U. S. SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C. 20549
                             FORM 10-QSB/A

(Mark One)
[X]   QUARTERLY   REPORT   PURSUANT  TO  SECTION  13  OR  15(d)  OF  THE
      SECURITIES EXCHANGE ACT OF 1934
      For the quarterly period ended JUNE 30, 1998

[  ]  TRANSITION   REPORT  PURSUANT  TO  SECTION  13  OR  15(d)  OF  THE
      SECURITIES EXCHANGE ACT OF 1934
      For the transition period from          to        


                    Commission file number 0-14937 

                        PMC INTERNATIONAL, INC.
   (Exact name of small business issuer as specified in its charter)

                    COLORADO                   84-0627374
        (State or other jurisdiction of       (IRS Employer
         incorporation or organization)    Identification No.)

          555 17th Street, 14th Floor, Denver, Colorado 80202
                (Address of principal executive offices)

                             (303) 292-1177
                      (Issuer's telephone number)

                             Not Applicable
 (Former name, former address and former fiscal year, if changed since
                              last report)

Check  whether the issuer (1) filed all  reports  required to be filed by
Section  13 or 15(d) of the  Exchange  Act  during the past 12 months (or
for such  shorter  period that the  registrant  was required to file such
reports),  and (2) has been subject to such filing  requirements  for the
past 90 days.  Yes     X     .  No  .

As of August 13, 1998, the issuer had  outstanding  4,857,803  shares of
Common Stock, par value $.01 per share.
 
Transitional Small Business Disclosure Format
Yes        No   X  .


<PAGE>

                PMC INTERNATIONAL, INC. AND SUBSIDIARIES


PMC  International,  Inc.  (the  "Company  or the  "Registrant")  hereby
amends its Quarterly  Report on Form 10-QSB  for the  quarterly  period
ended  June 30,  1998,  by  amending  its  response  to Part I,  Item 2,
contained in its original  filing by deleting  the  subsection  entitled
"Corporate  Restructuring"  and  replacing it in its entirety
and  by amending  its  response to Part II,  Item 6A contained
in its original filing by adding  Exhibits
10.5, 10.6, 10.7, 10.8, 10.9, 10.10, 10.11, 10.12, and 10.13.


<PAGE>


                PMC INTERNATIONAL, INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  
        CONDITION  AND  RESULTS  OF  OPERATIONS.

Corporate Restructuring

During the second  quarter of 1998,  the Company  committed  substantial
resources  and efforts in seeking to find a strategic  partner to assist
the Company with its capital needs as well as  strengthen  its positions
in the financial  services  arena.  To this end, the Company engaged the
investment banking firm of Putnam,  Lovell, de Guardiola & Thornton.  On
July 7,  1998,  after  an  extensive  negotiation  period,  the  Company
entered into a Letter of Intent with Dundee Bancorp Inc.  ("Dundee"),  a
Canadian  investment  management firm, for a proposed equity  investment
in the Company of $24 million.  In connection  with the execution of the
Letter of Intent,  Dundee provided a loan to the Company of $1.5 million
for working capital  purposes.  The loan is secured by the  assets  of 
the  Company  and by a pledge of the stock of each of
the Company's  subsidiaries  and is guaranteed by PMC,  PMCIS,  and PTS.
The loan is due on September  30, 1998, unless extended by mutual agreement.
On August 7, 1998,  the Company
and  Dundee   mutually   agreed  to  terminate  the  Letter  of  Intent,
principally  as a result of an internal  change in Dundee's  priorities.
Dundee  concluded  that a license for the use of the Company's  products
and services in Canada, or other similar  arrangements,  may better suit
its business  plan and  strategic  goals.  The Company and Dundee are in
discussions  regarding  such an  arrangement,  however  there  can be no
assurance  that an agreement will be reached.  The Company  continues to
seek out  strategic  relationships  and  sources  of capital to meet the
Company's working capital needs.

In order to address its working capital  deficit and capital needs,  the
Company is  implementing a wide reaching  corporate  restructuring.  The
Company  is  reorganizing  its  executive  management  and on August 24,
1998,  the  Company  concluded  negotiations  with  Kenneth S.  Phillips
concerning   the   termination   of  his  employment  and  accepted  his
resignation as President,  Chief  Executive  Officer and Director of the
Company and from all officer and director  positions  with the Company's
subsidiaries.  In  connection  with these  events,  the Company  entered
into a  separation  agreement  with Mr.  Phillips whereby the Company
agreed to make severance payments to Mr. Phillips in an amount of 
$50,000 for two months and $25,000 per month for an additional 23 months
in lieu of the severance  payments  required under Mr.  Phillips'
Employment  Agreement.  The separation  agreement restricts
Mr.   Phillips  from  competing  or   interfering   with  the  Company's
activities  during the 27 month period after his termination
or from disclosing or utilizing
proprietary   information.   At  the   option  of  Mr.   Phillips,   the
non-compete restrictions may be terminated  after one year
and the Company  would have no further  severance payment obligation to him. 
In addition, Mr. Phillips'   Employment   Agreement  and  Change  of  
Control   Severance Agreement were  terminated and the  Shareholders  
Agreement  dated as of December 24, 1996,  among the Company,  
Mr.  Phillips and certain  other
shareholders,  which included a voting agreement among the parties,  was
effectively  terminated as to Mr.  Phillips and KP3, LLC (a
Colorado limited  liability  company  controlled by Mr.  Phillips).  
Pursuant to the separation agreement, the Company and Mr. Phillips agreed
to conclude the relationship between the Company and KP3.  Mr. Phillips
agreed to apply all funds held by KP3 towards the prepayment of the KP3
Loans and the Company agreed to allow the bank to apply the collateral it 
pledged as security (including a portion of accrued interest therein)
in the amount of approximately $1,766,000, to the payment of principal
and interest on the KP3 Loan.  The Company will forgive accounts receivable
from KP3 in the amount of approximately $234,000, with the combined 
assistance to KP3 not exceeding $2 million.  

As a result of the application of the pledged collateral to the KP3 Loan and
pursuant to the terms of the Reimbursement and Pledge Agreement between the
Company and KP3, the Company will exercise its rights thereunder in respect
of the 410,961 shares of PMCI common stock pledged by KP3, and will take
such shares into its treasury. 


<PAGE>


                PMC INTERNATIONAL, INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  
        CONDITION  AND  RESULTS  OF  OPERATIONS. (cont'd)

The Company named Mr. Scott A. MacKillop,  the Company's  Executive Vice
President  and Chief  Operating  Officer,  President  and named Mr. C.R.
(Sonny)  Tucker,  a consultant for the Company,  Interim Chief Executive
Officer.  Mr. Tucker has held  positions as Chief  Executive  Officer of
Shell  Middle East and  CFO/Controller  of Shell  Offshore  Inc. He also
worked  as  Managing  Director  for  Westridge  Capital  Management  and
Director  Investment  Planning of the Shell Oil  Retirement  and Savings
plans.

The Company has  established an executive  management team consisting of
Mssrs. Tucker,  MacKillop and Mr. Robert Brown, Executive Vice President
of the  Company's  subsidiary  Portfolio  Management  Consultants,  Inc.
("PMC"),  to implement the Company's  restructuring  plans.  An internal
leadership  team of  approximately  20 employees,  including  senior and
middle  managers,  has  been  created  to  make  recommendations  to the
executive   management  team  and  implement  tactical  changes  to  the
Company's  method  of  operations.   The  goal  of  these  teams  is  to
restructure and refocus the Company's efforts and to achieve  profitable
operations.  The Company  intends to achieve  this result by focusing on
and increasing  profitable business channels,  eliminating  unprofitable
business  channels,  gaining  efficiencies  in  operations  and reducing
expenses.

As a result of this  restructuring,  the  Company  anticipates  one-time
charges and  write-offs  in the third  quarter of 1998 of  approximately
$2,500,000.

In addition, the Company has taken or intends to take the following
actions:

    Due to the PMCIS integration and related corporate  reorganizations,
   20  non-critical  employees have departed the Company or are expected
   to depart in the second  half of 1998.  The  Company  does not intend
   to replace those employees.

    In the second quarter of 1998, the Company  outsourced the portfolio
   accounting  function for its separate account  business.  The Company
   believes this  outsourcing will allow it to deploy capital into other
   areas and into  supporting new business.  This  outsourcing  decision
   is expected to create  annual  savings by  reducing  system  support,
   payroll,  licensing  and  maintenance  fees,  telecommunications  and
   pricing feeds.

    The Company has  implemented  measures to control costs in all areas
   and has made  strategic  improvements  in promotion  and  advertising
   spending.

    The  reorganization  of its executive  management  and executive pay
   cuts  it  intends  to  implement  will  reduce  payroll  and  related
   expenses.

    The  Company's  Atlanta lease  obligation  terminates in April 1999.
   The Company  believes  that all staff will have  relocated  to Denver
   or will have left the  Company  at that  time.  The  Company  expects
   there  will be a  reduction  in  one-time  relocation,  training  and
   employment agency fees and expenses.
<PAGE>

                PMC INTERNATIONAL, INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  
        CONDITION  AND  RESULTS  OF  OPERATIONS. (cont'd)


    The  Company's  sales and  marketing  group  has been  strategically
   reorganized.  The  customer  service area has been  reengineered  and
   customers  will benefit from more timely and efficient  support.  The
   Company  expects  to benefit  from a  re-energized  sales  effort and
   lower  payroll  and travel  costs as a result of the  reorganization.
   The  Company has also  gained  capacity  as a result of process  flow
   improvements.

    In connection with head count reductions,  the Company is evaluating
   its Denver office space options in order to further reduce costs.

While Management  believes that the  implementation of the restructuring
plans   will   move  the   Company   towards   its  goal  of  near  term
profitability,  there is no assurance  that the plan will be  successful
or that the Company will achieve profitable operations within the proposed 
time frame or at all.


<PAGE>

                PMC INTERNATIONAL, INC. AND SUBSIDIARIES

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

A.    Exhibits

      10.5  Letter of Intent between the Company and Dundee Bancorp Inc.,
            dated July 7, 1998
      10.6  Loan Agreement between the Company and Dundee Bancorp Inc., dated
            July 7, 1998
      10.7  Borrower Security Agreement between the Company and Dundee
            Bancorp Inc., dated July 9, 1998
      10.8  Subsidiary Security Agreement among PMC, PMCIS, PTS and Dundee
            Bancorp Inc., dated July 9, 1998
      10.9  Guarantee Agreement among PMC, PMCIS, PTS and Dundee Bancorp Inc.,
            dated July 9, 1998
      10.10 Pledge Agreement between the Company and Dundee Bancorp Inc.,
            dated July 9, 1998
      10.11 Promissory Note made by the Company, dated July 10, 1998
      10.12 Separation Agreement between the Company and Kenneth S. Phillips,
            dated August 24, 1998
      10.13 Amendment to Reimbursement and Pledge Agreement dated August 24,
            1998

<PAGE>



                PMC INTERNATIONAL, INC. AND SUBSIDIARIES

SIGNATURES

Pursuant to the  requirements  of the Exchange Act, the  registrant  has
caused  this  report  to be  signed  on its  behalf  by the  undersigned
thereunto duly authorized.

                                PMC INTERNATIONAL, INC.
                                REGISTRANT


Date:  September 14, 1998           /S/      Scott A. MacKillop             
                                Scott A.MmacKillop
                                President

<PAGE>
                                 EXHIBIT INDEX

A.   NUMBER EXHIBIT
      10.5  Letter of Intent between the Company and Dundee Bancorp Inc.,
            dated July 7, 1998
      10.6  Loan Agreement between the Company and Dundee Bancorp Inc.,
            dated July 7, 1998
      10.7  Borrower Security Agreement between the Company and Dundee
            Bancorp Inc., dated July 9, 1998
      10.8  Subsidiary Security Agreement among PMC, PMCIS, PTS and Dundee
            Bancorp Inc., dated July 9, 1998
      10.9  Guarantee Agreement among PMC, PMCIS, PTS and Dundee Bancorp 
            Inc., dated July 9, 1998
      10.10 Pledge Agreement between the Company and Dundee Bancorp Inc.,
            dated July 9, 1998
      10.11 Promissory Note made by the Company, dated July 10, 1998
      10.12 Separation Agreement between the Company and Kenneth S. Phillips,
            dated August 24, 1998
      10.13 Amendment to the Reimbursement and Pledge Agreement, dated August
            24, 1998
<PAGE>

EXHIBIT 10.5

July  7, 1998


PMC International, Inc.
c/o Joseph R. Hershberger
Putnam Lovell de Guardiola & Thornton
19 Fulton Street
South Street Sea Port
New York, New York 10038

Dear Sirs:

           This letter confirms that, subject to the terms and
conditions set forth in this letter, Dundee Bancorp Inc.
("Dundee") wishes to provide to PMC International, Inc. ("PMC")
equity financing in the amount of approximately US$24,000,000 and
interim bridge loan financing of US$1,500,000 pending the Closing
of the equity financing.  The terms and conditions on which
Dundee is willing to proceed are as follows:

           1.   On the Closing Date (as defined below), PMC shall
                issue to Dundee that number of shares of voting
                common stock, par value $.01 per share, of PMC
                (the "Dundee Shares") at a subscription price of
                US$4.00 per share, which shall represent not less
                than 50.5% of the common stock of PMC on a
                fully-diluted basis and not less than 55% of the
                outstanding common stock of PMC, in each case
                determined as of the Closing Date (as defined
                below) (the "Equity Financing").

           2.   Dundee shall make available to PMC by 5:00 p.m.
                (Toronto time) on the third business day (the
                "Advance Date") after the date on <PAGE> 
                which a
                definitive Loan Agreement with respect to the Debt
                Financing (the "Loan Agreement" and, together with
                the Subscription Agreement (as defined below), the
                "Definitive Agreements") is entered into by and
                between Dundee and PMC, on the terms and subject
                to satisfaction of the conditions contained in the
                Loan Agreement for such loan, a bridge loan in the
                principal amount of US$1,500,000 (the "Debt
                Financing").  The outstanding principal amount of
                the Debt Financing, and any overdue interest,
                shall bear interest at a rate of 12% per annum,
                calculated daily from and including the Advance
                Date to but excluding the date on which such
                principal amount, together with all interest
                thereon, is repaid in full.

           3.        (a)  Subject to section 3(b) below, the
                     principal amount of the Debt Financing, and
                     all accrued interest thereon, shall be repaid
                     in full on December 31, 1998 or, if earlier,
                     the Closing Date.

                (b)  Notwithstanding subsection 3(a), the
                     principal amount of the Debt Financing, and
                     all accrued interest thereon shall be repaid
                     in full on the earliest to occur of (i)
                     September 30, 1998, if for any reason
                     whatsoever PMC fails to complete the
                     transactions contemplated by the Subscription
                     Agreement in accordance with the terms
                     thereof by such date, other than solely as a
                     result of material breach of Dundee's
                     obligations thereunder or Dundee's exercising
                     its right not to close pursuant to the Due
                     Diligence Condition (as defined below), (ii)
                     August 31, 1998, if a definitive Subscription
                     Agreement with respect to the Dundee Shares
                     (the "Subscription Agreement") shall not have
                     been entered into by such date, and (iii) the
                     date on which the Subscription Agreement is
                     terminated (other than by PMC for material
                     breach by Dundee of its obligations
                     thereunder or by Dundee pursuant to the Due
                     Diligence Condition).  Notwithstanding
                     anything in this Section 3(b) to the
                     contrary, if Dundee terminates the
                     transactions contemplated by this letter of
                     intent for any reason (other than a breach by
                     PMC of its obligations hereunder), the Debt
                     Financing and all accrued interest thereon
                     shall not be due for 30 days from the date of
                     such termination.

                (c)  Repayment of the Debt Financing shall be made
                     by PMC, at the option of Dundee, by certified
                     check or by wire transfer to such account as
                     is directed in writing by Dundee.

           4.   The Debt Financing shall be evidenced by a
                promissory note (the "Note") issued pursuant to
                the Loan Agreement, which shall contain such
                representations and warranties, covenants and
                conditions as are mutually agreed by the parties,
                and shall be <PAGE> 
                secured by a general security
                agreement registered against all of the assets of
                PMC (the "PMC Security").  In addition, the
                repayment of the Debt Financing shall be
                guaranteed by each of the subsidiaries of PMC
                (other than Portfolio Brokerage Services Inc.
                ("PBSI")), as evidenced by their respective
                guaranties (the "Guaranties") and such Guaranties
                shall be secured by general security agreements
                registered against the respective assets of each
                of the subsidiaries of PMC (other than PBSI) (the
                "Subsidiary Security") and such repayment shall be
                further secured by pledges of the stock of the
                subsidiaries (including PBSI) (the "Subsidiary
                Pledges"), in each case in form and substance
                satisfactory to Dundee.

           5.   PMC shall pay to Dundee a fee in the amount of
                US$2,000,000 (the "Termination Fee") in the event

                 (i) PMC gives notice of termination of this
                     Letter of Intent in order to accept a
                     Superior Proposal as contemplated by
                     paragraph 12 of this letter of intent;

                (ii) there is a breach of PMC's obligations under
                     paragraph 12 of this letter of intent; or

                (iii)PMC terminates this letter of intent or a
                     definitive Subscription Agreement is not
                     entered into by August 31, 1998 (other than
                     as a result of a breach by Dundee of its
                     obligations under the binding terms of this
                     Letter of Intent or the Loan Agreement) and
                     within 12 months thereafter, PMC enters into
                     an agreement with respect to a Competing
                     Transaction (as defined below), provided that
                     PMC will not be required to pay the
                     Termination Fee pursuant to this clause
                     (iii), if (A) prior to the execution of the
                     Subscription Agreement, Dundee notifies PMC
                     pursuant to paragraph 12 of this Letter of
                     Intent that it no longer intends to proceed
                     with this transaction, and (B) within 12
                     months thereafter, PMC enters into an
                     agreement with respect to a Competing
                     Transaction with a person or persons with
                     whom PMC or its Representatives (as defined
                     below) had not discussed or negotiated, or
                     from whom PMC or its Representatives had
                     <PAGE> 
                     not received any proposal with respect
                     to, a Competing Transaction at any time prior
                     to Dundee's notification that it no longer
                     intends to proceed with this transaction.

                The Termination Fee shall be payable on the first
                to occur of (x) the date PMC gives notice as
                contemplated by clause (i) of the immediately
                preceding sentence, (y) upon demand, in the event
                PMC breaches its obligation under paragraph 12 of
                this letter of intent, and (z) immediately upon
                entry by PMC into such agreement with respect to a
                Competing Transaction, in case the Termination Fee
                is payable under clause (iii) of the immediately
                preceding sentence.

           6.   The closing of the Equity Financing shall take
                place on or before September 30, 1998 (the
                "Closing Date") at the offices of Dundee located
                at 40 King Street West, Suite 5500, Scotia Plaza,
                Toronto, Ontario, or at such other time and place
                as is agreed upon by Dundee and PMC.
                Notwithstanding the foregoing, if PMC is unable or
                unwilling to complete the transactions
                contemplated in the Subscription Agreement in
                accordance with the terms thereof on the Closing
                Date, Dundee shall be entitled, but not obligated,
                at its sole option, to extend the Closing Date for
                a specified period of time which shall not exceed
                three months, upon not less than 5 days' written
                notice by Dundee to PMC at any time prior to the
                expiry of the Closing Date, and in such event, all
                references herein to the Closing Date shall refer
                to the amended date of closing.

           7.   Dundee's obligation to complete the Equity
                Financing shall be subject to the satisfaction of
                the following conditions and such other conditions
                as may be contained in the Subscription Agreement:

                (a)  Dundee's technical and legal due diligence
                     investigation of PMC and its subsidiaries and
                     affiliates, and all matters relating thereto,
                     shall have been completed to the satisfaction
                     of Dundee, it being the expectation that
                     Dundee will complete its due diligence
                     investigation by not later than August 15,
                     1998 (the "Due Diligence Condition"), and no
                     event shall have occurred and no information
                     (financial <PAGE>
                     or otherwise) shall have
                     been disclosed to Dundee which, in the sole
                     opinion of Dundee, materially and adversely
                     affects the business, assets, liabilities,
                     condition (financial or otherwise) or
                     prospects of PMC and its subsidiaries or the
                     Equity Financing;

                (b)  Dundee shall be satisfied that each director
                     on the board of directors of PMC and its
                     subsidiaries shall have resigned, effective
                     on or before the Closing Date, other than
                     Kenneth Phillips and Scott MacKillop and that
                     simultaneously with the Closing, nominees
                     designated by Dundee shall have been elected
                     and qualified and constitute a majority of
                     the Board of Directors;

                (c)  Dundee and PMC shall have entered into a
                     registration rights agreement providing
                     Dundee demand and piggyback registration
                     rights in form and substance satisfactory to
                     Dundee;

                (d)  on the Closing Date (after giving effect to
                     any adjustment to outstanding incentives
                     contemplated by clause (ii) of subparagraph
                     (e) of this paragraph 7), the Dundee Shares
                     shall represent not less than 50.5% of the
                     common stock of PMC determined on a
                     fully-diluted basis and not less than 55% of
                     the outstanding common stock;

                (e)  all necessary formal documentation shall be
                     executed and delivered to Dundee, in form and
                     content reasonably satisfactory to Dundee,
                     including without limitation:

                     (i)  a subscription agreement which shall
                          contain comprehensive representations,
                          warranties, conditions, covenants and
                          indemnification in respect of PMC and
                          its subsidiaries;

                     (ii) an amended employment agreement between
                          PMC and Kenneth Phillips, which shall
                          include, without limitation, appropriate
                          incentives with respect to equity
                          participation and an appropriate non-
                          <PAGE>
                          competition covenant by Kenneth
                          Phillips in favor of PMC and its
                          subsidiaries; and

                     (iii)favorable legal opinion from legal
                          counsel to PMC, addressed to Dundee.

                 (f) receipt of all necessary consents and
                     approvals from all third parties, including,
                     without limitation, any required approval of
                     PMC's shareholders for the issuance of the
                     Dundee Shares, any necessary approvals of
                     PMC's investment advisory contracts arising
                     as a result of any change in control of PMC,
                     and the approval of all applicable regulatory
                     authorities; and

                (g)  such other documents, agreements and
                     instruments as Dundee may reasonably require.

           8.   During the period from the date hereof to and
                including the Closing Date, PMC shall provide or
                cause to be provided Dundee and its counsel,
                accountants, consultants and other representatives
                full access to the properties, books and records,
                contracts, facilities and personnel of PMC and its
                subsidiaries and to which PMC and its subsidiaries
                have access (e.g., accountants and other
                consultants) with respect to PMC and its
                subsidiaries in connection with the transactions
                contemplated hereby, including, without
                limitation, analysis and review of financial
                statements and projections, accounting methods,
                auditors' workpapers, assets, liabilities,
                operations, business plans and prospects, and a
                reasonable opportunity to discuss the affairs,
                finances and operations of PMC and its
                subsidiaries with officers, directors, management,
                employees, accountants and other appropriate
                personnel and shall furnish or cause to be
                furnished to Dundee and such representatives all
                such information about PMC and its subsidiaries as
                may be reasonably requested.

           9.   During the period from and including the date
                hereof to and including the Closing Date, PMC
                shall, and PMC shall ensure that its subsidiaries,
                conduct their business solely in the ordinary
                course consistent with past practice and, without
                limiting the generality of the foregoing, shall
                not, without Dundee's prior written consent:
                <PAGE>

                (a)  issue or agree to issue any shares in the
                     capital stock of PMC or any subsidiary of PMC
                     or any security convertible or exchangeable
                     for any such shares or grant or agree to
                     grant any option, warrant or other right to
                     acquire any such shares or securities, or
                     otherwise enter into any arrangement having
                     substantially the same effect, except for
                     issuances of stock in the ordinary course
                     pursuant to the exercise of options or
                     warrants outstanding on the date hereof;

                (b)  acquire or agree to acquire any assets or
                     properties, or dispose or agree to dispose of
                     any assets or properties, except in the
                     ordinary course of business consistent with
                     past practice;

                (c)  increase the level of compensation of any
                     employee, officer, director or consultant,
                     grant any bonuses, benefits, severance or
                     other forms of direct or indirect
                     compensation to any employee, officer,
                     director or consultant or adopt, increase,
                     terminate, amend or otherwise modify any plan
                     for the benefit of employees, directors or
                     officers, except as may be required by
                     applicable law or normal increases in salary
                     payable to employees and the provision of
                     normal benefits under plans existing on the
                     date hereof, in each case in the ordinary
                     course of business consistent with past
                     practice;

                (d)  enter into, modify, amend or terminate any
                     contract or agreement with any Affiliate or,
                     except in the ordinary course of business
                     consistent with past practice, any other
                     material contract or agreement;

                (e)  compromise or settle any material claim or
                     litigation;

                (f)  pay any dividends, redeem or repurchase any
                     securities, or otherwise cause assets to be
                     distributed to any of its stockholders; <PAGE>

                (g)  borrow any funds, under existing lines of
                     credit or otherwise, except as reasonably
                     necessary for the ordinary operation of the
                     Company's business in a manner, and in
                     amounts, consistent with past practice;

                (h)  make any loan, advance or investment to any
                     officer, director or shareholder or, except
                     in the ordinary course consistent with past
                     practice, to or in any other person (other
                     than payments consistent with past practice
                     to an affiliate of PMC's President not to
                     exceed $60,000 in the aggregate); or

                (i)  merge or consolidate with any person or
                     commit to any such merger or consolidation.

           10.  PMC agrees that, at any time prior to the Closing
                Date, Dundee may assign all or any part of its
                rights and obligations under this letter to any
                one or more affiliates of Dundee, upon written
                notice to, but without the approval of, PMC,
                including without limitation, the advance of the
                Debt Financing by Dundee.

           11.  All expenses incurred by PMC and Dundee shall be
                paid by the party incurring such expense, and
                without limiting the foregoing, any brokerage fees
                or finder's fees payable by PMC in connection with
                this transaction shall be paid by PMC, and PMC
                shall indemnify Dundee in respect of any liability
                in connection therewith.

           12.  Upon acceptance of this letter by PMC and until
                the earlier of (i) the date on which Dundee
                notifies PMC that it does not intend to proceed
                with this transaction (Dundee agreeing that it
                will notify PMC of its intention not to proceed
                with the transaction promptly upon reaching such
                decision) and (ii) the Closing Date, neither PMC
                nor any subsidiary nor any of their respective
                directors, officers, employees, representatives or
                agents (collectively, "Representatives") shall
                solicit, initiate or encourage the submission of
                any contact, inquiry or offer from, or engage in
                any discussion or negotiation with, any person
                relating to the acquisition of all or any material
                portion of PMC's or any of its <PAGE>
                subsidiaries' assets or of any equity interest in
                PMC or any subsidiary or any business combination
                with PMC or any subsidiary or the provision of any
                material financing to PMC or any subsidiary (any
                such acquisition,  business combination or
                financing a "Competing Transaction"), or provide
                any non-public information relating to PMC or any
                subsidiary to any person (other than for the
                ordinary course of business and consistent with
                past practice, or to governmental authorities or
                its counsel or accountants).  It is acknowledged
                and agreed that a Competing Transaction shall not
                include any financing transaction (x) for an
                amount not exceeding $1.5 million and the proceeds
                of which are used solely to repay the Debt
                Financing, (y) for an amount not exceeding $1.5
                million and the proceeds of which are used solely
                for working capital purposes, or (z) for an amount
                not exceeding $2.5 million and the proceeds of
                which are used solely to pay and discharge the
                Company's obligations with respect to the matters
                set forth in Schedule 5.1 to the Loan Agreement.
                In the event that PMC or any Representative
                receives any contact, inquiry or offer in respect
                of a Competing Transaction, PMC shall immediately
                advise Dundee of the receipt of such contact,
                inquiry or offer (and of any amendment thereof or
                supplement thereto), the identity of the person
                making such contact, inquiry or offer and  the
                substance of such contact, inquiry or offer
                (including, in the case of any offer, the price
                and other terms and conditions thereof).
                Notwithstanding the foregoing, nothing shall
                prevent PMC from furnishing information to, or
                entering into discussions or negotiations with,
                any person from and after August 15, 1998 in
                connection with an offer made without such
                solicitation, initiation or encouragement if and
                to the extent that PMC is advised in writing by
                outside legal counsel that its Board of Directors
                has a fiduciary duty to do so.  In the event the
                Board of Directors of PMC receives a proposal in
                respect of a Competing Transaction and the Board
                of Directors determines that such Competing
                Transaction is reasonably likely to be consummated
                and that the Board of Directors has a fiduciary
                obligation to accept such proposal (a "Superior
                Proposal"), then if  PMC shall have repaid the
                Debt Financing in full and paid Dundee the
                Termination Fee, PMC may terminate this Letter of
                Intent or the Subscription Agreement, as
                applicable, and enter into an agreement with
                respect to such Superior Proposal.  The parties
                <PAGE> 
                agree that payment of the Termination Fee
                for a breach of PMC's obligations under this
                paragraph 12 shall constitute liquidated damages,
                and not penalty, for such breach.

           13.  The terms and conditions of this letter are
                confidential and will not be released or discussed
                by either party to or with any other person,
                without the prior written consent of the other
                party or as otherwise required by applicable law;
                and, notwithstanding the foregoing, upon
                acceptance of this letter by PMC and delivery to
                Dundee of evidence of  approval of this letter of
                intent by PMC's Board of Directors or other
                evidence, satisfactory to Dundee, that this letter
                of intent has been duly authorized, executed and
                delivered by PMC and constitutes a valid and
                binding obligation of PMC to the extent provided
                in paragraph 14 hereof, PMC may issue a press
                release in respect of this transaction, subject to
                the prior review and approval of such press
                release by Dundee, and Dundee may issue a press
                release in respect of this transaction, subject to
                prior review and approval of such press release by
                PMC.

           14.  This letter constitutes a statement of the present
                intentions of the parties and does not constitute
                a binding obligation to consummate the
                transactions contemplated hereby.  A binding
                commitment with respect to such transactions will
                exist upon the execution of a definitive
                Subscription Agreement and Loan Agreement.
                Notwithstanding the foregoing, the provisions of
                paragraphs 5, 8, 9, 11, 12, 13 and 15 shall be
                binding upon the parties hereto.  Either party may
                terminate this letter of intent by written notice
                to the other in the event a definitive
                Subscription Agreement has not been entered into
                by July 31, 1998, in which event this letter of
                intent will be of no further force and effect,
                except that the provisions of paragraphs 5, 11,
                12, 13 and 15 shall survive such termination.  In
                addition, the parties hereby confirm that the
                terms and conditions of the Confidentiality
                Agreement, dated April 13, 1998, remain in full
                force and effect.

           15.  This letter shall be governed by and construed in
                accordance with the laws of the State of New
                York.  The parties hereto agree that any suit,
                action or proceeding seeking to enforce any
                provision of, or based on any matter arising out
                of or in connection with, this <PAGE> 
                Letter of
                Intent or the transactions contemplated hereby
                shall be brought in the United States District
                Court for the Southern District of New York or any
                other New York State Court sitting in New York
                City, and each of the parties hereby consents to
                the jurisdiction of such courts (and of the
                appropriate appellate courts therefrom) in any
                such suit, action or proceedings and irrevocably
                waives, to the fullest extent permitted by law,
                any objection which it may now or hereafter have
                to the laying of the venue of any such suit,
                action or proceeding in any such court or that any
                such suit, action or proceeding with is brought in
                any such court has been brought in an inconvenient
                forum.  Process in any such suit, action or
                proceeding may be served on any party anywhere in
                the world, whether within or without the
                jurisdiction of any such court.  Without limiting
                the foregoing, each party agrees that service of
                process on such party by first-class mail or
                overnight courier, postage or delivery charges
                prepaid, at its principal executive office
                addressed to the attention of its General Counsel
                shall be deemed effective service of process on
                such party.  This letter may not be amended,
                modified or waived orally, but only by an
                instrument in writing signed by the parties.  This
                letter may be executed in two or more
                counterparts, each of which shall be an original,
                but all of which together shall constitute one and
                the same letter.

           16.  Dundee intends that the Subscription Agreement
                will contemplate that after the Closing PMC will
                use reasonable efforts to obtain a listing of its
                stock on NASDAQ NMS and that Dundee will use
                reasonable efforts to facilitate such listing,
                provided that Dundee shall not be obligated to
                approve any additional issuance of shares or to
                make any further investment in PMC or to reduce
                its representation on the Board of Directors below
                that representing a majority of the Board. <PAGE>

           If you are in agreement with the foregoing, please
execute this letter where indicated below and return a copy
thereof by telecopier to Dundee (Attention:  Ray Benzinger) prior
to 11:30 p.m. (Toronto time) on the date of this letter (the
"Expiry Time").  This offer shall expire and be null and void if
Dundee does not receive a copy hereof duly executed by PMC prior
to the Expiry Time.

                               Yours very truly,

                               DUNDEE BANCORP INC.


                               By:/S/ Ray Benzinger
                                    Ray Benzinger
                                    Executive Vice President


PMC International, Inc. hereby agrees to be
bound by the foregoing terms and conditions.

Dated July 7, 1998

PMC INTERNATIONAL, INC.


By:/S/ Scott A. MacKillop
 
      

<PAGE>
EXHIBIT 10.6
                        LOAN AGREEMENT

           LOAN AGREEMENT,  dated as of July 7,  1998,  between PMC
INTERNATIONAL,  INC., a Colorado corporation (the "Borrower"),  and
DUNDEE BANCORP INC., an Ontario corporation (the "Lender").

           The parties hereto agree as follows:


                           ARTICLE I

                          DEFINITIONS

           SECTION  1.1  Definitions.  The
following terms, as used herein, have the following meanings:

           "Affiliate"  means,  as to any Person,  any other Person
directly  or  indirectly  controlling,  or  controlled  by or under
common control with such Person,  including without  limitation any
Person  owning  5% or more of any  class of  voting  securities  of
such Person  ("control"  meaning the power to direct the management
of  a  Person,  whether  by  the  ownership  of  securities  or  by
contract or otherwise).

           "Agreement"  means  this  Agreement,  as the same may be
amended, modified or supplemented from time to time.

           "Applicable  Law" means all applicable  laws,  treaties,
judgments,  decrees,  injunctions,  writs and  orders of any court,
governmental  agency or authority and rules,  regulations,  orders,
directives,   licenses  and  permits  of  any  governmental   body,
instrumentality, agency or authority.

           "Board"  means the Board of Directors of the Borrower or
a committee of directors  lawfully  exercising  relevant  powers of
the Board.

           "Borrower"  has  the  meaning  set  forth  in the  first
paragraph of this Agreement.

           "Borrower  Security  Agreement"  shall mean the security
agreement,  dated as of the Closing  Date,  made by the Borrower in
favor  of the  Lender,  as the  same  may  from  time  to  time  be
amended, modified or supplemented.  <PAGE>

           "Business  Day" means any day except a Saturday,  Sunday
or  other  day on  which  commercial  banks  in  Denver,  Colorado,
New York,  New York or  Toronto,  Canada are  authorized  by law to
close.

           "Closing  Date"  shall mean the date on which all of the
conditions set forth in Section 3.1 are satisfied.

           "Debt"  of  any  Person  means  at  any  date,   without
duplication,  (i) all  obligations  of  such  Person  for  borrowed
money,  (ii) all  obligations  of such Person  evidenced  by bonds,
debentures,   notes  or  other   similar   instruments,   (iii) all
obligations  of such Person to pay the deferred  purchase  price of
property or services,  except  trade  accounts  payable  arising in
the  ordinary  course of  business,  (iv) all  obligations  of such
Person as  lessee  under  capital  leases,  (v) all  Debt of others
secured  by a Lien on any  asset  of such  Person,  whether  or not
such Debt is assumed by such  Person  and  (vi) all  Debt of others
Guaranteed by such Person.

           "Default" means any condition or event that  constitutes
an Event of  Default  or that with the giving of notice or lapse of
time or both  would,  unless  cured or  waived,  become an Event of
Default.

           "Dollars,"  "United  States  dollars,"  "U.S.$"  or  "$"
means United States of America dollars.

           "Due Diligence  Condition" means a condition to Lender's
obligation  to  consummate  the  closing  under  the   Subscription
Agreement   that   permits  the  Lender  not  to  close  under  the
Subscription   Agreement  in  its  sole  discretion  based  on  its
investigation  of  Borrower  and its  business  without  regard  to
whether  any matter  discovered  during  such  investigation  would
otherwise  provide  grounds  for  Lender  not to  close  under  the
Subscription Agreement.

           "Event  of  Default"   has  the  meaning  set  forth  in
Section 6.1.

           "ERISA"  shall  mean  the  Employee   Retirement  Income
Security Act of 1974, as amended from time to time.

           "Governmental    Authority"    means   any   nation   or
government,  any  state  or  other  political  subdivision  thereof
<PAGE>   
and  any   entity   exercising   executive,   legislative,
judicial,  regulatory or administrative  functions of or pertaining
to government.

           "Guarantee   Agreement"   shall   mean   the   Guarantee
Agreement,  dated as of the Closing Date made by the  Guarantors in
favor  of the  Lender,  as the  same  may  from  time  to  time  be
amended, modified or supplemented.

           "Guarantors"  shall  mean each of  Portfolio  Management
Consultants,   Inc.,  a  Colorado   corporation,   PMC   Investment
Services,  Inc., a Delaware  corporation,  and Portfolio Technology
Services,  Inc.,  a  Colorado  corporation;  each  a  wholly  owned
subsidiary of the Borrower.

           "Guaranty"   by  any   Person   means  any   obligation,
contingent  or  otherwise,  of such Person  directly or  indirectly
guaranteeing  any  Debt or other  obligation  of any  other  Person
and,  without  limiting  the  generality  of  the  foregoing,   any
obligation,  direct or indirect,  contingent or otherwise,  of such
Person  (i) to  purchase or pay (or advance or supply funds for the
purchase  or  payment  of) such Debt or other  obligation  (whether
arising by virtue of  partnership  arrangements  or by agreement to
keep-well,  to purchase assets,  goods,  securities or services, to
take-or-pay,  or to  maintain  financial  statement  conditions  or
otherwise)  or  (ii) entered  into for the  purpose of  assuring in
any other  manner the obligee of such Debt or other  obligation  of
the payment  thereof or to protect  such  obligee  against  loss in
respect  thereof  (in  whole or in  part);  provided  that the term
Guaranty shall not include  endorsements  for collection or deposit
in the ordinary course of business.  The term  "Guarantee"  used as
a verb has a corresponding meaning.

