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                                                                   EXHIBIT 10.24

                            ASSET PURCHASE AGREEMENT

         This Asset Purchase Agreement (this "Agreement") is made as of July 25,
2003, by and among Funtime Hospitality Corp., an Ontario corporation ("Seller"),
and Dave and Buster's, Inc., a Missouri corporation ("Purchaser").

         WHEREAS, Seller is engaged in the business (the "Business") of
operating a Dave & Buster's entertainment complex at The Interchange Shopping
Center in Vaughan, Ontario (the "Purchased Store"); and

         WHEREAS, Purchaser desires to purchase certain assets and assume
certain liabilities of the Business, and Seller desires to sell such assets and
assign such liabilities to Purchaser, each upon the terms and conditions set
forth herein;

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:

1. PURCHASE AND SALE OF ASSETS

         1.1 Purchase and Sale.

         (a) At the Closing (as hereinafter defined) and subject to the terms
and conditions of this Agreement, Purchaser shall purchase from Seller, and
Seller shall sell to Purchaser, all right, title and interest in and to the
following assets that are owned by or under the control of Seller (collectively
the "Purchased Assets"):

                  (i) Seller's leasehold interest in the real property,
         buildings, fixtures, plant, equipment and improvements thereon or
         attached thereto (collectively referred to as the "Real Estate")
         granted to Seller under that certain Lease dated April 22, 1999 (the
         "Lease"), by and between Seller and 547495 ONTARIO LIMITED, as agent
         for the landlord thereof (the "Landlord"), together with Seller's
         rights to any related security deposits;

                  (ii) All tangible personal property including, but not limited
         to, furniture, fixtures, leasehold improvements, games and equipment
         owned by Seller and located in or used in the operation of the
         Purchased Store;

                  (iii) All inventory (whether on hand or in transit) of food,
         non-alcoholic beverages, alcoholic beverages (to the extent
         transferable), raw materials, packaging supplies, tableware, glassware,
         small wares, menus, tents, Power Cards, prize coupons, midway and other
         customer prizes and similar items used or held for use in the Business
         (the "Inventory");

                  (iv) Subject to any required consents, all of Seller's rights
         in and under the contracts and agreements relating primarily to the
         Business and set forth on Schedule 1.1 (a)(iv) (the "Contracts");

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                  (v) All Seller's records and files relating primarily to the
         Purchased Assets and the Purchased Store (the "Business Records"), it
         being understood and acknowledged that Seller will be entitled to make
         and retain copies of same; and

                  (vi) Cash and cash equivalents, including any petty cash on
         hand (the "Cash");

                  (vii) All accounts receivables, bills receivables, notes
         receivables, trade accounts, book debts and insurance claims, credit
         card receivables, and prepaid expenses and cash deposits arising from
         the operation of the Business prior to Closing (the "Receivables"); and

                  (viii) To the extent transferable, all licenses, permits or
         other rights granted by governmental authorities used in or required or
         necessary for the lawful ownership or operation of the Business (the
         "Permits").

         (b) Notwithstanding the foregoing, the Purchased Assets shall not
include the following assets of Seller (the "Excluded Assets"):

                  (i) All Permits that are not transferable by the terms thereof
         or by operation of law;

                  (ii) All Seller's properties, assets, capital stock, rights,
         claims, contracts and goodwill relating to all businesses conducted by
         Seller other than the Business;

                  (iii) Seller's rights under this Agreement and the other
         closing agreements, certificates and instruments to be executed by
         Seller in connection with or pursuant to this Agreement;

                  (iv) All refunds of income taxes filed or to be filed by
         Seller or its affiliates; and

                  (v) All Seller's records other than the Business Records.

         1.2 Assumption of Liabilities. At the Closing, Purchaser shall assume
the following categories of liabilities (collectively, the "Assumed
Liabilities"):

                  (i) to the extent relating to periods on and after the
         Closing, all liabilities and obligations of Seller under the Permits
         and the Contracts;

                  (ii) Seller's obligations to the Transferred Employees as
         described in Section 5.4 hereof;

                  (iii) Seller's obligations to customers in respect of gift
         certificates and gift cards issued prior to the Closing Date to
         consumers for redemption at the Purchased Store (the "Gift
         Certificates") (it being understood that Purchaser is not assuming any
         obligations to governmental agencies or taxing authorities under
         escheatment or similar statutes in respect of the funds collected by
         Seller upon the sale of such Gift Certificates);

                  (iv) Seller's obligations to its customers in respect of any
         Power Cards, promotional items, prize coupons or other prize awards
         issued to a customer prior to the Closing Date;

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                  (v) All of Seller's trade accounts payable and other payables
         that are, in each case, incurred in the ordinary course of business
         within forty-five (45) days of closing (the "Payables"). The Payables
         shall include any and all obligations to the Transferred Employees that
         are assumed by Purchaser under Section 5.4 or otherwise.
         Notwithstanding the foregoing, if the aggregate amount of the Payables
         is greater than the Working Capital (as defined below) as of the
         Closing Date, then the dollar amount of the Payables to be assumed by
         Purchaser shall be reduced by an amount equal to such excess, such that
         the total dollar amount of the Payables assumed by Purchaser shall be
         equal to the Working Capital. If there are excess Payables as
         contemplated in the foregoing sentence, then Seller shall pay the
         excess payables in full at the Closing, beginning with the oldest
         payables first, unless otherwise directed by Purchaser. For purposes of
         this Agreement, "Working Capital" shall mean the sum of the Inventory
         (valued at cost), Cash and Receivables being acquired by Purchaser as
         of the Closing Date, excluding any Receivables that are older than
         ninety (90) days or otherwise not collectible;

                  (vi) an amount equal to Can $391,687 on finance with respect
         to midway equipment, which is owed to Czechmate Financing Company; and

                  (vii) all debts, liabilities, obligations, taxes, commitments
         and contracts in respect of the Business or the Purchased Assets
         arising out of periods, or incurred by Purchaser, on or after the
         Closing Date.

Except as specifically set forth above, Purchaser does not assume and shall in
no event be liable for any debt, obligation, responsibility, liability or
contingent liability of Seller, or any affiliate or successor of Seller, or any
claim against any of the foregoing, whether known or unknown, contingent or
absolute, or otherwise.

         1.3. Purchase Price. The consideration to be received by Seller
hereunder at the Closing for the Purchased Assets ("Purchase Price") shall be
U.S. $3,600,000, payable in Canadian funds as measured three (3) business days
before the Closing by certified bank check or wire transfer of immediately
available funds.

         1.4. Allocation of Purchase Price. The Purchase Price shall be
allocated among the Purchased Assets and Assumed Liabilities in accordance with
the allocations set forth on Schedule 1.6. Seller and Purchaser each agree to
report the federal, provincial and local income and other tax consequences of
the transactions contemplated herein in a manner consistent with such
allocation.

         1.5. Section 22 Election. Purchaser and Seller shall execute jointly an
election in prescribed form under Section 22 of the Income Tax Act (Canada) in
respect of the Receivables and shall each file such election with their
respective tax returns for their respective taxation years that include the
Closing Date.

         1.6. GST Election. At the Closing, Seller and Purchaser shall execute
jointly an election under Section 167 of the Excise Tax Act (Canada) to have the
sale of the Purchased Assets take place on a GST-free basis under Part IX on the
Excise Tax Act (Canada) and Purchaser shall file such election with its GST
return for the reporting period in which the sale of the Purchased Assets takes
place.

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2. CLOSING MATTERS.

         2.1 Closing. A closing (the "Closing") to effect the purchase and sale
of the Purchased Assets shall be held at the offices of Seller on October 1,
2003, or such other date as may be mutually agreed upon by the parties (the
"Closing Date"). At the Closing, Seller shall execute such lease assignments,
bills of sale and instruments of assignment and assumption as are necessary to
convey title to the Purchased Assets and to constitute assignment and assumption
of the Assumed Liabilities, as further described in Section 2.2, and Purchaser
shall pay the Purchase Price to Seller. At the Closing, Seller shall pay or
cause to be paid the following indebtedness of Seller and the Business (the
"Extinguished Debt") at Closing (i) all amounts due under the Debenture dated
February 17, 2000, between Seller and First Ontario Labour Sponsored Investment
Fund, Ltd., being approximately U.S. $1,775,000, (ii) any amounts due to
Toronto-Dominion Bank under a credit facility dated May 16, 2000, which is
currently estimated to be approximately U.S. $225,000, (iii) any rent or other
charges in arrears under the Lease, and (iv) any other payables not assumed by
Purchaser. Seller shall provide documentation of the payment of such amounts and
termination of any agreements or obligations (including liens) relating to the
Extinguished Debt, other than the lease, as required in Purchaser's reasonable
discretion. All actions taken at the Closing shall be deemed to have been taken
simultaneously at the time the last of any such actions is taken or completed.

         2.2 Closing Deliveries. The parties shall take such actions and execute
such documents as are required to complete the transactions contemplated by this
Agreement at the Closing, including those set forth below:

                  (a) Seller's Closing Deliveries. At the Closing, Seller shall
deliver or cause to be delivered to Purchaser the following:

                           (i) a general conveyance and assumption of
         liabilities agreement substantially in the form of Exhibit A duly
         executed by Seller, together with such other bills of sale or
         instruments of conveyance, assignment or transfer as may be reasonably
         required by Purchaser;

                           (ii) a certificate of the President or other senior
         officer of Seller dated as of the Closing Date in the form of Exhibit
         B;

                           (iii) a certificate of the Secretary or other officer
         of Seller in the form of Exhibit C;

                           (iv) appropriate evidence of any consents and
         approvals, including the approval of Seller's shareholders;

                           (v) certificates evidencing the payment of all taxes
         collectable or payable by Seller in respect of the Business under
         provincial retail sales tax legislation of each province in which the
         Purchased Assets are located;

                           (vi) an opinion of Seller's counsel addressed to
         Purchaser and Purchaser's Solicitors substantially in the form of
         Exhibit D;

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                           (vii) the Termination Agreement in the form of
         Exhibit E (the "Termination Agreement"), which terminates, effective as
         of the Closing Date, that certain International License Agreement,
         International Area Development Agreement for Canada, and all related
         agreements, each of which were entered into by and between Seller and
         Purchaser (collectively, and as each of them has been amended, the
         "License Agreement"), and provides that any and all royalty payments or
         other payments due from Seller to Purchaser through and including the
         Closing Date shall be forgiven and the parties shall have no further
         rights or obligations under the License Agreement, except those that
         are to specifically survive upon termination in accordance with the
         terms of the License Agreement;

                           (viii) the elections referred to in Sections 1.5 and
         1.6; and

                           (ix) all deeds of conveyance, bills of sale,
         assurances, transfers, assignments, consents, and such other
         agreements, documents and instruments as may be reasonably required by
         Purchaser to complete the transactions provided for in this Agreement.

         (b) Purchaser's Closing Deliveries. At the Closing, Purchaser shall
deliver or cause to be delivered to Seller the following:

                           (i) a general conveyance and assumption of
         liabilities agreement substantially in the form of Exhibit A duly
         executed by Purchaser;

                           (ii) a certificate of the President or other senior
         officer of Purchaser dated as of the Closing Date in the form of
         Exhibit E;

                           (iii) a certificate of the Secretary or other officer
         of Purchaser in the form of Exhibit F;

                           (iv) the payments referred to in Section 2.1;

                           (v) an opinion of Purchaser's Solicitors addressed to
         Seller and Seller's Solicitors substantially in the form of Exhibit G;

                           (vi) the elections referred to in Sections 1.5 and
                  1.6;

                           (vii) the Termination Agreement; and

                           (viii) all such other assurances, consents,
         agreements, documents and instruments as may be reasonably required by
         Seller to complete the transactions provided for in this Agreement.

3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby represents and
warrants to Purchaser as follows.

         3.1. Organization and Good Standing of Seller. Seller is a corporation
duly organized and validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization.

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         3.2. Binding Effect. This Agreement has been or will have been duly
authorized, executed and delivered by Seller and is the legal, valid and binding
obligation of Seller enforceable in accordance with its terms except that (i)
enforceability may be limited by bankruptcy, insolvency or other similar laws
affecting creditors' rights and (ii) the availability of equitable remedies may
be limited by equitable principles of general applicability. Seller is not an
insolvent person within the meaning of the Bankruptcy and Insolvency Act
(Canada) and will not become an insolvent person as a result of the Closing.

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         3.3. No Conflicts; Consents and Approvals.

         (a) Except as contemplated elsewhere herein, neither the execution and
delivery by Seller of this Agreement nor the consummation by it of the
transactions contemplated hereby will violate, breach, be in conflict with, or
constitute a default under, or permit the termination or the acceleration of
maturity of, or result in the imposition of any lien, claim or encumbrance upon
any property or asset of Seller pursuant to (i) Seller's bylaws and articles of
incorporation, or (ii) any note, bond, indenture, mortgage, deed of trust,
evidence of indebtedness, loan or lease agreement, other agreement or instrument
which is material to the operation of the Purchased Store, or any judgment,
order, injunction or decree by which Seller is bound, to which it is a party, or
to which its assets are subject.

         (b) Except as contemplated elsewhere herein and except as set forth in
Schedule 3.3, Seller is not required to submit any notice, declaration, report
or other filing or registration with any governmental or regulatory authority or
instrumentality in connection with the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby.

         (c) Except as contemplated elsewhere herein and except as set forth in
Schedule 3.3, no waiver, consent, approval or authorization of any governmental
or regulatory authority or instrumentality or any other person is required to be
obtained or made by Seller in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby.

         3.4. Financial Statements and Records of Seller. No later than July 30,
2003, Seller will have delivered to Purchaser true, correct and complete copies
of the unaudited balance sheet of the Business as of June 29, 2003 (the "Seller
Financial Statements"), and the related statement of operations for the fiscal
year then ended. The Seller Financial Statements have been presented in
accordance with Canadian generally accepted accounting principles (except for
the absence of footnotes and as otherwise noted therein) and present fairly, in
all material respects, the assets, liabilities and financial position of the
Business as of the date thereof and the results of operations thereof for the
periods then ended.

         3.5. Absence of Certain Changes. Since June 29, 2003, Seller has not
(except as may result from the transactions contemplated by this Agreement or as
set forth on Seller Financial Statements, and except changes relating generally
to the economy or the restaurant industry) (i) suffered any adverse change in
its results of operations or financial condition, other than changes in the
ordinary course of business that, individually or in the aggregate, have not had
a material adverse effect on the Business (a "Business Material Adverse
Effect"); (ii) suffered any material damage or destruction to or loss of the
Purchased Assets not covered by insurance; or (iii) entered into or terminated
any material agreement, commitment or transaction, or agreed or made any changes
in the Assumed Liabilities.

         3.6. No Material Undisclosed Liabilities. There are no material
liabilities or obligations of the Business of any nature, whether absolute,
accrued, contingent or otherwise, other than the liabilities and obligations
that are fully reflected, accrued, or reserved against on Seller Financial
Statements, for which the reserves are appropriate and reasonable, or incurred
in the ordinary course of business and consistent with past practices since June
29, 2003.

