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                                                                   EXHIBIT 10.35


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                                CREDIT AGREEMENT

                                 by and between

                     JALATE, LTD., A CALIFORNIA CORPORATION

                                       and

                        WELLS FARGO HSBC TRADE BANK, N.A.



                                   Dated as of

                                  JAN 21, 1998


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                        Exhibit A - Addendum to Agreement
                       Exhibit B - Facility Supplement(s)
                 Exhibit C - Collateral/Credit Support Document



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WELLS FARGO HSBC TRADE BANK                                     CREDIT AGREEMENT
================================================================================

JALATE, LTD., a corporation ("Borrower"), organized under the laws of the State
of California whose chief executive office is located at the address specified
after its signature to this Agreement ("Borrower's Address") and WELLS FARGO
HSBC TRADE BANK, N.A. ("Trade Bank"), whose address is specified after its
signature to this Agreement, have entered into this CREDIT AGREEMENT as of
_________________ , 199_ ("Effective Date"). All references to this "Agreement"
include those covenants included in the Addendum to Agreement ("Addendum")
attached as Exhibit A hereto.


                              I. CREDIT FACILITIES

         1.1 THE FACILITIES. Subject to the terms and conditions of this
Agreement, Trade Bank will make available to Borrower each of those credit
facilities ("Facilities") for which a Facility Supplement ("Supplement") is
attached as Exhibit B hereto. Additional terms for each individual Facility (and
each subfacility thereof ("Subfacility")) are set forth in the Supplement for
that Facility. Each Facility will be available from the Closing Date until the
Facility Termination Date for that Facility. Collateral and credit support
required for each Facility are also set forth in the Supplement for each
Facility. Definitions for those capitalized terms not otherwise defined are
contained in Article 8 below.

         1.2 CREDIT EXTENSION LIMIT, The aggregate outstanding amount of all
Credit Extensions may at no time exceed One Million One Hundred Twenty-Seven
Thousand Six Hundred Thirteen Dollars ($127.613) ("Overall Credit Limit"). The
aggregate outstanding amount of all Credit Extensions outstanding at any time
under any Facility may not exceed that amount specified as the "Credit Limit" in
the Supplement for that Facility, and the aggregate outstanding amount of all
Credit Extensions outstanding at any time under each Subfacility (or any
subcategory thereof) may not exceed that amount specified as the "Credit
Sublimit" in the Supplement for the relevant Facility. An amount equal to 100%
of each unfunded Credit Extension shall be used in calculating the outstanding
amount of Credit Extensions under this Agreement.

         1.3 REPAYMENT; INTEREST AND FEES. Each funded Credit Extension shall be
repaid by Borrower, and shall bear interest from the date of disbursement at
those per annum rates and such interest shall be paid, at the times specified in
the applicable Supplement, Note or Facility Document. With respect to each
Facility, Borrower agrees to pay to Trade Bank the fees specified in the related
Supplement as well as those fees specified in the relevant Facility Document(s).
Interest and fees will be calculated on the basis of a 360 day year, actual days
elapsed. Any overdue payments of principal (and interest to the extent permitted
by law) shall bear interest at a per annum floating rate equal to the Prime Rate
plus 8.0%.

         1.4 PREPAYMENTS. Credit Extensions under any Facility may only be
prepaid in accordance with the terms of the related Supplement. At the time of
any prepayment (including, but not limited to, any prepayment which is a result
of the occurrence of an Event of Default and an acceleration of the Obligations)
Borrower will pay to Trade Bank all interest accrued on the amount so prepaid to
the date of such prepayment and all costs, expenses and fees specified in the
Loan Documents.


                       II. REPRESENTATIONS AND WARRANTIES

         Borrower represents and warrants to Trade Bank that the following
representations and warranties are true and correct:

         2.1 LEGAL STATUS. Borrower is duly organized and existing and in good
standing under the laws of the jurisdiction indicated in this Agreement, and is
qualified or licensed to do business in all jurisdictions in which such
qualification or licensing is required and in which the failure to so qualify or
to be so licensed could have a material adverse affect on Borrower.

         2.2 AUTHORIZATION AND VALIDITY. The execution, delivery and performance
of this Agreement, and all other Loan Documents to which Borrower is a party,
have been duly and validly authorized, executed and delivered by Borrower and
constitute legal, valid and binding agreements of Borrower, and are enforceable
against Borrower in accordance with their respective terms.

         2.3 BORROWER'S NAME. The name of Borrower set forth at the end of this
Agreement is its correct name. If Borrower is conducting business under a
fictitious business name, Borrower is in compliance with all laws relating to
the conduct of such business under such name.

         2.4 FINANCIAL CONDITION AND STATEMENTS. All financial statements of
Borrower delivered to Trade Bank have been prepared in conformity with GAAP, and
completely and accurately reflect the financial condition of Borrower (and any
consolidated Subsidiaries) at the times and for the periods stated in such
financial statements. Neither Borrower nor any Subsidiary has any material
contingent liability not reflected in the aforesaid financial statement. Since
the date of the financial statements delivered to Trade Bank for the last
fiscal period of Borrower to end before the Effective Date, there has been no
material adverse change in the financial condition, business or prospects of
Borrower. Borrower is solvent.


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         2.5 LITIGATION. Except as disclosed in writing to Trade Bank prior to
the Effective Date, there is no action, claim, suit, litigation, proceeding or
investigation pending or (to best of Borrower's knowledge) threatened by or
against or affecting Borrower or any Subsidiary in any court or before any
governmental authority, administrator or agency which may result in (a) any
material adverse change in the financial condition or business of Borrower, or
(b) any material impairment of the ability of Borrower to carry on its business
in substantially the same manner as it is now being conducted.

         2.6 OTHER OBLIGATIONS. Except as disclosed in writing to Trade Bank
prior to the Effective Date, neither Borrower nor any Subsidiary are in default
of any obligation for borrowed money, any purchase money obligation or any
material lease, commitment, contract, instrument or obligation.

         2.7 NO DEFAULTS. No Event of Default, and event which with the giving
of notice or the passage of time or both would constitute an Event of Default,
has occurred and is continuing.

         2.8 INFORMATION PROVIDED TO TRADE BANK. The information provided to the
Trade Bank concerning Borrower's business is true and correct.

      2.9 ENVIRONMENTAL MATTERS. Except as disclosed by Borrower to Bank in
writing prior to the Effective Date, Borrower (as well as any Subsidiary) is
each in compliance in all material respects with all applicable Federal or state
environmental, hazardous waste, health and safety statutes, and any rules or
regulations adopted pursuant thereto, which govern or affect any of Borrower's
or any Subsidiary's operations and/or properties, including without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, the Superfund Amendments and Reauthorization Act of 1986, the Federal
Resource Conservation and Recovery Act of 1976, the Federal Toxic Substances
Control Act and the California Health and Safety Code, as any of the same may be
amended, modified or supplemented from time to time. None of the operations of
Borrower or of any Subsidiary is the subject of any Federal or state
investigation evaluating whether any remedial action involving a material
expenditure is needed to respond to a release of any toxic or hazardous waste or
substance into the environment.


                     III. CONDITIONS TO EXTENDING FACILITIES

         3.1 Conditions to Initial Credit Extension. The obligation of Trade
Bank to make the first Credit Extension is subject to the fulfillment to Trade
Bank's satisfaction of the following conditions:

               (a)    APPROVAL OF TRADE BANK COUNSEL. All legal matters relating
                      to making the Facilities available to Borrower must be
                      satisfactory to counsel for Trade Bank.