           "Lender"   has  the  meaning  set  forth  in  the  first
paragraph of this Agreement.

           "Letter of Intent" means that certain  Letter of Intent,
dated the date  hereof,  between the  Borrower  and the Lender,  as
the  same  may  from  time  to  time  be   amended,   modified   or
supplemented.

           "Lien"  means,  with  respect to any asset or  property,
any  mortgage,   lien,   pledge,   charge,   security  interest  or
encumbrance of any kind in respect of such asset or property.
<PAGE>
           "Loan" shall have the meaning set forth in Section 2.1.

           "Loan  Documents"  means  (i) this  Agreement,  (ii) the
Guarantee    Agreement,    (iii) the   Note,    (iv) the   Security
Agreements,  (v) the Pledge Agreement, and (vi) any other agreement
entered  into  pursuant to  Section 5.9  hereof or Section 4 of the
Security  Agreements,  in each  case as the same  may from  time to
time be amended,  modified  or  supplemented,  and "Loan  Document"
means any one of them.

           "Note" shall mean a  promissory  note of the Borrower in
the form of  Exhibit A  hereto,  as the same may from  time to time
be amended, modified or supplemented.

           "Officer's  Certificate"  means a certificate  signed by
the  president,  a vice  president,  the secretary or the treasurer
of the Borrower.

           "Permitted  Liens"  shall have the  meaning set forth in
Section 5.11.

           "Person"   means  an  individual,   a   corporation,   a
partnership,  an  association,  a  trust  or any  other  entity  or
organization,  including a government or political  subdivision  or
an agency or instrumentality thereof.

           "Pledge Agreement" means the Pledge Agreement,  dated as
of the Closing  Date,  made by the Borrower in favor of Lender,  as
the  same  may  from  time  to  time  be   amended,   modified   or
supplemented.

           "Regulation U"   means  Regulation U  of  the  Board  of
Governors  of the Federal  Reserve  System,  as in effect from time
to time.

           "Responsible   Officer"  means,   with  respect  to  any
Person, the president or any vice president of such Person.

           "SEC" means the U.S. Securities and Exchange Commission.

           "SEC  Reports"  shall  mean the  annual  report  on Form
10-KSB of  Borrower  for its fiscal  year ended  December  31, 1997
<PAGE>  
(as  amended  prior  to the  date  hereof),  the  quarterly
report on Form  10-QSB of  Borrower  for its fiscal  quarter  ended
March 31,  1998,  the  definitive  proxy  statement on Schedule 14A
filed  by the  Borrower  with  respect  to its  annual  meeting  of
shareholders   held   December  15,  1997  and  any  other  report,
registration  statement,  proxy  statement or other filing with the
SEC made after December 31, 1997 and prior to the date hereof.

           "Security  Agreements"  shall mean the Borrower Security
Agreement and the Subsidiary Security Agreement.

           "Stockholder"  shall  mean  each of the  Persons  owning
capital stock of the Borrower.

           "Subscription    Agreement"   means   the   Subscription
Agreement,  between the Borrower and the Lender,  providing for the
subscription  by the  Lender  for  shares  of  common  stock of the
Borrower  representing  not less than 50.5% of such common stock on
a fully  diluted  basis and to be entered into between the Borrower
and the Lender as  contemplated  by the  Letter of  Intent,  as the
same may from time to time be amended, modified or supplemented.

           "Subsidiary"  means,  with  respect to any  Person,  any
corporation   or  other  entity  of  which   securities   or  other
ownership  interests  having  ordinary  voting  power  to  elect  a
majority  of the board of  directors  or other  persons  performing
similar  functions are at the time directly or indirectly  owned by
such Person.

           "Subsidiary  Security Agreement" shall mean the security
agreement,  dated as of the Closing Date made by the  Guarantors in
favor  of the  Lender,  as the  same  may  from  time  to  time  be
amended, modified or supplemented.

           SECTION 1.2       Accounting       Terms       and      
 Determinations.
Unless  otherwise  specified  herein,  all  accounting  terms  used
herein  shall  be   interpreted,   all  accounting   determinations
hereunder shall be made, and all financial  statements  required to
be  delivered  hereunder  shall  be  prepared  in  accordance  with
generally  accepted  accounting  principles  as in effect from time
to time, applied on a consistent basis. <PAGE>


                          ARTICLE II

                           THE LOAN

           SECTION  2.1  Term  Loan.  The
Lender  agrees,  on the terms and  subject  to the  conditions  set
forth in this  Agreement,  to make a term loan (the  "Loan") to the
Borrower  on  the  Closing   Date  in  the   principal   amount  of
$1,500,000.  The Loan will be made  available  to or at the written
direction of the Borrower in immediately available funds.

           SECTION  2.2 The Note;  Repayment  of   Principal.  The  
obligation  of the
Borrower  to repay the  unpaid  principal  amount of the Loan shall
be evidenced by the Note in the form of Exhibit A  hereto,  payable
to the  Lender  and  its  registered  assigns,  duly  executed  and
delivered  by the  Borrower  to the  Lender and  bearing  interest,
maturing  and  subject to  optional  and  mandatory  prepayment  as
provided  herein.  The  Borrower  shall  repay the  Loan,  together
with all accrued interest thereon,  on December 31,  1998,  subject
to earlier mandatory prepayment as provided in Section 2.5 hereof.

           SECTION  2.3  Loan     Record.
(a) The  Lender  shall  maintain  a loan  record  in which it shall
record  the  date and  amount  of each  payment  or  prepayment  of
principal of the Loan and the interest paid with respect thereto.

           (b) The  failure  of the  Lender to make an entry in the
loan  register  or any error  made in any such  entry  shall not in
any  way  affect  the   obligations  of  the  Borrower  under  this
Agreement   or  any  other   Loan   Document,   including   without
limitation  the  Borrower's   obligation  to  repay  the  principal
amount of the Loan and the  interest  accrued  from the actual date
on which  the  Loan is made.  The  Borrower  shall  not be bound by
any  entry in the loan  register  not made in  accordance  with the
terms hereof.

           SECTION  2.4  Interest Rate.  
           (a)  The  Loan  shall  bear  
interest  on  the   outstanding
principal  amount  at a rate  of 12%  per  annum.  Interest  on the
Loan  shall be  payable  in  arrears  on each date  that  principal
becomes  due,   whether  at  maturity,   by   acceleration   or  by
prepayment.  Interest  shall be  calculated  on the  basis of a 365
(or  366,  as the  case  may  be) day  year  for  the  actual  days
elapsed. <PAGE>

           (b) Any overdue  principal  of and  overdue  interest on
the Loan or any other overdue  amount  payable under this Agreement
shall bear  interest,  payable  on demand,  for each day until paid
(to  the  extent  permitted  by  applicable  law  after  as well as
before  judgment)  at a  rate  per  annum  equal  to 2%  above  the
interest   rate   otherwise   payable  for  such  day  pursuant  to
Section 2.4(a).

           SECTION 2.5  Mandatory  Prepayment  of the  Loan.  The  
Borrower  shall
prepay  the  Loan in  whole,  together  with all  accrued  interest
thereon,  on the  first  to occur  of:  (a) the  occurrence  of the
closing under the Subscription Agreement,  (b) September 30,  1998,
in the event  that the  closing  under the  Subscription  Agreement
shall  not have  occurred  by such  date  other  than  solely  as a
result of a  material  breach by  Lender of its  obligations  under
the  Subscription  Agreement or as a result of Lender's  exercising
its right not to close under the  Subscription  Agreement  pursuant
to the Due Diligence  Condition,  if such Condition is contained in
the   Subscription   Agreement,   (c)  the   date  on   which   the
Subscription  Agreement is  terminated  (other than by Borrower for
material  breach  by  Lender of its  obligations  thereunder  or by
Lender pursuant to the Due Diligence  Condition,  if such Condition
is contained in the Subscription  Agreement),  (d) August 31, 1998,
if the  Subscription  Agreement  shall not have been  entered  into
and be in full  force  and  effect on such date and (e) the date on
which Borrower terminates the Letter of Intent;  provided,  that if
the  Lender  notifies  the  Borrower  that  it is  terminating  the
Letter  of  Intent  or (if  the  Subscription  Agreement  has  been
executed and delivered) the  Subscription  Agreement other than for
a  breach  by the  Borrower  of  its  obligations  thereunder,  the
Borrower  shall repay the Loan in whole,  together with all accrued
interest  thereon,  on the later of 30 days from the notice of such
termination  by the Lender  and the date that Loan and all  accrued
interest   thereon  would  have  otherwise  been  due  and  payable
pursuant to this Section 2.5.

           SECTION 2.6  Optional  Prepayments  of the  Loan.  The  
Borrower may prepay
the  Loan,  in  whole  at any  time or from  time to time in  part,
without  premium  or  penalty,  upon at least  two  Business  Days'
irrevocable  notice to the Lender,  specifying  the date and amount
of  prepayment.  If such notice is given,  the Borrower  shall make
such  prepayment  and the payment  amount  specified in such notice
shall be due and  <PAGE>  
payable  on the date  specified  therein,
together  with all  accrued  interest  to such  date on the  amount
prepaid.

           SECTION  2.7  Manner and Time of   Payments.  
           (a)  All  payments  of  principal,
interest  and all  other  amounts  payable  hereunder  shall  be in
United  States  dollars in Federal or other  immediately  available
funds and shall be made not later  than  1:00 p.m.  (New York time)
on the date due to the  Lender at such  account of such bank as the
Lender  may from  time to time  designate.  Funds  received  by the
Lender  after  such  time  shall be deemed to have been paid by the
Borrower on the next succeeding Business Day.

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

           SECTION  2.8  Use  of  Proceeds.  The  Borrower  shall use 
the  proceeds  of the Loan only
for working capital of the Borrower and its Subsidiaries.


                          ARTICLE III

                          CONDITIONS

           SECTION 3.1  Conditions  Precedent to the  Loan.  The  
obligation  of the
Lender to make the Loan to be made by it  hereunder  is  subject to
the  satisfaction  of the  following  conditions  precedent (or the
waiver thereof in accordance with Section 7.4 hereof):

           (a)  The   Lender   shall   have   received   the  Note,
      conforming to the  requirements  hereof and duly executed and
      delivered  by a duly  authorized  Responsible  Officer of the
      Borrower;

           (b) The  representations  and warranties of the Borrower
      contained in this  Agreement and the other Loan Documents and
      those  otherwise  made  in  writing  by or on  behalf  of the
      Borrower in connection with the transactions  contemplated by
      this  Agreement  shall be  correct in all  material  respects
      when  made and at and as <PAGE> 
      of the  Closing  Date,  as if
      made at and as of the  Closing  Date;  no Event of Default or
      Default  shall  have  occurred  and be  continuing;  and  the
      Borrower  shall have delivered to the Lender a certificate of
      a  Responsible  Officer of the  Borrower,  dated the  Closing
      Date,  certifying  that  the  conditions  specified  in  this
      paragraph (b) have been fulfilled;

           (c)  The  Lender  shall  have  received  an  opinion  of
      counsel to the  Borrower,  which counsel is  satisfactory  to
      the Lender, in form and substance  satisfactory to the Lender
      and  covering  such  matters  incident  to  the  transactions
      contemplated  by this  Agreement and the other Loan Documents
      as  the  Lender  may  reasonably  request,  addressed  to the
      Lender and dated the Closing Date;

           (d)  The  Lender   shall  have   received  the  Borrower
      Security  Agreement  in the form of  Exhibit B  hereto,  duly
      executed  and  delivered  on behalf of the Borrower by a duly
      authorized   Responsible  Officer  of  the  Borrower,  and  a
      Subsidiary  Security  Agreement  in the  form  of  Exhibit  C
      hereto,  duly  executed  and  delivered  on  behalf  of  each
      Guarantor by a duly  authorized  Responsible  Officer of such
      Guarantor;  and  such  Security  Agreements  shall be in full
      force and effect;

           (e)  The   Lender  shall  have  received  the  Guarantee
      Agreement in the form of Exhibit D hereto,  duly executed and
      delivered on behalf of each  Guarantor  by a duly  authorized
      Responsible  Officer of such  Guarantor;  and such  Guarantee
      Agreement shall be in full force and effect;

           (f)  The   Lender   shall  have   received   the  Pledge
      Agreement in the form of Exhibit E hereto,  duly executed and
      delivered  on behalf  of the  Borrower  by a duly  authorized
      Responsible   Officer  of  the  Borrower;   and  such  Pledge
      Agreement shall be in full force and effect; and

           (g) The Lender  shall have  received  all  documents  it
      may  reasonably  request  relating  to the  existence  of the
      Borrower and its  Subsidiaries,  the corporate  authority for
      and  the  validity  of this  Agreement  and  the  other  Loan
      Documents and any other matters  relevant <PAGE> 
      hereto,  all
      in form and substance satisfactory to the Lender.


                          ARTICLE IV

                REPRESENTATIONS AND WARRANTIES

           The Borrower represents and warrants to the Lender that:

           SECTION  4.1  Corporate  Organization,  Etc.
           (a)  The  Borrower  is  a  corporation  duly
organized  and  validly  existing  and in good  standing  under the
laws of the  State of  Colorado,  and has the  corporate  power and
authority  to own or hold under lease its  properties  and to enter
into and  perform  its  obligations  under this  Agreement  and all
other Loan Documents.

           (b)  The Borrower is duly  qualified to do business as a
foreign  corporation  in each state of the  United  States in which
it  has  an  office  or  in  which  failure  so to  qualify  would,
individually  or in the aggregate,  have a material  adverse effect
on the  business,  assets,  liabilities,  condition  (financial  or
otherwise) or prospects of Borrower and its  Subsidiaries  taken as
a whole or on its  ability to perform  its  obligations  under this
Agreement,  the  Note  or any  other  Loan  Document  (a  "Material
Adverse Effect").

           (c)  Each  Subsidiary of Borrower is a corporation  duly
organized  and  validly  existing  and in good  standing  under the
laws of the  state  of its  incorporation,  and  has the  corporate
power and authority to own or hold under lease its  properties  and
assets and to enter into and  perform  its  obligations  under each
of  the  Loan  Documents  to  which  it  is  a  party.   Each  such
Subsidiary   is  duly   qualified  to  do  business  as  a  foreign
corporation  in each state of the United  States in which it has an
office or in which the  failure  to be so  qualified  would  have a
Material Adverse Effect.

           (d)  Set forth on  Schedule  4.1 is a list of all of the
Subsidiaries  of the  Borrower  and a true and correct  description
of the  authorized,  issued and  outstanding  capital stock of each
such   Subsidiary.   The  Borrower  owns  all  of  the  outstanding
capital  stock  of each  such  Subsidiary,  free  and  clear of any
Liens, except as specified in Schedule 4.1. <PAGE>

           SECTION   4.2  Due   Authorization.  The  execution,  
delivery  and  performance  by the
Borrower  of this  Agreement  and  the  Note,  and  the  execution,
delivery and  performance  by the Borrower  and the  Guarantors  of
each of the other Loan Documents to which any of them is a party:

           (a)  have  been  duly   authorized   by  all   necessary
      corporate action and do not require any stockholder  approval
      or the  approval  or consent  of or notice to any  trustee or
      holder of any  indebtedness or obligations of the Borrower or
      any Subsidiary;

           (b) do not conflict  with or result in any  violation of
      the certificate of  incorporation  or by-laws of the Borrower
      or any Subsidiary;

           (c) do not and will not  contravene  any  Applicable Law
      or conflict with or constitute a default under,  or result in
      the creation of any Lien (other than as permitted  under this
      Agreement  or the  Security  Agreement)  upon the property of
      the  Borrower  or  any   Subsidiary   under  any   indenture,
      mortgage,  lease,  instrument or other agreement to which the
      Borrower or any  Subsidiary  is a party or by which it may be
      bound or affected; and

           (d)  do  not  require  the  authorization,   consent  or
      approval of, the giving of notice to, the  registration  with
      or the taking of any other  action by or in  respect  of, any
      Federal, state or foreign governmental  authority,  agency or
      judicial  body,  or the taking of any other  action under any
      Applicable  Law,  except  for those  that have been or, on or
      before the Closing Date, will have been, duly made,  given or
      accomplished,  including  without  limitation  the  filing of
      Uniform Commercial Code financing  statements  referred to in
      the Security Agreements.

           SECTION   4.3    Litigation.
Except  as  disclosed  in its SEC  Reports,  complete  and  correct
copies of which have been  furnished  to the  Lender,  there are no
pending or, to the knowledge of the Borrower,  threatened  actions,
suits,   proceedings   or   investigations   before  any  court  or
administrative  agency or  arbitrator  which  would,  if  adversely
determined,  individually  or in the  aggregate,  have  a  Material
Adverse Effect.
<PAGE> 

           SECTION 4.4 Absence of  Undisclosed  Liabilities.  Except 
as disclosed in
the SEC  Reports or in  Schedule  4.4  hereto  and for  liabilities
arising  since  March 31, 1998 in the  ordinary  course of business
and  consistent  with  past  practice,  none of  which  have had or
could  reasonably be expected to have any Material  Adverse Effect,
neither  Borrower nor any of its  Subsidiaries  has any  liability,
obligation,  claim  or  cause  of  action  of any  kind  or  nature
whatsoever,  whether absolute,  accrued, contingent or other, known
or unknown.

           SECTION  4.5  Taxes.  Each  of  the
Borrower and its  Subsidiaries  has filed or caused to be filed all
material  tax returns  which are required to be filed by it and has
paid or  caused to be paid all taxes  which  have been  shown to be
due and  payable by such  returns  or  (except to the extent  being
contested  in good  faith  and for the  payment  of which  adequate
reserves  have  been  provided)  tax  assessments  received  by the
Borrower  or such  Subsidiary  to the  extent  that such taxes have
become due and payable.

           SECTION  4.6  Title to Certain  Properties.   Each  of  
the  Borrower  and  the
Guarantors  has good and  marketable  title to all of its  material
properties  and  assets  free and  clear  of any  Lien,  except  as
disclosed on Schedule 4.6 hereto.

           SECTION  4.7  No  Default.  No
Event of Default or Default has occurred and is  continuing  or has
occurred or will occur as a result of the  execution  and  delivery
of this Agreement or the other Loan  Documents or the  consummation
of the transactions contemplated hereby or thereby.

           SECTION    4.8    Investment  Company.  Neither the 
Borrower nor any  Guarantor is an
"investment  company"  or a company  controlled  by an  "investment
company" within the meaning of the Investment  Company Act of 1940,
as amended.

           SECTION    4.9    Legal,    Valid    and    Binding    
Agreements.  This
Agreement,  the Note and each other Loan  Document  constitute  or,
when  executed  and  delivered  by  each  of the  Borrower  and the
Guarantors which is a party thereto,  will  constitute,  the legal,
valid  and  binding  obligation  of  each of the  Borrower  and the
Guarantors  which  is a  party  thereto,  enforceable  against  the
Borrower or such Guarantor,  as the case may be, in accordance with
the  respective  terms  hereof and <PAGE>  
thereof,  except as such
enforcement  may be limited by applicable  bankruptcy,  insolvency,
reorganization,  moratorium  or other laws  affecting the rights of
creditors generally and by general principles of equity.

           SECTION  4.10   Compliance  with   ERISA.  Neither the  
Borrower  nor any  Subsidiary
has  breached  the  fiduciary  rules  of ERISA  or  engaged  in any
prohibited  transaction  in  connection  with which the Borrower or
such  Subsidiary  could  be  subjected  to (in the case of any such
breach)  liability  for  damages  or  (in  the  case  of  any  such
prohibited  transaction)  either  a civil  penalty  assessed  under
ERISA or a tax,  which  liability,  penalty  or tax,  in any  case,
would reasonably be expected to have a Material Adverse Effect.

           SECTION 4.11  Disclosure;  Financial   Statements.  
(a)  The SEC  Reports
do not contain any untrue  statement of a material  fact or omit to
state a  material  fact  necessary  to  make  the  statements  made
therein,  in the light of the  circumstances  under which they were
made, not misleading.

           (b)   The  consolidated  balance  sheets of Borrower and
its  consolidated   Subsidiaries   and  the  related   consolidated
statements  of  operations,  changes  in  shareholders'  equity and
cash  flows  contained  in the  SEC  Reports,  present  fairly  the
financial  condition  of the Borrower  and its  Subsidiaries  as at
the  dates   thereof,   and  the   consolidated   results   of  its
operations,  changes  in  shareholders,  equity  and cash flows for
the  periods   presented   therein  in  accordance  with  generally
accepted  accounting  principles  consistently  applied.  There has
been  no  material  adverse  change  in the  business,  operations,
assets,   liabilities,   condition   (financial  or  otherwise)  or
prospects  of the Borrower  and its  Subsidiaries  taken as a whole
from that reflected on the most recent  consolidated  balance sheet
of the Borrower and its subsidiaries contained in the SEC reports.

           SECTION   4.12   Compliance   with   Law.  Each of the  
Borrower  and its  subsidiaries
is in  compliance  with all  Applicable  Law,  except to the extent
that the failure to comply  therewith  would not,  individually  or
in the aggregate, have a Material Adverse Effect.

           SECTION  4.13   Consents.   No
consent of any other  Person and no  consent or  authorization  of,
filing  with  or  <PAGE>   
other  act  by  or  in  respect  of  any
Governmental   Authority  is  required  in   connection   with  the
borrowing   hereunder   or  with   the   execution,   delivery   or
performance  by  Borrower  or any  Guarantor,  or the  validity  or
enforceability  of,  this  Agreement  or any other  Loan  Document,
except as set forth on  Schedule  4.13  hereto  and except for such
consents,  authorizations,  filings or acts the failure of which to
obtain  or  to  undertake   would  not,   individually  or  in  the
aggregate,  have a Material Adverse Effect.

           SECTION  4.14   Patents,   Copyrights,   Permits  and  
Trademarks.  Each of Borrower and its  Subsidiaries  owns, or has a
valid  license or sublicense  in, all domestic and foreign  letters
patent,  patents,  patent  applications,  and  know-how,  licenses,
inventions,   technology,   permits,  trademark  registrations  and
applications,   trademarks,   tradenames,  trade  secrets,  service
marks,  copyrights,   product  designs,   applications,   formulae,
computer software and programs,  processes and industrial  property
rights  (collectively  "proprietary  rights") used in the operation
of its  business  in the  manner  in  which it is  currently  being
conducted  and  which are  material  to the  business,  operations,
assets,   liabilities,   condition   (financial  or  otherwise)  or
prospects of the Borrower  and its  Subsidiaries  taken as a whole.
Neither the  Borrower nor any of its  Subsidiaries  is aware of any
existing or  threatened  infringement  or  misappropriation  of any
proprietary  rights  of  others  by  the  Borrower  or  any  of its
Subsidiaries  or of any  proprietary  rights of the Borrower or any
of its  Subsidiaries  by  others,  except  for such as  would  not,
individually or in the aggregate, have Material Adverse Effect.


                           ARTICLE V

                           COVENANTS

           The Borrower  covenants and agrees that, so long as this
Agreement  shall  be in  effect  or any  amount  payable  hereunder
shall  remain  unpaid or any  obligation  required to be  performed
hereunder  shall  remain  unperformed,  and unless the Lender shall
otherwise consent in writing:

           SECTION  5.1  Performance  of   Obligations.  (a) The 
Borrower  shall perform,  and
shall  cause  each  Guarantor  to  <PAGE>  
perform,   promptly  and
faithfully all of its obligations  under this  Agreement,  the Note
and the other Loan Documents.

           (b) The Borrower shall,  and shall cause each Subsidiary
to, pay and discharge,  at or before maturity,  all of its material
obligations and liabilities,  including,  without  limitation,  tax
liabilities,  except  where the same may be contested in good faith
by  appropriate  proceedings,   and  maintain  in  accordance  with
generally accepted accounting  principles  appropriate reserves for
the  accrual of any of the same;  provided  that the  inability  of
the  Borrower  and  its  Subsidiaries  to pay and  discharge  their
obligations  or  liabilities  with respect to the matters set forth
in  Schedule  5.1  hereto or to pay and  discharge  their  accounts
payable  within 120 days of their  presentment  to the  Borrower or
its  Subsidiaries  shall not be  deemed a breach or  nonperformance
by the Borrower of its covenants in this Section 5.1(b).

           SECTION   5.2   Compliance    with  Laws.  The  Borrower  
shall,  and shall cause each
Subsidiary   to,   comply  in  all  material   respects   with  all
Applicable   Laws  except  where  the   necessity   of   compliance
therewith is contested in good faith by appropriate proceedings.

           SECTION   5.3   Notice   of   Default   and  Event  of  
 Default.  No
later  than   ten Business   Days  after   becoming  aware  of  the
existence  of any  condition or event which  constitutes  a Default
or an Event of Default  hereunder,  the Borrower  shall provide the
Lender  with an  Officer's  Certificate  specifying  the nature and
period  of  existence  thereof  and what  action  the  Borrower  is
taking or proposes to take with respect thereto. <PAGE>

           SECTION  5.4  Report on   Proceedings.  No later than  ten
Business  Days after  becoming
aware of any  investigation  of the Borrower or any  Subsidiary  by
any   governmental   authority   or   agency   or  any   court   or
administrative   proceeding  or  arbitration  which,  if  adversely
determined,  would  reasonably  involve a possibility of an adverse
effect on the ability of the  Borrower  to perform its  obligations
under  this  Agreement,  the Note or any other Loan  Document,  the
Borrower  shall  provide the Lender with an  Officer's  Certificate
specifying  the  nature of such  investigation  or  proceeding  and
what  action  the  Borrower  is  taking  or  proposes  to take with
respect thereto.

           SECTION   5.5   Financial    Statements   and   Other   
Reports.  The
Borrower  shall  furnish  to the  Lender  the  following  described
financial statements, reports, notices and information:

           (a)  Monthly   Financial   Statements.   Within  25 days
      after the end of the month,  consolidated  and  consolidating
      balance  sheets of the Borrower and its  Subsidiaries  at the
      end  of  such  month  and  the   related   consolidated   and
      consolidating  statements  of income of the  Borrower and its
      Subsidiaries  for such month,  and the general  ledger  trial
      balance of the Borrower and its  Subsidiaries for such month,
      all in reasonable detail and in form reasonably  satisfactory
      to the Lender,  together  with such other  information  as is
      customarily  prepared  by  Borrower  as part  of its  monthly
      report to management.

           (b)  Quarterly  Financial  Statements.   Within  45 days
      after  the  end of  each  fiscal  quarter  of  the  Borrower,
      consolidated   and   consolidating   balance  sheets  of  the
      Borrower and its  Subsidiaries at the end of such quarter and
      the related  consolidated  and  consolidating  statements  of
      income,  stockholders'  equity and cash flow of the  Borrower
      and its Subsidiaries for such fiscal quarter,  setting forth,
      in the case of the  consolidated  statements,  in comparative
      form the figures for the  previous  quarter of the  Borrower,
      all  in  reasonable  detail  and  certified  by  a  principal
      financial  officer of the Borrower as  presenting  fairly the
      financial  position of the Borrower and its  Subsidiaries  as
      of the dates  indicated and the results of their  operations,
      changes  in  shareholders'  equity  and  cash  flows  for the
      periods  indicated  in  conformity  with  generally  accepted
      accounting  principles  applied  on a  consistent  basis with
      prior periods (except as otherwise stated therein);  provided
      that the delivery of the Borrower's  Quarterly Report on Form
      10-QSB for such fiscal  quarter  prepared in accordance  with
      the requirements of the SEC and U.S.  securities  regulations
      shall be  sufficient  to satisfy the  Borrower's  obligations
      under this Section 5.5(b).

           (c)  Other   Reports.   Promptly  upon  their   becoming
      available,   copies  of  all  other   financial   statements,
      reports,  notices and proxy statements sent or made available
      <PAGE> 
      by the Borrower to its  shareholders or filed with the SEC.

           (d)   Officer's   Certificate.    Together   with   each
      delivery  of  financial  statements  or reports  required  by
      clauses (a)  and (b) above, a certificate  from a Responsible
      Officer  of the  Borrower  to the  effect  that the signer is
      familiar  with or has  reviewed  the  relevant  terms of this
      Agreement  and has made,  or  caused to be made  under his or
      her  supervision,  a review of the transactions and condition
      of the Borrower  during the period  covered by such financial
      statements,  and  that  such  review  has not  disclosed  the
      existence  during  such  period,  nor  does the  signer  have
      knowledge   of  the   existence   as  at  the  date  of  such
      certificate,  of any condition or event that  constitutes  an
      Event  of  Default  or  Default  hereunder  or,  if any  such
      condition or event existed or exists,  specifying  the nature
      and period of existence  thereof and what action the Borrower
      has  taken,  is  taking  or  proposes  to take  with  respect
      thereto.

           (e) Other  Information.  Such other data or  information
      regarding the business affairs or financial  condition of the
      Borrower  as the  Lender  may  from  time to time  reasonably
      request, promptly upon receipt of such request.

           SECTION  5.6 Conduct of Business  and  Preservation  of 
Corporate  Existence,  Etc.  (a)  The  Borrower  shall,  and  shall
cause each  Subsidiary  to,  maintain and preserve at all times its
corporate existence.

           (b)  The   Borrower   shall,   and  shall   cause   each
Subsidiary  to,  continue to engage in business of the same general
type as now conducted by the Borrower or such  Subsidiary  and will
do or cause to be done all  things  necessary  to  preserve,  renew
and keep in full force and effect its  corporate  existence and its
rights,   powers,   privileges  and  franchises,   except  for  any
corporate right,  power,  privilege or franchise that it determines
is  no  longer  necessary  or  desirable  in  the  conduct  of  its
business.
 
           (c) The Borrower  shall not,  without the prior  written
consent  of  the   Lender,   enter  into  the   ownership,   active
management   or  operation  of  any  business   other  than  <PAGE>
businesses   presently   conducted  in  the  geographic   locations
presently  conducted (and except as otherwise  permitted hereby the
Borrower  shall not  effect  or  permit a change  in its  corporate
organization existing on the date hereof).

           (d) The  Borrower  shall  not,  and shall not permit any
Subsidiary  to, amend or modify its  Certificate  of  Incorporation
or By-laws  without the prior written  consent of the Lender (which
consent will not be unreasonably withheld).

           SECTION  5.7   Inspection   of  Property;   Books  and  
 Records.
The  Borrower  shall,  and shall  cause each  Subsidiary  to,  keep
proper  books  of  record  and  account  in  which  full,  true and
correct  entries are made in  accordance  with  generally  accepted
accounting  principles  and all  Applicable  Laws; and shall permit
representatives  of the  Lender  to visit  and  inspect  any of its
properties,  and examine and make  abstracts  from any of its books
and records at the Borrower's  expense,  at any reasonable time and
as  often  as may  reasonably  be  requested,  and to  discuss  the
business,   operations,   properties   and   financial   and  other
condition of the Borrower and its  Subsidiaries  with  officers and
employees of the Borrower and its Subsidiaries.

           SECTION 5.8  Maintenance  of Property;  Insurance.  The 
Borrower  shall,  and
shall  cause  each  Subsidiary  to,  keep all  property  useful and
necessary  in its  business in good  working  order and  condition,
and  maintain  with  financially  sound  and  reputable   insurance
companies  insurance  on all its  property in at least such amounts
and against such risks as are usually  insured  against in the same
general area by Persons engaged in the same or a similar business.

           SECTION 5.9 Further Assurances;  Additional  Collateral 
Security.  The  Borrower  shall,  and shall  cause each  Subsidiary
to,  execute and file all such further  documents and  instruments,
and  perform  such  other  acts,  as  the  Lender  may   reasonably
determine  are  necessary  or  advisable to maintain or perfect the
Liens granted to the Lender in connection  with this  Agreement and
the  other  Loan   Documents  and  to  maintain  the  priority  and
perfection of such Liens  purported to be granted  pursuant to this
Agreement  and the other  Loan  Documents  (including  any Liens on
property  rights  (as  defined  in  Section  4.14  hereof)).   With
respect to any real  property,  fixtures,  equipment or  securities
identified  as  collateral  <PAGE>  
under  any  Security  Agreement
acquired  and held by the  Borrower  or any  Guarantor  at any time
after the Closing  Date,  upon request of the Lender,  the Borrower
shall,  or shall cause such  Guarantor  to, grant the Lender a Lien
of record on all such real  property,  fixtures and equipment and a
pledge  of all such  securities,  upon the  terms  set forth in the
applicable  Security  Agreement,  as appropriate,  and satisfactory
in form and substance to the Lender.

           SECTION  5.10   Indebtedness.
The  Borrower  shall not, and shall not permit any  Subsidiary  to,
create,  incur,  assume,  Guarantee  or  suffer  to exist  any Debt
except:

           (a)  Debt under the Loan Documents;

           (b)  Debt listed on Schedule 5.10 hereto;

           (c) In  addition  to Debt  permitted  under  clause (b),
      Debt for  borrowed  money,  the  proceeds  of which  are used
      solely for working capital  purposes,  in an aggregate amount
      outstanding not in excess of $1.5 million;

           (d) In  addition  to Debt  permitted  under  clause (b),
      Debt  representing the deferred purchase price of property or
      capital  leases  incurred in the ordinary  course of business
      consistent  with  past  practice,   in  an  aggregate  amount
      outstanding not in excess of $500,000;

           (e)  Debt for  borrowed  money,  the  proceeds are which
      are applied to repay the entire outstanding  principal of and
      accrued  interest on the Loan and to discharge the Borrower's
      payment obligations under the Loan Documents; and

           (f)  Debt for borrowed money,  the proceeds of which are
      used solely to pay and discharge  the  Company's  obligations
      and  liabilities  with  respect to the  matters  set forth in
      Schedule  5.1  hereto;  provided  that the  aggregate  amount
      outstanding  of such Debt does not exceed $2.5 million at any
      time.

           SECTION   5.11   Limitation   on  Liens.  The Borrower  
shall not and shall not permit
any  Subsidiary to,  create,  incur,  assume or suffer to exist any
Lien on any of its <PAGE>  
property,  assets or  revenues,  whether
now  owned  or  hereafter  acquired,   except  the  following  (the
"Permitted Liens"):

           (a)  Liens in favor of the  Lender  and  under  the Loan
      Documents;

           (b) Liens  existing  on the date hereof and set forth on
      Schedule 5.11 hereto;

           (c)   (i)   Liens   securing   Debt   permitted    under
      Section 5.10(d);  and  (ii)  Liens  securing  Debt  permitted
      under Sections  5.10(c),  (e) and (f), but only if such Liens
      represent  security  interests that are  subordinated  to the
      Liens in favor of the Lender under the Loan Documents;

           (d)   any   Lien   arising   out  of  the   refinancing,
      extension,  renewal or  refunding  of any Debt secured by any
      Lien  permitted  by  any  of the  foregoing  clauses of  this
      Section 5.11;  provided  that (i) the  interest  rate on, and
      other  terms  and  conditions  of,  such  Debt  are  no  less
      favorable to the Borrower  than those which would be obtained
      by   similarly-situated   Persons   from   banks   and  other
      institutions;  (ii) such  Debt  matures  after  December  31,
      1998,  except  when such Debt  renews  or  refunds  Debt that
      would have  otherwise  matured (other than as a result of the
      acceleration  thereof by the lender or the  occurrence  of an
      event  or   circumstance   that  would  have  resulted  in  a
      mandatory  prepayment  thereof) on or prior to  December  31,
      1998,  and (iii) the  principal  amount of such Debt does not
      exceed  the  principal  amount  of,  and  accrued  and unpaid
      interest on, the Debt so refunded;

           (e)  Liens for taxes  and  special  assessments  not yet
      due or  which  are  being  contested  in  good  faith  and by
      appropriate  proceedings  if adequate  reserves  with respect
      thereto  are  maintained  on the  books  of the  Borrower  in
      accordance with generally accepted accounting principles;

           (f)     carriers',      warehousemen's,      mechanics',
      materialmen's,  repairmen's  or other like  Liens  arising in
      the ordinary  course of business  which are not overdue for a
      period of more than  90 days or which are being  contested in
      good faith by appropriate proceedings;
<PAGE>
           (g)  pledges or deposits in  connection  with  workmen's
      compensation,   unemployment   insurance   and  other  social
      security   legislation  or  to  secure  the   performance  of
      tenders,  statutory  obligations,  surety and  appeal  bonds,
      performance   and    return-of-money    bonds   and   similar
      obligations;

           (h)  Liens  resulting  from  judgments  of any  court or
      governmental proceeding;  provided that such judgments in the
      aggregate  do  not  constitute  an  Event  of  Default  under
      Section 6.1(k); and

           (i) Liens of landlords or of  mortgagees  of  landlords,
      arising  solely by operation  of law, on fixtures  located on
      premises leased in the ordinary course of business;  provided
      that the rental  payments  secured  thereby are not more than
      30 days over due.

           SECTION  5.12 No  Dividends.
The  Borrower  shall not, and shall not permit any  Subsidiary  to,
declare  any  dividends  on, or make any  payment on account of, or
set apart  assets for a sinking or other  analogous  fund for,  the
purchase,  redemption,  retirement  or other  acquisition  of,  any
shares  of any  class  of  stock of the  Borrower,  whether  now or
hereafter  outstanding,  or make any other  distribution in respect
thereof,  either  directly  or  indirectly,   whether  in  cash  or
property or in obligations of the Borrower or any Subsidiary.

           SECTION  5.13  Limitation  on  Investments.  The Borrower  
shall not, and shall not
permit  any  Subsidiary  to,  make or  permit to exist any loans or
cash  advances  to, or capital  investments  in, any other  Person,
including any Affiliate, except that:

           (a)  the  Borrower  and any  Subsidiary  may  make  cash
      advances to, or investments in, any  wholly-owned  Subsidiary
      of the  Borrower  or, in the case of advances or  investments
      by any Subsidiary, the Borrower;

           (b) the  Borrower  and any  Subsidiary  may  purchase or
      otherwise acquire and own  (i) securities  with maturities of
      one  year or less  from  the date of  acquisition  issued  or
      fully  guaranteed  or insured by the United States of America
      or any agency thereof,  <PAGE>  
      (ii) commercial  paper issued
      by domestic  issuers  rated at least A-1 by Standard & Poor's
      Corporation  or P-1 by Moody's  Investors  Service,  Inc.  or
      (iii) certificates  of  deposit,  Eurodollar  time  deposits,
      overnight  bank deposits and bankers  acceptances,  each with
      maturities  of  one  year  or  less  from  the  date  of  the
      acquisition  thereof,  of any commercial  bank having capital
      and surplus in excess of $100,000,000;

           (c)  the  Borrower  and  its  Subsidiaries  may  acquire
      investments  in  notes  and  other  securities   received  in
      settlement  of  overdue  debts and  accounts  payable  in the
      ordinary course of business; and

           (d)  the Borrower and its  Subsidiary  may make Loans to
      KP3 LLC;  provided that the aggregate  outstanding  amount of
      such Loans made after the date hereof may not exceed  $60,000
      at any time.

