Date: June 6, 1997 TO: AT&T COMMERCIAL FINANCE CORPORATION ("AT&T"), which has its principal place of business in Morristown, New Jersey. The undersigned entity or person ("Dealer") agrees as follows: 1. Discretionary Financing. Dealer desires that...

                                                                EXHIBIT 10.3


                                                                     IFD-002

                                                                      (8/91)

                                                               Agreement for
                                                         Wholesale Financing

                                                          Date: June 6, 1997



TO:   AT&T COMMERCIAL FINANCE CORPORATION ("AT&T"), which has its principal
      place of business in Morristown, New Jersey.


The undersigned entity or person ("Dealer") agrees as follows:

1.    Discretionary Financing.  Dealer desires that AT&T finance the 
      acquisition of inventory by paying the manufacturer, distributor or
      other seller thereof ("Vendor," collectively, the "Vendors"), and/or
      issue letters of credit, and/or otherwise provide financing to or for
      the benefit of Dealer.  AT&T SHALL HAVE THE SOLE AND ABSOLUTE DISCRETION
      whether or not to advance funds, and the amounts advanced by AT&T, at
      any time, and from time to time, shall be such sums as AT&T may
      determine in AT&T'S SOLE AND ABSOLUTE DISCRETION.  In addition to, and
      not in diminution of, the foregoing and the other rights and remedies of
      AT&T hereunder, any failure by Dealer to fully and faithfully perform
      and observe all provisions of this Agreement for Wholesale Financing 
      ("Agreement") shall constitute grounds for AT&T to refuse to extend any 
      further credit to Dealer and/or reduce the amounts of credit made 
      available to Dealer.

2.    Financing Acquisition of Inventory; Dealer's Obligations.  If AT&T is
      notified in any manner by any Vendor that Dealer desires AT&T to finance 
      the acquisition of any inventory, AT&T may rely upon such notice as a 
      request from Dealer to finance the acquisition of such inventory.  Any 
      invoice or other Vendor document relating to any inventory that
      indicates AT&T has financed the acquisition of inventory shall be
      conclusive evidence against Dealer that AT&T has financed the
      acquisition of such inventory. In any event, and under all
      circumstances, Dealer shall be indebted and obligated to AT&T for all
      commitments for the financing of inventory of Dealer and payments by
      AT&T to any Vendor for inventory of Dealer.  All such commitments and
      payments shall constitute Indebtedness (as defined in Section 4 of this
      Agreement), secured by the Collateral (as defined in Section 3 of this
      Agreement). AT&T may, but shall not be required to, forward a statement
      with respect to inventory it has financed for Dealer.  Dealer shall be
      bound by the contents of such statement if Dealer does not notify AT&T
      in writing of any correction with respect to any data shown thereon
      within twenty-five (25) days of the date of such statement.

      Dealer understands and agrees that AT&T, at its election, may deal 
      with Vendors on the basis of electronic data interchange or other forms
      of electronic transmissions of data whereby paper-based invoices and
      other documents are not created.  Dealer understands and agrees that
      AT&T's statements of inventory for which AT&T has provided any financing
      or extension of credit and amounts due with respect thereto, or
      summaries or extracts thereof, shall be conclusive as to, and binding
      upon, Dealer if such statements are prepared by AT&T in the ordinary
      course of its business activities.

3.    Dealer's Grant of Security Interest.  Dealer hereby grants to AT&T a 
      security interest ("Security Interest") in all of Dealer's inventory, 
      equipment, fixtures, accounts, contract rights, leases, chattel paper, 
      documents, instruments, general intangibles, documents of title, letters 
      of credit and books and records relating to the foregoing, wherever 
      located and whether now or hereafter owned or acquired by Dealer,
      whether or not affixed to realty, and in all proceeds and products of
      all of the foregoing, including, without limitation, amounts payable
      under any insurance policy, and in all returned and repossessed goods,
      all parts, accessories, attachments, additions, replacements,
      substitutions and accessions thereto or therefor, and in all increases
      or profits received therefrom (collectively, the "Collateral").

