AMENDED AND RESTATED

                        LOAN AND SECURITY AGREEMENT

                         Dated:  December 30, 1997

                                $2,500,000

                                  between

                 FRANKLIN OPHTHALMIC INSTRUMENTS CO., INC.

                               as Borrower,

                                    and

                       HARRIS TRUST AND SAVINGS BANK

                                 as Lender

<PAGE>
                             TABLE OF CONTENTS

                                                            Page

   SECTION 1.  GENERAL DEFINITIONS                            1
        1.1. Defined Terms                                    1
        1.2. Accounting Terms                                14
        1.3. Other Terms                                     14
        1.4. Certain Matters of Construction                 14

   SECTION 2.  CREDIT FACILITY                               15
        2.1. Revolving Credit Loans                          15
        2.2. Term Loan                                       16
        2.3. Manner of Borrowing Revolving Credit Loans      17
        2.4. Letters of Credit; LC Guaranties                17
        2.5. All Loans to Constitute One Obligation          19
        2.6. Loan Account                                    19

   SECTION 3.  INTEREST, FEES, TERM AND REPAYMENT            19
        3.1. Interest, Fees and Charges                      19
        3.2. Letter of Credit and LC Guaranty Fees           23
        3.3. Term of Agreement                               23
        3.4. Termination                                     23
        3.5. Payments                                        24
        3.6. Application of Payments and Collections         25
        3.7. Statements of Account                           26

   SECTION 4.  COLLATERAL:  GENERAL TERMS                    26
        4.1. Security Interest in Collateral                 26
        4.2. Lien on Realty                                  26
        4.3. Representations, Warranties and
             Covenants -- Collateral                         27
        4.4. Lien Perfection                                 27
        4.5. Location of Collateral                          27
        4.6. Insurance of Collateral                         28
        4.7. Protection of Collateral                        28
   SECTION 5.  PROVISIONS RELATING TO ACCOUNTS               29
        5.1. Representations, Warranties and Covenants       29
        5.2. Assignments, Records and Schedules of Accounts  30
        5.3. Administration of Accounts                      30
        5.4. Collection of Accounts.                         31
        5.5. Notice Regarding Disputed Accounts              31
                                                     
   SECTION 6.  PROVISIONS RELATING TO INVENTORY              31
        6.1. Representations, Warranties and Covenants       31
        6.2. Inventory Reports                               32
        6.3. Returns of Inventory                            32

   SECTION 7.  PROVISIONS RELATING TO EQUIPMENT              33
        7.1. Representations, Warranties and Covenants       33
        7.2. Evidence of Ownership of Equipment              33
        7.3. Records and Schedules of Equipment              33
        7.4. Dispositions of Equipment                       33

   SECTION 8.  REPRESENTATIONS AND WARRANTIES                33
        8.1. General Representations and Warranties          33
        8.2. Reaffirmation                                   38
        8.3. Survival of Representations and Warranties      38
<PAGE>
   SECTION 9.  COVENANTS AND CONTINUING AGREEMENTS           38
        9.1. Affirmative Covenants                           38
        9.2. Negative Covenants                              43
        9.3. Specific Financial Covenants                    46

   SECTION 10.  CONDITIONS PRECEDENT                         47
        10.1.     Documentation                              47
        10.2.     Other Conditions                           49

   SECTION 11.  EVENTS OF DEFAULT: RIGHTS AND
                REMEDIES ON DEFAULT                          49
        11.1.     Events of Default                          49
        11.2.     Acceleration of the Obligations            51
        11.3.     Remedies                                   52
        11.4.     Remedies Cumulative; No Waiver             53

   SECTION 12.  MISCELLANEOUS                                53
        12.1.     Power of Attorney                          53
        12.2.     Indemnity                                  54
        12.3.     Complete Agreement; Modification of
                  Agreement; Sale of Interest                54
        12.4.     Reimbursement of Expenses                  55
        12.5.     Indulgences Not Waivers                    56
        12.6.     Severability                               56
        12.7.     Successors and Assigns                     56
        12.8.     Cumulative Effect; Conflict of Terms       56
        12.9.     Execution in Counterparts                  56
        12.10.    Notice                                     56
        12.11.    Lender's Consent                           57
        12.12.    Demand Obligations                         58
        12.13.    Time of Essence                            58
        12.14.    Entire Agreement                           58
        12.15.    Interpretation                             58
        12.16.    GOVERNING LAW; CONSENT TO FORUM            58
        12.17.    WAIVERS BY BORROWER                        59


   EXHIBITS
   Exhibit A Form of Revolving Credit Note
   Exhibit B Form of Term Note
   Exhibit C Borrower's Business Locations
   Exhibit D Jurisdictions in Which Borrower is Authorized to do Business
   Exhibit E Corporate Names and Predecessors
   Exhibit F Patents, Trademarks, Copyrights and Licenses
   Exhibit G Capital Structure and Affiliates
   Exhibit H Contracts Restricting Borrower's Right to Incur Debts
   Exhibit I Litigation
   Exhibit J Pension Plans
   Exhibit K Labor Contracts
   Exhibit L Capitalized Leases
   Exhibit M Operating Leases
   Exhibit N Form of Compliance Certificate
   Exhibit O Form of Borrowing Base Certificate
   Exhibit P Permitted Liens
   Exhibit Q Leased Premises
   Exhibit R Form of Opinion Letter
<PAGE>

             AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT


        THIS AMENDED AND  RESTATED LOAN AND  SECURITY AGREEMENT is  made
   this 30th  day December  of 1997,  by and  among FRANKLIN  OPHTHALMIC
   INSTRUMENTS CO., INC., a Delaware corporation ("Borrower") having its
   chief executive office at 1265 Naperville Drive, Romeoville, Illinois
   60446, and  HARRIS  TRUST  AND  SAVINGS  BANK,  an  Illinois  banking
   corporating having  an office  at 111  West Monroe  Street,  Chicago,
   Illinois  60690 ("Lender").

                                 RECITALS


   A.   Borrower and Silicon Valley  Bank ("Silicon Bank")  entered
        into that certain  Amended and Restated  Loan and  Security
        Agreement dated as of August  20, 1996, which amended  that
        certain Business Loan Agreement dated as of August 20, 1993
        between Borrower and  Silicon Bank dated  as of August  20,
        1993 (collectively, the "Old Loan Agreement").

   B.   Pursuant to  that certain  Assignment and  Assumption  (the
        "Assignment and Assumption") dated as of December 30,  1997
        by  and  between  the  Lender  and  Silicon  Bank,   Lender
        purchased from Silicon  Bank all of  Silicon Bank's  right,
        title and interest in the Old Loan Agreement, the  "Notes",
        the liens on the "Collateral", and the "Loan Documents" (as
        such terms are defined in the Assignment and Assumption).

   C.   Borrower and Lender  desire to  amend and  restate the  Old
        Loan Agreement.

   D.   Accordingly, in  consideration  of  the  mutual  agreements
        contained herein, and subject  to the terms and  conditions
        hereof, the parties hereto agree as follows:
   I.   SECTION   GENERAL DEFINITIONS

   A.             Defined Terms.  When used herein, the following  terms
   shall have the following meanings (terms  defined in the singular  to
   have the same meaning when used in the plural and vice versa):

             Account Debtor - any Person who is or may become  obligated
        under or on account of an Account.

             Accounts - all  accounts, contract  rights, chattel  paper,
        instruments  and  documents,  whether  now  owned  or  hereafter
        created or acquired by any Borrower or in which any Borrower now
        has or hereafter acquired any interest.
<PAGE>
             Adjusted Tangible  Assets -  all  assets except:    (i) any
        surplus resulting  from any  write-up  of assets  subsequent  to
        September 30,  1997; (ii) deferred  assets, other  than  prepaid
        insurance  and   prepaid   taxes;   (iii) patents,   copyrights,
        trademarks, trade names, non-compete agreements, franchises  and
        other similar intangibles; (iv) goodwill, including any amounts,
        however designated on a Consolidated  balance sheet of a  Person
        or its  Subsidiaries, representing  the excess  of the  purchase
        price paid for assets or stock  over the value assigned  thereto
        on  the  books  of  such  Person;  (v) Restricted   Investments;
        (vi) unamortized debt discount and expense; (vii) assets located
        and notes  and  receivables due  from  obligors outside  of  the
        United States of America;  and (viii) Accounts, notes and  other
        receivables due from Affiliates or employees.

             Adjusted Tangible Net Worth - at any date means a sum equal
        to:     (i) the  net   book  value   (after  deducting   related
        depreciation, obsolescence, amortization,  valuation, and  other
        proper reserves)  at which  the Adjusted  Tangible Assets  of  a
        Person would  be  shown on  a  balance  sheet at  such  date  in
        accordance  with  GAAP,  plus  (ii)  Subordinated  Debt,   minus
        (iii) the amount at which such Person's liabilities (other  than
        capital stock and surplus) would be shown on such balance  sheet
        in accordance  with  GAAP,  and  including  as  liabilities  all
        reserves for contingencies and other potential liabilities.

             Affiliate - a Person (other than a Subsidiary):   (i) which
        directly  or  indirectly  through  one  or  more  intermediaries
        controls, or is controlled by, or  is under common control  with
        Borrower; (ii) which beneficially  owns or holds  5% or more  of
        any class of the Voting Stock  of Borrower; or (iii) 5% or  more
        of the Voting Stock (or in the case  of a Person which is not  a
        corporation, 5%  or more  of the  equity interest)  of which  is
        beneficially owned  or  held  by Borrower  or  a  Subsidiary  of
        Borrower.  For purposes hereof, "control" means the  possession,
        directly or  indirectly, of  the power  to direct  or cause  the
        direction of the  management and policies  of a Person,  whether
        through the ownership of Voting Stock, by contract or otherwise.

             Agreement - this Loan and Security Agreement.

             Average Monthly  Loan  Balance  - the  amount  obtained  by
        adding the unpaid  balance of  Revolving Credit  Loans owing  by
        Borrower to Lender at  the end of each  day for each day  during
        the  month  in  question  plus  the  aggregate  amount  of   all
        outstanding Letters of Credit  and LC Guaranties outstanding  at
        the end of each day during the month in question and by dividing
        such sum by the number of days in such month.

             Base Rate - the higher of the prime rate or any other  rate
        announced in replacement of the prime rate, announced from  time
        to time  by Lender.   Such  rate would  not necessarily  be  the
        lowest interest rate offered by such  Lender; and, if the  prime
        rate for  commercial  loans  is  discontinued  by  Lender  as  a
        standard, a comparable reference rate designated by Lender as  a
        substitute therefor shall be the Base Rate.
<PAGE>
             Base Rate Loan -  a Loan that bears  interest based on  the
        Base Rate.

             Board -  the  Board of  Governors  of the  Federal  Reserve
        System of the United States.

             Borrowing Base - as at  any date of determination  thereof,
        an amount equal to the lesser of:

             1.             the Maximum Revolving Credit Loan; or

   1.                            an amount equal to:

   a)                       eighty  percent   (80%),  or   such   lesser
   percentage  as  Lender  may  in  its  sole  and  absolute  discretion
   determine from time to time, of  the net amount of Eligible  Accounts
   outstanding at such date;

                                   PLUS

   a)                       the  lesser  of  (A)  One  Million   Dollars
   ($1,000,000) or (B) the Inventory Percentage of the value of Eligible
   Inventory at such date consisting of raw materials or finished goods,
   calculated on the basis of the lower of cost or market with the  cost
   of raw  materials  and  finished  goods  calculated  on  a  first-in,
   first-out basis;

                            MINUS (subtract from  the lesser of  clauses
                       (a) or (b) above)

             1.             an amount equal to the  sum of (A) the  face
             amount of all LC Guaranties and Letters of Credit issued by
             Lender or any Affiliate of  Lender and outstanding at  such
             date, and (B) any amounts which Lender may be obligated  to
             pay in the future for the account of any Borrower.

        For purposes hereof, the net amount of Eligible Accounts at  any
   time shall be the face amount of such Eligible Accounts less any  and
   all returns, rebates,  discounts (which may,  at Lender's option,  be
   calculated on shortest terms), credits, allowances or excise taxes of
   any nature at  any time issued,  owing, claimed  by Account  Debtors,
   granted, outstanding or payable in  connection with such Accounts  at
   such time.

             Business Day  - (i)  when used  with respect  to the  LIBOR
        Option, shall mean a  day on which dealings  may be effected  in
        deposits of  United  States  dollars  in  the  London  interbank
        foreign currency  deposits market  and on  which the  Lender  is
        conducting business and on which  banks may conduct business  in
        London, England, Chicago, Illinois, and  New York, New York  and
        (ii) when  used with  respect to  the other  provisions of  this
        Agreement, shall mean any day that  is not a Saturday, a  Sunday
        or a day on which banks  are required or permitted to be  closed
        in the State of Illinois.
<PAGE>
             Capital Expenditures  -  expenditures made  or  liabilities
        incurred for the  acquisition of  any fixed  assets or  improve-
        ments, replacements,  substitutions or  additions thereto  which
        have a useful life of more  than one year, including the  direct
        or indirect  acquisition  of such  assets  by way  of  increased
        product or service  charges, offset items  or otherwise and  the
        principal portion of payments with respect to Capitalized  Lease
        Obligations.

             Capitalized  Lease  Obligation   -  any  Indebtedness   for
        Borrowed Money represented by obligations under a lease that  is
        required to be capitalized  for financial reporting purposes  in
        accordance with GAAP,  and the amount  of such Indebtedness  for
        Borrowed  Money  shall  be   the  capitalized  amount  of   such
        obligations determined in accordance with GAAP.

             Cash and Cash  Equivalents - any assets  of Borrower  which
        are in  the form  of, or  are  readily convertible  into  money,
        including without  limitation,  cash, checks  and  other  demand
        negotiable instruments,  deposits  with any  bank  or  financial
        institution (whether  as demand  deposits,  and whether  or  not
        evidenced by certificates  of deposit),  and readily  marketable
        securities of any type.

             Closing Date  - the  date on  which all  of the  conditions
        precedent in Section 10  are satisfied and  the initial Loan  is
        made hereunder.

             Code - the Uniform Commercial Code as adopted and in  force
        in the State of Illinois, as from time to time in effect.

             Collateral - all of the Property and interests in  Property
        described in  Section  4  hereof, and  all  other  Property  and
        interest in Property  that now or  hereafter secure the  payment
        and performance of any of the Obligations.

             Commitment Termination Date - the earliest of (i) March 31,
        2000, (ii) the date  of termination  of the  commitment to  make
        further Loans pursuant to Section 3.4 hereof, and (iii) the date
        of termination of the commitment to make further Loans  pursuant
        to Section 11.2 hereof.

