8-K

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549
                     ---------------------------------------

                                    FORM 8-K



                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934



Date of Report(Date of earliest event reported):August 21, 2002 (August 6, 2002)
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                       Progressive Software Holding, Inc.
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             (Exact name of registrant as specified in its charter)

                                    Delaware

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                 (State or other jurisdiction of incorporation)

                              001-05513 06-0682273
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          (Commission File Number) (IRS Employer Identification Number)

                  6836 Morrison Boulevard, Charlotte, NC 28211
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                    (Address of principal executive offices)

                                 (406) 556-9886
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              (Registrant's telephone number, including area code)

                               Tridex Corporation
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          (Former name or former address, if changed since last report)






Item 1.  Changes in Control of Registrant

     As a result of the events described in Item 3 below,  Massachusetts  Mutual
Life Insurance Company and certain of its affiliates  received  2,650,554 shares
of the  Series A  Common  Stock  of  Progressive  Software  Holding,  Inc.  (the
"Successor  Company"),  the successor by merger to Tridex  Corporation (the "Old
Company"),  representing  approximately  70% of the  total  voting  power of the
Successor  Company.  In addition,  pursuant to the terms of the  Certificate  of
Incorporation  of  the  Successor  Company,   upon  the  occurrence  of  certain
Triggering Events, the voting rights of the holders of the Series B Common Stock
would  increase to 51% of the voting power of all Common Stock of the  Successor
Company, all as described in more detail in Item 3 below.

Item 3. Bankruptcy or Receivership

     On February  12,  2002,  the Old Company and its wholly  owned  subsidiary,
Progressive  Software,  Inc. (the  "Subsidiary"  and,  collectively with the Old
Company,  the "Debtors") filed voluntary  petitions for protection under Chapter
11 of the United States Bankruptcy Code (the "Bankruptcy  Code") with the United
States  Bankruptcy  Court for the District of  Connecticut  (the  "Court").  The
Debtors' cases were consolidated for the purpose of joint  administration  (Case
Nos.  02-50156 and 02-50157).  The cases were assigned to Judge Alan H.W. Shiff.
The purpose of the filing was to reorganize  the Old Company and the  Subsidiary
pursuant to a plan of reorganization  (the "Plan").  Following a hearing held on
July 9, 2002 the  Court  entered  an order  confirming  the Plan.  A copy of the
Confirmation Order dated July 9, 2002 is included as Exhibit 99.1 to this filing
and is incorporated herein by reference.

     Pursuant to the Plan,  on August 6, 2002 (the  "Effective  Date"),  the Old
Company  merged  with and into the  Successor  Company,  a Delaware  corporation
formed on August 2, 2002 for the purpose of implementing the Plan. A copy of the
Certificate of Incorporation  dated August 2, 2002, the By-Laws of the Successor
Company  dated  August 2, 2002 and the Plan of Merger  dated  August 6, 2002 are
attached hereto as Exhibits 3.1, 3.2 and 4.1, respectively, and are incorporated
herein by reference.

     The Successor  Company is authorized by its Certificate of Incorporation to
issue a total of 6,000,000  shares of capital stock,  each having a par value of
$.01 per share,  designated as follows:  (i) 4,200,000  shares are designated as
Series A Common Stock (the  "Series A Common  Stock");  (ii) 800,000  shares are
designated as Series B Common Stock (the "Series B Common  Stock" and,  together
with the Series A Common Stock,  collectively,  the "Common  Stock");  and (iii)
1,000,000 shares are designated as Preferred Stock (the "Preferred Stock").

     The Board of Directors is authorized to issue the Preferred Stock in one or
more series without further stockholder authorization,  and to fix and determine
the terms,  limitations  and relative  rights and  preferences  of the Preferred
Stock and to establish  series of Preferred  Stock. No shares of Preferred Stock
were issued on the Effective Date.

     Each  share  of  Common  Stock  has  one  vote  on  all  matters  on  which
stockholders  are entitled or  permitted  to vote,  and holders of each share of
Common  Stock will share  ratably in all  dividends  and  distributions  and all
rights in  liquidation,  unless and until the  occurrence  of certain  events of
default by the Successor  Company under the Credit  Agreement (as defined in the
Certificate  of  Incorporation  and  hereinafter  referenced)  and notice to the
Successor Company. Upon the occurrence of such an event of default and notice (a
"Triggering  Event")  the holders of all  outstanding  shares of Series B Common
Stock  will  have  in  the   aggregate  33%  of  all  rights  to  dividends  and
distributions and rights in liquidation,  and will have such number of votes per
share of Series B Common Stock as will result in all holders of all  outstanding
shares of Series B Common Stock  having 51% of all voting  rights of the holders
of all Common Stock then outstanding.

     On the Effective Date, each  outstanding  share of Old Company common stock
ceased to be  outstanding  and every 10 shares of Old Company  common stock was,
automatically  and  without  any  action  on the  part  of the  holder  thereof,
converted  into and  exchanged  for the right to  receive  one share of Series A
Common Stock,  totaling  approximately  565,429 shares of Series A Common Stock,
representing  approximately 15% of all Common Stock outstanding on the Effective
Date.  Fractional  shares of the  Series A Common  Stock  shall not be issued or
distributed  and the  number of shares  of Series A Common  Stock  issued to any
holder of Old  Company  common  stock will be rounded up or down to the  nearest
whole number.  In addition,  on the  Effective  Date certain  allowed  unsecured
claims  were  satisfied  pursuant to the Plan  through  the  issuance of a total
2,827,145 shares of Series A Common Stock, representing approximately 75% of the
total Common Stock.

     Pursuant to the Plan, on the Effective  Date, the Successor  Company issued
376,953 shares of the Series B Common Stock to its allowed secured creditor, Ark
CLO 2000-1, Limited ("ARK"),  representing approximately 10% of the total Common
Stock  outstanding on the Effective Date and issued a Warrant to ARK to purchase
418,836  additional shares of Series B Common Stock for a purchase price of $.01
per share.  A copy of the  Warrant  is  attached  hereto as  Exhibit  4.4 and is
incorporated  herein by reference.  The Warrant is  exercisable if the Successor
Company makes a draw under the revolving credit facility described below and for
six months thereafter.

     In  addition,   the  Successor  Company  and  the  Subsidiary  delivered  a
$5,300,000  promissory  note (the "Term Loan") to ARK payable in accordance with
the terms of a Credit  Agreement  dated the Effective Date. A copy of the Credit
Agreement  is  attached  hereto as Exhibit  10.1 and is  incorporated  herein by
reference.  The Credit  Agreement  also provides for up to $500,000 of revolving
credit loans from ARK to be used for working capital ("Revolving Credit Loans").
Draws may be made on Revolving  Credit Loans for up to six months  following the
Effective Date. The Term Loan and any Revolving Credit Loan bear interest at the
prime rate  published  by the Wall Street  Journal,  plus 2%.  Interest  accrues
starting on the Effective Date and is payable  monthly until maturity  beginning
on February 6, 2003. Principal payments (including capitalized accrued interest)
on the Term Loan begin 12 months after the effective  date,  amortized  over ten
years, and any outstanding principal and interest on the Term Loan is payable in
full  five  years  after  the  Effective  Date.  In  addition,  in the event the
Successor Company and the Subsidiary have  consolidated  excess cash flow at any
time after the Effective  Date,  during the period from the Effective Date until
December 31, 2002,  25% of such excess cash flow must be used to prepay the Term
Loan on January 1, 2003 and  during the period  after  January 1, 2003 until the
Term Loan has been repaid in full,  25% of such excess cash flow must be used to
prepay the Term Loan on the due date of quarterly  financial  statements and 50%
must be used to  prepay  the  Term  Loan  on the due  date of  annual  financial
statements pursuant to the Credit Agreement.  All Revolving Loans are payable in
full six months after the Effective Date.

     In connection with the  implementation  of the Plan, the Successor  Company
and certain  holders of Series A Common  Stock (the  "MassMutual  Holders")  and
Series B Common Stock, representing  approximately 80% of the total Common Stock
outstanding on the Effective Date,  entered into a Stockholders  Agreement and a
Registration  Rights  Agreement.  Copies of the  Stockholders  Agreement and the
Registration  Rights  Agreement  are  attached  hereto as  Exhibits  4.2 and 4.3
respectively and are incorporated  herein by reference.  The Registration Rights
Agreement provides for certain demand registration,  piggyback  registration and
S-3 registration  rights for the MassMutual  Holders and the holders of Series B
Common  Stock.  The  Stockholders  Agreement  provides  for  the  election  of a
three-member  board of directors  (the  "Board"),  one to be  designated  by the
MassMutual  Holders,  one to be designated by the holders of the Series B Common
Stock and one to be designated by certain  members of  management.  In addition,
the Stockholders Agreement requires the approval of holders of two-thirds of the
Series  B  Common  Stock  then  outstanding  with  respect  to  changes  in  the
Certificate of Incorporation  affecting the rights of the Series B Common Stock,
the issuance or  authorization of additional  Series B Common Stock,  changes in
the number of the Board of Directors,  and entering  into material  transactions
with  affiliates.  Pursuant  to the  Stockholders  Agreement,  William A. Beebe,
Thomas R. Schwarz and Lynn Tilton were  appointed to the Board on the  Effective
Date.

     William A. Beebe  joined  the Old  Company in June 2000 as Chief  Financial
Officer.  From his  retirement  in 1997  from the  position  of chief  financial
officer of Project Pros,  Inc.  until  joining Old Company,  Mr. Beebe served in
various  consulting  capacities.  Previously,  for more than 30  years,  he held
executive and consulting positions, principally that of chief financial officer,
in a number of companies in the food service, software, electronic manufacturing
and distribution industries.

     Thomas R.  Schwarz  has been a  Director  of the Old  Company  since he was
Chairman of  Grossman's  Inc.,  a retailer of building  materials,  from 1990 to
1994, when he retired. Mr. Schwarz was President,  Chief Operating Officer and a
director of Dunkin Donuts  Incorporated,  a food service  company,  from 1980 to
1990. He is a director of TransAct and a director of Lebhar-Friedman  Publishing
Company. He is a Trustee of the Tanaka Growth Fund.

     Lynn  Tilton is a  founder  and  member  of  Patriarch  Partners  LLC,  the
investment  adviser and manager of ARK and related  entities.  Prior to founding
Patriarch  Partners,  Ms. Tilton was an executive at Long Drive Management Trust
(LDMT).  Preceding her tenure at LDMT, Ms. Tilton was the founding principal and
Executive  Managing  Director of Papillon  Partners,  Inc. In 1989,  Ms.  Tilton
worked as an asset manager for the Oppenheimer Horizon Fund at Oppenheimer & Co.
In December,  1990, she joined Kidder, Peabody & Co., Inc. to head the effort in
distressed debt research and direct certain proprietary  investments.  From 1993
to 1994, Ms. Tilton was a Managing  Director and Head of Sales at M.J.  Whitman,
Inc. From 1994 through  early-1998,  she was a Managing Director,  Principal and
Partner at Amroc  Investments,  Inc. Prior to 1989, Ms. Tilton worked in mergers
and  acquisitions  at Morgan Stanley & Co. and continued her career in corporate
finance and  merchant  banking at Goldman,  Sachs & Co. and Merrill  Lynch.  Ms.
Tilton  earned a B.A. in American  Studies  from Yale  University  and an MBA in
Finance from Columbia University.

     On the Effective  Date, the Board appointed  Christopher  Sebes to serve as
the President and Chief Executive Officer,  and William A. Beebe to serve as the
Treasurer and  Secretary,  of the Successor  Company.  Pursuant to the Plan, the
Successor Company entered into a six-month  Employment Agreement with William A.
Beebe and a one-year  Employment  Agreement with  Christopher  Sebes,  copies of
which are attached hereto as Exhibits 10.2 and 10.3, respectively.  In addition,
the Successor Company adopted a Stock Option Plan and authorized the issuance of
up to 418,836 shares of Series A Common Stock pursuant to the Stock Option Plan.
A copy of the Stock Option Plan is attached hereto as Exhibit 10.4.

     Attached as Exhibit 99.2 is an unaudited pro forma balance sheet of the Old
Company  reflecting assets and liabilities (on a consolidated  basis) as of July
31, 2002, giving effect to the reorganization as of such date.

Item 7.  Financial Statements and Exhibits.

         (a)      Financial statements of business acquired.

                  Not Applicable

         (b)      Pro forma financial information

                  Not Applicable

         (c)      Exhibits

 Exhibit  3.1 - Certificate of Incorporation dated August 2, 2000
 Exhibit  3.2 - By-Laws dated August 2, 2002
 Exhibit  4.1 - Plan of Merger dated August 6, 2002
 Exhibit  4.2 - Stockholders Agreement dated August 6, 2002
 Exhibit  4.3 - Registration Rights Agreement dated August 6, 2002
 Exhibit  4.4 - Warrant dated August 6, 2002
 Exhibit 10.1 - Credit Agreement dated August 6, 2002
 Exhibit 10.2 - Employment Agreement with William A. Beebe dated August 6, 2002
 Exhibit 10.3 - Employment Agreement with Christopher Sebes dated August 6, 2002
 Exhibit 10.4 - Stock Option Plan dated August 6, 2002
 Exhibit 99.1 - Confirmation Order dated July 9, 2002
 Exhibit 99.2 - Unaudited Pro Forma Balance Sheet of the Old Company dated as of
                July 31, 2002







                                   SIGNATURES

     Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, as
amended,  the  Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.

                                           Progressive Software Holding, Inc.



                                           By: /s/ Willaim A. Beebe
                                               ---------------------------------
                                                    William A. Beebe
                                                    Chief Financial Officer


Date:  August 21, 2002

EX-3.(I)

                                                     EXHIBIT 3.1

                          CERTIFICATE OF INCORPORATION
                                       OF
                       PROGRESSIVE SOFTWARE HOLDING, INC.


                                    ARTICLE I
                                      NAME
                                      ----

        The name of the corporation is Progressive Software Holding, Inc.
                    (hereinafter called the "Corporation").

                                   ARTICLE II
                                REGISTERED OFFICE

     The address of the  registered  office of the  Corporation  in the State of
Delaware is 1209 Orange Street,  City of Wilmington,  County of New Castle.  The
name of its registered agent at that address is The Corporation Trust Company.

                                   ARTICLE III
                                    PURPOSES

     The purpose of the  Corporation  is to engage in any lawful act or activity
for which a corporation  may be organized  under the General  Corporation Law of
the State of Delaware as set forth in Title 8 of the Delaware Code (the "GCL").


                                   ARTICLE IV
                               CAPITAL SECURITIES

     The  Corporation  shall  have  authority  to issue a total  of Six  Million
(6,000,000)  shares of capital stock, each having a par value of $.01 per share,
designated as follows:  (i) Four Million Two Hundred Thousand (4,200,000) shares
are  designated  as Series A Common  Stock (the "Series A Common  Stock");  (ii)
Eight Hundred Thousand  (800,000) shares are designated as Series B Common Stock
(the  "Series B Common  Stock"  and,  together  with the Series A Common  Stock,
collectively,  the "Common  Stock");  and (iii) One Million  (1,000,000)  shares
designated  as Preferred  Stock (the  "Preferred  Stock").  Subject to the terms
hereof,  the  Corporation  is  authorized  to issue from time to time all or any
portion of the  capital  stock of the  Corporation  that is  authorized  but not
issued to such  person or persons and for such  lawful  consideration  as it may
deem appropriate.


     Any and all such shares  issued for which the full  consideration  has been
paid or delivered  shall be deemed fully paid shares of capital  stock,  and the
holder of such shares shall not be liable for any further call or  assessment or
any other payment thereon.


     The voting  powers,  designations,  preferences,  privileges  and relative,
participating,  optional  or  other  special  rights,  and  the  qualifications,
limitations or  restrictions  of each class of capital stock of the  Corporation
shall be as hereafter provided in this Article IV.


     To the extent  prohibited  by Section 1123 of Title 11 of the United States
Code (the "Bankruptcy  Code"),  the Corporation will not issue non-voting equity
securities; provided, however, that the foregoing (i) will have no further force
and effect beyond that required under Section 1123 of the Bankruptcy  Code, (ii)
will have such force and effect,  if any,  only for so long as such Section 1123
is in effect  and  applicable  to the  Corporation,  and (iii) may be amended or
eliminated in accordance with applicable law as from time to time in effect.

                                 A. COMMON STOCK

1.   General.

          (a) Definitions. The following terms are used herein with the meanings
     indicated:

               (i)  "Credit  Party"  has the  meaning  set  forth in the  Credit
          Agreement (the "Credit  Agreement"),  dated as of the Effective  Date,
          among the Corporation, ARK CLO 2000-1, Limited ("ARK") and the lenders
          party thereto.

               (ii) The "Effective Date" means the "Effective Date" set forth in
          the First Amended Plan of  Reorganization  for Tridex  Corporation and
          Progressive  Software,  Inc.,  filed in the United  States  Bankruptcy
          Court,  District of  Connecticut,  Bridgeport  Division in the case of
          Tridex Corporation and Progressive Software,  Inc. (Case Nos. 02-50156
          and 02-50157).

               (iii) A  "Liquidation  Event" means any voluntary or  involuntary
          liquidation,  dissolution,  or  winding up of the  Corporation.  In no
          event  shall  a   reorganization,   consolidation  or  merger  of  the
          Corporation with or into one or more other entities, or a sale, lease,
          exchange  or  other  disposition  of all or  substantially  all of the
          assets of the Corporation,  constitute a Liquidation  Event within the
          meaning of this Certificate of Incorporation.

               (iv)  "Obligations"  has the  meaning  set  forth  in the  Credit
          Agreement.

               (v) A "Triggering  Event" means that (A) the aggregate  principal
          amount of Term Loans (as defined in the Credit Agreement)  outstanding
          under the Credit  Agreement,  is equal to or greater than  $4,000,000,
          (B) a  Triggering  Event of Default  (as  defined  herein)  shall have
          occurred and be continuing, and (C) ARK shall have delivered a written
          notice to the  Corporation  stating that the events  stated in clauses
          (A) and (B) above have occurred; provided, however, that no Triggering
          Event  may  occur  from and  after  the date on  which  the  aggregate
          outstanding   principal   amount  of  the  Term  Loans  is  less  than
          $4,000,000.  The date on which the  Corporation  receives  the written
          notice  referred  to in clause (C) above is  referred to herein as the
          "Triggering Date".

               (vi) A "Triggering  Event of Default"  means that any one or more
          of the following events shall have occurred and be continuing:

                    (a)  an  Event  of  Default   shall  have  occurred  and  be
               continuing  under Sections  8.1(a),  8.1(e)(i),  8.1(f),  8.1(g),
               8.1(h) or 8.1(i) of the Credit Agreement;

                    (b)  failure of any Credit  Party to perform or comply  with
               any term or condition  contained in Sections  2.2, 6.3, 6.4, 6.5,
               6.6 or 6.10 of the Credit Agreement;

                    (c)  failure  of  any  Credit  Party  to  prepay  fully  and
               completely  all  Obligations  immediately  upon a failure  of any
               Credit  Party to  perform  or comply  with any term or  condition
               contained in Section 6.7 of the Credit Agreement;

                    (d) (i) (A) failure of any Credit Party to perform or comply
               with any term or condition  contained in Sections  5.2, 6.9, 6.11
               or 6.12 of the Credit  Agreement or (B) an Event of Default shall
               have occurred and be continuing  under Sections  8.1(d) or 8.1(k)
               of the  Credit  Agreement,  (ii)  such  default  or  event  has a
               Material Adverse Effect (as defined in the Credit  Agreement) and
               (iii)  such  default  or event  shall not have been  remedied  or
               waived within 30 days after the earlier of (A) an officer of such
               Credit  Party  becoming  aware of such  default or (B) receipt by
               Borrowers  (as  defined in the Credit  Agreement)  of notice from
               Agent (as  defined  in the  Credit  Agreement)  or any Lender (as
               defined in the Credit Agreement) of such default or event;

                    (e) (i) (A) an Event of Default  shall have  occurred and be
               continuing under Section 8.1(c) of the Credit Agreement or (B) an
               Event of Default  shall have  occurred  and be  continuing  under
               Section  8.1(e)(ii),  which, in each case, shall have resulted in
               another party declaring any Indebtedness due and payable prior to
               its stated  maturity  and (ii) such  Event of Default  shall have
               resulted in the Agent (as defined in the Credit Agreement) or any
               Lender (as defined in the Credit  Agreement)  actually  declaring
               the Obligations due and payable prior to its stated maturity;

                    (f) any Credit  Party  shall have  entered  into any binding
               agreement that upon consummation  thereof is reasonably likely to
               result  in a  "Change  of  Control"  (as  defined  in the  Credit
               Agreement) and such agreement does not provide that, on or before
               consummation  of the  transactions  constituting  such "Change of
               Control", the Obligations shall be fully and completely prepaid;

                    (g)  failure of any Credit  Party to perform or comply  with
               any term or  condition  contained  in  Section  6.1 of the Credit
               Agreement;  provided, however, that such a default shall not be a
               "Triggering  Event  of  Default"  if (i)  such  Indebtedness  (as
               defined in the Credit  Agreement) is used  immediately  to prepay
               fully and  completely all  Obligations or (ii) such  Indebtedness
               (as defined in the Credit Agreement) is expressly subordinated to
               the Obligations;

                    (h)  failure of any Credit  Party to perform or comply  with
               any term or  condition  contained  in  Section  6.2 of the Credit
               Agreement;  provided, however, that such a default shall not be a
               "Triggering  Event of  Default"  if such Lien (as  defined in the
               Credit  Agreement)  is expressly  junior to any and all Liens (as
               defined in the Credit Agreement) in favor of Agent (as defined in
               the Credit  Agreement)  for the benefit of Lenders (as defined in
               the Credit  Agreement)  granted  pursuant to any Credit Document;
               and

                    (i)  failure of any Credit  Party to perform or comply  with
               any term or  condition  contained  in  Section  6.8 of the Credit
               Agreement;  provided, however, that such a default shall not be a
               "Triggering  Event of Default" if the proceeds from any such sale
               is  used   immediately   to  prepay  fully  and   completely  all
               Obligations.

          (b) Dividends.  Dividends may be declared and paid on the Common Stock
     from funds lawfully  available therefor as and when determined by the Board
     of  Directors,  and shall be  payable  as  provided  in  Section A3 of this
     Article IV.

          (c) Liquidation.  Upon the occurrence of a Liquidation Event,  holders
     of Common  Stock will be entitled to receive all assets of the  Corporation
     available  for  distribution  to its  stockholders  (which  shall be shared
     between  the  holders of the Series A Common  Stock and the Series B Common
     Stock as provided in Section A3 of this Article IV),  subject to the rights
     and  preferences of any then  outstanding  shares of any other class of the
     Corporation's  capital stock that may  hereafter be  authorized  and issued
     having preferred  rights upon the occurrence of a Liquidation  Event senior
     to the rights of holders of Common Stock.

          (d)  Valuation of Assets upon  Liquidation.  The value of any property
     delivered  to the holders of Common Stock  pursuant to Section  A1(c) above
     shall be valued upon a Liquidation Event as follows:

               (i) with  respect  to cash,  such  value  shall be the  aggregate
          amount of cash received by the holders of the Common Stock,  including
          amounts paid or payable for accrued interest or accrued dividends;

               (ii) with respect to  securities  which are  publicly  traded and
          which  are not  subject  to  restrictions  on sale as a result  of the
          circumstances under which the Corporation acquired them or as a result
          of the  relationship  of the issuer thereof to the  Corporation or any
          affiliate  thereof,  such  value  shall be the last sale  price on the
          principal national securities exchange on which they are traded on the
          business day immediately prior to the date of determination,  or if no
          sales occurred on such day, the highest final "bid" price on such day;
          and

               (iii) with respect to all other securities,  property and assets,
          the value determined by mutual agreement of the Corporation's board of
          directors and the holders of a majority of the  outstanding  shares of
          Common Stock, or from and after the Triggering  Date, the holders of a
          majority of the outstanding shares of Series B Common Stock.

          (e) Voting.  The holders of the Series A Common  Stock and the holders
     of the Series B Common  Stock shall vote  together as a single class on all
     matters with respect to which  holders of Common Stock shall have the right
     to vote.


2.  Classes of Common  Stock.  The rights and  privileges  of the holders of the
Series A Common  Stock,  including,  without  limitation,  voting,  dividend and
liquidation rights, are subject to and qualified by the rights and privileges of
the  holders  of  Series B Common  Stock as  specified  herein.  Subject  to the
provisions of Section A3 below, unless and until a Triggering Event shall occur,
(a) each  share of Series A Common  Stock  and  Series B Common  Stock  shall be
identical to, and shall entitle the holder to the same rights and privileges as,
all other shares of Series A Common Stock and Series B Common Stock with respect
to voting,  dividends,  distributions,  rights in  liquidation  and in all other
respects; provided, that any Common Stock dividend shall be payable in shares of
the series  with  respect to which it is paid,  and (b) each holder of shares of
Series A Common Stock and Series B Common Stock is entitled to one vote for each
share thereof held by such holder at all meetings of  stockholders  (and written
actions in lieu of meetings). There shall be no cumulative voting.

3.   Special Rights of the Series B Common Stock.


          (a) Dividends and Distributions. Effective on and after the Triggering
     Date automatically,  and without any action on the part of the Corporation,
     the holders of the Series B Common  Stock or any other person or entity and
     regardless  of the number of shares of Series B Common Stock which are then
     outstanding:  (i) the holders of all of the outstanding  shares of Series A
     Common Stock shall be entitled to receive,  in proportion to their holdings
     of Series A Common  Stock,  an  aggregate  amount equal to 67% of the total
     amount of dividends  and  distributions  which the holders of all series of
     Common Stock, together as a single class, shall be entitled to receive, and
     (ii) the holders of all of the outstanding  shares of Series B Common Stock
     shall be entitled to receive,  in proportion to their  holdings of Series B
     Common  Stock,  an  aggregate  amount  equal to 33% of the total  amount of
     dividends  and  distributions  which the  holders  of all  series of Common
     Stock, together as a single class, are entitled to receive.

          (b) Liquidation.  Effective on and after the Triggering Date, if there
     shall be a Liquidation Event, automatically,  and without any action on the
     part of the  Corporation,  the holders of the Series B Common  Stock or any
     other person or entity and  regardless  of the number of shares of Series B
     Common  Stock  which are then  outstanding:  (i) the  holders of all of the
     outstanding  shares of Series A Common  Stock shall be entitled to receive,
     in  proportion  to their  holdings of Series A Common  Stock,  an aggregate
     amount equal to 67% of the value of the assets of the Corporation available
     for  distribution  to the holders of the Common  Stock in  accordance  with
     Section  A(1)(c)  hereof,  and (ii) the  holders of all of the  outstanding
     shares of Series B Common Stock shall be entitled to receive, in proportion
     to their  holdings of Series B Common Stock,  an aggregate  amount equal to
     33%  of  the  value  of  the  assets  of  the  Corporation   available  for
     distribution  to the holders of the Common Stock in accordance with Section
     A(1)(c) hereof.

          (c) Voting.

               (i) Effective on and after the  Triggering  Date,  automatically,
          and without any action on the part of the Corporation,  the holders of
          the Series B Common Stock or any other person or entity and regardless
          of the  number  of  shares  of  Series B Common  Stock  which are then
          outstanding: (A) each share of Series B Common Stock shall be entitled
          to a number of votes per share of Series B Common  Stock such that the
          holders  of all of the  outstanding  shares of  Series B Common  Stock
          shall be  entitled to cast a number of votes equal to 51% of the total
          votes entitled to be cast by the holders of all Common Stock,  and (B)
          the holders of all of the outstanding  shares of Series A Common Stock
          shall be  entitled to cast a number of votes equal to 49% of the total
          votes entitled to be cast by the holders of all Common Stock,  in each
          case,  with the  holders of the Class A Common  Stock and the Series B
          Common  Stock  voting  together as a single  class.  There shall be no
          cumulative voting.

               (ii)  Notwithstanding  the foregoing,  the Corporation shall not,
          without the affirmative vote of the holders of at least 66-2/3% of the
          outstanding  shares of Series B Common  Stock  (voting  together  as a
          separate  class),  take,  or  permit to  occur,  any of the  following
          actions:

                    (A) Amend,  modify or waive any  provision  of Article IV or
               Article V of this Certificate of Incorporation so as to alter the
               rights,  preferences,  privileges,  restrictions  or terms of the
               Series B Common Stock; or

                    (B)  Increase  the number of  authorized  shares of Series B
               Common Stock or issue additional shares of Series B Common Stock.

(d) Elimination of Series B Common Stock. In the event that no Triggering  Event
shall have occurred on or prior to such date, on the date on which the aggregate
outstanding principal amount of the Term Loans is less than $4,000,000: (i) each
share of Series B Common Stock shall automatically and without any action on the
part of the  Corporation  or any other  party,  convert to one share of Series A
Common Stock; (ii) the designation  "Series B Common Stock" shall be eliminated;
and thereafter (iii) shares of stock designated as "Series A Common Stock" shall
be designated simply as "Common Stock",  and each share of Common Stock shall be
identical  to, and be entitled to the same rights and  privileges  as, all other
shares of Common  Stock with  respect  to  dividends,  distributions,  rights in
liquidation, voting and in all other respects.



                               B. PREFERRED STOCK

     The board of directors of the  Corporation  is authorized by vote or votes,
from time to time adopted, to provide for the issuance of one or more classes of
Preferred Stock,  which shall be separately  identified.  The board of directors
shall have the authority to divide any  authorized  class of Preferred  Stock of
the Corporation  into one or more series and to fix and state the voting powers,
designations, preferences and relative, participating, optional or other special
rights  of the  shares  of any  series so  established  and the  qualifications,
limitations  and  restrictions  thereof.  Each such series  shall be  separately
designated so as to distinguish  the shares thereof from the shares of all other
series and classes. All shares of the same class shall be identical except as to
the  following  relative  rights  and  preferences,  as to  which  there  may be
variations between different series:

     (a)  The   distinctive   serial   designation  and  the  number  of  shares
constituting such series;

     (b) The dividend  rates or the amount of dividends to be paid on the shares
of such series,  whether  dividends  shall be cumulative  and, if so, from which
date or dates, the payment date or dates for dividends, and the participating or
other special rights, if any, with respect to dividends;

     (c) The voting powers, full or limited, if any, of shares of such series;

      (d) Whether the shares of such series shall be  redeemable  and, if so, the
price or prices at which, and the terms and conditions on which, such shares may
be redeemed;

     (e) The amount or  amounts  payable  upon the shares of such  series in the
event of voluntary or involuntary liquidation,  dissolution or winding up of the
Corporation;

     (f) Whether the shares of such series shall be entitled to the benefit of a
sinking or  retirement  fund to be applied to the purchase or redemption of such
shares  and if so  entitled,  the  amount  of such  fund and the  manner  of its
application,  including the price or prices at which such shares may be redeemed
or purchased through the application of such fund;

     (g)  Whether  the  shares of such  series  shall be  convertible  into,  or
exchangeable for, shares of any other class or classes or of any other series of
the same or any other  class or classes of stock of the  Corporation,  and if so
convertible or exchangeable, the conversion price or prices or the rate or rates
of exchange,  and the adjustments  thereof,  if any, at which such conversion or
exchange may be made, and any other terms and  conditions of such  conversion or
exchange;

     (h) The price or other  consideration  for which the shares of such  series
shall be issued; and

     (i) Whether the shares of such series which are redeemed or converted shall
have the status of authorized but unissued shares of Preferred Stock and whether
such shares may be reissued as shares of the same or any other series of stock.

     Any such vote shall become  effective when the  Corporation  files with the
Secretary of State of the State of Delaware a certificate of designations of one
or more series of  Preferred  Stock,  setting  forth a copy of such vote and the
number of shares of stock of such class or series as to which the  resolution or
resolutions apply, executed and acknowledged as required by the GCL.

     Each share of each series of Preferred  Stock shall have the same  relative
rights as and be identical in all respects with all the other shares of the same
series.


                                   ARTICLIE V
                               PERPETUAL EXISTENCE


     The Corporation is to have perpetual existence.


                                   ARTICLE VI
                    LIMITATION ON LIABILITY; INDEMNIFICATION

     To the fullest extent  permitted by the GCL, no director of the Corporation
shall be personally  liable to the Corporation or its  stockholders for monetary
damages for breach of fiduciary duty as a director,  except for  liability:  (i)
for any  breach of the  director's  duty of loyalty  to the  Corporation  or its
stockholders;  (ii)  for acts or  omission  not in good  faith or which  involve
intentional misconduct or a knowing violation of law; (iii) under section 174 of
the GCL; or (iv) for any transaction from which the director derived an improper
personal  benefit.  If the  GCL is  amended  after  the  effective  date of this
Certificate of Incorporation to authorize  corporate action further  eliminating
or limiting  the  personal  liability  of  directors,  then the  liability  of a
director of the Corporation shall be eliminated or limited to the fullest extent
permitted by the GCL, as so amended.

     The Corporation shall, to the fullest extent permitted by the provisions of
Section  145 of the  GCL,  indemnify  each  person  who it shall  have  power to
indemnify  under said  section  from and  against  any and all of the  expenses,
liabilities  or other  matters  referred to in or covered by said  section.  The
indemnification  provided for herein shall not be deemed  exclusive of any other
rights to which each such  indemnified  person may be entitled under any by-law,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in such  indemnified  person's  official  capacity and as to action in
another capacity while serving as a director,  officer, employee or agent of the
Corporation,  and shall continue as to a person who has ceased to be a director,
officer, employee or agent of the Corporation, and shall inure to the benefit of
the heirs, executors and administrators of such person.

     Any (i) repeal or amendment of this Article VI by the  stockholders  of the
Corporation or (ii) amendment to the GCL shall not adversely affect any right or
protection  existing at the time of such repeal or amendment with respect to any
acts or omissions  occurring before such repeal or amendment of a person serving
as a  director,  officer,  employee  or agent of the  Corporation  or  otherwise
enjoying  the  benefits  of  this  Article  VI at the  time of  such  repeal  or
amendment.

                                   ARTICLE VII
                                    AMENDMENT

     Subject to the provisions of Section  IVA3(c)(ii)  hereof,  the Corporation
reserves the right to amend, alter, change or repeal any provisions contained in
this Certificate of Incorporation,  in the manner now or hereafter  prescribe by
statute,  and all rights conferred upon stockholders  herein are granted subject
to this reservation.

                                  ARTICLE VIII
                                  MISCELLANEOUS

     The following  provisions  are inserted for the  management of the business
and the conduct of the affairs of the Corporation,  and for further  definition,
limitation and regulation of the powers of the  Corporation and of its directors
and  stockholders,  and are in  furtherance  and not in limitation of the powers
conferred by the laws of the State of Delaware:

     A. The business and affairs of the Corporation shall be managed by or under
the direction of the Board of Directors.

     B. The  Board of  Directors  shall  have the power to make,  alter,  amend,
change, add to or repeal the By-Laws of the Corporation, subject to the right of
the stockholders to make, alter,  amend,  change,  add to or repeal the By-Laws,
provided that any such action by the stockholders  shall require the affirmative
vote of the  holders of at least a majority  of the then  outstanding  shares of
capital stock entitled to vote generally in the election of directors.

     C. The number of directors of the Corporation shall be as from time to time
fixed by, or in the manner provided in, the By-Laws of the Corporation. Election
of directors  need not be by written  ballot unless the By-Laws so provide.  The
term of office of each  director  shall  expire at the next  annual  meeting  of
stockholders  after  his  or her  election.  In  accordance  with  the  By-Laws,
directors  appointed to fill vacancies  created by the resignation or removal of
any  director  shall serve for the  remainder  of the term of the  director  who
resigned  or was  removed.  A  director  may be  removed  only for  cause by the
affirmative  vote of the holders of at least a majority of the then  outstanding
shares of capital stock entitled to vote generally in the election of directors.

     D. In  addition  to the powers  and  authority  hereinbefore  or by statute
expressly  conferred upon them,  the directors are hereby  empowered to exercise
all such powers and do all such acts and things as may be  exercised  or done by
the  Corporation,  subject,  nevertheless,  to the  provisions  of the GCL, this
Certificate  of  Incorporation  and any  By-Laws  adopted  by the  stockholders;
provided,  however,  that no By-Laws hereafter adopted by the stockholders shall
invalidate  any prior act of the  directors  which would have been valid if such
By-Laws had not been adopted.

     E.  Meetings  of  stockholders  may be held  within or without the State of
Delaware,  as the By-Laws may provide.  Special meetings of stockholders must be
called  by the  Secretary  upon the  request  in  writing  of a  stockholder  or
stockholders  holding of record at least twenty-five percent (25%) of the issued
and outstanding Common Stock entitled to vote at such meeting.

     F. The books of the  Corporation  may be kept  (subject  to any  provisions
contained  in the GCL)  outside  the State of  Delaware at such places as may be
designated  from time to time by the Board of Directors or in the By-Laws of the
Corporation.

     The  undersigned   incorporator  hereby  acknowledges  that  the  foregoing
Certificate of  Incorporation is her free act and deed and that the facts stated
therein are true.


                                             /s/  Margaret D. Farrell, Esq.
                                             ------------------------------
                                                  Margaret D. Farrell, Esq.
                                                  Incorporator


STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE

     On the 2nd day of  August  2002,  before me  personally  came  Margaret  D.
Farrell,  Esq.,  known  to me to be the  individual  described  here  in and who
acknowledged  the  foregoing  instrument  and  swore and  acknowledged  that she
executed the same as her free act and deed.


                                          /s/ Doris J. Alberg
                                          ------------------------------
                                          Notary Public
                                          My Commission Expires:3/23/02

EX-3.(II)

                                                                   EXHIBIT 3.2

                                  B Y - L A W S
                                  -------------
                                       of
                       Progressive Software Holding, Inc.
                       ----------------------------------
                                    Article I
                                    ---------
                                     OFFICES
                                     -------

     Section 1. The registered office shall be in the City of Wilmington, County
of New Castle, State of Delaware.

     Section 2. The  corporation may also have offices at such other places both
within and without the State of Delaware as the board of directors may from time
to time determine or the business of the corporation may require.


                                   Article II
                                   ----------
                            MEETINGS OF STOCKHOLDERS
                            ------------------------


     Section 1. All meetings of the  stockholders  for the election of directors
shall be held in the City of  Wilmington at such place as may be fixed from time
to time by the board of  directors,  or at such  other  place  either  within or
without the State of Delaware  as shall be  designated  from time to time by the
board of  directors  and  stated  in the  notice  of the  meeting.  Meetings  of
stockholders for any other purpose may be held at such time and place, within or
without the State of  Delaware,  as shall be stated in the notice of the meeting
or in a duly executed waiver of notice thereof.

     Section 2. Annual meetings of  stockholders,  commencing with the year 2003
shall be held on such date and time as shall be designated  from time to time by
the board of directors  and stated in the notice of the  meeting,  at which they
shall elect by a plurality  vote a board of  directors,  and transact such other
business as may properly be brought before the meeting.

     Section 3. Written notice of the annual meeting stating the place, date and
hour of the meeting shall be given to each stockholder  entitled to vote at such
meeting  not less  than ten nor more  than  fifty  days  before  the date of the
meeting.

     Section  4.  The  officer  who  has  charge  of  the  stock  ledger  of the
corporation  shall  prepare and make,  at least ten days before every meeting of
stockholders,  a  complete  list  of the  stockholders  entitled  to vote at the
meeting,  arranged  in  alphabetical  order,  and  showing  the  address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any  stockholder,  for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days  prior to the  meeting,  either at a place  within  the city  where the
meeting  is to be held,  which  place  shall be  specified  in the notice of the
meeting, or, if not so specified,  at the place where the meeting is to be held.
The list shall also be  produced  and kept at the time and place of the  meeting
during the whole time thereof,  and may be inspected by any  stockholder  who is
present.

     Section  5.  Special  meetings  of the  stockholders,  for any  purpose  or
purposes,  unless  otherwise  prescribed  by  statute or by the  certificate  of
incorporation,  may be  called  by the  president  and  shall be  called  by the
president  or  secretary at the request in writing of a majority of the board of
directors,  or at the  request in writing of  stockholders  owning a majority in
amount of the entire capital stock of the corporation issued and outstanding and
entitled  to vote.  Such  request  shall  state the  purpose or  purposes of the
proposed meeting.

     Section 6. Written notice of a special meeting stating the place,  date and
hour of the meeting and the purpose or purposes for which the meeting is called,
shall be given not less than ten nor more than fifty days before the date of the
meeting, to each stockholder entitled to vote at such meeting.

     Section 7. Business transacted at any special meeting of stockholders shall
be limited to the purposes stated in the notice.

     Section 8. The  holders of a majority of the stock  issued and  outstanding
and entitled to vote thereat,  present in person or represented by proxy,  shall
constitute a quorum at all meetings of the  stockholders  for the transaction of
business  except as  otherwise  provided  by  statute or by the  certificate  of
incorporation.  If, however,  such quorum shall not be present or represented at
any meeting of the  stockholders,  the  stockholders  entitled to vote  thereat,
present in person or  represented  by proxy,  shall  have  power to adjourn  the
meeting  from  time to time,  without  notice  other  than  announcement  at the
meeting,  until a quorum  shall be present  or  represented.  At such  adjourned
meeting at which a quorum  shall be present or  represented  any business may be
transacted  which  might  have been  transacted  at the  meeting  as  originally
notified.  If the  adjournment  is for more than  thirty  days,  or if after the
adjournment  a new record date is fixed for the adjourned  meeting,  a notice of
the adjourned  meeting shall be given to each  stockholder of record entitled to
vote at the meeting.

     Section 9. When a quorum is present at any meeting, the vote of the holders
of a majority of the stock having voting power present in person or  represented
by proxy shall  decide any  question  brought  before such  meeting,  unless the
question  is one upon  which by express  provisions  of the  statutes  or of the
certificate  of  incorporation,  a different vote is required in which case such
express provisions shall govern and control the decision of such question.

     Section 10. Unless  otherwise  provided in the certificate of incorporation
each  stockholder  shall at every meeting of the stockholders be entitled to one
vote in person or by proxy for each share of the  capital  stock  having  voting
power held by such stockholder, but no proxy shall be voted on after three years
from its date, unless the proxy provides for a longer period.

     Section 11. Unless otherwise  provided in the certificate of incorporation,
any action required to be taken at any annual or special meeting of stockholders
of the  corporation,  or any action  which may be taken at any annual or special
meeting of such  stockholders,  may be taken  without a meeting,  without  prior
notice and without a vote, if a consent in writing,  setting forth the action so
taken,  shall be signed by the holders of outstanding stock having not less than
the minimum  number of votes that would be  necessary  to authorize or take such
action at a meeting at which all shares  entitled to vote  thereon  were present
and voted. Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to those  stockholders who
have not consented in writing.

                                  ARTICLE III
                                  -----------
                                   DIRECTORS
                                  -----------

     Section 1. The number of directors  which shall  constitute the whole board
shall not be less than one (1) nor more than five (5).  Prior to the issuance of
stock,  the board shall consist of one (1) director.  Subsequent to the issuance
of stock, the board shall consist of three (3) directors. Thereafter, within the
limits  above  specified,  the  number  of  directors  shall  be  determined  by
resolution  of the  board of  directors  or by the  stockholders  at the  annual
meeting.   The  directors  shall  be  elected  at  the  annual  meeting  of  the
stockholders, except as provided in Section 2 of this Article, and each director
elected  shall  hold  office  until his  successor  is  elected  and  qualified.
Directors need not be stockholders.

     Section 2. If and for so long that  certain  Stockholders  Agreement by and
among the  Corporation and the  stockholders  named therein dated as of July 10,
2002 (as amended from time to time, the "Stockholders  Agreement") is effective,
the Board shall  nominate for election to the Board  individuals  designated  in
accordance with the  Stockholders  Agreement.  At such time as the  Stockholders
Agreement is no longer effective,  nominations for the election of directors may
be  made  by  the  Board  or a  committee  appointed  by  the  Board,  or by any
stockholder entitled to vote generally in the election of directors who complies
with the procedures set forth in this Section 2.

     Section  3.  Subject  to  the  Stockholders  Agreement  so  long  as  it is
effective, vacancies and newly created directorships resulting from any increase
in the  authorized  number  of  directors  may be filled  by a  majority  of the
directors  then in office,  though  less than a quorum,  or by a sole  remaining
director,  and the  directors  so chosen shall hold office until the next annual
election and until their  successors are duly elected and shall qualify,  unless
sooner  displaced.  If there are no  directors  in office,  then an  election of
directors  may be held in the manner  provided  by  statute.  If, at the time of
filling any vacancy or any newly created  directorship,  the  directors  then in
office shall  constitute less than a majority of the whole board (as constituted
immediately  prior to any  such  increase),  the  Court of  Chancery  may,  upon
application  of any  stockholder or  stockholders  holding at least ten per cent
(10%) of the total number of the shares at the time outstanding having the right
to vote for such  directors,  summarily order an election to be held to fill any
such  vacancies  or newly  created  directorships,  or to replace the  directors
chosen by the directors then in office.

     Section 4. The business of the corporation shall be managed by its board of
directors  which may exercise all such powers of the corporation and do all such
lawful  acts  and  things  as  are  not by  statute  or by  the  certificate  of
incorporation  or by these by-laws  directed or required to be exercised or done
by the stockholders.

     Section 5. The board of directors  of the  corporation  may hold  meetings,
both regular and special, either within or without the State of Delaware.

     Section 6. The first meeting of each newly elected board of directors shall
be held at such time and place as shall be fixed by the vote of the stockholders
at the annual  meeting and no notice of such  meeting  shall be necessary to the
newly elected  directors in order legally to constitute the meeting,  provided a
quorum shall be present.  In the event of the failure of the stockholders to fix
the time or place of such first meeting of the newly elected board of directors,
or in the event  such  meeting is not held at the time and place so fixed by the
stockholders,  the  meeting  may be held at such  time  and  place  as  shall be
specified in a notice given as hereinafter  provided for special meetings of the
board of directors,  or as shall be specified in a written  waiver signed by all
of the directors.

     Section 7. Regular  meetings of the board of directors  may be held without
notice at such time and at such place as shall  from time to time be  determined
by the board.

     Section 8. Special  meetings of the board may be called by the president on
two (2)  days'  notice  to each  director,  either  personally  or by mail or by
telegram. Special meetings shall be called by the president or secretary in like
manner and on like notice on the written request of two (2) directors.

     Section  9. At all  meetings  of the  board a  majority  of the  number  of
directors fixed pursuant to Section 3 of this Article shall  constitute a quorum
for the  transaction  of  business  and the act of a majority  of the  directors
present at any meeting at which there is a quorum  shall be the act of the board
of directors,  except as may be otherwise specifically provided by statute or by
the  certificate  of  incorporation.  If a quorum  shall not be  present  at any
meeting of the board of directors the directors  present thereat may adjourn the
meeting from time to time, without notice other than announcement at the meeting
until a quorum shall be present.

     Section 10. Unless otherwise restricted by the certificate of incorporation
or these by-laws, any action required or permitted to be taken at any meeting of
the  board of  directors  or of any  committee  thereof  may be taken  without a
meeting,  if all members of the board or committee,  as the case may be, consent
thereto in writing,  and the  writing or writings  are filed with the minutes of
proceedings of the board or committee.

     Section 11. The board of directors may, by resolution  passed by a majority
of the whole board, designate one or more committees,  each committee to consist
of one or more of the directors of the corporation.  The board may designate one
or more  directors as alternate  members of any  committee,  who may replace any
absent or disqualified member at any meeting of the committee. In the absence or
disqualification  of a member of a  committee,  the  member or  members  thereof
present at any meeting and not  disqualified  from voting,  whether or not he or
they constitute a quorum, may unanimously appoint another member of the board of
directors to act at the meeting in the place of any such absent or  disqualified
member.  Any such  committee,  to the extent  provided in the  resolution of the
board of directors,  shall have and may exercise all the powers and authority of
the board of  directors  in the  management  of the  business and affairs of the
corporation,  and may authorize the seal of the corporation to be affixed to all
papers  which may  require  it;  but no such  committee  shall have the power or
authority in reference to amending the certificate of incorporation, adopting an
agreement of merger or consolidation, recommending to the stockholders the sale,
lease or exchange of all or substantially all of the corporation's  property and
assets,  recommending to the  stockholders a dissolution of the corporation or a
revocation of a dissolution,  or amending the by-laws of the  corporation;  and,
unless the resolution or the certificate of incorporation expressly so provides,
no such committee  shall have the power or authority to declare a dividend or to
authorize the issuance of stock.  Such  committee or committees  shall have such
name or names as may be determined  from time to time by  resolution  adopted by
the board of directors.

     Section 12. Each committee  shall keep regular  minutes of its meetings and
report the same to the board of directors when required.

     Section  13.   Unless   otherwise   restricted   by  the   certificate   of
incorporation,  the  board of  directors  shall  have the  authority  to fix the
compensation of directors.  The directors may be paid their expenses, if any, of
attendance at each meeting of the board of directors and may be paid a fixed sum
for  attendance  at each meeting of the board of directors or a stated salary as
director.  No  such  payment  shall  preclude  any  director  from  serving  the
corporation in any other capacity and receiving compensation  therefor.  Members
of special or standing committees may be allowed like compensation for attending
committee meetings.


                                   Article IV
                                   ----------
                                     NOTICES
                                     -------

     Section  1.  Whenever,  under  the  provisions  of the  statutes  or of the
certificate of incorporation or of these by-laws, notice is required to be given
to any  director or  stockholder,  it shall not be  construed  to mean  personal
notice,  but such notice may be given in  writing,  by mail,  addressed  to such
director  or  stockholder,  at his  address as it appears on the  records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be  deposited  in the United  States mail.
Notice to directors may also be given by telegram.

     Section 2. Whenever any notice is required to be given under the provisions
of the statutes or of the certificate of  incorporation  or of these by-laws,  a
waiver  thereof in  writing,  signed by the person or persons  entitled  to said
notice,  whether  before  or after  the time  stated  therein,  shall be  deemed
equivalent thereto.


                                    Article V
                                    ---------
                                    OFFICERS
                                    --------

     Section 1. The officers of the corporation  shall be chosen by the board of
directors and shall be a president,  a secretary  and a treasurer.  The board of
directors may also choose one or more vice-presidents, and one or more assistant
secretaries and assistant treasurers.  Any number of officers may be held by the
same person,  unless the certificate of incorporation or these by-laws otherwise
provide.

     Section 2. The board of  directors at its first  meeting  after each annual
meeting of stockholders shall choose a president, a secretary and a treasurer.