4.    Indebtedness Secured.  The Security Interest secures payment of any 
      and all indebtedness of Dealer to AT&T ("Indebtedness"), whether such 
      Indebtedness is now existing or hereafter incurred, of every kind and 
      character, direct or indirect, and whether such Indebtedness is incurred 
      under this Agreement or otherwise, and whether any Indebtedness is from 
      time to time reduced and thereafter increased, or entirely extinguished 
      and thereafter reincurred.

5.    Payments. All amounts outstanding with respect to inventory shall be 
      due and payable as set forth in AT&T's statements and xxxxxxxx with 
      respect thereto.  From time to time, Dealer and AT&T may agree to
      Program Schedule(s) with respect to inventory and certain terms and
      conditions relating thereto; provided, however, if no applicable
      Program Schedule has been agreed to by AT&T with respect to any
      inventory financed by AT&T, or if an Event of Default (as defined in
      Section 8 of this Agreement) occurs, all Indebtedness outstanding with
      respect to a unit of inventory shall be due and payable immediately
      upon the earlier of (a) the sale, lease or other disposition of such
      inventory; or (b) the passage of sixty (60) days from AT&T's financing
      of such inventory; provided, further, that if an Event of Default
      occurs, in addition to the foregoing, all remedies set forth in Section
      9 of this Agreement shall be available to AT&T (including, but not
      limited to, the right, notwithstanding the preceding, to declare all or
      any part of the Indebtedness to be immediately due and payable).

      In no event shall Dealer, upon demand by AT&T for payment of the 
      Indebtedness, by acceleration of the maturity thereof or otherwise, be 
      obligated to pay any interest or other amount in excess of the maximum 
      amounts permitted by applicable law.  AT&T will provide Dealer with 
      monthly (or at such other interval as AT&T may elect) xxxxxxxx of 
      Indebtedness due or to become due.  Amounts reflected in such xxxxxxxx
      are due upon receipt by Dealer or as otherwise indicated in such
      xxxxxxxx; provided, however, Dealer shall be responsible for all
      Indebtedness when due, whether or not any billing is sent or received.
      Dealer recognizes and acknowledges that this Agreement and all matters
      hereunder are intended to comply strictly with applicable usury laws
      such that no amounts due under this Agreement deemed interest which are
      contracted for, charged or collected shall exceed the maximum
      nonusurious interest rate or amount.  Any amounts collected hereunder in
      excess of any maximum lawful amount shall be applied against
      Indebtedness remaining to be paid or, if no Indebtedness remains to be
      paid, refunded to Dealer.

      AT&T shall have the right, at any time, to apply and reapply all 
      payments made by Dealer to any part or portion of the Indebtedness as
      AT&T shall determine in its sole and absolute discretion, including,
      without limitation, application or reapplication of payments for
      inventory financed hereunder on a first-financed, first-paid basis.

6.    Representations and Warranties of Dealer.  Dealer represents and 
      warrants and shall continuously represent and warrant that: (a) Dealer
      is the owner of the Collateral; (b) AT&T's Security Interest shall be
      valid, enforceable and continuing and AT&T shall have a first lien and
      first priority security interest in all inventory for which AT&T has
      provided any financing or extension of credit, and in all cash proceeds
      thereof in any form; (c) Dealer is authorized to enter into this
      Agreement and is not thereby violating its charter or by-laws, any law
      or regulation, or any agreement with third parties, and has taken all
      such actions as may be necessary or appropriate to make this Agreement
      legally binding upon it; (d) all information supplied by Dealer in any
      financial, credit or accounting statement or application for credit
      prior to, contemporaneously with, or subsequent to the execution of this
      Agreement, is true, correct, valid, genuine and fairly represents
      Dealer's financial condition; (e) Dealer is engaged in business
      operations and Dealer's principal place of business is at the location
      specified on the reverse hereof.  Dealer's records concerning the
      Collateral are kept at the principal place of business specified on the
      reverse hereof, and all trade names, division names, or other names
      under which Dealer transacts any part of its business are specified in
      an appropriate schedule annexed hereto and made a part thereof; and (f)
      all Collateral will be kept at the Dealer's principal place of business
      specified on the reverse hereof and at any addresses listed on a
      schedule to this Agreement, and at such additional addresses as Dealer
      shall advise AT&T from time to time in writing prior to commencing any
      business activities thereat.  