           SECTION   5.14   Contingent  Liabilities.  The  Borrower  
shall  not,  and shall not
permit  any  Subsidiary  to,  become  liable  for  any  Guaranties,
except  for  (i) the  endorsement  of  negotiable  instruments  for
deposit or  collection  or  similar  transactions  in  the ordinary
course  of  business,   (ii) Guaranties  existing  as of  the  date
hereof and  listed on  Schedule 5.14,  (iii) Guaranties  in respect
of Debt  permitted  under  Section 5.10  or Liens  permitted  under
Section 5.11  and  (iv) Guaranties  (other than Guaranties of Debt)
arising in the  ordinary  course of business of the  Borrowers  and
the Subsidiaries consistent with past practice.

           SECTION   5.15   Limitation   on   Leases.  The  Borrower  
shall  not,  and  shall not
permit  any  Subsidiary  to,  enter into any  agreement,  or become
liable  under  any  agreement,  for the  lease,  hire or use of any
real or  personal  property  for a period in excess of one year and
an  aggregate  rental  or other  payment  in  excess  of  $500,000,
except  with  the  prior  written  approval  of  the  Lender,  such
approval not to be unreasonably withheld.

           SECTION  5.16   Prohibition  on  Sale  of   Assets.  The Borrower  
shall not, and
shall  not  permit  any  Subsidiary  to,  except  as  permitted  or
contemplated  under  this  Agreement  or any other  Loan  Document,
sell,  lease,  assign,  transfer or otherwise dispose of any of its
assets,  whether  now owned or <PAGE>  
hereafter  acquired,  except
for  dispositions  of assets  in the  ordinary  course of  business
consistent  with  past  practice  that,  taken  together,   do  not
constitute  any  material  portion of the assets of the Borrower or
any Subsidiary.

           SECTION 5.17  Limitation on  Prepayments  of Debt.  The Borrower 
shall not,
and shall not permit any  Subsidiary  to,  directly  or  indirectly
prepay,  purchase,  redeem,  retain or otherwise acquire any of its
Debt  except for  prepayments  of the Note in  accordance  with the
terms  of  this   Agreement  and  except  as  otherwise   expressly
provided  herein;  provided,  however,  that  discharges of Debt by
mandatory  prepayments  or by scheduled  installments  and payments
in full at their  stated  maturities  and  prepayments  of  working
capital  financing  permitted  under  Section 5.10(c)  shall not be
deemed to violate this subsection.

           SECTION  5.18   Subsidiaries.
The  Borrower  shall not, and shall not permit any  Subsidiary  to,
without  the  prior  written  consent  of the  Lender,  create  any
Subsidiary.

           SECTION   5.19   Mergers,   Disposition   of  Assets,   
Etc. The Borrower shall not,
and  shall  not  permit  any  Subsidiary  to,  merge,   combine  or
consolidate  with or into any  Person,  or sell,  assign,  lease or
otherwise  dispose of  (whether in one  transaction  or in a series
of  transactions,  whether or not related)  all or any  substantial
portion of its assets  (whether  now owned or  hereafter  acquired)
to any  Person,  except  with the  prior  written  approval  of the
Lender, such approval not to be unreasonably withheld.

           SECTION 5.20   Fiscal   Year.
The  Borrower  shall not, and shall not permit any  Subsidiary  to,
permit  its  fiscal  year to end on a day  other  than  December 31
without the prior written consent of the Lender.

           SECTION  5.21  No  Inconsistent  Agreements.  The  Borrower 
 shall not,  and shall
not permit any Subsidiary  to, enter into any agreement  containing
any  term or  provision  which  will be  violated,  contravened  or
breached  by  (i) the  Borrower's  execution  or  delivery  of this
Agreement or any Loan  Document,  (ii) the  Borrower's  performance
of its  obligations  hereunder  or  (iii) the  consummation  of the
transactions contemplated hereby. <PAGE>

           SECTION  5.22  Use  of Proceeds.  The  Borrower  agrees 
to apply the  proceeds of the Loan
solely  and  exclusively  for  working  capital   purposes  of  the
Borrower and its Subsidiaries.

           SECTION 5.23  Transactions  with  Affiliates.  The Borrower  
shall not, and shall
not permit any  Subsidiary to,  directly or indirectly,  enter into
or, except for such existing  transactions  as are disclosed in the
SEC  Reports  or  Schedule   5.23  hereto,   permit  to  exist  any
transaction  (including,  without limitation,  the purchase,  sale,
lease  or  exchange  of  any  property  or  the  rendering  of  any
service)  with  any  Affiliate  of the  Borrower  (other  than  its
wholly-owned  Subsidiaries)  or any director or  executive  officer
of the  Borrower  or its  Subsidiaries,  on  terms  that  are  less
favorable  to the  Borrower  or such  Subsidiary  than those  which
might  be   obtained   at  the  time  from   Persons  who  are  not
Affiliates, directors or executive officers.


                          ARTICLE VI

                           DEFAULTS

           SECTION  6.1 Events of  Default.  If one  or  more  of the  
following  events  ("Events  of
Default") shall have occurred and be continuing:

           (a) the  Borrower  shall fail to make any payment of any
      principal  of  the  Loan  required  to  be  made  under  this
      Agreement  when the same becomes due and payable,  whether at
      maturity   or  at  a  date   fixed  for   prepayment   or  by
      acceleration or otherwise;
           (b) the  Borrower  shall fail to make any payment of any
      other  amount  payable  under this  Agreement or the Note for
      more than five  Business  Days after the same becomes due and
      payable;

           (c) the  Borrower  shall fail to perform or comply  with
      any covenant set forth in Section 5.3  ("Notice of Default or
      Event  of   Default"),   5.6   ("Conduct   of  Business   and
      Preservation  of  Corporate  Existence,   Etc."),  5.12  ("No
      Dividends"),  5.17  ("Limitation  on  Prepayments  of Debt"),
      5.19 ("Mergers,  Disposition of Assets, Etc."), or 5.22 ("Use
      of Proceeds"); <PAGE>

           (d) the  Borrower  shall fail to perform or comply  with
      any other  covenant or  agreement to be performed or observed
      by it under this  Agreement  or any other Loan  Document  and
      such  failure  shall  continue  unremedied  for a  period  of
      30 days  after written  notice  thereof shall have been given
      by the Lender to the Borrower;

           (e) any  representation  or warranty of the  Borrower or
      any Guarantor  contained in this  Agreement or any other Loan
      Document  or in any  document  or  certificate  delivered  in
      connection  herewith  or  therewith  or  pursuant  hereto  or
      thereto  shall at any time  prove to have been  incorrect  or
      incomplete  in any  material  respect  at the  time  made  or
      deemed to have been made,  shall remain  material at the time
      in question  and shall  either be incapable of being cured or
      shall not be cured within  20 days  after  notice  thereof by
      the Lender to the Borrower;

           (f) the  Borrower  or any  Subsidiary  shall  consent to
      the  appointment  of  or  taking  possession  by a  receiver,
      assignee, custodian,  sequestrator, trustee or liquidator (or
      other similar  official) of itself or of a  substantial  part
      of its  property;  or the  Borrower or any  Subsidiary  shall
      admit in writing (to any creditor,  governmental authority or
      judicial  court or tribunal)  its  inability to pay its debts
      generally  as they come due or shall  fail  generally  to pay
      its  debts  as  they   become  due   (except  to  the  extent
      contemplated   by  the  proviso   clause  of  Section  5.1(b)
      hereof),  or shall make a general  assignment for the benefit
      of its  creditors;  or the Borrower or any  Subsidiary  shall
      file  a  voluntary  petition  in  bankruptcy  or a  voluntary
      petition or answer  seeking  liquidation,  reorganization  or
      other  relief  with  respect to itself or its debts under the
      Federal  bankruptcy laws, as now or hereafter  constituted or
      any other applicable Federal or State bankruptcy,  insolvency
      or other  similar  law,  or shall  consent to the entry of an
      order for relief in an  involuntary  case under any such law;
      or the  Borrower  or any  Subsidiary  shall  file  an  answer
      admitting  the  material  allegations  of  a  petition  filed
      against the  Borrower in any such  proceeding,  or  otherwise
      seek relief  under the  provisions  of any existing or future
      Federal or State bankruptcy,  insolvency or other similar law
      providing   for   the   reorganization   or   winding-up   of
      corporations,  or providing  for an  arrangement,  agreement,
      <PAGE>   
      composition,   extension  or  adjustment   with  its
      creditors;  or the Borrower or any  Subsidiary  shall take or
      publicly  announce its intention to take corporate  action in
      furtherance of any of the foregoing;

           (g) an order,  judgment  or decree  shall be  entered in
      any  proceeding  by  any  court  of  competent   jurisdiction
      appointing,  without the consent of the Borrower, a receiver,
      trustee or  liquidator  of the Borrower or any  Subsidiary or
      of any substantial  part of its property,  or any substantial
      part of the property of the Borrower or any Subsidiary  shall
      be  sequestered,  and any such  order,  judgment or decree of
      appointment   or   sequestration   shall   remain   in  force
      undismissed,  unstayed or  unvacated  for a period of 60 days
      after the date of entry thereof;

           (h) a petition  against the  Borrower or any  Subsidiary
      in a proceeding  under the Federal  bankruptcy  laws or other
      insolvency  laws,  as now or  hereafter  in effect,  shall be
      filed and shall not be withdrawn or dismissed  within 60 days
      thereafter,  or a decree or order for  relief in  respect  of
      the  Borrower or any  Subsidiary  shall be entered by a court
      of competent  jurisdiction  in an involuntary  case under the
      Federal  bankruptcy  laws,  as now or hereafter  constituted,
      and such decree or order shall remain  unstayed and in effect
      for a period of 60 days,  or, under the provisions of any law
      providing for  reorganization  or winding-up of  corporations
      which  may  apply to the  Borrower,  any  court of  competent
      jurisdiction  shall assume  jurisdiction,  custody or control
      of the Borrower or any Subsidiary or of any substantial  part
      of its  property  and such  jurisdiction,  custody or control
      shall   remain   in   force   unrelinquished,   unstayed   or
      unterminated for a period of 60 days;

           (i) any  event,  condition  or  circumstance  shall have
      occurred which results in the  cancellation or termination of
      the  Subscription  Agreement  or the Letter of Intent,  other
      than by virtue of entering  into the  Subscription  Agreement
      or solely as a result of a  material  breach by the Lender of
      its  obligations  thereunder  or  as  a  result  of  Lender's
      exercising  its  right not to close  under  the  Subscription
      Agreement  pursuant to the Due  Diligence  Condition (if such
      Condition is contained in the Subscription Agreement); <PAGE>

           (j) the  Borrower  or any  Subsidiary  shall fail to pay
      when due and payable (after any applicable  grace period) the
      principal  of or  interest  on any Debt in excess of $100,000
      in respect of which it is obligated  to make  payment  (other
      than Debt under this  Agreement  or the Note) or the maturity
      of such Debt shall have been  accelerated in accordance  with
      the provisions of the  instrument  providing for the creation
      of or concerning  such Debt, or any event shall have occurred
      or failed to occur and be continuing  which,  with the giving
      of notice or the  passage of time or both,  would  permit any
      holder or  holders  thereof or any agent or trustee on its or
      their behalf to accelerate such maturity;

           (k)  an  uninsured  final  judgment  in the  amount,  or
      final  judgments  in  related  proceedings  in  an  aggregate
      amount,  in excess of $100,000  shall be entered  against the
      Borrower or any  Subsidiary  and such judgment shall continue
      unsatisfied and unstayed for a period of ten days;

           (l) the  Borrower  or any  Subsidiary  shall fail to pay
      when due an  amount  or  amounts  aggregating  in  excess  of
      $100,000  which it shall  have  become  liable  to pay to the
      Pension  Benefit  Guaranty  Corporation  ("PBGC")  or  to  an
      employee  benefit plan under Title IV of ERISA;  or notice of
      intent  to  terminate  a  plan  or  plans  having   aggregate
      unfunded  vested  liabilities  in excess of $100,000 shall be
      filed  under  Title  IV of  ERISA  by  the  Borrower  or  any
      Subsidiary,  any plan administrator or any combination of the
      foregoing;  or the PBGC  shall  institute  proceedings  under
      Title IV of  ERISA to  terminate  or  cause a  trustee  to be
      appointed  to  administer  an  employee  benefit  plan;  or a
      proceeding   shall  be  instituted  by  a  fiduciary  of  any
      employee  benefit plan against the Borrower or any Subsidiary
      to  enforce  Section 515  or  4219(c)(5)  of  ERISA  and such
      proceeding  shall  not have  been  dismissed  within  30 days
      thereafter;  or a  condition  shall  exist by reason of which
      the PBGC would be  entitled  to obtain a decree  adjudicating
      that any plan must be terminated; or

           (m) any Loan  Document  shall cease for any reason to be
      in full force and effect in accordance  with its <PAGE> 
      terms or the Borrower or any Subsidiary  shall so assert in writing
      or  the  Borrower  or  any   Subsidiary   shall  in  any  way
      challenge,  or any proceedings shall be brought to challenge,
      the validity,  binding effect or  enforceability of such Loan
      Document  or  any  of  the  Liens  purported  to  be  granted
      pursuant to any Loan  Document  shall cease for any reason to
      be  legal,  valid  and  enforceable  Liens on the  collateral
      purported  to be  covered  thereby  or to have  the  priority
      purported to be granted thereby;

then,  and in every  such  event,  the  Lender may by notice to the
Borrower  declare  the  Loan to be,  and the Loan  shall  thereupon
become,  immediately due and payable without  presentment,  demand,
protest  or other  notice  of any  kind,  all of which  are  hereby
waived  by the  Borrower;  provided  that in the case of any of the
Events  of  Default  specified  in  clause (f),  (g) or (h)  above,
without  any  notice  to  the  Borrower  or  any  other  act by the
Lender,  the Loan shall become  immediately due and payable without
presentment,  demand,  protest or other notice of any kind,  all of
which are hereby waived by the Borrower.


                          ARTICLE VII

                         MISCELLANEOUS

           SECTION  7.1   Notices.   All
notices,  requests and other  communications to any party hereunder
shall be in writing  (including bank wire,  facsimile  transmission
or  similar  writing)  and  shall  be  given  to such  party at its
address or facsimile number set forth below:

           If to the Lender:

                Dundee Bancorp Inc.
                40 King Street West
                Scotia Plaza -- 55th Floor
                Toronto, Canada M5H 4A9
                Attention: Ray Benzinger
                TEL: (416) 365-5113
                FAX: (416) 363-4536
<PAGE>
           with a copy to:

                Debevoise & Plimpton
                875 Third Avenue
                New York, NY  10022
                Attention:  Steven Ostner
                TEL:  212-909-6000
                FAX:  212-909-6836

           If to the Borrower:

                PMC International Inc.
                555 17th Street - 14th Floor
                Denver, Colorado 80202
                Attention:  Kenneth S. Phillips
                            Scott A. McKillop
                TEL:  303-292-1177
                FAX:  303-293-2152

           with a copy to:

                Holme Roberts & Owen LLP
                1700 Lincoln Street
                Denver, Colorado 80203
                Attention:  Linda K. Wackwitz
                TEL:  303-861-7000
                FAX:  303-866-0200

or such  other  address  or  facsimile  number  as such  party  may
hereafter  specify  for the  purpose by notice to the other  party.
Each  such  notice,   request  or  other   communication  shall  be
effective  (i) if given by mail, 72 hours after such  communication
is  deposited  in the  mails  with  first  class  postage  prepaid,
addressed as aforesaid  or (ii) if  given by any other means,  when
delivered at the address specified in this Section 7.1.

           SECTION  7.2 No  Waivers;  Remedies   Cumulative.  No  
failure  or delay by
the Lender in exercising  any right,  power or privilege  hereunder
shall  operate as a waiver  thereof nor shall any single or partial
exercise  thereof  preclude any other or further  exercise  thereof
or the  exercise  of any  other  right,  power  or  privilege.  The
rights and remedies  herein  provided  shall be cumulative  and not
exclusive of any rights or remedies provided by law.
<PAGE>
           SECTION   7.3    Expenses;    Documentary    Taxes;   
Indemnification.  (a)  The  Borrower  shall  be  liable  to  pay on
demand  (i) all  out-of-pocket  expenses of the  Lender,  including
the  fees  and   disbursements   of  counsel  to  the  Lender,   in
connection  with the preparation of any waiver or consent under the
Loan  Documents or any amendment of any of the Loan  Documents,  or
any Default or alleged  Default  hereunder  and (ii) if an Event of
Default  occurs,   all  out-of-pocket   expenses  incurred  by  the
Lender,   including   fees  and   disbursements   of  counsel,   in
connection with such Event of Default and  collection,  bankruptcy,
insolvency   and   other    enforcement    proceedings    resulting
therefrom.  The Borrower  shall  indemnify the Lender from and hold
it  harmless  against  any  transfer  taxes,   documentary   taxes,
assessments  or  other  similar  charges  made by any  governmental
authority  by  reason of the  execution  and  delivery  of any Loan
Document.

           (b) The  Borrower  shall  indemnify  the Lender and hold
it  harmless  from and  against  any and all  liabilities,  losses,
damages,  costs  and  expenses  of  any  kind,  including,  without
limitation,  the  reasonable  fees and  disbursements  of  counsel,
that  may  be  incurred  by  the  Lender  in  connection  with  any
investigative,  administrative or judicial  proceeding  (whether or
not the Lender  shall be  designated a party  thereto)  relating to
or arising out of any Loan  Document or any actual or proposed  use
of the  proceeds of any Loan  hereunder;  provided  that the Lender
shall not have the right to be  indemnified  hereunder  for its own
gross  negligence  or willful  misconduct  as determined by a court
of competent jurisdiction.

           SECTION  7.4  Amendments  and   Waivers.  Neither this  
Agreement nor any provision
hereof may be amended,  modified,  waived or supplemented except by
an instrument in writing signed by the Borrower and the Lender.

           SECTION  7.5  Successors  and   Assigns.  
The  provisions of this  Agreement  shall
be  binding  upon and inure to the  benefit of the  parties  hereto
and  their  respective  successors  and  assigns,  except  that the
Borrower  may not assign or  otherwise  transfer  any of its rights
under  this  Agreement  without  the prior  written  consent of the
Lender. <PAGE>

           SECTION    7.6    GOVERNING    LAW;    VENUE    AND   
JURISDICTION.
THE VALIDITY OF THIS AGREEMENT,  THE  CONSTRUCTION,  INTERPRETATION
AND  ENFORCEMENT  HEREOF AND THE RIGHTS OF THE PARTIES HERETO SHALL
BE  DETERMINED  UNDER,  GOVERNED BY, AND  CONSTRUED  IN  ACCORDANCE
WITH THE  INTERNAL  LAWS OF THE  STATE OF NEW  YORK.  THE  BORROWER
AGREES THAT ALL ACTIONS OR PROCEEDINGS  ARISING IN CONNECTION  WITH
THIS  AGREEMENT AND EACH OTHER "LOAN  DOCUMENT"  SHALL BE TRIED AND
LITIGATED IN FEDERAL OR, IN THE ABSENCE OF FEDERAL  SUBJECT  MATTER
JURISDICTION,  STATE  COURTS  LOCATED  IN THE  STATE  OF  NEW  YORK
UNLESS SUCH  ACTIONS OR  PROCEEDINGS  ARE REQUIRED TO BE BROUGHT IN
ANOTHER  COURT  TO  OBTAIN  SUBJECT  MATTER  JURISDICTION  OVER THE
MATTER  IN  CONTROVERSY.  EACH  OF  THE  BORROWER  AND  THE  LENDER
WAIVES,  TO THE FULLEST EXTENT  PERMISSIBLE  UNDER  APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO ASSERT BY WAY OF  MOTION,  AS A DEFENSE OR
OTHERWISE  THE  DOCTRINE  OF FORUM NON  CONVENIENS  OR TO OBJECT TO
VENUE  IN  ANY   PROCEEDING   BROUGHT   IN   ACCORDANCE   WITH  THE
IMMEDIATELY  PRECEDING  SENTENCE.  SERVICE OF  PROCESS,  SUFFICIENT
FOR PERSONAL  JURISDICTION IN ANY ACTION AGAINST THE BORROWER,  MAY
BE  MADE  BY  REGISTERED   OR  CERTIFIED   MAIL,   RETURN   RECEIPT
REQUESTED, TO ITS ADDRESS INDICATED IN SECTION 7.1.

           SECTION   7.7  WAIVER  OF  JURY   TRIAL.  
EACH OF THE LENDER AND THE  BORROWER  HEREBY
IRREVOCABLY  WAIVES  ANY  AND ALL  RIGHT  TO  TRIAL  BY JURY IN ANY
LEGAL OR EQUITABLE  ACTION,  SUIT OR  PROCEEDING  ARISING OUT OF OR
RELATING TO THIS  AGREEMENT  OR THE OTHER "LOAN  DOCUMENTS"  OR ANY
TRANSACTION  CONTEMPLATED  HEREBY OR  THEREBY  OR THE  RELATIONSHIP
ESTABLISHED HEREUNDER OR THEREUNDER.

           SECTION  7.8  Limitation  on   Interest.  Each  provision
in this  Agreement  and
each other Loan  Document is expressly  limited so that in no event
whatsoever  shall the amount paid, or otherwise  agreed to be paid,
by the  Borrower  for the  use,  forbearance  or  detention  of the
proceeds  of the  Loan  under  this  Agreement  or any  other  Loan
Document or otherwise  (including  any sums paid as required by any
covenant  or  obligation  contained  herein  or in any  other  Loan
Document  which are for the use,  forbearance  or detention of such
money),   exceed  that  amount  of  money  which  would  cause  the
effective  rate of  interest  to exceed  the  highest  lawful  rate
permitted by applicable law (the "Highest  Lawful  Rate"),  and all
amounts  owed under  this  Agreement  and each other Loan  Document
shall be held to be subject to  reduction  to the effect  that such
amounts  so paid or  agreed  to be paid  which  <PAGE>  
are for the
use,  forbearance  or  detention  of money under this  Agreement or
such Loan  Document  shall in no event  exceed that amount of money
which  would  cause the  effective  rate of  interest to exceed the
Highest  Lawful  Rate.   Notwithstanding   any  provision  in  this
Agreement  or any  other  Loan  Document  to the  contrary,  if the
maturity  of the Loan or the Note is  accelerated  for any  reason,
or in the  event of any  prepayment  of all or any  portion  of the
Loan or the Note by the  Borrower  or in any  other  event,  earned
interest  on the Loan or the  Note may  never  exceed  the  Highest
Lawful Rate,  and any unearned  interest  otherwise  payable  under
the Note that is in  excess of the  Highest  Lawful  Rate  shall be
canceled  automatically  as of the  date  of such  acceleration  or
prepayment  or other such event and, if  theretofore  paid,  shall,
at the  option of the  holder of the Note,  be either  refunded  to
the  Borrower  or  credited  to  the  principal  of  the  Note.  In
determining  whether or not the  interest  paid or  payable,  under
any specific  contingency,  exceeds the Highest  Lawful  Rate,  the
Borrower and the Lender shall,  to the maximum extent  permitted by
Applicable Law,  amortize,  prorate,  allocate and spread, in equal
parts during the period of the actual term of this  Agreement,  all
interest  at  any  time  contracted  for,   charged,   received  or
reserved in connection with this Agreement.

           SECTION  7.9  Severability.   Any  provision  of  this
Agreement which is illegal,  invalid,  prohibited or  unenforceable
in  any   jurisdiction   shall,   as  to  such   jurisdiction,   be
ineffective   to  the  extent  of  such   illegality,   invalidity,
prohibition or unenforceability  without  invalidating or impairing
the  remaining  provisions  hereof or  affecting  the  validity  or
enforceability of such provision in any other jurisdiction.

           SECTION  7.10  Counterparts;   Integration;  Section  
Headings. This   Agreement   may  be  signed  in  any  number  of
counterparts,  each of which  shall be an  original,  with the same
effect as if the  signatures  thereto and hereto were upon the same
instrument.  This Agreement  constitutes  the entire  agreement and
understanding  among the parties  hereto and supersedes any and all
prior agreements and understandings,  oral or written,  relating to
the  subject   matter  hereof.   Except  as  otherwise   indicated,
references  herein  to any  "Section"  means  a  "Section"  of this
Agreement,  and the table of contents and section  headings in this
Agreement are for <PAGE>  
purposes of reference  only and shall not
limit or define the meaning hereof.

           SECTION  7.11.   Confidentiality  of  Information.  The  
Lender  agrees  (for
itself as a Lender  hereunder  and in its  capacity  as  collateral
agent  or  pledgee  under  any  other  Loan  Document  and  for any
assignee of the Lender's  rights  hereunder or under any other Loan
Documents) that any  information  concerning the Borrower or any of
its  Subsidiaries   furnished  to  the  Lender  (including  in  its
capacity  as  collateral  agent or  pledgee  under any  other  Loan
Documents)  by  or  on  behalf  of  the  Borrower  or  any  of  its
Subsidiaries  pursuant to the terms of this  Agreement or any other
Loan  Document will be kept  strictly  confidential;  provided that
the foregoing  shall not apply to information  which (i) is already
in possession of the Lender,  if such  information  is not known to
the  Lender to be  subject  to  another  confidentiality  agreement
with or another  obligation of secrecy to the Borrower,  any of its
Subsidiaries  or  another  Person  (including  the  Confidentiality
Agreement   dated  April  13,  1998  between  the  Lender  and  the
Borrower),  (ii) is or becomes  generally  available  to the public
other  than as a result  of a  disclosure  by the  Lender or any of
its directors,  officers,  employees,  agents,  representatives  or
advisers,   (iii)   becomes   available   to   the   Lender   on  a
non-confidential  basis from a source  other than the  Borrower  or
any of its  Subsidiaries or their respective  directors,  officers,
employees,  agents,  representatives or advisers, if such source is
not  known  by  the  Lender  to  be  bound  by  a   confidentiality
agreement  with or other  obligation  of secrecy to the Borrower or
any  of  their   Subsidiaries,   or  another  Person,  or  (iv)  is
disclosed  to a  prospective  assignee of the Lender in  connection
with the  transfer  or  assignment  of the  Loans or any  rights of
the  Lender   under  the  Loan   Documents,   provided   that  such
prospective  transferee  agree in advance to keep such  information
strictly  confidential  in accordance  with the  provisions of this
Section  7.11 and, if  applicable,  the  Confidentiality  Agreement
dated  April  13,  1998  between  the  Lender  and  the   Borrower.
Notwithstanding the foregoing,  the Borrower  acknowledges that the
Lender  disclose such  information or portions  thereof,  and if so
required,  will  disclose  such  information  (A) at the request of
governmental  or  self-regulatory  agencies  or other  authorities,
(B)  pursuant  to  subpoena  or  other  court  process,  (C) to its
independent   auditors  or  (D)   otherwise  as  required  by  law;
provided  that if the Lender is  requested  or required to disclose
any such <PAGE>  
information  to  governmental  or  self-regulatory
agencies  or  other  authorities,  pursuant  to  subpoena  or other
court  process or otherwise  as required by law, the Lender  shall,
if and to the extent reasonably  practicable,  provide the Borrower
with  prompt  notice of such  request or  requirement,  so that the
Borrower may seek an appropriate  protective  order or other relief
from such request or requirement. <PAGE>

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

                               PMC INTERNATIONAL, INC.
                               By:  /S/ Scott A. MacKillop                      
                                 Name:
                                 Title:


                               DUNDEE BANCORP INC.


                               By:  /S/ Ray Benzinger                         
                                 Name:
                                 Title:
<PAGE>
----------------------------------------------------------




                   PMC INTERNATIONAL, INC.,
                         as Borrower,



                              and



                     DUNDEE BANCORP INC.,
                           as Lender



                        LOAN AGREEMENT


                          $1,500,000



                        _______________


                   Dated as of July 7, 1998

                        _______________


----------------------------------------------------------
<PAGE>
                     TABLE OF CONTENTS


                                                          Page

                       ARTICLE I DEFINITIONS
SECTION 1.1  Definitions.....................................1
SECTION 1.2  Accounting Terms and Determinations.............6

                        ARTICLE II THE LOAN
SECTION 2.1  Term Loan.......................................6
SECTION 2.2  The Note; Repayment of Principal................6
SECTION 2.3  Loan Record.....................................7
SECTION 2.4  Interest Rate...................................7
SECTION 2.5  Mandatory Prepayment of the Loan................7
SECTION 2.6  Optional Prepayments of the Loan................8
SECTION 2.7  Manner and Time of Payments.....................8
SECTION 2.8  Use of Proceeds.................................8

                       ARTICLE III CONDITIONS
SECTION 3.1  Conditions Precedent to the Loan................9

             ARTICLE IV REPRESENTATIONS AND WARRANTIES
SECTION 4.1  Corporate Organization, Etc....................10
SECTION 4.2  Due Authorization..............................11
SECTION 4.3  Litigation.....................................12
SECTION 4.4  Absence of Undisclosed Liabilities.............12
SECTION 4.5  Taxes..........................................13
SECTION 4.6  Title to Certain Properties....................13
SECTION 4.7  No Default.....................................13
SECTION 4.8  Investment Company.............................13
SECTION 4.9  Legal, Valid and Binding Agreements............13
SECTION 4.10  Compliance with ERISA.........................14
SECTION 4.11  Disclosure; Financial Statements..............14
SECTION 4.12  Compliance with Law...........................14
SECTION 4.13  Consents......................................14
SECTION 4.14  Patents, Copyrights, Permits and Trademarks...15

                        ARTICLE V COVENANTS
SECTION 5.1  Performance of Obligations.....................16
SECTION 5.2  Compliance with Laws...........................16
SECTION 5.3  Notice of Default and Event of Default.........16
SECTION 5.4  Report on Proceedings..........................16
SECTION 5.5  Financial Statements and Other Reports.........17
<PAGE>
SECTION 5.6  Conduct of  Business  and  Preservation  of  Corporate
Existence, Etc..............................................18
SECTION 5.7  Inspection of Property; Books and Records......19
SECTION 5.8  Maintenance of Property; Insurance.............19
SECTION 5.9  Further Assurances; Additional
             Collateral Security............................20
SECTION 5.10  Indebtedness..................................20
SECTION 5.11  Limitation on Liens...........................21
SECTION 5.12  No Dividends..................................23
SECTION 5.13  Limitation on Investments.....................23
SECTION 5.14  Contingent Liabilities........................24
SECTION 5.15  Limitation on Leases..........................24
SECTION 5.16  Prohibition on Sale of Assets.................24
SECTION 5.17  Limitation on Prepayments of Debt.............24
SECTION 5.18  Subsidiaries..................................25
SECTION 5.19  Mergers, Disposition of Assets, Etc...........25
SECTION 5.20  Fiscal Year...................................25
SECTION 5.21  No Inconsistent Agreements....................25
SECTION 5.22  Use of Proceeds...............................25
SECTION 5.23  Transactions with Affiliates..................25
                              <PAGE>
                        ARTICLE VI DEFAULTS
SECTION 6.1  Events of Default..............................26

                     ARTICLE VII MISCELLANEOUS
SECTION 7.1  Notices........................................30
SECTION 7.2  No Waivers; Remedies Cumulative................32
SECTION 7.3  Expenses; Documentary Taxes; Indemnification...32
SECTION 7.4  Amendments and Waivers.........................33
SECTION 7.5  Successors and Assigns.........................33
SECTION 7.6  GOVERNING LAW; VENUE AND JURISDICTION..........33
SECTION 7.7  WAIVER OF JURY TRIAL...........................33
SECTION 7.8  Limitation on Interest.........................33
SECTION 7.10  Counterparts; Integration; Section Headings...35
SECTION 7.11. Confidentiality of Information................35

<PAGE>

SCHEDULES:
        Schedule 4.1 -  Subsidiaries
        Schedule 4.4 -  Certain Liabilities
        Schedule 4.6 -  Existing Liens
        Schedule 4.13 - Consents
        Schedule 5.1 -  Certain Contingent Obligations
        Schedule 5.10 - Existing Debt
        Schedule 5.11 - Existing Liens
        Schedule 5.14 - Guaranties
        Schedule 5.23 - Affiliate Transactions

EXHIBITS:
        Exhibit A - Form of Note
        Exhibit B - Form of Borrower Security Agreement
        Exhibit C - Form of Subsidiary Security Agreement
        Exhibit D - Form of Guarantee Agreement
        Exhibit E - Form of Pledge Agreement

<PAGE>
EXHIBIT 10.7
                  BORROWER SECURITY AGREEMENT


           BORROWER SECURITY AGREEMENT, dated as of  July 9,
1998, between PMC International, Inc., a Colorado
corporation (the "Company"), and Dundee Bancorp Inc., an
Ontario corporation, as collateral agent (the "Collateral 
Agent").


                           RECITALS

           A.  Pursuant to the Loan Agreement, dated as of
July __, 1998 (as the same may be modified, supplemented or
restated from time to time, the "Loan Agreement"), between
the Company, as borrower, and Dundee Bancorp Inc., as lender
(in such capacity, the "Lender"), the Lender has agreed to
extend to the Company a loan in the amount of $1.5 million
(the "Loan"), subject to the terms and conditions set forth
in the Loan Agreement.

           B.  In order to induce the Lender to enter into
the Loan Agreement and to extend the Loan, the Company has
agreed to enter into this Agreement to grant to the
Collateral Agent a continuing perfected security interest in
the Collateral (as defined in Section 1) to secure the
performance of its obligations under the Loan Agreement, all
upon the terms and conditions set forth in this Agreement.

           NOW THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which  are
hereby acknowledged, the Company hereby agrees with the
Collateral Agent as follows:

           Section 1.  Definitions.  Capitalized terms used
in this Agreement without definition have the meanings given
to them in the Loan Agreement.  The following terms, as used
in this Agreement, have the following meanings:

           "Existing Liens" means the Liens existing on the
Collateral as of the date hereof identified on Schedule 
5.11 to  the Loan Agreement, as granted to the Persons and
pursuant to the agreements or instruments listed on such
Schedule 5.11 .

           "Secured Obligations" means (i) the full and
prompt payment of the principal of and premium and interest
on the Loan (including, without limitation, interest
accruing after the date of any filing by the Company of any
petition in bankruptcy or the commencement of any
bankruptcy, insolvency or similar proceeding with respect to
the Company), as and when the same becomes due and payable
in accordance with the terms of the Loan Agreement, (ii) the
payment of all other indebtedness and other amounts payable
by the Company under the Loan Agreement, the Note, this
Agreement 
<PAGE>
(including, without limitation, amounts due under
Sections 10, 13 and 15 of this Agreement), and the other
Loan Documents (including, without limitation, interest
accruing after the date of any filing by the Company of any
petition in bankruptcy or the commencement of any
bankruptcy, insolvency or similar proceeding with respect to
the Company), (iii) the due and punctual performance by the
Company of and compliance by the Company with all its
obligations under the Loan Agreement, the Note, this
Agreement and all other Loan Documents, and (iv) any
renewals or extensions of any of the foregoing.

           "Secured Parties" means Lender and each assignee
of the Loan, as obligees of any or all of the Secured
Obligations, and their respective successors, and the
Collateral Agent.

           "Security Interests" means the security interests
in the Collateral granted pursuant to this Agreement
securing the Secured Obligations.

           "Supplemental Documentation" means agreements,
instruments, documents, financing statements, warehouse
receipts, bills of lading, notices of assignment of
accounts, schedules of accounts assigned, mortgages,
writings, filings and any other written matter requested
(whether or not required) by the Collateral Agent to perfect
and maintain a perfected Lien upon, and (if applicable) a
perfected first priority security interest in, any
Collateral, and to assist the Collateral Agent's realization
thereon (including, without limitation, the right to
receive, endorse, and collect all instruments made payable
to the Company representing any dividend, interest payment
or other distribution or proceeds in respect of any
Collateral).

           "UCC" means the Uniform Commercial Code as in
effect on the date hereof in the State of New York;
provided, that if by reason of mandatory provisions of law,
the perfection or the effect of perfection or non-perfection
of the security interest granted hereunder in any Collateral
is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than New York, "UCC" shall mean the
Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating
to such perfection or effect of perfection or non-perfection.

