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Sample Business Contracts

WCMA Note, Loan and Security Agreement - Infodata Systems Inc. and Merrill Lynch Business Financial Services Inc.

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                   WCMA(R) NOTE, LOAN AND SECURITY AGREEMENT

WCMA NOTE, LOAN AND SECURITY  AGREEMENT ("Loan  Agreement")  dated as of October
31, 1996,  between INFODATA  SYSTEMS INC., a corporation  organized and existing
under the laws of the State of  Virginia  having its  principal  office at 12150
Monument  Drive,  Fairfax,  VA 22033  ("Customer"),  and MERRILL LYNCH  BUSINESS
FINANCIAL SERVICES INC., a corporation  organized and existing under the laws of
the State of Delaware  having its  principal  office at 33 West  Monroe  Street,
Chicago, IL 60603 ("MLBFS").

In accordance with that certain WORKING CAPITAL  MANAGEMENT(R) ACCOUNT AGREEMENT
NO. 749-07U18 ("WCMA Agreement") between Customer and MLBFS' affiliate,  MERRILL
LYNCH, PIERCE, FENNER & SMITH INCORPORATED  ("MLPF&S"),  Customer has subscribed
to the WCMA Program  described in the WCMA  Agreement.  The WCMA Agreement is by
this reference  incorporated as a part hereof.  In conjunction  therewith and as
part of the WCMA Program, Customer has requested that MLBFS provide, and subject
to the terms and  conditions  herein set forth  MLBFS has agreed to  provide,  a
commercial line of credit for Customer (the "WCMA Line of Credit").

Accordingly, and in consideration of the premises and of the mutual covenants of
the parties hereto, Customer and MLBFS hereby agree as follows:

1.   DEFINITIONS

(a)  SPECIFIC  TERMS.  In  addition  to terms  defined  elsewhere  in this  Loan
Agreement,  when used  herein  the  following  terms  shall  have the  following
meanings:

(i) "Account  Debtor" shall mean any party who is or may become  obligated  with
respect to an Account or Chattel Paper.

(ii) "Activation Date" shall mean the date upon which MLBFS shall cause the WCMA
Line of Credit to be fully  activated  under MLPF&S'  computer system as part of
the WCMA Program.

(iii) "Additional Agreements" shall mean all agreements,  instruments, documents
and opinions  other than this Loan  Agreement,  whether with or from Customer or
any other party, which are contemplated hereby or otherwise  reasonably required
by MLBFS in connection  herewith,  or which  evidence the creation,  guaranty or
collateralization  of any of the  Obligations  or the granting or  perfection of
liens or security  interests upon the Collateral or any other collateral for the
Obligations.

(iv)  "Business Day" shall mean any day other than a Saturday,  Sunday,  federal
holiday or other day on which the New York Stock Exchange is regularly closed.

(v)  "Collateral"  shall mean all  Accounts,  Chattel  Paper,  Contract  Rights,
Inventory, Equipment, Fixtures, General Intangibles, Deposit Accounts, Documents
and Instruments of Customer, howsoever arising, whether now owned or existing or
hereafter  acquired or arising,  and wherever  located;  together with all parts
thereof  (including spare parts),  all accessories and accessions  thereto,  all
books and records  (including  computer records)  directly related thereto,  all
proceeds  thereof  (including,  without  limitation,  proceeds  in the  form  of
Accounts and insurance  proceeds),  and the additional  collateral  described in
Section 9 (b) hereof.

(vi) "Commitment Expiration Date" shall mean November 30, 1996.

(vii) "General Funding  Conditions" shall mean each of the following  conditions
to any WCMA Loan by MLBFS  hereunder:  (A) no Event of  Default,  or event which
with the giving of notice,  passage of time, or 


<PAGE>

both,  would  constitute  an  Event  of  Default,  shall  have  occurred  and be
continuing or would result from the making of any WCMA Loan  hereunder by MLBFS;
(B) there shall not have occurred any material adverse change in the business or
financial  condition of Customer;  (C) all  representations  and  warranties  of
Customer herein or in any Additional  Agreements  shall then be true and correct
in all material respects;  (D) MLBFS shall have received this Loan Agreement and
all of the  Additional  Agreements,  duly  executed and filed or recorded  where
applicable,  all of which shall be in form and substance reasonably satisfactory
to MLBFS; (E) MLBFS shall have received evidence  reasonably  satisfactory to it
as to the ownership of the  Collateral and the perfection and priority of MLBFS'
liens  and  security  interest  thereon,  as  well as the  ownership  of and the
perfection  and  priority of MLBFS'  liens and  security  interests on any other
collateral  for the  Obligations  furnished  pursuant  to any of the  Additional
Agreements; (F) MLBFS shall have received evidence reasonably satisfactory to it
of the insurance required hereby or by any of the Additional Agreements; and (G)
any additional conditions specified in the "WCMA Line of Credit Approval" letter
executed by MLBFS with  respect to the  transactions  contemplated  hereby shall
have been met to the reasonable satisfaction of MLBFS.

(viii) "Interest Rate" shall mean a variable per annum rate of interest equal to
the sum of 2.90% and the 30-Day  Commercial  Paper Rate. The "30-Day  Commercial
Paper Rate" shall mean, as of the date of any  determination,  the interest rate
from time to time  published  in the "Money  Rates"  section of The Wall  Street
Journal for 30-day  high-grade  unsecured  notes sold  through  dealers by major
corporations. The Interest Rate will change as of the date of publication in The
Wall Street  Journal of a 30-Day  Commercial  Paper Rate that is different  from
that published on the preceding  Business Day. In the event that The Wall Street
Journal shall,  for any reason,  fail or cease to publish the 30- Day Commercial
Paper Rate, MLBFS will choose a reasonably  comparable index or source to use as
the basis for the Interest Rate.

(ix) "Line Fee" shall  mean a fee of  $5,000.00  payable to MLBFS in  connection
with the WCMA Line of Credit  for the  period  from the  Activation  Date to the
Maturity Date.

(x)  "Location  of Tangible  Collateral"  shall mean the address of Customer set
forth at the beginning of this Loan  Agreement,  together with any other address
or  addresses  set forth on an exhibit  hereto as being a Location  of  Tangible
Collateral.

(xi)  "Maturity  Date" shall mean November 30, 1997 or such later date as may be
consented to in writing by MLBFS.

(xii) "Maximum WCMA Line of Credit" shall mean an amount equal to the lesser of:
(A) 80% of  Customer's  Domestic  Accounts  and Chattel  Paper,  as shown on its
regular books and records  (excluding  Accounts over 90 days old,  Chattel Paper
with  installments  or other sums more than 90 days past due,  and  Accounts and
Chattel  Paper  directly  or  indirectly  due from any  shareholder,  officer or
employee of Customer or any affiliated entity), or (B) $1,000,000.00.

(xiii)  "Obligations"  shall  mean  all  liabilities,   indebtedness  and  other
obligations  of  Customer to MLBFS,  howsoever  created,  arising or  evidenced,
whether now existing or hereafter arising, whether direct or indirect,  absolute
or contingent,  due or to become due,  primary or secondary or joint or several,
and, without limiting the foregoing,  shall include interest  accruing after the
filing of any petition in  bankruptcy,  and all present and future  liabilities,
indebtedness and obligations of Customer under this Loan Agreement.