     Section 3. The board of  directors  may  appoint  such other  officers  and
agents as it shall deem  necessary  who shall hold their  offices for such terms
and shall  exercise  such powers and perform such duties as shall be  determined
from time to time by the board.

     Section 4. The salaries of all officers and agents of the corporation shall
be fixed by the board of directors.

     Section 5. The  officers of the  corporation  shall hold office until their
successors are chosen and qualify. Any officer elected or appointed by the board
of directors may be removed at any time by the affirmative vote of a majority of
the board of directors.  Any vacancy  occurring in any office of the corporation
shall be filled by the board of directors.

     Section 6. The president  shall be the principal  executive  officer of the
corporation  and shall  supervise  and conduct the  business  and affairs of the
corporation.  The other  officers of the  corporation  shall have the powers and
shall perform the duties  customarily  appurtenant to their respective  offices,
and shall have such further  powers and shall  perform  such  further  duties as
shall be from time to time assigned to them by the board of directors.


                                   Article VI
                                   ----------
                              CERTIFICATES OF STOCK
                              ---------------------


     Section 1. Every  holder of stock in the  corporation  shall be entitled to
have a  certificate,  signed  by,  or in the  name of the  corporation  by,  the
president or vice-president and the treasurer or an assistant treasurer,  or the
secretary or an assistant secretary of the corporation, certifying the number of
shares owned by him in the corporation.

     Section 2. Where a certificate  is  countersigned  (1) by a transfer  agent
other than the corporation or its employee, or (2) by a registrar other than the
corporation  or its  employee,  any other  signature on the  certificate  may be
facsimile.  In case any officer,  transfer  agent or registrar who has signed or
whose facsimile  signature has been placed upon a certificate  shall have ceased
to be such  officer,  transfer  agent or registrar  before such  certificate  is
issued,  it may be issued by the corporation  with the same effect as if he were
such officer, transfer agent or registrar at the date of issue.

     Section  3.  The  board  of  directors  may  direct  a new  certificate  or
certificates   to  be  issued  in  place  of  any  certificate  or  certificates
theretofore  issued by the  corporation  alleged  to have been  lost,  stolen or
destroyed,  upon the making of an affidavit of that fact by the person  claiming
the certificate of stock to be lost, stolen or destroyed.  When authorizing such
issue of a new certificate or  certificates,  the board of directors may, in its
discretion  and as a condition  precedent to the issuance  thereof,  require the
owner of such lost,  stolen or destroyed  certificate  or  certificates,  or his
legal  representative,  to advertise the same in such manner as it shall require
and/or to give the  corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the  corporation  with respect to the
certificate alleged to have been lost, stolen or destroyed.

     Section 4. Upon  surrender to the  corporation or the transfer agent of the
corporation  of a certificate  for shares duly endorsed or accompanied by proper
evidence of  succession,  assignment  or authority to transfer,  it shall be the
duty of the  corporation  to  issue a new  certificate  to the  person  entitled
thereto, cancel the old certificate and record the transaction upon its books.

     Section 5. In order that the  corporation  may determine  the  stockholders
entitled  to  notice  of or to  vote  at  any  meeting  of  stockholders  or any
adjournment  thereof,  or to  express  consent  to  corporate  action in writing
without a meeting,  or  entitled  to receive  payment of any  dividend  or other
distribution  or allotment of any rights,  or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action,  the board of directors may fix, in advance, a record date,
which  shall not be more than  sixty nor less than ten days  before  the date of
such  meeting,   nor  more  than  sixty  days  prior  to  any  other  action.  A
determination  of  stockholders  of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the board of directors may fix a new record date for the adjourned
meeting.

     Section 6. The  corporation  shall be entitled to recognize  the  exclusive
right of a person  registered  on its books as the  owner of  shares to  receive
dividends,  and to  vote  as  such  owner,  and to hold  liable  for  calls  and
assessments a person  registered on its books as the owner of shares,  and shall
not be bound to  recognize  any  equitable or other claim to or interest in such
share or shares on the part of any other  person,  whether  or not it shall have
express or other notice  thereof,  except as  otherwise  provided by the laws of
Delaware.


                                   Article VII
                                   -----------
                                 INDEMNIFICATION
                                 ---------------

     Section 1. Third Party Actions.  The corporation shall indemnify any person
who was or is a party or is  threatened  to be made a party  to any  threatened,
pending or  completed  action,  suit or  proceeding,  whether  civil,  criminal,
administrative or investigative  (other than an action by or in the right of the
corporation)  by  reason  of the  fact  that he is or was a  director,  officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director,  officer,  employee or agent of another  corporation,
partnership,  joint venture,  trust or other enterprise (each an  "Indemnitee"),
against expenses (including attorney's fees), judgments,  fines and amounts paid
in settlement  actually and reasonably  incurred by him in connection  with such
action, suit or proceeding.

     Section 2. Derivative  Actions.  The corporation shall indemnify any person
who was or is a party or is  threatened  to be made a party  to any  threatened,
pending or  completed  action or suit by or in the right of the  corporation  to
procure  a  judgment  in its  favor by  reason  of the fact  that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the  request of the  corporation  as a director,  officer,  employee or agent of
another  corporation,  partnership,  joint  venture,  trust or other  enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit.

     Section 3. Expenses.  To the extent that a director,  officer,  employee or
agent of the  corporation  has been  successful  on the merits or  otherwise  in
defense of any  action,  suit or  proceeding  referred to in Sections 1 and 2 of
this Article,  or in defense of any claim, issue or matter therein,  he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.

     Section 4. Authorization and Request for Indemnification.

     (a) Any indemnification  requested by the Indemnitee under Section 1 hereof
shall be made no later than ten (10) days after  receipt of the written  request
of the  Indemnitee,  unless it shall have been  adjudicated  by a court of final
determination  that the  Indemnitee did not act in good faith and in a manner he
reasonably  believed  to be in, or not  opposed  to, the best  interests  of the
corporation,  and with  respect to any  criminal  action or  proceeding,  had no
reasonable cause to believe his conduct was unlawful.

     (b) Any indemnification  requested by the Indemnitee under Section 2 hereof
shall be made no later than ten (10) days after  receipt of the written  request
of the  Indemnitee,  unless it shall have been  adjudicated  by a court of final
determination  that the  Indemnitee did not act in good faith and in a manner he
reasonably  believed  to be in or not  opposed  to,  the best  interests  of the
corporation, the Indemnitee shall have been finally adjudged to be liable to the
corporation by a court of competent  jurisdiction due to willful misconduct of a
culpable nature in the performance of the  Indemnitee's  duty to the corporation
unless  and only to the  extent  that any  court in which  such  proceeding  was
brought  shall  determine  upon  application  that despite the  adjudication  of
liability,  but in view of all the  circumstances  of the case,  such  person is
fairly and  reasonably  entitled to  indemnity  for such  expenses as such court
shall deem proper.

     Section 5. Advance  Payment of Expenses.  Subject to Section 4 hereof,  the
corporation  shall advance all expenses incurred by the Indemnitee in connection
with the investigation, defense, settlement or appeal of any proceeding to which
the  Indemnitee  is a party or is threatened to be made a party by reason of the
fact that the Indemnitee is or was an agent of the  corporation.  The Indemnitee
hereby  undertakes  to repay such  amounts  advanced  only if, and to the extent
that, it shall  ultimately be determined  that the Indemnitee is not entitled to
be indemnified by the  corporation.  The advances to be made hereunder  shall be
paid  by the  corporation  to or on  behalf  of the  Indemnitee  within  30 days
following  delivery  of a written  request  therefor  by the  Indemnitee  to the
corporation.

     Section 6. Non-Exclusiveness.  The indemnification provided by this Article
VII shall not be deemed  exclusive  of any other  rights to which those  seeking
indemnification   may  be  entitled  under  any  by-law,   agreement,   vote  of
stockholders or disinterested  directors or otherwise,  both as to action in his
official  capacity  and as to action in  another  capacity  while  holding  such
office,  and shall  continue  as to a person  who has  ceased to be a  director,
officer,  employee  or agent  and  shall  inure  to the  benefit  of the  heirs,
executors and administrators of such a person.

     Section 7.  Insurance.  The  corporation  shall have power to purchase  and
maintain  insurance  on behalf of any person who is or was a director,  officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director,  officer,  employee or agent of another  corporation,
partnership,  joint  venture,  trust or other  enterprise  against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his  status as such,  whether  or not the  corporation  would  have the power to
indemnify him against such liability under the provisions of this Article VII.

     Section 8. Constituent  Corporations.  The corporation  shall have power to
indemnify any person who is or was a director,  officer,  employee or agent of a
constituent  corporation  absorbed  in  a  consolidation  or  merger  with  this
corporation or is or was serving at the request of such constituent  corporation
as a director,  officer, employee or agent of another corporation,  partnership,
joint  venture,  trust or other  enterprise  in the same  manner as  hereinabove
provided for any person who is or was a director,  officer, employee or agent of
the  corporation,  or is or was serving at the request of the  corporation  as a
director, officer, employee or agent of another corporation,  partnership, joint
venture, trust or other enterprise.


                                  Article VIII
                                  ------------
                               GENERAL PROVISIONS
                               ------------------

     Section 1. Dividends upon the capital stock of the corporation,  subject to
the provisions of the certificate of  incorporation,  if any, may be declared by
the board of  directors  at any  regular or special  meeting,  pursuant  to law.
Dividends may be paid in cash, in property,  or in shares of the capital  stock,
subject to the provisions of the certificate of incorporation.

     Section 2. Before  payment of any  dividend,  there may be set aside out of
any funds of the  corporation  available for  dividends  such sum or sums as the
directors  from time to time, in their  absolute  discretion,  think proper as a
reserve or reserves to meet contingencies,  or for equalizing dividends,  or for
repairing  or  maintaining  any property of the  corporation,  or for such other
purpose  as  the  directors  shall  think  conducive  to  the  interest  of  the
corporation,  and the  directors  may modify or abolish any such  reserve in the
manner in which it was created.

     Section  3. All checks or  demands  for money and notes of the  corporation
shall be signed by such  officer or officers or such other  person or persons as
the board of directors may from time to time designate.

     Section 4. The fiscal year of the corporation  shall be fixed by resolution
of the board of directors.

     Section 5. The  corporate  seal  shall be in the form of a circle  with the
name of the corporation,  the words "Incorporated  Delaware" and the year of its
incorporation  inscribed  therein.  The  seal  may be  used by  causing  it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.


                                   Article IX
                                   ----------
                                   AMENDMENTS
                                   ----------

     Section 1. These by-laws may be altered, amended or repealed or new by-laws
may be adopted by the stockholders or by the board of directors, when such power
is conferred upon the board of directors by the certificate of incorporation, at
any regular  meeting of the  stockholders or of the board of directors or at any
special  meeting of the  stockholders  or of the board of directors if notice of
such  alteration,  amendment,  repeal or adoption of new by-laws be contained in
the notice of such special meeting.

EX-4

                                                                    EXHIBIT 4.1


                                 PLAN OF MERGER
                                 --------------


     THIS PLAN OF MERGER (the "Plan of Merger"),  is made and executed as of the
6th day of  August,  2002  by  Tridex  Corporation,  a  Connecticut  corporation
("Tridex") and Progressive  Software Holding,  Inc., a Delaware corporation (the
"Surviving Corporation").

     Provision  for the making of this Plan of Merger is  contained in an Order,
dated July 9, 2002 and entered July 10, 2002 (the "Confirmation  Order"), of the
United  States  Bankruptcy  Court for the District of  Connecticut  in Case Nos.
02-50156 and -50157,  jointly  administered,  confirming  the First  Amended and
Restated Plan of Reorganization (the "Plan of Reorganization") of Tridex and its
subsidiary,  Progressive  Software,  Inc.,  a North  Carolina  Corporation.  The
Confirmation  Order  empowers and directs  Tridex to execute such  documents and
take, or cause to be taken, any and all actions required to enable the effective
implementation of the Plan of Reorganization and the Confirmation Order. Section
7.1 of the Plan of  Reorganization  contemplates  the merger of Tridex  with and
into the Surviving Corporation and the filing of certificates of merger with the
Secretary  of  State  of  Delaware  and  with  the  Secretary  of the  State  of
Connecticut as provided herein.


1.   Capital Structure and Ownership
     -------------------------------

     Tridex has a total authorized capital stock consisting of 10,000,000 shares
of common stock (the "Tridex Common  Stock"),  no par value,  of which 5,654,289
shares are issued and  outstanding on the date hereof,  and 2,000,000  shares of
preferred  stock,  $1.00 par value,  of which none are issued and outstanding on
the date hereof.

     The Surviving  Corporation has a total authorized  capital stock consisting
of 6,000,000 shares of capital stock,  $0.01 par value,  designated as 4,200,000
shares of Series A Common Stock (the "Series A Common Stock"), 800,000 shares of
Series B Common Stock and 1,000,000 shares of Preferred Stock, none of which are
issued and outstanding on the date hereof.


2.   Merger
     ------

     At the Effective Time (as hereinafter defined),  pursuant to Section 33-821
of the  Connecticut  Business  Corporation  Act and Section 252 of the  Delaware
General  Corporation  Law,  Tridex  shall be merged with and into the  Surviving
Corporation (the "Merger"),  which shall be the surviving  corporation and shall
continue in existence, on the terms and conditions hereinafter set forth. At the
Effective Time, the separate existence of Tridex shall thereby cease.

     At the Effective  Time, the effect of the Merger will be as provided in the
applicable  provisions  of the  Connecticut  Business  Corporation  Act  and the
Delaware General Corporation Law. Without limiting the foregoing, and subject to
the provisions of such laws, at the Effective Time all the  properties,  assets,
rights,  privileges,  powers and franchises of Tridex will vest in the Surviving
Corporation.

3.   Effective Time
     --------------

     The effective time of the merger  provided for herein shall be at the close
of business on the date on which a certificate of merger has been filed with the
Secretary of State of Delaware and a  certificate  of merger has been filed with
the Secretary of the State of Connecticut (the "Effective Time").


4.   Conversion of Shares
     --------------------

     a. At the  Effective  Time  every ten (10)  shares of Tridex  Common  Stock
outstanding  immediately prior to the Effective Time shall be converted into and
exchanged  for the right to receive one (1) share of Series A Common  Stock.  At
the  Effective  Time,  all shares of Tridex  Common  Stock,  including,  without
limitation,  all  treasury  shares,  will be canceled and  extinguished  and the
Series A Common Stock will be credited to the accounts  maintained  on behalf of
the holders thereof at the applicable record holder.

     b. No  fractional  shares of  Series A Common  Stock  shall be issued  upon
conversion  and  exchange  of any share or shares of Tridex  Common  Stock.  All
shares of Series A Common Stock  (including  fractions  thereof)  issuable  upon
conversion  of more than one share of Tridex  Common  Stock by a holder  thereof
shall be  aggregated  for purposes of  determining  whether the  conversion  and
exchange  would result in the issuance of any  fractional  share.  If, after the
aforementioned  aggregation,  the  conversion  and exchange  would result in the
issuance of a fraction of a share of Series A Common Stock, the number of shares
of Series A Common Stock to be issued to any  stockholder  upon  conversion  and
exchange of the Tridex Common Stock shall be rounded to the nearest whole number
of shares.

     c.  At  the  Effective  Time,  all  options,  rights,  warrants  and  other
securities  exercisable  for or  convertible  into shares of Tridex Common Stock
will be canceled and extinguished and shall be of no further force and effect.


5.   The Surviving Corporation
     -------------------------


     a. From and after the Effective Time until  thereafter  amended as provided
by  law,  the  Certificate  of  Incorporation   and  By-laws  of  the  Surviving
Corporation as in effect  immediately  prior to the merger shall be and continue
to be the Certificate of Incorporation and By-laws of the Surviving Corporation.

     b. The following persons are the directors of the Surviving Corporation and
shall hold office as provided in the Certificate of Incorporation and By-laws of
the Surviving Corporation.


     Directors
     ---------

            William Beebe
            Thomas R. Schwarz
            Lynn Tilton


     The persons who are the officers of the Surviving  Corporation  immediately
prior to the merger shall,  until  otherwise  changed in the manner  provided by
law, continue as the officers of the Surviving Corporation following the merger,
and shall hold  office as  provided  in the  Certificate  of  Incorporation  and
By-laws of the Surviving Corporation.



                        [SIGNATURES APPEAR ON NEXT PAGE]





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


                               Tridex Corporation, a Connecticut corporation


                               By: /s/  William A. Beebe
                                  -----------------------------------------
                                   Name: William A. Beebe
                                   Title:Chief Financial Officer


                               Progressive Software Holding, Inc., a Delaware
                               corporation


                               By: /s/  William A. Beebe
                                  -----------------------------------------
                                   Name: William A. Beebe
                                   Title:Treasurer

EX-4

                                                                   EXHIBIT 4.2


                             STOCKHOLDERS AGREEMENT
                             ----------------------


     This AGREEMENT, dated as of August 6, 2002 (this "Agreement"), by and among
Progressive Software Holding,  Inc., a Delaware corporation (the "Corporation"),
Massachusetts  Mutual Life Insurance Company,  MassMutual  Corporate  Investors,
Mass Mutual  Participation  Investors,  and MassMutual  Corporate Value Partners
Limited, (collectively, "MassMutual"), ARK CLO 2000-1, Limited, a Cayman Islands
exempted   company,   ("ARK"),   and  William   Beebe  and   Christopher   Sebes
(collectively, the "Management Parties").

     MassMutual  and ARK and any  person who  becomes a party to this  Agreement
pursuant  to  Section   2.1(a)  hereof  are  referred  to   individually   as  a
"Stockholder" and collectively as the "Stockholders."

                                    Recitals
                                    --------

     The Stockholders  are currently  owners of approximately  80% of the issued
and  outstanding  capital stock of the Corporation as set forth on Exhibit A and
the Management  Parties are currently  members of management of the Corporation.
The Stockholders, the Management Parties and the Corporation desire to set forth
the terms and  conditions  with  respect  to voting of the  Corporation's  stock
currently owned and hereafter acquired by the Stockholders (the "Securities").


     NOW, THEREFORE, the parties hereby agree as follows:

         1.       Corporate Governance.
                  --------------------

     1.1 Management Representatives.  There shall be up to three representatives
of management (the "Management  Representatives"),  who shall not be entitled to
vote at any meeting,  or  participate  in any written  consent or other official
action,  of the Board but who shall be  entitled  to attend all  meetings of the
Board and receive all materials  distributed to members of the Board.  Initially
and  until  such  time  as  they  resign  from  such  position,  the  Management
Representatives   shall  be  the  Management  Parties  and  a  third  Management
Representative  to be  appointed  by  the  Management  Parties.  The  Management
Representatives,  by majority vote or written consent, shall have the right, but
not  the   obligation,   to  designate  the   replacement   for  any  Management
Representative upon his or her resignation, incapacity or death.

     1.2 Board of Directors.  Each of the Stockholders  agrees to cast all votes
to which such party is entitled in respect of such Stockholder's  Securities and
other  shares of  capital  stock of the  Corporation,  whether  at any annual or
special  meeting,  by  written  consent  or  otherwise,  to  elect  the  members
("members") of the Corporation's board of directors (the "Board") as follows:

          (a) Management Director.  Unless a Triggering Event (as defined in the
     Corporation's  Certificate  of  Incorporation)  shall  have  occurred,  the
     Management  Representatives,  by majority vote or written consent, shall be
     entitled  to  designate  one member to the Board (such  director  being the
     "Management  Director").  The Management  Director may only be removed with
     the vote or written consent of a majority of the Management Representatives
     and  such  Management  Representatives  shall be  entitled  to  remove  the
     Management   Director  at  their  sole  discretion.   Only  the  Management
     Representatives  shall have the right, by majority vote or written consent,
     to designate the  replacement  for any Management  Director upon his or her
     removal,  resignation,  incapacity or death. Notwithstanding the foregoing,
     effective on and after the Triggering Date (as defined in the Corporation's
     Certificate of Incorporation), automatically, and without any action on the
     part of the  Corporation or any other person or entity,  (i) the Management
     Director shall  immediately  cease to be a member of the Board and (ii) the
     Management  Representatives  shall  have no further  rights to appoint  any
     Management Directors.

          (b) Series B Director or Directors. On the date hereof and for so long
     as ARK and any Person to whom ARK shall sell, assign, transfer or otherwise
     convey  its  Series B Common  Stock  (the  "Series  B  Holders")  shall own
     securities of the Corporation possessing 5% or more of the voting power for
     the  election of directors  of the  Corporation  or the right to receive on
     liquidation  of  the  Corporation  at  least  5% in  value  of  the  assets
     distributed to holders of the Corporation's  Common Stock, Series B Holders
     holding  a  majority  of the  Series B Common  Stock  held by the  Series B
     Holders,  shall be  entitled  to  designate  one member to the Board  (such
     member being the "Initial  Series B Director").  In addition,  effective on
     and after the Triggering Date, automatically, and without any action on the
     part of the  Corporation,  any holder of Series B Common Stock or any other
     person or  entity,  Series B Holders  holding a  majority  of the  Series B
     Common  Stock held by the Series B Holders  shall be entitled to  designate
     one  member to the Board to fill the  vacancy  in the Board  created by the
     absence of the Management Director (the "Additional Series B Director" and,
     together  with the Initial  Series B Director,  the "Series B  Directors"),
     such that after a Triggering  Event the Series B Holders  shall be entitled
     to appoint a total of 2 directors  to the Board.  Any Series B Director may
     only be  removed  with the vote or  written  consent  of  Series B  Holders
     holding  a  majority  of the  Series B Common  Stock  held by the  Series B
     Holders and such Series B Holders  shall be entitled to remove any Series B
     Director at their sole discretion. Only Series B Holders holding a majority
     of the Series B Common  Stock  held by the Series B Holders  shall have the
     right to designate  the  replacement  for any Series B Director upon his or
     her removal, resignation, incapacity or death.

          (c)  Mass  Mutual  Director.  On the  date  hereof  and for so long as
     MassMutual and any Person to whom MassMutual shall sell,  assign,  transfer
     or otherwise  convey its Series A Common Stock (the  "MassMutual  Holders")
     shall own securities of the Corporation possessing 5% or more of the voting
     power for the  election of  directors  of the  Corporation  or the right to
     receive  on  liquidation  of the  Corporation  at  least 5% in value of the
     assets distributed to holders of the Corporation's Common Stock, MassMutual
     Holders  holding  a  majority  of the  Series  A Common  Stock  held by the
     MassMutual  Holders  shall be entitled to designate one member to the Board
     (the "MassMutual  Director").  The MassMutual  Director may only be removed
     with the vote or written  consent of MassMutual  Holders holding a majority
     of the  Series A  Common  Stock  held by the  MassMutual  Holders  and such
     MassMutual  Holders shall be entitled to remove the MassMutual  Director at
     their sole  discretion.  Only MassMutual  Holders holding a majority of the
     Series A Common Stock held by the  MassMutual  Holders shall have the right
     to designate the  replacement  for any MassMutual  Director upon his or her
     removal, resignation, incapacity or death.

     1.3 Number of Directors.  Each of the Stockholders agrees to cast all votes
to which such party is  entitled  in  respect of such  shares of capital  stock,
whether at any annual or special  meeting,  by written consent or otherwise,  to
ensure  that:  (a) until  such time as all  indebtedness  of the  Company to ARK
pursuant  to the Credit  Agreement  shall have been paid in full,  the number of
directors  constituting the entire Board shall be three and (b) after payment in
full of all indebtedness of the Company to ARK pursuant to the Credit Agreement,
if ARK shall have  exercised its Warrant,  the number of directors  constituting
the entire Board shall be not more than five.

     1.4 Meetings of Directors.  The Board shall hold  meetings  quarterly or as
otherwise determined by the Board.

     1.5 Indemnification. The Corporation shall at all times maintain provisions
in the Certificate of Incorporation or By-laws  exculpating and indemnifying all
of the members of the Board from and  against  liability  to the maximum  extent
permitted under the laws of the state of its incorporation.

     1.6 Expenses.  The Corporation shall reimburse each member of the Board and
each Management  Representative  for reasonable  out-of-pocket  travel and other
similar expenses  incurred by each such member or Management  Representative  in
connection with such member's or Management  Representative's  participation  in
meetings of the Board and of its committees in accordance  with such  reasonable
procedures as may be approved by the Board.

     2.  Certain  Voting  Rights.  As long  as the  Series  B  Common  Stock  is
outstanding as a separate series,  each of the Stockholders agrees not to permit
or cause the  Corporation,  without  the  affirmative  vote of the holders of at
least  66-2/3%  of the  outstanding  shares  of  Series B Common  Stock  (voting
together as a separate class), to take, or permit to occur, any of the following
actions:

          (a) Amend, modify or waive any provision of Article IV or Article V of
     the  Corporation's  Certificate of Incorporation so as to alter the rights,
     preferences,  privileges,  restrictions  or  terms  of the  Series B Common
     Stock;

          (b) Increase the number of authorized  shares of Series B Common Stock
     or issue additional shares of Series B Common Stock;

          (c) Change the authorized number of directors  constituting the entire
     Board or the board of directors of any of its subsidiaries; or

          (d)  Authorize,  cause or  permit  the  Corporation  to  engage in any
     material transaction with an Affiliate of the Corporation.

     3.  Transfers of Securities.  No  Stockholder  shall directly or indirectly
sell,  assign or otherwise  transfer (each, a "Transfer") any Securities  unless
the  transferee  in such  Transfer  becomes  a party  to this  Agreement  by due
execution  and  delivery  of a written  instrument.  No  person or entity  shall
foreclose or otherwise  realize upon any pledge,  encumbrance or lien in respect
of any  Securities  covered by this  Agreement  unless it or the  transferee  in
connection with such  foreclosure or other  realization  becomes a party to this
Agreement by due execution and delivery of a written instrument.  This Section 3
shall  not  apply  to  any  Securities  Transferred  pursuant  to  an  effective
registration statement filed with the Securities and Exchange Commission.

     4.  Notation  On Share  Certificates.  There  will be  endorsed  upon  each
certificate for shares of the Corporation  held by the  Stockholders a statement
in substantially the following form:

          "These  shares  are  subject  to  the  terms  and  conditions  of  the
          Stockholders  Agreement,  dated  August  6,  2002,  a  copy  of  which
          Agreement  will be furnished by the  Corporation to the holder of this
          certificate upon written request and without charge,  and these shares
          can only be  transferred  subject  to,  and in  accordance  with,  the
          provisions of such Agreement."

     5.  Successors  and  Assigns.  Except as  expressly  permitted  or required
elsewhere in this Agreement,  this Agreement and the rights of a party hereunder
may  not be  assigned,  and the  obligations  of a  party  hereunder  may not be
delegated,  in whole or in part,  without the prior written consent of the other
parties hereto.

     6.  Termination.  This  Agreement  shall  terminate  (a) upon  the  written
agreement of the Corporation,  Series B Holders holding a majority of the Series
B Common  Stock  held by the  Series B  Holders,  MassMutual  Holders  holding a
majority  of the Series A Common  Stock  held by the  MassMutual  Holders  and a
majority of the Management  Representatives  agreeing to such  termination,  (b)
upon the filing of  proceedings  by the  Corporation  intended to  liquidate  or
dissolve  the  Corporation  under any federal or state law, (c) upon the date on
which the  Corporation  shall  consummate  an  initial  public  offering  of the
Corporation's  Common  Stock (i)  resulting  in  aggregate  net  proceeds to the
Corporation of not less than  $30,000,000,  (ii) with a public offering price of
not less than $5.00 per share, and (iii)  immediately after which, the shares of
the Corporation's  Common Stock are listed on a national  securities exchange or
quoted on the  NASDAQ  National  Market  System,  (d) upon the date the Series B
Holders no longer have the right to  designate a Series B Director,  or (e) upon
the date on which (i) all  indebtedness  of the  Company to ARK  pursuant to the
Credit  Agreement  shall  have  been  paid in full  and  (ii)  the  Warrant  has
terminated without having been exercised by ARK.

     7. Governing  Law. This  Agreement  shall be subject to and governed by the
substantive laws of the State of Delaware.  The parties hereto agree and consent
to the personal  jurisdiction and service in venue in any federal or state court
within the State of Delaware having subject matter jurisdiction, for purposes of
any action, suit or proceeding arising out of or relating to this Agreement.

     8. No Third Party Beneficiaries.  Except as otherwise specifically provided
herein,  nothing in this  Agreement  is intended to confer upon any person other
than the parties hereto any rights or remedies.

     9.  Severability.  If any portion of this Agreement or the  applications in
particular  circumstances shall for any reason be held by a judicial decision to
be invalid and unenforceable,  the valid and enforceable provisions in those and
other circumstances will continue to be given effect and bind the Stockholders.

     10. Entire  Agreement.  This document contains the entire Agreement between
the parties  hereto with respect to the subject matter herein and supercedes and
cancels all prior  agreements  among any or all of the parties.  No  variations,
modifications,  or  changes  herein or hereof  shall be  binding  upon any party
hereto  unless  set forth in a  document  duly  executed  by all of the  parties
hereto.

     11.  Amendment and Waiver.  This  Agreement may not be amended or modified,
nor any of its terms waived, except by a written instrument duly executed by the
parties  hereto.  When  used  herein,  the term  "Agreement"  will  include  any
amendments  or  modifications  made in accordance  herewith.  A waiver by either
party of a breach of any provision of this Agreement by the other party,  or any
right hereunder, will not be effective unless in writing and will not operate to
waive or excuse any subsequent breach or to waive any other right.  Failure of a
party to insist upon strict  compliance with any of the terms hereof will not be
deemed a waiver of such right at any subsequent time.

     12.  Notices.  All notices,  statements,  instructions  or other  documents
required to be given hereunder,  shall be in writing and shall be deemed to have
been sufficiently given if (i) delivered  personally,  (ii) mailed by registered
or certified  first-class mail,  postage prepaid with return receipt  requested,
(iii)  sent  by a  nationally  recognized  overnight  courier  service  or  (iv)
delivered by facsimile  transmission  which is confirmed in writing  pursuant to
clauses  (i),  (ii) or  (iii)  above  at the  addresses  specified  below.  Each
Stockholder,  by written notice given to the Corporation in accordance with this
Section 11 may change the address to which notices, statements,  instructions or
other  documents  are to be sent  to such  Stockholder,  which  information  the
Corporation shall provide to any Stockholder upon request.


                      If to the Corporation:

                           Progressive Software Holding, Inc.
                           61 Wilton Road
                           Westport, CT 06880
                           Attention:       Chief Executive Officer
                           Phone:   (203) 226-1144
                           Facsimile:       (203) 226-8806

                      with a required copy to:

                           Hinckley, Allen & Snyder LLP
                           1500 Fleet Center
                           Providence, RI 02903
                           Attention:       Stephen J. Carlotti, Esq.
                           Phone:   (401) 274-2000
                           Facsimile:       (401) 277-9600

                      If to the Series B Holders:

                           ARK CLO 2000-1, Limited
                           c/o Patriarch Partners, LLC
                           40 Wall Street
                           New York, New York  10005
                           Attention:       Ms. Lynn Tilton
                           Phone:   212-825-0550
                           Facsimile:       212-825

                     with a required copy to:

                           Richards Spears Kibe & Orbe
                           1 Chase Manhattan Plaza
                           New York, New York  10005
                           Attention:       Michael Friedman
                           Phone:   212-530-1846
                           Facsimile:       212-530-1801


                      If to the MassMutual Holders:

                           c/o David L. Babson &Company
                           1500 Main Street, Suite 2800
                           Springfield, MA 01115
                           Attention:       [___________]
                           Phone:   [___________]
                           Facsimile:       [___________]


                     with a required copy to:

                           [-----------]
                           [-----------]
                           Attention:       [___________]
                           Phone:   [___________]
                           Facsimile:       [___________]

                      If to the Management Parties:

                           Christopher Sebes
                           c/o Progressive Software, Inc.
                           6836 Morrison Boulevard, Suite 400
                           Phone:   704-295-7000
                           Facsimile:       704-295-7001

                           William Beebe
                           c/o Progressive Software, Inc.
                           6836 Morrison Boulevard, Suite 400
                           Phone:   704-295-7000
                           Facsimile:       704-295-7001


     13. Specific Enforcement. It is hereby agreed and acknowledged that it will
be  impossible  to measure in money the  damages  that would be  suffered if the
parties fail to comply with any of the  obligations  herein  imposed on them and
that in the event of any such failure,  an aggrieved  party will be  irreparably
damaged  and will not have an  adequate  remedy at law.  Any such  party  shall,
therefore,  be entitled to injunctive  relief,  including  specific  performance
(without  the  requirement  of posting a bond or other  security  or any similar
requirement),  to enforce  such  obligations  in addition to any other remedy to
which it may be  entitled  at law or in  equity,  and if any  action  should  be
brought in equity to enforce any of the  provisions of this  Agreement,  none of
the parties  hereto shall raise the defense that there is an adequate  remedy at
law and each of the parties hereto further agrees to waive any  requirement  for
the  securing  or  posting of any bond in  connection  with  obtaining  any such
injunctive or other equitable relief.

     14. Headings.  All headings are inserted herein for convenience only and do
not form a part of this Agreement.

     15.   Counterparts.   This  Agreement  may  be  executed  in  two  or  more
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same instrument.

     16.  Agreement  to Perform  Necessary  Acts.  Each party to this  Agreement
agrees to perform  any  further  acts and to execute  and  deliver  any  further
documents  that may be reasonably  necessary to carry out the provisions of this
Agreement.

     17.  Definitions.  Capitalized  terms used but not otherwise defined herein
have  the  meanings   given  to  them  in  the   Corporation's   Certificate  of
Incorporation. In addition, the following terms have the meanings stated:


          (a) "Affiliate" has the meaning set forth in the Credit Agreement.

          (b) "Credit  Agreement"  means the Credit  Agreement,  dated as of the
     date hereof, among the Corporation, Progressive Software, Inc., ARK and the
     lenders party thereto

          (c) "Person" means an  individual,  a  corporation,  a partnership,  a
     limited liability company,  an association,  a trust or any other entity or
     organization.

          (d)  "Warrant"  means  ARK's  Warrant to  purchase  shares of Series B
     Common  Stock,  dated August 6, 2002,  originally  issued by the Company to
     ARK.



                     [signatures appear on following pages]





     IN WITNESS  WHEREOF,  the parties hereto have caused this  instrument to be
duly executed on the date first written above.

PROGRESSIVE SOFTWARE HOLDING, INC.


By:  /s/ William A. Beebe
     _______________________________
     Name: William A. Beebe
     Title:Treasurer


Massachusetts Mutual Life Insurance Company


By: /s/ Richard C. Morrison
     _______________________________
     Name: Richard C. Morrison
     Title:Managing Director


MassMutual Corporate Investors


By: /s/ Richard C. Morrison
     _______________________________
     Name: Richard C. Morrison
     Title:Vice President

The foregoing is executed on behalf of MassMutual Corporate Investors, organized
under a Declaration of Trust,  dated September 13, 1985, as amended from time to
time. The  obligations of such trust are not personally  binding upon, nor shall
resort be had to the property of, any of the Trustees,  shareholders,  officers,
employees or agents of such Trust, but the Trust's property only shall be bound.


Mass Mutual Participation Investors


By: /s/ Richard C. Morrison
     _______________________________
     Name: Richard C. Morrison
     Title:Vice President

The  foregoing  is executed  on behalf of  MassMutual  Participation  Investors,
organized  under a  Declaration  of Trust,  dated April 7, 1988, as amended from
time to time.  The  obligations  of such Trust are not binding  upon,  nor shall
resort be had to the property of, any of the Trustees,  shareholders,  officers,
employees  or agents of such  Trust  individually,  but the  Trust's  assets and
property only shall be bound.

MassMutual Corporate Value Partners Limited


By: /s/ Richard C. Morrison
     _______________________________
     Name: Richard C. Morrison
     Title:Managing Director


ARK CLO 2000-1, Limited


By:  /s/ Lynn Tilton
     _______________________________
     Name:Lynn Tilton
     Title




MANAGEMENT PARTIES


/s/ William Beebe
- ----------------------------------
    William Beebe

/s/ Christopher Sebes
- ----------------------------------
    Christopher Sebes

EX-4

                                                                   EXHIBIT 4.3



     REGISTRATION  RIGHTS  AGREEMENT  (the  "Agreement"),  dated as of August 6,
2002,  between (a) PROGRESSIVE  SOFTWARE HOLDING,  INC., a Delaware  corporation
(the "Company"),  (b) ARK CLO 2000-1 LIMITED, a Cayman Islands exempted company,
("ARK") and Massachusetts  Mutual Life Insurance Company,  MassMutual  Corporate
Investors,  Mass Mutual Participation  Investors, and MassMutual Corporate Value
Partners Limited, (collectively, "MassMutual").


                                    RECITALS
                                    --------

     In order to induce ARK and  MassMutual to acquire the Series B Common Stock
(as defined  below) the Company  desires to grant the Holders (as defined below)
certain rights as set forth herein.


                                    AGREEMENT
                                    ---------

     In  consideration  of  the  premises  and  the  mutual  covenants  and  the
agreements  herein  set forth and other  good and  valuable  consideration,  the
receipt and  sufficiency of which are hereby  acknowledged,  the parties hereto,
intending to be legally bound, hereby agree as follows:


                                    ARTICLE I
                                   Definitions
                                   -----------

     Section 1.01. Definitions . As used in this Agreement,  the following terms
shall have the following  meanings  (such  meanings to be equally  applicable to
both the singular and plural forms of the terms defined):

     "ARK  Holder  Demand  Registration"  has the  meaning  provided  in Section
2.01(b).

     "ARK  Holder"  means ARK and any Person to whom ARK or any ARK Holder shall
sell, assign,  transfer or otherwise convey its Registrable  Securities pursuant
to Section 2.09 of this Agreement.

     "ARK Warrant" means the Warrant to Purchase shares of Series B Common Stock
of the Company, dated August 6, 2002, originally issued by the Company to ARK.


    "Common  Stock"  means the  Series A Common  Stock and the  Series B Common
Stock.

     "Demand Notice" means a written request by the MassMutual  Holders pursuant
to Section  2.01(a) or by the ARK Holders  pursuant  to Section  2.01(b) for the
registration  under the Securities Act of all or any portion of the  Registrable
Securities held by such Holders for sale or distribution in the manner specified
in such notice.

     "Demand Notice Date" means the date on which the Company  receives a Demand
Notice as provided in Section 2.01 (a) or (b).

     "Equity  Securities"  means the Common Stock and any other  capital  stock,
equity interest or other ownership  interest or profit  participation or similar
right  with  respect  to  the  Company,   including,   without  limitation,  any
partnership or membership  interest,  any stock  appreciation,  phantom stock or
similar right or plan, and any note or debt security having or containing equity
or profit participation  features,  or any option,  warrant or other security or
right  which is  directly  or  indirectly  convertible  into or  exercisable  or
exchangeable for any other Equity Securities of the Company.

     "Holder"  means any of the ARK Holders or the  MassMutual  Holders,  as the
context may require.

     "Initiating  Holders"  means  Holders  delivering  a  Demand  Notice  for a
MassMutual Holder Demand Registration or an ARK Holder Demand  Registration,  as
the case may be.

     "IPO"  means an  underwritten  initial  public  offering  by the Company of
shares of Common Stock.

     "MassMutual Holder Demand Registration" has the meaning provided in Section
2.01(a).

     "MassMutual  Holder" means  MassMutual and any Person to whom MassMutual or
any  MassMutual  Holder shall sell,  assign,  transfer or  otherwise  convey its
Registrable Securities pursuant to Section 2.09 of this Agreement.

     "Person" means an  individual,  a  corporation,  a  partnership,  a limited
liability company, an association, a trust or any other entity or organization.

     "Piggyback  Holders"  means  Holders  exercising  their  right  to  include
Registrable  Securities in a Registration  Statement pursuant to Section 2.02(a)
hereof.

     "Register",  "registered" and "registration" means a registration  effected
through  the  preparation  and  filing of a  registration  statement  or similar
document in compliance  with the Securities Act and the  declaration or ordering
of effectiveness of such registration statement or document.

     "Registering  Holders" means the  Initiating  Holders and any other Holders
exercising  their  right to include  Registrable  Securities  in a  Registration
Statement in connection with a MassMutual  Holder Demand  Registration or an ARK
Demand Registration, as the case may be.

     "Registrable  Securities"  means and includes all shares of Series A Common
Stock and Series B Common Stock (including,  without  limitation,  all shares of
Common Stock issued or issuable  upon  exercise of the ARK  Warrant);  provided,
however,  that Registrable  Securities shall cease to be Registrable  Securities
upon the consummation of any sale of such securities  pursuant to a registration
statement or under Rule 144.

     "Registration  Expenses"  means all  expenses  incurred  by the  Company in
effecting  any  registration  pursuant  to this  Agreement,  including,  without
limitation, all registration,  qualification and filing fees, printing expenses,
escrow fees, fees and  disbursements  of counsel for the Company,  blue sky fees
and expenses,  the expense of any special audits  incident to or required by any
such  registration  and the  reasonable  fees and  disbursements  (not to exceed
$15,000 in the case of a registration pursuant to Section 2.01 hereof and $5,000
in the case of a  registration  pursuant to Section 2.02 or Section 2.03 hereof)
of one  special  legal  counsel to  represent  all of the  Registering  Holders,
Piggyback  Holders  or  S-3  Holder  as  the  case  may be  (but  excluding  the
compensation  of regular  employees  of the  Company  which shall be paid in any
event by the Company).

     "Registration  Statement" means a registration  statement on Form S-1, Form
S-3 or Form SB-2 (or such  similar  or  successor  forms as may be  appropriate)
prepared  and filed with the SEC by the  Company  pursuant to Article II of this
Agreement.

     "Rule 144" means Rule 144  promulgated  under the  Securities  Act, as such
rule shall be in effect from time to time.

     "SEC"  means the United  States  Securities  and  Exchange  Commission  and
includes any governmental body,  authority or agency succeeding to the functions
thereof.

     "Securities  Act" means the  Securities  Act of 1933,  as  amended,  or any
similar  Federal  statute,  and the rules and regulations of the SEC promulgated
thereunder, all as the same shall be in effect at the time.

     "Securities  Exchange  Act" means the  Securities  Exchange Act of 1934, as
amended,  or any similar Federal  statute,  and the rules and regulations of the
SEC promulgated thereunder, all as the same shall be in effect at the time.

     "Selling Expenses" means all underwriting  discounts,  selling  commissions
and stock transfer taxes applicable to the Registrable  Securities registered by
the Registering Holders, Piggyback Holders or S-3 Holders, as the case may be.

     "Series A Common Stock" means the Series A Common Stock, par value $.01 per
share, of the Company.

     "Series B Common Stock" means (a) the Company's  Series B Common Stock, par
value $.01 per share,  (b) any securities of the Company for which the Company's
Series B Common Stock, par value $.01 per share, are exchanged or converted, (c)
any securities of the Company which the holders of the Company's Series B Common
Stock,  par value $.01 per share,  shall be entitled  to receive,  or shall have
received, in connection with any stock splits, stock dividends or similar events
with respect to the Company's  Series B Common Stock,  par value $.01 per share,
and (d) any other securities into which or for which any of the Company's Series
B Common Stock, par value $.01 per share, may be converted or exchanged pursuant
to a plan  of  recapitalization,  reorganization,  merger,  sale  of  assets  or
otherwise.


                                   ARTICLE II
                               Registration Rights
                               -------------------

     Section 2.01. Demand Registration.
                   -------------------

     (a) MassMutual  Holder Demand  Registration.  If at any time after the date
which is 180 days after the IPO, the Company  shall receive a Demand Notice from
the Holders of Registrable  Securities  constituting  at least a majority of the
total shares of Registrable  Securities then owned  beneficially or of record by
the MassMutual  Holders for the registration  under the Securities Act of all or
any  portion  of the  Registrable  Securities  held by such  MassMutual  Holders
(provided that the number of such Registrable  Securities shall not be less than
25% of the  Registrable  Securities  then held  beneficially or of record by all
MassMutual  Holders) for sale or  distribution  in the manner  specified in such
notice (a "MassMutual Holder Demand  Registration"),  the Company shall promptly
(but in any event within 5 calendar days) after the Demand Notice Date,  forward
a copy  of the  Demand  Notice  to all of the  MassMutual  Holders.  Each of the
MassMutual  Holders will have a period of 20 calendar  days after  receiving the
Demand  Notice from the Company in which to elect to include some or all of such
MassMutual Holder's Registrable Securities in such Registration  Statement.  The
MassMutual Holders shall exercise their right to include Registrable  Securities
in such  Registration  Statement by  delivering a written  notice to the Company
within  such 20  calendar  day  period  specifying  the  number  of  Registrable
Securities  such  MassMutual  Holder  wishes  to  include  in such  Registration
Statement.

     (b) ARK Holder Demand Registration.  If at any time after the date which is
180 days after the IPO,  the  Company  shall  receive a Demand  Notice  from the
Holders of Registrable Securities  constituting at least a majority of the total
shares of Registrable Securities then owned beneficially or of record by the ARK
Holders for the  registration  under the Securities Act of all or any portion of
the Registrable Securities held by such ARK Holders (provided that the number of
such  Registrable  Securities  shall  not be less  than  25% of the  Registrable
Securities  then held  beneficially or of record by all ARK Holders) for sale or
distribution  in the manner  specified  in such  notice (an "ARK  Holder  Demand
Registration"),  the Company shall  promptly (but in any event within 5 calendar
days) after the Demand  Notice Date,  forward a copy of the Demand Notice to all
of the ARK  Holders.  Each of the ARK Holders  will have a period of 20 calendar
days after  receiving  the Demand  Notice  from the Company in which to elect to
include  some  or all of  such  ARK  Holder's  Registrable  Securities  in  such
Registration  Statement.  The ARK Holders shall  exercise their right to include
Registrable  Securities in such  Registration  Statement by delivering a written
notice to the Company  within such 20 calendar day period  specifying the number
of Registrable Securities such ARK Holder wishes to include in such Registration
Statement.

     (c) Filing and  Effectiveness  of  Registration  Statement.  Subject to the
limitations set forth in Section  2.01(e)  hereof,  the Company will prepare and
file with the SEC, no later than 60 calendar  days after the Demand Notice Date,
a Registration  Statement  registering for resale by the  Registering  Holders a
sufficient number of shares of Common Stock for the Registering  Holders to sell
the Registrable Securities requested to be registered.  The Company will use its
best efforts to cause such  Registration  Statement to be declared  effective no
later  than five  calendar  days  after the date on which the  Company  receives
notice from the SEC that such Registration  Statement may be declared effective.
The Company will cause the Registration Statement filed pursuant to this Section
2.01 to  remain  effective  until  the  earlier  of (i) the  date on  which  all
Registrable  Securities registered pursuant to such Registration Statement shall
have been sold to the public and (ii) the date which is 120 calendar  days after
the date on which such Registration Statement is declared effective by the SEC.

     (d) Underwritten Offering.

          (i) If the Initiating  Holders  intend to distribute  the  Registrable
     Securities covered by their Demand Notice by means of an underwriting, they
     shall so advise  the  Company  as a part of their  Demand  Notice.  In such
     event,  the right of any Holder to include its  Registrable  Securities  in
     such registration shall be conditioned upon such Holder's  participation in
     such underwriting and the inclusion of such Holder's Registrable Securities
     in the underwriting (unless otherwise mutually agreed by Initiating Holders
     holding a majority of the  Registrable  Securities  held by the  Initiating
     Holders to be registered  hereunder and such Holder) to the extent provided
     herein.  In  connection  with  such an  underwritten  offering,  Initiating
     Holders  holding  a  majority  of the  Registrable  Securities  held by the
     Initiating Holders shall have the right to select the managing  underwriter
     or  underwriters,  subject to the reasonable  approval of the Company.  All
     Registering  Holders proposing to distribute their  Registrable  Securities
     through such  underwriting  shall enter into an  underwriting  agreement in
     customary  form with the  underwriter  or  underwriters,  and  complete and
     execute all  questionnaires,  powers of  attorney,  indemnities,  and other
     documents  required  under  the  terms of such  underwriting  arrangements,
     subject  to the  limitations  set forth in  Section  2.07  hereof,  and the
     representations and warranties by, and the other agreements on the part of,
     the Company to and for the benefit of such underwriters, shall also be made
     to and for the benefit of the Registering Holders.

          (ii)  Notwithstanding any other provision of this Section 2.01, if the
     underwriter  advises the Company  that in the opinion of such  underwriter,
     the  distribution  of all of the  Registrable  Securities  requested  to be
     registered would materially and adversely affect the distribution of all of
     the  securities to be  underwritten,  then (x) the Company shall notify the
     Registering  Holders in writing of such  underwriter's  opinion and (y) the
     number of Equity Securities (including the Registrable Securities) that may
     be included  in such  registration  shall be  allocated  (A) first,  to the
     Initiating  Holders,  (B) second, to the other Holders electing to register
     their  Registrable  Securities,  on a pro rata basis based on the number of
     Registrable  Securities held by such other Holders, and (C) finally, to the
     other Persons  proposing to register  securities in such  registration,  if
     any; provided, however, that the number of shares of Registrable Securities
     to be included in such  underwriting  shall not be reduced unless all other
     securities are entirely  excluded from such  underwriting.  Any Registrable
     Securities  excluded or withdrawn from such underwriting shall be withdrawn
     from the registration.

     (e)  Limitations  on  Registration.  The  Company  shall not be required to
effect a  registration  pursuant  to this  Section  2.01  (i) in any  particular
jurisdiction in which the Company would be required to execute a general consent
to service of process in  effecting  such  registration,  unless the  Company is
already subject to service in such  jurisdiction,  or (ii) after the Company has
effected  (A) two  registrations  under this Section 2.01 for the account of the
MassMutual  Holders,  and (B) one registration  (two if a Triggering Event shall
occur) under this Section 2.01 for the account of the ARK Holders.  For purposes
of this Section 2.01(e), in the event that the number of Registrable  Securities
of Initiating Holders included in any registration pursuant to this Section 2.01
is reduced by more than 40% of the number of Registrable  Securities proposed to
be registered pursuant to Section 2.01(a) or (b) in any registration,  then such
registration  shall not count as a  registration  for  purposes of this  Section
2.01.