7.    Additional Covenants of Dealer.  Dealer covenants and agrees: (a) to 
      defend at Dealer's own cost any action, proceeding or claim affecting
      the Collateral; (b) not to transfer, deliver or alienate any Collateral
      except in the ordinary course of Dealer's business and except for liens
      granted to First Union Bank of Connecticut and ICON Funding Corporation;
      (c) to keep accurate and complete records of the Collateral and to keep
      the Collateral in good condition and repair, and not to subject any
      Collateral to waste or use any Collateral in violation of any provision
      of this Agreement or of any applicable law or regulation or of any
      policy of insurance regarding the Collateral; (d) not to acquire by
      secured financing obtained from any other person or entity, inventory
      within any of the product lines of inventory for which AT&T has provided
      financing or extended credit without AT&T's prior written consent; (e)
      not to change its name or to merge or consolidate with any other firm or
      corporation without AT&T's prior written consent; and not to change
      Dealer's principal place of business without AT&T's prior written
      consent; (f) to pay promptly when due all taxes, assessments, fees and
      other public or private charges imposed, levied or assessed against the
      Collateral or this Agreement; (g) to insure all Collateral against
      risks, in coverage, form, amount and by insurer satisfactory to AT&T and
      to promptly deliver each policy to AT&T with a standard long form
      endorsement showing AT&T and its assigns as loss payee, as respective
      interests may appear (all such policies shall provide for prior written
      notification to AT&T before amendment or cancellation); (h) that AT&T,
      or its designee or agent, may enter upon Dealer's premises or wherever
      the Collateral may be located at any time to inspect, appraise or verify
      the Collateral and to inspect Dealer's books and records; (i) the
      Security Interest and Indebtedness shall not be diminished or impaired
      by any payment to the Vendor, by or on behalf of Dealer, for any
      inventory financed by AT&T; (j) to furnish to AT&T financial statements
      concerning Dealer's business, in such form, concerning such matter, and
      at such intervals as AT&T may request; (k) not to place any collateral
      in a warehouse that issues a negotiable document with respect thereto
      without the prior written consent of AT&T; (l) to execute and deliver
      to AT&T such financing statements and other documents relating to the
      perfection of the Security Interest and do such other things relating to
      the Collateral and the Security Interest as AT&T reasonably may request
      from time to time; and (m) to observe and perform all covenants set
      forth on any Schedule of Additional Covenants now or hereafter executed
      and delivered by Dealer.

