Document:

LOAN AGREEMENT

                 FLEET NATIONAL BANK, a Bank of America Company

                      $5,000,000 REVOLVING CREDIT FACILITY

                                       and

                $20,000,000 ACQUISITION REVOLVING CREDIT FACILITY

                                   PROVIDED TO

                           NATIONAL DENTEX CORPORATION

                                  June 30, 2004

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                               Table of Contents

                                                                   Page

1. The Credit Facility; Advances. .................................  1
   (a) The Credit Facility.........................................  1
   (b) Advances....................................................  1

2. Interest; Payments; Fees; Borrowing. ...........................  2
   (a) Interest....................................................  2
   (b) Payments....................................................  2
   (c) Additional Payments.........................................  3
   (d) Notice of Borrowing.........................................  4
   (e) Special Provisions Governing Loans..........................  4
   (f) Increased Capital Costs.....................................  9
   (g) Taxes.......................................................  9

3. Letters of Credit. ............................................. 10
   (a) Issuance.................................................... 10
   (b) Notice of Proposed Issuance................................. 10
   (c) Conditions to Issuance...................................... 10
   (d) Expiry Dates................................................ 11
   (e) Drawings.................................................... 11
   (f) Reimbursement by the Borrower............................... 11
   (g) Exculpatory Provisions...................................... 11
   (h) Indemnification by Borrower................................. 12

4. Definitions..................................................... 12

5. Representations and Warranties.................................. 19
   (a) Organization................................................ 19
   (b) Authority................................................... 19
   (c) Approvals; Compliance with Statutes, Etc.................... 20
   (d) Valid Obligations........................................... 20
   (e) Assets...................................................... 21
   (f) Agreements.................................................. 21
   (g) Insurance................................................... 21
   (h) Litigation and Other Proceedings............................ 21
   (i) Labor Matters............................................... 21
   (j) ERISA....................................................... 21
   (k) Financial Statements........................................ 22
   (l) Projections................................................. 22
   (m) Taxes....................................................... 22
   (n) Investments................................................. 23
   (o) Investment Company.......................................... 23
   (p) Equity Structure............................................ 23

                                      -i-
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   (q) Indebtedness for Money Borrowed............................. 23
   (r) Patents, Copyrights and Trademarks.......................... 23
   (s) Representations Accurate.................................... 23

6. Covenants....................................................... 24
   (a) Payments.................................................... 24
   (b) Intentionally omitted....................................... 24
   (c) Financial Report. The Borrower will furnish to the Bank:.... 24
   (d) Other Financial Reports..................................... 25
   (e) Maintain Rights............................................. 25
   (f) No Transfers................................................ 26
   (g) No Mergers.................................................. 26
   (h) Payment of Taxes............................................ 27
   (i) Guaranties.................................................. 27
   (j) Agreements.................................................. 27
   (k) Investments................................................. 27
   (l) Property.................................................... 28
   (m) Books and Records........................................... 28
   (n) Notices..................................................... 28
   (o) Liens....................................................... 29
   (p) Modifications............................................... 30
   (q) Additional Indebtedness..................................... 30
   (r) Payments to Affiliated Persons.............................. 30
   (s) Consolidated Total Liabilities to Consolidated Tangible Net
       Worth Ratio................................................. 31
   (t) Fixed Charge Coverage Ratio................................. 31

7. Conditions of Closing........................................... 32
   (a) Line of Credit Notes........................................ 32
   (b) Warranties and Covenants.................................... 32
   (c) Closing Certificate......................................... 32
   (d) Financial Statements........................................ 32
   (e) Annual Report............................................... 32
   (f) No Adverse Change........................................... 32
   (g) Closing Fees and Legal Expenses............................. 33
   (h) Legal Opinions.............................................. 33
   (i) Projections................................................. 33
   (p) Other Documents............................................. 34

8. Conditions of Making Subsequent Advances........................ 34
   (a) Representations and Warranties.............................. 34
   (b) Performance................................................. 34
   (c) Acquisitions................................................ 34

9. Events of Default............................................... 36
   (a) Representations and Warranties.............................. 36
   (b) Covenants................................................... 36

                                      -ii-
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   (c) Acceleration................................................ 36
   (d) Loan Documents.............................................. 36
   (e) Voluntary Bankruptcy........................................ 36
   (f) Involuntary Bankruptcy...................................... 36
   (g) Seizure of Assets........................................... 37
   (h) Judgments................................................... 37
   (i) Liens....................................................... 37
   (j) Casualty Loss............................................... 37
   (k) Qualified Audit Report...................................... 37
   (l) Change of Control........................................... 37

10. Remedies. ..................................................... 38

11. Intentionally reserved. ....................................... 39

12. Miscellaneous. ................................................ 39
    (a) Waivers. .................................................. 39
    (b) Delays. ................................................... 39
    (c) Notices. .................................................. 39
    (d) Set-Off. .................................................. 40
    (e) Jurisdiction; Waiver of Jury Trial. ....................... 40
    (f) Usury. .................................................... 40
    (g) Execution. ................................................ 41
    (h) Governing Law. ............................................ 41
    (i) Fees; Indemnification. .................................... 41
    (j) Binding Nature. ........................................... 41
    (k) Assignment; Participations; Pledge to Federal Reserve. .... 42
    (l) Under Seal. ............................................... 43
    (m) Use of Proceeds. .......................................... 43
    (n) Confidentiality. .......................................... 43

                                     -iii-
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                                    Exhibits
                                    --------

Exhibit A              First Line of Credit Note

Exhibit B              Second Line of Credit Note

Exhibit C              Compliance Certificate

Exhibit D              Form of Joinder Agreement

                                      -iv-
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                                    Schedules
                                    ---------

Schedule 5(a)          Jurisdictions of Business Qualification of the Borrower

Schedule 5(b)          Authority

Schedule 5(c)          Approvals

Schedule 5(e)          Assets and Properties; Liens

Schedule 5(g)          Insurance

Schedule 5(h)          Litigation and Other Proceedings

Schedule 5(i)          Labor Matters

Schedule 5(n)          Investments

Schedule 5(p)          Equity Structure of Borrower

Schedule 5(q)          Indebtedness for Money Borrowed

Schedule 5(r)          Patents and Trademarks

Schedule 6(v)          Bank Accounts

                                      -v-
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                               FLEET NATIONAL BANK
                               100 Federal Street
                           Boston, Massachusetts 02110

                                  June 30, 2004

David L. Brown, President and
 Chief Executive Officer
National Dentex Corporation
526 Boston Post Road
Wayland, MA 01778

          Re:     Loan Agreement

Dear Mr. Brown:

         This Loan Agreement (the "Agreement") is made as of June 30, 2004, by
and between National Dentex Corporation, a Massachusetts corporation (the
"Borrower"), and Fleet National Bank, a Bank of America company, organized and
existing under the laws of the United States (the "Bank").

                  The Credit Facility; Advances.

                  The Credit Facility.  The Credit Facility shall consist of the
following:

     (i) a  revolving  line of credit  (the "First Line of Credit") in an amount
equal to $5,000,000,  available  until the day prior to, and due and payable on,
the Termination  Date (as hereinafter  defined);  the First Line of Credit shall
include a sublimit for the issuance,  on the terms and  conditions  set forth in
this Agreement,  of letters of credit for the Borrower's account,  provided that
the Bank's LC  Exposure  (as  hereinafter  defined) at any time shall not exceed
$1,500,000.  Advances under the First Line of Credit may be used by the Borrower
for its general corporate purposes,  to refinance existing  indebtedness and for
the issuance of Letters of Credit.

     (ii) a revolving  line of credit (the "Second Line of Credit") in an amount
equal to $20,000,000,  available until the day prior to, and due and payable on,
the  Termination  Date.  (The First Line of Credit and the Second Line of Credit
may collectively  hereinafter be referred to as the "Lines of Credit.") Advances
under the  Second  Line of  Credit  may be used by the  Borrower  solely to fund
acquisitions  by the Borrower in  accordance  with Section 8 and the other terms
and conditions hereof.

     (b) Advances.

     After the  Closing,  advances  under the Lines of Credit may be made,  from
time to time,  until the day prior to the  Termination  Date, in such amounts as

<PAGE>

the Borrower may request;  provided that in the case of the First Line of Credit
the aggregate principal amount of all advances at any time outstanding under the
First Line of Credit  (after giving  effect to all amounts  requested)  plus the
aggregate LC Exposure at such time, shall not exceed $5,000,000; and in the case
of the Second Line of Credit, the aggregate  principal amount of all advances at
any time outstanding under the Second Line of Credit (after giving effect to all
amounts requested) shall not exceed $20,000,000, provided that any such advances
under the Second  Line of Credit  are  subject  to the  provisions  set forth in
Section  8(c) and  6(k)  hereof;  and  provided,  further,  that at the time the
Borrower  requests an advance  under the Lines of Credit and after giving effect
to the  making  thereof,  no Default or Event of  Default  has  occurred  and is
continuing.  Subject to the terms of this  Agreement,  advances  under the First
Line of Credit,  once repaid, may be reborrowed;  advances under the Second Line
of Credit,  once repaid, may be reborrowed,  subject to the provisions set forth
in Section 8(c) and 6(k) hereof. If at any time the outstanding principal amount
of the  advances  under  a Line of  Credit  exceeds  the  amount  determined  by
reference to the limits set forth in the first  sentence of this  Section  1(b),
the Borrower shall promptly pay an amount equal to such excess to the Bank.

     (2) Interest; Payments; Fees; Borrowing.

     (a) Interest.  Each advance, from time to time, under either Line of Credit
shall bear  interest  either  (i) at an annual  rate equal to the Prime Rate (as
hereinafter  defined)  plus the  Applicable  Margin with  respect  thereto as in
effect from time to time (in which case such advance  shall be  designated  as a
"Prime Rate loan"),  (ii) at the option of the  Borrower,  at the LIBOR  Lending
Rate for the applicable  Interest Period plus the Applicable Margin with respect
thereto  as in effect  from time to time (in which  case such  advance  shall be
designated as a "LIBOR Rate loan"),  or (iii) at the option of the Borrower,  at
the Cost of Funds Rate for the  applicable  Interest  Period plus the Applicable
Margin with  respect  thereto as in effect from time to time (in which case such
advance  shall  be  designated  as a "Cost  of Funds  Rate  loan").  If any such
interest  rate is unlawful,  then the rate shall be the highest  rate  permitted
under  applicable  law.  Any amounts  overdue  under this  Agreement  shall bear
interest  at the  annual  rate (the  "Post-Default  Rate") of 2% above the Prime
Rate, or, if such rate is unlawful,  the highest rate permitted under applicable
law.  Interest shall be payable (i) in the case of Prime Rate loans,  in arrears
on the first (1st)  Business  Day of each month,  (ii) in the case of LIBOR Rate
loans and Cost of Funds Rate loans,  on the Interest  Payment  Dates  applicable
thereto and (iii) in the case of any  advance,  when such  advance  shall be due
(whether at maturity,  by reason of prepayment or  acceleration or otherwise) or
converted,  but  only  to  the  extent  then  accrued  on the  amount  so due or
converted.  Interest at the Post-Default  Rate shall be payable on demand.  Each
change in the rate of interest payable on the Prime Rate loans shall take effect
simultaneously with the corresponding change in the Prime Rate.

     (b) Payments.  All payments received by the Bank from the Borrower,  except
for the payments referred to in Subsection (c) below,  shall be applied first to
expenses due hereunder, then to accrued interest and then to principal. Upon the

<PAGE>

occurrence of an Event of Default hereunder, however, payments may be applied in
such manner as the Bank may, in its sole discretion, determine. All computations
of interest  shall be made on the basis of a 360-day  year.  Advances  under the
Lines of Credit shall be evidenced  by this  Agreement,  the records of the Bank
and, with respect to the First Line of Credit,  a promissory note in the form of
Exhibit A hereto  (the "First Line of Credit  Note")  and,  with  respect to the
Second Line of Credit,  a  promissory  note in the form of Exhibit B hereto (the
"Second Line of Credit Note"),  each due on the Termination  Date (references in
this Agreement to the term "Line of Credit Note" shall, except where the context
does not otherwise  permit,  be deemed to apply to both the First Line of Credit
Note and the Second  Line of Credit  Notes).  The LC  Reimbursement  Obligations
shall be evidenced by this Agreement, the records of the Bank and the Letters of
Credit.  The records of the Bank shall be prima facie  evidence of the  advances
hereunder  and the LC  Reimbursement  Obligations  and, in each case, of accrued
interest thereon and of all payments made in respect thereof.

     All  payments  due to the Bank  hereunder or under the Line of Credit Notes
shall be made in U.S.  Dollars in immediately  available funds at Fleet National
Bank, 100 Federal Street,  Boston, MA 02110 or at such other address as the Bank
may designate by notice the Borrower.  A payment to the Bank shall not be deemed
to have been made on any day unless such payment shall have been received by the
Bank, at such address, in U.S. Dollars in immediately  available funds, no later
than 12:00 noon (Boston time) on such day.

     If any payment under this  Agreement  becomes due and payable on a day that
is not a Business Day and this  Agreement  does not  otherwise  provide for such
contingency,  the  maturity  thereof  shall be extended  to the next  succeeding
Business  Day, and with respect to any payment of  principal,  interest  thereon
shall be payable at the then applicable rate during any such extension.

     (c) Additional  Payments.  In addition to the amounts  specified above, the
Borrower  shall pay to the Bank the  following  in  connection  with the  Credit
Facility:

     (i) an unused  facility  fee  equal to 1/8 of 1% per  annum of the  average
unborrowed  portion  of  the  First  Line  of  Credit  (giving  effect,  without
duplication, to the Bank's LC Exposure thereunder),  such average to be computed
for the  three-month  period  preceding  each  Payment Date on which such unused
facility  fee is payable (or such longer or shorter  period as has elapsed  from
the Closing  Date to the first of such  Payment  Dates),  payable  quarterly  in
arrears on the last Payment Dates specified herein, commencing on the first such
date following the Closing Date and on each Payment Date thereafter  through the
Termination Date (with the last such fee payable on the Termination Date);

     (ii) a facility fee of $10,000.00  per annum for the Second Line of Credit,
payable  annually  in  advance,  commencing  on the  Closing  Date  and on  each
anniversary thereof;

<PAGE>

     (iii) a Letter of Credit  issuance  fee  equal to 1% of the  original  face
amount  of each  Letter  of  Credit  issued  hereunder,  payable  at the time of
issuance of such Letter of Credit; and

     (iv) an audit fee of $1,000 for each field  audit of the  Borrower's  books
and records  performed by the Bank,  up to a maximum of $1,000 in audit fees for
each 12-month period.

     (d) Notice of  Borrowing.  Whenever the  Borrower  elects to obtain a LIBOR
Rate loan or Cost of Funds Rate loan  hereunder,  it may  request  that the Bank
provide  quotes as of any specified date as to the LIBOR Lending Rate or Cost of
Funds Rate loan for any or all  Interest  Periods,  and the Bank shall  promptly
provide  such  quotes.  The  Borrower  shall give the Bank prior  telecopied  or
telephone notice, on a Business Day, (i) not later than 10:00 a.m. (Boston time)
on the day of any advance  with  respect to a Prime Rate loan and (ii) not later
than 10:00 a.m. (Boston time) at least two (2) Business Days prior to the day of
any advance with  respect to a LIBOR Rate loan or Cost of Funds Rate loan.  Each
such notice  shall be  irrevocable  once given and shall  specify the  principal
amount of the  advance to be made,  the date of the  advance  (which  shall be a
Business  Day),  whether each advance is to be  maintained as a Prime Rate loan,
Cost of Funds Rate loan or a LIBOR  Rate  loan,  and in the case of a LIBOR Rate
loan or Cost of Funds Rate loan, the Interest Period applicable thereto. If such
notice is given by telephone,  it shall be immediately  confirmed in writing. In
the event that the  Borrower  at any time fails in such notice to specify any of
the information  required by this subsection to be given with respect to a LIBOR
Rate loan or Cost of Funds Rate loan,  then the Borrower shall be deemed to have
requested that the Bank make a Prime Rate loan. All advances  hereunder shall be
disbursed by the Bank not later than 12:00 noon (Boston  time) on the  requested
date therefor,  in U.S. Dollars in immediately available funds, by credit to the
Borrower's operating account with the Bank.

     (e)  Special  Provisions   Governing  Loans.   Notwithstanding   any  other
provisions of this  Agreement to the contrary,  the following  provisions  shall
govern  with  respect  to any LIBOR  Rate  loans or Cost of Funds Rate loans (as
applicable):

     (i) Repayment, Continuation and Conversion. Each LIBOR Rate loan or Cost of
Funds Rate loan shall  mature and become  payable in full on the last day of the
Interest Period relating  thereto.  Upon maturity,  a LIBOR Rate loan or Cost of
Funds Rate loan may be continued  for an  additional  Interest  Period or may be
converted to a Prime Rate loan as provided in clause (ii) below.

     (ii)  Continuation  and  Conversion  Elections.  Subject to the  provisions
hereof,  the  Borrower  shall  have the option (A) to convert at any time one or
more integral  multiples of $500,000 of its  outstanding  Prime Rate loans under
the First Line of Credit into one or more LIBOR Rate loans or Cost of Funds Rate
loans, (B) to convert at any time one or more integral  multiples of $1,000,0000
of its outstanding  Prime Rate loans under the Second Line of Credit into one or
more LIBOR Rate loans or Cost of Funds Rate loans,  (C)  effective  on and as of
the expiration date of the Interest Period of a LIBOR Rate loan or Cost of Funds
Rate  loan,  to  continue  such loan LIBOR Rate loan or Cost of Funds Rate loan,
respectively,  as such, with an equivalent or different  Interest Period, or (D)
effective on and as of the  expiration  date of the  Interest  Period of a LIBOR
Rate loan or Cost of Funds Rate loan, to convert such loan to a Prime Rate loan;
provided,  however,  that (x) a LIBOR  Rate loan or Cost of Funds Rate loans may
only be  continued  pursuant  to clause (C) above if the  outstanding  principal

<PAGE>

amount of such loan equals or exceeds  $500,000 in the case a LIBOR Rate loan or
Cost of Funds Rate loan advanced  under the First Line of Credit,  or $1,000,000
in the case of a LIBOR Rate loan or Cost of Funds Rate loans  advanced under the
Second Line of Credit; (y) no portion of the outstanding principal amount of any
advance may be converted to, or continued as, a LIBOR Rate loan or Cost of Funds
Rate loan when any Default or Event of Default has occurred  and is  continuing;
and (z) no portion of the outstanding principal amount of any LIBOR Rate loan or
Cost of Funds Rate loan may be  converted  to a LIBOR Rate loan or Cost of Funds
Rate loan, respectively, of a different duration if such LIBOR Rate loan or Cost
of Funds Rate loan relates to any Hedging Obligations unless the maturity of the
relevant  Hedging  Obligations  has  been  appropriately  adjusted  in a  manner
satisfactory   to  the   Bank.   The   Borrower   shall   deliver  a  notice  of
conversion/continuation to the Bank, on a Business Day, no later than 10:00 a.m.
(Boston  time)  at  least  two (2)  Business  Days in  advance  of the  proposed
conversion/continuation date for a LIBOR Rate loan or a Cost of Funds Rate loan.
A notice of  conversion/continuation  shall,  in the case of a conversion to, or
continuation  of, a LIBOR Rate loan or a Cost of Funds Rate loan, be irrevocable
and   shall  be  given   by  the   Borrower   to   specify   (i)  the   proposed
conversion/continuation  date (which shall be a Business Day),  (ii) whether the
loan to be  converted/continued  is a First or Second Line of Credit loan, (iii)
the amount of the First or Second Line of Credit loan to be converted/continued,
(iv)  (A)   whether   the   First  or  Second   Line  of   Credit   loan  to  be
converted/continued  is a Prime  Rate  loan,  Cost of Funds Rate loan or a LIBOR
Rate loan,  and (B)  whether  the First or Second Line of Credit loan into which
such First or Second Line of Credit loan is converted/continued is to be a Prime
Rate loan,  Cost of Funds Rate loan or a LIBOR Rate loan, and (v) in the case of
a conversion to, or a  continuation  of, a LIBOR Rate loan or Cost of Funds Rate
loan, the requested  Interest Period. In lieu of delivering the  above-described
notice, the Borrower may give the Bank telephonic notice by the required time of
any  proposed  conversion/continuation;  provided  that  such  notice  shall  be
immediately confirmed in writing. If the Borrower fails to give such notice with
respect  to a LIBOR  Rate  loan or Cost of  Funds  Rate  loan at  least  two (2)
Business  Days  before the last day of the then  current  Interest  Period  with
respect  thereto,  the Borrower  shall be deemed to have delivered to the Bank a
notice to convert such loan into a Prime Rate loan and such loan shall,  on such
last  day,  automatically  convert  into  a  Prime  Rate  loan.  Any  notice  of
conversion/continuation  given pursuant to this subsection  shall be irrevocable
on and after the date of delivery thereof to the Bank, and the Borrower shall be
bound to convert or continue in accordance therewith.

     (iii) Determination and Notice of LIBOR Lending Rate or Cost of Funds Rate.
Promptly  after  receipt of notice from the  Borrower  that it wishes to elect a
LIBOR  Rate loan or Cost of Funds Rate loan,  the Bank  shall  determine  (which
determination  shall,  absent manifest  error, be final,  conclusive and binding
upon all parties) the  applicable  LIBOR  Lending Rate or Cost of Funds Rate, as
applicable, which rate shall apply to the LIBOR Rate loans or Cost of Funds Rate
loans,  as applicable,  for which an interest rate is then being  determined for

<PAGE>

the  applicable  Interest  Period,  and shall  promptly give notice  thereof (in
writing or by telephone and confirmed in writing) to the Borrower.

     (iv) Basis for Determining Interest Rate Inadequate. If the Bank shall have
determined that:

     (A) U.S.  Dollar  deposits  in the  relevant  amount  and for the  relevant
Interest Period are not available to the Bank in the London interbank market,

     (B) by reason of  circumstances  affecting the Bank in the London interbank
market,  adequate  means do not exist for  ascertaining  the LIBOR  Lending Rate
applicable hereunder to LIBOR Rate loans of any duration, or

     (C) the LIBOR Lending Rate no longer adequately reflects the Bank's cost of
funding LIBOR Rate loans of any duration,

then, upon notice from the Bank to the Borrower and until the Bank shall notify
the Borrower that the circumstances causing such suspension no longer exist, (1)
the obligations of the Bank under this Agreement to make or continue any loans
as, or to convert any loans into, LIBOR Rate loans of such duration shall
forthwith be suspended and (2) each affected outstanding LIBOR Rate loan shall
be converted into a Prime Rate loan on the last day of the then current Interest
Period applicable thereto.

     (v)  LIBOR  Rate  Lending  Unlawful.  If the Bank  shall  determine  (which
determination  shall,  upon notice  thereof to the Borrower,  be conclusive  and
binding on the Borrower,  absent manifest error) that the introduction of or any
change in or in the  interpretation  of any law,  rule,  regulation or guideline
(whether or not having the force of law) makes it unlawful,  or any central bank
or other  governmental  authority  asserts that it is unlawful,  for the Bank to
make,  continue or maintain any LIBOR Rate loan as, or to convert any loan into,
a LIBOR Rate loan of a certain  duration,  the  obligations of the Bank to make,
continue,  maintain or convert into any such LIBOR Rate loans  shall,  upon such
determination,  forthwith be suspended  until the Bank shall notify the Borrower
that the  circumstances  causing such suspension no longer exist,  and all LIBOR
Rate loans of such type shall automatically convert into Prime Rate loans on the
last day of the then current Interest Periods  applicable  thereto or sooner, if
required by such law or assertion.

     (vi)  Voluntary  Prepayment  of  LIBOR  Rate  loans.  LIBOR  Rate  loans in
connection with which the Borrower has entered into Hedging Obligations with the
Bank may not be  prepaid;  other  LIBOR Rate loans may be prepaid  only upon the
terms and  conditions  set forth  herein.  The Borrower  shall give the Bank, no
later than 10:00 a.m.  (Boston time), at least four (4) Business Days' notice of
any proposed prepayment of any LIBOR Rate loans, specifying the proposed date of
payment of such LIBOR Rate  loans,  and the  principal  amount to be paid.  Each
partial  prepayment of the  principal  amount of LIBOR Rate loans shall be in an

<PAGE>

integral multiple of (x) $500,000 in the case of LIBOR Rate loans advanced under
the First  Line of Credit  and (y)  $1,000,000  in the case of LIBOR  Rate loans
advanced under the Second Line of Credit,  and accompanied by the payment of all
charges  outstanding on such LIBOR Rate loans and of all accrued interest on the
principal repaid to the date of payment.

         Borrower acknowledges that prepayment or acceleration of a LIBOR Rate
loan during an Interest Period shall result in the Bank incurring additional
costs, expenses and/or liabilities and that it is extremely difficult and
impractical to ascertain the extent of such costs, expenses and/or liabilities.
Therefore, all full or partial prepayments of LIBOR Rate loans shall be
accompanied by, and the Borrower hereby promises to pay, on each date a LIBOR
Rate loan is prepaid or the date all sums payable hereunder become due and
payable, by acceleration or otherwise, in addition to all other sums then owing,
an amount (the "LIBOR Prepayment Fee") determined by the Bank pursuant to the
following formula:

                                    (1)     the then current rate for U.S.
                                            Treasury securities (bills on a
                                            discounted basis shall be converted
                                            to a bond equivalent) with a
                                            maturity date closest to the end of
                                            the Interest Period as to which
                                            prepayment is made, subtracted from

                                    (2)     the LIBOR Lending Rate applicable to
                                            the LIBOR Rate loan being prepaid,
                                            plus 1.5%.

                  If the result of this calculation is zero or a negative
                  number, then there shall be no LIBOR Prepayment Fee. If the
                  result of this calculation is a positive number, then the
                  resulting percentage shall be multiplied by:

                                    (3) the amount of the LIBOR Rate loan being
                                        prepaid.

                  The resulting amount shall be divided by:

                                    (4)     360

                   and multiplied by:

                                    (5)     the number of days remaining in the
                                            Interest Period as to which the
                                            prepayment is being made.

                   Said amount shall be reduced to present value calculated by
                   using the referenced U.S. Treasury securities rate and the
                   number of days remaining on the Interest Period for the LIBOR
                   Rate loan being prepaid.

         The resulting amount of these calculations shall be the LIBOR
Prepayment Fee.

     (vii)  Indemnities.  In addition to the LIBOR  Prepayment Fee, the Borrower
agrees to reimburse the Bank (without  duplication) for any increase in the cost
to the Bank,  or reduction in the amount of any sum  receivable  by the Bank, in
respect, or as a result of:

<PAGE>

     (A) any  conversion or repayment or  prepayment of the principal  amount of
any LIBOR Rate loan on a date other than the scheduled  last day of the Interest
Period applicable thereto, whether pursuant to Section 2(e)(vi) or otherwise;

     (B) any loan not being  made as a LIBOR  Rate loan in  accordance  with the
borrowing request therefor;

     (C) any LIBOR Rate loan not being  continued as, or converted into, a LIBOR
Rate loan in accordance with the continuation/conversion notice therefor; or

     (D) any costs  associated  with  marking to market any Hedging  Obligations
that (in the reasonable determination of the Bank) are required to be terminated
as a result of any conversion,  repayment or prepayment of the principal  amount
of any  LIBOR  Rate  loan on a date  other  than the  scheduled  last day of the
Interest Period  applicable  thereto,  whether  pursuant to Section  2(e)(vi) or
otherwise.

         The Bank shall promptly notify the Borrower in writing of the
occurrence of any such event, such notice to state, in reasonable detail, the
reasons therefor and the additional amount required fully to compensate the Bank
for such increased cost or reduced amount. Such additional amounts shall be
payable by the Borrower to the Bank within five (5) days of its receipt of such
notice, and such notice shall, in the absence of manifest error, be conclusive
and binding on the Borrower. The Borrower understands, agrees and acknowledges
the following: (i) the Bank does not have any obligation to purchase, sell
and/or match funds in connection with the use of the LIBOR Rate as a basis for
calculating the rate of interest on a LIBOR Rate loan; (ii) the LIBOR Rate may
be used merely as a reference in determining such rate; and (iii) the Borrower
has accepted the LIBOR Rate as a reasonable and fair basis for calculating such
rate, the LIBOR Prepayment Fee, and other funding losses incurred by the Bank.
Borrower further agrees to pay the LIBOR Prepayment Fee and other funding
losses, if any, whether or not the Bank elects to purchase, sell and/or match
funds.

     (viii)  Increased Costs. If on or after the date hereof the adoption of any
applicable law, rule or regulation or guideline (whether or not having the force
of  law),  or any  change  therein,  or any  change  in  the  interpretation  or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration  thereof, or compliance
by the Bank with any  request or  directive  (whether or not having the force of
law) of any such authority, central bank or comparable agency:

     (A) shall subject the Bank to any tax, duty or other charge with respect to
its LIBOR Rate loans or Letters of Credit issued by it or its obligation to make
LIBOR  Rate  loans or issue  Letters  of  Credit,  or shall  change the basis of
taxation of payments  to the Bank of the  principal  of or interest on its LIBOR
Rate loans or any other amounts due under this Agreement in respect of its LIBOR
Rate loans or the Letters of Credit or its  obligation  to make LIBOR Rate loans

<PAGE>

or issue  Letters of Credit  (except for the  introduction  of, or change in the
rate of, tax on the overall net income of the Bank or franchise  taxes,  imposed
by the jurisdiction (or any political  subdivision or taxing authority  thereof)
under the laws of which the Bank is organized  or in which the Bank's  principal
executive office is located); or

     (B) shall impose, modify or deem applicable any reserve, special deposit or
similar requirement (including, without limitation, any such requirement imposed
by the Board of Governors of the Federal  Reserve  System of the United  States)
against assets of,  deposits with or for the account of, or credit  extended by,
the Bank or shall impose on the Bank or on the London interbank market any other
condition  affecting  its LIBOR Rate loans or Letters or Credit  issued by it or
its obligation to make LIBOR Rate loans or issue Letters of Credit;

and the result of any of the foregoing is to increase the cost to the Bank of
making or maintaining any LIBOR Rate loan or issuing any Letter of Credit, or to
reduce the amount of any sum received or receivable by the Bank under this
Agreement with respect thereto, by an amount deemed by the Bank to be material,
then, within 15 days after demand by the Bank, the Borrower shall pay to the
Bank such additional amount or amounts as will compensate the Bank for such
increased cost or reduction. A statement of the Bank as to any such additional
amount or amounts (including calculations thereof in reasonable detail) shall,
in the absence of manifest error, be conclusive and binding on the Borrower. In
determining such amount, the Bank may use any method of averaging and
attribution that it (in its sole and absolute discretion) shall deem applicable.

     (f)  Increased  Capital  Costs.  If any  change  in,  or the  introduction,
adoption,  effectiveness,  interpretation,  reinterpretation or phase-in of, any
law or regulation,  directive,  guideline,  decision or request  (whether or not
having  the  force  of law) of any  court,  central  bank,  regulator  or  other
governmental authority affects or would affect the amount of capital required or
expected to be maintained by the Bank, or person  controlling  the Bank, and the
Bank determines (in its sole and absolute discretion) that the rate of return on
its or such controlling  person's capital as a consequence of its commitments or
the loans  made or  Letters  of Credit  issued by the Bank is reduced to a level
below that which the Bank or such controlling person could have achieved but for
the occurrence of any such circumstance, then, in any such case upon notice from
time to time by the Bank to the Borrower,  the Borrower  shall  immediately  pay
directly to the Bank  additional  amounts  sufficient to compensate  the Bank or
such controlling person for such reduction in rate of return. A statement of the
Bank as to any such additional amount or amounts (including calculations thereof
in reasonable detail) shall, in the absence of manifest error, be conclusive and
binding on the Borrower. In determining such amount, the Bank may use any method
of averaging and attribution that it (in its reasonable  discretion)  shall deem
applicable.

     (g) Taxes.  All payments by the Borrower of principal  of, and interest on,
the loans and all other amounts  payable  hereunder shall be made free and clear
of and without  deduction  for any present or future  income,  excise,  stamp or
franchise taxes and other taxes, fees, duties,  withholdings or other charges of

<PAGE>

any nature whatsoever imposed by any taxing authority,  but excluding  franchise
taxes and taxes  imposed on or  measured  by the  Bank's net income or  receipts
(such  non-excluded  items  being  called  "Taxes").   In  the  event  that  any
withholding or deduction  from any payment to be made by the Borrower  hereunder
is required  in respect of any Taxes  pursuant to any  applicable  law,  rule or
regulation, then the Borrower will:

     (i) pay directly to the relevant  authority the full amount  required to be
so withheld or deducted;

     (ii)   promptly   forward  to  the  Bank  an  official   receipt  or  other
documentation   satisfactory  to  the  Bank  evidencing  such  payment  to  such
authority; and

     (iii) pay to the Bank such additional amount or amounts as are necessary to
ensure  that the net amount  actually  received  by the Bank will equal the full
amount the Bank would have received had no such  withholding  or deduction  been
required.

