REVOLVING CREDIT AGREEMENT

     THIS  AGREEMENT dated as of October 1, 1996 between CURTIS  MATHES
HOLDING  CORPORATION, a Texas corporation with its principal  place  of
business  at  10911 Petal Street, Dallas, Texas 75238 ("Company"),  and
EMERALD  CAPITAL CORPORATION, a Virginia corporation with its principal
place  of  business  at 1350 Beverly Road, #115-339,  McLean,  Virginia
22101 ("Lender").  Company and Lender agree as follows:

                           Article I
                        Revolving Credit

     1.    Lender  hereby establishes a Revolving Credit  in  favor  of
Company on the terms hereof in an aggregate principal amount at any one
time outstanding not exceeding $10,000,000.

     2.   Subject to the provisions of this Agreement and if Company is
not  in default hereunder and if no condition exists which, but for the
giving  of  notice  or the lapse of time or both, would  constitute  an
event  of  default  hereunder, the Company may  avail  itself  of  such
Revolving Credits, in whole or in part, from time to time.  The  amount
of  any borrowing may be repaid in whole or in part within one (1) year
from  the  date  of funding and such repaid amounts may  be  thereafter
reborrowed.   The principal and accrued interest due on each  borrowing
must be repaid within one (1) year from the date of funding.

     3.    At  the  time of each borrowing under the Revolving  Credit,
Company  shall execute and deliver to Lender a note ("Revolving  Credit
Note")  payable to the order of Lender for the amount of  its  loan  to
Company.   Each  such Revolving Credit Note shall be  in  the  form  of
"Exhibit  1"  attached hereto, with blanks suitably  filled,  shall  be
dated the date of the borrowing, and shall mature on or before one  (1)
year  from  the  date of funding.  The annual rate of  interest  before
maturity  shall  be at a rate equivalent to the rate described  by  the
Wall  Street  Journal as the prime rate in effect  from  time  to  time
(computed  on  a 365-day basis) ("Prime Rate"), plus one  and  one-half
percent (1.5%.)

                           Article II
         Provisions Relative to Borrowing and Payments

     1.    Company  shall give the Lender at least five  full  business
days notice of each proposed borrowing hereunder.  Each borrowing under
the  revolving  credits shall be in units of at  least  $500,000.   Not
later  than  11  a.m.  Dallas time on the day of a proposed  borrowing,
Lender  shall  wire US federal funds to the Company's  designated  bank
account  against  delivery  of  the  Revolving  Credit  Note  for   the
borrowing.   Payments  by  Company shall  be  in  accordance  with  the
Revolving Credit Note executed in connection with each borrowing.

     2.    By  mutual agreement of the parties, Lender may convert  any
outstanding principal balance and accrued interest to common  stock  of
the  Company, according to such terms as may be mutually agreed at  the
time of conversion.
<PAGE>
                          Article III
                 Representations and Warranties

Company represents and warrants that:

     1.     The  Annual  Report  on  Form  10-K  of  Company  and   its
subsidiaries  for  fiscal year ended June 30, 1996, containing  audited
financial  statements of Company, heretofore furnished to  Lender,  are
complete  and  correct  and fairly present the  consolidated  financial
condition  of  Company and its subsidiaries as  at  the  date  of  said
Annual.  To the best of Company's knowledge and belief, neither Company
nor   any   subsidiary  has  any  material  or  substantial  contingent
obligation or liability for taxes not disclosed by or reserved  against
in said Annual Report.  Since June 30, 1996, there has been no material
adverse  change in the consolidated financial condition of Company  and
its  subsidiaries, except as may be reflected in a subsequent Quarterly
Report on Form 10-Q for subsequent fiscal quarter(s).

     2.    There  are no suits or proceedings pending or, to  Company's
knowledge,  threatened against or affecting Company or  any  subsidiary
which,  in  the  opinion of Company's counsel,  will  have  a  material
adverse  effect on the financial condition or business of  Company  and
its subsidiaries.

     3.    Company has full power and authority to execute and  perform
the terms and provisions of this Agreement and to borrow hereunder.

                           Article IV
                    Conditions of Borrowing

The   obligation  of  Lender  to  lend  hereunder  is  subject  to  the
satisfaction of the following conditions:

     1.    Company shall avail itself of the Revolving Credits  to  the
extent necessary to provide it with funds for any corporate purpose, to
be  described and mutually agreed between the Lender and Company at the
time of each borrowing.

