settling any claims and/or
legal proceedings made or threatened against such Secured Party Member with
respect to the foregoing. All amounts now or hereafter due and owing to Secured
Party by Grantor pursuant to this Section 1 are collectively referred to as the
"Obligations". The Secured Party Members under this Agreement hereby recognize
and agree that any reimbursements by Grantor for payments made or expenses
incurred by any one or more of them in respect of any of the Guaranteed

                                       1

<PAGE>

Obligations ("Reimbursable Payments") shall be made only to those of them making
or incurring the same, and the Grantor agrees that, in making any such
reimbursement payments where more than one Secured Party Member is entitled
thereto, the reimbursements will be paid by the Grantor to the Secured Party
Members entitled thereto in proportion to the respective Reimbursable Payments
each has incurred.

                  2. GRANT OF SECURITY INTEREST. The Grantor hereby affirms,
grants and transfers to Secured Party a security interest in all of the right,
title and interest of the Grantor in and to the following, whether now owned or
hereafter acquired (the "Collateral"):

                  (a) All fixed assets, including but not limited to equipment,
furnishings and all other tangible personal property not referenced under
Sections 2(b) below;

                  (b) All inventory in all of its forms, wherever located, now
or hereafter existing (including, but not limited to, (i) packing, packaging and
shipping materials and all goods, merchandise and other personal property
furnished under any contract of service or intended for sale or lease,
including, without limitation, all raw materials and work in process therefor,
finished goods thereof, and materials used or consumed in the manufacture or
production thereof, returned and repossessed goods, (ii) goods in which the
Grantor has an interest in mass or a joint or other interest or right of any
kind (including, without limitation, goods in which the Grantor has an interest
or right as consignee), and (iii) goods that are returned to or repossessed by
the Grantor, and all accessions thereto and products thereof and documents
therefor (any and all such inventory, accessions, products and documents being
the "Inventory");

                  (c) All accounts, contract rights (including, but not limited
to, contract rights under any and all marketing agreements, distribution
agreements, joint venture agreements, operating agreements, voting agreements,
stockholder agreements, and put or call agreements), general intangibles
(including, but not limited to, all tax refunds, corporate or other business
records, inventions, designs, blueprints, computer software, trade secrets,
goodwill, licenses or licensing agreements (whether as "licensor" or
"licensee"), sub-licenses or sub-licensing agreements (whether as "sub-licensor"
or "sub-licensee"), franchises, customer and supplier lists, rights and claims
against carriers and shippers and rights to indemnification, patents,
copyrights, trademarks and trade names), and other obligations of any kind, now
or hereafter existing, whether or not arising out of or in connection with the
sale or lease of goods or the rendering of services, and all rights now or
hereafter existing in and to all security agreements, leases, and other
contracts, instruments and agreements securing or otherwise made under or in
connection with or relating to any such accounts, contract rights, general
intangibles or other rights or obligations of the Grantor (any and all such
accounts, contract rights, general intangibles and obligations being the
"Receivables", and any and all such leases, security agreements and other
contracts, instruments and agreements being the "Related Contracts");

                  (d) All proceeds of any and all of the foregoing Collateral
including, without limitation, proceeds that constitute property of the types
described in clauses (a), (b), and (c) of this Section 2 and any and all
payments (in any form whatsoever) made or due and payable to the Grantor from
time to time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Collateral by any governmental
body, authority, bureau or agency (or any Person acting under color of
governmental authority) (the "Proceeds") and, to the extent not otherwise
included, all payments under insurance (whether or not Secured Party is the loss
payee thereof), or any indemnity, warranty or guaranty, payable to the Grantor
by reason of loss or damage to or otherwise with respect to any of the foregoing
Collateral but subject to the right of any lessor under any leasehold interest
between the Grantor and such lessor.

The security interest in the Collateral hereby granted to Secured Party is
intended for the benefit of each Secured Party Member.

                  3. SECURITY FOR OBLIGATIONS. This Agreement and the Collateral
hereunder secures the payment of all Obligations of the Grantor of any nature
whatsoever pursuant to this Agreement.

                                       2

<PAGE>

                  4. GRANTOR REMAINS LIABLE. Anything herein to the contrary
notwithstanding, (a) the Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by Secured Party of any of the
rights hereunder shall not release the Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral, and
(c) Secured Party shall not have any obligation or liability under the contracts
and agreements included in the Collateral by reason of this Agreement or its
exercise of any of its rights or remedies hereunder or with respect hereto, nor
shall Secured Party be obligated to perform any of the obligations or duties of
the Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder; provided the Grantor may take any action or enforce
any claim for payment under any contract assigned hereunder in the event that
Secured Party refuses to do so, notwithstanding anything herein to the contrary.