           Section 2.  Grant of Security Interest.  In order
to secure full and timely 
<PAGE>
payment of the Secured
Obligations, and to secure the performance of all of the
other obligations of the Company under the Loan Documents,
the Company hereby mortgages, pledges and assigns and
transfers to the Collateral Agent and grants to the
Collateral Agent, for the benefit of the Collateral Agent
and the other Secured Parties, a continuing perfected
security interest in, and a lien upon, all of the following
property of the Company, in each case whether now
owned or hereafter acquired or arising and regardless of
where located (collectively, the "Collateral"), subject to
no Liens other than Permitted Liens:

           (a)  All "accounts" (as defined in the UCC),
      including all accounts receivable, contract rights,
      book debts, notes, drafts and other obligations or
      indebtedness owing to the Company arising from the
      sale, lease or exchange of goods or other property by
      it and/or the performance of services by it (including,
      without limitation, any such obligation that might be
      characterized as an account, contract right or general
      intangible under the Uniform Commercial Code in effect
      in any jurisdiction) and all of the Company's rights
      in, to and under all purchase orders for goods,
      services or other property, and all of the Company's
      rights to any goods, services or other property
      represented by any of the foregoing and all monies due
      to or to become due to the Company under all contracts
      for the sale, lease or exchange of goods or other
      property and/or the performance of services by it
      (whether or not yet earned by performance on the part
      of the Company), including, without limitation, the
      right to receive the proceeds of said purchase orders
      and contracts and all collateral security and
      guarantees of any kind given by any Person with respect
      to any of the foregoing (collectively, "Accounts");

           (b)  All goods, merchandise, and other personal
      property that may at any time be held for sale or lease
      or to be furnished under any contract of service, be so
      leased or furnished, or constitute raw materials, work
      in process, finished goods, supplies or materials and
      all other "inventory" (as defined in the UCC) of
      whatsoever kind and nature that are or might be used or
      consumed in business or in connection with the
      manufacture, packing, shipping, advertising, selling,
      leasing or finishing of such goods, merchandise and
      other personal property, together with all attachments,
      accessories, replacements, substitutions, additions and
      improvements to any of the foregoing (collectively,
      "Inventory");
<PAGE>

           (c)  All "general intangibles" (as defined in the
      UCC) including, without limitation, (i) all obligations
      or indebtedness owing to the Company (other than
      Accounts and Instruments (as hereinafter defined)) from
      whatever source arising, (ii) all rights or claims in
      respect of refunds for taxes paid, (iii) all rights in
      business or operating licenses and permits, to the
      extent permitted by law, (iv) all rights,
      whether by contract or otherwise, to receive or obtain
      water, electricity, natural gas or any other resource
      or utility, (v) all warranty, indemnification, or
      contractual rights and claims of any sort and (vi) all
      choses or things in action, goodwill, licenses, leases,
      computer programs, tapes or discs, and tax refund
      claims;

           (d)  All "documents" (as defined in the UCC) or
      receipts covering, evidencing or representing goods;

           (e)  All "instruments", "chattel paper" or
      "letters of credit" (each as defined in the UCC)
      evidencing, representing, arising from or existing in
      respect of, relating to, securing or otherwise
      supporting the payment of, any of the Accounts,
      including, without limitation, promissory notes,
      drafts, bills of exchange and trade acceptances
      (collectively, "Instruments");

           (f)  All "equipment" (as defined in the UCC) now
      owned or hereafter acquired by the Company, including,
      without limitation, all machinery, equipment, tools,
      furniture, fixtures, and any other goods other than
      Inventory, together with any and all additions,
      substitutions and replacements of any of the foregoing,
      and all attachments, components, parts (including spare
      parts), equipment and accessories installed thereon or
      affixed thereto;

           (g)  All patents, copyrights, service marks,
      trademarks and trade names, including registrations and
      applications to register or renew the registration of
      any of the foregoing, and inventions, processes,
      designs, formulae, trade secrets, know-how,
      confidential information, computer software and
      programs (including source codes), data and
      documentation, and all similar intellectual property
      rights, tangible embodiments of any of the foregoing
      (in any medium, including electronic media), and
      licenses of any of the foregoing; other than source
      codes for computer software and programs designed for
      clients or customers of the 
<PAGE>
      Borrower or its
      Subsidiaries that have been placed in escrow or similar
      arrangement for the benefit of such clients or
      customers or may be so placed in the ordinary course of
      business consistent with past practice;

           (h)  All rights and claims of the Company in, to
      or under all policies of insurance covering any
      of the Collateral, including, but not limited to,
      insurance for fire, damage, loss, and casualty,
      together with the proceeds, products, renewals, and
      replacements thereof, including prepaid or unearned
      premiums;

           (i)  All books and records (including, but not
      limited to, credit files, computer programs, printouts
      and other computer materials and records) relating to
      any of the foregoing and all customer lists and
      advertising materials relating to the Company's
      business; and

           (j)  Without in any way limiting the foregoing and
      to the extent not otherwise included in the foregoing,
      (x) any and all products and proceeds of any of the
      foregoing (including, but not limited to, any claims of
      the Company against third parties relating to or in
      connection with the Collateral), whether derived from
      voluntary or involuntary disposition, and all renewals,
      replacements, substitutions, additions, accessions,
      rents, issues, royalties, and profits of any of the
      foregoing, and (y) all cash and bank deposit accounts,
      wherever located.

           Section 3.  Warranties, Covenants and Agreements 
of the Company.  The Company represents, warrants and
covenants that:

           (a)  Except for the Security Interests and the
Existing Liens and except as permitted by the Loan
Agreement, the Company is the owner and holder of, and has
rights in and good title to, the Collateral free from any
Lien of any Person, other than the Collateral Agent, and at
all times the Collateral shall be and remain free of all
such Liens.

           (b)  The Company has requisite corporate power and
authority to execute and deliver this Agreement and to sell,
assign and transfer, as the case may be, the Collateral to
the Collateral Agent and to grant to the Collateral Agent a
valid, perfected security interest in the Collateral as
contemplated by this Agreement, subject to no Liens other
than Permitted Liens; the execution and delivery of this
Agreement and 
<PAGE>
the sale, assignment and transfer, as the case
may be, of the Collateral and the grant of a valid,
perfected security interest in the Collateral as
contemplated by this Agreement, have been duly authorized by
all necessary corporate action; this Agreement and all
related documents executed by or on behalf of the Company
pursuant to this Agreement have been duly executed
and delivered by the Company; and the Company shall defend
the Collateral against all claims and demands of all Persons
at any time claiming the same or any interest therein.

           (c)  Except for the financing statements and
security agreements identified on Schedule  5.11 to  the 
Loan Agreement with respect to the Existing Liens, the
Company has not heretofore signed any financing statement or
security agreement that covers any of the Collateral, and no
such financing statement or security agreement is now on
file in any public office in any jurisdiction.

           (d)  As long as any amount remains unpaid on any
of the Secured Obligations, the Company shall not enter into
or execute, or permit to be on file in any public office in
any jurisdiction, any security agreement or financing
statement covering the Collateral, other than any
(i) security agreements and financing statements in favor of
the Secured Parties hereunder and (ii) security agreements
and financing statements in respect of Permitted Liens.

           (e)  The Company authorizes the Collateral Agent
to file, in the Collateral Agent's discretion and at the
Company's expense, in jurisdictions where this authorization
will be given effect, financing statements and continuation
statements covering the Collateral signed only by the
Collateral Agent, and hereby appoints the Collateral Agent
as the Company's attorney-in-fact to sign and file any such
financing statements and continuation statements covering
the Collateral.  The Company shall, at its expense, execute,
deliver, file and record any such documents, assignments,
agreements, or statements (including, without limitation,
financing and continuation statements under the UCC) and
take any other action that from time to time may be
necessary or desirable, or that the Collateral Agent may
request, in order to create, preserve, perfect, confirm or
validate the Security Interests granted hereunder or to
enable the Secured Parties to obtain the full benefits of,
or to enforce their rights, powers and remedies under, this
Agreement; and the Collateral Agent may, at any time or
times, file as a financing statement any counterpart, copy
or reproduction of this Agreement.
<PAGE>
           (f)   Except for the Accounts identified on
Schedule 5.11 to the Loan Agreement as being subject to a
Lien, the Company shall not transfer, sell or hypothecate
any Account except upon the prior written consent of the
Collateral Agent. 
           (g)  The Company's chief executive office and
principal place of business is in Denver, Colorado and
Inventory and all books and records relating to the
Collateral (including, but not limited to, credit files,
computer programs, printouts, other computer materials, and
records, and all customer lists, advertising materials and
reservations systems) are located only at the locations set
forth in Schedule  I to this Agreement.  The Company shall
not change its name, the location of its chief executive
office or principal place of business, or remove Collateral
or such books and records to locations that are not set
forth in such Schedule  I, unless the Company shall have
given the Collateral Agent prior written notice thereof and
taken all action (or made arrangements to take such action
substantially simultaneously with such change if it is
impracticable to take such action in advance) necessary or
reasonably requested by the Collateral Agent to amend each
financing statement or continuation statement so that it is
not seriously misleading, or so as to cause the Collateral
Agent to continue to maintain its lien on, and security
interest in, the Collateral subject only to Permitted
Liens.   Notwithstanding the foregoing, if for any reason
Inventory is at any time kept or located at locations other
than those specified in Schedule  I to this Agreement or
which may hereafter be consented to by the Collateral Agent,
the Collateral Agent shall nevertheless have and retain a
security interest therein.

           (h)  With respect to products and proceeds
included in the Collateral, any and all material amounts of
cash included in the Collateral shall promptly be deposited
only into such accounts at banking institutions with offices
in Denver, Colorado (i) as the Company may from time to time
designate and (ii) at all times following the date which is
30 days after receipt of a written request to that effect
from the Collateral Agent, which request is made after a
default or an Event of Default shall have occurred and be
continuing, as shall have a lock-box agreement, in form
reasonably satisfactory to the Collateral Agent (a "Lock-Box 
Agreement"), in full force and effect.  Upon receipt of such
request, the Company shall promptly enter into deposit
arrangements and a Lock-Box Agreement with a banking
institution reasonably acceptable to the Collateral Agent.
<PAGE>
           (i)  Except for Permitted Liens and the asset
dispositions permitted under Section  5.16 of the Loan
Agreement (and then only to the extent permitted  under the
Loan Agreement), the Company shall not sell or otherwise
transfer or encumber or  dispose of the Collateral or
any interest therein without the prior written consent of
the Collateral Agent.

           (j)  The Company shall not release or surrender
any guarantee, suretyship agreement or security for any
Accounts at any time or times except in the ordinary course
of business consistent with historical collection practices.

           (k)  If any certificates of title or similar
documents are at any time issued or outstanding with respect
to any Inventory, the Company shall promptly advise the
Collateral Agent thereof, and the Company shall promptly
cause the interest of the Collateral Agent to be properly
noted thereon, and if any certificates of title or similar
documents are so issued or outstanding at the time this
Agreement is executed by or on behalf of the Company, then
the Company shall have caused the interest of the Collateral
Agent so to have been properly noted at or before the time
of such execution; and the Company shall further promptly
deliver to the Collateral Agent any such certificate of
title or similar document.

           (l)  The Company shall promptly deliver or cause
to be delivered to the Collateral Agent, duly endorsed in a
manner reasonably satisfactory to the Collateral Agent, all
Instruments, if any, at any time representing all or any of
the Collateral to be held as Collateral pursuant to this
Agreement.

           (m)  The Company shall use diligent commercially
reasonable efforts consistent with past practice to cause to
be collected from their respective account debtors, as and
when due, any and all amounts owing under or on account of
each Account (including, without limitation, Accounts that
are delinquent, such Accounts to be collected in accordance
with lawful collection procedures) and shall apply forthwith
upon receipt thereof all such amounts as are so collected to
the outstanding balance of such Account.  Subject to the
rights of the Collateral Agent and the other Secured
Parties, if no Event of Default has occurred and is
continuing, the Company may allow, in the ordinary course of
business as adjustments to amounts owing under such
Accounts, (i) an 
<PAGE>
extension or renewal of the time or times
of payment, or settlement for less than the total unpaid
balance, which the Company finds appropriate in accordance
with sound business judgment and (ii) a refund or credit due
as a result of returned or damaged merchandise or
inadequately rendered service, all in accordance with the
Company's ordinary course of business consistent with
historical collection practices.  The costs and expenses
(including, without limitation, attorneys' fees) of
collection, whether incurred by the Company or the
Collateral Agent, shall be borne by the Company.

           (n)  The Company shall not amend, modify,
terminate or waive any provision of any agreement, contract
or other instrument giving rise to an Account or otherwise
constituting Collateral, except for amendments,
modifications, terminations or waivers which would not
adversely affect the Secured Parties and except that the
Company may amend, modify, terminate or waive provisions of
agreements, contracts or other instruments giving rise to
Accounts or otherwise constituting collateral in the
ordinary course of business.

           Section 4.  Further Assurances as to the 
Collateral; Collateral Agent as Attorney-In-Fact.  At the
Collateral Agent's request, the Company shall execute and
deliver to the Collateral Agent, at any time or times
hereafter, all Supplemental Documentation, in form and
substance reasonably acceptable to the Collateral Agent, and
the Company shall pay the costs of any recording or filing
thereof.  The Company hereby irrevocably makes, constitutes,
and appoints the Collateral Agent (and all Persons
designated by the Collateral Agent for that purpose) as the
Company's true and lawful attorney (and agent-in-fact) to
sign the name of the Company on any Supplemental
Documentation and to deliver any Supplemental Documentation
to such Persons as the Collateral Agent, in its sole
discretion, may elect; provided, that if no Event of Default
shall have occurred and be continuing the Collateral Agent
shall not, in the case of Supplemental Documentation other
than financing statements, exercise the power of attorney
granted in this Section 4 to sign and deliver such
Supplemental Documentation unless the Company has failed to
sign and deliver such Supplemental Documentation promptly
after the Collateral Agent has reasonably requested it to do
so.  The Company agrees that a  photocopy or other
reproduction of this Agreement or of a financing statement
is sufficient as a financing statement.

           Section 5.  Assignment of Security Interest.  If
at any time the Company 
<PAGE>
shall take and perfect a security
interest in any property of an Account debtor or any other
Person to secure payment and performance of an Account, the
Company shall promptly assign such security interest to the
Collateral Agent.  Such assignment need not be filed of
public record unless necessary to continue the perfected
status of the security interest  against creditors of
and transferees from the Account debtor or other Person
granting the security interest.

           Section 6.  Maintenance of Records; Additional 
Information.  (a)    The Company will keep and maintain, at
its own cost and expense, satisfactory and complete records
of the Collateral.

           (b)  The Company shall furnish to the Collateral
Agent from time to time such additional information and
copies of such documents relating to this Agreement, the
Collateral, the Secured Obligations and the Company's
financial condition as the Collateral Agent may reasonably
request.  The Company will promptly report to the Collateral
Agent any occurrence or condition known to or which becomes
known to the Company having any material adverse effect upon
the fair market value of the Inventory or the Accounts.

           Section 7.  Inspection and Verification.  The
Collateral Agent and such Persons as the Collateral Agent
may reasonably designate shall have the right, in connection
with the Loan or the Secured Parties' security interest in
the Collateral, during the Company's usual business hours
upon reasonable prior notice and as often as may be
reasonably requested, subject to any confidentiality
agreements existing between the Borrower and third parties,
(i) to inspect the Collateral, all books and records related
thereto (and to make extracts and copies from such records,
subject to reasonable objection by the Company and  the
terms of Section 7.11 of the Loan Agreement), and the
premises upon which any of the Collateral is located, (ii)
to discuss the Company's affairs with the officers of the
Company and its independent accountants, and (iii) to
verify under reasonable procedures the validity, amount,
quality, quantity, value and condition of or any other
matter relating to the Collateral (including, without
limitation, Collateral in the possession of a third Person
and contacting Account debtors or a third Person possessing
such Collateral for the purpose of making such a
verification); provided, that reimbursement of expenses
incurred by or on behalf of the Collateral Agent in
connection therewith shall be governed by Section 7.3 of the
Loan Agreement; 
<PAGE>
provided, further, that so long as a Default
or an Event of Default has not occurred and is not
continuing, the Collateral Agent may contact the creditors,
customers and clients of the Borrower and its Subsidiaries
only with the prior consent of the Borrower (which consent
will not be unreasonably withheld).  The Collateral Agent
shall have the absolute right to share any information
it gains from such inspection or verification with any other
Secured Party, subject to the terms of Section 7.11 of the
Loan Agreement.

           Section 8.  Rights and Remedies Upon Default.  If
an Event of Default has occurred and is continuing:

           (a)  The Collateral Agent shall have and may
exercise in respect of the Collateral and the Secured
Obligations any or all of the rights and remedies of a
secured party under the UCC, and as otherwise granted in
this Agreement or under any other Applicable Law or under
any other agreement of the Company now or hereafter in
effect, including, without limitation, the right and power
to sell, at public or private sale or sales, or otherwise
dispose of, or otherwise utilize the Collateral and any part
or parts thereof in any manner authorized or permitted under
the UCC after default by a debtor, and to apply the proceeds
thereof as specified in Section 9 of this Agreement.
Without limiting the foregoing, the Collateral Agent shall
have the right to take possession of all or any part of the
Collateral (including, without limitation, all books,
records, papers and documents of the Company or in the
Company's possession or control relating to the Collateral
which are not already in the Collateral Agent's possession),
and for such purpose may enter upon any premises upon which
any of the foregoing are situated and remove the same
therefrom without any liability for trespass or damages
thereby occasioned.  To the extent permitted by Applicable
Law, the Company expressly waives any notice of sale or
other disposition of the Collateral; and to the extent any
such notice is required and cannot be waived, the Company
agrees that if such notice is given in the manner provided
in Section 26 hereof at least  15 days before the time of
the sale or disposition, such notice shall be deemed
reasonable and shall fully satisfy any requirement for
giving of said notice.  The Collateral Agent may impose any
limitations and conditions in connection with any such sale
or disposition as the Collateral Agent deems advisable or
necessary to comply with Applicable Law; and the Collateral
Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given and may
adjourn any public or private sale.  The Collateral Agent
reserves the right to reject any and all bids at such sale
that in its commercially reasonable discretion it shall deem
inadequate.  The 
<PAGE>
Company shall execute and deliver such
documents as the Collateral Agent deems advisable or
necessary in order that any such sale or disposition be made
in compliance with Applicable Law. 

           (b)  The Company hereby waives all rights to
marshall the assets of the Company, including any such right
with respect to the Collateral.

           (c)  All recitals in any instrument of assignment
or any other instrument executed by the Collateral Agent
incident to sale, lease, transfer, assignment or other
disposition, lease or utilization of the Collateral or any
part thereof hereunder shall be sufficient proof of the
matters stated therein and no other proof shall be requisite
to establish full legal propriety of the sale or other
action taken by the Collateral Agent or of any fact,
condition or thing incident thereto and all prerequisites of
such sale or other action or of any fact, condition or thing
incident thereto shall be presumed to have been performed or
to have occurred.

           (d)(i)    The Collateral Agent shall have the
      right to take control of all proceeds of the Collateral
      (whether cash proceeds or non-cash proceeds) and to
      notify any and all account debtors, lessees, or other
      obligors to make payment on any and all accounts,
      leases, or obligations directly to the Collateral
      Agent; and, in such circumstances, the Company shall,
      upon the request of the Collateral Agent, likewise
      notify any and all such account debtors, lessees or
      other obligors to make payment directly to the
      Collateral Agent.  Upon demand by the Collateral Agent
      at any time following the occurrence of an Event of
      Default, all proceeds of Accounts, whether such
      proceeds be cash proceeds or non-cash proceeds,
      received by the Company and not otherwise deposited in
      an account provided for in Section 3(h)(ii), shall be
      held in trust by the Company for the account of the
      Collateral Agent, shall not be commingled with any
      other funds, accounts, monies or property of the
      Company, and shall be accounted for, paid over,
      transmitted and delivered to the Collateral Agent in
      the form as received by the Company promptly upon
      receipt thereof by the Company.

           (ii) At any time after demand as hereinabove
      provided, and in any event without demand, after any of
      the Secured Obligations shall become due, whether by
      acceleration or otherwise, the Collateral Agent shall
      have the right in 
<PAGE>
      its own name or in the name of the
      Company to demand, collect, receive, sue for, compound
      and give acquittance for, any and all amounts due or to
      become due on the Accounts and to endorse the name of
      the Company on all checks, drafts, commercial paper and
      other instruments given in payment or part payment
      thereof, and in its discretion to settle,
      compromise, prosecute or defend any action, claim or
      proceeding with respect thereto which the Collateral
      Agent may deem necessary or appropriate to protect and
      preserve and realize upon the Security Interest and
      collateral assignment of the Collateral Agent in the
      Accounts and the proceeds thereof and security therefor
      including, without limitation, the right to sell,
      assign, pledge, transfer and make any agreement
      respecting or otherwise deal with the Accounts and to
      exercise all rights of the Company thereunder.

           (e)  All proceeds of Inventory, whether cash
proceeds or non-cash proceeds, including, without
limitation, proceeds that constitute Accounts or that are
included in the Collateral as Accounts, and proceeds that
represent the proceeds of Accounts, received by the Company
and not otherwise deposited in an account provided for in
Section 3(h)(ii), shall be held in trust by the Company for
the account of the Collateral Agent, shall not be commingled
with any other funds, accounts, monies or property of the
Company, and shall be accounted for, paid over, transmitted
and delivered to the Collateral Agent in the form as
received by the Company promptly upon receipt thereof by the
Company.

           Section 9.  Application of Proceeds.  Any monies
or property actually received by the Collateral Agent
pursuant to the exercise of any rights or remedies referred
to in Section 8 of this Agreement (including the sale or
other disposition of any portion of the Collateral) shall be
applied in the following order:

           First, to payment of the costs and expenses of
      such sale or other realization, including reasonable
      compensation to agents and counsel for the Collateral
      Agent, and all expenses, liabilities and advances
      incurred or made by the Collateral Agent in connection
      therewith, and any other unreimbursed expenses for
      which the Collateral Agent or any Secured Party is to
      be reimbursed pursuant to the Loan Agreement or Section
      10, 13 or 15 of this Agreement;

           Second, to the ratable payment of accrued but
      unpaid interest on the 
<PAGE>
      Secured Obligations in
      accordance with the provisions of the Loan Agreement;

           Third, to the ratable payment of unpaid principal
      of the Secured Obligations;

           Fourth, to the ratable payment of all other
      Secured Obligations, until all Secured Obligations
      shall have been paid in full;

           Fifth, to the ratable payment of such amounts, if
      any, as shall be required to be paid pursuant to
      Section 9-504(1)(c) of the UCC and any similar
      provision of Applicable Law; and

           Finally, to payment to Company or its successors
      or assigns, or as a court of competent jurisdiction may
      direct, of any surplus then remaining from such
      proceeds.

           Section 10.  Reimbursement of Collateral Agent.
The Company shall forthwith upon demand pay to the
Collateral Agent:


           (a)  The amount of any taxes that the Collateral
      Agent may have been required to pay by reason of the
      Security Interests or to free any of the Collateral
      from any Lien thereon; provided, that so long as no
      Event of Default has occurred and is continuing,
      Company shall not be obligated to pay or discharge any
      such tax or Lien so long as the amount, validity or
      applicability thereof is contested diligently in good
      faith and by appropriate proceedings and so long as any
      reserves or other appropriate provisions as may be
      required by generally accepted accounting principles
      shall have been made therefor.

           (b)  The amount of any and all costs and expenses,
      including the reasonable fees and disbursements of
      counsel and of any other experts, that the Collateral
      Agent reasonably may incur in connection with (i) the
      administration or enforcement of this Agreement,
      including such expenses as are incurred to preserve the
      value of the Collateral and the validity, perfection,
      rank and value of any Security Interest, (ii) the
      collection, sale or any other disposition of any of the
      Collateral, (iii) the exercise by the Collateral Agent
      of any of the rights conferred 
<PAGE>
      upon it hereunder or
      (iv) any default or Event of Default.

           Any such amount not paid within five Business Days
following written demand therefor shall bear interest
at a rate equal to the rate specified in Section 2.4(b) of
the Loan Agreement.  This Section 10 shall survive the
termination of this Agreement.

           Section 11.  Exculpatory Provisions.  (a)Neither
the Collateral Agent nor any of its officers, directors,
employees or agents shall be liable to the Company for any
action lawfully taken or omitted to be taken by them under
or in connection with this Agreement.  The Collateral Agent
shall not be responsible in any manner to any of the other
Secured Parties for the value, validity, due execution,
genuineness, effectiveness, legality, enforceability or
sufficiency of this Agreement, the Loan Agreement or all or
any portion of the Collateral, or any of the certificates,
documents or instruments contemplated by the foregoing, or
for the failure of the Company or any other party to perform
its obligations under them or for any recitals, statements,
representations or warranties made by the Company in this
Agreement or for the value, sufficiency, title or condition
of all or any portion of the Collateral.  The Collateral
Agent shall not be under any obligation to any of the other
Secured Parties to ascertain or to inquire as to the
performance or observance on the part of the Company of any
of the terms, covenants or conditions of any agreements or
to inspect the properties, books or records of the Company
or to ascertain or to inquire as to the financial condition
of the Company.

           (b)  The Collateral Agent shall not be responsible
to any Person for the existence, genuineness or value of any
of the Collateral or for the validity, perfection, priority
or enforceability of the Security Interests in any of the
Collateral, whether impaired by operation of law or by
reason of any action or omission to act on its part
hereunder.  The Collateral Agent shall have no duty to any
Person to ascertain or inquire as to the performance or
observance of any of the terms of this Agreement by the
Company.

           (c)  The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of
the Collateral in its possession if the Collateral is
accorded treatment substantially equal to that which the
Collateral Agent accords its own property, it being
understood that neither the Collateral Agent nor any other
Secured Party shall have any responsibility for (i)
ascertaining or taking action with respect to 
<PAGE>
exchanges,
maturities, tenders or other matters relative to any
Instruments, whether or not the Collateral Agent has or is
deemed to have knowledge of such matters, or (ii) taking
any necessary steps to preserve rights against any
parties with respect to any portion of the Collateral.

           Section 12.  Secured Parties' Right of Set-Off and 
Bankers' Lien.  The Company recognizes and agrees that with
respect to any time or other deposit, certificate of deposit
or any other balance of account standing to the credit of
the Company on the books of the Collateral Agent or any
other Secured Party, the Collateral Agent or the Collateral
Agent through a Secured Party has a right of set-off and, to
the extent any Secured Party is a banking institution or of
a character otherwise qualified to assert the same, a
bankers' lien to the full extent permitted by law.  The
Company further agrees that the Secured Parties may exercise
such right of set-off or bankers' lien at any time when an
Event of Default shall have occurred and is continuing,
regardless of the stated maturity of any time deposit or
other such credit balance.

           Section 13.  Other Expenses.  (a)   In the event
the Company fails to pay or obtain the discharge of any
claim or Lien asserted against any material portion of the
Collateral, other than a Permitted Lien, the Company shall
so notify the Collateral Agent in writing and, regardless of
whether such notice is given, the Collateral Agent may, at
any time or times, in its discretion and without waiving any
Event of Default or waiving or releasing any obligation or
duty of the Company under this Agreement or any Supplemental
Documentation, the Loan Agreement or any other Loan
Document, make such payment or any part thereof or obtain
such discharge or take any other action with respect thereto
that the Collateral Agent deems advisable.

           (b)  In the event that the Company fails to comply
with any provision of the Loan Agreement, this Agreement or
any other Loan Document, such that the value of any
Collateral or the validity, perfection, rank or value of any
security interest granted hereunder is thereby diminished or
put at risk, the Collateral Agent may, but shall not be
required to, effect such compliance on behalf of the Company.

           (c)  In the event the Company fails to pay
promptly all insurance expenses relating to the Collateral,
any and all expenses of protecting, storing, warehousing,
appraising, insuring, handling, maintaining and shipping the
Collateral, any 
<PAGE>
and all excise, property, sales and use
taxes imposed by any state, federal or local authority on
any of the Collateral other than taxes that are being
contested as permitted by Section 10(a) hereof, or any
and all expenses in respect of the sale or other disposition
of the Collateral, the Collateral Agent may, at its option,
but shall not be required to, pay the same.

           (d)  The Company shall reimburse the Collateral
Agent on demand for all amounts so paid, incurred or
advanced by the Collateral Agent pursuant to
subsections (a), (b) and (c) of this Section 13, for any and
all other sums for which the Company may become liable
hereunder, and for all costs, fees and expenses (including
reasonable attorneys' fees, legal expenses and court costs)
incurred by the Collateral Agent in enforcing or protecting
the Security Interests granted hereunder or any of the
Collateral Agent's rights or remedies on behalf of the
Secured Parties under this Agreement, and all such amounts,
sums, costs, fees and expenses, together with interest
thereon at the rate required by Section 2.4(a) of the Loan
Agreement, shall, until paid to the Collateral Agent, be
additional Secured Obligations hereunder.

           Section 14.  Absolute Interest.  (a)     All
rights of the Collateral Agent hereunder, and all
obligations of the Company hereunder, shall be absolute and
unconditional irrespective of (i) any lack of validity or
enforceability of any provision of the Loan Agreement or any
other Loan Document, any agreement with respect to the
Secured Obligations or any other agreement or instrument
relating to any of the foregoing, (ii) any change in the
time, manner or place of payment of or in any other term of,
all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from
the Loan Agreement, any other Loan Document or any other
agreement or instrument or (iii) any exchange, release or
nonperfection of any Collateral, or any release or amendment
or waiver of or any consent to or departure from any
guarantee, for all or any of the Secured Obligations or this
Agreement.

           (b)  This Agreement shall not be construed as
relieving the Company from full liability on the Secured
Obligations or any and all future and other indebtedness
secured hereby or for any deficiency thereon.

           (c)  Following an Event of Default, the Collateral
Agent shall be subrogated to all of the Company's interests,
rights and remedies in respect to the 
<PAGE>
Collateral and all
security now or hereafter existing with respect thereto and
all guaranties and endorsements thereof and with respect
thereto.

           Section 15.  Indemnity.  (a)   In addition to the
payments pursuant to Sections 10 and 13, the Company shall
indemnify, defend and hold harmless the Collateral Agent and
the other Secured Parties and the officers, directors,
employees and agents of the Secured Parties (collectively,
the "Indemnitees") from and against, and pay or reimburse
the Indemnitees for, (i) any and all taxes, and all other
assessments or charges made by any governmental authority,
relating to the execution and delivery of this Agreement,
and (ii) any and all liabilities, losses, damages,
penalties, judgments, suits, claims, costs and expenses of
any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of a
single counsel) in connection with (A) any breach of a
representation, warranty or covenant hereunder or (B) any
investigative, administrative or judicial proceeding,
whether or not such Indemnitee shall be designated a party
thereto, which may be imposed on, incurred by or asserted
against such Indemnitee, in any manner relating to or
arising out of or in connection with this Agreement
(collectively, the "Indemnified Liabilities"), and to
reimburse each Indemnitee, upon its demand as incurred for
any cost or expenses (including, without limitation, the
reasonable fees, expenses and disbursements of a single
counsel) incurred in connection with investigating,
defending or preparing to defend or participating (including
as a witness) in any investigative, administrative or
judicial proceeding whether or not such Indemnitee shall be
designated a party thereto, whether commenced or threatened,
with respect to any such actual, alleged or threatened
liability, loss, damage, penalty, judgment, suit, claim,
cost or expense; provided that no Indemnitee shall have a
right to be indemnified hereunder for its own gross
negligence or willful misconduct as determined by a court of
competent jurisdiction.

           (b)(i)    The Collateral Agent shall or shall
      cause each Indemnitee to notify the Company promptly of
      each event of which it has knowledge which may give
      rise to a claim under the indemnification provisions of
      this Section 15; provided, that the failure so to
      notify the Company shall not impair the Company's
      obligations under this Section 15 except to the extent
      the defense of such claim is actually prejudiced
      thereby.
 
           (ii) If any investigative, judicial or
      administrative proceeding or arbitration arising from
      any of the foregoing is brought against any
      Indemnitee,  the Company shall assume the defense
      thereof on behalf of such Indemnitee, 
<PAGE>
      including
      the employment of counsel reasonably satisfactory to
      such Indemnitee and payment of all expenses relating
      thereto.  The Indemnitee shall have the right to employ
      separate counsel in any such proceeding or arbitration
      and participate in the defense thereof; provided, that
      the fees and expenses of such separate counsel shall be
      at the expense of the Indemnitee, rather than the
      Company, unless (A) the employment of such separate
      counsel has been specifically authorized by the Company
      or (B) the named parties to any such action (or any
      impleaded parties), or the Indemnitee, shall have been
      advised by its counsel that there may be one or more
      legal defenses available to the Indemnitee which are
      different from or additional to those available to the
      Company. If the provisions of clause (B) immediately
      above are met, the Company shall not have the right to
      assume the defense of such action on behalf of the
      Indemnitee.  The Company shall not be liable for any
      settlement of any such proceeding effected without the
      written consent of the Company, but if settled with the
      written consent of the Company or if there is a final
      judgment for the plaintiff in any such action, the
      Company shall indemnify and hold harmless the
      Indemnitee from and against any loss or liability by
      reason of such settlement or judgment.  The Company
      shall not enter into any settlement of, or consent to
      the entry of any judgment with respect to, any actual
      or alleged Indemnified Liabilities without the prior
      written consent of the Indemnitee, unless such
      settlement or judgement (x) includes an unconditional
      release of the Indemnitees from all liabilities arising
      out of such actual or alleged Indemnified Liability and
      (y) does not include a statement as to or an admission
      of fault, culpability or a failure to act by or on
      behalf of any Indemnitee.

           (iii)At any time after the Company has assumed the
      defense of any proceeding in respect of which indemnity
      has been sought hereunder against the Company, the
      Indemnitee may elect, by written notice to the Company,
      to withdraw its request for indemnity and thereafter
      the defense of such proceeding shall be maintained by
      counsel of the Indemnitee's choosing and at the
      Indemnitee's expense.

           (iv) To the extent that the undertaking to
      indemnify, pay and hold harmless set forth in the
      preceding provisions may be unenforceable because it is
      violative of any law or public policy, the Company
      shall make the maximum 
<PAGE>
      contribution to the payment and
      satisfaction of each of the Indemnified Liabilities
      which is permissible under Applicable Law.  All
      Indemnified Liabilities shall be payable on demand.

           (c)  The obligations of the Company under this
Section 15 shall survive the termination of this Agreement
and the discharge of the Company's other obligations
hereunder.

           Section 16.  No Waiver; Cumulative Remedies.  No
action or inaction of the Collateral Agent will be deemed to
waive any of the rights, powers or remedies of the
Collateral Agent hereunder except pursuant to a writing,
signed by the Collateral Agent, and then only to the extent
expressly set forth therein.  A waiver by the Collateral
Agent of any right, power or remedy on any one occasion will
not bar the exercise of any right, power or remedy hereunder
on any future occasion.  No failure of the Collateral Agent
to exercise nor delay of the Collateral Agent in exercising
any right, power or remedy will preclude the exercise of any
other right, power or remedy.  If the Collateral Agent
accepts payment of any amount secured hereby after its due
date, it will not thereby be deemed to have waived its right
to require prompt payment when due of all other amounts
payable hereunder.  Each right, power and remedy of the
Collateral Agent provided for in this Agreement or now or
hereafter existing at law or equity or by statute or
otherwise is cumulative and concurrent and is in addition to
every other such right, power or remedy of the Collateral
Agent, and the exercise of any one or more of any such
rights, powers or remedies with respect to any of the
Collateral will not preclude the simultaneous or later
exercise by the Collateral Agent of any other right, power
or remedy with respect to any other Collateral.

           Section 17.  Appointment of Co-Agents.  At any
time or times, in order to comply with any legal requirement
in any jurisdiction, the Collateral Agent may appoint a bank
or trust company or one or more other Persons, either to act
as co-agent or co-agents, jointly with the Collateral Agent,
or to act as separate, agent or agents on behalf of the
Secured Parties with such power and authority as may be
necessary for the effectual operation of the provisions
hereof and may be specified in the instrument of appointment
(which may, in the discretion of the Collateral Agent,
include provisions for the protection of such co-agent or
separate agent).
<PAGE>

           Section 18.  Termination of Security Interests; 
Release of Collateral.  (a)  Upon the payment in full of the
outstanding principal amount of, and all premium, if any,
and accrued interest on the Loan in accordance with the Loan
Agreement and payment or satisfaction of all other Secured
Obligations, the Security Interests shall terminate and all
rights to the Collateral shall revert to the Company.  Upon
any such termination of the Security Interests, the
Collateral Agent will, at the expense of the Company,
execute and deliver to the Company such documents, and take
such other actions, as the Company shall reasonably request
to effect or evidence the termination of the Security
Interests or the release of such Collateral, as the case may
be.

           (b)  If at any time a payment of the Loan or any
of the other Secured Obligations is rescinded or must
otherwise be returned upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, the provisions
of this Agreement and the security interest created hereby
shall continue to be effective or be reinstated, as the case
may be, all as though such payment had not been made.

           Section 19.  Contracts Not Assignable.  Any
provision in this Agreement to the contrary notwithstanding,
this Agreement shall not constitute an agreement to assign
or grant a security interest in any agreement, if an
attempted assignment thereof or grant of security interest
therein, without the consent of a third party thereto, would
constitute a termination or breach thereof (including,
without limitation, any contract for investment advisory
services that would be so terminated or breached).  From
time to time at the request of the Collateral Agent, the
Company shall use its best efforts to obtain the consent to
the assignment and the Lien granted or purported to be
granted hereunder of the parties to such agreements.  If
such consent is not obtained, or if an attempted assignment
thereof or grant of security interest therein would not be
effective or would affect the rights of the Company
thereunder so that the Secured Parties would not in fact
receive the benefit of the Lien granted or purported to be
granted hereunder, the Company will cooperate with the
Collateral Agent in any arrangement designed to provide such
benefits for the Secured Parties, including enforcement for
the benefit of the Secured Parties of any and all rights of
the Company against a third party thereto arising out of the
breach or cancellation by such third party or otherwise.

           Section 20.  Amendments, Etc.  No amendment,
modification, supplement, termination, consent or waiver of
this Agreement or any term or provision of 
<PAGE>
this Agreement
shall be effective and binding unless in writing and signed
by the Collateral Agent.  Any such waiver will be effective
only in the specific instance and for the specific purpose
for which it is given.

           Section 21.  Successors and Assigns.  This
Agreement and the Lien in the Collateral created hereunder
are for the benefit of the Collateral Agent and the Lender
and their successors, assigns and participants, and in the
event of an assignment of or the granting of a participation
in all or any of the Secured Obligations, the rights
hereunder, to the extent applicable to the indebtedness so
assigned or participated out, may be transferred with such
indebtedness.  This Agreement shall be binding on the
Company and its successors and assigns.

           Section 22.  Severability.  Any provision of this
Agreement which is illegal, invalid, prohibited or
unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such
illegality, invalidity, prohibition or unenforceability
without invalidating or impairing the remaining provisions
hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.

           Section 23.  WAIVER OF JURY TRIAL.  EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL OR EQUITABLE ACTION, SUIT OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE OTHER "LOAN DOCUMENTS" OR ANY TRANSACTION CONTEMPLATED
HEREBY OR THEREBY OR THE RELATIONSHIP ESTABLISHED HEREUNDER
OR THEREUNDER.

           Section 24.  GOVERNING LAW; VENUE AND 
JURISDICTION.  THE VALIDITY OF THIS AGREEMENT, THE
CONSTRUCTION, INTERPRETATION AND ENFORCEMENT HEREOF AND THE
RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER,
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK.  THE  COMPANY AGREES THAT ALL
ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS
AGREEMENT AND EACH OTHER "LOAN DOCUMENT" SHALL BE TRIED AND
LITIGATED IN FEDERAL OR, IN THE ABSENCE OF FEDERAL SUBJECT
MATTER JURISDICTION, STATE COURTS 

<PAGE>

LOCATED IN THE STATE OF
NEW YORK UNLESS SUCH ACTIONS OR PROCEEDINGS ARE REQUIRED TO
BE BROUGHT IN ANOTHER COURT TO OBTAIN SUBJECT MATTER
JURISDICTION OVER THE MATTER IN CONTROVERSY.  EACH OF THE
PARTIES WAIVES, TO THE FULLEST EXTENT PERMISSIBLE UNDER
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO ASSERT BY WAY OF
MOTION, AS A DEFENSE OR OTHERWISE THE DOCTRINE OF FORUM NON 
CONVENIENS OR TO OBJECT TO VENUE IN ANY PROCEEDING BROUGHT
IN ACCORDANCE WITH THE IMMEDIATELY PRECEDING SENTENCE.
SERVICE OF PROCESS, SUFFICIENT FOR PERSONAL JURISDICTION IN
ANY ACTION AGAINST THE COMPANY, MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ITS ADDRESS
INDICATED IN SECTION 26.