     Section 2.02. Piggyback Registration.
                   ----------------------

     (a) Company  Registration.  If the Company proposes to register  (including
for this purpose a registration  effected by the Company for shareholders  other
than the  Holders)  any of its Equity  Securities  under the  Securities  Act in
connection  with the  public  offering  (excluding  the IPO) of such  securities
(other than a  registration  (i) relating  solely to the sale of  securities  to
participants in a Company stock plan,  (ii) relating to a corporate  transaction
under Rule 145 or any successor  rule of the  Securities  Act, (iii) on any form
that does not include substantially the same information as would be required to
be included in a  registration  statement  covering the sale of the  Registrable
Securities,  or (iv) in which the only Common Stock being  registered  is Common
Stock  issuable  upon   conversion  of  debt  securities  that  are  also  being
registered),  the Company shall promptly give each Holder written notice of such
registration at least 30 calendar days prior to the filing of such  Registration
Statement  with the SEC.  Each of the Holders  will have a period of 20 calendar
days after  receiving  such written notice from the Company in which to elect to
include some or all of such Holder's Registrable Securities in such Registration
Statement.  The  Holders  shall  exercise  their  right to  include  Registrable
Securities in such Registration  Statement by delivering a written notice to the
Company within such 20 calendar day period  specifying the number of Registrable
Securities such Holder wishes to include in such Registration Statement. Subject
to the  provisions  of Sections  2.01(d) and 2.02(b)  hereof,  the Company  will
include the  Registrable  Securities  requested to be included by the  Piggyback
Holders in the Company Registration Statement.

     (b) Underwritten Offerings.

          (i) If the  registration  for which the  Company  gives  notice to the
     Holders  under Section  2.02(a) is an  underwritten  offering,  the Company
     shall  not be  required  under  this  Section  2.02 to  include  any of the
     Piggyback Holders'  Registrable  Securities in such underwriting unless the
     Piggyback  Holders  accept  the terms of the  underwriting  as agreed  upon
     between  the  Company  and the  underwriters.  In  connection  with such an
     underwritten offering, the Company (or other Persons who may be entitled to
     select  the  underwriters)  shall  have the  right to select  the  managing
     underwriter or underwriters.  All Piggyback Holders proposing to distribute
     their Registrable  Securities through such underwriting shall enter into an
     underwriting   agreement  in  customary   form  with  the   underwriter  or
     underwriters,  and  complete  and  execute  all  questionnaires,  powers of
     attorney, indemnities, and other documents required under the terms of such
     underwriting arrangements,  subject to the limitations set forth in Section
     2.07  hereof,  and the  representations  and  warranties  by, and the other
     agreements  on the part of,  the  Company  to and for the  benefit  of such
     underwriters,  shall also be made to and for the  benefit of the  Piggyback
     Holders.  If any  Piggyback  Holder  does not  approve of the terms of such
     underwriting, the Piggyback Holder may elect to withdraw from such offering
     by providing written notice to the Company and the underwriter.

          (ii)  Notwithstanding any other provision of this Section 2.02, if the
     underwriter  advises the Company  that in the opinion of such  underwriter,
     the  distribution  of all of the  Registrable  Securities  requested  to be
     registered would materially and adversely affect the distribution of all of
     the  securities to be  underwritten,  then (x) the Company shall notify the
     Piggyback  Holders  in writing of such  underwriter's  opinion  and (y) the
     number of Equity Securities (including the Registrable Securities) that may
     be included  in such  registration  shall be  allocated  (A) first,  to the
     Company,  (B) second, to the Piggyback Holders on a pro rata basis based on
     the number of Registrable  Securities held by such Piggyback  Holders,  and
     (C) finally,  to the other Persons proposing to register securities in such
     registration,  if  any,  or  if  so  determined  by  the  underwriter,  all
     Registrable  Securities  shall  be  excluded  from  such  registration  and
     underwritten  offering.  Any Registrable  Securities  excluded or withdrawn
     from such underwriting shall be withdrawn from the registration.

     Section 2.03. S-3 Registration.
                   ----------------

     (a) S-3  Registration.  If, at any time  after the first  date on which the
Company is eligible to file a registration statement under the Securities Act on
Form S-3 (or, if  applicable,  Form SB-2),  or such similar or successor form as
may be  appropriate,  the Company shall receive from (i) Holders of  Registrable
Securities  constituting  at least a majority of the total shares of Registrable
Securities  then owned  beneficially  or of record by the MassMutual  Holders or
(ii) Holders of Registrable  Securities  constituting at least a majority of the
total shares of Registrable  Securities then owned  beneficially or of record by
the ARK Holders,  a written  request (an "S-3 Notice") that the Company effect a
registration  on Form S-3 (or, if  applicable,  Form SB-2),  or such  similar or
successor  form  as  may  be  appropriate,  and  any  related  qualification  or
compliance  with respect to the  Registrable  Securities  (the date on which the
Company receives the S-3 Notice being the "S-3 Notice Date"),  the Company shall
promptly  (but in any event  within 5 calendar  days) after the S-3 Notice Date,
forward a copy of the S-3 Notice to all of the Holders. Each of the Holders will
have a period of 20  calendar  days  after  receiving  the S-3  Notice  from the
Company in which to elect to include  some or all of such  Holder's  Registrable
Securities  in  such  Registration  Statement,   provided  that  the  reasonably
anticipated  aggregate  price to the public (net of  underwriting  discounts and
commissions) of such Registrable  Securities would exceed $500,000.  The Holders
shall   exercise  their  right  to  include   Registrable   Securities  in  such
Registration Statement by delivering a written notice to the Company within such
20 calendar day period  specifying  the number of  Registrable  Securities  such
Holder wishes to include in such Registration  Statement (such electing Holders,
together  with the Holders  delivering  the S-3 Notice to the Company  being the
"S-3 Holders").

     (b) Filing and  Effectiveness  of  Registration  Statement.  Subject to the
limitations set forth in Section  2.03(c)  hereof,  the Company will prepare and
file with the SEC, no later than 30 calendar  days after the S-3 Notice  Date, a
Registration  Statement  on Form S-3 (or, if  applicable,  Form  SB-2),  or such
similar or successor form as may be appropriate,  covering, and shall obtain all
such  qualifications  and compliances as may be required and as would permit the
sale and distribution of, all Registrable  Securities.  The Company will use its
best efforts to cause such  Registration  Statement to be declared  effective no
later  than five  calendar  days  after the date on which the  Company  receives
notice from the SEC that such Registration  Statement may be declared effective.
The Company will cause the Registration Statement filed pursuant to this Section
2.03 to  remain  effective  until  the  earlier  of (A) the  date on  which  all
Registrable  Securities registered pursuant to such Registration Statement shall
have  been  sold to the  public,  (B) the date on which  all of the  Registrable
Securities  requested to be  registered by the S-3 Holders can be freely sold to
the public pursuant to Rule 144 without any volume  limitations and (C) the date
which is 180 days  after  the  date  such  Registration  Statement  is  declared
effective.

     (c)  Limitations  on  Registration.  The  Company  shall not be required to
effect a  registration  pursuant to this  Section 2.03 (i) if at the time of the
request,  Form S-3 or Form SB-2 (or such  similar  or  successor  form as may be
applicable)  is not  available  to the  Company for such  offering,  (ii) if the
reasonably  anticipated  aggregate  price  to the  public  (net of  underwriting
discounts  and  commissions)  of  Registrable  Securities to be included in such
Registration  Statement  would not exceed  $500,000,  (iii) if  counsel  for the
Company,  reasonably  acceptable  to the S-3 Holders,  shall  deliver an opinion
reasonably acceptable to the S-3 Holders,  stating that, pursuant to Rule 144 or
otherwise,  such Holders can  publicly  sell their shares of Common Stock of the
Company as to which  registration has been requested without  registration under
the Securities Act and without any limitation  with respect to offerees,  manner
of offering or size of the transaction,  or (iv) in any particular  jurisdiction
in which the Company  would be required to execute a general  consent to service
of process in effecting such registration, unless the Company is already subject
to service in such jurisdiction.  In addition,  if the Company shall furnish the
S-3 Holders a certificate signed by the President of the Company stating that in
the good faith  judgment of the Board of Directors  of the Company,  it would be
seriously  detrimental to the Company and its stockholders for such registration
statement to be filed and it is therefore  essential to defer the filing of such
registration  statement,  the Company  shall have the right to defer such filing
for a period of not more than one hundred twenty (120) days after the S-3 Notice
Date.

     Section 2.04. Expenses of Registration . All Registration Expenses incurred
in  connection  with  any  registration,  filing,  qualification  or  compliance
pursuant to Sections  2.01,  2.02 or 2.03 shall be borne by the Company.  Unless
otherwise  stated,  all  Selling  Expenses  relating to  Registrable  Securities
registered by the Holders shall be borne by the Holders holding such Registrable
Securities  pro rata on the basis of the  number of  Registrable  Securities  so
registered.

     Section 2.05. Further  Obligations of the Company . Whenever the Company is
required to effect the  registration of any Registrable  Securities  pursuant to
this Article II, the Company will:

     (a) Filing and Effectiveness of Registration  Statement.  With respect to a
Registration  Statement  required by Section 2.01 or 2.03,  (i) prepare and file
with the SEC a Registration  Statement,  (ii) use its reasonable best efforts to
cause such Registration  Statement to become  effective,  and (iii) maintain the
effectiveness of such Registration  Statement, in each case, as of the dates and
for the periods  required  by Section  2.01 or 2.03,  as the case may be,  which
Registration  Statement  (including any  amendments or  supplements  thereto and
prospectuses  contained  therein)  shall not contain any untrue  statement  of a
material fact or omit to state a material fact required to be stated  therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading.

     (b) Filing of  Amendments  and  Supplements.  Prepare and file with the SEC
such  amendments  (including  post-effective  amendments) and supplements to the
Registration   Statement  and  the  prospectus   used  in  connection  with  the
Registration  Statement as may be necessary to keep the  Registration  Statement
effective and to comply with the  provisions of the  Securities Act with respect
to the  disposition of all  Registrable  Securities and other  securities of the
Company covered by the Registration Statement at all times during the period for
which the Company is required to maintain the effectiveness of such Registration
Statement pursuant to the terms of this Agreement.

     (c)  Notification  of Certain  Events.  As  promptly as  practicable  after
becoming  aware  thereof,  notify each Holder of the  happening  of any event of
which the Company has knowledge, as a result of which the prospectus included in
the Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements  therein,  in light of the circumstances  under
which they were made, not misleading, and promptly prepare and file with the SEC
a supplement  or amendment to the  Registration  Statement or other  appropriate
filing with the SEC to correct such untrue statement or omission,  and deliver a
number  of  copies  of such  supplement  or  amendment  to each  Holder  selling
Registrable  Securities  pursuant to such Registration  Statement as such Holder
may reasonably request.

     (d) SEC Stop  Orders.  As  promptly as  practicable  after  becoming  aware
thereof, notify each Holder who holds Registrable Securities being sold (and, in
the  event  of an  underwritten  offering,  the  managing  underwriters)  of the
issuance  by the SEC of any notice of  effectiveness  or any stop order or other
suspension of the  effectiveness of the  Registration  Statement at the earliest
possible time.

     (e) Listing  Requirements.  Use its best  efforts to list such  Registrable
Securities  on each  securities  exchange on which the Equity  Securities of the
Company are then listed.

     (f)  Underwriting  Agreement.  In  the  event  of any  underwritten  public
offering,   enter  into  and  perform  its  obligations  under  an  underwriting
agreement,  in usual and  customary  form and complying  with the  provisions of
Section  2.07,  with the  managing  underwriter  of such  offering.  Each Holder
participating in such underwriting  shall also enter into and perform his or its
obligations  under such  agreement and complete and execute all  questionnaires,
powers of attorney,  indemnities and other documents required under the terms of
such underwriting arrangements.

     (g) Section 11  Information.  Make  available  to the  Holders,  as soon as
reasonably practicable, an earnings statement covering the period of at least 12
months, but not more than 18 months, beginning with the first month of the first
fiscal quarter after the effective date of such  Registration  Statement,  which
earnings  statement  shall  satisfy  the  provisions  of  Section  11(a)  of the
Securities Act, including, without limitation, Rule 158 promulgated thereunder.

     (h) Other Actions.  Take all other reasonable actions necessary to expedite
and facilitate disposition by the Holders of the Registrable Securities pursuant
to the Registration Statement.


     Section 2.06.  Preparation;  Reasonable  Investigation;  Review by Counsel.
                    -----------------------------------------------------------

     In  connection  with  the  preparation  and  filing  of  each  Registration
Statement  registering  Registrable  Securities  under the  Securities  Act, the
Holders on whose behalf such  Registrable  Securities  are to be so  registered,
their underwriters,  if any, and one counsel for all of the Holders holding such
Registrable Securities (and one counsel in each applicable jurisdiction) shall:

     (a) be permitted to review such  Registration  Statement,  each  prospectus
included therein or filed with the SEC, and each amendment thereof or supplement
thereto a reasonable period of time (but not less than 3 business days) prior to
their filing with the SEC; and

     (b) be given reasonable  access to the Company's books and records and such
opportunities to discuss the business of the Company with its officers,  counsel
and  the  independent  public  accountants  who  have  certified  its  financial
statements  as  shall  be  necessary,  in the  opinion  of  such  Holders,  such
underwriters,  if any,  or their  respective  counsel,  to conduct a  reasonable
investigation within the meaning of the Securities Act.

     In addition,  the Company  agrees not to file any  Registration  Statement,
prospectus  included therein, or any amendment thereof or supplement thereto, in
a form to which such  Holders,  their  underwriters,  if any,  or their  counsel
reasonably objects.

     Section 2.07. Indemnification . In the event any Registrable Securities are
included  in a  Registration  Statement  under this  Article  II, the  following
indemnification provisions shall apply.


     (a) Indemnification by the Company.

          (i) Indemnification.  To the extent permitted by law, the Company will
     indemnify and hold harmless each Holder,  each of the employees,  officers,
     directors, partners, members, managers and other agents of each Holder, any
     underwriter  (as  defined in the  Securities  Act) for such Holder and each
     Person, if any, who controls such Holder or underwriter  within the meaning
     of the Securities Act or Securities Exchange Act (collectively, the "Holder
     Indemnified  Persons")  against  and hold each  Holder  Indemnified  Person
     harmless  from  any  and all  liabilities,  obligations,  losses,  damages,
     lawsuits, investigations, arbitrations, actions, judgments, costs, expenses
     or claims,  including,  without limitation,  reasonable attorneys' fees and
     expenses  incurred  in  investigation  or  defending  any of the  foregoing
     (collectively, "Losses"), that the Holder Indemnified Persons may suffer or
     sustain arising out of or due to any of the following (any of the following
     being a "Violation")  (A) any untrue  statement or alleged untrue statement
     of a material fact contained in such Registration Statement,  including any
     preliminary  prospectus  or  final  prospectus  contained  therein  or  any
     amendments or supplements  thereto, (B) the omission or alleged omission to
     state therein a material fact required to be stated  therein,  or necessary
     to make the  statements  therein not  misleading,  or (C) any  violation or
     alleged  violation by the Company of the  Securities  Act,  the  Securities
     Exchange  Act,  any  state   securities  law  or  any  rule  or  regulation
     promulgated  under the Securities  Act, the Securities  Exchange Act or any
     state securities law.

          (ii) Limitations on  Indemnification.  Notwithstanding  the foregoing,
     the Company  shall not be liable for (A) any amounts paid in  settlement of
     any such Losses if such  settlement is effected  without the consent of the
     Company (which consent shall not be unreasonably  withheld or delayed),  or
     (B) any Losses to the  extent  that such  Losses  arise out of or are based
     upon a Violation  which  occurs in reliance  upon and in strict  conformity
     with  written  information  furnished  by a  Holder  expressly  for  use in
     connection with such registration.

     (b) Indemnification by the Holders.

          (i)  Indemnification.  To the extent  permitted  by law,  the Holders,
     severally and not jointly and  severally,  will indemnify and hold harmless
     the Company, each of the Company's employees, officers, directors and other
     agents,  any underwriter (as defined in the Securities Act) for the Company
     and each Person, if any, who controls the Company or underwriter within the
     meaning of the Securities Act or Securities Exchange Act (collectively, the
     "Company Indemnified  Persons"),  against and hold each Company Indemnified
     Person  harmless  from  any and all  Losses  that the  Company  Indemnified
     Persons may suffer or sustain  arising out of or due to any  Violation,  in
     each case to the extent (and only to the extent) that such Violation occurs
     in  reliance  upon  and  in  strict  conformity  with  written  information
     furnished  by  such  Holder  expressly  for  use in  connection  with  such
     registration.

          (ii) Limitations on Indemnification. Notwithstanding the foregoing, no
     Holder shall be liable for (A)  indemnification  pursuant to this Agreement
     in excess of the aggregate  net cash proceeds  received by such Holder from
     the  offering  of  Registrable  Securities  in such  registration,  (B) any
     amounts  paid in  settlement  of any  such  Losses  if such  settlement  is
     effected  without the consent of such Holder  (which  consent  shall not be
     unreasonably  withheld  or  delayed),  or (C) any Losses to the extent that
     such  Losses do not arise out of or are not based  upon a  Violation  which
     occurs in reliance upon and in strict  conformity with written  information
     furnished  by  such  Holder  expressly  for  use in  connection  with  such
     registration.

     (c)  Indemnification  Mechanics.  If there  occurs an event which a Company
Indemnified  Person or a Holder  Indemnified  Person (any such Person  being the
"Indemnitee") hereto asserts is an indemnifiable event pursuant to this Section,
the   Indemnitee   will   promptly   notify  the  party   obligated  to  provide
indemnification  hereunder (the "Indemnitor") in writing of such event. Delay or
failure to so notify the  Indemnitor  will only  relieve the  Indemnitor  of its
obligations to the extent,  if at all, that it is actually  prejudiced by reason
of such delay or failure.  The Indemnitor will have a period of 20 calendar days
in which to respond  thereto.  If the  Indemnitor  assumes  the  defense of such
matter within such 20 calendar day period, then the Indemnitor will be obligated
to compromise or defend,  at its own expense,  such matter,  and the  Indemnitor
will provide the Indemnitee with such  assurances as may be reasonably  required
by the Indemnitee to assure that the  Indemnitor  will assume and be responsible
for  the  Losses  at  issue  (subject  to the  limitations  set  forth  in  this
Agreement).  If the Indemnitor fails to assume the defense of such matter within
such 20  calendar  day period or does not respond  within  such 20 calendar  day
period,  the  Indemnitee  against which such matter has been asserted will (upon
delivering notice to such effect to the Indemnitor) have the right to undertake,
at the Indemnitor's cost and expense,  the defense,  compromise or settlement of
such matter on behalf of the Indemnitee.  In any event, the Indemnitee will have
the right to  participate  at its own  expense in the  defense of such  asserted
liability;  provided, however, that the Indemnitor will pay the expenses of such
defense if the Indemnitee is advised by counsel in writing that there are one or
more legal  defenses  available to the  Indemnitee  that are  different  from or
additional  to  those  available  to  the  Indemnitor  (in  which  case,  if the
Indemnitee notifies the Indemnitor in writing,  the Indemnitor will not have the
right to  assume  the  defense  of such  asserted  liability  on  behalf  of the
Indemnitee).

     (d) Contribution.  If the  indemnification  provided for in this Section is
held by a court of competent  jurisdiction  to be  unavailable  to an Indemnitee
with respect to any Losses,  then the Indemnitor,  in lieu of indemnifying  such
Indemnitee  hereunder,  shall  contribute  to the amount paid or payable by such
Indemnitee as a result of such Losses in such  proportion as is  appropriate  to
reflect  the  relative  fault  of the  Indemnitor  on the  one  hand  and of the
Indemnitee on the other in connection  with the Violation  that resulted in such
Losses,  as well  as any  other  relevant  equitable  considerations;  provided,
however, that in no event shall any contribution under this Section 2.07(d) from
a Holder, together with the amount of any indemnification  payments made by such
Holder  pursuant to Section  2.07(b)  above,  exceed the net  proceeds  from the
offering  received by such Holder.  The relative  fault of the Indemnitor and of
the Indemnitee shall be determined by reference to, among other things,  whether
the  Violation  relates  to  information  supplied  by  the  Indemnitor  or  the
Indemnitee and the parties  relative intent,  knowledge,  access to information,
and opportunity to correct or prevent such Violation.

     (e) No Inconsistent Underwriting Agreements.  Notwithstanding any provision
of this  Agreement to the  contrary,  the Holders shall not be required to enter
into an underwriting  agreement that contains  indemnification  and contribution
provisions which, in the reasonable  judgment of the Holders,  materially differ
from those contained in this Section.

     Section 2.08.  Rule 144 Reporting.  With a view to making  available to the
Holders  the  benefits of Rule 144 and any other rule or  regulation  of the SEC
that may at any time  permit a Holder to sell  securities  of the Company to the
public  without  registration  or pursuant to a  registration  on Form S-3,  the
Company agrees to:

     (a)  make  and  keep  public  information  available  as  those  terms  are
understood and defined in Rule 144 at all times after 90 calendar days after the
effective date of the first registration statement filed by the Company;

     (b) file with the SEC in a timely  manner all reports  and other  documents
required of the Company under the Securities Act and the Securities Exchange Act
(at any time after it has become subject to such reporting requirements);

     (c)  furnish  to any  Holder,  so long as the Holder  owns any  Registrable
Securities,  upon  request,  (i) a written  statement by the Company that it has
complied  with the  reporting  requirements  of Rule  144 (at any time  after 90
calendar days after the effective date of the first registration statement filed
by the Company), the Securities Act and the Securities Exchange Act (at any time
after  it has  become  subject  to  such  reporting  requirements),  or  that it
qualifies as a registrant  whose  securities may be resold  pursuant to Form S-3
(at any time after it so  qualifies),  (ii) a copy of the most recent  annual or
quarterly report of the Company and such other reports and documents so filed by
the Company and (iii) such other  information as may be reasonably  requested in
availing  any  Holder of any rule or  regulation  of the SEC which  permits  the
selling of any such  securities  without  registration or pursuant to such form;
and

     (d) to take such action, including the voluntary registration of its Common
Stock under Section 12 of the Securities Exchange Act, as is necessary to enable
the Holders to utilize  Form S-3 for the sale of their  Registrable  Securities,
such action to be taken as soon as practicable  after the end of the fiscal year
in which the first registration  statement filed by the Company for the offering
of its securities to the public is declared effective.

     Section  2.09.  Transfer of  Registration  Rights . The rights to cause the
Company to register  Registrable  Securities  pursuant to this  Agreement may be
assigned by a Holder to a transferee  or assignee of such  Holder's  Registrable
Securities;  provided,  that (x) the Company is,  within 15 calendar  days after
such  transfer,  furnished  a  written  notice of the name and  address  of such
transferee or assignee and the Registrable Securities with respect to which such
registration  rights are being  assigned,  and (y) such  transferee  or assignee
agrees in writing to be bound by and subject to the terms and conditions of this
Agreement.

     Section 2.10. "Market Stand-off" Agreement.  If requested in writing by the
underwriters  for an underwritten  public offering of securities of the Company,
each  Holder  shall  agree  not to  sell  publicly  any  shares  of  Registrable
Securities or any other shares of Common Stock (other than shares of Registrable
Securities or other shares of Common Stock being  registered in such  offering),
without the consent of such  underwriters,  for a period following the effective
date of the  Registration  Statement  relating to such offering to be reasonably
determined by the underwriters not to exceed 180 days, provided that the Company
shall use  commercially  reasonable  efforts  to limit  such  period to 90 days;
provided, however, that all persons entitled to registration rights with respect
to shares  of Common  Stock who are not  parties  to this  Agreement,  all other
Persons  selling  shares  of Common  Stock in such  offering  and all  executive
officers  and  directors  of the  Company  shall  also have  agreed  not to sell
publicly  their  Common  Stock for a like  period  under the  circumstances  and
pursuant to the terms set forth in this Section 2.10.

     In  order to  enforce  the  foregoing  covenant,  the  Company  may  impose
stop-transfer  instructions  with respect to the Registrable  Securities of each
Holder  (and the  shares or  securities  of every  other  person  subject to the
foregoing  restriction)  until the end of such  period,  and each Holder  agrees
that,  if so  requested,  such  Holder  will  execute an  agreement  in the form
provided by the underwriter  containing  terms which are essentially  consistent
with the provisions of this Section 2.10.

     Notwithstanding  the foregoing,  the obligations  described in this Section
2.10 shall not apply to  registrations  pursuant to  registration  statements on
Forms S-4 and S-8, or similar or successor  Forms, or registrations in which the
only stock being  registered is Common Stock  issuable  upon  conversion of debt
securities which are also being registered.

     Section  2.11.  Termination  of  Registration  Rights.  No Holder  shall be
entitled to exercise  any right  provided in this  Agreement  after such time as
Rule 144 or another similar  exemption under the Securities Act is available for
the  public  sale  of all of  such  Holder's  Registrable  Securities  during  a
three-month  period without  registration and without other  restrictions  other
than as set forth in paragraphs (f) and (g) of Rule 144.


                                   ARTICLE III

                                  Miscellaneous
                                  -------------

     Section  3.01.   Notices.   All  notices,   requests,   demands  and  other
communications to any party or given under this Agreement will be in writing and
delivered personally, by overnight delivery or courier, by registered mail or by
telecopier  (with  confirmation  received)  to the  parties  at the  address  or
telecopy number  specified for such parties on the signature pages hereto (or at
such other address or telecopy  number as may be specified by a party in writing
given at least five business days prior thereto). All notices, requests, demands
and other communications will be deemed delivered when actually received.

     Section 3.02.  Counterparts . This Agreement may be executed simultaneously
in one or  more  counterparts,  and by  different  parties  hereto  in  separate
counterparts, each of which when executed will be deemed an original, but all of
which taken together will constitute one and the same instrument.

     Section 3.03.  Modification  or Amendment of Agreement . This Agreement may
not be modified or amended  except by an instrument in writing signed by (a) the
Company,  and (b)  Holders  holding  at  least  a  majority  of the  Registrable
Securities;  provided,  however,  that any  modification  or  amendment  of this
Agreement which  materially and adversely  affects an Investor in a manner which
is materially worse than the affect on any other Investor shall not be effective
without the consent of such Investor and;  provided,  further,  however,  that a
Holder may waive any or all of such Holder's rights hereunder  without obtaining
the consent of the Company or any other Holder.

     Section 3.04.  Successors and Assigns . This Agreement will be binding upon
and inures to the benefit of and is enforceable by the respective successors and
permitted assigns of the parties hereto.

     Section  3.05.  Governing  Law . This  Agreement  will be governed  by, and
construed in accordance  with,  the laws of the state of Delaware  applicable to
contracts  executed in and to be performed  entirely within that state,  without
reference to conflicts of laws provisions.

     Section 3.06.  Integration . This Agreement  contains and  constitutes  the
entire  agreement of the parties with respect to the subject  matter  hereof and
supersedes  all  prior  negotiations,  agreements  and  understandings,  whether
written or oral, of the parties hereto.

     Section  3.07.  Severability  . If any  term  or  other  provision  of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public  policy,  all other  conditions  and provisions of this Agreement will
nevertheless  remain in full force and effect.  Upon such determination that any
term or other provision is invalid,  illegal or incapable of being enforced, the
parties  hereto will  negotiate in good faith to modify this  Agreement so as to
effect  the  original  intent  of the  parties  as  closely  as  possible  in an
acceptable  manner  to the end that the  transactions  contemplated  hereby  are
fulfilled to the extent possible.

     Section 3.08. Interpretation . As used in this Agreement, references to the
singular will include the plural and vice versa and  references to the masculine
gender  will  include  the  feminine  and  neuter  genders  and vice  versa,  as
appropriate. Unless otherwise expressly provided in this Agreement (a) the words
"hereof", "herein" and "hereunder" and words of similar import when used in this
Agreement  will  refer to this  Agreement  as a whole and not to any  particular
provision of this Agreement and (b) article, section,  subsection,  schedule and
exhibit  references  are  references  with  respect  to  this  Agreement  unless
otherwise specified. Unless the context otherwise requires, the term "including"
will mean  "including,  without  limitation." The headings in this Agreement are
included for  convenience  of reference  only and will not affect in any way the
meaning or interpretation of this Agreement.

     Section 3.09.  Ambiguities . This  Agreement was  negotiated  between legal
counsel  for the  parties  and any  ambiguity  in this  Agreement  shall  not be
construed against the party who drafted this Agreement.

     Section  3.10.  Further  Assurances  . In  order  to  (a)  carry  out  more
effectively the purposes of this  Agreement,  (b) enable the parties to exercise
and enforce their rights and remedies  hereunder,  promptly upon the  reasonable
request by any party hereto, the Company and the Holders (with the expenses paid
by the party  responsible as provided in this  Agreement)  shall (i) correct any
defect or error that may be  discovered in this  Agreement or in the  execution,
delivery,  acknowledgment  or  recordation  of this  Agreement and (ii) execute,
acknowledge,  deliver, record, file and register, any and all such further acts,
conveyances,   assignments,  notices  of  assignment,  transfers,  certificates,
assurances and other  instruments,  in each case, as such  requesting  party may
require from time to time.

     Section 3.11. No Third-Party  Rights . This Agreement is not intended,  and
will not be  construed,  to create  any  rights in any  parties  other  than the
Company  and the  Holders,  and no Person may  assert any rights as  third-party
beneficiary hereunder, except as provided in Section 2.07.

     Section  3.12.  No  Waiver;  Remedies . No failure or delay by any party in
exercising any right,  power or privilege under this Agreement will operate as a
waiver of the right,  power or  privilege.  A single or partial  exercise of any
right, power or privilege will not preclude any other or further exercise of the
right,  power  or  privilege  or the  exercise  of any  other  right,  power  or
privilege.

     Section  3.13.  Submission  to  Jurisdiction  . Each of the Company and the
Holders hereby (a) agrees that any action, lawsuit or proceeding with respect to
this  Agreement  may be brought in the courts of the State of New York or of the
United States of America for the Southern  District of New York, (b) accepts for
itself  and in respect  of its  property,  generally  and  unconditionally,  the
non-exclusive jurisdiction of such courts, (c) irrevocably waives any objection,
including,  without limitation, any objection to the laying of venue or based on
the grounds of forum non  conveniens,  which it may now or hereafter have to the
bringing of any action,  lawsuit or proceeding in those  jurisdictions,  and (d)
irrevocably  consents to the service of process of any of the courts referred to
above in any  action,  lawsuit  or  proceeding  by the  mailing of copies of the
process to the parties hereto as provided in Section 3.01.  Service  effected as
provided  in this  manner  will become  effective  ten  calendar  days after the
mailing of the process.

     Section  3.14.  Waiver of Jury Trial . Each of the  Company and the Holders
hereby waives any right to a trial by jury in any action,  lawsuit or proceeding
to  enforce  or  defend  any  right  under  this  Agreement  or  any  amendment,
instrument,  document or agreement  delivered  or to be delivered in  connection
with this  Agreement and agrees that any action,  lawsuit or proceeding  will be
tried before a court and not before a jury.





     In witness whereof,  the parties have executed and delivered this Agreement
as of the date first written above.

COMPANY:
- -------

                                           PROGRESSIVE SOFTWARE HOLDING, INC.
Address for Notices:
- -------------------
6836 Morrison Blvd.
Charlotte, NC
Att: Chief Executive Officer               By:/s/ William A. Beebe
Facsimile No.  704-295-7001                   ---------------------------------
                                              Name:William A. Beebe
                                              Title:Treasurer









HOLDERS:
- -------

                                           ARK CLO 2000-1 LIMITED
Address for Notices:
- -------------------
c/o Patriarch Partners, LLC
40 Wall Street
New York, New York  10005                  By:/s/ Lynn Tilton
Att:  Ms. Lynn Tilton                         ----------------------------------
Phone:            212-825-0550                   Name:  Lynn Tilton
Facsimile No.:212-825-                           Title:


                                           MASSACHUSETTS MUTUAL LIFE
                                           INSURANCE COMPANY,
                                           By: David L. Babson & Company Inc.
                                               as Investment Adviser
Address for Notices:
c/o David L. Babson & Company
1500 Main Street, Suite 2800
Springfield, MA  01115                     By:/s/ Richard C. Morrison
Facsimile No.:_______________                 ---------------------------------
                                                 Name:Richard C. Morrison
                                                 Title:Managing Director


                                           MassMutual Corporate Investors
Address for Notices:
c/o David L. Babson & Company
1500 Main Street, Suite 2800
Springfield, MA  01115                     By:/s/ Richard C. Morrison
Facsimile No.:_______________                 ---------------------------------
                                                 Name:Richard C. Morrison
                                                 Title:Vice President

                                        The  foregoing  is executed on behalf of
                                        MassMutual  Corporate  Investors,
                                        organized under a  Declaration of Trust,
                                        dated  September  13, 1985,  as amended
                                        from time to time. The obligations of
                                        such Trust are Not personally binding
                                        upon,  nor shall  resort  be had To the
                                        property  of,  any of the Trustees,
                                        shareholders, officers, employees or
                                        agents of such Trust, but the Trust's
                                        property only shall be bound.






                                           Mass Mutual Participation Investors
Address for Notices:
c/o David L. Babson & Company
1500 Main Street, Suite 2800
Springfield, MA  01115                     By:/s/ Richard C. Morrison
Facsimile No.:_______________                 ---------------------------------
                                                 Name:Richard C. Morrison
                                                 Title:Vice President


                                        The  foregoing  is  executed  on  behalf
                                        of  MassMutual Participation  Investors,
                                        organized under a  Declaration of Trust,
                                        dated  April 7, 1988,  as  amended  from
                                        time to time. The  obligations  of such
                                        Trust  are not binding  upon,  nor shall
                                        resort be had to the property of, any of
                                        the  Trustees, shareholders,  officers,
                                        employees  or agents  of such  Trust
                                        individually, but the Trust's assets and
                                        property only shall be bound.


                                           MassMutual Corporate Value Partners
                                           Limited
                                           By: David L. Babson & Company Inc.
                                               under Delegated authority from
                                               Massachusetts Mutual Life
                                               Insurance Company as Investment
                                               Manager,
Address for Notices:
c/o David L. Babson & Company
1500 Main Street, Suite 2800
Springfield, MA  01115                     By:/s/ Richard C. Morrison
Facsimile No.:_______________                 ---------------------------------
                                                 Name:Richard C. Morrison
                                                 Title:Managing Director





                                   SCHEDULE A
                                       to
                          REGISTRATION RIGHTS AGREEMENT


                                    Holders
                                    -------

EX-4

                                                                  EXHIBIT 4.4



                                     WARRANT

THE WARRANT  REPRESENTED BY THIS  CERTIFICATE  AND THE SHARES OF SERIES B COMMON
STOCK OR  COMMON  STOCK,  AS THE CASE MAY BE,  ISSUABLE  UPON  EXERCISE  OF THIS
WARRANT HAVE NOT BEEN  REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "1933 ACT"), OR UNDER ANY STATE SECURITIES LAWS AND THIS WARRANT
HAS  BEEN  ISSUED  TO THE  HOLDER  IN  RELIANCE  UPON  CERTAIN  EXEMPTIONS  FROM
REGISTRATION  AND  QUALIFICATION  PROVIDED  IN THE  1933 ACT AND THE  RULES  AND
REGULATIONS  THERETO AND THE  APPLICABLE  STATE  SECURITIES  LAWS.  ACCORDINGLY,
NEITHER  THIS WARRANT NOR ANY SUCH  SECURITIES  MAY BE OFFERED,  SOLD,  PLEDGED,
ASSIGNED OR  OTHERWISE  TRANSFERRED  UNLESS (A) A  REGISTRATION  STATEMENT  WITH
RESPECT  THERETO  IS  EFFECTIVE  UNDER  THE  1933 ACT AND ANY  APPLICABLE  STATE
SECURITIES  LAWS OR (B) AN  EXEMPTION  FROM SUCH  REGISTRATION  REQUIREMENTS  IS
AVAILABLE.



Warrant No.:  1                                                  August 6, 2002


                               WARRANT TO PURCHASE

                         SHARES OF SERIES B COMMON STOCK

                                       OF

                       PROGRESSIVE SOFTWARE HOLDING, INC.


     THIS CERTIFIES  THAT, for value  received,  ARK CLO 2000-1,  LIMITED or its
assignees and transferees  (the "Holder"),  is entitled,  in accordance with the
terms and conditions  hereinafter  set forth, to subscribe for and purchase from
PROGRESSIVE SOFTWARE HOLDING,  INC., a Delaware corporation (the "Company"),  at
any time during the Exercise Period (as defined below), 418,836 shares of Series
B Common  Stock (as  defined  below) or if the  Series B Common  Stock  shall no
longer exist as provided in Article IV of the Certificate of  Incorporation  (as
defined below), shares of Common Stock (as defined below) (such number of shares
of  Series B Common  Stock,  or  Common  Stock,  as the case may be,  being  the
"Warrant  Securities"),  for a purchase  price of $.01 per share for the Warrant
Securities (such price being the "Exercise Price"), and to receive a certificate
or certificates for the Warrant  Securities so purchased,  upon presentation and
surrender  of this  Warrant at the  location  set forth in Section  3(b)  below,
together with the Exercise Price.

     Section 1.  Definitions.  Capitalized  terms used but not otherwise defined
herein have the meanings given them in the Certificate of  Incorporation  of the
Company,  as in effect on the date hereof (the "Certificate of  Incorporation").
In all other cases, the following capitalized terms have the following meanings:

     "Affiliate"  of a Person means any other Person that directly or indirectly
controls, is controlled by or is under common control with, the Person.

     "Common  Stock"  means the  Series A Common  Stock and the  Series B Common
Stock of the Company.

     "Convertible  Securities" means any stock or securities convertible into or
exchangeable for shares of Common Stock.

     "Credit  Agreement" means the Credit  Agreement,  dated as of the Effective
Date, among the Company,  ARK CLO 2000-1,  Limited and the other lenders parties
thereto.

     "Expiration  Date" means (i) the date which is six months after the Trigger
Date or (ii) if no Revolving Loan is made pursuant to the Credit Agreement prior
to the Revolving  Credit  Commitment  Termination Date (as defined in the Credit
Agreement), then the Revolving Credit Commitment Termination Date.

     "Fair Market Value" means (a) if the Warrant  Securities are then traded on
a national securities exchange or on the over-the-counter market, the average of
the daily Market Prices for the 10 consecutive Trading Days immediately prior to
the date in question,  and (b) if the Warrant  Securities are not so traded, the
price per Warrant Security as agreed between the Holder and the Company.

     "Market  Price" per share of Series B Common  Stock  means on any day,  the
last sales price,  regular way, per share of such security on such day, or if no
such sale takes  place on such day,  the  average of the  closing  bid and asked
prices,  regular  way,  as reported in the  principal  consolidated  transaction
reporting system with respect to securities listed or admitted to trading on the
principal  national  securities  exchange  on which the shares of such stock are
listed or admitted to trading, or, if the shares of such stock are not listed or
admitted to trading on any national securities exchange, the average of the high
bid and low asked  prices in the  over-the-counter  market  as  reported  by the
National Association of Securities Dealers Inc.'s Automated Quotation System.

     "Registration  Rights  Agreement" means the Registration  Rights Agreement,
dated as of August 6, 2002,  by and among the Company,  ARK CLO 2000-1,  Limited
and the other stockholders parties thereto.

     "Revolving Loan" has the meaning stated in the Credit Agreement.

     "Securities Act" means the Securities Act of 1933, as amended.

     "Series A Common  Stock" means the Series A Common  stock,  par value $0.01
per share, of the Company as described in the Certificate of Incorporation.

     "Series B Common  Stock" means the Series B Common  Stock,  par value $0.01
per share, of the Company as described in the Certificate of Incorporation.

     "Stockholders  Agreement"  means the  Stockholders  Agreement,  dated as of
August 6, 2002, by and among the Company,  Massachusetts  Mutual Life  Insurance
Company,  MassMutual  Corporate  Investors,  MassMutual  Participant  Investors,
MassMutual Corporate Value Partners,  ARK CLO 2000-1,  Limited,  Thomas Schwarz,
William Beebe and Christopher Sebes.

     "Trading  Day"  means a day on  which  the  principal  national  securities
exchange  on which the Warrant  Securities  are listed or admitted to trading is
open for the  transaction  of  business  or, if the Warrant  Securities  are not
listed or admitted to trading on any  national  securities  exchange,  a Monday,
Tuesday,  Wednesday,  Thursday or Friday on which  banking  institutions  in the
Borough  of  Manhattan,  City  and  State of New  York,  are not  authorized  or
obligated by law or executive order to close.

     "Trigger  Date"  means the date on which the first  Revolving  Loan is made
pursuant to the Credit Agreement.

     Section  2.  Exercise  Period.  The  exercise  period of the  Warrant  (the
"Exercise  Period")  shall begin on the Trigger Date and expire at 5:00 p.m. New
York City time on the  Expiration  Date.  The Warrant  shall not be  exercisable
before the  beginning  of the  Exercise  Period or after the  expiration  of the
Exercise Period.  Upon the expiration of the Exercise Period,  all rights of the
Holder  hereunder  shall cease and this Warrant  shall be of no further force or
effect.

     Section 3. Exercise of the Warrant.


     (a) General. The Warrant shall be exercisable, in whole, at any time during
the Exercise Period.

     (b) Mechanics.  Subject to compliance with all applicable  securities laws,
in order to exercise the Warrant, the Holder must:

          (i) Original  Warrant  Agreement.  Deliver the original Warrant to the
     Company at the  address for the  Company  set forth on the  signature  page
     hereto,  or such other  address as the Company may provide to the Holder in
     writing;

          (ii) Subscription Notice. Deliver to the Company an executed notice of
     exercise  in  substantially  the form of  Exhibit  A to this  Warrant  (the
     "Subscription Notice"), duly completed and executed by the Holder;

          (iii) Payment of Exercise  Price.  Pay an amount equal to the Exercise
     Price of the Warrant in one or more of the following forms:

               (A) by cash or bank check  made  payable  to the  Company,  in an
          amount equal to the Exercise  Price,  which payment must accompany the
          Subscription  Notice  delivered to the Company in connection  with the
          exercise of the Warrant; or

               (B) by  surrendering  the right to receive upon  exercise of this
          Warrant a number of Warrant  Securities  having a value (as determined
          below)  equal to the  Exercise  Price,  in which  case,  the number of
          Warrant Securities to be issued to the Holder upon such exercise shall
          be calculated using the following formula:

                                            Y * (A - B)
                                            -----------
                           X        =              A

      with    X =    the number of Warrant Securities to be issued to the Holder

              Y =    the number of Warrant Securities with respect to which the
                     Warrant is being exercised

              A =    the Fair Market Value of one Warrant Security on the date
                     of exercise of this Warrant

              B =    the Exercise Price of the Warrant.


     (c) Date of Exercise.  This Warrant shall be deemed to have been  exercised
immediately  prior to the close of  business  on the date of its  surrender  for
exercise as provided in Section 3(b) above,  and the Person  entitled to receive
the Warrant  Securities  issuable  upon such  exercise  shall be treated for all
purposes as the holder of record of such Warrant  Securities  as of the close of
business on such date (such date being, the "Exercise Date").

     (d) Issuance of Warrant Securities;  No Fractional  Securities.  As soon as
practicable  after  the  Company's  receipt  (but in any  event no later  than 2
business days after such receipt) of the Warrant  surrendered in connection with
an exercise  provided  for in Section  3(b) above,  the Company  shall issue and
deliver to the Person entitled to receive the Warrant  Securities  issuable upon
such exercise of the Warrant,  a certificate or  certificates  for the number of
whole Warrant  Securities  issuable upon such  exercise.  No fractional  Warrant
Securities shall be issued upon the exercise of this Warrant,  and any fractions
shall be rounded down to the nearest whole number of Warrant Securities.

     (e) Taxes.  The  issuance of Warrant  Securities  upon the exercise of this
Warrant will be made  without  charge by the Company to the Holder for any issue
tax (other than applicable income tax).


     Section 5.  Representations  and  Warranties  of the  Company.  The Company
hereby  represents and warrants to the Holder as of the date of this Warrant and
as of the date of  exercise  of this  Warrant  that  upon the  exercise  of this
Warrant the Warrant  Securities will be duly authorized,  validly issued,  fully
paid and nonassessable.


     Section 6. Investment Representations.


     6.1 Representations by Holder. The Holder hereof represents and warrants to
the Company with respect to its acquisition and exercise of this Warrant that it
is experienced  in evaluating and investing in technology  companies such as the
Company;  that it is acquiring the Warrant  Securities for investment for his or
its own account and not with a view to, or for resale in  connection  with,  any
distribution  thereof;  and  that it has no  present  intention  of  selling  or
distributing the Warrant or any of the Warrant Securities issuable upon exercise
of  this  Warrant,  except  in  accordance  with  securities  laws.  The  Holder
understands that this Warrant (and the Warrant Securities issuable upon exercise
of this  Warrant)  to be  purchased  by it have not been  registered  under  the
Securities  Act  by  reason  of  a  specific  exemption  from  the  registration
provisions of the Securities Act which,  in the case of the Warrant  Securities,
depends upon, among other things,  the bona fide nature of the investment intent
as expressed herein.  The Holder has had an opportunity to discuss the Company's
business,  management and financial affairs with the Company's management and to
obtain  any  additional  information  necessary  to verify the  accuracy  of the
information  given to him or it. The Holder represents that it is an "accredited
investor"  as defined  in Rule  501(a) of  Regulation  D  promulgated  under the
Securities  Act and that the Holder is able to bear the economic  risk of his or
its investment in the Company contemplated hereby.

     6.2  Sale  or  Transfer  of the  Warrant.  On the  basis  of the  foregoing
representations  set forth in  Subsection  6.1 above,  this Warrant has not been
registered  under the  Securities  Act, and neither this Warrant nor the Warrant
Securities issuable hereunder shall be sold,  pledged,  transferred or otherwise
disposed  of  unless  (a) they  first  shall  have  been  registered  under  the
Securities  Act, (b) the Company first shall have been furnished with an opinion
of legal counsel reasonably satisfactory to the Company or, at its option, legal
counsel  of the  Company  stating  that such  sale or  transfer  is an  exempted
transaction  under the Securities Act and,  unless such opinion states that such
Warrant  or  such  Warrant  Securities  may be  transferred  by  the  transferee
immediately after acquisition  without  registration under the Securities Act, a
written agreement by the transferee thereof not to sell or transfer such Warrant
or such Warrant Securities without complying with the requirements  provided for
in this subsection 6.2, or (c) or the Warrant Securities  issuable hereunder are
transferred to an Affiliate of the Holder in compliance  with the Securities Act
and such  Affiliate  shall make the same  representations  and warranties to the
Company as are set forth in this Section 6.

     6.3 Restrictive  Legend.  Shares of Warrant Securities issued upon exercise
of  this  Warrant  shall  be  stamped  or  otherwise  imprinted  with  a  legend
substantially in the following form (in addition to, or in combination with, any
other legend required under  applicable  state  securities law and agreements or
by-law provisions relating to the transfer of the Company's securities):


     NO TRANSFER, SALE, ASSIGNMENT,  PLEDGE,  HYPOTHECATION OR OTHER DISPOSITION
     OF THE  SHARES  REPRESENTED  BY  THIS  CERTIFICATE  MAY BE MADE  EXCEPT  IN
     COMPLIANCE WITH ALL APPLICABLE  PROVISIONS OF STATE SECURITIES LAWS AND (A)
     PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
     1933, AS AMENDED,  AND THE RULES AND REGULATIONS IN EFFECT  THEREUNDER (THE
     "ACT") OR (B) IF THE COMPANY HAS BEEN FURNISHED WITH A SATISFACTORY OPINION
     OF COUNSEL FOR THE HOLDER  ACCEPTABLE  TO THE COMPANY  THAT SUCH  TRANSFER,
     SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM
     THE PROVISIONS OF SECTION 5 OF THE ACT.


    Section 7.  Covenants of the Company.

     (a) Reservation of Warrant  Securities.  The Company shall reserve and keep
available out of its authorized but unissued  shares of Series B Common Stock or
Common  Stock,  as the case may be,  for  issuance  upon  the  exercise  of this
Warrant,  free from preemptive rights,  such number of shares of Series B Common
Stock,  or Common  Stock,  as the case may be, for which this Warrant shall from
time to time be exercisable.

     (b) No  Impairment.  The  Company  will not,  by  amendment  of its charter
documents, or through reorganization,  consolidation, merger, dissolution, issue
or sale of  securities,  sale or  transfer of assets or any other  voluntary  or
involuntary action,  avoid or seek to avoid the observance or performance of any
of the terms of this Warrant to be observed or  performed  by the  Company,  and
will at all times in good faith  assist in the  carrying out of all of the terms
and  provisions  of this  Warrant and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Holder under this
Warrant.

     (c)  Listing  Requirements.  If and so long as any  Series B  Common  Stock
issuable upon the exercise of this Warrant is listed on any national  securities
exchange, the Company will, if permitted by the rules of such exchange, list and
keep listed on such exchange,  upon official  notice of issuance,  all shares of
Series B Common Stock issuable upon exercise of this Warrant.

     Section 8. Replacement  Warrant.  In case this Warrant is mutilated,  lost,
stolen or  destroyed,  the  Company  shall  issue and  deliver in  exchange  and
substitution for and upon cancellation of the mutilated  Warrant,  or in lieu of
and in substitution for the Warrant lost, stolen or destroyed,  a new Warrant of
like tenor and  representing  an  equivalent  right or  interest,  but only upon
receipt of evidence  reasonably  satisfactory to the Company of such loss, theft
or  destruction  of such  Warrant  and  upon  receipt  of  indemnity  reasonably
satisfactory to the Company.

     Section 9.  Stockholders  Agreement.  Each Warrant Security acquired by the
Holder pursuant to the exercise of this Warrant will be subject to the terms and
provisions of the Stockholders Agreement.

     Section 10. Transferability.

     (a) Restrictions on Transferability. The Holder may sell, assign, transfer,
convey or  otherwise  dispose  (a  "Transfer")  of this  Warrant  and any of the
Warrant   Securities  (or  portion   thereof)  or  any  interest   therein  (the
"Transferred Interest") without the consent of the Company.

     (b)  Conditions to Transfers.  No  Transferred  Interest may be Transferred
unless such  Transfer  satisfies all of the  following  conditions  (unless such
conditions  shall  be  waived  by the  Company  in  its  reasonable  good  faith
discretion):

          (i) the Holder shall have  delivered to the Company this Warrant and a
     properly  completed and executed  assignment  substantially  in the form of
     Exhibit B attached hereto; and

          (ii) such Transfer shall be in compliance with all of the requirements
     of the Securities Act and all other applicable  securities laws, the Holder
     recognizing  that neither the Warrant nor the Warrant  Securities have been
     registered under Federal or state securities laws.