(xiv)  "Permitted  Liens" shall mean (A) liens for current taxes not delinquent,
other  non-consensual  liens arising in the ordinary course of business for sums
not due,  and,  if  MLBFS'  rights to and  interest  in the  Collateral  are not
materially  and adversely  affected  thereby,  any such liens for taxes or other
non-consensual  liens arising in the ordinary course of business being contested
in good faith by appropriate proceedings; (B) liens in favor of MLBFS; (C) liens
which will be discharged with the proceeds of the initial WCMA Loan; and (D) any
other liens expressly permitted in writing by MLBFS.

(xv) "WCMA  Account"  shall  mean and refer to the  Working  Capital  Management
Account of Customer with MLPF&S identified as Account No. 749-07U18.

(xvi) "WCMA Loan" shall mean each  advance  made by MLBFS  pursuant to this Loan
Agreement.


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<PAGE>

(b) OTHER TERMS.  Except as otherwise defined herein: (i) all terms used in this
Loan  Agreement  which are  defined in the Uniform  Commercial  Code of Illinois
("UCC") shall have the meanings set forth in the UCC, and (ii) capitalized terms
used herein which are defined in the WCMA  Agreement  shall have the meaning set
forth in the WCMA Agreement.

2. WCMA PROMISSORY NOTE

FOR VALUE  RECEIVED,  Customer  hereby promises to pay to the order of MLBFS, at
the times and in the manner set forth in this Loan  Agreement,  or in such other
manner  and at such  place as MLBFS may  hereafter  designate  in  writing,  the
following:  (a) on the Maturity Date, the aggregate  unpaid  principal amount of
all WCMA Loans (the "WCMA Loan  Balance");  (b) interest at the Interest Rate on
the  outstanding  WCMA Loan  Balance,  from and  including the date on which the
initial  WCMA Loan is made  until the date of payment of all WCMA Loans in full;
and (c) on  demand,  all other sums  payable  pursuant  to this Loan  Agreement,
including,  but not  limited  to, the Line Fee and any late  charges.  Except as
otherwise expressly set forth herein, Customer hereby waives presentment, demand
for  payment,  protest  and notice of  protest,  notice of  dishonor,  notice of
acceleration,  notice  of  intent  to  accelerate  and  all  other  notices  and
formalities  in  connection  with  this  WCMA  Promissory  Note  and  this  Loan
Agreement.

3. WCMA LOANS

(a) ACTIVATION DATE. Provided that: (i) the Commitment Expiration Date shall not
then have occurred,  and (ii) Customer shall have subscribed to the WCMA Program
and its subscription to the WCMA Program shall then be in effect, the Activation
Date shall occur on or promptly after the date, following the acceptance of this
Loan Agreement by MLBFS at its office in Chicago,  Illinois,  upon which each of
the  General  Funding  Conditions  shall  have  been  met  or  satisfied  to the
reasonable  satisfaction  of MLBFS.  No  activation by MLBFS of the WCMA Line of
Credit for a nominal amount shall be deemed evidence of the  satisfaction of any
of the  conditions  herein  set  forth,  or a  waiver  of any  of the  terms  or
conditions hereof.  Customer hereby authorizes MLBFS to pay out of and charge to
Customer's  WCMA Account on the Activation  Date all amounts  necessary to fully
pay off any bank or other  financial  institution  having a lien upon any of the
Collateral other than a Permitted Lien.

(b) WCMA LOANS.  Subject to the terms and conditions  hereof,  during the period
from and after the  Activation  Date to the Maturity  Date:  (i) MLBFS will make
WCMA Loans to Customer in such amounts as Customer may from time to time request
in accordance with the terms hereof, up to an aggregate  outstanding  amount not
to exceed the Maximum WCMA Line of Credit,  and (ii) Customer may repay any WCMA
Loans in whole or in part at any time without premium or penalty,  and request a
reborrowing  of amounts repaid on a revolving  basis.  Customer may request WCMA
Loans by use of WCMA Checks, FTS, Visa(R) charges, wire transfers, or such other
means of access to the WCMA Line of  Credit as may be  permitted  by MLBFS  from
time to time; it being  understood that so long as the WCMA Line of Credit shall
be in  effect,  any charge or debit to the WCMA  Account  which but for the WCMA
Line of  Credit  would  under  the  terms of the  WCMA  Agreement  result  in an
overdraft, shall be deemed a request by Customer for a WCMA Loan.

(c) CONDITIONS OF WCMA LOANS.  Notwithstanding the foregoing, MLBFS shall not be
obligated to make any WCMA Loan, and may without notice refuse to honor any such
request by Customer,  if at the time of receipt by MLBFS of Customer's  request:
(i) the making of such WCMA Loan would cause the Maximum  WCMA Line of Credit to
be exceeded;  or (ii) the Maturity Date shall have occurred, or the WCMA Line of
Credit shall have otherwise been terminated in accordance with the terms hereof;
or (iii) Customer's subscription to the WCMA Program shall have been terminated;
or (iv) an event shall have occurred and is  continuing  which shall have caused
any of the General  Funding  Conditions  to not then be met or  satisfied to the
reasonable satisfaction of MLBFS. The making by MLBFS of any WCMA Loan at a time
when any one or more of said conditions shall not have been met shall not in any
event be construed as a waiver of said  condition or  conditions or of any Event
of  Default,  and  shall  not  prevent  MLBFS at any time  thereafter  while any
conditions  shall  not have  been met from  refusing  to honor  any  request  by
Customer for a WCMA Loan.


                                      - 3 -

<PAGE>

(d) FORCE MAJEURE.  MLBFS shall not be responsible,  and shall have no liability
to  Customer or any other  party,  for any delay or failure of MLBFS to honor an
request  of  Customer  for a WCMA Loan or any other  act or  omission  of MLBFS,
MLPF&S or any of their  affiliates due to or resulting from any system  failure,
error or delay in posting or other clerical error,  loss of power,  fire, Act of
God or other  cause  beyond the  reasonable  control of MLBFS,  MLPF&S or any of
their  affiliates  unless  directly  arising out of the willful  wrongful act or
active gross  negligence of MLBFS. In no event shall MLBFS be liable to Customer
or any other party for any incidental or consequential  damages arising from any
act or omission by MLBFS,  MLPF&S or any of their  affiliates in connection with
the WCMA Line of Credit or this Loan Agreement.