         3.7. Tax Liabilities. Seller has paid all federal, provincial and
municipal taxes or similar charges in the nature of a tax required to be paid by
it, including those with respect to income, goods and

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services, payroll, property, withholding, Canada Pension Plan, unemployment,
franchise, excise and sales taxes, and has filed all federal, provincial or
municipal tax returns and reports required to be filed by it, to the extent that
the same relate to the Purchased Assets or the operations of the Business, and
has either paid in full all such taxes that have become due as reflected on any
return or report and any interest and penalties with respect thereto or has
fully accrued on its books or has established adequate reserves for all taxes
payable but not yet due; and has made required cash deposits with appropriate
governmental authorities representing estimated payments of taxes, including
income taxes and employee withholding tax obligations. No extension or waiver of
any statute of limitations or time within which to file any return has been
granted to or requested by Seller with respect to any such tax. No unsatisfied
deficiency, delinquency or default for any tax, assessment or governmental
charge has been assessed (or, to the knowledge of Seller, claimed or proposed)
against Seller, nor has Seller received notice of any such deficiency,
delinquency or default.

         3.8. Title to Properties. Seller has, and will convey to Purchaser at
Closing, good and marketable title to the Purchased Assets, free and clear of
any lien, claim or encumbrance, except as reflected in Seller Financial
Statements or notes thereto and except for the following liens and encumbrances
("Permitted Liens"):

                  (i) liens for taxes, assessments or other governmental charges
         not yet due and payable;

                  (ii) statutory liens incurred in the ordinary course of
         business with respect to liabilities that are not yet due and payable;

                  (iii) liens set forth on Schedule 3.8 hereto; and

                  (iv) such imperfections of title and/or encumbrances as are
         not material in character, amount or extent and do not materially
         detract from the value or interfere with the use of the properties and
         assets subject thereto or affected thereby.

         3.9. Condition of Assets. All of the Purchased Assets (other than
inventory) are in good condition and working order, ordinary wear and tear
excepted, and are suitable for the uses for which intended, free from any
defects known to Seller, except such minor defects as do not substantially
interfere with the continued use thereof.

         3.10 Real Estate.

                  (a) Seller has a valid, binding and enforceable leasehold
         interest in and to the sites for the Real Estate. A true, complete and
         correct copy of the Lease has been made available to Purchaser. As of
         the Closing, the leasehold interests of Seller are subject to no lien
         or other encumbrance, and Seller is in quiet possession of the
         properties covered by such interests.

                  (b) Each of the buildings, structures and improvements
         situated on the Real Estate is in good condition and repair, reasonable
         wear and tear excepted, and is adequate and sufficient to carry on the
         Business as presently conducted.

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                  (c) Seller has made available to Purchaser, and will transfer
         possession to Purchaser at Closing, with respect to all of the Real
         Estate, in each case to the extent in the possession of Seller: (i)
         real estate tax certificates for previous years, current real estate
         tax statements, and receipts for current real estate taxes (if
         available); (ii) copies of all certificates of occupancy, if any; (iii)
         originals of any tags, licenses, permits, authorizations and approvals
         required by law and issued by all governmental authorities having
         jurisdiction and all other records, files and correspondence relating
         to the operation and maintenance of the Real Estate which have not been
         previously delivered; (iv) "as built" and other surveys; and (v) any
         environmental site assessments.

                  (d) To the extent in the possession of Seller, the file copies
         of the leasehold title policies with respect to the Real Estate
         (collectively the "Title Policies") have been made available to
         Purchaser.

                  (e) There is no material violation of any zoning, building,
         health, fire, water use or similar statute, ordinance, law, regulation
         or code in connection with the ownership and/or use of the Real Estate.
         To the knowledge of Seller, no fact or condition exists which would
         result in the termination or impairment of access to the Real Estate or
         discontinuation of necessary sewer, water, electrical, gas, telephone
         or other utilities or services.

                  (f) Seller has not received any notice that either the whole
         or any portion of the Real Estate is to be condemned, requisitioned or
         otherwise taken by any public authority. Seller has no knowledge of any
         public improvements that may result in special assessments against or
         otherwise adversely affect any of the Real Estate.

                  (g) Except as set forth on Schedule 3.10 and in each case
         solely in respect of the Real Estate:

                           (i) Seller is not in violation or alleged violation
                  of any judgment, decree, order, law, license, rule or
                  regulation pertaining to environmental matters, including,
                  without limitation those arising under any federal, provincial
                  or municipal statute, regulation, ordinance, order or decree
                  relating to health, safety or the environment (hereinafter
                  "Environmental Laws");

                           (ii) Seller has not received written notice from any
                  third party, including without limitation any federal,
                  provincial or municipal governmental authority, (A) that
                  Seller or any of its predecessors in interest has been
                  identified by any federal, provincial or municipal agency as
                  being in violation of Environmental Laws; (B) that any
                  hazardous waste, as defined or otherwise determined by
                  applicable Environmental Laws, any hazardous substance as
                  defined or otherwise determined by applicable Environmental
                  Laws or any toxic substance, oil or hazardous material or
                  other chemical or substance regulated by any Environmental
                  Laws ("Hazardous Substances") which Seller or any of its
                  predecessors in interest has generated, transported or
                  disposed of has been found at any site at which a federal,
                  provincial or municipal agency or other third party has
                  conducted or has ordered that Seller or any of its
                  predecessors in interest conduct a remedial investigation,
                  removal or other response action pursuant to

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                  any Environmental Law; or (C) that Seller or any of its
                  predecessors in interest is or shall be named a party to any
                  claim, action, cause of action, complaint (contingent or
                  otherwise), legal or administrative proceeding arising out of
                  any third party's incurrence of costs, expenses, losses or
                  damages of any kind whatsoever in connection with the release
                  of Hazardous Substances; and

                           (iii) (A) no portion of any of the Real Estate or any
                  other real property owned, leased or operated by Seller has
                  been used for the handling, manufacturing, processing, storage
                  or disposal of Hazardous Substances except in accordance with
                  applicable Environmental Laws, and no underground tank or
                  other underground storage receptacle for Hazardous Substances
                  is located on such properties; (B) in the course of any
                  activities conducted by Seller, no Hazardous Substances have
                  been generated or are being used on such properties except in
                  accordance with applicable Environmental Laws; and (C) there
                  have been no releases (i.e., any past or present releasing,
                  spilling, leaking, pumping, pouring, emitting, emptying,
                  discharging, injecting, escaping, disposing or dumping) or
                  threatened releases of Hazardous Substances on, upon, into or
                  from any of such properties except in accordance with
                  applicable Environmental Laws.

         3.11. Litigation and Governmental Claims. There is no pending suit,
action or litigation, or administrative, arbitration or other proceeding or
governmental investigation or inquiry, to which Seller is a party or to which
its assets are subject which would, if decided against Seller, individually or
in the aggregate, have a Business Material Adverse Effect. To the knowledge of
Seller, there are no such proceedings threatened which would, if decided against
Seller, individually or in the aggregate, have a Business Material Adverse
Effect.

         3.12. Suppliers. Schedule 3.12 sets forth a list of all vendors or
other suppliers from or through whom Seller has purchased goods and services
relating primarily to the Business, other than utilities, in excess of $15,000
in the aggregate during the twelve (12) month period ending June 29, 2003.
Except as set forth on Schedule 3.12, there are no claims pending or, to the
knowledge of Seller overtly threatened, by any of such suppliers.

         3.13 Permits. Seller holds all Permits which are required to permit it
to conduct the Business as presently conducted, except where the failure to hold
such Permits would not have a Business Material Adverse Effect, and all such
Permits are in full force and effect, except where the failure to be in full
force and effect would not reasonably be likely to have a Business Material
Adverse Effect.

         3.14. Employment Matters. Schedule 3.14 lists all the employees of
Seller engaged in the Business as of the date of this Agreement and the age,
position, status, length of service, compensation and benefits of each of them,
respectively. Except as set out in Schedule 3.14, Seller is not a party to or
bound by any contracts or requirements of applicable law in respect of any
employee engaged in the Business, including:

                  (a)      any contracts or arrangements for the employment or
                           statutory re-employment of any employee engaged in
                           the Business; or

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                  (b)      any bonus, deferred compensation, profit sharing,
                           retirement, hospitalization insurance, or other plans
                           or arrangements providing employee benefits, except
                           for the plans providing employee benefits described
                           in Schedule 3.20.

Seller does not participate in or offer to its employees any form of pension
plan.

There are no disputes of a material nature pending between Seller and any of the
employees engaged in the Business. In connection with the Business, Seller has
complied in all material respects with all employment laws including any
provisions thereof relating to wages, hours and the payment of applicable
employment-related taxes, and is not liable for any material arrears of wages or
any employment-related taxes or penalties for failure to comply with any of the
foregoing.

                  Except as set out in Schedule 3.14:

                  (a)      Seller is not a party to any collective bargaining
                           agreement, contract or legally binding commitment to
                           any trade union or employee organization or group in
                           respect of or affecting employees of the Business;

                  (b)      Seller is not currently engaged in any labor
                           negotiation;

                  (c)      Seller is not a party to any application, complaint
                           or other proceeding under any statute;

                  (d)      the Business is not engaged in any unfair labor
                           practice and Seller is not aware of any pending or
                           threatened complaint regarding any alleged unfair
                           labor practices;

                  (e)      there is no strike, labor dispute, work slow down or
                           stoppage pending or threatened against the Business;

                  (f)      there is no grievance or arbitration proceeding
                           arising out of or under any collective bargaining
                           agreement which is pending or threatened against the
                           Business;

                  (g)      the Business has not experienced any material work
                           stoppage in the last two years;

                  (h)      Seller is not the subject of any union organization
                           effort;

                  (i)      Seller is not the subject of any current orders or
         charges against it under the Occupational Health and Safety Act
         (Ontario); and

                  (j)      all levies, assessments of any kind and penalties
         under the Workplace Safety and Insurance Act 1997 (Ontario) have been
         paid and no assessment has taken place in the last two years.

         3.15. Material Contracts. Set forth on Schedule 3.15 are complete and
accurate lists of all of the following categories of contracts and commitments
to which Seller is a party or bound and which relate to the Business:

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                  (i) contracts with any labor union; employee benefit plans or
         contracts; and employment, consulting or similar contracts, including
         confidentiality agreements;

                  (ii) leases, whether as lessor or lessee, of the Real Estate,
         or of any personal property providing for annual rental payments in
         excess of $5,000;

                  (iii) agreements providing for liens, claims or encumbrances
         on the Purchased Assets;

                  (iv) contracts (other than purchase orders in the ordinary
         course of business) with third parties that (X) involve aggregate
         payments by the Purchased Store of more than $5,000, (Y) do not
         terminate or are not terminable by Seller without penalty within 45
         days after the Closing Date or (Z) contain covenants limiting the
         freedom of Seller to compete or deal with competitors of the other
         party; and

                  (v) contracts not made in the ordinary course of the Business.

To the extent requested, Seller has furnished or made available accurate and
complete copies of the foregoing contracts and agreements to Purchaser. All such
contracts are valid, binding, subsisting and enforceable obligations of Seller.

         3.16. Transaction with Affiliates. Upon the occurrence of the Closing,
neither Seller, nor any Affiliate of Seller will have any material interest in
or will own any material property or material right used principally in the
conduct of the Business. The term "Affiliate" shall mean Seller, any officer or
director of Seller, any member of the immediate family of the forgoing persons
or any corporation, partnership, trust or other entity in which Seller, the
officers and directors of Seller or any of such family member of such persons
has a substantial interest or is a director, officer, partner or trustee.

         3.17 Compliance with Laws. Seller is in compliance with all material
laws, statutes, governmental regulations and all judicial or administrative
tribunal orders, judgments, writs, injunctions, decrees or similar commands
applicable to the Business. In respect of the Business, Seller has not been
charged with, or received notice of any investigation with respect to, any
material violation of any provision of any federal, provincial or municipal law
or administrative regulation.

         3.18 Insurance. Schedule 3.18 hereto lists all policies of fire,
liability, workmen's compensation, life, property and casualty and other
insurance owned or held by Seller in connection with the operation of the
Business or otherwise covering the Purchased Assets. Such policies of insurance
are of the kind, cover such risks and are in such amounts as are consistent with
prudent business practice. All such policies (i) are in full force and effect
and (ii) are sufficient in all material respects for compliance by Seller with
all requirements of law and all agreements to which Seller is a party. Seller is
not in default with respect to its obligations under any of such insurance
policies and has not received any notification of cancellation of any such
insurance policies.

         3.19. Brokers and Finders. Seller has not engaged any person to act or
render services as a broker, finder or similar capacity in connection with the
transactions contemplated herein and no other person has, as a result of any
agreement or action by Seller, any right or valid claim against Purchaser or any
of Purchaser's affiliates for any commission, fee or other compensation as a
broker or finder, or in any similar capacity in connection with the transactions
contemplated herein.

                                      xii
<PAGE>

         3.20 Employee Benefit Plans.

                  (a) Schedule 3.20 lists all the employee benefit, health,
         welfare, supplemental unemployment benefit, bonus, pension, profit
         sharing, deferred compensation, stock compensation, stock purchase,
         retirement, hospitalization insurance, medical, dental, legal,
         disability and similar plans or arrangements or practices relating to
         the employees of Seller engaged in the Business or former employees of
         Seller engaged in the Business which are currently maintained or were
         maintained, at any time in the last five calendar years (the "Plans").
         None of the Plans is a registered pension plan under Applicable
         Employee Benefit Laws (as defined below).

                  (b) All of the Plans are and have been established,
         registered, qualified, invested and administered, in all respects, in
         accordance with all laws, regulations, orders or other legislative,
         administrative or judicial promulgations applicable to the Plans
         ("Applicable Employee Benefit Laws"). No fact or circumstance exists
         that could adversely affect the tax-exempt status of an Plan.

                  (c) All obligations regarding the Plans have been satisfied,
         there are no outstanding defaults or violations by any party to any
         Plan and no taxes, penalties or fees are owing or exigible under any of
         the Plans.

                  (d) Seller may unilaterally amend, modify, vary, revoke or
         terminate, in whole or in part, each Plan and take contribution
         holidays under or withdraw surplus from each Plan, subject only to
         approvals required by Applicable Employee Benefit Laws.

                  (e) No Plan, nor any related trust or other funding medium
         thereunder, is subject to any pending investigation, examination or
         other proceeding, action or claim initiated by any governmental agency
         or instrumentality, or by any other party (other than routine claims
         for benefits), and there exists no state of facts which after notice or
         lapse of time or both could reasonably be expected to give rise to any
         such investigation, examination or other proceeding, action or claim or
         to affect the registration of any Plan required to be registered.

                  (f) All contributions or premiums required to be made by
         Seller under the terms of each Plan or by Applicable Employee Benefit
         Laws have been made in a timely fashion in accordance with Applicable
         Employee Benefit Laws and the terms of the Plans, and Seller does not
         have, and as of the Closing will not have, any liability (other than
         liabilities accruing after the Closing) with respect to any of the
         Plans. Contributions or premiums will be paid by Seller on an accrual
         basis for the period up to the Closing even though not otherwise
         required to be made until a later date.

                  (g) No amendments have been made to any Plan and no
         improvements to any Plan have been promised and no amendments or
         improvements to a Plan will be made or promised before the Closing.

                                      xiii
<PAGE>

                  (h) There have been no improper withdrawals, applications or
         transfers of assets from any Plan or the trusts or other funding medium
         relating thereto, and neither Seller nor any of its agents has been in
         breach of any fiduciary obligation with respect to the administration
         of the Plans or the trusts or other funding medium relating thereto.

                  (i) Subject to approvals under Applicable Employee Benefit
         Laws, Seller may amend, revise or merge any Plan or the assets
         transferred from any Plan with any other arrangement, plan or fund.

                  (j) Seller has furnished to Purchaser true, correct and
         complete copies of all the Plans as amended as of the date hereof
         together with all related documentation including funding agreements,
         actuarial reports, funding and financial information returns and
         statements, all professional opinions (whether or not internally
         prepared) with respect to each Plan, all material internal memoranda
         concerning the Plans, copies of material correspondence with all
         regulatory authorities with respect to each Plan and plan summaries,
         booklets and personnel manuals. No material changes have occurred to
         the Plans or are expected to occur which would affect the actuarial
         reports or financial statements required to be provided to Purchaser
         pursuant to this Section 3.20.

