EXHIBIT 10.24















===============================================================================


                           SECOND AMENDED AND RESTATED

                           LOAN AND SECURITY AGREEMENT

                           DATED AS OF OCTOBER 9, 1995

                                     BETWEEN

                               AZIMUTH CORPORATION

                                       and

                            BANK OF AMERICA ILLINOIS


===============================================================================












<PAGE>



                                TABLE OF CONTENTS



                                                                            PAGE


1.  DEFINITIONS AND OTHER TERMS..............................................  2
    1.1  Definitions.........................................................  2
    1.2  Other Definitional Provisions....................................... 12
    1.3  Interpretation of Agreement......................................... 13
    1.4  Compliance with Financial Restrictions.............................. 13

2.  LOANS; OTHER MATTERS..................................................... 13
    2.1  Term Loan........................................................... 13
    2.2  Loan Account; Demand Deposit Account................................ 13
    2.3  Interest and Fees................................................... 14
           2.3.1  Interest................................................... 14
           2.3.2  Additional Fee............................................. 14
           2.3.3  Method of Calculating Interest and Fees.................... 14
           2.3.4  Payment of Interest and Fees................................14
    2.4  Note    ............................................................ 14
    2.5  One Obligation...................................................... 14
    2.6  Making of Payments; Application of Collections;
                 Charging of Accounts........................................ 15
    2.7  Lender's Election Not to Enforce.................................... 16
    2.8  Setoff  ............................................................ 16
    2.9  Refinancing Fee..................................................... 17

3.  COLLATERAL............................................................... 17
    3.1  Grant of Security Interest.......................................... 17
    3.2  Accounts Receivable................................................. 18
    3.3  Inventory........................................................... 22
    3.4  Equipment........................................................... 23
    3.5  Supplemental Documentation.......................................... 23
    3.6  Other Security...................................................... 24

4.  REPRESENTATIONS AND WARRANTIES........................................... 24
    4.1  Organization........................................................ 24
    4.2  Authorization....................................................... 25
    4.3  No Conflicts........................................................ 25
    4.4  Validity and Binding Effect......................................... 25
    4.5  No Default.......................................................... 25
    4.6  Financial Statements................................................ 26
    4.7  Insurance........................................................... 26
    4.8  Litigation; Contingent Liabilities.................................. 26
    4.9  Liens   ............................................................ 26
    4.10  Subsidiaries....................................................... 27
    4.11  Partnerships; Joint Ventures....................................... 27
    4.12  Business and Collateral Locations.................................. 27
    4.13  Real Property...................................................... 28
    4.14  [Intentionally Left Blank.]........................................ 28


                                        i

<PAGE>


                                                                            PAGE


     4.15  Control of Collateral; Lease of Property.......................... 28
     4.16  Patents, Trademarks, etc.......................................... 28
     4.17  Solvency.......................................................... 28
     4.18  Contracts; Labor Matters.......................................... 28
     4.19  Pension and Welfare Plans......................................... 29
     4.20  Regulation U...................................................... 30
     4.21  Compliance........................................................ 30
     4.22  Taxes  ........................................................... 30
     4.23  Investment Company Act Representation............................. 30
     4.24  Public Utility Holding Company Act
             Representation.................................................. 30
     4.25  Environmental and Safety and Health Matters....................... 30
     4.26  Related Agreements................................................ 31

5.  BORROWER COVENANTS....................................................... 32
     5.1  Financial Statements and Other Reports............................. 32
            5.1.1  Financial Reports......................................... 32
                    (a)  Annual Audit Report................................. 32
                    (b)  Quarterly Financial Statement....................... 32
                    (c)  Monthly Financial Statement......................... 32
                    (d)  Officer's Certificate............................... 33
            5.1.2  Other Reports............................................. 33
                    (a)  SEC and Other Reports............................... 33
                    (b)  Report of Change Relating to
                         Borrower, Subsidiaries, Partnerships
                         or Joint Ventures................................... 33
                    (c)  Patents, etc........................................ 33
                    (d)  Other Reports....................................... 33
     5.2  Notices ........................................................... 33
            (a)     Default...................................................34
            (b)     Litigation................................................34
            (c)     Judgment..................................................34
            (d)     Pension Plans and Welfare Plans...........................34
            (e)     Business and Collateral Information.......................34
            (f)     Change of Name or Status..................................35
            (g)     Insurance Information.....................................35
            (h)     Environmental and Safety and Health
                    Matters...................................................35
            (i)     Material Adverse Change...................................35
            (j)     Default by Others.........................................35
            (k)     Moveable Collateral.......................................35
            (l)     Change in Management or Line(s) of
                    Business..................................................36
            (m)     Other Notices.............................................36
     5.3  Existence...........................................................36
     5.4  Nature of Business..................................................36


                                       ii

<PAGE>


                                                                            PAGE


      5.5  Books, Records and Access..........................................36
      5.6  Insurance..........................................................37
      5.7  Insurance Survey...................................................38
      5.8  Repair  ...........................................................38
      5.9  Taxes   ...........................................................38
      5.10  Compliance........................................................39
      5.11  Pension Plans.....................................................39
      5.12  Merger, Purchase and Sale.........................................39
      5.13  Restricted Payments...............................................40
      5.14  Borrower's and Subsidiaries' Stock................................41
      5.15  Indebtedness......................................................41
      5.16  Liens  ...........................................................42
      5.17  Guaranties........................................................42
      5.18  Investments.......................................................42
      5.19  Subsidiaries......................................................43
      5.20  Leases ...........................................................43
      5.21  Change in Accounts Receivable.....................................43
      5.22  Future Environmental Assessments..................................43
      5.23  [Intenionally Left Blank].........................................44
      5.24  Unconditional Purchase Options....................................44
      5.25  Use of Proceeds...................................................44
      5.26  Transactions with Related Parties................................ 44
      5.27  Modification of Subordinated Debt, etc............................45
      5.28  Restrictive Agreements............................................45
      5.29  Inconsistent Agreements...........................................45
      5.30  Stock Appreciation Plan...........................................45

6.  DEFAULT.................................................................. 46
      6.1  Event of Default...................................................46
             (a)  Non-Payment.................................................46
             (b)  Non-Payment of Other Indebtedness...........................46
             (c)  Acceleration of Other Indebtedness..........................46
             (d)  Other Obligations...........................................46
             (e)  Insolvency..................................................47
             (f)  Pension Plans...............................................47
             (g)  Non-Compliance With This Agreement..........................48
             (h)  Non-Compliance With Related Agreements......................48
             (i)  Warranty....................................................48
             (j)  Litigation..................................................48
             (k)  Validity....................................................48
             (l)  Conduct of Business.........................................49
             (m)  Board Membership............................................49
             (n)  Material Adverse Change.....................................49
             (o)  Other Loan Agreements.......................................49
      6.2  Effect of Event of Default; Remedies...............................49



                                       iii

<PAGE>


                                                                            PAGE



7.       ADDITIONAL PROVISIONS REGARDING COLLATERAL AND LENDER'S
         RIGHTS............................................................. 50
         7.1   Notice of Disposition of Collateral.......................... 50
         7.2   Application of Proceeds of Collateral........................ 50
         7.3   Care of Collateral........................................... 51
         7.4   Performance of Borrower's Obligations........................ 51
         7.5   Lender's Rights.............................................. 51

8.       CONDITIONS PRECEDENT; DELIVERY OF DOCUMENTS AND OTHER
         MATTERS............................................................ 52
         8.1          Conditions Precedent.................................. 52
                      8.1.1  Security Interest.............................. 52
                      8.1.2  Financial Statements........................... 52
                      8.1.3  Other Loan Agreements.......................... 52
                      8.1.4  Blocked Account; Lock Box...................... 52
                      8.1.5  Effect of Law.................................. 52
                      8.1.6  Exhibits; Schedules............................ 52
                      8.1.7  Fees........................................... 53
                      8.1.8  Documents...................................... 53
                      (a)  Resolutions...................................... 53
                      (b)  Incumbency Certificates.......................... 53
                      (c)     Borrower's Certificate........................ 53
                      (d)     Accountant's Letter........................... 53
                      (e)     Bylaws........................................ 54
                      (f)     Charter....................................... 54
                      (g)     Registration; Good Standing................... 54
                      (h)     Legal Opinion................................. 54
                      (i)     Insurance..................................... 54
                      (j)     Landlord's Consents........................... 54
                      (k)  Note............................................. 54
                      (l)  Guaranty......................................... 54
                      (m)  Pledge Agreement................................. 54
                      (n)     Other Documents............................... 55
         8.2          Further Conditions Precedent; Certification........... 55
                      (a)     No Change in Condition........................ 55
                      (b)     Default....................................... 55
                      (c)     Insurance..................................... 55
                      (d)     Warranties.................................... 55
                      (e)     Accounting Methods............................ 55

9.  INDEMNITY............................................................... 56
         9.1          Environmental and Safety and Health Indemnity......... 56
         9.2          General Indemnity..................................... 56
         9.3          Capital Adequacy...................................... 57
         9.4          Other Indemnities..................................... 57



                                       iv

<PAGE>


                                                                            PAGE




10.  ADDITIONAL PROVISIONS................................................... 57

11.  GENERAL..................................................................58
         11.1  Borrower Waiver................................................58
         11.2  Power of Attorney..............................................58
         11.3  Expenses; Attorneys' Fees......................................59
         11.4  Lender Fees and Charges........................................60
         11.5  Lawful Interest................................................60
         11.6  No Waiver by Lender; Amendments................................60
         11.7  Termination of Credit..........................................60
         11.8  Notices........................................................61
         11.9  Assignments and Participations; Information....................61
         11.10  Severability..................................................62
         11.11  Successors....................................................62
         11.12  Construction..................................................62
         11.13  Consent to Jurisdiction.......................................62
         11.14  Subsidiary Reference..........................................62
         11.15  WAIVER OF JURY TRIAL..........................................63
         11.16  Prior Actions.................................................63

12.      BORROWER GUARANTY....................................................63
         12.1  Guaranty of Payment............................................63
         12.2  Obligations Absolute, Unconditional, etc.......................63
         12.3  Waiver of All Defenses.........................................65
         12.4  Payment, etc., by Borrower.....................................67
         12.5  Subrogation....................................................68





                                        v

<PAGE>



                         LIST OF EXHIBITS AND SCHEDULES


Exhibits:

Exhibit A                       [Reserved]
Exhibit B                       [Reserved]
Exhibit C                       Form of Term Note
Exhibit D                       Form of Insurance Endorsement (ss.5.6)
Exhibit E                       Form of Pledge Agreement
Exhibit F                       [Reserved]
Exhibit G                       Form of Guaranty
Exhibit H                       Form of Landlord's Consent
Exhibit I                       Form of Borrower's Counsel Opinion (ss.8.1.8(h))


Schedules:

Schedule 4.1                    Borrower Trade Names, State of Incorporation
                                    & Qualification
Schedule 4.3                    Schedule of Conflicts
Schedule 4.5                    Schedule of Defaults
Schedule 4.7                    Insurance Summary
Schedule 4.8                    Schedule of Litigation & Contingent Liabilities
Schedule 4.9                    Schedule of Liens
Schedule 4.10                   Schedule of Subsidiaries
Schedule 4.11                   Schedule of Partnerships & Joint Ventures
Schedule 4.12                   Schedule of Business & Collateral Locations
Schedule 4.13                   Schedule of Real Property Descriptions and
                                  Owners
Schedule 4.15                   Schedule of Leases
Schedule 4.16                   Schedule of Patents, Trademarks & Copyrights
Schedule 4.18                   Schedule of Labor Matters
Schedule 4.19                   Schedule of Contingent Employee Benefit Plan
                                  Liabilities
Schedule 4.21                   Schedule of Noncompliance
Schedule 4.25                   Schedule of Environmental Matters
Schedule 5.13                   Schedule of Restricted Payments
Schedule 5.15                   Schedule of Indebtedness
Schedule 5.18                   Schedule of Investments
Schedule 5.28                   Schedule of Restrictive Agreements




                                       vi

<PAGE>



                           SECOND AMENDED AND RESTATED
                           LOAN AND SECURITY AGREEMENT



         THIS SECOND  AMENDED AND RESTATED LOAN AND SECURITY  AGREEMENT (as from
time to time amended, modified or supplemented,  this "Agreement") is made as of
the 9th day of October,  1995 by and between BANK OF AMERICA ILLINOIS  (formerly
Continental  Bank N.A.), an Illinois banking  corporation,  having its principal
office at 231 South LaSalle  Street,  Chicago,  Illinois 60697  ("Lender"),  and
AZIMUTH CORPORATION, a Delaware corporation ("Borrower").

                                    RECITALS

         1. On  January  16,  1991,  Borrower  and  Lender  entered  into a Loan
Agreement  (such Loan  Agreement,  as amended to the date  hereof,  being herein
referred to as the "Original Loan Agreement";  and the other  capitalized  terms
used herein shall have the meanings set forth in Section 1.1)  pursuant to which
Lender has made revolving loans and a term loan to Borrower.

         2.  Borrower  and Lender  desire that the  Original  Loan  Agreement be
amended and  restated on the terms and  conditions  set forth  herein to,  among
other things,  set forth the terms and conditions  under which Lender  hereafter
will extend  Loans to  Borrower;  it being the  intention of Borrower and Lender
that this Agreement and the execution and delivery of any substituted promissory
notes not effect a novation of the  obligations  of Borrower to Lender under the
Original Loan  Agreement  but merely a  restatement  and,  where  applicable,  a
substitution of the terms governing and evidencing such obligations hereafter.

         3. As  security  for the loans  made or to be made by Lender to, or for
the account of,  Borrower,  (a)  Borrower  has caused  Borrower's  Subsidiaries,
Delaware Electro Industries, Inc., a Delaware corporation ("Delaware"), Contempo
Design,  Inc., an Illinois corporation  ("Contempo"),  and Contempo Design West,
Inc., a Delaware corporation ("Contempo West"), to grant Lender a lien on, and a
security interest in, all of their respective  assets, (b) Borrower has executed
and  delivered  a pledge of all or a  majority  of the  issued  and  outstanding
capital  stock of  Delaware,  Contempo  and  Contempo  West,  and (c)  Delaware,
Contempo  and Contempo  West have  executed a guaranty  whereby  such  companies
jointly and severally  guaranty the full and prompt  payment and  performance of
all  obligations  of Borrower to Lender in  connection  with the  Original  Loan
Agreement.

         4. Concurrently with the consummation of the transactions
contemplated hereby, each of Delaware, Contempo and Contempo West will enter
into a Loan and Security Agreement and related



<PAGE>



documentation  with Lender  whereby  Delaware,  Contempo and Contempo West shall
each assume a portion of the "Liabilities"  under and as defined in the Original
Loan Agreement that are represented by "Revolving Loans" under and as defined in
the  Original  Loan   Agreement.   Borrower  shall  guarantee  the  payment  and
performance of such assumed  liabilities and all other  obligations of Delaware,
Contempo and Contempo  West to Lender (and each such entity shall  guarantee the
payment  and  performance  of all  obligations  of the other  such  entities  to
Lender).

         Accordingly,  in  consideration  of  the  mutual  agreements  contained
herein,  and  subject to the terms and  conditions  hereof,  the  Original  Loan
Agreement is hereby amended and restated in its entirety, and the parties hereto
agree, as follows:

1.   DEFINITIONS AND OTHER TERMS.

     1.1  Definitions.  In  addition  to  terms  defined  elsewhere  in this
Agreement or any Supplement,  Schedule or Exhibit hereto,  when used herein, the
following  terms  shall have the  following  meanings  (such  meanings  shall be
equally  applicable  to the singular and plural forms of the terms used,  as the
context requires):

                  "Account  Debtor"  shall  mean  any  Person  who is or who may
become obligated to Borrower or any other Obligor,  as applicable,  under,  with
respect  to, or on account of an Account  Receivable,  Contract  Right,  General
Intangible or other Collateral or Third
Party Collateral.

                  "Account  Receivable"  shall mean any account of Borrower  and
any other right of Borrower or any other  Obligor,  as  applicable,  to payment,
whether or not  evidenced by an  instrument  or chattel paper and whether or not
yet earned by performance (excluding any Contract Right).

                  "Assignee  Deposit Account" shall have the meaning ascribed to
such term in Section 3.2(d).

                  "Attorneys'  Fees"  shall  mean  the  reasonable  value of the
services (and reasonable  costs,  charges and expenses  related  thereto) of the
attorneys (and all paralegals, secretaries, accountants and other staff employed
by such attorneys) employed by Lender (including,  but not limited to, attorneys
and  paralegals who are employees of Lender) from time to time (i) in connection
with the  negotiation,  preparation,  execution,  delivery,  administration  and
enforcement  of  this  Agreement,   any  Related  Agreement,   any  Supplemental
Documentation  and all other documents or instruments  provided for herein or in
any thereof or delivered or to be delivered hereunder or under any thereof or in
connection herewith or with any thereof,  (ii) to prepare  documentation related
to the Loans made and other Liabilities incurred hereunder, (iii) to


                                        2

<PAGE>



prepare any amendment to or waiver under this Agreement or any Related Agreement
and any documents or instruments  related  thereto,  (iv) to represent Lender in
any litigation,  contest,  dispute, suit or proceeding or to commence, defend or
intervene in any litigation,  contest,  dispute, suit or proceeding or to file a
petition,  complaint,  answer,  motion or other  pleading,  or to take any other
action  in or  with  respect  to,  any  litigation,  contest,  dispute,  suit or
proceeding  (whether  instituted  by Lender,  Borrower  or any other  Person and
whether  in  bankruptcy  or  otherwise)  in any way or respect  relating  to the
Collateral, any Third Party Collateral, this Agreement or any Related Agreement,
or  Borrower's  or any  other  Obligor's  or any  Subsidiary's  affairs,  (v) to
protect,  collect,  lease,  sell,  take  possession  of, or liquidate any of the
Collateral  or any Third  Party  Collateral,  (vi) to  attempt  to  enforce  any
security  interest in any of the Collateral or any Third Party  Collateral or to
give any advice  with  respect to such  enforcement  and (vii) to enforce any of
Lender's rights to collect any of the Liabilities.

                  "Banking Day" shall mean any day other than a Saturday, Sunday
or legal holiday on which banks are  authorized or required to be closed for the
conduct of commercial banking business in Chicago, Illinois.

                  "Borrower" -- see Preamble.

                  "Capitalized Lease" shall mean any lease which is or should be
capitalized on the balance sheet of the lessee in accordance with GAAP.

                  "Code"  shall  mean the  Internal  Revenue  Code of  1986,  as
amended,  and any  successor  statute  of  similar  import,  together  with  the
regulations thereunder,  in each case as in effect from time to time. References
to  sections  of the Code  shall be  construed  to also  refer to any  successor
sections.

                  "Collateral"  shall have the meaning  ascribed to such term in
Section 3.1, and, where the context requires, shall include "Collateral" as such
term is defined in each Other Loan Agreement.

                  "Consolidated  Net Worth" at any date shall mean the excess of
(a) the sum of capital stock, additional paid-in capital,  retained earnings (or
minus  accumulated  deficit) of Borrower and its  Subsidiaries,  all as would be
shown  on a  consolidated  balance  sheet  of  Borrower  and  its  Subsidiaries,
determined in accordance with GAAP,  prepared at such date  (including  minority
interests  reflected  in such  balance  sheet) over (b) any item which shall not
have been classified in such consolidated balance sheet as a liability but which
is included within "Indebtedness" as defined herein.



                                        3

<PAGE>



                  "Consolidated Senior Debt-Equity Ratio" at any time shall mean
the ratio,  expressed as a percentage,  of (a) all  Indebtedness of Borrower and
its Subsidiaries representing any borrowing or financing (excluding Subordinated
Debt and intercompany Indebtedness) to (b) the sum of (i) Consolidated Net Worth
plus (ii) Subordinated Debt.

                  "Consolidated  Senior Interest  Coverage Ratio" for any period
shall  mean the  ratio,  expressed  as a  percentage,  of (a) the sum of (i) the
consolidated pre-tax net income of Borrower and its Subsidiaries for such period
plus (ii) consolidated  interest expense (including imputed interest expense) of
Borrower  and  its   Subsidiaries   during  such  period  with  respect  to  all
Indebtedness  of Borrower and its  Subsidiaries  representing  any  borrowing or
financing (excluding intercompany Indebtedness) plus (iii) consolidated goodwill
amortization  of  Borrower  and its  Subsidiaries  during  such period plus (iv)
consolidated  depreciation  expense of Borrower and its Subsidiaries during such
period  to (b)  the  amount  calculated  pursuant  to  clause  (a)(ii)  of  this
definition (excluding interest expense with respect to Subordinated Debt).

                  "Consolidated  Total Debt-Equity Ratio" at any time shall mean
the ratio,  expressed as a percentage,  of (a) all  Indebtedness of Borrower and
its Subsidiaries representing any borrowing or financing (excluding intercompany
Indebtedness) to (b) Consolidated Net Worth.

                  "Consolidated  Total Interest  Coverage  Ratio" for any period
shall  mean  the  ratio,  expressed  as a  percentage,  of  (a)  the  sum of (i)
consolidated pre-tax net income of Borrower and its Subsidiaries for such period
plus (ii) consolidated  interest expense (including imputed interest expense) of
Borrower  and  its   Subsidiaries   during  such  period  with  respect  to  all
Indebtedness  of Borrower and its  Subsidiaries  representing  any  borrowing or
financing (excluding intercompany Indebtedness) plus (iii) consolidated goodwill
amortization  of  Borrower  and its  Subsidiaries  during  such period plus (iv)
consolidated  depreciation  expense of Borrower and its Subsidiaries during such
period  to (b)  the  amount  calculated  pursuant  to  clause  (a)(ii)  of  this
definition.

                  "Contempo" -- see Recitals.

                  "Contempo Amsterdam" shall mean Contempo Design Europe B.V., a
Dutch corporation 90% owned by Contempo and 10% owned by an employee thereof.

                  "Contempo West" -- see Recitals.

                  "Contract  Right"  shall mean any right of Borrower to payment
under a contract, which right is not yet earned by performance and not evidenced
by an instrument or chattel paper.


                                        4

<PAGE>




                  "Credit"  shall  mean  the  facility  established  under  this
Agreement pursuant to which Lender will make Loans to Borrower.

                  "Default"  shall mean any event or condition  which,  with the
lapse of time or giving of notice to Borrower or both, would constitute an Event
of Default.

                  "Default Rate" shall mean, with respect to a Loan, the rate of
interest  which is applicable to such Loan after any amount  thereof is not paid
when due,  whether by  acceleration  or  otherwise,  as  determined  pursuant to
Supplement A.

                  "Delaware" -- see Recitals.

                  "Demand  Deposit  Account" shall have the meaning  ascribed to
such term in Section 2.2.

                  "Environmental  Laws" shall mean the Clean Air Act of 1970, as
amended,  42 U.S.C.  ss.7401 et seq., the Clean Water Act, as amended, 33 U.S.C.
ss.1251 et seq., the Resource Conservation and Recovery Act of 1976, as amended,
42  U.S.C.   ss.6901  et  seq.,  the   Comprehensive   Environmental   Response,
Compensation and Liability Act of 1980, as amended,  42 U.S.C.  ss.9601 et seq.,
any so-called  "Superfund" or "Superlien" law, the Toxic Substances Control Act,
15 U.S.C. ss.2601 et seq., and any other federal,  state or local statute,  law,
ordinance,  code,  rule,  regulation,  order or  decree or other  written  legal
requirement  regulating,  relating  to, or imposing  liability  or  standards of
conduct  (including,  but not  limited  to,  permit  requirements,  emission  or
effluent   restrictions  and  other  requirements   relating  to  manufacturing,
processing,   generation,   distribution,  use,  treatment,  storage,  disposal,
clean-up,  transport  or handling)  concerning  any  Hazardous  Materials or any
hazardous,  toxic or dangerous  waste,  substance or constituent,  or any noise,
odor,  waste,  radiation,  pollutant or contaminant or other substance,  whether
solid, liquid or gas, as now or at any time hereafter in effect.