           Section 25.  Agreement May Constitute Financing 
Statement.  The Company consents to the filing of this
Agreement or a photocopy thereof as a financing statement
under the UCC as in effect in any jurisdiction in which the
Collateral Agent may determine such filing to be necessary
or desirable.

           Section 26.  Notices.  All notices, requests and
other communications to any party hereunder shall be in
writing and shall be given to such party at the following
address or facsimile number, or such other address or
facsimile number as such party may hereafter specify for the
purpose by notice to the other party. (a) if to the
Collateral Agent, Dundee Bancorp Inc., 40 King Street West,
Scotia Plaza, 55th Floor, Toronto, Canada M5H 4A9,
attention: Ray Benzinger, tel: (416) 365-5113, fax: (416)
363-4536; with a copy to Debevoise & Plimpton, 875 Third
Avenue, New York, New York 10022, attention: Steven Ostner,
tel: (212) 909-6000, fax:  (212) 909-6836; and (b) if to the
Company, PMC International Inc., 555 17th Street, 14th
Floor, Denver, Colorado 80202,  attention: Kenneth S.
Phillips and Scott A. McKillop, tel: (303) 292-1177, fax:
(303) 293-2152; with a copy to Holme Roberts & Owen LLP,
1700 Lincoln Street, Denver, Colorado 80203, attention:
Linda K. Wackwitz, tel: (303) 861-7000, fax: (303) 866-0200.
Each such notice, request or other communication shall be
effective (i) if given by mail, 72 hours after such
communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (ii) if given by
any other means, when delivered at the address specified in
this Section 26.
<PAGE>

           Section 27.  Counterparts; Section Headings.  This
Agreement may be executed in any number of counterparts,
each of which is an original, but all of which together
constitute but one instrument.  Except as otherwise
indicated, references herein to any "Section" means a
"Section" of this Agreement, and the section headings in
this Agreement are for purposes of reference only and shall
not limit or define the meaning hereof.
<PAGE>

           IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed as of the date first above
written.

                               PMC INTERNATIONAL, INC.


                               By   /s/ Kenneth S. Phillips   
                                 Name:
                                 Title:


                               DUNDEE BANCORP INC.,
                                 as Collateral Agent


                               By   /s/ Ray Benzinger         
                                 Name:
                                 Title:

                      Business Locations


 PMC International, Inc.
 555 17th Street, 14th Floor
 Denver, Colorado  80202
<PAGE>
EXHIBIT 10.8
                 SUBSIDIARY SECURITY AGREEMENT


           SUBSIDIARY SECURITY AGREEMENT, dated as of  July 9, 1998, between
PMC Investment Services, Inc., a Delaware corporation ("PIS"), Portfolio
Technology Services, Inc., a Colorado corporation ("PTS"), and Portfolio
Management Consultants, Inc., a Colorado corporation ("PMC" and each of PIS,
PTS and PMC, a "Guarantor"), and Dundee Bancorp Inc., an Ontario corporation,
as collateral agent (the "Collateral Agent").


                                   RECITALS

           A.  PMC International, Inc., a Colorado corporation (the
"Company"), and Dundee Bancorp Inc., as lender (in such capacity, the
"Lender"), have entered into a Loan Agreement, dated as of  July __, 1998 (as
the same may be modified, supplemented or restated from time to time, the
"Loan Agreement"), pursuant to which the Lender has agreed to extend to the
Company a loan in the amount of $1.5 million, subject to the terms and
conditions set forth in the Loan Agreement.

           B.  The Company owns, beneficially and of record, all of the issued
and outstanding capital stock of each of the Guarantors.

           C.  The obligation of the Lender to extend the loan to the Company
pursuant to the Loan Agreement is conditioned upon the execution and delivery
by each of the Guarantors of (i) a Guarantee Agreement to guarantee the
performance by the Company of its obligations under the Loan Agreement and
(ii) this Agreement to secure the performance by the Company of its
obligations under the Loan Agreement and the performance by the Guarantors of
their obligations under the Guarantee Agreement.

           D.  In order to induce Lender to enter into the Loan Agreement and
to extend to the Company the loan provided for thereunder, each Guarantor is
willing to enter into this Agreement to grant to the Collateral Agent a
continuing perfected security interest in and to the Collateral (as defined
in Section 1) to secure the Secured Obligations (as defined in Section 1).

           NOW, THEREFORE, for good and valuable consideration, receipt and
sufficiency of which  are hereby acknowledged, the Guarantors hereby agree
with the Collateral Agent as follows:
<PAGE>

           Section 1.  Definitions.  Capitalized terms used in this Agreement
without definition have the meanings given to them in the Loan Agreement.
The following terms, as used in this Agreement, have the following meanings:

           "Existing Liens" means the Liens existing on the Collateral as of
the date hereof identified on Schedule  5.11 to  the Loan Agreement, as
granted to the Persons and pursuant to the agreements or instruments listed
on such Schedule  5.11.

           "Secured Obligations" means (i) the full and prompt payment of the
principal of and premium and interest on the Loan (including, without
limitation, interest accruing after the date of any filing by the Company of
any petition in bankruptcy or the commencement of any bankruptcy, insolvency
or similar proceeding with respect to the Company), as and when the same
becomes due and payable in accordance with the terms of the Loan Agreement,
(ii) the payment of all other indebtedness and other amounts payable by the
Company under the Loan Agreement, the Note and the other Loan Documents,
(iii) the due and punctual performance by the Company of and compliance by the
Company with all its obligations under the Loan Agreement, the Note, and all
other Loan Documents, (iv) the full and prompt payment when due of all
indebtedness and amounts payable by the Guarantors under the Guarantee
Agreement and hereunder (including, without limitation, amounts due under
Sections 10, 13 and 15 of this Agreement) and the due and punctual performance
by the Guarantors of and compliance by the Guarantors with all their
obligations under the Guarantee Agreement and hereunder, (including, without
limitation, interest accruing after the date of any filing by any Guarantor
of any petition in bankruptcy or the commencement of bankruptcy, insolvency
or similar proceeding with respect to any Guarantor) and (v) any renewals or
extensions of any of the foregoing.

           "Secured Parties" means Lender and each assignee of the Loan, as
obligees of any or all of the Secured Obligations, and their respective
successors, and the Collateral Agent.

           "Security Interests" means the security interests in the Collateral
granted pursuant to this Agreement securing the Secured Obligations.

<PAGE>

           "Supplemental Documentation" means agreements, instruments,
documents, financing statements, warehouse receipts, bills of lading, notices
of assignment of accounts, schedules of accounts assigned, mortgages,
writings, filings and any other written matter requested (whether or not
required) by the Collateral Agent to perfect and maintain a perfected Lien
upon, and (if applicable) a perfected first priority security interest in,
any Collateral, and to assist the Collateral Agent's realization thereon
(including, without limitation, the right to receive, endorse, and collect
all instruments made payable to any Guarantor representing any dividend,
interest payment or other distribution or proceeds in respect of any
Collateral).

           "UCC" means the Uniform Commercial Code as in effect on the date
hereof in the State of New York; provided, that if by reason of mandatory
provisions of law, the perfection or the effect of perfection or
non-perfection of the security interest granted hereunder in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than New York, "UCC" shall mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to
such perfection or effect of perfection or non-perfection.

           Section 2.  Grant of Security Interest.  In order to secure full
and timely payment of the Secured Obligations, and to secure the performance
of all of the other obligations of the Company and such Guarantor under the
Loan Documents, each Guarantor hereby mortgages, pledges and assigns and
transfers to the Collateral Agent and grants to the Collateral Agent, for the
benefit of the Collateral Agent and the other Secured Parties, a continuing
perfected security interest in, and a lien upon, all of the following
property of such Guarantor, in each case whether now owned or hereafter
acquired or arising and regardless of where located (collectively, the
"Collateral"), subject to no Liens other than Permitted Liens:

           (a)  All "accounts" (as defined in the UCC), including all accounts
      receivable, contract rights, book debts, notes, drafts and other
      obligations or indebtedness owing to such Guarantor arising from the
      sale, lease or exchange of goods or other property by it and/or the
      performance of services by it (including, without limitation, any such
      obligation that might be characterized as an account, contract right or
      general intangible under the Uniform Commercial Code in effect in any
      jurisdiction) and all of such Guarantor's rights in, to and under all
      purchase orders for goods, services or other property, and all of such
      Guarantor's rights to any goods, services or other property represented
      by any of the foregoing and all monies due to or to become due to such
      Guarantor under all contracts for the sale, lease or exchange of goods
      or other property and/or the performance of services by it (whether or
      not yet earned by performance on the part of the Guarantor), including,
      without limitation, the right to receive the proceeds of said purchase
      orders and contracts and all collateral security and guarantees of any
      kind given by any Person with respect to any of the foregoing
      (collectively, "Accounts");

<PAGE>

           (b)  All goods, merchandise, and other personal property that may
      at any time be held for sale or lease or to be furnished under any
      contract of service, be so leased or furnished, or constitute raw
      materials, work in process, finished goods, supplies or materials and
      all other "inventory" (as defined in the UCC) of whatsoever kind and
      nature that are or might be used or consumed in business or in
      connection with the manufacture, packing, shipping, advertising,
      selling, leasing or finishing of such goods, merchandise and other
      personal property, together with all attachments, accessories,
      replacements, substitutions, additions and improvements to any of the
      foregoing (collectively, "Inventory");

           (c)  All "general intangibles" (as defined in the UCC) including,
      without limitation, (i) all obligations or indebtedness owing to such
      Guarantor (other than Accounts and Instruments (as hereinafter defined))
      from whatever source arising, (ii)  all rights or claims in respect of
      refunds for taxes paid, (iii) all rights in business or operating
      licenses and permits, to the extent permitted by law, (iv) all rights,
      whether by contract or otherwise, to receive or obtain water,
      electricity, natural gas or any other resource or utility, (v) all
      warranty, indemnification, or contractual rights and claims of any sort
      and (vi) all choices or things in action, goodwill, licenses, leases,
      computer programs, tapes or discs, and tax refund claims;

           (d)  All "documents" (as defined in the UCC) or receipts covering,
      evidencing or representing goods;

           (e)  All "instruments", "chattel paper" or "letters of credit"
      (each as defined in the UCC)  evidencing, representing, arising from or
      existing in respect of, relating to, securing or otherwise supporting
      the payment of, any of the Accounts, including, without limitation,
      promissory notes, drafts, bills of exchange and trade acceptances
      (collectively, "Instruments");

           (f)  All "equipment" (as defined in the UCC) now owned or hereafter
      acquired by such Guarantor, including, without limitation, all
      machinery, equipment, tools, furniture, fixtures, and any other goods
      other than Inventory, together with any and all additions, substitutions
      and replacements of any of the foregoing, and all attachments,
      components, parts (including spare parts), equipment and accessories
      installed thereon or affixed thereto;

<PAGE>

           (g)  All patents, copyrights, service marks, trademarks and trade
      names, including registrations and applications to register or renew the
      registration of any of the foregoing, of such Guarantor, and inventions,
      processes, designs, formulae, trade secrets, know-how, confidential
      information, computer software and programs (including source codes),
      data and documentation of such Guarantor, and all similar intellectual
      property rights, tangible embodiments of any of the foregoing (in any
      medium, including electronic media), and licenses of any of the
      foregoing; other than source codes for computer software and programs
      designed for clients or customers of the Guarantors that have been
      placed in escrow or similar arrangement for the benefit of such clients
      or customers or may be so placed in the ordinary course of business
      consistent with past practice;

           (h)  All rights and claims of such Guarantor in, to or under all
      policies of insurance covering any of the Collateral, including, but not
      limited to, insurance for fire, damage, loss, and casualty, together
      with the proceeds, products, renewals, and replacements thereof,
      including prepaid or unearned premiums;

           (i)  All books and records (including, but not limited to, credit
      files, computer programs, printouts and other computer materials and
      records) relating to any of the foregoing and all customer lists and
      advertising materials relating to such Guarantor's business; and

           (j)  Without in any way limiting the foregoing and to the extent
      not otherwise included in the foregoing, (x) any and all products and
      proceeds of any of the foregoing (including, but not limited to, any
      claims of such Guarantor against third parties relating to or in
      connection with the Collateral), whether derived from voluntary or
      involuntary disposition, and all renewals, replacements, substitutions,
      additions, accessions, rents, issues, royalties, and profits of any of
      the foregoing and (y) all cash and bank deposit accounts, wherever
      located.

           Section 3.  Warranties, Covenants and Agreements of the Guarantor.
Each Guarantor, jointly and severally with the other Guarantors, represents,
warrants and covenants that:

           (a)  Except for the Security Interests and the Existing Liens and
except as permitted by the Loan Agreement, the Guarantor is the owner and
holder of, and has rights in and good title to, the Collateral of such
Guarantor free from any Lien of any Person, other than the Collateral Agent,
and at all times the Collateral shall be and remain free of all such Liens.
<PAGE>

           (b)  The Guarantor has requisite corporate power and authority to
execute and deliver this Agreement and to sell, assign and transfer, as the
case may be, the Collateral of such Guarantor to the Collateral Agent and to
grant to the Collateral Agent a valid, perfected security interest in such
Collateral as contemplated by this Agreement, subject to no Liens other than
Permitted Liens; the execution and delivery of this Agreement and the sale,
assignment and transfer, as the case may be, of the Collateral and the grant
of a valid, perfected security interest in the Collateral of such Guarantor
as contemplated by this Agreement, have been duly authorized by all necessary
corporate action; this Agreement and all related documents executed by or on
behalf of such Guarantor pursuant hereto have been duly executed and
delivered by such Guarantor; the execution and delivery and the performance
of  this Agreement by such Guarantor are not in contravention of, and do not
constitute a default under, any provision of such Guarantor's certificate of
incorporation or by-laws or of any indenture, agreement or undertaking to
which such Guarantor is a party or by which such Guarantor or any of its
properties is bound; this Agreement constitutes the legal, valid and binding
obligation of such Guarantor enforceable against such Guarantor in accordance
with its terms; and such Guarantor shall defend the Collateral against all
claims and demands of all Persons at any time claiming the same or any
interest therein.

           (c)  Except for the financing statements and security agreements
identified on Schedule  5.11 to  the Loan Agreement with respect to the
Existing Liens, such Guarantor has not heretofore signed any financing
statement or security agreement that covers any of the Collateral of such
Guarantor, and no such financing statement or security agreement is now on
file in any public office in any jurisdiction.

           (d)  As long as any amount remains unpaid on any of the Secured
Obligations, such Guarantor shall not enter into or execute, or permit to be
on file in any public office in any jurisdiction, any security agreement or
financing statement covering the Collateral of such Guarantor, other than any
(i) security agreements and financing statements in favor of the Secured
Parties hereunder and (ii) security agreements and financing statements in
respect of Permitted Liens.

           (e)  Such Guarantor authorizes the Collateral Agent to file, in the
Collateral Agent's discretion and at the Guarantor's expense, in
jurisdictions where this authorization will be given effect, financing
statements and continuation statements covering the Collateral signed only by
the Collateral Agent, and hereby appoints the Collateral Agent as the
Guarantor's attorney-in-fact to sign and file any such financing statements
and continuation statements covering the Collateral of such Guarantor.  Such
Guarantor shall, at its expense, execute, deliver, file and record any such
documents, assignments, agreements, or statements (including, without
limitation, financing and continuation statements under the UCC) and take any
other action that from time to time may be necessary or desirable, or that
the Collateral Agent may request, in order to create, preserve, perfect,
confirm or validate the Security Interests granted hereunder or to enable the
Secured Parties to obtain the full benefits of, or to enforce their rights,
powers and remedies under, this Agreement; and the Collateral Agent may, at
any time or times, file as a financing statement any counterpart, copy or
reproduction of this Agreement.

           (f)   Except for the accounts identified on Schedule 5.11 to the
Loan Agreement as being subject to a Lien, such Guarantor shall not transfer,
sell or hypothecate any Account except upon the prior written consent of the
Collateral Agent.

<PAGE>

           (g)  Such Guarantor's chief executive office and principal place of
business is in Denver, Colorado and Inventory and all books and records
relating to the Collateral of such Guarantor (including, but not limited to,
credit files, computer programs, printouts, other computer materials, and
records, and all customer lists, advertising materials and reservations
systems) are located only at the locations set forth in Schedule  II to this
Agreement.  Such Guarantor shall not change its name, the location of its
chief executive office or principal place of business, or remove Collateral
or such books and records to locations not set forth in such Schedule  II,
unless it shall have given the Collateral Agent prior written notice thereof
and taken all action (or made arrangements to take such action substantially
simultaneously with such change if it is impracticable to take such action in
advance) necessary or reasonably requested by the Collateral Agent to amend
each financing statement or continuation statement so that it is not
seriously misleading, or so as to cause the Collateral Agent to continue to
maintain its lien on, and security interest in, the Collateral subject only
to Permitted Liens.   Notwithstanding the foregoing, if for any reason
Inventory is at any time kept or located at locations other than those
specified in Schedule  II to this Agreement or which may hereafter be
consented to by the Collateral Agent, the Collateral Agent shall nevertheless
have and retain a security interest therein.

           (h)  With respect to products and proceeds included in the
Collateral, any and all material amounts of cash included in the Collateral
of such Guarantor shall promptly be deposited only into such accounts at
banking institutions with offices in New York, New York (i) as the Guarantor
may from time to time designate and (ii) at all times following the date
which is 30 days after receipt of a written request to that effect from the
Collateral Agent, which request is made after a Default or an Event of
Default shall have occurred and be continuing, as shall have a lock-box
agreement, in form reasonably satisfactory to the Collateral Agent (a
"Lock-Box Agreement"), in full force and effect.  Upon receipt of such
request, each Guarantor shall promptly enter into deposit arrangements and a
Lock-Box Agreement with a banking institution reasonably acceptable to the
Collateral Agent.

           (i)  Except for Permitted Liens and the asset dispositions
permitted under Section  5.16 of the Loan Agreement (and then only to the
extent permitted  under the Loan Agreement), such Guarantor shall not sell or
otherwise transfer or encumber or dispose of the Collateral or any interest
therein without the prior written consent of the Collateral Agent.

           (j)  Such Guarantor shall not release or surrender any guarantee,
suretyship agreement or security for any Accounts at any time or times except
in the ordinary course of business consistent with historical collection
practices.
<PAGE>

           (k)  If any certificates of title or similar documents are at any
time issued or outstanding with respect to any Inventory of such Guarantor,
the Guarantor shall promptly advise the Collateral Agent thereof, and shall
promptly cause the interest of the Collateral Agent to be properly noted
thereon, and if any certificates of title or similar documents are so issued
or outstanding at the time this Agreement is executed by or on behalf of such
Guarantor, then the Guarantor shall have caused the interest of the
Collateral Agent so to have been properly noted at or before the time of such
execution; and the Guarantor shall further promptly deliver to the Collateral
Agent any such certificate of title or similar document.

           (l)  Such Guarantor shall promptly deliver or cause to be delivered
to the Collateral Agent, duly endorsed in a manner reasonably satisfactory to
the Collateral Agent, all Instruments, if any, at any time representing all
or any of the Collateral to be held as Collateral pursuant to this Agreement.

           (m)  Such Guarantor shall use diligent commercially reasonable
efforts consistent with past practice to cause to be collected from their
respective account debtors, as and when due, any and all amounts owing under
or on account of each Account (including, without limitation, Accounts that
are delinquent, such Accounts to be collected in accordance with lawful
collection procedures) and shall apply forthwith upon receipt thereof all
such amounts as are so collected to the outstanding balance of such Account.
Subject to the rights of the Collateral Agent and the other Secured Parties
hereunder, if no Event of Default has occurred and is continuing, the Company
may allow, in the ordinary course of business as adjustments to amounts owing
under such Accounts, (i) an extension or renewal of the time or times of
payment, or settlement for less than the total unpaid balance, which the
Company finds appropriate in accordance with sound business judgment and
(ii) a refund or credit due as a result of returned or damaged merchandise or
inadequately rendered service, all in accordance with the Guarantor's
ordinary course of business consistent with historical collection practices.
The costs and expenses (including, without limitation, attorneys' fees) of
collection, whether incurred by the Guarantor or the Collateral Agent, shall
be borne by the Guarantor.

           (n)  No Guarantor shall not amend, modify, terminate or waive any
provision of any agreement, contract or other instrument giving rise to an
Account or otherwise constituting Collateral, except for amendments,
modifications, terminations or waivers which would not adversely affect the
Secured Parties and except that the Guarantors may amend, modify, terminate
or waive provisions of agreements, contracts or other instruments giving rise
to Accounts or otherwise constituting collateral in the ordinary course of
business.
<PAGE>

           Section 4.  Further Assurances as to the Collateral; Collateral 
Agent as Attorney-In-Fact.  At the Collateral Agent's request, each Guarantor
shall execute and deliver to the Collateral Agent, at any time or times
hereafter, all Supplemental Documentation, in form and substance reasonably
acceptable to the Collateral Agent, and the Guarantors shall pay the costs of
any recording or filing thereof.  Each Guarantor hereby irrevocably makes,
constitutes, and appoints the Collateral Agent (and all Persons designated by
the Collateral Agent for that purpose) as such Guarantor's true and lawful
attorney (and agent-in-fact) to sign the name of such Guarantor on any
Supplemental Documentation and to deliver any Supplemental Documentation to
such Persons as the Collateral Agent, in its sole discretion, may elect;
provided, that if no Event of Default shall have occurred and be continuing
the Collateral Agent shall not, in the case of Supplemental Documentation
other than financing statements, exercise the power of attorney granted in
this Section 4 to sign and deliver such Supplemental Documentation unless the
Guarantor has failed to sign and deliver such Supplemental Documentation
promptly after the Collateral Agent has reasonably requested it to do so.
Each Guarantor agrees that a  photocopy or other reproduction of this
Agreement or of a financing statement is sufficient as a financing statement.

           Section 5.  Assignment of Security Interest.  If at any time any
Guarantor shall take and perfect a security interest in any property of an
Account debtor or any other Person to secure payment and performance of an
Account, such Guarantor shall promptly assign such security interest to the
Collateral Agent.  Such assignment need not be filed of public record unless
necessary to continue the perfected status of the security interest against
creditors of and transferees from the Account debtor or other Person granting
the security interest.

           Section 6.  Maintenance of Records; Additional Information.  (a)
Each Guarantor will keep and maintain, at its own cost and expense,
satisfactory and complete records of the Collateral.

           (b)  Each Guarantor shall furnish to the Collateral Agent from time
to time such additional information and copies of such documents relating to
this Agreement, the Collateral, the Secured Obligations and such Guarantor's
financial condition as the Collateral Agent may reasonably request.  Each
Guarantor will promptly report to the Collateral Agent any occurrence or
condition known to or which becomes known to any Guarantor having any
material adverse effect upon the fair market value of the Inventory or the
Accounts.
<PAGE>

           Section 7.  Inspection and Verification.  The Collateral Agent and
such Persons as the Collateral Agent may reasonably designate shall have the
right, in connection with the Loan or the Secured Parties' security interest
in the Collateral, during any Guarantor's usual business hours upon
reasonable prior notice and as often as may be reasonably requested, subject
to any confidentiality agreements between the Guarantor and third parties,
(i) to inspect the Collateral, all books and records related thereto (and to
make extracts and copies from such books and records, subject to reasonable
objection by such Guarantor and  the terms of Section 7.11 of the Loan
Agreement), and the premises upon which any of the Collateral is located,
(ii) to discuss the Guarantor's affairs with the officers of the Guarantor
and its independent accountants , and (iii) to verify under reasonable
procedures the validity, amount, quality, quantity, value and condition of or
any other matter relating to the Collateral (including, without limitation,
Collateral in the possession of a third Person and contacting Account debtors
or a third Person possessing such Collateral for the purpose of making such a
verification); provided, that reimbursement of expenses incurred by or on
behalf of the Collateral Agent in connection therewith shall be governed by
Section 7.3 of the Loan Agreement; provided, further, that so long as a
Default or Event of Default has not occurred and is not continuing, the
Collateral Agent may contact the creditors, customers and clients of the
Borrower and its Subsidiary only with the prior consent of the Borrower
(which consent will not be unreasonably withheld).  The Collateral Agent
shall have the absolute right to share any information it gains from such
inspection or verification with any other Secured Party, subject to the terms
of Section 7.11 of the Loan Agreement.

           Section 8.  Rights and Remedies Upon Default.  If an Event of
Default has occurred and is continuing:

<PAGE>

           (a)  The Collateral Agent shall have and may exercise in respect of
the Collateral and the Secured Obligations any or all of the rights and
remedies of a secured party under the UCC, and as otherwise granted in this
Agreement or under any other Applicable Law or under any other agreement of
any Guarantor now or hereafter in effect, including, without limitation, the
right and power to sell, at public or private sale or sales, or otherwise
dispose of, or otherwise utilize the Collateral and any part or parts thereof
in any manner authorized or permitted under said UCC after default by a
debtor, and to apply the proceeds thereof as specified in Section 9 of this
Agreement.  Without limiting the foregoing, the Collateral Agent shall have
the right to take possession of all or any part of the Collateral (including,
without limitation, all books, records, papers and documents of each
Guarantor or in any Guarantor's possession or control relating to the
Collateral which are not already in the Collateral Agent's possession), and
for such purpose may enter upon any premises upon which any of the foregoing
are situated and remove the same therefrom without any liability for trespass
or damages thereby occasioned.  To the extent permitted by Applicable Law,
each Guarantor expressly waives any notice of sale or other disposition of
the Collateral; and to the extent any such notice is required and cannot be
waived, each Guarantor agrees that if such notice is given in the manner
provided in Section 26 hereof at least  15 days before the time of the sale
or disposition, such notice shall be deemed reasonable and shall fully
satisfy any requirement for giving of said notice.  The Collateral Agent may
impose any limitations and conditions in connection with any such sale or
disposition as the Collateral Agent deems advisable or necessary to comply
with Applicable Law; and the Collateral Agent shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given and may
adjourn any public or private sale.  The Collateral Agent reserves the right
to reject any and all bids at such sale that in its commercially reasonable
discretion it shall deem inadequate.  Each Guarantor shall execute and
deliver such documents as the Collateral Agent deems advisable or necessary
in order that any such sale or disposition be made in compliance with
Applicable Law.

           (b)  Each Guarantor hereby waives all rights to marshall the assets
of such Guarantor, including any such right with respect to the Collateral.

           (c)  All recitals in any instrument of assignment or any other
instrument executed by the Collateral Agent incident to sale, lease, transfer,
assignment or other disposition, lease or utilization of the Collateral or
any part thereof hereunder shall be sufficient proof of the matters stated
therein and no other proof shall be requisite to establish full legal
propriety of the sale or other action taken by the Collateral Agent or of any
fact, condition or thing incident thereto and all prerequisites of such sale
or other action or of any fact, condition or thing incident thereto shall be
presumed to have been performed or to have occurred.

           (d)(i)    The Collateral Agent shall have the right to take control
      of all proceeds of the Collateral (whether cash proceeds or non-cash
      proceeds) and to notify any and all account debtors, lessees, or other
      obligors to make payment on any and all accounts, leases, or obligations
      directly to the Collateral Agent; and, in such circumstances, each
      Guarantor shall, upon the request of the Collateral Agent, likewise
      notify any and all such account debtors, lessees or other obligors to
      make payment directly to the Collateral Agent.  Upon demand by the
      Collateral Agent at any time following the occurrence of an Event of
      Default, all proceeds of Accounts, whether such proceeds be cash
      proceeds or non-cash proceeds, received by any Guarantor and not
      otherwise deposited in an account provided for in Section 3(h)(ii),
      shall be held in trust by such Guarantor for the account of the
      Collateral Agent, shall not be commingled with any other funds,
      accounts, monies or property of such Guarantor, and shall be accounted
      for, paid over, transmitted and delivered to the Collateral Agent in the
      form as received by such Guarantor promptly upon receipt thereof by such
      Guarantor.

<PAGE>

           (ii) At any time after demand as hereinabove provided, and in any
      event without demand after any of the Secured Obligations shall become
      due, whether by acceleration or otherwise, the Collateral Agent shall
      have the right in its own name or in the name of each Guarantor to
      demand, collect, receive, sue for, compound and give acquittance for,
      any and all amounts due or to become due on the Accounts and to endorse
      the name of each Guarantor on all checks, drafts, commercial paper and
      other instruments given in payment or part payment thereof, and in its
      discretion to settle, compromise, prosecute or defend any action, claim
      or proceeding with respect thereto which the Collateral Agent may deem
      necessary or appropriate to protect and preserve and realize upon the
      Security Interest and collateral assignment of the Collateral Agent in
      the Accounts and the proceeds thereof and security therefor including,
      without limitation, the right to sell, assign, pledge, transfer and make
      any agreement respecting or otherwise deal with the Accounts and to
      exercise all rights of any Guarantor thereunder.

           (e)  All proceeds of Inventory, whether cash proceeds or non-cash
proceeds, including, without limitation, proceeds that constitute Accounts or
that are included in the Collateral as Accounts, and proceeds that represent
the proceeds of Accounts, received by any Guarantor and not otherwise
deposited in an account provided for in Section 3(h)(ii), shall be held in
trust by such Guarantor for the account of the Collateral Agent, shall not be
commingled with any other funds, accounts, monies or property of such
Guarantor, and shall be accounted for, paid over, transmitted and delivered
to the Collateral Agent in the form as received by such Guarantor promptly
upon receipt thereof by such Guarantor.

           Section 9.  Application of Proceeds.  Any monies or property
actually received by the Collateral Agent pursuant to the exercise of any
rights or remedies referred to in Section 8 of this Agreement (including the
sale or other disposition of any portion of the Collateral) shall be applied
in the following order:

           First, to payment of the costs and expenses of such sale or other
      realization, including reasonable compensation to agents and counsel for
      the Collateral Agent, and all expenses, liabilities and advances
      incurred or made by the Collateral Agent in connection therewith, and
      any other unreimbursed expenses for which the Collateral Agent or any
      Secured Party is to be reimbursed pursuant to the Loan Agreement or
      Section 10, 13 or 15 of this Agreement;

           Second, to the ratable payment of accrued but unpaid interest on
      the Secured Obligations in accordance with the provisions of the Loan
      Agreement;

           Third, to the ratable payment of unpaid principal of the Secured
      Obligations;
<PAGE>

           Fourth, to the ratable payment of all other Secured Obligations,
      until all Secured Obligations shall have been paid in full;

           Fifth, to the ratable payment of such amounts, if any, as shall be
      required to be paid pursuant to Section 9-504(1)(c) of the UCC and any
      similar provision of Applicable Law; and

           Finally, to payment to the Guarantors or their respective
      successors or assigns, or as a court of competent jurisdiction may
      direct, of any surplus then remaining from such proceeds.

           Section 10.  Reimbursement of Collateral Agent.  Each Guarantor
shall forthwith upon demand pay to the Collateral Agent:

           (a)  The amount of any taxes that the Collateral Agent may have
      been required to pay by reason of the Security Interests or to free any
      of the Collateral from any Lien thereon; provided, that so long as no
      Event of Default has occurred and is continuing, the Guarantors shall
      not be obligated to pay or discharge any such tax or Lien so long as the
      amount, validity or applicability thereof is contested diligently in
      good faith and by appropriate proceedings and so long as any reserves or
      other appropriate provisions as may be required by generally accepted
      accounting principles shall have been made therefor.

           (b)  The amount of any and all costs and expenses, including the
      reasonable fees and disbursements of counsel and of any other experts,
      that the Collateral Agent reasonably may incur in connection with
      (i) the administration or enforcement of this Agreement, including such
      expenses as are incurred to preserve the value of the Collateral and the
      validity, perfection, rank and value of any Security Interest, (ii) the
      collection, sale or any other disposition of any of the Collateral,
      (iii) the exercise by the Collateral Agent of any of the rights
      conferred upon it hereunder or (iv) any default or Event of Default.

           Any such amount not paid within five Business Days following
written demand therefor shall bear interest at a rate equal to the rate
specified in Section 2.4(b) of the Loan Agreement.  This Section 10 shall
survive the termination of this Agreement.
<PAGE>

           Section 11.  Exculpatory Provisions.  (a)Neither the Collateral
Agent nor any of its officers, directors, employees or agents shall be liable
to any Guarantor for any action lawfully taken or omitted to be taken by them
under or in connection with this Agreement.  The Collateral Agent shall not
be responsible in any manner to any of the other Secured Parties for the
value, validity, due execution, genuineness, effectiveness, legality,
enforceability or sufficiency of this Agreement, the Loan Agreement or all or
any portion of the Collateral, or any of the certificates, documents or
instruments contemplated by the foregoing, or for the failure of the
Guarantor or any other party to perform its obligations under them or for any
recitals, statements, representations or warranties made by the Guarantor in
this Agreement or for the value, sufficiency, title or condition of all or
any portion of the Collateral.  The Collateral Agent shall not be under any
obligation to any of the other Secured Parties to ascertain or to inquire as
to the performance or observance on the part of the Company of any of the
terms, covenants or conditions of any agreements or to inspect the
properties, books or records of the Guarantor or to ascertain or to inquire
as to the financial condition of the Guarantors.

           (b)  The Collateral Agent shall not be responsible to any Person
for the existence, genuineness or value of any of the Collateral or for the
validity, perfection, priority or enforceability of the Security Interests in
any of the Collateral, whether impaired by operation of law or by reason of
any action or omission to act on its part hereunder.  The Collateral Agent
shall have no duty to any Person to ascertain or inquire as to the
performance or observance of any of the terms of this Agreement by the
Company.

           (c)  The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to
that which the Collateral Agent accords its own property, it being understood
that neither the Collateral Agent nor any other Secured Party shall have any
responsibility for (i) ascertaining or taking action with respect to
exchanges, maturities, tenders or other matters relative to any Instruments,
whether or not the Collateral Agent has or is deemed to have knowledge of
such matters, or (ii) taking any necessary steps to preserve rights against
any parties with respect to any portion of the Collateral.

           Section 12.  Secured Parties' Right of Set-Off and Bankers' Lien.
Each Guarantor recognizes and agrees that with respect to any time or other
deposit, certificate of deposit or any other balance of account standing to
the credit of such Guarantor on the books of the Collateral Agent or any
other Secured Party, the Collateral Agent or the Collateral Agent through a
Secured Party has a right of set-off and, to the extent any Secured Party is
a banking institution or of a character otherwise qualified to assert the
same, a bankers' lien to the full extent permitted by law.  Each Guarantor
further agrees that the Secured Parties may exercise such right of set-off or
bankers' lien at any time when an Event of Default shall have occurred and is
continuing, regardless of the stated maturity of any time deposit or other
such credit balance.

<PAGE>

           Section 13.  Other Expenses.  (a)   In the event a Guarantor fails
to pay or obtain the discharge of any claim or Lien asserted against any
material portion of the Collateral, other than a Permitted Lien, the
Guarantors shall so notify the Collateral Agent in writing and, regardless of
whether such notice is given, the Collateral Agent may, at any time or times,
hereafter, in its discretion and without waiving any Event of Default or
waiving or releasing any obligation or duty of the Guarantors under this
Agreement, any Supplemental Documentation, the Loan Agreement or any other
Loan Document, make such payment or any part thereof or obtain such discharge
or take any other action with respect thereto that the Collateral Agent deems
advisable.

           (b)  In the event that a Guarantor fails to comply with any
provision of the Loan Agreement, this Agreement or any other Loan Document,
such that the value of any Collateral or the validity, perfection, rank or
value of any security interest granted hereunder is thereby diminished or put
at risk, the Collateral Agent may, but shall not be required to, effect such
compliance on behalf of the Guarantors.

           (c)  In the event a Guarantor fails to pay promptly all insurance
expenses relating to the Collateral, any and all expenses of protecting,
storing, warehousing, appraising, insuring, handling, maintaining and
shipping the Collateral, any and all excise, property, sales and use taxes
imposed by any state, federal or local authority on any of the Collateral
other than taxes that are being contested as permitted by Section 10(a)
hereof, or any and all expenses in respect of the sale or other disposition
of the Collateral, the Collateral Agent may, at its option, but shall not be
required to, pay the same.

           (d)  Each Guarantor shall, jointly and severally, reimburse the
Collateral Agent on demand for all amounts so paid, incurred or advanced by
the Collateral Agent pursuant to subsections (a), (b) and (c) of this
Section 13, for any and all other sums for which any Guarantor may become
liable hereunder, and for all costs, fees and expenses (including reasonable
attorneys' fees, legal expenses and court costs) incurred by the Collateral
Agent in enforcing or protecting the Security Interests granted hereunder or
any of the Collateral Agent's rights or remedies on behalf of the Secured
Parties under this Agreement, and all such amounts, sums, costs, fees and
expenses, together with interest thereon at the rate required by Section
2.4(a) of the Loan Agreement, shall, until paid to the Collateral Agent, be
additional Secured Obligations hereunder.
<PAGE>

           Section 14.  Absolute Interest. (a) All rights of the Collateral
Agent hereunder, and all obligations of each Guarantor hereunder, shall be
absolute and unconditional irrespective of (i) any lack of validity or
enforceability of any provision of the Loan Agreement or any other Loan
Document, any agreement with respect to the Secured Obligations or any other
agreement or instrument relating to any of the foregoing, (ii) any change in
the time, manner or place of payment of or in any other term of, all or any
of the Secured Obligations, or any other amendment or waiver of or any
consent to any departure from the Loan Agreement, any other Loan Document or
any other agreement or instrument or (iii) any exchange, release or
nonperfection of any Collateral, or any release or amendment or waiver of or
any consent to or departure from any guarantee, for all or any of the Secured
Obligations or this Agreement.

           (b)  This Agreement shall not be construed as relieving the
Guarantor from full liability on the Secured Obligations or any and all
future and other indebtedness secured hereby or for any deficiency thereon.