     Moreover,  if any Taxes are directly asserted against the Bank with respect
to any payment  received by the Bank hereunder,  the Bank may pay such Taxes and
the Borrower will promptly pay such additional  amount (including any penalties,
interest or expenses)  as is necessary in order that the net amount  received by
the Bank after the payment of such Taxes (including any Taxes on such additional
amount)  shall equal the amount the Bank would have  received had such Taxes not
been asserted.

     If the Borrower fails to pay any Taxes when due to the  appropriate  taxing
authority or fails to remit to the Bank the required  receipts or other required
documentary evidence,  the Borrower shall indemnify the Bank for any incremental
Taxes,  interest or penalties that may become payable by the Bank as a result of
any such failure.

     3. Letters of Credit.

     (a) Issuance.  The Bank agrees,  on the terms and  conditions  set forth in
this Agreement,  to issue standby letters of credit hereunder (each a "Letter of
Credit") at the request of the Borrower from time to time prior to the date that
is 30 days before the Termination  Date;  provided that,  immediately after each
such  Letter  of  Credit  is  issued,  (i)  the LC  Exposure  shall  not  exceed
$1,500,000,  and (ii) the sum of the outstanding  principal  amount of all First
Line of Credit loans plus the LC Exposure shall not exceed $5,000,000.

     (b) Notice of Proposed Issuance. With respect to each Letter of Credit, the
Borrower  shall give the Bank at least two (2)  Business  Days' prior notice (i)
specifying  the date such  Letter of Credit is to be issued and (ii)  describing
the proposed  terms of such Letter of Credit and the nature of the  transactions
to be supported thereby.

     (c)  Conditions to Issuance.  The Bank shall not issue any Letter of Credit
unless:

<PAGE>

     (i) such  Letter of Credit  shall be  reasonably  satisfactory  in form and
substance to the Bank,

     (ii) the Borrower shall have executed and delivered such other  instruments
and  agreements  relating  to such  Letter  of  Credit  as the Bank  shall  have
reasonably requested, and

     (iii)  the  conditions  specified  in  Sections  7 and 8  shall  have  been
satisfied at or prior to the time such Letter of Credit is to be issued.

     (d) Expiry Dates.  No Letter of Credit shall have an expiry date later than
the fifth  (5th)  Business  Day  before  the  Termination  Date.  Subject to the
preceding  sentence,  each Letter of Credit issued  hereunder shall expire on or
before the  anniversary of the date of such  issuance;  provided that the expiry
date of any Letter of Credit may be extended from time to time at the Borrower's
request and with the Bank's consent for a period not exceeding one year.

     (e) Drawings. If the Bank receives a demand for payment under any Letter of
Credit issued by it and determines that such demand should be honored,  the Bank
shall (i) make  such  payment  in  accordance  with the terms of such  Letter of
Credit and (ii) reasonably promptly notify the Borrower as to the amount paid by
the Bank as a result of such demand and the date of such payment (an "LC Payment
Date").

     (f) Reimbursement by the Borrower.  If any amount is drawn under any Letter
of Credit, the Borrower irrevocably and unconditionally  agrees to reimburse the
Bank for such amount  together with any and all reasonable  charges and expenses
which the Bank may pay or incur  relative to such  drawing.  Such  reimbursement
shall be due and payable on the  relevant  LC Payment  Date or the date on which
the Bank  notifies the Borrower of such  drawing,  whichever is later;  provided
that,  if such notice is given after  12:00 noon  (Boston  time) on the later of
such dates,  such  reimbursement  shall be due and payable on the next following
Business Day (the date on which it is due and payable being an "LC Reimbursement
Due Date").

     In addition, the Borrower agrees to pay, on the applicable LC Reimbursement
Due Date,  interest on each amount drawn under a Letter of Credit,  for each day
from and  including  the date  such  amount  is drawn to but  excluding  such LC
Reimbursement  Due Date, at a rate per annum equal to the Applicable Margin with
respect  to the LIBOR  Rate loans as in effect on such day.  The  Borrower  also
agrees to pay, on demand,  interest on any overdue amount (including any overdue
interest) payable under this subsection (f), for each day from and including the
date when such amount  becomes due to but excluding the date such amount is paid
in full,  at a rate per annum  equal to the sum of the  Prime  Rate for such day
plus 2.0% (or,  if such rate is  unlawful,  the  highest  rate  permitted  under
applicable law).

     (g)  Exculpatory  Provisions.  The  obligations  of the Borrower under this
Section 3 shall be absolute and  unconditional  under any and all  circumstances
and  irrespective  of any setoff,  counterclaim  or defense to payment which the
Borrower may have or have had against the Bank, any beneficiary of any Letter of

<PAGE>

Credit  or any  other  person.  The  Borrower  assumes  all risks of the acts or
omissions of any  beneficiary of any Letter of Credit with respect to the use of
such  Letter  of  Credit by such  beneficiary.  Neither  the Bank nor any of its
officers,  directors,  employees  and agents shall be  responsible  for, and the
obligations of the Borrower to reimburse the Bank for drawings  pursuant to this
Section 3 (other than obligations  resulting solely from the gross negligence or
willful misconduct of the Bank) shall not be excused or affected by, among other
things,  (i) the use  which  may be made of any  Letter of Credit or any acts or
omissions of any  beneficiary  or transferee in connection  therewith;  (ii) the
validity,  sufficiency or genuineness of documents presented under any Letter of
Credit or of any  endorsements  thereon,  even if such documents  should in fact
prove to be in any or all respects invalid, insufficient,  fraudulent or forged;
(iii) payment by the Bank against  presentation  of documents to it which do not
comply  with the terms of the  relevant  Letter of Credit;  or (iv) any  dispute
between or among the Borrower,  any  beneficiary  of any Letter of Credit or any
other person or any claims or defenses  whatsoever  of the Borrower or any other
person against any  beneficiary  of any Letter of Credit.  The Bank shall not be
liable for any error, omission, interruption or delay in transmission,  dispatch
or delivery of any message or advice,  however  transmitted,  in connection with
any Letter of Credit. Any action taken or omitted by the Bank in connection with
any  Letter of Credit and the  related  drafts and  documents,  if done  without
willful  misconduct  or gross  negligence,  shall be binding on the Borrower and
shall not place the Bank under any liability to the Borrower.

     (h) Indemnification by Borrower.  The Borrower agrees to indemnify and hold
harmless  the  Bank  from  and  against  any and all  claims,  damages,  losses,
liabilities,  costs or expenses (including,  without limitation,  the reasonable
fees and disbursements of counsel) which the Bank may reasonably incur (or which
may be claimed  against  the Bank by any person  whatsoever)  by reason of or in
connection with any execution and delivery or transfer of, or payment or failure
to pay under,  any Letter of Credit or any actual or proposed  use of any Letter
of Credit;  provided  that the Borrower  shall not be required to indemnify  the
Bank for any  claims,  damages,  losses,  liabilities,  costs or expenses to the
extent,  but only to the extent,  caused by (i) the willful  misconduct or gross
negligence  of the Bank in  determining  whether a request  presented  under any
Letter of Credit  issued by it complied  with the terms of such Letter of Credit
or (ii) the Bank's  failure to pay under any Letter of Credit issued by it after
the  presentation  to it of a  request  strictly  complying  with the  terms and
conditions of such Letter of Credit.  Nothing in this  subsection is intended to
limit the  obligations of the Borrower under any other provision of this Section
3.

     4.  Definitions.  All defined  terms used in this  Agreement  which are not
otherwise defined herein shall have the respective  meanings assigned to them in
the Loan  Documents.  For purposes of this Agreement and of the Loan  Documents,
the following additional definitions shall apply:

     (a)  The  term  "Affiliated   Person"  shall  mean  any  person  or  entity
controlling, controlled by or under common control with the Borrower.

<PAGE>

     (b) The term  "Anti-Terrorism  Order" shall mean Executive Order No. 13,224
66 Fed Reg.  49,079  (2001)  issued by the  President  of the  United  States of
America  (Executive Order Blocking  Property and Prohibiting  Transactions  with
Persons Who Commit, Threaten to Commit, or Support Terrorism).

     (c) The term  "Applicable  Margin" shall mean,  for any Type of Loans,  the
percentage determined in accordance with the following table:
<TABLE>
<CAPTION>

---------------------------- -------------------------- -------------------------- --------------------------
   Ratio of Consolidated         Prime Rate Loans           LIBOR Rate Loans       Cost of Funds Rate Loans
   Total Liabilities to
 Consolidated Tangible Net
           Worth
---------------------------- -------------------------- -------------------------- --------------------------
<S>            <C>  <C>                 <C>                       <C>                        <C>
  Greater than 1.00:1.00                0%                        1.50%                      1.50%
---------------------------- -------------------------- -------------------------- --------------------------
   Less than or equal to                0%                        1.00%                      1.00%
1.00:1.00 but greater than
         0.50:1.00
---------------------------- -------------------------- -------------------------- --------------------------
   Less than or equal to                0%                        0.75%                      0.75%
         0.50:1.00
---------------------------- -------------------------- -------------------------- --------------------------
</TABLE>

From the Closing Date through the date on which the Compliance Certificate for
the fiscal quarter of the Borrower ending June 30, 2004, is required to be
delivered pursuant to Section 6(d) hereof, the Applicable Margin shall be equal
to 0% for Prime Rate Loans, and 0.75% for LIBOR Rate Loans and Cost of Funds
Rate Loans. Thereafter, for purposes of determining the Applicable Margin, the
Ratio of Consolidated Total Liabilities to Consolidated Tangible Net Worth will
be tested quarterly, commencing with the fiscal quarter of the Borrower ending
June 30, 2004, based on the Compliance Certificate required to be delivered
pursuant to Section 6(d) with respect to such fiscal quarter. For purposes of
determining the Applicable Margin, any interest rate change shall be effective
on the first (1st) Business Day of the fiscal month following delivery of the
Compliance Certificate required to be delivered pursuant to Section 6(d) is
delivered to the Bank, together with a notice to the Bank (which shall be
verified by the Bank) specifying any change in the Applicable Margin, and if the
Borrower has failed to deliver the Compliance Certificate required to be
delivered pursuant to Section 6(d), the Applicable Margin that would otherwise
be in effect shall automatically be increased to the highest margin until such
Compliance Certificate is delivered.

     (d) The term "Business Day" shall mean:

     (i) any day which is  neither a Saturday  or Sunday nor a legal  holiday on
which  commercial  banks are  authorized  or  required  to be closed in  Boston,
Massachusetts;

<PAGE>

     (ii)  when  such  term is  used to  describe  a day on  which a  borrowing,
payment, prepaying, or repaying is to be made in respect of any LIBOR Rate loan,
any day which is: (i) neither a Saturday or Sunday nor a legal  holiday on which
commercial  banks are  authorized or required to be closed in New York City; and
(ii) a London Banking Day; and

     when  such  term  is used to  describe  a day on  which  an  interest  rate
determination  is to be made in respect of any LIBOR Rate loan, any day which is
a London Banking Day.

     (e) The term "Capital  Expenditure" shall mean any payment made or required
to be made,  directly or indirectly,  by the Borrower or any of its subsidiaries
for the purpose of acquiring or  constructing  fixed  assets,  real  property or
equipment which, in accordance with GAAP, would be added as a debit to the fixed
asset  account of the Borrower or any of its  subsidiaries,  including,  without
limitation,  amounts paid or payable under any  conditional  sale or other title
retention agreement or under any lease or other periodic payment agreement which
is of such a nature that payment obligations of the Borrower thereunder would be
required by GAAP to be capitalized and shown as liabilities on the  consolidated
balance sheet of the Borrower and its subsidiaries.

     (f) The term "Closing" shall mean a closing at which the Credit Facility is
to be entered into as reflected herein.

     (g) The term "Closing Date" shall mean June 30, 2004.

     (h) The term  "Consolidated  Adjusted  EBITDA" for any fiscal  period shall
mean an amount equal to Consolidated EBITDA for such fiscal period minus the sum
of any amounts  attributable to any of the following for such fiscal period: (i)
income tax expense,  (ii) Capital Expenditures funded internally by the Borrower
and its  subsidiaries,  (iii) cash dividends or  distributions in respect of the
Borrower's  capital  stock,  (iv)  payments  by the  Borrower  in respect of any
repurchase,  redemption, conversion or other retirement of any of the Borrower's
capital  stock,  and (v)  payments  due by Borrower  in respect of the  deferred
purchase price of assets pursuant to acquisitions permitted by Sections 8(c) and
6(k)  hereunder,  all as  determined  in  accordance  with  GAAP  to the  extent
applicable.

     (i) The term  "Consolidated  EBITDA"  for any fiscal  period  shall mean an
amount equal to  Consolidated  Net Income for such fiscal  period,  plus, to the
extent deducted in determining  Consolidated  Net Income for such fiscal period,
interest  expense,  income tax expense,  depreciation  expense and  amortization
expense incurred by the Borrower and its subsidiaries,  on a consolidated basis,
for such fiscal period,  all as determined in accordance with GAAP. For purposes
of determining  Consolidated EBITDA for a division or separate operation,  there
shall be taken into account all income and expenses  properly  allocable to such
division or operation, including corporate overhead, administrative costs, taxes
and interest.

<PAGE>

     (j) The term "Consolidated Net Income" for any fiscal period shall mean the
net  income or net loss,  after  deduction  of or credit for  applicable  income
taxes,  of the  Borrower  and its  subsidiaries,  as such net income or net loss
would be set forth on a  consolidated  income  statement  for such fiscal period
prepared in  accordance  with GAAP;  provided  that there shall be excluded  any
items of gain which (i) are not  ordinary by GAAP  definition  or (ii) are not a
result of ordinary operations, as determined in the Bank's sole discretion.

     (k) The term "Consolidated  Tangible Net Worth" on any date shall mean, for
the Borrower and its subsidiaries on a consolidated basis,  Shareholders' Equity
on such date minus the sum of any amounts  attributable to any of the following:
(i) goodwill, (ii) intangible items, including,  but not limited to, unamortized
debt  discount and  expense,  future  income tax  benefits,  patents,  trade and
service  marks and  names,  copyrights  and  other  intellectual  property,  and
organizational  or research and development  expenses  except prepaid  expenses,
(iii)  reserves not already  deducted from assets in  determining  Shareholders'
Equity,  (iv) any equity investments in persons that are not subsidiaries of the
Borrower  and (v) any  write-up in the book value of assets  resulting  from any
revaluation  thereof  subsequent  to December 31,  2003,  all as  determined  in
accordance with GAAP.

     (l) The term "Consolidated Total Liabilities" shall mean all liabilities of
the  Borrower  and  its  subsidiaries  determined  on a  consolidated  basis  in
accordance with GAAP and classified as such on the consolidated balance sheet of
the Borrower and its subsidiaries and all other Indebtedness of the Borrower and
its subsidiaries, whether or not so classified.

     (m) The term  "Cost of Funds  Rate"  means the per annum  rate of  interest
which Bank is required to pay, or is offering to pay, for wholesale  liabilities
of like tenor,  adjusted for reserve requirements and such other requirements as
may be imposed by federal, state or local government and regulatory agencies, as
determined by Bank.

     (n) The term  "Default"  shall mean any  condition or event that,  with the
giving of notice  or lapse of time,  or both,  would,  unless  cured or  waived,
become an Event of Default.

     (o) The term "Fixed Charge  Coverage Ratio" shall mean as of the end of any
fiscal quarter of the Borrower the ratio of (x) Consolidated Adjusted EBITDA for
the period of four consecutive  fiscal quarters ending with such fiscal quarter,
determined in accordance  with GAAP, to (y) the sum of (A) the aggregate  amount
of principal payments of Indebtedness of the Borrower or any of its subsidiaries
scheduled to have been made during such period plus (B) the aggregate  amount of
interest expense of the Borrower or any of its subsidiaries for such period.

     (p) The term "GAAP" shall mean generally accepted accounting  principles in
the United States of America as in effect from time to time.

<PAGE>

     (q) The  term  "Hedging  Obligation"  shall  mean  all  liabilities  of the
Borrower to the Bank under interest rate swap agreements or any other agreements
or  arrangements  designed  to protect  the  Borrower  against  fluctuations  in
interest rates or currency exchange rates.

     (r) The term "Indebtedness" shall mean, with respect to any person, (i) all
indebtedness  or other  obligations of such person for borrowed money or for the
deferred purchase price of property or services,  (ii) all indebtedness or other
obligations of any other person for borrowed money or for the deferred  purchase
price of  property  or  services  in  respect  of which  such  person is liable,
contingently  or  otherwise,  to pay or advance  money or property as guarantor,
endorser or otherwise  (except as endorser for collection in the ordinary course
of business),  or which such person has agreed to purchase or otherwise acquire,
and (iii) all lease obligations of such person which are required, in accordance
with GAAP, to be capitalized on the books of the lessee.

     (s) The term  "Indebtedness  for Money Borrowed" on any date shall mean (x)
all outstanding Indebtedness of the Borrower or any of its subsidiaries, current
or funded,  secured or unsecured,  incurred in connection with borrowings or the
making available of credit or funds, (y) all Indebtedness of the Borrower or any
of its subsidiaries issued, incurred or assumed in respect of the purchase price
of property,  except for trade accounts  payable incurred in the ordinary course
of the Borrower's business consistent with the policies of the Borrower on which
interest  is not  being  accrued  and which  are  payable  within 90 days of the
statement  date  of such  trade  accounts  payable,  and  which  have  not  been
outstanding  longer than 90 days from the statement  date of such trade accounts
payable,  and (z) all capitalized  lease obligations (as defined by GAAP) of the
Borrower or any of its subsidiaries.

     (t) The term "Insolvent"  shall mean, with respect to any person,  when any
of the following  events shall have  occurred in respect of such person:  death,
dissolution, termination of existence, business failure, insolvency, appointment
of a receiver for any part of the property of, an assignment  for the benefit of
creditors  by, or a  commencement  of any  proceedings  under any  bankruptcy or
insolvency  law or any law  relating to the relief of debtors,  readjustment  of
indebtedness,  reorganization,  composition  or  extension  by or against,  such
person.

     (u) The term  "Interest  Period" shall mean,  with respect to any (1) LIBOR
Rate loan:

     (i) initially,  the period  beginning on (and  including) the date on which
such LIBOR Rate loan is made or continued  as, or  converted  into, a LIBOR Rate
loan pursuant to Section 2(d) or Section  2(e)(ii) and ending on (but excluding)
the day  which  numerically  corresponds  to such date 30,  60,  90, or 180 days
thereafter,  in each case as the Borrower  may select in its notice  pursuant to
Section 2(d) or Section 2(e)(ii); and

     (ii)  thereafter,  each  period  commencing  on the  last  day of the  next
preceding  Interest Period applicable to such LIBOR Rate loan and ending 30, 60,
90, or 180 days thereafter, as selected by the Borrower by irrevocable notice to

<PAGE>

the Bank not less than two (2)  Business  Days prior to the last day of the then
current Interest Period with respect thereto;

provided, however, that:

     (A) the Borrower shall not be permitted to select Interest Periods to be in
effect at any one time which have  expiration  dates occurring on more than five
(5) different dates;

     (B)  Interest  Periods  commencing  on the same date for LIBOR  Rate  loans
comprising  part of the same advance under this  Agreement  shall be of the same
duration;

     (C) Interest Periods for LIBOR Rate loans in connection with which Borrower
has  entered  into a  Hedging  Obligation  with  the  Bank  shall be of the same
duration as the relevant periods set under such Hedging Obligation;

     (D) if such  Interest  Period would  otherwise  end on a day which is not a
Business Day, such Interest Period shall end on the next following  Business Day
unless such day falls in the next  calendar  month,  in which case such Interest
Period shall end on the first preceding Business Day;

     (E) no Interest Period may end later than the Termination Date; and

     (F) no  Interest  Period  may be  selected  when a  Default  or an Event of
Default has occurred and is continuing;

     (2) with respect to any Cost of Funds Rate loan:

     (i) initially,  the period  beginning on (and  including) the date on which
such Cost of Funds Rate loan is made or continued as, or converted  into, a Cost
of Funds Rate loan  pursuant to Section  2(d) or Section  2(e)(ii) and ending on
(but excluding) the day that is seven (7), 14 or 30 days thereafter (or, if such
day is not a Business Day, such Interest  Period shall end on the next following
Business  Day unless such day falls in the next  calendar  month,  in which case
such Interest  Period shall end on the first  preceding  Business  Day), in each
case as the  Borrower  may select in its  notice  pursuant  to  Section  2(d) or
Section 2(e)(ii); and

     (ii)  thereafter,  each  period  commencing  on the  last  day of the  next
preceding  Interest Period applicable to such Cost of Funds Rate loan and ending
seven (7), 14 or 30 days thereafter,  as selected by the Borrower by irrevocable
notice to the Bank not less than two (2) Business  Days prior to the last day of
the then current Interest Period with respect thereto.

     (v) The term  "Interest  Payment Date" shall mean,  with respect to (1) any
LIBOR Rate loan having an Interest  Period of 90 days or less, the last Business
Day of such  Interest  Period,  and as to any LIBOR Rate loan having an Interest

<PAGE>

Period  longer  than 90 days,  each  Business  Day which is 90 days,  or a whole
multiple  thereof,  after the first day of such Interest Period and the last day
of such Interest Period,  and (2) any Cost of Funds Rate loan, the last Business
Day of the Interest Period applicable thereto.

     (w) The term "LC  Exposure"  shall  mean,  at any  time,  the sum,  without
duplication,  of (i) the  aggregate  amount that is (or may  thereafter  become)
available for drawing under all Letters of Credit  outstanding at such time plus
(ii) the aggregate  unpaid amount of all LC  Reimbursement  Obligations  at such
time.

     (x) The term "LC  Reimbursement  Obligations"  shall mean, at any time, all
obligations  of the Borrower to reimburse  the Bank for amounts paid by the Bank
in respect of drawings under Letters of Credit.

     (y) The term "Letter of Credit" shall have the meaning set forth in Section
3(a) hereof.

     (z) The term "LIBOR Rate" shall mean,  with respect to any Interest  Period
for any LIBOR Rate loan,  the offered  rate for  deposits of U.S.  Dollars in an
amount  approximately equal to the amount of the requested LIBOR Rate loan for a
term coextensive with the designated  Interest Period which the British Bankers'
Association  fixes as its LIBOR rate and which appears on the Telerate Page 3750
as of 11:00 a.m.  London  time on the day which is two (2) London  Banking  Days
prior to the beginning of such Interest Period.

     (aa) The term "LIBOR  Lending  Rate" means,  with respect to any LIBOR Rate
loan to be made,  continued or  maintained  as, or converted  into, a LIBOR Rate
loan  for any  Interest  Period,  a rate per  annum  for  such  Interest  Period
determined pursuant to the following formula:

     LIBOR Lending Rate    =                          LIBOR Rate
                                     -----------------------------------------
                                        (1.00 - LIBOR Reserve Percentage)

     (bb) The term "LIBOR Reserve  Percentage"  shall mean,  with respect to any
day of any Interest Period for LIBOR Rate loans, the maximum aggregate  (without
duplication)  of  the  rates  (expressed  as  a  decimal  fraction)  of  reserve
requirements (including all basic, emergency,  supplemental,  marginal and other
reserves and taking into account any transitional adjustments or other scheduled
changes in reserve requirements) under any regulations of the Board of Governors
of the Federal  Reserve  System (the  "Board") or other  governmental  authority
having  jurisdiction  with respect  thereto as issued from time to time and then
applicable to assets or liabilities consisting of "Eurocurrency Liabilities," as
currently  defined in  Regulation  D of the Board,  having a term  approximately
equal or comparable to such Interest Period.

     (cc) The term "Loan Documents" shall mean (i) this Agreement, including the
Exhibits and Schedules  attached hereto,  and the Line of Credit Notes, (ii) any
agreement or agreements between the Borrower and the Bank which give rise to any

<PAGE>

Hedging  Obligations and (iii) all other  agreements,  documents and instruments
relating to,  arising out of, or in any way connected  with any of the foregoing
referred to in clauses (i) and (ii) above.

     (dd) The term "London  Banking  Day" shall mean a day on which  dealings in
U.S. Dollar deposits are transacted in the London interbank market.

     (ee) The term  "Patriot  Act"  shall  mean  Public Law 107-56 of the United
States of America,  United and  Strengthening  America by Providing  Appropriate
Tools  Required to  Intercept  and Obstruct  Terrorism  (USA PATRIOT Act) Act of
2001.

     (ff) The term  "Payment  Date"  shall  mean the last  Business  Day of each
April, July, October and January from and after the Closing Date.

     (gg) The term "Prime  Rate"  shall mean the rate of interest  quoted by the
Bank from time to time in Boston as its "Prime  Rate," which is not  necessarily
the Bank's lowest rate of interest.

     (hh) The term  "Shareholders'  Equity" on any date shall mean stockholders'
equity determined in accordance with GAAP.

     (ii) The term "Termination Date" shall mean June 30, 2007.

     5. Representations and Warranties.  The Borrower represents and warrants as
follows (with the following representations and warranties being deemed to apply
to  each   subsidiary   of  the  Borrower  on  the  same  basis  as  which  such
representations and warranties expressly apply to the Borrower):

     (a)  Organization.  The Borrower is a corporation  duly organized,  validly
existing  and  in  good  standing  under  the  laws  of  its   jurisdiction   of
organization;  is duly  qualified  to do business  and in good  standing in each
jurisdiction  in the  United  States of  America  where  such  qualification  is
required,  except those  jurisdictions  where the failure to so qualify will not
have  a  material  adverse  effect  on the  Borrower's  business,  prospects  or
financial  condition  (a list of the  jurisdictions  where  the  Borrower  is so
qualified  being set  forth on  Schedule  5(a)  hereto);  and has all  requisite
corporate  power and  authority  to conduct  its  business  as  presently  being
conducted  and as  proposed  to be  conducted  after the  Closing and to own its
properties  now and  after  the  Closing;  and the  Borrower  has all  requisite
corporate power and authority to execute and deliver,  and to perform all of its
obligations under, this Agreement and the other Loan Documents.

     (b) Authority.  The execution,  delivery and performance by the Borrower of
this  Agreement  and the other Loan  Documents  to which it is a party have been
duly  authorized by all necessary  corporate  action and do not  contravene  any
provision of the Borrower's  charter or by-laws;  do not require any consents or
approvals  which have not been  obtained (a list of any  required  consents  and
approvals is set forth on Schedule 5(b) hereto); do not violate any provision of
any law, rule or regulation (including without limitation Regulations T, U and X

<PAGE>

of the Board of Governors of the Federal Reserve System) or any determination or
award;  do not and will not result in a breach or constitute a default under any
agreement to which the Borrower is a party or by which its properties are bound,
including,  without limitation, any indenture, loan or credit agreement,  lease,
debt instrument or mortgage;  or result in or require the creation or imposition
of any mortgage,  deed of trust, pledge, lien, security interest or other charge
or  encumbrance  of any nature  upon or with  respect  to any of the  Borrower's
properties;  and the Borrower is not in material  default under any law, rule or
regulation, order, writ, judgment,  injunction,  decree,  determination,  award,
indenture, loan or credit agreement, lease, debt instrument or mortgage referred
to  above  or  will  not  be in any  such  material  default  by  virtue  of the
transactions to be entered into at the Closing.

     (c)  Approvals;  Compliance  with  Statutes,  Etc..  (i) No  authorization,
consent,  approval,  license or exemption of, or filing a registration with, any
court or  governmental  department  or  commission,  board,  bureau,  agency  or
instrumentality,  domestic or  foreign,  is or will be  necessary  for the valid
execution,  delivery or  performance  by the Borrower of this  Agreement and the
other  Loan  Documents  to which it is a party,  other than  filings  which have
already been made and  approvals  which have already  been  received,  a list of
which is set forth on Schedule 5(c) hereto. The Borrower is the lawful holder of
all licenses, permits, certificates and governmental authorizations required for
the conduct of its business, except where the failure to hold any such licenses,
permits, certificates or authorizations, individually or in the aggregate, would
not have a material  adverse  effect on the  business,  prospects,  property  or
financial  condition of the Borrower and its  subsidiaries  as a whole.  No such
material license,  permit,  certificate or other governmental  authorization has
been revoked, cancelled, rescinded, modified, denied or lost and not reissued or
reinstated,  and the Borrower  has no reason to believe  that any such  material
license,  permit,  certificate  or  other  governmental  authorization  will  be
revoked, cancelled, rescinded, modified or lost.

     (ii) The Borrower and its subsidiaries is in compliance with all applicable
laws,   statutes,   rules,   regulations  and  orders  of,  and  all  applicable
restrictions  imposed by, all  governmental  bodies,  domestic  or  foreign,  in
respect of the conduct of its business and the ownership of its property, except
for such  non-compliances as could not reasonably be expected to have a material
adverse effect.  Without  limitation of the foregoing,  the Borrower and each of
its  subsidiaries  is in compliance  with,  and neither the entering into of the
Loan  Documents or the use of the proceeds of the loans will  violate:  any law,
rule or regulation relating to anti-terrorism or money laundering, including the
Anti-Terrorism  Order,  the  Patriot  Act,  the  Trading  with the Enemy Act, as
amended,  or any of the foreign assets control  regulations of the United States
Treasury  Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.

     (d) Valid Obligations. This Agreement and the other Loan Documents to which
the Borrower is a party have been duly  executed  and  delivered by the Borrower
and constitute legal, valid and binding obligations of the Borrower, enforceable
in accordance with their respective terms.

<PAGE>

     (e) Assets.  Except as noted on Schedule  5(e),  the  Borrower has good and
clear  marketable,  record  and  insurable  title  to  all  of  its  assets  and
properties,  in  each  case  subject  to  no  mortgage,   pledge,  lien,  lease,
encumbrance, charge, easement, restriction or encroachment.

     (f) Agreements. The Borrower is not in default under or with respect to any
contractual  obligation in any respect which could  reasonably be expected to be
materially adverse to the business, operations,  property or financial condition
of the  Borrower  and its  subsidiaries  as a whole,  or which could  materially
adversely  affect the ability of the Borrower to perform its  obligations  under
this Agreement or any of the other Loan Documents.

     (g) Insurance.  Attached hereto as Schedule 5(g) is a complete and accurate
list of all  insurance  policies of the  Borrower  covering its  properties  and
assets as of the date hereof.  The Borrower has previously  delivered or, at the
request of the Bank,  shall  deliver on the Closing  Date  complete and accurate
copies of all insurance  policies  listed on Schedule 5(g). Upon issuance of any
insurance  policy  listed on Schedule  5(g) as applied for,  the Borrower  shall
deliver, at the request of the Bank, a complete and accurate copy of such policy
to the Bank; provided,  however, that any policy so listed shall be delivered to
the Bank within 60 days following the Closing Date.  Except  policies  listed as
applied for, all  insurance  policies  listed on Schedule 5(g) are in full force
and effect,  with the  premiums  due thereon  paid,  and the  Borrower is not in
default with respect to any such policy. In addition,  all such policies satisfy
the requirements set forth in Section 6(l) hereof.

     (h) Litigation and Other Proceedings.  Except as set forth on Schedule 5(h)
hereto, there are no actions, suits or proceedings pending or threatened against
the Borrower before any court or any governmental department, commission, board,
bureau, agency or instrumentality, and none of the actions, suits or proceedings
listed on Schedule 5(h) could  reasonably be expected to be materially  adverse,
either individually or in the aggregate, to the business, properties,  financial
condition or prospects of the Borrower and its subsidiaries as a whole.

     (i) Labor  Matters.  Except  as set  forth on  Schedule  5(i)  hereto,  the
Borrower is not a party to any  collective  bargaining or similar  agreement and
has complied in all material respects with all applicable state and federal laws
respecting  employment  and  employment  practices,   terms  and  conditions  of
employment, wages and hours and other laws related to employment of employees of
the  Borrower or its  agents,  and there are no arrears in the payment of wages,
withholding or social security taxes,  unemployment  insurance premiums or other
similar  obligations  of the  Borrower  other  than in the  ordinary  course  of
business.