(e) INTEREST.  The WCMA Loan Balance  shall bear interest at the Interest  Rate.
Interest shall be computed for the actual number of days elapsed on the basis of
a year consisting of 360 days.  Notwithstanding any provision to the contrary in
this  Agreement  or any of the  Additional  Agreements,  no  provision  of  this
Agreement  or any of the  Additional  Agreements  should  require the payment or
permit the  collection of any amount in excess of the maximum amount of interest
permitted to be charged by law ("Excess  Interest").  If any Excess  Interest is
provided for, or is  adjudicated as being provided for, in this Agreement or any
of the Additional  Agreements,  then: (a) Customer shall not be obligated to pay
any Excess  Interest;  and (b) any Excess  Interest that MLBFS may have received
hereunder  or under any of the  Additional  Agreements  shall,  at the option of
MLBFS,  be: (i) applied as a credit  against the then unpaid balance of the WCMA
Line of Credit,  (iii) any  combination  of the  foregoing.  Except as otherwise
provided  herein,  accrued and unpaid interest on the WCMA Loan Balance shall be
payable monthly on the last Business Day of each calendar month, commencing with
the last Business Day of the calendar month in which the  Activation  Date shall
occur.  Customer hereby  irrevocably  authorizes and directs MLPF&S to pay MLBFS
such  accrued  interest  from any  available  free  credit  balances in the WCMA
Account,  and if such available free credit balances are insufficient to satisfy
any interest  payment due, to liquidate any  investments  in the Money  Accounts
(other than any  investments  constituting  any Minimum Money  Accounts  Balance
under the WCMA Directed  Reserve program) in an amount up to the balance of such
accrued interest, and pay to MLBFS the available proceeds on account thereof. If
available free credit balances in the WCMA Account and available proceeds of the
Money Accounts are  insufficient to pay the entire balance of accrued  interest,
and Customer  otherwise  fails to make such payment when due,  MLBFS may, in its
sole  discretion,  make a WCMA Loan in an amount  equal to the  balance  of such
accrued  interest and pay the proceeds of such WCMA Loan to itself on account of
such  interest.  The amount of any such WCMA Loan will be added to the WCMA Loan
Balance.  If MLBFS  declines  to  extend a WCMA  Loan to  Customer  under  these
circumstances,  Customer  hereby  authorizes and directs MLPF&S to make all such
interest payments to MLBFS from any Minimum Money Accounts Balance.  If there is
no Minimum  Accounts  Balance,  or it is  insufficient to pay all such interest,
MLBFS will invoice Customer for payment of the balance of the accrued  interest,
and Customer shall pay such interest as directed by MLBFS within 5 Business Days
of receipt of such invoice.

(f)  PAYMENTS.  All payments  required or permitted to be made  pursuant to this
Loan  Agreement  shall be made in  lawful  money of the  United  States.  Unless
otherwise directed by MLBFS, payments on account of the WCMA Loan Balance may be
made by the delivery of checks (other than WCMA  Checks),  or by means of FTS or
wire transfer of funds (other than funds from the WCMA Line of Credit) to MLPF&S
for credit to  Customer's  WCMA  Account.  Notwithstanding  anything in the WCMA
Agreement to the contrary,  Customer hereby  irrevocably  authorizes and directs
MLPF&S to apply  available  free  credit  balances  in the WCMA  Account  to the
repayment of the WCMA Loan Balance prior to  application  for any other purpose.
Payments to MLBFS from funds in the WCMA  Account  shall be deemed to be made by
Customer  upon the same  basis  and  schedule  as funds are made  available  for
investment  in the  Money  Accounts  in  accordance  with the  terms of the WCMA
Agreement.  All funds  received by MLBFS from MLPF&S  pursuant to the  aforesaid
authorization  shall be applied by MLBFS to repayment of the WCMA Loan  Balance.
The acceptance by or on behalf of MLBFS of a check or other payment for a lesser
amount  than  shall be due  from  Customer,  regardless  of any  endorsement  or
statement  thereon or transmitted  therewith,  shall not be deemed an accord and
satisfaction  or anything  other than a payment on account,  and MLBFS or anyone
acting on  behalf  of MLBFS  may  accept  such  check or other  payment  without
prejudice  to the  rights of MLBFS to recover  the  balance  actually  due or to
pursue any other remedy under this Loan  Agreement  or  applicable  law for such
balance.  All checks  accepted by or on behalf of MLBFS in  connection  with the
WCMA Line of Credit are subject to final collection.


                                      - 4 -

<PAGE>

(g) EXCEEDING  THE MAXIMUM WCMA LINE OF CREDIT.  In the event that the WCMA Loan
Balance shall at any time exceed the Maximum WCMA Line of Credit, Customer shall
within 1  Business  Day of the  first to occur of (i) any  request  or demand of
MLBFS,  or (ii)  receipt by Customer of a statement  from MLPF&S  showing a WCMA
Loan  Balance in excess of the Maximum WCMA Line of Credit,  deposit  sufficient
funds into the WCMA  Account to reduce the WCMA Loan  Balance  below the Maximum
WCMA Line of Credit.

(h) LINE FEE; EXTENSIONS. (i) In consideration of the extension of the WCMA Line
of Credit by MLBFS to Customer during the period from the Activation Date to the
Maturity Date, Customer has paid or shall pay the Line Fee to MLBFS. If such fee
has not heretofore been paid by Customer,  Customer hereby  authorizes MLBFS, at
its option,  to either cause said fee to be paid with a WCMA Loan which is added
to the WCMA Loan  Balance,  or  invoice  Customer  for said fee (in which  event
Customer  shall  pay said fee  within 5  Business  Days  after  receipt  of such
invoice).  No delay in the  Activation  Date,  howsoever  caused,  shall entitle
Customer to any rebate or reduction in the Line Fee or extension of the Maturity
Date.

(ii) In the event MLBFS and Customer,  in their respective sole discretion agree
to renew the WCMA Line of Credit  beyond the  current  Maturity  Date,  Customer
agrees to pay a renewal Line Fee or Line Fees (if the Maturity  Date is extended
for more than one 12-month  period),  in the amount per 12-month period or other
applicable  period then set forth in the writing  signed by MLBFS which  extends
the Maturity Date; it being  understood  that any request by Customer for a WCMA
Loan or failure of  Customer  to pay any WCMA Loan  Balance  outstanding  on the
immediately  prior  Maturity  Date,  after the  receipt by Customer of a writing
signed by MLBFS  extending  the  Maturity  Date,  shall be  deemed a consent  by
Customer to both the renewal Line Fees and the new Maturity  Date. If no renewal
Line Fees are set forth in the writing  signed by MLBFS  extending  the Maturity
Date,  the renewal Line Fee for each  12-month  period shall be deemed to be the
same as the immediately  preceding periodic Line Fee. Each such renewal Line Fee
may,  at the option of MLBFS,  either be paid with a WCMA Loan which is added to
the WCMA Loan Balance or invoiced to Customer,  as aforesaid,  on or at any time
after the first Business Day of the first Business Day of the first month of the
12-month period for which such fee is due.

(i)  STATEMENTS.  MLPF&S will include in each monthly  statement it issues under
the WCMA  Program  information  with  respect  to WCMA  Loans  and the WCMA Loan
Balance.  Any questions that Customer may have with respect to such  information
should be directed to MLBFS;  and any questions with respect to any other matter
in such  statements or about or affecting the WCMA Program should be directed to
MLPF&S.

(j) USE OF LOAN PROCEEDS;  SECURITIES  TRANSACTIONS.  On the Activation  Date, a
WCMA will be made to pay any  indebtedness  of Customer to a third party secured
by all or any part of the Collateral.  The proceeds of each subsequent WCMA Loan
shall be used by Customer  solely for working  capital in the ordinary course of
its  business,  or, with the prior  written  consent of MLBFS,  for other lawful
business purposes of Customer not prohibited hereby.  Customer agrees that under
no circumstances  will funds borrowed from MLBFS through the WCMA Line of Credit
be  used:  (i)  for  personal,  family  or  household  purposes  of  any  person
whatsoever, (ii) to purchase, carry or trade in securities,  including shares of
the Money Accounts, or (iii) to repay debt incurred to purchase,  carry or trade
in securities;  nor will any such funds be remitted,  directly or indirectly, to
an account of Customer with MLPF&S or any other broker or dealer in  securities,
by WCMA Check, check, FTS, wire transfer, or otherwise.

4. REPRESENTATIONS AND WARRANTIES

Customer represents and warrants to MLBFS that:

(a)  ORGANIZATION AND EXISTENCE.  Customer is a corporation,  duly organized and
validly existing in good standing under the laws of the State of Virginia and is
qualified  to do  business  and in good  standing  in each other state where the
nature of its  business  or the  property  owned by it make  such  qualification
necessary.