8.    Events of Default.  Each of the following shall constitute an "Event 
      of Default" under this Agreement; (a) nonpayment when due of any 
      Indebtedness, whether under this Agreement, any other agreement with
      AT&T, or otherwise due or owing to AT&T by Dealer; (b) Dealer's breach
      of any representation, warranty, covenant, provision, term or condition
      of this Agreement, any Program Schedule, any Schedule of Additional
      Covenants or any other agreement between Dealer and AT&T; (c) the filing
      by or against Dealer of a request, petition or pleading for liquidation,
      reorganization, arrangement, adjustment of debts, adjudication
      asabankrupt, relief as a debtor or other relief under the bankruptcy,
      insolvency or similar laws of the United States or any state or
      territory thereof or any foreign country; (d) Dealer becomes insolvent,
      ceases to do business as a going concern or admits an inability to pay
      debts as they become due or, generally, is not paying debts as they
      become due; (e) Dealer is in default of any obligation to any person or
      entity when such obligation is secured by any Collateral; (f) Dealer has
      given AT&T materially false information regarding Dealer's financial
      condition; (g) any Collateral is attached, seized or repossessed, or a
      trustee, receiver or custodial of any of Dealer's property is appointed
      or Dealer makes any assignment for the benefit of creditors; (h) the
      making or sending of notice of any bulk sale or the transfer, assignment
      or delivery of a major part of the inventory of Dealer without the prior
      written consent of AT&T; (i) the existence of any formal or informal
      proceeding for settlement of claims against, or winding up of affairs
      of, Dealer; (j) the entry of judgment against Dealer in excess of
      $100,000 that has become enforceable under applicable law (other than a
      judgment that is fully insured) if within twenty (20) days thereafter
      such judgment is not satisfied, vacated, bonded or stayed pending
      appeal; or (k) any event specified in subparagraphs (a) through (j)
      hereof occurs with respect to any guarantor of Dealer's obligations to
      AT&T, or any guaranty provided to AT&T in connection with any
      indebtedness is terminated or breached.

9.    Remedies.  Upon the existence or occurrence of an Event of Default, 
      and at any time thereafter so long as such Event of Default is
      continuing, AT&T (a) at its sole election, may declare all or any part
      of the Indebtedness to be immediately due and payable without demand or
      notice of any kind (the provisions of this clause (a) are not intended
      in any way to affect rights of AT&T with respect to any Indebtedness
      that may now or hereafter be payable on demand); (b) shall have all of
      the rights and remedies of a secured party under the Uniform Commercial
      Code and any other applicable laws, including, without limitation, the
      right to any deficiency remaining after sale or other disposition of any
      Collateral; (c)(i) may require Dealer to assemble all or any portion of
      the Collateral and return it to AT&T at a place designated by AT&T,
      and/or (ii) by itself or its agent, without notice to anyone and without
      judicial process of any kind, may enter any premises or upon any land
      owned, leased or otherwise under the real or apparent control of Dealer
      or any agent of Dealer, and AT&T may repossess the Collateral or any
      part thereof; and/or (d) may notify any or all account debtors and may
      demand, collect, enforce and xxx on any of Dealer's accounts, contract
      rights, leases, chattel paper, general intangibles, instruments, letters
      of credit, documents or other Collateral (in either Dealer's or AT&T's
      name, at AT&T's election) and all payment from and on the Collateral
      shall be applied to the Indebtedness in such order and in any manner as
      AT&T, in its sole and absolute discretion, may determine. AT&T may
      compromise, settle or discharge such Collateral without thereby
      releasing or discharging any Indebtedness. AT&T may endorse Dealer's
      name on all checks or other Instruments constituting or relating to the
      Collateral.

      A public or private sale of any Collateral is a commercially 
      reasonable disposition thereof.  A disposition of Collateral or interest 
      in Collateral pursuant to a Vendor repurchase agreement shall
      constitute a commercially reasonable disposition thereof.

      Without in any way requiring notice to be given, Dealer agrees that 
      any notice by AT&T of the sale or other disposition of any Collateral 
      shall constitute reasonable notice to Dealer if such notice is mailed to 
      the Dealer, at the address specified below or to such other address as 
      Dealer may specify in writing to AT&T, by regular or certified mail, 
      postage prepaid, or by reputable overnight delivery service, posted or 
      dispatched at least ten (10) days prior to such action.

      Dealer agrees to pay on demand all costs and expenses incurred by 
      AT&T in enforcing this Agreement, in realizing upon or protecting any 
      Collateral and in enforcing or collecting any Indebtedness or any
      guaranty thereof, including without limitation, if AT&T retains legal
      counsel for advice, suit, appeal, insolvency or bankruptcy proceedings,
      the attorneys' fees and disbursements of such legal counsel. All such
      sums shall constitute Indebtedness hereunder secured by the Collateral.