     2.    The  Lender  shall have received, from  Billy  J.  Robinson,
General Counsel for Company, a favorable opinion to the effect that (a)
Company  is  a validly organized and existing corporation, (b)  Company
has  the  power  and authority to execute, deliver and carry  out  this
Agreement and has duly authorized its officers executing this Agreement
so  to  do,  (c)  the  making of this Agreement by Company  is  not  in
violation of any charter provision, bylaw, or regulation of Company, or
any contractual obligation binding upon Company, and (d) this Agreement
so  executed and Company's notes given pursuant hereto will  constitute
Company's valid and binding obligations.

     3.    Company shall have furnished to Lender a certified  copy  of
all  resolutions  of  Company's Board of Directors  pertaining  to  the
execution of this Agreement and the borrowing of money pursuant hereto.
<PAGE>     
                           Article V
                     Affirmative Covenants

     1.    Company  covenants  and agrees that until  all  indebtedness
incurred hereunder has been paid in full and Company no longer has  the
right to borrow hereunder, it will:

          (a)  Furnish to Lender, not later than 120 days after the end
of  each fiscal year, an Annual Report on Form 10-K of Company and  its
subsidiaries  for  such  year, certified by the  Company's  independent
public accountants;

          (b)   Furnish  to  Lender, not later than 60 days  after  the
close  of  each  quarter-annual period (except the last  quarter-annual
period  of  each year), a Quarterly Report on Form 10-Q of Company  and
its  subsidiaries  for  the current fiscal year to  and  including  the
period then ending, certified by an appropriate officer of Company;

          (c)    From  time  to  time furnish to Lender  all  financial
information,  including proxy statements, furnished by Company  to  its
shareholders;

          (d)   At all times keep its property insured against loss  or
damage  to  the extent and against the risks that similar  property  is
usually  insured by other companies engaged in the same  business,  and
will cause its subsidiaries to do the same; and

          (e)   Promptly  pay and discharge, and cause its subsidiaries
to  pay and discharge, all taxes and assessments levied and assessed or
imposed  upon  its property or upon its income as well  as  all  claims
which,  if  unpaid,  might  by law become a lien  or  charge  upon  its
property.  Nothing herein contained, however, shall require Company  or
any subsidiary to pay any such taxes, assessments or claims so long  as
Company  or  such  subsidiary in good faith contests the  validity  and
stays the execution and enforcement thereof.

     2.    At the time of furnishing each financial statement specified
in  this  Article V, Section 1(a) and (b) hereof, Company shall furnish
to  Lender  upon  request an officer's certificate stating  that  there
exists  no  event of default, as defined hereinbelow, or  if  any  such
event  of default exists, specifying the nature thereof, the period  of
existence  thereof,  and  what action Company  proposes  to  take  with
respect thereto.

                           Article VI
                       Negative Covenants

     1.    Company  covenants  and agrees that until  all  indebtedness
incurred hereunder has been paid in full and Company no longer has  the
right  to borrow hereunder, it will not pay or declare any dividend  on
its  common stock at any time after the date of this Agreement,  or  at
any  time after said date make any other distribution on account of any
class  of its stock, or redeem, purchase or otherwise acquire, directly
or  indirectly,  any shares of its stock of any class.  Notwithstanding
the foregoing limitation, however, Company may expend after the date of
this Agreement for all of such purposes an amount not in excess of  (1)
$10,000,000,  plus (2) the consolidated net earnings of  Company  after
<PAGE>
the  date  of  this Agreement, determined in accordance with  generally
accepted accounting principles.  In addition to the foregoing,  Company
may,  after  the date of this Agreement, expend (i) for the purpose  of
purchasing and retiring its shares of any class an amount equivalent to
the cash and the fair value of property (as determined in good faith by
Company's Board of Directors at the time of acquisition) received after
said  date by Company in exchange for the issuance of its stock of  any
class,  plus (ii) the amount required for the purpose of redeeming  its
presently  outstanding preferred stock, plus (iii) any amount  expended
by  Company  to  purchase  its  own  stock  pursuant  to  its  deferred
compensation plan.  For the purpose of making any computation  required
by  this paragraph, consolidated net earnings shall be computed for the
period (taken as one accounting period) commencing on the date of  this
Agreement  and  terminating  at the end  of  the  last  fiscal  quarter
preceding  the date of any payment for the purposes mentioned  in  this
paragraph.