                  "Environmental  Lien" shall mean a Lien in favor of any entity
for (1) any liability under any Environmental Law or (2) damages arising from or
costs incurred by such governmental  entity in response to a spillage,  disposal
or release into the  environment  of any  Hazardous  Material or any  hazardous,
toxic  or  dangerous  waste,  substance  or  constituent,  or any  pollutant  or
contaminant or other substance.

                  "Equipment"  shall mean all  equipment  of every  description,
including, without limitation, fixtures, furniture, vehicles and trade fixtures,
together with any and all accessions,  parts and equipment  attached  thereto or
used in connection  therewith,  and any substitutions  therefor and replacements
thereof.



                                        5

<PAGE>



                  "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and any successor statute of similar import,  together with
the  regulations  thereunder,  in each  case as in  effect  from  time to  time.
References  to  sections  of  ERISA  shall  be  construed  to also  refer to any
successor sections.

                  "ERISA Affiliate" shall mean any corporation,  partnership, or
other  trade or  business  (whether  or not  incorporated)  that is,  along with
Borrower,  a member of a controlled  group of corporations or a controlled group
of  trades  or  businesses,   as  described  in  sections   414(b)  and  414(c),
respectively,  of the Code or  section  4001 of  ERISA,  or a member of the same
affiliated service group within the meaning of section 414(m) of the Code.

                  "Event of  Default"  shall have the  meaning  ascribed to such
term in Section 6.1.

                  "Federal  Reserve  Board" shall mean the Board of Governors of
the Federal Reserve System or any successor thereto.

                  "Fiscal Quarter" shall mean any quarter of a Fiscal Year.

                  "Fiscal Year" shall mean any period of 12 consecutive calendar
months ending on the last day of December.

                  "Fixtures"  shall mean all  fixtures  of Borrower or any other
Obligor,  as  applicable,   of  every  description  and  all  substitutions  and
replacements of any thereof.

                  "Fuse World" shall mean Fuse World, Inc., an Ohio
corporation.

                  "Fuse World  Acquisition"  shall mean (i) the  acquisition  by
Delaware of the  outstanding  capital stock of Fuse World  substantially  on the
terms set forth in the Fuse  World  Letter  of  Intent  and (ii) the  subsequent
dissolution or merger of Fuse World into Delaware; provided, however, that if an
acquisition  merger is agreed to by Fuse World,  then "Fuse  World  Acquisition"
shall mean the acquisition by merger of Fuse World by Delaware  substantially on
the terms set forth in the Fuse World Letter of Intent.

                  "Fuse World Letter of Intent"  shall mean that certain  letter
dated  August 15, 1995 from Steven D.  Hollopeter,  President  of  Delaware,  to
Curtis  Marling,  President of Fuse World, a copy of which has been presented to
Lender.

                  "GAAP" shall mean generally accepted accounting  principles as
applied in the  preparation  of the  audited  financial  statements  of Borrower
referred to in Section 4.6.



                                        6

<PAGE>



                  "General  Intangibles" shall mean all of Borrower's intangible
personal  property,  including things in action,  causes of action and all other
personal  property of Borrower  of every kind and nature  (other than  accounts,
inventory,   equipment,  chattel  paper,  documents,   instruments  and  money),
including, without limitation,  corporate or other business records, inventions,
designs, patents, patent applications, trademarks, trademark applications, trade
names, trade secrets, goodwill, copyrights, registrations, licenses, franchises,
customer  lists,  tax refund  claims,  claims  against  carriers  and  shippers,
guarantee claims,  security interests,  security deposits or other security held
by or granted to Borrower to secure any payment from an Account Debtor,  and any
rights to indemnification.

                  "Guaranteed  Obligations"  shall have the meaning  ascribed to
such term in Section 12.1.

                  "Guaranty" shall have the meaning ascribed to such term in
Section 3.6.

                  "Hazardous   Materials"   shall  mean  any  toxic   substance,
hazardous substance,  hazardous material,  hazardous chemical or hazardous waste
defined or qualifying as such in (or for the purposes of) any Environmental Law,
or any  pollutant  or  contaminant,  and shall  include,  but not be limited to,
petroleum,  including  crude  oil or any  fraction  thereof  which is  liquid at
standard  conditions of temperature or pressure (60 degrees  fahrenheit and 14.7
pounds per square inch absolute),  any radioactive material,  including, but not
limited to, any source,  special nuclear or by-product material as defined at 42
U.S.C.  ss.2011  et seq.,  as  amended  or  hereafter  amended,  polychlorinated
biphenyls and asbestos in any form or condition.

                  "Impermissible  Qualification"  shall  mean,  relative  to the
opinion or  certification  of any  public  accounting  firm as to any  financial
statement  of any  Obligor,  any  qualification  or exception to such opinion or
certification

                  (a)  which is of a "going concern" or similar nature;

                  (b)  which relates to the limited scope of examination of
                  matters relevant to such financial statement; or

                  (c) which  relates to the treatment or  classification  of any
                  item in such financial  statement and which, as a condition to
                  its  removal,  would  require an  adjustment  to such item the
                  effect  of  which  would  be to cause  such  Obligor  to be in
                  default  of  any  of  its  obligations  under  Section  3.1 of
                  Supplement A.



                                        7

<PAGE>



                  "Indebtedness" of any Person shall mean, without  duplication,
(i) any  obligation  of such  Person  for  borrowed  money,  including,  without
limitation,  (a) any obligation of such Person  evidenced by bonds,  debentures,
notes or other  similar debt  instruments  and (b) any  obligation  for borrowed
money which is non-recourse to the credit of such Person but which is secured by
a Lien on any  asset of such  Person,  (ii) any  obligation  of such  Person  on
account of deposits or  advances,  (iii) any  obligation  of such Person for the
deferred  purchase  price of any  property or services,  except  Trade  Accounts
Payable,  (iv) any obligation of such Person as lessee under a Capitalized Lease
and (v) any  Indebtedness  of another  Person  secured by a Lien on any asset of
such first  Person,  whether or not such  Indebtedness  is assumed by such first
Person. For all purposes of this Agreement, the Indebtedness of any Person shall
include  the  Indebtedness  of any  partnership  or joint  venture in which such
Person is a general partner or joint venturer.

                  "Inventory" shall mean any and all goods  (including,  without
limitation,  goods in transit) of Borrower or any other Obligor,  as applicable,
wheresoever  located,  which are or may at any time be leased to a lessee,  held
for sale or lease or furnished  under any contract of service by, or held as raw
materials,  work in process,  or supplies or  materials  used or consumed in the
business  of,  Borrower,  or  which  are  held  for use in  connection  with the
manufacture, packing, shipping, advertising, selling or finishing of such goods,
and all  goods  the sale or other  disposition  of which  has  given  rise to an
Account Receivable,  Contract Right or General Intangible and which are returned
to and/or  repossessed  and/or  stopped in transit by  Borrower or Lender or any
agent or bailee of any of them,  and all  documents of title or other  documents
representing the same.

                  "Investment" of any Person shall mean any investment,  made in
cash or by  delivery  of any kind of  property  or asset,  in any other  Person,
whether by acquisition of shares of stock or similar  interest,  Indebtedness or
other obligation or security,  or by loan, advance or capital  contribution,  or
otherwise.

                  "Landlord's   Consent"   shall  mean  a   Landlord's   Consent
substantially  in the form of Exhibit H, with  appropriate  insertions,  or such
other form as shall be  acceptable  to Lender,  as it may be amended or modified
from time to time.

                  "Lender" -- see Preamble.

                  "Liabilities" shall mean all of the liabilities,  obligations,
reimbursement   obligations  in  connection  with  any  letter  of  credit,  and
indebtedness  of  Borrower,   Delaware,   Contempo,  Contempo  West,  any  other
Subsidiary  or any  other  Obligor  to  Lender  of any kind or  nature,  however
created,  arising  or  evidenced,   whether  direct  or  indirect,  absolute  or
contingent, now or hereafter


                                        8

<PAGE>



existing  or  due or to  become  due,  and  including  but  not  limited  to (i)
Borrower's  obligations  under any Note, (ii) Borrower's  obligations under this
Agreement,  (iii) interest,  charges,  expenses,  Attorneys' Fees and other sums
chargeable to Borrower by Lender under this Agreement or any Related  Agreement,
(iv) the obligations of Borrower,  Delaware,  Contempo, Contempo West, any other
Subsidiary  or  any  other  Obligor  under  any  Related  Agreement,   including
obligations of performance  and (v) the  Guaranteed  Obligations.  "Liabilities"
shall also include any and all amendments,  extensions,  renewals, refundings or
refinancings of any of the foregoing.

                  "Lien"  shall  mean  any  mortgage,   pledge,   hypothecation,
judgment lien or similar legal  process,  title  retention  lien, or other lien,
encumbrance or security interest, including, without limitation, the interest of
a vendor under any conditional  sale or other title retention  agreement and the
interest of a lessor under any Capitalized Lease.

                  "Loan"  shall mean the Term Loan made  pursuant to Section 2.1
and any other loan or advance  made to Borrower  by Lender  under or pursuant to
this Agreement.

                  "Loan Account" shall have the meaning ascribed to such term in
Section 2.2.

                  "Margin Stock" shall have the meaning ascribed to such term in
Regulation  U of  the  Federal  Reserve  Board  or  any  regulation  substituted
therefor, as in effect from time to time.

                  "Multiemployer  Plan"  shall  mean a  "multiemployer  plan" as
defined in Section  4001(a)(3)  of ERISA which is  maintained  for  employees of
Borrower, any other Obligor or any ERISA Affiliate.

                  "Note" shall mean the Term Note and any other  promissory note
of Borrower  evidencing any loan or advance made by Lender to Borrower  pursuant
to this Agreement.

                  "Obligor"  shall mean Borrower and each other Person who is or
shall become primarily or secondarily  liable on any of the Liabilities,  or who
grants to Lender a Lien on any  property of such  Person as security  for any of
the Liabilities.

                  "Occupational   Safety   and   Health   Law"  shall  mean  the
Occupational  Safety and Health Act of 1970,  as  amended,  29 U.S.C.  ss.651 et
seq., and any other federal, state or local statute, law, ordinance, code, rule,
regulation,  order or decree  regulating,  relating to or imposing  liability or
standards of conduct concerning employee health and/or safety.

                  "Original Loan Agreement" - see Recitals.



                                        9

<PAGE>



                  "Other  Loan  Agreements"  shall  mean the  Loan and  Security
Agreement dated as of the date hereof between Lender and Contempo,  the Loan and
Security  Agreement dated as of the date hereof between Lender and Contempo West
and the Loan and Security  Agreement  dated as of the date hereof between Lender
and Delaware, in each case as the same may be amended, supplemented or otherwise
modified from time to time.

                  "Other Loan Documents" shall mean the "Related Agreements"
and the "Supplemental Documentation" as defined in each Other Loan
Agreement.

                  "Participant"  shall  mean any  Person,  now or at any time or
times  hereafter,  participating  with  Lender  in the  Loans  made to  Borrower
pursuant to this Agreement or any Related Agreement.

                  "PBGC" shall mean the Pension Benefit Guaranty Corporation and
any entity succeeding to any or all of its functions under ERISA.

                  "Pension  Plan"  shall mean a "pension  plan," as such term is
defined in Section 3(2) of ERISA, which is subject to the provisions of Title IV
of ERISA  (other than a  Multiemployer  Plan) and to which  Borrower,  any other
Obligor or any ERISA  Affiliate may have any liability,  including any liability
by reason of being deemed to be a  contributing  sponsor  under  Section 4069 of
ERISA.

                  "Person"  shall  mean  any  individual,  sole  proprietorship,
partnership,  joint venture, trust,  unincorporated  organization,  association,
corporation,  institution,  entity, or government  (whether  national,  federal,
state, county, city, municipal or otherwise,  including, without limitation, any
instrumentality, division, agency, body or department thereof).

                  "Pledge  Agreement"  shall have the  meaning  ascribed to such
term in Section 3.6.

                  "Post-Retirement   Welfare   Plans"  shall  have  the  meaning
ascribed to such term in Section 4.19.

                  "Reference Rate" shall mean, at any time, the rate of interest
then most  recently  announced by Lender at Chicago,  Illinois as its  reference
rate (of which  announcements  Lender shall give notice  promptly to  Borrower).
Each change in the interest  rate on any Loan shall take effect on the effective
date of the change in the Reference Rate.

                  "Refinancing Fee" shall have the meaning ascribed to such term
in Section 2.9.



                                       10

<PAGE>



                  "Related  Agreement"  shall mean any agreement,  instrument or
document (including, without limitation, notes, guarantees,  mortgages, deeds of
trust, chattel mortgages,  pledges, powers of attorney,  consents,  assignments,
contracts,   notices,   security  agreements,   leases,   financing  statements,
subordination agreements, trust account agreements and all other written matter)
heretofore,  now,  or  hereafter  delivered  to  Lender  with  respect  to or in
connection  with or pursuant to this  Agreement or any of the  Liabilities,  and
executed by or on behalf of Borrower,  Delaware,  Contempo, Contempo West or any
other Obligor.

                  "Related   Party"   shall  mean  any  Person   (other  than  a
Subsidiary) (i) which directly or indirectly through one or more  intermediaries
controls,  or is controlled by, or is under common control with, Borrower,  (ii)
which  beneficially  owns or  holds  ten  percent  (10%)  or more of the  equity
interest of Borrower or (iii) ten percent  (10%) or more of the equity  interest
of which is  beneficially  owned or held by Borrower or a  Subsidiary.  The term
"control" means the possession,  directly or indirectly,  of the power to direct
or cause the  direction  of the  management  and  policies of a Person,  whether
through the ownership of voting securities, by contract or otherwise.

                  "Reportable  Event" shall mean a "reportable event" as defined
in Section 4043(b) of ERISA and the regulations thereunder.

                  "Restatement  Date" shall mean the date this Agreement becomes
effective pursuant to Section 8.

                  "Stock  Appreciation  Plan" shall have the meaning ascribed to
such term in Section 5.15.

                  "Subordinated   Debt"   shall  mean  (i)  those   certain  10%
Subordinated  Promissory Notes due October 30, 1994 of Borrower in the aggregate
original principal amount of $1,525,000; (ii) that certain $300,000 subordinated
note of  Borrower  payable  to the order of Milley  Management  Incorporated,  a
Delaware  corporation;   and  (iii)  that  portion  of  any  other  liabilities,
obligations  or  Indebtedness  of  Borrower  which  contains  terms   reasonably
satisfactory to Lender and is subordinated,  in a manner reasonably satisfactory
to Lender, as to right and time of payment of principal and interest thereon, to
all of the Liabilities.

                  "Subsidiary"  shall  mean  any  Person  of  which  or in which
Borrower and its other  Subsidiaries  own directly or indirectly  50% or more of
(i) the  combined  voting power of all classes of stock  having  general  voting
power under ordinary circumstances to elect a majority of the board of directors
of such Person,  if it is a  corporation,  (ii) the capital  interest or profits
interest of such Person, if it is a partnership, joint venture or similar entity
or


                                       11

<PAGE>



(iii) the beneficial  interest of such Person, if it is a trust,  association or
other unincorporated organization.

                  "Supplemental  Documentation"  shall have the meaning ascribed
to such term in Section 3.5.

                  "Taxes"   with   respect  to  any  Person  shall  mean  taxes,
assessments  or other  governmental  charges or levies imposed upon such Person,
its income or any of its properties, franchises or assets.

                  "Term Loan"  shall have the  meaning  ascribed to such term in
Section 2.1.

                  "Term Note"  shall have the  meaning  ascribed to such term in
Section 2.4.

                  "Termination  Date"  shall mean  August 31, 1996 or such later
date to which the Termination Date may be extended pursuant to Section 11.7.

                  "Third Party Collateral" shall mean any property of any Person
other than Borrower which secures payment or performance of any Liabilities and,
where the context  requires,  shall include "Third Party  Collateral" under each
Other Loan Agreement.

                  "Trade  Accounts  Payable"  of any  Person  shall  mean  trade
accounts payable of such Person with a scheduled maturity of not greater than 90
days incurred in the ordinary course of such Person's business.

                  "UCC" shall mean the Uniform  Commercial  Code as in effect in
the State of Illinois, and any successor statute,  together with any regulations
thereunder,  in each case as in effect from time to time. References to sections
of the UCC shall be construed to also refer to any successor sections.

         1.2 Other  Definitional  Provisions.  Unless  otherwise  defined or the
context otherwise requires, all financial and accounting terms used herein or in
any  certificate  or other document made or delivered  pursuant  hereto shall be
defined in accordance with GAAP.  Unless otherwise  defined  therein,  all terms
defined in this Agreement shall have the defined  meanings when used in any Note
or in any certificate or other document made or delivered pursuant hereto. Terms
used in this  Agreement  which are defined in any  Supplement or Exhibit  hereto
shall, unless the context otherwise  indicates,  have the meanings given them in
such Supplement or Exhibit. Other terms used in this Agreement shall, unless the
context  indicates  otherwise,  have the meanings provided for by the UCC to the
extent the same are used or defined therein.



                                       12

<PAGE>



         1.3  Interpretation of Agreement.  A Section,  an Exhibit or a Schedule
is, unless otherwise  stated, a reference to a section hereof, an exhibit hereto
or a  schedule  hereto,  as the  case  may  be.  Section  captions  used in this
Agreement are for convenience only and shall not affect the construction of this
Agreement.  The words "hereof,"  "herein," "hereto" and "hereunder" and words of
similar  import when used in this  Agreement  refer to this Agreement as a whole
and not to any  particular  provision  of this  Agreement.  Reference  to  "this
Agreement" shall include the provisions of Supplement A.

         1.4 Compliance with Financial Restrictions. Compliance with each of the
financial ratios and restrictions  contained in Section 5 or Supplement A shall,
except as otherwise  provided  herein,  be determined  in  accordance  with GAAP
consistently followed.

2.       LOANS; OTHER MATTERS.

         2.1  Term Loan.

                           (a) On the Restatement Date, Borrower owed Lender the
                  principal amount of $5,468,200.02  under the "Term Loan" under
                  and as defined in the Original  Loan  Agreement.  Borrower and
                  Lender   agree  that  such   outstanding   principal   balance
                  constitutes the "Term Loan" hereunder as of the date hereof.

                           (b)  Unless  otherwise  required  to be  sooner  paid
                  pursuant  to  any  other  provision  of  this  Agreement,  the
                  principal of the Term Loan shall be repaid on the  Termination
                  Date.

                           (c)  Borrower  may,  upon at least  three (3) Banking
                  Days' prior notice to Lender, prepay the principal of the Term
                  Loan in whole or in part  without any premium or penalty.  Any
                  partial  prepayment of principal  shall be in a minimum amount
                  of the lesser of (i) the outstanding  principal balance of the
                  Term Loan and (ii)  $50,000 or an integral  multiple  thereof.
                  Any  principal  of the Term Loan  which is  repaid  may not be
                  reborrowed.

         2.2      Loan Account;  Demand Deposit  Account.  Lender shall
establish or cause to be established on its books in Borrower's name one or more
accounts (each a "Loan Account") to evidence Loans made to Borrower. Lender will
credit  or  cause  to be  credited  to a  commercial  account  ("Demand  Deposit
Account") maintained by Borrower at Lender's 231 South LaSalle Street,  Chicago,
Illinois office the amount of any sums advanced as Loans hereunder.  Any amounts
advanced as Loans  hereunder  which are credited to  Borrower's  Demand  Deposit
Account, together with any other amounts advanced to Borrower as a Loan pursuant
to this Agreement, will be debited to


                                       13

<PAGE>



the applicable  Loan Account and result in an increase in the principal  balance
outstanding in such Loan Account in the amount thereof.

         2.3      Interest and Fees.

                  2.3.1  Interest.  The  unpaid  principal  amount  of the Loans
         hereunder  shall bear interest until maturity at the rates indicated in
         Supplement  A. Until  maturity,  interest on the Loans shall be paid by
         Borrower  on the  date(s)  indicated  in  Supplement  A,  and  at  such
         maturity. After maturity, whether by acceleration or otherwise, accrued
         interest shall be payable on demand.

                  2.3.2  Additional Fee.  Borrower agrees to pay to Lender the
         fee of $300,000 specified in Section 2.3.3 of the Original Loan
         Agreement on the Termination Date.

                  2.3.3 Method of Calculating Interest and Fees. Interest on the
         unpaid  principal  amount of each Loan shall accrue from and  including
         the date such Loan is made to, but not including, the date such Loan is
         paid.  Interest and any fees shall be calculated on the basis of a year
         consisting  of  360  days  and  paid  for  actual  days  elapsed.   All
         determinations by Lender of the rate of interest applicable to any Loan
         shall be rebuttable  presumptive  evidence of the  applicable  interest
         rate for such Loan.

                  2.3.4 Payment of Interest and Fees. Lender may provide for the
         payment of any unpaid non-capitalized  accrued interest and any fees by
         charging  the  Demand  Deposit   Account  or  any  other  bank  account
         maintained by Borrower with Lender.

         2.4  Note.  The Term  Loan  shall be  evidenced  by a  promissory  note
(herein,  as it may from  time to time be  supplemented,  amended  or  replaced,
called the "Term Note")  substantially  in the form set forth on Exhibit C, with
appropriate insertions, payable to the order of Lender on the Termination Date.

         2.5 One Obligation.  All Indebtedness and other Liabilities of Borrower
to  Lender  under  this  Agreement  and  any of  the  Related  Agreements  shall
constitute  one  general  obligation  secured  by  Lender's  Lien  on all of the
Collateral and Third Party Collateral and by all other Liens heretofore, now, or
at any time or times  hereafter  granted  by  Borrower  or any other  Obligor to
Lender.  Borrower  agrees  that all of the  rights of  Lender  set forth in this
Agreement  shall apply to any  modification  of or supplement to this Agreement,
any Supplements or Exhibits hereto, and the Related Agreements, unless otherwise
agreed in writing.



                                       14

<PAGE>



         2.6  Making of Payments; Application of Collections; Charging
of Accounts.

                  (a) All payments  hereunder  shall be made without  set-off or
         counterclaim and shall be made to Lender in immediately available funds
         (except as Lender may otherwise  consent) prior to 12:30 p.m.,  Chicago
         time,  on the date  due at its  office  at 231  South  LaSalle  Street,
         Chicago, Illinois 60697, or at such other place as may be designated by
         Lender to Borrower in writing.  Any payments  received  after such time
         shall be deemed received on the next Banking Day.  Whenever any payment
         to be made  hereunder  or under any Note shall be stated to be due on a
         date other than a Banking Day,  such  payment  shall be due on the next
         succeeding Banking Day, and such extension of time shall be included in
         the calculation of interest and any fees.