                  (k) Each Plan is fully funded or fully insured on both an
         ongoing and solvency basis pursuant to the actuarial assumptions and
         methodology set out in Schedule 3.20.

                  (l) None of the Plans enjoys any special tax status under
         Applicable Employee Benefit Laws, nor have any advance tax rulings been
         sought or received in respect of the Plans.

                  (m) All employee data necessary to administer each Plan has
         been provided by Seller to Purchaser and is true and correct.

                  (n) No insurance policy or any other contract or agreement
         affecting any Plan requires or permits a retroactive increase in
         premiums or payments due thereunder. The level of insurance reserves
         under each insured Plan is reasonable and sufficient to provide for all
         incurred but unreported claims.

                  (o) Except as disclosed in Schedule 3.20, none of the Plans
         provides benefits to retired employees or to the beneficiaries or
         dependents of retired employees.

                  (p) In general, there are no facts or circumstances that
         could, directly or indirectly, subject Purchaser or any of its
         affiliates to any material liability of any nature with respect to any
         Plan. It is expressly acknowledged by Seller that no such liability
         shall constitute an Assumed Liability within the meaning of Section 1.2
         hereof.

         3.21 Deductions at Source. Seller has fulfilled all requirements under
the Income Tax Act (Canada) and the Regulations thereto, the Canada Pension
Plan, the Employment Insurance Act (Canada) and any applicable provincial
legislation, for withholding of amounts from employees and has remitted all
amounts withheld to the appropriate authorities within the prescribed times.

         3.22 Residence of Seller. Seller is not a non-resident of Canada within
the meaning of section 116 of the Income Tax Act (Canada).

                                      xiv
<PAGE>

         3.23 GST. The Purchased Assets constitute all or substantially all of
the property that can reasonably be regarded as being necessary for Purchaser to
be capable of carrying on the Business. Seller is a "registrant" under Part IX
of the Excise Tax Act (Canada).

4. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby represents and
warrants to Seller as follows:

         4.1. Organization and Good Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Missouri.

         4.2. Corporate Power and Authority. Purchaser has the corporate power
and authority and all licenses and permits required by governmental authorities
to execute, deliver and perform this Agreement.

         4.3. Binding Effect. This Agreement has been duly authorized, executed
and delivered by Purchaser and is the legal, valid and binding obligation of it,
enforceable in accordance with its terms except that (i) enforceability may be
limited by bankruptcy, insolvency, or other similar laws affecting creditors'
rights and (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability.

         4.4. No Conflicts; Consents and Approvals.

         (a) Except as contemplated elsewhere herein, neither the execution and
delivery by Purchaser of this Agreement nor the consummation by it of the
transactions contemplated hereby will violate, breach, be in conflict with, or
constitute a default under, or permit the termination or the acceleration of
maturity of, or result in the imposition of any lien, claim, or encumbrance upon
any property or asset of Purchaser pursuant to (i) Purchaser's certificate of
incorporation or bylaws or (ii) any note, bond, indenture, mortgage, deed of
trust, evidence of indebtedness, loan or lease agreement, other agreement or
instrument which is material to Purchaser's ability to consummate the
transactions contemplated hereby.

         (b) Except as contemplated elsewhere herein, Purchaser is not required
to submit any notice, declaration, report or other filing or registration with
any governmental or regulatory authority or instrumentality in connection with
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.

         (c) Except as contemplated elsewhere herein and except as set forth in
Schedule 4.4, no waiver, consent, approval or authorization of any governmental
or regulatory authority or instrumentality or any other person is required to be
obtained or made by Purchaser in connection with the execution and delivery of
this Agreement or the consummation of the transactions contemplated hereby.

         4.5. Brokers and Finders. Purchaser has not engaged any person to act
or render services as a broker, finder or similar capacity in connection with
the transactions contemplated herein and no person has, as a result of any
agreement or action by Purchaser any right or valid claim against Seller or any
of Seller's affiliates for any commission, fee or other compensation as a broker
or finder, or in any similar capacity in connection with the transactions
contemplated herein.

         4.6. GST. Purchaser is a "registrant," or will be at Closing, under
Part IX of the Excise Tax Act (Canada).

                                       xv
<PAGE>

5. CERTAIN COVENANTS.

         5.1. Consents and Approvals.

                  (a) Each of the parties hereto shall, and shall cause each of
         its affiliates to, use its reasonable efforts to obtain at the earliest
         practicable date any approvals, authorizations and consents necessary
         to consummate the transactions contemplated by this Agreement and take
         such actions as the other parties may reasonably request to consummate
         the transactions contemplated by this Agreement and diligently attempt
         to satisfy, to the extent within its control, all conditions precedent
         to its obligations to close the transactions contemplated by this
         Agreement. Without limiting the foregoing, Seller agrees to use its
         reasonable efforts to obtain the consent of its shareholders to the
         sale of the Purchased Assets hereunder, and in that regard shall call a
         special meeting of its shareholders and distribute such documents and
         circulars as necessary for such meeting as soon as practicable
         following the execution of this Agreement.

                  (b) Seller shall cooperate as reasonably necessary with
         Purchaser's efforts to obtain the required consents of alcoholic
         beverage agencies (the "Liquor Consents"), including the Alcohol and
         Gaming Commission of Ontario, to the consummation of the transactions
         contemplated herein, including the transfer of any applicable liquor
         license or licenses. Such cooperation shall include completing any
         application or other documents or forms required by the Alcohol and
         Gaming Commission of Ontario and any other governmental entity in order
         to process the Liquor Consents and the transfer of any and all
         applicable liquor license or licenses.

                  (c) Purchaser shall cooperate as reasonably necessary with
         Seller's efforts to obtain the consent of the lessor of the Purchased
         Store site to the consummation of the transactions contemplated herein
         and the assignment of the Lease to Purchaser, on terms acceptable to
         Purchaser (the "Landlord Consent").

                  (d) Nothing in this Section 5.1 shall require a party to
         expend any monies to obtain any approval or consent required hereunder,
         except for customary attorneys' fees and filing fees incidental to the
         transactions contemplated hereby or as otherwise specifically required
         under this Agreement.

         5.2. Access to Information and Purchased Restaurant.

                  (a) Between the date of this Agreement and the Closing Date,
         Seller will provide to Purchaser and its accountants, counsel and other
         authorized representatives reasonable access to the premises,
         management, employees, vendors, customers, properties, contracts,
         commitments, books and records of the Business and will cause its
         officers to furnish to Purchaser and its authorized representatives
         such financial, technical and operating data and other information
         pertaining to the Business, as Purchaser shall from time to time
         reasonably request.

                  (b) Between the date of this Agreement and the Closing Date,
         Seller will provide to Purchaser copies of the unaudited balance sheets
         and results of operations for the Business for

                                      xvi
<PAGE>

         monthly periods subsequent to June 29, 2003, including any audit of the
         financial statements of Seller's year ended June 29, 2003, if Seller
         chooses to have one completed, as promptly as practicable after the
         preparation thereof.

                  (c) Purchaser and its representatives shall maintain the
         confidentiality of all information (other than information which is
         generally available to the public or is available to Purchaser by
         virtue of its licensor relationship with Seller) concerning Seller
         acquired pursuant to the transactions contemplated hereby in the event
         that the sale of the Purchased Assets is not consummated. All files,
         records, documents, information, data and similar items relating to the
         confidential information of Seller shall remain the exclusive property
         of Seller prior to the Closing and shall be promptly delivered to
         Seller upon any termination of this Agreement.

         5.3. Maintenance of Business and the Purchased Assets.

                  (a) Seller covenants that between the date hereof and the
         Closing, except as contemplated hereby or with the prior consent of
         Purchaser, it will refrain from doing any of the following in respect
         of the Business: (i) entering into any transaction other than in the
         ordinary course of business, (ii) permitting any encumbrance, mortgage
         or pledge on any Purchased Asset, (iii) disposing of any material
         Purchased Asset except for the sale of inventory in the ordinary course
         of business, (iv) amending, renewing or modifying any of the Contracts
         without the prior written consent of Purchaser, (v) entering into any
         employment contract or make any change in the compensation payable or
         to become payable to any of its officers, executives or managers or
         other employees engaged primarily in the Business, other than
         anniversary increases or promotions consistent with past practice, (vi)
         amending any of its leases relating to the Real Estate or (vii)
         entering into any agreement, commitment or arrangement with respect to
         the foregoing. Without limiting the foregoing, Seller agrees that it
         will not make any capital expenditure, nor will it enter into any new
         contract or amend any existing contract, unless it first notifies
         Purchaser and receives Purchaser's prior written consent.

                  (b) Without the consent of Purchaser, Seller shall not
         transfer or terminate the employment of any employee engaged in the
         Business to any other restaurant operated or affiliated with Seller or
         its affiliates.

                  (c) Seller shall maintain insurance, in respect of the
         Business and Purchased Assets, of the kind, in the amount and with the
         insurers as currently maintained or equivalent insurance with
         substitute insurers.

         5.4. Employees.

                  (a) Purchaser may, in its discretion, offer employment, as of
         the Closing Date, to some or all salaried and hourly employees employed
         by Seller in the Business immediately prior to Closing, including those
         employees on vacation, leave of absence, disability or layoff. The
         employees of Seller who accept employment with Purchaser after the
         Closing Date are hereinafter referred to as the "Transferred
         Employees". Purchaser shall assume all accrued salary, wages, unpaid
         vacation, personal days and bonuses due to the Transferred Employees as
         of the Closing Date and not otherwise paid by Seller at Closing.

                                      xvii
<PAGE>

                  (b) Except as set forth in subsection (c) below, Seller shall
         retain responsibility for any liability under its Plans (as defined in
         Section 3.20) in respect of periods prior to the Closing Date.

                  (c) Except to the extent otherwise expressly provided herein,
         neither Purchaser nor its affiliates shall be obligated to provide any
         severance or separation pay benefits to any Transferred Employee on
         account (in whole or in part) of the transactions contemplated by this
         Agreement, and such benefits (if any) shall be payable by Seller.

         5.5. No Shopping. From the date hereof through and until the earlier of
termination of this Agreement or Closing, neither Seller nor any of its
affiliates, employees, officers, directors, agents or advisors shall, directly
or indirectly, (a) solicit, initiate or encourage any inquiries, proposals or
offers from any third party relating to any acquisition of the Business or the
Purchased Assets, or (b) with respect to any effort or attempt by any third
party to do or seek any of the foregoing, (i) participate in any discussions or
negotiations, (ii) furnish to any third party any information with respect to,
or afford access to the properties, books or records of or relating to, the
Business or Purchased Assets, or (iii) otherwise cooperate in any way with, or
assist or participate in, or facilitate or encourage any such effort. Seller
shall promptly notify Purchaser if any such proposal or offer or any inquiry or
contact with any third party with respect thereto is made.

         5.6. Non-Solicitation of Employees. For a period of three years after
the date of the Closing (the "Non-solicitation Period"), (i) Seller shall not
attempt to or assist any other person in attempting to encourage any director,
officer, employee or agent of Purchaser or its subsidiaries or affiliates to
terminate such relationship with Purchaser or such subsidiary or affiliate, as
the case may be, and (ii) Purchaser shall not attempt to or assist any other
person in attempting to encourage any director, officer, employee or agent of
Seller or its subsidiaries or affiliates to terminate such relationship with
Seller or such subsidiary or affiliate.

         5.7. Non-Competition. None of Seller nor any of their Affiliates, shall
own, operate or manage, either directly or through any subsidiary or affiliated
company, in the Province of Ontario for a period of three (3) years from and
after the Closing Date any business that competes with the Business as it is
operated as of the Closing Date.

         5.8. Purchase Of Tail Coverage By Seller. For any "claims made" policy
of insurance that is in effect as of the date of this Agreement with respect to
the Business, Seller will purchase insurance coverage or an endorsement that
extends the reporting period for three (3) years from the Closing Date with
respect to claims arising prior to the Closing Date.

6. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER. The obligations of Seller to
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction on or before the Closing Date of each of the following
conditions:

         6.1. Compliance. Purchaser shall have, or shall have caused to be,
satisfied or complied with and performed in all material respects, all terms,
covenants and conditions of this Agreement to be complied with or performed by
it on or before the Closing Date, including delivery of the documents to be
delivered by Purchaser under Section 2.2.

                                     xviii
<PAGE>

         6.2. Representations and Warranties. All of the representations and
warranties made by Purchaser in this Agreement and in all certificates and other
documents delivered by Purchaser to Seller pursuant hereto, shall have been true
and correct in all material respects as of the date hereof, and shall be true
and correct in all material respects at the Closing Date with the same force and
effect as if such representations and warranties had been made at and as of the
Closing Date, except for changes permitted or contemplated by this Agreement.

         6.3. Third Party Consents. Seller shall have obtained all
authorizations, approvals or consents required to permit the consummation of the
transactions contemplated hereby, including the consent of Seller's
shareholders, and such consents shall be in full force and effect.

7. CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER. Except as may be waived by
Purchaser, the obligations of Purchaser to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction, on or
before the Closing Date, of each of the following conditions:

         7.1. Compliance. Seller shall have, or shall have caused to be,
satisfied or complied with and performed in all material respects all terms,
covenants, and conditions of this Agreement to be complied with or performed by
Seller on or before the Closing Date, including delivery of the documents to be
delivered by Seller under Section 2.2.

         7.2. Representations and Warranties. All of the representations and
warranties made by Seller in this Agreement, the exhibits attached hereto and in
all certificates and other documents delivered by Seller pursuant hereto, shall
have been true and correct in all material respects as of the date hereof, and
shall be true and correct in all material respects at the Closing Date with the
same force and effect as if such representations and warranties had been made at
and as of the Closing Date, except for changes permitted or contemplated by this
Agreement.

         7.3. Seller Consents. Seller shall have received (a) the Landlord
Consent, which shall be in form and substance satisfactory to Purchaser and its
counsel, and (b) the consent of Seller's shareholders to this Agreement and the
sale of the Purchased Assets, and such consents shall be in full force and
effect.

         7.4. Third Party Consents. Purchaser shall have obtained all
authorizations, approvals or consents required to permit the consummation of the
transactions contemplated hereby, and such consents shall be in full force and
effect. Purchaser shall have obtained the approval of its Board of Directors
with respect to the transactions contemplated by this Agreement. Purchaser shall
have obtained the consent of its lenders with respect to the transactions
contemplated by this Agreement.

         7.5. Due Diligence. Purchaser's due diligence investigation of the
Business and Purchased Assets shall have been completed to Purchaser's sole
satisfaction; provided, however, that if Purchaser has not notified Seller of
the failure of this condition within fifty (50) days after the date of this
Agreement, the condition set forth in this section shall be deemed to have been
satisfied.

         7.6. Schedules. Seller shall have delivered to Purchaser all schedules
required to be attached hereto, but which were not attached as of the date of
this Agreement, and the form and content of such schedules shall be acceptable
to Purchaser in its sole discretion.

                                      xix
<PAGE>

         7.7. Bulk Sales Compliance. Seller shall have provided to Purchaser
evidence satisfactory to Purchaser that the bulk sales legislation in each of
the provinces in which the Purchased Assets are located has been complied with
or that the sale of the Purchased Assets is exempt from compliance with such
legislation.