             Common Stock -  shall  mean  the common  stock,  $.001  par
        value, of Borrower.

             Consolidated - the consolidation in accordance with GAAP of
        the accounts or other items as to which such term applies.

             Current Assets - at any date means the amount at which  all
        of the current assets of a  Person would be properly  classified
        as current  assets shown  on a  balance sheet  at such  date  in
        accordance with GAAP except that amounts due from Affiliates and
        investments in Affiliates shall be excluded therefrom.

             Default - an  event or  condition the  occurrence of  which
        would, with the lapse of time or the giving of notice, or  both,
        become an Event of Default.
<PAGE>
             Default Rate  -  as  defined  in  Section  3.1(C)  of  this
        Agreement.

             Distribution -  in respect  of  any corporation  means  and
        includes:    (i)   the  payment  of   any  dividends  or   other
        distributions  on  capital  stock  of  the  corporation  (except
        distributions  in  such  stock)  and  (ii)  the  redemption   or
        acquisition of Common Stock  unless made contemporaneously  from
        net proceeds of the sale of Common Stock.

             EBITDA - with  respect to any  fiscal period, the   sum  of
        Borrower's  Consolidated  (i)  net  earnings  (or  loss)  before
        interest  expense  and   taxes  for  said   period,  plus   (ii)
        depreciation and amortization  expense for such  period, all  as
        determined in accordance with GAAP.

             Eligible Account  -  an  Account arising  in  the  ordinary
        course  of  Borrower's  business  from  the  sale  of  goods  or
        rendition of services unless:  (i) it arises out of a sale  made
        by Borrower to a Subsidiary or an Affiliate of Borrower or to  a
        Person controlled by an Affiliate of Borrower; or (ii) it is due
        or unpaid more than ninety (90) days after the original  invoice
        date; or (iii) twenty-five percent (25%) or more of the Accounts
        from  the  Account  Debtor  are  not  deemed  Eligible  Accounts
        hereunder; or  (iv) any  covenant,  representation  or  warranty
        contained in this  Agreement with  respect to  such Account  has
        been breached in any material respect; or (v) the Account Debtor
        is also Borrower's creditor or supplier, but only to the  extent
        of Borrower's obligations to such  creditor or supplier, or  the
        Account Debtor  has  disputed  liability with  respect  to  such
        Account, or the Account Debtor has  made any claim with  respect
        to any other Account due from  such Account Debtor to  Borrower,
        or the Account otherwise is or  may become subject to any  right
        of setoff by the Account Debtor; or (vi) the Account Debtor  has
        commenced a voluntary case under the federal bankruptcy laws, as
        now constituted or hereafter amended, or made an assignment  for
        the benefit of creditors,  or a decree or  order for relief  has
        been entered by a court having  jurisdiction in the premises  in
        respect of the Account Debtor in  an involuntary case under  the
        federal  bankruptcy  laws,  as  now  constituted  or   hereafter
        amended, or any other petition  or other application for  relief
        under the federal  bankruptcy laws  has been  filed against  the
        Account Debtor, or if the  Account Debtor has failed,  suspended
        business, ceased to be  Solvent, or consented  to or suffered  a
        receiver, trustee, liquidator or  custodian to be appointed  for
        it or for all or a significant portion of its assets or affairs;
        or (vii) it arises from a sale to an Account Debtor outside  the
        United States, unless the sale is on letter of credit,  guaranty
        or acceptance terms, in  each case acceptable  to Lender in  its
        sole discretion or  unless Lender, in  its sole discretion,  has
        approved the Account Debtor; or (viii) it arises from a sale  to
        the  Account  Debtor  on   a  bill-and-hold,  guaranteed   sale,
        sale-or-return,  sale-on-approval,  consignment  or  any   other
        repurchase or return  basis; or (ix) the  Account Debtor is  the
        United  States  of   America  or  any   department,  agency   or
        instrumentality thereof  unless  all Accounts  of  such  Account
        Debtor are  equal to  or less  than $100,000  in the  aggregate,
        provided, however,  that any  Accounts  of such  Account  Debtor
<PAGE>
        which are greater than $100,000 in the aggregate shall be deemed
        Eligible Accounts if  Borrower assigns its  right to payment  of
        such Account to  Lender, in form  and substance satisfactory  to
        Lender, so as  to comply with  the Assignment of  Claims Act  of
        1940, as amended (31 U.S.C. Sub-Section 203 et seq.); or (x) the
        Account Debtor is located in the State of Minnesota or the State
        of Alabama,  unless  Borrower has  filed  a Notice  of  Business
        Activities Report with the appropriate officials in those states
        for the then current year; or  (xi) the Account is subject to  a
        Lien other than a Permitted Lien; or (xii) the goods giving rise
        to such Account have not been  delivered to and accepted by  the
        Account Debtor or the services giving rise to such Account  have
        not been  performed  by Borrower  and  accepted by  the  Account
        Debtor or the Account otherwise does not represent a final sale;
        or (xiii) the  Account  is  evidenced by  chattel  paper  or  an
        instrument of  any kind,  or has  been reduced  to judgment;  or
        (xiv) Borrower has made  any agreement with  the Account  Debtor
        for any deduction therefrom, except for discounts or  allowances
        which are made  in the ordinary  course of  business for  prompt
        payment and which discounts or  allowances are reflected in  the
        calculation of the face  value of each  invoice related to  such
        Account; or (xv) Borrower has made an agreement with the Account
        Debtor to  extend  the time  of  payment thereof;  or  (xvi) the
        Account consists of uncollected progress billings.

             Eligible Inventory - such Inventory of Borrower (other than
        packaging materials and supplies) which (i) is in good, new  and
        saleable  condition;  (ii)  is  not  slow  moving,  obsolete  or
        unmerchantable;  (iii)  meets  all  standards  imposed  by   any
        governmental agency or authority; (iv) conforms in all  respects
        to the warranties and representations  set forth in Section  6.1
        hereof; (v) is at all times subject to Lender's duly  perfected,
        first priority  security interest  and no  other Lien  except  a
        Permitted Lien; and (vi) is situated at a location in compliance
        with Section  4.5 hereof  and is  not  in-transit unless  it  is
        (y) Inventory  in  transit   to  a  customer   of  Borrower   or
        (z) Inventory with  an aggregate  value  of less  than  $100,000
        which is transit to, or at, a  trade show or the home or  office
        of a sales representative of the Borrower.

             Environmental Laws  - all  federal, state  and local  laws,
        rules, regulations,  ordinances, programs,  permits,  guidances,
        orders and  consent  decrees  relating  to  health,  safety  and
        environmental  matters,  including,  but  not  limited  to,  the
        Resource  Conservation  and  Recovery  Act,  the   Comprehensive
        Environmental Response, Compensation and Liability Act of  1980,
        the Toxic Substances  Control Act  as amended,  the Clean  Water
        Act, the River and Harbor Act, Water Pollution Control Act,  the
        Marine Protection Research and  Sanctuaries Act, the  Deep-Water
        Port Act, the Safe Drinking Water Act, the SuperFund  Amendments
        and  Reauthorization  Act  of  1986,  the  Federal  Insecticide,
        Fungicide and  Rodenticide Act,  the Mineral  Lands and  Leasing
        Act, the Surface Mining Control  and Reclamation Act, state  and
        federal superlien and environmental clean up programs and  laws,
        and U.S. Department of Transportation regulations.
<PAGE>
             Equipment - all machinery, apparatus, equipment,  fittings,
        furniture, fixtures, motor vehicles and other tangible  personal
        Property (other than  Inventory) of every  kind and  description
        used in Borrower's operations or owned  by Borrower or in  which
        Borrower  has  an  interest,  whether  now  owned  or  hereafter
        acquired by  Borrower  and  wherever  located,  and  all  parts,
        accessories and special tools  and all increases and  accessions
        thereto and substitutions and replacements therefor.

             ERISA - the Employee Retirement Income Security Act of 1974
        and all  rules and  regulations from  time to  time  promulgated
        thereunder.

             Event of  Default -  as defined  in  Section 11.1  of  this
        Agreement.

             Excess Revolving Credit Loan Availability - as of any date,
        the amount,  if any,  by which  the Borrowing  Base exceeds  the
        aggregate outstanding principal balance of the Revolving  Credit
        Loans.

             Fixed Charge Ratio - with respect to any fiscal period, the
        ratio of (a) EBITDA for  such period, less extraordinary  income
        to  (b) all  regularly  scheduled  payments  of  principal   and
        interest on Obligations required to be paid in cash within  such
        period.

             GAAP -  generally  accepted accounting  principles  in  the
        United States of America in effect from time to time.

             General Intangibles - all general intangibles of  Borrower,
        whether now owned or hereafter created or acquired by  Borrower,
        including, without limitation, all  choses in action, causes  of
        action, corporate or other  business records, deposit  accounts,
        inventions, designs, patents,  patent applications,  trademarks,
        trade names, trade secrets, goodwill, copyrights, registrations,
        licenses,  franchises,  customer   lists,  tax  refund   claims,
        computer  programs,  all   claims  under  guaranties,   security
        interests or other security  held by or  granted to Borrower  to
        secure payment of any of the Accounts by an Account Debtor,  all
        rights to indemnification and  all other intangible property  of
        every kind and nature (other than Accounts).

             Guarantors - Michael J.   Carroll, Brian Carroll and  James
        Urban and any other Person  who may hereafter guarantee  payment
        or performance of the whole or any part of the Obligations.

             Guaranty Agreements -  the  Continuing  Guaranty  Agreement
        which is  to be executed by each Guarantor in form and substance
        satisfactory to Lender.

             Hazardous Substance - the meaning given such term in 42 USC
        S 9601(14), 42 USC S 9601(33) and 42 USC S 6991(8) or any  state
        or local counterpart Environmental Law.
<PAGE>
             Indebtedness for Borrowed  Money -   means  for any  Person
        (without duplication) (i) all  indebtedness created, assumed  or
        incurred  in  any  manner  by  such  Person  representing  money
        borrowed  (including  by  the  issuance  of  debt   securities),
        (ii) all  indebtedness  for  the  deferred  purchase  price   of
        property or services (other than trade accounts payable  arising
        in the ordinary course  of business not more  than 60 days  past
        due), (iii) all indebtedness secured  by any Lien upon  Property
        of such Person, whether or not such Person has assumed or become
        liable  for   the  payment   of  such   indebtedness,   (iv) all
        Capitalized  Lease  Obligations  of  such  Person,  and  (v) all
        obligations of  such Person  on or  with respect  to letters  of
        credit, banker's acceptances and other evidences of indebtedness
        representing extensions of  credit whether  or not  representing
        obligations for borrowed money.

             Inventory - all of Borrower's inventory, whether now  owned
        or hereafter  acquired  by  the  Borrower,  including,  but  not
        limited to, all goods intended for sale or lease by Borrower, or
        for display  or  demonstration; all  work  in process;  all  raw
        materials and other materials and  supplies of every nature  and
        description used or which might be  used in connection with  the
        manufacture, printing, packing, shipping, advertising,  selling,
        leasing or  furnishing  of  such  goods  or  otherwise  used  or
        consumed in Borrower's  business; and  all documents  evidencing
        and General  Intangibles  relating  to  any  of  the  foregoing,
        whether now owned or hereafter acquired by Borrower.

             Inventory Percentage - Fifty percent (50%).

             Investments - when used with reference to any investment of
        Borrower or its Subsidiaries means any investment so  classified
        under GAAP, and, whether or not so classified, includes  (a) any
        loan or  advance made  by Borrower  or its  Subsidiaries to  any
        other Person, (b) any guaranty, and (c) any ownership or similar
        interest in any other Person; and  the amount of any  Investment
        shall be the original principal  or capital amount thereof  less
        all cash returns  of principal  or equity  thereof (and  without
        adjustment by reason  of the financial  condition of such  other
        Person).

             LC Guaranty - a guaranty  executed by Lender at  Borrower's
        request in favor of a person  who has issued a letter of  credit
        for the account of the Borrower.

             Leases - all of  those leasehold estates  in real  property
        now owned or hereafter acquired by Borrower or any Subsidiary of
        Borrower, as lessee.
<PAGE>
             Legal Requirement - any requirement imposed upon Lender  by
        any law of the United States of America or the United Kingdom or
        by any  regulation, order,  interpretation, ruling  of  official
        directive (whether or not having the force of law) of the Board,
        the Bank  of  England  or  any  other  board,  central  bank  or
        governmental or administrative agency, institution or  authority
        of the  United States  of America,  the  United Kingdom  or  any
        political subdivision of either thereof.

             Letter of Credit - a letter of credit at any time issued by
        Lender for the account of Borrower.

             LIBOR Interest Payment  Date -  with respect  to any  LIBOR
        Revolving Credit Portion or any LIBOR Term Portion, the last day
        of the applicable LIBOR Period.

             LIBOR Option  -  the  option granted  pursuant  to  Section
        3.1(B) to  have  the interest  on  all  or any  portion  of  the
        principal amount of the Revolving Credit  Loan or the Term  Loan
        based on a LIBOR Rate.

             LIBOR Period -  any period, selected  as provided below  in
        Section 3.1(B) of 1 month, 2  months or 3 months, commencing  on
        any Business Day, subject to  the provisions of Section  3.1(B);
        provided, however, that no LIBOR Period shall extend beyond  the
        last day of  the maturity date  of the  applicable Loan,  unless
        Borrower and Lender have agreed to an extension of such maturity
        date beyond the expiration of the LIBOR Period in question.   No
        LIBOR period may be selected if after giving effect thereto  the
        Borrower will be unable to make a principal payment scheduled to
        be made during such LIBOR Period without paying part of a  LIBOR
        Portion on a date  other than the last  day of the LIBOR  Period
        applicable thereto.  If any LIBOR  Period so selected shall  end
        on a date that  is not a Business  Day, such LIBOR Period  shall
        instead end on the next preceding or succeeding Business Day  as
        determined by the  Lender in  accordance with  the then  current
        banking practice in London.  Each  determination by Lender of  a
        LIBOR Period  shall,  in  the  absence  of  manifest  error,  be
        conclusive, and at Borrower's request, Lender shall  demonstrate
        the basis of such determination.