                  (b) Borrower authorizes Lender to, and Lender will, subject to
         the  provisions of this  paragraph  (b), apply the whole or any part of
         any  amounts  received by Lender  (whether  deposited  in the  Assignee
         Deposit  Account of Borrower or otherwise  received by Lender) from the
         collection of items of payment and proceeds of any  Collateral or Third
         Party Collateral  (whether received upon any sale or other distribution
         of  Collateral  or Third  Party  Collateral  by Lender  or  otherwise),
         against the  principal of and/or  interest on any Loans made  hereunder
         and/or any other Liabilities, whether or not then due, in such order of
         application as Lender may  determine,  unless such payments or proceeds
         are, in Lender's  sole and absolute  discretion,  released to Borrower;
         provided,  however,  so long  as no  Event  of  Default  exists  and is
         continuing,  any such  amounts  received by Lender  shall be applied as
         follows:  first,  to payment of amounts  then due with  respect to fees
         (including Attorneys' Fees), charges and expenses for which Borrower or
         any other Obligor is liable  pursuant to this Agreement and the Related
         Agreements;  second,  to payment of  amounts  then due with  respect to
         interest  on the Loans;  third,  to  payment  of amounts  then due with
         respect to principal of the Loans;  fourth,  to  prepayment of the Term
         Loan; and fifth, to the payment of the Guaranteed  Obligations then due
         and owing;  and  provided,  further,  that no  checks,  drafts or other
         instruments received by Lender shall constitute final payment to Lender
         unless and until such item of payment has actually been collected.  All
         items or  amounts  which  are  delivered  to  Lender by or on behalf of
         Borrower or any Obligor or any Account  Debtor on account of partial or
         full payment or otherwise as proceeds of any of the Collateral or Third
         Party  Collateral  (including  any items or amounts which may have been
         deposited  to the  Assignee  Deposit  Account) may from time to time in
         Lender's  sole and  absolute  discretion  be released to Borrower or be
         applied by Lender towards  payment of the  Liabilities,  whether or not
         then due, in accordance with the


                                       15

<PAGE>



         preceding  sentence.  Notwithstanding  anything to the contrary herein,
         (i) solely for purposes of  determining  the  occurrence of an Event of
         Default, all cash, checks, instruments and other items of payment shall
         be deemed  received upon actual  receipt by Lender,  unless the same is
         subsequently  dishonored for any reason  whatsoever and (ii) solely for
         purposes  of  interest   calculation   hereunder,   all  cash,  checks,
         instruments  and other  items of  payment  shall be deemed to have been
         applied against the Liabilities on the second Banking Day after receipt
         by Lender of available funds with respect thereto.

                  (c) Borrower hereby  authorizes  Lender to, and Lender may, in
         its sole and absolute  discretion,  charge to Borrower at any time when
         due all or any  portion  of any of the  Liabilities  including  but not
         limited to any  Attorneys'  Fees and other costs and expenses of Lender
         for which Borrower or any other Obligor is liable pursuant to the terms
         of this  Agreement  or any Related  Agreement,  by charging  Borrower's
         Demand  Deposit  Account or any other bank  account  of  Borrower  with
         Lender;  provided,  however, that the provisions of this Section 2.6(c)
         shall not affect the obligation of Borrower or any other Obligor to pay
         when due all amounts payable by such Person under this  Agreement,  any
         Note or any  Related  Agreement,  whether  or not there are  sufficient
         funds  therefor  in the Demand  Deposit  Account or any such other bank
         account of Borrower.  So long as no Event of Default or Default exists,
         Lender shall use reasonable  efforts to give Borrower  prompt notice of
         Liabilities  paid by  charging  such  Demand  Deposit  Account or other
         account (but failure to give such notice shall not impose any liability
         on Lender or relieve Borrower of any of its obligations).

         2.7  Lender's  Election  Not to  Enforce.  Notwithstanding  any term or
condition of this  Agreement to the contrary,  Lender,  in its sole and absolute
discretion,  at any time and from time to time,  may  suspend  or  refrain  from
enforcing any or all of the restrictions  imposed in this Section 2, but no such
suspension or failure to enforce shall impair any right or power of Lender under
this Agreement,  including,  without limitation,  any right of Lender to refrain
from making a Loan if all conditions  precedent to Lender's obligation to making
such Loan have not been satisfied.

         2.8 Setoff.  In addition to and not in  limitation  of all other rights
and remedies  (including other rights of offset or banker's lien) that Lender or
any other holder of any Note may have under applicable law, Lender or such other
holder shall,  upon the occurrence of any Event of Default  described in Section
6.1 and during the  continuance  thereof,  or upon the occurrence of any Default
described in Section 6.1(e) and during the continuance  thereof,  have the right
to appropriate and apply to the payment of the Liabilities  (whether or not then
due), in such order of


                                       16

<PAGE>



application  as Lender or such other  holder may  elect,  any and all  balances,
credits,  deposits (general or special,  time or demand,  provisional or final),
accounts  or moneys of  Borrower  then or  thereafter  with Lender or such other
holder.  Lender shall use reasonable  efforts to give Borrower  prompt notice of
any  appropriation  and  application  pursuant to the  preceding  sentence  (but
failure to give such notice shall not impose any  liability on Lender or relieve
Borrower of any of its obligations).

         2.9  Refinancing  Fee.  Borrower shall pay Lender a Refinancing Fee (as
hereinafter defined) from time to time if Borrower shall obtain any Indebtedness
or equity  contributions  (other than from another Obligor or Contempo Amsterdam
except if such Indebtedness or equity contribution is funded with funds obtained
by such other  Obligor or  Contempo  Amsterdam  from a  non-Obligor  (other than
Lender))  after the date hereof and Borrower  shall at any time repay all or any
portion  of the Term  Loan  with the  proceeds  of such  Indebtedness  or equity
contributions.  As used in this Section,  "Refinancing Fee" shall mean an amount
equal to the product of the amount of the  repayment  of the Term Loan with such
proceeds multiplied by .0125.

3.       COLLATERAL.

         3.1 Grant of  Security  Interest.  As  security  for the payment of all
Loans now or hereafter  made by Lender to Borrower  hereunder or under any Note,
and as security for the payment or other  satisfaction of all other Liabilities,
Borrower  hereby  grants to Lender a security  interest in and to the  following
property of Borrower,  whether now owned or existing,  or hereafter  acquired or
coming into existence,  wherever now or hereafter  located (all such property is
hereinafter referred to collectively as the "Collateral"):

                  (a)      Accounts Receivable;

                  (b)      Equipment and Fixtures;

                  (c)      Inventory;

                  (d)      General Intangibles (including all rights of Borrower
         with respect to all amounts now or hereafter from time to time
         loaned or advanced by Borrower to any Subsidiary);

                  (e)      Contract Rights and documents of title;

                  (f) All chattel paper and instruments evidencing,  arising out
         of or relating to any  obligation  to Borrower for goods sold or leased
         or services  rendered,  or otherwise  arising out of or relating to any
         property described in clauses (a) through (e) above;


                                       17

<PAGE>




                  (g)  Any and  all  balances,  credits,  deposits  (general  or
         special, time or demand,  provisional or final),  accounts or monies of
         or in the name of Borrower now or hereafter  with Lender,  any agent or
         bailee for  Lender,  or any  Participant,  and any and all  property of
         every  kind  or  description  of or in  the  name  of  Borrower  now or
         hereafter,  for any reason or purpose whatsoever,  in the possession or
         control of, or in transit to, or standing to  Borrower's  credit on the
         books of, Lender, any agent or bailee for Lender, or any Participant;

                  (h) All interest of Borrower in any goods the sale or lease of
         which shall have given or shall give rise to, and in all guaranties and
         other  property  securing  the  payment of or  performance  under,  any
         Accounts  Receivable,  General  Intangibles,  Contract  Rights,  or any
         chattel paper or instru-
         ments referred to in clause (f) above;

                  (i) Any and all other  property  of  Borrower,  of any kind or
         description  (including  but not limited to real  estate of  Borrower),
         including,  without  limitation,  any property of Borrower subject to a
         separate mortgage, pledge or security interest in favor of Lender or in
         which  Lender now or  hereafter  has or  acquires  a security  interest
         securing any Liabilities  pursuant to an agreement or instrument  other
         than this Agreement;

                  (j)      All replacements, substitutions, additions or
         accessions to or for any of the foregoing;

                  (k) To the extent related to the property described in clauses
         (a)  through  (j)  above,  all  books,  correspondence,  credit  files,
         records,  invoices and other papers and documents,  including,  without
         limitation,  to the extent so related, all tapes, cards, computer runs,
         computer  programs and other papers and documents in the  possession or
         control of Borrower or any computer bureau from time to time acting for
         Borrower,  and, to the extent so  related,  all rights in, to and under
         all  policies  of  insurance,  including  claims of rights to  payments
         thereunder and proceeds therefrom, including any credit insurance; and

                  (l) All products and  proceeds  (including  but not limited to
         any  Accounts  Receivable  or other  proceeds  arising from the sale or
         other  disposition of any  Collateral,  any returns of any Equipment or
         Inventory sold by Borrower,  and the proceeds of any insurance covering
         any of the Collateral) of any of the foregoing.

         3.2  Accounts Receivable.

         (a)      If requested by Lender, Borrower shall advise Lender
promptly of any Inventory returned by or repossessed from any


                                       18

<PAGE>



Account Debtor,  or otherwise  recovered,  shall receive such Inventory in trust
and, unless instructed to deliver such Inventory to Lender,  shall resell it for
Lender. If requested by Lender,  Borrower shall notify Lender immediately of all
disputes  and  claims by any  Account  Debtor  and  settle or adjust  them at no
expense  to  Lender.  If Lender  directs  after the  occurrence  and  during the
continuance of an Event of Default or a Default, no discount or credit allowance
shall be granted  thereafter  by  Borrower to any  Account  Debtor.  All Account
Debtor payments and all net amounts received by Lender in settlement, adjustment
or  liquidation  of any  Account  Receivable  may be  applied  by  Lender to the
Liabilities  or  credited  to  Borrower's  Demand  Deposit  Account  (subject to
collection)  with  Lender,  as Lender may deem  appropriate,  in either  case in
accordance  with Section 2.6. If requested by Lender,  Borrower will make proper
entries  in  its  books  and  records  disclosing  the  assignment  of  Accounts
Receivable to Lender.

         (b) Borrower warrants that: (i) to the best of Borrower's knowledge all
of the  Accounts  Receivable  are and will  continue  to be bona  fide  existing
obligations  created by the sale of goods,  the  rendering of  services,  or the
furnishing of other good and sufficient  consideration to Account Debtors in the
regular  course of business  and (ii) to the best of  Borrower's  knowledge  all
shipping or delivery  receipts and other documents  furnished or to be furnished
to Lender in connection therewith are and will be genuine.

         (c) Lender is hereby authorized and empowered (which  authorization and
power,  being coupled with an interest,  shall be irrevocable until the later to
occur of termination of this Agreement and the final payment and  performance in
full of all of the Liabilities) at any time in its sole and absolute discretion:

                  (1) To request,  in Borrower's  name or, after the  occurrence
         and during  the  continuance  of an Event of  Default or a Default,  in
         Lender's  name or the  name of a third  party,  confirmation  from  any
         Account  Debtor  or  party  obligated  under  or  with  respect  to any
         Collateral  of the amount  shown by the  Accounts  Receivable  or other
         Collateral to be payable, or any other matter stated therein;

                  (2) To endorse in  Borrower's  name and to collect any chattel
         paper,  checks,  notes,  drafts,  instruments or other items of payment
         tendered to or received by Lender in payment of any Account  Receivable
         or other obligation owing to Borrower;

                  (3) To notify, in Borrower's name or, after the occurrence and
         during the continuance of an Event of Default or a Default, in Lender's
         name, and/or to require Borrower to notify, any Account Debtor or other
         Person obligated under or


                                       19

<PAGE>



         in respect of any Collateral, of the fact of Lender's Lien
         thereon and of the collateral assignment thereof to Lender;

                  (4) To direct, in Borrower's name or, after the occurrence and
         during the continuance of an Event of Default or a Default, in Lender's
         name, and/or to require Borrower to direct, any Account Debtor or other
         Person  obligated under or in respect of any Collateral to make payment
         directly to Lender of any amounts  due or to become due  thereunder  or
         with respect thereto; and

                  (5) After the  occurrence  and  during the  continuance  of an
         Event of Default, to demand,  collect,  surrender,  release or exchange
         all or any part of any Collateral or any amounts due thereunder or with
         respect  thereto,  or  compromise  or extend  or renew  for any  period
         (whether or not longer than the initial  period) any and all sums which
         are now or may  hereafter  become due or owing upon or with  respect to
         any of the  Collateral,  or enforce,  by suit or otherwise,  payment or
         performance of any of the Collateral  either in Lender's own name or in
         the name of Borrower.

Under no circumstances shall Lender be under any duty to act in regard to any of
the  foregoing  matters.  The costs  relating to any of the  foregoing  matters,
including Attorneys' Fees and reasonable out-of-pocket expenses, and the cost of
any  Assignee  Deposit  Account or other bank  account or accounts  which may be
required  hereunder,  shall be borne  solely by  Borrower  whether  the same are
incurred by Lender or  Borrower,  and Lender may  advance  same to Borrower as a
Loan.

         (d) Unless otherwise consented to by Lender,  Borrower will,  forthwith
upon receipt by Borrower of all checks,  drafts,  cash and other  remittances in
payment or as proceeds of, or on account of, any of the Accounts  Receivable  or
other  Collateral,  deposit the same in a special bank  account  (the  "Assignee
Deposit  Account")  with Lender or such other bank or financial  institution  as
Lender shall consent, over which Lender alone has power of withdrawal, and will,
to the  extent  required  by  Lender,  designate  with  each  such  deposit  the
particular  Account  Receivable  or other  item of  Collateral  upon  which  the
remittance was made. Borrower  acknowledges that the maintenance of the Assignee
Deposit Account is solely for the convenience of Lender in facilitating  its own
operations and Borrower does not and shall not have any right, title or interest
in the Assignee  Deposit  Account or in the amounts at any time appearing to the
credit thereof.  Said proceeds shall be deposited in precisely the form received
except for Borrower's endorsement where necessary to permit collection of items,
which endorsement Borrower agrees to make. Pending such deposit, Borrower agrees
not to commingle any such checks, drafts, cash and other remittances with any of
its funds or property, but will hold them separate and apart


                                       20

<PAGE>



therefrom and upon an express trust for Lender until deposit  thereof is made in
the  Assignee  Deposit  Account.  Upon  the full and  final  liquidation  of all
Liabilities,  Lender will pay over to Borrower  any excess  amounts  received by
Lender as payment or proceeds  of  Collateral,  whether  received by Lender as a
deposit  in the  Assignee  Deposit  Account  or  received  by Lender as a direct
payment on any of the sums due hereunder.

         (e) Borrower  appoints Lender,  or any Person whom Lender may from time
to time  designate,  as Borrower's  attorney and agent-in- fact with power:  (i)
after the  occurrence  and during the  continuance  of an Event of  Default,  to
notify  the post  office  authorities  to change the  address  for  delivery  of
Borrower's  mail to an  address  designated  by  Lender;  (ii)  after  the event
described in the foregoing clause (i), to receive,  open and dispose of all mail
addressed  to  Borrower;  (iii) to  send,  in  Borrower's  name  or,  after  the
occurrence and during the  continuance  of an Event of Default or a Default,  in
Lender's  name or the  name of a  third  party,  requests  for  verification  of
Accounts  Receivable  or other  Collateral to Account  Debtors;  (iv) to open an
escrow account or Assignee  Deposit  Account under Lender's sole control for the
collection  of  Accounts  Receivable  or  other  Collateral,   if  not  required
contemporaneously  with the  execution  hereof;  and (v) to do all other  things
which Lender is permitted to do under this Agreement or any Related Agreement or
which are  reasonably  necessary  to carry out this  Agreement  and the  Related
Agreements.  Neither  Lender nor any of its  directors,  officers,  employees or
agents will be liable for any acts of  commission  or omission nor for any error
in judgment or mistake of fact or law,  unless the same shall have resulted from
gross  negligence or willful  misconduct.  The foregoing  appointment and power,
being coupled with an interest, shall be irrevocable until all Liabilities under
this  Agreement  are finally paid and  performed  in full and this  Agreement is
terminated.  Borrower expressly waives presentment,  demand,  notice of dishonor
and protest of all  instruments and any other notice to which it might otherwise
be entitled.

         (f) If any Account  Receivable,  Contract  Right or General  Intangible
arises out of a contract with the United States or any  department,  agency,  or
instrumentality  thereof,  Borrower will,  unless Lender shall otherwise  agree,
immediately  notify Lender in writing and execute any  instruments  and take any
steps  required  by Lender in order  that all monies due and to become due under
such  contract  shall be  assigned  to Lender  and notice  thereof  given to the
government  under the Federal  Assignment of Claims Act of 1940, as amended,  or
other  applicable laws or  regulations;  provided,  however,  that unless Lender
otherwise  requests,  until an Event of Default or a Default shall have occurred
and be continuing,  Borrower need not take any of the steps contemplated in this
paragraph with respect to any contract with a value of less than $10,000.



                                       21

<PAGE>



         (g) If any Account Receivable or Contract Right is evidenced by chattel
paper or promissory  notes,  trade  acceptances,  or other  instruments  for the
payment of money,  Borrower will,  unless Lender shall otherwise agree,  deliver
the originals of same to Lender,  appropriately  endorsed to Lender's order and,
regardless of the form of such  endorsement,  Borrower hereby  expressly  waives
presentment,  demand, notice of dishonor,  protest and notice of protest and all
other notices with respect thereto.

         3.3      Inventory.

         (a) Unless Lender shall  otherwise  agree,  if Borrower sells Inventory
for cash, all full and partial payments  therefor shall be immediately  (and, in
any event, not later than the end of the day received)  delivered by Borrower to
Lender in their original form for deposit in the Assignee Deposit Account or for
other application to reduction of the Liabilities,  in either case in accordance
with Section 2.6. Pending such delivery, all such cash shall be held by Borrower
in trust for Lender.

         (b)  Lender  shall  not be  liable  or  responsible  in any way for the
safekeeping of any Inventory  delivered to it, to any bailee appointed by or for
it, to any warehouseman,  or under any other circumstances,  except for Lender's
gross  negligence or willful  misconduct.  Lender shall not be  responsible  for
collection of any proceeds or for losses in collected  proceeds held by Borrower
in trust for  Lender.  Any and all risk of loss for any or all of the  foregoing
shall be upon Borrower, except for such loss as shall result from Lender's gross
negligence or willful misconduct.

         (c) If requested by Lender,  Borrower shall, upon acquiring an interest
in any Inventory,  deliver to Lender a description of such  Inventory,  together
with  supplier's  invoices,  warranties,  production,  cost and other records as
Lender may request.  If requested by Lender,  Borrower  shall  deliver to Lender
schedules of the sale of any Inventory  immediately  upon its sale. Any material
change in the value or condition of any Inventory,  and any errors discovered in
any schedule or  description  delivered  to Lender,  shall be reported to Lender
immediately.  Borrower confirms that the warranties and  representations in this
Agreement shall apply to each schedule.  Borrower  represents and warrants that,
as to each schedule and description of Inventory delivered to Lender:

                  (1) The descriptions,  origins, sizes, qualities,  quantities,
         weights, and markings of all goods stated thereon, or on any attachment
         thereto, are true and correct in all material respects;

                  (2)      None of the goods are defective, of second quality,
         used, or goods returned after shipment, except where described
         as such; and


                                       22

<PAGE>




                  (3)      All Inventory not included on such schedule or
         description has been previously scheduled or described.

         (d) If requested by Lender,  Borrower will notify Lender immediately if
Borrower  obtains  possession  (by return,  repossession  or  otherwise)  of any
Inventory  which has been sold,  and will inform  Lender of the  identity of the
returned or repossessed Inventory,  the applicable Account Debtor and the amount
of the applicable Account Receivable.

         3.4      Equipment.

         (a)  Borrower  shall at all times keep,  and cause each  Subsidiary  to
keep,  its Equipment in good operating  condition and repair,  ordinary wear and
tear excepted,  and neither Borrower nor any Subsidiary shall, without the prior
written  consent of Lender,  sell,  lease,  or  otherwise  dispose of any of its
Equipment,  or any part thereof or interest  therein;  provided,  however,  that
without  Lender's consent (but with notice to Lender) Borrower or any Subsidiary
may dispose of obsolete or unuseful  Equipment in the ordinary  course  provided
all Equipment so disposed of by Borrower and its Subsidiaries in any Fiscal Year
has an aggregate market value of $50,000 or less.

         (b) In the  event  any  Equipment  is sold,  transferred  or  otherwise
disposed of by Borrower or any Subsidiary,  unless Lender shall agree otherwise,
Borrower or the applicable  Subsidiary  shall deliver all of the proceeds of any
such sale, transfer or disposition to Lender,  which proceeds shall be deposited
in the Assignee  Deposit  Account or otherwise  applied to the  repayment of the
Liabilities, in either case in accordance with Section 2.6.

         (c) Borrower will,  upon request of Lender,  submit to Lender a current
listing of all Equipment of Borrower and its  Subsidiaries,  which listing shall
indicate the type, model, serial number and location of such Equipment.

         3.5 Supplemental  Documentation.  At Lender's  request,  Borrower shall
execute  and/or  deliver  to  Lender,  at any  time  or  times  hereafter,  such
agreements,  documents,  financing  statements,  warehouse  receipts,  bills  of
lading,  notices of  assignment  of Accounts  Receivable,  schedules of Accounts
Receivable assigned,  and other written matter necessary or reasonably requested
by Lender to perfect and maintain  perfected  Lender's  security interest in the
Collateral  (all  the  above is  hereinafter  referred  to as the  "Supplemental
Documentation"),  in form and substance acceptable to Lender, and pay all taxes,
fees and other  reasonable  costs and expenses  associated with any recording or
filing of the Supplemental  Documentation.  Borrower hereby  irrevocably  makes,
constitutes and appoints  Lender (and all Persons  designated by Lender for that
purpose) as Borrower's true and lawful attorney (and agent-in-fact)


                                       23

<PAGE>



(which  appointment  and  power,  being  coupled  with  an  interest,  shall  be
irrevocable  until the later to occur of termination of this Agreement and final
payment and  performance in full of all of the  Liabilities) to sign the name of
Borrower  on any of the  Supplemental  Documentation  and to deliver  any of the
Supplemental  Documentation to such Persons as Lender,  in its sole and absolute
discretion, may elect. Borrower agrees that a carbon, photographic, photostatic,
or  other  reproduction  of  this  Agreement  or  of a  financing  statement  is
sufficient as a financing statement.

         3.6  Other  Security.  Borrower  shall  cause  Delaware,  Contempo  and
Contempo West to execute and deliver to Lender an amended and restated  Guaranty
Agreement (the  "Guaranty")  in the form attached  hereto as Exhibit G. Borrower
has caused Delaware, Contempo and Contempo West to execute and deliver to Lender
UCC-1  financing  statements,  suitable for filing  centrally  (and  locally) in
certain  jurisdictions,  showing  Lender as secured  party and duly  executed on
behalf of such Obligor, as debtor.  Borrower shall execute and deliver to Lender
an amended and restated  Pledge  Agreement (the "Pledge  Agreement") in the form
attached  hereto as Exhibit E, and has  delivered to Lender  stock  certificates
representing  the  number  of  outstanding  shares of  capital  stock of each of
Delaware,  Contempo  and Contempo  West set forth in  Attachment 1 to the Pledge
Agreement,  as collateral in pledge thereunder,  along with undated stock powers
relating to the shares pledged under the Pledge  Agreement  executed by Borrower
in blank.  Borrower shall deliver to Lender the intercompany notes pledged under
the Pledge Agreement on or prior to the Restatement  Date.  Borrower shall cause
all intercompany Indebtedness owing to Borrower or any Subsidiary by Borrower or
any other Subsidiary to be reflected by intercompany notes in form and substance
satisfactory to Lender,  which notes shall be pledged to Lender under the Pledge
Agreement.

4.       REPRESENTATIONS AND WARRANTIES.  To induce Lender to make Loans
to Borrower under this Agreement, Borrower makes the following
representations and warranties, all of which shall survive the
execution of this Agreement:

         4.1   Organization.   Borrower  and  each  of  its  Subsidiaries  is  a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation.  Borrower and each of its Subsidiaries
is in good  standing and is duly  qualified to do business in each  jurisdiction
where, because of the nature of its business, such qualification is required and
where the  failure to so qualify  would have a material  adverse  effect on such
Person.  Schedule 4.1 sets forth a complete and accurate list, as of the date of
this Agreement, of (a) the state or other jurisdiction of formation of Borrower,
(b) each state in which  Borrower is  qualified  to do  business  and (c) all of
Borrower's trade names or doing business forms.