                  5. REPRESENTATIONS AND WARRANTIES. The Grantor represents and
warrants as follows:

                  (a) LOCATION OF COLLATERAL. All of the Receivables and
Inventory now existing are, and all Receivables and Inventory hereafter existing
will be, located at the places specified in Schedule 5(a) attached hereto. The
chief place of business and chief executive office of the Grantor and the office
where the Grantor keeps its records concerning the Receivables, and of all
documentation that evidences the Collateral, are located at the address first
specified above for the Grantor. None of the Receivables is evidenced by a
promissory note or other instrument which has not been delivered to Secured
Party in accordance with Section 16. The Grantor will hold and preserve such
records and will permit representatives of Secured Party at any time during
normal business hours to inspect and make abstracts from such records.

                  (b) OWNERSHIP OF COLLATERAL. The Grantor is the legal and
beneficial owner of the Collateral free and clear of any lien, security
interest, option, charge or encumbrance except for the security interest created
by this Agreement and any subordinated liens or security interest, if any, shown
on Schedule 5(b) attached hereto. No effective financing statement or other
instrument similar in effect covering all or any part of the Collateral is on
file in any recording office, except such as may have been filed in favor of
Secured Party relating to this Agreement.

                  (c) VALID SECURITY INTEREST. This Agreement creates a valid
security interest in favor of Secured Party in the Collateral, as security for
the Obligations. Secured Party's having possession of all instruments and cash
constituting Collateral from time to time and the filing of financing statements
result in the perfection of such security interest with respect to such
Collateral. Such security interest is, or in the case of Collateral in which the
Grantor obtains rights after the date hereof, will be, a perfected security
interest subject to no prior liens or security interests other than those, if
any, shown in Schedule 5(c) attached hereto (the "Permitted Liens"). Such
filings and all other action necessary or desirable to perfect and protect such
security interest have been duly taken, or will be taken immediately following
the execution of this Agreement, including without limitation the filing of UCC
financing statements with respect to the Collateral, except for Secured Party's
having possession of instruments and cash constituting Collateral after the date
hereof.

                  (d) POSSESSION. The Grantor has exclusive possession and
control of the Equipment and Inventory owned by it, other than Inventory in
transit, Inventory shipped directly to the Grantor's vendees by the Grantor's
vendors in the ordinary course of the Grantor's business and Inventory located
at third-party warehouses.

                  (e) AUTHORIZATION. No authorization, approval or other action
by, and no notice to or filing with (other than the filings and deliveries
referred to in Section 5(c) above, all of which filings and deliveries have been
made and effected), any governmental authority or regulatory body is required
either (i) for the grant by the Grantor of the security interest granted hereby
or for the execution, delivery or performance of this Agreement by the Grantor,
or (ii) for the perfection of or the exercise by Secured Party of its rights and
remedies hereunder.

                  (f) CONFLICTS. The exercise by Secured Party of any of its
rights and remedies hereunder will not contravene any contractual restriction
binding on or affecting the Grantor or any of its properties and will not result
in or require the creation of any lien upon or with respect to any of its
properties.

                                       3
<PAGE>

                  6. COVENANTS. The Grantor covenants and agrees with Secured
Party that, so long as the Guaranty remains outstanding, or Secured Party has
any continuing obligations thereunder or any of the Guaranteed Obligations or
the Obligations hereunder remain unsatisfied or any commitments thereunder or
hereunder remain outstanding, the Grantor will comply, at all times with the
following affirmative covenants:

                  (a) PERFECTION OF SECURITY INTEREST. The Grantor agrees that
from time to time, at the expense of the Grantor, the Grantor will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be necessary or desirable, or that Secured Party may request,
in order to perfect and protect any security interest granted or purported to be
granted hereby or to enable Secured Party to exercise and enforce its rights and
remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, the Grantor will execute and file such financing or
continuation statements, or amendments thereto, and such other Instruments or
notices, as may be necessary or desirable, or as Secured Party may request, in
order to perfect and preserve the security interests granted or purported to be
granted hereby.

                  (b) NO ENCUMBRANCES. The Grantor shall not create, permit or
suffer to exist, and shall take such action as is necessary to remove, any claim
to or interest in or lien or encumbrance upon the Collateral, other than the
security interest granted hereby and any Permitted Liens and shall defend the
right, title and interest of Secured Party in and to the Collateral against all
claims and demands of any and all other persons and entities at any time
claiming the same or any interest therein.

                  (c) FILING OF FINANCING STATEMENTS. The Grantor hereby
authorizes Secured Party and each of the Secured Party Members to file one or
more financing or continuation statements, and amendments thereto, relative to
all or any part of the Collateral without the signature of the Grantor where
permitted by law. A carbon, photographic or other reproduction of this Agreement
or any financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.