10.   Selection of Inventory; Risk of Loss; Indemnity.  Dealer is solely 
      responsible for the selection of inventory.  AT&T shall have no 
      responsibility, risk or liability as to the existence, delivery, amount
      or number, description, quality, character, suitability, condition or 
      performance of any inventory or other Collateral.  AT&T HAS NOT MADE AND 
      DOES NOT NOW MAKE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED,
      WITH RESPECT TO THE INVENTORY, AND HEREBY EXPRESSLY DISCLAIMS ANY AND
      ALL WARRANTIES OF MERCHANTABILITY OR FITNESS OF THE INVENTORY FOR A
      PARTICULAR PURPOSE.  Any claims that Dealer may at any time possess
      against any Vendor or any other person or entity with respect to
      inventory shall not be asserted against AT&T and shall not diminish,
      excuse or impair any Indebtedness or the Security Interest.  Dealer
      hereby indemnifies AT&T and holds AT&T harmless from and against all
      claims and/or defenses asserted by any Vendor or buyer of any inventory
      or any other Collateral for any reason.  As between AT&T and Dealer, all
      risk of loss with respect to the Collateral is, and shall remain, at all
      times with Dealer.

11.   Waiver of Jury Trial. DEALER AND AT&T HEREBY WAIVE THE RIGHT TO A 
      TRIAL BY JURY IN ANY COURT AND IN ANY ACTION OR PROCEEDING WHETHER IN 
      TORT, CONTRACT OR OTHERWISE, IN WHICH DEALER OR AT&T, OR ANY SUCCESSOR
      OR ASSIGN OF EITHER OF THE FOREGOING, ARE PARTIES AS TO ALL MATTERS AND
      THINGS ARISING OUT OF OR RELATING, DIRECTLY OR INDIRECTLY, TO THIS 
      AGREEMENT AND THE RELATIONS BETWEEN THE PARTIES HEREUNDER.

12.   AT&T Insecurity. Whenever AT&T in good faith believes that the 
      prospect of Dealer's payment or performance hereunder is impaired, or
      that any Collateral is at risk, AT&T shall be entitled to exercise any
      one or more of the remedies provided in Section 9 of this Agreement.

13.   Choice of Law. THE VALIDITY, INTERPRETATION, ENFORCEABILITY AND 
      OTHER LEGAL QUESTIONS RELATING TO THIS AGREEMENT, AND THE EXISTENCE AND 
      VALIDITY OF ANY CLAIMS OR DEFENSES CONCERNING OR RELATING THERETO, SHALL 
      IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE 
      INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAW PROVISION) OF THE STATE OF 
      NEW JERSEY.  IN ADDITION, DEALER CONSENTS TO THE JURISDICTION OF STATE
      AND FEDERAL COURTS LOCATED IN THE STATE OF NEW JERSEY TO ADJUDICATE ALL 
      MATTERS CONCERNING OR RELATING TO THIS AGREEMENT.

14.   Additional Provisions.  

      (a)    If an Event of Default has occurred and is continuing, Dealer 
             hereby irrevocably appoints AT&T as Dealer's attorney-in-fact to
             execute such financing statements or other documents relating to
             the Collateral in Dealer's name, to supply any omitted
             information and correct errors in any documents executed by
             Dealer or on Dealer's behalf and to endorse all checks or other
             instruments constituting or relating to the Collateral and 
             to execute, endorse or assign all papers and documents concerning
             or relating to the Collateral.  This power of attorney shall be
             durable and irrevocable and shall survive any legal disability of
             Dealer. If an Event of Default has occurred and is continuing,
             where permitted by law, AT&T may file financing statements signed
             only by AT&T to perfect the Security Interest.  A carbon,
             photographic or other reproduction of this security 
             agreement is sufficient as a financing statement.

      (b)    Upon Dealer's failure to perform any of its obligations or 
             duties hereunder, AT&T may, but shall not be required to, perform
             any such obligations or duties, including, without limitation,
             the payment of taxes, assessments or other charges or expenses
             and the placement of insurance with respect to the Collateral.
             Dealer shall pay on demand all such costs, charges or expenses so
             incurred by AT&T and all such sums shall constitute Indebtedness
             hereunder secured by the Collateral.