           (c)  Following an Event of Default, the Collateral Agent shall be
subrogated to all of the Guarantors' interests, rights and remedies in
respect to the Collateral and all security now or hereafter existing with
respect thereto and all guaranties and endorsements thereof and with respect
thereto.
<PAGE>

           Section 15.  Indemnity.  (a)   In addition to the payments pursuant
to Sections 10 and 13, each Guarantor shall indemnify, defend and hold
harmless the Collateral Agent and the other Secured Parties and the officers,
directors, employees and agents of the Secured Parties (collectively, the
"Indemnitees") from and against, and pay or reimburse the Indemnitees for,
(i) any and all taxes, and all other assessments or charges made by any
governmental authority, relating to the execution and delivery of this
Agreement, and (ii) any and all liabilities, losses, damages, penalties,
judgments, suits, claims, costs and expenses of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of a
single counsel) in connection with (A) any breach of a representation,
warranty or covenant hereunder or (B) any investigative, administrative or
judicial proceeding, whether or not such Indemnitee shall be designated a
party thereto, which may be imposed on, incurred by or asserted against such
Indemnitee, in any manner relating to or arising out of or in connection with
this Agreement (collectively, the "Indemnified Liabilities"), and to
reimburse each Indemnitee, upon its demand as incurred for any cost or
expenses (including, without limitation, the reasonable fees, expenses and
disbursements of a single counsel) incurred in connection with investigating,
defending or preparing to defend or participating (including as a witness) in
any investigative, administrative or judicial proceeding whether or not such
Indemnitee shall be designated a party thereto, whether commenced or
threatened, with respect to any such actual, alleged or threatened liability,
loss, damage, penalty, judgment, suit, claim, cost or expense; provided that
no Indemnitee shall have a right to be indemnified hereunder for its own
gross negligence or willful misconduct as determined by a court of competent
jurisdiction.

           (b)(i)    The Collateral Agent shall or shall cause each Indemnitee
      to notify the Guarantors promptly of each event of which it has
      knowledge which may give rise to a claim under the indemnification
      provisions of this Section 15; provided, that the failure so to notify
      the Guarantors shall not impair any Guarantor's obligations under this
      Section 15 except to the extent the defense of such claim is actually
      prejudiced thereby.
 
           (ii) If any investigative, judicial or administrative proceeding or
      arbitration arising from any of the foregoing is brought against any
      Indemnitee, each Guarantor shall assume the defense thereof on behalf of
      such Indemnitee, including the employment of counsel reasonably
      satisfactory to such Indemnitee and payment of all expenses relating
      thereto.  The Indemnitee shall have the right to employ separate counsel
      in any such proceeding or arbitration and participate in the defense
      thereof; provided, that the fees and expenses of such separate counsel
      shall be at the expense of the Indemnitee, rather than the Guarantors,
      unless (A) the employment of such separate counsel has been specifically
      authorized by any Guarantors or (B) the named parties to any such action
      (or any impleaded parties), or the Indemnitee, shall have been advised
      by its counsel that there may be one or more legal defenses available to
      the Indemnitee which are different from or additional to those available
      to the Guarantors. If the provisions of clause (B) immediately above are
      met, the Company shall not have the right to assume the defense of such
      action on behalf of the Indemnitee.  The Guarantor shall not be liable
      for any settlement of any such proceeding effected without the written
      consent of the Guarantor, but if settled with the written consent of the
      Company or if there is a final judgment for the plaintiff in any such
      action, the Guarantor shall indemnify and hold harmless the Indemnitee
      from and against any loss or liability by reason of such settlement or
      judgment.  The Guarantors shall not enter into any settlement of, or
      consent to the entry of any judgment with respect to, any actual or
      alleged Indemnified Liabilities without the prior written consent of the
      Indemnitee, unless such settlement or judgement (x) includes an
      unconditional release of the Indemnitees from all liabilities arising
      out of such actual or alleged Indemnified Liability and (y) does not
      include a statement as to or an admission of fault, culpability or a
      failure to act by or on behalf of any Indemnitee.
<PAGE>

           (iii)At any time after any Guarantor has assumed the defense of any
      proceeding in respect of which indemnity has been sought hereunder
      against the Guarantors, the Indemnitee may elect, by written notice to
      the Guarantors, to withdraw its request for indemnity and thereafter the
      defense of such proceeding shall be maintained by counsel of the
      Indemnitee's choosing and at the Indemnitee's expense.

           (iv) To the extent that the undertaking to indemnify, pay and hold
      harmless set forth in the preceding provisions may be unenforceable
      because it is violative of any law or public policy, each Guarantor
      shall make the maximum contribution to the payment and satisfaction of
      each of the Indemnified Liabilities which is permissible under
      Applicable Law.  All Indemnified Liabilities shall be payable on demand.

           (c)  The obligations of each Guarantor under this Section 15 shall
survive the termination of this Agreement and the discharge of the
Guarantor's other obligations hereunder.

           Section 16.    No Waiver; Cumulative Remedies.  No action or
inaction of the Collateral Agent will be deemed to waive any of the rights,
powers or remedies of the Collateral Agent hereunder except pursuant to a
writing, signed by the Collateral Agent, and then only to the extent
expressly set forth therein.  A waiver by the Collateral Agent of any right,
power or remedy on any one occasion will not bar the exercise of any right,
power or remedy hereunder on any future occasion.  No failure of the
Collateral Agent to exercise nor delay of the Collateral Agent in exercising
any right, power or remedy will preclude the exercise of any other right,
power or remedy.  If the Collateral Agent accepts payment of any amount
secured hereby after its due date, it will not thereby be deemed to have
waived its right to require prompt payment when due of all other amounts
payable hereunder.  Each right, power and remedy of the Collateral Agent
provided for in this Agreement or now or hereafter existing at law or equity
or by statute or otherwise is cumulative and concurrent and is in addition to
every other such right, power or remedy of the Collateral Agent, and the
exercise of any one or more of any such rights, powers or remedies with
respect to any of the Collateral will not preclude the simultaneous or later
exercise by the Collateral Agent of any other right, power or remedy with
respect to any other Collateral.

           Section 17.  Appointment of Co-Agents.  At any time or times, in
order to comply with any legal requirement in any jurisdiction, the
Collateral Agent may appoint a bank or trust company or one or more other
Persons, either to act as co-agent or co-agents, jointly with the Collateral
Agent, or to act as separate, agent or agents on behalf of the Secured
Parties with such power and authority as may be necessary for the effectual
operation of the provisions hereof and may be specified in the instrument of
appointment (which may, in the discretion of the Collateral Agent, include
provisions for the protection of such co-agent or separate agent).
<PAGE>

           Section 18.  Termination of Security Interests; Release of 
Collateral.  (a)  Upon the payment in full of the outstanding principal
amount of, and all premium, if any, and accrued interest on the Loan in
accordance with the Loan Agreement and payment or satisfaction of all other
Secured Obligations, the Security Interests shall terminate and all rights to
the Collateral shall revert to the Guarantors.  Upon any such termination of
the Security Interests, the Collateral Agent will, at the expense of the
Guarantors, execute and deliver to the Guarantors such documents, and take
such other actions, as the Guarantors shall reasonably request to effect or
evidence the termination of the Security Interests or the release of such
Collateral, as the case may be.

           (b)  If at any time a payment of the Loan or any of the other
Secured Obligations is rescinded or must otherwise be returned upon the
insolvency, bankruptcy or reorganization of the Company, any Guarantor or
otherwise, the provisions of this Agreement and the security interest created
hereby shall continue to be effective or be reinstated, as the case may be,
all as though such payment had not been made.

           Section 19.  Contracts Not Assignable.  Any provision in this
Agreement to the contrary notwithstanding, this Agreement shall not
constitute an agreement to assign or grant a security interest in any
agreement, if an attempted assignment thereof or grant of security interest
therein, without the consent of a third party thereto, would constitute a
termination or breach thereof (including, without limitation, any contract
for investment advisory services that would be so terminated or breached).
From time to time at the request of the Collateral Agent, each Guarantor
shall use its best efforts to obtain the consent to the assignment and the
Lien granted or purported to be granted hereunder of the parties to such
agreements.  If such consent is not obtained, or if an attempted assignment
thereof or grant of security interest therein would not be effective or would
affect the rights of a Guarantor thereunder so that the Secured Parties would
not in fact receive the benefit of the Lien granted or purported to be
granted hereunder, each Guarantor will cooperate with the Collateral Agent in
any arrangement designed to provide such benefits for the Secured Parties,
including enforcement for the benefit of the Secured Parties of any and all
rights of the Guarantors against a third party thereto arising out of the
breach or cancellation by such third party or otherwise.

           Section 20.  Amendments, Etc.  No amendment, modification,
supplement, termination, consent or waiver of this Agreement or any term or
provision of this Agreement shall be effective and binding unless in writing
and signed by the Collateral Agent.  Any such waiver will be effective only
in the specific instance and for the specific purpose for which it is given.


<PAGE>

           Section 21.  Successors and Assigns.  This Agreement and the Lien
in the Collateral created hereunder are for the benefit of the Collateral
Agent and the Lender and their successors, assigns and participants, and in
the event of an assignment of or the granting of a participation in all or
any of the Secured Obligations, the rights hereunder, to the extent
applicable to the indebtedness so assigned or participated out, may be
transferred with such indebtedness.  This Agreement shall be binding on the
Guarantors and their respective successors and assigns.

           Section 22.  Severability.  Any provision of this Agreement which
is illegal, invalid, prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such illegality,
invalidity, prohibition or unenforceability without invalidating or impairing
the remaining provisions hereof or affecting the validity or enforceability
of such provision in any other jurisdiction.

           Section 23.  WAIVER OF JURY TRIAL.  EACH OF THE GUARANTORS AND THE
COLLATERAL AGENT HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL OR EQUITABLE ACTION, SUIT OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER "LOAN DOCUMENTS" OR ANY TRANSACTION
CONTEMPLATED HEREBY OR THEREBY OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR
THEREUNDER.

<PAGE>

           Section 24.  GOVERNING LAW; VENUE AND JURISDICTION.  THE VALIDITY
OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION AND ENFORCEMENT HEREOF
AND THE RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
EACH GUARANTOR AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS AGREEMENT AND EACH OTHER "LOAN DOCUMENT" SHALL BE TRIED AND
LITIGATED IN FEDERAL OR, IN THE ABSENCE OF FEDERAL SUBJECT MATTER
JURISDICTION, STATE COURTS LOCATED IN THE STATE OF NEW YORK UNLESS SUCH
ACTIONS OR PROCEEDINGS ARE REQUIRED TO BE BROUGHT IN ANOTHER COURT TO OBTAIN
SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY.  EACH OF THE
GUARANTORS AND THE COLLATERAL AGENT WAIVES, TO THE FULLEST EXTENT PERMISSIBLE
UNDER APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO ASSERT BY WAY OF MOTION, AS A
DEFENSE OR OTHERWISE THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO
VENUE IN ANY PROCEEDING BROUGHT IN ACCORDANCE WITH THE IMMEDIATELY PRECEDING
SENTENCE.  SERVICE OF PROCESS, SUFFICIENT FOR PERSONAL JURISDICTION IN ANY
ACTION AGAINST ANY GUARANTOR, MAY BE MADE BY REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO ITS ADDRESS INDICATED IN SECTION 26.

           Section 25.  Agreement May Constitute Financing Statement.  Each
Guarantor consents to the filing of this Agreement or a photocopy thereof as
a financing statement under the UCC as in effect in any jurisdiction in which
the Collateral Agent may determine such filing to be necessary or desirable.

           Section 26.  Notices.  All notices, requests and other
communications to any party hereunder shall be in writing and shall be given
to such party at the address or facsimile number set forth on Schedule I to
this Agreement, or such other address or facsimile number as such party may
hereafter specify for the purpose by notice to the other party.  Each such
notice, request or other communication shall be effective (i) if given by
mail, 72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid or (ii) if given by any other
means, when delivered at the address specified in this Schedule I to this
Agreement.

           Section 27.  Counterparts; Section Headings.  This Agreement may be
executed in any number of counterparts, each of which is an original, but all
of which together constitute but one instrument.  Except as otherwise
indicated, references herein to any "Section" means a "Section" of this
Agreement, and the section headings in this Agreement are for purposes of
reference only and shall not limit or define the meaning hereof.

           IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the date first above written.

                          PMC INVESTMENT SERVICES, INC.

                          By   /s/ Kenneth S. Phillips        
                              Name:
                              Title:
                          PORTFOLIO TECHNOLOGY SERVICES, INC.

                          By   /s/ Kenneth S. Phillips
                              Name:
                              Title:
                          PORTFOLIO MANAGEMENT
                          CONSULTANTS, INC.

                          By   /s/ Kenneth S. Phillips        

<PAGE>

                          DUNDEE BANCORP INC.,
                            as Collateral Agent


                          By  /s/  Ray Benzinger                  
                              Name:
                              Title:
 
<PAGE>

                                                    Schedule I

                                                        to the
                                 Subsidiary Security Agreement



                             Notices

Guarantors:

If to PMC Investment Services, Inc.:

           PMC Investment Services, Inc.
           555 17th Street, 14th Floor
           Denver, Colorado  80202
           Attention:Kenneth S. Phillips
                     Scott A. McKillop
           Tel:  (303) 292-1177
           Fax:  (303) 293-2152

If to Portfolio Technology Services, Inc.

           Portfolio Technology Services, Inc.
           555 17th Street, 14th Floor
           Denver, Colorado  80202
           Attention:Kenneth S. Phillips
                     Scott A. McKillop
           Tel:  (303) 292-1177
           Fax:  (303) 293-2152

If to Portfolio Management Consultants, Inc.

           Portfolio Management Consultants, Inc.
           555 17th Street, 14th Floor
           Denver, Colorado  80202
           Attention:Kenneth S. Phillips
                     Scott A. McKillop
           Tel:  (303) 292-1177
           Fax:  (303) 293-2152

<PAGE>


In the case of each Guarantor, with a copy to:

           Holme Roberts & Owen LLP
           1700 Lincoln Street
           Denver, Colorado  80203
           Attention:  Linda K. Wackwitz
           Tel:  (303) 861-7000
           Fax:  (303) 866-0200

If to Dundee Bancorp Inc.:

           Dundee Bancorp Inc.
           40 King Street West
           Scotia Plaza - 55th Floor
           Toronto, Canada M5H 4A9
           Attention: Ray Benzinger
           Tel:  (416) 365-5113
           Fax:  (416) 363-4536

           with a copy to:

           Debevoise & Plimpton
           875 Third Avenue
           New York, New York 10022
           Attention:  Steven Ostner
           Tel:  (212) 909-6000
           Fax:  (212) 909-6836


<PAGE>

                                            Schedule III

                                                        to the
                                 Subsidiary Security Agreement




                       Business Locations


 Portfolio Management Consultants, Inc.
 555 17th Street, 14th Floor
 Denver, Colorado  80202

 Portfolio Technology Services, Inc.
 555 17th Street, 14th Floor
 Denver, Colorado  80202

 PMC Investment Services, Inc.
 555 17th Street, 14th Floor
 Denver, Colorado  80202

 and

 100 Galleria Pkwy, Suite 1200
 Atlanta, Georgia
<PAGE>
EXHIBIT 10.9
                      GUARANTEE AGREEMENT

           GUARANTEE AGREEMENT, dated as of  July 9, 1998, between PMC
Investment Services, Inc., a Delaware corporation ("PIS"), Portfolio
Technology Services, Inc., a Colorado corporation ("PTS"), and Portfolio
Management Consultants, Inc., a Colorado corporation ("PMC" and each of PIS,
PTS and PMC, a "Guarantor"), and Dundee Bancorp Inc., an Ontario corporation
("Lender").


                                   RECITALS

           A.  PMC International, Inc., a Colorado corporation (the
"Company"), and the Lender have entered into a Loan Agreement, dated as of
July __, 1998 (as the same may be modified, supplemented or restated from
time to time, the "Loan Agreement"), pursuant to which the Lender has agreed
to extend to the Company a loan in the amount of $1.5 million, subject to the
terms and conditions set forth in the Loan Agreement.

           B.  The Company owns, beneficially and of record, all of the issued
and outstanding capital stock of each of the Guarantors.

           C.  The obligation of the Lender to extend the loan to the Company
pursuant to the Loan Agreement is conditioned upon the execution and delivery
by each of the Guarantors of a Guarantee Agreement to guarantee the
performance by the Company of its obligations under the Loan Agreement.

           D.  In order to induce Lender to enter into the Loan Agreement and
to extend to the Company the loan provided for thereunder, each Guarantor is
willing to enter into this Guarantee Agreement, providing for the guarantee
by such Guarantor, jointly and severally with each other Guarantor, of the
Company's obligations under the Loan Agreement, the Note, the Borrower
Security Agreement and the Pledge Agreement (collectively, the "Principal 
Documents").

           E. Capitalized terms used in this Guarantee Agreement without
definition have the meanings given to them in the Loan Agreement.

           NOW, THEREFORE, for good and valuable consideration, receipt and
sufficiency of which  are hereby acknowledged, the Guarantors hereby agree
with the Lender as follows:

           Section 1. Guarantee.  Each Guarantor hereby
unconditionally and irrevocably guarantees, jointly and severally with each
other Guarantor, to Lender (a) the due, prompt and complete payment by the
Company of the principal of and the premium, 
<PAGE>  
if any, and interest on,
and any other amount becoming due under, each Principal Document, when and as
the same shall become due and payable (whether at stated maturity or by
required or optional prepayment or by declaration or otherwise) in accordance
with the terms of the Principal Documents, and (b) the due, prompt and
faithful performance of, and compliance with, all obligations, covenants,
terms, conditions and undertakings of the Company contained in the Principal
Documents and in any other agreement or document executed by the Company
pursuant to the Principal Documents (such Principal Documents and other
agreements and documents being sometimes collectively hereinafter referred to
as the "Operative Documents", and the amounts payable by the Company under
any of the Operative Documents, and all other obligations of the Company
thereunder, being sometimes collectively hereinafter referred to as the
"Guaranteed Obligations").  This guarantee is a guarantee of payment,
performance and compliance and not of collectibility and is in no way
conditioned or contingent upon any attempt to collect from or enforce
performance or compliance by the Company or upon any other event, contingency
or circumstance whatsoever.  If for any reason whatsoever the Company shall
fail or be unable duly, punctually and fully to pay such amounts as and when
the same shall become due and payable or to perform or comply with any
Guaranteed Obligation, whether or not such failure or inability shall
constitute an "Event of Default" under the Loan Agreement, each Guarantor,
jointly and severally, without demand, presentment, protest or notice of any
kind, will forthwith pay or cause to be paid such amounts to Lender, in
lawful money of the United States, at the place specified in the applicable
Operative Document, or perform or comply with such Guaranteed Obligations or
cause such Guaranteed Obligations to be performed or complied with, together
with interest (in the amounts and to the extent required of the Company under
such Operative Document) on any amount due and owing from the Company.  Each
Guarantor, jointly and severally, promptly after demand, will pay to Lender
the reasonable costs and expenses of collecting such amounts or otherwise
enforcing this Guarantee Agreement, including, without limitation, the
reasonable fees and expenses of counsel.

           Section 2.  Guarantor's 
Obligations Unconditional.  The obligations of each Guarantor under this
Guarantee Agreement are primary, absolute and unconditional obligations of
such Guarantor, shall not be subject to any counterclaim, set-off, deduction,
diminution, abatement, recoupment, suspension, deferment, reduction or
defense based upon any claim the Guarantor or any other Person may have
against the Company, the Lender or any other Person, and shall remain in full
force and effect without regard to, and shall not be released, discharged or
in any way affected by, any circumstance or condition whatsoever (whether or
not such Guarantor or the Company shall have any knowledge or notice
thereof), including, without limitation: 
<PAGE>

           (a)  any termination, waiver, amendment or modification of or
      deletion from or addition or supplement to or other change in any of the
      Operative Documents;
            (b)  any furnishing, acceptance or release of, or any defect in
      any security for, any of the Guaranteed Obligations, or the failure of
      any Person (including the Lender) to perfect any security interest;

           (c)  any failure, omission or delay on the part of the Company to
      conform or comply with any term of any of the Operative Documents,
      including, without limitation, failure to give notice to the Guarantor
      of the occurrence of a default or an Event of Default;

           (d)  any waiver of the payment, performance or observance of any of
      the obligations, conditions, covenants or agreements contained in any
      Operative Document, or any other waiver, consent, extension, indulgence,
      compromise, settlement, release or other action or inaction under or in
      respect of any of the Operative Documents or any obligation or liability
      of the Company, or any exercise or non-exercise of any right, remedy,
      power or privilege under or in respect of any such instrument or
      agreement or any such obligation or liability;

           (e)  any failure, omission or delay on the part of the Lender to
      enforce, assert or exercise any right, power or remedy conferred on it
      in this Guarantee Agreement or in any Operative Document;

           (f)  any voluntary or involuntary bankruptcy, insolvency,
      reorganization, arrangement, readjustment, assignment for the benefit of
      creditors, composition, receivership, conservatorship, custodianship,
      liquidation, marshalling of assets and liabilities or similar
      proceedings with respect to the Company, any Guarantor or any other
      Person or any of their respective properties or creditors, or any action
      taken by any trustee or receiver or by any court in any such proceeding;

           (g)  any limitation on the liability or obligations of the Company
      or any other Person under any of the Operative Documents, or any
      discharge, termination, cancellation, frustration, irregularity,
      invalidity or unenforceability, in whole or in part, of any of the
      Operative Documents or any term of this Guarantee Agreement; 
<PAGE>

           (h)  any merger or consolidation of the Company or any Guarantor
      into or with any other Person, or any sale, lease or transfer of any of
      the assets of the Company or any Guarantor to any other Person;

           (i)  any change in the ownership of any shares of capital stock of
      the Company or any Guarantor, or any change in the relationship between
      the Company and any Guarantor, or any termination of such relationship;
      or
            (j)  any other occurrence, circumstance, happening or event
      whatsoever, whether similar or dissimilar to the foregoing, whether
      foreseen or unforeseen, and any other circumstance that might otherwise
      constitute a legal or equitable defense or discharge of the liabilities
      of a guarantor or surety or might otherwise limit recourse against any
      Guarantor.

           Section 3.  Full Recourse Obligations; 
Maximum Liability. (a)  The obligations of each Guarantor set forth herein
constitute the full recourse obligations of such Guarantor enforceable
against such Guarantor to the full extent of all of such Guarantor's assets
and properties.

           (b)  Notwithstanding any other provision hereof, the liability of
no Guarantor hereunder shall exceed the greater of (x) 95% of the Adjusted
Net Worth (as defined below) of such Guarantor as of the date hereof and (y)
95% of the Adjusted Net Worth of such Guarantor on the date on which payment
under this Guarantee Agreement is sought.  As used herein, the term "Adjusted 
Net Worth" of a Guarantor means the excess of (i) the amount of the fair
saleable value of the assets of such Guarantor determined in accordance with
applicable federal and state laws governing determinations of solvency over
(ii) the amount of all liabilities of such Guarantor, including contingent
liabilities (but excluding contingent liabilities of such Guarantor as
Guarantor hereunder), determined in accordance with such laws.

           Section 4.  Waiver.  Each Guarantor unconditionally waives,
to the extent permitted by applicable law, (a) notice of any of the matters
referred to in Section 2, (b) notice to such Guarantor of the incurrence of
any of the Guaranteed Obligations, notice to such Guarantor or the Company of
any breach or default by the Company with respect to any of the Guaranteed
Obligations or any other notice that may be required, by statute, rule of law
or otherwise, to preserve any rights of Lender against such Guarantor,
(c) presentment to or demand of payment from the Company or any Guarantor with
respect to any Operative Document or protest for nonpayment or dishonor,
(d) any right to the enforcement, assertion or exercise by the Lender of any
right, power, privilege or 
<PAGE> 
remedy conferred in any Operative Document
or otherwise, (e) any requirement of diligence on the part of Lender, (f) any
requirement to exhaust any remedies or to mitigate the damages resulting from
any default under any Operative Document, (g) any notice of any sale,
transfer or other disposition of any right, title to or interest in any
Operative Document, (h) any release of any Guarantor from such Guarantor's
obligations hereunder resulting from any loss by such Guarantor of such
Guarantor's rights of subrogation hereunder or otherwise and (i) any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge, release or defense of a guarantor or surety or might otherwise
limit recourse against such Guarantor.

           Section 5.  Subrogation.  Upon the payment in full of
all principal of and premium, if any, and interest on the Loan and any other
amounts payable by the Company under the Operative Documents, and the
performance in full of all obligations to be performed or observed by the
Company under or pursuant to the Operative Documents, each Guarantor shall be
subrogated to the rights of Lender in respect of any payment or other
obligation with respect to which an amount has been paid by such Guarantor
hereunder.  No Guarantor shall seek to exercise any rights of subrogation,
reimbursement or indemnity arising from payments made by such Guarantor
pursuant to the provisions of this Guarantee Agreement until the full and
complete payment or performance and discharge of the Guaranteed Obligations.

           Section 6.  Effect of 
Bankruptcy Proceedings, etc.  This Guarantee Agreement shall continue to be
effective or shall be automatically reinstated, as the case may be, if at any
time payment, in whole or in part, of any of the sums due Lender pursuant to
the terms of any Operative Document is rescinded or must otherwise be
restored or returned by Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Company or any other Person, or upon or
as a result of the appointment of a custodian, receiver, trustee or other
officer with similar powers with respect to the Company or other Person or
any substantial part of its property, or otherwise, all as though such
payment had not been made.  If an event permitting the acceleration of the
maturity of any principal amount of the Loan shall at any time have occurred
and be continuing, and such acceleration shall at such time be prevented by
reason of the pendency against the Company or any other Person of a case or
proceeding under a bankruptcy or insolvency law, each Guarantor agrees that,
for purposes of this Guarantee Agreement and such Guarantor's obligations
hereunder, the maturity of the principal amount of the Loan shall be deemed
to have been accelerated with the same effect as if Lender had accelerated
the same in accordance with the terms of the Loan Agreement, and such
Guarantor shall forthwith, jointly and severally with the other
<PAGE>
Guarantor, pay such principal amounts, any interest thereon and any other
amounts guaranteed hereunder without further notice or demand.

           Section 7.  Subordination.  (a)  Each Guarantor hereby
agrees that until such time as all of the Guaranteed Obligations shall be
paid and performed in full, any Subordinated Indebtedness (as hereinafter
defined) is and shall be expressly subordinated, to the extent and in the
manner hereinafter set forth, in right of payment to the prior payment of the
Guaranteed Obligations.

           (b)  The term "Subordinated Indebtedness" shall mean, at any time,
the then outstanding aggregate principal amount of all indebtedness of the
Company to any Guarantor in respect of borrowed money, fees, royalties or
other advance or arrangement, all accrued and unpaid interest and premium, if
any, thereon and all expenses incurred by and all indemnities payable to any
Guarantor pursuant to any agreement between the Company and such Guarantor in
respect of any such indebtedness or otherwise.

           (c)  Upon the occurrence of an "Event of Default" under the Loan
Agreement, or an event which but for the lapse of time or the giving of
notice or both would be such an Event of Default, unless and until such Event
of Default or event shall have been remedied or waived, no direct or indirect
payment (in cash, property or securities or by set-off or otherwise) shall be
made or agreed to be made on account of the Subordinated Indebtedness and no
Guarantor shall demand, collect or receive any payment on account of any
Subordinated Indebtedness.

           (d)  In the event of any  bankruptcy, receivership, liquidation,
reorganization or other similar proceedings relating to the Company, or in
the event of any proceedings for the voluntary or involuntary liquidation,
dissolution or other winding-up of the Company, whether or not involving
insolvency or bankruptcy proceedings, all of the Guaranteed Obligations
(including any interest accruing at the legal rate after the commencement of
any such proceedings and any additional interest that would have accrued but
for the commencement of such proceedings) shall first be paid in full before
any payment or distribution, whether in cash, securities or other property,
shall be made to any Guarantor on account of any Subordinated Indebtedness.
Any payment or distribution, whether in cash, securities or other property,
which would otherwise (but for these subordination provisions) be payable or
deliverable in respect of any Subordinated Indebtedness shall be paid or
delivered directly to the Lender (or to a banking institution selected by the
court or designated by the Lender) and to the holders of any other senior
indebtedness of the Company that may then be outstanding, in accordance with
the priorities  
<PAGE>
then existing among such holders until all of the
Guaranteed Obligations shall have been paid in full.

           (e)  If any payment or distribution of any character, whether in
cash, property or otherwise, shall be received by any Guarantor in
contravention of any of the terms of the provisions of this Section 7, such
payment or distribution shall be paid over to Lender and to the holders of
any other senior indebtedness of the Company that may then be outstanding, in
accordance with the priorities then existing among such holders.  Upon
payment in full of all of the Guaranteed Obligations, each Guarantor shall be
subrogated to the rights of Lender and any holders of any other senior
indebtedness of the Company to receive payments or distributions of assets
made with respect to the Guaranteed Obligations to the extent of amounts
payable to such Guarantor which, pursuant to the provisions of this Section
7, were paid to Lender or such holders and, for the purposes of such
subrogation, no payments to Lender or such holders of any character to which
such Guarantor would be entitled except for the provisions hereof shall, as
between the Company and its creditors other than the Lender or such holders,
on the one hand, and such Guarantor, on the other, be deemed to be a payment
or distribution by the Company to or on account of the Guaranteed Obligations.

           Section 8.  Term of Agreement.  This Guarantee
Agreement and all guarantees, covenants and agreements of each Guarantor
contained herein shall continue in full force and effect and shall not be
discharged until such time as all of the Guaranteed Obligations shall be paid
and performed in full and all of the agreements of each Guarantor hereunder
shall be duly paid and performed in full.

           Section 9.  Notices.  All notices, requests and other
communications to any party hereunder shall be in writing and shall be given
to such party at the address or facsimile number set forth on Schedule I to
this Guarantee Agreement, or such other address or facsimile number as such
party may hereafter specify for the purpose by notice to the other party.
Each such notice, request or other communication shall be effective (i) if
given by mail, 72 hours after such communication is deposited in the mails
with first class postage prepaid, addressed as aforesaid or (ii) if given by
any other means, when delivered at the address specified in this Schedule I
to this Guarantee Agreement.

           Section 10.  Further Assurances.  Each Guarantor
hereby agrees to execute and deliver all such instruments and take all such
action as Lender may from time to time reasonably request in order to
effectuate fully the purposes of this Guarantee Agreement and to establish and
perfect the rights and remedies intended to be created in favor of the 
<PAGE>
Lender hereunder or under any of the Operative Documents.  Each Guarantor
shall cooperate with Lender to procure due performance by the Company of the
provisions of the Operative Documents.

           Section 11.  WAIVER OF JURY TRIAL.  EACH OF THE
GUARANTORS AND LENDER HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL OR EQUITABLE ACTION, SUIT OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS GUARANTEE AGREEMENT OR THE OTHER "LOAN DOCUMENTS" OR ANY
TRANSACTION CONTEMPLATED HEREBY OR THEREBY OR THE RELATIONSHIP ESTABLISHED
HEREUNDER OR THEREUNDER.

           Section 12.  GOVERNING LAW; VENUE AND JURISDICTION 
THE VALIDITY OF THIS GUARANTEE AGREEMENT, THE
CONSTRUCTION, INTERPRETATION AND ENFORCEMENT HEREOF AND THE RIGHTS OF THE
PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.  EACH GUARANTOR
AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS
AGREEMENT AND EACH OTHER "LOAN DOCUMENT" SHALL BE TRIED AND LITIGATED IN
FEDERAL OR, IN THE ABSENCE OF FEDERAL SUBJECT MATTER JURISDICTION, STATE
COURTS LOCATED IN THE STATE OF NEW YORK UNLESS SUCH ACTIONS OR PROCEEDINGS
ARE REQUIRED TO BE BROUGHT IN ANOTHER COURT TO OBTAIN SUBJECT MATTER
JURISDICTION OVER THE MATTER IN CONTROVERSY.  EACH OF THE  GUARANTORS AND THE 
COLLATERAL AGENT WAIVES, TO THE FULLEST EXTENT  PERMISSIBLE UNDER APPLICABLE
LAW, ANY RIGHT IT MAY HAVE TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR
OTHERWISE THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE IN ANY
PROCEEDING BROUGHT IN ACCORDANCE WITH THE IMMEDIATELY PRECEDING SENTENCE.
SERVICE OF PROCESS, SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST
ANY GUARANTOR, MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO ITS ADDRESS INDICATED IN SECTION 9.

           Section 13.  Amendments, Etc.  No amendment, modification,
supplement, termination, consent or waiver of this Guarantee Agreement or any
term or provision of this Guarantee Agreement shall be effective and binding
unless in writing 
<PAGE> 
and signed by the Lender.  Any such waiver will be
effective only in the specific instance and for the specific purpose for
which it is given.

           Section 14.  Successors and Assigns.  This Guarantee Agreement is
for the benefit of the Lender and its successors, assigns and participants,
and in the event of an assignment of or the granting of a participation in
all or any of the Guaranteed Obligations, the rights hereunder, to the extent
applicable to the indebtedness so assigned or participated out, may be
transferred with such indebtedness.

           Section 15.  Severability.  Any provision of this Guarantee
Agreement which is illegal, invalid, prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such illegality, invalidity, prohibition or unenforceability without
invalidating or impairing the remaining provisions hereof or affecting the
validity or enforceability of such provision in any other jurisdiction.  To
the extent permitted by applicable law, each Guarantor hereby waives any
provision of law that renders any provisions hereof prohibited or
unenforceable in any respect.

           Section 16.  Counterparts; Section Headings.  This Agreement may be
executed in any number of counterparts, each of which is an original, but all
of which together constitute but one instrument.  Except as otherwise
indicated, references herein to any "Section" means a "Section" of this
Agreement, and the section headings in this Agreement are for purposes of
reference only and shall not limit or define the meaning hereof.
<PAGE>
           IN WITNESS WHEREOF, each Guarantor and Lender has caused this
Guarantee Agreement to be duly executed as of the day and year first above
written.

                               GUARANTORS:

                               PMC INVESTMENT SERVICES, INC.


                               By   /s/ Kenneth S. Phillips   
                                  Name:
                                  Title:


                               PORTFOLIO TECHNOLOGY SERVICES, INC.


                               By   /s/ Kenneth S. Phillips   
                                  Name:
                                                            Title:


                               PORTFOLIO MANAGEMENT
                               CONSULTANTS, INC.


                               By   /s/ Kenneth S. Phillips   
                                  Name:
                                                            Title:


                               LENDER:

                               DUNDEE BANCORP INC.


                               By   /s/ Ray Benzinger                          
                                  Name:
                                  Title:
<PAGE>
                                                                     Schedule I
                                                        to the
                                           Guarantee Agreement

                            Notices

Guarantors:

If to PMC Investment Services, Inc.:

           PMC Investment Services, Inc.
           555 17th Street, 14th Floor
           Denver, Colorado  80202
           Attention:     Kenneth S. Phillips
                          Scott A. McKillop
           Tel:  (303) 292-1177
           Fax:  (303) 293-2152
<PAGE>
If to Portfolio Technology Services, Inc.

           Portfolio Technology Services, Inc.
           555 17th Street, 14th Floor
           Denver, Colorado  80202
           Attention:     Kenneth S. Phillips
                          Scott A. McKillop
           Tel:  (303) 292-1177
           Fax:  (303) 293-2152

If to Portfolio Management Consultants, Inc.

           Portfolio Management Consultants, Inc.
           555 17th Street, 14th Floor
           Denver, Colorado  80202
           Attention:     Kenneth S. Phillips
                          Scott A. McKillop
           Tel:  (303) 292-1177
           Fax:  (303) 293-2152

In the case of each Guarantor, with a copy to:

           Holme Roberts & Owen LLP
           1700 Lincoln Street
           Denver, Colorado  80203
           Attention:  Linda K. Wackwitz
           Tel:  (303) 861-7000
           Fax:  (303) 866-0200
<PAGE>
If to Dundee Bancorp Inc.:

           Dundee Bancorp Inc.
           40 King Street West
           Scotia Plaza - 55th Floor
           Toronto, Canada M5H 4A9
           Attention: Ray Benzinger
           Tel:  (416) 365-5113
           Fax:  (416) 363-4536

           with a copy to:

           Debevoise & Plimpton
           875 Third Avenue
           New York, New York 10022
           Attention:  Steven Ostner
           Tel:  (212) 909-6000
           Fax:  (212) 909-6836

<PAGE>
EXHIBIT 10.10
                       PLEDGE AGREEMENT

           PLEDGE AGREEMENT, dated as of  July 9, 1998, between PMC
International, Inc., a Colorado corporation (the "Pledgor"), and Dundee
Bancorp Inc., an Ontario corporation, as pledgee (the "Pledgee").


                           RECITALS

            1.  The Pledgor is the legal and beneficial owner of all of the
issued and outstanding shares of capital stock of (i) PMC Investment
Services, Inc., a Delaware corporation ("PIS"), (ii) Portfolio Technology
Services, Inc., a Colorado corporation ("PTS"), (iii) Portfolio Management
Consultants, Inc., a Colorado corporation ("PMC"), and (iv) Portfolio
Brokerage Services Inc., a Colorado corporation ("PBS" and together with PIS,
PTS and PMC, the "Pledged Subsidiaries").

            2.  Pursuant to the Loan Agreement, dated as of July __, 1998 (as
the same may be modified, supplemented or restated from time to time, the
"Loan Agreement"), between the Pledgor, as borrower, and  Dundee Bancorp Inc.,
as lender (in such capacity, the "Lender"), the Lender has agreed to extend
to the  Pledgor a loan in the amount of $1.5 million (the "Loan"), subject to
the terms and conditions set forth in the Loan Agreement.

            3.  In order to induce the Lender to enter into the Loan Agreement
and to extend the Loan, the Pledgor has agreed to pledge to the Pledgee all
of the shares of capital stock of each Pledged Subsidiary as security for the
performance of its obligations under the Loan Agreement.

            4.  Capitalized terms used in this Agreement without definition
have the meanings given to them in the Loan Agreement, except that the term
"UCC" shall have the meaning given to it in the Borrower Security Agreement.

           NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which  are hereby acknowledged,  the Pledgor hereby agrees
with the Pledgee as follows:


           Section 1.  Security for Obligations.  This Agreement is entered
into to secure (a) the payment of the principal of and premium and interest
on the Loan (including, without limitation, interest accruing after the date
of any filing by Pledgor of any petition in bankruptcy or the commencement of
any bankruptcy, insolvency or similar proceeding with respect to Pledgor) as
and when the same  becomes due and <PAGE> 
payable in accordance with the terms of
the Loan Agreement, whether at maturity or by prepayment, acceleration,
declaration of default or otherwise, (b) the payment of all other
indebtedness and other amounts payable by the Pledgor under the Loan
Agreement, the Note, this Agreement and the other Loan Documents, (c) the due
and punctual performance by Pledgor of and compliance by the Pledgor with all
its obligations under the Loan Agreement, the Note, this Agreement and all
other Loan Documents, and (d) all extensions and renewals of any of the
foregoing (all of the payment and performance obligations referred to in this
Section 1 being referred to collectively as the "Secured Obligations").