                  (d) SCHEDULES OF INVENTORY. The Grantor will furnish to
Secured Party from time to time statements and schedules further identifying and
describing the Inventory created or acquired by it and such other reports in
connection with the Inventory as Secured Party may reasonably request, all in
reasonable detail; provided, however, that the failure of the Grantor to execute
and deliver such schedules shall not affect or limit Secured Party's security
interest or other rights in and to the Inventory.

                  (e) LOCATION OF INVENTORY AND EQUIPMENT. The Grantor shall
keep Inventory (other than Inventory sold in the ordinary course of business)
and Equipment at the locations specified therefor in Section 5(a).

                  (f) MAINTENANCE OF EQUIPMENT. The Grantor shall cause the
Equipment to be maintained and preserved in the same condition, repair and
working order as when new, ordinary wear and tear excepted, and in accordance
with any manufacturer's manual, and shall forthwith, or in the case of any loss
or damage to any of the Equipment as quickly as practicable after the occurrence
thereof, make or cause to be made all repairs, replacements, and other
improvements in connection therewith that are necessary or desirable to such
end. The Grantor shall promptly furnish to Secured Party a statement respecting
any loss or damage in excess of $10,000.00 to any of the Equipment.

                  (g) SUBSTITUTIONS AND REMOVALS. In any instance where the
Grantor, in its reasonable discretion, determines that any item of the
Collateral shall have become inadequate, obsolete, worn out, unsuitable,
undesirable or unnecessary or should be replaced, the Grantor may remove such
items provided that such removal (taking into account any substitutions) shall
not impair the operative utility of the business of the Grantor and providing
that the Grantor shall be obligated to:

                           (i)      substitute and install property having equal
                                    or greater utility and value as the removed
                                    property, which such substituted property
                                    shall be free from all liens and
                                    encumbrances (other than Permitted Liens)
                                    and shall become part of the Premises;

                                       4
<PAGE>

                           (ii)     promptly report to Secured Party each such
                                    removal or substitution.

                  At Secured Party's request, Grantor shall deliver to Secured
Party such instruments, including financing statements and amendments thereto,
as may be necessary or advisable to perfect Secured Party's lien upon and
security interest in any personal property installed in substitution for any
Collateral removed pursuant to this Section 6(g), and Secured Party shall bear
the full expense of preparing and filing same. Upon Grantor's request, Secured
Party shall execute and deliver to Grantor appropriate instruments releasing
property removed pursuant to the provisions of this Section 6(g) only, and at
Grantor's expense, from the liens and security interests hereunder.

                  (h) TAXES. The Grantor shall pay promptly when due all
property and other taxes, assessments and governmental charges or levies imposed
upon, and all claims (including claims for labor, materials and supplies)
against the Inventory.

                  (i) WAREHOUSEMEN. Upon request by Secured Party, the Grantor
shall obtain from each warehouseman, if any, holding Inventory from time to time
an agreement acknowledging Secured Party's security interest in the Collateral
in form and substance satisfactory to Secured Party and promptly deliver such
agreement to Secured Party.

                  (j) PROCEEDS. The Grantor shall hold all Proceeds of all Fixed
Assets and Inventory in trust for the benefit of Secured Party.

                  (k) COLLECTION OF RECEIVABLES. Except as otherwise provided in
this Agreement, the Grantor shall continue to collect, at its own expense, all
amounts due or to become due the Grantor under the Receivables. In connection
with such collections, the Grantor may take (and, at Secured Party's direction,
shall take) such action as the Grantor or Secured Party may deem necessary or
advisable to enforce collection of the Receivables.

                  (l) SCHEDULE OF RECEIVABLES. Upon the request of Secured
Party, the Grantor shall provide Secured Party with schedules describing all
Receivables created or acquired by it and shall execute and deliver confirmatory
written assignments of such Receivables to Secured Party; provided, however,
that the failure of the Grantor to execute and deliver such schedules and/or
assignment describing all Receivables to Secured Party shall not affect or limit
Secured Party's security interest or other rights in and to the Receivables.
Together with each schedule, the Grantor shall furnish, upon request of Secured
Party, copies of customers' invoices or the equivalent, and, upon request
therefor, copies of original shipping or delivery receipts for all merchandise
sold and such other documents as Secured Party may require. The Grantor agrees
not to re-date any invoice or sale or make sales on extended dating beyond that
which is customary in its industry.