8. INDEMNIFICATION.

         8.1. Indemnification of Purchaser. Subject to the limitations set forth
in Sections 8.3 and 8.4, Seller shall indemnify and hold Purchaser harmless
from, against, for and in respect of (i) any and all damages, losses, settlement
payments, obligations, liabilities, claims, actions or causes of action and
encumbrances suffered, sustained, incurred or required to be paid by Purchaser,
net of any resulting income tax benefits to Purchaser, (A) because of the breach
of any written representation, warranty, agreement or covenant of Seller
contained in this Agreement or (B) in respect of any liability of the Purchased
Store (other than the Assumed Liabilities) relating to periods at or prior to
the Closing; and (ii) all reasonable costs and expenses (including, without
limitation, attorneys' fees, interest and penalties) incurred by Purchaser in
connection with any action, suit, proceeding, demand, assessment or judgment
incident to any of the matters indemnified against in this Section 8.1.

         8.2. Indemnification of Seller. Subject to the limitations set forth in
Sections 8.3 and 8.4, Purchaser shall indemnify and hold Seller harmless from,
against, for and in respect of: (i) any and all damages, losses, settlement
payments, obligations, liabilities, claims, actions or causes of action and
encumbrances suffered, sustained, incurred or required to be paid by Seller, net
of any resulting income tax benefits to Seller, (A) because of the breach of any
written representation, warranty, agreement or covenant of Purchaser contained
in this Agreement or (B) in respect of any of the Assumed Liabilities, or in
respect of any liability of the Purchased Store relating to periods after the
Closing; and (ii) all reasonable costs and expenses (including, without
limitation, attorneys' fees, interest and penalties) incurred by Seller in
connection with any action, suit, proceeding, demand, assessment or judgment
incident to any of the matters indemnified against in this Section 8.2.

         8.3. Survival of Representations, Warranties and Covenants. All
representations, warranties, covenants and agreements made by any party to this
Agreement or pursuant hereto shall be deemed to be material and to have been
relied upon by the parties hereto, and shall survive until the first anniversary
of the Closing Date (except for the representations pursuant to Section 3.7 and
3.10(g), which shall survive until the third anniversary of the Closing Date,
and those under Section 3.8, which shall survive indefinitely). Notice of any
claim, whether made under the indemnification provisions hereof or otherwise,
based on a breach of a representation, warranty, covenant or agreement must be
given prior to the expiration of such representation, warranty, covenant or
agreement; and any claim not made within such period shall be of no force or
effect. The representations and warranties hereunder shall not be affected or
diminished by any investigation at any time by or on behalf of the party for
whose benefit such representations and warranties were made.

         8.4. General Rules Regarding Indemnification. The obligations and
liabilities of each indemnifying party hereunder with respect to claims
resulting from the assertion of liability by the other party shall be subject to
the following terms and conditions:

                  (a) The indemnified party shall give prompt written notice
         (which in no event shall exceed 30 days from the date on which the
         indemnified party first became aware of such claim or

                                       xx
<PAGE>

         assertion) to the indemnifying party of any claim which might give rise
         to a claim by the indemnified party against the indemnifying party
         based on the indemnity agreements contained in Sections 8.1 or 8.2
         hereof, stating the nature and basis of said claims and the amounts
         thereof, to the extent known;

                  (b) If any action, suit or proceeding is brought against the
         indemnified party with respect to which the indemnifying party may have
         liability under the indemnity agreements contained in Sections 8.1 or
         8.2 hereof, the action, suit or proceeding shall, at the election of
         the indemnifying party, be defended (including all proceedings on
         appeal or for review which counsel for the indemnified party shall deem
         appropriate) by the indemnifying party. The indemnified party shall
         have the right to employ its own counsel in any such case, but the fees
         and expenses of such counsel shall be at the indemnified party's own
         expense unless the employment of such counsel and the payment of such
         fees and expenses both shall have been specifically authorized in
         writing by the indemnifying party in connection with the defense of
         such action, suit or proceeding. Notwithstanding the foregoing, (A) if
         there are defenses available to the indemnified party which are
         inconsistent with those available to the indemnifying party to such
         extent as to create a conflict of interest between the indemnifying
         party and the indemnified party, the indemnified party shall have the
         right to direct the defense of such action, suit or proceeding insofar
         as it relates to such inconsistent defenses, and the indemnifying party
         shall be responsible for the reasonable fees and expenses of the
         indemnified party's counsel insofar as they relate to such inconsistent
         defenses, and (B) if such action, suit or proceeding involves or could
         have an effect on matters beyond the scope of the indemnity agreements
         contained in Sections 8.1 and 8.2 hereof, the indemnified party shall
         have the right to direct (at its own expense) the defense of such
         action, suit or proceeding insofar as it relates to such other matters.
         The indemnified party shall be kept fully informed of such action, suit
         or proceeding at all stages thereof whether or not it is represented by
         separate counsel.

                  (c) The indemnified party shall make available to the
         indemnifying party and its attorneys and accountants all books and
         records of the indemnified party relating to such proceedings or
         litigation and the parties hereto agree to render to each other such
         assistance as they may reasonably require of each other in order to
         ensure the proper and adequate defense of any such action, suit or
         proceeding.

                  (d) The indemnified party shall not make any settlement of any
         claims without the written consent of the indemnifying party.

                  (e) An indemnified party shall not make any claim hereunder
         unless and until it has incurred damages and expenses of a cumulative
         aggregate in an amount (the "Basket Amount") equal to $10,000, and
         shall thereafter be entitled to make a claim only for amounts incurred
         in excess of such Basket Amount.

         9. MISCELLANEOUS.

         9.1. Termination. This Agreement and the transactions contemplated
hereby may be terminated at any time on or before the Closing Date:

                  (i) by mutual consent of Seller and Purchaser;

                                      xxi
<PAGE>

                  (ii) by Purchaser if there has been a material
         misrepresentation or breach of warranty in the representations and
         warranties of Seller set forth herein or if there has been any material
         failure on the part of Seller to comply with its obligations hereunder;

                  (iii) by Seller if there has been a material misrepresentation
         or breach of warranty in the representations and warranties of
         Purchaser set forth herein or if there has been any material failure on
         the part of Purchaser to comply with its obligations hereunder;

                  (iv) by either Purchaser or Seller if the transactions
         contemplated by this Agreement have not been consummated by October 1,
         2003, unless the parties otherwise agree or unless such failure of
         consummation is due to the failure of the terminating party to perform
         or observe the covenants and agreements hereof to be performed or
         observed by it at or before the Closing Date;

                  (v) by either Purchaser or Seller if the transactions
         contemplated hereby violate any order, decree, or judgment of any court
         or governmental body or agency having competent jurisdiction;

                  (vi) by either Purchaser or Seller if Seller's shareholders
         have not duly authorized and approved this Agreement and the
         transactions contemplated by this Agreement, to the extent required by
         applicable law, on or before October 1, 2003;

                  (vii) by Purchaser at any time prior to September 15, 2003 if
         it is not satisfied for any reason, or no reason at all, with its due
         diligence inspection as contemplated in Section 7.5; and

                  (viii) by Purchaser if any one or more of the following occur
         (A) Purchaser does not receive the consent of its lenders to this
         Agreement and the transactions contemplated hereby prior to October 1,
         2003, or if prior to that time such lenders indicate that they will not
         give such approval, (B) Purchaser's Board of Directors does not approve
         this Agreement prior to October 1, 2003, or if prior to that time the
         Board of Directors indicates that it will not give such approval, (C)
         Purchaser does not receive the Landlord Consent in a form and substance
         satisfactory to Purchaser and its counsel in their discretion, or (D)
         if the Permits that are to be transferred at Closing to Purchaser are
         not all the licenses, permits or other rights currently used by Seller,
         or otherwise necessary for Purchaser, in the operation of the Business.

In the event of the termination of this Agreement pursuant to this Section 9.1,
this Agreement shall forthwith become null and void and of no further force or
effect; provided, however, that the parties hereto shall remain liable for any
breach of this Agreement prior to its termination.

         9.2. Expenses. Each of Purchaser and Seller shall pay its own expenses
incurred in connection with this Agreement and the transactions contemplated
hereby. For purposes of determining the responsibility for fees and expenses in
connection with the transfer of the Real Estate, Purchaser shall be responsible
for all title policy premiums, title search and examination fees and survey
charges; Seller shall be responsible for all deed or lease transfer taxes; and
Purchaser and Seller shall bear equally any recording fees and any transfer or
sales taxes in respect of personal property.

                                      xxii
<PAGE>

         9.3. Entire Agreement. This Agreement and the exhibits hereto contain
the complete agreement among the parties with respect to the transactions
contemplated hereby and supersede all prior agreements and understandings, oral
or written, among the parties with respect to such transactions. Section and
other headings are for reference purposes only and shall not affect the
interpretation or construction of this Agreement. The parties hereto have not
made any representation or warranty except as expressly set forth in this
Agreement or in any certificate or schedule delivered pursuant hereto.

         9.4. Public Announcements. No party to this Agreement shall issue any
press release relating to, or otherwise publicly disclose, the transactions
contemplated by this Agreement without the prior approval of the other parties.
Notwithstanding the foregoing, any party may make such disclosure as may be
required by law, provided the disclosing party obtains from the other party
prior approval of the substance of the proposed disclosure (such as the content
of a proposed press release), which approval may not be unreasonably withheld or
delayed.

         9.5. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and such counterparts together shall constitute only one original.

         9.6. Notices. All notices, demands, requests or other communications
that may be or are required to be given, served or sent by any party to any
other party pursuant to this Agreement shall be in writing and shall be
transmitted by a reputable overnight courier service or by hand delivery or
facsimile transmission, addressed as follows:

         (i)      If to Purchaser:

                  Dave and Buster's, Inc.
                  2481 Manana Drive
                  Dallas, Texas 75220
                  Attn: John Davis, Vice President and General Counsel
                  Fax:  (214) 357-9588

                  with copy to:

                  Hallett & Perrin, P.C.
                  2001 Bryan Street, Suite 3900
                  Dallas, Texas 75201
                  Attn: Bruce H. Hallett
                  Fax:  (214) 922-4170

         (ii)     If to Seller:

                  Funtime Hospitality Corp.
                  120 Interchange Way
                  Concord, Ontario L4K 5L3
                  Attn: Michael Mandel, Chairman and CEO
                  Fax:  (905) 760-7610

                                      xxiii
<PAGE>

                  with copy to:

                  Irwin Singer
                  24 Hazelton Avenue
                  Toronto, Ontario  M5R 2E2
                  Fax:  (416)  920-0815

Each party may designate by notice in writing a new address to which any notice,
demand, request or communication may thereafter be so given, served, or sent.
Each notice, demand, request or communication that is mailed, delivered, or
transmitted in the manner described above shall be deemed sufficiently given,
served, sent and received for all purposes at such time as it is delivered to
the addressee (with the return receipt, the delivery receipt, fax confirmation
sheet or the affidavit of courier or messenger being deemed conclusive evidence
of such delivery) or at such time as delivery is refused by the addressee upon
presentation.

         9.7. Assignment; Successors and Assigns. This Agreement may not be
assigned by either of the parties hereto without the written consent of all the
other parties; provided, however, that Purchaser shall be entitled to assign
this Agreement to one or more subsidiary corporations so long as Purchaser
remains liable for the payment of the Purchase Price hereunder. Subject to the
preceding sentence, this Agreement and the rights, interests and obligations
hereunder shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and assigns.

         9.8. GOVERNING LAW; VENUE. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. THE PARTIES AGREE
THAT ANY ACTION TO ENFORCE, INTERPRET, OR RESOLVE ANY DISPUTE WITH RESPECT TO
ANY PROVISION OF THIS AGREEMENT MAY BE BROUGHT IN DALLAS COUNTY, TEXAS, OR IN
THE PROVINCE OF ONTARIO, AND ALL PARTIES HERETO AGREE THAT ANY LITIGATION
DIRECTLY OR INDIRECTLY RELATING TO THIS AGREEMENT MUST BE BROUGHT BEFORE AND
DETERMINED BY A COURT OF COMPETENT JURISDICTION WITHIN ONE OF THOSE
JURISDICTIONS. EACH OF THE PARTIES FURTHER ACKNOWLEDGE THAT THE FOREGOING IS
APPROPRIATE AND AGREE NOT TO RAISE ANY ARGUMENT THAT SUCH VENUE IS IN ANY WAY
UNDULY INCONVENIENT FOR ANY OF THEM, WITH THEIR EXECUTION HEREOF BEING EVIDENCE
OF THEIR AGREEMENT TO SUBMIT TO THE JURISDICTION OF SUCH COURTS.

         9.9. Waiver and Other Action. This Agreement may be amended, modified,
or supplemented only by a written instrument executed by the parties against
which enforcement of the amendment, modification or supplement is sought.

         9.10. Severability. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable, such provision shall be fully severable, and
this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision were never a part hereof; the remaining provisions
hereof shall remain in full force and effect and shall not be affected by the
illegal, invalid or unenforceable provision or by its severance; and in lieu of
such illegal, invalid or unenforceable provision, there shall be added
automatically as part of this Agreement, a provision as similar in its terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.

                                      xxiv
<PAGE>

         9.11. Third-Party Beneficiaries. This Agreement and the rights,
obligations, duties and benefits hereunder are intended for the parties hereto,
and no other person or entity shall have any rights, obligations, duties and
benefits pursuant hereto.

         9.12. Mutual Contribution. The parties to this Agreement and their
counsel have mutually contributed to its drafting. Consequently, no provision of
this Agreement shall be construed against any party on the ground that such
party drafted the provision or caused it to be drafted or the provision contains
a covenant of such party.

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

                                           SELLER:

                                           FUNTIME HOSPITALITY CORP.,
                                           an Ontario corporation

                                           By: /s/ Michael Mandel
                                               ---------------------------------
                                           Name: Michael Mandel
                                                 -------------------------------
                                           Title: CEO
                                                  ------------------------------

                                           PURCHASER:

                                           DAVE AND BUSTER'S, INC.,
                                           a Missouri corporation

                                           By: /s/ David O. Corriveau
                                               ---------------------------------
                                           Name: David O. Corriveau
                                                 -------------------------------
                                           Title: President
                                                  ------------------------------

                                      xxv<PAGE>
                                                                   EXHIBIT 10.53

                                CREDIT AGREEMENT

         THIS AGREEMENT is entered into and made effective as of May 30, 2003,
by and between IDENTIX INCORPORATED, a Delaware corporation (the "BORROWER"),
and ASSOCIATED BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking
association (the "BANK"). In consideration of the mutual agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the parties, the Borrower and the
Bank agree as follows:

                                   ARTICLE I.
                                   Definitions

         Section 1.01 Definitions. For purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:

                  (a) the terms defined in this Article have the meanings
         assigned to them in this Article, and include the plural as well as the
         singular;

                  (b) the words "include," "includes" and "including" shall be
         deemed to be followed by the phrase "without limitation." The words
         "hereof," "herein," "hereunder," and similar terms in this Agreement
         refer to this Agreement as a whole and not to any particular provision
         of this Agreement; and

                  (c) all accounting terms not otherwise defined herein have the
         meanings assigned to them in accordance with GAAP.

                  "ADVANCE" means an advance of credit by the Bank to the
         Borrower in the form of a loan pursuant to Section 2.01.

                  "AFFILIATE" means, with respect to a given Person, any other
         person or entity controlled by, controlling or under common control
         with the subject Person. For purposes of this definition, "control,"
         when used with respect to any specified Person, means the power to
         direct the management and policies of such Person, directly or
         indirectly, whether through the ownership of voting securities, by
         contract or otherwise.

                  "BANK" has the meaning specified above.