             LIBOR Portion - all of the Indebtedness for Borrowed  Money
        hereunder evidenced by  the Notes bearing  interest at the  same
        LIBOR Rate for the same period of time.
<PAGE>
             LIBOR Rate -  with respect  to any  LIBOR Revolving  Credit
        Portion or any LIBOR Term Portion for the related LIBOR  Period,
        an interest rate  per annum (rounded  upwards, if necessary,  to
        the next higher  one hundred thousandth  of a percentage  point)
        equal to the product of (a) the Base LIBOR Rate (as  hereinafter
        defined) and  (b)  Statutory Reserves.    For purposes  of  this
        definition, the term "Base LIBOR Rate" shall mean (i) the  LIBOR
        Index Rate (as hereinafter defined) for such LIBOR Period, or if
        the LIBOR  Index  Rate is  unavailable  (ii) the rate  per  anum
        (rounded  upwards,  if  necessary,   to  the  next  higher   one
        hundred thousandth of a percentage  point) at which deposits  of
        U.S. Dollars  approximately equal  in  principal amount  to  the
        LIBOR  Revolving  Credit  Portion  or  the  LIBOR  Term  Portion
        specified in the applicable LIBOR Request are offered to Lender,
        in the  London interbank  foreign  currency deposits  market  at
        approximately 11:00  a.m., London  time, two  (2) Business  Days
        prior to the commencement of such LIBOR Period, for delivery  on
        the first  day of  such  LIBOR Period.    For purposes  of  this
        definition, the  term "LIBOR  Index Rate"  shall mean,  for  any
        LIBOR Period, the rate per annum (rounded upwards, if necessary,
        to the next one  hundred thousandth of  a percentage point)  for
        deposits of  U.S.  Dollars for  a  period equal  to  such  LIBOR
        Period, which appears on the Telerate Page 3750 (as  hereinafter
        defined) as of  11:00 a.m., London  time, two (2) Business  Days
        prior to the commencement of such LIBOR Period, for delivery  on
        the first  day of  such  LIBOR Period.    For purposes  of  this
        definition, the  term "Telerate  Page  3750" means  the  display
        designated as "Page 3750" on the Telerate Service (or such other
        page as may  replace Page  3750 on  that service  or such  other
        service as may be nominated by the British Bankers'  Association
        as the information vendor for the purpose of displaying  British
        Bankers' Association Interest Settlement  Rates for U.S.  Dollar
        deposits).  Each determination by Lender of any LIBOR Rate shall
        in  the  absence  of  manifest  error,  be  conclusive,  and  at
        Borrower's request, Lender shall demonstrate the basis for  such
        determination.

             LIBOR Rate Loan - a Loan  that bears interest based on  the
        LIBOR Rate.

             LIBOR Request  -  a notice  in  writing (or  by  telephonic
        communication confirmed by  telex, telecopy  or other  facsimile
        transmission on  the same  day as  the telephone  request)  from
        Borrower to Lender requesting that interest on a LIBOR Revolving
        Credit Loan or  a LIBOR Term  Loan be based  on the LIBOR  Rate,
        specifying:  (i)  the first day  of the LIBOR  Period, (ii)  the
        length of the  LIBOR Period  consistent with  the definition  of
        that term,  and (iii)  a dollar  amount of  the LIBOR  Revolving
        Credit  Portion  or  LIBOR  Term  Portion  consistent  with  the
        definition of such terms.

             LIBOR Revolving  Credit  Portion  -  that  portion  of  the
        Revolving Credit Loan  specified in a  LIBOR Request  (including
        any portion  of Revolving  Credit Loan  and Term  Loan which  is
        being borrowed by Borrower concurrently with such LIBOR Request)
        which is  not less  than $500,000  and an  integral multiple  of
        $100,000, which  does  not  exceed the  outstanding  balance  of
        Revolving Credit Loan not already subject to a LIBOR Option and,
        which, as of the date of the LIBOR Request specifying such LIBOR
        Revolving Credit  Portion, has  met  the conditions  for  basing
        interest on  the LIBOR  Rate in  Section 3.1(B)  hereof and  the
        LIBOR Period of which was commenced and not terminated.
<PAGE>
             LIBOR  Term  Portion  -  that  portion  of  the  Term  Loan
        specified in a LIBOR Request (including any portion of Revolving
        Credit Loan and Term  Loan which is  being borrowed by  Borrower
        concurrently with such  LIBOR Request)  which is  not less  than
        $500,000 and an  integral multiple of  $100,000, which does  not
        exceed the outstanding balance of Term Loan not already  subject
        to a  LIBOR Option  and, which,  as  of the  date of  the  LIBOR
        Request  specifying  such  LIBOR  Term  Portion,  has  met   the
        conditions for  basing interest  on the  LIBOR Rate  in  Section
        3.1(B) hereof and the  LIBOR Period of  which was commenced  and
        not terminated.

             Lien - any interest in Property securing an obligation owed
        to, or  a  claim  by, a  Person  other  than the  owner  of  the
        Property, whether  such interest  is based  on the  common  law,
        statute or  contract, and  including, but  not limited  to,  the
        security  interest,  security  title  or  lien  arising  from  a
        security agreement,  mortgage, deed  of  trust, deed  to  secure
        debt, encumbrance, pledge, conditional sale or trust receipt  or
        a lease, consignment  or bailment  for security  purposes.   The
        term   "Lien"    shall   include    reservations,    exceptions,
        encroachments, easements, rights-of-way, covenants,  conditions,
        restrictions, leases and other title exceptions and encumbrances
        affecting Property.  For the purpose of this Agreement, Borrower
        shall be deemed  to be the  owner of any  Property which it  has
        acquired or holds  subject to  a conditional  sale agreement  or
        other arrangement pursuant  to which title  to the Property  has
        been retained by  or vested in  some other  Person for  security
        purposes.

             Loan Account - the loan account established on the books of
        Lender pursuant to Section 2.6 hereof.

             Loan Documents - this  Agreement, the Other Agreements  and
        the Security Documents.

             Loans - all loans and advances  made by Lender pursuant  to
        this Agreement,  including,  without limitation,  all  Revolving
        Credit Loans and the Term Loan,  and each payment made  pursuant
        to an  LC  Guaranty and  each  payment  made by  Lender  or  any
        Affiliate pursuant to a Letter of Credit.

             Maximum Revolving Credit Loan - at any particular time,  an
        amount equal to $2,200,000.

             Multiemployer Plan - has the  meaning set forth in  Section
        4001(a)(3) of ERISA.

             New Mortgages - as defined in Section 4.2 hereof.

             Note(s) - the Term Note and the Revolving Credit Note.

             Notice of Revolving  Credit Loan  - as  defined in  Section
        2.1(A) of this Agreement.
<PAGE>
             Obligations - all Loans and  all other advances, letter  of
        credit reimbursement obligations, and/or any debts, liabilities,
        obligations, covenants and duties owing, arising, due or payable
        from Borrower  to  Lender of  any  kind or  nature,  present  or
        future, whether or not evidenced by any note, guaranty or  other
        instrument, whether arising under this  Agreement or any of  the
        other Loan  Documents or  otherwise whether  direct or  indirect
        (including  those   acquired   by   assignment),   absolute   or
        contingent, primary  or secondary,  due or  to become  due,  now
        existing or hereafter  arising and however  acquired.  The  term
        includes, without limitation,  all interest, charges,  expenses,
        fees, attorney's fees and any other sums chargeable to  Borrower
        under any of the Loan Documents.

             Original  Term  -  as  defined  in  Section  3.3  of   this
        Agreement.

             OSHA - the Occupational Safety and Health Act and all rules
        and regulations from time to time promulgated thereunder.

             Other Agreements - any and all agreements, instruments  and
        documents  (other   than  this   Agreement  and   the   Security
        Documents), heretofore, now  or hereafter  executed by  Borrower
        and  delivered  to  Lender   in  respect  to  the   transactions
        contemplated by this  Agreement, including, without  limitation,
        the Term Note and the Revolving Credit Note.

             Overadvance  -  as  defined  in  Section  2.1(C)  of   this
        Agreement.

             Permitted  Liens  -  any  Lien  of  a  kind  specified   in
        subparagraphs  (i)  through  (x)  of  Section  9.2(H)  of   this
        Agreement.

             Permitted Purchase  Money  Indebtedness  -  Purchase  Money
        Indebtedness of Borrower incurred after the date hereof which is
        secured by a Purchase Money Lien and which, when aggregated with
        the principal  amount of  all  Indebtedness for  Borrowed  Money
        (other than the Obligations)  and Capitalized Lease  Obligations
        of Borrower  at  the  time outstanding,  does  not  exceed  Five
        Hundred Thousand    and  No/100 Dollars  ($500,000).    For  the
        purposes  of  this  definition,  the  principal  amount  of  any
        Purchase Money  Indebtedness  consisting of  capitalized  leases
        shall be computed as a Capitalized Lease Obligation.

             Person - an  individual, sole proprietorship,  partnership,
        joint venture,  corporation,  limited liability  company,  joint
        stock  company,   land  trust,   association,  business   trust,
        institution, or unincorporated organization, or a government  or
        agency or political subdivision thereof.

             Plan - an employee benefit plan now or hereafter maintained
        for employees of Borrower that is covered by Title IV of ERISA.

             Prime Revolving  Credit  Portion  -  that  portion  of  the
        Revolving Credit Loan not subject to a LIBOR Option.

             Prime Term  Portion -  that portion  of the  Term Loan  not
        subject to a LIBOR Option.
<PAGE>
             Prohibited Transaction  -  any  transaction  set  forth  in
        Section 406 of  ERISA or Section  4975 of  the Internal  Revenue
        Code of 1986.

             Property - any interest in any  kind of property or  asset,
        whether real, personal or mixed, or tangible or intangible.

             Purchase  Money  Indebtedness  -  means  and  includes  (i)
        Indebtedness for Borrowed Money (other than the Obligations) for
        the payment of  all or  any part of  the purchase  price of  any
        fixed assets, (ii)  any Indebtedness for  Borrowed Money  (other
        than the Obligations) incurred at the time of or within ten (10)
        days prior to or after the  acquisition of any fixed assets  for
        the purpose of financing all or  any part of the purchase  price
        thereof, and  (iii)  any renewals,  extensions  or  refinancings
        thereof, but not any increases in the principal amounts  thereof
        outstanding at the time.

             Purchase Money Lien - a Lien upon fixed assets which secure
        Purchase Money Indebtedness, but only if such Lien shall at  all
        times be confined solely to the fixed assets the purchase  price
        of which was  financed through  the incurrence  of the  Purchase
        Money Indebtedness secured by such Lien.

             Rentals - as defined in Section 9.2(V) of this Agreement.

             Reportable Event - any of the  events set forth in  Section
        4043(b) of ERISA.

             Restricted Investment  -  any  investment  in  cash  or  by
        transfer or other delivery of Property to any Person, whether by
        acquisition  of  stock,  indebtedness  or  other  obligation  or
        Security, or  by  loan,  advance  or  capital  contribution,  or
        otherwise, or  in  any  Property  except  the  following:    (i)
        investments in  one  or  more  Subsidiaries  of  Borrower;  (ii)
        Property to be used  in the ordinary  course of business;  (iii)
        Current Assets arising from  the sale of  goods and services  in
        the  ordinary   course  of   business   of  Borrower   and   its
        Subsidiaries; (iv)  investments  in direct  obligations  of  the
        United States of America, or  any agency thereof or  obligations
        guaranteed by the United States  of America, provided that  such
        obligations mature within one year from the date of  acquisition
        thereof; (v)  investments in  certificates of  deposit  maturing
        within one year from the date of acquisition issued by a bank or
        trust company organized under the laws  of the United States  or
        any state thereof having  capital surplus and undivided  profits
        aggregating at  least  $100,000,000;  and  (vi)  investments  in
        commercial paper given the highest  rating by a national  credit
        rating agency and  maturing not  more than  two hundred  seventy
        (270) days from the date of creation thereof.

             Revolving Credit Loan - a Loan  made by Lender as  provided
        in Section 2.1 of this Agreement.
             Revolving Credit Loan  Commitment - as  defined in  Section
        2.1 of this Agreement.
<PAGE>
             Revolving Credit Notes - the  Revolving Credit Notes to  be
        executed by Borrower on or prior to the Closing Date in favor of
        Lender to evidence the Revolving Credit Loans, which shall be in
        the form of Exhibit A attached hereto.

             Security - shall have the same  meaning as in Section  2(1)
        of the Securities Act of 1933, as amended.

             Security Documents  -  the  Guaranty  Agreement,  each  New
        Mortgage, and all other instruments and agreements now or at any
        time  hereafter  securing   the  whole  or   any  part  of   the
        Obligations.

             Solvent - as to any  Person, such Person (i) owns  Property
        whose fair saleable value is greater than the amount required to
        pay all  of  such Person's  indebtedness  (including  contingent
        debts), (ii) is  able to  pay all  of its  indebtedness as  such
        indebtedness matures and (iii) has  capital sufficient to  carry
        on  its  business   and  transactions  and   all  business   and
        transactions in which it is about to engage.

             Statutory Reserves - a  fraction (expressed as a  decimal),
        the numerator of which is the number one and the denominator  of
        which is  the number  one minus  the  aggregate of  the  maximum
        reserve  percentages   (including,   without   limitation,   any
        marginal,  special,   emergency   or   supplemental   reserves),
        expressed as a decimal, established by  the Board and any  other
        banking authority to  which Lender is  subject for  Eurocurrency
        Liabilities (as  defined in  Regulation D  of the  Board or  any
        successor thereto).   Such  reserve percentages  shall  include,
        without limitation,  those  imposed  under  such  Regulation  D.
        LIBOR Revolving Credit Portions or LIBOR Term Portions shall  be
        deemed to constitute Eurocurrency Liabilities and as such  shall
        be deemed to  be subject  to such  reserve requirements  without
        benefit of or credit for proration, exceptions or offsets  which
        may be  available  from  time  to  time  to  Lender  under  such
        Regulation  D.      Statutory   Reserves   shall   be   adjusted
        automatically on and as of the  effective date of any change  in
        any reserve percentage, provided that no adjustment shall reduce
        Statutory Reserves below  the amount  in effect  on the  Closing
        Date.

             Subordinated Debt  -  Indebtedness for  Borrowed  Money  of
        Borrower that is subordinated to the Obligations.

             Subsidiary -  any  corporation  of  which  a  Person  owns,
        directly or indirectly through one or more intermediaries,  more
        than 50% of the Voting Stock at the time of determination.

             Tax - in relation to any LIBOR Revolving Credit Portion  or
        LIBOR Term Portion and the applicable LIBOR Rate, any tax, levy,
        impost,  duty,  deduction,  withholding  or  other  charges   of
        whatever nature required by any Legal Requirement (i) to be paid
        by Lender  and/or  (ii) to  be  withheld or  deducted  from  any
        payment otherwise  required hereby  to be  made by  Borrower  to
        Lender; provided,  that the  term "Tax"  shall not  include  any
        taxes imposed upon the net income of Lender by the United States
        of America or any political subdivision thereof.
<PAGE>
             Term Loan - the  Loan described in  Section 2.2(A) of  this
        Agreement.

             Term Loan Commitment - as defined in Section 2.2(A) of this
        Agreement.