                  (m) INSURANCE AND ENDORSEMENT. The Grantor shall (i) keep the
Collateral and Grantor's other properties insured against loss or damage by
flood (if applicable) and by fire and other hazards (so-called "All Risk"
coverage) in amounts and with companies satisfactory to Secured Party to the
same extent and covering such risks as is customary in the same or a similar
business; (ii) maintain public liability coverage, including without limitation,
products liability coverage, against claims for personal injuries or death; and
(iii) maintain all worker's compensation, employment or similar insurance as may
be required by applicable law. All insurance shall contain such terms, be in
such form, and be for such periods satisfactory to Secured Party, and be written
by such carriers duly licensed by the State of Ohio and satisfactory to Secured
Party. Upon the request of Secured Party, the Grantor shall cause Secured Party
to be endorsed as a loss payee in form and substance acceptable to Secured Party
on all such insurance. In the event of a failure to provide and maintain
insurance as herein provided, Secured Party may, at its option, provide such
insurance and charge the amount thereof to the Grantor. Upon the request of
Secured Party, the Grantor shall furnish to Secured Party certificates or other
satisfactory evidence of compliance with the foregoing insurance provisions.
Upon the occurrence of an Event of Default under Section 11, Grantor hereby
irrevocably appoints Secured Party as its attorney-in-fact, coupled with an
interest, to make proofs of loss and claims for insurance, and to receive
payments of the insurance and execute all documents, checks and

                                       5
<PAGE>

drafts in connection with payment of the insurance. Any proceeds received by
Secured Party shall be applied to the Obligations in such order and manner as
Secured Party shall determine in its sole discretion, or shall be remitted to
the Grantor, in either event at Secured Party's sole discretion.

                  (n) PAYMENT OF LOAN. The Grantor shall pay promptly when due
all principal, interest and other amounts due Bank for which Secured Party may
be held liable under the Guaranty.

                  7. TRANSFERS AND OTHER LIENS. The Grantor shall not:

                  (a) Sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, except Inventory in the ordinary
course of business or as otherwise permitted by this Agreement.

                  (b) Create or suffer to exist any lien, security interest or
other charge or encumbrance upon or with respect to any of the Collateral to
secure obligations of any person or entity, except for the security interest
created by this Agreement and the security interests, if any, shown in Schedule
6(b).

                  8. APPOINTMENT AS ATTORNEY-IN-FACT.

                  (a) The Grantor hereby irrevocably constitutes and appoints
Secured Party and any such officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in its place and stead and in its name or in its own name,
from time to time, in Secured Party's discretion, for the purpose of carrying
out the terms of this Agreement, to the extent permitted by applicable law, to
take any and all appropriate action and to execute any and all documents and
Instruments which may be necessary or desirable to accomplish the purposes of
this Agreement and, without limiting the generality of the foregoing, hereby
gives Secured Party, subject to the other terms of this Agreement, the power and
right, on behalf of the Grantor, without notice to or assent by the Grantor to
do the following:

                           (i)      to ask, demand, collect, receive and give
                                    acquittances and receipts for any and all
                                    moneys due and to become due under the
                                    Receivables and, in the name of the Grantor
                                    or its own name or otherwise, to take
                                    possession of and endorse and collect any
                                    checks, drafts, notes, acceptances or other
                                    Instruments for the payment of moneys due
                                    under any Receivable and to file any claim
                                    or to take any other action or proceeding in
                                    any court of law or equity or otherwise
                                    deemed appropriate by the Grantor for the
                                    purpose of collecting any and all such
                                    moneys due under any Receivables whenever
                                    payable;

                           (ii)     to pay or discharge taxes, liens, security
                                    interests or other encumbrances levied or
                                    placed on or threatened against the
                                    Collateral which are not permitted by the
                                    terms hereof, to effect any repairs or
                                    procure any insurance called for by the
                                    terms of this Agreement and to any all or
                                    any part of the premiums therefor and the
                                    costs thereof;

                           (iii)    (A) to receive payment of and receipt for
                                    any and all moneys, claims and other amounts
                                    due or to become due at any time in respect
                                    of or arising out of any Collateral; and (B)
                                    to sign and endorse any invoices, freight or
                                    express bills, bills of lading, storage or
                                    warehouse receipts, drafts against debtors,
                                    assignments, verifications and notices in
                                    connection with Accounts and other documents
                                    relating to the Collateral; and

                           (iv)     upon the occurrence and continuance of an
                                    Event of Default, (A) to notify the post
                                    office authorities to change the address for
                                    delivery of the Grantor's mail to an address
                                    designated by Secured Party; (B) to receive,
                                    open and dispose of all mail addressed to
                                    the Grantor; (C) to commence and prosecute
                                    any suits,