                  "BORROWER" has the meaning specified above.

                  "BORROWING BASE" means the sum of 80% of Eligible Accounts
         Receivable.

                  "BORROWING BASE CERTIFICATE" means the certificate attached
         hereto as Exhibit A.

                  "CASH COLLATERAL BALANCE" means the available collected
         balance of all funds deposited by the Borrower in the Cash Collateral
         Account and subject to a first assignment and security interest in
         favor of the Bank.

<PAGE>
                  "CASH COLLATERAL ACCOUNT" means the cash collateral account
         established by the Borrower with the Bank and subject to the control of
         the Bank in accordance with the terms of the Deposit Account
         Assignment.

                  "CERTIFICATE OF INDEBTEDNESS AND LIENS" means the certificate
         attached hereto as Exhibit B.

                  "COVENANT COMPLIANCE CERTIFICATE" means the certificate
         attached hereto as Exhibit C.

                  "CREDIT DOCUMENTS" means this Agreement, the Revolving Note,
         the Deposit Account Assignment, the Security Agreement and all related
         financing statements, as such documents may be amended, supplemented,
         restated or replaced from time to time.

                  "DEBT" means the sum of (i) all items of indebtedness or
         liability of the Borrower and its Subsidiaries which in accordance with
         GAAP would be included in determining total liabilities as shown on the
         liabilities side of a balance sheet on the date as of which Debt is to
         be determined, plus (ii) indebtedness secured by any mortgage, deed of
         trust, assignment, security interest or other lien on property of the
         Borrower or its Subsidiaries whether or not the indebtedness secured
         thereby shall have been assumed, plus (iii) guaranties, endorsements
         (other than for purposes of collection in the ordinary course of
         business) and other contingent obligations of the Borrower and its
         subsidiaries in respect of or to purchase or otherwise acquire
         indebtedness of others.

                  "DEBT SERVICE COVERAGE RATIO" for any fiscal year of the
         Borrower means the ratio of (a) the Borrower's and its Subsidiaries'
         consolidated net income plus interest expenses plus depreciation and
         amortization expenses minus dividends for such fiscal year, to (b) the
         Borrower's and its Subsidiaries' aggregate consolidated amount of
         current maturities of long term debt plus interest expense payable by
         the Borrower and its Subsidiaries in such fiscal year on all Debt.

                  "DEBT TO TANGIBLE NET WORTH RATIO" has the meaning specified
         in Section 5.09.

                  "DEPOSIT ACCOUNT ASSIGNMENT" has the meaning specified in
         Section 3.01.

                  "ERISA" means the Employee Retirement Income Security Act of
         1974, as amended.

                  "ELIGIBLE ACCOUNTS RECEIVABLE" means the aggregate of all
         accounts receivable of the Borrower and its Subsidiaries that satisfy
         the following conditions: (a) are due and payable within sixty (60)
         days; (b) have been outstanding less than one hundred twenty (120) days
         past the original date of invoice; (c) have arisen in the ordinary
         course of business from services performed by the Borrower and its
         Subsidiaries to or for the account debtor or the sale by the Borrower
         and its Subsidiaries of goods in which the Borrower and its
         Subsidiaries had sole ownership where such goods have been shipped or
         delivered to the account debtor, including without limitation, progress
         payments; (d) represent complete bona fide transactions which require
         no further act under any circumstances on the part of the Borrower or
         its Subsidiaries to make such accounts receivable payable by the
         account debtor; (e) the goods the sale of which gave rise to such
         accounts receivable were shipped or delivered to the account debtor on
         an absolute sale basis and not on consignment, a sale or return basis,
         a guaranteed sale basis, a bill and hold basis, or on the basis of any
         similar

                                       2
<PAGE>
         understanding; (f) the goods the sale of which gave rise to such
         accounts receivable were not, at the time of sale thereof, subject to
         any lien, except the security interest in favor of the Bank created by
         the Credit Documents; (g) are not subject to any provisions prohibiting
         assignment or requiring notice of or consent to such assignment; (h)
         are subject to a perfected, first priority security interest in favor
         of the Bank and are not subject to any other lien; (i) are not subject
         to setoff, counterclaim, defense, allowance, dispute, or adjustment
         other than normal discounts for prompt payment, and the goods for sale
         which gave rise to such accounts receivable have not been returned,
         rejected, repossessed, lost or damaged; (j) the account debtor is not
         insolvent or the subject of any bankruptcy or insolvency proceeding and
         has not made an assignment for the benefit of creditors, suspended
         normal business operations, dissolved, liquidated, terminated its
         existence, ceased to pay its debts as they become due, or suffered a
         receiver or trustee to be appointed for any of its assets or affairs;
         (k) are not evidenced by chattel paper or any instrument of any kind;
         (l) are owed by a Person or Persons that are citizens of or organized
         under the laws of the United States or any State and are not owed by
         any Person organized under the laws of a jurisdiction located outside
         of the United States of America ("FOREIGN PERSONS"), provided that
         accounts receivable owed by Foreign Persons may constitute Eligible
         Accounts Receivable if (i) payment of such accounts receivable is
         insured by a foreign risk insurance policy acceptable to the Bank and
         the proceeds of such policy have been assigned to the Bank by an
         instrument satisfactory to the Bank, (ii) payment of such accounts
         receivable is covered by a letter of credit in form and substance
         satisfactory to the Bank, issued by a financial institution
         satisfactory to the Bank, and the proceeds of such letter of credit
         have been assigned to Bank by an instrument satisfactory to the Bank,
         or (iii) Bank specifically approves such accounts receivable as
         Eligible Accounts Receivable; (m) if any accounts receivable are owed
         by the United States of America or any department, agency, or
         instrumentality thereof, the Federal Assignment of Claims Act shall
         have been complied with; and (n) are not owed by an Affiliate of the
         Borrower. No account receivable owed by an account debtor to the
         Borrower and its Subsidiaries shall be included as an Eligible Account
         Receivable if more than ten percent (10%) of the balances then
         outstanding on accounts receivable owed by such account debtor and its
         Affiliates to the Borrower and its Subsidiaries have remained unpaid
         for more than one hundred nineteen (119) days from the dates of their
         original invoices. The amount of any Eligible Account Receivable owed
         by an account debtor to the Borrower and its Subsidiaries shall be
         reduced by the amount of all "contra accounts" and other obligations
         owed by the Borrower and its Subsidiaries to such account debtor.

                  "ENVIRONMENTAL LAWS" means all federal, state, local and
         foreign laws, statutes, codes, ordinances, regulations, requirements,
         rules and common law relating in any way to any hazardous or toxic
         materials or the protection of the environment.

                  "EVENT OF DEFAULT" means any of the events specified in
         Section 8.01, and following the implementation of the Borrowing Base,
         the additional events specified in Section 8.02.

                  "GAAP" means generally accepted accounting principles
         consistently applied. Except as otherwise approved by the Bank in
         writing, all financial reporting, financial record keeping, and
         financial calculations in connection with this Agreement shall be made
         on the basis of accounting principles, methods, elections and estimates
         that are consistent with GAAP and that are consistent with the
         accounting principles, methods, elections and estimates used in the
         financial statements described in Section 4.04, and that fairly present
         the financial condition or results of operations for the period then
         ended.

                                        3
<PAGE>
                  "GOVERNMENTAL AUTHORITY" means any nation or government, any
         state or other political subdivision thereof, any agency, authority,
         instrumentality, regulatory body, court, administrative tribunal,
         central bank or other entity exercising executive, legislative,
         judicial, taxing, regulatory or administrative powers or functions of
         or pertaining to government.

                  "LETTER OF CREDIT" has the meaning specified in Section 2.04.

                  "LINE OF CREDIT" has the meaning specified in Section 2.01.

                  "MATERIAL ADVERSE EFFECT" means a material adverse change in,
         or material adverse effect upon, the business, property or condition
         (financial or otherwise) of the Borrower and its Subsidiaries taken as
         a whole on a consolidated basis.

                  "OBLIGATIONS" means any and all liabilities, whether
         contingent or non-contingent, of the Borrower or its Subsidiaries to
         the Bank under or with respect to the Credit Documents, whether now
         existing or arising at any time hereafter.

                  "PERSON" means any natural person, corporation, limited
         liability company, trust, joint venture, association, company,
         partnership, Governmental Authority or other entity.

                  "PLAN" has the meaning specified in Section 4.10.

                  "PROHIBITED TRANSACTION" has the meaning assigned to that term
         in ERISA.

                  "REPORTABLE EVENT" has the meaning assigned to that term in
         ERISA.

                  "REVOLVING NOTE" has the meaning specified in Section 2.01.

                  "SECURITY AGREEMENT" has the meaning specified in Section
         7.01.

                  "SUBSIDIARIES" means any direct or indirect wholly owned
         subsidiary entity of the Borrower. The existing Subsidiaries of the
         Borrower are identified on Exhibit D.

                  "TANGIBLE NET WORTH" means the difference of:

                  (a) the tangible assets of the Borrower and its Subsidiaries
         which, in accordance with GAAP, are tangible assets, after deducting
         adequate reserves in each case where, in accordance with GAAP, a
         reserve is proper, minus

                  (b) all Debt of the Borrower and its Subsidiaries; provided,
         that (i) inventory shall be taken into account on the basis of the cost
         or current market value, whichever is lower, (ii) in no such event
         shall there be included as such tangible assets patents, trademarks,
         tradenames, copyrights, licenses, good will, memberships, prepaid
         expenses, deferred charges or treasury stock

                                       4
<PAGE>
         or any securities or debt of the Borrower and its Subsidiaries, or any
         receivables due to the Borrower or its Subsidiaries from or investments
         of the Borrower or its Subsidiaries in any Affiliate of the Borrower or
         its Subsidiaries, or any other debt or securities unless the same are
         readily marketable in the United States of America, (iii) securities
         included as such tangible assets shall be taken into account in
         accordance with GAAP, and (iv) any write-up in the book value of any
         assets shall not be taken into account.

                                   ARTICLE II.
                          Amount and Terms of Advances

         Section 2.01 Advances. Subject to the provisions of this Agreement, the
Borrower may obtain Advances, prepay, and obtain new Advances under this Section
2.01, and the Bank shall make such Advances to the Borrower from time to time
during the period from the date hereof to October 30, 2004 or the earlier date
of termination of the Line of Credit pursuant to Section 8.03, in an aggregate
maximum amount up to but not in excess of the Line of Credit. As used in this
Agreement, the term "LINE OF CREDIT" means the lesser of (a) $15,000,000.00, or
(b)(i) the Cash Collateral Balance or (ii) the Borrowing Base when the Borrowing
Base becomes effective under Article VII of this Agreement. The obligation to
repay the Advances and to pay interest and other charges, fees and expenses
thereon is evidenced by the Borrower's $15,000,000.00 Promissory Note dated the
date hereof payable to the order of the Bank (together with any amendments,
extensions, renewals and replacements thereof, called the "REVOLVING NOTE"). If
at any time the unpaid principal balance of the Revolving Note exceeds the Cash
Collateral Balance or the Borrowing Base, as applicable, the Borrower shall
immediately upon demand of the Bank make a mandatory principal payment on the
Revolving Note in an amount sufficient to bring the Borrower into compliance
with this Section 2.01. The Borrower shall use all proceeds of the Advances
solely for working capital of the Borrower. No proceeds of any Advance shall be
used to purchase any stock of the Borrower, any Subsidiary, or any Affiliate of
the Borrower or any Subsidiary.

         Section 2.02 Making the Advances. Each Advance shall be made on prior
written request from the Borrower to the Bank or prior telephonic request to the
Bank from the Borrower to the Bank made by any person purporting to be
authorized to request Advances on behalf of the Borrower, which request shall
specify the date of the requested Advance and the amount thereof and which
request shall be received by the Bank no later than 3:00 p.m. (Central Time) on
of the day on which the Advance is to be made. Upon fulfillment of the terms and
conditions of this Agreement, the Bank shall disburse the amount of any
requested Advance by crediting the same to the Borrower's checking account at
the Bank or in such other manner as the Bank and the Borrower may from time to
time agree. The Borrower shall be obligated to repay all Advances
notwithstanding the fact that the person requesting the same was not authorized
to do so, provided the Bank had a reasonable good faith basis to believe the
person requesting the Advance had the authority to do so. Any request for an
Advance shall be deemed to be a representation that the statements set forth in
Sections 3.02(a) and 3.02(b) are correct as of the date of such request.

         Section 2.03 Payment, Balance and Setoff. All payments of principal,
interest and other charges, fees and expenses under the Revolving Note and this
Agreement shall be made to the Bank in immediately available funds. The Borrower
agrees that the amount shown on the books and records of the Bank as being the
unpaid balance of principal, accrued interest and other charges, fees and
expenses under the Revolving Note and this Agreement shall be prima facie
evidence thereof. The Borrower hereby irrevocably authorizes the Bank, if and to
the extent payment is not promptly made pursuant hereto, to charge against

                                       5
<PAGE>
any amount owing by the Bank to the Borrower, an amount equal to the principal,
accrued interest and other charges, fees and expenses then due. In addition, the
Borrower hereby irrevocably authorizes the Bank to collect interest and other
charges, fees and expenses under the Revolving Note and this Agreement when due
from time to time by charging the Borrower's checking account at the Bank. The
Bank agrees to promptly notify the Borrower following the exercise of its rights
under this Section 2.03 but the failure to give such notice shall not affect the
validity of such action or the application of any funds to the payment of the
Obligations under this Section 2.03.

         Section 2.04 Letters of Credit. The Bank may in its discretion issue
one or more letters of credit as directed by the Borrower (collectively, the
"LETTER OF CREDIT"). In such case, the issuance of the Letter of Credit shall be
treated as an Advance of the Line of Credit and the Line of Credit availability
under this Agreement shall be restricted by the face amount of the Letter of
Credit outstanding from time to time. The Borrower agrees that any amounts
advanced by the Bank under any such Letter of Credit shall be a mandatory
Advance of the Line of Credit without any request or approval of the Borrower.
The obligations of the Borrower to pay advances made on the Letter of Credit
shall be unconditional and irrevocable, and shall be paid strictly in accordance
with the terms of the Revolving Note and this Agreement under all circumstances,
including, without limitation, the following circumstances: (a) the existence of
any claim, setoff, defense or other right which the Borrower may have at any
time against the holder of any beneficiary or transferee of the Letter of Credit
(or any persons or entities for whom such beneficiary or any such transferee may
be acting), the Bank or any other person or entity, whether in connection with
this Agreement, the transactions contemplated herein or in the Credit Documents;
(b) any statement or any other document presented under the Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect; (c) payment by the
Bank under the Letter of Credit against presentation of a draft or certificate
which does not comply with the terms of the Letter of Credit, except in the
event of the Bank's willful misconduct or gross negligence in determining
whether documents presented under the Letter of Credit comply with the terms of
the Letter of Credit. Any such Letter of Credit shall be in form and substance
acceptable to the Bank and shall have an expiration date of not later than
October 30, 2004, unless the Letter of Credit is fully secured by cash
collateral on deposit with the Bank in the Cash Collateral Account in which case
the expiration date of the Letter of Credit may be later than October 30, 2004.
The Bank shall not be obligated to release the collateral subject to the Deposit
Account Assignment and the Security Agreement until the Letter of Credit has
expired and all amounts owing to the Bank under the Revolving Credit Note,
including amounts, if any, advanced under the Letter of Credit have been paid in
full. If any change in any law or regulation or in the interpretation thereof by
any court or administrative or governmental authority charged with the
administration thereof shall either (i) impose, modify or deem applicable any
reserve, special deposit or similar requirement against letters of credit issued
by, or assets held by, or deposits in or for the account of, the Bank or (ii)
impose on the Bank any other condition regarding the Letter of Credit, and the
result of any event referred to in the preceding clause (i) or (ii) shall be to
increase the cost to the Bank of issuing or maintaining the Letter of Credit
(which increase in cost shall be determined by the Bank's reasonable allocation
of the aggregate of such cost increases resulting from such event), then, upon
demand by the Bank, the Borrower shall immediately pay to the Bank, from time to
time as specified by the Bank, additional amounts which shall be sufficient to
compensate the Bank for such increased cost.