      (c)    AT&T, or its designee or agent, shall have the right to 
             inspect, verify and appraise the Collateral, or any part thereof,
             and to verify its condition and Dealer agrees to furnish all
             assistance and perform such acts as AT&T may reasonably request
             in connection therewith. If such inspection, verification or
             appraisal of the Collateral is conducted by AT&T upon the
             existence or occurrence of any Event of Default hereunder, or at
             any time thereafter, Dealer agrees to pay on demand all of AT&T's
             expenses therefor. All such sums shall constitute Indebtedness 
             hereunder secured by the Collateral.

      (d)    AT&T is authorized to provide to others any information 
             supplied by Dealer or relating to Dealer and not marked
             "confidential" by Dealer, and any public financial and credit
             information relating to Dealer, without regard to the source of
             such information.

      (e)    No delay or omission by AT&T in exercising any right or remedy 
             hereunder shall operate as a waiver thereof or of any other right
             or remedy; and no single or partial exercise of any right or
             remedy shall preclude any other or further exercise thereof or
             the exercise of any other right or remedy. All rights and
             remedies of AT&T hereunder are cumulative and not alternative.

      (f)    The terms "Dealer" and "AT&T" as used herein shall include the 
             successors or assigns of those parties.  In the event more than
             one person or entity executes this Agreement as a Dealer, the
             term Dealer as used herein, and the provisions of this Agreement,
             shall be binding upon each such person or entity, jointly and
             severally.

      (g)    This Agreement constitutes the entire agreement between the 
             parties concerning the subject matter hereof and no modification, 
             rescission, waiver, release or amendment of any provision of this 
             Agreement shall be effective unless made in a writing executed by
             Dealer and AT&T.

      (h)    Terms used in this Agreement, unless otherwise defined herein, 
             shall have the meanings ascribed to them in the Uniform
             Commercial Code adopted in New Jersey.

      (i)    AT&T may assign this Agreement, but Dealer must have AT&T's 
             prior written consent to assign this Agreement. If assigned,
             this Agreement shall be for the benefit of each assignee or other
             successor in interest of each party and shall be binding upon
             them.

      (j)    If after receipt of any payment AT&T is for any reason 
             compelled to surrender any payment to any person or entity
             because such payment is determined to be void or voidable, or for
             any other reason, this Agreement shall continue in full force and
             effect notwithstanding any contrary action that may have been
             taken by AT&T, which shall be without prejudice to AT&T's rights
             under this Agreement and shall at all times be deemed to have
             been conditioned upon such payment having become complete, final
             and irrevocable. No refinancing, consolidation, renewal,
             forbearance or other change of, or with respect to, any
             Indebtedness shall constitute a novation or result in any
             impairment of the (i) Security Interest, or (ii) effect,
             perfection or priority of the Security Interest.

      (k)    If any provision of this Agreement shall be adjudged by any 
             court of competent jurisdiction to be invalid, such judgment
             shall not affect, impair or invalidate the remainder hereof, but
             shall be confined in its operation to the specific provision of
             this Agreement so invalidated.


IN WITNESS WHEREOF, this Agreement for Wholesale Financing has been duly 
executed by and on behalf of the undersigned as of the date specified on 
the front page hereof.