                                       24

<PAGE>



         4.2  Authorization.  Each of  Borrower  and any  other  Obligor a party
thereto is duly authorized to execute and deliver this Agreement, the Other Loan
Agreements,  the Other Loan Documents,  the Notes, and any Related Agreements or
Supplemental  Documentation  contemplated by this Agreement,  and to perform its
obligations  under this  Agreement,  the Other Loan  Agreements,  the Other Loan
Documents,   the  Notes  and  any  such  Related   Agreements  and  Supplemental
Documentation.  Borrower is and will  continue to be duly  authorized  to borrow
monies  hereunder.  The execution,  delivery and performance by each of Borrower
and any  other  Obligor  a party  thereto  of this  Agreement,  the  Other  Loan
Agreements,  the Other Loan Documents,  the Notes, and any Related Agreements or
Supplemental  Documentation  contemplated by this Agreement,  and the borrowings
hereunder and thereunder, do not and will not require any consent or approval of
any governmental agency or authority.

         4.3 No Conflicts.  Except as set forth on Schedule 4.3, the  execution,
delivery and  performance  by Borrower and each other Obligor a party thereto of
this Agreement, the Other Loan Agreements,  the Other Loan Documents, the Notes,
and any Related  Agreements or Supplemental  Documentation  contemplated by this
Agreement do not and will not conflict  with (i) any  provision of law, (ii) the
charter or by-laws of Borrower or such Obligor, (iii) any agreement binding upon
Borrower  or such  Obligor or (iv) any court or  administrative  order or decree
applicable  to Borrower or such  Obligor,  and do not and will not  require,  or
result in, the  creation or  imposition  of any Lien on any asset of Borrower or
any of its Subsidiaries or such Obligor except as provided herein.

         4.4  Validity  and  Binding  Effect.  This  Agreement,  the Other  Loan
Agreements,  the Other Loan Documents,  the Notes, and any Related Agreements or
Supplemental  Documentation  contemplated by this Agreement,  when duly executed
and delivered, will be legal, valid and binding obligations of Borrower and each
other Obligor a party thereto,  enforceable against Borrower or such Obligor, as
applicable,  in accordance with their respective terms, except as enforceability
may be  limited  by  bankruptcy,  insolvency  or other  similar  laws of general
application  affecting  the  enforcement  of  creditors'  rights  or by  general
principles of equity limiting the availability of equitable remedies.

         4.5 No Default.  Except as set forth on Schedule 4.5,  neither Borrower
nor any of its  Subsidiaries  is in default under any agreement or instrument to
which Borrower or such Subsidiary is a party or by which any of their respective
properties or assets is bound or affected,  which  default  would  reasonably be
expected to materially and adversely  affect (i) Lender's Lien on or rights with
respect  to any  Collateral  or Third  Party  Collateral  or (ii) the  financial
condition  or  operations  of  Borrower,  any  Subsidiary  or  Borrower  and its
Subsidiaries  taken as a whole.  No Event of Default or Default has occurred and
is continuing.


                                       25

<PAGE>




         4.6 Financial  Statements.  Borrower's  consolidated and  consolidating
financial   statements  as  at  December  31,  1994  and  Borrower's   unaudited
consolidated and consolidating financial statements as at March 31, 1995, copies
of which  have  been or  concurrently  with  the  effectiveness  hereof  will be
furnished to Lender,  have been  prepared in  conformity  with GAAP applied on a
basis  consistent with that of the preceding  fiscal year and period and present
fairly the financial condition of Borrower and its Subsidiaries as at such dates
and the results of their operations for the periods then ended,  subject (in the
case of the interim financial  statements) to year-end audit adjustments.  Since
December 31, 1994,  there has been no material  adverse  change in the financial
condition of Borrower,  any Subsidiary or Borrower and its Subsidiaries taken as
a whole.

         4.7 Insurance.  Schedule 4.7 hereto is a complete and accurate  summary
of the  property  and  casualty  insurance  program  carried by Borrower and its
Subsidiaries  on the  date  hereof.  Schedule  4.7  includes  the  insurer's(s')
name(s), policy number(s), expiration date(s), amount(s) of coverage, type(s) of
coverage,  the annual  premium(s),  Best's  policyholder's  and  financial  size
ratings of the insurer(s),  exclusions,  deductibles and self-insured  retention
and describes in detail any retrospective  rating plan, fronting  arrangement or
any  other  self-insurance  or risk  assumption  agreed  to by  Borrower  or any
Subsidiary or imposed upon Borrower or any Subsidiary by any such insurer.  This
summary also includes any self-insurance program that is in effect.

         4.8      Litigation; Contingent Liabilities.

                  (a) Except for those  referred to in Schedule  4.8, no claims,
         litigation,  arbitration  proceedings or  governmental  proceedings are
         pending or, to the best of Borrower's knowledge,  threatened against or
         are affecting  Borrower or any  Subsidiary,  the results of which would
         reasonably  be  expected to  materially  and  adversely  affect (i) the
         financial  condition or  operations  of  Borrower,  any  Subsidiary  or
         Borrower  and  its  Subsidiaries  taken  as a whole  or  (ii)  Lender's
         interest  in  or  Lien  on  any  material  Collateral  or  Third  Party
         Collateral.

                  (b)  Other  than  any   liability   incident  to  the  claims,
         litigation or  proceedings  disclosed in Schedule 4.8 or Schedule 4.19,
         or provided for or disclosed in the financial statements referred to in
         Section  4.6,  neither  Borrower  nor any of its  Subsidiaries  has any
         contingent  liabilities which are material to Borrower,  any Subsidiary
         or Borrower and its Subsidiaries taken as a whole.

         4.9      Liens.  None of the Collateral, the Third Party Collateral
or any other property, revenues or assets of Borrower or any
Subsidiary is subject to any Lien (including but not limited to


                                       26

<PAGE>



Liens pursuant to Capitalized Leases under which Borrower or any Subsidiary is a
lessee) except:  (a) Liens permitted by Section 5.16; (b) Liens disclosed in the
financial  statements  referred  to in  Section  4.6;  and (c)  Liens  listed on
Schedule 4.9.

         4.10  Subsidiaries.  Borrower has no Subsidiaries  except for Delaware,
Contempo,  Contempo  Amsterdam and Contempo West.  Schedule 4.10 sets forth, for
each  Subsidiary,  a complete and accurate  statement of (a) Borrower's and each
Subsidiary's percentage ownership of each of their respective Subsidiaries,  (b)
the  state  or  other   jurisdiction  of  formation  or  incorporation  of  each
Subsidiary,  (c) each state in which each Subsidiary is qualified to do business
on the date of this  Agreement and (d) all of each  Subsidiary's  trade names or
doing business forms on the date of this Agreement.

         4.11  Partnerships;  Joint  Ventures.  Neither  Borrower nor any of its
Subsidiaries  is a partner or joint venturer in any partnership or joint venture
other than the partnerships and joint ventures listed on Schedule 4.11. Schedule
4.11 sets forth,  for each such  partnership  or joint  venture,  a complete and
accurate statement of (a) Borrower's and each Subsidiary's  percentage ownership
of each such partnership or joint venture,  (b) the state or other  jurisdiction
of formation or incorporation, as appropriate, of each such partnership or joint
venture,  (c) each  state in which  each such  partnership  or joint  venture is
qualified to do business on the date of this  Agreement and (d) all of each such
partnership's or joint venture's trade names or doing business forms on the date
of this Agreement.

         4.12  Business and Collateral Locations.

                  (a) On the date hereof the  offices  where  Borrower  and each
         Subsidiary  keeps  its  books  and  records   concerning  its  accounts
         receivable and other Collateral, and Borrower's chief place of business
         and chief executive  office,  are located at the addresses set forth on
         Schedule 4.12.  Schedule 4.12 contains a complete and accurate list, as
         of the  date of this  Agreement,  of (i) all of  Borrower's  places  of
         business  other than that  referred  to in the first  sentence  of this
         paragraph  (a) and (ii) all  locations  and places of  business of each
         Subsidiary  other than those  referred to in the first sentence of this
         paragraph  (a). On the date hereof,  the names of any  landlords of any
         such locations  (including  Borrower's place of business referred to in
         the first  sentence of this  paragraph  (a)) are identified in Schedule
         4.12.

                   (b) Schedule 4.12  contains a complete and accurate  list, as
         of  the  date  of  this  Agreement,  of  (i)  the  locations  of all of
         Borrower's  Inventory,  Equipment and Fixtures and the locations of all
         Inventory,  Equipment and Fixtures of any  Subsidiary  under each Other
         Loan Agreement, (ii) the locations


                                       27

<PAGE>



         of all Third Party  Collateral  (except any part thereof which prior to
         the execution of this  Agreement  Borrower shall have advised Lender in
         writing   consists  of  Collateral  or  Third  Party   Collateral,   as
         applicable,  normally  used in more than one state) and (iii) if any of
         Borrower's  or  any  Subsidiary's   Inventory  or  Equipment  or  other
         Collateral or any Third Party  Collateral,  is not in the possession or
         control of Borrower or such Subsidiary or the owner of such Third Party
         Collateral,  the name and mailing  address of each  bailee,  processor,
         ware- houseman or other Person in possession or control thereof.

         4.13 Real  Property.  Schedule  4.13  contains a complete  and accurate
list,  as of  the  date  of  this  Agreement,  of  (a)  the  address  and  legal
descriptions  of any real  property  owned by Borrower or any  Subsidiary  or on
which any  Fixtures  are  located  and (b) in the case of  Fixtures  located  on
property  not owned by  Borrower  or any  Subsidiary,  the  name(s)  and mailing
addresses of the record owners of such property.

         4.14  [Intentionally Left Blank.]

         4.15 Control of Collateral;  Lease of Property.  Except for Capitalized
Leases included on Schedule 5.15, Schedule 4.15 contains a complete and accurate
list of (a) all  leases  under  which  Borrower  or a  Subsidiary  is the lessee
covering  any  machinery,  equipment  or real  property  used by Borrower or any
Subsidiary and (b) the name and mailing  address of each lessor or owner of such
machinery, equipment or real property.

         4.16 Patents,  Trademarks,  etc.  Borrower and each of its Subsidiaries
possesses,  or has sufficient  rights in, adequate  assets,  licenses,  patents,
patent  applications,   copyrights,   trademarks,  trademark  applications,  and
tradenames  to  continue  to  conduct  its  respective  business  as  heretofore
conducted by it, and all such licenses, patents, patent applications, registered
copyrights,  trademarks,  trademark applications, and tradenames existing on the
date hereof and, in the case of patents,  trademarks and registered  copyrights,
the date of issuance thereof, are listed on Schedule 4.16.

         4.17 Solvency.  Borrower and each of its  Subsidiaries  now has capital
sufficient to carry on its respective business and transactions and all business
and transactions in which it is about to engage,  and is now solvent and able to
pay  its  respective  debts  as  they  mature,  and  Borrower  and  each  of its
Subsidiaries  now owns property  having a value,  both at fair  valuation and at
present fair salable value,  greater than the amount  required to pay Borrower's
or such Subsidiary's debts.

         4.18  Contracts; Labor Matters.  Except as disclosed on
Schedule 4.18:  (a) neither Borrower nor any Subsidiary is a party


                                       28

<PAGE>



to  any  contract  or  agreement,  or  is  subject  to  any  charge,   corporate
restriction,  judgment,  decree or order, which materially and adversely affects
its business, property, assets, operations or condition, financial or otherwise;
(b) no labor  contract  to which  Borrower  or any  Subsidiary  is a party or is
otherwise  subject is scheduled to expire prior to the current  Termination Date
or the "Termination  Date" under any Other Loan Agreement;  (c) neither Borrower
nor any Subsidiary has,  within the two-year  period  preceding the date of this
Agreement, taken any action which would have constituted or resulted in a "plant
closing" or "mass layoff"  within the meaning of the Federal  Worker  Adjustment
and Retraining Notification Act of 1988 or any similar applicable federal, state
or local law, and Borrower has no reasonable expectation that any such action is
or will be  required at any time prior to the  current  Termination  Date or the
"Termination  Date" under any Other Loan Agreement;  and (d) on the date of this
Agreement  (i) neither  Borrower nor any  Subsidiary  is a party to any material
labor dispute and (ii) there are no strikes or walkouts  pending or, to the best
knowledge  of  Borrower,  threatened  relating to any labor  contracts  to which
Borrower or any Subsidiary is a party or is otherwise subject.

         4.19  Pension and Welfare  Plans.  Each  Pension  Plan  complies in all
material  respects  with all  applicable  statutes  and  governmental  rules and
regulations;  no Reportable Event has occurred and is continuing with respect to
any Pension Plan;  neither  Borrower nor any ERISA  Affiliate has withdrawn from
any Multiemployer Plan in a "complete  withdrawal" or a "partial  withdrawal" as
defined  in  sections  4203 or 4205 of ERISA,  respectively;  no steps have been
instituted to terminate any Pension Plan; no  contribution  failure has occurred
with respect to any Pension Plan sufficient to give rise to a Lien under section
302(f) of ERISA;  no condition  exists or event or  transaction  has occurred in
connection with any Pension Plan or Multiemployer Plan which could result in the
incurrence by Borrower, any other Obligor or any ERISA Affiliate of any material
liability,  fine or penalty;  and neither Borrower nor any other Obligor nor any
ERISA Affiliate is a  "contributing  sponsor" as defined in section 4001(a) (13)
of ERISA of a  "single-employer  plan" as defined  in  section  4001 (a) (15) of
ERISA which has two or more  contributing  sponsors at least two of whom are not
under common control.  Except as listed in Schedule 4.19,  neither  Borrower nor
any Subsidiary has any contingent  liability with respect to any post-retirement
benefit under any "employee  welfare  benefit plans," as such term is defined in
section 3(1) of ERISA,  other than  liability for benefit  coverage  required by
applicable law, continuation coverage described in Part 6 of Title I of ERISA or
in section 4980B of the Code,  severance pay, benefits the full cost of which is
borne  by the  former  employee  (or  the  former  employee's  beneficiary),  or
disability,  medical or life  benefits  provided  due to  injuries,  sickness or
disease  commencing  prior to the  termination  of employment  ("Post-Retirement
Welfare Plans").



                                       29

<PAGE>



         4.20  Regulation  U.  Borrower  is  not  engaged  in  the  business  of
purchasing or selling Margin Stock or extending credit to others for the purpose
of  purchasing  or carrying  Margin  Stock,  and no part of the  proceeds of any
borrowing  hereunder  will be used to purchase or carry any Margin  Stock or for
any other  purpose  which  would  violate any of the margin  regulations  of the
Federal Reserve Board.

         4.21 Compliance. Except as described on Schedule 4.21 or Schedule 4.25,
Borrower and its Subsidiaries  are in material  compliance with all statutes and
governmental rules and regulations applicable to them.

         4.22 Taxes.  Borrower  and each of its  Subsidiaries  has filed all tax
returns  which are  required to have been filed and has paid,  or made  adequate
provisions  for the  payment  of,  all of its Taxes  which are due and  payable,
except  such  Taxes,  if  any,  as are  being  contested  in good  faith  and by
appropriate  proceedings  and as to which  such  reserves  or other  appropriate
provisions as may be required by GAAP have been  maintained.  The federal income
tax liability of Borrower and its domestic  Subsidiaries has been audited by the
Internal  Revenue Service and has been finally  determined and satisfied (or the
statute of limitations as provided in Code section 6501 has expired) for all tax
years up to and including  the tax year ended  December 31, 1986. To the best of
Borrower's knowledge, there is no proposed assessment against Borrower or any of
its  Subsidiaries  for additional  Taxes (or any basis for any such  assessment)
which  would  reasonably  be  expected  to  be  material  to  Borrower  and  its
Subsidiaries taken as a whole.

         4.23  Investment  Company Act  Representation.  None of Borrower or any
Subsidiary  is  an  "investment   company"  or  a  company  "controlled"  by  an
"investment  company" within the meaning of the Investment  Company Act of 1940,
as amended.  For purposes of this Section 4.23,  the term  "investment  company"
does not include so-called "private investment companies" that are exempted from
the definition of "investment company" under section 3(c)(1) of such Act.

         4.24  Public  Utility  Holding  Company  Act  Representation.  None  of
Borrower or any Subsidiary is a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company" within the meaning of
the Public Utility Holding Company Act of 1935, as amended.

         4.25  Environmental and Safety and Health Matters.  Except as disclosed
on Schedule 4.25,  Borrower and each of its  Subsidiaries  and/or each property,
operation and facility that Borrower or any Subsidiary may own,  lease,  operate
or control:  (i) complies in all respects with (A) all applicable  Environmental
Laws and (B) all  applicable  Occupational  Safety and Health Laws;  (ii) is not
subject to any judicial or administrative proceeding alleging the violation


                                       30

<PAGE>



of any  Environmental  Law or Occupational  Safety and Health Law; (iii) has not
received  any  notice  or  inquiry  (A)  that  it  may  be in  violation  of any
Environmental  Law or  Occupational  Safety and Health Law, (B)  threatening the
commencement  of any  proceeding  relating  to  allegedly  unlawful,  unsafe  or
unhealthy  conditions or (C) alleging that it is or may be  responsible  for any
response,  cleanup,  or  corrective  action,  including  but not  limited to any
remedial  investigation/feasibility  studies,  under  any  Environmental  Law or
Occupational Safety and Health Law; (iv) to the best of Borrower's knowledge, is
not the  subject  of  federal  or state  investigation  evaluating  whether  any
investigation,  remedial  action or other response is needed to respond to (A) a
spillage,  disposal or release or threatened release into the environment of any
Hazardous  Material or other hazardous,  toxic or dangerous waste,  substance or
constituent,  or other  substance  or (B) any  allegedly  unsafe or  unhealthful
condition;  (v) has not filed any notice under or relating to any  Environmental
Law or Occupational  Safety and Health Law  (excluding,  solely as to treatment,
storage  and  disposal,   any  routine  periodic  filings  required  under  law,
including, without limitation the Emergency Planning and Community Right-to-Know
Act, 42 U.S.C. ss.11001 et seq.) indicating or reporting (A) any past or present
spillage, disposal or release into the environment of, or treatment,  storage or
disposal  of, any  Hazardous  Material or other  hazardous,  toxic or  dangerous
waste,  substance or  constituent,  or other  substance  or (B) any  potentially
unsafe  or  unhealthful  condition,  and there  exists no basis for such  notice
irrespective  of  whether  such  notice  was  actually  filed;  and  (vi) has no
contingent  liability in connection  with (A) any actual or potential  spillage,
disposal or release into the  environment  of, or otherwise with respect to, any
Hazardous  Material or other hazardous,  toxic or dangerous waste,  substance or
constituent,  or other  substance,  whether on any premises owned or occupied by
Borrower  or any  Subsidiary  or on any  other  premises  or (B) any  unsafe  or
unhealthful  condition.  Except as  disclosed  on  Schedule  4.25,  there are no
underground  storage  tanks,  whether or not in use, in or under any property or
facilities owned, operated or controlled by Borrower or any Subsidiary and there
are no Hazardous  Materials  on, in or under any property or  facilities  owned,
operated or controlled by Borrower or any Subsidiary,  including but not limited
to such Hazardous  Materials that may be contained in underground storage tanks,
but excepting  such Hazardous  Materials used in accordance  with all applicable
laws and in the same manner as an ordinary consumer (e.g.,  gasoline in tanks of
motor vehicles, small amounts of cleaners, etc.).

         4.26 Related Agreements. All representations and warranties of Borrower
and its Subsidiaries contained in any Related Agreements are true and correct as
if made on the date  hereof and  Borrower  hereby  adopts and  affirms  all such
representations  and warranties  which Borrower  agrees shall be incorporated by
reference herein and made a part hereof.


                                       31

<PAGE>




5. BORROWER COVENANTS.  From the date of this Agreement and thereafter until the
Credit  is  terminated  and  all  Liabilities  of  Borrower  hereunder  and  all
"Liabilities"  of each  Subsidiary  under  and as  defined  in each  Other  Loan
Agreement are finally paid in full,  Borrower  agrees that,  unless Lender shall
otherwise consent in writing, it will:

         5.1 Financial Statements and Other Reports.  Furnish, or cause
to be furnished, to Lender in form reasonably satisfactory to
Lender:

                  5.1.1  Financial Reports:

                           (a) Annual Audit  Report.  Within one hundred  twenty
                  (120) days after each Fiscal Year of  Borrower,  a copy of the
                  annual audit report of Borrower and its Subsidiaries  prepared
                  on a consolidating  and  consolidated  basis and in conformity
                  with GAAP and  certified  by KPMG Peat  Marwick  or such other
                  independent   certified   public   accountant   who  shall  be
                  reasonably satisfactory to Lender, together with a certificate
                  from  such  accountant  (i)   acknowledging   to  Lender  such
                  accountant's  understanding that Lender and any Participant is
                  relying  on  such  annual  audit  report,  (ii)  containing  a
                  computation  of,  and  showing  compliance  with,  each of the
                  financial ratios and restrictions  contained in this Section 5
                  or in  Supplement  A, and (iii) to the effect that,  in making
                  the examination necessary for the signing of such annual audit
                  report,  such  accountant has not become aware of any Event of
                  Default or Default that has occurred and is continuing, or, if
                  such accountant has become aware of any such event, describing
                  it and the steps, if any, being taken to cure it;

                           (b) Quarterly Financial Statement.  Within forty-five
                  (45) days after each Fiscal Quarter of Borrower, a copy of the
                  unaudited financial statement of Borrower and its Subsidiaries
                  prepared in the same manner as the audit report referred to in
                  the preceding clause (a), signed by Borrower's chief financial
                  officer and  consisting  of at least a balance sheet as at the
                  close of such Fiscal  Quarter and  statements  of earnings and
                  cash flows for such Fiscal Quarter and for the period from the
                  beginning  of such  Fiscal  Year to the  close of such  Fiscal
                  Quarter;

                           (c) Monthly  Financial  Statement.  Within forty-five
                  (45) days after the end of each month of each  Fiscal  Year of
                  Borrower,  a copy  of the  unaudited  financial  statement  of
                  Borrower and its  Subsidiaries  prepared in the same manner as
                  the audit  report  referred  to in the  preceding  clause (a),
                  signed by Borrower's chief financial officer and consisting of
                  at least a balance sheet as at the close


                                       32

<PAGE>



                  of such month and  statements  of earnings  and cash flows for
                  such  month  and for the  period  from the  beginning  of such
                  Fiscal Year to the close of such month; and

                           (d)   Officer's   Certificate.   Together   with  the
                  financial statements furnished by Borrower under the preceding
                  clauses (a), (b) and (c), a certificate of Borrower  signed by
                  Borrower's  chief  financial  officer,  dated the date of such
                  annual  audit report or such  quarterly  or monthly  financial
                  statement,  as the case may be, containing a statement that no
                  Event of Default or Default has  occurred  and is  continuing,
                  or, if there is any such event,  describing  it and the steps,
                  if any,  being taken to cure it, and  containing a computation
                  of, and showing  compliance with, each of the financial ratios
                  and restrictions  contained in this Section 5 or in Supplement
                  A.

                  5.1.2  Other Reports:

                           (a) SEC and Other Reports.  Copies of each filing and
                  report  made  by  Borrower  or any  Subsidiary  with or to any
                  securities  exchange or the Securities and Exchange Commission
                  and of each  communication  from Borrower or any Subsidiary to
                  shareholders  generally,  promptly  upon the  filing or making
                  thereof;

                           (b)  Report of Change Relating to Borrower,
                  Subsidiaries, Partnerships or Joint Ventures.  Promptly
                  from time to time, a written report of any change in the
                  information set forth in Schedule 4.1, Schedule 4.10 or
                  Schedule 4.11 concerning Borrower, any Subsidiary, or any
                  partnership or joint venture;

                           (c)   Patents, etc.  Promptly from time to time, a
                  written report of any change to the list of patents,
                  trademarks, copyrights and other information set forth in
                  Schedule 4.16; and

                           (d)  Other Reports.  As soon as practicable from time
                  to time, such other reports or information reasonably
                  requested by Lender.