     (c) Transferees  Bound; Other Transfers Void. The Transferee shall be bound
to the same  extent  as the  Holder  in  making a  Transfer  of the  Transferred
Interest.  Any Transfer or attempted Transfer of a Transferred  Interest made in
violation of the  provisions  of this Section 9 shall be null and void ab initio
and of no force or effect.

     Section  11.   Registration   Rights.   All  Warrant   Securities  will  be
"Registrable Securities" under the Registration Rights Agreement.


     Section 12. Miscellaneous.

     (a) Notices. All notices, requests, demands and other communications to any
party or given under this Warrant will be in writing and  delivered  personally,
by overnight  delivery or courier,  by registered  mail or by  telecopier  (with
confirmation  received)  to  the  parties  at the  address  or  telecopy  number
specified  for such  parties  on the  signature  pages  hereto (or at such other
address or telecopy  number as may be specified  by a party in writing  given at
least five  business days prior  thereto).  All notices,  requests,  demands and
other communications will be deemed delivered when actually received.

     (b)  Counterparts.  This Warrant may be executed  simultaneously  in one or
more  counterparts,  and by different  parties hereto in separate  counterparts,
each of which when executed  will be deemed an original,  but all of which taken
together will constitute one and the same instrument.

     (c)  Amendment  of Warrant.  This  Warrant may not be amended,  modified or
waived  except  by an  instrument  in  writing  signed  on behalf of each of the
parties hereto.

     (d)  Successors  and Assigns;  Assignability.  This Warrant will be binding
upon  and  inures  to  the  benefit  of  and is  enforceable  by the  respective
successors and permitted assigns of the parties hereto.

     (e)  Governing  Law.  This Warrant  will be governed  by, and  construed in
accordance  with,  the laws of the state of  Delaware  applicable  to  contracts
executed in and to be performed entirely within that state, without reference to
conflicts of laws provisions.

     (f)  Severability.  If any  term or  other  provision  of this  Warrant  is
invalid,  illegal or incapable  of being  enforced by any rule of law, or public
policy,  all other  conditions and provisions of this Warrant will  nevertheless
remain in full force and effect so long as the  economic or legal  substance  of
the  transactions  contemplated  hereby is not affected in any manner adverse to
any party. Upon such  determination that any term or other provision is invalid,
illegal or incapable of being  enforced,  the parties  hereto will  negotiate in
good faith to modify  this  Warrant so as to effect the  original  intent of the
parties as  closely  as  possible  in an  acceptable  manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.

     (g)  Interpretation.  As used in this  Warrant,  references to the singular
will include the plural and vice versa and  references to the  masculine  gender
will  include the feminine and neuter  genders and vice versa,  as  appropriate.
Unless  otherwise  expressly  provided in this  Warrant (i) the words  "hereof",
"herein" and  "hereunder"  and words of similar import when used in this Warrant
will refer to this  Warrant as a whole and not to any  particular  provision  of
this  Warrant  and (ii)  article,  section,  subsection,  schedule  and  exhibit
references  are  references  with  respect  to  this  Warrant  unless  otherwise
specified. Unless the context otherwise requires, the term "including" will mean
"including,  without  limitation."  The  headings  in  this  Warrant  and in the
Schedules are included for  convenience of reference only and will not affect in
any way the meaning or interpretation of this Warrant.

     (h) Ambiguities.  This Warrant was negotiated between legal counsel for the
parties and any  ambiguity  in this Warrant  shall not be construed  against the
party who drafted this Warrant.

     (i) Submission to  Jurisdiction.  Each of the Company and the Holder hereby
(i) agrees that any  lawsuit,  proceeding  or other legal action with respect to
this  Warrant  may be  brought  in the courts of the State of New York or of the
United States of America for the Southern District of New York, (ii) accepts for
itself  and in respect  of its  property,  generally  and  unconditionally,  the
nonexclusive   jurisdiction  of  such  courts,   (iii)  irrevocably  waives  any
objection,  including,  without limitation, any objection to the laying of venue
or based on the grounds of forum non  conveniens,  which it may now or hereafter
have to the bringing of any lawsuit,  proceeding  or other legal action in those
jurisdictions,  and (d) irrevocably consents to the service of process of any of
the courts  referred to above in any lawsuit,  proceeding or legal action by the
mailing of copies of the  process to the  parties  hereto as provided in Section
10(a).  Service  effected as provided in this manner will become  effective  ten
calendar days after the mailing of the process.

     (j) Waiver of Jury Trial.  Each of the Company and the Holder hereby waives
any  right to a trial by jury in any  lawsuit,  proceedings  or legal  action to
enforce or defend any right  under this  Warrant or any  amendment,  instrument,
document or  agreement  delivered or to be  delivered  in  connection  with this
Agreement and agrees that any such  lawsuit,  proceeding or legal action will be
tried before a court and not before a jury.




     In witness whereof,  the Company and the Holder have caused this Warrant to
be executed as of the date first written above.


Address for Notices:                        PROGRESSIVE SOFTWARE HOLDING, INC.
Progressive Software Holdings, Inc.
6836 Morrison Blvd.
Charlotte, NC  28211
Attention: Chief Executive Officer
Facsimile No.: 704-295-7001                By: /s/ William A. Beebe
                                               ________________________________
                                                 Name:William A. Beebe
                                                 Title:Treasurer
With a copy to:
Hinckley, Allen & Snyder LLP
1500 Fleet Center
Providence, RI  02903
         Attention: Stephen J. Carlotti
         Facsimile No.:  401-277-9600


Address for Notices:                        ARK CLO 2000-1, LIMITED
c/o Patriarch Partners, LLC
40 Well Street
New York, NY  10005
Attention:  Ms. Lynn Tilton
Phone No.: 212-825-0550
Facsimile No.: 212-825-2038                By:  /s/ Lynn Tilton
                                                ________________________________
                                                 Name: Lynn Tilton
                                                 Title:
With a copy to:

         Richard Spears Kiffe &Orbe
         1 Chase Manhattan Plaza
         New York, NY  20005
         Phone No.212-530-1846
         Facsimile No.: 212530-1801
         Attention: Michael Friedman




                                                                       EXHIBIT A
                                                                              to
                                                               WARRANT AGREEMENT

                                Subscription Form
                                -----------------

To:      Progressive Software Holding, Inc.
         [Address]

     (a) The undersigned  hereby elects to purchase 418,836 shares of [Series B]
Common Stock of Progressive Software Holding,  Inc. pursuant to the terms of the
attached Warrant,  and tenders payment of the purchase price for such [Series B]
Common Stock in full.

     (b) In  exercising  this  Warrant,  the  undersigned  hereby  confirms  and
acknowledges that all of the  representations  and warranties of the undersigned
set forth in Section 5 of the Warrant are true and correct as of this date.

     (c) [If applicable] Please issue a certificate or certificates representing
said [Series B] Common Stock in the name or names specified below:

            [insert name, address and number of shares to be issued]


Dated: ____________________                 HOLDER:

                                            [HOLDER]



                                            By:________________________________
                                                    Name:
                                                    Title:



                                                                       EXHIBIT B
                                                                              to
                                                               WARRANT AGREEMENT

                               Form of Assignment
                               ------------------

To:      Progressive Software Holding, Inc.
         [Address]


     FOR VALUE RECEIVED,  the undersigned  Holder of the attached Warrant hereby
sells, assigns and transfers unto each of the Assignee(s) named below all of the
rights of the  undersigned  under such  Warrant,  with  respect to the number of
Warrant Securities set forth below:

                                                             Number of
                                                              Warrant
Name of Assignee                 Address                 Securities Assigned
- ----------------                 -------                ---------------------

- ----------------------           -------------------     ----------------

and does hereby irrevocably  constitute and appoint the Secretary of Progressive
Software Holding,  Inc. (the "Company") as attorney to make such transfer on the
books  of  the  Company  maintained  for  such  purpose,   with  full  power  of
substitution.


Dated: ___________________                 [HOLDER]:





                                            By:________________________________
                                                     Name:
                                                     Title:

EX-10

                                                                   EXHIBIT 10.1

                                CREDIT AGREEMENT

                           dated as of August 6, 2002

                                      among

                     PROGRESSIVE SOFTWARE HOLDING, INC. and
                           PROGRESSIVE SOFTWARE, INC.,
                                  as Borrowers,


                             ARK CLO 2000-1 LIMITED,
                                    as Agent,


                                       and


                            THE LENDERS PARTY HERETO






     CREDIT  AGREEMENT dated as of August 6, 2002,  among  PROGRESSIVE  SOFTWARE
HOLDING,  INC. ("Parent"),  a Delaware  Corporation,  and PROGRESSIVE  SOFTWARE,
INC., a North Carolina Corporation ("Progressive", and together with Parent, the
"Borrowers"),  ARK CLO 2000-1 LIMITED ("ARK"),  as the Agent (the "Agent"),  and
the LENDERS party hereto from time to time.

                                    RECITALS
                                    --------

     A.  Capitalized  terms used in these  Recitals  shall  have the  respective
meanings set forth for such terms in Section 1.1 hereof.

     B. The Lenders have extended certain loans to Tridex Corporation ("Tridex")
and Progressive  under that certain Credit  Agreement dated as of April 17, 1998
among Fleet National Bank, Tridex and Progressive (as amended, the "Prior Credit
Agreement").

     C. Tridex and Progressive  commenced separate  bankruptcy  proceedings (the
"Bankruptcy  Cases") on February 12, 2002 (the "Petition  Date").  In connection
with  the  Bankruptcy   Cases,   Tridex  and  Progressive   filed  the  Plan  of
Reorganization  pursuant to which,  inter alia,  the Lenders  agreed to exchange
their prior loans for $5,300,000 of Term Loans to Borrowers and agreed to extend
to Borrowers  up  to$500,000  aggregate  principal  amount of  Revolving  Credit
Commitment.

     D. The Borrowers have agreed to secure all of their  obligations  hereunder
by granting to the Agent,  for the benefit of Lenders,  a First Priority Lien on
substantially  all of their  assets,  including  a pledge of all of the  Capital
Stock of each of their Subsidiaries.

                                    AGREEMENT
                                    ---------

     In  consideration  of  the  premises  and  the  mutual  covenants  and  the
agreements  herein set forth,  and other good and  valuable  consideration,  the
receipt and  sufficiency of which are hereby  acknowledged,  the parties hereto,
intending to be legally bound, hereby agree as follows:

                                   ARTICLE I

                                  Defined Terms
                                  -------------

     Section 1.1.  Definitions.  As used in this Agreement,  including,  without
limitation, the preamble, recitals, exhibits and schedules hereto, the following
terms have the meanings stated:

     "Action" against a Person means an action, suit,  litigation,  arbitration,
investigation, complaint, contest, hearing, inquiry, inquest, audit, examination
or other proceeding threatened or pending against or affecting the Person or its
property, whether civil, criminal,  administrative,  investigative or appellate,
in law or equity before any arbitrator or Governmental Body.



     "Affiliate"  of a Person  means  any  other  Person  (a) that  directly  or
indirectly  controls,  is  controlled by or is under common  control  with,  the
Person or any of its Subsidiaries,  (b) that directly or indirectly beneficially
owns or  holds 5% or more of any  class  of  equity  Security  or other  similar
interests  of the  Person  or any of its  Subsidiaries  or (c) 5% or more of the
equity Securities of which is directly or indirectly  beneficially owned or held
by the  Person  or any  of  its  Subsidiaries.  The  term  "control"  means  the
possession,  directly  or  indirectly,  of the  power to  direct  or  cause  the
direction  of the  management  and  policies  of a Person,  whether  through the
ownership of voting securities, by contract, agreement or otherwise.


     "Agent" has the meaning stated in the Heading of this Agreement.

     "Agreement" means this Credit Agreement, as it may be amended, supplemented
or otherwise modified from time to time.

     "Assignment Agreement" has the meaning stated in Section 10.4(b).

     "Authorized  Officer"  means,  as applied  to any  Person,  any  individual
holding the position of chairman of the board (if an officer),  chief  executive
officer,  president or one of its vice  presidents (or the equivalent  thereof),
and such Person's chief financial officer or treasurer.

     "Bankruptcy  Cases"  has  the  meaning  stated  in  the  Recitals  of  this
Agreement.

     "Bankruptcy  Code"  means  Title  11 of the  United  States  Code  entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.

     "Borrower" has the meaning stated in the Heading of this Agreement.

     "Borrowing" means the making of a Loan.

     "Borrowing Date" means the date of a Borrowing.

     "Borrowing  Base"  means  an  amount  equal  to  70% of  Eligible  Accounts
Receivable in excess of $400,000.00;  provided,  however, that in no event shall
the Borrowing Base exceed the aggregate amount of Revolving  Credit  Commitments
then in effect.

     "Borrowing Base Certificate" has the meaning stated in Section 3.1(o).

     "Business Day" means any day excluding  Saturday,  Sunday and any day which
is a legal  holiday under the laws of the State of New York or is a day on which
banking  institutions located in such state are authorized or required by law or
other governmental action to close.





     "Capital Lease" means, as applied to any Person,  any lease of any property
(whether  real,  personal or mixed) by that Person as lessee that, in conformity
with GAAP, is or should be accounted for as a capital lease on the balance sheet
of that Person.

     "Capital  Stock"  means any and all shares,  interests,  participations  or
other equivalents  (however  designated) of capital stock of a corporation,  any
and all equivalent  ownership  interests in a Person (other than a corporation),
including,  without limitation,  partnership interests and membership interests,
and any and all warrants, rights or options to purchase or other arrangements or
rights to acquire any of the foregoing.

     "Capitalized  Lease  Obligation"  means  any  Indebtedness   consisting  of
obligations under a Capital Lease.


     "Change of Control" means any one or more of the following events:

     (i)  Any   individual,   corporation   (other  than  any  Borrower  or  any
Subsidiary),  partnership,  trust,  association,  pool, syndicate,  or any other
entity or any group of persons  acting in concert  (other than (x) any  employee
benefit  plan (or any  trust  forming a part  thereof)  of any  Borrower  or any
Subsidiary  or (y) any  person  or  group  of  persons  who  shall  directly  or
indirectly  own  twenty  percent  (20%)  or  more  of  the  Common  Stock  to be
distributed as of the Closing Date in connection  with the  consummation  of the
Plan of Reorganization) becomes the beneficial owner, as that concept is defined
in Rule 13d-3  promulgated by the Securities and Exchange  Commission  under the
Exchange Act of securities of any Borrower  possessing either (X) thirty percent
(30%) or more of the voting power for the election of directors of such Borrower
or (Y)  thirty  percent  (30%)  or  more  in  value  of the  outstanding  equity
securities  (or the  right to  acquire  thirty  (30%)  per cent or more) of such
Borrower;

     (ii)  There  shall  be  consummated  any  consolidation,  merger,  or other
business combination involving any Borrower or the securities of any Borrower in
which (X) holders of voting  securities  of such Borrower  immediately  prior to
such consummation own, as a group,  immediately after such consummation,  voting
securities  of such  Borrower  (or,  if such  Borrower  does  not  survive  such
transaction,  voting  securities of the corporation  surviving such transaction)
having less than fifty percent (50%) of the total voting power in an election of
directors of such Borrower (or such other surviving  corporation) or (Y) holders
of equity securities of any Borrower immediately prior to such consummation own,
as a group,  immediately  after such  consummation,  equity  securities  of such
Borrower  (or,  if such  Borrower  does not  survive  such  transaction,  voting
securities of the corporation surviving such transaction) having less than fifty
percent (50%) of the equity securities of such Borrower (or such other surviving
corporation);




     (iii) During any period of two (2)  consecutive  years,  individuals who at
the beginning of such period  constitute the directors of any Borrower cease for
any reason other than voluntary resignation, death, disability, retirement or as
otherwise  provided in the Credit  Documents to  constitute  at least a majority
thereof unless the election,  or the nomination for election by such  Borrower's
shareholders, of each new director of such Borrower was approved by a vote of at
least  two-thirds  (2/3) of the  directors of such Borrower then still in office
who were directors of such Borrower at the beginning of any such period; or

     (iv)  There  shall be  consummated  any  sale,  lease,  exchange,  or other
transfer  (in one  transaction  or a series of related  transactions)  of assets
representing  all or  substantially  all of the  assets  of any  Borrower  (on a
consolidated  basis)  to a party  which is not  controlled  by or  under  common
control with such Borrower either before or after such  transaction or series of
related transactions.

     "Closing Date" means the date on which the Term Loans are made.

     "Closing Date Certificate" has the meaning stated in Section 3.1(j).

     "Collateral" has the meaning stated in the Security Agreement.

     "Collateral   Documents"  means  the  Security   Agreement  and  all  other
instruments,  documents and agreements delivered by any Credit Party pursuant to
this  Agreement  or any of the other  Credit  Documents in order to grant to the
Agent,  for the  benefit  of  Lenders,  a Lien on any  real,  personal  or mixed
property of that Credit Party as security for the Obligations.

     "Compliance Certificate" has the meaning stated in Section 5.1(d).

     "Confirmation  Order"  means that  certain  order of the  bankruptcy  court
confirming  the  Plan  of  Reorganization  of  Tridex  and  Progressive  in  the
Bankruptcy Cases.

     "Consents" means any approval,  consent,  authorization or order of, notice
to or registration or filing with, or any other action by, any Governmental Body
or other Person.

     "Consolidated  Adjusted EBITDA" means, for any period, an amount determined
for the Borrowers and their  Subsidiaries  on a consolidated  basis equal to (a)
the sum, without duplication, of the amounts for such period of (i) Consolidated
Net Income, (ii) Consolidated Interest Expense, (iii) provisions for taxes based
on income, (iv) total depreciation  expense, (v) total amortization expense, and
(vi) other non-cash items reducing  Consolidated Net Income  (excluding any such
non-cash  item to the extent  that it  represents  an  accrual  or  reserve  for
potential cash items in any future period or amortization of a prepaid cash item
that was paid in a prior  period),  minus (b) other  non-cash  items  increasing
Consolidated Net Income for such period (excluding any such non-cash item to the
extent it represents  the reversal of an accrual or reserve for  potential  cash
item in any prior period).

     "Consolidated Capital Expenditures" means, for any period, the aggregate of
all  expenditures  of  Borrowers  and  their  Subsidiaries  during  such  period
determined on a consolidated  basis that, in accordance with GAAP, are or should
be included in "purchase of property and  equipment" or similar items  reflected
in the  consolidated  statement  of  cash  flows  of  the  Borrowers  and  their
Subsidiaries.



     "Consolidated  Cash Interest  Expense" means, for any period,  Consolidated
Interest Expense for such period, excluding any amount not payable in cash.

     "Consolidated  Current Assets" means, as at any date of determination,  the
total assets of Borrowers and their  Subsidiaries  on a consolidated  basis that
may properly be classified as current assets in conformity with GAAP,  excluding
cash and cash equivalents.

     "Consolidated  Current Liabilities" means, as at any date of determination,
the total liabilities of the Borrowers and their  Subsidiaries on a consolidated
basis that may properly be classified as current  liabilities in conformity with
GAAP, excluding the current portion of long term debt.

     "Consolidated  Excess  Cash  Flow"  means,  for any  period,  an amount (if
positive) equal to (a) Consolidated  Adjusted EBITDA for such period,  minus (b)
the amount of Taxes actually paid by the Borrowers and their Subsidiaries during
such period,  minus (c) the Consolidated  Working Capital Adjustment,  minus (d)
Consolidated  Capital  Expenditures for such period,  minus (e) the sum, without
duplication,  of the  amounts  for such period of (i)  voluntary  and  scheduled
repayments of Consolidated Total Debt (excluding repayments of Revolving Loans),
plus (ii) Consolidated Cash Interest Expense.

     "Consolidated  Fixed  Charges"  means,  for any  period,  the sum,  without
duplication, of the amounts determined for Borrowers and their Subsidiaries on a
consolidated  basis equal to (a)  Consolidated  Cash  Interest  Expense for such
period; (b) Scheduled Principal Payments for such period; and (c) Taxes required
to be paid during such period in respect of income and profits, as determined in
accordance with GAAP.

     "Consolidated  Interest  Expense"  means,  for any period,  total  interest
expense  (including  that portion  attributable  to Capital Leases in accordance
with GAAP and capitalized interest) of the Borrowers and their Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Borrowers and
their  Subsidiaries,  including  all  commissions,  discounts and other fees and
charges owed with respect to letters of credit and bankers acceptance financing.




     "Consolidated  Net Income"  means,  for any period,  (a) the net Income (or
loss) of the Borrowers and their  Subsidiaries on a consolidated  basis for such
period taken as a single  accounting  period determined in conformity with GAAP,
minus (b) (i) the income of any Person (other than a Subsidiary of the Borrower)
in which any other Person  (other than  Borrowers or any of their  Subsidiaries)
has a joint  interest,  except to the extent of the amount of dividends or other
distributions  actually paid to Borrowers or any of their  Subsidiaries  by such
Person during such period, (ii) the income (or loss) of any Person accrued prior
to the date it  becomes  a  Subsidiary  of any  Borrower  or is  merged  into or
consolidated with Borrowers or any of their Subsidiaries or that Person's assets
are acquired by Borrowers or any of their Subsidiaries,  (iii) the income of any
Subsidiary  of any  Borrower  to the extent that the  declaration  or payment of
dividends or similar  distributions  by that Subsidiary of that income is not at
the time  permitted by  operation of the terms of its charter or any  agreement,
instrument,  judgment,  decree, order, statute, rule or governmental  regulation
applicable to that Subsidiary,  (iv) any after-tax gains or losses  attributable
to  returned  surplus  assets of any  Pension  Plan,  and (v) (to the extent not
included in clauses (i) through (iv) above) any net  extraordinary  gains or net
non-cash extraordinary losses.

     "Consolidated  Total  Debt"  means,  as at any date of  determination,  the
aggregate stated balance sheet amount of all Indebtedness of Borrowers and their
Subsidiaries determined on a consolidated basis in accordance with GAAP.

     "Consolidated Working Capital" means, as at any date of determination,  the
excess of Consolidated Current Assets over Consolidated Current Liabilities.

     "Consolidated  Working  Capital  Adjustment"  means,  for any  period  on a
consolidated  basis,  the  amount  (which  may be a  negative  number)  by which
Consolidated  Working  Capital as of the end of such period  exceeds (or is less
than) Consolidated Working Capital as of the beginning of such period.

     "Credit  Document"  means any of this  Agreement,  the Notes,  if any,  the
Collateral Documents and all other documents, instruments or agreements executed
and  delivered  by a Credit  Party  for the  benefit  of Agent or any  Lender in
connection herewith.

     "Credit Party" means each Person (other than the Agent or any Lender or any
representative thereof) from time to time party to a Credit Document.

     "Currency  Agreement"  means any foreign exchange  contract,  currency swap
agreement,  futures  contract,  option contract,  synthetic cap or other similar
agreement  or  arrangement,  each of which is for the  purpose  of  hedging  the
foreign   currency  risk  associated  with  Borrower's  and  its   Subsidiaries'
operations.

     "Default" means a condition or event that, after notice or lapse of time or
both, would constitute an Event of Default.

     "Deposit Account" means a demand,  time, savings,  passbook or like account
with a bank,  savings and loan association,  credit union or like  organization,
other than an account evidenced by a negotiable certificate of deposit.

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

     "Eligible  Accounts  Receivable"  means,  as of any  date of  determination
thereof,  all  Receivables  of the  Borrowers  net of the  Borrowers'  customary
reserves,   discounts,   credits,  returns,  rebates,  allowances  or  set-offs,
excluding the following:

     (i) any Receivable unpaid for 90 or more days from the date of the original
invoice;

     (ii) any Receivable  evidenced by chattel paper or an instrument of any kind
unless such chattel paper or instrument is pledged and delivered to the Agent or
unless the total amount of such  Receivables  at any one time does not exceed 5%
of total Eligible Receivables at such time;

     (iii) any Receivable which is owed by an account debtor which is insolvent or
the subject of any  bankruptcy or insolvency  proceedings  of any kind or of any
other  proceeding or action,  which might have an adverse effect on the business
of such account debtor;

     (iv) all Receivables deemed  uncollectible by any Borrower or turned over to
collection agencies or outside collection attorneys;

     (v) any Receivable which is not a valid, legally enforceable  obligation of
the  account  debtor or is subject to any  present  or  contingent,  or any fact
exists  which is the  basis for any  future,  offset  or  counterclaim  or other
defense on the part of such account debtor;

     (vi) any  Receivable not evidenced by an invoice or other  documentation  in
form reasonably acceptable to the Agent;

     (vii) any  Receivable  which  arises out of any  transaction  between (A) any
Borrower and (B) any Subsidiary or any Affiliate or any other Borrower;

     (viii) any  Receivable  which is  subject  to any  provision  prohibiting  its
assignment or requiring notice not theretofor given or of consent not theretofor
obtained to such assignment;

     (ix) all Receivables  from customers  having their place of business outside
of the United States of America,  except for such  Receivables  backed by either
(A) letters of credit  denominated  in Dollars  issued to any  Borrower by banks
acceptable  to the Agent or (B)  credit  insurance  policies  acceptable  to the
Agent;

     (x) all Receivables  arising out of or in connection with advance billings
of a customer's  requirements of supplies over a period of time, but only to the
extent that such Receivables exceed 10% of all Eligible Receivables;

     (xi)  all  Receivables  that  do not  conform  to the  representations  and
warranties contained in Article IV of the Security Agreement;

     (xii) all  Receivables  in which the Agent  does not have a first  perfected
security  interest,  subject to no other Lien prior to or on a parity  with such
security interest;

     (xiii) all Receivables not denominated in Dollars;

     (xiv)  all  Receivables  from an  account  debtor  if more  than  50% of the
aggregate  Dollar amount of invoices  billed with respect to such account debtor
is more than 90 days past due according to the original terms of payment;

     (xv) if any account  debtor owes  greater  than 20% of the Dollar  value of
total Receivables  collectively  owed to the Borrowers on a consolidated  basis,
then  all  Receivables  owed  by such  account  debtor  in  excess  of such  20%
limitation shall be ineligible;

     (xvi) any Receivables in respect of which the U.S.  Government or any agency
thereof is the account debtor;

     (xvii) any  Receivable  which is owed by an account  debtor who has  disputed
liability  or made any claim  with  respect to any other  account  due from such
account debtor to a Borrower,  except the foregoing exclusion shall not apply to
any account debtor unless and until such disputed amounts equal or exceed twenty
percent (20%) of the  aggregate  Dollar amount of accounts due from such account
debtor; and

     (xviii) any  Receivable  which is determined by the Agent,  in the exercise of
its  reasonable  judgment,  to be  ineligible  for any  other  reason  generally
accepted in the commercial finance business as a reason for ineligibility.

     "Eligible  Assignee"  means (a) any Lender or any  Affiliate of any Lender,
and (b) any commercial  bank,  insurance  company,  investment or mutual fund or
other entity that is an "accredited  investor" (as defined in Regulation D under
the  Securities  Act)  and  which  extends  credit  or buys  loans as one of its
businesses;  provided,  neither any Borrower  nor any  Affiliate of any Borrower
shall be an Eligible Assignee.

     "Employee  Benefit  Plan" means any  "employee  benefit plan" as defined in
Section 3(3) of ERISA which is or was  sponsored,  maintained or  contributed to
by, or required to be contributed by, the Borrower,  any of its  Subsidiaries or
any of their respective ERISA Affiliates.

     "Environmental   Laws"  means  all  federal,   state,   local  and  foreign
Regulations relating to pollution,  human health, safety,  industrial hygiene or
protection of the environment,  including,  without limitation, laws relating to
releases or threatened  releases of Hazardous Materials or otherwise relating to
the manufacture,  processing,  distribution,  use, treatment,  storage, release,
disposal,  cleanup,  transport  or  handling  of  Hazardous  Materials  and  all
Regulations  with  regard  to  record  keeping,  notification,   disclosure  and
reporting  requirements  respecting  Hazardous Materials and all similar federal
and state Regulations.

     "Environmental Liability" has the meaning stated in Section 4.13(a).

     "ERISA"  means the Employee  Retirement  Income  Security  Act of 1974,  as
amended from time to time, and any successor thereto.

     "ERISA  Affiliate"  means,  as applied to any Person,  (a) any  corporation
which is a member of a controlled  group of  corporations  within the meaning of
Section  414(b) of the  Internal  Revenue Code of which that Person is a member,
(b) any trade or business (whether or not  incorporated)  which is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal  Revenue  Code of which that Person is a member,  and (c)
any member of an affiliated  service group within the meaning of Section  414(m)
or (o) of the  Internal  Revenue  Code of which  that  Person,  any  corporation
described  in clause (a) above or any trade or business  described in clause (b)
above is a member.  Any former ERISA  Affiliate of the Borrowers or any of their
Subsidiaries shall continue to be considered an ERISA Affiliate of the Borrowers
or any such Subsidiary within the meaning of this definition with respect to the
period such entity was an ERISA  Affiliate of the  Borrowers or such  Subsidiary
and with  respect  to  liabilities  arising  after  such  period  for  which the
Borrowers or such Subsidiary  could be liable under the Internal Revenue Code or
ERISA.

     "ERISA Event" means (a) a "reportable  event" within the meaning of Section
4043 of ERISA and the regulations  issued thereunder with respect to any Pension
Plan (excluding  those for which the provision for 30-day notice to the PBGC has
been waived by regulation), (b) the failure to meet the minimum funding standard
of Section 412 of the  Internal  Revenue  Code with  respect to any Pension Plan
(whether or not waived in accordance with Section 412(d) of the Internal Revenue
Code)  or the  failure  to make by its due  date a  required  installment  under
Section 412(m) of the Internal  Revenue Code with respect to any Pension Plan or
the failure to make any required  contribution to a Multiemployer  Plan, (c) the
provision  by  the  administrator  of  any  Pension  Plan  pursuant  to  Section
4041(a)(2)  of ERISA of a notice of intent to terminate  such plan in a distress
termination  described  in  Section  4041(c)  of ERISA,  (d) the  withdrawal  by
Borrower,  any of its  Subsidiaries or any of their  respective ERISA Affiliates
from any Pension Plan with two or more contributing  sponsors or the termination
of any such Pension Plan resulting in liability pursuant to Section 4063 or 4064
of ERISA,  (e) the  institution  by the PBGC of  proceedings  to  terminate  any
Pension Plan, or the occurrence of any event or condition which might constitute
grounds under ERISA for the  termination  of, or the appointment of a trustee to
administer,  any Pension Plan, (f) the imposition of liability on Borrower,  any
of its  Subsidiaries or any of their  respective  ERISA  Affiliates  pursuant to
Section  4062(e)  or 4069 of ERISA or by reason of the  application  of  Section
4212(c) of ERISA, (g) the withdrawal of Borrower, any of its Subsidiaries or any
of their respective ERISA Affiliates in a complete or partial withdrawal (within
the meaning of Sections 4203 and 4205 of ERISA) from any  Multiemployer  Plan if
there is any potential  liability therefor,  or the receipt by Borrower,  any of
its  Subsidiaries or any of their respective ERISA Affiliates of notice from any
Multiemployer  Plan  that it is in  reorganization  or  insolvency  pursuant  to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated
under Section 4041A or 4042 of ERISA,  (h) the  occurrence of an act or omission
which could give rise to the imposition on Borrower,  any of its Subsidiaries or
any of their respective ERISA Affiliates of fines,  penalties,  taxes or related
charges  under  Chapter 43 of the Internal  Revenue  Code or under  Section 409,
Section 502(c),  (i) or (1), or Section 4071 of ERISA in respect of any Employee
Benefit Plan,  (i) the assertion of a material  claim (other than routine claims
for benefits) against any Employee Benefit Plan other than a Multiemployer  Plan
or the assets thereof,  or against  Borrower,  any of its Subsidiaries or any of
their  respective ERISA Affiliates in connection with any Employee Benefit Plan,
(j) receipt  from the Internal  Revenue  Service of notice of the failure of any
Pension Plan (or any other Employee  Benefit Plan intended to be qualified under
Section 401(a) of the Internal  Revenue Code) to qualify under Section 401(a) of
the  Internal  Revenue  Code,  or the failure of any trust  forming  part of any
Pension Plan to qualify for exemption  from taxation under Section 501(a) of the
Internal  Revenue  Code,  or (k) the  imposition  of a Lien  pursuant to Section
401(a)(29)  or 412(n) of the  Internal  Revenue  Code or  pursuant to ERISA with
respect to any Pension Plan.

     "Event of  Default"  means  each of the  conditions  or events set forth in
Section 8.1.

     "Exchange Act" means the  Securities  Exchange Act of 1934, as amended from
time to time, and any successor statute.

     "Existing  Indebtedness"  means all Indebtedness of the Borrowers and their
Subsidiaries as of the Closing Date.

     "Final Order" means an order, ruling,  judgment, the operation or effect of
a judgment or other decree issued and entered by the bankruptcy  court or by any
state or other federal court or other court of competent  jurisdiction which has
not been reversed,  vacated, stayed, modified or amended and as to which (i) the
time to appeal or petition  for review,  rehearing,  certiorari,  reargument  or
retrial has expired and as to which no appeal or petition for review, rehearing,
certiorari,  reargument or retrial is pending or (ii) any appeal or petition for
review,  rehearing,  certiorari,  reargument or retrial has been finally decided
and no further appeal or petition for review, rehearing, certiorari,  reargument
or retrial can be taken or granted.

     "Financial  Officer  Certification"  means,  with respect to the  financial
statements for which such  certification is required,  the  certification of the
chief  financial  officer of Borrowers  that such  financial  statements  fairly
present,  in all material  respects,  the  financial  condition of Borrowers and
their Subsidiaries as at the dates indicated and the results of their operations
and their cash flows for the  periods  indicated,  subject to changes  resulting
from audit and normal year-end adjustments.

     "Financial Plan" has the meaning stated in Section 5.1(h).

     "Financial  Statements"  means  the  financial  statements  referred  to in
Sections 4.7(a) and (b).




     "First Priority" means, with respect to any Lien purported to be created in
any Collateral pursuant to any Collateral  Document,  that such Lien is the only
Lien to which such Collateral is subject, other than Permitted Liens.

     "Fiscal Quarter" means a fiscal quarter of any Fiscal Year.

     "Fiscal Year" means the fiscal year of the Borrowers and their Subsidiaries
ending on December 31 of each calendar year.

      "Fixed  Charge  Coverage  Ratio"  means the ratio as of the last day of any
Fiscal Quarter of (a)  Consolidated  Adjusted  EBITDA for the applicable  Fiscal
Quarter period then ending,  to (b)  Consolidated  Fixed Charges for such Fiscal
Quarter period.

     "Funding Notice" has the meaning stated in Section 3.2(a).

     "GAAP" means generally accepted accounting  principles in the United States
as in effect from time to time,  consistently  applied throughout the periods to
which reference is made.

     "Governmental   Body"  means  any  agency,   bureau,   commission,   court,
department,  official, political subdivision,  tribunal or other instrumentality
of any administrative,  judicial, legislative,  executive, regulatory, police or
taxing authority of any government,  whether supranational,  national,  federal,
state, regional, provincial, local, domestic or foreign.

     "Hazardous  Materials"  means  any  hazardous  or toxic  substance,  waste,
contaminant,   pollutant,  gas  or  material,   including,  without  limitation,
radioactive  materials,  oil,  petroleum and petroleum products and constituents
thereof,  which are regulated under any Environmental  Law,  including,  without
limitation,  any  substance,  waste  or  material  which  is  (a)  designated  a
"pollutant",  "hazardous  substance",  "extremely hazardous substance" or "toxic
chemical"  under any  Environmental  Law, or (b)  regulated in any way under the
Regulations  of any  state  where  the  Borrowers  or any of their  Subsidiaries
conducts  their  business or owns any real  property or has any  leasehold or in
which any Relevant Property is located.

     "Hedge Agreement" means an Interest Rate Agreement or a Currency  Agreement
entered into in order to satisfy the requirements of this Agreement or otherwise
in the ordinary course of Borrower's or any of its Subsidiaries' businesses.




     "Indebtedness" of a Person at any date means, without duplication,  the sum
of (a) all obligations of the Person (i) for borrowed  money,  (ii) evidenced by
bonds, debentures, notes or other similar instruments, (iii) to pay the deferred
purchase price of property or services (except any such balance that constitutes
an accrued  expense or trade  payable),  if and to the extent such  indebtedness
would  appear as a liability  upon a balance  sheet of such  Person  prepared in
accordance with GAAP, (iv) as lessee under Capital Leases,  (v) under letters of
credit or  guarantees  issued for the account of the Person,  (vi) arising under
acceptance  facilities,  plus (b) all  Indebtedness of others  guaranteed by the
Person,  plus (c) all  Indebtedness  of others secured by a Lien on any asset of
the Person whether or not such  Indebtedness is assumed by the Person,  plus (d)
the aggregate unfunded vested liabilities under each Pension Plan.


     "Interest  Coverage Ratio" means the ratio as of the last day of any Fiscal
Quarter of (a)  Consolidated  Adjusted EBITDA for the applicable  Fiscal Quarter
period then ended, to (b) Consolidated Cash Interest Expense for such applicable
Fiscal Quarter Period.

     "Interest  Payment  Date"  means  the  first  Business  Day of each  month,
commencing  on the first such date to occur on the first month after the Closing
Date, and the final maturity date of such Loan.

     "Interest Rate Agreement" means any interest rate swap agreement,  interest
rate cap  agreement,  interest  rate collar  agreement,  interest  rate  hedging
agreement or other similar  agreement or  arrangement,  each of which is for the
purpose of hedging the interest rate exposure associated with Borrower's and its
Subsidiaries' operations.

     "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
to the date hereof and from time to time hereafter, and any successor statute.

     "Investment" means (a) any direct or indirect purchase or other acquisition
by Borrowers or any of their  Subsidiaries  of, or of a beneficial  interest in,
any of  the  Securities  of  any  other  Person,  (b)  any  direct  or  indirect
redemption,  retirement,  purchase  or  other  acquisition  for  value,  by  any
Subsidiary of any Borrower from any Person (other than Borrower), of any Capital
Stock of such Person,  and (c) any direct or indirect loan,  advance (other than
advances to employees for moving,  entertainment  and travel  expenses,  drawing
accounts and similar expenditures in the ordinary course of business) or capital
contribution  by  Borrowers  or any of their  Subsidiaries  to any other  Person
(other than Borrower),  including all indebtedness and accounts  receivable from
that other  Person  that are not  current  assets or did not arise from sales to
that  other  Person  in the  ordinary  course  of  business.  The  amount of any
Investment  shall be the original cost of such  Investment  plus the cost of all
additions thereto,  without any adjustments for increases or decreases in value,
or write-ups, write-downs or write-offs with respect to such Investment.

     "IRS Refund" means  refundable  income taxes  associated with the filing of
Tridex's  and its  Subsidiaries'  federal  and state  income tax returns for the
years ended December 31, 2000 and 2001 and the related  carryback of federal net
operating losses.

     "Joint  Venture"  means a  joint  venture,  partnership  or  other  similar
arrangement, whether in corporate, partnership or other legal form; provided, in
no event shall any  corporate  Subsidiary  of any Person be  considered  to be a
Joint Venture to which such Person is a party.

     "Knowledge of the Borrower" means the knowledge,  after reasonable inquiry,
of any of the following persons: William Beebe and Christopher Sebes.



     "Leasehold  Property"  means any leasehold  interest of any Credit Party as
lessee under any lease of real property,  other than any such leasehold interest
designated  from  time to time by  Agent  in its sole  discretion  as not  being
required to be included in the Collateral.

     "Lender" means each  financial  institution  listed on the signature  pages
hereto  as a  Lender,  together  with each  such  institution's  successors  and
permitted assigns.

     "Lien" means (a) any security interest, lien, claim, pledge, mortgage, deed
of trust,  hypothecation,  charge,  deposit arrangement,  preference,  priority,
license,  lease, conveyance of any right, or encumbrance of any kind, including,
without  limitation,  any  conditional  sale agreement or other title  retention
agreement,  any Capital Lease or financing lease having  substantially  the same
economic  effect as the  foregoing  and the filing of or  agreement  to give any
financing  statement under the uniform  commercial code or comparable law of any
jurisdiction  to  evidence  any of  the  foregoing,  and  (b)  in  the  case  of
Securities,  any purchase  option,  call or similar  right of a third party with
respect to such Securities.

     "Loan" means a Term Loan or a Revolving Loan.

     "Margin  Stock" as defined in Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.

     "Material  Adverse Effect" means a material  adverse effect upon any of (a)
the  business,  results,   operations,   assets,  properties,  the  liabilities,
condition  (financial  or  otherwise),  or prospects of the  Borrowers and their
Subsidiaries,  (b) the ability of any Credit  Party to fully and timely  perform
the  Obligations,  (c) the legality,  validity or  enforceability  of any of the
Credit  Documents,  (d) the  rights,  remedies  and  benefits  available  to, or
conferred upon, the Agent and any Lender under any Credit  Document,  or (e) the
Collateral  or the  Agent's  Liens,  on  behalf  of  Agent  and  Lenders  on the
Collateral or the priority of such Liens.

     "Multiemployer   Plan"  means  any   Employee   Benefit  Plan  which  is  a
"multiemployer plan" as defined in Section 3(37) of ERISA.

     "Narrative  Report"  means,  with respect to the financial  statements  for
which such  narrative  report is required,  a narrative  report  describing  the
operations  of  Borrowers  and  their  Subsidiaries  in the  form  prepared  for
presentation to senior management thereof for the applicable,  Fiscal Quarter or
Fiscal Year and for the period from the  beginning  of the then  current  Fiscal
Year to the end of such period to which such financial statements relate.

     "Note" means a Term Note or a Revolving Note.




     "Obligations"  means all  obligations  of every nature of each Credit Party
from  time to time  owed  to the  Agent,  the  Lenders  or any of them or  their
respective Affiliates under any Credit Document or Hedge Agreement,  whether for
principal,  interest (including interest which, but for the filing of a petition
in  bankruptcy  with  respect to such Credit  Party,  would have  accrued on any
Obligation, whether or not a claim is allowed against such Credit Party for such
interest in the related bankruptcy  proceeding),  payments for early termination
of Hedge Agreements, fees, expenses, indemnification or otherwise.

     "Parent" has the meaning stated in the Recitals of this Agreement.

     "PBGC" means the Pension  Benefit  Guaranty  Corporation  or any  successor
thereto.

     "Pension Plan" means any Employee  Benefit Plan, other than a Multiemployer
Plan,  which is subject to Section 412 of the  Internal  Revenue Code or Section
302 of ERISA.

     "Permit" means any permit, license, approval, consent, permission,  notice,
franchise,  confirmation,  endorsement,  waiver,  certification,   registration,
qualification,  clearance  or  other  authorization  issued,  granted,  given or
otherwise made available by or under the authority of any  Governmental  Body or
pursuant to any federal, state, local or foreign Regulation.

     "Permitted  Indebtedness" means (a) the Existing Indebtedness,  (b) the 100
Foley Street Secured Note, as defined in the Plan of  Reorganization  but solely
to the extent the 100 Foley Street Note is actually  issued in  accordance  with
the  terms of the Plan of  Reorganization,  (c)  Indebtedness  secured  by Liens
permitted by Section 6.2, and (d) Purchase  Money  Indebtedness  in an aggregate
amount  not to exceed  the  Maximum  Consolidated  Capital  Expenditure  for the
respective Fiscal Years set forth in Section 6.6(d) herein.

     "Permitted  Liens"  means each of the Liens  permitted  pursuant to Section
6.2.

     "Person"  means  and  includes  natural  persons,   corporations,   limited
partnerships,   general  partnerships,   limited  liability  companies,  limited
liability  partnerships,  joint stock companies,  Joint Ventures,  associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Governmental Bodies.

     "Petition Date" has the meaning stated in the Recitals of this Agreement.

     "Plan of Merger"  means that  certain  Plan of Merger dated as of August 6,
2002 by and between  Tridex and Parent,  providing for the merger of Tridex into
Parent with Parent being the surviving entity.

     "Plan  of  Reorganization"   means  that  certain  First  Amended  Plan  of
Reorganization of Tridex Corporation and Progressive  Software,  Inc. dated June
20, 2002.

     "Prime Rate" means the rate  published  in the Eastern  edition of The Wall
Street Journal as the "prime rate" from time to time.




     "Principal  Office"  means,  for  the  Agent,  its  office  located  at c/o
Patriarch  Partners,  LLC, 40 Wall Street, 25th Floor, New York, New York 10005,
or such other office as the Agent may from time to time  designate in writing to
Borrowers and each Lender.

     "Prior  Credit  Agreement"  has the meaning  stated in the Recitals of this
Agreement.

     "Progressive" has the meaning stated in the Recitals of this Agreement.

     "Pro Rata Share" means (a) with respect to all payments,  computations  and
other matters relating to the Term Loans of any Lender, the percentage  obtained
by dividing  (i) the Term Loan  Exposure of that Lender,  by (ii) the  aggregate
Term  Loan  Exposure  of all  Lenders;  and (b) with  respect  to all  payments,
computations and other matters  relating to the Revolving  Credit  Commitment or
Revolving  Loans of any Lender,  the  percentage  obtained  by dividing  (i) the
Revolving Credit Exposure of that Lender, by (ii) the aggregate Revolving Credit
Exposure of all  Lenders.  For all other  purposes  with respect to each Lender,
"Pro Rata Share" means the  percentage  obtained by dividing (x) an amount equal
to the sum of the Term Loan Exposure and the Revolving  Credit  Exposure of that
Lender,  by (y) an amount equal to the sum of the  aggregate  Term Loan Exposure
and the aggregate Revolving Credit Exposure of all Lenders.

     "Projections" has the meaning stated in Section 4.7(d).

     "Purchase  Money   Indebtedness"   means   Indebtedness   (other  than  the
Obligations)  incurred at the time of, or within 20 days after,  the acquisition
of any  fixed  assets  for  the  purpose  of  financing  all or any  part of the
acquisition cost thereof and Capitalized Lease Obligations.

     "Register" as defined in Section 2.3(b).

     "Regulation" means each applicable law, rule,  regulation,  order, guidance
or recommendation  (or any hange in its interpretation or administration) by any
Governmental  Body,  central  bank  or  comparable  agency  and any  request  or
directive  (whether or not having the force of law) of any of those  Persons and
each judgment,  injunction,  order,  writ,  decree or award of any  Governmental
Body, arbitrator or other Person.

     "Relevant Property" means all sites, facilities,  locations,  real property
and leaseholds (a) presently or formerly owned,  leased, used or operated by the
Borrowers  or any of their  Subsidiaries  (whether  or not such  properties  are
currently  owned,  leased,  used or  operated by the  Borrowers  or any of their
Subsidiaries),  (b) at  which  any  Hazardous  Material  has  been  transported,
disposed,  treated,  stored  or  released  by the  Borrowers  or  any  of  their
Subsidiaries,  or (c) that  are  directly  adjacent  to any  sites,  facilities,
locations, real property or leaseholds presently or formerly owned, leased, used
or operated by the Borrowers or any of their Subsidiaries.




     "Required  Lenders"  means one or more Lenders  having or holding Term Loan
Exposure and/or Revolving Credit Exposure  representing more than 50% of the sum
of (a) the aggregate  Term Loan  Exposure of all Lenders,  and (b) the aggregate
Revolving Credit Exposure of all Lenders.

     "Restricted  Junior Payment" means (a) any dividend or other  distribution,
direct  or  indirect,  on  account  of any  shares  of any class of stock of any
Borrower  now or  hereafter  outstanding,  except a dividend  payable  solely in
shares of that class of stock to the holders of that class,  (b) any redemption,
retirement,  sinking fund or similar payment,  purchase or other acquisition for
value,  direct or indirect,  of any shares of any class of stock of any Borrower
now or hereafter  outstanding,  and (c) any payment made to retire, or to obtain
the surrender of, any outstanding  warrants,  options or other rights to acquire
shares of any class of stock of any Borrower now or hereafter outstanding.

     "Revolving  Credit  Commitment" means the commitment of a Lender to make or
otherwise fund any Revolving Loan. The amount of each Lender's  Revolving Credit
Commitment,  if  any,  is set  forth  on  Exhibit  1.1(a)  or in the  applicable
Assignment  Agreement,  subject to any  adjustment or reduction  pursuant to the
terms  and  conditions  hereof.  The  aggregate  amount  of the  Revolving  Loan
Commitments as of the Closing Date is $500,000.00.

     "Revolving Credit Commitment Period" means the period from the Closing Date
to but excluding the Revolving Credit Commitment Termination Date.

     "Revolving Credit Commitment  Termination Date" means the earliest to occur
of (a) the date  which is 6 months  after  the  Closing  Date,  (b) the date the
Revolving  Credit  Commitments are permanently  reduced to zero pursuant to this
Agreement,  (c) the date on which any Borrower  receives any cash in  connection
with or as a result of the IRS Refund,  and (d) the date of the  termination  of
the Revolving Credit Commitments pursuant to Section 8.1 and 8.2.

     "Revolving  Credit  Exposure"  means,  with respect to any Lender as of any
date of  determination,  (a) prior to the  termination  of the Revolving  Credit
Commitments,  that  Lender's  Revolving  Credit  Commitment,  and (b)  after the
termination  of the Revolving  Credit  Commitments,  the  aggregate  outstanding
principal amount of the Revolving Loans of that Lender.

     "Revolving  Loan"  means a Loan made by a Lender to  Borrowers  pursuant to
Section 2.1(b).

     "Revolving Note" has the meaning stated in Section 2.3(c)(i).

     "Scheduled  Principal Payments" means, for any fiscal period, the aggregate
amount of all principal  required to be paid by the Borrowers during such period
under Section 2.5 herein in respect of the Term Loans.




     "Securities" means any stock, shares,  partnership interests,  voting trust
certificates,  certificates of interest or participation  in any  profit-sharing
agreement or arrangement,  options, warrants, bonds, debentures, notes, or other
evidences of indebtedness,  secured or unsecured,  convertible,  subordinated or
otherwise,  or in general any instruments  commonly known as "securities" or any
certificates  of  interest,  shares or  participations  in  temporary or interim
certificates  for the purchase or acquisition  of, or any right to subscribe to,
purchase or acquire, any of the foregoing.

     "Securities  Act" means the Securities Act of 1933, as amended from time to
time, and any successor statute.

     "Security Agreement" has the meaning stated in Section 3.1(l).