Witness
Attest:__________________       and  Dealer: Farmstead Telephone Group, Inc.
                                              -------------------------------   
                                     (Corporate, Partnership or Sole
                                     Proprietor's Name)

                                     By: /s/ Xxxxxx X. XxXxxxx

[Corporate Seal]                     Title: Vice President

                                     Dealer's Principal Place of Business is:


AT&T COMMERCIAL FINANCE CORPORATION      00 Xxxxxxxx Xxxx Xxxxxx
                                         --------------------------------
                                                  Street Address

By:                                      Xxxx Xxxxxxxx, XX  00000-0000
-----------------------------            --------------------------------
Authorized Representative                City         State     Zip Code

                                         --------------------------------
                                                     County					

                        [Any additional Dealer locations
                       are shown on an attachment hereto]


Mr. Xxxxxx XxXxxxx                                              Exhibit 10.3
Chief Financial Officer
Farmstead Telephone Group, Inc.
00 Xxxxxxxx Xxxx Xxxxxx
Xxxx Xxxxxxxx, XX  00000-0000

Cc:   Xxxx Xxxxxxxx
      Xxxx Xxxx

Re:   Approval of Line of Credit with AT&T Commercial Finance Corporation

      Dear Xx. XxXxxxx:

      AT&T Commercial Finance Corporation ("AT&T-CFC") is pleased to 
      advise you of our commitment to offer Farmstead Telephone Group, Inc.
      (the "Borrower") a line of credit in an amount not to exceed
      $2,000,000.00 (the "Line of Credit"). This commitment is made subject
      to the following terms and conditions;

1.    Amount of Line of Credit

      The Line of Credit shall be in a maximum amount of $2,000,000.00 (as 
      described above).  AT&T-CFC may from time to time finance sums above the 
      committed line at its sole discretion.  Further, any such additional 
      advances are not intended to be and should not be construed as a
      permanent commitment above the approved line and are subject to
      immediate repayment, at our sole option, upon notice by AT&T-CFC. There
      shall be no minimum extension of credit required of AT&T-CFC under this
      commitment. All extensions of credit shall be made in the sole and
      complete discretion of AT&T-CFC.  The outstanding balance under the Line
      of Credit shall be computed by adding the principal outstanding amount
      and the amount of unpurchased approvals.

2.    Line of Credit Utilization

      AT&T-CFC will set aside up to $500,000 of Farmstead's line of credit.  
      This portion of the Line of Credit will be used to finance Borrower's
      open account inventory purchases (Other Eligible Inventory).

3.    Other Eligible Inventory

      AT&T-CFC will finance Other Eligible Inventory as follows:
 
      *   Repayment terms shall be 1/2 30, 1/2 60 from the advance date
      *   Rate of Prime plus 1.5 percent ADB
      *   Advances shall be in AT&T-CFC's sole discretion and shall be made 
          directly to Farmstead on a per invoice basis upon AT&T-CFC's receipt
          of all appropriate support documentation.
      *   Advance rate shall be up to 50 percent of the wholesale value of the 
          invoice.
      *   AT&T-CFC reserves to right to approve vendors for advances on Other 
          Eligible Inventory
      *   There shall be a .10 percent of invoice amount transaction fee per 
          advance
      *   Acceptability of Other Eligible Inventory to be determined by 
          prefunding audit
      *   No minimum balance requirement


4.    Duration of Line of Credit		

      The term of the Line of Credit shall commence on June 1, 1997 and shall 
      continue through April 30, 1998 ("Expiration") at which time the Line of 
      Credit shall terminate and expire. AT&T-CFC will annually review the
      line for renewal based on our receipt and satisfactory review of your
      next fiscal year end financial statement.  AT&T-CFC may, in its sole and 
      absolute discretion extend the Line of Credit for such additional
      periods of time and under such terms and conditions as AT&T-CFC
      determines to be appropriate. No advances will be made by AT&T-CFC until
      AT&T-CFC actually receives executed copies of any and all documentation
      required by AT&T-CFC.