                                       6
<PAGE>

                                    actions or proceedings at law or in equity
                                    in any court of competent jurisdiction to
                                    collect the Collateral or any Proceeds
                                    thereof and to enforce any other right in
                                    respect of any Collateral; (D) to defend any
                                    suit, action or proceeding brought against
                                    the Grantor with respect to any Collateral;
                                    (E) to settle, compromise or adjust any
                                    suit, action or proceeding described above
                                    and, in connection therewith, to give such
                                    discharges or releases as Secured Party may
                                    deem appropriate; and (F) except to the
                                    extent prohibited by law, generally to sell,
                                    transfer, pledge, make any agreement with
                                    respect to or otherwise deal with any of the
                                    Collateral as fully and completely as though
                                    Secured Party were the absolute owner
                                    thereof for all purposes, and to do, at
                                    Secured Party's option and the Grantor's
                                    expense, at any time, or from time to time,
                                    all acts and things which Secured Party
                                    reasonably deems necessary to protect,
                                    preserve or realize upon the Collateral and
                                    Secured Party's security interest therein,
                                    in order to effect the intent of this
                                    Agreement, all as fully and effectively as
                                    the Grantor might do.

The Grantor hereby ratifies all that said attorney shall lawfully do or cause to
be done by virtue hereof and in accordance herewith. This power of attorney is a
power coupled with an interest and shall be irrevocable.

                  (b) The Grantor also authorizes Secured Party, at any time and
from time to time, to execute, in connection with any sale of the Collateral,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral.

                  9. SECURED PARTY MAY PERFORM. If the Grantor fails to perform
any agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of Secured Party incurred in
connection therewith shall be payable by the Grantor under Section 13(b).

                  10. SECURED PARTY'S DUTIES. The powers conferred on Secured
Party hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the safe
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, Secured Party shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral. Secured Party
shall be deemed to have exercised reasonable care in the custody and
preservation of the Receivables in its possession if the Receivables are
accorded treatment substantially equal to that which Secured Party accords its
own property, it being understood that Secured Party shall not have any
responsibility or liability for (i) ascertaining or taking action with respect
to calls, conversions, exchanges, maturities, tenders or other matters relative
to any Receivables, whether or not Secured Party has or is deemed to have
knowledge of such matters, or (ii) taking any necessary steps to preserve rights
against any parties with respect to any Receivables or (iii) the collection of
any proceeds of any Collateral or by reason of any invalidity, lack of value or
uncollectability of any of the payments received by it from Account Debtor or
otherwise.

                  11. EVENTS OF DEFAULT. The occurrence of any of the following
events shall constitute an event of default (each an "Event of Default"):

                  (a) The Grantor shall fail to pay any amount when due under
the Note;

                  (b) Bank shall demand payment from Secured Party pursuant to
the Guaranty;

                  (c) The Secured Party shall make any payment to Bank pursuant
to the Guaranty or otherwise in respect of any of the Guaranteed Obligations;

                                       7
<PAGE>

                  (d) The Grantor shall fail to pay any sum it is obligated to
pay under this Agreement;

                  (e) The Grantor shall fail to comply with Sections 6(e) and
6(f) and any such failure shall remain unremedied for ten (10) days after
written notice thereof shall have been given to the Grantor by Secured Party;
PROVIDED HOWEVER, such notice shall not be required if Grantor has not complied
with its obligation to notify Secured Party of a default or event of default.

                  (f) Except as provided in Section 11(e), the Grantor shall
fail to perform or observe any term, covenant, or agreement contained in this
Agreement; and

                  (g) The occurrence of any default or event of default as
defined in or otherwise under any of the Loan Documents.

                  12. REMEDIES. In addition to and in furtherance of the rights
granted to Secured Party in this Agreement, if any Event of Default shall have
occurred and be continuing:

                  (a) Secured Party may exercise in respect of the Collateral,
in addition to other rights and remedies provided for herein, all the rights and
remedies of a secured party on default under the Uniform Commercial Code as
enacted in any jurisdiction in which the Collateral is located (the "Code")
(whether or not the Code applies to the affected Collateral) and also may:

                           (i)      exercise any and all rights and remedies of
                                    the Grantor in respect of the Collateral;

                           (ii)     require the Grantor to, and the Grantor
                                    hereby agrees that it will at its own
                                    expense and upon request of Secured Party
                                    forthwith, assemble all or part of the
                                    Collateral as directed by Secured Party and
                                    make it available to Secured Party at a
                                    place to be designated by Secured Party;