     (j) ERISA. No "prohibited  transaction" or "accumulated funding deficiency"
or "reportable event" has occurred with respect to any "single employer plan" of
the Borrower that could  subject the Borrower to a tax,  penalty or liability in
an amount in excess of $300,000 per such occurrence.  None of the Borrower,  any
predecessor  to the Borrower or any "commonly  controlled  entity" has ever been
included in a  "multiemployer  plan" as to which the  Borrower or any  "commonly

<PAGE>

controlled  entity"  would  have  liability  if the  Borrower  or any  "commonly
controlled  entity" were to withdraw  therefrom  (as each of the quoted terms is
defined or used in the  Employee  Retirement  Income  Security  Act of 1974,  as
amended  ("ERISA"),  and the  Internal  Revenue  Code of 1986,  as amended  (the
"Code")).

     (k)  Financial  Statements.  The  Borrower  has  delivered  to the Bank (i)
consolidated   financial   statements  of  the  Borrower  and  its  consolidated
subsidiaries,  including  consolidated balance sheets,  statements of income and
retained earnings and statements of changes in financial position (collectively,
the " 2003 Financial Statements") for and as of the end of the fiscal year ended
December 31, 2003, and (ii) unaudited consolidated balance sheets and statements
of income of the Borrower and its  consolidated  subsidiaries  for and as of the
end of the fiscal quarter ended March 31, 2004 (collectively,  together with the
2003  Financial  Statements,  the  "Financial  Statements").  The 2003 Financial
Statements  have  been  audited  by   PriceWaterhouseCooper,   certified  public
accountants.  The Financial  Statements  present fairly in all material respects
the consolidated financial condition and performance and results of operation of
the  Borrower  and its  consolidated  subsidiaries  for and as of the end of the
periods presented, in accordance with GAAP consistently applied (subject, in the
case of the unaudited Financial Statements, to normal year-end audit adjustments
and the omission of footnotes). Since December 31, 2003, (i) the physical assets
and  properties  owned or leased by the Borrower and its  subsidiaries  have not
suffered any material  destruction  or damage,  regardless of whether or not any
such loss was insured, (ii) neither the Borrower nor any of its subsidiaries has
incurred any Indebtedness or liabilities,  fixed, contingent or otherwise, other
than in the ordinary course of business, and (iii) there has not been a material
adverse   change  in  the  business  or  operations  of  the  Borrower  and  its
subsidiaries taken as a whole.

     (l) Projections . The Borrower has delivered to the Bank certain  unaudited
projections of the Borrower and its  subsidiaries,  including  projected balance
sheets,  projected  results of operations,  including  projected profit and loss
statements,  and  projected  cash  flow  statements,  each as of the end of each
fiscal year through  December 31, 2009.  The  projections  have been prepared in
accordance with GAAP consistently  applied with those used in the preparation of
the Financial  Statements  (subject to the addition of notes and, in the case of
interim  projections,   to  recurring  year-end   adjustments).   The  financial
projections have been prepared using  assumptions which the Borrower believes in
good  faith  to be  reasonable,  having a  reasonable  factual  basis;  and such
financial projections represent the good faith judgment of the management of the
Borrower as to the future  financial  results and  condition of the Borrower and
its subsidiaries.

     (m) Taxes.  The Borrower has filed all federal and state tax returns  which
are required to be filed and has paid all taxes shown on such returns and on all
assessments  received by it, to the extent that such taxes have become due.  All
of such tax returns are accurate and complete.  All other taxes and  assessments
of any nature with  respect to which the  Borrower is  obligated  and which have
become due are being paid or adequate accruals have been set up therefor.

<PAGE>

     (n)  Investments.  Except as set forth on  Schedule  5(n),  and  except for
subsidiaries of the Borrower  acquired by the Borrower  pursuant to acquisitions
that  either (i) are  funded by one or more  advances  under the Second  Line of
Credit  pursuant to Section 8 hereof or (ii) are  permitted  under  Section 6(k)
hereof,  the  Borrower  does  not own any  securities  or other  equity  or debt
interests in any corporation,  partnership or other business entity.  All of the
Affiliated Persons of the Borrower are set forth on Schedule 5(n).

     (o) Investment  Company.  The Borrower is not an "investment  company" or a
company  "controlled" by an "investment company" (as each of the quoted terms is
defined or used in the Investment Company Act of 1940, as amended).

     (p) Equity Structure.  The equity structure of the Borrower and each of its
subsidiaries, including each class of its capital stock and other securities, is
set forth on Schedule 5(p). Each of the Borrower's subsidiaries is wholly-owned,
directly or indirectly through one or more subsidiaries, by the Borrower.

     (q) Indebtedness for Money Borrowed.  Attached as Schedule 5(q) hereto is a
list  of  all   Indebtedness   for  Money  Borrowed  of  the  Borrower  and  its
subsidiaries,  indicating, as applicable,  the original principal amount of each
borrowing or debt,  the current  amount due thereon,  the terms and schedule for
payments in respect  thereof,  and the security,  if any,  given  therefor or in
connection  therewith.  Other than as set forth on Schedule 5(q) hereto, none of
such  Indebtedness  for Money  Borrowed  is  secured  by any lien,  encumbrance,
mortgage,  pledge,  or  security  interest  given by the  Borrower or any of its
subsidiaries.

     (r) Patents,  Copyrights  and  Trademarks.  Except as set forth on Schedule
5(r), the Borrower does not own any trademarks,  copyrights or patents which are
material  in the  ordinary  course of  business  as the  Borrower's  business is
currently  conducted or as such business is  contemplated to be conducted in the
future.

     (s)  Representations  Accurate.  No  representation or warranty made by the
Borrower  herein,  in  any  other  Loan  Document  or in any  other  certificate
furnished from time to time in connection herewith or therewith contains or will
contain any  misrepresentation of a material fact or omits or will omit to state
any material fact necessary to make the statements herein or therein (taken as a
whole in conjunction with all such documents) not misleading when made. There is
no condition specific to the business of the Borrower which materially adversely
affects, or which would in the future materially adversely affect, the business,
operations, property or financial condition of the Borrower and its subsidiaries
as a whole.

<PAGE>

     6. Covenants.  The Borrower  incorporates herein all of the affirmative and
negative  covenants  contained in the other Loan  Documents.  In  addition,  the
Borrower represents,  warrants, covenants and agrees as follows (and shall cause
each  of  its  subsidiaries  to  comply  with  the  following   representations,
warranties,   covenants  and   agreements  on  the  same  basis  as  which  such
representations,  warranties,  covenants and agreements  expressly  apply to the
Borrower):

     (a)  Payments.  The Borrower  shall duly and  punctually  make the payments
required under this Agreement and the Line of Credit Notes and shall perform and
observe all of its other obligations under the Loan Documents.

     (b) Intentionally omitted.

     (c) Financial Report. The Borrower will furnish to the Bank:

     (i) as soon as available, but in any event within 120 days after the end of
each fiscal year of the  Borrower,  a copy of the audited  consolidated  balance
sheet of the Borrower and its  consolidated  subsidiaries  as at the end of such
fiscal  year  and  the  related  audited  consolidated   statements  of  income,
stockholders'  equity and changes in financial position for such fiscal year, in
each case setting forth in  comparative  form the figures for the previous year,
reported on without a "going  concern" or like  qualification  or  exception  or
qualification  as to the scope of the audit,  by  independent  certified  public
accountants of nationally recognized standing, together with any letter from the
Borrower's  management  prepared in connection with the Borrower's  annual audit
report;

     (ii) as soon as available, but in any event within 60 days after the end of
each  fiscal  quarter end in each  fiscal  year of the  Borrower,  copies of the
unaudited  consolidated  balance  sheets of the  Borrower  and its  consolidated
subsidiaries as at the end of such quarterly  period,  together with the related
unaudited  consolidated  statements of income for such quarterly  period and for
the portion of the fiscal year of the Borrower through such quarterly period, in
each case certified by the Chief Financial Officer of the Borrower as presenting
fairly  in  all  material  respects  the  financial  condition  and  results  of
operations of the Borrower and its consolidated subsidiaries, in conformity with
GAAP (subject to normal  year-end  audit  adjustments  and to the fact that such
financial  statements may be condensed and may not include footnotes);  all such
financial  statements  to be complete and correct in all  material  respects and
prepared in reasonable  detail and in conformity with GAAP applied  consistently
throughout the periods reflected therein; and

     (iii) as soon as available, but in any event not less than 14 days prior to
the  end of each  fiscal  year  of the  Borrower,  a  projected  balance  sheet,
projected cash flow statement  (including  proposed  Capital  Expenditures)  and
projected  profit  and  loss  statement  of the  Borrower  and its  consolidated
subsidiaries  for the  forthcoming  fiscal year, in all cases setting forth such
financial  information  on a fiscal  quarter  by fiscal  quarter  basis for such
forthcoming fiscal year; provided that, in the event Borrower shall begin, after

<PAGE>

the Closing  Date,  to prepare such  projections  for a period  greater than the
forthcoming fiscal year, the Borrower shall furnish the same to Bank pursuant to
the terms of this Section 6(c)(iii).  Other Financial Reports. The Borrower will
also furnish to the Bank:

     (d) concurrently with the delivery of each set of the financial  statements
referred to in paragraphs  (i) and (ii) of Section  6(c), a  certificate  of the
President and Chief  Financial  Officer of the Borrower in the form of Exhibit C
attached  hereto (a "Compliance  Certificate")  (i) stating that, to the best of
such  person's  knowledge,  during the period  covered by such set of  financial
statements,  the  Borrower  has observed or performed in all respects all of its
covenants  and other  agreements  and satisfied in all material  respects  every
condition  contained  in this  Agreement  and the  other  Loan  Documents  to be
observed,  performed or satisfied by it, and that,  to the best of such person's
knowledge,  no Default or Event of Default  exists  (except as specified in such
certificate),  (ii) showing in detail the calculations supporting such statement
in respect of the  covenants  set forth in Sections 6(s) through 6(u) hereof and
(iii)  stating that such  financial  statements  present  fairly in all material
respects the  financial  condition and results of operations of the Borrower and
its consolidated subsidiaries, in conformity with GAAP (subject, with respect to
quarterly financial statements,  to normal year-end audit adjustments and to the
fact  that  such  financial  statements  may be  condensed  and may not  include
footnotes);

     (i) promptly after the same are sent and received,  copies of all financial
statements,  reports  and  notices  which the  Borrower  sends to holders of all
classes of capital  stock of the  Borrower or which the Borrower  receives  from
such holders;

     (ii) promptly,  such additional financial and other information as the Bank
may from time to time reasonably request; and

     (iii) as soon as  available,  a copy of each other report  submitted to the
Borrower by its certified  public  accountants  in  connection  with any annual,
interim or special audit made by them of the books of the Borrower.

     (e) Maintain Rights. The Borrower shall:

     (i) keep in full force and effect its corporate  existence and all material
rights,  licenses,  leases and franchises reasonably necessary to the conduct of
its business;

     (ii) duly observe and conform to all applicable  material  requirements  of
all  governmental  authorities  in any way  relating to it or the conduct of its
business,  all applicable material laws and regulations wherever its business is
conducted, and all applicable decrees, orders and judgments;

<PAGE>

     (iii)  perform or comply  with the terms and  conditions  of each  material
contract,  agreement or obligation to which it is a party, and the provisions of
its charter documents;

     (iv) keep true records and books of account;

     (v) not engage in any business other than the dental laboratory business in
which it is now engaged and businesses reasonably related thereto;

     (vi) not establish any  subsidiaries,  other than pursuant to  acquisitions
that  either (i) are  funded by one or more  advances  under the Second  Line of
Credit  pursuant to Section 8 hereof,  or (ii) are permitted  under Section 6(k)
hereunder.  All  subsidiaries  established or acquired by the Borrower or any of
its subsidiaries  shall be wholly-owned,  either directly or indirectly  through
one or more other  subsidiaries,  by the Borrower.  If such subsidiaries are not
consolidated or merged with the Borrower within 45 days of their  acquisition or
establishment,  then any such subsidiaries  shall become a borrower or guarantor
hereunder,  at the  Bank's  sole  discretion.  Upon  forming  or  acquiring  any
subsidiary,  at the Bank's  discretion  such  subsidiary  and the Borrower shall
execute and  deliver to the Bank (a) a joinder  agreement  substantially  in the
form of Exhibit D attached hereto and the documents  referred to therein and (b)
such other documents  reasonably requested by the Bank consistent with the terms
of this Agreement which provide that such  subsidiary  shall become bound by all
of the terms,  covenants and agreements  contained in the Loan  Documents.  Upon
satisfaction of the conditions set forth in this Section 6(e), each newly-formed
or acquired  subsidiary shall become a Borrower or guarantor hereunder and under
the other Loan  Documents  to the same extent as if such  subsidiary  had been a
party hereto and thereto on the Closing Date; and

     (vii) maintain its chief executive  office at 526 Boston Post Road Wayland,
MA 01778, or at such other place in the United States of America as the Borrower
shall  designate upon written notice to the Bank,  where notices,  presentations
and  demands to or upon the  Borrower  in respect of the Loan  Documents  may be
given or made.

     (f) No Transfers. The Borrower shall not sell, lease, transfer or otherwise
dispose of any assets  necessary  for the  effective or  efficient  operation or
proper  maintenance of its business,  except for (i) sales of obsolete equipment
in the ordinary course of business,  and (ii) sales of equipment in the ordinary
course of business not to exceed $25,000 in any fiscal year.

     (g) No Mergers.  The Borrower will not enter into any transaction of merger
or  consolidation,  or  liquidate,  wind up or  dissolve  itself  (or suffer any
liquidation  or  dissolution),  or convey,  sell,  lease,  transfer or otherwise
dispose of, in one transaction or a series of transactions,  all or any material
part of its  business,  property or tangible or intangible  assets,  whether now
owned or  hereafter  acquired,  or acquire,  by purchase  or  otherwise,  all or
substantially  all of the  business,  property  or fixed  assets of, or stock or
other  evidence  of  beneficial  ownership  of, any person or entity  other than
pursuant to (i) acquisitions  that either (A) are funded by one or more advances

<PAGE>

under a Line of Credit pursuant to Section 8 hereof,  or (B) are permitted under
Section  6(k)  hereunder  or  (ii) so long as no  Default  has  occurred  and is
continuing  both before and after giving  effect  thereto,  mergers  between any
subsidiary of the Borrower with and into the Borrower or any other subsidiary of
the Borrower,  provided that if the Borrower is a constituent  party to any such
merger it shall be the surviving corporation of such merger.

     (h) Payment of Taxes.  The Borrower  will  promptly pay and  discharge  all
taxes,  assessments and  governmental  charges or levies imposed upon it or upon
its income or profit or upon any property, real, personal or mixed, belonging to
it; provided,  however,  that the Borrower shall not be required to pay any such
tax,  assessment,  charge  or levy if the same  shall not at the time be due and
payable or can be paid  thereafter  without  penalty or if the validity  thereof
shall currently be contested in good faith by appropriate proceedings and if the
Borrower shall have made adequate provision on its books for the payment of such
tax,  assessment,  charge or levy; and provided further,  that such tax or other
sum shall be paid  before it gives rise to a lien  against  the  property of the
Borrower.

     (i)  Guaranties.  The Borrower  shall not become or be liable in respect of
any guaranty,  except for  guaranties in conjunction  with an  acquisition  that
either (i) is funded by an advance under a Line of Credit  pursuant to Section 8
hereof or (ii) is permitted  under Section 6(k) hereunder,  and  endorsements by
the Borrower in the ordinary  course of business of negotiable  instruments  for
deposit or collection.

     (j)  Agreements.  The  Borrower  shall not enter into any  agreement of any
nature whatsoever,  including without limitation any agreement which constitutes
or effects a material  modification  of any agreement to which the Borrower is a
party as of the date hereof,  other than in the ordinary course of its business;
provided,  that,  any such  agreement  which is entered into with an  Affiliated
Person (i) shall be  subject to the  restriction  on  compensation  set forth in
Section 6(r) below, (ii) shall be on an arms-length basis, and (iii) shall be on
terms and  conditions no more  favorable  than the Borrower could obtain from an
unrelated third party.

     (k)  Investments.  The  Borrower  shall  not make or  permit  to exist  any
investments,  directly or indirectly  (in the form of any  acquisition of assets
other than in the ordinary  course of business or other than an  acquisition  of
the assets of an entity engaged in a dental laboratory business;  or in the form
of any acquisition of stock,  securities,  indebtedness or obligation of, or any
loan, advance, capital contribution or transfer of property to, or any guarantee
or other  commitment  on behalf  of,  any  person,  other  than  pursuant  to an
acquisition of the stock or business of an entity engaged in a dental laboratory
business;  or otherwise),  other than in (i) United States Treasury  securities,
(ii) readily  marketable  direct  obligations of the United States of America or
any agency  thereof,  backed by the full faith and credit of the United  States,
(iii)  certificates  of deposit,  time deposits or banker's  acceptances  with a
limit  of  $5,000,000  per  institution  issued  by any of the top 50  financial
institutions  in the United  States of America or its  territories,  each having
total assets and surplus of at least $4,000,000,000, (iv) commercial paper rated
A1/P1 or better by  Standard  & Poor's  Corporation/Moody's  Investors  Service,
Inc.,  (v)  repurchase   agreements  made  against  securities  which  meet  the

<PAGE>

qualifications  stated herein,  (vi) tax-exempt  securities,  including  without
limitation,  municipal  bonds or notes,  rated A or better by Moody's  Investors
Service,  Inc, or (vii)  acquisitions  in accordance  with the  requirements  of
Section 8(c) hereof.

     (l)  Property.  The  Borrower  will  keep  all of its  property  reasonably
necessary for the continued  operation of its business in good working order and
condition,  reasonable wear and tear and, subject to Section 9 hereof, damage by
fire and other  casualty  excepted,  and  maintain  with  financially  sound and
reputable  insurance  companies  insurance  thereon in at least such amounts and
with such deductibles and against at least such risks (including  hazard) as are
usually  insured  against in the same general  area by companies  engaged in the
same or similar businesses;  and the Borrower will furnish to the Bank, upon its
written request, full information with respect to any insurance carried.

     (m) Books and Records.  The  Borrower  will (i) keep proper books of record
and account in which full,  true and correct entries in conformity with GAAP and
all  requirements  of law  shall be made of all  dealings  and  transactions  in
relation to its business and activities,  and (ii) permit representatives of the
Bank to  visit  and  inspect  any of its  properties  and to  examine  and  make
abstracts from any of its books and records at any reasonable  time and as often
as  may  reasonably  be  desired,  and  to  discuss  the  business,  operations,
properties  and  financial  condition  of the  Borrower  with its  officers  and
employees and with its independent certified public accountants.

     (n)  Notices.  The Borrower  will give notice to the Bank,  within five (5)
days of knowledge thereof, of:

     (i) the occurrence of any Default or Event of Default under this Agreement;

     (ii) any default or event of default under any other contractual obligation
of the Borrower  which, if not paid or remedied by the Borrower or waived by the
obligee thereon, could result in liability to the Borrower in excess of $300,000
in any single instance or $650,000 in the aggregate;

     (iii) any litigation, investigation or proceeding of which the Borrower has
knowledge which may exist at any time between the Borrower and any  governmental
authority which may have a material adverse effect on the business,  operations,
property or financial  condition of the Borrower,  any  litigation or proceeding
affecting  the  Borrower  which  may have a  material  adverse  effect  upon the
Borrower,   or  any  material  adverse   development  in  previously   disclosed
litigation;

     (iv) the following  events,  as soon as possible and in any event within 15
days after the Borrower  knows thereof:  (x) the  occurrence of any  "reportable
event"  with  respect to any  "single  employer  plan"  which in the  reasonable
judgment of the Borrower could be expected to have a material  adverse affect on
the Borrower or its business,  (y) the  institution of proceedings or the taking
or  expected  taking  of any  other  action  by the  Borrower  or any  "commonly
controlled entity" to terminate any "single employer plan" with respect to which

<PAGE>

there  exists  any  vested  unfunded  pension  liabilities  at the  time of such
termination,  or (z) the  "reorganization" or "insolvency" of any "multiemployer
plan" which may reasonably be expected to have a material  adverse affect on the
business,  operations,  property or financial condition of the Borrower (as each
of the quoted terms is defined or used in ERISA or the Code);

     (v) a material  adverse  change in the  business,  operations,  property or
financial condition of the Borrower and its subsidiaries as a whole; and

     (vi) the  revocation,  expiration  or loss of any license,  permit or other
governmental  authorization  of the  Borrower  material  to the  conduct  of the
business of the Borrower and its subsidiaries as a whole;

each notice pursuant to paragraphs (i) through (vi) of this Section 6(n) to be
accompanied by a statement of the President of the Borrower setting forth
details of the occurrence referred to therein and stating what action, if any,
the Borrower proposes to take with respect thereto.

     (o) Liens. The Borrower will not create,  incur,  assume or suffer to exist
any lien,  mortgage or other  encumbrance  upon any of its  property,  assets or
revenues, whether now owned or hereafter acquired, except for:

     (i) carriers', warehousemen's,  mechanics', materialmen's,  repairmen's, or
other  like liens  arising  in the  ordinary  course of  business  in respect of
obligations  not  overdue  for a period  of more than 60 days or which are being
contested in good faith by appropriate proceedings;

     (ii) easements,  rights-of-way,  restrictions,  license rights,  leases and
other similar encumbrances  incurred in the ordinary course of business which do
not in any case  materially  detract  from the  value  of the  property  subject
thereto or interfere with the ordinary conduct of the business of the Borrower;

     (iii)  pledges  or  deposits  in  connection  with  workers'  compensation,
unemployment  insurance  and other  social  security  legislation  and  deposits
securing liability to insurance carriers under self-insurance arrangements;

     (iv) deposits to secure the  performance of bids,  trade  contracts  (other
than for  borrowed  money),  leases,  statutory  obligations,  surety and appeal
bonds,  performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

     (v)  liens  existing  on the  assets  or  properties  of the  Borrower  and
identified on Schedule 5(e) attached hereto;

     (vi) purchase money liens securing additional  Indebtedness permitted under
Section 6(q) hereof;

<PAGE>

     (vii) liens securing the Borrower's obligations under operating leases; and

     (viii) liens upon assets acquired after the Closing Date in connection with
any  acquisition  permitted  under the terms of  Sections  6(k) and 8(c)  hereof
provided that such liens shall not secure Indebtedness in an aggregate amount in
excess of $300,000.

     In  addition,  the Borrower  shall not,  nor shall the Borrower  permit any
subsidiary to, enter into or permit to exist any  arrangement or agreement which
directly  or  indirectly  prohibits  the  Borrower or any such  subsidiary  from
creating or  incurring  any lien or  encumbrance  in favor of the Bank under the
Loan Documents.

     (p) Modifications.  The Borrower will not permit the modification or waiver
of or any change in any provisions of any agreement  relating to Indebtedness of
the  Borrower  if such  modification,  waiver or change  could  have a  material
adverse effect on the ability of the Borrower to perform its  obligations  under
this Agreement or the other Loan Documents  (such effect to be determined by the
Bank in its sole discretion).

     (q) Additional Indebtedness.  The Borrower shall not create, incur, assume,
agree to  purchase or  repurchase  or provide  funds in respect of or  otherwise
become or be or remain  liable  with  respect  to any  Indebtedness  of any type
whatsoever  owed to any  person,  except (i) with  respect  to any  Indebtedness
incurred pursuant to the terms of this Agreement  (including in conjunction with
an  acquisition  that is  either  funded  by an  advance  under a Line of Credit
pursuant  to  Section  8 hereof or  permitted  under  Section  6(k)  hereof)  or
outstanding  on the date  hereof  and  listed  on  Schedule  5(q)  hereto;  (ii)
obligations  to  make  payments  of  money  pursuant  to  so-called   "earn-out"
agreements  or other  similar  arrangements  providing  for the  payment  by the
Borrower of contingent  consideration  in connection with the acquisition of one
or more businesses;  (iii) trade indebtedness incurred in the ordinary course of
the  Borrower's   business;   and  (iv)   Indebtedness  in  respect  of  Capital
Expenditures not exceeding $300,000 in the aggregate during any 12-month period.

     (r)  Payments  to  Affiliated  Persons.  The  Borrower  shall  not make any
payment, compensation or distribution,  directly or indirectly,  whether in cash
or in  property  and  whether  in  respect  of stock  ownership  or  employment,
management,  consulting or other services or for any other reason whatsoever, to
any Affiliated Person,  except that (i) the Borrower may (A) pay compensation in
the form of salary,  fringe benefits and reimbursement  for reasonable  business
expenses to Affiliated  Persons who are directors or officers of the Borrower in
the ordinary  course of business and in a manner  consistent with past practice,
(B) pay  bonuses to such  Affiliated  Persons and (C)  repurchase  shares of the
Borrower's capital stock from such Affiliated Persons and (ii) any subsidiary of
the Borrower may pay dividends and make distributions to the Borrower;  provided
that  immediately  prior to and after giving effect to any such bonus payment or
stock repurchase there exists no Default or Event of Default hereunder,  and the
Bank  receives a  certificate  to such effect  signed by the  President or Chief
Financial Officer of the Borrower.

<PAGE>

     (s)  Consolidated  Total  Liabilities  to  Consolidated  Tangible Net Worth
Ratio. The Borrower shall not permit the ratio of Consolidated Total Liabilities
to  Consolidated  Tangible  Net Worth as of the end of any fiscal  quarter to be
greater than 1.5:1.

     (t) Fixed Charge  Coverage  Ratio.  The Borrower shall not permit the Fixed
Charge Coverage Ratio as of the end of any fiscal quarter to be less than 1.5:1.

     (u) Minimum Consolidated EBITDA. The Borrower shall not permit Consolidated
EBITDA to be less than (i)  $3,510,500  for the fiscal  quarter  ending June 30,
2004,  (ii) $2,758,000 for the fiscal quarter ending  September 30, 2004,  (iii)
$3,385,000 for the fiscal quarter ending  December 31, 2004, (iv) $3,176,000 for
the fiscal quarter ending March 31, 2005, (v) $ 3,866,000 for the fiscal quarter
ending June 30, 2005,  (vi)  $3,038,000 for the fiscal quarter ending  September
30, 2005,  (vii)  $3,728,000 for the fiscal  quarter  ending  December 31, 2005,
(viii) $3,533,000 for the fiscal quarter ending March 31, 2006, (ix) $ 4,300,000
for the fiscal  quarter  ending June 30,  2006,  (x)  $3,379,000  for the fiscal
quarter ending September 30, 2006, (xi) $4,146,000 for the fiscal quarter ending
December 31, 2006,  (xii)  $3,968,000  for the fiscal  quarter  ending March 31,
2007, and (xiii) $4,831,000 for the fiscal quarter ending June 30, 2007.

     (v) Bank  Accounts.  (i) No later than 30 days from the Closing  Date,  the
Borrower shall establish its primary operating account with Fleet National Bank,
and (ii) at all times after such date,  the Borrower  shall maintain its primary
operating account with Fleet National Bank. As of the Closing Date, the Borrower
and its  subsidiaries  do not maintain any bank accounts other than as set forth
on Schedule 6(v). For the avoidance of any doubt, it is hereby acknowledged that
for the purposes of this Section 6(v), "establish its primary operating account"
means that the Borrower  shall  maintain all of its cash  management  activities
with Fleet  National Bank by  transferring  all of the bank accounts  maintained
with Citizens Bank and marked "Corporate" on the attached Schedule 6(v) to Fleet
National  Bank,  and that with respect to bank  accounts  established  after the
Closing Date,  Borrower  shall use best efforts to establish  such bank accounts
with Fleet National Bank or Bank of America, N.A.

     (w)  Further  Assurances.  At any time and from  time to time the  Borrower
shall,  and shall cause each of its  subsidiaries  to,  execute and deliver such
further  instruments and take such further action as may reasonably be requested
by the  Bank to  effect  the  purposes  of this  Agreement  and the  other  Loan
Documents.  Without limitation of the foregoing, upon receipt of an affidavit of
an officer of the Bank as to the loss,  theft,  destruction or mutilation of any
Note, and, in the case of any such loss, theft, destruction or mutilation,  upon
cancellation  of  such  Note,  the  Borrower  will  issue,  in lieu  thereof,  a
replacement  Note in the same  principal  amount  thereof and  otherwise of like
tenor.

     (x)  Post-closing  Lien  Searches.  No later than 30 days from the  Closing
Date,  Borrower  shall  deliver to Bank the results of UCC lien  searches in the
following  jurisdictions : Texas, New Hampshire,  Delaware, and Louisiana (which
jurisdictions represent in the aggregate 40% of the total revenues and assets of
the Borrower),  indicating no liens,  mortgages or other  encumbrances on any of
the Borrower's  property,  assets or revenues,  other than liens permitted under

<PAGE>

Section 6(o) hereof,  and  otherwise in form and substance  satisfactory  to the
Bank.

     7.  Conditions  of  Closing.  The  obligation  of the Bank to make  initial
advances  under a Line of Credit or to issue any  Letter of Credit is subject to
the satisfaction of all of the following conditions on or prior to the Closing:

     (a) Line of Credit  Notes.  The Bank shall have received the Line of Credit
Notes, duly executed and delivered by the Borrower, each in form satisfactory to
the Bank and its special counsel.

     (b)  Warranties and Covenants.  All warranties and  representations  of the
Borrower and its  subsidiaries  in this  Agreement and the other Loan  Documents
shall be true on the date of the Closing as if then given,  each of the Borrower
and  its  subsidiaries  shall  have  performed  or  observed  all of the  terms,
covenants,  conditions and  obligations  under this Agreement and the other Loan
Documents  which are  required to be  performed or observed by it on or prior to
such  date,  and on such date there  shall  exist no Default or Event of Default
hereunder.

     (c) Closing Certificate. The Bank shall have received a certificate,  dated
as of the Closing and executed by the President and the Chief Financial  Officer
of the  Borrower,  in form and  content  satisfactory  to the Bank,  stating the
substance of the foregoing clause (b).

     (d) Financial  Statements.  The Bank shall have received  copies of (1) the
2003 Financial  Statements,  together with the management  letter for the fiscal
year ending December 31, 2003, and (2) the unaudited consolidated balance sheets
of the Borrower and its consolidated subsidiaries as of March 31, 2004, together
with the related unaudited consolidated statements of income for such period and
for  the  portion  of the  fiscal  year of the  Borrower  through  such  period,
certified by the Chief Financial Officer of the Borrower as presenting fairly in
all material  respects the financial  condition and results of operations of the
Borrower and its consolidated subsidiaries,  in conformity with GAAP (subject to
normal year-end audit adjustments and to the fact that such financial statements
may be  condensed  and may not include  footnotes),  and Bank shall be satisfied
with the  foregoing.  There  shall have been no  material  misstatements  in, or
omissions from, such financial statements and any other documentation  furnished
to the Bank.

     (e) Annual  Report.  The Bank shall have received  copies of the Borrower's
Annual  Report on Form 10-K for the fiscal  year  ended  December  31,  2003 and
Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2004.

     (f) No Adverse Change. There shall have occurred no material adverse change
in (1) the business, prospects,  operations,  properties or condition (financial
or otherwise) of the Borrower or any subsidiary  taken as a whole since the date
of March 31, 2004  financial  statements,  or (2) the ability of the Borrower or
any of its subsidiaries to perform their obligations under the Loan Documents.

<PAGE>

     (g) Closing Fees and Legal  Expenses.  At the Closing,  the Borrower  shall
have paid to the Bank (i) the annual $10,000  facility fee referenced in Section
2(c)(ii) hereof, and (ii) all costs and expenses (including legal fees) referred
to in Section 12(h).

     (h) Legal Opinions.  All legal matters  incident to this Agreement shall be
satisfactory  to Goulston & Storrs,  special  counsel to the Bank,  and the Bank
shall have received at the Closing the legal  opinion of Posternak  Blankstein &
Lund  LLP,  counsel  to  the  Borrower,  such  opinion  in  form  and  substance
satisfactory to the Bank and its special counsel.

     (i) Projections. The Bank shall have received copies of the Borrower's base
line  fiscal  quarter  by fiscal  quarter  projections  for  fiscal  year  2004,
including  profit and loss,  balance sheet,  cash flow and schedules  reflecting
branch profit and losses.

     (j)  Approval.   All  necessary  consents,   approvals  and/or  waivers  in
connection with the  consummation of the  transactions  contemplated by the Loan
Documents shall have been obtained by the Borrower and copies thereof shall have
been delivered to the Bank.