5.    Early Termination

      The Line of Credit may be terminated by AT&T-CFC at any time prior to
      the Expiration specified above if;

             a.)   The Borrower fails to execute and/or deliver any and all
             financing documents required by AT&T-CFC, which financing
             documents shall include, but shall not be limited to, an
             Agreement for Wholesale Financing.

             b.)   The Borrower is in breach of any of the provisions of any
             of the financing documents required by AT&T-CFC or is in default
             under any such document.

             c.)   There has occurred any adverse change in the financial
             condition or business prospects of the Borrower or any guarantor
             of the Borrower's indebtedness to AT&T-CFC or if AT&T-CFC shall
             learn of any misrepresentation or omission of a fact or
             circumstance by the Borrower (or any guarantor of the Borrower's)
             indebtedness to AT&T-CFC) or if AT&T-CFC shall learn of any
             misrepresentation or omission of a fact or circumstance by the
             Borrower (or any guarantor) that AT&T-CFC deems to be material. 
             The Borrower and all guarantors shall be obligated to notify
             AT&T-CFC in writing of any change in either of their financial
             condition, structure, ownership, or business prospects.

5.    No Assignment

      This commitment may not be assigned by the Borrower without the prior 
      written consent of AT&T-CFC, which consent shall be granted or withheld
      in the sole and absolute discretion of AT&T-CFC.

6.    Conditions

      i)   This commitment for a Line of Credit is subject to receiving
      a satisfactory intercreditor agreement from First Union Bank
      N.A.

      ii)  Collateral Covenants

             a)   The ratio of total collateral available to AT&T-CFC after
             deduction of senior liens, to total AT&T-CFC indebtedness must be
             at least 1.5 to 1.

             b)   The ratio of Other Eligible Inventory to advances on Other
             Eligible Inventory must be at least 2 to 1.  




In the event of  a short fall of either collateral coverage ratio, an 
immediate paydown shall be required such that Farmstead would thereafter 
be in compliance with both ratios.

We look forward to working with you.

Sincerely,


Xxxx Xxxx
Portfolio Manager


                     Accepted:  Xxxxxx X. XxXxxxx
                                (Name)

                                Vice President/CFO
                                (Title)
                           
                            June 6, 1997
                           (Date)



Schedule of Additional Covenant (s)

      Terms defined in the Agreement for Wholesale Financing between AT&T 
and Dealer (the "Agreement") and not otherwise defined herein have those 
meanings assigned to them in the Agreement. Notwithstanding anything 
contained in the Agreement or otherwise to the contrary, Dealer hereby 
covenants and agrees that at all times Dealer will maintain on its 
premises or otherwise in its possession, or under its custody or control, 
Collateral subject to the first lien and first priority security interest 
of AT&T, having an actual value from time to time equal to at least one 
hundred fifity percent (150%) of the Indebtedness outstanding from time to 
time.  Within fifteen (15) days after the end of each month, Dealer shall 
provide AT&T with evidence satisfactory to At&T in all respects that 
Dealer is in compliance with this covenant, and Indebtedness outstanding 
from time to time to an amount whereby Dealer shall be in compliance wit 
this covenant at all times.

      Notwithstanding anything contained in the Agreement or otherwise to 
the contrary, Dealer hereby covenants and agrees that at all times Dealer 
will maintain on its premises or otherwise in its possession, or under its 
custody or control, Inventory purchased on open account from vendors not 
financed by AT&T ("Other Eligible Inventory Collateral") subject to the 
first lien and first priority security interest of AT&T, having an actual 
value from time to time equal to a t least two hundred (200%) of the Other 
Eligible Inventory Indebtedness outstanding from time to time.  Within 
five (5) days after the end of each month, Dealer shall provide AT&T with 
evidence satisfactory to AT&T in all respects that Dealer is in compliance 
wit this covenant, and from time to time Dealer shall pay AT&T such 
amounts as are necessary to reduce the Indebtedness outstanding from time 
to time to an amount whereby Dealer shall be in compliance with this 
covenant at all times.

Date:  June 6, 1997

Farmstead Telephone Group, Inc.

By:  Xxxxxx X. XxXxxxx

Title:  Vice President

00 Xxxxxxxx Xxxx Xxxxxx
Xxxx Xxxxxxxx, XX  00000

AT&T COMMERCIAL FINANCE CORPORATION

By:  _______________________________________

Title:  ____________________________________
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, XX  00000