           Section 2.  Pledge of Shares, Etc.  As security for the prompt
payment and performance of the Secured Obligations when due (whether at
stated maturity, by acceleration or otherwise), the Pledgor hereby pledges to
the Pledgee and grants, transfers and sets over to the Pledgee a continuing
security interest in all the following property, whether now owned or
hereafter acquired and whether now or in the future existing (collectively,
the "Collateral"):

           (a)  all of the issued and outstanding shares of capital stock of
      each Pledged Subsidiary;

           (b)  all additional shares of capital stock and other equity
      securities of any class of the Pledged Subsidiaries from time to time
      acquired by Pledgor in any way (the property described in clause (a)
      above and this clause (b) being referred to collectively as "Pledged 
      Stock");

           (c)  all subscriptions, warrants, rights or options of Pledgor to
      acquire any shares of capital stock or other equity securities of any
      Pledged Subsidiary or any interest therein;

           (d)  all dividends, instruments, cash and other property or rights
      of any kind at any time received, receivable or otherwise distributed or
      distributable with respect to any of the property described in clauses
      (a) through (c) above;

           (e)  all certificates or other writings representing or evidencing
      any of the property described in clauses (a) through (d) above;

           (f)  all proceeds of any of the property described in clauses (a)
      through (e) above; and
 <PAGE>
           (g)  all books, correspondence, credit files, electronic data,
      records, invoices and other papers and documents relating to any of the
      foregoing.

           Section 3.  Representations and Warranties.  The Pledgor represents
and warrants to the Pledgee as follows:

           (a)  The issued and outstanding shares of capital stock of PIS
      consists solely of 920 shares of common stock; the issued and
      outstanding capital stock of PTS consists solely of  100 shares of
      common stock; the issued and outstanding capital stock of PMC consists
      solely of  23,492.67 shares of Class A common stock and 18,907.33 shares
      of Class B common stock; and the issued and outstanding capital stock of
      PBS consists solely of  1,000 shares of common stock (all of the shares
      described in this clause (a) being referred to collectively as the
      "Shares").

           (b)  The Pledgor is the record and beneficial owner of the Shares,
      free and clear of any Lien except for the Lien created by this Agreement.

           (c)  All of the Shares have been duly and validly issued and are
      fully paid and non-assessable.  There are no preemptive, conversion or
      similar rights on the part of any Person with respect to the capital
      stock of any Pledged Subsidiary.  There are no subscriptions, options,
      warrants or other agreements or arrangements of any kind, contingent or
      otherwise, obligating the Pledgor or any Pledged Subsidiary to sell or
      issue, or cause to be sold or issued, any equity interest in any Pledged
      Subsidiary, and no authorization therefor has been given.  There are no
      securities convertible into or exchangeable for any equity interests of
      any Pledged Subsidiary, and no authorization therefor has been given.
      No Person has any contractual or other right or obligation to purchase
      or otherwise acquire any shares or other equity interests in any Pledged
      Subsidiary.

           (d)  Upon delivery to the Pledgee of the certificates evidencing
      the Shares, the security interest granted pursuant to this Agreement
      will constitute a valid perfected first priority security interest in
      the  Shares, enforceable as such against all creditors of the Pledgor
      and any Persons purporting to purchase any Shares from Pledgor.

           Section 4.  Voting Rights, Dividends and Other Distributions, Etc.

            4.1  Prior to Event of Default.  So long as no Event of Default
has occurred and is continuing, the Pledgor will remain entitled to exercise
any and all voting and other consensual rights pertaining to the Pledged
Stock and to receive and use cash dividends as and to the extent permitted by
the Loan Agreement, in either case for any purpose not inconsistent with the
terms of this Agreement or any other Loan Document.

<PAGE>

            4.2  After Event of Default.  For so long as an Event of Default
is continuing, (i) the Pledgor may not exercise any voting or other
consensual rights with respect to any Pledged Stock without the prior written
consent of the Pledgee, (ii) the right, if any, of Pledgor to receive cash
dividends in respect of the Pledged Stock will cease and all such dividends
must be paid directly to the Pledgee (or if received by Pledgor will be
deemed held in trust by Pledgor for the benefit of, and must be turned over
immediately by Pledgor to, the Pledgee) and thereafter will be held and
disposed of by the Pledgee as part of the Collateral, and (iii) if the Pledgee
has notified the Pledgor that it elects to exercise the Pledgee's right to
exercise voting and other consensual rights hereunder, all rights of Pledgor
to exercise the voting and other consensual rights which Pledgor would
otherwise be entitled to exercise pursuant to Section 4.1 will cease, all
such rights will thereupon become vested in the Pledgee, who during the
continuance of such Event of Default will have (directly or through its
nominee) the sole right to exercise such voting and other consensual rights,
including, without limitation, (A) all voting, corporate and other rights
pertaining to any of the Pledged Stock, (B) all rights to give consents,
waivers and ratifications in respect thereof and (C) any and all rights of
conversion, exchange, subscription and any other rights, privileges or
options pertaining to any of the Pledged Stock as if it were the absolute
owner thereof, and in connection therewith, the right to deposit and deliver
any and all of the Pledged Stock with any committee, depositary, transfer
agent, registrar or other designated agency upon such terms and conditions as
it may determine, all without liability except to account for property
actually received by it (the Pledgor hereby irrevocably constituting and
appointing the Trustee the proxy and attorney-in-fact of the Pledgor, with
full power of substitution, to do or take any of the above actions for as
long as the Event of Default is continuing).  The Pledgee will have no duty
to Pledgor to exercise any such right and will not be responsible for any
failure to do so or delay in so doing.  In order to permit the Pledgee to
exercise the voting and other consensual rights which it may be entitled to
exercise pursuant to this Section 4.2, and to receive all dividends and
distributions which it may be entitled to receive under this Section 4.2, the
Pledgor will, upon written notice from the Pledgee, from time to time execute
and deliver to the Pledgee appropriate proxies, dividend payment orders and
other instruments as the Pledgee may reasonably request.

           Section 5.  Covenants of Pledgor.

            5.1  Sale of Collateral, Etc.  Pledgor will not (i) sell, assign,
transfer, convey, or otherwise dispose of, or grant any option with respect
to, any of the Collateral, or (ii) create or permit to exist any Lien upon or
with respect to any of the Collateral, except for the Lien created by this
Agreement.

<PAGE>

            5.2  Delivery of Stock Certificates, Etc.  Pledgor will
immediately deliver to the Pledgee all certificates or other writings
representing or evidencing any of the Shares and any other "securities" or
"instruments" (as such terms are defined in the UCC) included in the
Collateral at any time acquired or received by Pledgor, directly or
indirectly, either in suitable form for transfer by delivery, or issued in
the name of Pledgor and accompanied by stock powers or other appropriate
instruments of transfer or assignment, duly executed by Pledgor in blank and
undated, and in either case having attached thereto all requisite federal or
state stock transfer tax stamps, all in form and substance satisfactory to
the Pledgee.

            5.3  Other Distributions.  Except for cash dividends permitted to
be paid to Pledgor pursuant to Section 4.1, Pledgor will cause all dividends
and distributions of any kind on the Pledged Stock (including any sums paid
upon or in respect of the Pledged Stock upon the liquidation or dissolution
of the issuer thereof or upon the recapitalization or reclassification of the
capital of the issuer thereof or upon the reorganization of the issuer
thereof) to be paid directly to the Pledgee (and if any such dividends or
distributions are received by Pledgor, Pledgor will hold them in trust for
the benefit of, and will immediately turn them over to, the Pledgee) and the
Pledgee will hold and dispose of all such dividends and distributions as part
of the Collateral.

            5.4  Additional Capital Stock of any Pledged Subsidiary.  Pledgor
will not permit or suffer any Pledged Subsidiary to issue any shares of
capital stock or any subscriptions, warrants, options or rights to acquire
the same or any securities convertible into or granting the right to purchase
or exchange for any shares of capital stock of any Pledged Subsidiary except
to Pledgor, and then only unless such capital stock, subscriptions, warrants,
options or rights are duly and validly pledged to the Pledgee as additional
Collateral under this Agreement.

            5.5  Records; Location of Records; Inspection.  Pledgor will keep
full and accurate books and records relating to the Collateral, and stamp or
otherwise mark such books and records in such manner as is necessary or
desirable in order to reflect the pledge and security interest granted
pursuant to this Agreement.  Pledgor will permit representatives of the
Pledgee at any time upon reasonable advance notice to inspect and make
abstracts from its books and records pertaining to the Collateral and to
discuss matters relating to the Collateral with officers of Pledgor.
<PAGE>

            5.6  Costs, Expenses and Certain Taxes.  Pledgor will pay to the
Pledgee from time to time on demand any and all costs and expenses, including
attorneys' fees and expenses, paid or incurred by or on behalf of the Pledgee
in connection with the administration or enforcement of this Agreement or the
collection of any amount payable by Pledgor under this Agreement, whether or
not any legal proceeding is commenced hereunder or thereunder and whether or
not any Default or Event of Default has occurred and is continuing.  The
Pledgor will indemnify the Pledgee on demand against any loss, liability or
expense incurred by the Pledgee arising out of or in connection with the
acceptance or administration of this trust, or any action or omission of the
Pledgee hereunder, including the costs and expenses of defending itself
against any claim or liability (including any claim by Pledgor) in connection
with the exercise or performance of any of its powers or duties hereunder;
provided that the Pledgee shall not have the right to be indemnified
hereunder for its own gross negligence or willful misconduct as determined by
a court of competent jurisdiction.  All amounts payable to the Pledgee under
this Section 5.6 accrue interest until paid in full at the default interest
rate in the Loan Agreement from the date of demand therefor.  All such
amounts shall constitute additional indebtedness of the Pledgor secured
hereunder and shall be payable on demand.  Pledgor will also pay, and will
hold the Pledgee harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamps, excise, sales or
other taxes which may be payable or determined to be payable with respect to
any of the Collateral or in connection with any of the transactions
contemplated by this Agreement.

            5.7  Priority of Security Interest; Further Assurances.  (a)
Pledgor will at all times cause the security interest granted pursuant to
this Agreement to constitute a valid perfected first priority security
interest in the Collateral, enforceable as such against all creditors of
Pledgor and any Persons purporting to purchase any Collateral from Pledgor.

           (b)  Pledgor will at any time and from time to time, at its own
expense, promptly execute and deliver all further instruments and documents,
and take all further actions, as may be necessary or desirable, or that the
Pledgee may reasonably request, in order to (i) grant more effectively a
security interest in favor of the Pledgee in all or any portion of the
Collateral, (ii) maintain, preserve, or perfect the Lien created or purported
to be created by this Agreement and the first priority status of such lien,
(iii) preserve and defend against any Person Pledgor's rights in and title to
the Collateral and the rights purported to be granted therein by this
Agreement, (iv) enable the Pledgee to exercise and enforce its rights and
remedies hereunder, or (v) carry out more effectively the purposes of this
Agreement.

           Section 6.  Rights of the Pledgee.
<PAGE>

            6.1  No Obligations or Liability to Pledgor.  The rights and
powers of the Pledgee hereunder are not contingent upon the pursuit by the
Pledgee of any right or remedy against Pledgor or against any other Person
which may be or become liable in respect of any of the Secured Obligations or
against any other collateral security or guarantee therefor or right of
offset with respect thereto, but are solely to protect its interest in the
Collateral.  The Pledgee will not be liable for any failure to demand,
collect or realize upon all or any part of the Collateral or for any delay in
doing so, nor is the Pledgee under any obligation to sell or otherwise
dispose of any Collateral upon the request of Pledgor or any other Person or
to take any other action whatsoever with regard to the Collateral or any part
thereof.  No action or inaction on the part of the Pledgee hereunder or under
any other Loan Document will release Pledgor from any of its obligations
hereunder or under any other Loan Document, or constitute an assumption of any
such obligations on the part of the Pledgee, or cause the Pledgee to become
subject to any obligation or liability to Pledgor.  The Pledgee has no
obligation to perform any of the obligations or duties of Pledgor as a
shareholder of the Pledged Subsidiaries.

            6.2  Right of Pledgee to Perform Pledgor's Covenants, Etc.  If
Pledgor fails to make any payment or to perform any agreement required to be
made or performed hereunder, the Pledgee may (but need not) at any time
thereafter make such payment or perform such act, or otherwise cause such
payment or performance.  No such action will create any liability to Pledgor
on the part of the Pledgee.  All amounts so paid by the Pledgee and all costs
and expenses (including, without limitation, reasonable attorneys' fees and
expenses) incurred by the Pledgee in any such performance shall accrue
interest from the date paid or disbursed until reimbursed to the Pledgee in
full by or on behalf of Pledgor at the rate established in Section 5.6.  All
such amounts shall constitute additional indebtedness of the Pledgor secured
hereunder and shall be payable on demand.

            6.3  Registration of Securities in Name of Pledgee.  In addition
to its rights under the last sentence of Section 4.2, if the Pledgee
determines that registration of any of the Pledged Stock in the name of the
Pledgee or its nominee is necessary or desirable to protect the interests of
the Pledgee, then the Pledgee may without notice to or consent of Pledgor
cause any or all of the Pledged Stock to be so registered, and the Pledgor
will take all reasonable actions to accomplish such registration.
Notwithstanding any such registration, the Pledgee and any such nominee will
continue to hold such Pledged Stock on the terms and conditions set forth
herein.

            6.4  Additional Security.  Without notice to or consent of Pledgor
and without impairment of the security interest and rights granted pursuant
to this Agreement, the Pledgee may accept from any other Person or Persons,
additional security for the Secured Obligations.  Neither the giving of this
Agreement nor the acceptance of any such additional security will prevent the
Pledgee from resorting, first to such additional security, or, first to the
security created by this Agreement, in either case without affecting the
Pledgee's security interest and rights granted pursuant to this Agreement.

<PAGE>

            6.5  Release of the Pledge and Security Interest Created Hereby.
Upon payment in full of the outstanding principal amount of, and all premium,
if any, and accrued interest on the Loan in accordance with the Loan
Agreement and payment or satisfaction of all other Secured Obligations, the
Pledgee will, upon the written request of Pledgor, promptly return to the
Pledgor all Collateral held by the Pledgee.

           Section 7.  Remedies and Enforcement.

            7.1  Remedies in Case of an Event of Default.  If an Event of
Default has occurred and is continuing, then in addition to the actions
referred to in Section 4.2 the Pledgee may take any or all of the following
actions, without demand of performance or other demand, advertisement or
notice of any kind to or upon Pledgor or any other Person (except as
specified in Section 7.1(b)) all and each of which are hereby expressly
waived by Pledgor:

           (a)  The Pledgee may, in its own name or at its sole option in the
      name of Pledgor, exercise any or all of the rights, powers and
      privileges of, and pursue any or all of the remedies accorded to,
      Pledgor under the Collateral and may exclude Pledgor and all Persons
      claiming by, through or under Pledgor wholly or partly therefrom,
      including in such rights, privileges and remedies, but without
      limitation, all rights of Pledgor to demand, receive, sue for,
      compromise and settle all payments in respect of the Collateral, and in
      connection therewith to exercise all rights and remedies thereunder
      which Pledgor could enforce if this Agreement had not been made.

           (b)  The Pledgee may forthwith collect, recover, receive,
      appropriate and realize upon the Collateral, or any part thereof, and/or
      may forthwith sell, assign, give an option or options to purchase,
      contract to sell or otherwise dispose of and deliver the Collateral, or
      any part thereof, in one or more parcels at public or private sale or
      sales, at such place and on such terms and conditions as it may deem
      advisable and at such prices as it may deem best, for cash or on credit
      or for future delivery without assumption of any credit risk.  The
      Pledgee need not make any sale of Collateral even if notice thereof has
      been given, may reject any and all bids that in its commercially
      reasonable discretion it shall deem inadequate, and may adjourn any
      public or private sale.  Without limiting the foregoing, Pledgor agrees
      that the Pledgee need not give more than  ten days notice of the time
      and place of any public sale or of the time after which a private sale
      or other intended disposition is to take place and that such notice is
      reasonable notification of such matters, and waives all other demands or
      notices of any kind.

<PAGE>

           (c)  The Pledgee may, as a matter of right and without notice to
      Pledgor or any Person claiming by, through or under Pledgor, cause the
      appointment of a receiver for all or any part of the Collateral.

           (d)  In addition to all other rights and remedies granted to it in
      this Agreement and in any other instrument or agreement securing,
      evidencing or relating to any of the Secured Obligations, the Pledgee
      will have and may exercise with respect to any or all of the Collateral
      all of the rights and remedies of a secured party under the UCC.

           Pledgor consents to and ratifies any action which the Pledgee may
take to enforce its rights under this Section 7.1.  Pledgor waives to the
full extent permitted by law the benefit of all appraisement, valuation,
stay, extension, moratorium and redemption laws now or hereafter in force and
all rights of marshalling in the event of the sale of the Collateral or any
part thereof or any interest therein.  Pledgor will execute and deliver such
documents as the Pledgee deems advisable or necessary in order that any such
sale or disposition be made in compliance with applicable law.

           Any sale or other disposition of the Collateral or any part thereof
or interest therein in the exercise of any remedy hereunder will constitute a
perpetual bar against Pledgor and any Persons claiming by, through or under
Pledgor.  Upon any such sale or other disposition, the receipt of the officer
making the sale or other disposition or of the Pledgee is a sufficient
discharge to the purchaser for the purchase money, and such purchaser will
have no duty to see to the application thereof.

            7.2  Application of Proceeds Following an Event of Default.  All
amounts held or collected by the Pledgee as part of the Collateral
(including, without limitation, all amounts realized as a result of the
exercise of any rights and remedies hereunder) following the occurrence of any
Event of Default will be applied forthwith by the Pledgee as provided in
Section 10 of the Borrower Security Agreement.

            7.3  Purchase of Collateral by Pledgee.  The Pledgee may be a
purchaser of the Collateral or any part thereof or any interest therein at
any sale or other disposition hereunder and may apply against the purchase
price the indebtedness secured hereby owing to such purchaser.

<PAGE>

            7.4  Purchaser to Acquire Good Title.  Any purchaser of the
Collateral at any sale or other disposition thereof pursuant to this Section
7 will, upon any such purchase, acquire good title to the Collateral so
purchased free of the Lien created by this Agreement and free of all rights of
equity or redemption in Pledgor, which rights Pledgor hereby expressly waives
and releases to the full extent permitted by law, and Pledgor will warrant
and defend the title of such purchaser against all claims arising by, through
or under the Pledgor.  Nevertheless, if so requested by the Pledgee or any
such purchaser, Pledgor will ratify and confirm any exercise of remedies by
the Pledgee hereunder by executing and delivering to the Pledgee or such
purchaser all bills of sale, assignments, releases and other proper
instruments to effect such ratification and confirmation as may be designated
in any such request.  In addition, Pledgor will do or cause to be done all
such other acts and things as may be reasonably necessary to make such
exercise of remedies valid and binding and in compliance with any and all
applicable laws, regulations, orders, writs, injunctions, decrees or awards
of any and all courts, arbitrators or governmental instrumentalities,
domestic or foreign, having jurisdiction over any such exercise, all at
Pledgor's expense.

            7.5  Sale of Pledged Stock Without Registration.  Pledgor
recognizes that (i) the Pledgee may be unable to effect a public sale of any
or all of the Pledged Stock by reason of the Securities Act of 1933, as
amended (the "Securities Act"), and applicable state or foreign securities
laws or otherwise, but may be compelled to resort to one or more private
sales thereof to a restricted group of purchasers who will be obliged to
agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof and
who otherwise satisfy the requirements of any such applicable law, and
(ii) any such private sale may result in prices and other terms less favorable
to the seller than if such sale were a public sale.  No such sale will be
deemed to have been made in a commercially unreasonable manner for the reason
that it was made as a private sale rather than a public sale, and the Pledgee
will be under no obligation to delay a sale of any of the Pledged Stock for
the period of time necessary to permit the issuer of such securities to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, or otherwise comply with applicable law,
even if the issuer would agree to do so and would be able to do so.
<PAGE>

            7.6  Appointment as Attorney-in-Fact.  Pledgor hereby irrevocably
constitutes and appoints the Pledgee, with full power of substitution, as
Pledgor's attorney-in-fact, with full irrevocable power and authority in the
place and stead of Pledgor and in the name of Pledgor or otherwise, from time
to time in the Pledgee's discretion, to execute and deliver any and all bills
of sale, assignments or other instruments which the Pledgee may deem
necessary or advisable in its exercise of any of the remedies hereunder, and
to take any other action to accomplish the purposes of this Agreement,
including, without limitation, to ask, demand, collect, sue for, recover,
compound, receive and give acquittance and receipt for moneys due and to
become due under or in connection with the Collateral, to receive, endorse,
and collect any drafts or other instruments, documents and chattel paper in
connection therewith, and to file any claims or take any action or institute
any proceedings which the Pledgee may deem to be necessary or desirable for
the collection thereof, Pledgor hereby ratifying and confirming all that such
attorney or any substitute may lawfully do by virtue hereof.  This power of
attorney is a power coupled with an interest and is irrevocable.

            7.7  No Waiver; Cumulative Remedies.  No action or inaction of the
Pledgee will be deemed to waive any of the rights, powers or remedies of the
Pledgee hereunder except pursuant to a writing, signed by the Pledgee, and
then only to the extent expressly set forth therein.  A waiver by the Pledgee
of any right, power or remedy on any one occasion will not bar the exercise
of any right, power or remedy hereunder on any future occasion.  No failure
of the Pledgee to exercise nor delay of the Pledgee in exercising any right,
power or remedy will preclude the exercise of any other right, power or
remedy.  If the Pledgee accepts payment of any amount secured hereby after
its due date, it will not thereby be deemed to have waived its right to
require prompt payment when due of all other amounts payable hereunder.  Each
right, power and remedy of the Pledgee provided for in this Agreement or now
or hereafter existing at law or equity or by statute or otherwise is
cumulative and concurrent and is in addition to every other such right, power
or remedy of the Pledgee, and the exercise of any one or more of any such
rights, powers or remedies with respect to any of the Collateral will not
preclude the simultaneous or later exercise by the Pledgee of any other
right, power or remedy with respect to any other Collateral.

            7.8  Restoration of Rights and Remedies.  If the Pledgee has
instituted any proceeding to enforce any right, power or remedy under this
Agreement and such proceeding has been discontinued or abandoned for any
reason, with or without notice to Pledgor, or has been determined adversely
to the Pledgee, then and in every such case Pledgor and the Pledgee will be
restored to their former positions hereunder, and thereafter all rights,
powers and remedies of the Pledgee will continue as though no such proceeding
had been instituted.

           Section 8.  Miscellaneous.

            8.1  Amendments, Etc.  No amendment, modification, supplement,
termination, consent or waiver of this Agreement or any term or provision of
this Agreement shall be effective and binding unless in writing and signed by
the Pledgee.  Any such waiver will be effective only in the specific instance
and for the specific purpose for which it is given.
<PAGE>

            8.2  Successors and Assigns.  This Agreement and the Lien in the
Collateral created hereunder are for the benefit of the Pledgee and the
Lender and their successors, assigns and participants, and in the event of an
assignment of or the granting of a participation in all or any of the Secured
Obligations, the rights hereunder, to the extent applicable to the
indebtedness so assigned or participated out, may be transferred with such
indebtedness.  This Agreement shall be binding on the Pledgor and its
successors and assigns.

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

            8.4  WAIVER OF JURY TRIAL.  EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL OR
EQUITABLE ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE OTHER "LOAN DOCUMENTS" OR ANY TRANSACTION CONTEMPLATED
HEREBY OR THEREBY OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.

<PAGE>

            8.5  GOVERNING LAW; VENUE AND JURISDICTION.  THE VALIDITY OF THIS
AGREEMENT, THE CONSTRUCTION, INTERPRETATION AND ENFORCEMENT HEREOF AND THE
RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.  THE
PLEDGOR AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT AND EACH OTHER "LOAN DOCUMENT" SHALL BE TRIED AND LITIGATED IN
FEDERAL OR, IN THE ABSENCE OF FEDERAL SUBJECT MATTER JURISDICTION, STATE
COURTS LOCATED IN THE STATE OF NEW YORK UNLESS SUCH ACTIONS OR PROCEEDINGS
ARE REQUIRED TO BE BROUGHT IN ANOTHER COURT TO OBTAIN SUBJECT MATTER
JURISDICTION OVER THE MATTER IN CONTROVERSY.  EACH OF THE PARTIES WAIVES, TO
THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO
ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE THE DOCTRINE OF FORUM NON 
CONVENIENS OR TO OBJECT TO VENUE IN ANY PROCEEDING BROUGHT IN ACCORDANCE WITH
THE IMMEDIATELY PRECEDING SENTENCE.   SERVICE OF PROCESS, SUFFICIENT FOR
PERSONAL JURISDICTION IN ANY ACTION AGAINST THE BORROWER, MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ITS ADDRESS
INDICATED IN SECTION 8.7.

            8.6  Agreement May Constitute Financing Statement.  Pledgor
consents to the filing of this Agreement or a photocopy thereof as a
financing statement under the UCC as in effect in any jurisdiction in which
the Pledgee may determine such filing to be necessary or desirable.

            8.7  Notices.  All notices, requests and other communications to
any party hereunder shall be in writing and shall be given to such party at
the following address or facsimile number, or such other address or facsimile
number as such party may hereafter specify for the purpose by notice to the
other party. (a) if to the Pledgee, Dundee Bancorp Inc., 40 King Street West,
Scotia Plaza, 55th Floor, Toronto, Canada M5H 4A9, attention: Ray Benzinger,
tel: (416) 365-5113, fax: (416) 363-4536; with a copy to Debevoise &
Plimpton, 875 Third Avenue, New York, New York 10022, attention:  Steven
Ostner, tel: (212) 909-6000, fax:  (212) 909-6836; and (b) if to the
Borrower, PMC International Inc., 555 17th Street, 14th Floor, Denver,
Colorado 80202,  attention: Kenneth S. Phillips and Scott A. McKillop, tel:
(303) 292-1177, fax: (303) 293-2152; with a copy to Holme Roberts &  Owen
LLP, 1700 Lincoln Street, Denver, Colorado 80203, attention: Linda K.
Wackwitz, tel: (303) 861-7000, fax: (303) 866-0200. Each such notice, request
or other communication shall be effective (i) if given by mail, 72 hours
after such communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid or (ii) if given by any other means, when
delivered at the address specified in this Section 8.7.

            8.8  Counterparts; Section Headings.  This Agreement may be
executed in any number of counterparts, each of which is an original, but all
of which together constitute but one instrument.  Except as otherwise
indicated, references herein to any "Section" means a "Section" of this
Agreement, and the section headings in this Agreement are for purposes of
reference only and shall not limit or define the meaning hereof.








<PAGE>

           IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.

                                    PMC INTERNATIONAL, INC.,
                                      as Pledgor


                                    By   /s/ Kenneth S. Phillips   
                                      Title:


                                    DUNDEE BANCORP INC.,
                                      as Pledgee


                                    By   /s/ Ray Benzinger     
                                      Title:

<PAGE>
EXHIBIT 10.11
                    PMC INTERNATIONAL, INC.

                         SECURED NOTE


$1,500,000                                  New York, New York
                                                July 10 , 1998


           FOR VALUE RECEIVED, PMC INTERNATIONAL, INC., a Colorado
corporation (the "Borrower"), hereby promises to pay to the order
of DUNDEE BANCORP INC., an Ontario corporation (the "Lender"),
the principal sum of ONE MILLION FIVE HUNDRED THOUSAND DOLLARS
($1,500,000) on December 31, 1998, unless previously paid in
full, and to pay interest on such unpaid principal amount on the
dates and at the rates specified in the Loan Agreement referred
to below.  Payments of principal and interest are to be made to
the Lender at the place specified pursuant to the Loan Agreement,
in the lawful money of the United States of America.
 
           This Note evidences the Loan made under, and is
entitled to the benefits of, the Loan Agreement, dated as of
July 7, 1998 (said agreement, as the same may from time to time
be amended, modified or supplemented, the "Loan Agreement"),
between the Borrower and the Lender.  Terms defined in such Loan
Agreement are used herein with the same meanings.  Reference is
made to such Loan Agreement, as so amended, for provisions
relating to the prepayment, both optional and mandatory, and the
acceleration of maturity hereof.

           The Borrower hereby waives presentment, demand, notice
of dishonor, protest and notice of protest.

           This Note is entitled to the benefits of the Security
Agreements and the Pledge Agreement, which contain provisions for
the securing of this Note and the Loan evidenced hereby upon the
terms and conditions specified therein.

<PAGE>
           This Note shall be construed in accordance with and
governed by the laws of the State of New York.

                               PMC INTERNATIONAL, INC.



                               By:   /s/ Kenneth S. Phillips  
                                  Name:
                                  Title:


                          ENDORSEMENT

           This Note is entitled to the benefit of the Guarantee
of the undersigned pursuant to the Guarantee Agreement.



                               PMC INVESTMENT SERVICES, INC.


                               By:   /s/ Kenneth S. Phillips  


                               PORTFOLIO TECHNOLOGY SERVICES, INC.


                               By:   /s/ Kenneth S. Phillips  


                               PORTFOLIO MANAGEMENT CONSULTANTS,
                               INC.


                               By:   /s/ Kenneth S. Phillips  



<PAGE>

EXHIBIT 10.12
                       SEPARATION AGREEMENT

      This  agreement is between PMC  International,  Inc.  ("PMC,"
which   definition   unless   otherwise  noted  shall  include  all
subsidiaries  of PMC) and  Kenneth S.  Phillips  ("Phillips"),  and
shall be  effective  the 24th day of August,  1998 (the  "Effective
Date"),  which date  represents  the date  Phillips  executed  this
agreement.

                              Recitals


      A.   Phillips  has been  employed  by PMC in the  capacity of
Chief  Executive  Officer and  President  pursuant to an Employment
Agreement,  by and between PMC and  Phillips,  dated as of July 26,
1995 (as  subsequently  amended  by an  Amendment  dated  April 15,
1998,   the   "Employment   Agreement").   A  dispute   has  arisen
concerning  the  circumstances  of Phillips's  employment  with PMC
(the "Dispute").

      B.   PMC and Phillips now desire to terminate the  employment
relationship and employment  agreement,  to terminate certain other
contractual  relationships  and fully and completely to resolve all
differences between them.

                              Agreement

      In consideration of the conditions,  covenants and agreements
set forth below, the parties agree as follows:

1.    Resignation.  Concurrent  with  the  execution  of this  Agreement,
      Phillips  shall resign,  effective as of the Effective  Date,
      as a director,  an  executive  officer and an employee of PMC
      and all PMC subsidiaries and affiliates.

2.    Termination   of   Employment   Agreement.   Concurrent   with  the
      execution  hereof,  the Employment  Agreement shall terminate
      and  for  all  purposes  shall  be of no  further  force  and
      effect. In satisfaction of all  responsibilities  thereunder,
      the parties agree that:

    a.    Accrued  salary in the gross amount of  $5769.01,  subject to
           reduction  by an amount equal to all taxes and usual and
           customary payroll  deductions,  will be paid to Phillips
           on the Effective Date.

    b.    Phillips is  entitled to payment of $ 11,538.02  representing
           two weeks  unused  vacation,  subject to reduction by an
           amount  equal  to all  taxes  and  usual  and  customary
           payroll  deductions,  which  amount  shall  be  paid  to
           Phillips on the eighth day after the Effective  Date (or
           the next following  business day if such eighth day is a
           Saturday, Sunday or a banking holiday).


<PAGE>


     c.    All documented,  authorized and as yet unreimbursed  business
           expenses  incurred by Phillips on or before the close of
           business August 18,  1998 (the "Allowed  Expenses"),  as
           are  itemized  in an expense  reimbursement  request and
           timely presented to PMC, will be paid to Phillips.

     d.    The  outstanding  advance to Phillips  from PMC in the amount
           of $12,977.07 (the  "Advance")  shall be subtracted from
           the last  payment  or  payments  to be made to  Phillips
           pursuant to paragraph 2(e),  below,  after all taxes and
           usual  and  customary   payroll   deductions  have  been
           deducted.  Phillips  shall  be  solely  responsible  for
           all taxes that might  result from the delayed  repayment
           of said advance.

     e.    PMC  shall pay to  Phillips  as  severance,  the gross sum of
           $675,000.00,  payable in equal bi-monthly  payments over
           a period of  twenty-seven  months,  subject to reduction
           by an amount equal to all taxes and usual and  customary
           payroll  deductions.  The first payment shall be due and
           payable on  September 1, 1998 which  payment  shall be a
           prorata  payment for the number of days elapsed from the
           Effective  Date. The payments due in the  twenty-seventh
           month shall be  accelerated  and also paid on  September
           1, 1998.  All  subsequent  payments shall me made on the
           1st and  15th  day of each  month  until  paid in  full,
           subject to the terms of paragraphs  2(d), 2(h) and 10(d)
           hereof.  Said  severance  payments may be accelerated if
           and when control of PMC changes,  at the sole discretion
           of the  purchaser  or entity  gaining  control of PMC. A
           "change  of  control"  is  defined  as a  change  in the
           person  or  entity  controlling  51% or  more  of  PMC's
           voting  shares  through  a stock  purchase  or merger or
           other  means of change of control.  Phillips  shall have
           no  right  to  compel   acceleration  of  the  severance
           payments upon a change of control.

     f.    The "Severance  Period" is defined as the twenty-seven  month
           period during which severance  payments shall be made to
           Phillips,  or such  shorter  duration of  payments  that
           results  pursuant  to the  terms  of  paragraph  2(h) or
           10(d) below.

     g.    During the Severance  Period,  Phillips  shall continue to be
           provided the following additional  benefits,  subject to
           the terms of paragraph 2(h) or 10(d) below:

         i.     During the Severance  Period, or for so long as Phillips
                is  eligible  to  continue  his  health  and dental
                coverage   through  COBRA,  or  until  Phillips  is
                eligible to  participate  in a health and/or dental
                plan  through   another   employer,   whichever  is
                shorter,  PMC shall pay to COBRA the  premiums  for
                Phillips'  health  and dental  insurance  (covering
                Phillips  and his two  minor  children),  less  any
                amounts  for  such   insurance   paid  by  Phillips
                pursuant  to  PMC's  then   current   policies  and
                procedures   for  payment  of  insurance   premiums
                (currently, $171.87 per bi-monthly period).


<PAGE>

         ii.    After  termination  of COBRA  coverage,  PMC  shall  pay
                directly  to  Phillips   the  amount  paid  by  PMC
                pursuant to subparagraph  2(g)(i) above for so long
                as  the   Severance   Period   continues  or  until
                Phillips  is eligible  to  participate  in a health
                and/or   dental  plan  through   another   employer
                whichever is shorter.


         iii.   PMC shall  continue to pay the premiums for and maintain
                the same  $30,000 term life  insurance  policy that
                it currently  maintains on the life of Phillips for
                so long as the Severance  Period continues or until
                Phillips  is  eligible  to  participate  in a  life
                insurance plan through another employer,  whichever
                is shorter.

     h.    Any  violation  or breach by  Phillips of any of the terms of
           paragraphs 7 (Release),  9 (Protection  of Trade Secrets
           and Confidential Information),  10 (Noncompetition),  11
           (Non-Solicitation),       12      (Inventions),       19
           (Confidentiality),  20 (Covenant of  Non-Disparagement),
           21  (Covenant  of  Non-Interference)  or 22 (Covenant of
           Cooperation  in  Litigation),  or of  this  subparagraph
           2(h),  shall  result  in  immediate  termination  of the
           Severance   Period   and   Phillips's   rights   to  any
           remuneration,  benefits, or payments on his behalf shall
           terminate  immediately  and all  sums  due to PMC  shall
           become immediately due and payable;  it being understood
           and  agreed  (i)  that  during  the   Severance   Period
           Phillips  shall  provide  to PMC,  in a form  reasonably
           acceptable to PMC, written  representation  and warranty
           quarterly,  no later than the last day of such  quarter,
           that  Phillips  has not  breached and does not intend to
           breach any of said  provisions  or  covenants,  and (ii)
           that,  immediately  but no later than five business days
           after   Phillips   shall  have  accepted  any  offer  of
           employment  or other  arrangement  to  conduct  business
           and, in any event,  at least two business  days prior to
           commencement of such employment,  Phillips shall provide
           the  name  of the  employer  and a  reasonably  detailed
           description  of the duties and  responsibilities  of the
           position or arrangement.

3.    Termination of Change of Control  Severance  Agreement.  Concurrent
      with the  execution  hereof,  that certain  Change of Control
      Severance  Agreement,  by and between Phillips and PMC, dated
      as of May 15,  1998,  shall  terminate  and for all  purposes
      shall be of no further force and effect.