                           (iii)    occupy any premises owned or leased by the
                                    Grantor where the Collateral or any part
                                    thereof is assembled for a reasonable period
                                    in order to effectuate its rights and
                                    remedies hereunder or under law, without
                                    obligation to the Grantor in respect of such
                                    occupation and do any acts which it deems
                                    necessary or desirable to preserve the
                                    value, marketability or rentability of the
                                    Collateral, or any part thereof or interest
                                    therein, all without prior notice to the
                                    Grantor, except as specifically provided in
                                    Section 12(a)(iv) below with respect to a
                                    formal public or private sale; and to do all
                                    such things and acts as Secured Party deems
                                    necessary or desirable in order to maximize
                                    the value of the Collateral) and upon every
                                    such entry, Secured Party, at the expense of
                                    the Grantor, from time to time, may maintain
                                    Collateral, (nothing contained herein shall
                                    be construed to impose upon Secured Party
                                    any obligation to preserve or protect the
                                    Collateral or the Grantor's business
                                    following the occurrence of an Event of
                                    Default);

                           (iv)     without notice except as specified below,
                                    sell the Collateral or any part thereof in
                                    one or more parcels at public or private
                                    sale, at any of Secured Party's offices or
                                    elsewhere, for cash, on credit or for future
                                    delivery, and upon such other terms as
                                    Secured Party may deem commercially
                                    reasonable. The Grantor agrees that at least
                                    five (5) days' notice to the Grantor of the
                                    time and place of any public sale or the
                                    time after which any private sale is to be
                                    made shall

                                       8
<PAGE>

                                    constitute reasonable notification. Secured
                                    Party shall not be obligated to make any
                                    sale of Collateral regardless of notice of
                                    sale having been given. Secured Party may
                                    adjourn any public or private sale from time
                                    to time by announcement at the time and
                                    place fixed therefor, and such sale may,
                                    without further notice, be made at the time
                                    and place to which it was so adjourned; and

                           (v)      notify the account debtors or obligors under
                                    any Receivables ("Account Debtors") of the
                                    assignment of such Receivables to Secured
                                    Party and to direct such Account Debtors to
                                    make payment of all amounts due or to become
                                    due to the Grantor thereunder directly to
                                    Secured Party and, upon such notification
                                    and at the expense of the Grantor, to
                                    enforce collection of any such Receivables,
                                    and to adjust, settle or compromise of any
                                    such Receivables, and to adjust, settle or
                                    compromise the amount or payment therefor,
                                    in the same manner and to the same extent as
                                    the Grantor might have done. All amounts and
                                    proceeds (including instruments) received by
                                    the Grantor in respect of the Receivables
                                    shall be received in trust for the benefit
                                    of Secured Party hereunder, shall be
                                    segregated from other funds of the Grantor
                                    and shall be forthwith paid over to Secured
                                    Party in the same form as so received (with
                                    any necessary endorsement) to be held as
                                    cash collateral and either (i) released to
                                    the Grantor or (ii) applied as determined by
                                    Secured Party, and the Grantor shall not
                                    adjust, settle or compromise the amount or
                                    payment of any Receivable, or release wholly
                                    or partly any account debtor or obligor
                                    thereof, or allow any credit or discount
                                    thereon.

                  (b) All payments received by the Grantor under or in
connection with any Collateral shall be received in trust for the benefit of
Secured Party, shall be segregated from other funds of the Grantor and shall be
forthwith paid over to Secured Party in the same form as so received (with any
necessary endorsement).

                  (c) All payments made under or in connection with any
Collateral and all cash held by Secured Party as Collateral and all cash
proceeds received by Secured Party in respect of any sale of, collection from,
or other realization upon all or any part of the Collateral may, in the
discretion of Secured Party, be held by Secured Party as collateral for, and/or
then or at any time thereafter applied (after payment of any amounts payable to
Secured Party pursuant to Section 13) in whole or in part by Secured Party all
or any part of the Obligations, in such order as Secured Party shall elect. Any
surplus of such cash or cash proceeds held by Secured Party and remaining after
payment in full of all the Obligations shall be paid over to the Grantor or to
whomsoever may be lawfully entitled to receive such surplus.

The Grantor acknowledges and agrees, and each of the Secured Party Members
agrees with the others, that each Secured Party Member shall be entitled, alone
and without the necessity of doing so (though they may elect to act) jointly
with the other Security Party Members, to exercise each of the rights and
remedies in respect of the Collateral as from time to time available to such
Secured Party Member under this Agreement or otherwise; provided that any
proceeds or other benefits realized through such exercise shall be for the
ratable benefit of, pari passu, in proportion to and up to the respective
amounts in which each has made any Reimbursable Payments for which the Grantor
has not reimbursed it, and shall be shared with, all of the Security Party
Members who as of the time of such realization are owed such unreimbursed
amounts; and provided further, that to the extent that subsequent to any such
realization event any Secured Party Member becomes entitled to, and do not
receive from the Grantor, reimbursement of any Reimbursable Payments, the
Secured Party Members so subsequently becoming entitled to such amounts shall be
entitled to receive from the Secured Party Members who originally shared in the
proceeds or other benefits from such prior realization event payment of such
amount as will equalize among all such original and subsequent Secured Party
Members the proportionate cumulative Reimbursable Payments for

                                       9
<PAGE>

which they are made whole through reimbursement from the Grantor or the
realization of remedies or a combination thereof.