     "Solvent"  means,  with  respect  to any  Person,  that  as of the  date of
determination  both (a)(i) the sum of such Person's debt  (including  contingent
liabilities)  does  not  exceed  the  value  of all of its  property,  at a fair
valuation,  (ii) the present fair saleable  value of the property of such Person
is not  less  than  the  amount  that  will  be  required  to pay  the  probable
liabilities on such Person's then existing,  debts as they become absolute,  and
matured,  (iii) such Person's capital is not  unreasonably  small in relation to
its business or any contemplated or undertaken transaction; and (iv) such Person
does not intend to incur, or believe (nor should it reasonably  believe) that it
will incur,  debts  beyond its ability to pay such debts as they become due, and
(b) such  Person is  "solvent"  within the  meaning  given that term and similar
terms under  applicable laws relating to fraudulent  transfers and  conveyances.
For purposes of this definition,  the amount of any contingent  liability at any
time  shall be  computed  as the amount  that,  in light of all of the facts and
circumstances  existing at such time,  represents the amount that can reasonably
be expected to become an actual or matured  liability  (irrespective  of whether
such  contingent  liabilities  meet the criteria for accrual under  Statement of
Financial Accounting Standard No. 5).

     "Subsidiary"   means,   with  respect  to  any  Person,   any  corporation,
partnership,  limited  liability  company,  association,  joint venture or other
business  entity of which more than 50% of the total  voting  power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any  contingency)  to vote in the  election  of the Person or  Persons  (whether
directors,  managers,  trustees or other Persons  performing  similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or  controlled,  directly  or  indirectly,  by that
Person or one or more of the other  Subsidiaries of that Person or a combination
thereof,  provided,  in determining the percentage of ownership interests of any
Person  controlled by another Person,  no ownership  interest in the nature of a
"qualifying share" of the former Person shall be deemed to be outstanding.




     "Tax" means any  present or future tax,  levy,  impost,  duty,  assessment,
charge,  fee,  deduction or  withholding of any nature and whatever  called,  by
whomsoever, on whomsoever and wherever imposed, levied,  collected,  withheld or
assessed,  provided,  "Tax on the  overall  net  income"  of a  Person  shall be
construed  as a  reference  to a tax imposed by the  jurisdiction  in which that
Person is  organized  or in which  that  Person's  applicable  principal  office
(and/or,  in the case of a Lender,  its  lending  office) is located or in which
that Person (and/or, in the case of a Lender, its lending,  office) is deemed to
be doing  business on all or part of the net income,  profits or gains  (whether
worldwide,  or only insofar as such income,  profits or gains are  considered to
arise in or to relate to a particular jurisdiction, or otherwise) of that Person
(and/or, in the case of a Lender, its applicable lending office).

     "Term  Loan"  means a Term Loan made by a Lender to  Borrowers  pursuant to
Section 2.1(a).

     "Term Loan  Amount"  means the amount of each  Lender's  Term Loan,  as set
forth on Exhibit 1.1(b) or in the applicable  Assignment  Agreement,  subject to
any  adjustment or reduction  pursuant to the terms and conditions  hereof.  The
aggregate   amount  of  the  Term  Loan  Amount  as  of  the  Closing   Date  is
$5,300,000.00.

     "Term Loan Exposure" means,  with respect to any Lender,  as of any date of
determination,  the  outstanding  principal  amount  of the  Term  Loans of such
Lender.

     "Term Loan Maturity Date" means the earlier to occur of (a) August 6, 2007,
and (b) the date  that all Term  Loans  shall  become  due and  payable  in full
hereunder, whether by acceleration or otherwise.

     "Term Note" has the meaning stated in Section 2.3(c)(ii).

     "Total Utilization of Revolving Credit  Commitments"  means, as at any date
of determination,  the aggregate  principal amount of all outstanding  Revolving
Loans.

     "Transfer" means a direct or indirect offer,  transfer,  sale,  assignment,
pledge, hypothecation or other disposition of all or any interest.

     "Tridex" has the meaning stated in the Recitals of this Agreement.

     "UCC"  means the  Uniform  Commercial  Code (or any  similar or  equivalent
legislation) as in effect in any applicable jurisdiction.

                                   ARTICLE II

                                      Loans
                                      -----

     Section 2.1. Loans.

     (a) Term Loans.




          (i) General.  As of the Closing  Date,  each Lender shall be deemed to
     have exchanged its loans under the Prior Credit Agreement for its Term Loan
     Amount. Any amount of Term Loans subsequently  repaid or prepaid may not be
     re-borrowed. Subject to Sections 2.6(a) and 2.7, all amounts owed hereunder
     with respect to the Term Loans shall be paid in full no later than the Term
     Loan Maturity Date.

     (b) Revolving Loans.

          (i)  Revolving  Credit   Commitments.   During  the  Revolving  Credit
     Commitment  Period,  subject to and upon the terms and  conditions  hereof,
     each  Lender,  severally,  and not  jointly and  severally,  agrees to make
     Revolving  Loans  to  Borrowers  in the  aggregate  amount  up to  but  not
     exceeding such Lender's Revolving Credit Commitment;  provided,  that after
     giving  effect to the making of any  Revolving  Loans in no event shall the
     aggregate outstanding amount of Revolving Loans exceed the lower of (A) the
     Borrowing  Base then in effect and (B) the  aggregate  amount of  Revolving
     Credit  Commitments  then in  effect.  Amounts  borrowed  pursuant  to this
     Section 2.1(b) may be repaid and  re-borrowed  during the Revolving  Credit
     Commitment  Period.  Each Lender's Revolving Credit Commitment shall expire
     on the Revolving Credit Commitment Termination Date and all Revolving Loans
     and all other amounts owed  hereunder  with respect to the Revolving  Loans
     and the Revolving  Credit  Commitments  shall be paid in full no later than
     such date.

          (ii) Borrowing Mechanics for Revolving Loans.

               (A) Revolving Loans shall be made in an aggregate  minimum amount
          of $25,000 and integral multiples of $25,000 in excess of that amount.

               (B) Whenever  Borrowers desire that Lenders make Revolving Loans,
          Borrowers  shall deliver to Agent a fully  executed  Funding Notice no
          later than 10:00 a.m.  (New York City time) at least one  Business Day
          in advance of the proposed Borrowing Date.

               (C)  Notice of  receipt  of each  Funding  Notice in  respect  of
          Revolving  Loans,  together  with the amount of each Lender's Pro Rata
          Share thereof,  if any,  together with the  applicable  interest rate,
          shall be provided by Agent to each applicable Lender by facsimile with
          reasonable promptness,  but (provided,  Agent shall have received such
          notice by 10:00  a.m.  (New York City  time)) not later than 2:00 p.m.
          (New York City time) on the same day as Agent's receipt of such Notice
          from Borrowers.

               (D) Each  Lender  shall  make the  amount of its  Revolving  Loan
          available  to Agent no later than  12:00 p.m.  (New York City time) on
          the  applicable  Borrowing  Date by wire transfer of same day funds in
          Dollars,  at the Agent's Principal Office.  Except as provided herein,
          upon  satisfaction  or waiver of the  conditions  precedent  specified
          herein,  Agent  shall  make  the  proceeds  of  such  Revolving  Loans
          available to Borrowers on the applicable  Borrowing Date by causing an
          amount of same day funds in Dollars  equal to the proceeds of all such
          Revolving  Loans  received by Agent from Lenders to be credited to the
          account of Borrowers designated in writing to Agent by Borrowers.



               (E)  Pro  Rata  Shares.  All  Loans  shall  be  made  by  Lenders
          simultaneously  and  proportionately  to  their  respective  Pro  Rata
          Shares,  it being  understood  that no Lender shall be responsible for
          any default by any other Lender in such other  Lender's  obligation to
          make a  Loan  requested  hereunder  nor  shall  the  Revolving  Credit
          Commitment  of any Lender be  increased  or decreased as a result of a
          default by any other Lender in such other Lender's  obligation to make
          a Loan requested hereunder.

     Section 2.2. Use of Proceeds.  The proceeds of the Revolving  Loans made or
issued  after  the  Closing  Date  shall  be used  by the  Borrowers  and  their
Subsidiaries  solely for working capital and general  corporate  purposes of the
Borrowers  and their  Subsidiaries.  No portion of the proceeds of any Borrowing
shall be used by the Borrowers or any of their  Subsidiaries  in any manner that
might  cause such  Borrowing  or the  application  of such  proceeds  to violate
Regulation  T,  Regulation  U or  Regulation  X of the Board of Governors of the
Federal  Reserve  System or any  other  regulation  thereof  or to  violate  the
Exchange  Act, in each case as in effect on the date or dates of such  Borrowing
and such use of proceeds.

     Section 2.3. Evidence of Debt; Register; Lenders' Books and Records; Notes.

     (a) Lenders'  Evidence of Debt.  Each Lender shall maintain on its internal
records an account or accounts  evidencing the Indebtedness of Borrowers to such
Lender,  including  the amounts of the Loans made by it and each  repayment  and
prepayment in respect  thereof.  Any such  recordation  shall be conclusive  and
binding on Borrower,  absent manifest error; provided,  failure to make any such
recordation,  or any error in such  recordation,  shall not affect any  Lender's
Revolving  Credit  Commitments  or  Borrower's  Obligations  in  respect  of any
applicable  Loans;  and  provided,  further,  in the event of any  inconsistency
between the Register and any Lender's records,  the recordations in the Register
shall govern.

     (b) Register.  Agent shall maintain at its Principal  Office a register for
the  recordation of the names and addresses of Lenders and the Revolving  Credit
Commitments  and Loans of each  Lender from time to time (the  "Register").  The
Register  shall be available  for  inspection  by Borrowers or any Lender at any
reasonable time and from time to time upon reasonable prior notice.  Agent shall
record in the Register the Revolving Credit  Commitments and the Loans, and each
repayment or prepayment in respect of the principal amount of the Loans, and any
such  recordation  shall be conclusive and binding on Borrowers and each Lender,
absent manifest error;  provided,  failure to make any such recordation,  or any
error in such  recordation,  shall not  affect  any  Lender's  Revolving  Credit
Commitments or Borrower's Obligations in respect of any Loan.




     (c) Notes.  If so  requested  by any Lender by written  notice to Borrowers
(with a copy to Agent) at least two Business  Days prior to the Closing Date, or
at any time  thereafter,  Borrowers  shall  execute  and  deliver to such Lender
(and/or,  if applicable and if so specified in such notice, to any Person who is
an assignee of such Lender pursuant to Section 10.4) on the Closing Date (or, if
such notice is  delivered  after the Closing  Date,  promptly  after  Borrower's
receipt of such notice) (i) a promissory note, in the form of Exhibit  2.3(c)(i)
(each, a "Revolving  Note"), to evidence such Lender's Revolving Loan, or (ii) a
promissory  note, in the form of Exhibit  2.3(c)(ii)  (each, a "Term Note"),  to
evidence such Lender's Term Loan.

     Section 2.4. Interest on Loans.

     (a) Interest Rates.  Except as otherwise set forth herein,  each Loan shall
bear interest on the unpaid  principal amount thereof from the date made through
repayment (whether by acceleration or otherwise) thereof at the Prime Rate, plus
2%.

     (b) Calculation of Interest  Rates.  Interest  payable  pursuant to Section
2.4(a) shall be computed on the basis of a 365-day or 366-day  year, as the case
may be, for the actual  number of days  elapsed  in the period  during  which it
accrues.  In computing interest on any Loan, the date of the making of such Loan
or the  first  day of an  interest  period  applicable  to such  Loan  shall  be
included,  and the date of  payment  of such Loan or the  expiration  date of an
interest period applicable to such Loan shall be excluded;  provided,  if a Loan
is repaid on the same day on which it is made,  one day's interest shall be paid
on that Loan.

     (c) Payment of Interest.

          (i) Except as  otherwise  set forth in clause (ii) below,  interest on
     each Loan shall be payable in  arrears on (A) each  Interest  Payment  Date
     applicable to that Loan, (B) any prepayment of that Loan, whether voluntary
     or mandatory, to the extent accrued on the amount being prepaid, and (C) at
     maturity, including final maturity.

          (ii)  Notwithstanding  the provisions of clause (i) above,  during the
     period from the Closing  Date  through the date which is 6 months after the
     Closing Date, on each Interest  Payment Date occurring  during such period,
     any interest payable on any Term Loan or Revolving Loan accrued and payable
     in accordance with the provisions of Section 2.4 hereof (each, an "Interest
     Payment") shall be payable either, as elected by the Borrower,  (A) in cash
     or (B) by increasing the outstanding  principal amount of such Term Loan or
     Revolving  Loan,  as the case may be,  by an amount  equal to the  Interest
     Payment due on such Interest  Payment Date. In the event that the Borrowers
     shall   elect  to  make  an   Interest   Payment  as  provided  in  Section
     2.4(c)(ii)(B),  then for all purposes of this Agreement, the amount of such
     Interest  Payment shall be deemed to have been loaned by the Lenders to the
     Borrowers on such  Interest  Payment Date and as of such  Interest  Payment
     Date, the outstanding  principal amount of the Term Loans and the Revolving
     Loan, as the case may be, shall be increased by the amount of such Interest
     Payment for all purposes of this Agreement.




     (d) Default Interest.  Upon the occurrence and during the continuance of an
Event of Default described in Section 8.1(a),  the principal amount of all Loans
and, to the extent  permitted by  applicable  law, any interest  payments on the
Loans or any fees or other  amounts  owed  hereunder  not paid when due, in each
case whether at stated  maturity,  by notice of prepayment,  by  acceleration or
otherwise,  shall thereafter bear interest (including  post-petition interest in
any proceeding  under the Bankruptcy Code or other  applicable  bankruptcy laws)
payable on demand at a rate that is 2% per annum in excess of the interest  rate
otherwise  payable  hereunder with respect to the  applicable  Loans (or, in the
case of any such  fees and  other  amounts,  at a rate  which is 2% per annum in
excess of the interest rate otherwise payable  hereunder on the Loans).  Payment
or acceptance of the  increased  rates of interest  provided for in this Section
2.4 is not a permitted  alternative to timely payment and shall not constitute a
waiver of any Event of Default  or  otherwise  prejudice  or limit any rights or
remedies of Agent or any Lender.

     Section 2.5. Repayment; Scheduled Payments.

     (a)  Repayment.  All of the Term Loans  shall be due and  payable,  and the
Borrowers shall be required to repay all of the Term Loans, plus all accrued and
unpaid  interest on the  principal  amounts of the Term Loans,  on the Term Loan
Maturity  Date.  All of the  Revolving  Loans  shall  be due  and  payable,  the
Revolving Credit Commitments shall be reduced to zero and the Borrowers shall be
required  to repay all of the  Revolving  Loans,  plus all  accrued  and  unpaid
interest on the  principal  amounts of the  Revolving  Loans,  on the  Revolving
Credit Commitment Termination Date.

     (b) Scheduled  Payments.  The principal  amounts of the Term Loans shall be
repaid in the amounts set forth below on each of dates set forth below:


       Date                             Term Loan Installments
       ----                             ----------------------

       August 6, 2003 and          $44,167.00 plus 1/120th of the amount of any
       each month thereafter       Interest Payments that have been added to the
                                   principal amount in accordance with
                                   Section 2.4(c)(ii)(B).

       August 6, 2007              Entire unpaid principal balance and all
                                   accrued interest and fees.

     Notwithstanding  the  foregoing,  such  installments  shall be  reduced  in
connection  with any  optional  or  mandatory  prepayments  of the Term Loans in
accordance with Sections 2.6 and 2.7.

     Section 2.6. Optional Prepayments.




     (a) Optional  Prepayments.  Any time and from time to time (i) with respect
to Term Loans,  the Borrowers may prepay,  without premium or penalty,  any Term
Loans on any Business Day in whole or in part, in an aggregate minimum amount of
$25,000 and integral  multiples  of $25,000 in excess of that  amount,  and (ii)
with  respect to  Revolving  Loans,  Borrowers  may prepay,  without  premium or
penalty,  any  Revolving  Loans  on any  Business  Day in whole or in part in an
aggregate minimum amount of $25,000 and integral  multiples of $25,000 in excess
of that amount.

     (b) Notice of Optional Prepayment.  All such prepayments shall be made upon
not less than one Business  Day's prior  written or telephonic  notice,  in each
case given to Agent by 12:00 p.m. (New York City time) on the date required and,
if given by  telephone,  promptly  confirmed in writing to Agent (and Agent will
promptly transmit such telephonic or original notice for Term Loans or Revolving
Loans,  as the case may be, by facsimile or telephone to each Lender).  Upon the
giving of any such notice,  the principal  amount of the Loans specified in such
notice shall become due and payable on the prepayment date specified therein.

     Section 2.7. Mandatory Prepayments; Mandatory Commitment Reductions.

     (a)  Consolidated  Excess  Cash  Flow.  In the event  that  there  shall be
Consolidated  Excess Cash Flow at any time after the Closing Date, the Borrowers
shall prepay the Term Loans as follows:

          (i) during the period from the Closing Date through December 31, 2002,
     the Borrowers shall pay 25% of the  Consolidated  Excess Cash Flow for such
     period to prepay the outstanding Term Loans,  such amount to be paid on the
     first Interest Payment Date following such period; and

          (ii) during each Fiscal Quarter during the period from January 1, 2003
     through  the date on which the Term Loans  shall have been  repaid in full,
     the Borrowers shall pay 25% of the  Consolidated  Excess Cash Flow for each
     such Fiscal Quarter to prepay the outstanding Term Loans, such amount to be
     paid at the same time as the reports or financial statements required under
     Section  5.1 herein are due or on the date on which the Terms  Loans  shall
     have been repaid in full, as the case may be; and

          (iii)  during each Fiscal Year during the period from  January 1, 2003
     through  the date on which the Term Loans  shall have been  repaid in full,
     the Borrowers shall pay 50% of the  Consolidated  Excess Cash Flow for such
     Fiscal Year to prepay the outstanding Term Loans, such amount to be paid at
     the same time as the reports or financial statements required under Section
     5.1 herein are due or on the date on which the Terms  Loans shall have been
     repaid  in full,  as the  case may be;  provided,  however,  that  payments
     actually made by the  Borrowers  under clause (ii) above during such period
     shall be credited to the required prepayments under this clause (iii).

     (b) IRS  Refund.  In the event that the  Borrowers  shall  receive  the IRS
Refund, the Borrowers shall, within 5 days of receiving such IRS Refund,  prepay
any outstanding  Revolving Loans in the aggregate amount of such IRS Refund, and
the aggregate Revolving Credit Commitment shall be permanently be reduced by the
amount of any such IRS Refund.




     (c) Revolving Loans. Borrowers shall from time to time prepay the Revolving
Loans to the  extent  necessary  so that the  aggregate  outstanding  amount  of
Revolving Loans does not at any time exceed the lesser of (i) the Borrowing Base
then in effect and (ii) the aggregate amount of the Revolving Credit Commitments
then in effect.

     (d) Prepayment  Certificate.  Concurrently with any prepayment of the Loans
and/or reduction of the Revolving Credit Commitments  pursuant to Section 2.7(a)
or (b),  Borrowers shall deliver to Agent a certificate of an Authorized Officer
demonstrating the calculation of the amount of Consolidated  Excess Cash Flow or
the amount of the IRS  Refund,  as the case may be. In the event that  Borrowers
shall subsequently determine that the actual amount received exceeded the amount
set forth in such  certificate,  Borrowers  shall  promptly  make an  additional
prepayment of the Loans in an amount equal to such excess,  and Borrowers  shall
concurrently  therewith deliver to Agent a certificate of an Authorized  Officer
demonstrating the derivation of such excess.

     Section 2.8. Application of Prepayments.

     (a)  Application  of  Optional  Prepayments.  Any  prepayment  of any  Loan
pursuant to Section  2.6(a)  shall be applied as  specified  by Borrowers in the
applicable  notice  of  prepayment;  provided  in the event  Borrowers  fails to
specify the Loans to which any such prepayment shall be applied, such prepayment
shall  prepay  each  scheduled  installment  of  principal  on the Term Loans in
inverse order of due date.

     (b)  Application of Mandatory  Prepayments.  Any amount required to be paid
pursuant to Section 2.7 shall be applied to prepay each scheduled installment of
principal  on the Term  Loans in  inverse  order of due date to the full  extent
thereof,  and then to prepay the Revolving  Loans to the full extent thereof and
to  permanently  reduce the Revolving  Credit  Commitments by the amount of such
prepayment.

     Section 2.9. General Provisions Regarding Payments.

     (a) Payments.  All payments by Borrowers of principal,  interest,  fees and
other Obligations  shall be made in Dollars in same day funds,  without defense,
setoff or counterclaim,  free of any restriction or condition,  and delivered to
Agent not later  than  12:00  p.m.  (New York City  time) on the date due at the
Agent's Principal Office for the account of Lenders. All funds received by Agent
after that time on such due date shall be deemed to have been paid by  Borrowers
on the next succeeding Business Day.




     (b)  Non-Conforming  Payments.  The Agent  shall deem any  payment by or on
behalf of Borrowers  hereunder that is not made in same day funds prior to 12:00
p.m. (New York City time) to be a non-conforming payment. Any such payment shall
not be  deemed to have been  received  by Agent  until the later of (i) the time
such funds become  available  funds,  and (ii) the applicable next Business Day.
Agent shall give  prompt  telephonic  notice to  Borrowers  and each  applicable
Lender   (confirmed   in  writing)  if  any  payment  is   non-conforming.   Any
non-conforming payment may constitute or become a Default or Event of Default in
accordance with the terms of Section  8.1(a).  Interest shall continue to accrue
on any principal as to which a  non-conforming  payment is made until such funds
become  available  funds (but in no event less than the period  from the date of
such  payment  to the  next  succeeding  applicable  Business  Day) at the  rate
determined pursuant to Section 2.4 from the date such amount was due and payable
until the date such amount is paid in full.

     (c) Payments to Include  Accrued  Interest.  All payments in respect of the
principal  amount of any Loan  (whether  Mandatory  or Optional)  shall  include
payment of accrued  interest on the principal  amount being,  repaid or prepaid,
and all such payments (and, in any event, any payments in respect of any Loan on
a date when  interest  is due and  payable  with  respect to such Loan) shall be
applied to the payment of interest before application to principal.

     (d) Distributions by Agent. Agent shall promptly  distribute to each Lender
at such  address  as such  Lender  shall  indicate  in  writing,  such  Lender's
applicable  Pro Rata Share of all payments  and  prepayments  of  principal  and
interest due hereunder,  together with all other amounts due thereto, including,
without  limitation,  all fees  payable  with  respect  thereto,  to the  extent
received by Agent.

     (e)  Business  Days.  Whenever  any payment to be made  hereunder  shall be
stated to be due on a day that is not a Business Day, such payment shall be made
on the next succeeding Business Day and such extension of time shall be included
in the computation of the payment of interest hereunder.

                                   ARTICLE III

                              Conditions Precedent
                              --------------------

     Section 3.1. Closing Date. The obligation of any Lender to make any Loan on
the Closing Date is subject to the  satisfaction,  or waiver in accordance  with
Section 10.1, of the following conditions on or before the Closing Date:

     (a) Secretary's Certificate. The Agent shall have received a certificate of
the secretary or assistant secretary, the manager or the general partner, as the
case may be, of each Credit  Party,  each  substantially  in the form of Exhibit
3.1(a),  with  respect to (i) the  articles  of  incorporation,  certificate  of
formation or  certificate  of limited  partnership,  as the case may be, of such
Credit  Party,  (ii) the  bylaws,  operating  agreement  or limited  partnership
agreement,  as the case may be, of such Credit Party,  (iii) the  resolutions of
the board of directors,  manager or general partner, as the case may be, of such
Credit  Party  approving  each Credit  Document to which such Credit  Party is a
party and the other  documents  to be  delivered  by such Credit Party under the
Credit  Documents and the  performance  of the  obligations of such Credit Party
thereunder,  and (iv) the  names and true  signatures  of the  officers  of such
Credit Party or such other persons  authorized  to sign each Credit  Document to
which such Credit Party is a party and the other documents to be delivered by it
under the Credit Documents.




     (b) Organizational and Capital Structure.  The organizational structure and
the capital structure of the Borrowers and their  Subsidiaries,  shall be as set
forth on Schedule 4.5.

     (c) Good  Standing  Certificates.  The Agent  shall  have  received  a good
standing  certificate  from  the  applicable  Governmental  Body of each  Credit
Party's  jurisdiction  of  incorporation,  organization or formation and in each
jurisdiction  in which it is qualified as a foreign  corporation or other entity
to do business, each dated a recent date prior to the Closing Date.

     (d) Plan of  Reorganization.  The Plan of  Reorganization  for  Tridex  and
Progressive shall have been confirmed by the Bankruptcy Court and the Bankruptcy
Court shall have entered the Confirmation  Order which Order shall have become a
Final Order.

     (e)  Consents.  The Agent shall have  received  copies of all  Consents set
forth on Schedule  4.4, and each such Consent  shall be in full force and effect
and in form and substance reasonably satisfactory to Agent.

     (f) Financial  Statements;  Projections.  The Agent shall have received (i)
the Financial Statements, and (ii) the Projections.

     (g) Plan of Merger. The merger of Tridex with and into Parent in accordance
with the Plan of Merger shall have become effective.

     (h) Evidence of Insurance.  Agent shall have  received a  certificate  from
Borrower's  insurance  broker  or  other  evidence  satisfactory  to it that all
insurance required to be maintained pursuant to Section 5.9 is in full force and
effect and that Agent,  for the benefit of Lenders has been named as  additional
insured and loss payee thereunder to the extent required under Section 5.9.

     (i) Opinions of Counsel.  The Agent and the Lenders  shall have received an
originally executed copy of the written opinion of Hinckley, Allen & Snyder LLP,
counsel for Credit Parties, in the form of Exhibit 3.1(i), and otherwise in form
and substance reasonably satisfactory to Agent.

     (j)  Closing  Date  Certificate.  Agent shall have  received an  originally
executed Closing Date  Certificate,  in the form of Exhibit 3.1(j) (the "Closing
Date Certificate"), from the Borrower, together with all attachments thereto.

     (k) UCC  Financing  Statements.  Agent shall have  received  UCC  Financing
Statements,  duly executed by each  applicable  Credit Party with respect to all
personal and mixed property  Collateral of such Credit Party,  for filing in all
jurisdictions  as may be necessary  or, in the opinion of Agent,  desirable,  to
perfect  the  security  interests  created in such  Collateral  pursuant  to the
Collateral Documents.




     (l)  Security  Agreement.  The  Agent  shall  have  received  the  Security
Agreement,  in the form of  Exhibit  3.1(l)  (the  "Security  Agreement"),  duly
executed and delivered by the Borrowers.

     (m)  Security  Collateral.  The Agent  shall  have  received  certificates,
instruments and promissory notes (which certificates, instruments and promissory
notes  shall be  accompanied  by  instruments  of transfer  or  assignment  duly
endorsed in blank and  otherwise in form and  substance  satisfactory  to Agent)
representing  or  evidencing  all Security  Collateral  pledged  pursuant to the
Security Agreement.

     (n) Other  Actions  to Perfect  Security  Interests.  The Agent  shall have
received  evidence that each Credit Party shall have taken or caused to be taken
any other action,  executed and delivered or caused to be executed and delivered
any other agreement,  document and instrument, and made or caused to be made any
other filing and recording (other than as set forth herein) reasonably  required
by Agent.

     (o) Borrowing Base  Certificate.  If the Borrowers  desire that the Lenders
make  Revolving  Loans on the Closing  Date,  the Agent  shall have  received an
initial Borrowing Base Certificate,  in the form of Exhibit 3.1(o) (a "Borrowing
Base Certificate") satisfactory to the Agent.

     (p) Other Information. The Agent shall have received any other financial or
non-financial  information regarding the Borrowers and their Subsidiaries as the
Agent or any Lender may reasonably request.

     (q)  Proceedings.  All proceedings  taken or to be taken in connection with
the  transactions  contemplated  by this Agreement  shall be satisfactory to the
Agent and its counsel.

     Section 3.2. Conditions to Each Borrowing. The obligation of each Lender to
make any Loan on any Borrowing Date,  including the Closing Date, are subject to
the  satisfaction,  or waiver in accordance  with Section 10.1, of the following
conditions precedent:

     (a) Funding  Notice.  The Agent shall have  received a fully  executed  and
delivered  Funding  Notice,  in the form of  Exhibit  3.2(a)  (each,  a "Funding
Notice"), as provided in Section 2.1.

     (b)  Representations  and  Warranties.  As  of  such  Borrowing  Date,  the
representations, warranties and covenants of the Credit Parties contained in the
Credit  Documents  shall be true,  correct and  complied  with on and as of that
Borrowing Date.

     (c) No Default or Event of Default.  As of such  Borrowing  Date,  no event
shall have occurred and be continuing or would result from the  consummation  of
the applicable Borrowing that would constitute an Event of Default or a Default.




     (d)  Consents.  The Agent  shall  have  received  such  Consents  and other
information,  approvals, opinions or documents reasonably requested by the Agent
in connection with such Borrowing;

     (e)  Available  Commitment.  After  making  the  Loans  requested  on  such
Borrowing Date, the Total Utilization of Revolving Credit  Commitments shall not
exceed the aggregate amount of Revolving Credit Commitments then in effect;

     (f) Use of Proceeds.  The Borrowers  shall have confirmed that the proceeds
of such  Borrowing  shall be used  only in  accordance  with the  provisions  of
Section 2.2;

     (g) No Material  Adverse  Effect.  No Material  Adverse  Effect  shall have
occurred; and

     (h)  Borrowing  Base  Certificate.  The Agent shall have received a current
Borrowing Base Certificate.

                                   ARTICLE IV

                         Representations and Warranties
                         ------------------------------

     In order to induce the  Lenders to enter  into this  Agreement  and to make
each  Borrowing to be made  thereby,  each Credit Party  hereby  represents  and
warrants to each  Lender,  on the  Closing  Date and on each  Borrowing  Date as
follows.

     Section  4.1.  Existence  and Power.  Each of the Credit  Parties  (a) is a
corporation,  limited liability company or limited partnership,  as the case may
be, duly organized,  validly existing and in good standing under the laws of the
jurisdiction of its  organization,  (b) is duly qualified under the laws of each
jurisdiction  in which  qualification  is required to own,  lease or license its
assets and  properties  and to carry on its business,  and (c) has all necessary
corporate,  limited liability company or partnership,  as the case may be, power
and authority  required to own, lease or license its assets and  properties,  to
carry on its business  and to execute and deliver  each of the Credit  Documents
and to consummate the transactions  contemplated thereby,  except in the case of
clauses  (b)  and  (c)  where  the  failure  to  have  such   status,   license,
qualification  or authority  could not reasonably be expected to have a Material
Adverse Effect.




     Section 4.2.  Authorization;  Binding Effect. The execution and delivery by
the Credit Parties of each of the Credit  Documents to which such Credit Parties
are a party,  the performance by the Credit Parties of their  obligations  under
such Credit  Documents and the  consummation  of the  transactions  contemplated
thereby has been duly authorized by all necessary  corporate,  limited liability
company  or  partnership,  as the case may be,  action on the part of the Credit
Parties.  No other  proceedings on the part of any Credit Party are necessary to
approve and adopt the Credit  Documents  or to approve the  consummation  of the
transactions  contemplated  thereby.  Each of the Credit  Documents is, or, when
executed and delivered in accordance  with this Agreement will be, legal,  valid
and binding  obligations  of the Credit Parties  enforceable  against the Credit
Parties in accordance  with its terms,  except that such  enforcement (a) may be
limited  by  bankruptcy,   insolvency,  moratorium  or  similar  laws  affecting
creditors'  rights generally and (b) is subject to the availability of equitable
remedies,  as  determined  in the  discretion  of the court  before which such a
proceeding may be brought.

     Section 4.3. Contravention. Neither the execution, delivery and performance
of the  Credit  Documents  by the Credit  Parties  nor the  consummation  of the
transactions  contemplated thereby will (with or without notice or lapse of time
or both) (a)  conflict  with,  violate  or breach  any  provision  of any Credit
Party's  certificate  of  incorporation  or bylaws,  certificate of formation or
operating  agreement  or  certificate  of  limited  partnership  or  partnership
agreement,  as the case  may be,  (b)  conflict  with,  violate  or  breach  any
Regulation by which the Credit  Parties or any of their assets or properties may
be bound or affected,  (c) conflict  with,  breach or result in a default under,
result  in the  acceleration  of,  or  give  rise  to a  right  of  termination,
cancellation,  modification  or  acceleration  or require any notice under,  any
material  contract or agreement to which any Credit Party or any of their assets
or properties may be bound or affected, (d) result in or require the creation or
imposition of any Lien on any of the Credit  Parties'  assets or properties,  or
(e) result in a Material Adverse Effect.

     Section 4.4. Consents. As of (a) the date of this Agreement, except for the
Consents set forth on Schedule 4.4, and (b) the Closing Date,  all Consents have
been  obtained  which are required or advisable in  connection  with (i) the due
execution  and delivery by the Credit  Parties of the Credit  Documents  and the
performance  of  the  Credit  Parties'  obligations   thereunder  and  (ii)  the
consummation of the transactions contemplated by the Credit Documents.




     Section 4.5.  Capitalization  of the  Borrowers.  Immediately  prior to the
consummation  of the Plan of Merger,  which shall take place on the Closing Date
and is a condition  precedent  set forth in Section  3.1(g)  herein,  Tridex had
total authorized  capital stock consisting of 10,000,000 shares of common stock,
no par  value,  of which  5,654,289  shares  were  issued and  outstanding,  and
2,000,000 shares of preferred stock,  $1.00 par value, of which none were issued
and  outstanding.  All of the issued and  outstanding  shares of common stock of
Tridex   were  duly   authorized,   validly   issued  and  are  fully  paid  and
nonassessable.  The authorized Capital Stock of Parent consists of (i) 5,000,000
shares of common  stock,  of which  4,200,000 are  designated  Series A of which
approximately  3,769,530  shares are issued and  outstanding,  and (ii)  800,000
shares are  designated as Series B, of which  approximately  376,953  shares are
issued and outstanding,  and (iii) 1,000,000 shares of preferred stock, of which
none are issued and  outstanding.  All of the issued and  outstanding  shares of
common stock and preferred stock have been duly  authorized,  validly issued and
are fully paid and  nonassessable.  Except for such  shares of common  stock and
preferred  stock,  there are no shares of Capital Stock of the Parent issued and
outstanding. The authorized Capital Stock of Progressive consists of (i) 100,000
shares of common stock, of which 10,000 shares are issued and  outstanding.  All
of the issued and outstanding  shares of common stock have been duly authorized,
validly issued and are fully paid and  nonassessable.  Except for such shares of
common  stock and  preferred  stock,  there are no  shares of  Capital  Stock of
Progressive issued and outstanding.

     Section 4.6. Subsidiaries and Other Securities.

     (a) Subsidiaries.  Schedule 4.6(a) sets forth a true,  correct and complete
list of each  Subsidiary of the Borrower,  showing (i) the  jurisdiction  of its
organization and jurisdictions in which it is qualified to do business, (ii) the
number of shares of Capital  Stock of each class (A)  authorized  and (B) issued
and outstanding, (iii) the percentage of the outstanding shares of Capital Stock
of each Subsidiary owned directly or indirectly by the Borrower,  (iv) the names
of the record  holders of each class of  outstanding  shares of Capital Stock of
the Subsidiaries and the number of such shares held by each such holder, (v) the
number of shares of Capital Stock of each Subsidiary  covered by all outstanding
options,  warrants,  rights of conversion or purchase,  and similar rights, (vi)
the percentage of those options, warrants or rights owned directly or indirectly
by the  Borrower,  and (vii) the names of the record  holders  of such  options,
warrants and rights and the number of such options,  warrants and rights held by
each such holder.

     (b) Subsidiary  Capital Stock.  All outstanding  shares of Capital Stock of
each  Subsidiary  are  duly   authorized,   validly   issued,   fully  paid  and
nonassessable  and are free of any preemptive rights and, except as set forth on
Schedule 4.6(a), are owned,  directly or indirectly,  beneficially and of record
by the  Borrower(s)  free and clear of all Liens and any  options,  warrants and
other  rights,  other than the  Permitted  Liens created by and under the Credit
Documents.

     (c)  Securities.  Schedule  4.6(c) sets forth a true,  correct and complete
list and  description  of all  Securities in which the Borrowers or any of their
Subsidiaries has an interest.  Each of the Securities  listed on Schedule 4.6(c)
that is an equity Security is duly  authorized,  validly issued,  fully paid and
non-assessable.  Each of the Securities listed on Schedule 4.6(c) that is a debt
Security is duly authorized and validly issued and constitutes the legal,  valid
and binding obligation of the issuer thereof and each guarantor thereof.  All of
the Securities listed on Schedule 4.6(c) are owned,  beneficially and of record,
by the Borrower(s) or one of its Subsidiaries.




     (d) No Assets.  Allu Realty Trust, a  Massachusetts  business  trust,  is a
wholly owned subsidiary of the Parent and is a non-operating  entity that has no
assets  other than any interest it may have in and to the  adversary  proceeding
commenced  under the  Parent's  Bankruptcy  Case  encaptioned  "Ark CLO  2000-1,
Limited v. 100 Foley  Street,  Inc.  and Tridex  Corporation",  Adv.  Proc.  No.
02-5031( AHWS),  currently pending in the United States Bankruptcy Court for the
District of Connecticut,  Bridgeport  Division.  RIL Corporation,  a Connecticut
corporation,  is a wholly owned  subsidiary of the Parent and is a non-operating
entity  that has no assets  other than (a) that  certain  Promissory  Note dated
January  21,  2000,  executed  by  Samuel T.  Jenkins,  an  individual,  and STJ
Holdings,  LLC, a Connecticut limited liability company, and made payable to the
order of RIL Corporation in the stated  principal amount of One Hundred Thirteen
Thousand and 00/100 Dollars  ($113,000.00) and (b) a mortgage from STJ Holdings,
LLC to RIL  Corporation  dated January 21, 2000 and recorded in Volume 853, Page
195 of the Bloomfield Land Records.

     Section 4.7. Financial Information.

     (a) [Reserved]

     (b) Other  Financial  Statements.  The  statements of  operations,  for the
period from the Petition Date through June 30, 2002, of Tridex and  Progressive,
copies of which are  attached  hereto  as  Schedule  4.7(b),  were  prepared  in
accordance  with the  requirements of the Bankruptcy Code and fairly present the
results of operations, of Tridex and Progressive for such period.

     (c) Accounts  Receivable.  Schedule  4.7(c) sets forth a true,  correct and
complete  accounts  receivable  of  Tridex  and  Progressive  as of  the  Friday
immediately preceding the Closing Date.

     (d)  Projections.  The projections of the Borrowers and their  Subsidiaries
for the  current (as of the Closing  Date)  Fiscal Year  through the 2005 Fiscal
Year (the "Projections"),  a copy of which is attached hereto as Exhibit 4.7(d),
were  prepared  based  on  good  faith  estimates  and  assumptions  made by the
management of the Borrower;  provided,  the  Projections are not to be viewed as
facts and that  actual  results  during  the  period or  periods  covered by the
Projections  may differ from such  Projections  and that the  differences may be
material;  provided further,  as of the Closing Date, the Borrowers believe that
the Projections are reasonable and attainable.

     Section  4.8.  Taxes.  Except as set  forth in  Schedule  4.8,  each of the
Borrowers  and their  Subsidiaries  has timely  filed all Tax  returns  that are
required  to be filed by them and have  timely  paid all  Taxes due and owing by
them.  All such Tax returns were  correct and complete in all material  respects
when filed. The charges, accruals and reserves on the books of the Borrowers and
each of their  Subsidiaries  in respect of Taxes are  accurate  and adequate and
were  calculated  in the  ordinary  course  of  business  consistent  with  past
practice.

     Section 4.9.  Litigation.  Except as set forth on Schedule 4.9, there is no
Action (a)  against  the  Borrowers  or any of their  Subsidiaries,  or (b) that
questions  the  validity  of any of the Credit  Documents  or that  involves  or
relates to any of the transactions contemplated thereby, or (c) affecting any of
the Credit  Parties' assets or properties.  Except as specifically  indicated on
Schedule  4.9,  none of the matters  disclosed  on Schedule 4.9 has had or could
reasonably be expected to have a Material Adverse Effect.




     Section  4.10.  Permits;  Compliance  With Laws.  The Borrowers and each of
their  Subsidiaries,  as the case may be,  own,  hold or  possess  all  material
Permits  necessary or advisable to entitle them to own,  lease,  operate and use
their  properties  and assets and to carry on and conduct their business at full
capacity,  and all such  Permits are validly  held and in full force and effect,
except for those  Permits,  the failure of which to have could not reasonably be
expected to have a Material Adverse Effect. The Borrowers and their Subsidiaries
are in  compliance  in all material  respects  with each  Regulation  and Permit
applicable to the Borrower,  its Subsidiaries,  their operations or their assets
or properties.

     Section 4.11. Absence of Certain Changes or Events.  Except as contemplated
by the Plan of  Reorganization,  since the date of the  Confirmation  Order, (a)
there has not occurred a Material  Adverse  Effect or any event or  circumstance
which could reasonably be expected to have, a Material  Adverse Effect,  (b) the
Borrowers and each of their Subsidiaries have conducted its business only in the
ordinary course consistent with past practice,  and (c) none of the Borrowers or
any of their  Subsidiaries  has (i)  Transferred  any  material  portion  of its
properties  or assets or permitted  any of their  properties or assets to become
subject to any Liens or suffered to exist any Lien on any of their properties or
assets, or (ii) directly or indirectly declared,  ordered,  paid or made, or set
apart any sum or property for, any Restricted  Junior Payment or agreed to do so
except as expressly permitted pursuant to Section 6.4.

     Section 4.12. Assets.

     (a) The Assets.  Each of the Borrowers or one of its  Subsidiaries (i) owns
or  leases,  (ii) has the legal  and  valid  right to use and (iii) has good and
marketable title to or leasehold interest in, free and clear of all Liens (other
than Liens  disclosed  in the  financial  statements  or as may be  permitted or
created under the Credit Agreement),  all of the properties and assets, tangible
or intangible,  including,  without limitation,  all real property,  leaseholds,
equipment,  fixtures,  inventory,  contract  rights,  intellectual  property and
personal  property (x) used in or necessary for the conduct of their businesses,
and (y) reflected in the financial  statements referred to in Section 4.7 (other
than any  properties  or assets  disposed of in the ordinary  course of business
consistent with the past practices of Borrowers and their Subsidiaries).

     (b) Real  Property  and  Leaseholds.  Schedule  4.12(b)  sets forth a true,
correct and complete  list and location of all real  property and  leaseholds in
which the Borrowers or any of their Subsidiaries has an interest.  Except as set
forth on Schedule  4.12(b),  none of such real property is subject to any lease,
sublease or other similar arrangement.

     Section 4.13. Environmental Matters.

     (a) No  Environmental  Liability.  Except as set forth on Schedule 4.13, to
the best  knowledge  of the  Borrowers,  none of the  Borrowers  or any of their
Subsidiaries has any actual,  alleged or contingent  liability or obligation (A)
relating to the  violation,  or alleged  violation of any  Environmental  Law or
Permit, (B) with respect to, or relating to, the generation, presence, disposal,
release,  threatened  release,  handling,  transportation,  treatment,  storage,
cleanup  or  contamination  of or by any  Hazardous  Material  at  any  Relevant
Property,  or (C) with  respect to, or relating  to, the cleanup of any Relevant
Property (any such  liability or obligation  referred to in clauses (A), (B) and
(C) being an "Environmental Liability").




     (b) Basis for Environmental  Claims.  None of the Borrowers or any of their
Subsidiaries has been identified or listed as a potentially responsible party or
a  responsible  party under the federal  Comprehensive  Environmental  Response,
Compensation and Liability Act or any other  Environmental  Law, nor have any of
the Borrowers or any of their Subsidiaries received any information request from
a  Governmental  Body  under any  Environmental  Law.  There are no  underground
storage  tanks,  storing  or  previously  storing  Hazardous  Materials  at  any
property, site or facility currently or, to the best knowledge of the Borrowers,
previously  owned,  leased  or  operated  by  the  Borrowers  or  any  of  their
Subsidiaries.  To the best knowledge of the Borrowers,  there are no conditions,
occurrences or activities  which could  reasonably be expected to form the basis
of an Environmental Liability against the Borrowers or any of their Subsidiaries
that,  individually or in the aggregate,  could reasonably be expected to have a
Material Adverse Effect.

     Section 4.14. Material  Contracts.  Except for defaults arising as a result
of the filing or commencement of the Bankruptcy  Cases, none of the Borrowers or
any of their  Subsidiaries  is in  default  in the  performance,  observance  or
fulfillment of any of the obligations,  covenants or conditions contained in any
of the material  contracts and agreements to which the Borrowers or any of their
Subsidiaries is a party or by which they or any of their  properties,  assets or
rights  are or may be  bound  or  subject  (the  "Material  Contracts"),  and no
condition exists which,  with the giving of notice or the lapse of time or both,
could  constitute  such a  default,  except  where the  consequences,  direct or
indirect,  of such default or defaults, if any, could not reasonably be expected
to have a Material Adverse Effect.

     Section 4.15. Indebtedness and Liens.

     (a)  Schedule of  Indebtedness.  Schedule  4.15(a) sets forth a correct and
complete list of (i) all Indebtedness in respect of which any Credit Party is in
any manner directly or  contingently  obligated,  (ii) the maximum  principal or
face amounts of the Indebtedness  outstanding or which may be outstanding  under
each of those agreements and other arrangements,  and (iii) the maturity date of
such Indebtedness.

     (b) Lien Schedule.  Schedule 4.15(b) sets forth a correct and complete list
of all Liens on assets or property owned, leased, licensed or used by any of the
Credit  Parties.  The Borrowers  have delivered to Lender a correct and complete
copy of each instrument,  agreement, judgment or other evidence giving rise to a
Lien.

     Section 4.16. Insurance.  The Borrowers,  their Subsidiaries,  all of their
assets and  properties  and their  businesses are covered by valid and currently
effective  insurance  policies  or  binders  of  insurance,  including,  without
limitation,   general  liability   insurance,   property   insurance,   workers'
compensation insurance and business interruption  insurance,  issued in favor of
the Borrowers or one of their Subsidiaries, in each case, with financially sound
and  reputable  insurance  companies  and in such types and amounts and covering
such risks as are consistent with customary practices and standards of companies
engaged  in  business  and  operations  substantially  similar  to  those of the
Borrowers and their Subsidiaries. Section 1.1.


     Section  4.17.  Governmental  Regulation.  None of the  Borrowers or any of
their  Subsidiaries  is subject to regulation  under the Public Utility  Holding
Company Act of 1935, the Federal Power Act or the Investment Company Act of 1940
or under any other federal or state  statute or  regulation  which may limit its
ability to incur  Indebtedness or which may otherwise  render all or any portion
of the  Obligations  unenforceable.  None  of  the  Borrowers  or  any of  their
Subsidiaries is a "registered  mezzanine  company" or company  "controlled" by a
"registered  investment  company" or a "principal  underwriter" of a "registered
investment  company" as such terms are defined in the Investment  Company Act of
1940.

     Section  4.18.  Margin  Stock.  None  of the  Borrowers  or  any  of  their
Subsidiaries is engaged principally,  or as one of its important activities,  in
the business of extending  credit for the purpose of  purchasing or carrying any
Margin Stock.

     Section  4.19.  Employee  Matters.  None of the  Borrowers  or any of their
Subsidiaries  is engaged in any unfair labor  practice that could  reasonably be
expected  to have a  Material  Adverse  Effect.  There  is (a) no  unfair  labor
practice  complaint pending against the Borrowers or any of their  Subsidiaries,
or to the Knowledge of the Borrower,  threatened  against any of them before the
National  Labor  Relations  Board and no  grievance  or  arbitration  proceeding
arising out of or under any collective  bargaining  agreement that is so pending
against the  Borrowers or any of their  Subsidiaries  or to the Knowledge of the
Borrower,  threatened  against  any of them,  (b) no strike or work  stoppage in
existence or threatened  involving  the  Borrowers or any of their  Subsidiaries
that could reasonably be expected to have a Material Adverse Effect,  and (c) to
the Knowledge of the Borrower,  no union  representation  question existing with
respect to the employees of the Borrowers or any of their  Subsidiaries  and, to
the Knowledge of the  Borrower,  no union  organization  activity that is taking
place,  except (with  respect to any matter  specified in clause (a), (b) or (c)
above, either individually or in the aggregate) such as is not reasonably likely
to have a Material Adverse Effect.




     Section 4.20.  Employee  Benefit  Plans.  Each of the Borrowers and each of
their  Subsidiaries  and  each  of  their  respective  ERISA  Affiliates  are in
compliance  in  all  material  respects  with  all  applicable   provisions  and
requirements  of ERISA and the  Internal  Revenue Code and the  regulations  and
published interpretations thereunder with respect to each Employee Benefit Plan,
and have performed all their obligations under each Employee Benefit Plan in all
material respects. Each Employee Benefit Plan which is intended to qualify under
Section  401(a)  of the  Internal  Revenue  Code is so  qualified.  No  material
liability  to the PBGC (other than  required  premium  payments),  the  Internal
Revenue Service,  any Employee Benefit Plan or any Trust established under Title
IV of ERISA has been or is expected to be  incurred by the  Borrowers  or any of
their Subsidiaries or any of their ERISA Affiliates. No ERISA Event has occurred
or is reasonably  expected to occur. Except to the extent required under Section
4980B of the Internal  Revenue Code or similar state laws,  no Employee  Benefit
Plan provides health or welfare  benefits  (through the purchase of insurance or
otherwise)  for any  retired  or former  employee  of the  Borrower,  any of its
Subsidiaries or any of their respective ERISA Affiliates.  As of the most recent
valuation date for any Pension Plan, the amount of unfunded benefit  liabilities
(as defined in Section  4001(a)(18) of ERISA),  individually or in the aggregate
for all Pension Plans  (excluding for purposes of such  computation  any Pension
Plans with respect to which assets exceed benefit liabilities),  does not exceed
$25,000.  As of the most recent valuation date for each  Multiemployer  Plan for
which  the  actuarial  report  is  available,  the  potential  liability  of the
Borrower,  its Subsidiaries and their respective ERISA Affiliates for a complete
withdrawal from such  Multiemployer  Plan (within the meaning of Section 4203 of
ERISA),  when aggregated with such potential liability for a complete withdrawal
from all Multiemployer Plans, based on information available pursuant to Section
4221(e) of ERISA,  does not exceed  $25,000.  Each of the Borrower,  each of its
Subsidiaries  and  each  of  their  ERISA  Affiliates  have  complied  with  the
requirements of Section 515 of ERISA with respect to each Multiemployer Plan and
are not in material  "default" (as defined in Section  4219(c)(5) of ERISA) with
respect to payments to a Multiemployer Plan.