(b) EXECUTION, DELIVERY AND PERFORMANCE. The execution, delivery and performance
by Customer of this Loan  Agreement  and such of the  Additional  Agreements  to
which it is a party: (i) have been duly authorized by all requisite action, (ii)
do not and will  not  violate  or  conflict  with any law or other  governmental


                                      - 5 -

<PAGE>

requirement, or any of the agreements,  instruments or documents which formed or
govern  Customer,  and (iii) do not and will not  breach or  violate  any of the
provisions  of, and will not result in a default by  Customer  under,  any other
agreement,  instrument  or document to which it is a party or by which it or its
properties are bound.

(c) NOTICES AND APPROVALS.  Except as may have been given or obtained, no notice
to or consent or approval of any  governmental  body or authority or other third
party whatsoever (including, without limitation, any other creditor) is required
in connection with the execution, delivery or performance by Customer of such of
this Loan Agreement and the Additional Agreements to which it is a party.

(d) ENFORCEABILITY. This Loan Agreement and such of the Additional Agreements to
which it is a party are the legal,  valid and binding  obligations  of Customer,
enforceable  against it in accordance  with their  respective  terms,  except as
enforceability may be limited by bankruptcy and other similar laws affecting the
rights of creditors generally or by general principles of equity.

(e)  COLLATERAL.  Subject to any  Permitted  Liens:  (i)  Customer  has good and
marketable  title to the  Collateral,  (ii) none of the Collateral is subject to
any lien,  encumbrance  or security  interest,  and (iii) upon the filing of all
Uniform Commercial Code financing  statements  executed by Customer with respect
to the Collateral in the  appropriate  jurisdiction(s)  and/or the completion of
any other action  required by  applicable  law to perfect its liens and security
interests,  MLBFS  will  have  valid and  perfected  first  liens  and  security
interests upon all of the Collateral.

(f) FINANCIAL STATEMENTS.  Except as expressly set forth in Customer's financial
statements,  all financial  statements of Customer  furnished to MLBFS have been
prepared  in  conformity   with  generally   accepted   accounting   principles,
consistently  applied,  are true and correct,  and fairly  present the financial
condition  of it as at such  dates and the  results  of its  operations  for the
periods  then ended;  and since the most recent date  covered by such  financial
statements,  there has been no  material  adverse  change in any such  financial
condition or operation.

(g)  LITIGATION.  No litigation,  arbitration,  administrative  or  governmental
proceedings  are pending or, to the  knowledge of Customer,  threatened  against
Customer, which would, if adversely determined,  materially and adversely affect
the  liens  and  security  interests  of MLBFS  hereunder  or  under  any of the
Additional  Agreements,  the  financial  condition of Customer or the  continued
operations of Customer.

(h) TAX  RETURNS.  All  federal,  state  and  local  tax  returns,  reports  and
statements required to be filed by Customer have been filed with the appropriate
governmental agencies and all taxes due and payable by Customer have been timely
paid  (except  to the  extent  that  any  such  failure  to file or pay will not
materially and adversely affect either the liens and security interests of MLBFS
hereunder or under any of the Additional Agreements,  the financial condition of
Customer, or the continued operations of Customer).

(i) COLLATERAL LOCATION. All of the tangible Collateral is located at a Location
of Tangible Collateral.

Each of the foregoing representations and warranties are continuing and shall be
deemed remade by Customer concurrently with each request for a WCMA Loan.

5.      FINANCIAL AND OTHER INFORMATION

Customer shall furnish or cause to be furnished to MLBFS during the term of this
Loan Agreement all of the following:

(a) ANNUAL FINANCIAL STATEMENTS.  Within 120 days after the close of each fiscal
year of  Customer,  Customer  shall  furnish or cause to be furnished to MLBFS a
copy of the annual  audited  financial  statements of Customer  consisting of at
least a balance sheet as at the close of such fiscal year and related statements
of  income,   retained  earnings  and  cash  flows,  certified  by  its  current
independent  certified public accountants or other independent  certified public
accountants reasonably acceptable to MLBFS.


                                     - 6 -

<PAGE>

(b) INTERIM FINANCIAL STATEMENTS.  Within 45 days after the close of each fiscal
quarter of Customer,  Customer  shall furnish or cause to be furnished to MLBFS:
(i) a statement of profit and loss for the fiscal quarter then ended, and (ii) a
balance sheet as at the close of such fiscal quarter,  all in reasonable  detail
and certified by its chief financial officer.

(c) AGING OF  ACCOUNTS.  Within 15 days after the close of each fiscal  month of
Customer,  Customer  shall furnish or cause to be furnished to MLBFS an aging of
its Accounts and any Chattel Paper, certified by its chief financial officer.

(d) OTHER INFORMATION.  Customer shall furnish or cause to be furnished to MLBFS
such  other  information  as MLBFS  may  from  time to time  reasonably  request
relating to Customer or the Collateral.

6. OTHER COVENANTS

Customer further agrees during the term of this Loan Agreement that:

(a) FINANCIAL RECORDS; INSPECTION.  Customer will: (i) maintain at its principal
place of business  complete and accurate books and records,  and maintain all of
its  financial  records in a manner  consistent  with the  financial  statements
heretofore  furnished  to  MLBFS,  or  prepared  on such  other  basis as may be
approved  in  writing by MLBFS;  and (ii)  permit  MLBFS or its duly  authorized
representatives,  upon reasonable notice and at reasonable times, to inspect its
properties (both real or personal), operations, books and records.

(b)  TAXES.  Customer  will  pay  when  due all  taxes,  assessments  and  other
governmental  charges,  howsoever  designated,  and all  other  liabilities  and
obligations,  except  to the  extent  that  any  such  failure  to pay  will not
materially and adversely affect either the liens and security interests of MLBFS
hereunder or under any of the Additional Agreements,  the financial condition of
Customer or the continued operations of Customer.

(c)  COMPLIANCE  WITH LAWS AND  AGREEMENTS.  Customer  will not violate any law,
regulation or other governmental requirement, any judgment or order of any court
or governmental agency or authority, or any agreement, instrument or document to
which  it is a party  or by  which  it is  bound,  if any  such  violation  will
materially and adversely affect either the liens and security interests of MLBFS
hereunder or under any of the Additional Agreements,  or the financial condition
or the continued operations of Customer.

(d) CONTINUITY.  Except upon the prior written  consent of MLBFS,  which consent
will  not be  unreasonably  withheld:  (i)  Customer  will not be a party to any
merger  or  consolidation   with,  or  purchase  or  otherwise  acquire  all  or
substantially  all of the  assets or stock of, or any  material  partnership  or
joint venture interest in, any person or entity, or sell,  transfer or lease all
or any  substantial  part of its  assets if any such  action  causes a  material
change in its control or principal business, or a material adverse change in its
financial condition or operations; (ii) Customer will preserve its existence and
good standing in the jurisdictions of establishment and operation,  and will not
operate in any material business other than a business substantially the same as
its  business as of the date of  application  by Customer for credit from MLBFS;
and  (iii)  Customer  will not  cause  or  permit  any  material  change  in its
controlling  ownership,  controlling  senior management or, except upon not less
than 30 days  prior  written  notice to MLBFS,  its name or  principal  place of
business.