               (b)    DOCUMENTATION. Trade Bank must have received, in form and
                      substance satisfactory to Trade Bank, the following
                      documents and instruments duly executed and in full force
                      and effect:

                      (1)    a corporate borrowing resolution and incumbency
                             certificate if Borrower is a corporation, a
                             partnership or joint venture borrowing certificate
                             if Borrower is a partnership or joint venture, and
                             a limited liability company borrowing certificate
                             if Borrower is a limited liability company;

                      (2)    the Facility Documents for each Facility,
                             including, but not limited to, note(s) ("Notes")
                             for any Revolving Credit or Term Loan Facility,
                             Trade Bank's standard Continuing Commercial Letter
                             of Credit Agreement or Continuing Standby Letter of
                             Credit Agreement for any letter of credit Facility;

                      (3)    those guarantees, security agreements, deeds of
                             trust, subordination agreements, intercreditor
                             agreements, factoring agreements, tax service
                             contracts, and other Collateral Documents required
                             by Trade Bank to evidence the collateral/credit
                             support specified in the Supplement;

                      (4)    if an audit or inspection of any books, records or
                             property is specified in the Supplement for any
                             Facility, an audit or inspection report from Wells
                             Fargo or another auditor or inspector acceptable to
                             Trade Bank reflecting values and property
                             conditions satisfactory to Trade Bank;

                      (5)    if an appraisal of any real property is specified
                             in any Facility Supplement, an appraisal from an
                             appraiser acceptable to Trade Bank reflecting
                             values satisfactory to Trade Bank;

                      (6)    if a policy of title insurance is specified in any
                             Facility Supplement, an ALTA policy containing the
                             endorsements, and issued by a company, acceptable
                             to Trade Bank; and

                      (7)    if insurance is required in the Addendum, the
                             insurance policies specified in the Addendum (or
                             other satisfactory proof thereof) from insurers
                             acceptable to Trade Bank.

         3.2 CONDITIONS TO MAKING EACH CREDIT EXTENSION. The obligation of Trade
Bank to make each Credit Extension is subject to the fulfillment to Trade Bank's
satisfaction of the following conditions:

               (a)    REPRESENTATIONS AND WARRANTIES. The representations and
                      warranties contained in this Agreement, the Facility
                      Documents and the Collateral Documents will be true and
                      correct on as of the date of the Credit Extension with the
                      same effect as though such representations and warranties
                      had been made on and as of such date;



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               (b)    DOCUMENTATION. Trade Bank must have received, in form and
                      substance satisfactory to Trade Bank, the following
                      documents and instruments duly executed and in full force
                      and effect:

                      (1)    if the Credit Extension is the issuance of a
                             Commercial Letter of Credit, Trade Bank's standard
                             Application For Commercial Letter of Credit or
                             standard Application and Agreement For Commercial
                             Letter of Credit;

                      (2)    if the Credit Extension is the issuance of a
                             Standby Letter of Credit, Trade Bank's standard
                             Application For Standby Letter of Credit or
                             standard Application and Agreement For Standby
                             Letter of Credit;

                      (3)    if a Borrowing Base Certificate is required for the
                             Credit Extension, a Borrowing Base Certificate
                             demonstrating compliance with the requirements for
                             such Credit Extension.

               (c)    FEES. Trade Bank must have received any fees required by
                      the Loan Documents to be paid at the time such Credit
                      Extension is made.


                            IV. AFFIRMATIVE COVENANTS

         Borrower covenants that so long as Trade Bank remains committed to make
Credit Extensions to Borrower, and until payment of all Obligations and Credit
Extensions, Borrower will comply with each of the following covenants: (For
purposes of this Article IV, and Article V below, reference to "Borrower" may
also extend to Borrower's subsidiaries, if so specified in the Addendum.)

         4.1 PUNCTUAL PAYMENTS. Punctually pay all principal, interest, fees and
other Obligations due under this Agreement or under any Loan Document at the
time and place and in the manner specified herein or therein.

         4.2 NOTIFICATION TO TRADE BANK. Promptly, but in no event more than 5
calendar days after the occurrence of each such event, provide written notice in
reasonable detail of each of the following:

               (a)   OCCURRENCE OF A DEFAULT. The occurrence of any Event of
                     Default or any event which with the giving of notice or the
                     passage of time or both would constitute an Event of
                     Default,

               (b)   BORROWER'S TRADE NAMES, PLACE OF BUSINESS. Any change of
                     Borrower's (or any Subsidiary's) name, trade name or place
                     of business, or chief executive officer;

               (c)   LITIGATION. Any action, claim, proceeding, litigation or
                     investigation threatened or instituted by or against or
                     affecting Borrower (or any Subsidiary) in any court or
                     before any government authority, administrator or agency
                     which may materially and adversely affect Borrower's (or
                     any Subsidiary's) financial condition or business or
                     Borrower's ability to carry on its business in
                     substantially the same manner as it is now being conducted;

               (d)   UNINSURED OR PARTIALLY UNINSURED LOSS. Any uninsured or
                     partially uninsured loss through liability or property
                     damage or through fire, theft or any other cause affecting
                     Borrower's (or any Subsidiary's) property in excess of the
                     aggregate amount required hereunder;

               (e)   REPORTS MADE TO INSURANCE COMPANIES. Copies of all material
                     reports made to insurance companies; and

               (f)   ERISA. The occurrence and nature of any Reportable Event or
                     Prohibited Transaction, each as defined in ERISA, or any
                     funding deficiency with respect to any Plan.

         4.3 BOOKS AND RECORDS. Maintain at Borrower's address books and records
in accordance with GAAP, and permit any representative of Trade Bank, at any
reasonable time, to inspect, audit and examine such books and records; to make
copies of them, and to inspect the properties of Borrower.

         4.4 TAX RETURNS AND PAYMENTS. Timely file all tax returns and reports
required by foreign, federal, state and local law, and timely pay all foreign,
federal, state and local taxes, assessments, deposits and contributions owed by
Borrower. Borrower may, however, defer payment of any contested taxes, provided
that Borrower (i) in good faith contests Borrower's obligation to pay the taxes
by appropriate proceedings promptly instituted and diligently conducted, (ii)
notifies Trade Bank in writing of the commencement of, and any material
development in, the proceedings, (iii) posts bonds or takes any other steps
required to keep the contested taxes from becoming a lien upon any of the
Collateral, and (iv) makes provision, to Trade Bank's satisfaction, for eventual
payment of such taxes in the event Borrower is obligated to make such payment.

         4.5 COMPLIANCE WITH LAWS. Comply in all material respects with the
provisions of all foreign, federal, state and local laws and regulations
relating to Borrower, including, but not limited to, those relating to
Borrower's ownership of real or personal property, the conduct and licensing of
Borrower's business, and health and environmental matters.

         4.6 INSURANCE. Maintain and keep in force insurance of the types and in
amounts customarily carried in lines of business similar to that of Borrower,
including, but not limited to, fire, extended coverage, public liability, flood,
property damage and workers' compensation, with all such insurance to be in
amounts satisfactory to Trade Bank and to be carried with companies approved by
Trade Bank before such companies are retained, and deliver to Trade Bank from
time to time at Trade Bank's request

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schedules setting forth all insurance then in effect. All insurance policies
shall name Trade Bank as an additional loss payee, and shall contain a lenders
loss payee endorsement in form reasonably acceptable to Trade Bank. (Upon
receipt of the proceeds of any such insurance, Trade Bank shall apply such
proceeds in reduction of the outstanding funded Credit Extensions and shall hold
any remaining proceeds as collateral for the outstanding unfunded Credit
Extensions, as Trade Bank shall determine in its sole discretion, except that,
provided no Event of Default has occurred, Trade Bank shall release to Borrower
insurance proceeds with respect to equipment totaling less than $100,000, which
shall be utilized by Borrower for the replacement of the equipment with respect
to which the insurance proceeds were paid, if Trade Bank receives reasonable
assurance that the insurance proceeds so released will be so used.) If Borrower
fails to provide or pay for any insurance, Trade Bank may, but is not obligated
to, obtain the insurance at Borrower's expense.