             Term Notes - the Secured Promissory Notes to be executed by
        Borrower on or prior to the  Closing Date in favor of Lender  to
        evidence the Term Loan, which shall be in the form of Exhibit  B
        attached hereto.

             Voting Stock  - Securities  of any  class or  classes of  a
        corporation the holders of which are ordinarily, in the  absence
        of contingencies, entitled to elect a majority of the  corporate
        directors (or Persons performing similar functions).

   A.             Accounting  Terms.      All   accounting   terms   not
   specifically defined  herein shall  be construed  in accordance  with
   GAAP consistent with  that applied  in preparation  of the  financial
   statements referred  to in  Section 9.1(J),  and all  financial  data
   pursuant to the Agreement shall be  prepared in accordance with  such
   principles.

   A.             Other Terms.    All  other  terms  contained  in  this
   Agreement shall have,  when the  context so  indicates, the  meanings
   provided for by the Code to the  extent the same are used or  defined
   therein.

   A.             Certain Matters of Construction.  The terms  "herein",
   "hereof" and "hereunder" and other words  of similar import refer  to
   this Agreement  as  a  whole  and  not  to  any  particular  section,
   paragraph or subdivision.  Any pronoun used shall be deemed to  cover
   all genders.   The  section titles,  table of  contents and  list  of
   exhibits appear as a matter of convenience only and shall not  affect
   the interpretation of this Agreement.  All references to statutes and
   related regulations  shall include  any amendments  of same  and  any
   successor  statutes  and   regulations.    All   references  to   any
   instruments or agreements, including, without limitation,  references
   to any of the Loan Documents, shall include any and all modifications
   thereto and any  and all extensions  or renewals  thereof.   Wherever
   from the context it appears appropriate,  each term stated in  either
   the singular or plural shall include the singular and the plural, and
   pronouns stated in  the masculine,  feminine or  neuter gender  shall
   include the masculine, the feminine and the neuter.
<PAGE>
   I.   SECTION   CREDIT FACILITY

        Subject to the terms and conditions of, and in reliance upon the
   representations and warranties made in, this Agreement and the  other
   Loan Documents, Lender agrees to make  a total credit facility of  up
   to Two Million Five  Hundred Thousand Dollars ($2,500,000)  available
   upon Borrower's request therefor, as follows:

   A.             Revolving Credit Loans.

   1.                  The aggregate principal  amount of the  Revolving
   Credit Loans to be made by Lender is Two Million Two Hundred Thousand
   Dollars ($2,200,000) (the "Revolving  Credit Loan Commitment")  minus
   (without duplication)  (i)  the  Obligations  of  Borrower  hereunder
   (other than the  Term Loan) minus  (ii) the stated  amount of all  LC
   Guaranties and Letters of Credit minus (iii) the aggregate  principal
   amount  of  permanent  reductions   of  the  Revolving  Credit   Loan
   Commitment.   Subject to  all of  the terms  and conditions  of  this
   Agreement, Lender  agrees, for  so long  as no  Default or  Event  of
   Default exists, to  make Revolving Credit  Loans to  Borrower and  to
   provide Letters of  Credit and LC  Guaranties from time  to time,  as
   requested by Borrower in accordance with the terms of Section 2.3 and
   Section 2.4 hereof,  up to  a maximum  principal amount  at any  time
   outstanding equal  to  the  Borrowing  Base at  such  time.    It  is
   expressly understood and  agreed that  Lender may  use the  Borrowing
   Base as a maximum  ceiling on Revolving  Credit Loans outstanding  to
   Borrower at any time.  If the unpaid balance of the Revolving  Credit
   Loans should exceed the ceiling so determined or any other limitation
   set forth  in  this  Agreement, such  Revolving  Credit  Loans  shall
   nevertheless  constitute  Obligations   that  are   secured  by   the
   Collateral and entitled  to all the  benefits thereof.   In no  event
   shall Borrower be authorized to request a Loan at any time that there
   exists a  Default  or  an Event  of  Default.    Notwithstanding  the
   foregoing provisions of  this Section 2.1(A), Lender  shall have  the
   right to establish reserves in such amounts, and with respect to such
   matters, as Lender shall deem   reasonably necessary or  appropriate,
   against the  amount  of Revolving  Credit  Loans which  Borrower  may
   otherwise  request  under  this  Section 2.1(A),  including,  without
   limitation, with respect to (i) price adjustments, damages,  unearned
   discounts, returned  products  or  other  matters  for  which  credit
   memoranda are issued in the  ordinary course of Borrower's  business;
   (ii) shrinkage, spoilage  and obsolescence  of Inventory;  (iii) slow
   moving Inventory; (iv) other sums chargeable against Borrower's  Loan
   Account  as  Revolving  Credit  Loans  under  any  section  of   this
   Agreement;  and  (v) such  other   matters,  events,  conditions   or
   contingencies as  to  which  Lender, in  its  reasonable  discretion,
   determines  reserves  should  be   established  from  time  to   time
   hereunder.  Each Revolving Credit Loan shall be made on notice, given
   not later  than 11:00  A.M. (Chicago  time) (i) three  Business  Days
   prior to  the requested  borrowing date  in the  case of  LIBOR  Rate
   Loans; and (ii) on the Business Day of the proposed Revolving  Credit
   Loan in the case of Prime  Revolving Credit Portions, by Borrower  to
   Lender.  Each such notice (a "Notice of Revolving Credit Loan") shall
   be in writing or by telephone to Todd A. Andritsch of Lender at (847)
   640-3525, or  such other  person as  Lender notifies  Borrower of  in
   writing, confirmed  immediately in  writing, specifying  therein  the
   requested date and amount of such Revolving Credit Loan.
<PAGE>
   1.                  The Revolving Credit Loans shall be evidenced  by
   a promissory note  to be executed  and delivered by  Borrower at  the
   time of  the initial  Revolving Credit  Loan, the  form of  which  is
   attached hereto and made a part  hereof as Exhibit A (the  "Revolving
   Credit Note").   The Revolving Credit  Note shall be  payable to  the
   order of Lender and shall represent the obligation of Borrower to pay
   the amount of Lender's Revolving Credit Loan Commitment or, if  less,
   the aggregate unpaid principal amount  of all Revolving Credit  Loans
   made by Lender  to Borrower with  interest thereon  as prescribed  in

   Section 3.1.
   1.                  Insofar as Borrower may request and Lender may be
   willing in its sole and absolute discretion to make Revolving  Credit
   Loans to Borrower  at a  time when  the unpaid  balance of  Revolving
   Credit Loans exceeds,  or would exceed  with the making  of any  such
   Revolving Credit Loan, the  Borrowing Base (any  such Loans or  Loans
   being  herein  referred  to  individually  as  an  "Overadvance"  and
   collectively as "Overadvances"; provided, however, that the Term Loan
   shall not  be considered  an Overadvance),  Lender shall  enter  such
   Overadvances as debits in the Loan  Account.  All Overadvances  shall
   be repaid on demand, shall be deemed to be secured by the  Collateral
   and shall bear interest as provided  in this Agreement for  Revolving
   Credit Loans generally.

   1.                  The Revolving Credit Loans  shall be used  solely
   for the satisfaction of existing  Indebtedness for Borrowed Money  of
   Borrower to Silicon Valley Bank, and for Borrower's general operating
   capital needs to the  extent consistent with  the provisions of  this
   Agreement.

   A.             Term Loan.

   1.                  Term Loan.    Subject to  all  of the  terms  and
   conditions of this  Agreement, Lender  agrees to  make a   term  loan
   ("Term Loan")  to Borrower  in the  principal amount  equal to  Three
   Hundred Thousand  Dollars ($300,000)  (the "Term  Loan  Commitment").
   The Term Loan shall be evidenced, shall bear interest as specified in
   Section 3.1, shall be repayable in accordance with the terms of  Term
   Note, and shall be secured by  the Property of Borrower described  in
   Section 4 hereof and in the Security Documents.  The Term Loan  shall
   be funded on  the Closing  Date, concurrently  with Lender's  initial
   Revolving Credit Loan.  The proceeds  of the Term Loan shall be  used
   by Borrower  solely  for  purposes for  which  the  proceeds  of  the
   Revolving Credit Loans are authorized to be used.

             The Term Loan shall be made on notice, given not later than
   11:00 A.M. (Chicago time) on the Closing Date, by Borrower to Lender.
   Such notice from Borrower shall be by telephone to Todd A.  Andritsch
   of Lender at  (847) 640-3525, confirmed  immediately in writing,  and
   shall specify  the Closing  Date.   Lender  shall, before  3:00  P.M.
   (Chicago Time) on  the Closing Date,  wire to a  bank or other  third
   party designated by Borrower and reasonably acceptable to Lender, the
   amount of the Term Loan Commitment.
<PAGE>
   1.                  Mandatory Prepayments.    If  Borrower  sells  an
   aggregate amount of Equipment and  real Property during any  calendar
   year for  an aggregate  purchase price  in excess  of Fifty  Thousand
   Dollars  ($50,000),  or  if  any  of  the  Collateral  is  taken   by
   condemnation, Borrower shall prepay the principal installments of the
   Term Note, unless otherwise agreed by Lender, as and when received by
   the Borrower and as a mandatory  prepayment of the Term Loan (or,  at
   Lender's option, such of the other Obligations as Lender may  elect),
   a sum equal to  the proceeds received by  Borrower from such sale  or
   condemnation.  Said prepayments shall  be applied to the  outstanding
   principal balance of the Term Note.

   A.             Manner   of   Borrowing   Revolving   Credit    Loans.
   Borrowings under the credit facility established pursuant to  Section
   2.1 hereof shall be as follows:

   1.                  A request for  a Revolving Credit  Loan shall  be
   made, or shall be deemed  to be made, in  the following manner:   (i)
   Borrower may  give  Lender  notice of  its  intention  to  borrow  in
   accordance with the  provisions contained  in Section  2.1; (ii)  the
   becoming due of any amount required  to be paid under this  Agreement
   or the Term  Note as  interest shall be  deemed irrevocably  to be  a
   request for a  Revolving Credit Loan  on the due  date in the  amount
   required to pay  such interest;  and (iii)  the becoming  due of  any
   other Obligations shall be deemed irrevocably  to be a request for  a
   Revolving Credit Loan on the due date in the amount then so due;

   1.                  Borrower hereby irrevocably authorizes Lender  to
   disburse the proceeds  of each  Revolving Credit  Loan requested,  or
   deemed to be requested, pursuant to this Section 2.3 as follows:  (i)
   the proceeds of  each Revolving Credit  Loan requested under  Section
   2.3(A)(i) shall be disbursed by Lender in lawful money of the  United
   States of America in immediately available funds, in the case of  the
   initial Revolving Credit Loan,  in accordance with  the terms of  the
   written disbursement letter from  Borrower, and in  the case of  each
   subsequent borrowing, by wire transfer to such bank account as may be
   agreed upon by Borrower  and Lender from time  to time; and (ii)  the
   proceeds of  each  Revolving  Credit  Loan  requested  under  Section
   2.3(A)(ii) or (iii)  shall be disbursed  by Lender by  way of  direct
   payment of the relevant Obligation.
<PAGE>
   A.             Letters of Credit; LC Guaranties.

   1.                   Subject to availability under the Borrowing Base
   and all of the terms and conditions of this Agreement and subject  to
   the written consent of Lender, if requested to do so by Borrower, the
   Revolving Credit Loan Commitment and a  Revolving Credit Loan may  be
   made available to the Borrower (to the same extent a Revolving Credit
   Loan would otherwise be available hereunder)  in the form of  Letters
   of Credit issued by the Lender, or issued by its Affiliates, for  the
   account of Borrower, or the Lender  or its Affiliates may execute  LC
   Guaranties by  which  Lender or  its  Affiliates shall  guaranty  the
   payment or performance  by Borrower of  its reimbursement  obligation
   with respect to Letters  of Credit issued  for Borrower's account  by
   other Persons; provided, however, that (i) the aggregate face  amount
   of all Letters of  Credit and LC Guaranties  outstanding at any  time
   shall not exceed One Million Dollars ($1,000,000) and (ii) no  Letter
   of Credit may have  an expiration date that  is after the  Commitment
   Termination Date.  Any amounts paid  by Lender under any LC  Guaranty
   or in connection with any Letter  of Credit shall become part of  the
   Obligations and shall be payable on demand.

   1.                  Borrower agrees  to unconditionally,  irrevocably
   and absolutely pay  immediately to Lender  the amount  drawn under  a
   Letter of Credit or paid pursuant to  a LC Guaranty.  If Borrower  at
   any time fails to make such payment, Borrower shall be deemed to have
   elected to borrow  from Lender on  such date  Revolving Credit  Loans
   equal in aggregate  amount to the  amount paid by  Lender under  such
   Letter of Credit or LC Guaranty.
<PAGE>
   1.                  At the  time  Borrower requests  each  Letter  of
   Credit to be issued (or  prior to the first  issuance of a Letter  of
   Credit, in  the case  of a  continuing application),  Borrower  shall
   execute and  deliver to  Lender an  application  for such  Letter  of
   Credit in the form customarily prescribed by the Lender (individually
   an "Application" and  collectively the "Applications").   Subject  to
   the other provisions of this  subsection, the obligation of  Borrower
   to reimburse Lender for  drawings under a Letter  of Credit shall  be
   governed by the Application for such Letter of Credit.  In the  event
   Lender is not reimbursed  by Borrower for the  amount Lender pays  on
   any draft drawn under  a Letter of Credit  issued hereunder by  11:00
   a.m. (Chicago  time) on  the  date when  such  drawing is  paid,  the
   obligation of Borrower  to reimburse Lender  for the  amount of  such
   draft paid shall bear interest (which Borrower hereby promises to pay
   on demand)  from and  after the  date  the draft  is paid  and  until
   payment in full thereof at the Default  Rate as from time to time  in
   effect.   This Agreement  supersedes any  terms of  the  Applications
   which  are  irreconcilably  inconsistent   with  the  terms   hereof.
   Anything   contained   in   the   Applications   to   the    contrary
   notwithstanding, (i) Borrower shall pay fees in connection with  each
   Letter of Credit as set forth  in Section 3.2 hereof, (ii) except  as
   otherwise provided herein, prior to the occurrence of a Default or an
   Event of  Default, Lender  will not  call for  additional  collateral
   security for the obligations of Borrower under the Applications other
   than the collateral security contemplated  by this Agreement and  the
   Loan Documents, and (iii) except as otherwise provided herein,  prior
   to the occurrence of  a Default or an  Event of Default, Lender  will
   not call for the funding of a  Letter of Credit by Borrower prior  to
   being presented with a draft drawn  thereunder (or, in the event  the
   draft is  a time  draft, prior  to its  due date).   Borrower  hereby
   irrevocably authorizes  Lender to  charge any  of Borrower's  deposit
   accounts maintained with Lender for the amount necessary to reimburse
   Lender for any drafts drawn under Letters of Credit issued hereunder.