                                       6
<PAGE>
                                  ARTICLE III.
                                   Conditions

         Section 3.01 Required Documents. The initial Advance shall be subject
to the condition precedent that the Bank shall have received prior thereto all
of the following, in form and substance acceptable to the Bank:

                  (a) The Revolving Note, properly executed by the Borrower.

                  (b) A Deposit Account Assignment and Security Agreement (the
         "DEPOSIT ACCOUNT ASSIGNMENT"), properly executed by the Borrower,
         granting to the Bank a first perfected security interest in the Cash
         Collateral Account, and all amounts now or at any time hereafter on
         deposit therein, and all interest and other earnings which may now or
         hereafter accrue thereon, whether now owned or hereafter acquired,
         whether now existing or hereafter arising, and all proceeds of the
         foregoing property.

                  (c) A certificate of authority of the Borrower. The Bank may
         conclusively rely on such certificate until it shall receive a further
         certificate of authority of the Borrower, in form and substance
         acceptable to the Bank, canceling or amending the prior certificate.

                  (d) A certificate of good standing of the Borrower, issued by
         the Delaware Secretary of State.

                  (e) The Certificate of Indebtedness and Liens, properly
         completed and executed by the chief financial officer of the Borrower.

                  (f) An opinion of legal counsel for the Borrower.

                  (g) Payment to the Bank of a one time origination fee in the
         amount of $18,000.00.

                  (h) Payment of the Bank's attorneys' fees and legal expenses,
         and other out-of-pocket expenses of the Bank incurred, in connection
         with the drafting of this Credit Agreement, the Note, the Deposit
         Account Assignment and closing the Loan, not to exceed $10,000.00.

         Section 3.02 Other Conditions. Each Advance shall be subject to the
further conditions precedent that:

                  (a) The representations and warranties contained of the
         Borrower contained in Article IV of this Agreement, and when the
         Borrowing Base is in effect (except during times when there is no
         amount outstanding on the Note other than amounts which will be due as
         a result of a draw on a Letter of Credit which is fully collateralized
         with cash collateral on deposit with the Bank in the Cash Collateral
         Account) the representations contained in Article VII of this
         Agreement, are correct as of the date of such Advance as though made as
         of such date, except to the extent that such representations and
         warranties relate solely to an earlier date; and

                                       7
<PAGE>
                  (b) No event has occurred, or would result from such Advance,
         which constitutes an Event of Default or would constitute an Event of
         Default with notice or passage of time or both.

                  (c) Until the Borrowing Base is implemented in accordance with
         Article VII of this Agreement, collected unrestricted funds of the
         Borrower (and not funds of a Subsidiary) are deposited by the Borrower
         into the Cash Collateral Account equal to the sum of the aggregate
         outstanding principal amount of all prior Advances plus any portion of
         the Line of Credit reserved to support unexpired Letters of Credits
         plus the amount of the requested Advance. The Borrower shall provide to
         the Bank at the time of each deposit into the Cash Collateral Account a
         certificate executed by the chief financial officer or corporate
         controller of the Borrower certifying to the Bank that the funds then
         being deposited into the Cash Collateral Account are the collected
         unrestricted funds of the Borrower (and not funds of a Subsidiary).

                  (d) Each Advance requested during any time that the Borrowing
         Base is in effect in accordance with Article VII of this Agreement
         (except during times when there is no amount outstanding on the Note
         other than amounts which will be due as a result of a draw of a Letters
         of Credit which is fully collateralized by cash collateral on deposit
         with the Bank in the Cash Collateral Account), shall be subject to the
         following additional conditions precedent:

                          (i)   The Bank shall have received all Borrowing Base
                                Certificates required to be delivered by the
                                Borrower;

                          (ii)  The Bank shall have received a Covenant
                                Compliance Certificate for the fiscal quarter of
                                the Borrower most currently ending and for which
                                a Covenant Compliance Certificate is due in
                                accordance with Section 5.01(f) of this
                                Agreement; and

                          (iii) The most recent Borrowing Base Certificate
                                shows, to the satisfaction of the Bank, that the
                                sum of the aggregate outstanding principal
                                amount of all prior Advances plus any amount of
                                the Line of Credit reserved to support unexpired
                                Letters of Credits plus the amount of the
                                requested Advance does not exceed the Borrowing
                                Base.

                                   ARTICLE IV.
                         Representations and Warranties

         The Borrower represents and warrants to the Bank as follows:

         Section 4.01 Corporate Existence and Power. The Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, is duly licensed or qualified to transact
business in all jurisdictions where the character of the property owned or
leased or the nature of the business transacted by it makes such licensing or
qualification necessary except where the Borrower's failure to so license or
qualify does not cause a Material Adverse Effect, and has all requisite power
and authority to own its property and carry on its business. The Borrower has
all requisite power and authority to execute and deliver and to perform all of
its obligations under the Credit Documents.

                                       8
<PAGE>
         Section 4.02 Authorization. The execution, delivery and performance by
the Borrower of the Credit Documents have been duly authorized by all requisite
action and do and will not (a) require any consent or approval of any person or
entity or governmental authority, (b) violate any law, rule, regulation, order,
writ, injunction or decree, or the articles, bylaws, or shareholder control
agreement of the Borrower, (c) result in a breach of or constitute a default
under any contract, agreement or other writing to which the Borrower is a party
or by which the Borrower or any property of the Borrower may be bound or
affected, or (d) result in, or require the creation or imposition of, any
mortgage, deed of trust, assignment, security interest or other lien, interest,
encumbrance, claim or charge of any nature, except in favor of the Bank, upon or
with respect to any property of the Borrower.

         Section 4.03 Legal Agreements. The Credit Documents constitute the
legal, valid and binding obligations of the Borrower, enforceable in accordance
with their respective terms, subject to bankruptcy, insolvency and similar laws,
statutes of limitation and principles of equity.

         Section 4.04 Financial Statements. The Borrower has provided or has
made available through public filing the following financial statements to the
Bank: annual audited fiscal year end financial statements of the Borrower as of
June 30, 2002, and quarterly interim financial statements of the Borrower as of
March 31, 2003. Said statements, including all schedules and notes pertaining
thereto, were prepared in accordance with GAAP, and fully and fairly present the
financial condition of the Borrower on the dates thereof and the results of its
operations for the periods covered thereby; provided however, the quarterly
statements are subject to customary year end adjustments in the annual financial
statement for such fiscal year which in the aggregate do not cause a Material
Adverse Effect.

         Section 4.05 No Adverse Change. There has been no material adverse
change in the business, property or condition (financial or otherwise) of the
Borrower since the date of the latest financial statement referred to in
Sections 4.04 and 5.01.

         Section 4.06 Titles and Liens. The Borrower has good title to all of
the property reflected in the latest balance sheet referred to in Sections 4.04
and 5.01, free and clear of all mortgages, deeds of trust, assignments, security
interests and other liens, interests, encumbrances, claims and charges, except
for liens permitted by Section 6.01 and covenants, restrictions, rights,
easements and minor irregularities in title which do not materially interfere
with the business or operations of the Borrower.

         Section 4.07 Taxes. The Borrower has filed all required tax returns,
has paid all due and payable taxes, assessments and other governmental charges
levied or imposed upon it or upon its income or profits or upon any of its
property, and has made adequate provision for the payment of such taxes,
assessments and other charges accruing but not yet due and payable; except for
those being contested in good faith and for which adequate reserves have been
established or those that do no otherwise cause a Material Adverse Effect.

         Section 4.08 Litigation. There is no pending or threatened notice,
claim, litigation, proceeding or investigation against or affecting the Borrower
or any property of the Borrower, whether or not covered by insurance, that would
cause a Material Adverse Effect, and there is no basis for any such order,
notice, claim, litigation, proceeding or investigation.

                                       9
<PAGE>
         Section 4.09 Margin Stock. The Borrower is not engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System), and no part of the proceeds of any Advance will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying any margin stock.

         Section 4.10 Employee Benefit Plans. No Reportable Event or Prohibited
Transaction has occurred with respect to any employee benefit plan or other plan
maintained for employees of the Borrower ("PLAN"). Each Plan is in compliance
with all applicable requirements of ERISA and all applicable rulings and
regulations thereunder.

         Section 4.11 No Stock or Securities. The Borrower owns no shares of
stock or securities of any Person other than stock of the Subsidiaries and
except as set forth in Exhibit D.

         Section 4.12 Environmental Matters.

                  (a) The Borrower is not in violation of any Environmental Law
         which would cause a Material Adverse Effect; and

                  (b) No disposal or release of any hazardous or toxic material
         has occurred on, from or under any property owned, operated or
         controlled by the Borrower which would cause a Material Adverse Effect
         (as to property leased by the Borrower as lessee, this representation
         is to the Borrower's knowledge only); and

                  (c) There has been no treatment, manufacturing, refining,
         handling or storage of any hazardous or toxic material at any property
         owned, operated or controlled by the Borrower, which could cause a
         Material Adverse Effect (as to property leased by the Borrower as
         lessee, this representation is to Borrower's knowledge only); and

                  (d) No litigation, investigation or administrative action has
         been commenced or is pending or threatened, nor has any settlement been
         reached with any public or private party or parties, or any order
         issued, relating in any way to any alleged or actual presence, disposal
         or release of any hazardous or toxic material or any violation of any
         Environmental Law with respect to any property owned, operated or
         controlled by the Borrower which could cause a Material Adverse Effect
         (as to property leased by the Borrower as lessee, this representation
         is to Borrower's knowledge only); and

                  (e) To the Borrower's knowledge, all tenants of the Borrower
         have filed all notices and permit applications required to be filed
         under the Environmental Laws with respect to their businesses, property
         and operations; and

                  (f) The Borrower has no known material contingent liability
         with respect to its business, property or operations as now or
         previously owned, operated, controlled or conducted by the Borrower in
         connection with any hazardous or toxic material or any Environmental
         Law which could cause a Material Adverse Effect.

                                       10
<PAGE>
                                   ARTICLE V.
                              Affirmative Covenants

         So long as any Obligation shall remain outstanding, the Borrower shall
comply with the following requirements:

         Section 5.01 Financial Statements and Other Information. The Borrower
shall deliver to the Bank, in form and substance acceptable to the Bank:

                  (a) As soon as available, and in any event within ninety (90)
         days after the end of each fiscal year of the Borrower (beginning with
         the fiscal year ending June 30, 2003), a copy of the annual audited
         consolidated financial statements of the Borrower and its Subsidiaries
         prepared by independent certified public accountants selected by the
         Borrower and acceptable to the Bank, which report shall include the
         consolidated balance sheet of the Borrower and its Subsidiaries as of
         the end of such fiscal year, and the related statements of income, cash
         flows and stockholders' equity of the Borrower and its Subsidiaries for
         such fiscal year, including all supporting schedules and notes, all in
         reasonable detail, prepared in accordance with GAAP.

                  (b) As soon as available and in any event within forty-five
         (45) days after the end of each fiscal quarter of the Borrower, the
         interim consolidated reviewed financial statement of the Borrower and
         its Subsidiaries reviewed by independent certified accountants selected
         by the Borrower and acceptable to the Bank, including a consolidated
         balance sheet, statements of income and cash flows of the Borrower and
         its Subsidiaries for such quarter and for year to date, including all
         supporting schedules and notes, all in reasonable detail, prepared in
         accordance with GAAP, subject however, to year-end audit adjustments.

                  (c) As soon as available and in any event within forty-five
         (45) days after the end of each calendar month, "draft" internally
         prepared confidential consolidated month end financial statement of the
         Borrower and its Subsidiaries without any representation as to accuracy
         or completeness, including a consolidated balance sheet and a
         consolidated income statement of the Borrower and its Subsidiaries.

                  (d) Promptly after sending, making available or filing the
         same, copies of all other financial statements, reports, proxy
         statements, registration statements and other communications which the
         Borrower or its Subsidiaries sends or makes available to its
         stockholders or files with any securities exchange.

                  (e) Within 10 days after the Bank's request therefor, such
         other information respecting the condition (financial or otherwise),
         business and property of the Borrower or its Subsidiaries as the Bank
         may from time to time reasonably request.

                  (f) As promptly as practicable (but in any event not later
         than five (5) days after Borrower's chief executive officer, chief
         financial officer, corporate controller or any other executive officer
         obtains knowledge of the occurrence of any event which constitutes an
         Event of Default or would constitute an Event of Default with notice or
         passage of time or both), written notice of such occurrence, together
         with a detailed statement by a responsible officer of the Borrower of
         the steps being taken to cure the effect of such event.

                                       11
<PAGE>
                  (g) During any time that the Borrowing Base is in effect in
         accordance with Article VII of this Agreement (except during times when
         there is no amount outstanding on the Note other than amounts which
         will be due as a result of a draw on a Letter of Credit which is fully
         collateralized with cash collateral on deposit with the Bank in the
         Cash Collateral Account), the Borrower shall also deliver to the Bank:

                          (i)   As soon as available and in any event within
                                thirty (30) days after the end of each month, a
                                Borrowing Base Certificate with amounts
                                determined as of the end of such month and
                                executed by the chief financial officer or
                                corporate controller of the Borrower;

                          (ii)  As soon as available and in any event within
                                thirty (30) days after the end of each month,
                                the listing and aging of accounts receivable of
                                the Borrower and a report of work in process of
                                the Borrower, all as the end of such month,
                                including all supporting schedules and notes,
                                all in reasonable detail, prepared by the chief
                                financial officer of the Borrower in accordance
                                with GAAP, executed by the chief financial
                                officer or corporate controller of the Borrower;
                                and

                          (iii) As soon as available and in any event within
                                forty-five (45) days after the end of each
                                fiscal quarter of the Borrower, a Covenant
                                Compliance Certificate with calculations
                                determined as of each fiscal quarter end for the
                                Debt to Tangible Net Worth Ratio and as of each
                                fiscal year end of the Borrower for the Debt
                                Service Coverage Ratio, executed by the chief
                                financial officer or corporate controller of the
                                Borrower.

         Section 5.02 Books and Records. The Borrower shall keep accurate books
and records in which true and complete entries will be made in accordance with
GAAP. Upon reasonable request of the Bank, the Borrower, during normal business
hours, shall give any representatives of the Bank access to and permit such
representatives to examine and copy all books, records and other writings in its
possession, to inspect its property and to discuss its finances, accounts,
property and business with any of its officers and directors.

         Section 5.03 Taxes and Other Claims. The Borrower shall file when due
all required tax returns, shall pay when due all taxes, assessments and other
governmental charges levied or imposed upon the Borrower or upon the Borrower's
income or profits or upon any of the Borrower's property, and shall pay when due
all lawful claims for labor, materials and supplies which, if unpaid, might
become a lien or charge upon any property of the Borrower; provided, that the
Borrower shall not be required to pay any such tax, assessment, charge or claim
whose amount, applicability or validity is being contested in good faith by
appropriate proceedings, and for which the Borrower has set aside adequate
reserves for the payment thereof.