         5.2  Notices.  Notify  Lender  in  writing  of  any  of  the  following
immediately upon learning of the occurrence  thereof (or, in the case of clauses
(e) and (f) of this  Section  5.2,  at  least 30 days  prior  to the  occurrence
thereof  to the extent  applicable  to  Borrower,  any  Subsidiary  or any other
Obligor),  describing the same and, if applicable,  the steps being taken by the
Person(s) affected with respect thereto:



                                       33

<PAGE>



                  (a) Default.  The  occurrence  of (i) an Event of Default or a
         Default  and (ii) to the  extent  not  included  in clause  (i) of this
         Section 5.2(a), the default by Borrower,  Delaware,  Contempo, Contempo
         West,  any  other  Obligor  or any  Subsidiary  under  any  Other  Loan
         Agreement or any material note,  indenture,  loan agreement,  mortgage,
         lease,  deed or other  material  similar  agreement to which  Borrower,
         Delaware, Contempo, Contempo West, any other Obligor or any Subsidiary,
         as appropriate, is a party or by which it is bound;

                  (b) Litigation. The institution of any litigation, arbitration
         proceeding or governmental  proceeding  affecting  Borrower,  Delaware,
         Contempo,  Contempo  West,  any  other  Obligor,  any  Subsidiary,  any
         Collateral or any Third Party Collateral,  whether or not considered to
         be covered by insurance, if the amount in controversy exceeds $10,000;

                  (c) Judgment.  The entry of any judgment or decree
         against Borrower, Delaware, Contempo, Contempo West, any other
         Obligor or any Subsidiary, if the amount of such judgment
         exceeds $25,000;

                  (d)  Pension  Plans and Welfare  Plans.  The  occurrence  of a
         Reportable  Event with  respect to any  Pension  Plan;  the filing of a
         notice of intent to  terminate a Pension  Plan by  Borrower,  any ERISA
         Affiliate,  or any other  Obligor;  the  institution  of proceedings to
         terminate  a  Pension  Plan  by the  PBGC  or  any  other  Person;  the
         withdrawal  in a "complete  withdrawal"  or a "partial  withdrawal"  as
         defined in sections 4203 and 4205, respectively,  of ERISA by Borrower,
         any ERISA Affiliate or any other Obligor from any  Multiemployer  Plan;
         the failure of Borrower,  any other  Obligor or any ERISA  Affiliate to
         make a required  contribution  to any Pension  Plan,  including but not
         limited to any  failure to pay an amount  sufficient  to give rise to a
         Lien under  section  302(f) of ERISA;  the  taking of any  action  with
         respect to a Pension  Plan which could result in the  requirement  that
         Borrower,  any other Obligor or any ERISA  Affiliate  furnish a bond or
         other  security  to the PBGC or such  Pension  Plan other than the bond
         required by section  412 of ERISA;  the  occurrence  of any other event
         with respect to any Pension  Plan which could result in the  incurrence
         by Borrower,  any other Obligor or any ERISA  Affiliate of any material
         liability,  fine or penalty; or the incurrence of any material increase
         in the  contingent  liability  of  Borrower,  any other  Obligor or any
         Subsidiary with respect to any Post-Retirement Welfare Plans;

                  (e)  Business and Collateral Information.  Any change or
         proposed change in any of the information set forth on Schedule
         4.12, 4.13 or 4.15, including but not limited to (i) any change
         in the location of any of Borrower's Inventory or Equipment or

                                       34

<PAGE>



         any other  Collateral or Third Party  Collateral,  (ii) the identity of
         any new bailee,  processor,  warehouseman or other Person in possession
         or control of any of  Borrower's  Inventory  or  Equipment or any other
         Collateral or Third Party  Collateral,  (iii) any change in the name or
         address of the lessor or owner of any real property or equipment leased
         to Borrower,  any  Subsidiary or any other  Obligor,  (iv) any proposed
         change  in  the  location  of  Borrower's  or  any  Subsidiary's  chief
         executive office or chief place of business,  (v) any proposed opening,
         closing  or other  change in the list of  offices  and other  places of
         business of Borrower or any Subsidiary and (vi) any opening, closing or
         other  change in the offices and other  places of business of any other
         Obligor;

                  (f) Change of Name or Status.  Any change in the name or
         address of Borrower, any Subsidiary or any other Obligor, as
         well as any change in the list of tradenames set forth in
         Schedule 4.1;

                  (g) Insurance Information.  Any material change in the
         information set forth in Schedule 4.7;

                  (h) Environmental and Safety and Health Matters.  The
         occurrence of any event, or the acquisition of any information
         which, if it had occurred or was true on or before the
         Restatement Date, would have been required to have been
         disclosed and included on Schedule 4.25, including but not
         limited to (i) existence of any Environmental Lien and (ii)
         receipt of any notice from any federal, state or local
         government or agency with respect to any actual or alleged
         violation of any Environmental Law or any Occupational Safety
         and Health Law;

                  (i) Material Adverse Change.  The occurrence of a
         material adverse change in the business, operations or
         financial condition of Borrower, any other Obligor or any
         Subsidiary;

                  (j) Default by Others.  Any  material  default by any Account
         Debtor or other Person obligated to Borrower, any other Obligor, or any
         Subsidiary under any contract, chattel paper, note or other evidence of
         amounts  payable or due or to become due to  Borrower,  such Obligor or
         such  Subsidiary  if the amount  payable under such  contract,  chattel
         paper,  note or other  evidence of amounts  payable or due or to become
         due is material;

                  (k) Moveable Collateral.  If any of the Collateral or
         Third Party Collateral shall consist of goods of a type
         normally used in more than one state, whether or not actually
         so used, any use of any such goods in any state other than a



                                       35

<PAGE>



         state in which Borrower shall have previously advised Lender such goods
         will be used.  Borrower  agrees that such goods will not, unless Lender
         shall  otherwise  consent in writing,  be used outside the  continental
         United States or in Louisiana;

                  (l) Change in Management or Line(s) of Business.  Any
         substantial change in the senior management of Borrower or any
         Subsidiary, or any change in Borrower's or any Subsidiary's
         line(s) of business; and

                  (m) Other  Notices.  Any  notices  required  to  be  provided
         pursuant  to any  Related  Agreement  or the other  provisions  of this
         Agreement,  and notice of the occurrence of such other events as Lender
         may reasonably specify from time to time.

         5.3  Existence.  Maintain and  preserve,  and cause each  Subsidiary to
maintain and preserve,  its respective  existence as a corporation or other form
of  business  organization,  as the case  may be,  and all  rights,  privileges,
licenses,   patents,  patent  rights,  copyrights,   trademarks,   trade  names,
franchises  and other  authority to the extent  material and  necessary  for the
conduct of its respective business in the ordinary course as conducted from time
to time.

         5.4  Nature of Business.  Engage, and cause each Subsidiary to engage
engage,  in substantially the same fields of business as it is engaged in on the
date hereof.

         5.5  Books, Records and Access.  Maintain, and cause each Subsidiary to
maintain,  complete and accurate books and records (including but not limited to
records  relating  to  Accounts  Receivable,   Inventory,  Equipment  and  other
Collateral),  in which full and correct entries in conformity with GAAP shall be
made of all dealings and transactions in relation to its respective business and
activities;  cause its books and records as at the end of any calendar  month to
be posted and closed not more than fifteen (15) days after the last business day
of such month; and permit, and cause each Subsidiary to permit, access by Lender
and its  agents  or  employees  upon not less than one  day's  prior  telephonic
notice,  such access to be given during normal  business  hours (except after an
Event of Default or a Default  shall have occurred and be  continuing,  in which
case no notice shall be required and no limitation on the business  hours of the
investigation  shall  apply) to the  books  and  records  of  Borrower  and such
Subsidiary  at Borrower's  or such  Subsidiary's  place or places of business at
intervals to be determined by Lender and without hindrance or delay, and on like
notice  permit  and cause  each  Subsidiary  to permit  Lender or its agents and
employees  to  inspect   Borrower's  and/or  such  Subsidiary's   inventory  and
Equipment,   to  perform  appraisals  of  Borrower's  and/or  such  Subsidiary's
equipment, and to inspect, audit, check and make copies and/or extracts from the
books, records, computer data and


                                       36

<PAGE>



records, computer programs, journals, orders, receipts, correspondence and other
data  relating to  Inventory,  Accounts  Receivable,  Contract  Rights,  General
Intangibles,  Equipment and any other Collateral or Third Party  Collateral,  or
relating to any other transactions  between the parties hereto. Any and all such
inspections and/or audits shall be at Borrower's expense, and Lender may advance
the same to Borrower as a Loan.  Notwithstanding  the  foregoing,  as long as no
Event of Default or Default has occurred and is  continuing,  Borrower shall not
be required to reimburse  Lender for appraisals of Equipment of Borrower and its
Subsidiaries more frequently than once each Fiscal Year.

         5.6  Insurance.  Maintain,  and  cause  each  Subsidiary  to  maintain,
insurance to such extent and against such hazards and liabilities as is commonly
maintained by companies  similarly  situated or as Lender may reasonably request
from time to time. Keep the Collateral  properly housed and insured for its full
insurable value against loss or damage by fire,  theft,  explosion,  sprinklers,
collision  (in  the  case  of  motor  vehicles)  and  such  other  risks  as are
customarily  insured against by persons  engaged in business  similar to that of
Borrower,  with such companies,  in such amounts and under policies in such form
as shall be reasonably satisfactory to Lender.  Certificates of such policies of
insurance have been  delivered to Lender prior to the date hereof  together with
evidence of payment of all premiums  therefor.  Borrower shall cause each issuer
of an insurance policy to provide Lender, prior to the Restatement Date, with an
endorsement  or an  independent  instrument  (i)  substantially  in the  form of
Exhibit  D or such  other  form  and  containing  such  other  terms as shall be
acceptable to Lender and (ii) showing loss payable to Lender and, if required by
Lender,  naming Lender as an additional  insured.  Borrower  hereby  directs all
insurers under such policies of insurance to pay all proceeds payable thereunder
directly to Lender. Borrower appoints Lender and any Person whom Lender may from
time to time  designate  (and all  officers,  employees or agents  designated by
Lender or such Person) as Borrower's true and lawful attorney and  agent-in-fact
with power to make,  settle and adjust  claims under such policies of insurance,
endorse the name of Borrower on any check,  draft,  instrument  or other item of
payment  for  the  proceeds  of  such   policies  of  insurance   and  make  all
determinations  and decisions  with respect to such  policies of insurance.  The
foregoing  appointment  and power,  being  coupled  with an  interest,  shall be
irrevocable  until  all  Liabilities  are  paid and  performed  in full and this
Agreement is terminated.  In the event Borrower or any Subsidiary at any time or
times  hereafter  shall  fail to  obtain  or  maintain  any of the  policies  of
insurance  required  herein or to pay any  premium in whole or in part  relating
thereto,  then Lender,  without  waiving or releasing any  obligation or default
hereunder, may at any time or times thereafter (but shall be under no obligation
to do so) obtain and maintain  such  policies of insurance and pay such premiums
and take any other action with respect  thereto  which Lender  reasonably  deems
advisable. All sums


                                       37

<PAGE>



so disbursed by Lender,  including  Attorneys' Fees,  court costs,  expenses and
other  charges  relating  thereto,  shall be  payable on demand by  Borrower  to
Lender, and Lender may, in its sole and absolute  discretion,  advance such sums
to Borrower as a Loan.

         5.7 Insurance  Survey.  Provide to Lender at least annually  within 120
days of the end of Borrower's  Fiscal Year, a certificate of Borrower  signed by
its president or a vice president of Borrower that attests to and summarizes the
property  and   casualty   insurance   program   carried  by  Borrower  and  its
Subsidiaries.  This summary  shall  include the  insurer's(s')  name(s),  policy
number(s),  expiration date(s),  amount(s) of coverage, type(s) of coverage, the
annual  premium(s),  Best's  policyholder's  and  financial  size ratings of the
insurer(s),   exclusions,  deductibles  and  self-insured  retention  and  shall
describe in detail any retrospective  rating plan,  fronting  arrangement or any
other  self-insurance or risk assumption agreed to by Borrower or any Subsidiary
or imposed upon Borrower or any  Subsidiary by any such insurer,  as well as any
self-insurance  program  that is in  effect.  Borrower  shall  notify  Lender in
writing (1) at least 20 days prior to any cancellation or material change of any
such  insurance by Borrower or any  Subsidiary,  and (2) within 5 business  days
after receipt of any notice (whether formal or informal) of any  cancellation or
change in any of its insurance by any of its insurers or any material  change in
the cost thereof or which reduces the  policyholder's  or financial size ratings
of the insurance carriers of Borrower or any of its Subsidiaries, as established
by Best's Insurance  Reports.  Annually,  Lender shall have the right to request
Borrower to have a risk management survey completed by a recognized  independent
risk  management  consultant  acceptable  to it and Lender which will  identify,
quantify and assess any  catastrophic  uninsured,  underinsured  or self-insured
exposures faced by Borrower and its Subsidiaries.  The cost of such survey shall
be borne solely by Borrower.  A copy of the results of each such survey shall be
promptly delivered by Borrower to Lender.

         5.8 Repair.  Maintain,  preserve and keep, and cause each Subsidiary to
maintain,  preserve and keep, its respective  properties in operating  condition
and repair,  ordinary wear and tear  excepted,  and from time to time make,  and
cause each Subsidiary to make, all necessary  repairs,  renewals,  replacements,
additions,  betterments  and  improvements  thereto  so  that at all  times  the
efficiency thereof shall be fully preserved and maintained.

         5.9 Taxes.  Pay, and cause each Subsidiary to pay, when due, all of its
Taxes,  unless  and only to the  extent  that  Borrower  or such  Subsidiary  is
contesting such Taxes in good faith and by appropriate  proceedings and Borrower
or such Subsidiary has set aside on its books such reserves or other appropriate
provisions therefor as may be required by GAAP.



                                       38

<PAGE>



         5.10  Compliance.  Comply in all  material  respects,  and  cause  each
Subsidiary  to  comply  in  all  material   respects,   with  all  statutes  and
governmental rules and regulations applicable to it.

         5.11  Pension  Plans.  Not  permit,  and not permit any  Subsidiary  to
permit,  any condition to exist in connection  with any Pension Plan which would
reasonably constitute grounds for the PBGC to institute proceedings to have such
Pension Plan terminated or a trustee  appointed to administer such Pension Plan;
not fail, and not permit any Subsidiary to fail, to make a required contribution
to any Pension Plan if such failure is  sufficient  to give rise to a Lien under
section  302(f) of ERISA;  and not  engage  in, or permit to exist or occur,  or
permit any of its  Subsidiaries  to engage in, or permit to exist or occur,  any
other  condition,  event or  transaction  with respect to any Pension Plan which
could result in the  incurrence  by Borrower or any of its  Subsidiaries  of any
material liability, fine or penalty.

         5.12  Merger, Purchase and Sale. Not, and not permit any Subsidiary to:
(a) be a party to any merger,  liquidation or  consolidation;  (b) except in the
normal  course of its business and except as permitted by the proviso to Section
3.4(a), sell, transfer, convey, lease or otherwise dispose of any of its assets;
(c) sell or assign, with or without recourse, any Accounts Receivable,  Contract
Rights, notes receivable or chattel paper, except as provided in this Agreement;
or (d) purchase or otherwise  acquire all or substantially all the assets of any
Person; provided, however, that the Fuse World Acquisition shall be permitted if
the Lender  has  received  five  Business  Days'  prior  written  notice of such
acquisition  and if, prior to such  acquisition or  contemporaneously  with such
acquisition, the following conditions precedent shall have been satisfied

                  (i) if,  after the Fuse World  Acquisition,  Fuse World  shall
         continue to exist as a separate legal entity, (x) Delaware shall pledge
         to the Lender all of the  outstanding  shares of capital  stock of Fuse
         World  pursuant to an  amendment  to the Pledge  Agreement  in form and
         substance  satisfactory to the Lender and shall deliver to Lender share
         certificates  representing  all of the  outstanding  shares of  capital
         stock of Fuse World along with undated  stock  powers duly  executed in
         blank, (y) Fuse World shall become a party to the Guaranty  pursuant to
         an amendment to the Guaranty in form and substance  satisfactory to the
         Lender and (z) Fuse World shall grant to the Lender a security interest
         in all of its  personal  property  pursuant to a security  agreement in
         substantially the form of the Original Security Agreement,

                  (ii)   Delaware   shall   have   delivered   to   the   Lender
         acknowledgment   copies  of  properly  filed  Uniform  Commercial  Code
         financing statements (Form UCC-1) or such other evidence of


                                       39

<PAGE>



         filing as may be acceptable  to the Lender,  naming  Delaware  (and, if
         after the Fuse World  Acquisition  Fuse World continues to exist,  Fuse
         World) as the debtor and the Lender as the secured party,  filed in all
         jurisdictions  as may be necessary or desirable to perfect the security
         interest of the Lender in the collateral of Delaware (and, if after the
         Fuse World Acquisition Fuse World continues to exist, Fuse World),

                  (iii)  Delaware  shall have  delivered to the Lender  executed
         copies  of  proper  Uniform  Commercial  Code  Form  UCC-3  termination
         statements,  if any, necessary to release all Liens and other rights of
         any Person other than the Lender in any collateral being granted to the
         Lender  pursuant to the  Delaware  Loan  Agreement  or, if  applicable,
         clause (i)(z) above, and

                  (iv)  Delaware  shall have  delivered to the Lender  certified
         copies of Uniform  Commercial  Code Requests for  Information or Copies
         (Form  UCC-11),  or a  similar  search  report  certified  by  a  party
         acceptable  to the  Lender,  dated a date  satisfactory  to the Lender,
         listing all effective  financing  statements which name either Delaware
         or Fuse World, under their present names and any previous names, as the
         debtor and which are filed in the  jurisdictions  in which filings were
         made  pursuant  to clause  (ii)  above,  together  with  copies of such
         financing statements.

         5.13  Restricted Payments.

                  (a) Borrower  will not  declare,  pay, or make any dividend or
         distribution (in cash,  property,  or obligations) on any shares of any
         class of capital stock (now or hereafter outstanding) of Borrower or on
         any  warrants,  options,  or other rights with respect to any shares of
         any class of capital stock (now or hereafter  outstanding)  of Borrower
         (other  than  dividends  or  distributions  payable  in its  stock,  or
         warrants to purchase its stock, or splitups or reclassifications of its
         stock into additional or other shares of its stock) or apply, or permit
         any Subsidiary to apply, any of its funds,  property,  or assets to the
         purchase,  redemption,  sinking fund, or other retirement of any shares
         of any  class  of  capital  stock  (now or  hereafter  outstanding)  of
         Borrower;

                  (b) Borrower will not permit any  Subsidiary to declare,  pay,
         or  make  any  dividend  or  distribution   (in  cash,   property,   or
         obligations)  on any  shares  of any  class of  capital  stock  (now or
         hereafter outstanding) of such Subsidiary or on any warrants,  options,
         or other  rights  with  respect  to any  shares of any class of capital
         stock (now or hereafter outstanding) of such Subsidiary or apply any of
         its funds,  property,  or assets to the purchase,  redemption,  sinking
         fund,  or other  retirement of any shares of any class of capital stock
         (now or hereafter


                                       40

<PAGE>



         outstanding) of such  Subsidiary  other  than  (x)  dividends  paid to
         Borrower  to   reimburse   Borrower   for   Borrower's   overhead   and
         administrative expenses and (y) dividends of Contempo Amsterdam paid to
         Contempo;

                  (c) Borrower will not, and will not permit any  Subsidiary to,
         pay or prepay any  principal of, or make any payment of interest on, or
         redeem,  purchase, or defease, any Subordinated Debt (except (x) solely
         to the  extent  of and with the net cash  proceeds  of an  offering  of
         equity securities by Borrower and (y) intercompany Indebtedness held by
         Borrower or another Obligor); and

                  (d)  Borrower will not, and will not permit any Subsidiary
         to, make any deposit for any of the foregoing purposes;

provided, however, that

                  (e)  Borrower  may,  subject to the  subordination  provisions
         applicable to any of its  Subordinated  Debt and provided that no Event
         of Default or Default has  occurred  and is  continuing  or would exist
         after  giving  effect to any such  payment,  make  payments of interest
         accrued thereon when due; and

                  (f)  Borrower may make the payments described in Schedule
         5.13.

         5.14  Borrower's and Subsidiaries' Stock. Not permit any Subsidiary to
purchase or otherwise acquire any shares of the stock of Borrower,  and not take
any action, or permit any Subsidiary to take any action,  which will result in a
decrease in Borrower's or any Subsidiary's ownership interest in any Subsidiary.

         5.15  Indebtedness.  Not,  and not permit any  Subsidiary  to, incur or
permit to exist any  Indebtedness  (including but not limited to Indebtedness as
lessee under Capitalized Leases), except: (a) Indebtedness under this Agreement;
(b) Subordinated  Debt; (c) Indebtedness owing by Borrower or another Obligor to
Borrower or another Obligor which is evidenced by a note pledged to Lender under
the Pledge Agreement;  (d) other Indebtedness outstanding on the date hereof and
listed on Schedule 5.15; (e) Indebtedness  hereafter incurred in connection with
Liens permitted under Section  5.16(d);  (f)  Indebtedness  issued in connection
with that  certain  Stock  Appreciation  Plan  adopted  by  Borrower's  Board of
Directors on October 30, 1988 (the "Stock  Appreciation  Plan") which is not due
and payable until  Borrower  shall offer to redeem its Series A Preferred  Stock
(which  offer shall not violate  Section  5.13);  (g)  Indebtedness  of Contempo
Amsterdam to Contempo or another Obligor which is evidenced by a note pledged to
Lender in an amount not to exceed $350,000 at any one time outstanding; (h) from
and after the time of the Fuse World Acquisition (or the stock acquisition


                                       41

<PAGE>



described in clause (i) of the  definition  thereof),  Indebtedness  of Delaware
described in the "Shareholder  Note" section of the Fuse World Letter of Intent,
provided that such  Indebtedness is  subordinated,  in a manner  satisfactory to
Lender,  as to right of  payment  of  principal  and  interest  thereon,  to all
Liabilities  of  Delaware;  and (i) other  Indebtedness  approved  in writing by
Lender.

         5.16 Liens.  Not, and not permit any Subsidiary to, create or permit to
exist any Lien with  respect to any  property,  revenue or assets,  whether  now
owned or hereafter acquired,  except: (a) Liens for current Taxes not delinquent
or Taxes being contested in good faith and by appropriate  proceedings and as to
which such reserves or other  appropriate  provisions as may be required by GAAP
are being maintained; (b) carriers', warehousemen's,  mechanics', materialmen's,
repairmen's,  and other like statutory  Liens arising in the ordinary  course of
business securing obligations which are not overdue or which are being contested
in good faith and by  appropriate  proceedings  and as to which such reserves or
other  appropriate  provisions as may be required by GAAP are being  maintained;
(c) pledges or deposits in connection with workers'  compensation,  unemployment
insurance and other social  security  legislation;  (d) Liens in connection with
the  acquisition  of property  after the date  hereof by way of  purchase  money
mortgage, conditional sale or other title retention agreement, Capitalized Lease
or other  deferred  payment  contract,  and attaching only to the property being
acquired,  if (i) the  Indebtedness  secured  thereby does not exceed 80% of the
fair market value of such  property at the time of the  acquisition  thereof and
(ii) the aggregate  outstanding  amount of such Indebtedness of Borrower and its
Subsidiaries does not exceed $100,000;  (e) Liens in favor of Lender;  (f) Liens
referred to in clauses (b) and (c) of Section  4.9; (g) Liens  granted  prior to
December  31, 1987 to secure  Indebtedness  which is  permitted by clause (c) of
Section 5.15; and (h) Liens consented to in writing by Lender.