   1.                  Borrower is obligated, and hereby unconditionally
   agrees, to  pay in  immediately available  funds to  Lender (i)  each
   draft drawn and presented under a  Letter of Credit issued by  Lender
   hereunder and (ii) each LC Guaranty honored by Lender not later  than
   11:00 a.m. (Chicago Time)  on the date provided  for in the  relevant
   Application (Chicago time)  or letter of  credit subject  to such  LC
   Guaranty (the obligation of each  Borrower under this Section  2.4(D)
   with  respect  to  any  Letter  of   Credit  or  LC  Guaranty  is   a
   "Reimbursement Obligation").    Borrower's obligation  to  repay  all
   Reimbursement Obligations shall be absolute and unconditional.  If at
   any time Borrower  fails to  pay any  Reimbursement Obligations  when
   due, Borrower shall be deemed to have automatically requested a  Base
   Rate Loan from  Lender hereunder,  as of  the maturity  date of  such
   Reimbursement Obligation, the proceeds of which Loan shall be used to
   repay such Reimbursement Obligation.  Such Loan shall only be made if
   no Default  or Event  of Default  shall exist  and upon  approval  of
   Lender, and  shall be  subject to  availability under  the  Revolving
   Credit Loan Commitment.  If such Loan  is not made by Lender for  any
   reason, the unpaid amount of  such Reimbursement Obligation shall  be
   due and payable to Lender upon demand and shall bear interest at  the
   Default Rate.
<PAGE>
   A.             All Loans  to Constitute  One Obligation.   The  Loans
   shall constitute one  general Obligation  of Borrower,  and shall  be
   secured by Lender's  security interest in  and Lien upon  all of  the
   Collateral, and by  all other security  interests, Liens, claims  and
   encumbrances heretofore,  now  or  at any  time  or  times  hereafter
   granted by Borrower to Lender.

   A.             Loan Account.  Lender shall enter all Loans as  debits
   to the Loan  Account and shall  also record in  the Loan Account  all
   payments made  by Borrower  on any  Obligations and  all proceeds  of
   Collateral which are finally paid to  Lender and may record  therein,
   in accordance with  customary accounting practice,  other debits  and
   credits, including all  charges and expenses  properly chargeable  to
   Borrower and any other Obligation.

   I.   SECTION   INTEREST, FEES, TERM AND REPAYMENT

   A.             Interest, Fees and Charges.

   a)                  Interest.    Interest  shall accrue on the  Prime
   Revolving Credit Portion outstanding at the end of each day (computed
   on the basis of a  calendar year of 360  days) at a fluctuating  rate
   per annum equal to the sum  of one-half percent (.50%) plus the  Base
   Rate.  After the date hereof, the foregoing rate of interest shall be
   increased or decreased, as the case may be, by an amount equal to any
   increase or decrease in  the Base Rate, with  such adjustments to  be
   effective as of  the opening  of business on  the day  that any  such
   change in the Base Rate becomes  effective.  The Base Rate in  effect
   on the date hereof shall be the Base Rate Effective on the opening of
   business on the date hereof, but  if this Agreement is executed on  a
   day that is not a Business Day, the  Base Rate in effect on the  date
   hereof shall be the Base Rate effective as of the opening of business
   on the last Business Day immediately preceding the date hereof.

   a)                       Interest  shall   accrue   on   each   LIBOR
   Revolving Credit Portion outstanding at the end of each day (computed
   on the basis of a calendar  year of 360 days)  at rates equal to  the
   sum of the LIBOR Rate applicable to each such LIBOR Revolving  Credit
   Portion plus three percent (3%).

   a)                       Interest shall  accrue  on  the  Prime  Term
   Portion outstanding at the end of each day (computed on the basis  of
   a calendar year of 360 days) at a fluctuating rate per annum equal to
   the sum of  one-half percent (.50%)  plus the Base  Rate.  After  the
   date hereof, the  foregoing rate of  interest shall  be increased  or
   decreased, as the case may be, by an amount equal to any increase  or
   decrease in the Base Rate, with  such adjustments to be effective  as
   of the opening of  business on the  day that any  such change in  the
   Base Rate becomes  effective.  The  Base Rate in  effect on the  date
   hereof shall be the Base Rate effective on the opening of business on
   the date hereof, but if this Agreement  is executed on a day that  is
   not a Business Day, the Base Rate in effect on the date hereof  shall
   be the Base Rate effective as of the opening of business on the  last
   Business Day immediately preceding the date hereof.
<PAGE>
   a)                        Interest shall  accrue on  each LIBOR  Term
   Portion outstanding at the end of each day (computed on the basis  is
   of a calendar  year of 360  days) at rates  equal to the  sum of  the
   LIBOR Rate applicable to each such LIBOR Term Loan Portion plus three
   percent (3%).

   2.                  LIBOR Option.

   a)                       Conditions for Basing Interest on the  LIBOR
   Rate.  Upon the condition that:

             (1)                 Lender  shall  have  received  a  LIBOR
             Request from  Borrower at  least  three (3)  Business  Days
             prior to the first day of the LIBOR Period requested  prior
             to 1:00 p.m. (Chicago time) on such Business Day;

             (1)                 There shall have occurred no change  in
             applicable law which would make  it unlawful for Lender  to
             obtain deposits  of U.S.  dollars in  the London  interbank
             foreign currency deposits market;

             (1)                 As of the date of the LIBOR Request and
             the first day  of the LIBOR  Period, there  shall exist  no
             Default or Event of  Default which has  not been waived  by
             Lender; and

             (1)                 Lender shall  not  have  determined  in
             good faith that  Lender is  unable to  determine the  LIBOR
             Rate in  respect  of the  requested  LIBOR Period  or  that
             Lender is unable to obtain deposits of U.S. dollars in  the
             London interbank foreign  currency deposits  market in  the
             applicable amounts and for the requested LIBOR Period;

   then interest on the LIBOR Revolving Credit Portion and/or LIBOR Term
   Portion requested during the LIBOR Period requested will be based  on
   the applicable LIBOR Rate.  Notwithstanding anything contained to the
   contrary, at no time shall there be more than four (4) LIBOR Portions
   outstanding hereunder.

   a)                       Indemnification for Funding and Other Losses
   .  Each LIBOR Request shall  be irrevocable and binding on  Borrower.
   Borrower shall indemnify  Lender as a  result of any  failure on  the
   part of Borrower to fulfill, on  or before the date specified in  any
   LIBOR Request, the applicable conditions set forth in this Agreement,
   including,  without   limitation,  any   loss  (including   loss   of
   anticipated profits) or expense incurred by reason of the liquidation
   of redeployment of deposits or other funds acquired by Lender to fund
   or maintain the requested LIBOR Revolving Credit Portion and/or LIBOR
   Term Portion,  when, as  a result  of  such failure  on the  part  of
   Borrower, interest on  such LIBOR Revolving  Credit Portion or  LIBOR
   Term Portion  is not  based  on the  applicable  LIBOR Rate  for  the
   requested LIBOR Period.
<PAGE>
   a)                       Change in Applicable Laws, Regulations, etc.
   If any Legal Requirement  shall make it unlawful  for Lender to  fund
   through the  purchase of  U.S. dollar  deposits any  LIBOR  Revolving
   Credit Portion or LIBOR Term Portion, or otherwise to give effect  to
   its obligations as contemplated under  this Section 3.1(B), or  shall
   impose on Lender any costs based on or measured by the excess above a
   specified level of  the amount  of a  category of  deposits or  other
   liabilities of Lender which includes  deposits by reference to  which
   the LIBOR Rate  is determined  as provided  herein or  a category  of
   extensions of credit  or other assets  or Lender  which includes  any
   LIBOR Revolving  Credit  Portion, or  LIBOR  Term Portion,  or  shall
   impose on Lender any restrictions on the amount of such a category of
   liabilities of assets which Lender may hold, (i) Lender may by notice
   thereof to Borrower terminate the LIBOR  Option, with respect to  the
   Revolving Credit Loans and Term Loans  made or to be made by  Lender,
   (ii) any LIBOR Revolving Credit Portion of Lender's Revolving  Credit
   Loans and/or any LIBOR  Term Portion of  Lender's Term Loans  subject
   thereto shall  immediately  bear  interest  thereafter  at  the  rate
   provided for in Section 3.1(A) payable  on the dates provided for  in
   Section 3.5(C), and (iii) Borrower shall indemnify Lender against any
   loss, penalty  or  expense  incurred  by  Lender  by  reason  of  the
   liquidation or redeployment  of deposits or  other funds acquired  by
   Lender to fund or maintain such LIBOR Revolving Credit Portion and/or
   LIBOR Term Portion.

   a)                       Taxes.  It is the understanding of  Borrower
   and Lender that Lender shall receive payments of amounts of principal
   of and interest  on the Revolving  Credit Note, with  respect to  the
   LIBOR Revolving Credit Portions and on the Term Note with respect  to
   LIBOR Term Portions from time to time subject to a LIBOR Option  free
   and clear of, and  without deduction for, any  Taxes.  If (i)  Lender
   shall be  subject  to any  such  Tax in  respect  of any  such  LIBOR
   Revolving Credit Portion or LIBOR Term Portion or any part thereof or
   (ii) Borrower shall be  required to withhold or  deduct any such  Tax
   from any  such  amount,  the LIBOR  Rate  applicable  to  such  LIBOR
   Revolving Credit Portion or LIBOR Term  Portion shall be adjusted  by
   Lender  to  reflect  all  additional  costs  incurred  by  Lender  in
   connection with the payments by Lender or the withholding by Borrower
   of such  Tax  and Borrower  shall  provide Lender  with  a  statement
   detailing the  amount of  any such  Tax  actually paid  by  Borrower.
   Determination by Lender  of the amount  of such costs  shall, in  the
   absence of manifest error, be conclusive, and at Borrower's  request,
   Lender shall demonstrate the basis of  such determination.  If  after
   any  such  adjustment,  any  part  of  any  Tax  paid  by  Lender  is
   subsequently recovered by Lender, Lender shall reimburse Borrower  to
   the extent of the amount so  recovered.  A certificate of an  officer
   of Lender setting  forth the amount  of such recovery  and the  basis
   therefor shall, in the absence of manifest error, be conclusive.

   1.                  Default Rate  of Interest.   Upon  and after  the
   occurrence of  an  Event  of Default,  and  during  the  continuation
   thereof, the principal amount of the Obligations shall bear interest,
   calculated daily (computed on the actual days elapsed over a year  of
   360 days), at a fluctuating rate per annum equal to four percent (4%)
   above the Base Rate (the "Default Rate").
<PAGE>
   1.                  Unused Line Fee.  If during any calendar  quarter
   prior to the Commitment Termination  Date, the average daily  balance
   of the  Revolving Credit  Loan is  less  than the  Maximum  Revolving
   Credit Loan  amount as  reduced by  any  permanent reduction  in  the
   Revolving Credit Loan  Commitment, Borrower  shall pay  to Lender  in
   addition to  any interest,  late charges  or liquidated  damages  due
   under this  Agreement,  an  amount  ("Unused  Revolving  Credit  Loan
   Charge") equal to the quotient of (i) an amount equal to (A) the  sum
   of positive  differences between  the Maximum  Revolving Credit  Loan
   above and  the sum  of the  average daily  balance of  the  Revolving
   Credit Loan plus the sum of the daily balance of outstanding  Letters
   of Credit and L/C Guaranties on each during such quarter for each day
   during the previous quarter or  portion thereof, multiplied by  (B) a
   rate equal to one quarter of one percent (1/4%), divided by (ii) 360.
   The amount  of  any Unused  Revolving  Credit Loan  Charge  shall  be
   payable to Lender  quarterly, in arrears,  commencing April 1,  1998,
   with a final payment date on the Commitment Termination Date.

   2.                  Closing Fee.   Borrower  shall  pay to  Lender  a
   closing fee of  Fifteen Thousand  Dollars ($15,000),  which shall  be
   deemed  fully  earned  and  nonrefundable  at  the  closing  of   the
   transactions contemplated hereby and shall be paid concurrently  with
   the initial Loan hereunder.  Such fee shall compensate Lender for the
   costs  associated  with  the  origination,  structuring,  processing,
   approving and  closing  of  the  transactions  contemplated  by  this
   Agreement,   including,   but   not   limited   to,   administrative,
   out-of-pocket, general overhead and  lost opportunity costs, but  not
   including any expenses  for which  Borrower has  agreed to  reimburse
   Lender pursuant to any other provisions  of this Agreement or any  of
   the other Loan Documents, such as, by way of example, legal fees  and
   expenses.

   1.                  Capital Adequacy  Charge.    In  the  event  that
   Lender shall have determined  that the adoption of  any law, rule  or
   regulation regarding capital  adequacy, or any  change therein or  in
   the interpretation  or application  thereof or  compliance by  Lender
   with any request or directive regarding capital adequacy (whether  or
   not having the force  of law) from any  central bank or  governmental
   authority, does or  shall have  the effect  of reducing  the rate  of
   return on  Lender's  capital  as a  consequence  of  its  obligations
   hereunder to a level below that which Lender could have achieved  but
   for such adoption,  change or compliance  (taking into  consideration
   Lender's policies  with respect  to capital  adequacy) by  an  amount
   deemed by Lender, in its sole  discretion, to be material, then  from
   time to time,  after submission by  Lender to Borrower  of a  written
   demand therefor, the  Borrower shall  pay to  Lender such  additional
   amount or amounts as  will compensate Lender for  such reduction.   A
   certificate of Lender  claiming entitlement to  payment as set  forth
   above shall be  conclusive in the  absence of manifest  error.   Such
   certificate shall set forth the nature of the occurrence giving  rise
   to such  payment, the  additional amount  or amounts  to be  paid  to
   Lender, and the  method by which  such amounts were  determined.   In
   determining such amount, Lender may use any reasonable averaging  and
   attribution method.
<PAGE>
   1.                  Maximum Interest.   In  no contingency  or  event
   whatsoever  shall  the  aggregate  of  all  amounts  deemed  interest
   hereunder or under  the Revolving Credit  Note or the  Term Note  and
   charged or  collected pursuant  to the  terms  of this  Agreement  or
   pursuant to the  Revolving Credit Note  or the Term  Note exceed  the
   highest rate permissible  under any law  which a  court of  competent
   jurisdiction shall, in a final determination, deem applicable hereto.
   In the event that such a court determines that Lender has charged  or
   received interest hereunder in excess of the highest applicable rate,
   the rate in effect  hereunder shall automatically  be reduced to  the
   maximum rate permitted  by applicable law  and Lender shall  promptly
   refund to Borrower any interest received  by Lender in excess of  the
   maximum lawful rate or, if so requested by Borrower, shall apply such
   excess to the principal balance of the Obligations.  It is the intent
   hereof that Borrower not pay or contract to pay, and that Lender  not
   receive or contract to receive, directly or indirectly in any  manner
   whatsoever, interest in excess of that which may be paid by  Borrower
   under applicable law.