     (k) Legality of  Transactions.  No change in  applicable  law or regulation
shall have occurred as a consequence  of which it shall have become and continue
to be unlawful (i) for the Bank to perform any of its  respective  agreements or
obligations  under any of the Loan  Documents,  or (ii) for the  Borrower or any
subsidiary to perform any of its agreements or obligations under any of the Loan
Documents.

     (l) Proof of Corporate Action; Good Standing.  The Bank shall have received
from the  Borrower  and any  subsidiaries  a  certificate,  certified  by a duly
authorized officer of such Borrower or subsidiary to be true and complete on the
Closing Date,  (i) attaching a copy of records of all corporate  action taken by
Borrower or such  subsidiary to authorize (a) its execution and delivery of each
of  the  Loan  Documents  to  which  it is or is to  become  a  party,  (b)  its
performance  of all  of its  agreements  and  obligations  under  each  of  such
documents,  and (c) any borrowings and other  transactions  contemplated by this
Agreement,  (ii) certifying as to its charter or other organizational  documents
and its by-laws,  and (iii) giving the name and bearing a specimen  signature of
each  individual  who shall be  authorized to sign, in the name and on behalf of
the Borrower, each of the Loan Documents to which it is or is to become a party,
to make application for the Loans and Letters of Credit, and to give notices and
to take other action on its behalf under the Loan Documents.

     (m) Organizational  and Capital  Structure.  The organizational and capital
structure of the Borrower and any subsidiaries shall be reasonably  satisfactory
to the Bank.

     (n) Payoff and Release  Letters.  The Bank shall have received a payoff and
release letter (and related UCC-3 financing  statements or other discharges,  if
applicable) in form and substance  satisfactory  to the Bank from Citizens Bank,
and  arrangements  satisfactory to the Bank shall have been made by the Borrower
with respect thereto.

<PAGE>

     (o) Lien  Searches.  The Bank shall have  received  from the  Borrower  the
results of lien searches (UCC, state tax, federal tax, judgment,  litigation and
bankruptcy)  in  the  Commonwealth  of  Massachusetts  from  a  service  company
reasonably  satisfactory  to the Bank,  indicating no liens,  mortgages or other
encumbrances on any of the Borrower's property,  assets or revenues,  other than
liens permitted  under Section 6(o) hereof,  and otherwise in form and substance
satisfactory to the Bank.

     (p) Other  Documents.  The Bank shall have received all other documents and
assurances  which it requires or which it may  reasonably  request in connection
with the transactions  contemplated by this Agreement,  and such documents shall
be certified, when appropriate, by the proper authorities or corporate officers.
All such  documents  and all  proceedings  to be taken in  connection  with such
transactions  shall be  satisfactory  in form and  substance to the Bank and its
special counsel.

     8. Conditions of Making Subsequent Advances.  The obligation of the Bank to
make any  advance  under a Line of Credit  or to issue  any  Letter of Credit is
subject to the satisfaction of the following  conditions  precedent on or before
the date of each such subsequent  advance or issuance of a Letter of Credit (the
"Borrowing Date"):

     (a)  Representations  and Warranties.  The  representations  and warranties
contained  in  Section  5 hereof  and  otherwise  made by the  Borrower  and its
subsidiaries  in the Loan  Documents  shall have been  correct as of the date on
which made and shall also be correct at and as of such  Borrowing  Date with the
same effect as if made at and as of such time, except as may have been disclosed
to the Bank by the  Borrower  and to which  the  Bank has  consented  and to the
extent that the facts upon which such  representations  and warranties are based
may  in  the  ordinary  course  be  changed  by the  transactions  permitted  or
contemplated hereby.

     (b) Performance. The Borrower and its subsidiaries shall have performed and
complied  with all  terms,  conditions,  covenants  and  obligations  under this
Agreement and the other Loan Documents required to be performed or complied with
by it prior to or on such Borrowing Date, and on such Borrowing Date there shall
exist no Default or Event of Default hereunder.

Each request by the Borrower for an advance under a Line of Credit shall
constitute certification by the Borrower that the conditions specified in
Sections 8(a) and 8(b) will be duly satisfied on the date of such advance.

     (c)  Acquisitions.  If the  Borrower  desires  to make a drawing  under the
Second  Line of  Credit,  the  proceeds  of  which  may  only be used to fund an
acquisition  by the Borrower,  then the  obligation of the Bank to make any such
advance is subject to the satisfaction of the following  conditions precedent on
or before the Borrowing Date for such advance:

     (i) The entity  whose  business,  assets or stock is to be  acquired by the
Borrower with funds from the requested  advance must be primarily engaged in the
dental laboratory business or a business closely related thereto;

<PAGE>

     (ii)  the  Borrower   shall  have   provided  the  Bank  with  a  projected
consolidated  pro forma balance sheet, a projected  consolidated  pro forma cash
flow  statement  (including  proposed  Capital  Expenditures)  and  a  projected
consolidated  pro  forma  profit  and loss  statement  of the  Borrower  and its
subsidiaries for the period ending on the last day of the first full fiscal year
following  the date of the  requested  advance,  in all cases setting forth such
financial  information  on a fiscal  quarter  by fiscal  quarter  basis for such
period and giving effect to such acquisition;

     (iii)  The  Borrower  shall  have  provided  the Bank  with (1)  historical
financial  statements  of the entity  whose  business,  assets or stock is to be
acquired, as may be requested by Bank, and (2) evidence satisfactory to the Bank
in its sole discretion that the entity whose business,  assets or stock is to be
acquired by the Borrower with funds from the requested  advance has historically
generated  recast positive cash flow; for purposes of this  provision,  positive
cash flow that is "recast"  shall be  determined  by  calculating  the  acquired
entity's net income by adjusting  the amount of  depreciation  and  amortization
incurred,  any other  non-cash  charges,  non-recurring  expenses,  or excessive
salaries  incurred,  and the manufacturing  costs to the level that the acquired
entity  would have  incurred had it been  operated by the  Borrower  during such
period;

     (iv) immediately prior to, and after giving effect to, such acquisition, no
Default or Event of Default  shall exist,  and the Borrower  shall have provided
the Bank with evidence  satisfactory  to the Bank  demonstrating  the Borrower's
compliance  with  all of its  covenants  and  agreements  under  this  Agreement
(including,  but not limited to, its  financial  covenants set forth in Sections
6(s) through (u), as evidenced by Borrower's Compliance  Certificate) both prior
to such  acquisition  and on a pro  forma  basis  after  giving  effect  to such
acquisition;

     (v) upon  consummation  of such  acquisition,  any  corporation or business
entity acquired which remains a separate legal entity from the Borrower shall be
a party to such of the Loan  Documents as is required by the Bank, as more fully
described in Section 6(e)(vi) hereof; and

     (vi) the Borrower  shall have  obtained  the prior  written  consent  (such
consent  not to be  unreasonably  withheld)  of the  Bank  for  (1)  any  single
acquisition   with  a  purchase   price,   whether  payable  in  cash  or  other
consideration,  that exceeds  $4,000,000,  and (2) in any event, at such time as
the  aggregate  purchase  price  for  acquisitions  after  the  Closing  exceeds
$10,000,000,  for any single acquisition with a purchase price,  whether payable
in cash or other consideration,  that exceeds $2,000,000.  Bank shall respond to
Borrower's  request for  consent  within five (5)  Business  Days of  Borrower's
providing  Bank with the  information  and  documents  in  accordance  with this
Section 8(c).

<PAGE>

     9. Events of Default.  Each of the following  shall  constitute an event of
default (an "Event of Default") under this  Agreement,  the Line of Credit Notes
and the other Loan Documents:

     (a) Representations and Warranties.  Any representation or warranty made by
the  Borrower or any of its  subsidiaries  in this  Agreement  or any other Loan
Document shall prove to have been  incorrect in any material  respect when made,
or any information furnished in writing,  whether in this Agreement or any other
Loan Document,  shall prove to be untrue in any material  respect on the date on
which it is or was given.

     (b)  Covenants.  The  Borrower  or any of its  subsidiaries  shall  fail to
perform or observe any  covenant or  condition  contained or referred to in this
Agreement or any Line of Credit Note,  including without  limitation the failure
to make any payment of  principal  or interest on a Line of Credit Note or other
amounts when due or any payment of any fee hereunder;  provided,  however,  that
failure  to make any  payment  of  interest  on a Line of Credit  Note shall not
constitute  an Event of Default  under this  Agreement  until such failure shall
have continued for five (5) days after the same became due and payable; provided
further that any failure to perform under Sections  6(b),  (c), (d), (l) and (m)
hereof shall not constitute an Event of Default under this Agreement  until such
failure shall have continued uncured for 10 days.

     (c)  Acceleration.  Any event occurs which permits the  acceleration of the
maturity  of any  Indebtedness  of the  Borrower or any of its  subsidiaries  in
excess  of  $300,000  under  any  mortgage,  deed  of  trust,  security  or loan
agreement,  indenture,  note or other undertaking;  or any demand for payment is
made  with  respect  to  any   Indebtedness  of  the  Borrower  or  any  of  its
subsidiaries.

     (d) Loan  Documents.  Any default or event of default shall occur under any
of the  Loan  Documents  (other  than a  default  or event  of  default  that is
elsewhere specifically dealt with in this Section 9).

     (e) Voluntary  Bankruptcy.  The Borrower or any of its  subsidiaries  shall
commence   a   voluntary   case  or  other   proceeding   seeking   liquidation,
reorganization  or other  relief  with  respect to itself or its debts under any
bankruptcy,  insolvency  or other  similar  law now or  hereafter  in  effect or
seeking the appointment of a trustee, receiver,  liquidator,  custodian or other
similar official of it or any substantial part of its property, or shall consent
to any such relief or to the  appointment  of or taking  possession  by any such
official in an involuntary  case or other  proceeding  commenced  against it, or
shall make a general  assignment  for the  benefit of  creditors,  or shall fail
generally  to pay its debts as they  become  due,  or shall  take any  corporate
action to authorize any of the foregoing;

     (f) Involuntary  Bankruptcy.  An involuntary case or other proceeding shall
be  commenced   against  the  Borrower  or  any  of  its  subsidiaries   seeking
liquidation,  reorganization  or other  relief  with  respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the  appointment  of a trustee,  receiver,  liquidator,  custodian or
other similar official of it or any substantial  part of its property,  and such

<PAGE>

involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 60 days; or an order for relief shall be entered  against the Borrower
or any of its subsidiaries under the federal bankruptcy laws as now or hereafter
in effect;

     (g)  Seizure  of  Assets.  There  shall  occur  any  seizure,   vesting  or
intervention  by or under  the  authority  of a  governmental  unit by which the
Borrower's  management  is  displaced  or its  authority  in the  conduct of its
business is materially curtailed.

     (h)  Judgments.  Any  judgment,  order or writ in  excess  of  $300,000  is
rendered or entered  against the  Borrower  or any of its  subsidiaries  and not
paid,  satisfied  or  otherwise  discharged  within  60  days of the  date  such
judgment, order or writ becomes final and non-appealable.

     (i) Liens.  A notice of lien,  levy or assessment is filed or recorded with
respect to any material part of the assets of the Borrower and its  subsidiaries
taken  as  a  whole  by  the  United  States,  or  any  department,   agency  or
instrumentality  thereof,  or  by  any  state,  county,  municipality  or  other
governmental  agency,  or any taxes or debts owing at any time  hereafter to any
one of them become a lien upon a material part of the assets of the Borrower and
its subsidiaries taken as a whole.

     (j)  Casualty  Loss.  There shall  occur any  material  casualty  loss with
respect to a material part of the Borrower's or any subsidiary's assets.

     (k) Qualified Audit Report. Any audit report required pursuant to Section 6
is not an unqualified  audit report,  unless the reason for qualification is not
material, as determined in the Bank's sole and absolute discretion.

     (l) Change of Control.  (i) Any person or group of persons acting  together
(within the meaning of Section 13 or 14 of the Securities  Exchange Act of 1934,
as amended)  shall have  acquired  at any time after the date hereof  beneficial
ownership  (within the meaning of Rule 13d-3  promulgated  by the Securities and
Exchange  Commission  under said Act) of more than thirty  percent  (30%) of the
common stock or other  capital  securities of the Borrower  outstanding  at such
time and (ii) and such person or group of persons  (including  any  designees or
appointees of such person or group or person) shall hold or control  (whether by
acting as a Director,  by any voting  agreement  or  arrangement  or  otherwise)
one-third  (1/3) or more of the votes  eligible to be cast by  Directors  at any
duly called meeting of the Board of Directors of the Borrower.

     (m) ERISA.  The  occurrence of any of the  following:  (a) Any  "prohibited
transaction"  or  "accumulated  funding  deficiency"  shall have  occurred  with
respect  to any  "single  employer  plan" of the  Borrower  to the  extent  such
occurrence  would cause liability to the Borrower or any of its  subsidiaries in
an amount in excess of $300,000 per occurrence; (b) any "reportable event" shall
have occurred with respect to any "single  employer  plan" of the Borrower which
in the reasonable  judgment of the Borrower could be expected to have a material
adverse  effect on the Borrower or its business;  (c) any of the  Borrower,  any

<PAGE>

predecessor to the Borrower or any "commonly  controlled entity" shall have been
included in a  "multiemployer  plan" as to which the  Borrower or any  "commonly
controlled   entity"  has  liability  because  the  Borrower  or  any  "commonly
controlled  entity" withdrew therefrom to the extent such occurrence would cause
liability to the Borrower or any of its  subsidiaries  in an amount in excess of
$300,000 per occurrence; (d) the institution of proceedings or the taking of any
other action by the Borrower or any  "commonly  controlled  entity" to terminate
any  "single  employer  plan"  with  respect  to which  there  exists any vested
unfunded pension  liabilities at the time of such termination to the extent such
occurrence  would cause liability to the Borrower or any of its  subsidiaries in
an amount in excess of $300,000 per occurrence;  or (e) the  "reorganization" or
"insolvency"  of any  "multiemployer  plan" which may  reasonably be expected to
have  a  material  adverse  effect  on the  business,  operations,  property  or
financial  conditions of the Borrower (as each of the quoted terms is defined or
used in ERISA or the Code).

     10. Remedies.

     (a) Upon the occurrence and during the  continuation of an Event of Default
under this  Agreement,  the Bank may exercise  any one or more of the  following
rights and remedies (all of which shall be cumulative):

     (i)  declare  all or any part of the  loans or  other  amounts  outstanding
hereunder  or under the Line of  Credit  Notes  and the  other  Loan  Documents,
together  with all accrued  interest  thereon and all fees and expenses  related
thereto,  to be  forthwith  due and  payable,  whereupon  the same shall  become
forthwith due and payable, without presentment,  demand, protest or other notice
of any kind, all of which are expressly waived by the Borrower;

     (ii) terminate the Lines of Credit, the Bank's obligations to issue Letters
of Credit  hereunder,  and any other financial  accommodations or commitments of
the Bank provided for by this Agreement or the other Loan Documents;

     (iii) not extend the expiry date of any outstanding Letter of Credit;

     (iv)  proceed with every remedy that is provided for herein or in the other
Loan Documents, or that the Bank may have under applicable law;

provided that, if any Event of Default specified in clause (e) or (f) of Section
9 occurs, then without any notice to the Borrower or any other act by the Bank,
the Lines of Credit, the Bank's obligations to issue Letters of Credit
hereunder, and any other financial accommodations or commitments provided for in
this Agreement or the other Loan Documents shall thereupon terminate and all
loans and other amounts outstanding hereunder or under the Line of Credit Notes
or the other Loan Documents, together with all accrued interest thereon and all
fees and expenses related thereto shall become immediately due and payable,
without presentment, demand, protest or notice of any kind, all of which are
hereby waived by the Borrower.

<PAGE>

     (b) Without  limitation of any other right or remedy of the Bank, (i) if an
Event of  Default  shall have  occurred  and the Bank  shall  have  demanded  or
accelerated  the loans  outstanding  under the Credit  Facility  or (ii) if this
Agreement  and/or the Credit  Facility  described  herein  shall have expired or
shall have been  earlier  terminated  by either the Bank or the Borrower for any
reason, the Borrower shall,  promptly after it receives a request from the Bank,
deposit  with the  Bank in cash a sum  equal  to the  total of all then  undrawn
amounts  under all  outstanding  Letters  of  Credit  issued by the Bank for the
account of the Borrower,  such cash deposit to serve as cash  collateral for the
Borrower's  reimbursement  obligations in respect of such undrawn  amounts under
such  Letters of Credit;  provided  that,  if any Event of Default  specified in
clause (e) or (f) of Section 9 occurs,  the Borrower  shall  deposit such amount
with the Bank  forthwith  without  any  notice or demand or any other act by the
Bank.

     11. Intentionally reserved.

     12. Miscellaneous.

     (a)  Waivers.  This  Agreement  and the  other  Loan  Documents  may not be
changed, waived,  discharged or terminated orally or in writing, except that any
term of this  Agreement  or any  other  Loan  Document  may be  amended  and the
performance  or observance by the Borrower of any term of this  Agreement or any
other Loan Document may be waived (either generally or in a particular  instance
and either  retroactively  or  prospectively)  with,  but only  with,  the prior
written consent of the Bank.

     (b) Delays. No delay on the part of the Bank in exercising any right, power
or privilege hereunder shall operate as a waiver thereof,  nor shall any partial
exercise or waiver of any  privilege  or right  hereunder  preclude  any further
exercise of such privilege or right or the exercise of any other right, power or
privilege.  The rights and remedies expressed in this Agreement and in the other
Loan Documents are cumulative and not exclusive of any right or remedy which the
Bank may otherwise have. To the extent the Bank holds any collateral as security
for payment or any of the other obligations  hereunder,  the Bank may release or
surrender, exchange or substitute any real estate or personal property, or both,
or other  collateral  security now or hereafter held as security for the payment
of the Line of Credit Notes or any other obligations of the Borrower to the Bank
under this  Agreement or the other Loan Documents or however  arising.  Bank may
extend the time for payment or otherwise modify the terms of payment of any part
or the whole of the Line of Credit Notes.

     (c) Notices.  Any  notices,  consents or other  communications  to be given
under this Agreement or under the other Loan  Documents  shall be in writing and
shall be deemed given when mailed to the respective parties by overnight courier
or by  registered  mail  addressed  as set  forth  on the  first  page  of  this
Agreement,  with all such notices, consents and other communications to the Bank
to be sent to the  attention  of Elise M. Russo,  or to such other  addresses as
either party may from time to time  designate for that  purpose.  A copy of each
notice to the Bank shall also by sent to the Bank's special counsel,  Goulston &
Storrs, 400 Atlantic Avenue, Boston, Massachusetts 02110-3333, Attention: Philip
A. Herman,  Esquire. A copy of each notice to the Borrower shall also be sent to
the Borrower's  counsel,  Posternak  Blankstein & Lund LLP, 800 Boylston Street,

<PAGE>

Prudential Tower, Boston, Massachusetts 02199-8004, Attention: Donald H. Siegel,
P.C.  Section  headings and defined  terms in this  Agreement and the other Loan
Documents  are included for  convenience  only and are not intended to modify or
define any term or provision of any such instrument.

     (d) Set-Off.  Regardless of the adequacy of any  collateral,  any deposits,
balances or other sums  credited by or due from the Bank to the  Borrower or any
of its subsidiaries may, at any time or from time to time, without notice to the
Borrower  or any of its  subsidiaries  or  compliance  with any other  condition
precedent now or hereafter imposed by statute,  rule of law or otherwise (all of
which are hereby expressly waived), be set off,  appropriated and applied by the
Bank against any or all such  obligations in such manner as the Bank in its sole
discretion may determine.

     (e)  Jurisdiction;  Waiver of Jury Trial. The Borrower,  for itself and its
subsidiaries,  irrevocably  submits  to the  jurisdiction  of the  courts of the
Commonwealth  of  Massachusetts  and the United  States  District  Court for the
District  of  Massachusetts  for  the  purpose  of any  suit,  action  or  other
proceeding  brought by the Bank arising out of or relating to this  Agreement or
any other Loan  Document,  and the  Borrower,  for itself and its  subsidiaries,
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 the Borrower or any of its
subsidiaries is not personally  subject to the jurisdiction of the courts of the
Commonwealth  of  Massachusetts  or the  United  States  District  Court for the
District of  Massachusetts  or that the  property of the  Borrower or any of its
subsidiaries  is exempt or immune from execution or attachment,  either prior to
judgment or in aid of execution,  that the suit, action or proceeding is brought
in an inconvenient  forum or that the venue of the suit, action or proceeding is
improper,  or that this  Agreement  or any other Loan  Document  or the  subject
matter  hereof or thereof may not be  enforced in or by such court.  EACH OF THE
BORROWER AND THE BANK HEREBY MUTUALLY  KNOWINGLY,  VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED HEREON, ARISING
OUT OF, UNDER OR IN CONNECTION  WITH THIS  AGREEMENT OR ANY OTHER LOAN DOCUMENTS
CONTEMPLATED  TO BE  EXECUTED IN  CONNECTION  HEREWITH OR ANY COURSE OF CONDUCT,
COURSE OF  DEALING,  STATEMENTS  (WHETHER  VERBAL OR  WRITTEN) OR ACTIONS OF ANY
PARTY, AND AGREE THAT NO PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY
OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED.  EACH PARTY
HERETO  CERTIFIES THAT NO  REPRESENTATIVE,  AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT  OF  LITIGATION,  SEEK  TO  ENFORCE  THE  FOREGOING  WAIVER.  THIS  WAIVER
CONSTITUTES A MATERIAL  INDUCEMENT  FOR BANK TO EXECUTE THIS  AGREEMENT AND MAKE
THE LOANS AND EXTEND CREDIT TO BORROWER.

     (f) Usury.  All agreements  between  Borrower and Bank are hereby expressly
limited  so that in no  contingency  or event  whatsoever,  whether by reason of
acceleration  of maturity of the  indebtedness  evidenced  hereby or  otherwise,
shall  the  amount  paid  or  agreed  to be  paid  to  Bank  for  the use or the

<PAGE>

forbearance of the indebtedness  evidenced hereby exceed the maximum permissible
under  applicable law. As used herein,  the term "applicable law" shall mean the
law in effect as of the date hereof; provided,  however, that in the event there
is a change in the law which results in a higher  permissible  rate of interest,
then the  Line of  Credit  Notes  shall  be  governed  by such new law as of its
effective date. In this regard,  it is expressly agreed that it is the intent of
Borrower  and Bank in the  execution,  delivery  and  acceptance  of the Line of
Credit Notes to contract in strict  compliance with the laws of the Commonwealth
of  Massachusetts   from  time  to  time  in  effect.  If,  under  or  from  any
circumstances  whatsoever,  fulfillment of any provision hereof or of any of the
Loan Documents at the time of performance of such provision  shall be due, shall
involve  transcending  the limit of such validity  prescribed by applicable law,
then the obligation to be fulfilled shall automatically be reduced to the limits
of such validity, and if under or from any circumstances  whatsoever Bank should
ever receive as interest an amount  which would exceed the highest  lawful rate,
such amount which would be excessive  interest shall be applied to the reduction
of the principal  balance  evidenced  hereby and not to the payment of interest.
This provision  shall control every other  provision of all  agreements  between
Borrower and Bank.

     (g) Execution.  This Agreement may be signed in any number of counterparts,
which together will be one and the same instrument.  This Agreement shall become
effective whenever each party shall have signed at least one such counterpart.

     (h)  Governing  Law.  This  Agreement  shall be governed by the laws of the
Commonwealth  of  Massachusetts  and for all  purposes  shall  be  construed  in
accordance with the laws of such Commonwealth.

     (i)  Fees;  Indemnification.   Whether  or  not  any  funds  are  disbursed
hereunder,  the  Borrower  shall  pay all of the  Bank's  reasonable  costs  and
expenses  in  connection  with the  preparation,  execution,  delivery,  review,
administration  and  enforcement of this Agreement and the other Loan Documents,
including reasonable legal fees and disbursements;  provided that the legal fees
of the Bank's special counsel in connection with the preparation,  execution and
delivery of this Agreement shall not exceed $10,000.  The Borrower hereby agrees
to  indemnify  and hold  harmless  the Bank from and against any and all claims,
damages, losses, liabilities,  costs or expenses (including, without limitation,
the reasonable fees and  disbursements of counsel) which the Bank may reasonably
incur (or which may be claimed  against  the Bank by any person  whatsoever)  by
reason of, in  connection  with or in any way related to this  Agreement and the
other Loan Documents or any of the transactions  contemplated hereby or thereby;
provided  that the Borrower  shall not be required to indemnify the Bank for any
claims, damages, losses, liabilities,  costs or expenses to the extent, but only
to the extent caused by gross negligence or willful misconduct of the Bank.

     (j) Binding Nature. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their  respective  successors and assigns;
provided that the rights and  obligations  under this Agreement and under any of
the other Loan Documents may not be assigned by the Borrower without the written
consent of the Bank.

<PAGE>

     (k) Assignment;  Participations;  Pledge to Federal Reserve. (i) Bank shall
have  the  unrestricted  right at any time or from  time to  time,  and  without
Borrower's  consent,  to assign all or any portion of its rights and obligations
hereunder  to one or more  banks  or  other  financial  institutions  (each,  an
"Assignee"), after giving at least 15 Business Days prior written notice of such
assignment to the Borrower,  and Borrower agrees that it shall execute, or cause
to be executed, such documents, including without limitation, amendments to this
Agreement and to any other  documents,  instruments  and agreements  executed in
connection  herewith as Bank shall deem  necessary to effect the  foregoing.  In
addition, at the request of Bank and any such Assignee, Borrower shall issue one
or more new promissory  notes, as applicable,  to any such Assignee and, if Bank
has  retained  any  of its  rights  and  obligations  hereunder  following  such
assignment,  to Bank,  which new promissory notes shall be issued in replacement
of, but not in discharge of, the liability evidenced by the promissory note held
by Bank prior to such  assignment and shall reflect the amount of the respective
commitments and loans held by such Assignee and Bank after giving effect to such
assignment.   Upon  the  execution  and  delivery  of   appropriate   assignment
documentation,  amendments  and  any  other  documentation  required  by Bank in
connection  with such  assignment,  and the payment by Assignee of the  purchase
price agreed to by Bank and such  Assignee,  such  Assignee  shall be a party to
this  Agreement  and  shall  have  all of the  rights  and  obligations  of Bank
hereunder (and under any and all other  guaranties,  documents,  instruments and
agreements  executed in connection  herewith) to the extent that such rights and
obligations have been assigned by Bank pursuant to the assignment  documentation
between Bank and such Assignee,  and Bank shall be released from its obligations
hereunder and thereunder to a corresponding extent.

     (ii) Bank  shall have the  unrestricted  right at any time and from time to
time,  and without the consent of  Borrower,  after  giving at least 15 Business
Days prior written notice of such grant to the Borrower, to grant to one or more
banks or other  financial  institutions  (each, a  "Participant")  participating
interests in Bank's  obligation to lend hereunder and/or any or all of the loans
held  by  Bank  hereunder.  In  the  event  of  any  such  grant  by  Bank  of a
participating  interest to a Participant,  Bank shall remain responsible for the
performance  of its  obligations  hereunder and Borrower  shall continue to deal
solely and directly with Bank in connection  with Bank's rights and  obligations
hereunder.

     (iii)  Bank  may  furnish  any  information   concerning  Borrower  in  its
possession from time to time to prospective Assignees or Participants,  provided
that Bank shall require any such prospective Assignee or Participant to agree in
writing to maintain the confidentiality of such information.

     (iv)  Notwithstanding any of the foregoing,  Bank may at any time pledge or
assign all or any portion of its rights under the Loan  Documents  including any
portion of the Line of Credit  Notes to any of the twelve (12)  Federal  Reserve
Banks organized  under Section 4 of the Federal  Reserve Act, 12 U.S.C.  Section
341. No such pledge or assignment or enforcement thereof shall release Bank from
its obligations under any of the Loan Documents.

<PAGE>

     (l) Under Seal.  This Agreement  shall be deemed to be an instrument  under
seal and shall continue in full force and effect so long as any  indebtedness of
the Borrower to the Bank remains unpaid.

     (m)  Use of  Proceeds.  The  proceeds  of the  loans  shall  be used by the
Borrower (i) for working  capital  purposes of the  Borrower,  (ii) to refinance
existing  Indebtedness  of the Borrower and (iii) in the case of the Second Line
of Credit, to fund acquisitions by the Borrower, to the extent permitted herein.
No portion of the  proceeds  of any loans  shall be used,  and no portion of any
Letter of Credit is to be  obtained,  in whole or in part,  for the  purpose  of
purchasing or carrying any "margin security" or "margin stock" as such terms are
used in Regulations  U, T or X of the Board of Governors of the Federal  Reserve
System.

     (n)   Confidentiality.   Notwithstanding  any  confidentiality   provisions
contained  herein,  and in accordance  with Section  1.6011-4(b)(3)(iii)  of the
Treasury  Regulations,   each  party  to  this  Agreement  (and  each  employee,
representative,  or  other  agent of each  party)  may  disclose  to any and all
persons,  without limitation of any kind, the tax treatment and tax structure of
the  transactions  contemplated  by this Agreement and all materials of any kind
(including  opinions  or other tax  analyses)  that are  provided  to such party
relating to such tax  treatment  and tax  structure;  provided,  however,  that,
pursuant  to  Section  1.6011-4(b)(3)(ii)  of  the  Treasury  Regulations,  such
disclosure  shall not be permitted to the extent,  but only to the extent,  such
disclosure would  reasonably be considered to result in  noncompliance  with the
securities laws of any applicable jurisdiction.  For the avoidance of doubt, the
parties  acknowledge  and agree that the tax  treatment and tax structure of any
transaction  does not  include  the name of any  party to a  transaction  or any
sensitive  business  information   (including,   without  limitation,   specific
information about any party's intellectual property or other proprietary assets)
unless such  information  may be related or relevant to the purported or claimed
federal income tax treatment of the transaction.

<PAGE>

         If you agree with the terms of this Agreement, including the Exhibits
attached hereto and the other documents referred to herein, please sign below
where indicated in your capacity as President and Chief Executive Officer of the
Borrower.

                                     FLEET NATIONAL BANK

                                     By:      /s/ ELISE M. RUSSO
                                        ----------------------------------------
                                        Name:  Elise M. Russo
                                        Title: SVP.

Accepted and agreed to:

NATIONAL DENTEX CORPORATION

By:    /s/ RICHARD F. BECKER, JR.
  ------------------------------

  Name:  Richard F. Becker, Jr.
  Title: Treasurer, Vice President and Chief Financial OfficerLOAN AND SECURITY AGREEMENT

         THIS LOAN AND SECURITY AGREEMENT is made on July 6, 2004, by and
between HEALTHCARE QUALITY SOLUTIONS, INC., a Florida corporation (the
"Borrower"), and STANFORD VENTURE CAPITAL HOLDINGS, INC., a Delaware corporation
(together with its successors and assigns, the "Lender"). Capitalized terms used
in this Agreement have the meanings assigned to them in Appendix A, General
Definitions.

                                R e c i t a l s:

         Borrower has requested that Lender extend financing to Borrower in
accordance with the provisions of this Agreement.

         Health Systems Solutions, Inc., a Nevada corporation ("the
"Guarantor"), owns all of the issued and outstanding capital stock of the
Borrower and is willing to unconditionally guarantee the obligations of the
Borrower to the Lender as set forth in a Guarantee of even date herewith as a
material inducement to the Lender to extend the financing contemplated hereby.

         Lender is willing to make loans and other extensions of credit to
Borrower, subject to the terms and conditions of this Agreement.

         NOW, THEREFORE, for Ten Dollars ($10.00) and other good and valuable
consideration, receipt of which is acknowledged, the parties hereto, intending
to be legally bound hereby, agree as follows:

SECTION 1.        FACILITY

         Subject to the terms and conditions of, and in reliance upon the
representations and warranties made in, this Agreement and the other Financing
Documents, Lender agrees, to the extent and in the manner hereinafter set forth,
to establish the Facility in an aggregate amount up to $1,600,000.00, as
follows:

         1.1. Revolver Facility.

                  1.1.1. Revolver Loans. Lender agrees, upon the terms and
subject to the conditions set forth herein, to make Revolver Loans to Borrower
on any Business Day during the period from the date hereof through the day
before the last day of the Term, not to exceed the Gross Availability at such
time, and not in excess of the amount set forth in the Budget, which Revolver
Loans may be repaid and reborrowed in accordance with the provisions of this
Agreement; provided, however, that Lender shall have no obligation whatsoever to
make any Revolver Loan if at the time of the proposed funding thereof either (a)
the aggregate principal amount of all of the Revolver Loans and Pending Revolver
Loans then outstanding exceeds, or would exceed after the funding of such
Revolver Loan, the Gross Availability, or (b) the amount of consolidated EBITDA
to have been earned by the Guarantor as of the end of the month prior to the
date of borrowing or re-borrowing any Revolver Loan. The Revolver Loans shall
bear interest as set forth in Section 2.1 hereof.