7. COLLATERAL

(a) PLEDGE OF COLLATERAL.  To secure payment and performance of the Obligations,
Customer hereby pledges,  assigns,  transfers and sets over to MLBFS, and grants
to MLBFS first liens and security  interests in and upon all of the  Collateral,
subject only to Permitted Liens.

(b) LIENS.  Except upon the prior written  consent of MLBFS,  Customer shall not
create or permit to exist any lien,  encumbrance  or security  interest  upon or
with  respect  to any  Collateral  now owned or  hereafter  acquired  other than
Permitted Liens.


                                     - 7 -
<PAGE>

(c)  PERFORMANCE OF  OBLIGATIONS.  Customer shall perform all of its obligations
owing on account of or with respect to the Collateral;  it being understood that
nothing herein, and no action or inaction by MLBFS, under this Loan Agreement or
otherwise,  shall be deemed an  assumption  by MLBFS of any of  Customer's  said
obligations.

(d) SALES AND  COLLECTIONS.  So long as no Event of Default  shall have occurred
and is continuing, Customer may in the ordinary course of its business: (i) sell
any  inventory  normally  held by  Customer  for sale,  (ii) use or consume  any
materials  and supplies  normally held by Customer for use or  consumption,  and
(iii) collect all of its Accounts.  Customer shall take such action with respect
to protection of its inventory and other  Collateral  and the  collection of its
Accounts as MLBFS may from time to time reasonably request.

(e) ACCOUNT SCHEDULES.  Upon the request of MLBFS, made now or at any reasonable
time or times  hereafter,  Customer  shall deliver to MLBFS,  in addition to the
other information required hereunder,  a schedule identifying,  for each Account
and all Chattel  Paper  subject to MLBFS'  security  interests  hereunder,  each
Account  Debtor by name and address and amount,  invoice or contract  number and
date of  each  invoice  or  contract.  Customer  shall  furnish  to  MLBFS  such
additional  information with respect to the Collateral,  and amounts received by
Customer as proceeds  of any of the  Collateral,  as MLBFS may from time to time
reasonably request.

(f) ALTERATIONS AND MAINTENANCE. Except upon the prior written consent of MLBFS,
Customer  shall  make  or  permit  any  material  alterations  to  any  tangible
Collateral which might materially  reduce or impair its market value or utility.
Customer  shall at all times keep the tangible  Collateral in good condition and
repair and shall pay or cause to be paid all obligations arising from the repair
and maintenance of such Collateral,  as well as all obligations  being contested
by Customer in good faith by appropriate proceedings.

(g) LOCATION. Except for movements required in the ordinary course of Customer's
business, Customer shall give MLBFS 30 days' prior written notice of the placing
at or movement of any tangible  Collateral to any location other than a Location
of Tangible Collateral.  In no event shall Customer cause or permit any material
tangible  Collateral  to be removed from the United  States  without the express
prior written consent of MLBFS.

(h)  INSURANCE.  Customer  shall insure all of the tangible  Collateral  under a
policy or policies of physical  damage  insurance  providing that losses will be
payable to MLBFS as its interests may appear pursuant to a Lender's Loss Payable
Endorsement and containing such other  provisions as may be reasonably  required
by MLBFS.  Customer  shall further  provide and maintain a policy or policies of
comprehensive  public  liability  insurance  naming MLBFS as an additional party
insured.  Customer shall maintain such other insurance as may be required by law
or is  customarily  maintained  by companies in a similar  business or otherwise
reasonably  required by MLBFS.  All such insurance shall provide that MLBFS will
receive  not less than 10 days prior  written  notice of any  cancellation,  and
shall otherwise be in form and amount and with an insurer or insurers reasonably
acceptable to MLBFS.  Customer shall furnish MLBFS with a copy or certificate of
each such policy or policies and, prior to any expiration or cancellation,  each
renewal or replacement thereof.

(i) EVENT OF LOSS.  Customer shall at its expense promptly repair all repairable
damage to any tangible Collateral.  In the event that any tangible Collateral is
damaged  beyond repair,  lost,  totally  destroyed or confiscated  (an "Event of
Loss") and such Collateral had a value prior to such Event of Loss of $25,000.00
or more,  then,  on or  before  the  first to  occur  of (i) 90 days  after  the
occurrence  of such Event of Loss,  or (ii) 10  Business  Days after the date on
which either  Customer or MLBFS shall receive any proceeds of either Customer or
MLBFS that it  disclaims  liability  in respect of such Event of Loss,  Customer
shall, at Customer's option, either replace the Collateral subject to such Event
of Loss with comparable  Collateral free of all liens other than Permitted Liens
(in which event  Customer shall be entitled to utilize the proceeds of insurance
on  account of such  Event of Loss for such  purpose,  and may retain any excess
proceeds of such  insurance),  or consent to a reduction the WCMA Line of Credit
in an amount equal to the actual cash value of such  Collateral as determined by
either  the  applicable   insurance   company's  payment  (plus  any  applicable
deductible)  or,  in  absence  of  insurance  company  payment,   as  reasonably
determined by 


                                     - 8 -

<PAGE>

MLBFS. Notwithstanding the foregoing, if at the time of occurrence of such Event
of Loss or any  time  thereafter  prior to  replacement  or line  reduction,  as
aforesaid, an Event of Default shall occur hereunder, then MLBFS may at its sole
option, exercisable at any time while such Event of Default shall be continuing,
require  Customer to either replace such  Collateral or, on its own volition and
without the consent of Customer, reduce the WCMA Line of Credit, as aforesaid.

(j) NOTICE OF CERTAIN EVENTS.  Customer shall give MLBFS immediate notice of any
attachment,  lien, judicial process, encumbrance or claim affecting or involving
$25,000.00 or more of the Collateral.

(k)  INDEMNIFICATION.  Customer shall indemnify,  defend and save MLBFS harmless
from and against any and all claims,  liabilities,  losses,  costs and  expenses
(including, without limitation,  reasonable attorneys' fees and expenses) of any
nature whatsoever which may be asserted against or incurred by MLBFS arising out
of or in any manner occasioned by (i) the ownership, collection, possession, use
or operation of any  Collateral,  or (ii) any failure by Customer to perform any
of its obligations hereunder;  excluding,  however, from said indemnity any such
claims,  liabilities,  etc.  arising directly out of the willful wrongful act or
active gross negligence of MLBFS. This indemnity shall survive the expiration or
termination of this Loan  Agreement as to all matters  arising or accruing prior
to such expiration or termination.

8. EVENTS OF DEFAULT

The  occurrence  of any of the  following  events shall  constitute an "Event of
Default" under this Loan Agreement:

(a) FAILURE TO PAY. Customer shall fail to pay to MLBFS or deposit into the WCMA
Account when due any amount owing or required to be deposited by Customer  under
this Loan Agreement,  or shall fail to pay when due any other  Obligations,  and
any such  failure  shall  continue for more than 5 Business  Days after  written
notice thereof shall have been given by MLBFS to Customer.

(b) FAILURE TO PERFORM.  Customer shall default in the performance or observance
of any covenant or  agreement on its part to be performed or observed  under the
Loan Agreement or any of the Additional Agreements (not constituting an Event of
Default under any other clause of this Section), and such default shall continue
unremedied  for 10 Business  Days after written  notice  thereof shall have been
given by MLBFS to Customer.

(c)  BREACH  OF  WARRANTY.  Any  representation  or  warranty  made by  Customer
contained in this Loan  Agreement or any of the Additional  Agreements  shall at
any time prove to have been incorrect in any material respect when made.