     Section 4.21.  Certain Fees. No broker's or finder's fee or commission will
be payable with respect hereto or any of the transactions contemplated hereby.

     Section 4.22.  Solvency.  Each Credit Party is and, upon the  incurrence of
any Obligation by such Credit Party on any date on which this representation and
warranty is made, will be, Solvent.

     Section 4.23. No Misstatements or Omissions.  No information,  certificate,
schedule or report furnished or to be furnished by the Borrowers or any of their
Subsidiaries (or by their employees,  representatives,  counsel,  accountants or
other professionals) to the Agent or the Lenders or any of their representatives
in connection with (a) the  transactions  contemplated by the Credit  Documents,
(b)  the   preparation  or  negotiation  of  any  Credit  Document  or  (c)  the
satisfaction  of any  conditions  set  forth  in  any  Credit  Documents  and no
representation or warranty contained in the Credit Documents,  contained or will
contain,  as the case may be, any  material  misstatement  of fact or omitted or
will omit, as the case may be, to state a material fact or any fact necessary to
make the statement contained therein not materially misleading.

     Section  4.24.  Full  Disclosure.  There  are no  facts  pertaining  to the
Borrower, its Subsidiaries, their assets or properties or their businesses which
could  reasonably be expected to have a Material  Adverse  Effect and which have
not been disclosed in this Agreement.  None of the representations or warranties
of the Borrowers or any of their Subsidiaries  contained in the Credit Documents
is untrue or incorrect.  There is no  information  which would  contradict or is
inconsistent  with any  representation  or  warranty of the  Borrowers  or their
Subsidiaries contained in the Credit Documents.

                                   ARTICLE V

                              Affirmative Covenants
                              ---------------------




     Each Credit Party covenants and agrees that so long as any Revolving Credit
Commitment  is in effect  and until  payment  in full of all  Obligations,  each
Credit Party shall perform, and shall cause each of its Subsidiaries to perform,
all covenants in this Article V.

     Section 5.1.  Financial  Statements and Other  Reports.  The Borrowers will
deliver to Agent and Lenders:

     (a) Monthly Reports. As soon as available,  and in any event within 15 days
after the end of each month ending after the Closing Date, (i) the  consolidated
balance  sheet of the  Borrowers  and their  Subsidiaries  as at the end of such
month and the related  consolidated  statements  of income of the  Borrowers and
their  Subsidiaries  for such month and for the period from the beginning of the
then current Fiscal Year to the end of such month, setting forth in each case in
comparative  form the  corresponding  figures  from the  Financial  Plan for the
current Fiscal Year, to the extent prepared on a monthly basis, and,  commencing
with the first full month  following the first  anniversary of the Closing Date,
the corresponding  figures for the corresponding  periods of the previous Fiscal
Year, all in reasonable detail,  together with a Financial Officer Certification
and a brief  narrative  with respect  thereto  highlighting  and/or  summarizing
unusual or  prominent  items,  and (ii) the accounts  receivable  agings for the
Borrowers and their Subsidiaries;

     (b) Quarterly Financial Statements.  As soon as available, and in any event
within 45 days after the end of each of the Fiscal  Quarters,  the  consolidated
and consolidating  balance sheets of the Borrowers and their  Subsidiaries as at
the end of such Fiscal Quarter and the related consolidated (and with respect to
statements of income,  consolidating) statements of income, stockholders' equity
and cash flows of the Borrowers and their  Subsidiaries  for such Fiscal Quarter
and for the period from the beginning of the then current Fiscal Year to the end
of such  Fiscal  Quarter,  setting  forth in each case in  comparative  form the
corresponding  figures for the corresponding periods of the previous Fiscal Year
and the  corresponding  figures from the Financial  Plan for the current  Fiscal
Year, all in reasonable detail,  together with a Financial Officer Certification
and a Narrative Report with respect thereto;




     (c) Annual  Financial  Statements.  As soon as available,  and in any event
within 120 days after the end of each  Fiscal  Year,  (i) the  consolidated  and
consolidating  balance sheets of the Borrowers and their  Subsidiaries as at the
end of such  Fiscal  Year and the  related  consolidated  (and with  respect  to
statements of income,  consolidating) statements of income, stockholders' equity
and cash flows of the  Borrowers  and their  Subsidiaries  for such Fiscal Year,
setting forth in each case in comparative form the corresponding figures for the
previous Fiscal Year and the  corresponding  figures from the Financial Plan for
the Fiscal Year covered by such  financial  statements,  in  reasonable  detail,
together  with a Financial  Officer  Certification  and a Narrative  Report with
respect thereto, and (ii) with respect such consolidated  financial statements a
report  thereon  of  or  other  independent   certified  public  accountants  of
recognized   national  standing   selected  by  the  Borrower,   and  reasonably
satisfactory to Agent (which report shall be unqualified as to going concern and
scope of audit,  and shall  state that such  consolidated  financial  statements
fairly present, in all material respects, the consolidated financial position of
the Borrowers and their  Subsidiaries  as at the dates indicated and the results
of their operations and their cash flows for the periods indicated in conformity
with  GAAP  applied  on a  basis  consistent  with  prior  years  and  that  the
examination by such accountants in connection with such  consolidated  financial
statements  has  been  made  in  accordance  with  generally  accepted  auditing
standards)  together  with a written  statement  by such  independent  certified
public  accountants  stating (x) that their  audit  examination  has  included a
review  of the  terms  of the  Credit  Documents,  (y)  whether,  in  connection
therewith,  any  condition  or event that  constitutes  a Default or an Event of
Default has come to their  attention  and, if such a condition or event has come
to their attention,  specifying the nature and period of existence thereof,  and
(z) that  nothing has come to their  attention  that causes them to believe that
the information  contained in any Compliance  Certificate is not correct or that
the  matters  set  forth  in  such  Compliance  Certificate  are not  stated  in
accordance with the terms hereof;

     (d)  Compliance  Certificate.  Together  with each  delivery  of  financial
statements pursuant to Sections 5.1(b) and 5.1(c), a duly executed and completed
Compliance  Certificate,  in the form of Exhibit  5.1(d)  (each,  a  "Compliance
Certificate");

     (e) Notice of Default.  Promptly  upon any officer of any of the  Borrowers
obtaining  knowledge (i) of any condition or event that constitutes a Default or
an Event of Default or that notice has been given to any Borrowers  with respect
thereto,  (ii) any Person has given any notice to the  Borrowers or any of their
Subsidiaries  or taken any other  action with  respect to any event or condition
set forth in Section 8.1(b),  (iii) of any condition or event of a type required
to be disclosed in a current  report on Form 8-K of the  Securities and Exchange
Commission;  or (iv) of the occurrence of any event or change that has caused or
evidences,  either in any case or in the aggregate, a Material Adverse Effect, a
certificate  of its  Authorized  Officers  specifying  the  nature and period of
existence of such condition, event or change, or specifying the notice given and
action taken by any such Person and the nature of such claimed Event of Default,
Default,  default, event or condition, and what action Borrowers have taken, are
taking and propose to take with respect thereto;

     (f)  Notice  of  Litigation.  Promptly  upon any  officer  of any  Borrower
obtaining  knowledge of (i) the institution of, or non-frivolous  threat of, any
Action not previously  disclosed in writing by any Borrower to Lenders,  or (ii)
any material  development  in any Action that, in the case of either (i) or (ii)
if adversely determined, could be reasonably expected to have a Material Adverse
Effect,  or seeks to enjoin or  otherwise  prevent  the  consummation  of, or to
recover  any  damages  or  obtain  relief  as  a  result  of,  the  transactions
contemplated hereby, written notice thereof together with such other information
as may be  reasonably  available  to any  Borrower  to enable  Lenders and their
counsel to evaluate such matters;




     (g)  ERISA.  (i)  Promptly  upon  becoming  aware of the  occurrence  of or
forthcoming  occurrence of any ERISA Event,  a written  notice  specifying,  the
nature  thereof,  what action the Borrower,  any of its  Subsidiaries  or any of
their  respective ERISA Affiliates has taken, is taking or proposes to take with
respect thereto and, when known,  any action taken or threatened by the Internal
Revenue Service,  the Department of Labor or the PBGC with respect thereto,  and
(ii) with  reasonable  promptness,  copies  of (A) each  Schedule  B  (Actuarial
Information)  to the annual report (Form 5500 Series) filed by Borrower,  any of
its  Subsidiaries or any of their  respective ERISA Affiliates with the Internal
Revenue  Service with respect to each Pension Plan, (B) all notices  received by
Borrower,  any of its  Subsidiaries or any of their  respective ERISA Affiliates
from a Multiemployer  Plan sponsor  concerning an ERISA Event, and (C) copies of
such other documents or governmental reports or filings relating to any Employee
Benefit Plan as Agent shall reasonably request;

     (h) Financial  Plan. As soon as practicable  and in any event no later than
30 days prior to the  beginning  of each Fiscal Year,  a  consolidated  plan and
financial  forecast for such Fiscal Year and the next succeeding Fiscal Years (a
"Financial  Plan"),  including (i) a forecasted  consolidated  balance sheet and
forecasted consolidated statements of income and cash flows of the Borrowers and
their  Subsidiaries  for each such Fiscal Year,  together with an explanation of
the   assumptions  on  which  such  forecasts  are  based  and  (ii)  forecasted
consolidated  statements  of income  and cash flows of the  Borrowers  and their
Subsidiaries for each Fiscal Quarter of each such Fiscal Year,  together with an
explanation of the assumptions on which such forecasts are based;

     (i) Borrowing Base Certificate.  (i) As soon as available, and in any event
within 30 days of the  Closing  Date,  an initial  Borrowing  Base  Certificate,
certified by the Borrowers' President or Chief Financial Officer; (ii) each week
during which any Revolving Loan is  outstanding,  a Borrowing Base  Certificate,
certified by the Borrowers'  President or Chief Financial  Officer;  (iii) three
Business  Days  prior  to any  request  by the  Borrowers  for  Lenders  to make
Revolving  Loans,  a Borrowing  Base  Certificate,  certified by the  Borrowers'
President or Chief Financial Officer; and (iv) together with the delivery of any
Funding  Notice,  a Borrowing  Base  Certificate,  certified  by the  Borrowers'
President or Chief Financial Officer.

     (j) Insurance  Report.  As soon as practicable and in any event by the last
day of each Fiscal Year, a report in form and substance reasonably  satisfactory
to Agent outlining all material insurance coverage  maintained as of the date of
such report by  Borrowers  and their  Subsidiaries  and all  material  insurance
coverage planned to be maintained by the Borrowers and their Subsidiaries in the
immediately succeeding Fiscal Year;

     (k)  Environmental  Reports and Audits.  As soon as  practicable  following
receipt thereof copies of all  environmental  audits and reports with respect to
environmental   matters  at  any  Relevant  Property  or  which  relate  to  any
Environmental Liabilities;




     (l) Balance Sheet. As soon as  practicable,  and (i) in any event within 15
days after the Closing  Date,  an unaudited  balance  sheet of the Borrowers and
their  Subsidiaries,  dated as of the Closing  Date,  that fairly  presents (but
without  giving effect to  fresh-start  accounting)  the  financial  position of
Borrowers  and their  Subsidiaries  as of the Closing Date and (ii) in any event
within 90 days after the Closing Date, an audited balance sheet of the Borrowers
and their  Subsidiaries,  dated as of the Closing  Date (the  "Balance  Sheet"),
prepared in  accordance  with GAAP applied on a consistent  basis in  accordance
with  the  past  practice  of  Parent  (except  as  required  under  fresh-start
accounting).

     (m) Other Information.  Promptly upon their becoming  available,  copies of
(i) all financial statements, reports, notices and proxy statements sent or made
available  generally  by  the  Borrowers  or any of  their  Subsidiaries  to its
security holders acting in such capacity,  (ii) all regular and periodic reports
and all registration  statements  (other than on Form S-8 or a similar form) and
prospectuses,  if any, filed by the Borrowers or any of their  Subsidiaries with
any securities  exchange or with the  Securities and Exchange  Commission or any
governmental or private regulatory authority, (iii) all press releases and other
statements   made  available   generally  by  the  Borrowers  or  any  of  their
Subsidiaries to the public concerning  material  developments in the business of
the Borrowers or any of their Subsidiaries,  and (iv) such other information and
data with respect to the Borrowers or any of their  Subsidiaries as from time to
time may be reasonably requested by Agent or any Lender.

     Section 5.2.  Maintenance  of  Existence.  Each of the  Borrowers and their
Subsidiaries  shall  preserve  and  maintain its  corporate  existence  and good
standing  in the  jurisdiction  of its  incorporation,  and  qualify  and remain
qualified  as a foreign  corporation  in each  jurisdiction  in which  both such
qualification  is required  and the failure to so qualify  could have a Material
Adverse Effect on its business, properties,  operations,  prospects or condition
(financial or otherwise).

     Section  5.3.  Maintenance  of  Records.  Each of the  Borrowers  and their
Subsidiaries shall keep adequate records and books of account reflecting all its
financial  transactions,  keep minute books  containing  accurate records of all
meetings and accurately  reflecting all action of its shareholders,  members and
its board of  directors  (including  committees),  as the case may be,  and keep
stock books and ledgers  correctly  recording all transfers and issuances of all
capital stock, as the case may be.

     Section 5.4.  Maintenance  of  Properties.  Each of the Borrowers and their
Subsidiaries  shall maintain,  keep and preserve all its tangible and intangible
assets and properties  necessary or useful in the proper conduct of its business
in good working order and condition, ordinary wear and tear excepted.

     Section  5.5.  Conduct  of  Business.  Each  of  the  Borrowers  and  their
Subsidiaries  shall  continue to engage  solely in the business  and  activities
engaged in by the Borrowers and their Subsidiaries on the Closing Date.




     Section 5.6.  Inspections;  Lenders  Meetings.  Each Credit Party will, and
will cause each of its  Subsidiaries  to, permit any authorized  representatives
designated  by any  Lender to visit and  inspect  any of the  properties  of any
Credit Party and any of its respective  Subsidiaries,  to inspect, copy and take
extracts from its and their financial and accounting records, and to discuss its
and  their  affairs,  finances  and  accounts  with its and their  officers  and
independent  public  accountants,   all  upon  reasonable  notice  and  at  such
reasonable  times during normal business hours and as often as may reasonably be
requested.  Borrowers  will,  upon the  request  of Agent or  Required  Lenders,
participate in a meeting of Agent and Lenders once during each Fiscal Year to be
held at Borrowers' corporate offices (or at such other location as may be agreed
to by  Borrowers  and Agent) at such time as may be agreed to by  Borrowers  and
Agent.

     Section 5.7. Payment of Taxes. Each of the Borrowers and their Subsidiaries
shall promptly pay its Tax liabilities  before the same shall become  delinquent
or in  default,  except  where  (a) the  validity  or  amount  thereof  is being
contested in good faith by appropriate  proceedings  and (b) any Borrower or any
Subsidiary,  as the case may be,  has set aside on its books  adequate  reserves
with respect thereto in accordance with GAAP.

     Section 5.8. Use of Proceeds.  Each of the Borrowers and their Subsidiaries
shall use the proceeds of the Loans solely as provided in Section 2.2.

     Section 5.9. Insurance.  Each of the Borrowers and their Subsidiaries shall
maintain insurance as provided in Section 4.16.

     Section  5.10.  Compliance  With  Laws.  Each of the  Borrowers  and  their
Subsidiaries  shall  comply  in  all  respects  with  all  Regulations,   writs,
judgments,  injunctions,  orders,  decrees and awards of any  Governmental  Body
applicable to it or its  business,  properties  or  operations,  if a failure to
comply  with  any of the  foregoing,  individually  or in the  aggregate,  could
materially and adversely affect its business, properties,  operations, prospects
or  conditions  (financial or  otherwise)  or, in the case of the Borrower,  its
ability to perform its  obligations  under any Credit Document to which it is or
may become a party.

     Section 5.11.  Compliance with Credit Documents.  Each of the Borrowers and
their  Subsidiaries shall perform and observe all of the terms and provisions of
each Credit  Document to be performed or observed by it and maintain each Credit
Document in full force and effect.

     Section 5.12.  Intellectual  Property.  As soon as practicable,  and in any
event  within 30 days  after the  Closing  Date,  Borrower  shall  enter  into a
software escrow agreement and a license agreement in the form attached hereto as
Exhibit 5.12 with such changes as required by the Software Escrow Agent (as such
term is defined in the Security  Agreement)  and  reasonably  acceptable  to the
Agent and deliver the  underlying  software into escrow,  all as provided for in
the Security Agreement.




     Section 5.13.  Collateral  Assignment of Mortgage and Security Instruments.
As soon as practicable,  and in any event within 30 days after the Closing Date,
RIL  Corporation,  a  subsidiary  of  Borrower,  shall  enter into an  agreement
providing  for the  collateral  assignment of (a) that certain  Promissory  Note
dated January 21, 2000,  executed by Samuel T. Jenkins,  an individual,  and STJ
Holdings,  LLC, a Connecticut limited liability company, and made payable to the
order of RIL Corporation in the stated  principal amount of One Hundred Thirteen
Thousand and 00/100 Dollars ($113,000.00), (b) a mortgage from STJ Holdings, LLC
to RIL  Corporation  dated January 21, 2000 and recorded in Volume 853, Page 195
of the  Bloomfield  Land  Records  and (c)  other  instruments  relating  to the
foregoing in form and substance reasonably acceptable to the Agent.

     Section 5.14. Blocked Account Agreement. As soon as practicable, and in any
event within 30 days after the Closing Date, Borrower shall enter into a blocked
account  agreement in the form  attached  hereto as Exhibit 5.14 and  reasonably
acceptable to the Agent.

     Section  5.15.  Further  Assurances.   Each  of  the  Borrowers  and  their
Subsidiaries shall promptly upon request by Lender,  correct,  and cause each of
the other  parties to the Credit  Document  to promptly  correct,  any defect or
error  that  may be  discovered  in any  Credit  Document  or in the  execution,
acknowledgment  or recordation of the Credit Document.  Promptly upon request by
Lender, each of the Borrowers and their Subsidiaries shall execute, acknowledge,
deliver,  record,  file and  register,  any and all such  further  acts,  deeds,
conveyances, documents, security agreements, pledge agreements, mortgages, deeds
of trust,  trust deeds,  assignments,  financing  statements and  continuations,
notices of assignment, transfers, certificates, assurances and other instruments
as the Agent or any Lender may reasonably  require from time to time in order to
carry out more effectively the purposes of each Credit Document.

                                   ARTICLE VI

                               Negative Covenants
                               ------------------

     Each Credit  Party  covenants  and agrees  that,  so long as any  Revolving
Credit  Commitment  is in effect and until  payment in full of all  Obligations,
such Credit Party shall  perform,  and shall cause each of its  Subsidiaries  to
perform, all covenants in this Article VI.

     Section 6.1.  Indebtedness.  No Credit Party shall, nor shall it permit any
of its  Subsidiaries  to,  directly  or  indirectly,  create,  incur,  assume or
guaranty,  or  otherwise  become or remain  directly or  indirectly  liable with
respect  to any  Indebtedness,  except  for the  Obligations  hereunder  and the
Permitted Indebtedness.

     Section 6.2. Liens.  No Credit Party shall,  nor shall it permit any of its
Subsidiaries  to,  directly or indirectly,  create,  incur,  assume or permit to
exist  any  Lien on or  with  respect  to any  property  or  asset  of any  kind
(including   any  document  or  instrument  in  respect  of  goods  or  accounts
receivable) of the Borrowers or any of their Subsidiaries,  whether now owned or
hereafter  acquired,  or any income or profits therefrom,  or file or permit the
filing  of, or permit to remain in  effect,  any  financing  statement  or other
similar notice of any Lien with respect to any such property,  asset,  income or
profits  under  the UCC of any State or under any  similar  recording  or notice
statute, except:




     (a) Liens in favor of Agent for the benefit of Lenders granted  pursuant to
any Credit Document;

     (b) Liens for Taxes,  or claims the  payment of which is not,  at the time,
required thereby;

     (c)  statutory  Liens of  landlords,  banks  (and  rights of  set-off),  of
carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other
Liens  imposed  by law (other  than any such Lien  imposed  pursuant  to Section
401(a)(29)  or 412(n) of the Internal  Revenue  Code or by ERISA),  in each case
incurred in the  ordinary  course of business (i) for amounts not yet overdue or
(ii) for  amounts  that are  overdue  and that (in the case of any such  amounts
overdue for a period in excess of 5 days) are being  contested  in good faith by
appropriate  proceedings,   so  long  as  such  reserves  or  other  appropriate
provisions,  if any,  as shall be  required by GAAP shall have been made for any
such contested amounts;

     (d) Liens  incurred or deposits made in the ordinary  course of business in
connection with workers' compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases,  government  contracts,  trade contracts,
performance and return-of-money  bonds and other similar obligations  (exclusive
of obligations for the payment of borrowed money or other Indebtedness), so long
as no foreclosure,  sale or similar proceedings have been commenced with respect
to any portion of the Collateral on account thereof;

     (e) judgments  and other  similar  Liens  arising in connection  with court
proceedings;  provided that (i) the execution or other enforcement of such Liens
is effectively stayed and claims secured thereby are being actively contested in
good faith and by  appropriate  proceedings  (ii) a reserve with respect to such
Liens is  established on the books and records of Borrowers in such amount as is
required under GAAP,  and (iii) Agent is reasonably  satisfied  that,  while any
such  Liens  are  being   contested,   there  will  be  no   impairment  of  the
enforceability, validity, or priority of any of the Agent's Liens;

     (f) easements, rights-of-way,  restrictions, encroachments, and other minor
defects  or  irregularities  in title,  in each  case  which do not and will not
interfere in any material  respect with the ordinary  conduct of the business of
Borrowers or any of their Subsidiaries;

     (g) Liens in favor of the holders of  Permitted  Indebtedness  and securing
such Permitted Indebtedness; and




     (h) purchase  money Liens or the interests of lessors under Capital  Leases
to the extent that such Liens or interests  secure  Purchase Money  Indebtedness
and so long as: (i) any property  subject to any of the foregoing is acquired by
a Borrower or any such Subsidiary in the ordinary course of its business and the
Lien on any such property is created  contemporaneously  with such  acquisition;
(ii) the obligations secured by any Lien so created shall not exceed 100 percent
of the lesser of cost or fair market value as of the time or  acquisition of the
property  covered  thereby to a Borrower or any such  Subsidiary  acquiring  the
same;  (iii) the  obligations  secured  by all Liens  created  pursuant  to this
subsection, together with all other Purchase Money Indebtedness, does not exceed
the maximum Purchase Money  Indebtedness  permitted  herein;  and (iv) such Lien
attaches only to the property so acquired and fixed improvements thereon.

     Section 6.3. Equitable Lien. If any Credit Party or any of its Subsidiaries
shall create or assume any Lien upon any of its  properties  or assets,  whether
now owned or hereafter  acquired,  other than Permitted  Liens, it shall make or
cause to be made effective  provision whereby the Obligations will be secured by
such  Lien  equally  and  ratably  with any and all other  Indebtedness  secured
thereby  as  long  as any  such  Indebtedness  shall  be so  secured;  provided,
notwithstanding the foregoing, this covenant shall not be construed as a consent
by Required Lenders to the creation or assumption of any such Lien not otherwise
permitted  hereby.  Except with respect to (a) specific  property  encumbered to
secure payment of particular  Indebtedness or to be sold pursuant to an executed
agreement with respect to a permitted Asset Sale and (b)  restrictions by reason
of customary provisions restricting  assignments,  subletting or other transfers
contained  in  leases,  licenses  and  similar  agreements  entered  into in the
ordinary course of business (provided, that such restrictions are limited to the
property or assets  secured by such Liens or the  property or assets  subject to
such leases, licenses or similar agreements, as the case may be) no Credit Party
nor any of its  Subsidiaries  shall  enter into any  agreement  prohibiting  the
creation or assumption of any Lien upon any of its properties or assets, whether
now owned or hereafter acquired.

     Section 6.4. Restricted Payments; Restrictions on Subsidiary Distributions.

     (a) No Restricted Payments.  No Credit Party shall, nor shall it permit any
of its Subsidiaries to, directly or indirectly, declare, order, pay, make or set
apart any sum for any Restricted Junior Payment.

     (b) No Restrictions on Subsidiary Distributions. Except as provided herein,
no Credit Party shall, nor shall it permit any of its Subsidiaries to, create or
otherwise  cause  or  suffer  to  exist  or  become   effective  any  consensual
encumbrance  or  restriction of any kind on the ability of any Subsidiary of any
Borrower to (i) pay  dividends  or make any other  distributions  on any of such
Subsidiary's  Capital Stock owned by any Borrower or any other Subsidiary of any
Borrower,  (ii) repay or prepay any Indebtedness  owed by such Subsidiary to any
Borrower or any other  Subsidiary of any Borrower,  (iii) make loans or advances
to any Borrower or any other Subsidiary of any Borrower, or (iv) transfer any of
its property or assets to any Borrower or any other Subsidiary of any Borrower.

     Section 6.5. Investments. No Credit Party shall, nor shall it permit any of
its Subsidiaries  to, directly or indirectly,  make or own any Investment in any
Person, including without limitation any Joint Venture, except:

     (a) cash equivalents;



     (b) Investments owned as of the Closing Date and Investments made after the
Closing Date in wholly-owned Subsidiaries of Borrower;

     (c) Investments (i) in accounts receivable arising and trade credit granted
in  the  ordinary  course  of  business  and  in  any  Securities   received  in
satisfaction or partial  satisfaction  thereof from financially troubled account
debtors and (ii)  deposits,  prepayments  and other credits to suppliers made in
the ordinary course of business  consistent with the past practices of Borrowers
and their Subsidiaries; and

     (d) Consolidated Capital Expenditures permitted by Section 6.6(d).

     Section 6.6. Financial Covenants.

     (a) Interest  Coverage  Ratio.  The Borrowers shall not permit the Interest
Coverage  Ratio as of the last day of any  Fiscal  Quarter,  beginning  with the
Fiscal Quarter ending March 31, 2003, to be less than 2.0 to 1.0.

     (b) Fixed Charge Coverage  Ratio.  The Borrowers shall not permit the Fixed
Charge Coverage Ratio as of the last day of any Fiscal  Quarter,  beginning with
the Fiscal Quarter ending March 31, 2003, to be less than (i) during each Fiscal
Quarter  ending on or before  September 30, 2003,  1.25 to 1.00, and (ii) during
any four  Fiscal  Quarter  periods  beginning  with the  Fiscal  Quarter  ending
December  31, 2003 through the date on which all of the  Obligations  shall have
been repaid in full, 1.50 to 1.00.




     (c) Consolidated  Adjusted EBITDA. During the period beginning on August 1,
2002  and  ending  on  December  31,  2002,  the  Borrowers   shall  not  permit
Consolidated  Adjusted  EBITDA as set  forth in the  monthly  reports  delivered
pursuant to Section  5.1(a) to be less than (i) for any  consecutive  two months
during such period,  an amount equal to 50% of the aggregated  projected  EBITDA
for each such  two-month  period as set forth on  Exhibit  6.6(c),  (ii) for the
period commencing August 1, 2002 and ending October 31, 2002, an amount equal to
70% of the aggregated  projected  EBITDA for such period as set forth on Exhibit
6.6(c),  and  (iii) for the  period  commencing  August  1,  2002 and  ending on
December 31, 2002, an amount equal to 75% of the aggregated projected EBITDA for
such  period  as set  forth  on  Exhibit  6.6(c);  provided,  however,  that  in
calculating  Consolidated  Adjusted  EBITDA for  purposes  of this  clause  (c),
Consolidated  Adjusted  EBITDA shall  exclude (A)  pre-August  1 2002  operating
expenses  relating to the  pre-August  1, 2002  period,  (B)  professional  fees
incurred in connection  with the Borrower's  audit,  and the  preparation of the
Borrower's  2000  and  2001 Tax  Returns,  (C)  professional  fees  incurred  in
connection  with  the IRS  Refund,  (D)  the  loss of the  security  deposit  in
connection with the negotiations with the Borrower's landlord,  (E) $50,000 paid
to Seth Lukash, and $25,000 paid to Bill Beebe for  post-confirmation  services,
but, in each case,  only to the extent  actually  paid,  (F) unpaid rent accrued
during  the  bankruptcy  proceedings  of Tridex and  Progressive,  not to exceed
$55,000  and (G) to the extent not  already  accounted  for in (A)  through  (F)
above, expenses and income items presented as "Reorganization Items" pursuant to
the adoption of fresh-start accounting in accordance with GAAP.

     (d) Maximum Consolidated Capital Expenditures. The Borrowers shall not, and
shall  not  permit  its  Subsidiaries  to,  make or incur  Consolidated  Capital
Expenditures  (which includes Purchase Money  Indebtedness and Capitalized Lease
Obligations), in any Fiscal Year indicated below, in an aggregate amount for the
Borrowers and their  Subsidiaries in excess of (i) for the remainder of the 2002
Fiscal Year, $20,000, (ii) for the 2003 Fiscal Year, $40,000, and (iii) for each
of the  2004  and 2005  Fiscal  Years,  $100,000;  provided,  that if  Borrowers
relocate  their  headquarters  to a  location  other than the  location  of such
headquarters as of the Closing Date, Borrowers shall be permitted to incur up to
an additional $150,000 of Consolidated  Capital  Expenditures,  but only for the
purpose of acquiring a communications system.

     Section 6.7. Fundamental Changes; Disposition of Assets;  Acquisitions.  No
Credit Party shall, nor shall it permit,  any of its Subsidiaries to, enter into
any transaction of merger or  consolidation,  or liquidate,  wind-up or dissolve
itself (or suffer any liquidation or  dissolution),  or convey,  sell,  lease or
sub-lease  (as lessor or  sublessor),  transfer or otherwise  dispose of, in one
transaction or a series of transactions, all or any part of its business, assets
or property of any kind whatsoever,  whether real, personal or mixed and whether
tangible or intangible,  whether now owned or hereafter acquired,  or acquire by
purchase or otherwise (other than purchases or other  acquisitions of inventory,
materials  and  equipment in the  ordinary  course of  business)  the  business,
property or fixed assets of, or stock or other evidence of beneficial  ownership
of, any Person or any division or line of business or other business unit of any
Person, except:

     (a) any  Subsidiary  of any  Borrower  may be  merged  with  or  into  such
Borrower,  or be  liquidated,  wound up or dissolved,  or all or any part of its
business,  property or assets may be  conveyed,  sold,  leased,  transferred  or
otherwise  disposed of, in one transaction or a series of transactions,  to such
Borrower;  provided,  in the case of such a merger,  such Borrowers shall be the
continuing or surviving Person;

     (b) disposals of obsolete, worn-out or surplus property;

(c)      Investments made in accordance with Section 6.5;

     (d) disposals of other property and assets for cash in the aggregate amount
not less than fair market value of such  property and assets  provided  that the
net cash  proceeds  of such other  dispositions  do not exceed  $100,000  in the
aggregate in any twelve (12) month period; and

     (e) entering into software  licensing  agreements in the ordinary course of
business consistent with past practices of Borrowers and their Subsidiaries.




     Section 6.8. Disposal of Subsidiary Interests.  Except for any sale of 100%
of the  Capital  Stock  of  any  of its  Subsidiaries  in  compliance  with  the
provisions  of Section  6.7, no Credit  Party shall (a)  directly or  indirectly
sell,  assign,  pledge or otherwise  encumber or dispose of any Capital Stock of
any of its  Subsidiaries,  except to qualify directors if required by applicable
law,  or (b) permit any of its  Subsidiaries  directly  or  indirectly  to sell,
assign,  pledge or otherwise  encumber or dispose of any Capital Stock of any of
its Subsidiaries, except to another Credit Party (subject to the restrictions on
such disposition  otherwise  imposed herein under),  or to qualify  directors if
required by applicable law.

     Section 6.9.  Sales and  Lease-Backs.  No Credit Party shall,  nor shall it
permit any of its  Subsidiaries  to,  directly or  indirectly,  become or remain
liable as lessee or as a guarantor  or other surety with respect to any lease of
any property (whether real,  personal or mixed),  whether now owned or hereafter
acquired,  which such Credit Party (a) has sold or  transferred or is to sell or
to  transfer  to any other  Person  (other  than the  Borrowers  or any of their
Subsidiaries),  or (b) intends to use for  substantially the same purpose as any
other  property  which has been or is to be sold or  transferred  by such Credit
Party to any Person (other than the Borrowers or any of their  Subsidiaries)  in
connection with such lease.

     Section 6.10.  Transactions  with  Shareholders  and Affiliates.  No Credit
Party  shall,  nor shall it  permit  any of its  Subsidiaries  to,  directly  or
indirectly,  enter  into or  permit  to exist  any  transaction  (including  the
purchase,  sale,  lease or exchange  of any  property  or the  rendering  of any
service)  with any  holder  of 5% or more of any class of  Capital  Stock of the
Borrowers or any of their Subsidiaries or with any Affiliate of the Borrowers or
of any such holder,  on terms that are less  favorable to the  Borrowers or that
Subsidiary,  as the case may be,  than those that might be  obtained at the time
from a Person who is not such a holder or Affiliate.

     Section  6.11.  Conduct of Business.  From and after the Closing  Date,  no
Credit Party shall,  nor shall it permit any of its  Subsidiaries  to, engage in
any business  other than (a) the  businesses  engaged in by such Credit Party on
the Closing Date and similar or related businesses,  and (b) such other lines of
business as may be consented to by Required Lenders.

     Section 6.12.  Fiscal Year. No Credit Party shall,  nor shall it permit any
of its  subsidiaries  to change its Fiscal Year-end from December 31 without the
prior consent of the Agent, which consent shall not be unreasonably withheld.

                                   ARTICLE VII

                Increased Costs; Taxes; Indemnification; Set-Off
                ------------------------------------------------




     Section  7.1.  Increased  Costs;  Capital  Adequacy.  In the event that any
Lender  shall have  determined  that the  adoption,  effectiveness,  phase-in or
applicability  after the Closing  Date of any law,  rule or  regulation  (or any
provision thereof)  regarding capital adequacy,  or any change therein or in the
interpretation or administration  thereof by any Governmental Body, central bank
or comparable agency charged with the interpretation or administration  thereof,
or  compliance  by any  Lender  (or its  applicable  lending  office)  with  any
guideline,  request or  directive  regarding  capital  adequacy  (whether or not
having  the  force  of law)  of any  such  Governmental  Body,  central  bank or
comparable  agency,  has or would have the effect of reducing the rate of return
on the capital of such Lender or any  corporation  controlling  such Lender as a
consequence  of, or with reference to, such Lender's  Loans or Revolving  Credit
Commitments or other obligations  hereunder with respect to the Loans to a level
below that which such Lender or such controlling corporation could have achieved
but  for  such  adoption,  effectiveness,  phase-in,  applicability,  change  or
compliance  (taking  into  consideration  the  policies  of such  Lender or such
controlling  corporation  with  regard to capital  adequacy),  then from time to
time,  within 5 Business Days after receipt by Borrowers from such Lender of the
statement  referred to in the next sentence,  Borrowers shall pay to such Lender
such  additional  amount  or  amounts  as will  compensate  such  Lender or such
controlling,  corporation on an after-tax basis for such reduction.  Such Lender
shall deliver to Borrowers (with a copy to Agent) a written  statement,  setting
forth in reasonable detail the basis for calculating the additional amounts owed
to Lender under this Section,  which  statement shall be conclusive and binding,
upon all parties hereto absent manifest error.

     Section 7.2. Taxes; Withholding, etc.

     (a)  Payments to Be Free and Clear.  All sums  payable by any Credit  Party
hereunder  and under the other  Credit  Documents  shall  (except  to the extent
required  by law) be paid  free and clear  of,  and  without  any  deduction  or
withholding  on account  of, any Tax (other than a Tax on the overall net income
of any Lender) imposed, levied, collected, withheld or assessed by or within the
United States of America or any political subdivision in or of the United States
of America or any other jurisdiction from or to which a payment is made by or on
behalf of any Credit Party or by any  federation  or  organization  of which the
United  States of  America or any such  jurisdiction  is a member at the time of
payment.




     (b)  Withholding  of Taxes.  If any  Credit  Party or any  other  Person is
required by law to make any deduction or  withholding on account of any such Tax
from any sum paid or payable by any  Credit  Party to Agent or any Lender  under
any of the  Credit  Documents:  (i)  Borrowers  shall  notify  Agent of any such
requirement or any change in any such  requirement as soon as Borrowers  becomes
aware of it,  (ii)  Borrowers  shall pay any such Tax  before  the date on which
penalties  attach  thereto,  such payment to be made (if the liability to pay is
imposed  on any  Credit  Party) for its own  account  or (if that  liability  is
imposed  on Agent or such  Lender,  as the case may be) on  behalf of and in the
name of Agent or such  Lender,  (iii) the sum  payable by such  Credit  Party in
respect of which the  relevant  deduction,  withholding  or payment is  required
shall be increased to the extent  necessary to ensure that,  after the making of
that deduction,  withholding or payment,  Agent or such Lender,  as the case may
be,  receives on the due date a net sum equal to what it would have received had
no such deduction, withholding or payment been required or made, and (iv) within
30 days  after  paying  any sum  from  which it is  required  by law to make any
deduction  or  withholding,  and within 30 days after the due date of payment of
any Tax  which it is  required  by clause  (ii)  above to pay,  Borrowers  shall
deliver to Agent evidence  satisfactory  to the other  affected  parties of such
deduction,  withholding or payment and of the remittance thereof to the relevant
taxing or other authority; provided, no such additional amount shall be required
to be paid to any Lender  under clause (iii) above except to the extent that any
change after the date hereof (in the case of each Lender listed on the signature
pages hereof on the Closing Date) or after the effective  date of the Assignment
Agreement  pursuant  to which such  Lender  became a Lender (in the case of each
other Lender) in any such requirement for a deduction, withholding or payment as
is mentioned  therein shall result in an increase in the rate of such deduction,
withholding  or payment from that in effect at the date hereof or at the date of
such  Assignment  Agreement,  as the case may be, in respect of payments to such
Lender.

     Section 7.3. Indemnification.

     (a)  Indemnification  by the  Borrowers.  Each of the  Borrowers  and their
Subsidiaries  will indemnify and defend the Agent, the Lenders and each of their
respective  shareholders,  partners,  members,  managers,  directors,  officers,
employees,  agents and  Affiliates  (collectively,  the  "Indemnified  Persons")
against and hold each Indemnified  Person harmless from any and all liabilities,
obligations,  losses,  damages,  costs, expenses,  claims,  penalties,  Actions,
judgments,  disbursements  of any kind or nature  whatsoever,  interest,  fines,
cleanup  costs,  settlements,  costs of  preparation  and  investigation,  costs
incurred in enforcing this indemnity and reasonable attorneys' fees and expenses
(collectively,  "Losses"),  that the  Indemnified  Persons  may  incur,  suffer,
sustain  or become  subject to arising  out of,  relating  to, or due to (i) any
inaccuracy or breach of any of the  representations and warranties of any Credit
Party  contained  in  any  Credit  Document  or  in  any  certificate  delivered
thereunder,  (ii) the  nonfulfillment  or breach of any  covenant,  undertaking,
agreement  or other  obligation  of any  Credit  Party  contained  in any Credit
Document or in any certificate delivered thereunder,  or (iii) any Environmental
Liability.

     (b) Contribution.  If the indemnification  provided for in this Section 7.3
is prohibited under applicable  Regulations to an Indemnified  Person,  then the
Borrower, in lieu of indemnifying the Indemnified Person, will contribute to the
amount  paid or payable by the  Indemnified  Person as a result of the Losses in
such proportion as is appropriate to reflect the relative fault of the Borrower,
on the one hand, and of the Indemnified Person, on the other, in connection with
the events or  circumstances  which  resulted in the Losses as well as any other
relevant equitable considerations.




     Section 7.4.  Right of Set-Off.  In addition to any rights now or hereafter
granted  under  applicable  law and not by way of limitation of any such rights,
upon the occurrence of any Event of Default each Lender is hereby  authorized by
each Credit Party at any time or from time to time, without notice to any Credit
Party or to any other Person,  any such notice being hereby expressly waived, to
set off and to  appropriate  and to  apply  any and  all  deposits  (general  or
special,  including Indebtedness  evidenced by certificates of deposit,  whether
matured  or  unmatured,   but  not  including  trust  accounts)  and  any  other
Indebtedness  at any time held or owing by such  Lender to or for the  credit or
the account of any Credit Party against and on account of the Obligations of any
Credit Party to such Lender  hereunder,  irrespective of whether or not (a) such
Lender  shall  have made any demand  hereunder  or (b) the  principal  of or the
interest on the Loans or any other amounts due  hereunder  shall have become due
and  payable   pursuant  to  Article  II  and  although  such   obligations  and
liabilities, or any of them, may be contingent or unmatured.

                                   ARTICLE VIII

                                Events of Default
                                -----------------

     Section 8.1.  Events of Default.  Any one or more of the  following  events
which shall occur and be continuing shall constitute an "Event of Default":

     (a) Failure to Make Payments When Due. Failure by Borrowers to pay (i) when
due any  installment of principal of any Loan,  whether at stated  maturity,  by
acceleration,  by mandatory prepayment or otherwise, or (ii) any interest on any
Loan or any fee or any other amount due  hereunder  within 5 days after the date
due;

     (b) Breach of Certain Covenants.  Failure of any Credit Party to perform or
comply  with any term or  condition  contained  in Section  2.2,  Section 5.2 or
Article VI;

     (c)  Breach  of  Representations,   etc.  Any   representation,   warranty,
certification  or other statement made or deemed made by any Credit Party in any
Credit  Document or in any  statement  or  certificate  at any time given by any
Credit Party or any of its  Subsidiaries in writing,  pursuant hereto or thereto
or in connection herewith or therewith shall be false in any material respect as
of the date made or deemed made;

     (d) Other Defaults Under Credit  Documents.  Any Credit Party shall default
in the performance of or compliance with any term contained herein or any of the
other  Credit  Documents,  other  than any such  term  referred  to in any other
section of this Section 8.1,  and such default  shall not have been  remedied or
waived  within 30 days after the earlier of (i) an officer of such Credit  Party
becoming aware of such default or (ii) receipt by Borrowers of notice from Agent
or any Lender of such default; or




     (e) Default in Other  Agreements.  (i)  Failure of any Credit  Party to pay
when due any principal of or interest on or any other amount  payable in respect
of one or more  items of  Indebtedness  in an  individual  principal  amount  of
$75,000 or more or with an aggregate  principal  amount of $150,000 or more,  in
each case beyond the grace period, if any, provided therefor,  or (ii) breach or
default by any Credit Party with respect to any other  material  term of (A) one
or more items of Indebtedness in the individual or aggregate  principal  amounts
referred to in clause (i) above or (B) any loan agreement,  mortgage,  indenture
or other agreement  relating to such item of  Indebtedness,  in each case beyond
the grace period,  if any,  provided  therefor,  if the effect of such breach or
default is to cause, or to permit the holder or holders of that Indebtedness (or
a trustee on behalf of such holder or holders),  to cause,  that Indebtedness to
become or be  declared  due and  payable  (or  redeemable)  prior to its  stated
maturity or the stated  maturity of any underlying  obligation,  as the case may
be;

     (f) Involuntary  Bankruptcy,  Appointment of Receiver,  etc. (i) A court of
competent  jurisdiction  shall  enter a decree or order for relief in respect of
the  Borrowers or any of their  Subsidiaries  in an  involuntary  case under the
Bankruptcy Code or under any other applicable bankruptcy,  insolvency or similar
law now or  hereafter  in effect,  which  decree or order is not stayed,  or any
other similar relief shall be granted under any applicable federal or state law,
or (ii) an involuntary  case shall be commenced  against the Borrowers or any of
their  Subsidiaries  under the  Bankruptcy  Code or under  any other  applicable
bankruptcy, insolvency or similar law now or hereafter in effect, or a decree or
order of a court having  jurisdiction  in the premises for the  appointment of a
receiver, liquidator,  sequestrator,  trustee, custodian or other officer having
similar powers over the Borrowers or any of their Subsidiaries, or over all or a
substantial part of its property,  shall have been entered;  or there shall have
occurred the involuntary  appointment of an interim  receiver,  trustee or other
custodian of the Borrowers or any of their Subsidiaries for all or a substantial
part of its property or a warrant of  attachment,  execution or similar  process
shall have been issued against any substantial part of the property of Borrowers
or any of their  Subsidiaries,  and any such event described in this clause (ii)
shall continue for 60 days without having been dismissed, bonded or discharged;

     (g) Voluntary  Bankruptcy,  Appointment of Receiver,  etc. (i) Borrowers or
any of their Subsidiaries shall have an order for relief entered with respect to
it or shall  commence a voluntary  case under the  Bankruptcy  Code or under any
other  applicable  bankruptcy,  insolvency  or similar law now or  hereafter  in
effect,  or shall consent to the entry of an order for relief in an  involuntary
case, or to the conversion of an involuntary case to a voluntary case, under any
such law,  or shall  consent to the  appointment  of or taking  possession  by a
receiver,  trustee  or  other  custodian  for all or a  substantial  part of its
property;  or Borrowers or any of their  Subsidiaries  shall make any assignment
for the benefit of  creditors,  or (ii)  Borrowers or any of their  Subsidiaries
shall be  unable,  or  shall  fail  generally,  or shall  admit in  writing  its
inability,  to pay its debts as such debts become due; or the board of directors
(or similar  governing body) of Borrowers or any of their  Subsidiaries  (or any
committee thereof) shall adopt any resolution or otherwise  authorize any action
to approve any of the actions referred to herein or in Section 8.1(f);

     (h)  Judgments  and  Attachments.  Any money  judgment,  writ or warrant of
attachment or similar process  involving (i) in any individual case an amount in
excess of $100,000 or (ii) in the  aggregate  at any time an amount in excess of
$250,000 (in either case to the extent not adequately covered by insurance as to
which a solvent and unaffiliated  insurance  company has acknowledged  coverage)
shall be entered or filed against the Borrowers or any of their  Subsidiaries or
any of  their  respective  assets  and  shall  remain  undischarged,  unvacated,
unbonded or unstayed  for a period of 60 days (or in any event later than 5 days
prior to the date of any proposed sale thereunder);




     (i) Dissolution. Any order, judgment or decree shall be entered against any
Credit  Party  decreeing,  the  dissolution  or split up of any Borrower or that
Subsidiary and such order shall remain  undischarged or unstayed for a period in
excess of thirty 30 days;

     (j) Change of Control. A Change of Control shall occur; or

     (k) Collateral Documents and other Credit Documents.  At any time after the
execution and delivery thereof, (i) this Agreement or any Credit Document ceases
to be in full force and effect  (other than by reason of a release of Collateral
in accordance  with the terms hereof or thereof or the  satisfaction  in full of
the  Obligations in accordance  with the terms hereof) or shall be declared null
and void,  or Agent shall not have or shall cease to have a valid and  perfected
Lien in any  material  Collateral  purported  to be  covered  by the  Collateral
Documents with the priority  required by the relevant  Collateral  Document,  in
each case for any reason  other than the  failure of Agent or any Lender to take
any action  within its  control,  or (ii) any Credit  Party  shall  contest  the
validity or  enforceability of any Credit Document in writing or deny in writing
that it has any further liability,  including with respect to future advances by
Lenders, under any Credit Document to which it is a party.

     Section  8.2.  Remedies.  Upon  and  after  the  occurrence  of an Event of
Default:

     (a)  Non-Bankruptcy  Related Defaults.  In the case of any Event of Default
specified in any Section other than Section  8.1(f) or 8.1(g),  the Agent at the
request of or with the  consent of the  Required  Lenders,  may by notice to the
Borrowers  (i)  terminate  the  Revolving  Credit  Commitments,  and they  shall
thereupon terminate, and (ii) declare the Loans (together with accrued interest)
to be, and the Loans shall thereupon become, immediately due and payable without
presentment,  demand,  protest  or other  notice of any  kind,  all of which are
hereby waived by the Borrowers.

     (b)  Bankruptcy  Events  of  Default.  In the case of any of the  Events of
Default  specified  in  Section  8.1(f) or  8.1(g),  without  any  notice to the
Borrowers or any other act by Lender,  automatically,  (i) the Revolving  Credit
Commitments shall thereupon immediately terminate,  and (ii) the Loans (together
with  accrued  interest)  shall  become  immediately  due  and  payable  without
presentment,  demand,  protest  or other  notice of any  kind,  all of which are
hereby waived by the Borrowers.

     (c) Remedies in All Events of Default.  The Agent shall,  at the request of
or with the consent of the Required Lenders (i) exercise all rights and remedies
provided  in the Credit  Documents,  (ii)  exercise  any right of  counterclaim,
setoff,  banker's  lien or  otherwise  which  it may  with  respect  to money or
property of the Borrower,  (iii) bring any lawsuit,  action or other  proceeding
permitted  by law for the specific  performance  of, or  injunction  against any
violation of, any Credit Document and may exercise any power granted under or to
recover judgment under any Credit  Document,  (iv) enforce any and all Liens and
security  interests created pursuant to Collateral  Documents,  and (v) exercise
any other right or remedy permitted by applicable Regulations.




                                    ARTICLE IX

                                    The Agent
                                    ---------

     Section  9.1.  Appointment  of Agent.  ARK CLO  2000-1,  Limited  is hereby
appointed Agent hereunder, and each Lender hereby authorizes Agent to act as its
agent in accordance  with the terms hereof and the other Credit  Documents.  The
Agent hereby agrees to act upon the express conditions  contained herein and the
other Credit  Documents,  as  applicable.  The provisions of this Article IX are
solely for the benefit of Agent and  Lenders and no Credit  Party shall have any
rights  as a  third  party  beneficiary  of any of the  provisions  thereof.  In
performing its functions and duties hereunder,  the Agent shall act solely as an
agent of Lenders and does not assume and shall not be deemed to have assumed any
obligation  towards or  relationship of agency or trust with or for Borrowers or
any of their  Subsidiaries.  The Agent without consent of or notice to any party
hereto, may assign any and all of its rights or obligations  hereunder to any of
its Affiliates.