      4.7 FURTHER ASSURANCES. At Trade Bank's request and in form and substance
satisfactory to Trade Bank, execute all documents and take all such actions at
Borrower's expense as Trade Bank may deem reasonably necessary or useful to
perfect and maintain Trade Bank's perfected security interest in the Collateral
and in order to fully consummate all of the transactions contemplated by the
Loan Documents.

                              V. NEGATIVE COVENANTS

        Borrower covenants that so long as Trade Bank remains committed to make
any Credit Extensions to Borrower and all Obligations and Credit Extensions have
been paid, Borrower will not:

         5.1 MERGE OR CONSOLIDATION, TRANSFER OF ASSETS. Merge into or
consolidate with any other entity; make any substantial change in the nature of
Borrower's business as conducted as of the date hereof; acquire all or
substantially all of the assets of any other entity; nor sell, lease, transfer
or otherwise dispose of all or a substantial or material portion of Borrower's
assets except in the ordinary course of its business.

        5.2 LIENS. Except for Permitted Liens, mortgage, pledge, grant or permit
to exist a security interest in, or lien upon, all or any portion of Borrower's
assets now owned or hereafter acquired.

        5.3 USE OF PROCEEDS. Borrower will not use the proceeds of any Credit
Extension except for the purposes, if any, specified for such Credit Extension
in the Supplement covering the Facility under which such Credit Extension is
made.


                       VI. EVENTS OF DEFAULT AND REMEDIES

         6.1 EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "Event of Default":

               (a)   FAILURE TO MAKE PAYMENTS WHEN DUE. Borrower's failure to
                     pay principal, interest, fees or other amounts when due
                     under any Loan Document.

               (b)   FAILURE TO PERFORM OBLIGATIONS. Any failure by Borrower to
                     comply with any covenant or obligation in this Agreement or
                     in any Loan Document (other than those referred to in
                     subsection (a) above), and such default shall continue for
                     a period of twenty calendar days from the earlier of (i)
                     Borrower's failure to notify Trade Bank of such Event of
                     Default pursuant to Section 4.2(a) above, or (ii) Trade
                     Bank's notice to Borrower of such Event of Default.

               (c)   UNTRUE OR MISLEADING WARRANTY OR STATEMENT. Any warranty,
                     representation, financial statement, report or certificate
                     made or delivered by Borrower under any Loan Document is
                     untrue or misleading in any material respect when made or
                     delivered.

               (d)   DEFAULTS UNDER OTHER LOAN DOCUMENTS. Any "Event of Default"
                     occurs under any other Loan Document; any Guaranty is no
                     longer in full force and effect (or any claim thereof made
                     by Guarantor) or any failure of a Guarantor to comply with
                     the provisions thereof, or any breach of the provisions of
                     any Subordination Agreement or Intercreditor Agreement by
                     any party other than the Trade Bank.

               (e)   DEFAULTS UNDER OTHER AGREEMENTS OR INSTRUMENTS. Any default
                     in the payment or performance of any obligation, or the
                     occurrence of any event of default, under the terms of any
                     other agreement or instrument pursuant to which Borrower,
                     any Subsidiary or any Guarantor or general partner of
                     Borrower has incurred any debt or other material liability
                     to any person or entity.

               (f)   CONCEALING OR TRANSFERRING PROPERTY. Borrower conceals,
                     removes or transfers any part of its property with intent
                     to hinder, delay or defraud its creditors, or makes or
                     suffers any transfer of any of its property which may be
                     fraudulent under any bankruptcy, fraudulent conveyance or
                     similar law.

               (g)   JUDGMENTS AND LEVIES AGAINST BORROWER. the filing of a
                     notice of judgment lien against Borrower, or the recording
                     of any abstract of judgment against Borrower, in any county
                     in which Borrower has ail interest in real property, or the
                     service of a notice of levy and/or of a writ of attachment
                     or execution, or other like process, against the assets of
                     Borrower, or the entry of a judgment against Borrower.

               (h)   EVENT OR CONDITION IMPAIRING PAYMENT OR PERFORMANCE. Any
                     event occurs or condition arises which Trade Bank in good
                     faith believes impairs or is substantially likely to
                     impair the prospect of payment or performance by Borrower
                     of the Obligations. including, but not limited to any
                     material adverse change in Borrower's financial condition,
                     business or prospects.


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               (i)    VOLUNTARY INSOLVENCY. Borrower, any Subsidiary or any
                      Guarantor (i) becomes insolvent, (ii) suffers or consents
                      to or applies for the appointment of a receiver, trustee,
                      custodian or liquidator of itself or any of its property,
                      (iii) generally fails to pay its debts as they become due,
                      (iv) makes a general assignment for the benefit of
                      creditors, or (v) files a voluntary petition in
                      bankruptcy, or seeks reorganization, in order to effect a
                      plan or other arrangement with creditors or any other
                      relief under the Bankruptcy Reform Act, Title 11 of the
                      United States Code, as amended or recodified from time to
                      time ("Bankruptcy Code"), or under any state or Federal
                      law granting relief to debtors, whether now or hereafter
                      in effect.

               (j)    INVOLUNTARY INSOLVENCY. Any involuntary petition or
                      proceeding pursuant to the Bankruptcy Code or any other
                      applicable state or federal law relating to bankruptcy,
                      reorganization or other relief for debtors is filed or
                      commenced against Borrower, any Subsidiary or Guarantor,
                      or (b) have an order for relief entered against it by any
                      court of competent jurisdiction under the Bankruptcy Code
                      or any other applicable state or federal law relating to
                      bankruptcy, reorganization or other relief for debtors.

               (k)    CHANGE IN OWNERSHIP. Any change in the ownership of
                      Borrower, any general partner of Borrower or any Guarantor
                      which the Trade Bank determines, in its sole discretion,
                      may adversely affect the creditworthiness of Borrower or
                      credit support for the Obligations.

REMEDIES. Upon the occurrence of any Event of Default, or at any time
thereafter, Trade Bank, at its option, and without notice or demand of any kind
(all of which are hereby expressly waived by Borrower), may do any one or more
of the following: (a) terminate Trade Bank's obligation to make Credit
Extensions or to make available to Borrower the Facilities or other financial
accommodations; (b) accelerate and declare all or any part of the Obligations
to be immediately due, payable, and performable, notwithstanding any deferred or
installment payments allowed by any instrument evidencing or relating to any
Credit Extension; and/or (c) exercise all its rights, powers and remedies
available under the Loan Documents, or accorded by law, including, but not
limited to, the right to resort to any or all Collateral or other security for
any of the Obligations and to exercise any or all of the rights of a beneficiary
or secured party pursuant to applicable law. Notwithstanding the provisions in
the foregoing sentence, if any Event of Default set out in subsections (i) and
(j) of Section 6.1 above shall occur, then all the remedies specified in the
preceding sentence shall automatically take effect without notice or demand of
any kind (all of which are hereby expressly waived by Borrower) with respect to
any and all Obligations. All rights, powers and remedies of Trade Bank may be
exercised at any time by Trade Bank and from time to time after the occurrence
of an Event of Default, are cumulative and not exclusive, and shall be in
addition to any other rights, powers or remedies provided by law or equity.