                                       12
<PAGE>
         Section 5.04 Maintenance of Properties. The Borrower shall keep and
maintain the Borrower's inventory, equipment, real estate and other property
necessary or useful in the Borrower's business in good condition and repair and
shall pay when due all rental and mortgage payments due on such property;
provided, that nothing in this Section shall prevent the Borrower from
discontinuing the operation and maintenance of any such property if such
discontinuance is desirable in the conduct of the Borrower's business which
would not cause a Material Adverse Effect.

         Section 5.05 Insurance. The Borrower shall obtain and maintain
insurance with insurers that are reasonably acceptable to the Bank, in such
amounts and with such coverages (including without limitation liability
insurance, fire, hazard and extended coverage insurance on all of the Borrower's
assets, necessary workers' compensation insurance and all other coverages as are
consistent with industry practice) as are reasonably acceptable to the Bank. In
the event the Borrower fails to pay any premium on any such insurance, the Bank
may do so, and the Borrower shall reimburse the Bank for any such payment on
demand.

         Section 5.06 Corporate Existence. The Borrower shall preserve and
maintain its corporate existence and all of the Borrower's corporate rights,
privileges and franchises.

         Section 5.07 Compliance with Laws. The Borrower shall comply with all
applicable laws and regulations except where the failure to do so would not
cause a Material Adverse Effect.

         Selection 5.08 Accounts. The Borrower shall maintain its primary
operating account with the Bank.

         Section 5.09 Operating Covenants. During any time that the Borrowing
Base is in effect in accordance with Article VII of this Agreement (except
during times when there is no amount outstanding on the Note other than amounts
which will be due as a result of a draw on a Letter of Credit which is fully
collateralized by cash collateral on deposit with the Bank in the Cash
Collateral Account), the following operating covenants shall be in effect:

                  (a) As of the end of each fiscal quarter of the Borrower, the
         Borrower shall not permit the ratio of the Borrower's Debt to Tangible
         Net Worth to exceed 1.0 to 1.0 (the "DEBT TO TANGIBLE NET WORTH
         RATIO").

                  (b) As of the end of each fiscal year of the Borrower, the
         Borrower shall not permit the Borrower's Debt Service Coverage Ratio to
         be less than 1.25 to 1.

                  (c) The Borrower shall maintain a quarterly profit of at least
         $1.00 before taxes.

                                       13
<PAGE>
                                   ARTICLE VI.
                               Negative Covenants

         The Borrower shall not do any of the following without the prior
written consent of the Bank, which consent shall not be unreasonably withheld.
The following negative covenants shall only be in effect during the time that
the Borrowing Base is in effect in accordance with Article VII of this Credit
Agreement (but not during times when there is no amount outstanding on the Note
other than amounts which will be due as a result of a draw on a Letter of Credit
which is fully collateralized by cash collateral on deposit with the Bank in the
cash collateral Account):

         Section 6.01 Liens on General Business Assets. The Borrower shall not
create, incur or permit to exist in favor of any Person other than the Bank any
mortgage, deed of trust, assignment, security interest or other lien on any of
its property now owned or hereafter acquired, except: (a) purchase money
security interests in equipment of the Borrower, (b) other mortgages, deeds of
trust, assignments, security interests and other liens in existence on the date
of the implementation of the Borrowing Base in accordance with Article VII of
this Credit Agreement and listed on the updated Certificate of Indebtedness and
Liens to be delivered to the Bank under Article VII of this Credit Agreement,
and (c) liens that are being contested in good faith and for which adequate
reserves have been established.

         Section 6.02 Sale of Assets. The Borrower shall not sell, lease,
assign, transfer or otherwise dispose of all or a substantial part of its assets
(whether in one or more transactions).

         Section 6.03 Corporate Structure. The Borrower shall not consolidate
with or merge into any other person or entity, or permit any other person or
entity to merge into the Borrower, or acquire all or a substantial part of the
assets of any other person or entity, except where the Borrower is the surviving
entity by merger or consolidation and no change of control has occurred.

         Section 6.04 Nature of Business. The Borrower shall not engage in any
line of business materially different from that presently engaged in by the
Borrower.

         Section 6.05 Investments. The Borrower shall not purchase or hold
beneficially any shares of stock or other securities or evidences of
indebtedness of any other Person, make or permit to exist any loans or advances
to any other Person, or make any investment or acquire any interest whatsoever
in any other Person or entity, except:

                  (a) Deposits in the Bank;

                  (b) Other deposits which are fully insured by the Federal
         Deposit Insurance Corporation;

                  (c) Repurchase agreements with the Bank;

                  (d) Commercial paper issued by corporations incorporated in
         the United States of America, rated "A-1" by Standard & Poors
         Corporation or "Prime-1" by Moody's Investors Service, Inc.;

                                       14
<PAGE>
                  (e) Shares of money market mutual funds incorporated or
         organized in the United States of America;

                  (f) Obligations of, or guaranteed by, the United States
         Government or any agency thereof;

                  (g) Business-related advances to officers, managers and
         employees of the Borrower for travel relating to the Borrower's
         business;

                  (h) Advances in the form of progress payments, prepaid rent or
         security deposits; and

                  (i) Stock or indebtedness of its Subsidiaries, including the
         Subsidiaries listed on Exhibit D.

                  (j) Existing obligations to make loans set forth in Exhibit E.

                                  ARTICLE VII.
                        Implementation of Borrowing Base

         Section 7.01 Implementation of Borrowing Base. Subject to the
fulfillment of each condition precedent set forth in this Article VII to the
satisfaction of the Bank, the Bank will implement the Borrowing Base to support
Advances of the Line of Credit in lieu of the Borrower providing Cash Collateral
to support Advances of the Line of Credit:

                  (a) The Borrower establishes a net profit before taxes in two
         (2) consecutive fiscal quarters.

                  (b) The Borrower establishes a Debt to Tangible Net Worth
         Ratio of not more than 1.0 to 1.0.

                  (c) The Bank has completed a satisfactory collateral audit of
         the Borrower and its Subsidiaries and the Borrower's assets and the
         assets of the Borrower's Subsidiaries. The Borrower agrees to pay or
         reimburse the Bank for the reasonable cost of such collateral audit,
         not to exceed $2,500.00.

                  (d) The Borrower and each Subsidiary executes and delivers to
         the Bank a Security Agreement in form and content acceptable to the
         Bank (collectively, the "SECURITY AGREEMENT"), granting to the Bank a
         first perfected security interest in the following:

                           (i)  All inventory of the Borrower and its
                                Subsidiaries, and all returns of such inventory,
                                and all warehouse receipts, bills of lading and
                                other documents covering such inventory, whether
                                now existing or hereafter arising, whether now
                                owned or hereafter acquired;

                                       15
<PAGE>

                          (ii)  All equipment of the Borrower and its
                                Subsidiaries, together with all accessions,
                                accessories, attachments, fittings, increases,
                                parts, repairs, returns, renewals and
                                substitutions of all or any part thereof, and
                                all warehouse receipts, bills of lading and
                                other documents covering such equipment, whether
                                now existing or hereafter arising, whether now
                                owned or hereafter acquired;

                          (iii) All accounts of the Borrower and its
                                Subsidiaries (including but not limited to all
                                health-care-insurance receivables), instruments,
                                chattel paper, investment property,
                                letter-of-credit rights, letters of credit,
                                other rights to payment, documents, deposit
                                accounts, money, patents, patent applications,
                                trademarks, trademark applications, copyrights,
                                copyright applications, trade names, other
                                names, software, including all embedded
                                software, payment intangibles, and other general
                                intangibles of the Borrower and its
                                Subsidiaries, together with all good will
                                related to the foregoing property and all
                                rights, liens, security interests and other
                                interests which the Borrower and its
                                Subsidiaries may at any time have by law or
                                agreement against any account, issuer or obligor
                                obligated to make any such payment or against
                                any of the property of such account debtor,
                                issuer, or obligor, and all supporting
                                obligations relating to the foregoing, whether
                                now existing or hereafter arising, whether now
                                owned or hereafter acquired;

                          (iv)  All records and data pertaining to all of the
                                foregoing property, whether in the form of
                                writing, photograph, microfilm, microfiche, or
                                electronic media, together with all of the
                                Borrower and its Subsidiaries's software,
                                including embedded software, required to
                                utilize, create, maintain and process any such
                                records or data on electronic media; and

                          (v)   All products and proceeds of the foregoing
                                property, including without limitation all
                                accounts, instruments, chattel paper, investment
                                property, letter-of-credit rights, letters of
                                credit, other rights to payment, documents,
                                deposit accounts, money, insurance proceeds and
                                general intangibles related to the foregoing
                                property, and all refunds of insurance premiums
                                due or to become due under all insurance
                                policies covering the foregoing property.

                                Notwithstanding the foregoing, the Borrower will
                                not be required to file collateral assignments
                                of its patents or trademarks with the federal
                                office of Patents or Trademarks or register any
                                of its copyrights or software with the U.S.
                                Copyright office.

                  (e) The Borrower delivers to the Bank an initial Borrowing
         Base Certificate, an initial Covenant Compliance Certificate and an
         updated Certificate of Indebtedness and Liens, properly completed and
         extended by the chief financial officer or corporate controller of the
         Borrower.

                  (f) All financing statements, termination statements, and
         other writings, properly executed, which are deemed by the Bank to be
         necessary or desirable to grant the Bank a perfected security interest
         constituting a first lien on the property described in Section 7.01(d)
         of this Agreement.

                                       16
<PAGE>
                  (g) UCC and state and federal tax lien searches, with respect
         to the Borrower and its Subsidiaries, duly certified to a current date
         by the appropriate filing officer, from the Secretary of State of
         Delaware, the Secretary of State of Minnesota, and each and every other
         jurisdiction in which the Borrower and its Subsidiaries have owned
         assets in the past five (5) years.

                  (h) A certificate of insurance covering the tangible property
         described in the Section 7.01(d) of this Agreement, in such amounts,
         against such risks and in such companies as shall be reasonably
         acceptable to the Bank, which certificate shall name the Bank as lender
         loss payee and shall provide for at least thirty (30) days' prior
         written notice to the Bank of any cancellation or modification of such
         insurance, and certificates of all other insurance required by Section
         5.05 of this Agreement.

                  (i) A certificate of authority of the Borrower and each
         Subsidiary. The Bank may conclusively rely on such certificate until it
         shall receive a further certificate of authority of the Borrower or the
         Subsidiary, in form and substance acceptable to the Bank, canceling or
         amending the prior certificate.

                  (j) A current certificate of good standing of the Borrower and
         each Subsidiary, issued by the Secretary of State of the State of
         organization of the Borrower and each Subsidiary.

                  (k) An opinion of legal counsel for the Borrower and each
         Subsidiary.

                  (l) Payment of the Bank's attorneys' fees and legal expenses,
         and other out-of-pocket expenses of the Bank in drafting the Security
         Agreement and closing the implementation of the Borrowing Base, not to
         exceed $2,000.00.

         Section 7.02 Other Conditions. The implementation of the Borrowing Base
shall be subject to the further conditions precedent that:

                  (a) The representations and warranties of the Borrower
         contained in Article IV are correct as of the date of the
         implementation of the Borrowing Base as though made as of such date,
         except to the extent that such representations and warranties relate
         solely to an earlier date;

                  (b) Each of the following representations and warranties will
         be true and correct for each of the Subsidiaries:

                          (i)   The execution, delivery and performance by each
                                Subsidiary of the Security Agreement has been
                                duly authorized by all requisite action and do
                                and will not (A) require any consent or approval
                                of any person or entity or governmental
                                authority, (B) violate any law, rule,
                                regulation, order, writ, injunction or decree,
                                or the articles, bylaws, or shareholder control
                                agreement of the Subsidiary, (C) result in a
                                breach of or constitute a default under any
                                contract, agreement or other writing to which
                                the Subsidiary is a party or by which the
                                Subsidiary or any property of the Subsidiary may
                                be bound or affected, or (D) result in, or
                                require the creation or imposition of, any
                                mortgage, deed of trust, assignment, security
                                interest or other lien, interest, encumbrance,
                                claim or charge of any nature, except in favor
                                of the Bank, upon or with respect to any
                                property of the Subsidiary;

                                       17
<PAGE>
                          (ii)  The Security Agreement constitutes the legal,
                                valid and binding obligations of the Subsidiary,
                                enforceable in accordance with their respective
                                terms, subject to bankruptcy, insolvency and
                                similar laws, statutes of limitation and
                                principles of equity;

                          (iii) No Material Adverse Effect has occurred since
                                the date of the latest financial statement
                                referred to in Sections 4.04 and 5.01; and

                          (iv)  The Subsidiary has good title to all of the
                                property reflected in the latest balance sheet
                                referred to in Sections 4.04 and 5.01, free and
                                clear of all mortgages, deeds of trust,
                                assignments, security interests and other liens,
                                interests, encumbrances, claims and charges,
                                except for liens permitted by Section 6.01 with
                                respect to the Subsidiary and covenants,
                                restrictions, rights, easements and minor
                                irregularities in title which do not materially
                                interfere with the business or operations of the
                                Subsidiary.

                                  ARTICLE VIII.
                     Events of Default, Rights and Remedies

         Section 8.01 Events of Default. The occurrence of any of the following
events shall constitute an Event of Default under this Credit Agreement and the
other Credit Documents:

                  (a) Any default in the payment of any amount due under this
         Agreement or the Revolving Note within five (5) days of its due date;
         or

                  (b) Any material statement, representation or warranty of the
         Borrower (or any officer, director, employee, agent or attorney of the
         Borrower) to the Bank at any time, including without limitation any
         statement, representation or warranty made in this Agreement or in any
         writing contemplated by this Agreement, shall be incorrect or
         misleading in any material respect when made; or

                  (c) Any non-monetary default in the performance or breach of
         any other covenant or agreement of the Borrower in this Agreement, any
         writing contemplated by this Agreement, or any other agreement with the
         Bank which continues in effect for thirty (30) days after written
         notice thereof by the Bank to the Borrower; provided however, a notice
         of default does not have to be given by the Borrower under this
         Agreement if notice of the same default is being given to the Borrower
         under any other writing contemplated by this Agreement or in any other
         agreement with the Bank, or if such default is otherwise provided for
         in this Section 8.01; or

                  (d) The Borrower shall be dissolved or become insolvent, make
         an assignment for the benefit of creditors, apply for or consent to the
         application or suffer the appointment of any receiver, trustee or
         similar officer, or initiate or have initiated against it any act,
         process or proceeding under any insolvency, bankruptcy, dissolution,
         liquidation or similar law; or

                                       18
<PAGE>
                  (e) Any default under any other bond, debenture, note or other
         evidence of indebtedness of the Borrower in favor of the Bank, or under
         any indenture or other writing under which any such evidence of
         indebtedness has been issued or by which it is governed or the
         acceleration of payment of any such indebtedness, following the passage
         of any applicable grace or cure period; or

                  (f) Any default under any bond, debenture, note or other
         evidence of indebtedness of the Borrower to any party other than the
         Bank, or under any indenture or other writing under which any such
         evidence of indebtedness has been issued or by which it is governed or
         the acceleration of payment of any such indebtedness, following the
         passage of any applicable grace or cure period and resulting in a
         Material Adverse Effect; or

                  (g) The Borrower shall suffer a final judgment or other order
         for the payment of money in the amount of $10,000,000.00 or more or
         which otherwise results in a Material Adverse Effect that is not or is
         no longer subject to a stay pending appeal; or

                  (h) The issuance or levy of any writ, warrant, attachment,
         garnishment, execution or similar process against any property of the
         Borrower, or the attachment of any tax lien to any property of the
         Borrower which has not been stayed; or

                  (i) The occurrence of any Reportable Event or Prohibited
         Transaction with respect to any Plan, or any Plan shall not be in
         compliance with all applicable requirements of ERISA and all applicable
         rules and regulations thereunder, or any Plan shall terminate, or a
         trustee is appointed by any court to administer any Plan, or the
         Pension Benefit Guaranty Corporation shall institute any proceeding
         with respect to any Plan; or

                  (j) Any event resulting in a Material Adverse Effect occurs;
         or

                  (k) The Borrower shall fail to be in compliance with any of
         the operating covenants specified in Section 5.09 of this Agreement
         during any time that such operating covenants are in effect; or

                  (l) The Borrower fails to timely deliver any financial
         statement or certificate required to be delivered to the Bank under
         Sections 5.01(a), (b), (c) or (g) of this Agreement within the period
         of time allowed for the delivery of the same as provided in this
         Agreement.