     Section 9.2.  Powers and Duties.  Each Lender  irrevocably  authorizes  the
Agent to take such action on such  Lender's  behalf and to exercise such powers,
rights  and  remedies  hereunder  and under the other  Credit  Documents  as are
specifically  delegated or granted to the Agent by the terms hereof and thereof,
together  with such  powers,  rights and remedies as are  reasonably  incidental
thereto.  The Agent shall have only those duties and  responsibilities  that are
expressly  specified  herein  and the  other  Credit  Documents.  The  Agent may
exercise such powers,  rights and remedies and perform such duties by or through
its agents or  employees.  The Agent shall not have,  by reason hereof or any of
the other Credit  Documents,  a fiduciary  relationship in respect of any Lender
and nothing herein or any of the other Credit  Documents,  expressed or implied,
is  intended  to or shall be so  construed  as to  impose  upon  the  Agent  any
obligations  in respect  hereof or any of the other Credit  Documents  except as
expressly set forth herein or therein.

     Section 9.3. General Immunity.




     (a)  No  Responsibility  for  Certain  Matters.  The  Agent  shall  not  be
responsible  to  any  Lender  for  the  execution,  effectiveness,  genuineness,
validity,  enforceability,  collectability  or  sufficiency  hereof or any other
Credit Document or for any representations,  warranties,  recitals or statements
made  herein or therein  or made in any  written  or oral  statements  or in any
financial or other statements, instruments, reports or certificates or any other
documents  furnished  or made by the Agent to  Lenders or by or on behalf of any
Credit Party to the Agent or any Lender in connection with the Credit  Documents
and the  transactions  contemplated  thereby or for the  financial  condition or
business  affairs of any Credit Party or any other Person liable for the payment
of any  Obligations,  nor shall the Agent be required to ascertain or inquire as
to the  performance or observance of any of the terms,  conditions,  provisions,
covenants or  agreements  contained in any of the Credit  Documents or as to the
use of the proceeds of the Loans or as to the existence or possible existence of
any Event of Default  or  Default.  Anything  contained  herein to the  contrary
notwithstanding,  Agent shall not have any liability arising from  confirmations
of the amount of outstanding Loans.

     (b)  Exculpatory  Provisions.  None of the  Agent  or any of its  officers,
trustees, members, partners,  directors,  employees or agents shall be liable to
Lenders for any action taken or omitted by the Agent under or in connection with
any of the Credit  Documents  except to the extent  caused by the Agent's  gross
negligence  or willful  misconduct.  The Agent shall be entitled to refrain from
any act or the taking of any action (including the failure to take an action) in
connection herewith or any of the other Credit Documents or from the exercise of
any power,  discretion or authority vested in it hereunder or thereunder  unless
and until the Agent shall have  received  instructions  in respect  thereof from
Required  Lenders  (or  such  other  Lenders  as may be  required  to give  such
instructions  under Section 10.1) and,  upon receipt of such  instructions  from
Required Lenders (or such other Lenders, as the case may be), the Agent shall be
entitled to act or (where so  instructed)  refrain from  acting,  or to exercise
such power,  discretion or  authority,  in  accordance  with such  instructions.
Without  prejudice to the  generality of the  foregoing,  (i) the Agent shall be
entitled  to  rely,  and  shall  be  fully   protected  in  relying,   upon  any
communication,  instrument or document  believed by it to be genuine and correct
and to have been signed or sent by the proper  Person or  Persons,  and shall be
entitled to rely and shall be protected in relying on opinions and  judgments of
attorneys  (who may be  attorneys  for the  Borrowers  and their  Subsidiaries),
accountants, experts and other professional advisors selected by it, and (ii) no
Lender shall have any right of action  whatsoever  against the Agent as a result
of the Agent acting or (where so instructed) refraining from acting hereunder or
any of the  other  Credit  Documents  in  accordance  with the  instructions  of
Required  Lenders  (or  such  other  Lenders  as may be  required  to give  such
instructions under Section 10.1).

     Section 9.4.  Agent  Entitled to Act as Lender.  The agency hereby  created
shall in no way  impair or affect any of the rights and powers of, or impose any
duties or obligations  upon,  the Agent in its  individual  capacity as a Lender
hereunder.  With respect to its participation in the Loans, the Agent shall have
the same rights and powers  hereunder  as any other  Lender and may exercise the
same as if it were not  performing  the duties  and  functions  delegated  to it
hereunder,  and the term "Lender" shall,  unless the context  clearly  otherwise
indicates,  include  the  Agent in its  individual  capacity.  The Agent and its
Affiliates may accept deposits from,  lend money to and generally  engage in any
kind of banking,  trust, financial advisory or other business with the Borrowers
or any of their  Affiliates as if it were not  performing  the duties  specified
herein, and may accept fees and other  consideration from Borrowers for services
in connection  herewith and otherwise  without having to account for the same to
Lenders.

     Section 9.5. Lenders' Representations, Warranties and Acknowledgment.




     (a)  Each  Lender  represents  and  warrants  that  it  has  made  its  own
independent  investigation  of  the  financial  condition  and  affairs  of  the
Borrowers and their  Subsidiaries in connection  with  Borrowings  hereunder and
that  it  has  made  and  shall  continue  to  make  its  own  appraisal  of the
creditworthiness  of the Borrowers and their  Subsidiaries.  The Agent shall not
have any duty or  responsibility,  either initially or on a continuing basis, to
make any such  investigation  or any such  appraisal  on behalf of Lenders or to
provide any Lender with any credit or other  information  with respect  thereto,
whether coming into its possession before the making of the Loans or at any time
or times  thereafter,  and the  Agent  shall  not have any  responsibility  with
respect to the accuracy of or the  completeness of any  information  provided to
Lenders.

     (b) Each Lender,  by delivering  its signature  page to this  Agreement and
funding its Term Loan Amount and/or a Revolving Loan on the Closing Date,  shall
be deemed to have acknowledged  receipt of, and consented to and approved,  each
Credit  Document and each other  document  required to be approved by the Agent,
Required Lenders or Lenders, as applicable on the Closing Date.

     (c) Each Lender shall, with respect to any and all financial  statements or
other  reports,  documents or other  information  delivered by the  Borrowers to
Lenders pursuant to the terms of the Credit  Documents,  to the extent that such
information  therein  contained has not  heretofore  otherwise been disclosed in
such a manner as to render  such  information  no  longer  confidential,  employ
reasonable  procedures  designed  to  maintain  the  confidential  nature of the
information therein contained;  provided, however, that each Lender may disclose
or  disseminate  such  information  to: (a) the Lender's  respective  employees,
agents,  attorneys  and  accountants  who would  ordinarily  have access to such
information  in the  normal  course  of  the  performance  of  their  duties  in
connection with the  administration  of the Loans; (b) such third parties as may
be required by law or  regulatory  process;  (c) any  prospective  Assignee  (as
defined in Section  10.4(b)),  in connection  with an Assignment  (as defined in
Section 10.4(b)),  provided that such prospective  Assignee shall have agreed in
writing to be bound by the terms of this  Section  9.5(c),  (d) any  prospective
Participant (as defined in Section 10.4(c)),  in connection with a Participation
(as defined in Section  10.4(c)),  provided  that such  prospective  Participant
shall have  agreed in writing to be bound by the terms of this  Section  9.5(c);
and (e) any entity  utilizing such  information to rate or classify any Lender's
debt or equity securities for sale to the public.




     Section 9.6. Right to Indemnity. Each Lender, in proportion to its Pro Rata
Share,  severally  agrees to indemnify  the Agent,  to the extent that the Agent
shall not have been reimbursed by any Credit Party,  for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  expenses  (including counsel fees and disbursements) or disbursements of
any kind or nature  whatsoever  which may be imposed on, incurred by or asserted
against the Agent in  exercising  its powers,  rights and remedies or performing
its duties  hereunder  or under the other  Credit  Documents or otherwise in its
capacity as the Agent in any way  relating to or arising out hereof or the other
Credit  Documents;  provided,  no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements  resulting from the Agent's gross negligence or
willful  misconduct.  If any  indemnity  furnished  to the Agent for any purpose
shall, in the opinion of such Agent, be  insufficient  or become  impaired,  the
Agent may call for additional  indemnity and cease,  or not commence,  to do the
acts indemnified against until such additional indemnity is furnished; provided,
in no event  shall  this  sentence  require  any Lender to  indemnify  the Agent
against any liability,  obligation,  loss, damage,  penalty,  action,  judgment,
suit,  cost,  expense or  disbursement in excess of such Lender's Pro Rata Share
thereof, and provided further,  this sentence shall not be deemed to require any
Lender to indemnify the Agent against any liability,  obligation,  loss, damage,
penalty,  action, judgment, suit, cost, expense or disbursement described in the
proviso in the immediately preceding sentence.

     Section 9.7. Successor Agent. The Agent may resign at any time by giving 30
days prior  written  notice  thereof to Lenders and  Borrower,  and Agent may be
removed  at any time  with or  without  cause  by an  instrument  or  concurrent
instruments in writing,  delivered to Borrowers and Agent and signed by Required
Lenders.  Upon any such  notice of  resignation  or any such  removal,  Required
Lenders  shall have the right,  upon 5 Business  Days'  notice to  Borrower,  to
appoint a successor  Agent.  If no  successor  Agent is  appointed  prior to the
effective date of the resignation of Agent, Agent may appoint,  after consulting
with the  Required  Lenders,  a  successor  Agent.  Upon the  acceptance  of any
appointment as Agent hereunder by a successor Agent,  that successor Agent shall
thereupon succeed to and become vested with all the rights,  powers,  privileges
and duties of the retiring or removed  Agent and the  retiring or removed  Agent
shall  promptly (i) transfer to such  successor  Agent all sums,  Securities and
other items of Collateral held under the Collateral Documents, together with all
records and other  documents  necessary or  appropriate  in connection  with the
performance of the duties of the successor Agent under the Credit Documents, and
(ii) execute and deliver to such  successor  Agent such  amendments to financing
statements,  and take such other actions,  as may be necessary or appropriate in
connection with the assignment to such successor Agent of the security interests
created under the Collateral Documents, whereupon such retiring or removed Agent
shall be  discharged  from its  duties  and  obligations  hereunder.  After  any
retiring or removed  Agent's  resignation  or removal  hereunder  as Agent,  the
provisions of this Article IX shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent hereunder.

     Section 9.8. Collateral Documents.

     (a) Agent as Agent under Collateral  Documents.  Each Lender hereby further
authorizes  Agent, on behalf of and for the benefit of Lenders,  to be the agent
for and  representative  of  Lenders  with  respect  to the  Collateral  and the
Collateral  Documents.  Subject to Section 10.1, without further written consent
or  authorization  from Lenders,  Agent may execute any documents or instruments
necessary to release any Lien  encumbering  any item of  Collateral  that is the
subject of a sale or other  disposition of assets  permitted  hereby or to which
Required  Lenders (or such other Lenders as may be required to give such consent
under Section 10.1) have otherwise consented.




     (b) Agent's Right to Realize on  Collateral.  Anything  contained in any of
the Credit Documents to the contrary  notwithstanding  Borrower,  Agent and each
Lender  hereby  agree that (i) no Lender  shall have any right  individually  to
realize  upon any of the  Collateral,  it being  understood  and agreed that all
powers,  rights and  remedies  hereunder  may be exercised  solely by Agent,  on
behalf of Lenders in accordance with the terms hereof,  and (ii) in the event of
a foreclosure by Agent on any of the Collateral  pursuant to a public or private
sale,  Agent or any Lender may be the purchaser of any or all of such Collateral
at any such sale and Agent, as agent for and  representative of Lenders (but not
any Lender or Lenders in its or their respective  individual  capacities  unless
Required  Lenders shall otherwise  agree in writing) shall be entitled,  for the
purpose of bidding and making  settlement  or payment of the purchase  price for
all or any portion of the  Collateral  sold at any such public sale,  to use and
apply any of the  Obligations  as a credit on account of the purchase  price for
any collateral payable by Agent at such sale.

                                   ARTICLE X

                                  Miscellaneous
                                  -------------

     Section 10.1. Amendments and Waivers.

     (a) General. Subject to Section 10.1(b) below, no amendment,  modification,
termination  or waiver of any provision of the Credit  Documents,  or consent to
any  departure by any Credit  Party  therefrom,  shall be effective  without the
written consent of the Agent and the Required Lenders.

     (b) Affected  Lenders' Consent.  Notwithstanding  the provisions of Section
10.1(a)  above,  no  amendment,  modification,  termination  or  waiver  of  any
provision  of the Credit  Documents,  or consent to any  departure by any Credit
Party  therefrom,  shall be effective  without the written consent of the Agent,
the  Required  Lenders and each Lender  that would be affected  thereby,  if the
effect thereof would:

          (i) extend the scheduled  final maturity of any Loan or Note or reduce
     the principal amount of any Loan;

          (ii)  waive,  reduce or  postpone  any  scheduled  repayment  (but not
     prepayment);

          (iii)  reduce  the rate of  interest  on any  Loan or any fee  payable
     hereunder, or extend the time for payment of any such interest or fees;

          (iv) amend,  modify,  terminate or waive any provision of this Section
     10.1(b) or Section 10.1(c);

          (v) amend the definitions of "Required Lenders" or "Pro Rata Share";

          (vi) release or otherwise  subordinate all or substantially all of the
     Collateral or except as expressly provided in the Credit Documents;

          (vii) consent to the assignment or transfer by any Credit Party of any
     of its rights and obligations under any Credit Document; or



          (viii) increase any Revolving Credit Commitment of any Lender over the
     amount thereof then in effect; provided, that no amendment, modification or
     waiver of any condition  precedent,  covenant,  Default or Event of Default
     shall  constitute  an increase in any  Revolving  Credit  Commitment of any
     Lender.

     (c) Effect of Notices,  Waivers or Consents. Any waiver or consent shall be
effective only in the specific  instance and for the specific  purpose for which
it was  given.  No notice to or demand  on any  Credit  Party in any case  shall
entitle any Credit Party to any other or further  notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance  with this Section 10.1 shall be binding upon each Lender
at the time outstanding, each future Lender and, if signed by a Credit Party, on
such Credit Party.

     Section  10.2.   Notices.   All  notices,   requests,   demands  and  other
communications  to any party or given under any Credit  Document  (collectively,
"Notices") will be in writing and delivered personally,  by overnight courier or
by  registered  mail  to the  parties  at  the  following  address  or  sent  by
telecopier,  with confirmation  received, to the telecopy number specified below
(or at such other address or telecopy  number as will be specified by a party by
like notice given at least five calendar days prior thereto):

         (a)      If to the Borrowers, at:

                  6836 Morrison Blvd.
                  Charlotte, North Carolina 28211
                  Attn: Chief Executive Officer
                  Facsimile: 704-295-7001

                  With a copy to:

                  Hinckley, Allen & Snyder LLP
                  1500 Fleet Center
                  Providence, Rhode Island 02903
                  Attn: Stephen J. Carlotti, Esq.
                  Facsimile: 401-277-9600

        (b)       If to the Agent, at:

                  c/o Patriarch Partners, LLC
                  40 Wall Street, 25th Floor
                  New York, New York 10005
                  Attn: Lynn Tilton
                  Facsimile: 212-825-2038




                  With a copy to:

                  Richards Spears Kibbe & Orbe
                  One Chase Manhattan Plaza
                  New York, New York 10005
                  Attn: Michael Friedman, Esq.
                  Facsimile: 212-530-1801

     (c) If to the  Lenders,  to the  address  for such  Lender set forth on the
signature pages hereto.

     All Notices will be deemed  delivered when actually  received.  Each of the
parties will hereafter  notify the other in accordance  with this Section of any
change of address or telecopy number to which notice is required to be mailed.

     Section 10.3. Expenses. Whether or not the transactions contemplated hereby
shall be consummated or any Loans shall be made, Borrowers agree to pay promptly
after the  occurrence  of a Default  or an Event of  Default,  all fees,  costs,
expenses and disbursements,  including  attorneys' fees and expenses (including,
without   limitation,   allocated  costs  of  internal  counsel)  and  costs  of
settlement,  incurred by the Agent or any Lender in enforcing any Obligations of
or in collecting  any payments due from any Credit Party  hereunder or under the
other Credit Documents by reason of such Default or Event of Default  (including
in connection with the sale of,  collection from, or other  realization upon any
of the Collateral) or in connection with any refinancing or restructuring of the
credit arrangements provided hereunder in the nature of a "work-out" or pursuant
to any insolvency or bankruptcy cases or proceedings.

     Section 10.4. Enforceability; Successors and Assigns.

     (a) Enforceability;  Successors and Assigns. This Agreement will be binding
upon and inure to the benefit of and is enforceable by the respective successors
and permitted assigns of the parties hereto.  This Agreement may not be assigned
by the Borrowers  hereto without the prior written  consent of the Agent and the
Required  Lenders.  Any assignment or attempted  assignment in  contravention of
this Section will be void ab initio and will not relieve the assigning  party of
any obligation under this Agreement.




     (b)  Assignments.  Each Lender may assign (each, an "Assignment") to one or
more Eligible Assignees (each, an "Assignee") all or a portion of its rights and
obligations  under this  Agreement  (including all or a portion of such Lender's
Loans,  Revolving Credit  Commitment and Notes, as the case may be), without the
consent of the Borrowers. In connection with any such assignment,  the assigning
Lender and the  Assignee  shall  execute and deliver to the Agent an  Assignment
Agreement,  in the form of Exhibit  10.4(b) (each,  an "Assignment  Agreement").
Upon its receipt of a duly executed and completed  Assignment  Agreement,  Agent
shall  record the  information  contained  in such  Assignment  Agreement in the
Register,  shall give prompt notice  thereof to Borrowers  and shall  maintain a
copy of such  Assignment  Agreement.  From and  after the  effective  date of an
Assignment,  the  Assignee  shall be a party  hereto  and,  to the extent of the
interest assigned pursuant to the Assignment, have the rights and obligations of
a lender  under  this  Agreement,  and the  Lender  shall,  to the extent of the
interest  assigned,  be released from its obligations under this Agreement.  The
Borrowers hereby consent to the disclosure of any information obtained by Lender
in  connection  with this  Agreement  to any Person to which  Lender  sells,  or
proposes to sell, its Loans, Revolving Credit Commitment or Notes.

     (c)  Participations.   Each  Lender  may  sell   participations   (each,  a
"Participation")  to one or more Persons  (each,  a  "Participant")  in all or a
portion of such Lender's rights and obligations under this Agreement  (including
all or a portion of such Lender's Loans,  Revolving Credit Commitment and Notes,
as the case may be);  provided  that (i) such  Lender's  obligations  under this
Agreement  shall  remain  unchanged,   (ii)  such  Lender  shall  remain  solely
responsible to the Borrowers for the performance of such obligations,  and (iii)
the  Borrowers  shall  continue to deal solely and  directly  with the Lender in
connection with the Lender's rights and  obligations  under this Agreement.  Any
agreement or instrument  pursuant to which the Lender sells such a participation
shall  provide that the Lender shall retain the sole right to enforce the Credit
Documents and to approve any amendment,  modification or waiver of any provision
of the Credit  Documents.  The Borrowers hereby consent to the disclosure of any
information obtained by a Lender in connection with this Agreement to any Person
to which such  Lender  participates,  or  proposes  to  participate,  its Loans,
Revolving Credit Commitment or the Note.

     Section 10.5.  Integration.  This Agreement and the other Credit  Documents
contain and constitute  the entire  agreement of the parties with respect to the
subject  matter hereof and  supersedes  all prior  negotiations,  agreements and
understandings, whether written or oral, of the parties hereto.

     Section  10.6.  No  Waiver;  Remedies.  No failure or delay by any party in
exercising  any right,  power or  privilege  under this  Agreement or any of the
other  Credit  Documents  will  operate  as a  waiver  of the  right,  power  or
privilege.  A single or partial  exercise of any right,  power or privilege will
not preclude any other or further  exercise of the right,  power or privilege or
the exercise of any other  right,  power or  privilege.  The rights and remedies
provided in the Credit  Documents  will be  cumulative  and not exclusive of any
rights or remedies provided by law.

     Section 10.7. Submission to Jurisdiction.  Each of the Borrower,  the Agent
and the Lenders  hereby (a) agrees  that any Action  with  respect to any Credit
Document  may be brought in the courts of the State of New York or of the United
States of America for the Southern  District of New York, (b) accepts for itself
and in respect of its property, generally and unconditionally, the non-exclusive
jurisdiction of such courts,  (c) irrevocably  waives any objection,  including,
without limitation, any objection to the laying of venue or based on the grounds
of forum non  conveniens,  which it may now or hereafter have to the bringing of
any Action in those  jurisdictions,  and (d) irrevocably consents to the service
of process of any of the courts  referred  to above in any Action by the mailing
of copies of the  process to the parties  hereto as  provided  in Section  10.2.
Service  effected as provided in this manner will become  effective ten calendar
days after the mailing of the process. Section 1.1.


     Section 10.8.  Execution in  Counterparts.  This  Agreement may be executed
simultaneously in one or more  counterparts,  and by different parties hereto in
separate  counterparts,  each of which when executed will be deemed an original,
but all of which taken together will constitute one and the same instrument.

     Section 10.9.  Governing Law. This Agreement and the other Credit Documents
will be governed by, and construed in accordance  with, the laws of the state of
New York applicable to contracts executed in and to be performed entirely within
that state, without reference to conflicts of laws provisions.

     Section  10.10.   Waiver  of  Jury.  THE  PARTIES  HEREBY   IRREVOCABLY  AND
UNCONDITIONALLY  WAIVE,  TO THE FULLEST EXTENT  PERMITTED BY APPLICABLE LAW, ANY
RIGHT THAT THEY MAY HAVE TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION, OR IN
ANY LEGAL  PROCEEDING,  DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR THE TRANSACTIONS  CONTEMPLATED BY THIS AGREEMENT  (WHETHER BASED ON
CONTRACT,  TORT,  OR ANY  OTHER  THEORY).  EACH  PARTY  (A)  CERTIFIES  THAT  NO
REPRESENTATIVE, AGENT, OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION,  SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY
HAVE BEEN  INDUCED TO ENTER INTO THIS  AGREEMENT  BY,  AMONG OTHER  THINGS,  THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

     Section  10.11.  Severability.  If any  term  or  other  provision  of  this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public  policy,  all other  conditions  and provisions of this Agreement will
nevertheless  remain in full force and effect so long as the  economic  or legal
substance of the transactions  contemplated hereby is not affected in any manner
adverse to any party. Upon such  determination  that any term or other provision
is invalid,  illegal or incapable  of being  enforced,  the parties  hereto will
negotiate  in good faith to modify this  Agreement  so as to effect the original
intent of the parties as closely as possible in an acceptable  manner to the end
that the transactions contemplated hereby are fulfilled to the extent possible.

     Section  10.12.  Survival.  All  representations,   warranties,   covenants,
agreements,  and  conditions  contained in or made pursuant to this Agreement or
the other  Credit  Documents  shall  survive (a) the making of any Loans and the
payment of the  Obligations and (b) the  performance,  observance and compliance
with the  covenants,  terms and  conditions,  express or implied,  of all Credit
Documents,   until  the  due  and  punctual  (i)  indefeasible  payment  of  the
Obligations and (ii) performance,  observance and compliance with the covenants,
terms and conditions, express or implied, of this Agreement and all of the other
Credit Documents;  provided,  however,  that the provisions of Article VII shall
survive  (i)  indefeasible  payment  of the  Obligations  and (ii)  performance,
observance and compliance with the covenants,  terms and conditions,  express or
implied, of this Agreement and all of the other Credit Documents. Section 1.1.


     Section 10.13. Lawful Interest.  The Borrowers shall not be obligated to pay
any  interest in excess of the maximum rate  provided by law and interest  under
any Credit  Document  otherwise  in excess of that rate shall be reduced to that
rate.

     Section 10.14. Interpretation.  As used in this Agreement, references to the
singular will include the plural and vice versa and  references to the masculine
gender  will  include  the  feminine  and  neuter  genders  and vice  versa,  as
appropriate. Unless otherwise expressly provided in this Agreement (a) the words
"hereof", "herein" and "hereunder" and words of similar import when used in this
Agreement  will  refer to this  Agreement  as a whole and not to any  particular
provision of this Agreement and (b) article, section,  subsection,  schedule and
exhibit  references  are  references  with  respect  to  this  Agreement  unless
otherwise specified. Unless the context otherwise requires, the term "including"
will mean "including, without limitation." The headings in this Agreement and in
the Schedules are included for convenience of reference only and will not affect
in any way the meaning or interpretation of this Agreement.

     Section 10.15.  Ambiguities.  This Agreement and the other Credit  Documents
were negotiated  between legal counsel for the parties and any ambiguity in this
Agreement or the other Credit Documents shall not be construed against the party
who drafted this Agreement or such other Credit Documents.


  [Remainder of page intentionally left blank; signatures on following pages.]



     In witness  whereof,  the parties  hereto have caused this  Agreement to be
duly  executed  and  delivered  by  their  respective  officers  thereunto  duly
authorized as of the date first written above.

                                     PROGRESSIVE SOFTWARE HOLDING, INC.



                                     By:/s/ William A. Beebe
                                        _______________________________________
                                          Name:William A. Beebe
                                          Title:Treasurer



                                     PROGRESSIVE SOFTWARE, INC.



                                     By:/s/ William A. Beebe
                                        _______________________________________
                                          Name:William A. Beebe
                                          Title:Treasurer


                                     ARK CLO 2000-1, LIMITED, as Agent

                                     By: Patriarch Partners, LLC
                                           Its Collateral Manager


                                     By:/s/ Lynn Tilton
                                        _______________________________________
                                          Name:Lynn Tilton
                                          Title:




LENDERS:
- -------

Address for Notices:                 ARK CLO 2000-1, LIMITED
- -------------------
c/o Patriarch Partners, LLC
40 Wall Street                       By: Patriarch Partners, LLC
New York, New York 10005             Its Collateral Manager
Facsimile No.:212-825- 2038

                                      By:/s/ Lynn Tilton
                                        _______________________________________
                                          Name:Lynn Tilton
                                          Title:



                                TABLE OF CONTENTS
                                -----------------

                                    ARTICLE I

                                  Defined Terms

Section 1.1.   Definitions.....................................................1

                                   ARTICLE II

                                      Loans

Section 2.1.    Loans.........................................................18

Section 2.2.    Use of Proceeds...............................................20

Section 2.3.    Evidence of Debt; Register; Lenders' Books and Records; Notes 20

Section 2.4.    Interest on Loans.............................................21

Section 2.5.    Repayment; Scheduled Payments ................................22

Section 2.6.    Optional Prepayments..........................................22

Section 2.7.    Mandatory Prepayments; Mandatory Commitment Reductions........23

Section 2.8.    Application of Prepayments....................................24

Section 2.9.    General Provisions Regarding Payments.........................24

                                   ARTICLE III

                              Conditions Precedent

Section 3.1.     Closing Date.  ..............................................25

Section 3.2.     Conditions to Each Borrowing  ...............................27

                                   ARTICLE IV

                         Representations and Warranties

Section 4.1.     Existence and Power..........................................28

Section 4.2.     Authorization; Binding Effect................................28

Section 4.3.     Contravention................................................29

Section 4.4.     Consents.....................................................29

Section 4.5.     Capitalization of the Borrowers .............................29

Section 4.6.     Subsidiaries and Other Securities ...........................30

Section 4.7.     Financial Information........................................31

Section 4.8.     Taxes........................................................31

Section 4.9.     Litigation...................................................31

Section 4.10.    Permits; Compliance With Laws................................31

Section 4.11.    Absence of Certain Changes or Events.........................32

Section 4.12.    Assets.......................................................32

Section 4.13.    Environmental Matters........................................32

Section 4.14.    Material Contracts...........................................33

Section 4.15.    Indebtedness and Liens.......................................33

Section 4.16.    Insurance....................................................33

Section 4.17.    Governmental Regulation. ....................................34

Section 4.18.    Margin Stock.  ..............................................34

Section 4.19.    Employee Matters.  ..........................................34

Section 4.20.    Employee Benefit Plans.  ....................................34

Section 4.21.    Certain Fees.  ..............................................35

Section 4.22.    Solvency.  ..................................................35

Section 4.23.    No Misstatements or Omissions................................35

Section 4.24.    Full Disclosure.  ...........................................35

                                    ARTICLE V

                              Affirmative Covenants

Section 5.1.     Financial Statements and Other Reports.......................36

Section 5.2.     Maintenance of Existence.....................................39

Section 5.3.     Maintenance of Records.......................................39

Section 5.4.     Maintenance of Properties....................................39

Section 5.5.     Conduct of Business..........................................39

Section 5.6.     Inspections; Lenders Meetings................................39

Section 5.7.     Payment of Taxes.............................................40

Section 5.8.     Use of Proceeds..............................................40

Section 5.9.     Insurance....................................................40

Section 5.10.    Compliance With Laws.  ......................................40

Section 5.11.    Compliance with Credit Documents.............................40

Section 5.12.    Intellectual Property. ......................................40

Section 5.13.    Collateral Assignment of Mortgage and Security Instruments...40

Section 5.14.    Blocked Account Agreement....................................41

Section 5.15.    Further Assurances.  ........................................41

                                   ARTICLE VI

                               Negative Covenants

Section 6.1.     Indebtedness.  ..............................................41

Section 6.2.     Liens.  .....................................................41

Section 6.3.     Equitable Lien.  ............................................43

Section 6.4.     Restricted Payments; Restrictions on Subsidiary Distributions43

Section 6.5.     Investments.  ...............................................43

Section 6.6.     Financial Covenants..........................................44

Section 6.7.     Fundamental Changes; Disposition of Assets; Acquisitions.....45

Section 6.8.     Disposal of Subsidiary Interests.............................46

Section 6.9.     Sales and Lease-Backs.  .....................................46

Section 6.10.    Transactions with Shareholders and Affiliates................46

Section 6.11.    Conduct of Business. ........................................46

Section 6.12.    Fiscal Year. ................................................46

                                   ARTICLE VII

                Increased Costs; Taxes; Indemnification; Set-Off

Section 7.1.     Increased Costs; Capital Adequacy. ..........................46

Section 7.2.     Taxes; Withholding, etc......................................47

Section 7.3.     Indemnification..............................................48

Section 7.4.     Right of Set-Off.............................................48

                                  ARTICLE VIII

                                Events of Default

Section 8.1.     Events of Default.  .........................................49

Section 8.2.     Remedies.  ..................................................51

                                   ARTICLE IX

                                    The Agent

Section 9.1.     Appointment of Agent.........................................52

Section 9.2.     Powers and Duties.  .........................................52

Section 9.3.     General Immunity.............................................52

Section 9.4.     Agent Entitled to Act as Lender .............................53

Section 9.5.     Lenders' Representations, Warranties and Acknowledgment. ....53

Section 9.6.     Right to Indemnity...........................................54

Section 9.7.     Successor Agent..............................................55

Section 9.8.     Collateral Documents.........................................55

                                    ARTICLE X

                                  Miscellaneous

Section 10.1.    Amendments and Waivers.......................................56

Section 10.2.    Notices......................................................57

Section 10.3.    Expenses.....................................................58

Section 10.4.    Enforceability; Successors and Assigns ......................58

Section 10.5.    Integration..................................................59

Section 10.6.    No Waiver; Remedies..........................................59

Section 10.7.    Submission to Jurisdiction...................................59

Section 10.8.    Execution in Counterparts....................................60

Section 10.9.    Governing Law................................................60

Section 10.10.   Waiver of Jury...............................................60

Section 10.11.   Severability.................................................60

Section 10.12.   Survival.....................................................60

Section 10.13.   Lawful Interest..............................................60

Section 10.14.   Interpretation...............................................61

Section 10.15.   Ambiguities..................................................61




                                                     EXHIBITS
                                                     --------

Exhibit 1.1(a).   Revolving Credit Commitment

Exhibit 1.1(b).   Term Loan Amount

Exhibit 2.3(c)(i).Revolving Note

Exhibit 2.3(c)(ii).Term Note

Exhibit 3.1(a).   Secretary's Certificates

Exhibit 3.1(i).   Opinion of Counsel

Exhibit 3.1(j).   Closing Date Certificates

Exhibit 3.1(l).   Security Agreement

Exhibit 3.1(o).   Borrowing Base Certificate

Exhibit 3.2(a).   Funding Notice

Exhibit 4.7(d).   Projections

Exhibit 5.1(d).   Compliance Certificate

Exhibit 5.12.     Software Escrow Agreement and License Agreement

Exhibit 5.14.     Blocked Account Agreement

Exhibit 6.6(c).   Consolidated Adjusted EBITDA Test

Exhibit 10.4(b).  Assignment Agreement




                                    SCHEDULES

Schedule 4.4      Consents

Schedule 4.5      Organizational and Capital Structure

Schedule 4.6(a)   Subsidiaries

Schedule 4.6(c)   Securities

Schedule 4.7(b)   Statement of Operations from 2/12/02 to 6/30/02

Schedule 4.7(c)   Accounts Receivable

Schedule 4.8      Taxes

Schedule 4.9      Litigation

Schedule 4.12(b)  Real Property and Leaseholds

Schedule 4.13     Environmental Liability

Schedule 4.15(a)  Indebtedness

Schedule 4.15(b) Liens

EX-10

                                                                  EXHIBIT 10.2



                              EMPLOYMENT AGREEMENT
                              --------------------

     THIS EMPLOYMENT  AGREEMENT (the  "Agreement") is entered into as of the 6th
day of August,  2002,  by and between  Progressive  Software  Holding,  Inc.,  a
Delaware  corporation  with its  principal  place of business  at 6836  Morrison
Boulevard,  Charlotte,  North  Carolina  28211 (the  "Company"),  and William A.
Beebe, an individual with a residence address of 825 St. Andrews Drive, Bozeman,
Montana 59715ADDRESS (the "Executive").

                                  INTRODUCTION

     WHEREAS,  the Company is in the  business  of  designing,  developing,  and
marketing  high  quality,  specialized  point of sale  ("POS"),  back office and
enterprise  technology for the food service and specialty  retail  industry (the
"Business"); and

     WHEREAS,  the Company desires to employ Executive and Executive  desires to
accept such employment on the terms and conditions set forth herein.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the premises and mutual promises herein
below set forth, the parties hereby agree as follows:


     1. Employment Period. The term of this Agreement (the "Employment  Period")
shall  commence  on the date  hereof  and,  subject  to earlier  termination  as
hereinafter provided, shall terminate six (6) months from the date hereof.

     2. Employment Duties. Subject to the terms and conditions set forth herein,
the  Company  hereby  employs  Executive  to act as  Vice  President  and  Chief
Financial  Officer of the Company  during the Employment  Period,  and Executive
hereby accepts such  employment.  The duties  assigned and authority  granted to
Executive  shall be as set forth in the By-laws of the Company and as determined
by its Board of Directors  and the CEO.  Executive  agrees to perform his duties
for  the  Company  diligently,  competently,  and in a good  faith  manner.  The
Executive may also engage in civic and charitable  activities to the extent they
are not inconsistent with Executive's duties hereunder.

     3. Base Salary.  The Company  agrees to pay  Executive a salary  during the
Employment Period of $100,000, payable in equal monthly installments.

     4. Other Benefits.

     (a) Reimbursement for Insurance  Premiums.  The Executive shall participate
in the Company's medical insurance program for its employees.

     (b) Vacation.  Executive  shall be entitled to vacation of such duration as
may be determined by the Board of  Directors,  but not less than that  generally
established for other  executives of Company and in no event less than three (3)
weeks annually on a pro rata basis, without interruption of salary.

     (c)  Reimbursement of Expenses.  The Company shall reimburse  Executive for
all reasonable  travel,  entertainment,  gasoline and other expenses incurred or
paid by the Executive in connection  with, or related to, the performance of his
duties or responsibilities under this Agreement, provided that Executive submits
to the Company  substantiation of such expenses sufficient to satisfy the record
keeping  guidelines  promulgated  from  time  to time  by the  Internal  Revenue
Service.

     5.  Termination  by the Company with Cause.  The Company may terminate this
Agreement if any of the following events shall occur:

     (a)  the  death  or  disability  of the  Executive  (for  purposes  of this
Agreement, "disability" shall mean the Executive's incapacity due to physical or
mental  illness  which has caused the  Executive to be absent from the full-time
performance of his duties with the Company for a period of three (3) consecutive
months).

     (b) any action or  inaction  by the  Executive  that  constitutes  larceny,
fraud,  gross  negligence,  a  willful  or  negligent  misrepresentation  to the
directors  or officers of the Company,  its  successors  or assigns,  or a crime
involving moral turpitude; or

     (c) the  refusal  of the  Executive  to follow  the  reasonable  and lawful
written  instructions  of the Board of Directors of the Company or the CEO, with
respect to the services to be rendered and the manner of rendering such services
by Executive.

The Company may terminate this Agreement  pursuant to this Section 5 immediately
upon written notice to the Executive, except for termination due to the death of
the Executive, which shall require no notice.

     6. Termination.

     (a) Notice/Events.

          (i)  Termination  of  the  Executive.  Executive  may  terminate  this
     Agreement  at any time by  providing  a minimum of two (2) weeks of written
     notice to the Company.

          (ii)  Termination  by the  Company  Without  Cause.  The  Company  may
     terminate  this Agreement at any time,  without cause by providing  written
     notice to Executive.  As used in this  Agreement,  the term "without cause"
     shall mean  termination  for any reason not  specified in Section 5 hereof,
     except for retirement.

     (b) No Severance. If this Agreement expires or is terminated by the Company
or the Executive for any reason or no reason, the Executive shall have no rights
to receive  severance  payments  from the Company,  and all  obligations  of the
Company  pursuant  to Sections 3 and 4 hereof  (except  for  amounts  earned but
unpaid under Section 3) shall terminate  immediately  effective upon the date of
such termination; provided, however, if the Executive's employment is terminated
by the Company  without  cause,  the Executive  shall be entitled to receive his
salary for the remainder of the Employment Period.

     7. Non-Competition.  During the term of this Agreement and for one (1) year
following the expiration or termination  of this  Agreement,  Executive will not
directly  or  indirectly  whether as a  partner,  consultant,  agent,  employee,
co-venturer,  greater  than two percent  owner or otherwise or through any other
Person (as hereafter defined):  (a) be engaged in any business or activity which
is  competitive  with the  Business  of the  Company in any part of the world in
which the  Company  is at the time of the  Executive's  termination  engaged  in
selling  its  products  directly  or  indirectly;  or (b) attempt to recruit any
employee  of the  Company,  assist  in their  hiring  by any  other  person,  or
encourage any employee to terminate his or her employment  with the Company;  or
(c)  encourage  any customer of the Company to conduct with any other person any
business or activity  which such  customer  conducts or could  conduct  with the
Company.  For purpose of this Section 7, the term  "Company"  shall  include any
person controlling, under common control with or controlled by, the Company, and
the term  "Person"  shall mean an  individual  or  corporation,  association  or
partnership in estate or trust or any other entity or organization.

     The Executive recognizes and agrees that because a violation by him of this
Section  7  will  cause  irreparable  harm  to the  Company  that  could  not be
quantified  and for which money damages would be  inadequate,  the Company shall
have the right to injunctive  relief to prevent or restrain any such  violation,
without the necessity of posting a bond.

     Executive  expressly agrees that the character,  duration and scope of this
covenant not to compete are  reasonable  in light of the  circumstances  as they
exist at the date upon which this Agreement has been executed. However, should a
determination  nonetheless  be made by a court of  competent  jurisdiction  at a
later date that the character,  duration or geographical  scope of this covenant
not to compete is unreasonable in light of the circumstances as they then exist,
then it is the  intention of both  Executive  and the Company that this covenant
not to  compete  shall be  construed  by the court in such a manner as to impose
only those  restrictions  on the conduct of Executive  which are  reasonable  in
light of the  circumstances  as they then exist and  necessary  to  provide  the
Company to the fullest  extent  permitted  by law the  intended  benefit of this
covenant not to compete.

     8. Confidentiality Covenants. Executive understands that Company may impart
to  him  confidential  business  information  including,   without  limitations,
designs, financial information,  personnel information, strategic plans, product
development information and the like (collectively "Confidential  Information").
Executive hereby acknowledges Company's exclusive ownership of such Confidential
Information.

     (a) Executive's  Agreements.  Executive  agrees as follows:  (i) to use the
Confidential  Information  only to  provide  services  to the  Company;  (ii) to
communicate  Confidential  Information  only to  fellow  employees,  agents  and
representatives  of the  Company  on a  need-to-know  basis;  and  (iii)  not to
otherwise  disclose  or use any  Confidential  Information.  Upon  demand by the
Company or upon termination of Executive's employment, Executive will deliver to
the Company all manuals,  photographs,  recordings,  and any other instrument or
device by which,  through which, or on which  Confidential  Information has been
recorded and/or preserved,  which are in the Executive's possession,  custody or
control.  Executive  acknowledges  that for purposes of this Section 8 that term
"Company"  means any person or entity now or  hereafter  during the term of this
Agreement which controls, is under common control with, or is controlled by, the
Company.

     (b)  Remedies  for  Violation.  The  Executive  recognizes  and agrees that
because a violation by him of this Section 8 will cause  irreparable harm to the
Company  that  could not be  quantified  and for which  money  damages  would be
inadequate,  the Company shall have the right to injunctive relief to prevent or
restrain any such violations, without the necessity of posting a bond.

     9.  Governing  Law/Jurisdiction.  This  Agreement  shall be governed by and
interpreted  and  governed  in  accordance  with the laws of the  State of North
Carolina.  The parties  agree that this  Agreement  was made and entered into in
North Carolina and each party hereby consents to the jurisdiction of a competent
court in North Carolina to hear any dispute arising out of this Agreement.

     10. Entire  Agreement.  This  Agreement  constitutes  the entire  agreement
between the parties hereto with respect to the subject matter hereof and thereof
and supersedes any and all previous agreements,  written and oral, regarding the
subject matter hereof between the parties  hereto.  This Agreement  shall not be
changed,  altered,  modified or amended, except by a written agreement signed by
both parties hereto.

     11.  Notices.  All  notices,  requests,  demands  and other  communications
required  or  permitted  to be given or made  under this  Agreement  shall be in
writing  and shall be deemed to have been given if  delivered  by hand,  sent by
generally recognized overnight courier service,  telex or telecopy, or certified
mail, return receipt requested.

         (a)   to the Company at:

               6836 Morrison Boulevard
               Charlotte, North Carolina 28211
               Attn: Chairman and CEO


         (b)   to the Executive at:

               6838 Morrison Boulevard
               Charlotte, North Carolina  28211
               Attn:  William Beebe

     Any such  notice or other  communication  will be  considered  to have been
given (i) on the date of delivery in person, (ii) on the third day after mailing
by certified  mail,  provided  that receipt of delivery is confirmed in writing,
(iii) on the first  business day  following  delivery to a commercial  overnight
courier, or (iv) on the date of facsimile transmission  (telecopy) provided that
the giver of the notice obtains telephone confirmation of receipt.

     Either  party may, by notice  given to the other party in  accordance  with
this  Section,  designate  another  address  or person  for  receipt  of notices
hereunder.

     12.  Severability.  If any  term or  provision  of this  Agreement,  or the
application thereof to any person or under any circumstance, shall to any extent
be invalid or unenforceable, the remainder of this Agreement, or the application
of such terms to the persons or under circumstances other than those as to which
it is invalid or unenforceable,  shall be considered  severable and shall not be
affected thereby, and each term of this Agreement shall be valid and enforceable
to the fullest extent permitted by law. The invalid or unenforceable  provisions
shall,  to the  extent  permitted  by law,  be deemed  amended  and  given  such
interpretation as to achieve the economic intent of this Agreement.

     13. Waiver. The failure of any party to insist in any once instance or more
upon  strict  performance  of any of the  terms  and  conditions  hereof,  or to
exercise any right of privilege  herein  conferred,  shall not be construed as a
waiver of such terms, conditions,  rights or privileges, but same shall continue
to remain in full force and effect. Any waiver by any party of any violation of,
breach of or default  under any  provision of this  Agreement by the other party
shall not be construed as, or constitute, a continuing waiver of such provision,
or waiver of any  other  violation  of,  breach  of or  default  under any other
provision of this Agreement.

     14.  Successors  and  Assigns.  This  Agreement  shall be binding  upon the
Company and any successors and assigns of the Company.



     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.


                                         PROGRESSIVE SOFTWARE HOLDING, INC.


                                         By: /s/ Christopher Sebes
                                             -----------------------------------
                                                 Christopher Sebes
                                                 President and CEO


                                         EXECUTIVE:


                                          /s/ William A. Beebe
                                         ---------------------------------------
                                              William A. Beebe

EX-10

                                                                  EXHIBIT 10.3


                              EMPLOYMENT AGREEMENT
                              --------------------

     THIS EMPLOYMENT  AGREEMENT (the  "Agreement") is entered into as of the 6th
day of July, 2002 (the "Effective  Date"), by and between  Progressive  Software
Holding,  Inc., a Delaware  corporation  with its principal place of business at
6836 Morrison Boulevard,  Charlotte,  North Carolina 28211 (the "Company"),  and
Christopher  Sebes, an individual with a residence address of 7409 Red Oak Lane,
Charlotte, North Carolina 28226 (the "Executive").

                                  INTRODUCTION

     WHEREAS,  the Company is in the  business  of  designing,  developing,  and
marketing  high  quality,  specialized  point of sale  ("POS"),  back office and
enterprise  technology for the food service and specialty  retail  industry (the
"Business"); and

     WHEREAS,  the Company  desires to employ the  Executive  and the  Executive
desires to accept such employment on the terms and conditions set forth herein.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the premises and mutual promises herein
below set forth, the parties hereby agree as follows:

     1. Employment Period. The term of this Agreement (the "Employment  Period")
shall  commence  on the date  hereof  and,  subject  to earlier  termination  as
hereinafter provided, shall terminate one (1) year from the date hereof.

     2. Employment Duties. Subject to the terms and conditions set forth herein,
the Company hereby employs the Executive to act as President and Chief Executive
Officer of the Company during the Employment  Period,  and the Executive  hereby
accepts  such  employment.  The duties  assigned  and  authority  granted to the
Executive shall be determined by the Company's Board of Directors. The Executive
agrees to perform his duties for the Company diligently,  competently,  and in a
good  faith  manner.  The  Executive  may also  engage in civic  and  charitable
activities to the extent they are not inconsistent  with the Executive's  duties
hereunder.

     3. Salary and Bonus.

     (a) Base  Salary.  The Company  agrees to pay the  Executive a salary at an
annualized  rate of $175,000 from the Effective Date through  December 31, 2002,
and a salary at an annualized  rate of $200,000 from January 1, 2003 through the
remainder of the Employment Period, payable monthly.

     (b) Bonus.  The Executive  shall have an opportunity to earn an annual cash
bonus in the discretion of the Company's  Board of Directors (or any appropriate
committee thereof);  provided, that nothing herein shall obligate the Company to
pay any bonus to the Executive.

     (c) Options.  The Executive shall have an opportunity to participate in any
employee  option  plan  established  by the  Company  in the  discretion  of the
Company's Board of Directors (or any appropriate  committee thereof);  provided,
that  nothing  herein  shall  obligate  the  Company  to  grant  options  to the
Executive.

     4. Other Benefits.

     (a) Reimbursement for Insurance  Premiums.  The Executive shall participate
in the Company's medical insurance program for its employees.

     (b) Vacation. The Executive shall be entitled to an annual vacation of such
duration in accordance  with the vacation  policies of the Company in effect for
its  executives  and as may be determined  by the Board of Directors,  and in no
event less than three (3) weeks, without interruption of salary.

     (c)  Reimbursement  of Expenses.  The Company shall reimburse the Executive
for all reasonable travel,  entertainment,  gasoline and other expenses incurred
or paid by the Executive in connection  with, or related to, the  performance of
his duties or responsibilities under this Agreement, provided that the Executive
submits to the Company substantiation of such expenses sufficient to satisfy the
record keeping guidelines  promulgated from time to time by the Internal Revenue
Service.

     (d) Moving  Expenses.  The Company shall  reimburse the Executive for up to
$7,000 for moving  expenses  incurred by the  Executive in  connection  with his
relocation to North Carolina.

     (e)  Forgiveness  of Debt. The Company shall forgive loans in the amount of
$45,000 made before the date hereof by the Company to the Executive.

     5.  Termination  by the Company with Cause.  The Company may terminate this
Agreement if any of the following events shall occur:

     (a)  the  death  or  disability  of the  Executive  (for  purposes  of this
Agreement, "disability" shall mean the Executive's incapacity due to physical or
mental  illness  which has caused the  Executive to be absent from the full-time
performance of his duties with the Company for a period of three (3) consecutive
months).

     (b) any action or  inaction  by the  Executive  that  constitutes  larceny,
fraud,  gross  negligence,  a  willful  or  negligent  misrepresentation  to the
directors  or officers of the Company,  its  successors  or assigns,  or a crime
involving moral turpitude; or

     (c) the  refusal  of the  Executive  to follow  the  reasonable  and lawful
written  instructions of the Board of Directors of the Company,  with respect to
the  services to be rendered and the manner of  rendering  such  services by the
Executive or the Executive's failure,  after notice, to satisfactorily carry out
the duties assigned to him.

The Company may terminate this Agreement  pursuant to this Section 5 immediately
upon written notice to the Executive, except for termination due to the death of
the Executive, which shall require no notice.


     6. Termination and Severance.

     (a) Notice/Events/Defined Terms.

          (i)  Termination  by the  Executive.  The Executive may terminate this
     Agreement  at any time by  providing  a minimum of two (2) weeks of written
     notice to the Company.

          (ii)  Termination  by the  Company  Without  Cause.  The  Company  may
     terminate  this  Agreement at any time without  cause by providing  written
     notice  to the  Executive.  As used in this  Agreement,  the term  "without
     cause"  shall mean  termination  for any reason not  specified in Section 5
     hereof, except for retirement.

     (b)  Severance.  If the Company  terminates  this  Agreement  without cause
within the first six (6) months of the Effective  Date,  then  commencing on the
date of such  termination,  the  Company  shall  provide  the  Executive  with a
severance  payment equal to three  quarters of his annual salary then in effect,
payable in nine (9) equal monthly installments.  Thereafter, the Executive shall
accrue one (1) additional month of severance payment for every two (2) months of
service to the Company through the end of the Employment  Period up to a maximum
severance  payment equal to twelve (12) months of the Executive's  annual salary
in effect at the time of termination of this agreement, payable in equal monthly
installments over the number of months of severance so accrued, upon termination
without  cause during the last six (6) months of the  Employment  Period or upon
the end of the Employment Period if the Executive's  employment is not continued
or renewed by the Company.

     (c) General  Release.  As a condition  precedent to receiving any severance
payment,  the Executive  shall  execute a general  release of any and all claims
which the  Executive  or his  heirs,  executors,  agents or  assigns  might have
against the Company, its subsidiaries,  affiliates,  successors, assigns and its
past, present and future stockholders,  employees,  officers,  directors, agents
and attorneys.