     2.    Company  covenants  and agrees that until  all  indebtedness
incurred hereunder has been paid in full and Company no longer has  the
right  to  borrow  hereunder,  it will not  and  will  not  permit  any
subsidiary to:

          (a)  Create, assume, or suffer to exist any mortgage, pledge,
encumbrance,  lien, or charge of any kind upon any of its  property  or
assets,  whether now owned or hereafter acquired, except (1) liens  for
taxes  not  yet  due  or which are being contested  in  good  faith  by
appropriate  proceedings,  (2) other liens,  charges  and  encumbrances
incidental  to  the  conduct of its business or the  ownership  of  its
property  and  assets  which were not incurred in connection  with  the
borrowing  of money or the obtaining of advances or credits, and  which
do  not  in  the  aggregate materially detract from the  value  of  its
property  or  assets  or  materially impair  the  use  thereof  in  the
operation of its business, (3) mortgages or other liens on property  or
assets  of  a  subsidiary to secure obligations of such  subsidiary  to
Company  or  another subsidiary, or (4) purchase money obligations  not
exceeding $2,000,000 in the aggregate at any one time outstanding;

          (b)   Create, incur, or suffer to exist any funded or current
debt,  except  (1) funded or current debt represented by the  Revolving
Credit Notes and the Term Notes, (2) funded or current debt represented
by  purchase  money  obligations permitted by the  provisions  of  this
Article  VI  Section 2(a), (3)  funded or current  debt  owing  by  any
subsidiary  to  Company or to any other subsidiary, (4) guarantees  and
other  contingent  liabilities permitted  by  the  provisions  of  this
Article VI, Section 2(c), (5) current debt of Company (other than  debt
evidenced  by the Revolving Credit Notes) not in excess of  $10,000,000
at any time outstanding;

          (c)   Assume,  guarantee,  endorse,  contingently  agree   to
purchase, or otherwise become liable upon the obligation of any person,
firm,   or   corporation,  except  by  the  endorsement  of  negotiable
instruments for deposit or collection, in excess of $10,000,000 for the
amount  of  all  such  guarantees, endorsements, and  other  contingent
liabilities at any one time outstanding;
<PAGE>
          (d)   Sell  or  otherwise dispose of any shares of  stock  or
funded  or current debt of any subsidiary except to Company or  another
subsidiary, except that all shares of stock and debt of any  subsidiary
at  the  time owned by or owed to Company and all subsidiaries  may  be
sold  as an entirety for a cash consideration which represents the fair
value (as determined in good faith by Company's Board of Directors)  at
the  time of sale of the shares and debt so sold, if the assets of such
subsidiary  do  not constitute a substantial part of  the  consolidated
assets  of  Company and all subsidiaries, and also if, at the  time  of
such  sale, such subsidiary does not , directly or indirectly  own  any
shares  of  stock or debt of any other subsidiary (unless  all  of  the
shares  of  stock and debt of such other subsidiary are  simultaneously
being sold as permitted by this Section 2(d));

          (e)   Merge  or  consolidate with any other  corporation,  or
sell, lease, transfer or otherwise dispose of all or a substantial part
of  its assets, except that (1) any subsidiary may merge or consolidate
with Company (if Company is the continuing or surviving corporation) or
with  any one or more other subsidiaries, (2) any subsidiary may  sell,
lease, transfer or otherwise dispose of any of its assets to Company or
another subsidiary, (3) any subsidiary may sell or otherwise dispose of
all  or  substantially  all  of its assets subject  to  the  conditions
specified in Section 2(d) of this Article VI with respect to a sale  of
the  stock of such subsidiary, (4) Company and any subsidiary may  sell
in   the  ordinary  course  of  their  respective  businesses  products
manufactured  by  either  of  them,  and  (5)  Company  may  merge   or
consolidate,  or  sell of dispose of all or substantially  all  of  its
assets,  if (i) Company is the continuing or surviving corporation,  or
(ii)  the  successor or acquiring corporation assumes all of  Company's
obligations  under  this  Agreement and on  the  notes,  including  all
covenants  herein  and  therein contained, and  (iii)  Company  as  the
continuing  or  surviving  corporation or the  successor  or  acquiring
corporation, as the case may be, is not, immediately after such  merger
or  consolidation, or such sale or other disposition, in default  under
any of such obligations;

          (f)    Enter  into,  or  permit  to  remain  in  effect,  any
agreements  to  rent or lease any real property used for  manufacturing
operations providing for payments in excess of an aggregate of $500,000
per annum by Company and all subsidiaries;