<PAGE>

                  1.1.2. Use of Proceeds. The proceeds of the Revolver Loans
shall be used by Borrower exclusively for one or more of the following purposes:
(i) to pay expenses of the financing provided for herein; (ii) to pay any of the
Obligations; (iii) for general working capital of the Borrower; (iv) to pay
property taxes with respect to any Collateral to the extent such property taxes
constitute a Lien senior to Lender's Liens; and (v) to pay up to $400,000 to
satisfy obligations to the Internal Revenue Service. Notwithstanding anything to
the contrary contained herein, in no event shall proceeds of Revolver Loans be
used to pay expenses incurred in connection with the assertion of or joinder in
any claim, counterclaim, action, contested matter, objection, defense or other
proceeding, the purpose of which is to seek or the result of which would be to
obtain any order, judgment, declaration, or similar relief (a) seeking damages
on account of any alleged cause of action arising on, before or after the
Effective Date; (b) invalidating, setting aside, avoiding or subordinating, in
whole or in part, any of the Obligations or Liens and security interests in any
Collateral granted to Lender under this Agreement; (c) declaring any of the
Financing Documents to be invalid, not binding or unenforceable in any respect;
(d) preventing, enjoining, hindering or otherwise delaying Lender's enforcement
of any of the Financing Documents or any realization upon any Collateral; (e)
declaring any Liens granted or purported to be granted under any of the
Financing Documents to have a priority other than the priority set forth
therein; (f) objecting to the amount or method of calculation by Lender of any
of the Obligations or any accounting rendered by Lender with respect to any of
those obligations; or (g) seeking to use the cash proceeds of any of the
Collateral without the prior written consent of Lender.

                  1.1.3. Revolver Note. The Revolver Loans made by Lender and
interest accruing thereon shall be evidenced by the records of Lender and by the
Revolver Note payable to Lender (or the assignee of Lender), which shall be
executed by Borrower, completed in conformity with this Agreement and delivered
to Lender on the Closing Date. All outstanding principal amounts and accrued
interest under the Revolver Note shall be due and payable as set forth in
Section 4.2 hereof.

SECTION 2.        INTEREST,  FEES  AND  CHARGES

         2.1. Interest.

                  2.1.1. Rates of Interest. Borrower agrees to pay interest in
respect of all unpaid principal amounts of the Loans from the respective dates
such principal amounts are advanced until paid (whether at stated maturity, on
acceleration or otherwise) at a fixed rate per annum equal to 8%. Interest on
each Loan shall accrue from and including the date on which such Loan is made to
(but excluding) the date of any repayment thereof; provided, however, that, if a
Loan is repaid on the same day made, one day's interest shall be paid on such
Loan.

                                       2

<PAGE>

                  2.1.2. Default Rate of Interest. From and after the occurrence
of any Event of Default, the principal amount of the Obligations (and, to the
extent permitted by Applicable Law, all past due interest) shall bear interest
at the Default Rate. To the fullest extent permitted by Applicable Law, the
Default Rate shall apply and accrue on any judgment entered with respect to any
of the Obligations. Borrower acknowledges that the cost and expense to Lender
attendant upon the occurrence of an Event of Default are difficult to ascertain
or estimate and that the Default Rate is a fair and reasonable estimate to
compensate Lender for such added cost and expense.

         2.2. Fees.

                  2.2.1. Audit and Appraisal Fees. Borrower shall be obligated
to reimburse Lender for all reasonable costs and expenses incurred by Lender in
connection with all appraisals of any Collateral and audits of any Obligor's
books and records and such other matters pertaining to any Obligor or any
Collateral as Lender shall deem appropriate.

                  2.2.2 General Provisions. All fees shall be fully earned by
the identified recipient thereof pursuant to the foregoing provisions of this
Agreement on the due date thereof and, except as otherwise set forth herein or
required by Applicable Law, shall not be subject to rebate, refund or proration.
All fees provided for in this Section 2.2 are and shall be deemed to be
compensation for services and are not, and shall not be deemed to be, interest
or any other charge for the use, forbearance or detention of money.

         2.3. Computation of Interest and Fees. Interest shall be calculated on
a daily basis, commencing on the date hereof, and shall be payable monthly, in
arrears, on the tenth day of each month. All interest, fees and other charges
provided for in this Agreement shall be calculated daily and shall be computed
on the actual number of days elapsed over a year of 360 days. Borrower
acknowledges that the calculation of interest on the basis of a 360-day year, as
opposed to a year of 365 days, results in a higher effective rate of interest
hereunder. For purposes of computing interest hereunder, all Payment Items
received by Lender shall be deemed applied by Lender on account of the
Obligations (subject to Full Payment of such items) one Business Day after
Lender receives such items in immediately available funds in the Payment
Account, and Lender shall be deemed to have received such Payment Item on the
date specified in Section 4.5 hereof.

         2.4. Reimbursement Obligations.

                  2.4.1. Borrower shall reimburse Lender, for all reasonable
legal, accounting, appraisal and other fees and expenses incurred by Lender
(including fees and expenses of Lender Professionals) in connection with (i) the
negotiation and preparation of any of the Financing Documents, any amendment or
modification thereto, any waiver of any Default or Event of Default thereunder,
or any restructuring or forbearance with respect thereto; (ii) the
administration of the Financing Documents and the transactions contemplated
thereby, to the extent that such fees and expenses are expressly provided for in
this Agreement or any of the other Financing Documents; (iii) action taken to
perfect or maintain the perfection or priority of any of Lender's Liens with
respect to any of the Collateral; (iv) any inspection of or audits conducted
with respect to any of Borrower's books and records or any of the Collateral;

                                       3

<PAGE>

(v) any effort to verify, protect, preserve, or restore any of the Collateral or
to collect, sell, liquidate or otherwise dispose of or realize upon any of the
Collateral; (vi) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by or against Lender, any Obligor or any other Person) in
any way arising out of or relating to any of the Collateral (or the validity,
perfection or priority of any of Lender's Liens thereon), any of the Financing
Documents or the validity, allowance or amount of any of the Obligations; (vii)
the protection or enforcement of any rights or remedies of Lender in any
Insolvency Proceeding; and (viii) any other action taken by Lender to enforce
any of the rights or remedies of Lender against any Obligor or any Account
Debtors to enforce collection of any of the Obligations or payments with respect
to any of the Collateral. All amounts chargeable to Borrower under this Section
2.4 shall constitute Obligations that are secured by all of the Collateral and
shall be payable on demand to Lender. Borrower shall also reimburse Lender for
reasonable expenses incurred by Lender in its administration of any of the
Collateral to the extent and in the manner provided in Section 7 hereof or in
any of the other Financing Documents. The foregoing shall be in addition to, and
shall not be construed to limit, any other provision of any of the Financing
Documents regarding the reimbursement by Borrower of costs, expenses or
liabilities suffered or incurred by Lender.

                  2.4.2. If at any time Lender shall agree to indemnify any
Person against losses or damages that such Person may suffer or incur in its
dealings or transactions with Borrower, or shall guarantee any liability or
obligation of Borrower to such Person, or otherwise shall provide assurances of
Borrower's payment or performance under any agreement with such Person, then
Borrower shall indemnify and defend Lender and shall hold them harmless from and
against any and all liability any of them may have under any such indemnity,
guaranty or assurance, and any amounts so paid by Lender shall be repaid to them
immediately by Borrower. Borrower's agreement to indemnify and defend Lender
shall constitute part of the Obligations that are secured by the Collateral and
Borrower shall repay, on demand, any amount so paid or any liability incurred by
Lender in connection with any such indemnity, guaranty or assurance. Nothing
herein shall be construed to impose upon Lender any obligation to provide any
such indemnity, guaranty or assurance. The foregoing agreement of Borrower shall
apply whether or not such indemnity, guaranty or assurance is in writing or oral
and regardless of Borrower's knowledge of the existence thereof, and shall be in
addition to any of the provision of the Financing Documents regarding
reimbursement by Borrower of costs, expenses or liabilities suffered or incurred
by Lender.

         2.5. Bank Charges. Borrower shall pay to Lender, on demand, any and all
fees, costs or expenses which Lender pays to a bank or other similar institution
(including any fees paid by Lender to any Participant) arising out of or in
connection with (i) the forwarding to Borrower or any other Person on behalf of
Borrower by Lender of proceeds of Loans made by Lender to Borrower pursuant to
this Agreement and (ii) the depositing for collection by Lender of any Payment
Item received or delivered to Lender on account of the Obligations. Borrower
acknowledges and agrees that Lender may charge such costs, fees and expenses to
Borrower based upon Lender's good faith estimate of such costs, fees and
expenses as they are incurred by Lender.

                                       4

<PAGE>

         2.6. Maximum Interest. Regardless of any provision contained in this
Agreement or any of the other Financing Documents, in no contingency or event
whatsoever shall the aggregate of all amounts that are contracted for, charged
or received by Lender pursuant to the terms of this Agreement or any of the
other Financing Documents and that are deemed interest under Applicable Law
exceed the highest rate permissible under any Applicable Law. No agreements,
conditions, provisions or stipulations contained in this Agreement or any of the
other Financing Documents or the exercise by Lender of the right to accelerate
the payment or the maturity of all or any portion of the Obligations, or the
exercise of any option whatsoever contained in any of the Financing Documents,
or the prepayment by Borrower of any of the Obligations, or the occurrence of
any contingency whatsoever, shall entitle Lender to charge or receive in any
event, interest or any charges, amounts, premiums or fees deemed interest by
Applicable Law (such interest, charges, amounts, premiums and fees referred to
herein collectively as "Interest") in excess of the Maximum Rate and in no event
shall Borrower be obligated to pay Interest exceeding such Maximum Rate, and all
agreements, conditions or stipulations, if any, which may in any event or
contingency whatsoever operate to bind, obligate or compel Borrower to pay
Interest exceeding the Maximum Rate shall be without binding force or effect, at
law or in equity, to the extent only of the excess of Interest over such Maximum
Rate. If any Interest is charged or received in excess of the Maximum Rate
("Excess"), Borrower acknowledges and stipulates that any such charge or receipt
shall be the result of an accident and bona fide error, and such Excess, to the
extent received, shall be applied first to reduce the principal Obligations and
the balance, if any, returned to Borrower, it being the intent of the parties
hereto not to enter into a usurious or otherwise illegal relationship. The right
to accelerate the maturity of any of the Obligations does not include the right
to accelerate any interest that has not otherwise accrued on the date of such
acceleration, and Lender does not intend to collect any unearned interest in the
event of any such acceleration. Borrower recognizes that, with fluctuations in
the rates of interest set forth in Section 2.1.1 of this Agreement, and the
Maximum Rate, such an unintentional result could inadvertently occur. All monies
paid to Lender hereunder or under any of the other Financing Documents, whether
at maturity or by prepayment, shall be subject to any rebate of unearned
interest as and to the extent required by Applicable Law. By the execution of
this Agreement, Borrower covenants that (i) the credit or return of any Excess
shall constitute the acceptance by Borrower of such Excess, and (ii) Borrower
shall not seek or pursue any other remedy, legal or equitable, against Lender,
based in whole or in part upon contracting for, charging or receiving any
Interest in excess of the Maximum Rate. For the purpose of determining whether
or not any Excess has been contracted for, charged or received by Lender, all
interest at any time contracted for, charged or received from Borrower in
connection with any of the Financing Documents shall, to the extent permitted by
Applicable Law, be amortized, prorated, allocated and spread in equal parts
throughout the full term of the Obligations. Borrower and Lender shall, to the
maximum extent permitted under Applicable Law, (i) characterize any
non-principal payment as an expense, fee or premium rather than as Interest and
(ii) exclude voluntary prepayments and the effects thereof. The provisions of
this Section 2.6 shall be deemed to be incorporated into every DIP Financing
Document (whether or not any provision of this Section is referred to therein).
All such Financing Documents and communications relating to any Interest owed by
Borrower, and all figures set forth therein shall, for the sole purpose of
computing the extent of Obligations, be automatically recomputed by Borrower,
and by any court considering the same, to give effect to the adjustments or
credits required by this Section 2.6.

                                       5

<PAGE>

SECTION 3.        LOAN ADMINISTRATION

         3.1. Manner of Borrowing and Funding Revolver Loans. Borrowings under
the Revolver Commitment of the Facility established pursuant to Section 1 hereof
shall be made and funded as follows:

                  3.1.1. Notice of Borrowing.

                           (i) Whenever Borrower desires to make a Borrowing
         under this Agreement, Borrower shall give Lender prior written notice
         (or telephonic notice promptly confirmed in writing) of such Borrowing
         request (a "Notice of Borrowing"), which shall be in the form of
         Exhibit B annexed hereto and signed by an authorized officer of
         Borrower. Such Notice of Borrowing shall be given by Borrower at the
         office of Lender designated by Lender from time to time no later than
         ten (10) Business Days prior to the requested funding date of such
         Borrowing. Notices received after 11:00 a.m. shall be deemed received
         on the next Business Day. Each Notice of Borrowing (or telephonic
         notice thereof) shall be irrevocable and shall specify (a) the
         principal amount of the Borrowing, and (b) the date of Borrowing (which
         shall be a Business Day).

                           (ii) Unless payment is otherwise timely made by
         Borrower, the becoming due of any amount required to be paid under this
         Agreement or any of the other Financing Documents with respect to the
         Obligations (whether as principal, accrued interest, fees or other
         charges) shall be deemed irrevocably to be a request for Revolver Loans
         on the due date of, and in an aggregate amount required to pay, such
         principal, accrued interest, fees or other charges, and the proceeds of
         such Revolver Loans may be disbursed by way of direct payment of the
         relevant Obligation. Lender shall not have any obligation to Borrower
         to honor any deemed request for a Revolver Loan after the Commitment
         Termination Date, but may do so in its discretion and without regard to
         the existence of, and without being deemed to have waived, any Default
         or Event of Default.

                           (iii) Lender shall have no obligation to honor any
         deemed request for a Revolver Loan after the Commitment Termination
         Date or when any condition precedent in Section 10 hereof is not
         satisfied, but may do so in its discretion and without regard to the
         existence of, and without being deemed to have waived, any Default or
         Event of Default and regardless of whether such Revolver Loan is funded
         after the Commitment Termination Date.

                           (iv) As an accommodation to Borrower, Lender may
         permit telephonic requests for Borrowings and electronic transmittal of
         instructions, authorizations, agreements or reports to Lender by
         Borrower. Lender shall not have any liability to Borrower for any loss
         or damage suffered by Borrower as a result of Lender's honoring of any
         requests, execution of any instructions, authorizations or agreements
         or reliance on any reports communicated to it telephonically or
         electronically and purporting to have been sent to Lender by Borrower
         and Lender shall not have any duty to verify the origin of any such
         communication or the identity or authority of the Person sending it.

                                       6

<PAGE>

                  3.1.2. Disbursement Authorization. Borrower hereby irrevocably
authorizes Lender to disburse the proceeds of each Revolver Loan requested by
Borrower, or deemed to be requested pursuant to Section 3.1.1, as follows: (i)
the proceeds of each Revolver Loan requested under Section 3.1.1(i) shall be
disbursed by Lender in accordance with the terms of the written disbursement
letter from Borrower in the case of the initial Borrowing, and, in the case of
each subsequent Borrowing, by wire transfer to such bank account as may be
agreed upon by Borrower and Lender from time to time in writing; and (ii) the
proceeds of each Revolver Loan requested under Section 3.1.1(ii) shall be
disbursed by Lender by way of direct payment of the relevant interest or other
Obligation. Any proceeds disbursed in payment of any of the Obligations shall be
deemed to have been received by Borrower.

         3.2. All Loans to Constitute One Obligation. The Loans shall constitute
one general Obligation of Borrower and shall be secured by Lender's Lien upon
all of the Collateral.

SECTION 4.        PAYMENT

         4.1. General Payment Provisions. All payments of principal of and
interest on the Loans and other Obligations that are payable to Lender shall be
made to Lender in Dollars without any offset or counterclaim and free and clear
of (and without deduction for) any present or future Taxes, and, with respect to
payments made other than by application of balances in the Payment Account, in
immediately available funds not later than 12:00 noon on the due date (and
payment made after such time on the due date to be deemed to have been made on
the next succeeding Business Day). All payments received by Lender shall be
distributed by Lender in accordance with Section 4.5 hereof.

         4.2. Repayment of Revolver Loans.

                  4.2.1. Payment of Principal. The outstanding principal amounts
with respect to the Revolver Loans shall be due and payable by Borrower to
Lender immediately upon (a) each receipt by Lender or Borrower of any proceeds
of any of the Collateral, to the extent of such proceeds; and (b) the Commitment
Termination Date.

                  4.2.2. Payment of Interest. Interest accrued on each Revolver
Loan shall be due and payable on the first calendar day of each month (for the
immediately preceding month), computed through the last calendar day of the
preceding month. Accrued interest shall also be paid by Borrower on the
Commitment Termination Date.

                                       7

<PAGE>

         4.3. Payment of Other Obligations. The balance of the Obligations
requiring the payment of money, including the Extraordinary Expenses incurred by
Lender, shall be repaid by Borrower to Lender, as and when provided in the
Financing Documents, or, if no date of payment is otherwise specified in the
Financing Documents, on demand.

         4.4. Marshaling; Payments Set Aside. Lender shall not be under any
obligation to marshal any assets in favor of any Obligor or against or in
payment of any or all of the Obligations. To the extent that Borrower makes a
payment or payments to Lender or Lender receives payment from the proceeds of
any Collateral or exercises its right of setoff, and such payment or payments or
the proceeds of Collateral or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other party, then to the extent of such
recovery, the Obligations or part thereof originally intended to be satisfied,
and all Liens, rights and remedies therefor, shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred. The provisions of the immediately preceding sentence
of this Section 4.4 shall survive any termination of the Facility and Full
Payment of the Obligations.

         4.5. Application of Payments and Collections. All Payment Items
received by Lender by 12:00 noon, Miami, Florida time, on any Business Day shall
be deemed received on that Business Day. All Payment Items received by Lender
after 12:00 noon, Miami, Florida time, on any Business Day shall be deemed
received on the following Business Day. Except to the extent that the manner of
application to the Obligations of payments or proceeds of Collateral is
expressly governed by other provisions of this Agreement, Borrower irrevocably
waives the right to direct the application of any and all payments and
Collateral proceeds at any time or times received by Lender from or on behalf of
Borrower, and Borrower does hereby irrevocably agree that Lender shall have the
continuing exclusive right to apply and reapply any and all such payments and
Collateral proceeds received at any time or times hereafter by Lender or its
agent against the Obligations, in such manner as Lender may deem advisable,
notwithstanding any entry by Lender upon any of its books and records. Without
limiting the generality of the foregoing, Borrower acknowledges and agrees that
Lender may apply all payments and Collateral proceeds to all of the Obligations
prior to application of the same to the Term Loan. If as the result of Lender's
collection of proceeds of Accounts and other Collateral as authorized by Section
7.2.5 a credit balance exists, such credit balance shall not accrue interest in
favor of Borrower, but shall be available to Borrower at any time or times for
so long as no Default or Event of Default exists. Lender may, at its option,
offset such credit balance against any of the Obligations upon and after the
occurrence of an Event of Default.

         4.6. Loan Account. Lender shall establish an account on its books (the
"Loan Account") and shall enter all Loans as debits to the Loan Account and
shall also record in the Loan Account all payments made by Borrower on any
Obligations and all proceeds of Collateral which are finally paid to Lender, and
may record therein, in accordance with customary accounting practice, other
debits and credits, including interest and all charges and expenses properly
chargeable to Borrower.

                                       8

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         4.7. Gross Up for Taxes. If Borrower shall be required by Applicable
Law to withhold or deduct any Taxes from or in respect of any sum payable under
this Agreement or any of the other Financing Documents, (a) the sum payable to
Lender shall be increased as may be necessary so that, after making all required
withholding or deductions, Lender receives an amount equal to the sum it would
have received had no such withholding or deductions been made, (b) Borrower
shall make such withholding or deductions, and (c) Borrower shall pay the full
amount withheld or deducted to the relevant taxation authority or other
authority in accordance with Applicable Law.

SECTION 5.        TERM AND TERMINATION OF THE FACILITY

         5.1. Term. Subject to Lender's right to cease making Loans to Borrower
when any Default or any Event of Default exists or upon the Commitment
Termination Date, the Facility shall be in effect for the Term. The Term may be
extended by written agreement between Borrower and Lender.

         5.2. Termination of Facility.

                  5.2.1. Termination by Lender. Lender may terminate the
Facility at any time, without notice to Borrower, upon or after the occurrence
of an Event of Default.

                  5.2.2. Effect of Termination. On the Commitment Termination
Date, all of the Obligations (including Contingent Obligations owing to Lender)
shall be immediately due and payable, and Lender shall have no further
obligation to make any Loans. All undertakings, agreements, covenants,
warranties and representations of Borrower contained in the Financing Documents
shall survive any such termination and Lender shall retain its Liens in the
Collateral and all of its rights and remedies under the Financing Documents
notwithstanding such termination until Full Payment of the Obligations. With
respect to any Obligations that are Contingent Obligations on the Commitment
Termination Date, Borrower shall, on the Commitment Termination Date, either
deposit with Lender cash or procure and deliver to Lender a direct pay letter of
credit naming Lender as beneficiary (to be in form and substance, and from an
issuing bank, satisfactory to Lender), in each case in an amount not less than
105% of the aggregate amount of all such Contingent Obligations to Lender.
Notwithstanding Full Payment of the Obligations, Lender shall not be required to
terminate its security interests in any of the Collateral unless, with respect
to any loss or damage Lender may incur as a result of the dishonor or return of
any Payment Items applied to the Obligations, Lender shall have received either
(i) a written agreement, executed by Borrower and any Person whose loans or
other advances to Borrower are used in whole or in part to satisfy the
Obligations, indemnifying Lender from any such loss or damage; or (ii) such
monetary reserves and Liens on the Collateral for such period of time as Lender,
in its reasonable discretion, may deem necessary to protect Lender from any such
loss or damage. The provisions of Sections 2.4, 4.4, 4.7 and this Section 5.2.2
and all obligations of Borrower to indemnify Lender pursuant to this Agreement
shall in all events survive any termination of the Facility.

                                       9

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SECTION 6.        COLLATERAL SECURITY

         6.1. Grant of Security Interest in Collateral. To secure the prompt and
Full Payment and performance of all of the Obligations, Borrower hereby grants
to Lender a continuing security interest in and Lien upon all of the assets of
Borrower, whether now owned or existing or hereafter created, acquired or
arising (irrespective of whether the same existed on or was created or acquired
after the Effective Date), including the following Property and interests in
Property of Borrower:

                           (i) all Accounts;

                          (ii) all Inventory;

                         (iii) all Equipment;

                          (iv) all General Intangibles;

                           (v) all Instruments;

                          (vi) all Chattel Paper;

                         (vii) all Documents;

                        (viii) all Investment Property;

                          (ix) all Supporting Obligations;

                           (x) all Letter-of-Credit Rights;

                          (xi) all Deposit Accounts;

                         (xii) all monies and other Property of any kind, now
         or at any time or times hereafter in the possession or under the
         control of Lender or a bailee or Affiliate of Lender, including any
         Cash Collateral in the Cash Collateral Account;

                        (xiii) all cash and non-cash proceeds of (i) through
         (xii) above, including proceeds of and unearned premiums with respect
         to insurance policies insuring any of the Collateral; and

                         (xiv) all books and records (including customer lists,
         files, correspondence tapes, computer programs, print-outs, and other
         computer materials and records) of Borrower pertaining to any of (i)
         through (xiii) above.

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<PAGE>

         6.2. Other Collateral. In addition to the items of Property referred to
in Section 6.1 above, the Obligations shall also be secured by the Cash
Collateral to the extent provided herein and all of the other items of Property
from time to time described in any of the Security Documents as security for any
of the Obligations.

         6.3. Lien on Deposit Accounts. As additional security for the Full
Payment and performance of the Obligations, Borrower hereby grants to Lender a
continuing security interest in and Lien upon, and hereby collaterally assigns
to Lender, all of Borrower's right, title and interest in and to each Deposit
Account and all deposits or other sums at any time credited to each such Deposit
Account, including any sums in any blocked account or any special lockbox
account and in the accounts in which sums are deposited from such blocked
accounts and special lockbox accounts. In connection with the foregoing,
Borrower hereby authorizes and directs each such bank or other depository to pay
or deliver to Lender upon its written demand therefor made at any time upon the
occurrence and during the continuation of an Event of Default and without
further notice to Borrower (such notice being hereby expressly waived), all
balances in each Deposit Account maintained by Borrower with such depository for
application to the Obligations then outstanding, and the rights given Lender in
this Section shall be cumulative with and in addition to Lender's other rights
and remedies in regard to the foregoing Property as proceeds of Collateral.
Borrower hereby irrevocably appoints Lender as Borrower's attorney-in-fact to
collect any and all such balances to the extent any such payment is not made to
Lender by such bank or other depository after demand thereon is made by Lender
pursuant hereto.

         6.4. Lien Perfection; Further Assurances. Promptly after Lender's
request therefor, Borrower shall execute or cause to be executed and delivered
to Lender (and consent to Lender's filing without Borrower's signature where
permitted by Applicable Law) such instruments, assignments, title certificates
or other documents as are necessary under the UCC or other Applicable Law
(including any motor vehicle certificates of title act) to perfect (or continue
the perfection of) Lender's Lien upon the Collateral, and shall take such other
action as may be requested by Lender to give effect to or carry out the intent
and purposes of this Agreement. Unless prohibited by Applicable Law, Borrower
hereby authorizes Lender to execute and file any such financing statement on
Borrower's behalf. The parties agree that a carbon, photographic or other
reproduction of this Agreement shall be sufficient as a financing statement and
may be filed in any appropriate office in lieu thereof.

         6.5. Lien Priority. The Liens and security interests granted to Lender
pursuant to the provisions of this Section 6 and pursuant to any of the
Financing Documents shall be first priority Liens and security interests in the
Collateral.

                                       11

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SECTION 7.        COLLATERAL ADMINISTRATION

         7.1. General Provisions.

                  7.1.1. Locations of Collateral. All tangible items of
Collateral, other than Inventory in transit, shall at all times be kept by
Borrower at one or more of the business locations of Borrower previously
disclosed to Lender and shall not be moved therefrom, without the prior written
approval of Lender, except that prior to an Event of Default and acceleration of
the maturity of the Obligations in consequence thereof, Borrower may (i) make
sales or other dispositions of any Collateral to the extent such sales or other
dispositions are not prohibited by Section 9.2.4 hereof and (ii) may move
Inventory or any record relating to any Collateral to a location in the United
States other than those previously disclosed to Lender, so long as Borrower has
given Lender at least 30 days prior written notice of such new location and
prior to moving any Inventory to such location there shall have been filed all
UCC-1 financing statements and any other appropriate documentation necessary to
perfect or continue the perfection of Lender's Liens with respect to such
Inventory and all proceeds thereof.

                  7.1.2. Insurance of Collateral; Condemnation Proceeds.
Borrower shall maintain and pay for insurance upon all Collateral, wherever
located, covering casualty, hazard, public liability, theft, malicious mischief,
and such other risks in such amounts and with such insurance companies as are
reasonably satisfactory to Lender. All proceeds payable under each such policy
shall be payable to Lender for application to the Obligations. Borrower shall
deliver the originals or certified copies of such policies to Lender with
lender's loss payable endorsements reasonably satisfactory to Lender, naming
Lender as sole loss payee, assignee or additional insured, as appropriate. Each
policy of insurance or endorsement shall contain a clause requiring the insurer
to give not less than 30 days prior written notice to Lender in the event of
cancellation of the policy for any reason whatsoever and a clause specifying
that the interest of Lender shall not be impaired or invalidated by any act or
neglect of Borrower or the owner of the Property or by the occupation of the
premises for purposes more hazardous than are permitted by said policy. If
Borrower fails to provide and pay for such insurance, Lender may, at its option,
but shall not be required to, procure the same and charge Borrower therefor.
Borrower agrees to deliver to Lender, promptly as rendered, true copies of all
reports made in any reporting forms to insurance companies. For so long as no
Event of Default exists, Borrower shall have the right to settle, adjust and
compromise any claim with respect to any insurance maintained by Borrower
provided that all proceeds thereof are applied in the manner specified in this
Agreement, and Lender agrees promptly to provide any necessary endorsement to
any checks or drafts issued in payment of any such claim. At any time that an
Event of Default exists, only Lender shall be authorized to settle, adjust and
compromise such claims. Lender shall have all rights and remedies with respect
to such policies of insurance as are provided for in this Agreement and the
other Financing Documents.

                                       12

<PAGE>

                  7.1.3. Protection of Collateral. All expenses of protecting,
storing, warehousing, insuring, handling, maintaining and shipping any
Collateral, all Taxes imposed under any Applicable Law on any of the Collateral
or in respect of the sale thereof, and all other payments required to be made by
Lender to any Person to realize upon any Collateral shall be borne and paid by
Borrower. If Borrower fails to pay promptly any portion thereof when due, Lender
may, at its option, but shall not be required to, pay the same and charge
Borrower therefor. Lender shall not be liable or responsible in any way for the
safekeeping of any of the Collateral or for any loss or damage thereto (except
for reasonable care in the custody thereof while any Collateral is in Lender's
actual possession) or for any diminution in the value thereof, or for any act or
default of any warehouseman, carrier, forwarding agency, or other Person
whomsoever, but the same shall be at Borrower's sole risk.

                  7.1.4. Defense of Title to Collateral. Borrower shall at all
times defend its title to the Collateral and Lender's Liens therein against all
Persons and all claims and demands whatsoever.

         7.2. Administration of Accounts.

                  7.2.1. Records and Schedules of Accounts. Borrower shall keep
accurate and complete records of its Accounts and all payments and collections
thereon and shall submit to Lender on a daily basis or such other periodic basis
as Lender shall request a sales and collections report for the preceding period,
in form satisfactory to Lender. On or before the 15th day of each month from and
after the date hereof, Borrower shall deliver to Lender, in form acceptable to
Lender, a detailed aged trial balance of all Accounts existing as of the last
day of the preceding month, specifying the names, addresses, face value, dates
of invoices and due dates for each Account Debtor obligated on an Account so
listed ("Schedule of Accounts"), and, upon Lender's request therefor, copies of
proof of delivery and a copy of all documents, including repayment histories and
present status reports relating to the Accounts so scheduled and such other
matters and information relating to the status of then existing Accounts as
Lender shall reasonably request. At the request of Lender made at any time,
Borrower shall deliver to Lender copies of invoices or invoice registers related
to all of its Accounts.

                  7.2.2. Discounts, Disputes and Returns. If Borrower grants any
discounts, allowances or credits that are not shown on the face of the invoice
for the Account involved, Borrower shall report such discounts, allowances or
credits, as the case may be to Lender as part of the next required Schedule of
Accounts. If any amounts due and owing in excess of $10,000 are in dispute
between Borrower and any Account Debtor, or if any returns are made in excess of
$10,000 with respect to any Accounts owing from an Account Debtor, Borrower
shall provide Lender with written notice thereof at the time of submission of
the next Schedule of Accounts, explaining in detail the reason for the dispute
or return, all claims related thereto and the amount in controversy. Upon and
after the occurrence of an Event of Default, Lender shall have the right to
settle or adjust all disputes and claims directly with the Account Debtor and to
compromise the amount or extend the time for payment of any Accounts comprising
a part of the Collateral upon such terms and conditions as Lender may deem
advisable, and to charge the deficiencies, costs and expenses thereof, including
attorneys' fees, to Borrower.

                  7.2.3. Taxes. If an Account of Borrower includes a charge for
any Taxes payable to any governmental taxing authority, Lender is authorized, in
its sole discretion, to pay the amount thereof to the proper taxing authority
for the account of Borrower and to charge Borrower therefor; provided, however,
that Lender shall not be liable for any Taxes that may be due by Borrower.

                                       13

<PAGE>

                  7.2.4. Account Verification. Whether or not a Default or an
Event of Default exists, Lender shall have the right at any time, in the name of
Lender, any designee of Lender or Borrower to verify the validity, amount or any
other matter relating to any Accounts of Borrower by mail, telephone, telegraph
or otherwise. Borrower shall cooperate fully with Lender in an effort to
facilitate and promptly conclude any such verification process.