                             VII. GENERAL PROVISIONS

         7.1 NOTICES. All notices to be given under this Agreement shall be in
writing and shall be given personally or by regular first-class mail, by
certified mail return receipt requested, by a private delivery service which
obtains a signed receipt, or by facsimile transmission addressed to Trade Bank
or Borrower at the address indicated after their signature to this Agreement, or
at any other address designated in writing by one party to the other party.
Trade Bank is hereby authorized by Borrower to act on such instructions or
notices sent by facsimile transmission or telecommunications device which Trade
Bank believes come from Borrower. All notices shall be deemed to have been given
upon delivery, in the case of notices personally delivered or delivered by
private delivery service, upon the expiration of 3 calendar days following the
deposit of the notices in the United States mail, in the case of notices
deposited in the United States mail with postage prepaid, or upon receipt, in
the case of notices sent by facsimile transmission.

         7.2 WAIVERS. No delay or failure of Trade Bank in exercising any right,
power or remedy under any of the Loan Documents shall affect or operate as a
waiver of such right, power or remedy nor shall any single or partial exercise
of any such right, power or remedy preclude, waive or otherwise affect any other
or further exercise thereof or the exercise of any other right, power or remedy.
Any waiver, consent or approval by Trade Bank under any of the Loan Documents
must be in writing and shall be effective only to the extent set out in such
writing.

         7.3 BENEFIT OF AGREEMENT. The provisions of the Loan Documents shall be
binding upon and inure to the benefit of the respective successors, assigns,
heirs, executors, administrators, beneficiaries and legal representatives of
Borrower and Trade Bank; provided, however, that Borrower may not assign or
transfer any of its rights under any Loan Document without the prior written
consent of Trade Bank, and any prohibited assignment shall be void. No consent
by Trade Bank to any assignment shall release Borrower from its liability for
the Obligations unless such release is specifically given by Trade Bank to
Borrower in writing. Trade Bank reserves the right to sell, assign, transfer,
negotiate or grant participations in all or any part of, or any interest in,
Trade Bank's rights and benefits under each of the Loan Documents. In connection
therewith, Trade Bank may disclose any information relating to the Facilities,
Borrower or its business, or any Guarantor or its business.

         7.4 JOINT AND SEVERAL LIABILITY. If Borrower consists of more than one
person or entity, the liability of each of them shall be joint and several, and
the compromise of any claim with, or the release of, any one such Borrower shall
not constitute a compromise with, or a release of, any other such Borrower.

         7.5 NO THIRD PARTY BENEFICIARIES. This Agreement is made and entered
into for the sole protection and benefit of Borrower and Trade Bank and their
respective permitted successors and assigns, and no other person or entity shall
be a third party beneficiary of, or have any direct or indirect cause of action
or claim in connection with, any of the Loan Documents to which it is not a
party.

        7.6 GOVERNING LAW AND JURISDICTION. This Agreement shall, unless
provided differently in any Loan Document, be governed by, and be construed in
accordance with, the internal laws of the State of California, except to the
extent Trade Bank has greater rights or remedies under federal law whether as a
national bank or otherwise. Borrower and Trade Bank (a) agree that all actions
and proceedings relating directly or indirectly to this Agreement shall be
litigated in courts located within California; (b) consent to the jurisdiction
of any such court and consent to service of process in any such action or
proceeding by personal delivery or


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<PAGE>   7


any other method permitted by law; and (c) waive any and all rights Borrower may
have to object to the jurisdiction of any such court or to transfer or change
the venue of any such action or proceeding.

         7.7 SEVERABILITY. Should any provision of any Loan Document be
prohibited by, or invalid under applicable law, or held by any court of
competent jurisdiction to be void or unenforceable, such defect shall not
affect, the validity of the other provisions of the Loan Documents.

         7.8 ENTIRE AGREEMENT, AMENDMENTS. This Agreement and the other Loan
Documents are the final, entire and complete agreement between Borrower and
Trade Bank concerning the Credit Extensions and the Facilities; supersede all
prior and contemporaneous negotiations and oral representations and agreements.
There are no oral understandings, representations or agreements between the
parties concerning the Credit Extensions or the Facilities which are not set
forth in the Loan Documents. This Agreement and the Supplements may not be
waived, amended or superseded except in a writing executed by Borrower and Trade
Bank.

         7.9 COLLECTION OF PAYMENTS. Unless otherwise specified in any Loan
Document, other than this Agreement or any Note, all principal, interest and any
fees due to Trade Bank by Borrower under this Agreement, the Addendum, any
Supplement, any Facility Document, any Collateral Document or any Note, will be
paid by Trade Bank having Wells Fargo debit any of Borrower's accounts with
Wells Fargo and forwarding such amount debited to Trade Bank, without
presentment, protest, demand for reimbursement or payment, notice of dishonor or
any other notice whatsoever, all of which are hereby expressly waived by
Borrower. Such debit will be made at the time principal, interest or any fee is
due to Trade Bank pursuant to this Agreement, the Addendum, any Supplement, any
Facility Document, any Collateral Document or any Note.

         7.11 COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower will reimburse Trade
Bank for all costs and expenses, including, but not limited to, reasonable
attorneys' fees and expenses (which counsel may be Trade Bank or Wells Fargo
employees), expended or incurred by Trade Bank in the preparation and
negotiation of this Agreement, the Notes, the Collateral Documents, the Addenda,
and the Facility Documents, in amending this Agreement, the Collateral
Documents, the Notes, the Addenda, or the Facility Documents, in collecting any
sum which becomes due Trade Bank on the Notes, under this Agreement, the
Collateral Documents, the Addenda, the Supplements, or any of the Facility
Documents, in the protection, perfection, preservation and enforcement of any
and all rights of Trade Bank in connection with this Agreement, the Notes, any
of the Collateral Documents, any of the Supplements, any of the Addenda, or any
of the Facility Documents, including, without limitation, the fees and costs
incurred in any out-of-court work out or a bankruptcy or reorganization
proceeding.

                                VIII. DEFINITIONS

         8.1 "AGREEMENT" means this Agreement and the Addendum attached hereto,
as corrected or modified from time to time by Trade Bank and Borrower.

         8.2 "BANKING DAY" means each day except Saturday, Sunday and a day
specified as a holiday by federal or California statute.

         8.3 "CLOSING DATE" means the date on which the first Credit Extension
is made.

         8.4 "COLLATERAL" means all property securing the Obligations.

         8.5 "COLLATERAL DOCUMENTS" means those security agreement(s), deed(s)
of trust, guarantee(s), subordination agreement(s), intercreditor agreement(s),
and other credit support documents and instruments required by the Trade Bank to
effect the collateral and credit support requirements set forth in the
Supplement with respect to the Facilities.

         8.6 "CREDIT EXTENSION" means each extension of credit under the
Facilities (whether funded or unfunded), including, but not limited to, (a) the
issuance of sight or usance commercial letters of credit or commercial letters
of credit supported by back-up letters of credit, (b) the issuance of standby
letters of credit, (c) the issuance of shipping Guarantees, (d) the making of
loans against imports for letters of credit, (d) the making of clean import
loans outside letters of credit, (e) the making of advances against export
orders, (f) the making of advances against outgoing collections, (g) the making
of revolving credit working capital loans, (h) the making of term loans, (i) the
discounting of drafts or foreign receivables with recourse, (j) the discounting
or purchasing of promissory notes with recourse to Borrower, and (k) the entry
into foreign exchange contracts.

         8.7 "CREDIT LIMIT" means, with respect to any Facility, the amount
specified under the column labeled "Credit Limit" in the Supplement for that
Facility.