                  13. INDEMNITY AND EXPENSES.

                  (a) The Grantor agrees, to indemnify each Secured Party
Member, from and against any and all claims, losses (including, without
limitation, attorney's fees) and liabilities growing out of or resulting from
this Agreement or the Guaranty (including, without limitation, enforcement of
this Agreement or the Guaranty), except claims, losses or liabilities resulting
from such Secured Party Member's gross negligence or willful misconduct.

                  (b) The Grantor will, upon demand, pay to each Secured Party
Member the amount of any and all reasonable expenses, including the attorneys'
fees and fees of any experts and agents, which such Secured Party Member may
incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from, or
other realization upon, any of the Collateral, as provided for herein, (iii) the
exercise or enforcement of any of the rights of Secured Party hereunder or (iv)
the failure by the Grantor to perform or observe any of the provisions hereof.

                  (c) The Secured Party Members under this Agreement hereby
recognize and agree that any payments or reimbursements for reasonable expenses
by Grantor pursuant to Section 13(b) shall be made only to those Secured Party
Members incurring the same, and the Grantor agrees that, in making any such
reimbursement payments where more than one Secured Party Member is entitled
thereto, the payments or reimbursements will be paid by the Grantor to the
Secured Party Members entitled thereto in proportion to the respective expenses
each has incurred.

                  14. SECURITY INTEREST ABSOLUTE. All rights of Secured Party
and security interests hereunder, and all Obligations of the Grantor hereunder,
shall be absolute and unconditional, irrespective of:

                  (a) any lack of validity or enforceability of the Obligations,
or any agreement or instrument relating thereto;

                  (b) any amendment or waiver of or any consent to any departure
from the terms of this Agreement;

                  (c) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from any guaranty, for all or any of the Obligations; or

                  (d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Grantor.

                  15. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement nor consent to any departure by the Grantor herefrom, shall in
any event be effective unless the same shall be in writing and signed by Secured
Party, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

                  16. ADDRESSES FOR NOTICES. All notices and other
communications provided for hereunder shall be in writing addressed to the
respective parties at the address set forth on the signature page(s) hereto, or
as to any party at such other address as shall be designated by such party in a
written notice to each other party complying as to delivery with the terms of
this Section 16. Unless the context otherwise requires, any notice or other
communication to be provided to the Secured Party shall be provided by the
Grantor to each of the Secured Party Members and any request, notice or power of
attorney which Secured Party is entitled to make, give to or

                                       10
<PAGE>

exercise in the stead of the Grantor under the terms of this Agreement may be
made, given or exercised by any Secured Party Member alone without the others,
subject to such obligations as the Secured Party Member so acting may owe to the
other Secured Party Members. All such notices and other communications shall,
when mailed, be effective upon the earlier of (a) receipt by the party so
notified, or (b) three (3) days following deposit in the mails addressed as
aforesaid.

                  17. CONTINUING SECURITY INTEREST. This Agreement shall create
a continuing security interest in the Collateral and shall (a) remain in full
force and effect until payment in full of all of the Obligations, if any, by
Grantor and the termination of all of Secured Party's obligations under the
Guaranty, (b) be binding upon the Grantor, its successors and assigns and (c)
inure, together with the rights and remedies of Secured Party hereunder, to
Secured Party and its successors, transferees and assigns. Unless otherwise
agreed by the parties in writing, upon the payment in full of all Obligations,
if any, by Grantor and the termination of any and all obligations of Secured
Party under the Guaranty, the security interest granted hereby shall terminate
and all rights to the Collateral granted to Secured Party hereunder shall revert
to the Grantor. Upon any such termination, Secured Party will, at the Grantor's
expense, execute and deliver to the Grantor such documents as the Grantor shall
reasonably request to evidence such termination.