                  7.2.5. Collection of Accounts and Proceeds of Collateral. To
expedite collection, Borrower shall endeavor in the first instance to make
collection of Borrower's Accounts for Lender. All Payment Items received by
Borrower in respect of its Accounts, together with the proceeds of any other
Collateral, shall be held by Borrower as trustee of an express trust for
Lender's benefit and Borrower shall immediately deposit same in kind in the
Dominion Account. Lender retains the right at all times after the occurrence of
a Default or an Event of Default to notify Account Debtors of Borrower that
Accounts have been assigned to Lender and to collect Accounts directly in its
own name and to charge to Borrower the collection costs and expenses, incurred
by Lender, including reasonable attorneys' fees.

         7.3. Administration of Equipment.

                  7.3.1. Records and Schedules of Equipment. Borrower shall keep
accurate records itemizing and describing the kind, type, quality, quantity and
cost of its Equipment and all dispositions made in accordance with Section 7.3.2
hereof, and shall furnish Lender with a current schedule containing the
foregoing information on at least an annual basis and more often if requested by
Lender. Promptly after request therefor by Lender, Borrower shall deliver to
Lender any and all evidence of ownership, if any, of any of the Equipment.

                  7.3.2. Dispositions of Equipment. Borrower will not sell,
lease or otherwise dispose of or transfer any of the Equipment or any part
thereof without the prior written consent of Lender; provided, however, that the
foregoing restriction shall not apply, for so long as no Default or Event of
Default exists, to (i) dispositions of Equipment which, in the aggregate during
any consecutive 12-month period, has a fair market value or book value,
whichever is more, of $10,000 or less, provided that all Net Proceeds thereof
are remitted to Lender for application to the Obligations in such order of
application as Lender shall elect, or (ii) replacements of Equipment that is
substantially worn, damaged or obsolete with Equipment of like kind, function
and value, provided that the replacement Equipment shall be acquired prior to or
concurrently with any disposition of the Equipment that is to be replaced, the
replacement Equipment shall be free and clear of Liens other than Permitted
Liens that are not Purchase Money Liens, and Borrower shall have given Lender at
least 10 days prior written notice of such disposition. Nothing herein shall be
construed to authorize Borrower to sell any Equipment subject to a lease between
Lender and Borrower without Lender's prior written consent.

                                       14

<PAGE>

                  7.3.3. Condition of Equipment. The Equipment is in good
operating condition and repair, and all necessary replacements of and repairs
thereto shall be made so that the value and operating efficiency of the
Equipment shall be maintained and preserved, reasonable wear and tear excepted.
Borrower will not permit any of the Equipment to become affixed to any real
Property leased to Borrower so that an interest arises therein under the real
estate laws of the applicable jurisdiction unless the landlord of such real
Property has executed a landlord waiver or leasehold mortgage in favor of and in
form acceptable to Lender, and Borrower will not permit any of the Equipment to
become an accession to any personal Property that is subject to a Lien unless
the Lien is a Permitted Lien.

SECTION 8.        REPRESENTATIONS AND WARRANTIES

         8.1. General Representations and Warranties. To induce Lender to enter
into this Agreement and to establish the Facility, Borrower warrants and
represents to Lender that:

                  8.1.1. Organization and Qualification. Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its organization, has the power to own Properties and to
transact the business in which it is presently engaged or proposed to be engaged
and is duly qualified and in good standing in each jurisdiction in which it
presently is, or proposes to be, engaged in business.

                  8.1.2. Power and Authority. The execution, delivery and
performance by Borrower of the Financing Documents are within Borrower's
corporate power, has been duly authorized by all necessary or proper corporate
action and, on the date of initial funding of Loans hereunder; are not in
contravention of any provision of its own Organizational Documents; will not
violate any Applicable Law; will not conflict with any Material Contract of
Borrower; and does not require the consent or approval of any Governmental
Authority or any other Person.

                  8.1.3. Enforceable Agreements. Each of the Financing Documents
has been duly executed and delivered by Borrower and constitutes a legal, valid
and binding obligation of Borrower, enforceable against each Borrower in
accordance with its terms.

                  8.1.4. Priority of Liens. The security interests granted
pursuant to the Financing Documents constitute valid, enforceable, perfected and
first priority Liens on the Collateral.

                  8.1.5. Places of Business. Borrower has no office or place of
business, nor does Borrower store any Collateral, at any location other than
those previously disclosed to the Lender.

                  8.1.6. Compliance With Laws. All of Borrower's business,
operations and Properties are conducted, maintained and owned in accordance with
Applicable Law, including all Environmental Laws, except to the extent that any
such noncompliance could not reasonably be expected to have a Material Adverse
Effect and except as heretofore described by Borrower in filings with the SEC.

                                       15

<PAGE>

                  8.1.7. Governmental Approvals. Borrower has obtained and holds
in full force and effect all Governmental Approvals necessary for the operation
of its business as presently and proposed to be constructed to the extent that
the failure to obtain same could not reasonably be expected to have a Material
Adverse Effect.

                  8.1.8. No Adverse Changes. Since the Effective Date, no event
has occurred that has or could reasonably be expected to have a Material Adverse
Effect.

                  8.1.9. Taxes. The FEIN of Borrower is _______________, and
Borrower has filed all federal, state and local tax returns and other reports
that it is required by Applicable Law to file and has paid, or made for
provision of the payment of, all Taxes upon it, its income and properties as and
when such Taxes are due and payable, except to the extent being Properly
Contested.

                  8.1.10. Brokers. There are no claims for brokerage
commissions, finders' fees or investment banking fees in connection with the
transactions contemplated by this Agreement or any of the other Financing
Documents.

                  8.1.11. No Default. No Default or Event of Default exists at
the time, or would result from the funding, of any Loan or other extension of
credit hereunder;

                  8.1.12. Accounts. Except as set forth on Schedule 8.1.12
hereto, with respect to each Account of Borrower, such Account is genuine and in
all respects what it purports to be and is not evidenced by a judgment; arises
out of a completed sale and delivery of goods or rendition of services by
Borrower in the Ordinary Course of Business and substantially in accordance with
the terms and conditions of all purchase orders, contracts or other documents
relating thereto and forming a part of the contract between Borrower and the
Account Debtor; is for a sum certain maturing, as stated in the duplicate
invoice covering such sale, a copy of which is available to Lender upon request;
such Account is absolutely owing to such Borrower and is not contingent in any
respect or for any reason, and the Account is not subject to any offset, Lien,
deduction, defense, dispute, counterclaim or any other adverse condition, except
for disputes resulting in returned goods where the amount in controversy is
deemed by Lender to be immaterial; the contract under which such Account arose
does not condition or restrict Borrower's right to assign to Lender the right to
payment thereunder; Borrower has not made any agreement with any Account Debtor
thereunder for any extension, compromise, settlement or modification of any such
Account or any deduction therefrom, other than deductions, discounts and
allowances that are granted in the Ordinary Course of Business for prompt
payment and are reflected in the calculation of the net amount of each
respective invoice related thereto and reflected in the Schedule of Accounts
submitted to Lender pursuant to this Agreement; and to the best of Borrower's
knowledge, there are no facts, events or occurrences that are reasonably likely
to impair the validity or enforceability of any such Accounts or reduce the
amount payable thereunder from the face amount of the invoice with respect
thereto.

                                       16

<PAGE>

                  8.1.13. Intellectual Property. Borrower and its Subsidiaries
each owns or has the lawful right to use all Intellectual Property necessary for
the present and planned future conduct of its business without any conflict with
the rights of others; there is no objection to, or pending (or, to Borrower's
knowledge, threatened) Intellectual Property Claim with respect to, Borrower's
or any Subsidiary's right to use any such Intellectual Property and Borrower is
not aware of any grounds for challenge or objection thereto; and neither
Borrower nor any Subsidiary pays any royalty or other compensation to any Person
for the right to use any Intellectual Property. All such Intellectual Property
and other similar rights have been previously described to the Lender, to the
extent they are registered under any Applicable Law or are otherwise material to
Borrower's or any Subsidiary's business.

                  8.1.14. Burdensome Contracts. Neither Borrower nor any of the
Subsidiaries is a party or subject to any contract, agreement, or charter or
other corporate restriction, which has or could be reasonably expected to have a
Material Adverse Effect. Neither Borrower nor any of the Subsidiaries is a party
or subject to any Restrictive Agreements.

                  8.1.15. ERISA. Neither Borrower nor any of the Subsidiaries
has any Plan on the date hereof. Borrower and each of its Subsidiaries is in
full compliance with the requirements of ERISA and the regulations promulgated
thereunder with respect to each Plan. No fact or situation that is reasonably
likely to result in a material adverse change in the financial condition of
Borrower or any of the Subsidiaries exists in connection with any Plan. Neither
Borrower nor any of its Subsidiaries has any withdrawal liability in connection
with a Multiemployer Plan.

                  8.1.16. Labor Matters. Neither Borrower nor any of the
Subsidiaries is a party to any collective bargaining agreement on the date
hereof. On the date hereof, there are no material grievances, disputes or
controversies with any union or any other organization of Borrower's or any
Subsidiary's employees, or, to Borrower's knowledge, any threats of strikes,
work stoppages or any asserted pending demands for collective bargaining by any
union or organization.

                  8.1.17. Not a Regulated Entity. No Obligor is (i) an
"investment company" or a "person directly or indirectly controlled by or acting
on behalf of an investment company" within the meaning of the Investment Company
Act of 1940; (ii) a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935; or (iii) subject to regulation under the Federal Power Act, the
Interstate Commerce Act, any public utilities code or any other Applicable Law
regarding its authority to incur Debt.

                  8.1.18. Margin Stock. Neither Borrower nor any of the
Subsidiaries is engaged, principally or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying any
Margin Stock.

                                       17

<PAGE>

                  8.1.19. Customer and Trade Relations. Except as set forth on
Schedule 8.1.19 hereto, there exists no actual or threatened termination,
cancellation or limitation of, or any materially adverse modification or change
in, the business relationship between Borrower and any customer or any group of
customers whose purchases individually or in the aggregate are material to the
business of Borrower, or with any material supplier or group of suppliers, and
there exists no condition or state of facts or circumstances which is reasonably
likely to have a Material Adverse Effect or prevent Borrower from conducting
such business after the consummation of the transactions contemplated by this
Agreement in substantially the same manner in which it conducted its business on
the Effective Date.

                  8.1.20. Budget. Borrower has furnished to Lender a copy of the
Budget. The Budget has been prepared by Borrower in light of the past operations
of the business of Borrower and its Subsidiaries and represents as of the
respective dates thereof the good faith opinion of Borrower and its senior
management concerning the likely course of business of Borrower and its
Subsidiaries.

         8.2. Reaffirmation of Representations and Warranties. All of the
foregoing representations and warranties made by Borrower in this Agreement or
in any of the other Financing Documents shall survive the execution and delivery
of this Agreement and such other Financing Documents, and shall be deemed to
have been remade and reaffirmed on each day that any Obligations are outstanding
or that Borrower requests or is deemed to have requested the funding of a Loan
under the Facility, except for changes that may occur after the date hereof in
the Ordinary Course of Business as long as Lender has consented to such changes
or such changes are not violative of any provision of this Agreement.

SECTION 9.        COVENANTS AND CONTINUING AGREEMENTS

         9.1. Affirmative Covenants. During the Term and thereafter until Full
Payment of the Obligations, Borrower covenants that it shall and shall cause
each of its Subsidiaries to:

                  9.1.1. Business and Existence. Preserve and maintain its
separate corporate existence and all rights, privileges, and franchises in
connection therewith, and maintain its qualification and good standing in all
states in which such qualification is necessary to the ownership of its
Properties or the conduct of its businesses.

                  9.1.2. Business Records. Keep adequate records and books of
account with respect to its business activities in which proper entries are made
in accordance with GAAP reflecting all of its financial transactions.

                  9.1.3. Visits and Inspections. Permit representatives of
Lender, from time to time, as often as may be reasonably requested, but only
during normal business hours, to visit and inspect the Properties of Borrower,
inspect and make extracts from Borrower's books and records, and discuss with
Borrower's officers, its employees and its independent accountants, Borrower's
business, assets, liabilities, financial condition, business prospects and
results of operations.

                  9.1.4. Further Assurances. At Lender's request, promptly
execute or cause to be executed and deliver to Lender any and all documents,
instruments and agreements deemed necessary by Lender to give effect to or carry
out the terms or intent of this Agreement or any of the other Financing
Documents.

                                       18

<PAGE>

                  9.1.5. Financial Reporting. Cause to be prepared and to be
furnished to Lender the following (which, in the case of financial reporting,
shall be prepared in accordance with GAAP applied on a consistent basis, unless
Borrower's certified public accountants concur in any change therein, such
change is disclosed to Lender and is consistent with GAAP):

                           (i) as soon as available, and in any event within 90
         days after the close of each Fiscal Year, consolidated balance sheets
         of Guarantor as of the end of such Fiscal Year and related statements
         of income, shareholders' equity and cash flow, and setting forth in
         each case in comparative form the corresponding figures for the
         preceding Fiscal Year;

                           (ii) as soon as available, and in any event within 45
         days after the end of each calendar quarter hereafter (but within 90
         days after the last calendar quarter in a Fiscal Year), reviewed
         consolidated interim financial statements of Guarantor as of the end of
         such quarter and the related reviewed consolidated statements of income
         and cash flow for such quarter and for the portion of Guarantor's
         Fiscal Year then elapsed, certified by the principal financial officer
         of Guarantor as prepared in accordance with GAAP and fairly presenting
         the consolidated financial position and consolidated results of
         operations of Guarantor for such quarter and period subject only to
         changes from audit and year-end adjustments and except that such
         statements need not contain notes;

                           (iii) promptly after the filing thereof, copies of
         any annual report to be filed in accordance with ERISA in connection
         with each Plan;

                           (iv) such other data and information (financial or
         otherwise) as Lender, from time to time, may reasonably request,
         bearing upon or related to the Collateral or Borrower's financial
         condition or results of operations; and

                  9.1.6. Notices. Notify Lender in writing, promptly after
Borrower's obtaining knowledge thereof, of the termination or breach of any
Material Contract; the occurrence of any Default or Event of Default; Borrower's
violation (or asserted violation) of any Applicable Law (including any
Environmental Law); any claim that Borrower may make under any policy of
insurance with respect to the Collateral; and any proposed sale of any of the
Collateral (including with such notice copies of drafts of all instruments and
agreements applicable to any such sale), which shall specify the identity of the
proposed purchaser, the terms of the proposed sale and the expected date of
closing.

                  9.1.7. Insurance. In addition to the insurance required herein
with respect to the Collateral, maintain with financially sound and reputable
insurers, insurance with respect to its Properties and business against such
casualties and contingencies of such type (including product liability, business
interruption, larceny, embezzlement or other criminal misappropriation
insurance) and in such amounts as is customary in the business of Borrower.

                                       19

<PAGE>

                  9.1.8. Compliance With Laws. Comply with all Applicable Law,
including ERISA, FLSA, OSHA, all Environmental Laws, the Bankruptcy Code and all
laws, statutes, regulations and ordinances regarding the collection, payment and
deposit of Taxes, and obtain and keep in force any and all Governmental
Approvals necessary to the ownership of its Properties or to the conduct of its
business, to the extent that any such failure to comply, obtain or keep in force
could be reasonably expected to have a Material Adverse Effect. Without limiting
the generality of the foregoing, if any Environmental Release shall occur at or
on any of the Properties of Borrower or any Subsidiary, Borrower shall, or shall
cause the applicable Subsidiary to, act immediately to investigate and report to
Lender and all appropriate Governmental Authorities the extent of, and to make
appropriate remedial action to eliminate, such Environmental Release, whether or
not ordered or otherwise directed to do so by any Governmental Authority.

                  9.1.9. Taxes. Pay and discharge all Taxes (other than Taxes
that accrued or arose prior to the Petition and that are not secured by a Lien
senior to the Liens in favor of Lender) prior to the date on which such Taxes
become delinquent or penalties attach thereto, except and to the extent only
that such Taxes are being Properly Contested.

                  9.1.10. Turn Over of Collateral Proceeds. Promptly turn over
to Lender all proceeds received from any sale or other disposition of any
Collateral (such proceeds to be applied to the Obligations). After Full Payment
of all of the Obligations that are not Contingent Obligations, Lender shall be
authorized to retain and apply any remaining proceeds for the purposes set forth
in Section 5.2.2.

         9.2      Negative  Covenants.  During the Term and thereafter until
Full Payment of the Obligations,  Borrower  covenants that it shall not and
shall not permit any Subsidiary to:

                  9.2.1. Fundamental Changes. Merge, reorganize, consolidate or
amalgamate with any Person, or liquidate, wind up its affairs or dissolve
itself, except for mergers or consolidations of any Subsidiary with another
Subsidiary; change Borrower's name or conduct business under any new fictitious
name; or change Borrower's FEIN.

                  9.2.2. Loans. Make any loans or other advances of money (other
than for salary, travel advances, advances against commissions and other similar
advances in the Ordinary Course of Business) to any Person.

                                       20

<PAGE>

                  9.2.3. Limitation on Liens. Create or suffer to exist any Lien
upon any of its Property, income or profits, whether now owned or hereafter
acquired, except: (i) Liens at any time granted in favor of Lender and other
Liens in existence on the Effective Date; (ii) post-Effective Date Liens for
Taxes (excluding any Lien imposed pursuant to any of the provisions of ERISA)
not yet due or being Properly Contested; (iii) post-Effective Date statutory
Liens (excluding Liens imposed pursuant to any of the provisions of ERISA)
securing the claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons for labor, materials, supplies or
rentals incurred in the Ordinary Course of Business, but only if the payment
thereof is not at the time required or the Debt secured by such Lien is being
Properly Contested; (iv) post-Effective Date Liens resulting from deposits made
in the Ordinary Course of Business in connection with workmen's compensation,
unemployment insurance, social security and other like laws; (v) reservations,
exceptions, easements, rights-of-way, and other similar encumbrances affecting
real Property of Borrower that were in existence on the Effective Date; (vi)
Purchase Money Liens securing Permitted Purchase Money Debt; and (vii) such
other Liens as Lender may consent to in writing from time to time, in its sole
and absolute discretion.

                  9.2.4. Disposition of Assets. Sell, lease or otherwise dispose
of any of the Collateral, including any disposition of the Collateral as part of
a sale and leaseback transaction, to or in favor of any Person, except (i) sales
of Inventory in the Ordinary Course of Business for so long as no Event of
Default exists hereunder, (ii) dispositions of Equipment as authorized by
Section 7.3 hereof, (iii) dispositions of Property that is not Collateral or
that is consented to in writing by Lender, (iv) dispositions in connection with
which Full Payment is made of all of the Obligations (and all Contingent
Obligations of Borrower as provided for in Section 5.2.2 hereof), and (v) other
sales, leases or dispositions that are consented to by Lender.

                  9.2.5. Compromise of Accounts. Compromise or settle, or extend
the time of payment of, any Account without Lender's prior written consent.

                  9.2.6. Payment of Claims. Other than any Claims assumed by the
Borrower, with the prior written consent of the Lender, make any payment of
principal or interest on account of any Claim against Borrower that arose prior
to the Effective Date, other than Claims for property taxes assessed against any
of the Collateral and Claims that may be paid from the proceeds of Loans
pursuant to Section 1.1.2.

                  9.2.7. Restricted Investments. Make or have any Restricted
Investment.

                  9.2.8. Distributions. Make any Distribution.

                  9.2.9. Permitted Debt. Incur or suffer to exist any Debt other
than Claims in existence on the Effective Date; the Obligations; Capitalized
Lease Obligations and Permitted Purchase Money Debt to the extent expenditures
in connection therewith are not in violation of Section 9.3 hereof; Debt (other
than Debt for Money Borrowed, Capitalized Lease Obligations and Permitted
Purchase Money Debt) incurred in the Ordinary Course of Business of Borrower, so
long as such Debts are not past due and payable and are not secured by any Lien
that is not a Permitted Lien; and Permitted Contingent Obligations.

                  9.2.10. Conduct of Business. Engage in any business other than
the business engaged in by it on the Effective Date and any business or
activities that are substantially similar, related or incidental thereto.

                  9.2.11. Use of Proceeds. Use any proceeds of Loans for a
purpose that is not expressly permitted by Section 1.1.2.

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                  9.2.12. Tax Consolidation. File or consent to the filing of
any consolidated income tax return with any Person other than a Subsidiary.

                  9.2.13. Accounting Changes. Make any significant change in
accounting treatment or reporting practices, except as may be required by GAAP,
or establish a fiscal year different from the Fiscal Year.

                  9.2.14. Organization Documents. Amend, modify or otherwise
change any of the terms or provisions in any of its Organization Documents as in
effect on the date hereof, except for changes that do not affect in any way
Borrower's or such Subsidiary's rights and obligations to enter into and perform
the Financing Documents to which it is a party and to pay all of the Obligations
and that do not otherwise have a Material Adverse Effect.

                  9.2.15. Restrictive Agreements. Enter into or become party to
any Restrictive Agreement.

         9.3 Financial Covenants. During the Term and thereafter until Full
Payment of the Obligations, Borrower covenants that, unless otherwise consented
to by Lender in writing, it shall not make or commit or agree to make, or permit
any of its Subsidiaries to make or commit or agree to make, any Capital
Expenditures in excess of $150,000.

SECTION 10.       CONDITIONS PRECEDENT

         10.1. Conditions Precedent to Initial Credit Extensions.
Notwithstanding any other provision of this Agreement or any of the other
Financing Documents, and without affecting in any manner the rights of Lender
under other sections of this Agreement, Lender shall not be required to fund any
Loan requested by Borrower, unless each of the following conditions has been and
continues thereafter to be satisfied:

                  10.1.1. All of the Financing Documents shall have been
executed in form and substance satisfactory to Lender by each of the signatories
thereto and accepted by Lender, and each Obligor shall be in compliance with all
of the terms thereof, and all representations and warranties contained therein
shall be true and correct in all material respects.

                  10.1.2. No Default or Event of Default shall exist at the time
of, and would not result from the funding of, any requested Loan, and no event
shall have occurred and no condition shall exist since the Effective Date that
has had or could reasonably be expected to have a Material Adverse Effect.

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<PAGE>

                  10.1.3.  All fees and expenses required to be paid by Borrower
hereunder on the Closing Date shall have been paid in full.

                  10.1.4. Lender shall have received satisfactory proof of
insurance by Borrower, in accordance with the terms of this Agreement, together
with loss payable endorsements on Lender's standard form of loss payable
endorsement, naming Lender as loss payee with respect to each policy and
certified copies of Borrower's liability insurance policies, together with
endorsements naming Lender as an additional insured.

                  10.1.5. Lender shall have received, reviewed and found
satisfactory a copy of the Budget.

         10.2. Conditions Precedent to All Credit Extensions. Notwithstanding
any other provision of this Agreement or any of the other Financing Documents,
and without affecting in any manner the rights of Lender under other sections of
this Agreement, Lender shall not be required to fund any Loans, unless and until
each of the following conditions has been and continues to be satisfied:

                  10.2.1. No Default or Event of Default exists at the time, or
would result from the funding, of any Loan or other extension of credit.

                  10.2.2. No action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before any court
or Governmental Authority to enjoin, restrain or prohibit, or to obtain damages
in respect of, or which is related to or arises out of, any of the Financing
Documents or the consummation of any of the transactions contemplated thereby.

                  10.2.3. No event shall have occurred and no condition shall
exist that could reasonably be expected to have a Material Adverse Effect.

         10.3. Limited Waiver of Conditions Precedent. If Lender shall make any
Loan or otherwise extend any credit to Borrower under this Agreement at a time
when any of the foregoing conditions precedent are not satisfied (regardless of
whether the failure of satisfaction of any of such conditions precedent is known
or unknown to Lender), the funding of such Loans shall not operate as a waiver
of the right of Lender to insist upon the satisfaction of all conditions
precedent with respect to each subsequent Borrowing requested by Borrower or a
waiver of any Default or Event of Default as a consequence of the failure of any
such conditions to be satisfied.

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<PAGE>

SECTION 11.       EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT

         11.1. Events of Default. The occurrence of any one or more of the
following events shall constitute an "Event of Default":

                  11.1.1. Payment of Obligations. Borrower shall fail to pay (a)
the principal of or accrued interest with respect to any Loan Outstanding on the
due date thereof (whether due at stated maturity, on demand, upon acceleration
or otherwise) or (b) any of the other Obligations on the due date thereof
(whether due at stated maturity, on demand, upon acceleration or otherwise).

                  11.1.2. Misrepresentations. Any warranty, representation, or
other statement made or furnished to Lender by or on behalf of Borrower or
Guarantor or in any instrument, certificate or financial statement furnished in
compliance with or in reference to this Agreement or any of the Financing
Documents proves to have been false or misleading in any material respect when
made or furnished.

                  11.1.3. Breach of Specific Covenants. Borrower shall fail or
neglect to perform, keep or observe any covenant contained in Sections 1.1.2,
6.4, 7.1.1, 7.1.2, 7.2, 7.3.2., 9.1.1, 9.1.3, 9.1.4, 9.1.5, 9.1.6, 9.1.7, 9.1.8,
9.1.9, 9.1.10, 9.2 or 9.3 hereof on the date that Borrower is required to
perform, keep or observe such covenant.

                  11.1.4. Breach of Other Covenants. Borrower or Guarantor shall
fail or neglect to perform, keep or observe any covenant contained in this
Agreement (other than a covenant which is dealt with specifically elsewhere in
this Section 11.1) or the Guarantee and the breach of such other covenant is not
cured to Lender's satisfaction within 10 days after the sooner to occur of any
Senior Officer's receipt of notice of such breach from Lender or the date on
which such failure or neglect first becomes known to any Senior Officer;
provided, however, that such notice and opportunity to cure shall not apply in
the case of any failure to perform, keep or observe any covenant which is not
capable of being cured at all or within such 10-day period or which is a willful
and knowing breach by Borrower or Guarantor or which was the subject of a breach
during the prior 60-day period.

                  11.1.5. Default Under Other Financing Documents. Any event of
default shall occur under, or Borrower or Guarantor shall default in the
performance or observance of any term, covenant, condition or agreement
contained in, any of the other Financing Documents and such default shall
continue beyond any applicable period of grace.

                  11.1.6. Cross-Defaults. There shall occur any default or event
of default on the part of Borrower or Guarantor under any agreement, document or
instrument, which is entered into after the Effective Date and which relates to
any Debt for Money Borrowed, if, as a consequence of such default or event of
default, the holder of such Debt shall be authorized to accelerate the maturity
or demand payment thereof.

                                       24

<PAGE>

                  11.1.7. Uninsured Losses; Unauthorized Dispositions. There
shall occur any material loss, theft, damage or destruction not fully covered by
insurance (as required by this Agreement and subject to such deductibles as
Lender shall have agreed to in writing), or any sale, lease or encumbrance of
any of the Collateral or the making of any levy, seizure, or attachment thereof
or thereon, except as may be specifically permitted by other provisions of this
Agreement.

                  11.8. Change of Control. Any of the following shall have
occurred: (i) any Person or group of Persons shall acquire for the first time
direct or indirect ownership or the power to vote more than 50% of the issued
and outstanding capital stock of Borrower or Guarantor; (ii) a change in the
composition of the board of directors of Borrower or Guarantor, the result of
which is fewer than a majority of the directors are directors of the Borrower or
Guarantor as of the date hereof; or (iii) a change in the management of the
Borrower or Guarantor, the result of which is the principal executive officers
of the Borrower or Guarantor as of the date hereof resign or are otherwise
removed from such positions.

                  11.9. Judgments. One or more judgments or orders for the
payment of money in an amount that exceeds, individually or in the aggregate,
$25,000 shall be rendered against Borrower or Guarantor and either (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there should be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect.

                  11.10. Failure of Financing Documents. Any covenant, agreement
or obligation of Borrower or Guarantor contained in or evidenced by any of the
Financing Documents shall cease to be enforceable or shall be determined to be
unenforceable in accordance with its terms; Borrower or Guarantor shall deny or
disaffirm its obligations under any of the Financing Documents or Liens granted
in connection therewith; or the Liens granted in any of the Collateral shall be
determined to be voidable, invalid or subordinated or shall be determined, with
respect to any material part of the Collateral, to be unperfected or not to have
the priority contemplated by this Agreement.

                  11.11. Material Adverse Effect. Any event shall occur or any
condition shall exist that could reasonably be expected to have a Material
Adverse Effect.

                  11.12. Criminal Forfeiture. Any Obligor shall be convicted
under any criminal law that could lead to a forfeiture of any Property of such
Obligor.

                  11.13. Event of Bankruptcy. In addition, the Borrower
covenants and agrees that in the event the Borrower or Guarantor shall: (i) file
any petition with any Bankruptcy Court or be the subject of any petition under
the Bankruptcy Code; (ii) file or be the subject of any petition seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any present or future federal or state act
or law relating to bankruptcy, insolvency or other relief for the Borrower or
Guarantor; (iii) have sought or consented to or acquiesce in the appointment of

                                       25

<PAGE>

any Trustee, Receiver, Conservator or Liquidator; or, (iv) be the subject of any
order, judgment or decree entered by any court of competent jurisdiction
approving a petition filed against such party for any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future federal or state act or law relating to
bankruptcy, insolvency or relief for the Borrower or Guarantor, the Lender shall
thereupon be entitled, and the Borrower irrevocably consents, to the entry of an
order by a bankruptcy court granting to the Lender, relief from any automatic
stay imposed by Section 362 of the Bankruptcy Code, or otherwise, on or against
the exercise of the rights and remedies otherwise available to the Lender the
Financing Documents or as otherwise provided by law or in equity, and the
Borrower or Guarantor irrevocably waives its right to object to, attempt to
enjoin or otherwise interfere with such relief and the exercise and enforcement
by the Lender of its rights and remedies following entry of such order. Without
limiting the generality of the immediately preceding sentence, the Borrower
agrees that the Lender will be entitled to immediate relief from the automatic
stay imposed by the Bankruptcy Code to allow the Lender to take any and all
actions necessary, desirable or appropriate to enforce any rights the Lender may
have under the Financing Documents, including but not limited to, the right to
possession of the Collateral, the right to prohibit the use of proceeds from the
sale of Collateral and/or the commencement or continuation of an action to
foreclose liens granted hereunder. The Borrower further agrees that the filing
of any petition for relief under the Bankruptcy Code which postpones, prevents,
delays or otherwise hinders the Lender's efforts to collect the amounts due
under the Financing Documents or to liquidate any of the Collateral shall be
deemed to have been filed in bad faith and, therefore, shall be subject to
prompt dismissal or conversion to a liquidation case under the Bankruptcy Code
upon motion therefore by the Lender. Further, the Borrower agrees it will not
seek, apply for or cause the entry of any order enjoining, staying or otherwise
prohibiting or interfering with the Lender's obtaining an order granting relief
from the automatic stay and enforcement of any rights which the Lender may have
under the Financing Documents, including but not limited to, the Lender's right
to possession of the Collateral.

         11.2 Acceleration of the Obligations. Without in any way limiting the
right of Lender to demand payment of any portion of the Obligations payable on
demand in accordance with this Agreement, upon or at any time after the
occurrence of an Event of Default as above provided, Lender may, in its
discretion (i) declare the principal of and any accrued interest on the Loans
and all other Obligations owing under any of the Financing Documents to be,
whereupon the same shall become, without further notice or demand (all of which
notice and demand Borrower expressly waives), forthwith due and payable and
Borrower shall forthwith pay to Lender the entire principal of and accrued and
unpaid interest on the Loans and other Obligations plus reasonable attorneys'
fees and expenses if such principal and interest are collected by or through an
attorney-at-law; and (ii) terminate the Facility.

         11.3 Remedies. Upon or at any time after the occurrence of an Event of
Default, Lender may, in its discretion, exercise from time to time all rights
and remedies available to Lender including, without limitation, the following
rights and remedies to enforce collection of the Obligations:

                                       26

<PAGE>

                  11.3.1. All of the rights and remedies of a secured party
under the UCC or under other Applicable Law, and all other legal and equitable
rights to which Lender may be entitled under any of the Financing Documents, all
of which rights and remedies shall be cumulative and shall be in addition to any
other rights and remedies contained in this Agreement or any of the other
Financing Documents, and none of which shall be exclusive.

                  11.3.2. The right to collect Accounts, Chattel Paper,
Instruments and General Intangibles and all other rights of Borrower to the
payment of money from any Person obligated therefor.