         8.8 "CREDIT SUBLIMIT" means, with respect to any Subfacility, the
amount specified after the name of that Subfacility under the column labeled
"Credit Sublimit" in the Supplement for the related Facility.

         8.9 "DOLLARS" and "$" means United States dollars.

         8.10 "FACILITY DOCUMENTS" means, with respect to any Facility, those
documents specified in the Supplement for that Facility, and any other documents
customarily required by Trade Bank for such Facility.

         8.11 "FACILITY TERMINATION DATE" means, with respect to any Facility,
the date specified in the Supplement for that Facility after which no further
Credit Extensions will be made under that Facility.

         8.12 "GAAP" means generally accepted accounting principles, which are
applicable to the circumstances, as of the date of determination, set out in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of

                                   Page 6 of 9



<PAGE>   8


Certified Public Accountants and in the statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting profession.

         8.13 "LOAN DOCUMENTS" means this Agreement, the Addendum, the
Supplements, the Facility Documents and the Collateral Documents.

         8.14 "NOTE" has the meaning specified in Section 3.1(b)(2) above.

         8.15 "OBLIGATIONS" means (a) the obligation of Borrower to pay
principal, interest and fees on all funded Credit Extensions and fees on all
unfunded Credit Extensions, and (b) the obligation of Borrower to pay and
perform when due all other indebtedness, liabilities, obligations and covenants
required under the Loan Documents.

         8.16 "PERMITTED LIENS" shall have the meaning provided in the
Addendum.

         8.17 "PERSON" means and includes natural persons, corporations, limited
partnerships, general 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 governments
and agencies and political subdivisions thereof.

         8.18 "PRIME RATE" means the rate most recently announced by Wells Fargo
at its principal office in San Francisco, California as its "Prime Rate", with
the understanding that the Prime Rate is one of Wells Fargo's base rates and
serves as the basis upon which effective rates of interest are calculated for
those loans making reference thereto, and is evidenced by the recording thereof
after its announcement in such internal publication or publications as Wells
Fargo may designate. Any change in an interest rate resulting from a change in
the Prime Rate shall become effective as of 12:01 A.M. of the Banking Day on
which each change in the Prime Rate is announced by Wells Fargo.

         8.19 "SUBSIDIARY" means (i) any corporation at least the majority of
whose securities having ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) are at the time owned by Borrower and/or one or more Subsidiaries,
and (ii) any joint venture or partnership in which Borrower and/or one or more
Subsidiaries has a majority interest.

         8.20 "WELLS FARGO" means Wells Fargo Bank, N.A.


                               IX. GENERAL RELEASE

         9.1 RELEASE OF CLAIMS. In consideration of Bank extending credit to
Borrower as set forth herein, Borrower hereby agrees as follows:

         (a) Each Borrower, for itself and on behalf of its successors and
assigns, does hereby release, acquit and forever discharge Trade Bank, and all
of Trade Bank's officers, directors, attorneys, affiliates, employees and
agents, of and from any and all claims, demands, obligations, liabilities,
indebtedness, breaches of contract, breaches of duty or any relationship, acts,
omissions, misfeasance, malfeasance, cause or causes of action, debts, sums of
money, accounts, compensation, contracts, controversies, promises, damages,
costs, losses and expenses, of every type, kind, nature, description or
character, whether known or unknown, suspected or unsuspected, liquidated or
unliquidated, each as though fully set forth herein at length, which in any way
arises out of, are connected with or related to the Agreement, any of the other
Loan Documents or the transactions contemplated thereby or hereby, or any other
agreement or document referred to herein or therein or any other action, claim,
cause of action, demand, damage or cost of whatever nature as of the date
hereof.

         (b) Each Borrower hereby acknowledges, represents and warrants to Trade
Bank as follows:

               (i) Each Borrower understands the meaning and effect of Section
                   1542 of the California Civil Code which provides:

               "Section 1542. GENERAL RELEASE; EXTENT. A GENERAL RELEASE DOES
               NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
               TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
               IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH
               THE DEBTOR."

         With regard to Section 1542 of the California Civil Code, Each Borrower
agrees to assume the risk of any and all unknown, unanticipated or misunderstood
defenses, claims, causes of action, contracts, liabilities, indebtedness and
obligations which are released by this release in favor of Trade Bank, and Each
Borrower hereby waives and releases ail rights and benefits which it might
otherwise have under the aforementioned Section 1542 of the California Civil
Code with regard to the release of such unknown, unanticipated or misunderstood
defenses, claims, causes of action, contracts, liabilities, indebtedness and
obligations.

              (ii) Each person signing this Amendment on behalf of each
                   Borrower acknowledges that he or she has read the foregoing
                   Release. Said persons fully understand that this Release has
                   important legal consequences. Said persons realize that they
                   are releasing any and all claims that such persons have as
                   set forth above. Each such person has had an opportunity to
                   obtain a lawyer's advice concerning the legal consequences of
                   this Release.

         (c) This Release is not to be construed and does not constitute an
admission of any liability on the part of Trade Bank. This Release shall
constitute an absolute bar to any claim of any kind, whether any such claim is
based on contract, tort, warranty, mistake or any other theory, whether legal,
statutory or equitable. Each Borrower specifically agrees that any attempt to
assert a claim barred by this Release shall subject each Borrower to the
provisions of applicable law setting forth the remedies for the bringing of
groundless, frivolous or baseless claims or causes of action."

                                   Page 7 of 9



<PAGE>   9


                                 X. ARBITRATION

         10.01 ARBITRATION. Upon the demand of any party, any Dispute shall be
resolved by binding arbitration (except as set forth in 10.05 below) in
accordance with the terms of this Agreement. A "Dispute" shall mean any action,
dispute, claim or controversy of any kind, whether in contract or tort,
statutory or common law, legal or equitable, now existing or hereafter arising
under or in connection with, or in any way pertaining to, any of the Loan
Documents or the Notes, or any past, present or future extensions of credit and
other activities, transactions or obligations of any kind related directly or
indirectly to any of the Loan Documents or the Notes, including without
limitation, any of the foregoing arising in connection with the exercise of any
self-help, ancillary or other remedies pursuant to any of the Loan Documents or
the Notes. Any party may by summary proceedings bring an action in court to
compel arbitration of a Dispute. Any party who fails or refuses to submit to
arbitration following a lawful demand by any other party shall bear all costs
and expenses incurred by such other party in compelling arbitration of any
Dispute.

         10.02 GOVERNING RULES. Arbitration proceedings shall be administered by
the American Arbitration Association ("AAA") or such other administrator as the
parties shall mutually agree upon in accordance with the AAA Commercial
Arbitration Rules. All Disputes submitted to arbitration shall be resolved in
accordance with the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the Loan
Documents. The arbitration shall be conducted at a location in California
selected by the AAA or other administrator. If there is any inconsistency
between the terms hereof and any such rules, the terms and procedures set forth
herein shall control. All statutes of limitation applicable to any Dispute shall
apply to any arbitration proceeding. All discovery activities shall be expressly
limited to matters directly relevant to the Dispute being arbitrated. Judgment
upon any award rendered in an arbitration may be entered in any court having
jurisdiction, provided however, that nothing contained herein shall be deemed to
be a waiver by any party that is a bank of the protections afforded to it under
12 U.S.C. Section 91 or any similar applicable state law.