   1.                  Discretion of  Lender as  to Manner  of  Funding.
   Notwithstanding any  provision of  this  Agreement to  the  contrary,
   Lender shall be entitled to fund  and maintain its funding of all  or
   any part of the Loans in any manner it sees fit, it being  understood
   however, that for the purposes  of this Agreement all  determinations
   hereunder shall  be  made  as  if  Lender  had  actually  funded  and
   maintained each LIBOR Portion during each Interest Period  applicable
   thereto through the purchase  of deposits in  the relevant market  in
   the amount of such LIBOR Portion, having a maturity corresponding  to
   such Interest Period and bearing an interest rate equal to the  LIBOR
   Rate for such Interest Period.

   A.             Letter of Credit and LC Guaranty Fees.  As  additional
   consideration for  Lender  issuing  its, or  causing  to  be  issued,
   Letters of  Credit  for Borrower's  account  or for  issuing  its  LC
   Guaranties at  Borrower's request  pursuant  to Section  2.4  hereof,
   Borrower agrees to pay  Lender, commencing with  the date upon  which
   the Letter  of  Credit  or  LC  Guaranty  is  issued  and  upon  each
   subsequent renewal or issuance thereafter during which the Letters of
   Credit or LC Guaranties are outstanding, a fee in an amount equal  to
   the quotient of  (x) an  amount equal  to (A)  the sum  of the  daily
   outstanding amount  of  such  Letter  of  Credits  or  LC  Guaranties
   outstanding on each day during the previous month multiplied by (B) a
   rate equal to one percent (1%) for Standby Letters of Credit, or  (2)
   one-quarter  percent  (0.25%)  for  Documentary  Letters  of  Credit,
   divided by (y)  360.  Further,  Borrower shall  pay and/or  reimburse
   Lender all fees and charges paid  by Lender on account of any  Letter
   of Credit or LC  Guaranty, including, but  not limited to,  customary
   issuance and draw fees.  Such fees and other amounts shall be paid to
   Lender in  advance upon  the issuance  or renewal  of any  Letter  of
   Credit or LC Guaranties and on the Commitment Termination Date.

   A.             Term of Agreement.  Subject to Lender's right to cease
   making Loans to Borrower at any time upon or after the occurrence  of
   any Default or Event  of Default, this Agreement  shall be in  effect
   for a  period through  and including  March 31, 2000  (the  "Original
   Term").
<PAGE>
   A.             Termination.

   1.                  Upon at  least  ninety (90)  days  prior  written
   notice to  Lender,  Borrower  may,  at  its  option,  terminate  this
   Agreement; provided, however, no such termination shall be  effective
   until Borrower  has  paid  all  of  the  Obligations  in  immediately
   available funds and  all Letters of  Credit issued by  Lender or  its
   Affiliates and all LC Guaranties have expired.

   1.                  Borrower may  terminate or  reduce the  financing
   under the Revolving Credit Loan at any  time prior to the end of  the
   Original Term  by  giving  to  the  other  party  written  notice  of
   reduction or termination hereunder,  by registered or certified  mail
   addressed to the other  party at its principal  place of business  at
   least one (1) day prior to the end of any such term.  In order for  a
   notice of  reduction or  termination  to become  effective,  Borrower
   shall, on or before  the termination date or  reduction date, pay  to
   Lender in full all of Borrower's Obligations under this Agreement and
   the Notes in an amount to the reduction or  in full in the case of  a
   termination, notwithstanding that any portion thereof may be  payable
   in installments not yet due, and shall cause all outstanding  Letters
   of Credit or L/C Guaranties to  be terminated, or otherwise  provided
   for as  set  forth  in  Section 3.4(D).    The  aforesaid  notice  of
   termination  by  Borrower  or  Lender   shall  have  the  effect   of
   accelerating payment on any principal indebtedness not then due.   In
   the event of a termination, Lender shall have no further  Obligations
   to make Revolving Credit Loans after  the date specified in any  such
   notice of termination.

   1.                  All  of   the  Obligations   including,   without
   limitation, the Term Loan,  shall be forthwith  due and payable  upon
   any termination of  this Agreement.   Except  as otherwise  expressly
   provided for  in  this Agreement  or  the other  Loan  Documents,  no
   termination or  cancellation (regardless  of cause  or procedure)  of
   this Agreement, or any of the  other Loan Documents shall in any  way
   affect or impair the  rights, powers or privileges  of Lender or  the
   obligations, duties, or liabilities of Borrower or Lender in any  way
   relating to  (i) any  transaction or  event occurring  prior to  such
   termination  or  cancellation  or  (ii)  any  of  the   undertakings,
   agreements, covenants,  warranties  or  representations  of  Borrower
   contained in this Agreement, or any of the other Loan Documents.  All
   such   undertakings,    agreements,   covenants,    warranties    and
   representations  of  Borrower  shall  survive  such  termination   or
   cancellation and Lender shall retain its Liens in the Collateral, and
   all of its  rights and remedies  under this Agreement  and the  other
   Loan Documents notwithstanding such termination or cancellation,  and
   Lender shall retain its  Liens in the  Collateral until Borrower  has
   paid the  Obligations to  Lender in  full, in  immediately  available
   funds.
<PAGE>
   1.                  With  respect  to  the  face  amount  of  all  LC
   Guaranties and Letters of  Credit issued by  Lender or Affiliates  of
   Lender outstanding on any proposed  date of termination, Lender  may,
   at its option, require Borrower to deposit with Lender funds equal to
   such face  amount,  in  order for  any  such  termination  to  become
   effective.  Any such deposit or advance shall be held by Lender as  a
   reserve to  fund future  payments on  such LC  Guaranties and  future
   drawings against such  Letters of  Credit.  At  such time  as all  LC
   Guaranties have been  paid or terminated  and all  Letters of  Credit
   have been  drawn  upon or  expired,  any amounts  remaining  in  such
   reserve shall be applied against  any outstanding Obligations, or  to
   the extent  all  Obligations have  been  indefeasibly paid  in  full,
   returned to Borrower.

   1.                  It is  understood  that  Borrower  may  elect  to
   terminate this Agreement in its entirety only; no section or  lending
   facility may be terminated singly.

   A.             Payments.  Except  where evidenced by  notes or  other
   instruments  issued  or  made  by  Borrower  to  Lender  specifically
   containing payment provisions which are in conflict with this Section
   3.5 (in which event the conflicting provisions of said notes or other
   instruments  shall  govern   and  control),  that   portion  of   the
   Obligations consisting of:

   1.                  Principal, payable on account of Revolving Credit
   Loans made by  Lender to  Borrower pursuant  to Section  2.1 of  this
   Agreement, shall be  payable by Borrower  to Lender immediately  upon
   the earliest of (i) the receipt by Lender or Borrower of any proceeds
   of any of the Collateral consisting of Accounts or Inventory, to  the
   extent of said proceeds, (ii) the  occurrence of an Event of  Default
   in consequence of which Lender elects to accelerate the maturity  and
   payment of the  Obligations, or (iii)  termination of this  Agreement
   pursuant to  Section  3.4  hereof; provided,  however,  that  if  the
   principal balance of Revolving Credit  Loans outstanding at any  time
   shall exceed  the Borrowing  Base at  such time,  Borrower shall,  on
   demand, repay the Revolving Credit Loans  in an amount sufficient  to
   reduce the aggregate unpaid principal amount of such Revolving Credit
   Loans by an amount equal to such excess;

   1.                  Principal, payable on account  of the Term  Loans
   made by Lender to Borrower pursuant to Section 2.2 of this  Agreement
   shall be payable by Borrower to  Lender in an amount equal to  $3,750
   per month which is based upon a five-year amortization schedule  with
   a final  payment  due  on March 31,  2000  or  immediately  upon  the
   earliest of (i) the occurrence of an Event of an Event of Default  in
   consequence of which  Lender elects  to accelerate  the maturity  and
   payment of  the Obligations,  or (ii) termination  of this  Agreement
   pursuant to Section 3.4 hereof;
<PAGE>
   (a)                   Interest accrued on the Prime Revolving  Credit
   Portion and the Prime  Term Portion shall be  due on the earliest  of
   (i) the  first  day of  each  month (for  the  immediately  preceding
   month), computed  through  the last  calendar  day of  the  preceding
   month, (ii) the occurrence of an Event of Default in the  consequence
   of which Lender elects to accelerate the maturity and payment of  the
   Obligations or  (iii)  termination  of  this  Agreement  pursuant  to
   Section  3.4   hereof;  provided,   however,  the   Borrower   hereby
   irrevocably  authorizes  Lender,  in  Lender's  sole  discretion,  to
   advance  to  Borrower  and  to  charge  to  Borrower's  Loan  Account
   hereunder as a Revolving Credit Loan, a sum sufficient each month  to
   pay all interest accrued on the Prime Revolving Credit Portion and on
   the Prime Term Portion during the immediately preceding month.

   (a)                      Interest  on  the  LIBOR  Revolving   Credit
   Portion and the LIBOR  Term Portion shall be  due on the earliest  of
   (i) each LIBOR Interest  Payment Date applicable  to each such  LIBOR
   Revolving Credit  Portion  and  each LIBOR  Term  Portion,  (ii)  the
   occurrence of Events of Default in consequence of which Lender elects
   to accelerate the maturity and payment  of the Obligations, or  (iii)
   termination of  this Agreement  pursuant  to Section  3.4;  provided,
   however, that  Borrower irrevocably  authorizes Lender,  in  Lender's
   sole discretion, to  advance to  Borrower, and  to charge  Borrower's
   Loan Account  hereunder as  a Revolving  Credit  Loan on  each  LIBOR
   Interest Payment Date, a sum sufficient  to pay all interest  accrued
   and payable with respect to each  LIBOR Revolving Credit Portion  and
   each LIBOR Term Portion.

   1.                  Costs, fees and expenses payable pursuant to this
   Agreement shall be payable  by Borrower, on demand,  to Lender or  to
   any other Person designated by Lender in writing; and

   1.                  The balance  of  the  Obligations  requiring  the
   payment of money, if any, shall  be payable by Borrower to Lender  as
   and when  provided in  this Agreement,  the Other  Agreements or  the
   Security Documents, or on demand, whichever is earlier.

   A.             Application of  Payments  and Collections.    Borrower
   irrevocably waives the right to direct the application of any and all
   payments and collections at any time  or times hereafter received  by
   Lender from  or  on behalf  of  Borrower, and  Borrower  does  hereby
   irrevocably agree  that Lender  shall have  the continuing  exclusive
   right to apply and reapply any and all such payments and  collections
   received at  any  time  or times  hereafter  by  Lender  against  the
   Obligations,  in   such  manner   as  Lender   may  deem   advisable,
   notwithstanding any  entry  by  Lender upon  any  of  its  books  and
   records.  If as the result  of collections of Accounts as  authorized
   by Section 5.2 hereof  a credit balance exists  in the Loan  Account,
   such credit balance shall not accrue  interest in favor of  Borrower,
   but shall be available to Borrower at  any time or times for so  long
   as no Default or  Event of Default  exists.  In  no event shall  such
   credit balance be  applied or  be deemed to  have been  applied as  a
   prepayment of the Term Loan.

        Upon receipt from Borrower of  good funds, Lender will  promptly
   thereafter cause to be distributed like funds relating to the payment
   of principal, interest or, if applicable, fees ratably to Lender.
<PAGE>
   A.             Statements  of  Account.    Lender  will  account   to
   Borrower monthly with a statement of Loans, charges and payments made
   pursuant to this Agreement, a copy  of which shall be sent to  Lender
   and such account rendered  by Lender shall  be deemed final,  binding
   and conclusive upon Borrower unless Lender is notified by Borrower in
   writing to the  contrary within  thirty (30)  days of  the date  each
   account is mailed to Borrower.   Such notice shall only be deemed  an
   objection to those items specifically objected to therein.

   I.   SECTION   COLLATERAL:  GENERAL TERMS

   A.             Security Interest in Collateral.  To secure the prompt
   payment and performance to Lender of the Obligations, Borrower hereby
   grants to Lender a continuing security interest in and Lien upon  all
   of Borrower's current  and non-current assets,  including all of  the
   following Property and interests in Property of Borrower, whether now
   owned or  existing  or hereafter  created,  acquired or  arising  and
   wheresoever located:

   1.                  Accounts;

   1.                  Inventory;

   1.                  Equipment;

   1.                  General Intangibles;

   1.                  All monies and other Property of any kind, now or
   at any  time or  times  hereafter, in  the  possession or  under  the
   control of Lender or a bailee of Lender;

   1.                  All accessions  to,  substitutions  for  and  all
   replacements, products and  cash and non-cash  proceeds of (A),  (B),
   (C), (D) and  (E) above, including,  without limitation, proceeds  of
   and unearned premiums with respect to insurance policies insuring any
   of the Collateral; and

   1.                  All  books   and  records   (including,   without
   limitation,  customer   lists,  credit   files,  computer   programs,
   print-outs, and  other computer  materials and  records) of  Borrower
   pertaining to any of (A), (B), (C), (D), (E) or (F) above.
<PAGE>
   A.             Lien on Realty.  If Borrower shall acquire at any time
   or times  hereafter any  interest in  other real  Property,  Borrower
   agrees promptly  to  execute  and deliver  to  Lender  as  additional
   security and Collateral for the Obligations, deeds of trust, security
   deeds, mortgages or other collateral assignments satisfactory in form
   and  substance  to  Lender,  and  its  counsel  (herein  collectively
   referred to as "New  Mortgages") covering such  real Property.   Each
   New Mortgage  shall  be  duly recorded  in  each  office  where  such
   recording is required to constitute a valid Lien on the real Property
   covered thereby.   Borrower  shall deliver  to Lender  at  Borrower's
   expense,  mortgagee  title  insurance  policies  issued  by  a  title
   insurance  company  satisfactory   to  Lender   insuring  Lender   as
   mortgagee; such policies shall be in form and substance  satisfactory
   to Lender and shall insure a valid  first Lien in favor of Lender  on
   the Property  covered  thereby,  subject  only  to  those  exceptions
   acceptable to Lender and its counsel.  Said policies shall be in form
   and substance  satisfactory to  Lender.   Borrower shall  deliver  to
   Lender such  other  documents, including,  without  limitation,  ALTA
   Surveys, of  the  real  Property,  as  Lender  and  its  counsel  may
   reasonably request relating to the real Property subject to any  such
   New Mortgages.