(d)  DEFAULT  UNDER OTHER  AGREEMENT.  A default or Event of Default by Customer
shall occur under the terms of any other agreement,  instrument or document with
or intended for the benefit of MLBFS, MLPF&S or any of their affiliates, and any
required  notice shall have been given and  required  passage of time shall have
elapsed.

(e)  BANKRUPTCY,  ETC.  A  proceeding  under  any  bankruptcy,   reorganization,
arrangement,  insolvency,  readjustment of debt or  receivership  law or statute
shall be filed  by  Customer,  or any  such  proceeding  shall be filed  against
Customer and shall not be dismissed or withdrawn within 60 days after filing, or
Customer  shall make an  assignment  for the benefit of  creditors,  or Customer
shall  become  insolvent  or  generally  fail to pay,  or admit in  writing  its
inability to pay, its debts as they become due.

(f)  MATERIAL  IMPAIRMENT.  Any event shall occur which shall  reasonably  cause
MLBFS to in good faith  believe that the prospect of payment or  performance  by
Customer has been materially impaired.

(g) ACCELERATION OF DEBT TO OTHER CREDITORS. Any event shall occur which results
in the  acceleration of the maturity of any  indebtedness of $100,000.00 or more
of Customer to another creditor under any indenture, agreement,  undertaking, or
otherwise.


                                     - 9 -

<PAGE>

(h)  SEIZURE  OR ABUSE OF  COLLATERAL.  The  Collateral,  or any  material  part
thereof,  shall be or become  subject to any material  abuse or misuses,  or any
levy,  attachment,  seizure  or  confiscation  which is not  released  within 10
Business Days.

9.      REMEDIES

(a) REMEDIES UPON DEFAULT. Upon the occurrence and during the continuance of any
Event of Default,  MLBFS may at its sole option do any one or more or all of the
following,  at such time and in such  order as MLBFS may in its sole  discretion
choose:

(i) TERMINATION.  MLBFS may without notice terminate the WCMA Line of Credit and
all  obligations  to  provide  the WCMA Line of Credit or  otherwise  extend any
credit to or for the benefit of Customer;  and upon any such  termination  MLBFS
shall be relieved of all such obligations.

(ii)  ACCELERATION.  MLBFS may declare the principal of and interest on the WCMA
Loan  Balance,  and all  other  Obligations  to be  forthwith  due and  payable,
whereupon  all  such  amounts  shall be  immediately  due and  payable,  without
presentment,  demand  for  payment,  protest  and notice of  protest,  notice of
dishonor, notice of acceleration, notice of intent to accelerate or other notice
or formality of any kind, all of which are hereby expressly waived.

(iii)  EXERCISE  RIGHTS OF SECURED  PARTY.  MLBFS may exercise any or all of the
remedies of a secured party under applicable law, including, but not limited to,
the UCC,  and any or all of its  other  rights  and  remedies  under  this  Loan
Agreement and the Additional Agreements.

(iv)  POSSESSION.  MLBFS may  require  Customer to make the  Collateral  and the
records pertaining to the Collateral available to MLBFS at a place designated by
MLBFS which is reasonably  convenient,  or may take possession of the Collateral
and the records  pertaining  to the  Collateral  without the use of any judicial
process and without any prior notice to Customer.

(v) SALE.  MLBFS may sell any or all of the Collateral at public or private sale
upon such terms and  conditions as MLBFS may reasonably  deem proper.  MLBFS may
purchase any  Collateral  at any such public sale.  The net proceeds of any such
public or private sale and all other amounts  actually  collected or received by
MLBFS pursuant  hereto,  after deducting all costs and expenses  incurred at any
time in the collection of the Obligations and in the protection,  collection and
sale of the Collateral, will be applied to the payment of the Obligations,  with
any remaining liable for any amount remaining unpaid after such application.

(vi) DELIVERY OF CASH, CHECKS, ETC. MLBFS may require Customer to forthwith upon
receipt,  transmit and deliver to MLBFS in the form received,  all cash, checks,
drafts and other instruments for the payment of money (properly endorsed,  where
required, so that such items may be collected by MLBFS) which may be received by
Customer at any time in full or partial payment of any  Collateral,  and require
that  Customer not commingle any such items which may be so received by Customer
with any other of its funds or property but instead hold them separate and apart
and in trust for MLBFS until delivery is made to MLBFS.

(vii) NOTIFICATION OF ACCOUNT DEBTORS.  MLBFS may notify any Account Debtor that
its Account or Chattel  Paper has been assigned to MLBFS and direct such Account
Debtor to make payment directly to MLBFS of all amounts due or becoming due with
respect to such  Account or Chattel  Paper;  and MLBFS may  enforce  payment and
collect, by legal proceedings or otherwise, such Account or Chattel Paper.

(viii)  CONTROL OF  COLLATERAL.  MLBFS may otherwise  take control in any lawful
manner of any cash or non-cash items of payment or proceeds of Collateral and of
any rejected,  returned, stopped in transit or repossessed goods included in the
Collateral and endorse  Customer's name on any item of payment on or proceeds of
the Collateral.

(b) SET-OFF.  MLBFS shall have the further right upon the  occurrence and during
the continuance of an Event of Default to set-off,  appropriate and apply toward
payment of any of the  Obligations,  in such order of  application  as MLBFS may
from time to time and at any time elect, any cash, credit,  deposits,  accounts,


                                     - 10 -

<PAGE>

securities  and any other  property of Customer which is in transit to or in the
possession,  custody  or  control  of MLBFS,  MLPF&S or any  agent,  bailee,  or
affiliate  of MLBFS or  MLBF&S  a  security  interest  in all such  property  as
additional Collateral.

(c)  REMEDIES ARE  SEVERABLE  AND  CUMULATIVE.  All rights and remedies of MLBFS
herein are  severable  and  cumulative  and in addition to all other  rights and
remedies  available in the Additional  Agreements,  at law or in equity, and any
one or more of such  rights and  remedies  may be  exercised  simultaneously  or
successively.

(d) NOTICES.  To the fullest extent permitted by applicable law, Customer hereby
irrevocably  waives and releases MLBFS of and from any and all  liabilities  and
penalties for failure of MLBFS to comply with any statutory or other requirement
imposed upon MLBFS relating to notices of sale,  holding of sale or reporting of
any sale, and Customer waives all rights of redemption or reinstatement from any
such sale.  Any notices  required  under  applicable law shall be reasonably and
properly  given to Customer if given by any of the  methods  provided  herein at
least 5 Business  Days prior to taking  actions.  MLBFS  shall have the right to
postpone  or adjourn any sale or other  disposition  of  Collateral  at any time
without  giving  notice of any such  postponed or adjourned  date.  In the event
MLBFS seeks to take possession of any or all of the Collateral by court process,
Customer further  irrevocably  waives to the fullest extent permitted by law any
bonds and any surety or security relating thereto required by any statute, court
rule or  otherwise  as an  incident  to such  possession,  and  any  demand  for
possession prior to the commencement of any suit or action.