<PAGE>


4.    Payment of Loans and  Dissolution  of LLC. The parties  acknowledge
      that PMC has provided  certain  financial  assistance to KP3,
      LLC  (the  "LLC"),  a  Colorado  limited   liability  company
      principally  owned and  controlled  by Phillips.  The LLC has
      obtained  certain loans in the aggregate  principal amount of
      $1,750,000  (the  "Loans")  from  Citywide Bank (the "Bank"),
      for which PMC has  provided  cash  collateral  in the form of
      certificates  of  deposit  on  deposit  with  the Bank in the
      aggregate  amount  of  $1,750,000  (the  "Cash   Collateral")
      pursuant to that certain  Reimbursement  and Pledge Agreement
      dated  January 8,  1997,  as  amended  August  24,  1998 (the
      "Pledge  Agreement"),  against  a pledge by the LLC of shares
      of PMC common stock (the  "Pledged  Shares").  Payment of the
      Loans is subject to  certain  restrictions  imposed by Dundee
      Bancorp  Inc.  ("Dundee")  in  connection  with a recent loan
      from   Dundee  to  PMC.   In   addition,   under  the  Pledge
      Agreement,  PMC has provided funds to the LLC for the purpose
      of funding  interest  payments on the Loans and for which the
      LLC has  executed  promissory  notes  in  favor of PMC in the
      aggregate   principal  amount  of  $217,504.33  plus  accrued
      interest  thereon (the  "Notes").  The parties  agree to take
      the following actions to pay the Loans and dissolve the LLC:


     a.    Subject  to  paragraph  4(d)  below,  on the later of (x) the
           eighth  day  after  the  Effective  Date  (or  the  next
           following   business   day  if  such  eighth  day  is  a
           Saturday,  Sunday or a banking holiday), (y) the date of
           Dundee's  approval,  or (z) if  Dundee  shall  not  have
           granted  its  approval,  on such date as the Loans shall
           come due,

           i.   PMC   shall   instruct   the  Bank  to  apply  the  Cash
                Collateral in payment of the  principal  balance of
                the Loans,

           ii.  Phillips  shall cause the LLC to apply all funds held on
                its  account  at the Bank (in the amount of no less
                than $7,670.00)  towards payment of the accrued and
                unpaid  interest  on the Loans  (which  funds shall
                continue  to  accrue  interest  and  shall  not  be
                diminished   by   Phillips  or  the  LLC  prior  to
                application to payment of the Loans),

           iii. Subject  to  an  absolute  maximum  of  $2,000,000  (the
                "Cap"),  which  consists  of the  aggregate  of all
                advances and accrued  interest  thereon made by PMC
                to LLC or  Phillips  for the  benefit  of LLC,  all
                payments of interest and accrued  interest  thereon
                made  by PMC to the  Bank  in  satisfaction  of the
                Loans,  and all  principal  payments made by PMC to
                the Bank in  satisfaction  of the Loans,  PMC shall
                instruct  the Bank to apply the  interest  that has
                accrued to date on the Cash  Collateral  in payment
                of  the  principal   balance  of  the  Loans.   The
                balance of all  interest  in excess of the Cap that
                has  accrued  on  the  Cash   Collateral   to  date
                ("Excess Interest"), if any, shall be paid to PMC.

           iv.  Phillips  shall pay any  remaining  accrued  interest in
                full satisfaction of the Loans.

           v.   In the event that PMC is not paid the  Excess  Interest,
                if any,  on or  before  the  eighth  day  after the
                Effective  Date,  PMC shall deduct such amount from
                the next severance  payment due and each successive
                severance payment due to Phillips,  until the total
                amount  of the  Excess  Interest  shall  have  been
                recovered by PMC.



<PAGE>


     b.    Concurrently  with the  application  of the  Cash  Collateral
           pursuant to subparagraph  4(a)(i) above,  Phillips shall
           cause the LLC to release  to PMC all of the LLC's  right
           title and interest in the Pledged  Shares (being 410,961
           shares of PMC  common  stock  beneficially  owned by the
           LLC and held by PMC  pursuant to the terms of the Pledge
           Agreement).  Upon  release  of the  Pledged  Shares  and
           receipt by PMC of the Excess Interest,  PMC shall cancel
           the Notes.


     c.    Immediately  upon  completion  of the  actions  set  forth in
           paragraphs  (a) and (b)  above  to the  satisfaction  of
           PMC, Phillips shall cause the LLC to dissolve.

     d.    In the event Dundee  shall not have  approved  prepayment  of
           the Loans by 5:00 p.m.  Denver  time  September  4, 1998
           PMC   shall   accelerate   the   payments   due  in  the
           twenty-sixth   month  and  shall  pay  those   funds  to
           Phillips  together  with  the  bi-monthly   payment  due
           October 1, 1998 pursuant to paragraph 2(e) above.

5.    General  Termination.  Concurrent  with the execution  hereof,  and
      except  as  expressly  agreed  herein,  all  other  contracts
      between  Phillips  and PMC,  express and  implied,  all other
      positions   with  PMC  held  by   Phillips   and  all   other
      relationships   of  any  kind   between   Phillips   and  PMC
      (including  without limitation  Phillips's rights,  direct or
      indirect,  under that certain  Shareholders  Agreement by and
      among PMC,  Phillips and the other parties thereto,  dated as
      of December 24, 1996,  and under those  certain  Subscription
      Agreements by and among PMC and the  Investors  named therein
      in connection  with PMC's December 1996 private  placement of
      securities)  shall terminate and for all purposes shall be of
      no further force and effect.

6.    Return of Property; Representations; Covenants.

      a.   No later than the Effective  Date,  Phillips  shall return or
           shall cause to be returned to PMC all personal  property
           of PMC of  any  kind  whatsoever  in the  possession  of
           Phillips or any family member, agent or assign;  without
           limiting  the  generality  of  the  foregoing,  Phillips
           shall return all documents,  files,  client and customer
           lists   and   information,   rolodexes,   cell   phones,
           computers,  printers and other  equipment,  instruments,
           furnishings,  software, credit cards, office access card
           and telephone cards;  EXCEPT, that Phillips may keep one
           laptop  computer  (all  others  must be  returned),  one
           cellular  phone (all others must be  returned),  and the
           one desk and one  chair  currently  located  at his home
           (all  others   must  be   returned).   Phillips   hereby
           acknowledges   that  he   has,   among   other   things,
           intellectual  property  of PMC  stored on the  laptop in
           his   possession,   which  Phillips  agrees  to  return,
           together with all copies  thereof,  to PMC no later than
           the seventh day after the Effective Date.

<PAGE>

      b.   Phillips  hereby  represents  and  warrants  that  he has not
           destroyed  or   otherwise   impaired  any  material  PMC
           intellectual  property,  files,  client  information  or
           business   records   of  any   kind   (the   "Identified
           Property")   during  the  15-day  period  preceding  the
           Effective   Date.   Phillips   further   represents  and
           warrants  that to his  knowledge,  based  on a  thorough
           search, he has no Identified  Property in his possession
           other  than  the  intellectual  property  identified  in
           subparagraph 6(a) above.


      c.   Phillips  hereby  covenants  that,  in the event he should at
           any time after the  Effective  Date discover that he has
           any Identified  Property in his possession,  he promptly
           shall return all such Identified Property to PMC.

7.    Release.

      a.   Phillips,  for himself, his heirs,  personal  representatives
           and  assigns,  and any other person or entity that could
           or  might  act  on  behalf  of  him  (all  of  whom  are
           collectively  referred to as "Releasers"),  hereby fully
           and forever  release and discharge  PMC, its present and
           future  affiliates and  subsidiaries,  and each of their
           past,   present   and   future   officers,    directors,
           employees,   shareholders,    independent   contractors,
           attorneys,  insurers  and any and all other  persons  or
           entities  that  are  now or  may  become  liable  to any
           Releaser due to any Releasee's  act or omission,  all of
           whom are  collectively  referred to as  "Releasees,"  of
           and from any and all actions,  causes of action, claims,
           demands, costs and expenses,  including attorneys' fees,
           of  every  kind  and  nature  whatsoever,  in  law or in
           equity,  whether now known or unknown,  that  Releasers,
           or any person  acting  under any of them,  may now have,
           or claim at any future  time to have,  based in whole or
           in part upon any act or omission  occurring on or before
           the Effective  Date,  without  regard to present  actual
           knowledge   of  such   acts  or   omissions,   including
           specifically,  but  not by way  of  limitation,  matters
           which  may  arise  at  common  law,  such as  breach  of
           contract,  express  or  implied,   promissory  estoppel,
           wrongful   discharge,    tortious    interference   with
           contractual  rights,  infliction of emotional  distress,
           defamation,  or under federal, state or local laws, such
           as  the  Fair  Labor   Standards   Act,   the   Employee
           Retirement  Income  Security  Act,  the  National  Labor
           Relations  Act,  Title VII  of the Civil  Rights  Act of
           1964,  the Age  Discrimination  in  Employment  Act, the
           Rehabilitation  Act of 1973,  the  Equal  Pay  Act,  the
           Americans with  Disabilities Act, and the Colorado Civil
           Rights  Act;  EXCEPT  for  the  rights  and  obligations
           created  by this  agreement.  Phillips  understands  and
           agrees that by signing  this  agreement  he is giving up
           his  right  to  bring  any  legal   claim   against  PMC
           concerning,    directly   or   indirectly,    Phillips's
           employment   relationship   with  PMC,   including   his
           separation  from  employment;  provided,  that no claims
           arising hereunder shall be released.

<PAGE>

     b.    PMC, for itself and its affiliates ("PMC  Releaser"),  hereby
           releases   and   discharges    Phillips,    his   heirs,
           representatives,  assigns, and any and all other persons
           or entities  that are now liable to any PMC  Releaser on
           account of Phillips's  employment with PMC or separation
           therefrom,  all of whom are collectively  referred to as
           "PMC  Releasees,"  of and  from  any  and  all  actions,
           causes of action,  claims,  demands, costs and expenses,
           including  attorneys'  fees,  of every  kind and  nature
           whatsoever,  in law or in equity,  now  known,  that PMC
           Releasers,  may now have, based in whole or in part upon
           any  act or  omission  occurring  before  the  Effective
           Date; EXCEPT as specifically  provided otherwise in this
           agreement.    Notwithstanding   the   foregoing,    this
           subparagraph  7(b) shall not release Phillips or any PMC
           Releasee  from any  actions,  causes of action,  claims,
           demands, costs and expenses,  including attorneys' fees,
           of  every  kind  and  nature  whatsoever,  in  law or in
           equity,  derivative  or  otherwise,  brought  by any PMC
           shareholder  or any other third party  against  Phillips
           or any PMC Releasee,  nor shall this  subparagraph  7(b)
           release any claims arising hereunder.


           Upon  payment  in  full  of the  Loans,  release  of the
           Pledged Shares and  dissolution of the LLC, all pursuant
           to paragraph 4 hereof,  PMC Releaser,  shall release and
           discharge  LLC  from  any and all  claims  against  LLC,
           except claims arising  hereunder,  claims based on fraud
           or wilful  misconduct and claims which may be brought by
           third  parties  based on the Cap having been exceeded by
           any payments made pursuant to paragraph 4.

8.    Unemployment  Compensation.  Phillip hereby expressly  acknowledges
      and  agrees  that he  shall  not  make  any  application  for
      benefits under Colorado's Unemployment Compensation Act.

9.    Protection of Trade Secrets and Confidential Information.

      a.   "Confidential  Information"  means all nonpublic  information
           concerning  or arising  from PMC's  business,  including
           particularly  but not by way of limitation trade secrets
           used,  developed or acquired by PMC in  connection  with
           its  business;  information  concerning  the  manner and
           details   of   PMC's    operation,    organization   and
           management; financial  information  and/or documents and
           nonpublic  policies,  procedures  and other  printed  or
           written  material  generated or used in connection  with
           PMC's  business;  PMC's business  plans and  strategies;
           the  identities  of  PMC's  customers  and the  specific
           individual  customer   representatives   with  whom  PMC
           works;  the  details  of PMC's  relationship  with  such
           customers and customer  representatives;  the identities
           of  distributors,  contractors  and vendors  utilized in
           PMC's business;  the details of PMC's  relationship with
           such distributors,  contractors and vendors;  the nature
           of fees and charges made to PMC's  customers;  nonpublic
           forms,  contracts  and  other  documents  used in  PMC's
           business;  the nature and content of  computer  software
           used in PMC's  business,  whether  proprietary to PMC or
           used by PMC under  license from a third  party;  and all
           other nonpublic  information  concerning PMC's concepts,
           prospects, customers, employees, contractors,  earnings,
           products,   services,    equipment,    systems,   and/or
           prospective  and executed  contracts and other  business
           arrangements.

<PAGE>

     b.    Phillips shall not, without PMC's prior written  consent,  at
           any time,  directly  or  indirectly,  use,  disclose  or
           otherwise  communicate any  Confidential  Information to
           any person or entity.


     c.    Phillips  acknowledges that during the term of his employment
           with  PMC,   Phillips   had   access   to   Confidential
           Information;    that    unauthorized    disclosure    of
           Confidential  Information  will damage  PMC's  business;
           that  Confidential  Information  would be susceptible to
           immediate  competitive  application  by a competitor  of
           PMC's;  that PMC's business is  substantially  dependent
           on access to and the continuing  secrecy of Confidential
           Information;  that Confidential Information is unique to
           PMC and known  only to  Phillips,  PMC and  certain  key
           employees and  contractors of PMC; that PMC shall at all
           times retain  ownership and control of all  Confidential
           Information;  and that  the  restrictions  contained  in
           this  paragraph  are  reasonable  and  necessary for the
           protection of PMC's business.

     d.    All  documents  or other  records  containing  or  reflecting
           Confidential  Information   ("Confidential   Documents")
           prepared  by or  provided  to  Phillips  are  and  shall
           remain PMC's  property.  Except with PMC's prior written
           consent,   Phillips   shall   not   copy   or  use   any
           Confidential  Document for any purpose or use,  disclose
           or sell any  Confidential  Document  to any party  other
           than PMC.  This  paragraph  shall not bar Phillips  from
           complying  with any  subpoena or court  order,  provided
           that  Phillips  shall at the earliest  practicable  date
           provide a copy of the  subpoena  or court order to PMC's
           President.

     e.    Phillips  acknowledges  that  PMC  has  received  from  third
           parties  confidential  or proprietary  information,  and
           that  PMC  must  maintain  the  confidentiality  of such
           information  and  use  it  only  for  proper   purposes.
           Phillips shall not use or disclose any such  information
           except  as  permitted  in  writing  by PMC or the  third
           party to whom the information belongs.
<PAGE>

10.    Noncompetition.


     a.    During  the  Severance  Period  or for a period  of two years
           from the Effective Date,  whichever is longer , or until
           such time as Phillips  shall have  exercised  his option
           pursuant    to    subparagraph    10(d)    below    (the
           "Noncompetition  Period"),  Phillips shall not, directly
           or  indirectly,  as  an  officer,  director,   employee,
           consultant,    owner,   shareholder,    adviser,   joint
           venturer,  or  otherwise,  compete  with PMC  within the
           United  States  of  America  (the  "Protected  Region"):
           (i) in  a  Competitive  Advisory  Business  (as  defined
           below);  or (ii) in  any other line of business in which
           PMC was engaged at any time during Phillip's  employment
           with PMC;  or (iii) in  any other line of business  into
           which PMC, during the term of Phillip's  employment with
           PMC,  developed  a business  plan to pursue  (including,
           without   limitation,   hedge   fund   products).   This
           covenant  shall not preclude  Phillips  from owning less
           than  two  percent  (2%)  of  the   securities   of  any
           competitor  of  PMC  if  such  securities  are  publicly
           traded on a  nationally  recognized  stock  exchange  or
           over-the-counter market.


     b.    Phillips   acknowledges   that   the   foregoing   geographic
           restriction  on  competition  is  fair  and  reasonable,
           given the geographic scope of PMC's business  operations
           and  the  nature  of   Phillips's   position  with  PMC.
           Phillips also  acknowledges  that while employed by PMC,
           Phillips  had  access  to  information   that  would  be
           valuable or useful to PMC's  competitors,  and therefore
           acknowledges   that  the   foregoing   restrictions   on
           Phillips's  future  employment  and business  activities
           are fair and reasonable.  Phillips  acknowledges  and is
           prepared  for  the  possibility  that  his  standard  of
           living may be reduced during the Noncompetition  Period,
           and assumes and  accepts any risk  associated  with that
           possibility.

     c.    For the purposes of this paragraph 12, "Competitive Advisory 
           Business" includes, but is not limited to:

          i.    services,   products  or  software  in  the   investment
                advisory,  wrap-fee or  privately  managed  account
                business  (whether  using  individual   securities,
                mutual funds,  hedge funds,  insurance  products or
                separate  accounts)  and/or  services,  products or
                software in the  investment  performance  reporting
                business;

          ii.   the  offering  of  any  of  the  following  products  or
                services     directly    or    through    financial
                intermediaries,  either  alone  or in  combination,
                whether  or  not  such  products  or  services  are
                generally or customarily  understood to be included
                in the terms "investment  advisory",  "wrap-fee" or
                "privately managed account"  business,  and whether
                or not such  products or services are offered for a
                single fee or are charged for separately:

             (1)     investment  recommendations or portfolio management
                     services  based on or tailored to the specific
                     investment  needs and/or risk tolerance of the
                     client whose assets are being managed,

             (2)     access  to  the  asset   management   services   of
                     portfolio and/or separate account managers,

             (3)     automated   trading   services   that  involve  the
                     exercise   of   discretionary   authority,   a
                     limited   power   of   attorney   or   similar
                     authorization  granted by an asset  management
                     client, and

<PAGE>

             (4)     the  preparation of reports or statements that show
                     the  securities   transactions   in  a  client
                     account and/or  calculate,  display or analyze
                     the  performance  or  investments  held  in  a
                     client account;


          iii.  turn key asset management programs; and

          iv.   any investment  advisory  services or products  provided
                to financial  intermediaries by Lockwood  Financial
                Services,  Inc.,  Rheinhardt  Werba Bowen  Advisory
                Services,    Advisory    Consulting    Group,   SEI
                Investments;  Brinker Capital,  Meridian Investment
                Management,  IAN, Frank Russell  Company and Callan
                Associates, Inc.;

           provided,  that  "Competitive  Advisory  Business" shall
           not include  personally  providing  investment  advisory
           products  or  services  directly  to  clients  through a
           financial planning,  investment management or investment
           consulting  firm,  as long as either (1) at least 75% of
           the  clients of such firm have assets  under  management
           or  under  advisement  by  such  firm in  excess  of $30
           million,  or (2) such clients are not primarily  secured
           by such  firm  through  referrals  or  solicitations  by
           individuals  not  employed by such firm who derive a fee
           or   other    compensation   for   such   referrals   or
           solicitations,   and  shall  not   include   such  other
           business as to which PMC shall reasonably consent.

     d.    The  parties  agree  that,  at any time  after  the  one-year
           anniversary  of the Effective  Date,  Phillips may, upon
           two weeks written  notice to PMC, elect to terminate the
           benefits  of  the  severance  and  other  payments  made
           pursuant  to  subparagraphs   2(e)  and  2(g)  above  in
           consideration  of PMC's  release  of  Phillips  from the
           obligations  of this  paragraph 10;  provided,  that PMC
           shall be under no  obligation  to release  Phillips from
           this  paragraph  10 unless and until all amounts owed to
           PMC pursuant to  subparagraph  2(d) shall have been paid
           in full.

     e.    In the event PMC shall fail to make any  payment  required by
           paragraph 2(e)  by the close of  business  on the fourth
           business  day  after  the  date  such  payment  was due,
           Phillips  shall be  released  from the  restrictions  of
           this paragraph 10.

11.   Non-Solicitation.  During the  Severance  Period or for a period of
      two years  after the  Effective  Date,  whichever  is longer,
      Phillips  shall not  without  PMC's  prior  written  consent,
      directly or indirectly:

<PAGE>

     a.    cause or attempt to cause any  employee,  agent or contractor
           of PMC or any PMC  affiliate,  to  terminate  his or her
           employment,  agency or contractor  relationship with PMC
           or any PMC affiliate;  interfere or attempt to interfere
           with the relationship  between PMC and any PMC employee,
           contractor  for  products or  services  related to PMC's
           investment advisory,  brokerage,  information technology
           or  reporting  businesses,  or  agent  of  PMC;  hire or
           attempt to hire any  employee,  agent or  contractor  of
           PMC or any PMC  affiliate;  or conduct  business  of any
           kind  with  any  PMC  contractor   without  the  express
           written  consent  of  PMC  which  consent  shall  not be
           withheld unreasonably.


     b.    solicit  business from or conduct  business with any customer
           or  client  served  by  PMC  at any  point  during  such
           period;  or interfere  or attempt to interfere  with any
           transaction,   agreement  or  business  relationship  in
           which PMC or any  affiliate  was  involved  at any point
           during such period.

12.  Inventions.

     a.    Disclosure.  Upon  PMC's  request,  Phillips  shall  promptly
           disclose  to PMC,  in a manner  specified  by PMC in its
           sole discretion,  all ideas,  processes,  trademarks and
           service    marks,    inventions,     discoveries,    and
           improvements  to  any of the  foregoing,  that  Phillips
           learned of,  conceived,  developed  or created  alone or
           with others during his  employment  with PMC (whether or
           not  conceived,  developed  or  created  during  regular
           working  hours) that directly or indirectly  arises from
           or relates to: (i) PMC's  business;  (ii) work performed
           for  PMC  by  Phillips   or  any  other  PMC   employee;
           (iii) the  use of PMC's  property or time; or (v) access
           to PMC's Confidential  Information  and/or  Confidential
           Documents.

     b.    Assignment.  Phillips  shall assign to PMC,  without  further
           consideration,  Phillips's  entire right to any concept,
           idea   or   invention   described   in   the   preceding
           subparagraph,  which  shall be the  sole  and  exclusive
           property  of PMC  whether  or  not  subject  to  patent,
           copyright,  trademark or trade secret  protection  under
           applicable  law.  Phillips  also  acknowledges  that all
           original works of authorship  which are made by Phillips
           (solely or  jointly  with  others),  within the scope of
           Phillips'  employment  and/or this agreement,  and which
           are  protectable  by  copyright,  are  "works  made  for
           hire,"  as that term is  defined  in the  United  States
           Copyright  Act (17 U.S.  C. section 101).  To the extent that
           any such works,  by operation  of law,  cannot be "works
           made  for  hire,"  Phillips  hereby  assigns  to PMC all
           right,  title,  and interest in and to such works and to
           any related copyrights.

<PAGE>

13.   References.  Phillips  may  indicate  on  a  resume  or  employment
      application  the fact of his  employment  with PMC.  Phillips
      may list as a reference  PMC's  Director of Human  Resources,
      who  will  respond  to  inquiries   concerning   Phillips  by
      providing only Phillips's salary and position histories,  and
      dates  of hire and  separation.  Phillips  may  also  list as
      references past or present  employees of PMC, solely in those
      persons'  individual  capacities and not in a  representative
      capacity  involving  PMC.  Phillips  agrees  that any  future
      claim that he may have that  directly  or  indirectly  arises
      from or relates to his use of a past or present PMC  Employee
      as a  reference,  shall  not be made  against  PMC  under any
      circumstances.   Phillips   expressly   assumes   all   risks
      associated  with  listing any past or present  PMC  Employee,
      other  than  PMC's   Director  of  Human   Resources,   as  a
      reference,  and explicitly authorizes any past or present PMC
      Employee  whom he chooses to name as a reference,  other than
      PMC's  Director  of  Human  Resources,   to  respond  to  any
      reference  request  openly,  honestly and candidly as to both
      fact and opinion.


14.   [Intentionally left blank]

15.   Indemnification.  Notwithstanding  the  provisions of  paragraph 7,
      and subject to  Phillips'  performance  of the  covenants  of
      paragraph 22  (Covenant of Cooperation in Litigation)  below,
      to the  extent  that  Phillips  would have been  entitled  to
      indemnification  during the term of his employment  with PMC,
      such  indemnification  shall  continue  according to the same
      terms and conditions then in effect,  but only for such acts,
      omissions,  and  otherwise,  that occurred or failed to occur
      during the time period  during  which he was employed by PMC.
      Phillips  is not and will not be  indemnified  for any  acts,
      omissions,  and  otherwise,  that occurred or failed to occur
      subsequent  to the time period  during  which he was employed
      by  PMC  or as of  the  Effective  Date  of  this  agreement,
      whichever first occurs.

16.   Denial of  Liability.  The parties  understand  and agree that this
      agreement   shall  not  be   construed  as  an  admission  of
      liability  on the part of any  person  or  entity,  liability
      being expressly denied.

17.   Injunctive  Relief.   Phillips  acknowledges  that  the  breach  or
      threatened  breach  by  him  of  any  of  the  provisions  of
      paragraphs 7 (Release),  9  (Protection  of Trade Secrets and
      Confidential    Information),    10   (Noncompetition),    11
      (Non-Solicitation),  12 (Inventions),  19  (Confidentiality),
      20   (Covenant   of   Non-Disparagement),   21  (Covenant  of
      Non-Interference)   or  22   (Covenant  of   Cooperation   in
      Litigation),  would  cause  PMC  irreparable  harm.  Upon the
      breach or  threatened  breach of any of such  provisions  PMC
      will be entitled to an injunction,  without bond, restraining
      Phillips  from  committing  such breach.  This right will not
      be  construed  to limit  PMC's  ability  to obtain  any other
      remedies  available  to it  for  such  breach  or  threatened
      breach, including the recovery of damages.

18.   Authority  and  Nonassignment.  The parties  warrant  that each has
      authority to enter into this agreement,  and that neither has
      transferred to any other person or entity any claim,  action,
      demand, or cause of action released by this agreement.

<PAGE>

19.   Confidentiality.  Phillips  represents  and  warrants  to PMC that,
      prior to the  Effective  Date,  he has not  disclosed  to any
      person,  other than to his tax advisor and counsel, the terms
      of  this  agreement  or the  circumstances  under  which  the
      Dispute  has  been  resolved.   After  the  Effective   Date,
      neither Phillips,  counsel for Phillips, nor any other person
      under  Phillips's  control  shall  disclose  any term of this
      agreement or the circumstances of Phillips's  separation from
      PMC,  except  that  he  may  disclose  such  information,  as
      required  by subpoena  or court  order,  or to an attorney or
      accountant  to the extent  necessary  to obtain  professional
      advice.  Phillips  shall  not be  entitled  to rely  upon the
      foregoing  exception for disclosures  pursuant to subpoena or
      court order  unless  Phillips  has given PMC written  notice,
      within three business days following  service of the subpoena
      or court order.  If Phillips  violates any  provision of this
      paragraph,  he shall be liable to PMC for liquidated damages,
      not a penalty, in the amount of $25,000 for each breach.


20.   Covenant of Non-Disparagement.

     a.    Phillips  covenants never to disparage or speak ill of PMC or
           any PMC  product or  service,  or of any past or present
           employee,   officer  or  director  of  PMC,   nor  shall
           Phillips at any time  harass or behave  unprofessionally
           toward  any  past,   present  or  future  PMC  employee,
           officer  or   director.   If  Phillips   breaches   this
           non-disparagement  obligation, he shall be liable to PMC
           for liquidated damages,  not a penalty, in the amount of
           $25,000 for each breach.

     b.    PMC covenants  that no PMC officer or director  shall,  while
           employed by or while  serving on the board of  directors
           of PMC,  disparage  or speak ill of  Phillips to any non
           affiliated  third  party,  nor  shall  any such  person,
           while  employed  by or  while  serving  on the  board of
           directors   of  PMC,   at  any  time  harass  or  behave
           unprofessionally  toward Phillips;  notwithstanding  the
           foregoing,  the  parties  agree  that PMC has the  right
           generally  and  specifically  to  discuss  and  describe
           PMC's   past  and   current   financial   and   business
           conditions  and  prospects and in so doing has the right
           generally and  specifically  to discuss actions taken by
           Phillips   on  behalf  of  PMC,   whether  or  not  such
           discussion   is  favorable  to  Phillips.   If  any  PMC
           officer  or  director  breaches  this  non-disparagement
           obligation,   PMC  shall  be  liable  to  Phillips   for
           liquidated  damages,  not a  penalty,  in the  amount of
           $25,000 for each breach.

21.   Covenant  of  Non-Interference.  Phillips  covenants  that,  at all
      times on or after the  Effective  Date, he will not interfere
      with the business or activities of PMC;  without limiting the
      generality of the foregoing,  Phillips covenants that he will
      not interfere with PMC's business  relationship  with any PMC
      president  or chief  executive  officer,  client or customer,
      contractor,  vendor  or  any  other  third  party  having  or
      proposing to do business  with PMC or enter into an agreement
      of any kind  with PMC.  Phillips  further  covenants  he will
      have no  communication  with any PMC  employee  regarding  or
      relating to or in any way arising from PMC's business.

<PAGE>

22.   Covenant  of  Cooperation  in  Litigation.   Phillips  acknowledges
      that  because  of his  position  with  PMC,  he  may  possess
      information  that  may  be  relevant  to or  discoverable  in
      litigation  in which PMC is  involved or may in the future be
      involved.  Phillips  agrees that he shall testify  truthfully
      in connection with any such litigation,  shall cooperate with
      PMC in connection with such litigation,  and that his duty of
      cooperation  shall  include  an  obligation  to meet with PMC
      representatives  and/or counsel  concerning  such  litigation
      for such  purposes,  and at such  times  and  places,  as PMC
      deems necessary,  in its sole  discretion,  and to appear for
      deposition   upon  PMC's  request  and  without  a  subpoena.
      Phillips  shall  not  be  entitled  to  any  compensation  in
      connection with his duty of cooperation,  except that PMC may
      reimburse  Phillips  for  reasonable  out-of-pocket  expenses
      that he incurs in honoring  his  obligation  of  cooperation.
      Without  limiting  the  generality  of  the  foregoing,   (a)
      Phillips  agrees to  cooperate  in all  respects  with  PMC's
      defense of the Daniel Shore dispute,  and (b) Phillips agrees
      to  provide  to PMC a  sworn  affidavit  satisfactory  to PMC
      setting  forth the facts and  circumstances  of such  dispute
      and such other related  information  as PMC shall  reasonably
      require.


23.   Nonreliance.  Each  party  understands  and  agrees  that  he or it
      assumes  all risk that the  facts or law may be,  or  become,
      different  than the facts or law as  believed by the party at
      the time he or it executes this  agreement.  Phillips and PMC
      acknowledge that their adversary  relationship  precludes any
      affirmative obligation of disclosure,  and expressly disclaim
      all reliance  upon  information  supplied or concealed by the
      adverse  party  or  its  counsel  in   connection   with  the
      negotiation and/or execution of this agreement.

24.   Additional  Warranty and  Acknowledgment.  The parties  warrant and
      represent   that  they  have  been   offered  no  promise  or
      inducement  except as expressly  provided in this  agreement,
      and  that  this  agreement  is  not  in  violation  of  or in
      conflict with any other agreement of either party.

25.   Survival  of  Covenants   and   Warranties.   All   covenants   and
      warranties  contained in this agreement are  contractual  and
      shall survive the closing of this agreement.

26.   Acknowledgment  of  Rights  Under  the  Older  Worker's  Benefits  
      Protection Act.

     a.    Phillips  agrees and  acknowledges  that he:  (i) understands
           the language used in this agreement and the  agreement's
           legal  effect;  (ii)  understands  that by signing  this
           agreement  he is  giving up the right to sue PMC for age
           discrimination;  (iii) will  receive  compensation under
           this  agreement to which he would not have been entitled
           without  signing this  agreement;  (iv) has been advised
           by PMC to consult with an attorney  before  signing this
           agreement;  and (v) was  given no less  than  twenty-one
           days to consider whether to sign this agreement.

     b.    For  a  period  of  seven  days  after  the  Effective  Date,
           Phillips  may,  in his  sole  discretion,  rescind  this
           agreement,  by  delivering a written  notice of recision
           to PMC.  If  Phillips  rescinds  this  agreement  within
           seven  calendar  days  after the  Effective  Date,  this
           agreement  shall be void,  all actions taken pursuant to
           this  agreement  shall be  reversed,  and  neither  this
           agreement nor the fact of or  circumstances  surrounding
           its  execution  shall  be  admissible  for  any  purpose
           whatsoever  in  any  proceeding   between  the  parties,
           except in connection  with a claim or defense  involving
           the   validity   or   effective   rescission   of   this
           agreement.  If Phillips does not rescind this  agreement
           within seven  calendar  days after the  Effective  Date,
           this agreement  shall become final and binding and shall
           be irrevocable.

<PAGE>

27.   Press  Release.  The  parties  acknowledge  that PMC  must  issue a
      press release to disclose the departure of Mr.  Phillips from
      the  employ of the  company  and from its board of  directors
      and they  hereby  agree to work  together to arrive at a text
      for such press  release that is  reasonably  satisfactory  to
      both  parties;  provided,  that, if the parties are unable to
      agree to acceptable  text by the end of the business day next
      following the Effective  Date, PMC shall be entitled to issue
      the press release in a form it deems reasonably  necessary to
      meet its disclosure obligations.


28.   Miscellaneous.

     a.    Successors and Assigns.  This  agreement  shall be binding in
           all  respects  upon,  and shall inure to the benefit of,
           the parties' heirs, successors and assigns.

     b.    Governing  Law.  This  agreement  shall  be  governed  by the
           internal laws of the State of Colorado,  irrespective of
           the choice of law rules of any jurisdiction.

     c.    Severability.   In  the  event  that  a  court  of  competent
           jurisdiction  enters a final  judgment  holding  invalid
           any provision of this  agreement  other than  paragraphs
           7 (Release) and 19  (Confidentiality),  the remainder of
           this  agreement  shall  be  fully  enforceable.  In  the
           event that a court of  competent  jurisdiction  enters a
           final judgment holding invalid  paragraphs 7  and/or 19,
           above,  then either  party may, in its sole  discretion,
           rescind this  agreement by providing  written  notice of
           rescission  to the other party,  in care of that party's
           counsel,  not later than ten days following entry of the
           judgment;  in this  event,  all  monies  paid under this
           agreement  shall be returned  within ten days of receipt
           of the notice, all other rights and obligations  created
           under  this  agreement   shall  then  become  void,  and
           neither this agreement nor the fact of or  circumstances
           surrounding  its  execution  shall  be  admissible  into
           evidence for any purpose  whatsoever  in any  proceeding
           between the parties,  except in connection  with a claim
           or  defense   involving  the   validity,   or  effective
           rescission, of this agreement.

     d.    Integration.    This   agreement   constitutes   the   entire
           agreement of the parties and a complete  merger of prior
           negotiations and agreements.

     e.    Modification.  This  agreement  shall not be modified  except
           in a writing signed by the parties.

     f.    Waiver.  No term or  condition  of this  agreement  shall  be
           deemed  to have  been  waived,  nor  shall  there  be an
           estoppel  against the  enforcement  of any  provision of
           this agreement,  except by a writing signed by the party
           charged  with the waiver or  estoppel.  No waiver of any
           breach  of this  agreement  shall be  deemed a waiver of
           any  later  breach  of the same  provision  or any other
           provision of this agreement.

<PAGE>

     g.    Headings.  Headings are intended  solely as a convenience and
           shall not control the meaning or  interpretation  of any
           provision of this agreement.


     h.    Gender  and  Number.  Pronouns  contained  in this  agreement
           shall  apply  equally  to  the   feminine,   neuter  and
           masculine  genders.   The  singular  shall  include  the
           plural, and the plural shall include the singular.

     i.    Other   Agreements.   Each  party  shall  promptly   execute,
           acknowledge  and  deliver  any  additional  document  or
           agreement  that the other party  reasonably  believes is
           necessary  to carry  out the  purpose  or effect of this
           agreement.

      j.   Burden  of  Proof.  Any  party  contesting  the  validity  or
           enforceability  of any term of this  agreement  shall be
           required  to  prove  by clear  and  convincing  evidence
           fraud,   concealment,   failure  to  disclose   material
           information,  unconscionability,   misrepresentation  or
           mistake of fact or law.

      k.   Construction.  The  parties  acknowledge  that they and their
           respective  counsel have reviewed this  agreement in its
           entirety  and have had a full  and fair  opportunity  to
           negotiate  its terms.  Each party  therefore  waives all
           applicable  rules of construction  that any provision of
           this agreement should be construed  against its drafter,
           and agrees that all  provisions of the  agreement  shall
           be construed  as a whole,  according to the fair meaning
           of the language used.

      l.   Disputes.  Every  dispute  arising  from or  relating to this
           agreement  shall be tried  only in the state or  federal
           courts  situated in the Denver,  Colorado,  metropolitan
           area.  The  parties  consent  to venue in those  courts,
           and  agree  that  those  courts   shall  have   personal
           jurisdiction   over   them  in,   and   subject   matter
           jurisdiction concerning, any such action.

      m.   Fees and Costs.  In any action  relating  to or arising  from
           this  agreement,   the  party  substantially  prevailing
           shall recover from the other party all  attorneys'  fees
           and litigation expenses.

      n.   Counterparts  and Telecopies.  This agreement may be executed
           in   counterparts,   or   by   copies   transmitted   by
           telecopier,  all of which  shall be given the same force
           and effect as the original.

           *          *           *          *          *
<PAGE>

      IN WITNESS WHEREOF,  the parties have executed this Agreement
as of the date first above written.





Kenneth S. Phillips:




     /s/ Kenneth S. Phillips

Date: 8/24/98


PMC International, Inc.



By:   /s/ Scott A. MacKillop

As its: Exec. VP / COO

Date: August 24, 1998


<PAGE>

Read and approved as to form:


Holme Roberts & Owen LLP
 Linda K. Wackwitz, Esq.


   /s/ Linda K. Wackwitz
Attorneys for PMC International, Inc.








Waldbaum, Corn, Koff, Berger & Cohen, P.C.
  Leonard N. Waldbaum, Esq.


    /s/ Leonard N. Waldbaum
 Attorneys for Kenneth S. Phillips

<PAGE>
EXHIBIT 10.13

         AMENDMENT TO REIMBURSEMENT AND PLEDGE AGREEMENT

This Amendment to that certain Reimbursement and Pledge Agreement (this
"Amendment"), dated August 24, 1998, by and among PMC International, Inc.,
a Colorado corporation (the "Company") and KP3, LLC, a Colorado limited 
liability company (the "Pledgor") (collectively the "Parties"), amends 
that certain Reimbursement and Pledge Agreement among the Parties dated as
of January 8, 1997 (the "Agreement").  Capitalized
terms used but not otherwise defined herein have the meanings ascribed to
such terms in the Agreement.

The Parties desire to amend the Agreement as set
forth below.

NOW THEREFORE, in consideration of the mutual promises made herein and
other good and valuable consideration, the receipt and sufficiency of 
which are hereby acknowledged, the Parties hereby agree as follows:

1.  Section 4 of the Agreement is amended 
    to include the following additional language:

  "4.5  If, at any time, the Bank shall apply all or any portion of the Bank
  Collateral in payment of the principal and/or interest of the Loan,
  the Stock shall automatically be released to the Company without prior 
  notice to the Pledgor, subject to compliance with notice provisions, 
  if any, required by law, in satisfaction (partial or full as the case
  may be) of the obligations secured thereby.  This paragraph is in addition
  to and not in lieu of nor as a substitute for any and/or all of the
  other rights and/or remedies the Company enjoys under the Agreement."

2.  Except as modified by Section 1 above, the Agreement shall continue
    in full force and effect as between the Parties.

3.  This Amendment may be executed in any number of counterparts, each
    of which shall be deemed an original, including all counterparts
    received by facsimile transmission, but all of which together shall 
    constitute one and the same instrument.
                               *   *   *   *
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
day and year first above written.


PMC INTERNATIONAL, INC.,
A Colorado corporation

/s/ Scott A. MacKillop
By  Scott A. MacKillip
Title: Exec. VP / COO

KP3, LLC,
a Colorado limited liability company

/s/ Kenneth S. Phillips
By  Kenneth S. Phillips
Title: Manager