         10.03 NO WAIVER: PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. No
provision hereof shall limit the right of any party to exercise self-help
remedies such as setoff, foreclosure against or sale of any real or personal
property collateral or security, or to obtain provisional or ancillary remedies,
including without limitation injunctive relief, sequestration, attachment,
garnishment or the appointment of a receiver, from a court of competent
jurisdiction before, after or during the pendency of any arbitration or other
proceeding. The exercise of any such remedy shall not waive the right of any
party to compel arbitration or reference hereunder.

         10.04 ARBITRATOR QUALIFICATIONS AND POWERS, AWARDS. Arbitrators must be
active members of the California State Bar or retired judges of the state or
federal judiciary of California, with expertise in the substantive laws
applicable to the subject matter of the Dispute. Arbitrators are empowered to
resolve Disputes by summary rulings in response to motions filed prior to the
final arbitration hearing. Arbitrators (i) shall resolve all Disputes in
accordance with the substantive law of the state of California, (ii) may grant
any remedy or relief that a court of the state of California could order or
grant within the scope hereof and such ancillary relief as is necessary to make
effective any award, and (iii) shall have the power to award recovery of all
costs and fees, to impose sanctions and to take such other actions as they deem
necessary to the same extent a judge could pursuant to the Federal Rules of
Civil Procedure, the California Rules of Civil Procedure or other applicable
law. Any Dispute in which the amount in controversy is $5,000,000 or less shall
be decided by a single arbitrator who shall not render an award of greater than
$5,000,000 (including damages, costs, fees and expenses). By submission to a
single arbitrator, each party expressly waives any right or claim to recover
more than $5,000,000. Any Dispute in which the amount in controversy exceeds
$5,000,000 shall be decided by majority vote of a panel of three arbitrators;
provided however, that all three arbitrators must actively participate in all
hearings and deliberations.

         10.05 JUDICIAL REVIEW. Notwithstanding anything herein to the contrary,
in any arbitration in which the amount in controversy exceeds $25,000,000, the
arbitrators shall be required to make specific, written findings of fact and
conclusions of law. In such arbitrations (i) the arbitrators shall not have the
power to make any award which is not supported by substantial evidence or which
is based on legal error, (ii) an award shall not be binding upon the parties
unless the findings of fact are supported by substantial evidence and the
conclusions of law are not erroneous under the substantive law of the state of
California, and (iii) the parties shall have in addition to the grounds referred
to in the Federal Arbitration Act for vacating, modifying or correcting an award
the right to judicial review of (A) whether the findings of fact rendered by the
arbitrators are supported by substantial evidence, and (B) whether the
conclusions of law are erroneous under the substantive law of the state of
California. Judgment confirming an award in such a proceeding may be entered
only if a court determines the award is supported by substantial evidence and
not based on legal error under the substantive law of the state of California.

         10.06 REAL PROPERTY COLLATERAL; JUDICIAL REFERENCE. Notwithstanding
anything herein to the contrary, no Dispute shall be submitted to arbitration if
the Dispute concerns indebtedness secured directly or indirectly, in whole or in
part, by any real property unless (i) the holder of the mortgage, lien or
security interest specifically elects in writing to proceed with the
arbitration, or (ii) all parties to the arbitration waive any rights or benefits
that might accrue to them by virtue of the single action rule statute of
California, thereby agreeing that all indebtedness and obligations of the
parties, and all mortgages, liens and security interests securing such
indebtedness and obligations, shall remain fully valid and enforceable. If any
such Dispute is not submitted to arbitration, the Dispute shall be referred to a
referee in accordance with California Code of Civil Procedure Section 638 et
seq., and this general reference agreement is intended to be specifically
enforceable in accordance with said Section 638, A referee with the
qualifications required herein for arbitrators shall be selected pursuant to the
AAA's selection procedures. Judgment upon the decision rendered by a referee
shall be entered in the court in which such proceeding was commenced in
accordance with California Code of Civil Procedure Sections 644 and 645.

         10.07 MISCELLANEOUS. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business, by applicable law or
regulation, or to the extent necessary to exercise any judicial review rights
set forth herein. If more than one agreement for arbitration by or between the
parties potentially applies to a Dispute, the arbitration provision most
directly related to the Loan Documents or the subject matter of the Dispute
shall control. This


                                   Page 8 of 9



<PAGE>   10


arbitration provision shall survive termination, amendment or expiration of any
of the Loan Documents, the Notes or any relationship between the parties.

        Borrower and Trade Bank have caused this Agreement to be executed by
their duly authorized officers or representatives on the date specified below.

This Agreement supercedes and replaces that certain Credit Agreement between
Jalate Limited, Inc. and Wells Fargo HSBC Trade Bank dated May 31, 1997.

                                                  "BORROWER"

                                 JALATE, LTD.



                                 By: /s/ F. A. FINDLEY
                                     -------------------------------------------
                                     Title: VP Finance & CFO


                                 Borrower's Address:
                                 1675 South Alameda Street
                                 Los Angeles, CA. 90021



                                                  "LENDER"

                                 WELLS FARGO HSBC TRADE BANK,
                                 NATIONAL ASSOCIATION


                                 By:
                                    --------------------------------------------
                                     Greg Richardson
                                     Title: Vice President

                                 Lender's Address:
                                 333 South Grand Avenue, 9th Floor
                                 Los Angeles, CA 90071




                                   Page 9 of 9



<PAGE>   11




                                                                       EXHIBIT A
WELLS FARGO HSBC TRADE BANK                         ADDENDUM TO CREDIT AGREEMENT
================================================================================

THIS ADDENDUM IS AN INTEGRAL PART OF THE CREDIT AGREEMENT ("CREDIT AGREEMENT")
BETWEEN WELLS FARGO HSBC TRADE BANK AND THE FOLLOWING BORROWER:


NAME OF BORROWER: JALATE, LTD.


                        ADDITIONAL AFFIRMATIVE COVENANTS

The following covenants are part of Article IV of the Credit Agreement:

REPORTS. Borrower will furnish the following information or deliver the
following reports to Trade Bank at the times indicated below:

o    ANNUAL FINANCIAL STATEMENTS. Not later than ninety (90) calendar days after
     and as of the end of each of Borrower's fiscal years, an annual audited
     financial statement of Borrower prepared by a certified public accountant
     acceptable to Trade Bank and prepared in accordance with GAAP, to include
     balance sheet, income statement, statement of cash flow, and source and
     application of funds statement.

o    ANNUAL FORM 10-K STATEMENT. Not later than ninety (90) calendar days after
     and as of the end of each of Borrower's fiscal years, a 10-K Statement.

o    QUARTERLY FORM 10-Q STATEMENT. Not later than sixty (60) calendar days
     after and as of the end of each of Borrower's fiscal quarters, a 10-Q
     Statement.

                  CERTIFICATE OF ACCURACY AND NO EVENT OF DEFAULT. At the time
                  each financial statement of Borrower required above is
                  delivered to Trade Bank, a certificate of the president or
                  chief financial officer of Borrower that said financial
                  statements are accurate and that there exists no Event of
                  Default under the Agreement nor any condition, act or event
                  which with the giving of notice or the passage of time or both
                  would constitute an Event of Default.

o    INVENTORY LIST: Not later than thirty (30) calendar days after and as of
     the end of each quarter, an inventory report showing the types, locations
     and unit or dollar values of all the inventory collateral.

o    COLLATERAL AUDIT: Collateral audit to be performed annually, by auditors
     acceptable to Trade Bank.

o    INSURANCE: Borrower will maintain in full force and effect insurance
     coverage on all Borrower's property, including, but not limited to, the
     following types of insurance coverage:
           policies of fire insurance
           marine cargo insurance
           business personal property insurance

     All the insurance referred to in the preceding sentence must be in form,
     substance and amounts, and issued by companies, satisfactory to Trade Bank,
     and cover risks required by Trade Bank and contain loss payable
     endorsements in favor of Trade Bank.