     (d) Resignation. If the Executive or the Company with cause terminates this
Agreement, the Executive shall have no rights to receive severance payments from
the Company,  and all obligations of the Company pursuant to Sections 3, 4 and 6
hereof shall terminate  immediately effective upon the date of such termination;
provided,  that the Company shall pay to the Executive any amounts under Section
3 hereof earned but unpaid as of such date of termination.

     7. Non-Competition.  During the term of this Agreement and for one (1) year
following the termination of this Agreement,  the Executive will not directly or
indirectly  whether  as a partner,  consultant,  agent,  employee,  co-venturer,
greater  than two percent  owner or  otherwise  or through any other  Person (as
hereafter  defined):  (a) be  engaged  in any  business  or  activity  which  is
competitive  with the  business of the Company in any part of the world in which
the Company is at the time of the Executive's termination engaged in selling its
products  directly or indirectly;  or (b) attempt to recruit any employee of the
Company,  assist in their hiring by any other person,  or encourage any employee
to terminate  his or her  employment  with the  Company;  or (c)  encourage  any
customer  of the  Company  to conduct  with any other  person  any  business  or
activity  which such customer  conducts or could  conduct with the Company.  For
purpose  of this  Section  7,  the  term  "Company"  shall  include  any  person
controlling,  under common control with, or controlled by, the Company,  and the
term  "Person"  shall  mean  an  individual  or   corporation,   association  or
partnership in estate or trust or any other entity or organization.

     The Executive recognizes and agrees that because a violation by him of this
Section  7  will  cause  irreparable  harm  to the  Company  that  could  not be
quantified  and for which money damages would be  inadequate,  the Company shall
have the right to injunctive  relief to prevent or restrain any such  violation,
without the necessity of posting a bond.

     The Executive  expressly  agrees that the character,  duration and scope of
this  covenant not to compete are  reasonable in light of the  circumstances  as
they exist at the date upon which this  Agreement  has been  executed.  However,
should a determination  nonetheless be made by a court of competent jurisdiction
at a later  date that the  character,  duration  or  geographical  scope of this
covenant not to compete is  unreasonable in light of the  circumstances  as they
then exist,  then it is the intention of both the Executive and the Company that
this covenant not to compete shall be construed by the court in such a manner as
to impose  only those  restrictions  on the conduct of the  Executive  which are
reasonable  in light of the  circumstances  as they then exist and  necessary to
provide the Company to the fullest extent  permitted by law the intended benefit
of this covenant not to compete.

     8. Confidentiality  Covenants.  The Executive  understands that Company may
impart to him confidential business information including,  without limitations,
designs, financial information,  personnel information, strategic plans, product
development information and the like (collectively "Confidential  Information").
The  Executive  hereby  acknowledges   Company's  exclusive  ownership  of  such
Confidential Information.

     (a) The Executive's Agreements. The Executive agrees as follows: (i) to use
the Confidential  Information  only to provide services to the Company;  (ii) to
communicate  Confidential  Information  only to  fellow  employees,  agents  and
representatives  of the  Company  on a  need-to-know  basis;  and  (iii)  not to
otherwise  disclose  or use any  Confidential  Information.  Upon  demand by the
Company or upon termination of Executive's employment, Executive will deliver to
the Company all manuals,  photographs,  recordings,  and any other instrument or
device by which,  through which, or on which  Confidential  Information has been
recorded and/or preserved,  which are in the Executive's possession,  custody or
control.  Executive  acknowledges  that for purposes of this Section 8 that term
"Company"  means any person or entity now or  hereafter  during the term of this
Agreement which controls, is under common control with, or is controlled by, the
Company.

     (b)  Remedies  for  Violation.  The  Executive  recognizes  and agrees that
because a violation by him of this Section 8 will cause  irreparable harm to the
Company  that  could not be  quantified  and for which  money  damages  would be
inadequate,  the Company shall have the right to injunctive relief to prevent or
restrain any such violations, without the necessity of posting a bond.


     9.  Governing  Law/Jurisdiction.  This  Agreement  shall be governed by and
interpreted  and  governed  in  accordance  with the laws of the  State of North
Carolina.  The parties  agree that this  Agreement  was made and entered into in
North Carolina and each party hereby consents to the jurisdiction of a competent
court in North Carolina to hear any dispute arising out of this Agreement.

     10.  Entire  Agreement.   This  Agreement,   together  with  its  Exhibits,
constitutes the entire agreement  between the parties hereto with respect to the
subject   matter  hereof  and  thereof  and  supersedes  any  and  all  previous
agreements,  written and oral,  regarding the subject  matter hereof between the
parties  hereto.  This  Agreement  shall not be  changed,  altered,  modified or
amended, except by a written agreement signed by both parties hereto.

     11.  Notices.  All  notices,  requests,  demands  and other  communications
required  or  permitted  to be given or made  under this  Agreement  shall be in
writing  and shall be deemed to have been given if  delivered  by hand,  sent by
generally recognized overnight courier service,  telex or telecopy, or certified
mail, return receipt requested.

         (a)      to the Company at:

                  6836 Morrison Boulevard
                  Charlotte, North Carolina 28211

         (b)      to the Executive at:

                  6836 Morrison Boulevard
                  Charlotte, North Carolina  28211


     Any such  notice or other  communication  will be  considered  to have been
given (i) on the date of delivery in person, (ii) on the third day after mailing
by certified  mail,  provided  that receipt of delivery is confirmed in writing,
(iii) on the first  business day  following  delivery to a commercial  overnight
courier, or (iv) on the date of facsimile transmission  (telecopy) provided that
the giver of the notice obtains telephone confirmation of receipt.

     Either  party may, by notice  given to the other party in  accordance  with
this  Section,  designate  another  address  or person  for  receipt  of notices
hereunder.

     12.  Severability.  If any  term or  provision  of this  Agreement,  or the
application thereof to any person or under any circumstance, shall to any extent
be invalid or unenforceable, the remainder of this Agreement, or the application
of such terms to the persons or under circumstances other than those as to which
it is invalid or unenforceable,  shall be considered  severable and shall not be
affected thereby, and each term of this Agreement shall be valid and enforceable
to the fullest extent permitted by law. The invalid or unenforceable  provisions
shall,  to the  extent  permitted  by law,  be deemed  amended  and  given  such
interpretation as to achieve the economic intent of this Agreement.

     13. Waiver. The failure of any party to insist in any once instance or more
upon  strict  performance  of any of the  terms  and  conditions  hereof,  or to
exercise any right of privilege  herein  conferred,  shall not be construed as a
waiver of such terms, conditions,  rights or privileges, but same shall continue
to remain in full force and effect. Any waiver by any party of any violation of,
breach of or default  under any  provision of this  Agreement by the other party
shall not be construed as, or constitute, a continuing waiver of such provision,
or waiver of any  other  violation  of,  breach  of or  default  under any other
provision of this Agreement.

     14.  Successors  and  Assigns.  This  Agreement  shall be binding  upon the
Company and any successors and assigns of the Company.



     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.


                                            PROGRESSIVE SOFTWARE HOLDING, INC.


                                             By:/s/ William A. Beebe
                                                -------------------------------
                                                Name:William A. Beebe
                                                Title:Treasurer


                                             EXECUTIVE:


                                             /s/ Christopher Sebes
                                             ----------------------------------
                                                 Christopher Sebes

EX-10

                                                                  EXHIBIT 10.4

                       PROGRESSIVE SOFTWARE HOLDING, INC.
                             2002 STOCK OPTION PLAN

                            Effective: August 6, 2002


                        ---------------------------------




                       PROGRESSIVE SOFTWARE HOLDING, INC.
                             2002 STOCK OPTION PLAN


1.       Purpose

     Progressive  Software Holding,  Inc. (the "Company") desires to attract and
retain the best available  talent and encourage the highest level of performance
by employees and other persons who perform  services for the Company in order to
serve the best  interests  of the Company  and its  stockholders.  By  affording
eligible persons the opportunity to acquire proprietary interests in the Company
and by providing them incentives to put forth maximum efforts for the success of
the Company's business, the Progressive Software Holding, Inc. 2002 Stock Option
Plan  (the  "Plan")  is  expected  to  contribute  to the  attainment  of  those
objectives.

2.       Options and Shares of Common Stock Subject to the Plan

     Option  grants  under the Plan may be granted in the form of (i)  incentive
stock  options  ("incentive  stock  options")  as provided in Section 422 of the
Internal  Revenue Code of 1986, as amended (the "Code"),  to purchase  shares of
the Series A Common Stock,  $.01 par value per share, of the Company,  or if the
Series A Common  Stock  shall no longer  exist as  provided in Article IV of the
Company's  Certificate of  Incorporation,  the Common Stock,  $.01 par value per
share, of the Company (the "Common  Stock");  (ii) options to purchase shares of
Common  Stock  which are not  intended  to qualify as  incentive  stock  options
("non-qualified options") (unless otherwise indicated, references in the Plan to
"options" include  incentive stock options and  non-qualified  options) or (iii)
any combination of the foregoing as the Committee (as defined in paragraph 3(a))
shall  determine.  The maximum  aggregate number of shares of Common Stock as to
which options may be granted from time to time under the Plan is 418,386 shares.
The shares  available  may be in whole or in part,  as the Board of Directors of
the  Company  (the  "Board of  Directors")  shall  from time to time  determine,
authorized  but  unissued  shares or issued  shares  reacquired  by the Company.
Unless  otherwise  provided  by the  Committee,  shares  covered  by  expired or
terminated  options will be available  for  subsequent  option  grants under the
Plan.  Any  shares  issued  by the  Company  in  respect  of the  assumption  or
substitution of outstanding  options from a corporation or other business entity
by the Company shall not reduce the number of shares available for option grants
under the Plan.

3.       Administration

     (a) The  Plan  shall  be  administered  by a  committee  (the  "Committee")
consisting  of not less  than two  members  of the  Board of  Directors  who are
selected  by the Board of  Directors.  The term  "Committee"  shall refer to the
Board of  Directors  if at any time no  committee  of the Board of  Directors is
constituted to administer the Plan.

     (b) The Committee shall have plenary  authority in its discretion,  subject
to and not  inconsistent  with the express  provisions  of the Plan (i) to grant
options,  (ii) to  determine  the  purchase  price of the shares of Common Stock
covered by each option, (iii) the term of each option, (iv) the persons to whom,
and the time or times at which  options  shall be  granted,  (v) the  number  of
shares to be covered by each  option,  (vi) to  designate  options as  incentive
stock options or non-qualified  options,  (vii) to interpret the Plan, (viii) to
prescribe, amend and rescind rules and regulations relating to the Plan, (ix) to
determine  the terms and  provisions  of the option  agreements  as described in
paragraph  14  (which  need  not be  identical),  and  (x)  to  make  all  other
determinations deemed necessary or advisable for the administration of the Plan.
Except to the extent  prohibited  by any  applicable  law,  rule or  regulation,
including,  without limitation, the requirements applicable under Section 162(m)
of the Code to any  option  granted  under the plan  intended  to be  "qualified
performance-based compensation," or the requirements for any award granted under
the Plan to an officer or  director  to be covered by any  exemptive  rule under
Section 16 of the  Securities  Exchange Act of 1934,  as amended (the  "Exchange
Act")  (including  Rule 16b-3, or any successor rule, as the same may be amended
from time to time),  the Committee may delegate to one or more of its members or
to one or more agents such administrative  duties as it may deem advisable,  and
the  Committee or any person to whom it has  delegated  duties as aforesaid  may
employ one or more persons to render  advice with respect to any  responsibility
the Committee or such person may have under the Plan.

     (c) The Committee may employ attorneys,  consultants,  accountants or other
persons and the Committee,  the Company and its officers and directors  shall be
entitled to rely upon the advice,  opinions or  valuations  of any such persons.
The Committee shall have full discretionary  authority in all matters related to
the discharge of its  responsibilities  and the exercise of its authority  under
the Plan. All actions taken and all  interpretations  and determinations made by
the Committee in good faith shall be final and binding upon all persons who have
received option grants, the Company and all other interested  persons. No member
or  agent  of  the  Committee  shall  be  personally   liable  for  any  action,
determination or interpretation  taken or made in good faith with respect to the
Plan or  option  grants  made  thereunder,  and all  members  and  agents of the
Committee and the Board of Directors shall be fully indemnified and protected by
the Company in respect of any such action, determination or interpretation.

4.       Eligibility; Factors to be Considered in Granting Options

     (a) Subject to the  limitations  on the granting of options  otherwise  set
forth in the Plan,  option  grants will be limited to  employees  and  directors
(whether or not also  employees)  of the Company or a Subsidiary  (as defined in
the  last  sentence  of this  paragraph  4(a))  and to  individuals  who are not
employees but who provide  services to the Company or a Subsidiary,  but only to
the extent any such  non-employees  (i) are natural  persons;  (ii) provide bona
fide  services to the Company or a Subsidiary;  and (iii) provide  services that
are not in connection  with the offer or sale of the Company's or a Subsidiary's
securities in a capital-raising  transaction,  and do not directly or indirectly
promote or  maintain a market for the  Company's  or a  Subsidiary's  securities
(such service  providers who are neither employees nor directors are referred to
in the Plan as "consultants").  In determining the eligible  individuals to whom
options  shall be granted and the number of shares to be covered by each option,
the  Committee  shall take into account the nature of the  individuals'  duties,
their present and potential contributions to the success of the Company and such
other  factors as it shall deem relevant in connection  with  accomplishing  the
purposes  of the Plan.  An  eligible  individual  who has been  selected  by the
Committee to participate  in the Plan and who holds an outstanding  option under
the Plan is  referred  to in the  Plan as an  "optionee."  As used in the  Plan,
"Subsidiary" shall mean any present or future corporation which is or would be a
"subsidiary  corporation"  of the  Company  as such term is  defined  in Section
424(f) of the Code.

     (b) Option grants may be granted  singly,  in  combination or in tandem and
may be  made  in  combination  or in  tandem  with,  in  replacement  of,  or as
alternatives  to, awards or grants under any other  employee plan  maintained by
the Company and/or any Subsidiary. No incentive stock option shall be granted to
any  individual  otherwise  eligible  to  participate  in the Plan who is not an
employee of the Company or a Subsidiary  on the date of granting of such option.
An  optionee  who has been  granted an option or  options  under the Plan may be
granted additional options, subject to such limitations as may be imposed by the
Code on the  grant of  incentive  stock  options.  No grant of  incentive  stock
options  (under the Plan and any other  "incentive  stock  option"  plans of the
Company,  any Subsidiary and any "parent  corporation" of the Company within the
meaning of Section 424(e) of the Code) shall result in the aggregate fair market
value of Common Stock with respect to which  "incentive  stock options"  (within
the meaning of Section 422 of the Code,  but without regard to subsection (d) of
such  Section) are  exercisable  for the first time by any  employee  during any
calendar year  (determined  at the time the  incentive  stock option is granted)
exceeding  $100,000 and any options  granted in such  calendar year which do not
qualify   hereunder  as  "incentive   stock  options"  shall  be  deemed  to  be
non-qualified options..

     (c)  Notwithstanding  any  other  provision  contained  in the  Plan to the
contrary,  the maximum  number of shares of Common Stock which may be subject to
options  granted under the Plan to any single  optionee during any calendar year
shall not exceed 150,000 shares of Common Stock.

     (d) The  adoption  of the Plan shall not be deemed to give any  employee of
the Company or any  Subsidiary  or any other  person any right to be selected to
participate  in the Plan or to be  granted an option  under the Plan.  No person
shall have any rights or claims  under the Plan  except in  accordance  with the
provisions of the Plan and the applicable option agreement.



5.       Purchase Price

     (a) The  purchase  price of a share of the  Common  Stock  covered  by each
option shall be determined by the Committee,  but,  subject to paragraphs  5(b),
shall, in the case of any incentive  stock option,  not be less than 100% of the
fair market value (as hereinafter defined, the "Market Value") of a share of the
Common  Stock on the date  such  incentive  stock  option is  granted,  and such
purchase  price of any option  granted  under the Plan shall not be reduced,  by
action of the  Committee  or the Board of Directors  or  otherwise,  at any time
after the date such option is granted  (subject to Section 11(a)).  For purposes
of the Plan,  the Market  Value of a share of Common  Stock shall be the closing
price for a share of Common Stock on the date of the  determination,  or if such
date is not a trading  day,  then on the most  recently  preceding  trading day;
provided,  however,  that for purposes of any incentive  stock  options  granted
under the Plan,  such  Market  Value  shall be  determined  subject  to  Section
422(c)(7) of the Code.  The closing  price for a share of Common Stock shall be:
(i) if the Common  Stock shall be listed or admitted to trading on any  national
securities  exchange,  the  average  of the last  reported  sales  prices on the
specified  days (or if there is no reported sale on any such trading  date,  the
average of the closing bid and asked prices on such trading  date);  (ii) if the
Common  Stock is not traded or  admitted to trading on any  national  securities
exchange,  the  closing  price,  if  reported,  or if the  closing  price is not
reported,  the average of the closing bid and asked  prices,  as reported by The
Nasdaq  Stock  Market(R)or  similar  source  or, if no such  source  exists,  as
furnished  by two members of the National  Association  of  Securities  Dealers,
Inc.,  selected by the Committee for that purpose,  on the specified  dates;  or
(iii) if the Common  Stock is not traded or admitted to trading on any  national
securities  exchange or The Nasdaq Stock  Market(R),  the closing  price on such
dates as  determined  in good faith by the  Committee or the Board of Directors.
The  Committee  shall  determine  the date on which an option  under the Plan is
granted,  provided that such date is consistent with the Code and any applicable
rules or regulations thereunder. In the absence of such determination,  the date
on  which  the  Committee  adopts  a  resolution  granting  an  option  shall be
considered  the date on which such option is granted,  provided  the optionee to
whom the  option is  granted  is  promptly  notified  of the grant and an option
agreement is duly executed as of the date of the resolution.  The purchase price
shall be subject to adjustment as provided in paragraph 11(a).

     (b) No incentive  stock  option  shall be granted to an employee  under the
Plan who owns  (within the meaning of Section  424(d) of the Code),  at the time
the option is granted,  more than ten percent (10%) of the total combined voting
power of all  classes of stock of the  Company or a  Subsidiary  or any  "parent
corporation"  of the Company  within the meaning of Section  424(e) of the Code.
This  restriction  does not apply if at the time such incentive  stock option is
granted  the  option  exercise  price per share of Common  Stock  subject to the
option is at least  110% of the Market  Value of a share of Common  Stock on the
date such incentive  stock option is granted,  and the incentive stock option by
its terms is not  exercisable  after the expiration of five years from such date
of grant.

6.       Terms of Option Grants

     The term of each option  granted  under the Plan shall be determined by the
Committee  and  set  forth  in the  option  agreement  evidencing  such  option,
provided,  however,  that, subject to paragraph 5(b) and earlier  termination as
provided in paragraphs 9 and 10, no option shall be  exercisable  after ten (10)
years from the date such option was granted.

7.       Exercise; Loans


     (a) Subject to the provisions of the Plan, an option granted under the Plan
shall become vested and exercisable as determined by the Committee and set forth
in the option  agreement  evidencing  such  option.  The  Committee  may, in its
discretion,  determine  as a  condition  of any  option,  that  all or a  stated
percentage  of the option  shall only become  exercisable,  in  installments  or
otherwise,  after  completion of a specified  period of service with the Company
and the Subsidiaries or subject to any other condition or conditions.

     (b)  The   Committee   may  also,  in  its   discretion,   accelerate   the
exercisability of any options at any time and provide,  in any option agreement,
that the option shall become immediately exercisable as to all or any portion of
the shares of Common  Stock  remaining  subject to the option on or  following a
Change of Control (as defined in this  paragraph).  The date upon which a Change
of Control  occurs  shall be referred to herein as an  "acceleration  date").  A
"Change of Control" shall be deemed to have occurred as of the first day any one
or more of the following conditions shall have been satisfied:

          (i)  Any  individual,  corporation  (other  than  the  Company  or any
     Subsidiary), partnership, trust, association, pool, syndicate, or any other
     entity  or any  group of  persons  acting in  concert  (other  than (x) any
     employee  benefit plan (or any trust forming a part thereof) of the Company
     or any  Subsidiary or (y) any person or group of persons who shall directly
     or  indirectly  own twenty  percent (20%) or more of the Common Stock to be
     distributed as of the "Effective  Date" in connection with the consummation
     of the  "Plan"  (as such  terms  are  defined  in the  Reorganization  Plan
     referred to in paragraph 12 hereof)) becomes the beneficial  owner, as that
     concept is defined in Rule 13d-3 promulgated by the Securities and Exchange
     Commission  under the Exchange Act of securities of the Company  possessing
     either  (X)  thirty  percent  (30%)  or more of the  voting  power  for the
     election of directors of the Company or (Y) thirty percent (30%) or more in
     value of the outstanding  equity securities (or the right to acquire thirty
     (30%) per cent or more) of the Company;

          (ii) There shall be consummated any  consolidation,  merger,  or other
     business combination involving the Company or the securities of the Company
     in which (X) holders of voting securities of the Company  immediately prior
     to such consummation own, as a group,  immediately after such consummation,
     voting  securities of the Company (or, if the Company does not survive such
     transaction,   voting   securities  of  the   corporation   surviving  such
     transaction) having less than fifty percent (50%) of the total voting power
     in an  election  of  directors  of the  Company  (or such  other  surviving
     corporation) or (Y) holders of equity securities of the Company immediately
     prior  to  such  consummation  own,  as a  group,  immediately  after  such
     consummation, equity securities of the Company (or, if the Company does not
     survive such transaction,  voting  securities of the corporation  surviving
     such  transaction)  having  less than  fifty  percent  (50%) of the  equity
     securities of the Company (or such other surviving corporation);

          (iii) During any period of two (2) consecutive years,  individuals who
     at the  beginning of such period  constitute  the  directors of the Company
     cease for any reason other than voluntary resignation, death, disability or
     retirement to constitute at least a majority  thereof  unless the election,
     or the nomination for election by the Company's  shareholders,  of each new
     director of the Company was approved by a vote of at least two-thirds (2/3)
     of the directors of the Company then still in office who were  directors of
     the Company at the beginning of any such period; or

          (iv) There shall be consummated any sale,  lease,  exchange,  or other
     transfer (in one transaction or a series of related transactions) of assets
     representing  all or  substantially  all of the assets of the Company (on a
     consolidated  basis) to a party which is not  controlled by or under common
     control with the Company either before or after such  transaction or series
     of related transactions.

     (c) An option may be exercised  at any time or from time to time  (subject,
in the case of an incentive stock option, to such restrictions as may be imposed
by the  Code),  as to any or all full  shares  of  Common  Stock as to which the
option has become  exercisable.  Notwithstanding  the  foregoing  provision,  no
option  may be  exercised  without  the prior  consent  of the  Committee  by an
employee  who is  subject  to  Section  16(b)  of the  Exchange  Act  until  the
expiration of six months from the date of the grant of the option.

     (d) The  purchase  price of the  shares as to which an option is  exercised
shall be paid in full to the  Company at the time of  exercise;  payment  may be
made (i) in cash, which may be paid by check, or other instrument  acceptable to
the Company;  (ii) with the consent of the Committee,  and subject to such terms
and  conditions as it may  determine,  by delivery of shares of the Common Stock
which have been owned by the optionee  exercising  such option for more than six
months (or such longer or shorter  period of time  required to avoid a charge to
earnings for financial accounting  purposes),  valued at the Market Value on the
date of exercise,  or (iii) at the  discretion of the  Committee,  in accordance
with a  cashless  exercise  program  (through  broker  accommodation),  if  any,
established by the Committee.  In addition,  the optionee exercising such option
shall  promptly  pay to the Company in cash any amount  necessary to satisfy all
applicable  Federal,  state or local  tax  requirements  (and in no event  shall
Common  Stock be  delivered  with  respect to such option until all such amounts
have been fully paid to the Company). The Committee may permit such amount to be
paid in shares of Common  Stock  previously  owned by the optionee for more than
six months  prior to such  payment  (or such  longer or  shorter  period of time
required to avoid a charge to earnings for financial accounting purposes),  or a
portion of the shares of Common Stock that  otherwise  would be  distributed  to
such optionee upon exercise of the option (provided, however, that the amount of
any Common  Stock so withheld  shall not exceed the amount  necessary to satisfy
the Company's or any Subsidiary's required tax withholding obligations using the
minimum statutory  withholding rates for Federal,  state,  local and foreign tax
purposes,  including payroll taxes, that are applicable to supplemental  taxable
income), in either case, based on the Market Value of such shares on the date of
payment, as determined by the Committee,  or a combination of cash and shares of
such Common Stock. The Company or a Subsidiary shall, to the extent permitted by
law,  have the right to  deduct  any such  taxes  from any  payment  of any kind
otherwise due to such optionee.

     (e)  Except  as  provided  in  paragraphs  8, 9 and 10, no  options  may be
exercised  at any time  unless the  holder  thereof  is then an  employee  of or
performing services for the Company or one of its Subsidiaries.

     (f) Upon,  but not until,  the exercise of an option or portion  thereof in
accordance  with the Plan,  the applicable  option  agreement and such rules and
regulations as may be  established  by the  Committee,  the holder thereof shall
have the rights of a  stockholder  with respect to the shares issued as a result
of such exercise.

     (g) The Company may make loans to such optionees as the  Committee,  in its
discretion,  may  determine  (including a holder who is a director or officer of
the Company) in connection  with the exercise of options granted under the Plan;
provided, however, that the Committee shall not authorize the making of any loan
where the possession of such  discretion or the making of such loan would result
in a  "modification"  (as defined in Section  424 of the Code) of any  incentive
stock option.  Such loans shall be subject to the following terms and conditions
and such  other  terms and  conditions  as the  Committee  shall  determine  not
inconsistent  with the Plan. Such loans shall bear interest at such rates as the
Committee  shall  determine  from time to time,  which  rates may be below  then
current  market rates  (except in the case of incentive  stock  options).  In no
event may any such loan exceed the fair market  value,  at the date of exercise,
of the  shares  covered by the  option,  or portion  thereof,  exercised  by the
holder.  No loan shall have an initial term exceeding  five years,  but any such
loan may be renewable at the discretion of the Committee. When a loan shall have
been made,  shares of Common  Stock having a fair market value at least equal to
the  principal  amount of the loan shall be pledged by the holder to the Company
as  security  for  payment of the unpaid  balance of the loan.  Every loan shall
comply with all applicable laws, regulations and rules of the Board of Governors
of  the  Federal  Reserve  System  and  any  other  governmental  agency  having
jurisdiction.

8.       Transferability of Options

     (a) Except as otherwise provided in this paragraph 8, options granted under
the Plan shall not be transferable otherwise than by will or the laws of descent
and  distribution,  and may be exercised during the lifetime of the optionee who
received such option only by such optionee.

     (b) No  transfer  of any  options  by  will  or the  laws  of  descent  and
distribution  shall be effective to bind the Company unless the Committee  shall
have been  furnished with (i) written notice thereof and with a copy of the will
and/or such  evidence as the  Committee  may deem  necessary  to  establish  the
validity of the transfer and (ii) an agreement by the  transferee to comply with
all the terms and  conditions  of the  option  grant that are or would have been
applicable  to the  individual to whom the option was granted and to be bound by
the acknowledgments  made by such individual in connection with the grant of the
option.

     (c) With the approval of the  Committee  and subject to such  conditions as
the Committee may prescribe,  an optionee may, upon providing  written notice to
the  Secretary  of the  Company,  elect to transfer  any or all such  optionee's
non-qualified options to such optionee's spouse, children, grandchildren and the
spouses  of  children  and  grandchildren  or to trusts  for the  benefit of the
optionee  and/or  any of the  foregoing  family  members of the  optionee  or to
partnerships  in which the  optionee  and/or  such  family  members are the only
partners ("Permitted Transferees");  provided, however, that no such transfer by
any optionee may be made in exchange for  consideration  and  following any such
transfer the option may not be subsequently  transferred;  and provided further,
however, that following any such transfer, the exercise, vesting and termination
provisions of such option and the Plan shall continue to be applied with respect
to the optionee who transferred such option.

     (d) If any rights exercisable by the optionee or benefits deliverable to an
optionee under the Plan have not been exercised or delivered,  respectively,  at
the time of the  optionee's  death,  such  rights  shall be  exercisable  by the
optionee's Designated  Beneficiary,  and such benefits shall be delivered to the
Designated  Beneficiary,  in accordance  with the provisions of the Plan and the
applicable  option  agreement.   The  "Designated   Beneficiary"  shall  be  the
beneficiary or beneficiaries  designated by the optionee in a writing filed with
the Committee in such form and at such time as the Committee shall require. If a
deceased  optionee  fails  to  designate  a  beneficiary,  or if the  Designated
Beneficiary  does not  survive  the  optionee,  any rights  that would have been
exercisable by the optionee and any benefits distributable to the optionee shall
be exercised by or distributed to the legal  representative of the estate of the
optionee.  If a deceased  optionee  designates a beneficiary  but the Designated
Beneficiary  dies  before the  Designated  Beneficiary's  exercise of all rights
under the Plan or the option  agreement or before the complete  distribution  of
benefits to the  Designated  Beneficiary  under the option  agreement,  then any
rights that would have been exercisable by the Designated  Beneficiary  shall be
exercised  by  the  legal   representative  of  the  estate  of  the  Designated
Beneficiary,  and any benefits distributable to the Designated Beneficiary shall
be  distributed  to the legal  representative  of the  estate of the  Designated
Beneficiary.

9.       Termination of Service

     (a) Unless  otherwise  determined by the Committee and stated in the option
agreement, and subject to such restrictions as may be imposed by the Code in the
case of any incentive  stock options,  in the event that the employment or other
period of service with the Company and the  Subsidiaries  of an optionee to whom
an option has been  granted  under the Plan shall be  terminated  (except as set
forth in paragraph 10), such option may,  subject to the provisions of the Plan,
be  exercised  (to the extent that the  optionee was entitled to do so under the
Plan and the optionee's option agreement at the termination of his employment or
period of service) at any time within three months after such  termination,  or,
in the case of an employee whose termination results from retirement from active
employment at or after age 55 (as  determined by the Committee in its good faith
discretion)  within one year after such  termination,  but in no case later than
the date on which the option expires; provided, however, that any option held by
an employee or  consultant  whose  employment  or service  with the Company or a
Subsidiary is terminated  for cause (as  determined by the Committee in its good
faith  discretion)  shall  forthwith  terminate,  to the extent not  theretofore
exercised.

     (b) Options  granted  under the Plan shall not be affected by any change of
duties or position so long as the optionee  holding any such option continues to
be  an  employee,   director  or  consultant  of  the  Company  or  any  of  its
Subsidiaries,  subject to any applicable limitations on the holding of incentive
stock options.  Any option agreement,  or any rules and regulations  relating to
the Plan,  may contain  such  provisions  as the  Committee  shall  approve with
reference to the  determination of the date employment or period of service with
the Company and any  Subsidiary  terminates and the effect of leaves of absence.
Any such rules and regulations  with reference to any option  agreement shall be
consistent  with  the  provisions  of the  Code  and any  applicable  rules  and
regulations thereunder.

     (c) Nothing in the Plan or in any option granted pursuant to the Plan shall
confer upon any employee,  director or  consultant  any right to continue in the
employ  of,  or in  any  other  relationship  with,  the  Company  or any of its
Subsidiaries  or  interfere in any way with the right of the Company or any such
Subsidiary to terminate any such employment or other relationship at any time.


10.      Death or Total Disability of Optionee

     If an optionee  ceases to be an  employee,  director or  consultant  of the
Company  or any  Subsidiary  by reason of "total  disability,"  such  optionee's
option  may be  exercised,  to the  extent  that  the  optionee  or a  Permitted
Transferee of the option was entitled to do so at the  termination of employment
or service with the Company or such a Subsidiary, as set forth herein and in the
optionee's option agreement  (subject to the restrictions set forth in paragraph
7 or otherwise  applicable  with respect to persons  subject to Section 16(b) of
the Exchange Act) at any time within one year after the date of such termination
of employment or service, but in no case later than the date on which the option
expires.  If an optionee shall die while an employee,  director or consultant of
the Company or its  Subsidiaries  or within  three months (or, in the case of an
employee whose  termination  results from  disability or retirement  from active
employment  at or after age 55, within one year) after the  termination  of such
employment or other  relationship  with the Company or such a Subsidiary  (other
than  termination for cause),  such optionee's  option may be exercised,  to the
extent that the optionee or a Permitted Transferee of the option was entitled to
do so at the  termination  of  employment  or service with the Company or such a
Subsidiary (or at the date of death,  if later),  as set forth herein and in the
optionee's  option  agreement  by the  optionee,  a legatee or  legatees  of the
optionee   under  the  optionee's   last  will,  by  the   optionee's   personal
representatives  or  distributees or by the Permitted  Transferee,  whichever is
applicable,  at any time within one year after the date of the optionee's death,
but in no case  later than the date on which the option  expires.  For  purposes
hereof, "total disability" is defined as the permanent inability of an optionee,
as a result of accident or sickness, to perform any and every duty pertaining to
such  optionee's  occupation or  employment  for which the optionee is suited by
reason  of the  optionee's  previous  training,  education  and  experience,  as
determined by the Committee in its good faith  discretion,  and, for purposes of
incentive stock options granted under the plan,  "total  disability"  shall mean
"permanent and total disability," as defined in Section 22(e)(3) of the Code.

11.      Adjustment upon Changes in Capitalization, etc.

     (a)  Notwithstanding  any  other  provision  of the  Plan,  in the event of
distributions  to holders of Common  Stock  other than a normal  cash  dividend,
changes in the outstanding Common Stock by reason of stock dividends, split-ups,
recapitalizations, mergers, consolidations, combinations or exchanges of shares,
separations,  reorganizations,  liquidations,  "spin-offs"  or  similar  capital
changes, the Committee may, in its sole discretion, make such adjustments to the
number,  class and kind of shares  available  under the Plan and to the  number,
class, kind and price of shares available under any outstanding option as it may
deem  appropriate to prevent  dilution or enlargement of the rights of optionees
or  otherwise to reflect such capital  changes.  Any such  determination  by the
Committee  shall be  conclusive.  No  adjustment  shall be made in respect of an
incentive  stock option if such  adjustment  would  disqualify such option as an
incentive  stock  option  under  Section  422  of  the  Code  and  the  Treasury
Regulations thereunder, unless the Committee determines otherwise. No adjustment
shall be made in the minimum  number of shares  with  respect to which an option
may be  exercised  at any  time.  Any  fractional  shares  resulting  from  such
adjustments to options shall be eliminated.

     (b) In the event of a Change of  Control,  in addition to or in lieu of the
any acceleration of outstanding options described in paragraph 7(b):


          (i) In its  discretion,  and on such terms and  conditions as it deems
     appropriate,  the Committee may provide,  either by the terms of the option
     agreement  applicable to any option or by  resolution  adopted prior to the
     occurrence of the Change of Control,  that any outstanding  option shall be
     adjusted by  substituting  for Common Stock subject to such option stock or
     other securities of the surviving  corporation or any successor corporation
     to the Company,  or a parent or subsidiary thereof, or that may be issuable
     by another corporation that is a party to the transaction  resulting in the
     Change  of  Control,  whether  or not such  stock or other  securities  are
     publicly  traded,  in which event the aggregate option exercise price shall
     remain the same and the amount of shares or other securities subject to the
     option shall be the amount of shares or other  securities  which could have
     been purchased on the closing date or expiration  date of such  transaction
     with the  proceeds  which would have been  received by the  optionee if the
     option  had been  exercised  in full (or with  respect to a portion of such
     option,  as determined by the Committee,  in its discretion)  prior to such
     transaction  or  expiration  date and the  optionee  exchanged  all of such
     shares in the transaction.

          (ii) In its  discretion,  and on such terms and conditions as it deems
     appropriate,  the Committee may provide,  either by the terms of the option
     agreement  applicable to any option or by  resolution  adopted prior to the
     occurrence of the Change of Control,  that any outstanding  option shall be
     converted  into a right to receive cash on or following the closing date or
     expiration date of the transaction resulting in the Change of Control in an
     amount equal to the highest  value of the  consideration  to be received in
     connection with such  transaction  for one share of Common Stock,  less the
     per share option exercise price of such option, multiplied by the number of
     shares of Common Stock subject to such option, or a portion thereof.

          (iii) The  Committee  may, in its  discretion,  provide that an option
     cannot be exercised after such a Change of Control, to the extent that such
     option is or becomes fully  exercisable on or before such Change of Control
     and/or  is  subject  to  any  acceleration,  adjustment  or  conversion  in
     accordance with paragraph 7(b) or the foregoing  subparagraphs  (i) or (ii)
     of this paragraph 11(b).

No  optionee  shall have any right to  prevent  the  consummation  of any of the
foregoing acts affecting the number of shares of Common Stock  available to such
optionee.  Any actions or  determinations  of the Committee under this paragraph
11(b) or paragraph 7(b) need not be uniform as to all outstanding  options,  nor
treat all optionees identically.  Notwithstanding the foregoing adjustments,  in
no event may any option be  exercised  after ten (10) years from the date it was
originally granted.

12.      Stock Appreciation Rights.

     (a) Grant and Exercise.  The Committee may grant stock appreciation  rights
in  conjunction  with all or any part of any option  granted  under the Plan.  A
"stock appreciation right" means the right to surrender to the Company all (or a
portion) of an option in exchange for an amount equal to the difference  between
(i) the  Market  Value,  as of the date such  option  (or  portion  thereof)  is
surrendered,  of the  shares of Common  Stock  covered  by such  option (or such
portion  thereof),  subject,  where  applicable,  to the pricing  provisions  in
paragraph  12(b)(ii),  and (ii) the aggregate  exercise price of such option (or
such portion thereof). In the case of a non-qualified option, such rights may be
granted either at or after the time of the grant of such option.  In the case of
an incentive  stock  option,  such rights may be granted only at the time of the
grant of such option. A stock  appreciation  right or applicable portion thereof
granted  with  respect  to a given  option  shall  terminate  and no  longer  be
exercisable  upon the termination or exercise of the related option,  subject to
such provisions as the Committee may specify at grant where a stock appreciation
right is granted with respect to less than the full number of shares  covered by
a related option.

     A stock  appreciation  right may be exercised  by an  optionee,  subject to
Section 12(b),  in accordance  with the procedures  established by the Committee
for such purpose. Upon such exercise,  the optionee shall be entitled to receive
an amount  determined  in the manner  prescribed  in  paragraph  12(b).  Options
relating to exercised stock  appreciation  rights shall no longer be exercisable
to the extent that the related stock appreciation rights have been exercised.

     (b) Terms and  Conditions.  Stock  appreciation  rights shall be subject to
such terms and conditions,  not inconsistent with the provisions of the Plan, as
shall be determined from time to time by the Committee, including the following:

          (i) Stock  appreciation  rights shall be exercisable only at such time
     or times and to the  extent  that  options to which  they  relate  shall be
     exercisable  in  accordance  with the  provisions  of  paragraph 7 and this
     paragraph 12 of the Plan;  provided,  however,  that any stock appreciation
     right  granted to an optionee  subject to Section 16(b) of the Exchange Act
     subsequent  to the grant of the  related  option  shall not be  exercisable
     during  the first  six (6)  months  of its term  unless  the grant has been
     approved in accordance with the approval  requirements of Rule  16b-3(d)(1)
     or (2), except that this special limitation shall not apply in the event of
     death or total  disability of the optionee  prior to the  expiration of the
     six-month  period.  The  exercise  of  stock  appreciation  rights  held by
     optioned who are subject to Section  16(b) of the Exchange Act shall comply
     with Rule 16b-3 promulgated thereunder, to the extent applicable.

          (ii) Upon the  exercise  of a stock  appreciation  right,  an optionee
     shall be  entitled  to  receive an amount in cash  and/or  shares of Common
     Stock  equal in value to the  excess  of the  Market  Value of one share of
     Common  Stock  over the option  price per share  specified  in the  related
     option  multiplied  by the  number of shares in  respect of which the stock
     appreciation right shall have been exercised, with the Committee having the
     right to  determine  the form of  payment.  When  payment  is to be made in
     shares of Common Stock, the number of shares to be paid shall be calculated
     on the  basis of the  Market  Value of the  Common  Stock as of the date of
     exercise.

          (iii) Stock appreciation rights shall be transferable only when and to
     the extent that the underlying option would be transferable under paragraph
     8 of the Plan.

          (iv) Upon the exercise of a stock  appreciation  right,  the option or
     part  thereof to which such stock  appreciation  right is related  shall be
     deemed to have been  exercised for the purpose of the  limitation set forth
     in  paragraph  2 of the Plan on the number of shares of Common  Stock to be
     issued  under the  Plan,  but only to the  extent  of the  number of shares
     issued under the stock  appreciation right at the time of exercise based on
     the value of the stock appreciation right at such time.

          (v) In its sole  discretion,  the Committee may grant  "limited" stock
     appreciation  rights  under this  paragraph  12, i.e.,  stock  appreciation
     rights  that  become  exercisable  only in the event of a Change of Control
     subject to such terms and conditions as the Committee may specify at grant.
     Such limited stock appreciation rights shall be settled solely in cash.


13.      Effective Date; Compliance with Law; Optionee Acknowledgments

     (a) The Plan shall be effective as of the "Effective Date" set forth in the
Company's  First  Amended  Plan of  Reorganization  of  Tridex  Corporation  and
Progressive  Software,  Inc.  filed  pursuant to Chapter 11 of the United States
Bankruptcy Code (the  "Reorganization  Plan") provided that such  Reorganization
Plan shall be approved and confirmed by the bankruptcy court having jurisdiction
over the Reorganization  Plan. The Committee  thereafter may, in its discretion,
grant options under the Plan,  the grant,  exercise or payment of which shall be
expressly  subject to the conditions that, to the extent required at the time of
grant,  exercise or payment, (i) if the Company deems it necessary or desirable,
a  Registration  Statement  under the  Securities  Act of 1933,  as amended (the
"Securities Act"), with respect to such shares shall be effective,  and (ii) any
requisite  approval or consent of any governmental  authority of any kind having
jurisdiction over options granted under the Plan shall have been obtained.

     (b) If at any time counsel to the Company  shall be of the opinion that any
sale or delivery of shares of Common Stock  pursuant to an option under the Plan
is or may be in the circumstance  unlawful or result in the imposition of excise
taxes on the Company or any Subsidiary under the statutes,  rules or regulations
of any  applicable  jurisdiction,  the Company  shall have no obligation to make
such sale or delivery,  or to make any  application  or to effect or to maintain
any  qualification  or registration  under the Securities Act, or otherwise with
respect to shares of Common Stock or option  grants under the Plan and the right
to exercise any option shall be suspended until, in the opinion of such counsel,
such sale or delivery  shall be lawful or will not result in the  imposition  of
excise taxes on the Company or any Subsidiary.

     (c) The  Committee  may  require  each  person  receiving  Common  Stock in
connection  with an award under the Plan to represent and agree with the Company
in  writing  that  such  person is  acquiring  the  shares  of Common  Stock for
investment  without a view to the distribution  thereof.  The Committee,  in its
absolute  discretion,   may  impose  such  restrictions  on  the  ownership  and
transferability of shares of Common Stock purchasable or otherwise receivable by
any person under any award as it deems appropriate.  Any such restrictions shall
be set forth in the applicable option agreement, and the certificates evidencing
such  shares may  include any legend that the  Committee  deems  appropriate  to
reflect any such  restrictions.  The  Committee  may require an optionee to give
prompt  written notice to the Company  concerning  any  disposition of shares of
Common Stock received upon the exercise of an incentive stock option within: (i)
two (2) years from the date of  granting  such  incentive  stock  option to such
optionee or (ii) one (1) year from the  transfer of such shares of Common  Stock
to such  optionee or (iii) such other period as the  Committee  may from time to
time  determine.  The  Committee  may direct that an optionee  undertake  in the
applicable  option  agreement  to give such notice  described  in the  preceding
sentence,  at such time and  containing  such  information  as the Committee may
prescribe,  and/or  that the  certificates  evidencing  shares of  Common  Stock
acquired by exercise of an incentive  stock option refer to such  requirement to
give such notice.

     (d) By accepting any benefit under the Plan,  each optionee and each person
claiming  under or through such optionee  shall be  conclusively  deemed to have
indicated their acceptance and ratification of, and consent to, all of the terms
and conditions of the Plan and any action taken under the Plan by the Committee,
the Company or the Board of Directors,  in any case in accordance with the terms
and conditions of the Plan.

14.      Termination and Amendment

     The Plan shall be of unlimited duration;  provided,  however,  that, to the
extent  required by the Code, no incentive stock option may be granted under the
Plan on a date that is more than ten (10) years from the  effective  date of the
Plan set forth in paragraph 13. The Board of Directors  may suspend,  terminate,
modify or amend the Plan, provided that any modification or amendment that would
(a) increase the aggregate number of shares that may be issued under the Plan or
the  limitations  set forth in paragraph 4(c) on the maximum number of shares of
Common Stock that may be subject to options  granted to a single  optionee;  (b)
decrease  the minimum  option  exercise  price  requirements  of  paragraph 5 or
otherwise materially increase the benefits accruing to optionees under the Plan;
(c) extend the duration of the period during which  incentive  stock options may
be granted  under the Plan or the period  during which  options may be exercised
under  paragraph  6;  or (d)  modify  the  requirements  as to  eligibility  for
participation  in the Plan  shall be subject to the  approval  of the  Company's
stockholders,  except  that any such  increase  in  shares  of  Common  Stock or
decrease in option exercise price that may result from adjustments authorized by
paragraph  11 does not require such  approval.  If the Plan is  terminated,  the
terms of the Plan shall, notwithstanding such termination,  continue to apply to
awards  granted  prior  to  such  termination.   In  addition,   no  suspension,
termination,  modification  or amendment  of the Plan,  other than as may result
from  adjustments  authorized by paragraph  11, may,  without the consent of the
optionee  to whom an option  shall  theretofore  have been  granted,  materially
adversely  affect the rights of such optionee  under such option.  The Committee
may amend the terms of any option theretofore granted under the Plan,  including
any agreement evidencing any such option, retroactively or prospectively, but no
such  amendment,  other  than  as may  result  from  adjustments  authorized  by
paragraph  11,  shall  materially  impair the  previously  accrued  right of any
optionee under any outstanding option without his or her written consent.

15.      Written Agreements

     Each grant of options shall be evidenced by a written  agreement,  executed
by the optionee and the Company,  which shall contain such  restrictions,  terms
and conditions,  not inconsistent  with the terms and conditions of the Plan, as
the Committee may require.  Each such option  agreement shall state whether such
option will be treated as an incentive stock option or non-qualified option.

16.      Effect on Other Stock Plans; Governing Law

     (a) The adoption of the Plan shall have no effect on option  grants made or
to be made, pursuant to other stock plans or otherwise, to employees,  directors
or  consultants  of the  Company or its  Subsidiaries,  or any  predecessors  or
successors thereto.

     (b) The Plan shall be governed by and construed in accordance with the laws
of the  State of  Delaware,  without  regard  to such  state's  conflict  of law
provisions, and, in any event, except as superseded by applicable Federal law.



     IN WITNESS WHEREOF,  the Company has caused its duly authorized  officer to
execute this Plan as of the 6th day of August, 2002.


                                             PROGRESSIVE SOFTWARE HOLDING, INC.


                                            By: /s/ Christopher Sebes
                                                -------------------------------
                                            Name:   Christopher Sebes
                                            Title:  President and Chief
                                                    Executive Officer

EX-99.77Q1

                                                                   EXHIBIT 99.1



                                                            ORDER ENTERED ON:
                                                            7-10-02
                                                            /S/ DEPUTY CLERK



                         UNITED STATES BANKRUPTCY COURT
                             DISTRICT OF CONNECTICUT
                               BRIDGEPORT DIVISION

In re:

TRIDEX CORPORATION AND              :       CHAPER 11
PROGRESSIVE SOFTWARE, INC.          :
                                    :
                           Debtors  :        CASE NO. 02-50156
____________________________________:        CASE NO. 02-50157
                                                         Re#95

                       ORDER CONFIRMING FIRST AMENDED PLAN
                       -----------------------------------

     The First Amended Plan under Chapter 11 of the Bankruptcy Code filed by the
Debtors,  Tridex Corporation and Progressive Software, Inc. dated June 20, 2002,
having been transmitted to creditors, equity security holders, and other parties
in interest, and

     It having been determined after hearing on notice that the requirements for
confirmation set forth in 11 U.S.C.ss.1129(a) and 11 U.S.C.ss.1129(b)  have been
satisfied;

     IT IS HEREBY ORDERED that:

     The  First  Amended  Plan  filed by the  Debtors,  dated  June 20,  2002 is
CONFIRMED including,  without limitation,  the assumption of the Lease Agreement
between the Progressive Software, Inc. and Avery at Morrocroft,  LLC as modified
by the Lease  Agreement  dated July 2,  2002;  A copy of the  confirmed  plan is
attached and incorporated herein; and it is further

     ORDERED  that  the  Debtors  is  directed  to file a Final  Report  with an
Application  for Final Decree no later than December 2, 2002 unless that time is
extended by this Court; applicable U.S. Trustee quarterly fees shall continue to
accrue until a final decree enters.

     Dated in Bridgeport Connecticut this 9 day of July, 2002.

                                            BY THE COURT,

                                            /s/ Alan H.W. Shiff
                                            -----------------------------------
                                            Alan H.W. Shiff
                                            Chief U.S. Bankruptcy Judge

EX-99.77Q1

                                                                  EXHIBIT 99.2

                       Progressive Software Holding, Inc.
              Pro Forma Consolidated Balance Sheet (unaudited) (a)
                                  July 31, 2002
                                 ($'s in 000's)

Total assets
  Current assets
    Cash                                                     $     316
    Receivables, Gross                                             192
    Estimated tax refunds                                          500
    Prepaid assets                                                  31
  Total current assets                                           1,039

  Property, plant and equipment                                    637
    Accumulated depreciation                                      (532)
  Property, plant and equipment, net                               105

  Purchased technology & capitalized software                3,031
  Security deposit                                                 100
  Investment in Retail DNA                                         850
  Goodwill related to "fresh start" accounting                   1,894
Total assets                                                 $   7,019

Total liabilities and equity
  Current liabilities
    ARC notes                                                $   5,341
    Accounts payable                                                73
    Accrued liabilities                                            807
    Deferred income                                                798
  Total current liabilities                                      7,019

Contingent liability (b)

Equity                                                             ---
Total liabilities and equity                                 $   7,019


(a)  Not prepared in accordance with GAAP.
(b)  Foley Street Matter