         5.17 Guaranties.  Not, and not permit any Subsidiary to, become or be a
guarantor  or surety of, or  otherwise  become or be  responsible  in any manner
(whether by agreement  to purchase  any  obligations,  stock,  assets,  goods or
services,  or to supply or advance  any funds,  assets,  goods or  services,  or
otherwise) with respect to, any undertaking of any other Person,  except for (i)
the endorsement, in the ordinary course of collection, of instruments payable to
it or its order,  (ii) the  guaranty of Borrower  contained in Section 12, (iii)
the Related  Agreements  and (iv)  guaranties by Borrower of the  obligations of
Delaware, Contempo and Contempo West under real estate leases.

         5.18  Investments.  Not, and not permit any Subsidiary to, make
or permit to exist any Investment in any Person, except for: (a)
advances to employees of Borrower or any of its Subsidiaries for
travel or other ordinary business expenses provided that the


                                       42

<PAGE>



aggregate  amount  outstanding  at any one time shall not exceed $15,000 for any
single employee and $50,000 in the aggregate for all employees;  (b) advances to
subcontractors and suppliers in maximum aggregate amounts reasonably  acceptable
to Lender but in any event not  exceeding  an  aggregate  outstanding  amount of
$35,000;  (c) extensions of credit in the nature of Accounts Receivable or notes
receivable arising from the sale of goods and services in the ordinary course of
business;  (d) shares of stock,  obligations  or other  securities  received  in
settlement of claims arising in the ordinary course of business; (e) Investments
(other than  Investments in the nature of loans or advances)  outstanding on the
date hereof in Subsidiaries by Borrower and other Subsidiaries;  (f) Investments
in the nature of loans and advances constituting Indebtedness of Subsidiaries to
Borrower and to other Subsidiaries  outstanding on the date hereof and listed on
Schedule 5.18 and Investments representing  Indebtedness permitted under Section
5.15(c) and (g); (g) other Investments outstanding on the date hereof and listed
on Schedule 5.18;  (h) the  Investment by Delaware in Fuse World  represented by
the Fuse World Acquisition;  and (i) other Investments consented to by Lender in
writing.

         5.19  Subsidiaries.  Not, and not permit any Subsidiary to, acquire any
stock or similar  interest in any Person,  and not create,  establish or acquire
any  Subsidiaries  other than those  existing on the date of this  Agreement and
except that Delaware may purchase the outstanding capital stock of Fuse World in
the Fuse World  Acquisition  provided  that within 10 days'  thereof  Fuse World
shall be dissolved or merged into Delaware.

         5.20  Leases.  Not  enter  into or  permit  to  exist,  or  permit  any
Subsidiary to enter into or permit to exist, any arrangements for the leasing by
Borrower or such Subsidiary,  as lessee under a lease which is not a Capitalized
Lease,  of any real or personal  property (or any interest  therein)  other than
under leases in  existence  on the date hereof and listed on Schedule  4.15 (and
renewals,  replacements  and  extensions  thereof  entered into on  commercially
reasonable  terms);  provided,  however,  that Borrower and its Subsidiaries may
enter into additional  leases of personal or real property after the date hereof
which, in the aggregate for all such leases,  do not require rental payments for
any Fiscal Year in excess of $50,000.

         5.21 Change in Accounts Receivable. After the occurrence of an Event of
Default or a Default, permit or agree to any extension, compromise or settlement
or make any change or  modification  of any kind or nature  with  respect to any
Account Receivable, including any of the terms relating thereto.

         5.22  Future Environmental Assessments.  Borrower shall provide
such information and certifications which Lender may reasonably
request from time to time pertaining to the environmental aspects of


                                       43

<PAGE>



Borrower and its Subsidiaries and any property owned,  operated or controlled by
Borrower or any Subsidiary. To investigate environmental aspects of Borrower and
its Subsidiaries and their properties,  facilities and operations, Lender or its
agents shall have the right upon prior notice to Borrower and at any  reasonable
time to enter upon the  property of Borrower or any  Subsidiary,  take  samples,
review the books,  records or other documents of Borrower and its  Subsidiaries,
interview  officers and employees of Borrower or its  Subsidiaries,  and conduct
such other  activities as Lender,  in its sole  discretion,  deems  appropriate;
provided, however, that (i) Lender's activities shall not unreasonably interfere
with Borrower's  operations,  and (ii) Lender shall provide Borrower with a copy
of any written findings or results of such assessment. Borrower shall, and shall
cause  its  Subsidiaries  to,  cooperate  fully  in  the  conduct  of  any  such
assessment.  If Lender  decides  to cause  such an  assessment  to be  conducted
because  of (a)  Lender's  considering  taking  possession  of or  title  to the
property after the occurrence of an Event of Default or (b) a material change in
the use of the  property  which,  in  Lender's  opinion,  increases  the risk of
non-compliance  with  Environmental  Laws  or  increases  the  risk  of  cost or
liabilities  thereunder,  then  Borrower  shall  pay upon  demand  all costs and
expenses (including Attorneys' Fees) connected with such assessment. Lender may,
in its discretion, provide for the payment of any amount due from Borrower under
this Section 5.22 by making  Borrower a Loan.  Nothing in this Section 5.22, and
no actions  taken by Lender  pursuant  thereto,  shall give,  or be construed as
controlling  or giving,  to Lender the right or  obligation to direct or control
the conduct or action or inaction of Borrower or any Subsidiary  with respect to
any  environmental  matters,  including  but not limited to those  pertaining to
compliance with any Environmental Laws.

         5.23  [Intentionally Left Blank.]

         5.24  Unconditional Purchase Options.  Not enter into or be a party to,
or permit any  Subsidiary  to enter into or be a party to any  contract  for the
purchase of materials,  supplies or other property or services, if such contract
requires  that  payment be made by it  regardless  of whether or not delivery is
ever made of such materials, supplies or other property or services.

         5.25 Use of Proceeds. Not use or permit any proceeds of the Loans to be
used,  either  directly  or  indirectly,  for the  purpose,  whether  immediate,
incidental  or ultimate,  of  "purchasing  or carrying"  any Margin  Stock,  and
furnish to Lender upon request,  a statement in conformity with the requirements
of Federal  Reserve Form U-1 referred to in Regulation U of the Federal  Reserve
Board.

         5.26  Transactions with Related Parties.  Not, and not permit
any Subsidiary to, enter into or be a party to any transaction or
arrangement, including, without limitation, the purchase, sale,


                                       44

<PAGE>



lease or exchange of property or the rendering of any service,  with any Related
Party,  except (x) in the  ordinary  course of and  pursuant  to the  reasonable
requirements  of  Borrower's  or such  Subsidiary's  business  and upon fair and
reasonable  terms no less  favorable to Borrower or such  Subsidiary  than would
obtain in a comparable  arm's-  length  transaction  with a Person not a Related
Party and (y) transactions  permitted by Section 5.15(c) and (g) and 5.18(e) and
(f).

         5.27 Modification of Subordinated Debt, etc. From and after the date of
issuance of any Indebtedness qualifying as Subordinated Debt (including, without
limitation,  the  Subordinated  Debt  referenced  in clauses (i) and (ii) of the
definition of Subordinated Debt), not, and not permit any Subsidiary to, consent
to any  amendment,  supplement,  or  other  modification  of  any  of the  terms
(including  acceleration,   covenant,  default,  subordination,   sinking  fund,
repayment,  interest rate, or redemption  provisions contained in, or applicable
to, any instrument  evidencing or applicable to any Subordinated Debt) contained
in or applicable to any instrument  evidencing or applicable to any Subordinated
Debt held by a non-  Obligor,  other than any  amendment,  supplement,  or other
modification  which  extends  the date or  reduces  the  amount of any  required
repayment or redemption.

         5.28  Restrictive  Agreements.  Not, and not permit any  Subsidiary to,
enter into any agreement or  arrangement  which  contains a  restriction  on the
ability of such  Subsidiary to make any payment to Borrower by way of dividends,
advances,  repayments  of  advances,  reimbursements  of  management  and  other
intercompany charges, expenses, and accruals, or other returns on investments or
any  other  agreement  or  arrangement  which  restricts  the  ability  of  such
Subsidiary  to make any payment to  Borrower,  except as  disclosed  in Schedule
5.28.

         5.29  Inconsistent  Agreements.  Not, and not permit any Subsidiary to,
enter into any agreement  containing  any  provision  which would be violated or
breached  by the making of any Loan or by the  performance  by  Borrower  of its
obligations  hereunder or under any Related  Agreement or the performance by any
other Obligor of its obligations under any Related Agreement.

         5.30  Stock  Appreciation  Plan.  Borrower  shall  not  (i)  amend  any
currently  existing award notices issued pursuant to the Stock Appreciation Plan
or (ii) issue any award  notices  after the date  hereof  pursuant  to the Stock
Appreciation Plan or any similar plan or arrangement providing for cash payments
to be made to any Person prior to the scheduled  date for payment in full of all
Liabilities.



                                       45

<PAGE>



6.  DEFAULT.

         6.1  Event of Default.  Each of the following shall constitute
an Event of Default under this Agreement:

                  (a) Non-Payment.  Default in the payment, when due or
         declared due, of any of the Liabilities.

                  (b) Non-Payment of Other Indebtedness.  Default in the payment
         when  due,  whether  by  acceleration  or  otherwise  (subject  to  any
         applicable  grace period),  of any  Indebtedness  of, or guaranteed by,
         Borrower,  any other  Obligor  or any  Subsidiary  (other  than (i) any
         Indebtedness  under this Agreement and any Notes, (ii) any Indebtedness
         of Borrower or any Subsidiary to Borrower or to any other Subsidiary or
         (iii) Indebtedness under the Other Loan Agreements);  provided that (x)
         the aggregate  amount of Indebtedness so affected shall equal or exceed
         $25,000 and (y) failure to make any  payment on any  Subordinated  Debt
         described in clause (i) of the  definition of  Subordinated  Debt shall
         not be an Event of Default, so long as the holders of such Subordinated
         Debt are  prohibited  under  the terms of such  Subordinated  Debt from
         taking any action,  and refrain from  instituting  any  litigation,  to
         collect.

                  (c) Acceleration of Other Indebtedness. Any event or condition
         shall occur which  results in the  acceleration  of the maturity of any
         Indebtedness of, or guaranteed by,  Borrower,  any other Obligor or any
         Subsidiary  (other  than  (i)  any  Indebtedness  of  Borrower  or  any
         Subsidiary   to  Borrower  or  to  any  other   Subsidiary,   (ii)  the
         Indebtedness  under this Agreement and any Notes or (iii)  Indebtedness
         under the Other Loan  Agreements)  or enables  the holder or holders of
         such other  Indebtedness  or any trustee or agent for such holders (any
         required  notice of default having been given and any applicable  grace
         period  having  expired)  to  accelerate  the  maturity  of such  other
         Indebtedness;  provided that (x) the aggregate  amount of  Indebtedness
         with respect to which such event or condition shall have occurred shall
         equal or exceed $25,000 and (y) any event or condition which shall have
         occurred  which shall result in the  acceleration  of any  Subordinated
         Debt  described in clause (i) of the  definition of  Subordinated  Debt
         shall  not be an  Event  of  Default,  so long as the  holders  of such
         Subordinated  Debt are prohibited under the terms of such  Subordinated
         Debt  from  taking  any  action,   and  refrain  from  instituting  any
         litigation, to collect.

                  (d) Other Obligations.  Default in the payment when due,
         whether by acceleration or otherwise, or in the performance or
         observance (subject to any applicable grace period or waiver of
         such default) of (i) any obligation or agreement of Borrower,
         any other Obligor or any Subsidiary to or with Lender (other


                                       46

<PAGE>



         than any  obligation  or agreement of Borrower  hereunder and under any
         Related  Agreement);  or (ii) any material  obligation  or agreement of
         Borrower,  any other  Obligor  or any  Subsidiary  to or with any other
         Person  (other  than  (x) any such  material  obligation  or  agreement
         constituting or related to Indebtedness, (y) Trade Accounts Payable and
         (z) any material  obligation or agreement of any Subsidiary to Borrower
         or to any  other  Subsidiary),  except  only  to the  extent  that  the
         existence  of any such default is being  contested  by  Borrower,  such
         other Obligor or such Subsidiary, as the case may be, in good faith and
         by  appropriate  proceedings  and Borrower,  such other Obligor or such
         Subsidiary,  as  applicable,  shall  have set aside on its  books  such
         reserves or other appropriate provisions therefor as may be required by
         GAAP.

                  (e) Insolvency.  Borrower, any other Obligor or any Subsidiary
         becomes insolvent,  or generally fails to pay, or admits in writing its
         inability to pay, its debts as they  mature,  or applies for,  consents
         to, or acquiesces in the  appointment  of a trustee,  receiver or other
         custodian for Borrower, such other Obligor or such Subsidiary, or for a
         substantial  part of the  property of Borrower,  such other  Obligor or
         such  Subsidiary,  or makes a general  assignment  for the  benefit  of
         creditors;  or,  in  the  absence  of  such  application,   consent  or
         acquiescence,  a trustee,  receiver or other custodian is appointed for
         Borrower,  any other  Obligor or any  Subsidiary,  or for a substantial
         part of the property of Borrower,  any other Obligor or any  Subsidiary
         and is not discharged or dismissed  within 60 days; or any  bankruptcy,
         reorganization,   debt   arrangement  or  other  proceeding  under  any
         bankruptcy  or  insolvency  law,  or  any  dissolution  or  liquidation
         proceeding,  is instituted by or against Borrower, any other Obligor or
         any Subsidiary and, solely in the case where such proceeding shall have
         been instituted against Borrower, such Obligor or such Subsidiary, such
         proceeding shall not have been dismissed within 60 days or an order for
         relief shall have been entered; or any warrant of attachment or similar
         legal process is issued against any substantial part of the property of
         Borrower, any other Obligor or any Subsidiary.

                  (f) Pension  Plans.  The  institution by Borrower or any ERISA
         Affiliate  of steps  to  terminate  any  Pension  Plan if,  in order to
         effectuate such  termination,  Borrower or any ERISA Affiliate would be
         required to make a contribution  to such Pension Plan, or would incur a
         liability or obligation to such Pension Plan, in excess of $50,000; the
         institution  by the PBGC of steps to terminate any Pension Plan and the
         continuation of either such condition after notice thereof from Lender;
         or a  contribution  failure  occurs with  respect to any  Pension  Plan
         sufficient to give rise to a Lien under section 302(f) of ERISA.


                                       47

<PAGE>




                  (g)  Non-Compliance  With  This  Agreement.   Default  in  the
         performance  of any of  Borrower's  agreements  set forth in Section 2,
         3.2, 3.3, 3.4, 5.3, 5.5, 5.6 or 5.12 through 5.30 (and not constituting
         an Event of Default under any of the other  subsections of this Section
         6.1),  and  continuance of such default after written notice thereof to
         Borrower  from  Lender;  or  default  in  the  performance  of  any  of
         Borrower's agreements set forth in Section 5.2 (and not constituting an
         Event of Default  under any of the other  subsections  of this  Section
         6.1), and  continuance of such default for three (3) Banking Days after
         notice thereof to Borrower from Lender;  or default in the  performance
         of any of  Borrower's  other  agreements  herein  set  forth  (and  not
         constituting an Event of Default under any of the other  subsections of
         this Section 6.1), and continuance of such default for thirty (30) days
         after written notice thereof to Borrower from Lender.

                  (h)  Non-Compliance  With Related  Agreements.  Default in the
         performance by Borrower,  any other Obligor or any Subsidiary of any of
         its agreements set forth in any Related Agreement (and not constituting
         an Event of Default under any of the other  subsections of this Section
         6.1), and  continuance of such default after notice from Lender and the
         expiration of the grace period (if any) set forth therein.

                  (i)  Warranty.  Any  warranty  made by  Borrower  or any other
         Obligor  herein or in any Related  Agreement is untrue or misleading in
         any material respect when made or deemed made; any schedule, statement,
         report,  notice,  certificate or other writing furnished by Borrower or
         any other  Obligor to Lender is untrue or  misleading  in any  material
         respect on the date as of which the facts set forth  therein are stated
         or certified;  or any certification  made or deemed made by Borrower or
         any other  Obligor to Lender is untrue or  misleading  in any  material
         respect on or as of the date made or deemed made.

                  (j)  Litigation.  There  shall be entered  against  any one of
         Borrower,  any other Obligor or any Subsidiary one or more judgments or
         decrees  in  excess  of  $50,000  in  the  aggregate  at any  one  time
         outstanding,  excluding  those judgments or decrees (i) that shall have
         been  outstanding  less than 30 calendar days from the entry thereof or
         (ii) for and to the extent  which  Borrower,  such  Subsidiary  or such
         Obligor,  as  applicable,  is  insured  and with  respect  to which the
         insurer has assumed  responsibility in writing or for and to the extent
         which  Borrower,  such  Subsidiary or such Obligor,  as applicable,  is
         otherwise   indemnified  if  the  terms  of  such  indemnification  are
         satisfactory to Lender.

                  (k)  Validity.  If the validity or enforceability of this
         Agreement or any Related Agreement shall be challenged by


                                       48

<PAGE>



         Borrower,  any other Obligor or any other Person acting through,  or on
         behalf of,  Borrower or any other  Obligor,  or shall fail to remain in
         full force and effect.

                  (l) Conduct of Business. If Borrower, any other Obligor or any
         Subsidiary  is enjoined,  restrained  or in any way  prevented by court
         order,  which has not been dissolved or stayed within five (5) business
         days, from conducting all or any material part of its business affairs.

                  (m) Board Membership.  If (x) Alexander M. Milley or (y)
         Robert C. Shaw and Steven Hollopeter shall for any reason other
         than the death, disability or permanent incapacity of any such
         individual cease to be members of the board of directors of
         Borrower.

                  (n) Material  Adverse Change.  Lender shall have determined in
         good faith  that (i) a material  adverse  change  has  occurred  in the
         business,  operations  or financial  condition  of Borrower,  any other
         Obligor or any  Subsidiary,  (ii)  Lender's  interest  in any  material
         Collateral or Third Party  Collateral  has been  adversely  affected or
         impaired,  or the value  thereof  to Lender  has been  diminished  to a
         material  extent or (iii) the prospect of payment or performance of any
         obligation or agreement of Borrower or any other  Obligor  hereunder or
         under any Related Agreement is materially  impaired,  and the condition
         giving  rise to such  determination  does  not  constitute  an Event of
         Default  under any of the other  subsections  of this  Section  6.1 and
         continues  to exist  unremedied  for a period of thirty (30) days after
         written notice of such determination by Lender to Borrower.

                  (o) Other Loan Agreements.  The existence of any other
         "Event of Default" under and as defined in the Other Loan
         Agreements.

         6.2      Effect of Event of Default; Remedies.

         (a) In the  event  that one or more  Events  of  Default  described  in
Section 6.1(e) shall occur,  then Lender's  commitment  and the Credit  extended
under this Agreement shall terminate and all Liabilities hereunder and under any
Notes shall be immediately due and payable without demand, notice or declaration
of any kind whatsoever.

         (b) In the  event an Event  of  Default  other  than one  described  in
Section 6.1(e) shall occur,  then Lender may declare its  commitment  terminated
and/or all Liabilities hereunder and under any Notes immediately due and payable
without demand or notice of any kind  whatsoever,  whereupon the Credit extended
under this Agreement shall terminate and all Liabilities hereunder and under any
Notes


                                       49

<PAGE>



shall be immediately  due and payable.  Lender shall promptly advise Borrower of
any such  declaration,  but failure to do so shall not impair the effect of such
declaration.

         (c) If any Event of Default exists and is continuing, Lender
may exercise any one or more or all of the following remedies, all
of which are cumulative and non-exclusive:

                  (1) Any remedy contained in this Agreement or in any of
         the Related Agreements or any Supplemental Documentation;

                  (2) Any rights and remedies available to Lender under the
         UCC and any other applicable law;

                  (3) To the extent  permitted by  applicable  law,  Lender may,
         without notice, demand or legal process of any kind, take possession of
         any or all of the Collateral and Third Party Collateral (in addition to
         Collateral and Third Party  Collateral which it may already have in its
         possession),  wherever it may be found, and for that purpose may pursue
         the same  wherever  it may be found,  and may enter  into any  premises
         where any of the  Collateral  or Third  Party  Collateral  may be or is
         supposed to be, and search for, take  possession of,  remove,  keep and
         store any of the  Collateral or Third Party  Collateral  until the same
         shall be sold or otherwise disposed of, and Lender shall have the right
         to store the same in any of Borrower's premises without cost to Lender;

                  (4) At  Lender's  request,  Borrower  will (and will cause its
         Subsidiaries  to),  at  Borrower's  (or  such  Subsidiaries')  expense,
         assemble  the  Collateral  and  Third  Party  Collateral  and  make  it
         available  to Lender at a place or  places to be  designated  by Lender
         which is reasonably convenient to Lender and Borrower; and

                  (5) Lender at its option,  and pursuant to notification  given
         to Borrower  (or any other  applicable  Obligor) as provided for below,
         may  sell  any  Collateral  or  Third  Party  Collateral   actually  or
         constructively  in its  possession  at public or private sale and apply
         the proceeds thereof as provided below.

7.       ADDITIONAL PROVISIONS REGARDING COLLATERAL AND LENDER'S RIGHTS.

         7.1  Notice of Disposition of Collateral. Any  notification of intended
disposition of any of the Collateral  required by law shall be deemed reasonably
and  properly  given if  given at least  ten  (10)  calendar  days  before  such
disposition.

         7.2  Application of Proceeds of Collateral.  Any proceeds of
any disposition by Lender of any of the Collateral may be applied by
Lender to the payment of expenses in connection with the taking


                                       50

<PAGE>



possession  of,  storing,  preparing for sale,  and  disposition  of Collateral,
including  Attorneys' Fees and legal expenses,  and any balance of such proceeds
may be applied by Lender toward the payment of such of the  Liabilities,  and in
such order of application, as Lender may from time to time elect.

         7.3 Care of  Collateral.  Lender  shall  be  deemed  to have  exercised
reasonable  care  in the  custody  and  preservation  of any  Collateral  in its
possession  if it takes such  action for that  purpose as  Borrower  requests in
writing, but failure of Lender to comply with such request shall not, of itself,
be deemed a failure to  exercise  reasonable  care,  and no failure of Lender to
preserve or protect any rights with  respect to such  Collateral  against  prior
parties,  or to do any act with respect to the  preservation  of such Collateral
not so requested by Borrower,  shall be deemed a failure to exercise  reasonable
care in the custody or preservation of such Collateral.

         7.4 Performance of Borrower's Obligations. Lender shall have the right,
but shall not be obligated,  to discharge any claims  against or Liens,  and any
Taxes at any time  levied  or  placed  upon  any or all  Collateral,  including,
without limitation, those arising under statute or in favor of landlords, taxing
authorities,  government,  public  and/or  private  warehousemen,  common and/or
private carriers,  processors,  finishers,  draymen, coopers, dryers, mechanics,
artisans,  laborers,  attorneys,  courts,  or  others.  Lender  may also pay for
maintenance and preservation of Collateral. Lender may, but is not obligated to,
perform or fulfill any of Borrower's responsibilities under this Agreement which
Borrower  has failed to perform or fulfill.  Lender may advance to Borrower as a
Loan any payment made or expense incurred by Lender under this Section 7.4.