         Section 8.02 Additional Events of Default. Following the implementation
of the Borrowing Base under Article VII of this Agreement, the following shall
be additional Events of Default under this Credit Agreement and all other Credit
Documents:

                  (a) Any material statement, representation or warranty of a
         Subsidiary (or any officer, director, employee, agent or attorney of
         such Subsidiary) to the Bank at any time, including without limitation
         any statement, representation or warranty made in the Security
         Agreement or in any writing contemplated by the Security Agreement,
         shall be incorrect or misleading in any material respect when made; or

                                       19
<PAGE>
                  (b) Any Subsidiary shall be dissolved or become insolvent,
         make an assignment for the benefit of creditors, apply for or consent
         to the application or suffer the appointment of any receiver, trustee
         or similar officer, or initiate or have initiated against it any act,
         process or proceeding under any insolvency, bankruptcy, dissolution,
         liquidation or similar law; provided however, a dissolution of a
         Subsidiary into the Borrower or another Subsidiary shall be permitted
         and shall not create an Event of Default; or

                  (c) Any default under any other bond, debenture, note or other
         evidence of indebtedness of any Subsidiary in favor of the Bank, or
         under any indenture or other writing under which any such evidence of
         indebtedness has been issued or by which it is governed or the
         acceleration of payment of any such indebtedness following the passage
         of any applicable grace or cure period; or

                  (d) Any default under any bond, debenture, note or other
         evidence of indebtedness of any Subsidiary to any party other than the
         Bank, or under any indenture or other writing under which any such
         evidence of indebtedness has been issued or by which it is governed or
         the acceleration of payment of any such indebtedness following the
         passage of any applicable grace or cure period, resulting in a Material
         Adverse Effect; or

                  (e) Any Subsidiary shall suffer a final judgment or other
         order for the payment of money in the amount of $10,000,000.00 or more
         or which otherwise results in a Material Adverse Effect that is not or
         is no longer subject to a stay pending appeal; or

                  (f) The issuance or levy of any writ, warrant, attachment,
         garnishment, execution or similar process against any property of any
         Subsidiary, or the attachment of any tax lien to any property of any
         Subsidiary which has not been stayed.

         Section 8.03 Rights and Remedies. Upon the commencement of any
proceeding under any bankruptcy law by or against the Borrower, the Line of
Credit shall automatically terminate, and all principal, interest, and other
charges, fees and expenses under the Revolving Note and this Agreement and all
other Obligations to the Bank shall become immediately due and payable in full,
all without declaration, presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by the Borrower. Upon the
occurrence of any Event of Default or at any time thereafter until such Event of
Default is cured to the written satisfaction of the Bank, the Bank may exercise
any and all of the following rights and remedies:

                  (a) The Bank may, by notice to the Borrower, declare the Line
         of Credit to be terminated, whereupon the same shall terminate.

                  (b) The Bank may declare all principal, interest and other
         charges, fees and expenses under the Revolving Note and this Agreement
         and all other Obligations to the Bank to be immediately due and payable
         in full, whereupon the same shall become immediately due and payable in
         full, without presentment, demand, protest or other notice of any kind,
         all of which are hereby expressly waived by the Borrower.

                                       20
<PAGE>
                  (c) The Bank may exercise and enforce its rights and remedies
         under the Deposit Account Assignment, the Security Agreement, the other
         writings contemplated hereby, the Uniform Commercial Code and any other
         applicable law.

         Section 8.04 Assignment and Setoff. The Borrower grants the Bank a lien
and security interest in all of the Borrower's present and future property now
or hereafter in the possession, control or custody of, or in transit to, the
Bank for any purpose, and the balance of every present and future account of the
Borrower with the Bank, including without limitation, the Cash Collateral
Account, and each present and future claim of the Borrower against the Bank.
Such lien and security interest secures all present and future debts,
obligations and liabilities of the Borrower to the Bank. The Bank may, at any
time following the occurrence of an Event of Default place a freeze or block on
such account balances and foreclosure such lien and security interest, and the
Bank may offset of charge all or any part of the aggregate amount of the
Obligations against any such account without any advance notice. The Bank agrees
to promptly notify the Borrower following the exercise of its offset rights
under this Section 8.04, provided that failure to give such notice shall not
effect the validity of such action or the application of any funds of the
Borrower to the payment of the Obligations as provided in this Section 8.04.

                                   ARTICLE IX.
                                  Miscellaneous

         Section 9.01 Waiver and Amendment. No provision of any of the Credit
Documents can be waived, except by a writing executed by the Bank, nor may any
provision of this Credit Agreement be modified, amended, abridged, replaced,
supplemented or terminated, except by a writing executed by the Bank and the
Borrower. A waiver by the Bank shall be effective only in the specific instance
and for the specific purpose given. No delay or failure by the Bank to exercise
any right or remedy shall be a waiver thereof nor shall any single or partial
exercise by the Bank of any right or remedy preclude any other exercise thereof
or the exercise of any other right or remedy. All rights and remedies of the
Bank under this Agreement and any other writing are cumulative and not
exclusive.

         Section 9.02 Indemnification. The Borrower agrees to indemnify and hold
harmless the Bank and the Bank's former, present and future officers, directors,
employees, agents, shareholders, affiliates and attorneys, and all of their
respective heirs, representatives, successors and assigns, from any and all
losses, liabilities (including without limitation strict liability), suits,
obligations, fines, damages, judgments, penalties, actions, causes of action,
charges, costs and expenses, including but not limited to reasonable attorneys'
fees and legal expenses and consultants' fees and expenses, whether based on
tort, contract, implied or express warranty, statute, regulation, common law or
otherwise, arising out of or related to the presence on, remediation of or
release from any property at any time owned, operated or controlled by the
Borrower, including without limitation any building, structure or equipment
thereon, of any toxic or hazardous waste, constituent or substance or in
connection with any Environmental Law applicable to any such hazardous or toxic
waste, constituent or substance, unless the same was caused solely by any action
or inaction of the Bank or any of its former, present or future officers,
directors, employees, agents, shareholders, affiliates or attorneys or any of
their respective heirs, representatives, successors or assigns.

         Section 9.03 Costs and Expenses. The Borrower shall pay to the Bank on
demand all of the Bank's fees, costs and expenses, including but not limited to
audit fees and expenses and reasonable attorneys' fees and legal expenses, in
connection with the preparation, amendment, administration and enforcement of
this

                                       21
<PAGE>
Agreement and the writings contemplated by this Agreement and the transactions
and matters relating to this Agreement and any such writings, including without
limitation, all reasonable attorneys' fees and legal expenses incurred by the
Bank in connection with or arising from any bankruptcy or insolvency case or
proceeding filed by or against the Borrower.

         Section 9.04 Addresses. All notices, requests, demands and other
communications provided for under this Agreement and the writings contemplated
by this Agreement shall be in writing and shall be delivered in person, faxed,
or deposited in the mail, postage prepaid, addressed as follows:

           If to Borrower:     IDENTIX INCORPORATED
                               Attention:  Mr. Erik Prusch
                               5600 Rowland Road
                               Minnetonka, Minnesota 55343-4315
                               Fax No. 952-945-5522

           If to the Bank:     ASSOCIATED BANK MINNESOTA, NATIONAL ASSOCIATION
                               Attention: G. Richard Gove
                               2655 Campus Drive
                               Plymouth, Minnesota 55441
                               Fax No. 763-533-3700

or, as to each party, at such other address or fax number as shall be designated
by such party in a written notice to the other party complying as to delivery
with the terms of this Section. All such notices, requests, demands and other
communications shall be effective when actually delivered, faxed, or deposited
in the mail, except that notices and requests to the Bank pursuant to Article II
shall not be effective until received by the Bank.

         Section 9.05 Binding Effect and Assignment. The Credit Documents shall
bind and benefit the parties hereto and thereto and their respective successors
and assigns, except that the Borrower shall have no right to assign any of its
rights hereunder or thereunder or any interest herein or therein without the
prior written consent of the Bank, and any assignment in violation of this
sentence shall be void. If any provision or application of any of the Credit
Documents are held unlawful or unenforceable in any respect, such illegality or
unenforceability shall not affect the other provisions or applications which can
be given effect, and this Agreement and such writings shall be construed as if
the unlawful or unenforceable provision or application had never been contained
herein or therein or prescribed hereby or thereby.

         Section 9.06 Jurisdiction and Venue. The Borrower consents to the
personal jurisdiction of the state and federal courts located in the State of
Minnesota in connection with any controversy related in any way to any of the
Credit Documents or any transaction or matter relating to any of the Credit
Documents, waives any argument that venue in such forums is not convenient, and
agrees that any litigation initiated by the Borrower against the Bank in
connection with any of the Credit Documents or any transaction or matter
relating to any of the Credit Documents shall be venued in either the District
Court of Hennepin County, Minnesota, or the United States District Court,
District of Minnesota, Fourth Division.

                                       22
<PAGE>
         Section 9.07 Headings. Article and Section headings in this Agreement
are for convenience of reference only, and shall not constitute a part of this
Agreement for any other purpose or a limitation of the scope of the particular
Articles or Sections to which they refer.

         Section 9.08 Governing Law. This Agreement and the writings
contemplated by this Agreement shall be governed by and construed in accordance
with the internal laws of the State of Minnesota (excluding its conflict of law
rules).

         Section 9.09 Confidentiality. The Bank agrees to keep confidential any
non-public information delivered to the Bank under this Credit Agreement in
accordance with the Bank's privacy policy, a copy of which has been delivered to
the Borrower herewith.

         THE BORROWER AND THE BANK HEREBY WAIVE ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION OR PROCEEDING RELATING TO ANY OF THE CREDIT DOCUMENTS, THE
OBLIGATIONS THEREUNDER, ANY COLLATERAL SECURING SUCH OBLIGATIONS, OR ANY
TRANSACTION ARISING THEREFROM OR CONNECTED THERETO. THE BORROWER AND THE BANK
EACH REPRESENTS TO THE OTHER THAT THIS WAIVER IS KNOWINGLY, WILLINGLY AND
VOLUNTARILY GIVEN.

         THE BORROWER REPRESENTS, WARRANTS AND CERTIFIES TO THE BANK AND AGREES
THAT THE BORROWER HAS READ ALL OF THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS
AND UNDERSTANDS ALL OF ITS PROVISIONS.

                                       23
<PAGE>
         Executed as of the date first above written.

                                    BORROWER:

                                    IDENTIX INCORPORATED,
                                    a Delaware corporation

                                    By:
                                       ---------------------------------
                                             Erik Prusch
                                    Its:     Chief Financial Officer

                                    BANK:

                                    ASSOCIATED BANK MINNESOTA, NATIONAL
                                    ASSOCIATION, a national banking association

                                    By:
                                       ---------------------------------
                                             G. Richard Gove
                                    Its:     Vice President

                                       24
<PAGE>
                                    EXHIBIT A

                           BORROWING BASE CERTIFICATE

         The undersigned chief financial officer of IDENTIX INCORPORATED, a
Delaware corporation (the "BORROWER"), pursuant to the Credit Agreement dated
May 30, 2003 (the "AGREEMENT"), hereby certifies to ASSOCIATED BANK MINNESOTA,
NATIONAL ASSOCIATION, a national banking association (the "BANK") as follows:

         As the close of business on _____________________, 200_, the Borrowing
Base and the unpaid principal balance of the Revolving Note were as follows:

4.       Accounts Receivable                                     $___________(1)
5.       Less:  Ineligibles
                  Over 120 days                       $__________
                  10% Rule                            $__________
                  Other Ineligibles                   $__________
                  Contra Accounts                     $__________
                  Total Ineligibles                   $__________(2)
3.       Eligible Accounts Receivable (1 minus 2)                $___________(3)
4.       80% of Line 3                                           $___________(4)
5.       Credit Limit (lesser of $15,000,000 or Line 4)          $___________(5)
6.       Unpaid Principal Balance of Revolving Note       $___________(6)
7.       Face Amount of Letter of Credit outstanding      $___________(7)
8.       Availability or (Shortfall) (5 minus 6 and 7)           $___________(8)

         As the date of this Certificate, no event has occurred which
constitutes an Event of Default as defined in the Agreement or would constitute
an Event of Default under the Agreement with notice or passage of time or both.

Date of Certificate _________________, ________.

                                               _________________________________
                                               Signature

<PAGE>

                                    EXHIBIT B

                      CERTIFICATE OF INDEBTEDNESS AND LIENS

         The undersigned chief financial officer of IDENTIX INCORPORATED, a
Delaware corporation (the "BORROWER") pursuant to the Credit Agreement dated May
30, 2003, hereby certifies to ASSOCIATED BANK MINNESOTA, NATIONAL ASSOCIATION, a
national banking association (the "BANK"), that the following is a true,
complete and correct list of all existing Debt of the Borrower and all existing
mortgages, deeds of trust, assignments, security interests and other liens on
any of the properties of the Borrower, whether now owned or hereafter acquired,
securing any indebtedness of the Borrower or any other person or entity:

<TABLE>
<CAPTION>
Date     Principal Debtor      Creditor(s)     Principal Balance     Payment Schedule     Security
----     ----------------      -----------     -----------------     ----------------     --------
<S>      <C>                   <C>             <C>                   <C>                  <C>

</TABLE>

Date of Certificate_____________, ______________

                                                    ____________________________
                                                    Signature

<PAGE>

                                    EXHIBIT C

                         COVENANT COMPLIANCE CERTIFICATE

         The undersigned chief financial officer of IDENTIX INCORPORATED, a
Delaware corporation (the "BORROWER") pursuant to the Credit Agreement dated May
30, 2003, hereby certifies to ASSOCIATED BANK MINNESOTA, NATIONAL ASSOCIATION, a
national banking association (the "BANK") as follows:

         As of the close of business on __________________, _____, the following
amounts and ratios of the Borrower were true and correct:

1.       Ratio of Debt to Tangible Net Worth for Quarter Ending
         a.     Debt                                               $___________
         b.     Tangible Net Worth                                 $___________
         c.     Actual Ratio of Debt to Tangible Net Worth          ___________
         f.     Maximum Ratio                                       1.0 to 1.0

3.       Debt Service Coverage Ratio for Fiscal Year Ending
         a.     Net Income + Interest + Depreciation         $___________
                and Amortization less Distributions
         b.     Current Maturities for Principal and
                Interest on Debt                                   $___________
         c.     Actual Debt Service Coverage Ratio (a to b)        $___________
         d.     Minimum Debt Service Coverage Ratio                1.25 to 1.0

         As the date of this Certificate, no event has occurred which
constitutes and Event of Default as defined in the Agreement or would constitute
an Event of Default under the Agreement with notice or the passage of time or
both.

Date of Certificate____________, _____________

                                                 _______________________________
                                                 Signature

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