                  11.3.3. The right to take immediate possession of all tangible
items of the Collateral and (i) to require Borrower to assemble such Collateral,
at Borrower's expense, and make it available to Lender at a place designated by
Lender that is reasonably convenient to both parties and (ii) to enter any of
the premises of Borrower or wherever any of the Collateral shall be located, and
to keep and store the same on said premises until sold (and if said premises be
the Property of Borrower, Borrower agrees not to charge Lender for storage
thereof).

                  11.3.4. The right to sell or otherwise dispose of all or any
Inventory in its then condition, or after any further manufacturing or
processing thereof, at public or private sale or sales, with such notice as may
be required by law, in lots or in bulk, for cash or on credit, all as Lender, in
its sole discretion, may deem advisable; Borrower agrees that 10 days written
notice to Borrower of any public or private sale or other disposition of such
Collateral shall be reasonable notice thereof, and such sale shall be at such
locations as Lender may designate in said notice. Lender shall have the right to
conduct such sales on Borrower's premises, without charge therefor, and such
sales may be adjourned from time to time in accordance with Applicable Law;
Lender may sell, lease or otherwise dispose of such Collateral, or any part
thereof, for cash, credit or any combination thereof, and Lender may purchase
all or any part of such Collateral at public or, if permitted by Applicable Law,
private sale and, in lieu of actual payment of such purchase price, may set off
the amount of such price against the Obligations.

Lender is hereby irrevocably granted a license or other right to use throughout
the world, without royalty, fee or other charge, Borrower's labels, patents,
copyrights, rights of use of any name, trade secrets, tradenames, trademarks and
advertising matter, or any Property of a similar nature, as it pertains to the
Collateral, in advertising for sale and selling any Collateral and Borrower's
rights under all licenses and all franchise agreements shall inure to Lender's
benefit. Any proceeds realized from the sale or other disposition of any
Collateral may be applied to the Obligations, after allowing 2 Business Days for
collection, to principal, interest, fees and expenses (including Extraordinary
Expenses) in such order and manner as Lender, in its sole discretion, may
determine.

         11.4. Setoff. In addition to any Liens granted under any of the
Financing Documents and any rights now or hereafter available under Applicable
Law, Lender (and each of its Affiliates) is hereby authorized by Borrower at any
time that an Event of Default exists, without notice to Borrower or any other
Person (any such notice being hereby expressly waived) to set off and to
appropriate and to apply any and all deposits, general or special (including
Debt evidenced by certificates of deposit whether matured or unmatured (but not

                                       27

<PAGE>

including trust accounts)) and any other Debt at any time held or owing by
Lender or any of its Affiliates to or for the credit or the account of Borrower
against and on account of the Obligations of Borrower arising under the
Financing Documents to Lender or any of its Affiliates, including all Loans
Outstanding and all claims of any nature or description arising out of or in
connection with this Agreement, irrespective of whether or not (i) Lender shall
have made any demand hereunder, (ii) Lender shall have declared the principal of
and interest on the Loans and other amounts due hereunder to be due and payable
as permitted by this Agreement and even though such Obligations may be
contingent or unmatured or (iii) the Collateral for the Obligations is adequate.

         11.5     Remedies Cumulative; No Waiver.

                  11.5.1. All covenants, conditions, provisions, warranties,
guaranties, indemnities, and other undertakings of Borrower contained in this
Agreement and the other Financing Documents, or in any document referred to
herein or contained in any agreement supplementary hereto or in any schedule or
in any Guaranty given to Lender or contained in any other agreement between
Lender and Borrower, heretofore, concurrently, or hereafter entered into, shall
be deemed cumulative to and not in derogation or substitution of any of the
terms, covenants, conditions, or agreements of Borrower herein contained. The
rights and remedies of Lender under this Agreement and the other Loan Documents
shall be cumulative and not exclusive of any rights or remedies that Lender
would otherwise have.

                  11.5.2. The failure or delay of Lender to require strict
performance by Borrower or Guarantor of any provision of any of the Financing
Documents or to exercise or enforce any rights, Liens, powers or remedies under
any of the Financing Documents or with respect to any Collateral shall not
operate as a waiver of such performance, Liens, rights, powers and remedies, but
all such requirements, Liens, rights, powers, and remedies shall continue in
full force and effect until all Loans and all other Obligations owing or to
become owing from Borrower to Lender shall have been fully satisfied. None of
the undertakings, agreements, warranties, covenants and representations of
Borrower contained in this Agreement or any of the other Loan Documents and no
Event of Default by Borrower under this Agreement or any other Financing
Documents shall be deemed to have been suspended or waived by Lender, unless
such suspension or waiver is by an instrument in writing specifying such
suspension or waiver and is signed by a duly authorized representative of Lender
and directed to Borrower.

                  11.5.3. If Lender shall accept performance by Borrower, in
whole or in part, of any obligation that Borrower is required by any of the
Financing Documents to perform only when a Default or Event of Default exists,
or if Lender shall exercise any right or remedy under any of the Financing
Documents that may not be exercised other than when a Default or Event of
Default exists, Lender's acceptance of such performance by Borrower or Lender's
exercise of any such right or remedy shall not operate to waive any such Event
of Default or to preclude the exercise by Lender of any other right or remedy,
unless otherwise expressly agreed in writing by Lender, as the case may be.

                                       28

<PAGE>

SECTION 12.       BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS

         12.1. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of Borrower and Lender and their respective successors and
assigns, except that Borrower shall not have the right to assign its rights or
delegate performance of any of its obligations under any of the Financing
Documents. Borrower hereby consents to Lender's participation, sale, assignment,
transfer or other disposition, at any time or times hereafter, of all of any
part of the Obligations, this Agreement and any of the other Financing
Documents, or of any portion hereof or thereof, including Lender's rights,
title, interests, remedies, powers, and duties hereunder or thereunder. In the
case of an assignment, the assignee shall have, to the extent of such
assignment, the same rights, benefits and obligations as it would if it were
"Lender" hereunder, and Lender shall be relieved of all obligations hereunder
upon any such assignment. Borrower further agrees that Lender may disclose
credit information regarding Borrower to any potential participant or assignee.

         12.2. Participations.

                  12.2.1. Permitted Participants; Effect. Lender may, in the
ordinary course of its business and in accordance with Applicable Law, at any
time sell to one or more banks or other financial institutions (each a
"Participant") a participating interest in any of the Obligations owing to
Lender or any other interest of Lender under any of the Financing Documents. In
the event of any such sale by Lender of participating interests to a
Participant, Lender's obligations under the Loan Documents shall remain
unchanged, Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, Lender shall remain the holder of any
Note for all purposes under the Financing Documents, all amounts payable by
Borrower under this Agreement and any of the Notes shall be determined as if
Lender had not sold such participating interests, and Borrower shall continue to
deal solely and directly with Lender in connection with Lender's rights and
obligations under the Financing Documents. If Lender sells a participation to a
Person other than an Affiliate of Lender, then Lender shall give prompt written
notice thereof to Borrower.

                  12.2.2. Voting Rights. Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment, modification or
waiver of any provision of the Financing Documents other than in the case of any
Participant, an amendment, modification or waiver with respect to any Loans in
which such Participant has an interest which forgives principal, interest or
fees or reduces the stated interest rate or the stated rates at which fees are
payable with respect to any such Loan, postpones the Commitment Termination
Date, or any date fixed for any regularly scheduled payment of interest or fees
on such Loan, or releases from liability Borrower or releases any substantial
portion of any of the Collateral.

                  12.2.3. Benefit of Set-Off. Borrower agrees that each
Participant shall be deemed to have the right of set-off provided in Section
11.4 hereof in respect of its participating interest in amounts owing under the
Financing Documents to the same extent and subject to the same requirements
under this Agreement as if the amount of its participating interest were owing
directly to it as a Lender under the Financing Documents, provided that Lender
shall retain the right of set-off provided in Section 11.4 hereof with respect
to the amount of participating interests sold to each Participant. Lender agrees
to share with each Participant, and each Participant by exercising the right of
set-off provided in Section 11.4 agrees to share with Lender, any amount
received pursuant to the exercise of its right of set-off.

                                       29

<PAGE>

                  12.2.4. Notices. Lender shall be solely responsible for
notifying its Participants of any matters relating to the Financing Documents to
the extent that any such notice may be required.

SECTION 13.       MISCELLANEOUS

         13.1. Power of Attorney. Borrower hereby irrevocably designates, makes,
constitutes and appoints Lender (and all Persons designated by Lender) as
Borrower's true and lawful attorney (and agent-in-fact) and Lender, or Lender's
designee, may, without notice to Borrower and in either Borrower's or Lender's
name, but at the cost and expense of Borrower:

                  13.1.1. At such time or times as Lender or said designee, in
its sole discretion, may determine, endorse Borrower's name on any Payment Item
or proceeds of the Collateral which come into the possession of Lender or under
Lender's control.

                  13.1.2. At any time that an Event of Default exists: (i)
demand payment of the Accounts from the Account Debtors, enforce payment of the
Accounts by legal proceedings or otherwise, and generally exercise all of
Borrower's rights and remedies with respect to the collection of the Accounts;
(ii) settle, adjust, compromise, discharge or release any of the Accounts or
other Collateral or any legal proceedings brought to collect any of the Accounts
or other Collateral; (iii) sell or assign any of the Accounts and other
Collateral upon such terms, for such amounts and at such time or times as Lender
deems advisable; (iv) take control, in any manner, of any item of payment or
proceeds relating to any Collateral; (v) prepare, file and sign Borrower's name
to a proof of claim in bankruptcy or similar document against any Account Debtor
or to any notice of lien, assignment or satisfaction of Lien or similar document
in connection with any of the Collateral; (vi) receive, open and dispose of all
mail addressed to Borrower and to notify postal authorities to change the
address for delivery thereof to such address as Lender may designate; (vii)
endorse the name of Borrower upon any of the items of payment or proceeds
relating to any Collateral and deposit the same to the account of Lender on
account of the Obligations; (viii) endorse the name of Borrower upon any Chattel
Paper, Document, Instrument, invoice, freight bill, bill of lading or similar
document or agreement relating to any Accounts or Inventory of any Obligor and
any other Collateral; (ix) use Borrower's stationery and sign the name of
Borrower to verifications of the Accounts and notices thereof to Account
Debtors; (x) use the information recorded on or contained in any data processing
equipment and computer hardware and software relating to the Accounts, Inventory
and any other Collateral; (xi) make and adjust claims under policies of
insurance; and (xii) do all other acts and things necessary, in Lender's
determination, to fulfill Borrower's obligations under this Agreement.

                                       30

<PAGE>

         13.2. General Indemnity. Borrower hereby agrees to indemnify and defend
the Lender Indemnitees and to hold the Lender Indemnitees harmless from and
against any Claim ever suffered or incurred by any of the Lender Indemnitees
arising out of or related to this Agreement or any of the other Financing
Documents, the performance by Lender of its duties or the exercise of any of its
rights or remedies hereunder, or the result of Borrower's failure to observe,
perform or discharge any of Borrower's duties hereunder. Borrower shall also
indemnify and defend the Lender Indemnitees against and save the Lender
Indemnitees harmless from all Claims of any Person arising out of, related to,
or with respect to any transactions entered into pursuant to this Agreement or
Lender's Lien upon the Collateral. Without limiting the generality of the
foregoing, these indemnities shall extend to any Claims asserted against any of
the Lender Indemnitees by any Person under any Environmental Laws or similar
laws by reason of Borrower's or any other Person's failure to comply with laws
applicable to solid or hazardous waste materials or other toxic substances.
Additionally, if any Taxes (excluding Taxes imposed upon or measured solely by
the net income of Lender, but including, any intangibles tax, stamp tax,
recording tax or franchise tax) shall be payable by Lender or any Obligor on
account of the execution or delivery of this Agreement, or the execution,
delivery, issuance or recording of any of the other Financing Documents, or the
creation or repayment of any of the Obligations hereunder, by reason of any
Applicable Law now or hereafter in effect, Borrower shall pay (or will promptly
reimburse Lender for the payment of) all such Taxes, including any interest and
penalties thereon, and will indemnify and hold Lender Indemnitees harmless from
and against liability in connection therewith. The foregoing indemnities shall
not apply to protect any of the Lender Indemnitees for the consequences of their
own gross negligence or willful misconduct.

         13.3. Survival of All Indemnities. Notwithstanding anything to the
contrary in this Agreement or any of the other Financing Documents, the
obligations of Borrower and Lender with respect to each indemnity given by it in
this Agreement, whether given by Borrower to Lender Indemnitees, shall survive
the Full Payment of the Obligations and the termination of the Facility.

         13.4. Indulgences Not Waivers. Lender's failure at any time or times
hereafter, to require strict performance by Borrower of any provision of this
Agreement shall not waive, affect or diminish any right of Lender thereafter to
demand strict compliance and performance therewith.

         13.5. Modification of Agreement. This Agreement may not be modified,
altered or amended, except by an agreement in writing signed by Borrower and
Lender.

         13.6. Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
Applicable Law, but if any provision of this Agreement shall be prohibited by or
invalid under Applicable Law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.

                                       31

<PAGE>

         13.7. Cumulative Effect; Conflict of Terms. To the fullest extent
permitted by Applicable Law, the provisions of the Other Agreements and the
Security Documents are hereby made cumulative with the provisions of this
Agreement. Except as otherwise provided in any of the other Financing Documents
by specific reference to the applicable provision of this Agreement, if any
provision contained in this Agreement is in direct conflict with, or
inconsistent with, any provision in any of the other Financing Documents, the
provision contained in this Agreement shall govern and control.

         13.8. Execution in Counterparts. This Agreement and any amendments
hereto may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which counterparts taken together
shall constitute but one and the same instrument.

         13.9. Lender's Consent. Whenever Lender's consent is required to be
obtained under this Agreement or any of the other Financing Documents as a
condition to any action, inaction, condition or event, Lender shall be
authorized to give or withhold its consent in its sole and absolute discretion
and to condition its consent upon the giving of additional collateral security
for the Obligations, the payment of money or any other matter.

         13.10. Notices. All notices, requests and demands to or upon a party
hereto shall be in writing and shall be sent by certified or registered mail,
return receipt requested, personal delivery against receipt or by telecopier or
other facsimile transmission and shall be deemed to have been validly served,
given or delivered when delivered against receipt or 3 Business Days after
deposit in the U.S. mail, certified mail postage prepaid, or, in the case of
facsimile transmission, when received (if on a Business Day and, if not received
on a Business Day, then on the next Business Day after receipt) at the office
where the noticed party's telecopier is located, in each case addressed to the
noticed party at the address shown for such party on the signature page hereof.
Notwithstanding the foregoing, no notice to or upon Lender pursuant to Sections
3.1 or 5.2.2 shall be effective until after actually received by the individual
to whose attention at Lender such notice is required to be sent. Any written
notice or demand that is not sent in conformity with the provisions hereof shall
nevertheless be effective on the date that such notice is actually received by
the noticed party.

         13.11. Performance of Borrower's Obligations. If Borrower shall fail to
discharge any covenant, duty or obligation hereunder or under any of the other
Financing Documents, Lender may, in its sole discretion at any time or from time
to time, for Borrower's account and at Borrower's expense, pay any amount or do
any act required of Borrower hereunder or under any of the Financing Documents
or otherwise lawfully requested by Lender to enforce any of the Financing
Documents or Obligations, preserve, protect, insure or maintain any of the
Collateral, or preserve, defend, protect or maintain the validity or priority of
Lender's Liens in any of the Collateral, including the payment of any judgment
against Borrower, any insurance premium, any warehouse charge, any finishing or
processing charge, any landlord claim, any other Lien upon or with respect to
any of the Collateral. All payments that Lender may make under this Section and
all out-of-pocket costs and expenses (including Extraordinary Expenses) that
Lender pays or incurs in connection with any action taken by it hereunder shall
be reimbursed to Lender by Borrower on demand with interest from the date such
payment is made or such costs or expenses are incurred to the date of payment
thereof at the Default Rate. Any payment made or other action taken by Lender
under this Section shall be without prejudice to any right to assert, and
without waiver of, an Event of Default hereunder and to proceed thereafter as
provided herein or in any of the other Loan Documents.

                                       32

<PAGE>

         13.12. Time of Essence. Time is of the essence of this Agreement, the
Other Agreements and the Security Documents.

         13.13. Entire Agreement; Appendix A and Exhibits. This Agreement and
the other Financing Documents, together with all other instruments, agreements
and certificates executed by the parties in connection therewith or with
reference thereto, embody the entire understanding and agreement between the
parties hereto and thereto with respect to the subject matter hereof and thereof
and supersede all prior agreements, understandings and inducements, whether
express or implied, oral or written. Appendix A and each of the Exhibits
attached hereto are incorporated into this Agreement and by this reference made
a part hereof.

         13.14. Interpretation. No provision of this Agreement or any of the
other Financing Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having, or being deemed to have, structured,
drafted or dictated such provision.

         13.15. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida.

         13.16. Waivers by Borrower. To the fullest extent permitted by
Applicable Law, Borrower waives (i) the right to trial by jury (which Lender
hereby also waives) in any action, suit, proceeding or counterclaim of any kind
arising out of or related to any of the Financing Documents, the Obligations or
the Collateral; (ii) presentment, demand and protest and notice of presentment,
protest, default, non payment, 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 Lender
on which Borrower may in any way be liable and hereby ratifies and confirms
whatever Lender may do in this regard; (iii) notice prior to taking possession
or control of the Collateral or any bond or security which might be required by
any court prior to allowing Lender to exercise any of Lender's remedies; (iv)
the benefit of all valuation, appraisement and exemption laws; and (v) notice of
acceptance hereof. Borrower acknowledges that the foregoing waivers are a
material inducement to Lender's entering into this Agreement and that Lender is
relying upon the foregoing waivers in its future dealings with Borrower.
Borrower warrants and represents that it has reviewed the foregoing waivers with
its legal counsel and has knowingly and voluntarily waived its jury trial rights
following consultation with legal counsel. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court in which
such litigation is brought.

                         [SIGNATURES ON FOLLOWING PAGE]

                                       33

<PAGE>

         IN WITNESS WHEREOF, this Agreement has been duly executed on the day
and year specified at the beginning of this Agreement.

                                                     BORROWER:

                       HEALTHCARE QUALITY SOLUTIONS, INC.

                                                By:
                                                    ----------------------------
                                                     B.M. Milvain, President

                                                405 North Reo Street, Suite 300
                                                Tampa, Florida 33609
                                                Telephone No.: (813) 282-3303
                                                Telecopier No.: (813) 282-8907

                                                LENDER:

                                                STANFORD VENTURE CAPITAL
                                                HOLDINGS, INC.

                                                By:
                                                    ----------------------------
                                                     James M. Davis, President

                                                6075 Poplar Avenue
                                                Suite 202
                                                Memphis, Tennessee
                                                Attention: James M. Davis
                                                Telecopier No.: (901) 680-5265

                                       34

<PAGE>

                                   APPENDIX A

                               GENERAL DEFINITIONS

         When used in the Loan and Security Agreement dated July 6, 2004 (as at
any time amended, the "Agreement"), by and between HEALTHCARE QUALITY SOLUTIONS,
INC., a Florida corporation (collectively, the "Borrower"), and STANFORD VENTURE
CAPITAL HOLDINGS, INC., a Delaware corporation, (together with its successors
and assigns, the "Lender"), the following terms shall have the following
meanings (terms defined in the singular to have the same meaning when used in
the plural and vice versa):

                  Account - shall have the meaning ascribed to "account" in the
         UCC and shall include a right to payment for goods sold or leased or
         for services rendered that is not evidenced by an Instrument or Chattel
         Paper, whether or not any such right to payment has been earned by
         performance.

                  Account Debtor - any Person who is or may become obligated
         under or on account of an Account.

                  Affiliate - a Person (other than a Subsidiary): (i) which
         directly or indirectly through one or more intermediaries controls, or
         is controlled by, or is under common control with, another Person; (ii)
         which beneficially owns or holds 10% or more of any class of the Equity
         Interests of another Person; or (iii) 10% or more of the Equity
         Interests of which is beneficially owned or held by another Person or a
         Subsidiary of another Person.

                  Agreement - the Loan and Security Agreement referred to in the
         first sentence of this Appendix A, all Exhibits thereto and this
         Appendix A.

                  Applicable Law - all laws, rules and regulations applicable to
         the Person, conduct, transaction, covenant or Financing Documents in
         question, including all applicable common law and equitable principles;
         all provisions of all applicable state and federal constitutions,
         statutes, rules, regulations and orders of governmental bodies; and
         orders, judgments and decrees of all courts and arbitrators.

                  Availability - on any date, an amount equal to the difference
         derived when the sum of the principal amount of Revolver Loans then
         outstanding (including any amounts that Lender may have paid for the
         account of Borrower pursuant to any of the Financing Documents and that
         have not been reimbursed by Borrower) is subtracted from the Gross
         Availability on such date; provided that in no event shall the
         Availability be deemed to exceed the following amounts on the following
         dates, in each case in addition to up to $400,000 as and when needed to
         satisfy an up to $400,000 payment to the Internal Revenue Service
         assumed in connection with the purchase of assets from the Assignee of
         Provider Solutions corporation:

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<PAGE>

                  July 6, 2004              $300,000
                  July 31, 2004             $550,000
                  August 15, 2004           $850,000
                  October 15, 2004          $1,050,000
                  November 15, 2004         $1,200,000

                  Provided, further that the increase of the Availability on
         August 15, 2004 and October 15, 2004 is subject to the timely filing by
         the Guarantor of a Form 10-QSB for the quarter ended June 30, 2004 that
         sets forth a consolidated EBITDA of ($50,000) or better; and provided
         further the increase of the Availability on November 15, 2004 is
         subject to the timely filing by the Guarantor of a Form 10-QSB for the
         quarter ended September 30, 2004 that sets forth a consolidated EBITDA
         of $50,000 or better. If the amount outstanding is equal to or greater
         than the Gross Availability, Availability is 0.

                  Availability Reserve - on any date of determination thereof,
         an amount equal to the sum of the following (without duplication): (i)
         a reserve for general Inventory shrinkage that is determined by Lender
         from time to time in its reasonable credit judgment based upon
         Borrower's historical losses due to such shrinkage; (ii) any amount
         that Borrower is obligated to pay pursuant to the provisions of any of
         the Financing Documents that Lender elects to pay for the account of
         Borrower in accordance with authority contained in any of the Financing
         Documents; (iii) all amounts of rent or other charges that accrue after
         the Effective Date and are past due and payable and owing at such time
         by Borrower to any landlord of any premises where any of the Collateral
         is located plus, commencing on the 30th day prior to the date on which
         Borrower shall be obligated to assume or reject any lease of a premises
         where any of the Collateral is located, the amount of any rent or other
         charges that accrued prior to the Effective Date and that remain unpaid
         under such lease; (iv) such additional reserves as Lender may, in its
         sole credit judgment, determine to be appropriate from time to time to
         protect Lender against any changes in the composition, amount, quality,
         nature or value of any Collateral or the priority of Lender's Liens
         upon the Collateral.

                  Bankruptcy Code - title 11 of the United States Code.

                  Board of Governors - the Board of Governors of the Federal
         Reserve Board.

                  Borrowing - a borrowing consisting of Loans made on the same
         day by Lender.

                  Business Day - any day excluding Saturday, Sunday and any day
         which is a legal holiday under the laws of the State of Florida or is a
         day on which banking institutions located in such state are closed.

                  Capital Expenditures - expenditures made for the acquisition
         of any fixed assets or improvements, replacements, substitutions or
         additions thereto which have a useful life of more than one year,
         including the total principal portion of Capitalized Lease Obligations.

                                       36

<PAGE>

                  Capitalized Lease Obligation - any Debt represented by
         obligations under a lease that is required to be capitalized for
         financial reporting purposes in accordance with GAAP.

                  Cash Collateral - cash or Cash Equivalents, and any interest
         earned thereon, that is deposited with Lender in accordance with the
         Agreement as security for the Obligations to the extent provided in the
         Agreement.

                  Cash Collateral Account - a demand deposit, money market or
         other account established by Lender at such financial institution as
         Lender may select in its discretion, which account shall be in Lender's
         name and subject to Lender's Liens.

                  Cash Equivalents - (i) marketable direct obligations issued or
         unconditionally guaranteed by the United States government and backed
         by the full faith and credit of the United States government having
         maturities of not more than 12 months from the date of acquisition;
         (ii) domestic certificates of deposit and time deposits having
         maturities of not more than 12 months from the date of acquisition,
         bankers' acceptances having maturities of not more than 12 months from
         the date of acquisition and overnight bank deposits, in each case
         issued by any commercial bank organized under the laws of the United
         States, any state thereof or the District of Columbia, which at the
         time of acquisition are rated A-1 (or better) by S&P or P-1 (or better)
         by Moody's, and (unless issued by Lender) not subject to offset rights
         in favor of such bank arising from any banking relationship with such
         bank; (iii) repurchase obligations with a term of not more than 30 days
         for underlying securities of the types described in clauses (i) and
         (ii) entered into with any financial institution meeting the
         qualifications specified in clause (ii) above; and (iv) commercial
         paper having at the time of investment therein or a contractual
         commitment to invest therein a rating of A-1 (or better) by S&P or P-1
         (or better) by Moody's, and having a maturity within 9 months after the
         date of acquisition thereof.

                  CERCLA - the Comprehensive Environmental Response Compensation
         and Liability Act, 42 U.S.C. ss. 9601 et seq. and its implementing
         regulations.

                  Chattel Paper - shall have the meaning ascribed to the term
         "chattel paper" in the UCC.

                  Claims - any and all claims, demands, liabilities,
         obligations, losses, damages, penalties, actions, judgments, suits,
         awards, remedial response costs, expenses or disbursements of any kind
         or nature whatsoever (including reasonable attorneys', accountants',
         consultants' or paralegals' fees and expenses), whether arising under
         or in connection with the Financing Documents, any Applicable Law
         (including any Environmental Laws) or otherwise, that may be suffered
         or incurred by a Person prior to, on or after the Effective Date and
         whether suffered or incurred in or as a result of any investigation,
         litigation, arbitration or other judicial or non-judicial proceeding or
         any appeals related thereto.

                                       37

<PAGE>

                  Closing Date - the date on which all of the conditions
         precedent in Section 10.1 of the Agreement are satisfied and the
         initial Loans are made under the Agreement.

                  Collateral - all of the Property and interests in Property of
         Borrower that are described in Section 6 of the Agreement, and all
         other Property and interests in Property that now or hereafter secure
         the payment and performance of any of the Obligations, whether or not
         such Property or interest in Property was in existence on or acquired
         by Borrower after the Effective Date.

                  Commercial Tort Claim - shall have the meaning ascribed to
         "commercial tort claim" in the UCC.

                  Commitment Termination Date - the date that is the soonest to
         occur of: (i) the last day of the Term, (ii) the effective date of any
         sale of all or a substantial part of the Collateral, or (iii) the date
         on which Lender terminates the Facility pursuant to Section 5.2.1 of
         the Agreement.

                  Compliance Certificate - a Compliance Certificate to be
         provided by Borrower to Lender in accordance with, and in the form
         annexed as Exhibit C to, the Agreement, and the supporting schedules to
         be annexed thereto.

                  Contingent Obligation - with respect to any Person, any
         obligation of such Person arising from any guaranty, indemnity, or
         other assurance of payment or performance of any Debt, lease, dividend
         or other obligation ("primary obligations") of any other Person (the
         "primary obligor") in any manner, whether directly or indirectly,
         including (i) the direct or indirect guaranty endorsement (other than
         for collection or deposit in the Ordinary Course of Business),
         co-making, discounting with recourse or sale with recourse by such
         Person of the obligation of a primary obligor, (ii) the obligation to
         make take-or-pay or similar payments, if required, regardless of
         non-performance by any other party or parties to an agreement, (iii)
         any obligation of such Person, whether or not contingent, (A) to
         purchase any such primary obligation or any Property constituting
         direct or indirect security therefor, (B) to advance or supply funds
         (1) for the purchase or payment of any such primary obligations or (2)
         to maintain working capital or equity capital of the primary obligor or
         otherwise to maintain the net worth or solvency of the primary obligor,
         (C) to purchase Property, Securities or services primarily for the
         purpose of assuring the owner of any such primary obligation of the
         ability of the primary obligor to make payment of such primary
         obligation or (D) otherwise to assure or hold harmless the holder of
         such primary obligation against loss in respect thereof; provided,
         however, that the term "Contingent Obligation" shall not include any
         product warranties extended in the Ordinary Course of Business. The
         amount of any Contingent Obligation shall be deemed to be an amount
         equal to the stated or determinable amount of the primary obligation
         with respect to which such Contingent Obligation is made (or, if less,
         the maximum amount of such primary obligation for which such Person may
         be liable pursuant to the terms of the instrument evidencing such
         Contingent Obligation) or, if not stated or determinable, the maximum
         reasonably anticipated liability with respect thereto (assuming such
         Person is required to perform thereunder), as determined by such Person
         in good faith.

                                       38

<PAGE>

                  Current Assets - at any date, the amount at which all of the
         current assets of a Person would be properly classified as current
         assets shown on a balance sheet at such date, in accordance with GAAP,
         except that amounts due from Affiliates and investments in Affiliates
         shall be excluded therefrom.

                  Debt - as applied to a Person means, without duplication: (i)
         all items which in accordance with GAAP would be included in
         determining total liabilities as shown on the liability side of a
         balance sheet of such Person on the date as of which Debt is to be
         determined, including Capitalized Lease Obligations; (ii) all
         obligations of other Persons which such Person has guaranteed; (iii)
         all reimbursement obligations in connection with letters of credit or
         letter of credit guaranties issued for the account of such Person; and
         (iv) in the case of Borrower (without duplication), the Obligations.

                  Default - an event or condition the occurrence of which would,
         with the lapse of time or the giving of notice, or both, become an
         Event of Default.

                  Default Rate - on any date, a rate per annum that is equal to
         15%.

                  Deposit Account - shall have the meaning ascribed to "deposit
         account" in the UCC and shall include any demand, time, savings,
         passbook, money market or other depository account, or a certificate of
         deposit, maintained by Borrower with any bank, savings and loan
         association, credit union or other depository institution.

                  Disbursements - the total of "advance requests" as shown on
         the Budget.

                  Distribution - in respect of any entity, (i) any payment of
         any dividends or other distributions on Equity Interests of the entity
         (except distributions in such Equity Interests) and (ii) any purchase,
         redemption or other acquisition or retirement for value of any Equity
         Interests of the entity or any Affiliate of the entity unless made
         contemporaneously from the net proceeds of the sale of Equity
         Interests.

                  Document - shall have the meaning ascribed to the term
         "document" in the UCC.

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

                                       39

<PAGE>

                  Dominion Account - a special account of Lender established by
         Borrower at a bank selected by Borrower, but acceptable to Lender in
         its discretion, and over which Lender shall have sole and exclusive
         access and control for withdrawal purposes.

                  EBITDA - shall mean consolidated earnings of the Guarantor
         before interest, taxes, depreciation and amortization, all in
         accordance with GAAP.

                  Effective Date - July 6, 2004.

                  Environmental Laws - all federal, state and local laws, rules,
         regulations, ordinances, programs, permits, guidance documents
         promulgated by regulatory agencies, orders and consent decrees relating
         to human health and safety or the protection or pollution of the
         environment, including CERCLA.

                  Environmental Release - a release as defined in CERCLA or
         under any applicable Environmental Laws.

                  Equipment - shall have the meaning ascribed to the term
         "equipment" in the UCC.

                  Equity Interest - the interest of a shareholder in a
         corporation, a partner (whether general or limited) in a partnership
         (whether general, limited or limited liability), a member in a limited
         liability company, or any other Person having any other form of equity
         security.

                  ERISA - the Employee Retirement Income Security Act of 1974
         and all rules and regulations from time to time promulgated thereunder.

                  Event of Default - as defined in Section 11 of the Agreement.