                  18. GOVERNING LAW; TERMS. This Agreement shall be governed by
and construed in accordance with the laws of the State of Ohio, except to the
extent that the validity or perfection of the security interest hereunder, or
remedies hereunder, in respect of any particular Collateral are governed by the
laws of a jurisdiction other than the State of Ohio. Unless otherwise defined
herein, terms used in Article 9 of the Uniform Commercial Code in the State of
Ohio are used herein as therein defined. The term "Loan Documents" means the
Note, and all other agreements, instruments and documents including, without
limitation, all security agreements, assignments, security agreements,
mortgages, letters of credit, reimbursement agreements, deeds of trust, lien
waivers, subordinations, guarantees, pledges, powers of attorney and consents
but excluding the Guaranty) heretofore, now or hereafter executed by Grantor or
any other person and/or delivered to Bank relating to any obligations now or
hereafter owing to Bank from Grantor, including but not limited to the Loan.

                  19. WAIVERS BY GRANTOR. EXCEPT AS OTHERWISE PROVIDED FOR IN
THIS AGREEMENT OR AS REQUIRED BY APPLICABLE LAW, GRANTOR WAIVES (i) PRESENTMENT,
DEMAND AND PROTEST AND NOTICE OF PRESENTMENT, PROTEST, DEFAULT, NONPAYMENT,
MATURITY, RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL
COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS, CHATTEL
PAPER AND GUARANTIES AT ANY TIME HELD BY SECURED PARTY ON WHICH GRANTOR MAY IN
ANY WAY BE LIABLE, (ii) NOTICE PRIOR TO TAKING POSSESSION OR CONTROL OF THE
COLLATERAL WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING SECURED PARTY
TO EXERCISE ANY OF SECURED PARTY'S REMEDIES AND (iii) ITS RIGHT TO A JURY TRIAL
IN THE EVENT OF ANY LITIGATION INSTITUTED IN RESPECT OF THIS AGREEMENT. GRANTOR
ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY COUNSEL OF ITS CHOICE WITH RESPECT TO
THIS AGREEMENT AND THE TRANSACTIONS EVIDENCED BY THIS AGREEMENT.

                            (Signature Page Follows)

                                       11
<PAGE>

                  IN WITNESS WHEREOF, the Grantor has caused this Agreement to
be duly executed and delivered by its duly authorized officer, and the
individuals and (by their respective duly authorized representatives) entities
comprising Secured Party have duly executed and delivered the same, as of the
date first above written.

"GRANTOR"                                     ADDRESSES:

EMPYREAN BIOSCIENCE, INC.                     23800 Commerce Park Road
                                              Suite A
                                              Cleveland, Ohio  44122
By:
   --------------------------------

Title:
      -----------------------------

"SECURED PARTY"

-----------------------------------           7240 Rollingbrook Trail
Richard C. Adamany                            Solon, Ohio  44139

-----------------------------------
Vicky L. Adamany

-----------------------------------           32379 Pinebrook Lane
Bennett S.  Rubin                             Pepper Pike, Ohio  44124

-----------------------------------
Jill G. Okun

The Bennett S. Rubin Trust                    32379 Pinebrook Lane
Under Trust Agreement Dated                   Pepper Pike, Ohio  44124
November 2, 1994 Amended and
Restated Under Declaration of Trust
Dated August 11, 2000

By:
   --------------------------------
      Bennett S. Rubin, Trustee

-----------------------------------           30651 Ainsworth Drive
Lawrence D. Bain                              Pepper Pike, Ohio  44124

-----------------------------------
Kathy Bain

Uptic Investments Corp.                       30651 Ainsworth Drive
                                              Pepper Pike, Ohio  44124

By:
   --------------------------------
      Lawrence D. Bain, President

                                       12
<PAGE>

                                  SCHEDULE 5(a)
                                  -------------

Location of Collateral

1.       Empyrean Bioscience, Inc.
         23800 Commerce Park Rd., Suite A
         Cleveland, Ohio 44122

2.       Handl-It, Inc.
         26200 Richmond Road
         Bedford Heights, Ohio 44146

3.       Star Supply
         875 Mahoning Avenue
         Youngstown, Ohio 44502

4.       Guy & O'Neill, Inc.
         617 Tower Drive
         Fredonia, WI  53021

5.       Multi-Pack
         5700 West Hemlock Street
         Milwaukee, WI  53223

6.       National Towelette Company
         1400 Taylors Lane
         Cinnaminson, NJ  08077

7.       Canadian Custom Packaging
         333 Rimrock Road
         Toronto, Ontario
         Canada  M3J 3J9

                                       13
<PAGE>

                                  SCHEDULE 5(b)
                                  -------------

Subordinated Liens

Laurus Master Funds
C/O Onshore Corporate Services Ltd.
P.O. Box 1234GT
Queensgate House
South Church Street
Grand Cayman, Cayman Islands

                                       14
<PAGE>

                                  SCHEDULE 5(c)
                                  -------------

None

                                       15

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