   A.             Representations,   Warranties    and   Covenants    --
   Collateral.  To induce Lender to enter into this Agreement,  Borrower
   represents, warrants, and covenants to Lender:

   1.                  The Collateral is now, and so long as any of  the
   Obligations are outstanding,  will continue  to be,  owned solely  by
   Borrower.   No  other Person  has  or  will have  any  right,  title,
   interest, claim, or Lien thereon, other than a Permitted Lien.

   1.                  Except as specifically consented to in writing by
   Lender, the Liens granted to Lender  shall be first and prior on  the
   Collateral and as to the  Accounts and proceeds, including  insurance
   proceeds, resulting from the sale, disposition, or loss thereof.   No
   further action need be taken to  perfect the Liens granted to  Lender
   other than the filing  of continuation statements  under the Code  or
   other applicable law, continued possession by Lender of that  portion
   of the  Collateral  constituting  instruments or  documents  and  the
   processing of Lien notations on motor vehicle title certificates  and
   the recording of the New Mortgages.

   1.                  All   goods   evidenced    by   the    Collateral
   constituting chattel paper, documents, or instruments, the possession
   of which has been given to Lender, are owned by Borrower and the same
   are free and clear of any prior Lien.  Borrower further warrants  and
   guarantees  the  value,  quantities,  sound  condition,  grades,  and
   qualities of  the goods  and services  described therein.    Borrower
   shall pay and discharge when due all taxes, levies, and other charges
   upon said Collateral and  upon the goods  evidenced by any  documents
   constituting Collateral and shall defend  Lender against and save  it
   harmless  from  all  claims  of  any  Person  with  respect  to   the
   Collateral.  This indemnity shall include reasonable attorneys'  fees
   and legal expenses.
<PAGE>
   A.             Lien Perfection.  Borrower agrees to execute the UCC-1
   financing statements or similar documents provided for by the Code or
   otherwise, together with any  and all other instruments,  assignments
   or documents and shall take such  other action as may be required  to
   perfect or to continue the  perfection of Lender's security  interest
   in the Collateral,  including, without limitation,  the execution  at
   Lender's request of all documents deemed necessary by Lender to cause
   Lender's Lien to be noted on any motor vehicle title certificates for
   motor vehicles forming a part of  the Collateral.  Unless  prohibited
   by applicable law, Borrower hereby  authorizes Lender to execute  and
   file any such financing statement on Borrower's behalf.  The  parties
   agree that  a  carbon, photographic  or  other reproduction  of  this
   Agreement shall be  sufficient as a  financing statement  and may  be
   filed in any appropriate office in lieu thereof.

   A.             Location of Collateral.   All  Collateral, other  than
   Inventory in transit and motor vehicles, will at all times be kept by
   Borrower at  one or  more  of the  business  locations set  forth  in
   Exhibit C  and  shall not,  without  the prior  written  approval  of
   Lender, be moved therefrom except, prior  to an Event of Default  and
   the acceleration of  the maturity of  the Obligations in  consequence
   thereof, for  (A)  sales  of Inventory  in  the  ordinary  course  of
   business; (B)  the  storage  of Inventory  at  locations  within  the
   continental United States other than those shown on Exhibit C if  (i)
   Borrower gives Lender written notice of  the new storage location  at
   least thirty (30) days prior to  storing Inventory at such  location,
   (ii) Lender's security interest in such Inventory is and continues to
   be a  duly  perfected, first  priority  Lien thereon,  (iii)  neither
   Borrower's nor Lender's right of entry  upon the premises where  such
   Inventory is stored, or its right to remove the Inventory  therefrom,
   is in any way restricted, (iv) the owner of such premises agrees with
   Lender not  to  assert any  landlord's,  bailee's or  other  Lien  in
   respect of the Inventory for unpaid  rent or storage charges and  (v)
   all negotiable documents  and receipts in  respect of any  Collateral
   maintained at such  premises are  promptly delivered  to Lender;  (C)
   temporary transfers (for a period not  to exceed three (3) months  in
   any event) of  Equipment from a  location set forth  on Exhibit C  to
   another location  if  done  for the  limited  purpose  of  repairing,
   refurbishing or overhauling such Equipment in the ordinary course  of
   Borrower's business and (D) removals in connection with  dispositions
   of  Equipment   that   are   authorized  by   Section   7.4   hereof.
   Notwithstanding anything else herein  to the contrary, Inventory  (i)
   with an aggregate value of less than $100,000 may be in transit,  to,
   or at, a trade show or the  home or office of a sales  representative
   of Borrower, and (ii)  with an aggregate value  of less than  $30,000
   may be held by third parties, including but not limited to Borrower's
   customers, to demonstrate the benefit of Borrower's products.
<PAGE>
   A.             Insurance of Collateral.  Borrower agrees to  maintain
   and pay  for  insurance  upon all  Collateral  wherever  located,  in
   storage or  in  transit in  vehicles,  including goods  evidenced  by
   documents, covering casualty, hazard, public liability and such other
   risks and in such amounts and with such insurance companies as  shall
   be reasonably satisfactory to Lender  to insure Lender's interest  in
   the Collateral.  Borrower  shall deliver copies  of such policies  to
   Lender with satisfactory  lender's loss  payable endorsements  naming
   Lender loss payee.   Each policy  of insurance  or endorsement  shall
   contain a clause requiring the insurer  to give not less than  thirty
   (30) days prior written notice to Lender in the event of cancellation
   of the  policy for  any  reason whatsoever.    If Borrower  fails  to
   provide and  pay  for  such  insurance,  Lender  may,  at  Borrower's
   expense, procure  the same,  but  shall not  be  required to  do  so.
   Borrower agrees  to deliver  to Lender,  promptly as  rendered,  true
   copies of  all  reports made  in  any reporting  forms  to  insurance
   companies.   Borrower  will  maintain,  with  financially  sound  and
   reputable insurers,  insurance with  respect  to its  Properties  and
   business against  such  casualties  and contingencies  of  such  type
   (including   public    liability,   product    liability,    larceny,
   embezzlement, or other  criminal misappropriation  insurance) and  in
   such amounts as is customary in the business.

   A.             Protection of Collateral.  All insurance expenses  and
   all expenses of protecting, storing, warehousing, 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 or  in respect of the  sale
   thereof shall be borne  and paid by Borrower.   If Borrower fails  to
   promptly pay any portion thereof when due, Lender may, at its option,
   but shall  not be  required to,  pay  the same  and charge  the  Loan
   Account therefor.    Borrower  agrees to  reimburse  Lender  promptly
   therefor with interest  accruing thereon  daily at  the Default  Rate
   provided in this Agreement.  All  sums so paid or incurred by  Lender
   for any  of  the foregoing  and  all costs  and  expenses  (including
   reasonable attorneys' fees,  legal expenses, and  court costs)  which
   Lender may incur in enforcing or protecting its Lien on or rights and
   interest in the Collateral or any of is rights or remedies under this
   or any other agreement  between the parties hereto  or in respect  of
   any of the transactions to be had hereunder until paid by Borrower to
   Lender with  interest  at  the  Default  Rate,  shall  be  considered
   Obligations owing by Borrower to Lender hereunder.  Such  Obligations
   shall be  secured  by  all  Collateral  and  by  any  and  all  other
   collateral, security, assets,  reserves, or funds  of Borrower in  or
   coming into the hands  or inuring to the  benefit of Lender.   Lender
   shall not be liable or responsible in any way for the safekeeping  of
   any of the Collateral or for  any loss or damage thereto (except  for
   reasonable care in  the custody thereof  while any  Collateral is  in
   Lender's actual  possession)  or  for any  diminution  in  the  value
   thereof, or  for any  act or  default of  any warehouseman,  carrier,
   forwarding agency, or other person whomsoever, but the same shall  be
   at Borrower's sole risk.
<PAGE>
   I.   SECTION   PROVISIONS RELATING TO ACCOUNTS

   A.             Representations,  Warranties  and  Covenants.     With
   respect to all Accounts, Borrower  represents and warrants to  Lender
   that Lender  may rely,  in determining  which Accounts  are  Eligible
   Accounts, on all statements and representations made by Borrower with
   respect to any Account or  Accounts, and, unless otherwise  indicated
   in writing to Lender, that with respect to each Account:

   1.                  It  is  genuine  and  in  all  respects  what  it
   purports to be, and it is not evidenced by a judgment;

   1.                  It arises out of a completed, bona fide sale  and
   delivery of  goods  or  rendition of  services  by  Borrower  in  the
   ordinary course of its business and in accordance with the terms  and
   conditions of  all  purchase  orders, contracts  or  other  documents
   relating thereto and forming a part of the contract between  Borrower
   and the Account Debtor;

   1.                  It is for a liquidated amount maturing as  stated
   in the duplicate invoice covering such sale or rendition of services,
   a copy of which has been furnished or is available to Lender;

   1.                  To  the  best   of  Borrower's  knowledge,   such
   Account, and Lender's security interest therein, is not, and will not
   be in the future,  subject to any  offset, Lien, deduction,  defense,
   dispute, counterclaim  or  any  other adverse  condition  except  for
   disputes resulting in returned goods where the amount in  controversy
   is deemed  by Lender  to  be immaterial,  and  each such  Account  is
   absolutely owing to Borrower and is not contingent in any respect  or
   for any reason;

   1.                  Borrower has made no  agreement with any  Account
   Debtor thereunder for  any deduction therefrom,  except discounts  or
   allowances which are granted  by Borrower in  the ordinary course  of
   its business  for  prompt payment  and  which are  reflected  in  the
   calculation of  the net  amount of  each respective  invoice  related
   thereto;

   1.                  To the best of Borrower's knowledge, there are no
   facts, events or occurrences which in any way impair the validity  or
   enforceability  thereof  or  tend   to  reduce  the  amount   payable
   thereunder from  the  face  amount  of  the  invoice  and  statements
   delivered to Lender with respect thereto;

   1.                  To the best of Borrower's knowledge, the  Account
   Debtor thereunder (i) had  the capacity to contract  at the time  any
   contract or other document  giving rise to  the Account was  executed
   and (ii) such Account Debtor is Solvent; and

   1.                  Borrower  has  no  knowledge   of  any  fact   or
   circumstance which would impair the validity or collectability of the
   Account, and  to  the  best of  Borrower's  knowledge  there  are  no
   proceedings or actions  which are threatened  or pending against  any
   Account Debtor thereunder which might result in any material  adverse
   change  in  such   Account  Debtor's  financial   condition  or   the
   collectability of such Account.
<PAGE>
   A.             Assignments, Records and Schedules of Accounts.  If so
   requested by Lender,  Borrower shall  execute and  deliver to  Lender
   formal written  assignments of  all of  its  Accounts weekly,  or  if
   requested by Lender,  daily, which  shall include  all Accounts  that
   have been created  since the date  of the  last assignment,  together
   with  copies  of  invoices  or  invoice  registers  related  thereto.
   Borrower shall keep accurate and complete records of its Accounts and
   all payments and collections thereon and shall submit to Lender on  a
   monthly basis a sales and collections report for the preceding month,
   in form satisfactory to  Lender.  On or  before the fifteenth day  of
   each month from and after the date hereof, Borrower shall deliver  to
   Lender, in form acceptable to Lender,  a detailed aged trial  balance
   of all Accounts existing as of  the last day of the preceding  month,
   specifying the names,  addresses, face value,  dates of invoices  and
   due dates for each Account Debtor  obligated on an Account so  listed
   ("Schedule of Accounts"), and, upon Lender's request therefor, copies
   of proof  of  delivery  and  the  original  copy  of  all  documents,
   including, without limitation, repayment histories and present status
   reports relating to the Accounts so scheduled and such other  matters
   and information relating to the status  of then existing Accounts  as
   Lender shall reasonably request.

   A.             Administration of Accounts.

   1.                  Upon the granting of any discounts, allowances or
   credits by Borrower that are not shown on the face of the invoice for
   the Account involved, Borrower shall promptly report such  discounts,
   allowances or credits, as the case may be, to Lender and in no  event
   later than the time of its submission to Lender of the next  Schedule
   of Accounts  as  provided  in  Section  5.2.    Upon  and  after  the
   occurrence of an  Event of Default,  Lender shall have  the right  to
   settle or adjust all  disputes and claims  directly with the  Account
   Debtor and to compromise the amount or extend the time for payment of
   the Accounts  upon  such terms  and  conditions as  Lender  may  deem
   advisable, and to charge the  deficiencies, and reasonable costs  and
   expenses thereof, including attorney's fees, to Borrower.

   1.                  If an  Account  includes  a charge  for  any  tax
   payable to any governmental  taxing authority, Lender is  authorized,
   in its  sole discretion,  to pay  the amount  thereof to  the  proper
   taxing Authority for the account of Borrower and to cause  Borrower's
   Loan Account hereunder to be charged therefor.  Borrower shall notify
   Lender if any Account includes any tax due to any governmental taxing
   authority and, in the absence of  such notice, Lender shall have  the
   right to retain  the full proceeds  of the Account  and shall not  be
   liable for any taxes to any governmental taxing authority that may be
   due by  Borrower by  reason of  the sale  and delivery  creating  the
   Account.

   1.                  Whether or not a Default  or an Event of  Default
   has occurred, any  of Lender's  officers, employees  or agents  shall
   have the  right, at  any time  or  times hereafter,  in the  name  of
   Lender, any designee of Lender or  Borrower, to verify the  validity,
   amount or  any  other  matter  relating  to  any  Accounts  by  mail,
   telephone, telegraph or  otherwise.  Borrower  shall cooperate  fully
   with Lender in an effort to facilitate and promptly conclude any such
   verification process.
<PAGE>
   A.             Collection of Accounts.

             Upon an Event of Default,  all cash, checks, notes,  drafts
   or other remittances received by Borrower  on account of Accounts  or
   which constitute  Collateral or  proceeds thereof  shall be  held  as
   Lender's property by  Borrower, as trustee  of an  express trust  for
   Lender's benefit and Borrower   shall immediately  deposit same in  a
   lockbox account set up  with the Lender.   Borrower agrees to pay  to
   Lender any and all reasonable fees,  costs and expenses which  Lender
   incurs in connection with opening  and maintaining a lockbox  account
   and depositing for collection by Lender any check or item of  payment
   received by Lender or delivered to  Lender.  Borrower further  agrees
   to execute all agreements and documents and to open and maintain  all
   accounts  Lender  reasonably  deems   necessary  or  appropriate   to
   effectuate an  effective lockbox  arrangement for  the operations  of
   Borrower.  Upon an Event of Default, Lender retains the right at  all
   times to notify Account Debtors that  Accounts have been assigned  to
   Lender and to collect Accounts directly in its own name and to charge
   the collection  costs and  expenses,  including attorneys'  fees,  to
   Borrower.  Lender has no duty to protect, insure, collect or  realize
   upon the Accounts  or preserve rights  in them.   For the purpose  of
   computing interest hereunder, all items of payment received by Lender
   shall be  deemed applied  by Lender  on  account of  the  Obligations
   (subject to final payment of such  items) one (1) Business Day  after
   receipt by Lender of such items.