         7.5 Lender's Rights. None of the following shall affect the obligations
of Borrower to Lender under this Agreement or Lender's right with respect to the
remaining  Collateral or any Third Party Collateral (any or all of which actions
may be taken by Lender at any time, whether before or after an Event of Default,
at its sole and absolute discretion and without notice to Borrower):

                  (a)  acceptance  or retention  by Lender of other  property or
         interests in property as security for the Liabilities, or acceptance or
         retention of any Obligor(s),  in addition to Borrower,  with respect to
         any of the Liabilities;

                  (b) release of its security  interest in, or the  surrender or
         release of, or the  substitution or exchange of or for, all or any part
         of the  Collateral or any Third Party  Collateral or any other property
         securing  any of the  Liabilities  (including  but not  limited  to any
         property of any  Obligor  other than  Borrower),  or any  extension  or
         renewal  for  one or more  periods  (whether  or not  longer  than  the
         original period), or release,


                                       51

<PAGE>



         compromise, alteration or exchange, of any obligations of any guarantor
         or other  Obligor  with  respect  to any  Collateral,  any Third  Party
         Collateral or any such property;

                  (c)  extension or renewal for one or more periods  (whether or
         not  longer  than  the  original  period),   or  release,   compromise,
         alteration  or  exchange  of any  of the  Liabilities,  or  release  or
         compromise of any  obligation of any Obligor with respect to any of the
         Liabilities; or

                  (d)  failure by Lender to resort to other  security  or pursue
         any Person liable for any of the  Liabilities  before  resorting to the
         Collateral or Third Party Collateral.

8.  CONDITIONS PRECEDENT; DELIVERY OF DOCUMENTS AND OTHER MATTERS.

         8.1  Conditions Precedent.  The effectiveness of this Agreement
is subject to satisfaction of the following conditions precedent (in
addition to those provided in Section 8.2):

                  8.1.1 Security   Interest.   The  security  interest  in  the
         Collateral granted under this Agreement and the Related Agreements, and
         in any Third Party  Collateral and all other Liens granted to Lender to
         secure the  Liabilities,  shall be a senior,  perfected  Lien except as
         otherwise  agreed by Lender,  and all  financing  statements  and other
         documents  relating to Collateral and Third Party Collateral shall have
         been filed or recorded, as appropriate.

                  8.1.2 Financial Statements.  Borrower shall deliver to Lender
         Borrower's audited consolidated and consolidating  financial statements
         as at December 31, 1994,  prepared in conformity with GAAP applied on a
         basis consistent with that of the preceding Fiscal Year.

                  8.1.3 Other Loan Agreements.  The Other Loan Agreements
         shall have become effective in accordance with their terms.

                  8.1.4 Blocked Account; Lock Box. Borrower and its Subsidiaries
         shall have entered into blocked account and/or lock box agreements with
         Lender for the  collection and remittance to Lender of cash proceeds of
         Collateral and Third Party Collateral.

                  8.1.5 Effect of Law. No law or regulation  affecting  Lender's
         entering  into this  Agreement  shall  impose upon Lender any  material
         obligation, fee, liability, loss, cost, expense or damage.

                  8.1.6 Exhibits; Schedules.  All Exhibits and Schedules to
         this Agreement shall have been completed and submitted to


                                       52

<PAGE>



         Lender,  shall  be in form and  substance  reasonably  satisfactory  to
         Lender and shall contain no facts or information  which Lender,  in its
         reasonable judgment, determines to be unacceptable.

                  8.1.7  Fees. Lender shall have  received all fees then due and
         payable by  Borrower or any other  Person  hereunder  or in  connection
         herewith.

                  8.1.8  Documents.  Lender  shall  have  received  all  of  the
         following,  each duly executed  where  appropriate  and dated as of the
         Restatement  Date (or such  other  date as  shall  be  satisfactory  to
         Lender), in form and substance satisfactory to Lender:

                  (a) Resolutions. A copy, duly certified by the secretary or an
         assistant  secretary of Borrower and each Subsidiary party to a Related
         Agreement,  of: (1)  resolutions  of the Board of Directors of Borrower
         and each such  Subsidiary  authorizing  (A) the  borrowings by Borrower
         hereunder and (B) the execution,  delivery and  performance by Borrower
         and each such  Subsidiary  of this  Agreement  and each  other  Related
         Agreement to which  Borrower and each such  Subsidiary is a party or by
         which it is bound;  (2) all documents  evidencing  any other  necessary
         corporate  action  with  respect  to this  Agreement  and  the  Related
         Agreements;  and (3) all approvals or consents, if any, with respect to
         this Agreement and the Related Agreements;

                  (b) Incumbency Certificates. A certificate of the secretary of
         Borrower and each Subsidiary  party to a Related  Agreement  certifying
         the  names  of the  officers  of  Borrower  and  each  such  Subsidiary
         authorized to sign this  Agreement and each other Related  Agreement to
         which  Borrower and each such  Subsidiary is a party or by which any of
         them is bound, and all other documents and certificates to be delivered
         by any of them hereunder, together with samples of the true signatures
         of such officers;

                  (c) Borrower's Certificate.  The certificate of the President
         or Chief Executive Officer of Borrower certifying to the fulfillment of
         all conditions  precedent to closing and funding the secured  financing
         transaction  contemplated  by  this  Agreement  and  to the  truth  and
         accuracy,  as of such date, of the  representations  and  warranties of
         Borrower and each Subsidiary party to a Related Agreement  contained in
         this  Agreement and each other Related  Agreement to which  Borrower or
         such Subsidiary is a party or by which it is bound;

                  (d) Accountant's Letter.  With respect to the financial
         statements referred to in Section 4.6, a "reliance letter" from


                                       53

<PAGE>



         the accountants who prepared such statements in form and
         content acceptable to Lender;

                  (e) Bylaws.  A copy, duly certified by the secretary or
         an assistant secretary of Borrower and each Subsidiary party to
         a Related Agreement, of the Bylaws of Borrower and each such
         Subsidiary;

                  (f) Charter.  A copy, duly certified by the Secretary of
         State of the state of organization of each such Person, of the
         Certificate of Incorporation of Borrower and each Subsidiary
         party to a Related Agreement;

                  (g) Registration; Good Standing. A copy, duly certified by the
         applicable Secretary of State, of a certificate of good standing issued
         by the Secretary of the State of the state of  organization of Borrower
         and each Subsidiary  party to a Related  Agreement and each other state
         where Borrower and each such  Subsidiary is qualified to do business or
         where,   because  of  the  nature  of  its   business  or   properties,
         qualification to do business is required;

                  (h) Legal Opinion.  A legal opinion from counsel for
         Borrower and each Subsidiary party to a Related Agreement
         substantially in the form of Exhibit I;

                  (i) Insurance.   Evidence   satisfactory  to  Lender  of  the
         existence of insurance on the  Collateral,  Third Party  Collateral and
         business of Borrower and each  Subsidiary  in amounts and with insurers
         acceptable to Lender,  together with evidence  establishing that Lender
         is named as a loss payee and/or additional insured,  as applicable,  on
         all related insurance policies;

                  (j) Landlord's Consents.  A Landlord's Consent, duly
         executed by the owner of each leased premises identified on
         Schedule 4.12, 4.13 or 4.15 where Collateral or Third Party
         Collateral is located other than 4209 Vineland Road, Orlando,
         Florida;

                  (k) Note.  The Term Note in the form of Exhibit C;

                  (l) Guaranty.  A Guaranty, duly executed by Delaware,
         Contempo and Contempo West;

                  (m) Pledge Agreement.  A Pledge Agreement, duly executed
         by Borrower, together with all intercompany notes pledged
         thereunder, duly endorsed in blank or accompanied by duly
         endorsed blank bond powers or allonges; and


                                       54

<PAGE>



                  (n) Other  Documents.  Such other  documents  as Lender  shall
         determine to be necessary or  desirable,  including  but not limited to
         documents  described in paragraphs (a), (b), (e), (f), (g), (h) and (i)
         of this Section  8.1.8 with respect to any Obligor  other than Borrower
         and its Subsidiaries.

         8.2   Further Conditions Precedent; Certification.  The
effectiveness of this Agreement is subject to satisfaction of the
following conditions precedent in addition to those provided in
Section 8.1:

                  (a) No Change in  Condition.  No  change in the  condition  or
         operations,  financial or otherwise, of Borrower, any Subsidiary or any
         other  Obligor  shall have occurred  which  change,  in the  reasonable
         credit  judgment  of Lender,  would  reasonably  be  expected to have a
         material  adverse  effect on Borrower,  such  Subsidiary  or such other
         Obligor,  or  on  any  Collateral  or  Third  Party  Collateral  (which
         Collateral  or  Third  Party  Collateral   Lender  deems  in  its  sole
         discretion to be material);

                  (b) Default.  Before and after the effectiveness hereof,
         no Event of Default or Default shall have occurred and be
         continuing;

                  (c) Insurance.  There shall have been no material  change,  or
         notice of prospective material change (whether such notice is formal or
         informal),  in the  nature,  extent,  scope  or cost  of the  insurance
         policies  of Borrower or any  Subsidiary  listed on Schedule  4.7 which
         change would have a material adverse effect on the financial  condition
         of Borrower, any Subsidiary or Borrower and its Subsidiaries taken as a
         whole, or would  significantly  adversely affect Borrower's  ability to
         perform its obligations under this Agreement, the Notes, or any Related
         Agreement to which it is a party or by which it is bound;

                  (d) Warranties.  Before and after the effectiveness
         hereof, the warranties in Section 4 shall be true and correct
         as though made on the Restatement Date, except for such changes
         as are specifically permitted hereunder; and

                  (e) Accounting Methods.  Borrower shall not have made any
         material (as reasonably determined by Lender) change in its
         accounting methods or principles except as required by GAAP.

         Each request for a Loan  hereunder  made or deemed to have been made by
Borrower  shall be deemed to be a certificate  of Borrower as to the matters set
out in the foregoing provisions of this Section 8.2.



                                       55

<PAGE>



9.  INDEMNITY.

         9.1  Environmental  and Safety and Health  Indemnity.  Borrower  hereby
indemnifies  Lender and agrees to hold Lender  harmless from and against any and
all losses,  liabilities,  damages,  injuries, costs, expenses and claims of any
and every  kind  whatsoever  (including,  without  limitation,  court  costs and
Attorneys' Fees) which at any time or from time to time may be paid, incurred or
suffered by, or asserted against, Lender for, with respect to, or as a direct or
indirect  result of the violation by Borrower or any of its  Subsidiaries of any
Environmental Law or Occupational  Safety and Health Law, or with respect to, or
as a direct or indirect  result of, (i) the presence on or under, or the escape,
seepage,  leakage,  spillage,  disposal,  discharge,  emission or release  from,
properties utilized by Borrower and/or any Subsidiary into or upon any land, the
atmosphere,  or any watercourse,  body of water,  groundwater or wetland, of any
Hazardous  Material or other hazardous,  toxic or dangerous waste,  substance or
constituent,  or other substance  (including,  without  limitation,  any losses,
liabilities,  damages,  injuries,  costs, expenses or claims asserted or arising
under any Environmental  Law) or (ii) the existence of any unsafe or unhealthful
condition on or at any premises  utilized by Borrower  and/or any  Subsidiary in
the conduct of its business.  The provisions and undertakings of indemnification
set out in this  Section  9.1 shall  survive  satisfaction  and  payment  of the
Liabilities and termination of this Agreement.

         9.2  General Indemnity. In addition to the payment of expenses pursuant
to Section 11.3,  whether or not the transactions  contemplated  hereby shall be
consummated, Borrower agrees to indemnify, pay and hold Lender and any holder of
any Note,  and the officers,  directors,  employees,  agents,  and affiliates of
Lender and such holders  (collectively,  the  "Indemnitees"),  harmless from and
against any and all other liabilities,  obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature whatsoever  (including,  without  limitation,  the reasonable fees and
disbursements  of counsel for any of such  Indemnitees  in  connection  with any
investigative,  administrative or judicial  proceeding  commenced or threatened,
whether or not any of such Indemnitees shall be designated a party thereto) that
may be imposed on,  incurred  by, or asserted  against  any  Indemnitee,  in any
manner  relating to or arising out of this Agreement,  any Related  Agreement or
any other agreements  executed and delivered by Borrower or any other Obligor in
connection herewith, the statements contained in any commitment letter delivered
by  Lender,  Lender's  agreement  to make  the  Loans  hereunder,  or the use or
intended use of the  proceeds of any of the Loans  hereunder  (the  "indemnified
liabilities");  provided that Borrower shall have no obligation to an Indemnitee
hereunder  with  respect  to  indemnified  liabilities  arising  from the  gross
negligence  or willful  misconduct  of such  Indemnitee.  To the extent that the
undertaking


                                       56

<PAGE>



to indemnify,  pay and hold harmless set forth in the preceding  sentence may be
unenforceable  because it  violates  any law or public  policy,  Borrower  shall
contribute the maximum portion that it is permitted to pay under  applicable law
to the payment and satisfaction of all indemnified  liabilities  incurred by the
Indemnitees or any of them. The provisions and  undertakings of  indemnification
set out in this  Section  9.2 shall  survive  satisfaction  and  payment  of the
Liabilities and termination of this Agreement.

         9.3 Capital  Adequacy.  If Lender shall  reasonably  determine that the
application or adoption of any law, rule, regulation, directive, interpretation,
treaty or guideline regarding capital adequacy,  or any change therein or in the
interpretation or administration thereof, whether or not having the force or law
(including,  without  limitation,  application  of changes to  Regulation  H and
Regulation Y of the Federal Reserve Board issued by the Federal Reserve Board on
January 19, 1989 and regulations of the Comptroller of the Currency,  Department
of the  Treasury,  12 CFR Part 3, Appendix A, issued by the  Comptroller  of the
Currency  on January  27,  1989)  increases  the amount of capital  required  or
expected to be maintained by Lender or any Person  controlling  Lender, and such
increase is based upon the existence of Lender's obligations hereunder and other
commitments  of this  type,  then from time to time,  within ten (10) days after
demand from Lender,  Borrower shall pay to Lender such amount or amounts as will
compensate  Lender  or such  controlling  Person,  as the case may be,  for such
increased  capital  requirement.  The  determination of any amount to be paid by
Borrower  under this Section 9.3 shall take into  consideration  the policies of
Lender or any Person  controlling  Lender with  respect to capital  adequacy and
shall be  based  upon  any  reasonable  averaging,  attribution  and  allocation
methods. A certificate of Lender setting forth the amount or amounts as shall be
necessary  to  compensate  Lender  as  specified  in this  Section  9.3 shall be
delivered to Borrower and shall be conclusive in the absence of manifest  error.
The provisions and undertakings of  indemnification  set out in this Section 9.3
shall survive  satisfaction  and payment of the  Liabilities  and termination of
this Agreement.

         9.4  Other  Indemnities.   Notwithstanding  anything  to  the  contrary
elsewhere  in this  Agreement,  all other  indemnities  of  Borrower in favor of
Lender contained in this Agreement shall survive satisfaction and payment of the
Liabilities and termination of this Agreement.

10.    ADDITIONAL PROVISIONS.  Additional provisions are set forth in
Supplement A.



                                       57

<PAGE>



11.  GENERAL.

     11.1  Borrower  Waiver.  Except  as  otherwise  provided  for  in  this
Agreement,  Borrower  waives (i)  presentment,  demand and protest and notice of
presentment,  protest,  default,  non-payment,  maturity,  release,  compromise,
settlement,  one or more extensions or renewals of any or all commercial  paper,
accounts, contract rights, documents,  instruments, chattel paper and guaranties
at any time  held by  Lender on which  Borrower  may in any way be  liable  and,
assuming Lender has acted in a commercially  reasonable manner,  hereby ratifies
and confirms  whatever  Lender may do in this regard;  (ii) all rights to notice
and a hearing  prior to Lender's  taking  possession  or control of, or Lender's
relevy,  attachment  or levy on or of, the  Collateral  or any bond or  security
which might be required by any court prior to allowing Lender to exercise any of
Lender's  remedies;  and (iii) the benefit of all  valuation,  appraisement  and
exemption laws. Borrower acknowledges that it has been advised by counsel of its
choice with respect to this  Agreement  and the  transactions  evidenced by this
Agreement.

     11.2  Power of Attorney.  Borrower  appoints Lender,  or any Person whom
Lender may from time to time designate, as Borrower's attorney and agent-in-fact
with power (which appointment and power,  being coupled with an interest,  shall
be irrevocable  until all Liabilities are finally paid and performed in full and
this Agreement is terminated), without notice to Borrower, to:

                  (a) At such time or times  hereafter  as Lender or said agent,
         in its sole and absolute  discretion,  may  determine in  Borrower's or
         Lender's name (i) endorse Borrower's name on any checks,  notes, drafts
         or any  other  items of  payment  relating  to and/or  proceeds  of the
         Collateral  which come into the  possession of Lender or under Lender's
         control  and apply  such  payment or  proceeds  to the  Liabilities in
         accordance with the terms hereof;  (ii) endorse  Borrower's name on any
         chattel paper,  document,  instrument,  invoice,  freight bill, bill of
         lading or similar document or agreement in Lender's possession relating
         to Accounts  Receivable,  Inventory or any other Collateral;  (iii) use
         the  information  recorded  on or  contained  in  any  data  processing
         equipment  and computer  hardware  and  software to which  Borrower has
         access  relating  to  Accounts   Receivable,   Inventory  and/or  other
         Collateral;  (iv)  use  Borrower's  stationery  and  sign  the  name of
         Borrower to verification of Accounts  Receivable and notices thereof to
         Account  Debtors;  and (v) if not  done by  Borrower,  do all  acts and
         things  determined  by Lender to be  necessary,  to fulfill  Borrower's
         obligations under this Agreement; and

                  (b) At such time or times after the  occurrence and during the
         continuance  of an Event of Default,  as Lender or said  agent,  in its
         sole and absolute discretion, may determine, in


                                       58

<PAGE>



         Borrower's  or  Lender's  name:  (i)  demand  payment  of the  Accounts
         Receivable;  (ii) enforce payment of the Accounts Receivable,  by legal
         proceedings or otherwise;  (iii) exercise all of Borrower's  rights and
         remedies with respect to the collection of the Accounts  Receivable and
         other Collateral; (iv) settle, adjust, compromise,  extend or renew the
         Accounts  Receivable;  (v)  settle,  adjust  or  compromise  any  legal
         proceedings  brought  to  collect  the  Accounts  Receivable;  (vi)  if
         permitted by  applicable  law,  sell or assign the Accounts  Receivable
         and/or  other  Collateral  upon such terms for such amounts and at such
         time or times as Lender may deem advisable; (vii) discharge and release
         the Accounts Receivable and/or other Collateral;  (viii) prepare,  file
         and sign Borrower's name on any proof of claim in bankruptcy or similar
         document  against  any  Account  Debtor;  (ix)  prepare,  file and sign
         Borrower's  name on any notice of lien,  assignment or  satisfaction of
         lien or similar  document in  connection  with the Accounts  Receivable
         and/or other Collateral;  and (x) do all acts and things necessary,  in
         Lender's  sole and  absolute  discretion,  to obtain  repayment  of the
         Liabilities  and to fulfill  Borrower's  other  obligations  under this
         Agreement.

         11.3 Expenses;  Attorneys' Fees.  Borrower  agrees,  whether or not any
Loan is made  hereunder,  to pay upon demand all  Attorneys'  Fees and all other
reasonable  expenses  incurred by Lender in connection with (i) the preparation,
negotiation and execution of this Agreement,  any Related  Agreement,  the Other
Loan  Agreements,  the Other Loan  Documents  and any  document  required  to be
furnished in connection  herewith or therewith,  (ii) the preparation of any and
all amendments to this Agreement or any of the Related  Agreements and all other
instruments  or  documents  provided for therein or delivered or to be delivered
thereunder or in connection  therewith,  (iii) the  collection or enforcement of
Borrower's  or any other  Obligor's  obligations  hereunder or under any Related
Agreement,  and (iv) the collection or enforcement of any of Lender's  rights in
or to any Collateral or Third Party Collateral; provided, however, that Borrower
shall  have no  obligation  to pay the  Attorney's  Fees in  clause  (i) of this
sentence to the extent that the same exceed $30,000. Lender may advance all such
amounts to Borrower as a Loan.  Borrower also agrees,  (v) to indemnify and hold
Lender  harmless  from any loss or expense  which may arise or be created by the
acceptance  of  telephonic  or other  instructions  for making  Loans except for
losses  and  expenses   arising  from  Lender's  gross   negligence  or  willful
misconduct,  and (vi) to pay, and save Lender  harmless from all liability  for,
any stamp or other taxes which may be payable with  respect to the  execution or
delivery  of  this   Agreement,   or  any  Related   Agreement  or  Supplemental
Documentation,  or the  issuance  of any  Note or of any  other  instruments  or
documents  provided  for herein or to be delivered  hereunder  or in  connection
herewith. Borrower's foregoing obligations shall survive any termination of this
Agreement.


                                       59

<PAGE>




         11.4 Lender Fees and Charges.  Borrower  agrees to pay Lender on demand
the customary fees and charges of Lender for maintenance of accounts with Lender
or for  providing  other  services  to  Borrower.  Lender  may,  in its sole and
absolute discretion, provide for such payment by advancing the amount thereof to
Borrower as a Loan.

         11.5 Lawful  Interest.  In no contingency or event whatsoever shall the
interest rate charged pursuant to the terms of this Agreement exceed the highest
rate permissible under any law which a court of competent jurisdiction shall, in
a final  determination,  deem applicable  hereto. In the event that such a court
determines that Lender has received interest  hereunder in excess of the highest
applicable rate, Lender shall promptly refund such excess interest to Borrower.

         11.6 No Waiver by Lender;  Amendments.  No failure or delay on the part
of  Lender in the  exercise  of any  power or  right,  and no course of  dealing
between  Borrower and Lender  shall  operate as a waiver of such power or right,
nor shall any single or partial exercise of any power or right preclude other or
further  exercise  thereof  or the  exercise  of any other  power or right.  The
remedies  provided for herein are  cumulative  and not exclusive of any remedies
which may be available to Lender at law or in equity.  No notice to or demand on
Borrower not required hereunder shall in any event entitle Borrower to any other
or further  notice or demand in similar or other  circumstances  or constitute a
waiver  of  the  right  of  Lender  to  any  other  or  further  action  in  any
circumstances without notice or demand. No amendment, modification or waiver of,
or consent  with  respect to, any  provision  of this  Agreement  or any Related
Agreement  shall in any event be  effective  unless the same shall be in writing
and signed and delivered by Lender and Borrower.  Any waiver of any provision of
this  Agreement,  and any consent to any departure by Borrower from the terms of
any  provision  of this  Agreement,  shall  be  effective  only in the  specific
instance and for the specific purpose for which given.

         11.7  Termination of Credit.

                  (a) Unless the Termination Date is extended pursuant to clause
         (b)  of  this  Section  11.7,   the  Credit  shall   terminate  on  the
         then-scheduled  Termination Date.  Borrower may terminate the Credit at
         any time  prior to the  Termination  Date upon  notice  to  Lender  and
         payment in full of the outstanding  principal  balance of the Loans and
         all other Liabilities.  All of Lender's rights and remedies,  the liens
         and security  interests of Lender in the Collateral and the Third Party
         Collateral  and all of  Borrower's  duties and  obligations  under this
         Agreement shall survive  termination of the Credit extended to Borrower
         hereunder  until  all of the  Liabilities  have been  finally  paid and
         performed in full. The  termination or cancellation of the Credit shall
         not affect or impair the


                                       60

<PAGE>



         liabilities  and  obligations  of  Borrower  or any  one or more of the
         Obligors  to Lender or Lender's  rights  with  respect to any Loans and
         advances made and other Liabilities  incurred prior to such termination
         or with respect to the Collateral or any Third Party Collateral.