          (g)   Enter  into  any arrangement with any  bank,  insurance
company,  or  other  lender or investor providing for  the  leasing  by
Company or any subsidiary of real property which has been or is  to  be
sold  or  transferred by Company or any subsidiary to  such  lender  or
investor; or

          (h)   Discount or sell with recourse, or sell for  less  than
the face value thereof, any of its notes or accounts receivable, except
that  Company  may  discount or sell with recourse notes  and  accounts
receivable  received  by  it from the sale  of  its  products,  if  the
contingent liability on all such notes and accounts receivable does not
exceed an aggregate of $10,000,000 at any time outstanding.

     3.    Company covenants that it will not permit any subsidiary  to
lease,  sell, or dispose of any shares of any class of its stock (other
than  Directors'  qualifying  shares)  except  to  Company  or  another
subsidiary.
<PAGE>
                          Article VII
                       Events of Default

     The  following  shall  constitute Events  of  Default  under  this
Agreement:  (a) Company defaults in the payment of any principal on any
note  when  it  becomes  due, either under the terms  of  the  note  or
otherwise  as provided herein; (b) Company defaults in the  payment  of
any  interest on any note for more than 15 days after the due date; (c)
any  material representation or warranty made by Company herein  or  in
any  writing furnished in connection with or pursuant to the  Agreement
is false in any material respect on the date made; (d) Company defaults
in  the  performance  or observance of any other  agreement,  term,  or
condition contained herein, and such default is not remedied within  30
days  after  Company receives written notice thereof from  Lender;  (e)
Company  or  a  subsidiary  makes  an assignment  for  the  benefit  of
creditors;  (f)  Company  or  a subsidiary,  after  the  date  of  this
Agreement, petitions or applies to any tribunal for the appointment  of
a  trustee  or receiver, either of it or of a substantial part  of  its
assets,  or  commences  any  proceedings  relating  to  it  under   any
bankruptcy,  reorganization, arrangement, insolvency,  readjustment  of
debt, dissolution, or liquidation law of any jurisdiction; (g) any such
petition  or  application  is  filed,  or  any  such  proceedings   are
commenced,  against  Company  or  a subsidiary,  and  Company  or  such
subsidiary by any act indicates its approval, consent, or acquiescence,
or   an   order  is  entered  appointing  such  trustee  or   receiver,
adjudicating  Company  or  a  subsidiary  bankrupt  or  insolvent,   or
approving the petition in any such proceedings, and such order  remains
in  effect  for  more than 60 days or (h) an order is  entered  in  any
proceedings against Company decreeing its dissolution or split-up,  and
such order remains in effect for more than 60 days.  If any one or more
of  the  above Events of Default occur and continue past any  specified
grace period, Lender may, by written notice to Company, declare all  of
the  notes  to  be immediately due and payable, together with  interest
accrued thereon.

                          Article VIII
                          Definitions

     For  the purpose of this Agreement, the following terms shall have
the following meanings:
     1.   "Person" shall mean and include an individual, a partnership,
a  limited liability company, a corporation, a trust, an unincorporated
organization, and a government or any department or agency thereof;

     2.    "Subsidiary" shall mean any corporation organized under  the
laws of any state of the United States of America, Puerto Rico, Canada,
or  any  province of Canada, a majority of the voting  stock  of  which
shall,  at  the  time as of which any determination is being  made,  be
owned by Company, either directly or through subsidiaries;

     3.    "Purchase  Money  Obligations" shall mean  (a)  indebtedness
secured  by  an  existing mortgage or other lien on property  hereafter
acquired  by  Company  or a subsidiary, or (b)  indebtedness  which  is
issued  as, or the entire proceeds of which are used to pay, a part  of
the purchase price paid for property hereafter acquired, regardless  of
whether  such  indebtedness is secured by a mortgage or other  lien  on
such  property  provided, however, that as to each such  after-acquired
property,  the liens thereon immediately after the acquisition  thereof
<PAGE>
shall  be confined solely to such property and the aggregate amount  of
all  indebtedness secured thereby or the unsecured indebtedness created
for  the purpose of paying part of the purchase price of such property,
as the case may be, shall not exceed 66.66 percent of the lower of cost
or  fair  value  (as  determined in good faith by  Company's  Board  of
Directors) of such property at the time of acquisition;