10.     MISCELLANEOUS

(a)  NON-WAIVER.  No  failure  or delay on the part of MLBFS is  exercising  any
right,  power or remedy pursuant to this Loan Agreement or any of the Additional
Agreements shall operate as a waiver thereof,  and no single or partial exercise
of any such right,  power or remedy shall preclude any other or further exercise
thereof, or the exercise of any other right, power or remedy. Neither any waiver
of any provision of this Loan Agreement or any of the Additional Agreements, nor
any consent to any departure by Customer  therefrom,  shall be effective  unless
the same shall be in writing and signed by MLBFS. Any waiver of any provision of
this Loan Agreement or any of the  Additional  Agreements and any consent to any
departure  by  Customer  from the  terms of this  Loan  Agreement  or any of the
Additional  Agreements shall be effective only in the specific  instance and for
the specific  purpose for which given.  Except as otherwise  expressly  provided
herein, no notice to or demand on Customer shall in any case entitle Customer to
any other or further notice or demand in similar or other circumstances.

(b)  DISCLOSURE.  Customer  hereby  irrevocably  authorize MLBFS and each of its
affiliates,  including without limitation MLPF&S, to at any time (whether or not
an Event of Default shall have occurred)  obtain from and disclose to each other
any and all financial and other information about Customer.

(c) COMMUNICATIONS.  All notices and other communications  required or permitted
hereunder shall be in writing, and shall be either delivered personally,  mailed
by postage  prepaid  certified mail or sent by express  overnight  courier or by
facsimile.  Such notices and  communications  shall be deemed to be given on the
date  of  personal  delivery,  facsimile  transmission  or  actual  delivery  of
certified  mail,  or one  Business  Day after  delivery to an express  overnight
courier.  Unless otherwise specified in a notice sent or delivered in accordance
with the terms  hereof,  notices and other  communications  in writing  shall be
given to the  parties  hereto  at their  respective  addresses  set forth at the
beginning of this Loan Agreement, or, in the case of facsimile transmission,  to
the parties at their respective regular facsimile telephone number.

(d) COSTS, EXPENSES AND TAXES. Customer shall upon demand pay or reimburse MLBFS
for:  (i) all  Uniform  Commercial  Code  filing  and search  fees and  expenses
incurred  by  MLBFS  in  connection   with  the   verification,   perfection  or
preservation  of  MLBFS'  rights  hereunder  or in the  Collateral  or any other
collateral for the Obligations; (ii) any and all stamp, transfer and other taxes
and fees payable or determined to be payable in connection  with the  execution,
delivery  and/or  recording  of this  Loan  Agreement  or any of the  Additional
Agreements; and (iii) all reasonable fees and out-of-pocket expenses (including,
but not limited to, reasonable fees and expenses of outside counsel) incurred by
MLBFS in connection with the 


                                     - 11 -

<PAGE>

enforcement of this Loan  Agreement or any of the  Additional  Agreements or the
protection  of  MLBFS'  rights  hereunder  or  thereunder,  excluding,  however,
salaries and expenses of MLBFS'  employees.  The  obligations  of Customer under
this  paragraph  shall  survive  the  expiration  or  termination  of this  Loan
Agreement and the discharge of the other Obligations.

(e) RIGHT TO PERFORM OBLIGATIONS.  If Customer shall fail to do any act or thing
which it has covenanted to do under this Loan Agreement or any representation or
warranty  on the part of  Customer  contained  in this Loan  Agreement  shall be
breached, MLBFS may, in its sole discretion, after 5 days written notice is sent
to Customer (or such lesser notice,  including no notice, as is reasonable under
the circumstances) do the same or cause it to be done or remedy any such breach,
and may expend its funds for such  purpose.  Any and all  reasonable  amounts so
expended by MLBFS shall be  repayable  to MLBFS by Customer  upon  demand,  with
interest at the  Interest  Rate during the period  from and  including  the date
funds are so expended by MLBFS to the date of  repayment,  and all such  amounts
shall be additional  Obligations.  The payment or performance by MLBFS of any of
Customer's  obligations hereunder shall not relieve Customer of said obligations
or of the  consequences  of having failed to pay or perform the same,  and shall
not waive or be deemed a cure of any Event of Default.

(f) LATE CHARGE.  Any payment  required to be made by Customer  pursuant to this
Loan  Agreement  not paid  within 10 days of the  applicable  due date  shall be
subject  to a late  charge in an amount  equal to the  lesser  of: (i) 5% of the
overdue  amount,  or (ii) the maximum amount  permitted by applicable  law. Such
late charge  shall be payable on demand,  or,  without  demand,  may in the sole
discretion of MLBFS be paid by a WCMA Loan and added to the WCMA Loan Balance in
the same manner as provided herein for accrued interest.

(g) FURTHER  ASSURANCES.  Customer agrees to do such further acts and things and
to execute  and deliver to MLBFS such  additional  agreements,  instruments  and
documents as MLBFS may  reasonably  require or deem  advisable to effectuate the
purposes  of  this  Loan  Agreement  or any  the  Additional  Agreements,  or to
establish,  perfect and maintain  MLBFS'  security  interests and liens upon the
Collateral, including, but not limited to: (i) executing financing statements or
amendments thereto when and as reasonably requested by MLBFS; and (ii) if in the
reasonable  judgment of MLBFS it is  required  by local law,  causing the owners
and/or mortgagees of the real property on which any Collateral may be located to
execute and deliver to MLBFS waivers or subordinations  reasonably  satisfactory
to MLBFS with respect to any rights in such Collateral.

(h) BINDING EFFECT.  This Loan Agreement and the Additional  Agreements shall be
binding  upon,  and shall  inure to the  benefit  of MLBFS,  Customer  and their
respective  successors and assigns.  Customer shall not assign any of its rights
or  delegate  any of its  obligations  under this Loan  Agreement  or any of the
Additional  Agreements  without  the prior  written  consent  of  MLBFS.  Unless
otherwise  expressly  agreed to in a writing  signed by MLBFS,  no such  consent
shall in any event relieve  Customer of any of its  obligations  under this Loan
Agreement or the Additional Agreements.

(i) HEADINGS. Captions and section and paragraph headings in this Loan Agreement
are  inserted  only as a  matter  of  convenience,  and  shall  not  affect  the
interpretation hereof.

(j) GOVERNING LAW. This Loan Agreement, and, unless otherwise expressly provided
therein, each of the Additional Agreements, shall be governed in all respects by
the laws of the State of Illinois.

(k) SEVERABILITY OF PROVISIONS.  Whenever possible,  each provision of this Loan
Agreement and the Additional  Agreements  shall be interpreted in such manner as
to be  effective  and valid under  applicable  law.  Any  provision of this Loan
Agreement  or  any  of  the  Additional   Agreements   which  is  prohibited  or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability  without invalidating
the remaining provisions of this Loan Agreement and the Additional Agreements or
affecting  the  validity  or  enforceability  of  such  provision  in any  other
jurisdiction.

(l) TERM.  This Loan  Agreement  shall become  effective on the date accepted by
MLBFS at its office in Chicago, Illinois, and, subject to the terms hereof,shall
continue  in effect so long  thereafter  as the WCMA Line of Credit  shall be in
effect or there shall be any Obligations outstanding.