                  (b) Borrower  may, not more than 90 days nor less than 75 days
         prior to any scheduled Termination Date, request that Lender extend the
         Credit for an additional  one-year  period to the next  anniversary  of
         such date.  Unless  Lender,  in the  exercise of its sole and  complete
         discretion,  notifies  Borrower of its willingness to extend the Credit
         for such additional  one-year period, the Credit shall terminate on the
         then scheduled  Termination  Date (and all Loans and other  Liabilities
         shall be thereupon due and payable).

         11.8 Notices. Except as otherwise expressly provided herein, any notice
hereunder  to Borrower  or Lender  shall be in writing  (including  telegraphic,
telex, or facsimile  communication)  and shall be given to Borrower or Lender at
its address,  telex number or facsimile  number set forth on the signature pages
hereof or at such other address, telex number or facsimile number as Borrower or
Lender  may,  by written  notice,  designate  as its  address,  telex  number or
facsimile  number for purposes of notices  hereunder.  All such notices shall be
deemed to be given when  transmitted by telex and the appropriate  answerback is
received, transmitted by facsimile, delivered to the telegraph office, delivered
by courier,  personally  delivered or, in the case of notice by mail,  three (3)
Banking Days following deposit in the United States mails, properly addressed as
herein provided, with proper postage prepaid; provided,  however, that notice to
Lender of Borrower's intent to terminate the Credit shall not be effective until
actually received by Lender.

         11.9  Assignments  and  Participations;  Information.  Borrower  hereby
consents to Lender's grant of participations in or sale, assignment, transfer or
other  disposition,  at any  time  and  from  time  to time  hereafter,  of this
Agreement or any Related Agreement, or of any portion of any thereof,  including
without limitation Lender's rights, titles,  interests,  remedies, powers and/or
duties. Lender may furnish any information concerning Borrower in the possession
of Lender from time to time to assignees  of the rights  and/or  obligations  of
Lender  hereunder  and  to  Participants  in  any  Loan  (including  prospective
assignees and  Participants)  and may furnish  information in response to credit
inquiries consistent with general banking practice. Lender shall promptly notify
Borrower of Lender's grant of any participation in or sale, assignment, transfer
or other  disposition  of this  Agreement  or any Related  Agreement,  or of any
portion of any  thereof.  Borrower  shall use its  reasonable  efforts to assist
Lender in its efforts to sell assignments and participations.



                                       61

<PAGE>



         11.10 Severability. Any provision of this Agreement which is prohibited
or  unenforceable  in  any  jurisdiction  shall,  as to  such  jurisdiction,  be
ineffective  to the  extent  of such  prohibition  or  unenforceability  without
invalidating  the  remaining  provisions  hereof or  affecting  the  validity or
enforceability of such provision in any other jurisdiction.

         11.11  Successors.  This  Agreement  shall be binding upon Borrower and
Lender and their  respective  successors  and  assigns,  and shall  inure to the
benefit  of  Borrower  and  Lender  and the  successors  and  assigns of Lender.
Borrower shall not assign its rights or duties hereunder  without the consent of
Lender.

         11.12 Construction. Borrower acknowledges that this Agreement shall not
be binding  upon Lender  until and unless  accepted by Lender in writing.  If so
accepted by Lender,  this Agreement and the Related  Agreements and Supplemental
Documentation  shall,  unless otherwise expressly provided therein, be deemed to
have been  negotiated  and entered into in, and shall be governed and controlled
by the laws  of,  the  State  of  Illinois  as to  interpretation,  enforcement,
validity,  construction,  effect,  choice  of law,  and in all  other  respects,
including,  but not limited  to, the  legality  of the  interest  rate and other
charges, but excluding perfection of security interests and liens which shall be
governed and controlled by the laws of the relevant jurisdiction.

         11.13  Consent  to  Jurisdiction.  To  induce  Lender  to  accept  this
Agreement,  Borrower  irrevocably  agrees  that,  subject to  Lender's  sole and
absolute  election,  ALL ACTIONS OR PROCEEDINGS  IN ANY WAY,  MANNER OR RESPECT,
ARISING OUT OF OR FROM OR RELATED TO THIS AGREEMENT, THE RELATED AGREEMENTS, THE
SUPPLEMENTAL DOCUMENTATION OR THE COLLATERAL SHALL BE LITIGATED IN COURTS HAVING
SITUS WITHIN THE CITY OF CHICAGO,  STATE OF ILLINOIS.  BORROWER  HEREBY CONSENTS
AND SUBMITS TO THE  JURISDICTION  OF ANY LOCAL,  STATE OR FEDERAL  COURT LOCATED
WITHIN  SAID CITY AND STATE AND WAIVES  PERSONAL  SERVICE OF ANY AND ALL PROCESS
UPON  BORROWER,  AND AGREES  THAT ALL SUCH  SERVICE  OF  PROCESS  MAY BE MADE BY
REGISTERED MAIL DIRECTED TO BORROWER AT THE ADDRESS STATED ON THE SIGNATURE PAGE
HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED  UPON ACTUAL  RECEIPT
THEREOF.

         11.14  Subsidiary  Reference.  Any reference  herein to a Subsidiary or
Subsidiaries of Borrower,  and any financial definition,  ratio,  restriction or
other  provision of this Agreement which is stated to be applicable to "Borrower
and its  Subsidiaries"  or  which is to be  determined  on a  "consolidated"  or
"consolidating"  basis,  shall  apply  only  to  the  extent  Borrower  has  any
Subsidiaries  and, where  applicable,  to the extent any such  Subsidiaries  are
consolidated with Borrower for financial reporting purposes.



                                       62

<PAGE>



         11.15  WAIVER OF JURY TRIAL.  BORROWER AND LENDER EACH WAIVES ANY RIGHT
TO A TRIAL BY JURY IN ANY ACTION OR  PROCEEDING  TO ENFORCE OR DEFEND ANY RIGHTS
(i) UNDER  THIS  AGREEMENT  OR ANY  RELATED  AGREEMENT  OR UNDER ANY  AMENDMENT,
INSTRUMENT,  DOCUMENT  OR  AGREEMENT  DELIVERED  OR WHICH  MAY IN THE  FUTURE BE
DELIVERED IN CONNECTION  HEREWITH OR (ii) ARISING FROM ANY BANKING  RELATIONSHIP
EXISTING IN CONNECTION WITH THIS  AGREEMENT,  AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

         Initials of Alexander M. Milley, President of Borrower:
                .

         11.16 Prior  Actions.  Borrower  hereby  waives,  releases  and forever
discharges Lender, its officers,  employees and agents, from any and all rights,
claims, demands or causes of action against Lender, in law or in equity, arising
out of Lender's  past  actions or omissions  with  respect to the Original  Loan
Agreement, any other agreements or documents, or any lien or collateral securing
any Liabilities under and as defined in the Original Loan Agreement.

12.  BORROWER GUARANTY.

     12.1  Guaranty of Payment.  Borrower hereby absolutely,
unconditionally and irrevocably

                  (i)  guarantees  the full and prompt  payment and  performance
         when due, whether by required payment,  declaration,  acceleration,  or
         otherwise,  and  at all  times  thereafter,  of  all  of  the  monetary
         obligations of each of Delaware,  Contempo and Contempo West under,  or
         in respect of, the  Indebtedness of such  Subsidiaries  under the Other
         Loan   Agreements  and  the  Other  Loan  Documents  (the   "Guaranteed
         Obligations"); and

                  (ii) agrees to  reimburse  Lender for all costs and  expenses,
         including, without limitation, Attorneys' Fees, which Lender expends or
         incurs in collecting or compromising  any Guaranteed  Obligation and in
         enforcing this Section 12, whether or not suit is filed,  including all
         costs, expenses, reasonable Attorneys' Fees, and other charges incurred
         by   Lender   in   connection   with   any   insolvency,    bankruptcy,
         reorganization, liquidation, dissolution, arrangement, or other similar
         proceeding  involving Borrower which in any way affects the exercise by
         Lender of its rights, powers,  remedies, and privileges with respect to
         this Section 12 or the outstanding  principal  amount of the Guaranteed
         Obligations.

     12.2  Obligations  Absolute, Unconditional, etc.  Borrower agrees that its
obligations  under  this  Section  12  shall  be  absolute,  unconditional,  and
irrevocable,   irrespective  of  the   genuineness,   validity,   legality,   or
enforceability of the Guaranteed Obligations,  the Other Loan Agreements, or any
Other Loan Document, or any other


                                       63

<PAGE>



instrument or collateral  relating to or securing the payment,  performance,  or
observance thereof or any other circumstance which could otherwise  constitute a
legal or equitable discharge of a surety or guarantor, and Lender may proceed to
enforce this Section 12 without  pursuing or  collecting a judgment  against any
other Person, without resorting to or enforcing any other collateral or security
and without any other  action  whatsoever.  Lender shall have no  obligation  to
protect, secure, perfect, or insure any collateral security document or property
at any time held as security for the Guaranteed  Obligations or this Section 12.
Borrower hereby  absolutely,  unconditionally  and irrevocably waives and agrees
not to assert or take advantage of:

                  (a) any right to require Lender to proceed  against  Delaware,
         Contempo, Contempo West or any other Obligor or any other Person, or to
         proceed  against or exhaust any other  security or  collateral  for the
         payment,  performance,  or observance of the Guaranteed Obligations, or
         to  pursue  any  other  remedy  whatsoever  before  proceeding  against
         Borrower hereunder;

                  (b) any  defense  that may arise by reason of the  incapacity,
         lack of authority,  death, or disability of any Person,  or the failure
         of  Lender  to  file  or  enforce  a  claim   against  any  estate  (in
         administration, bankruptcy or any other proceedings) of any Person;

                  (c) any defense based upon an election of remedies by
         Lender, including an election to proceed by non-judicial rather
         than judicial foreclosure;

                  (d) any other defense of Delaware,  Contempo or Contempo West,
         or the  cessation of the  liability  of Delaware,  Contempo or Contempo
         West,  for  any  cause  whatsoever,  with  respect  to  any  Guaranteed
         Obligation;

                  (e) any other  defense of any kind,  whether  now  existing or
         arising  hereafter,  of Borrower to any  action,  suit,  or judicial or
         legal  proceeding  that may be instituted  with respect to this Section
         12;

                  (f) presentment,  demand,  protest  and  notice  of any kind,
         including, without limitation, notice of the creation or non-payment or
         non-performance of all or any of the Guaranteed Obligations,  notice of
         dishonor or protest, notice of acceptance by Lender of this Section 12,
         notice  of  the  existence,  creation  or  incurrence  of  any  new  or
         additional indebtedness,  obligation, or other liability, and notice of
         action  or  non-action  on the  part  of  Lender,  Delaware,  Contempo,
         Contempo West or any other  Obligor or other Person in connection  with
         the Guaranteed Obligations or otherwise; and


                                       64

<PAGE>




                  (g) any duty on the part of  Lender  or any  other  Person  to
         disclose to Borrower any facts or  information  any such Person may now
         or hereafter know or possess  regarding  Delaware,  Contempo,  Contempo
         West,  the  Guaranteed  Obligations  or any  other  matter  whatsoever,
         regardless of whether such Person has reason to believe that such facts
         or other  information  may materially  increase the risk which Borrower
         intends  to assume or has  reason to  believe  that such facts or other
         information are unknown to Borrower or has a reasonable  opportunity to
         communicate  such facts or other  information,  it being understood and
         agreed  that  Borrower  is fully and solely  responsible  for being and
         keeping informed of the financial  condition of Delaware,  Contempo and
         Contempo  West and of all other  circumstances  bearing  on the risk of
         non-payment,  non-performance,  or  non-observance  of  any  Guaranteed
         Obligation.

This Section 12 shall in all respects be a continuing, absolute,  unconditional,
and irrevocable  guaranty of payment,  and shall remain in full force and effect
until all  Guaranteed  Obligations  have been fully paid.  This Section 12 shall
continue to be effective,  or be reinstated,  as the case may be, if at any time
any payment,  in whole or in part, of any Guaranteed  Obligation is rescinded or
must  otherwise  be  restored  or  returned  by  Lender  upon  the   insolvency,
bankruptcy,  dissolution,  liquidation or  reorganization  of Borrower or any of
Delaware,  Contempo or Contempo West, or upon or as a result of the  appointment
of a custodian,  receiver,  trustee,  or other officer with similar  powers with
respect to Borrower or any of Delaware, Contempo or Contempo West or any part of
the property of any thereof, or otherwise, all as though such payments had never
been  made.  If any  Event of  Default  shall at any time have  occurred  and be
continuing and  acceleration of the  Indebtedness  represented by any Other Loan
Agreement  shall at any time be prevented by reason of the pendency  against the
Subsidiary  obligated  thereunder of a case or proceeding  under a bankruptcy or
insolvency  law,  Borrower  agrees that, for purposes of this Section 12 and its
obligations hereunder,  the maturity of such principal amount shall be deemed to
have been accelerated with the same effect as if the holder of such Indebtedness
had  accelerated  the same in  accordance  with the  terms  of such  Other  Loan
Agreement,  and Borrower shall forthwith pay such principal  amount and interest
(if any) thereon and other  Guaranteed  Obligations  without  further  notice or
demand.

     12.3  Waiver of All  Defenses. Lender may,  from time to time,  in its sole
discretion and without notice to the Borrower,  take any or all of the following
actions, all without in any way diminishing,  impairing, releasing, or affecting
the liability or  obligations  of Borrower under or with respect to this Section
12, and  Borrower  hereby  irrevocably  consents to any or all of the  following
actions by Lender or any holder of any Guaranteed Obligation:


                                       65

<PAGE>



                  (a) retain or obtain a Lien in any property to secure any
         of the Guaranteed Obligations or any obligation hereunder;

                  (b) retain or obtain the primary or secondary obligation
         of any obligor or obligors with respect to any of the
         Guaranteed Obligations;

                  (c) extend or renew for one or more  periods (whether  or not
         longer than the  original  period),  or alter or  exchange,  any of the
         Guaranteed Obligations,  or release or compromise any obligation of any
         nature of any other  Obligor or any other Person with respect to any of
         the Guaranteed  Obligations or amend or modify in any respect any Other
         Loan Agreement or any Other Loan Document;

                  (d) waive, modify, subordinate, compromise or release its Lien
         in, or surrender,  release, or permit any substitution or exchange for,
         all or  any  part  of  any  property  securing  any  of the  Guaranteed
         Obligations or any obligation hereunder,  or extend or renew for one or
         more periods (whether or not longer than the original period) or waive,
         release,  subordinate,   compromise,  modify,  alter  or  exchange  any
         guaranty or other obligations of any nature of any obligor with respect
         to any such property; and

                  (e) resort to Borrower  for  payment of any of the  Guaranteed
         Obligations,  whether or not Lender shall have resorted to or exhausted
         any other remedy or any other security or collateral for any obligation
         hereunder or shall have proceeded against Delaware,  Contempo, Contempo
         West or any other Obligor or any other Person  primarily or secondarily
         obligated with respect to any of the Guaranteed Obligations.

Borrower absolutely,  unconditionally, and irrevocably agrees that its liability
hereunder,  and the remedies for the enforcement of such liability,  shall in no
way be diminished or affected by:

                  (i) the release or discharge of Delaware, Contempo or Contempo
         West or any other  Obligor  or any  other  Person  responsible  for the
         payment, performance, or observance of any Guaranteed Obligation in any
         creditors', receivership,  bankruptcy,  reorganization,  insolvency, or
         other case or proceeding;

                  (ii) the rejection or disaffirmance in any such proceeding
         of any instrument evidencing, securing, or executed in
         connection with the Guaranteed Obligations; or

                  (iii) the  impairment,  limitation,  or  modification  of the
         Guaranteed  Obligations  resulting from the operation of any present or
         future provision of the federal Bankruptcy Code or


                                       66

<PAGE>



         any other statute or law of any kind or from the decision or
         order of any court.

Borrower absolutely, unconditionally, and irrevocably further agrees that:

                  (x) the creation from time to time of Guaranteed  Obligations,
         and the application or allocation of amounts  received by the Lender or
         any other Person to the payment of such Guaranteed Obligations, and the
         creation,  existence,  or enforcement from time to time of any security
         for the Guaranteed  Obligations,  and the application and allocation of
         the  proceeds  of such  security,  shall in no way affect or impair the
         rights,  remedies,  powers and privileges of Lender or any other holder
         of a Guaranteed  Obligation or the  obligations  of Borrower under this
         Section 12; and

                  (y) any amounts  received by Lender from whatsoever  source on
         account of the Guaranteed  Obligations  may be applied by it toward the
         payment  of such of the  Guaranteed  Obligations  and in such  order of
         application as Lender may in its sole discretion determine.

Borrower  hereby  expressly  waives  notice of the  creation  of the  Guaranteed
Obligations and all diligence in collection or protection of or realization upon
the Guaranteed  Obligations or any thereof,  any  obligation  hereunder,  or any
security for or guaranty of any of the foregoing.

     12.4 Payment, etc., by Borrower.  Borrower hereby unconditionally covenants
and agrees that,  in the event any of Delaware,  Contempo or Contempo West shall
fail duly and punctually to pay any  Guaranteed  Obligation on the date on which
such  payment  is due  (whether  at  scheduled  maturity,  by  acceleration,  or
otherwise),  Borrower  will,  within  five  Business  Days after the  receipt of
written  notice from Lender  demanding  payment of the amount of the  Guaranteed
Obligation which the Subsidiary  primarily  obligated thereon has failed to pay,
pay the entire amount of Guaranteed Obligations demanded to Lender at its office
at 231 South LaSalle  Street,  Chicago,  Illinois  60697,  in same day funds. If
Borrower  fails to pay any such  amount,  Lender  may  institute  any  action or
proceeding,  and make,  obtain and enforce a judgment or final  decree,  against
Borrower  and  collect  in  the  manner  provided  by law  or in  equity  out of
Borrower's  property,  wherever situated,  all amounts adjudged or decreed to be
payable. Borrower further agrees that Lender may from time to time, upon receipt
by Lender of any  proceeds  of any  collateral  granted by Borrower to Lender in
connection  herewith,  apply such  proceeds  to the  payment  of the  Guaranteed
Obligations.


                                       67

<PAGE>



     12.5  Subrogation.  Borrower  hereby  irrevocably  agrees not to assert any
claim or other  right  which it may now or  hereafter  acquire  against  each of
Delaware,  Contempo and Contempo  West or any other Obligor that arises from the
existence,  payment,  performance or enforcement of Borrower's obligations under
this  Section  12 or  any  other  Related  Agreement,  including  any  right  of
subrogation,  reimbursement,  exoneration,  or  indemnification,  any  right  to
participate  in any claim or remedy of Lender  against the Borrower or any other
Obligor or any collateral which Lender now has or hereafter acquires, whether or
not such claim, remedy or right arises in equity, or under contract,  statute or
common law,  including  the right to take or receive from  Borrower or any other
Obligor,  directly or indirectly,  in cash or other property or by set-off or in
any manner,  payment or security on account of such claim or other right,  until
all  Guaranteed  Obligations  have  been  finally  paid in full in cash  and all
obligations  of Lender to make  advances to  Borrower,  Delaware,  Contempo  and
Contempo West have been terminated.


                                       68

<PAGE>



     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed by their respective  officers  thereunto duly authorized as of the date
first written above.


                                     AZIMUTH CORPORATION

                                     By:____________________________________
                                     Title:_________________________________

                                     Address:    4209 Vineland Road
                                                 Suite J-1
                                                 Orlando, Florida  32811
                                     Attention:  Alexander M. Milley

                                     Facsimile number: (407) 849-0625


                                     BANK OF AMERICA ILLINOIS

                                     By:____________________________________
                                     Title:_________________________________

                                     Address:    231 South LaSalle Street
                                                 Chicago, Illinois  60697

                                     Attention:  Andrew J. Sutherland

                                     Facsimile number: 312/828-3889




                                       69

<PAGE>



                                  SUPPLEMENT A
                                       to
                           SECOND AMENDED AND RESTATED
                           LOAN AND SECURITY AGREEMENT

               Dated as of October 9, 1995 between BANK OF AMERICA
            ILLINOIS ("Lender") and AZIMUTH CORPORATION ("Borrower")


1. Loan Agreement Reference. This Supplement A, as it may be amended or modified
from  time to  time,  is a part of the  Second  Amended  and  Restated  Loan and
Security  Agreement  dated as of October  9, 1995  between  Borrower  and Lender
(together with all amendments,  modifications and supplements thereto, the "Loan
Agreement").  Terms used herein  which are defined in the Loan  Agreement  shall
have the meaning ascribed to them therein unless the context requires otherwise.

2. Interest.

   2.1  Loans.  (a) Interest to Maturity.  The unpaid principal
balance of the Loans shall bear interest to maturity at 11% per
annum.

         (b)  Default  Rate.  If any  amount  of the Loans is not paid when due,
whether by acceleration or otherwise, the entire unpaid principal balance of the
Loans shall bear interest until paid at a rate per annum equal to 13%.

         2.2  Computation.  Interest  shall be calculated on the basis of a year
consisting of 360 days and paid for actual days elapsed. Changes in any interest
rate  provided for herein which are due to changes in the  Reference  Rate shall
take effect on the date of the change in the Reference Rate.

         2.3  Payment.  Until  maturity,  interest on the Loans shall be payable
monthly in arrears on the last day of each  calendar  month at  maturity.  After
maturity,  whether by  acceleration  or  otherwise,  accrued  interest  shall be
payable  on demand.  Notwithstanding  the  foregoing,  if no Event of Default or
Unmatured Event of Default shall have occurred and be continuing  (excluding any
Unmatured  Event or Default  relating to the  non-payment  of interest  which is
capitalized  pursuant to this  Section  2.3),  until the  Termination  Date,  at
Borrower's  option,  all interest  payable on the Loans shall be capitalized and
added at the end of each  March,  June,  September  and  December  to the unpaid
principal amount of the Loans on which such interest was payable.

3.  Additional Covenants.  From the date of the Loan Agreement and
thereafter until all of Borrower's Liabilities under the Loan



<PAGE>


Agreement  are paid in full,  Borrower  agrees  that,  unless  Lender  otherwise
consents in writing, it will:

         3.1  Consolidated Net Worth.  Not permit Borrower's
Consolidated Net Worth to be less than $2,750,000.

         3.2  Current Ratio.  Not permit the ratio of Borrower's
consolidated current assets to Borrower's consolidated current
liabilities to be less than 1.35:1.

         3.3  Liabilities to Net Worth Ratio.  Not permit the ratio of
Borrower's consolidated total liabilities to Borrower's Consolidated
Net Worth to exceed 6.2:1.

         3.4 Working Capital.  Not permit the excess of Borrower's  consolidated
current  assets over  Borrower's  consolidated  current  liabilities  (excluding
interest  bearing  Indebtedness  with a maturity  of less than one year from the
date of calculation) to be less than $3,500,000.

         3.5  Capital  Expenditures.  Not,  and not  permit any  Subsidiary  to,
purchase or otherwise acquire (including, without limitation, acquisition by way
of Capitalized  Lease),  or commit to purchase or otherwise  acquire,  any fixed
asset  if,  after  giving  effect to such  purchase  or other  acquisition,  the
aggregate cost of all fixed assets  purchased or otherwise  acquired by Borrower
and its Subsidiaries on a consolidated basis in any one Fiscal Year would exceed
$425,000 in any Fiscal Year.

         3.6  Consolidated Senior Debt-Equity Ratio.  Not permit the
Consolidated Senior Debt-Equity Ratio to exceed 250%.

         3.7  Consolidated Senior Interest Coverage Ratio.  From and
after October 31, 1995, not permit the Consolidated Senior Interest
Coverage Ratio to be less than 100%.

Borrower's Initials:___________________
Lender's Initials:_____________________
Date: October 9, 1995




                                        2

<PAGE>