                  Extraordinary Expenses - all reasonable costs, expenses, fees
         (including fees incurred to Lender Professionals) or advances that
         Lender may suffer or incur, whether prior to or after the occurrence of
         an Event of Default, on account of or in connection with (i) the audit,
         inspection, repossession, storage, repair, appraisal, insuring,
         completion of the manufacture of, preparing for sale, advertising for
         sale, selling, collecting or otherwise preserving or realizing upon any
         Collateral; (ii) the defense of Lender's Lien upon any Collateral or
         the priority thereof or any adverse claim with respect to the Loans,
         the Financing Documents or the Collateral asserted by any Obligor, any
         receiver or trustee for any Obligor or any creditor or representative
         of creditors of any Obligor; (iii) the settlement or satisfaction of
         any Liens upon any Collateral (whether or not such Liens are Permitted
         Liens); (iv) the collection or enforcement of any of the Obligations;
         (v) the negotiation, documentation, and closing of any restructuring or
         forbearance agreement with respect to the Financing Documents or
         Obligations; (vi) amounts advanced by Lender pursuant to Section 7.1.3
         of the Agreement; (vii) the enforcement of any of the provisions of any
         of the Financing Documents; or (viii) any payment under indemnity or
         other payment agreement provided by Lender to any financial institution
         in connection with any Dominion Account or any lockbox arrangement.
         Such costs, expenses and advances may include transfer fees, taxes,
         storage fees, insurance costs, permit fees, utility reservation and
         standby fees, legal fees, appraisal fees, brokers' fees and
         commissions, auctioneers' fees and commissions, consultants' fees,
         accountants' fees, environmental study fees, wages and salaries paid to

                                       40

<PAGE>

         employees of Borrower or independent contractors in liquidating any
         Collateral, travel expenses, all other fees and expenses payable or
         reimbursable by Borrower or any other Obligor under any of the
         Financing Documents, and all other fees and expenses associated with
         the enforcement of rights or remedies under any of the Financing
         Documents, but excluding compensation paid to employees (including
         inside legal counsel who are employees) of Lender.

                  FEIN - with respect to any Person, the Federal Employer
         Identification Number of such Person.

                  Facility - the $1,600,000.00 credit facility established by
         Lender in favor of Borrower under Section 1 of the Agreement consisting
         of the Revolver Commitment.

                  Financing Documents - the Agreement, the Other Agreements and
         the Security Documents and any and all other agreements, instruments
         and documents now or hereafter executed by Borrower in favor of Lender
         with respect to any of the transactions contemplated by the Agreement.

                  Fiscal Year - the fiscal year of Borrower and its Subsidiaries
         for accounting and tax purposes, which ends on the last Friday of each
         year.

                  FLSA - the Fair Labor Standards Act of 1938.

                  Full Payment - with respect to any Debt (including the
         Obligations), full, final and indefeasible payment of such Debt in cash
         or immediately available funds and, in the case of any Contingent
         Obligations, Lender's receipt of either cash or a direct pay letter of
         credit naming Lender as beneficiary and in form and substance, and from
         an issuing bank, acceptable to Lender, in each case in an amount not
         less than 105% of the aggregate amount of all such contingent Debt.

                  GAAP - generally accepted accounting principles in the United
         States of America in effect from time to time.

                  General Intangible - shall have the meaning ascribed to the
         term "general intangible" in the UCC and shall include all interests in
         Intellectual Property.

                  Governmental Approvals - all authorizations, consents,
         approvals, licenses and exemptions of, registrations and filings with,
         and reports to, all Governmental Authorities.

                                       41

<PAGE>

                  Governmental Authority - any federal, state, municipal,
         national or other governmental department, commission, board, bureau,
         court, agency or instrumentality or political subdivision thereof or
         any entity or officer exercising executive, legislative, judicial,
         regulatory or administrative functions of or pertaining to any
         government or any court, in each case whether associated with a state
         of the United States, the District of Columbia or a foreign entity or
         government.

                  Gross Availability - The amount set forth in the Budget as the
         maximum amount to be drawn hereunder as of the end of the month
         immediately prior to the date in question, up to the amount of the
         Facility.

               Guarantor - Health Systems Solutions, Inc., a Nevada corporation.

                  Indemnified Amount - the amount of any loss, cost, expenses or
         damages suffered or incurred by Lender Indemnitees and against which
         Lender and/or Borrower have agreed to indemnify such Lender Indemnitees
         pursuant to the terms of the Agreement or any of the other Financing
         Documents.

                  Insolvency Proceeding - any action, case or proceeding
         commenced by or against a Person, or any agreement of such Person, for
         (a) the entry of an order for relief under any chapter of the
         Bankruptcy Code or other insolvency or debt adjustment law (whether
         state, federal or foreign), (b) the appointment of a receiver, trustee,
         liquidator or other custodian for such Person or any part of its
         Property, (c) an assignment or trust mortgage for the benefit of
         creditors of such Person, or (d) the liquidation, dissolution or
         winding up of the affairs of such Person.

                  Instrument - shall have the meaning ascribed to the term
         "instrument" in the UCC.

                  Intellectual Property - Property constituting under any
         Applicable Law a patent, patent application, copyright, trademark,
         service mark, tradename, mask work, trade secret or license or other
         right to use any of the foregoing.

                  Intellectual Property Claim - the assertion by any Person of a
         claim (whether asserted in writing, by action, suit or proceeding or
         otherwise) that Borrower's ownership, use, marketing, sale or
         distribution of any Inventory, Equipment, Intellectual Property or
         other Property is violative of any ownership of or right to use any
         Intellectual Property of such Person.

                  Inventory - shall have the meaning ascribed to "inventory" in
         the UCC and shall include, in the case of Borrower, all goods intended
         for sale or lease by Borrower, or for display or demonstration; all
         work in process; all raw materials and other materials and supplies of
         every nature and description used or which might be used in connection
         with the manufacture, printing, packing, shipping, advertising,
         selling, leasing or furnishing of such goods or otherwise used or
         consumed in Borrower's business; and all Documents evidencing and
         General Intangibles relating to any of the foregoing, whether now owned
         or hereafter acquired by Borrower.

                                       42

<PAGE>

                  Investment Property - shall have the meaning ascribed to
         "investment property" in the UCC.

                  Lender Indemnities - Lender and all of its present and future
         officers, directors and agents.

                  Lender Professionals - attorneys, accountants, appraisers,
         business valuation experts, environmental engineers or consultants,
         turnaround consultants and other professionals or experts retained by
         Lender.

                  Letter-of-Credit Right - shall have the meaning ascribed to
         the term "letter-of-credit right" in the UCC.

                  Lien - any interest in Property securing an obligation owed
         to, or a claim by, a Person other than the owner of the Property,
         whether such interest is based on common law, statute or contract. The
         term "Lien" shall also include reservations, exceptions, encroachments,
         easements, rights-of-way, covenants, conditions, restrictions, leases
         and other title exceptions and encumbrances affecting Property. For the
         purpose of the Agreement, Borrower shall be deemed to be the owner of
         any Property which it has acquired or holds subject to a conditional
         sale agreement or other arrangement pursuant to which title to the
         Property has been retained by or vested in some other Person for
         security purposes.

                  Loan - a Revolver Loan.

                  Loan Account - the loan account established by Lender on its
         books pursuant to Section 4.6 of the Agreement.

                  Material Adverse Effect - the effect of any event, condition,
         act, omission or circumstance, which, alone or when taken together with
         other events, conditions, acts, omissions or circumstances occurring or
         existing concurrently therewith, (i) has a material adverse effect upon
         the business, operations, Properties or condition (financial or
         otherwise) of any Obligor; (ii) has or may be reasonably expected to
         have any material adverse effect whatsoever upon the validity or
         enforceability of the Agreement or any of the other Financing
         Documents; (iii) has any material adverse effect upon the value of the
         whole or any material part of the Collateral, the Liens of Lender with
         respect to the Collateral or the priority of any such Liens; (iv)
         materially impairs the ability of any Obligor to perform its
         obligations under the Agreement or any of the other Financing
         Documents, including repayment of any of the Obligations when due; or
         (v) materially impairs the ability of Lender to enforce or collect the
         Obligations or realize upon any of the Collateral in accordance with
         the Financing Documents and Applicable Law.

                                       43

<PAGE>

                  Material Contract - any agreement between Borrower and one or
         more other Persons, the termination of which could reasonably be
         expected to have a Material Adverse Effect.

                  Maximum Rate - the maximum non-usurious rate of interest
         permitted by Applicable Law that at any time, or from time to time, may
         be contracted for, taken, reserved, charged or received on the Debt in
         question or, to the extent that at any time Applicable Law may
         thereafter permit a higher maximum non-usurious rate of interest, then
         such higher rate. Notwithstanding any other provision hereof, the
         Maximum Rate shall be calculated on a daily basis (computed on the
         actual number of days elapsed over a year of 365 or 366 days, as the
         case may be).

                  Money Borrowed - as applied to any Person, (i) Debt arising
         from the lending of money by any other Person to such Person; (ii)
         Debt, whether or not in any such case arising from the lending of money
         by another Person to such Person, (A) which is represented by notes
         payable or drafts accepted that evidence extensions of credit, (B)
         which constitutes obligations evidenced by bonds, debentures, notes or
         similar instruments, or (C) upon which interest charges are customarily
         paid (other than accounts payable) or that was issued or assumed as
         full or partial payment for Property; (iii) Debt that constitutes a
         Capitalized Lease Obligation; (iv) reimbursement obligations with
         respect to letters of credit or guaranties of letters of credit and (v)
         Debt of such Person under any guaranty of obligations that would
         constitute Debt for Money Borrowed under clauses (i) through (iii)
         hereof, if owed directly by such Person.

                  Moody's - Moody's Investors Services, Inc.

                  Multiemployer Plan - has the meaning set forth in Section
         4001(a)(3) of ERISA.

                  Net Proceeds - proceeds (including cash receivable (when
         received) by way of deferred payment) received by Borrower from the
         sale, lease, transfer or other disposition of any Property, including
         insurance proceeds and awards of compensation received with respect to
         the destruction or condemnation of all or part of such Property, net
         of: (i) the reasonable and customary costs of such sale, lease,
         transfer or other disposition; and (ii) amounts applied to repayment of
         Debt (other than the Obligations) that is secured by a Permitted Lien
         on the Property disposed of that is senior to Lender's Liens.

                  Notes - the Revolver Note and any other promissory note
         hereafter executed by Borrower at Lender's request to evidence any of
         the Obligations.

                  Notice of Borrowing - as defined in Section 3.1.1(i) of the
         Agreement.

                                       44

<PAGE>

                  Obligations - in each case, whether now in existence or
         hereafter arising, (i) the principal of, and interest and premium, if
         any, on, the Loans; and (ii) all other Debts, covenants, duties and
         obligations (including Contingent Obligations) now or at any time or
         times hereafter owing by any Obligor to Lender under or pursuant to the
         Agreement or any of the other DIP Financing Documents, whether
         evidenced by any note or other writing, whether arising from any
         extension of credit, opening of a letter of credit, acceptance, loan,
         guaranty, indemnification or otherwise and whether direct or indirect,
         absolute or contingent, due or to become due, primary or secondary, or
         joint or several, including all interest, charges, expenses, fees or
         other sums (including Extraordinary Expenses) chargeable to any or all
         Obligors hereunder or under any of the other Financing Documents.

                  Obligor - Borrower and any other Person that is at any time
         liable for the payment of the whole or any part of the Obligations or
         that has granted in favor of Lender a Lien upon any of any of such
         Person's assets to secure payment of any of the Obligations.

                  Ordinary Course of Business - with respect to any Person, the
         ordinary course of such Person's business, as conducted by such Person
         in accordance with past practices and undertaken by such Person in good
         faith and not for the purpose of evading any covenant or restriction in
         any Loan Document.

                  Organization Documents - with respect to any Person, its
         charter, certificate or articles of incorporation, bylaws, articles of
         organization, operating agreement, members agreement, partnership
         agreement, voting trust, or similar agreement or instrument governing
         the formation or operation of such Person.

                  OSHA - the Occupational Safety and Hazard Act of 1970.

                  Other Agreements - the Notes and any and all agreements,
         instruments and documents (other than the Agreement and the Security
         Documents), heretofore, now or hereafter executed by Borrower, any
         Obligor or any other Person and delivered to Lender in respect of the
         transactions contemplated by the Agreement.

                  Participant - as defined in Section 12.2.1 of the Agreement.

                  Payment Account - an account maintained by Lender (currently
         at Bank) to which all monies from time to time deposited to a Dominion
         Account shall be transferred and all other payments shall be sent in
         immediately available federal funds.

                  Payment Intangible - shall have the meaning ascribed to the
term "payment intangible" in the UCC.

                  Payment Items - all checks, drafts, or other items of payment
         payable to Borrower, including proceeds of any of the Collateral.

                  Pending Revolver Loans - at any date, the aggregate principal
         amount of all Revolver Loans which have been requested in any Notice of
         Borrowing received by Lender but which have not theretofore been
         advanced by Lender.

                                       45

<PAGE>

                  Permitted Contingent Obligations - Contingent Obligations
         arising from endorsements for collection or deposit in the Ordinary
         Course of Business; Contingent Obligations arising from entered into in
         the Ordinary Course of Business pursuant to the Agreement or with
         Lender's prior written consent; Contingent Obligations of Borrower and
         its Subsidiaries existing as of the Closing Date, including extensions
         and renewals thereof that do not increase the amount of such Contingent
         Obligations as of the date of such extension or renewal; Contingent
         Obligations incurred in the Ordinary Course of Business with respect to
         surety bonds, appeal bonds, performance bonds and other similar
         obligations; and other Contingent Obligations not to exceed $25,000 in
         the aggregate at any time.

                  Permitted Liens - any Lien of a kind specified in Section
         9.2.3 of the Agreement.

                  Permitted Purchase Money Debt - Purchase Money Debt of
         Borrower and its Subsidiaries which is incurred after the date of the
         Agreement and which is secured by no Lien or only by a Purchase Money
         Lien, provided that the aggregate amount of Purchase Money Debt
         outstanding at any time does not exceed $25,000 and the incurrence of
         such Purchase Money Debt does not violate any limitation in the
         Financing Documents regarding Capital Expenditures. For the purposes of
         this definition, the principal amount of any Purchase Money Debt
         consisting of capitalized leases shall be computed as a Capitalized
         Lease Obligation.

                  Person - an individual, partnership, corporation, limited
         liability company, limited liability partnership, joint stock company,
         land trust, business trust, or unincorporated organization, or a
         Governmental Authority.

                  Plan - an employee benefit plan now or hereafter maintained
         for employees of Borrower that is covered by Title IV of

         ERISA.

                  Properly Contested - in the case of any Debt of an Obligor
         (including any Taxes) that is not paid as and when due or payable by
         reason of such Obligor's bona fide dispute concerning its liability to
         pay same or concerning the amount thereof, (i) such Debt is being
         properly contested in good faith by appropriate proceedings promptly
         instituted and diligently conducted; (ii) such Obligor has established
         appropriate reserves as shall be required in conformity with GAAP;
         (iii) the non-payment of such Debt will not have a Material Adverse
         Effect and will not result in a forfeiture of any assets of such
         Obligor; (iv) no Lien is imposed upon any of such Obligor's assets with
         respect to such Debt unless such Lien is at all times junior and
         subordinate in priority to the Liens in favor of Lender (except only
         with respect to property taxes that have priority as a matter of
         applicable state law) and enforcement of such Lien is stayed during the
         period prior to the final resolution or disposition of such dispute;
         (v) if the Debt results from, or is determined by the entry, rendition
         or issuance against an Obligor or any of its assets of a judgment,
         writ, order or decree, enforcement of such judgment, writ, order or
         decree is stayed pending a timely appeal or other judicial review; and
         (vi) if such contest is abandoned, settled or determined adversely (in
         whole or in part) to such Obligor, such Obligor forthwith pays such
         Debt and all penalties, interest and other amounts due in connection
         therewith.

                                       46

<PAGE>

                  Property - any interest in any kind of property or asset,
         whether real, personal or mixed, or tangible or intangible.

                  Purchase Money Debt - means and includes (i) Debt (other than
         the Obligations) for the payment of all or any part of the purchase
         price of any fixed assets, (ii) any Debt (other than the Obligations)
         incurred at the time of or within 10 days prior to or after the
         acquisition of any fixed assets for the purpose of financing all or any
         part of the purchase price thereof, and (iii) any renewals, extensions
         or refinancings thereof, but not any increases in the principal amounts
         thereof outstanding at the time.

                  Purchase Money Lien - a Lien upon fixed assets which secures
         Purchase Money Debt, but only if such Lien shall at all times be
         confined solely to the fixed assets acquired through the incurrence of
         the Purchase Money Debt secured by such Lien and such Lien constitutes
         a purchase money security interest under the UCC.

                  Receipts - the total "collections" as shown on the Budget.

                  Rentals - rent owing by Borrower in respect of a lease of
         Property that is owned by the lessor.

                  Reportable Event - any of the events set forth in Section
         4043(b) of ERISA.

                  Restricted Investment - any acquisition of Property by
         Borrower or any of its Subsidiaries in exchange for cash or other
         Property, whether in the form of an acquisition of Equity Interests or
         indebtedness or obligations, or the purchase or acquisition by Borrower
         or any of its Subsidiaries of any other Property, or a loan, advance,
         capital contribution or subscription, except acquisitions of the
         following: (a) fixed assets to be used in the business of Borrower or
         any of its Subsidiaries so long as the acquisition costs thereof
         constitute Capital Expenditures permitted hereunder; (b) goods held for
         sale or lease or to be used in the manufacture of goods or the
         provision of services by Borrower or any of its Subsidiaries in the
         ordinary course of business; (c) Current Assets arising from the sale
         or lease of goods or the rendition of services in the ordinary course
         of business of Borrower or any of its Subsidiaries; (d) investments in
         Subsidiaries of Borrower to the extent existing on the Closing Date;
         and (e) Cash Equivalents.

                                       47

<PAGE>

                  Restrictive Agreement - an agreement (other than any of the
         Financing Documents) that, if and for so long as an Obligor or any
         Subsidiary of such Obligor is a party thereto, would prohibit,
         condition or restrict such Obligor's or Subsidiary's right to incur or
         repay Debt for Money Borrowed (including any of the Obligations); grant
         Liens upon any of such Obligor's or Subsidiary's assets (including
         Liens granted in favor of Lender pursuant to the Financing Documents);
         declare or make Distributions; amend, modify, extend or renew any
         agreement evidencing Debt for Money Borrowed (including any of the
         Financing Documents); or repay any Debt owed to any Obligor.

                  Revenue - the total of "sales" as shown on the Budget.

                  Revolver Commitment - the obligation of Lender to make
         Revolver Loans pursuant to the terms and conditions of the Agreement,
         which shall not exceed on any date $1,600,000.00.

                  Revolver Loan - a Loan made by Lender as provided in Section
         1.1 of the Agreement.

                  Revolver Note - a Revolver Note to be executed by Borrower in
         favor of Lender in the form of Exhibit A attached hereto, which shall
         be in the face amount of the Facility and which shall evidence all
         Revolver Loans made by Lender to Borrower pursuant to the Agreement.

                  S&P - Standard & Poor's Ratings Group, a division of
         McGraw-Hill, Inc.

                  Schedule of Accounts - as defined in Section 7.2.1 of the
         Agreement.

                  SEC - the Securities Exchange Commission.

                  Security - shall have the same meaning as in Section 2(1) of
         the Securities Act of 1933.

                  Security Documents - any and all other instruments and
         agreements now or at any time hereafter securing the whole or any part
         of the Obligations.

                  Senior Officer - the chairman of the board of directors, the
         president or the chief financial officer of, or in-house legal counsel
         to, such Person.

                  Solvent - as to any Person, such Person (i) owns Property
         whose fair saleable value is greater than the amount required to pay
         all of such Person's Debts (including Contingent Obligations), (ii) is
         able to pay all of its Debts as such Debts mature, (iii) has capital
         sufficient to carry on its business and transactions and all business
         and transactions in which it is about to engage; and (iv) is not
         "insolvent" within the meaning of Section 101(32) of the Bankruptcy
         Code.

                                       48

<PAGE>

                  Subsidiary - any Person a majority of the Equity Interests of
         which is at the time owned, directly or indirectly, by another Person
         or by one or more other Subsidiaries or by such other Person and one or
         more other Subsidiaries.

                  Supporting Obligation - shall have the meaning ascribed to the
         term "supporting obligation" in the UCC.

                  Taxes - any present or future taxes, levies, imposts, duties,
         fees, assessments, deductions, withholdings or other charges of
         whatever nature, including income, receipts, excise, property, sales,
         use, transfer, license, payroll, withholding, social security and
         franchise taxes now or hereafter imposed or levied by the United
         States, or any state, local or foreign government or by any department,
         agency or other political subdivision or taxing authority thereof or
         therein and all interest, penalties, additions to tax and similar
         liabilities with respect thereto, but excluding, in the case of Lender,
         taxes imposed on or measured by the net income or overall gross
         receipts of Lender.

                  Term - a period commencing on the Effective Date and ending 36
         months later.

                  UCC - the Uniform Commercial Code (or any successor statute)
         as adopted and in force in the State of Florida from time to time or,
         when the laws of any other state govern the method or manner of the
         creation or perfection of any security interest in any of the
         Collateral, the Uniform Commercial Code (or any successor statute) of
         such state.

                  Value - with reference to the value of Inventory, value
         determined on the basis of the lower of cost or market of such
         Inventory, with the cost thereof calculated on a first-in, first-out
         basis.

                  Accounting Terms. Unless otherwise specified herein, all terms
of an accounting character used in the Agreement shall be interpreted, all
accounting determinations under the Agreement shall be made, and all financial
statements required to be delivered under the Agreement shall be prepared in
accordance with GAAP, applied on a basis consistent with the most recent audited
consolidated financial statement of Borrower and its Subsidiaries heretofore
delivered to Lender and using the same method for inventory valuation as used in
such audited financial statements, except for any change in which Borrower's
independent public accountants concur or as required by GAAP unless (i) Borrower
shall have objected to determining such compliance on such basis at the time of
delivery of such financial statements or (ii) Lender shall so object in writing
within 30 days after the delivery of such financial statements, in either of
which events such calculations shall be made on a basis consistent with those
used in the preparation of the latest financial statements as to which such
objection shall not have been made. In the event of any change in GAAP that
occurs after the date of the Agreement and that is material to Borrower, Lender
shall have the right to require either that conforming adjustments be made to
any financial covenants set forth in the Agreement, or the components thereof,
that are affected by such change or that Borrower reports its financial
condition based on GAAP as in effect immediately prior to the occurrence of such
change.

                                       49

<PAGE>

                  Other Terms. All other terms contained in the Agreement shall
have, when the context so indicates, the meanings provided for by the UCC to the
extent the same are used or defined therein.

                  Certain Matters of Construction. The terms "herein," "hereof"
and "hereunder" and other words of similar import refer to the Agreement as a
whole and not to any particular section, paragraph or subdivision. Any pronoun
used shall be deemed to cover all genders. In the computation of periods of time
from a specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding." The
section titles, table of contents and list of exhibits appear as a matter of
convenience only and shall not affect the interpretation of the Agreement. All
references to statutes (including the UCC) and related regulations shall include
any amendments of same after the date hereof and any successor statutes and
regulations; to any of the Financing Documents shall include any and all
amendments or modifications thereto and any and all restatements, extensions or
renewals thereof; to any Person shall mean and include the successors and
permitted assigns of such Person; to "including" and "include" shall be
understood to mean "including, without limitation" and "include, without
limitation;" to the time of day shall mean the time of day on the day in
question in Miami, Florida, unless otherwise expressly provided in the
Agreement; and to any Property of Borrower shall mean and include all Property
of the Estate. A Default or an Event of Default shall be deemed to exist at all
times during the period commencing on the date that such Default or Event of
Default occurs to the date on which such Default or Event of Default is waived
in writing pursuant to this Agreement or, in the case of a Default, is cured
within any period of cure expressly provided in this Agreement; and an Event of
Default shall "continue" or be "continuing" until such Event of Default has been
waived in writing by Lender. Whenever the phrase "to the best of Borrower's
knowledge" or words of similar import relating to the knowledge or the awareness
of Borrower are used herein, such phrase shall mean and refer to (i) the actual
knowledge of a Senior Officer of Borrower or (ii) the knowledge that a Senior
Officer would have obtained if they had engaged in good faith and the diligent
performance of their duties, including the making of such reasonable specific
inquiries as may be necessary of the officers, employees or agents of Borrower
and a good faith attempt to ascertain the existence or accuracy of the matter to
which such phrase relates.

         IN WITNESS WHEREOF, this Appendix has been duly executed on July 6,
2004.

                                                     BORROWER:

                       HEALTHCARE QUALITY SOLUTIONS, INC.

                                                     By:
                                                        ------------------------
                                                         B.M. Milvain, President

                                       50

<PAGE>

                                                     LENDER:

                                                     STANFORD VENTURE CAPITAL
                                                     HOLDINGS, INC.

                                                   By:
                                                       -------------------------
                                                       James M. Davis, President

                                       51

<PAGE>

                                    EXHIBIT A

                              FORM OF REVOLVER NOTE

U.S. $1,600,000.00
                                                                July 6, 2004

         FOR VALUE RECEIVED, the undersigned, HEALTHCARE QUALITY SOLUTIONS, INC.
a Florida corporation (the "Borrower"), promises to pay to the order of STANFORD
VENTURE CAPITAL HOLDINGS, INC. (herein, together with any subsequent holder
hereof, called the "Lender") the principal sum of ONE MILLION SIX HUNDRED
THOUSAND AND 00/100 DOLLARS ($1,600,000.00) or such lesser sum as may be the
outstanding principal amount of all Revolver Loans pursuant to the terms of the
Loan Agreement referred to below on the date on which such outstanding principal
amounts become due and payable pursuant to Section 4.2 of the Loan Agreement (as
defined below), in strict accordance with the terms thereof. Borrower, each
jointly and severally, likewise unconditionally promises to pay to Lender
interest from and after the date hereof on the outstanding principal amount of
Revolver Loans at the interest rate, payable at such times, and computed in such
manner as is specified in Section 2.1 of the Loan Agreement, in strict
accordance with the terms thereof.

         This Revolver Note ("Note") is issued pursuant to, and is the "Revolver
Note" referred to in, the Loan and Security Agreement dated July 6, 2004 (as the
same may be amended from time to time, the "Loan Agreement"), between Borrower
and Lender, and Lender is and shall be entitled to all benefits thereof and of
all Financing Documents executed and delivered in connection therewith. The
provisions of the Loan Agreement are incorporated herein by this reference. All
capitalized terms used herein, unless otherwise defined herein, shall have the
meanings ascribed to such terms in the Loan Agreement.

         The repayment of the principal balance of this Note is subject to the
provisions of Section 4.2 of the Loan Agreement. The entire unpaid principal
balance and all accrued interest on this Note shall be due and payable on the
Commitment Termination Date.

         All payments of principal and interest shall be made in Dollars in
immediately available funds as specified in the Loan Agreement.

         Upon or after the occurrence of an Event of Default and for so long as
such Event of Default exists, the principal balance and all accrued interest of
this Note may be declared due and payable in the manner and with the effect
provided in the Loan Agreement, and the unpaid principal balance hereof shall
bear interest at the Default Rate as and when provided in Section 2.1.2 of the
Loan Agreement. Borrower agrees to pay, and save Lender harmless against, any
liability for the payment of, all costs and expenses, including, but not limited
to, reasonable attorneys' fees, arising in connection with the enforcement by
Lender of any of its rights under this Note, the Loan Agreement or any of the
other Financing Documents.

         All principal amounts of Revolver Loans made by Lender to Borrower
pursuant to the Loan Agreement, and all accrued and unpaid interest thereon,
shall be deemed outstanding under this Note and shall continue to be owing by
Borrower in accordance with the terms of this Note and the Loan Agreement.

<PAGE>

         In no contingency or event whatsoever, whether by reason of advancement
of the proceeds hereof or otherwise, shall the amount paid or agreed to be paid
to Lender for the use, forbearance or detention of money advanced hereunder
exceed the highest lawful rate permissible under any law which a court of
competent jurisdiction may deem applicable hereto; and, in the event of any such
payment inadvertently paid by Borrower or inadvertently received by Lender, such
excess sum shall be, at Borrower's option, returned to Borrower forthwith or
credited as a payment of principal, but shall not be applied to the payment of
interest. It is the intent hereof that Borrower not pay or contract to pay, and
that Lender not receive or contract to receive, directly or indirectly in any
manner whatsoever, interest in excess of that which may be paid by Borrower
under Applicable Law.

         Time is of the essence of this Note. To the fullest extent permitted by
Applicable Law, Borrower, for itself and its legal representatives, successors
and assigns, expressly waives presentment, demand, protest, notice of dishonor,
notice of non-payment, notice of maturity, notice of protest, presentment for
the purpose of accelerating maturity, diligence in collection, and the benefit
of any exemption or insolvency laws.

         Wherever possible each provision of this Note shall be interpreted in
such a manner as to be effective and valid under Applicable Law, but if any
provision of this Note shall be prohibited or invalid under Applicable Law, such
provision shall be ineffective to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or remaining provisions of
this Note. No delay or failure on the part of Lender in the exercise of any
right or remedy hereunder shall operate as a waiver thereof, nor as an
acquiescence in any default, nor shall any single or partial exercise by Lender
of any right or remedy preclude any other right or remedy. Lender, at its
option, may enforce its rights against any Collateral securing this Note without
enforcing its rights against Borrower, any guarantor of the indebtedness
evidenced hereby or any other property or indebtedness due or to become due to
Borrower. Borrower agrees that, without releasing or impairing Borrower's
liability hereunder, Lender may at any time release, surrender, substitute or
exchange any Collateral securing this Note and may at any time release any party
primarily or secondarily liable for the indebtedness evidenced by this Note.

         The rights and obligations of Lender and Borrower hereunder shall be
construed in accordance with and governed by the laws (without giving effect to
the conflict of law principles thereof) of the State of Florida. This Note is
intended to take effect as an instrument under seal under Florida law.

         IN WITNESS WHEREOF, Borrower has caused this Note to be executed and
delivered by its duly authorized officer on the date first above written.

                        HEALTHCARE QUALITY SOLUTIONS INC.

                                                   By:
                                                       ------------------------
                                                        B.M. Milvain, President

<PAGE>

                                    EXHIBIT B

                           Form of Notice of Borrowing

                           Date ______________, 20___

Stanford Venture Capital Holdings, Inc.
6075 Poplar Avenue
Suite 202
Memphis, Tennessee

Re:      Loan and Security  Agreement dated April ____, 2004, by and between
         healthcare  Quality  Solutions Inc. and Stanford Venture Capital
         Holdings, Inc. (as at any time amended, the "Loan Agreement")

Ladies and Gentlemen:

         This Notice of  Borrowing  is  delivered to you pursuant to Section
3.1.1 of the Loan  Agreement.  Unless  otherwise  defined herein,  capitalized
terms used herein shall have the meanings  attributable thereto in the Loan
Agreement.  Borrower hereby requests a Revolver Loan in the aggregate principal
amount of $______________ to be made on _____________, 20___.

         Borrower hereby ratifies and reaffirms all of its liabilities and
obligations under the Financing Documents and hereby certifies that no Default
or Event of Default exists on the date hereof. In addition, Borrower confirms
that it is in compliance with the Availability requirements set forth in the
Loan Agreement.

         Borrower has caused this Notice of Borrowing to be executed and
delivered by its duly authorized representative, this ______ day of
_____________, 20___.

                                               BORROWER:

                                               HEALTHCARE QUALITY SOLUTIONS INC.

                                               By:
                                                  ------------------------------
                                                   B.M. Milvain, President

<PAGE>

                                    EXHIBIT C

                             COMPLIANCE CERTIFICATE
                            [Letterhead of Borrower]

                                                      __________________, 20__

Stanford Venture Capital Holdings, Inc.
6075 Poplar Avenue
Suite 202
Memphis, Tennessee

                  The undersigned, the chief financial officer of Healthcare
Quality Solutions Inc., a Florida corporation ("Borrower"), gives this
certificate to Stanford Venture Capital Holdings, Inc. ("Lender") in accordance
with the requirements of Section 9.1.5 of that certain Loan and Security
Agreement dated July 6, 2004, between Borrower and Lender ("Loan Agreement").
Capitalized terms used in this Certificate, unless otherwise defined herein,
shall have the meanings ascribed to them in the Loan Agreement.

                         1. Based upon my review of the balance sheets and
statements of income of Borrower and its
Subsidiaries for the [Fiscal Year] [quarterly period] ending __________________,
20__, copies of which are attached hereto, I hereby certify that:

(a) Consolidated EBITDA of the Guarantor for the fiscal quarter ended
__________________ as set forth in the Guarantor's Form 10-QSB for such period
duly and timely filed with the Securities & Exchange Commission was
$----------------.

<PAGE>

                         2. No Default exists on the date hereof, other than:
_________________________________________ [if none, so state]; and

                         3. No Event of Default exists on the date hereof, other
than _____________________________________________ [if none, so state].

                         4. As of the date hereof, Borrower is current in its
payment of all accrued rent and other charges to
Persons who own or lease any premises where any of the Collateral is located,
and there are no pending disputes or claims regarding Borrower's failure to pay
or delay in payment of any such rent or other charges.

                                                     Very truly yours,

                                                     ---------------------------
                                                     Chief Financial Officer

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