                                     - 12 -

<PAGE>

(m) INTEGRATION.  THIS LOAN AGREEMENT,  TOGETHER WITH THE ADDITIONAL AGREEMENTS,
CONSTITUTES THE ENTIRE UNDERSTANDING AND REPRESENTS THE FULL AND FINAL AGREEMENT
BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT  MATTER  HEREOF,  AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR WRITTEN  AGREEMENTS OR PRIOR,  CONTEMPORANEOUS
OR  SUBSEQUENT  ORAL  AGREEMENTS  OF THE PARTIES.  THERE ARE NO  UNWRITTEN  ORAL
AGREEMENTS OF THE PARTIES. Without limiting the foregoing, Customer acknowledges
that: (i) no promise or commitment  has been made to it by MLBFS,  MLPF&S or any
of  their  respective  employees,   agents  or  representatives  to  extend  the
availability of the WCMA Line of Credit or the due date of the WCMA Loan Balance
beyond the  current  Maturity  Date,  or to increase  the  Maximum  WCMA Line of
Credit,  or  otherwise  extend any other  credit to Customer or any other party;
(ii) no purported  extension of the Maturity Date,  increase in the Maximum WCMA
Line of Credit or other  extension or agreement to extend  credit shall be valid
or binding unless expressly set forth in a written  instrument  signed by MLBFS;
and (iii) except as otherwise  expressly  provided  herein,  this Loan Agreement
supersedes  and replaces any and all  proposals,  letters of intent and approval
and commitment letters from MLBFS to Customer, none of which shall be considered
an Additional  Agreement.  No amendment or modification of this Agreement or any
of the  Additional  Agreements  to which  Customer is a party shall be effective
unless in a writing signed by both MLBFS and Customer.

(n)  JURISDICTION;  WAIVER.  CUSTOMER  ACKNOWLEDGES  THAT THIS LOAN AGREEMENT IS
BEING ACCEPTED BY MLBFS IN PARTIAL  CONSIDERATION OF MLBFS' RIGHT AND OPTION, IN
ITS  SOLE  DISCRETION,  TO  ENFORCE  THIS  LOAN  AGREEMENT  AND  THE  ADDITIONAL
AGREEMENTS  IN EITHER THE STATE OF ILLINOIS OR IN ANY OTHER  JURISDICTION  WHERE
CUSTOMER OR ANY COLLATERAL FOR THE OBLIGATIONS MAY BE LOCATED. CUSTOMER CONSENTS
TO JURISDICTION IN THE STATE OF ILLINOIS AND VENUE IN ANY STATE OR FEDERAL COURT
IN THE COUNTY OF COOK FOR SUCH PURPOSES,  AND CUSTOMER  WAIVES ANY ALL RIGHTS TO
CONTEST  SAID  JURISDICTION  AND  VENUE.  CUSTOMER  WAIVES ANY AND ALL RIGHTS TO
COMMENCE ANY ACTION  AGAINST MLBFS IN ANY  JURISDICTION  EXCEPT IN THE COUNTY OF
COOK AND STATE OF ILLINOIS.  MLBFS AND CUSTOMER  HEREBY EACH EXPRESSLY WAIVE ANY
AND ALL  RIGHTS TO A TRIAL BY JURY IN ANY  ACTION,  PROCEEDING  OR  COUNTERCLAIM
BROUGHT BY EITHER OF THE PARTIES  AGAINST  THE OTHER  PARTY WITH  RESPECT TO ANY
MATTER RELATING TO, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE WCMA LINE OF
CREDIT,  THIS  LOAN  AGREEMENT,  ANY  ADDITIONAL  AGREEMENTS  AND/OR  ANY OF THE
TRANSACTIONS WHICH ARE THE SUBJECT MATTER OF THIS LOAN AGREEMENT.


                                     - 13 -

<PAGE>

IN WITNESS WHEREOF, this Loan Agreement has been executed as of the day and year
first above written.

INFODATA SYSTEMS INC.

By:     /s/ Harry Kaplowitz                 /s/ Richard M. Tworek
        -------------------                 ---------------------
            Harry Kaplowitz                     Richard M. Tworek
        Signature (1)                       Signature (2)

        Harry Kaplowitz                     Richard M. Tworek
        Printed Name                        Printed Name

        President                           Executive Vice President
        Title                               Title


Accepted at Chicago, Illinois:
MERRILL LYNCH BUSINESS FINANCIAL
SERVICES INC.


By:
   -----------------------------


                                     - 14 -


<PAGE>

                            CERTIFICATE OF SECRETARY
                              (WCMA Line of Credit)


THE UNDERSIGNED  HEREBY CERTIFIES that the undersigned is the duly appointed and
acting   Secretary  (or  Assistant   Secretary)  of  INFODATA  SYSTEMS  INC.,  a
corporation duly organized, validly existing and in good standing under the laws
of the  State of  Virginia,  and  that the  following  is a true,  accurate  and
compared  transcript of resolutions duly, validly and lawfully adopted on the 29
day of October,  1996 by the Board of  Directors of said  corporation  acting in
accordance with the laws of the state of incorporation:

        "RESOLVED,  that it its  advisable  and in the  best  interests  of this
        Corporation that in connection with Working Capital  Management  Account
        No.  749-07U18 that this  Corporation is subscribing from Merrill Lynch,
        Pierce,  Fenner  & Smith  Incorporated  it  obtain  from  MERRILL  LYNCH
        BUSINESS  FINANCIAL  SERVICES INC. ("MLBFS") a commercial line of credit
        referred to by MLBFS as a "WCMA Line of Credit"; and

        "FURTHER RESOLVED,  that the President,  any Vice President,  Treasurer,
        Secretary or other  officer of this  Corporation,  or any one or more of
        them, be and each of them hereby is authorized  and empowered for and on
        behalf of this  Corporation to: (a) execute and deliver to MLBFS:  (i) a
        WCMA  Note,  Loan  and  Security  Agreement  and all  other  agreements,
        instruments and documents required by MLBFS in connection with said Line
        of Credit,  and (ii) any present or future  extensions of and amendments
        to any of the foregoing; all in such form as such officer shall approve,
        as conclusively  evidenced by his signature thereon;  (b) grant to MLBFS
        such  liens  and  security  interests  on  any  of the  assets  of  this
        Corporation as collateral  therefor and/or the other obligations of this
        Corporation to MLBFS as may be required by MLBFS; and (c) do and perform
        all such acts and things  deemed by any such  officer to be necessary or
        advisable to carry out and perform the  undertakings  and  agreements of
        this  Corporation  in connection  therewith;  and all prior acts of said
        officers in these premises are hereby ratified and confirmed; and

        "FURTHER  RESOLVED,  that MLBFS is authorized to rely upon the foregoing
        resolutions   until  it  receives   written  notice  of  any  change  or
        revocation, which change or revocation shall not in any event affect the
        obligations  of  this   Corporation  with  respect  to  any  transaction
        committed  to by MLBFS or having its  inception  prior to the receipt of
        such notice by MLBFS."

THE UNDERSIGNED  FURTHER CERTIFIES that the foregoing  resolutions have not been
rescinded,  modified  or repealed in any manner and are in full force and effect
as of the date of this Certificate,  and that the following  individuals are now
the duly elected and acting officers of said corporation:

        President:           /s/ Harry Kaplowitz
                             -----------------------------
                                 Harry Kaplowitz

        Executive
        Vice President:      /s/ Richard M. Tworek
                             -----------------------------
                                 Richard M. Tworek


        Secretary:           /s/ Gregory T. Pennell
                             -----------------------------


        Treasurer:          N/A
                            ------------------------------

IN WITNESS  WHEREOF,  the  undersigned  has executed  this  Certificate  and has
affixed the seal of said corporation hereto, pursuant to due authorization,  all
as of this 11th day of November, 1996.

                                               /s/ Gregory T. Pennell
(Corporate Seal)                               ---------------------------------
                                                       Secretary

                                                   Gregory T. Pennell
                                               ---------------------------------
                                                     Printed Name