FINANCIAL COVENANTS. Borrower will maintain the following (if Borrower has any
Subsidiaries which must be consolidated under GAAP, the following applies to
borrower and the consolidated Subsidiaries):

o    CURRENT RATIO. From and after December 31, 1997, not at any time less than
     1.0 to 1.0. ("CURRENT RATIO" means total current assets divided by total
     current liabilities, and "CURRENT ASSETS" and "CURRENT LIABILITIES" have
     the meanings given to them in accordance with GAAP; provided, however, that
     "current liabilities" will include indebtedness which is subordinated to
     the Obligations to Trade Bank under a subordination agreement in form and
     substance acceptable to Trade Bank or by subordination language acceptable
     to Trade Bank in the instrument evidencing such indebtedness.)

o    WORKING CAPITAL. From and after December 31, 1997, not at any time less
     than $750,000. ("WORKING CAPITAL" means total current assets minus total
     current liabilities, provided, however, that "current liabilities" will
     include indebtedness which is subordinated to the Obligations to Trade Bank
     under a subordination agreement in form and substance acceptable to Trade
     Bank or by subordination language acceptable to Trade Bank in the
     instrument evidencing such indebtedness.)

o    TANGIBLE NET WORTH. From and after December 31, 1997, not at any time less
     than $750,000. ("TANGIBLE NET WORTH" means the excess of total assets over
     total liabilities determined in accordance with GAAP, (a) excluding,
     however, in determining total assets (i) all assets which would be
     classified as intangible assets under GAAP, including, but not limited to,
     goodwill, licenses., patents, trademarks, trade names, copyrights,
     capitalized software and organizational costs, licenses and franchises, and
     (ii) assets which Trade Bank determines in its business judgment would not
     be available or would be of relatively small value in a liquidation of
     Borrower's business, including, but not limited to, prepaid expenses, loans
     to officers or affiliates and other items, and (b) including, in
     determining total liabilities, indebtedness which is subordinated to the
     Obligations to Trade Bank.)

o    TOTAL LIABILITIES DIVIDED BY TANGIBLE NET WORTH. From and after December
     31, 1997, not at any time greater 2.25 to 1.0. ("Tangible Net Worth" has
     the meaning given to it above, and "Total Liabilities" includes
     indebtedness which is subordinated to


                                   Page 1 of 2



<PAGE>   12


the Obligations to Trade Bank under a subordination agreement in form and
substance acceptable to Trade Bank or by subordination language acceptable to
Trade Bank in the instrument evidencing such indebtedness.)



                          ADDITIONAL NEGATIVE COVENANTS

The following covenants are part of Article V of the Credit Agreement (Borrower
shall also cause any Subsidiary to comply with the following covenants):

o    USE OF PROCEEDS. Borrower will not use the proceeds of any Credit Extension
     except for the purposes, if any, specified for such Credit Extension in the
     Supplement covering the Facility under which such Credit Extension is made.

o    LIENS. Borrower will not create or permit any liens, charges, security
     interests, encumbrances or adverse claims with respect to any of its
     property or other assets except for the following "PERMITTED LIENS":

         purchase money security interests in specific items of Borrower's
         equipment; additional security interests and liens consented to in
         writing by Trade Bank in its sole discretion;

o    ACQUISITIONS OF ASSETS. Borrower will not acquire any assets or enter into
     any other transaction outside the ordinary course of Borrower's business.

o    LOANS AND INVESTMENTS. Borrower will not make any loans or advances to, or
     investments in, any person or entity except for accounts receivable created
     in the ordinary course of Borrower's business.

o    INDEBTEDNESS FOR BORROWED MONEY. Borrower will not incur any indebtedness
     for borrowed money, except to Trade Bank and except for indebtedness
     subordinated to the Obligations by an instrument or agreement in form
     acceptable to Trade Bank.

o    GUARANTEES. Borrower will not guarantee or otherwise become liable with
     respect to the obligations of any other person or entity, except for
     endorsement of instruments for deposit into Borrower's account in the
     ordinary course of Borrower's business.

o    DIVIDENDS AND DISTRIBUTIONS OF CAPITAL OF CORPORATION. If Borrower is a
     corporation, Borrower will not pay or declare any dividends or make any
     distribution of capital on Borrower's stock (except for dividends payable
     solely in stock of Borrower).

o    STOCK REDEMPTIONS. Borrower will not redeem, retire, purchase or otherwise
     acquire, directly or indirectly, any of Borrower's stock.

o    INVESTMENTS IN, OR ACQUISITIONS OF, SUBSIDIARIES. Borrower will not make
     any investments in, or form or acquire, any subsidiaries.

o    CAPITAL EXPENDITURES. Borrower shall not, without the prior written consent
     of Trade Bank, make any capital expenditures in any fiscal year in an
     aggregate amount in excess of $750,000.

o    COMPENSATION. Borrower will not, without the prior written consent of Trade
     Bank, pay, accrue or obligate itself to pay, directly or indirectly, any
     salaries, bonuses or other compensation or fees to its officers, directors,
     shareholders or partners, or any members of their immediate families, in
     any fiscal year in an aggregate amount in excess of $2,000,000.


BY SIGNING HERE BORROWER AGREES TO THE DESIGNATED PROVISIONS IN THIS ADDENDUM:

                                      /s/ F.A. FINDLEY, VP FINANCE & CFO
                                    --------------------------------------------
                                                 (SIGNATURE)


                                  Page 2 of 2



<PAGE>   13


                                                                       EXHIBIT B
WELLS FARGO HSBC TRADE BANK        SIGHT COMMERCIAL LETTERS OF CREDIT SUPPLEMENT
================================================================================

THIS SUPPLEMENT IS AN INTEGRAL PART OF THE CREDIT AGREEMENT BETWEEN WELLS FARGO
HSBC TRADE BANK AND THE FOLLOWING BORROWER:

NAME OF BORROWER: JALATE, LTD.

FACILITY TERMINATION DATE: MARCH 31,1998

CREDIT LIMIT FOR THIS SIGHT COMMERCIAL LETTERS OF CREDIT FACILITY AND SUBLIMITS:
CREDIT LIMIT: $34,668 IN SIGHT COMMERCIAL LETTERS OF CREDIT ISSUED AND
OUTSTANDING AS OF DECEMBER 31, 1997. EFFECTIVE AS OF DECEMBER 31, 1997, TRADE
BANK WILL NOT ISSUE ANY NEW SIGHT COMMERCIAL LETTERS OF CREDIT FOR THE ACCOUNT
OF BORROWER.

                                              ----------------------------------
                                                       CREDIT SUBLIMITS

o    GOODS CONSIGNED TO, OR                   $34,668 up to December 31, 1997
     CONTROLLED BY, TRADE BANK                $O Effective December  31, 1997
                                              and thereafter


 THE AGGREGATE AMOUNT OF CREDIT EXTENSIONS OUTSTANDING UNDER THIS FACILITY AND
THE FOLLOWING OTHER FACILITIES MAY NOT AT ANY ONE TIME EXCEED $1,127,613:
                 1. THE BALANCE UNDER THE TERM LOANS SUPPLEMENT

FACILITY DESCRIPTION:

Trade Bank will issue sight commercial letters of credit (each a "Sight
Commercial Credit") for the account of Borrower as indicated under the heading
"Facility Purpose" below. Subject to the credit sublimits specified above, these
Sight Commercial Credits will be transferable or not transferable and have the
goods related to them consigned to or not consigned to, or controlled by or not
controlled by, Trade Bank. The Facility Credit Limit specified above refers to
the aggregate undrawn amount of all Sight Commercial Credits which may be at any
one time outstanding under this Facility together with the aggregate amount of
all drafts drawn under such Sight Commercial Credits which have not been
reimbursed as provided below at such time. The Facility Credit Sublimits
specified above refer to the aggregate undrawn amount of all Sight Commercial
Credits which may be at any one time outstanding under each subcategory under
this Facility together with the aggregate amount of all drafts drawn under such
Sight Commercial Credits which have not been reimbursed as provided below at
such time.