     4.   "Funded debt" shall mean any obligation payable more than one
year  from  the  date  of the creation thereof, which  under  generally
accepted  accounting  principles is shown on the  balance  sheet  as  a
liability,  and "current debt" shall mean any obligation  for  borrowed
money  (and  any  negotiable instruments payable  and  drafts  accepted
representing   extensions  of  credit  whether  or   not   representing
obligations for borrowed money) payable on demand or within a a  period
of  one  year  from the date of the creation thereof.  Any  obligation,
however, shall be treated as funded debt, regardless of its term, if it
is  renewable pursuant to the terms thereof or of a revolving credit or
similar  agreement effective for more than one year after the  date  of
the  creation of such obligation, or may be payable out of the proceeds
of  a similar obligation pursuant to the terms of such obligation or of
any such agreement.  "Debt" shall include guarantees, endorsements,  or
other contingent liabilities in connection with the obligations, stock,
or  dividends  of any person, other than endorsements in  the  ordinary
course  of  business  of  negotiable  instruments  in  the  course   of
collection.

     5.    "Event of default" shall mean any event specified in Article
VI,  provided that every requirement in connection with such event  for
the  giving  of  notice, the lapse of time, or  the  happening  of  any
further  condition, event or act has been satisfied.   "Default"  shall
mean any of such events, regardless of whether any such requirement has
been satisfied.

     6.    "Officer's certificate" shall mean a certificate  signed  in
the name of Company by its President or one of its Vice Presidents.

     7.   "Note" shall mean and include both the Revolving Credit Notes
and the Term Notes.

                           Article IX
                         Miscellaneous

     1.    This  Agreement  may be amended, and Company  may  take  any
action herein prohibited, or omit to perform any act herein required to
be performed if it obtains the written consent of Lender.

     2.    All representations and warranties contained herein or  made
in  writing  by  Company  in  connection  herewith  shall  survive  the
execution and delivery of this Agreement and of the notes.
     3.    All covenants and agreements in this Agreement contained  by
or  on behalf of either party to shall bind and inure to the benefit of
its respective successors and assigns.

     4.    All  communications provided for hereunder shall be sent  by
first  class mail addressed to each party at the address shown  in  the
first paragraph of this Agreement above, attention President, or to any
other address of which either party notifies the other in writing.
<PAGE>
     5.   No delay or failure by Lender to exercise any right or remedy
under  this Agreement, and no partial or single exercise of that right,
shall  constitute a waiver of that or any other right, unless otherwise
expressly provided herein.  The rights and remedies expressly specified
herein  are  cumulative and not exclusive of Lender' other  rights  and
remedies.

     6.   This Agreement shall terminate when Company no longer has the
right  to  borrow hereunder and all notes issued pursuant  hereto  have
been paid in full.

     7.    This  Agreement may be executed in any number of copies  and
separate counterparts. Complete sets of counterparts executed by all of
the parties shall be filed with Company and Lender.

     The  parties hereto have caused this Agreement to be duly executed
by  their  respective duly authorized officers as of the day  and  year
first above written.

COMPANY:  CURTIS MATHES HOLDING CORPORATION


          By:    /S/  Pat Custer
               Patrick A. Custer, President


LENDER:   EMERALD CAPITAL CORPORATION


          By:  /s/  Yolanda Herik
               Yolanda Herik, President

                           Exhibit 1

$____________________,                                    19_____

     On or before _____________________ (1yr.), for value received, the
undersigned promises to pay to the order of EMERALD CAPITAL CORPORATION
the  sum of $_____________, with interest payable quarter-annually  and
at  maturity  at a rate equivalent to the rate described  by  the  Wall
Street  Journal as the prime rate in effect from time to time (computed
on  a  365-day  basis)  ("Prime Rate"), plus one and  one-half  percent
(1.5%.)   After  maturity,  both  principal  and  interest  shall  bear
interest at the same rate, and both principal and interest are  payable
in  lawful  money of the United States at the main office of the  payee
hereof.

     This  Note  is  issued  pursuant  to  an  Agreement  between   the
undersigned  and Lender dated as of October 1, 1996 to which  Agreement
reference is hereby made for a description of the right of the maker to
anticipate  payment  hereof, the conditions  upon  which  the  maturity
hereof may be accelerated by the holder, and other terms and conditions
upon which this Note is issued.

                              CURTIS MATHES HOLDING CORPORATION

                              By:______(Form only)____________
                                   Patrick A. Custer, President
<PAGE>