FACILITY PURPOSE: The Facility may only be used for the following purpose(s): To
finance the importation of garments.


FACILITY DOCUMENTS:

  Before the first Sight Commercial Credit is issued:
      Trade Bank's standard form Continuing Commercial Letter of Credit
      Agreement (Form TB 020)

  Before each Sight Commercial Credit is issued:
      Trade Bank's standard form Application For Commercial Letter of Credit
      (Form TB 002)

  Before each Sight Commercial Credit is amended:
      Trade Bank's standard form Application For Amendment To Letter of Credit
      (Form TB 010)

SUBFACILITY DOCUMENTS:

o    GOODS CONSIGNED TO, OR CONTROLLED BY, TRADE BANK: See Exhibit C -
     Collateral/Credit Support Document.

TERM: The Sight Commercial Credits, issued and outstanding as of the date of
this Agreement, may not expire later than February 2, 1998.




                                   Page 1 of 2



<PAGE>   14


FEES: The following fees will apply to the Sight Commercial Credits:

o    ISSUANCE FEES/FEES FOR INCREASING CREDIT AMOUNTS OR EXTENDING EXPIRATION
     DATES: (Minimum $50) 1/8 of 1% per annum for every 120-day period or
     fraction thereof of the term of each Sight Commercial Credit on the amount
     of each Sight Commercial Credit and of any increase in such amount.
     PAYABLE: At the time each Sight Commercial Credit is issued or increased
     and at the time the expiration date of any Sight Commercial Credit is
     extended.

o    AMENDMENT FEES: (Minimum $50)
     $50 for each amendment, unless the amendment is an increase in the Sight
     Commercial Credit amount or an extension of the expiration date, in which
     case the Issuance Fee above will substitute for any Amendment Fee.
     PAYABLE: At the time each amendment is issued.

o    NEGOTIATION/PAYMENT/EXAMINATION FEES: (Minimum $75)
     1/8 of 1% of the face amount of each drawing under each Sight Commercial
     Credit. PAYABLE: At the time any draft or other documents are negotiated,
     paid or examined.


INTEREST RATE:

All drawings under Sight Commercial Credits not reimbursed on the day they are
paid by Trade Bank will bear interest at the following rate from the date they
are paid by Trade Bank to the date such payment is fully reimbursed:

o    PRIME RATE: The Prime Rate plus 5% per annum.

o    INTEREST PAYMENT DATES: Interest on unreimbursed drawings under Sight
     Commercial Credits will be paid on the date the unreimbursed drawing is
     fully reimbursed.

COLLATERAL/CREDIT SUPPORT DOCUMENTS: See Exhibit C - Collateral/Credit Support
Document.


BY INITIALING HERE BORROWER AGREES TO ALL THE TERMS OF THIS SUPPLEMENT:_[INIT]_


                                   Page 2 of 2


<PAGE>   15


                                                                       EXHIBIT B

WELLS FARGO HSBC TRADE BANK                                 TERM LOAN SUPPLEMENT
================================================================================

THIS SUPPLEMENT IS AN INTEGRAL PART OF THE CREDIT AGREEMENT BETWEEN WELLS FARGO
HSBC TRADE BANK AND THE FOLLOWING BORROWER:

NAME OF BORROWER: JALATE, LTD.

FACILITY TERMINATION DATE: JULY 17,1998

CREDIT LIMIT FOR THIS TERM LOANS FACILITY AND SUBLIMITS: CREDIT LIMIT:
$1,092,945

                                                    CREDIT SUBLIMITS
                                           -------------------------------------

o  SUPPORTED BY ACCOUNTS RECEIVABLE,
   INVENTORY OR OTHER COLLATERAL                       $1,092,945


 THE AGGREGATE AMOUNT OF CREDIT EXTENSIONS OUTSTANDING UNDER THIS FACILITY AND
   THE FOLLOWING OTHER FACILITIES MAY NOT AT ANY ONE TIME EXCEED $1,127,613:
  1. LETTERS OF CREDIT UNDER THE SIGHT COMMERCIAL LETTERS OF CREDIT SUPPLEMENT

FACILITY DESCRIPTION: Trade Bank will make a Term Loan or Term Loans to Borrower
for the purpose or purposes stated below. Subject to the credit sublimits
specified above, The Term Loan or Term Loans may be supported by (i) a standby
letter of credit in favor of Trade Bank, (ii) a guarantee or (iii) accounts
receivable, inventory or other collateral. A Term Loan cannot be used to repay
an outstanding Term Loan or Revolving Credit Loan that has matured OR to repay
amounts due under any other Facilities provided to Borrower.

FACILITY PURPOSE: The Term Loan or Term Loans may only be used for the following
purpose(s): Payoff outstanding Letters of Credit and advances under the Loans
Against Imports for Letter of Credit Reimbursement Facility.

FACILITY DOCUMENT: Term Note

SUBFACILITY DOCUMENTS:

o    SUPPORTED BY ACCOUNTS RECEIVABLE, INVENTORY OR OTHER COLLATERAL: See
     Exhibit C - Collateral/Credit Support Document.

TERM: Term Loan will mature on July 17, 1998.

INTEREST RATE: Term Loan will bear interest at the following rate:

o    PRIME RATE: The Prime Rate plus 5.0% per annum.

INTEREST PAYMENT DATES: Interest on the outstanding Term Loan will be paid at
least once each month on the last day of the month.

REPAYMENT: Outstanding principal balance of the Term Loan shall be repaid in
four (4) weekly installments of $25,000 commencing February 6, 1998; and
nineteen (19) weekly installments of $50,000 commencing March 6, 1998, with the
entire principal outstanding due and payable in full on July 17, 1998.

PREPAYMENTS: Prepayments of the outstanding Term Loan or Term Loans are
permitted in any amounts.

COLLATERAL/CREDIT SUPPORT DOCUMENTS: See Exhibit C - Collateral/Credit Support
Document.

BY INITIALING HERE BORROWER AGREES TO ALL THE TERMS OF THIS SUPPLEMENT: [INIT]
                                                                        ------

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                                                                       EXHIBIT C
WELLS FARGO HSBC TRADE BANK                   COLLATERAL/CREDIT SUPPORT DOCUMENT
================================================================================


o    PERSONAL PROPERTY SECURITY FROM BORROWER:
     First priority lien in the following assets of Borrower:
         inventory

      Second priority lien in the following assets of Borrower:
         accounts receivable
      COLLATERAL DOCUMENTS:
         Security Agreement: Rights to Payment and Inventory
         UCC-1 Financing Statement
         UCC-3 Search

o    INTERCREDITOR AGREEMENT: The creditor or creditors named below under the
     heading "Collateral Documents" will enter into an intercreditor arrangement
     with Trade Bank with respect to the Obligations under this Facility.
     COLLATERAL DOCUMENTS:
        Intercreditor Agreement with Heller Financial, Inc.

BY INITIALING HERE BORROWER AGREES TO ALL THE TERMS OF THIS EXHIBIT:   [INIT]
                                                                       ------


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