   A.             Notice Regarding Disputed Accounts.  In the event  any
   amounts due and  owing in excess  of One Hundred  Fifty Thousand  and
   No/100 Dollars ($150,000)  are in  dispute between  Borrower and  any
   Account Debtor,  Borrower shall  provide Lender  with written  notice
   thereof at the time of submission  of the next Schedule of  Accounts,
   explaining in detail the reason for  the dispute, all claims  related
   thereto and the amount in controversy.

   I.   SECTION   PROVISIONS RELATING TO INVENTORY

   A.             Representations,  Warranties  and  Covenants.     With
   respect to Inventory, Borrower represents and warrants to Lender that
   Lender may rely, in determining  which items of Inventory  constitute
   Eligible Inventory,  on all  statements and  representations made  by
   Borrower with respect to any Inventory and that:

   1.                  All Inventory is presently  and will continue  to
   be located at Borrower's places of  business listed on Exhibit C  and
   will not be removed therefrom except as authorized by Section 4.5  of
   this Agreement;

   1.                  No Inventory is now,  nor shall any Inventory  at
   any time or times hereafter be, stored with a bailee, warehouseman or
   similar party without Lender's prior  written consent and, if  Lender
   gives such consent,  Borrower will concurrently  therewith cause  any
   such bailee, warehouseman, or similar party  to issue and deliver  to
   Lender,  in  form  and  substance  acceptable  to  Lender,  warehouse
   receipts therefor in Lender's name;
<PAGE>
   1.                  No Inventory  is  or  will be  consigned  to  any
   Person without Lender's prior written  consent, and, if such  consent
   is given, Borrower shall, prior to  the delivery of any Inventory  on
   consignment (provided, however, that  nothing contained herein  shall
   prevent Borrower  from providing  up to  Thirty Thousand  and  No/100
   Dollars ($30,000) of Inventory at any one time to third parties to be
   used to demonstrate the benefits of Borrower's products), (i) provide
   Lender with all consignment agreements to be used in connection  with
   such consignment, all of  which shall be  acceptable to Lender,  (ii)
   prepare, execute  and  file  appropriate  financing  statements  with
   respect to any consigned Inventory, showing Lender as assignee, (iii)
   conduct a search  of all filings  made against the  consignee in  all
   jurisdictions in which any consigned Inventory  is to be located  and
   deliver to Lender  copies of the  results of all  such searches,  and
   (iv) notify, in writing, all the creditors of the consignee which are
   or may be  holders of  Liens in the  Inventory to  be consigned  that
   Borrower expects to deliver certain  Inventory to the consignee,  all
   of which Inventory shall be described in such notice by item or type;
   and

   1.                  No Inventory is or  will be produced by  Borrower
   in violation of the Fair Labor Standards Act.

   A.             Inventory Reports.  Borrower agrees to furnish  Lender
   with Inventory reports  at such times  as Lender may  request.   Such
   reports shall be in form and detail satisfactory to Lender.  Borrower
   shall conduct a physical inventory  no less frequently than  annually
   and shall provide  to Lender  a report  based on  each such  physical
   inventory  promptly   thereafter,  together   with  such   supporting
   information as Lender shall in its discretion request.

   A.             Returns of  Inventory.    If  at  any  time  or  times
   hereafter any Account  Debtor returns any  Inventory to Borrower  the
   shipment of which generated an Account  on which such Account  Debtor
   is obligated in  excess of One  Hundred Thousand  and No/100  Dollars
   ($100,000), Borrower  shall notify  Lender of  the same  immediately,
   specifying the reason for such return and the location and  condition
   of the  returned Inventory.   After  the occurrence  of an  Event  of
   Default, Borrower  shall hold  all returned  Inventory in  trust  for
   Lender shall segregate all returned Inventory from all other Property
   owned by Borrower or in its possession and shall conspicuously  label
   such Inventory as the Property of Lender.
<PAGE>
   I.   SECTION   PROVISIONS RELATING TO EQUIPMENT

   A.             Representations,  Warranties  and  Covenants.     With
   respect to the Equipment, Borrower represents, warrants and covenants
   to and with Lender that:

   1.                  The Equipment is in good operating condition  and
   repair, and all necessary replacements  of and repairs thereto  shall
   be made so that the value  and operating efficiency of the  Equipment
   shall be maintained and preserved, reasonable wear and tear excepted;
   and

   1.                  Borrower will not permit any of the Equipment  to
   become affixed to  any real Property  leased to Borrower  so that  an
   interest arises therein under the real estate laws of the  applicable
   jurisdiction unless the landlord of such real Property has executed a
   landlord waiver or leasehold mortgage in favor of Lender and Borrower
   will not permit any  of the Equipment to  become an accession to  any
   personal Property  other than  Equipment  subject to  first  priority
   Liens in favor of Lender or subject to Permitted Liens.

   A.             Evidence of Ownership  of Equipment.   Immediately  on
   request therefor by Lender, Borrower shall deliver to Lender any  and
   all  evidence  of  ownership,  if  any,  of  any  of  the   Equipment
   (including,   without   limitation,   certificates   of   title   and
   applications for title).

   A.             Records and Schedules  of Equipment.   Borrower  shall
   maintain accurate records  itemizing and describing  the kind,  type,
   quality, quantity and  value of  its Equipment  and all  dispositions
   made in accordance with Section 7.4 hereof, and shall furnish  Lender
   with a current  schedule containing the  foregoing information on  at
   least an annual basis and more often if requested by Lender.

   A.             Dispositions of Equipment.   Borrower  will not  sell,
   lease or otherwise dispose of or transfer any of the Equipment or any
   part thereof without the prior  written consent of Lender;  provided,
   however, that the foregoing restriction shall not apply, for so  long
   as no Default  or Event  of Default  exists, to  (i) dispositions  of
   Equipment which, in the aggregate during any consecutive twelve-month
   period, has a fair market value or book value, whichever is less,  of
   Fifty  Thousand  Dollars  and  No/100  ($50,000)  or  less,  or  (ii)
   replacements of  Equipment that  is  substantially worn,  damaged  or
   obsolete with Equipment  of like kind,  function and value,  provided
   that  the  replacement  Equipment  shall  be  acquired  prior  to  or
   concurrently with  any disposition  of the  Equipment that  is to  be
   replaced, the replacement Equipment shall be free and clear of  Liens
   other than Permitted  Liens that are  not Purchase  Money Liens,  and
   Borrower shall  give Lender  at least  five  (5) days  prior  written
   notice of such disposition.
<PAGE>
   I.   SECTION   REPRESENTATIONS AND WARRANTIES

   A.             General Representations  and  Warranties.   To  induce
   Lender to enter into this Agreement  and to make advances  hereunder,
   Borrower warrants, represents and covenants to Lender that:

   1.                  Organization and  Qualification.   Borrower is  a
   corporation duly  organized, validly  existing and  in good  standing
   under the laws of the State of Delaware.  Borrower has duly qualified
   and is authorized to do business and is in good standing as a foreign
   corporation in  each  state  or  jurisdiction  listed  on  Exhibit  D
   attached hereto and made  a part hereof and  in all other states  and
   jurisdictions where the character of its Properties or the nature  of
   its activities make  such qualification  necessary, or  in which  the
   failure of Borrower to be so qualified would have a material  adverse
   effect  on  the  financial  condition,  business  or  Properties   of
   Borrower.

   1.                  Corporate Names.  During the preceding seven  (7)
   years, Borrower  has  not  been  known  as  or  used  any  corporate,
   fictitious or trade names except as  disclosed on Exhibit E  attached
   hereto and made a  part hereof.   Except as set  forth on Exhibit  E,
   Borrower has  not, during  the preceding  seven (7)  years, been  the
   surviving corporation of a merger or consolidation or acquired all or
   substantially all of the assets of any Person.

   1.                  Corporate Power and Authority.  Borrower has  the
   right and power and is duly  authorized and empowered to enter  into,
   execute, deliver and  perform this Agreement  and each  of the  other
   Loan Documents to which it is  a party.  The execution, delivery  and
   performance of this Agreement  and each of  the other Loan  Documents
   have been duly authorized  by all necessary  corporate action and  do
   not  and  will  not  (i) require  any  consent  or  approval  of  the
   shareholders  of   Borrower;  (ii) contravene   Borrower's   charter,
   certificate or articles of  incorporation or by-laws;  (iii) violate,
   or cause Borrower to be in  default under, any provision or any  law,
   rule,  regulation,   order,  writ,   judgment,  injunction,   decree,
   determination or award  in effect having  applicability to  Borrower;
   (iv) result in  a  breach  of  or  constitute  a  default  under  any
   indenture or loan or credit agreement  or any other agreement,  lease
   or instrument to  which Borrower is  a party or  by which  it or  its
   Properties may be bound  or affected; or  (v) result in, or  require,
   the creation or imposition  of an Lien  (other than Permitted  Liens)
   upon or with respect to any of the Properties now owned or  hereafter
   acquired by Borrower.

   1.                  Legally Enforceable  Agreement.   This  Agreement
   is, and each of  the other Loan Documents  when delivered under  this
   Agreement will be, legal, valid  and binding obligations of  Borrower
   enforceable against it in  accordance with its  terms, except to  the
   extent that such enforcement may be limited by applicable bankruptcy,
   insolvency  and  other  similar  laws  affecting  creditors'   rights
   generally or by principles of  equity pertaining to the  availability
   of equitable remedies.
<PAGE>
   1.                  Use of Proceeds.  Borrower's uses of the proceeds
   of any Loans made pursuant to  this Agreement are, and will  continue
   to be, legal and proper corporate uses, duly authorized by its  Board
   of Directors, and  such uses will  not violate  any applicable  laws,
   including,   without   limitation,   the   Foreign   Assets   Control
   Regulations,  the   Foreign  Funds   Control  Regulations   and   the
   Transaction  Control  Regulations  of  the  United  States   Treasury
   Department (31 CFR, Subtitle B, Chapter V, as amended).

   1.                  Margin  Stock.      Borrower   is   not   engaged
   principally, or as one of its  important activities, in the  business
   of purchasing  or  carrying "margin  stock"  (within the  meaning  of
   Regulation G, T or U of the Board of Governors of the Federal Reserve
   System), and  no  part of  any  Loans to  Borrower  will be  used  to
   purchase or carry any margin stock or to extend credit to others  for
   the purpose of purchasing or carrying any margin stock or be used for
   any purpose which violates or in inconsistent with the provisions  of
   Regulation X of said Board of Governors.

   1.                  Governmental Consents.  Borrower  has, and is  in
   good standing with respect to, all governmental consents,  approvals,
   authorizations, permits,  certificates, inspections,  and  franchises
   necessary to  continue  to  conduct its  business  as  heretofore  or
   proposed to be conducted by  it and to own  or lease and operate  its
   Properties as now owned or leased by it.

   1.                  Patents,  Trademarks,  Copyrights  and  Licenses.
   Borrower owns  or  possesses  all the  patents,  trademarks,  service
   marks, trade names, copyrights, licenses, and rights with respect  to
   the foregoing necessary for the present and planned future conduct of
   its business without any  known conflict with  the rights of  others.
   All such patents, trademarks, service marks, tradenames,  copyrights,
   licenses and other similar  rights are listed  on Exhibit F  attached
   hereto and made a part hereof.

   1.                  Capital Structure.  Exhibit G attached hereto and
   made a  part  hereof states  (a) the  correct  name of  each  of  the
   Subsidiaries of Borrower, the  jurisdiction of incorporation and  the
   percentage of its  Voting Stock owned  by Borrower,  (b) the name  of
   Borrower's corporate or  joint venture Affiliates  and the nature  of
   the affiliation, (c) the number, nature and holder of all outstanding
   Securities of Borrower  and each Subsidiary  of Borrower and  (d) the
   number of authorized, issued and treasury shares of Borrower and each
   Subsidiary of Borrower.   Borrower has good  and marketable title  to
   all of the shares it purports to own of the stock of each Subsidiary,
   free and clear in each case  of any Lien other than Permitted  Liens.
   All such  shares  have  been  duly issued  and  are  fully  paid  and
   non-assessable.  Other than as set forth on Exhibit G, there are  not
   outstanding any options  to purchase, or  any rights  or warrants  to
   subscribe for, or any commitments or agreements to issue or sell,  or
   any Securities  or obligations  convertible into,  or any  powers  of
   attorney relating to, shares of the capital stock of Borrower.  Other
   than as  set  forth on  Exhibit  G,  there are  not  outstanding  any
   agreements or instruments binding upon any of Borrower's shareholders
   relating to the ownership of its shares of capital stock.
<PAGE>
   1.                  Solvent Financial  Condition.   Borrower  is  now
   and, after giving effect  to initial Loans to  be made hereunder,  at
   all times will be, Solvent.

   1.                  Restrictions.  Borrower is not a party or subject
   to  any   contract,  agreement,   or  charter   or  other   corporate
   restriction, which materially  and adversely affect  its business  or
   the use or ownership  of any of  its Properties.   Borrower is not  a
   party or subject  to any contract  or agreement  which restricts  its
   right or ability to incur Indebtedness for Borrowed Money, other than
   as set forth on Exhibit H attached hereto, none of which prohibit the
   execution of or compliance with this Agreement by Borrower.   Neither
   Borrower nor any of its Subsidiaries has agreed or consented to cause
   or permit  in the  future (upon  the happening  of a  contingency  or
   otherwise) any  of  its  Property, whether  now  owned  or  hereafter
   acquired, to be subject to a Lien that is not a Permitted Lien.

   1.                  Litigation.   Except as  set forth  on Exhibit  I
   attached hereto and made a part hereof, there are no actions,  suits,
   proceedings  or  investigations  pending,  or  to  the  knowledge  of
   Borrower, threatened, against  or affecting  Borrower or  any of  its
   Subsidiaries, or  the  business, operations,  Properties,  prospects,
   profits or condition of Borrower or  any of its Subsidiaries, in  any
   court or before  any governmental authority  or arbitration board  or
   tribunal, and no action, suit,  proceeding or investigation shown  on
   Exhibit I  involves  the  possibility  of  materially  and  adversely
   affecting the Properties, business,  prospects, profits or  condition
   (financial or otherwise) of  Borrower or the  ability of Borrower  to
   perform this Agreement.  Neither Borrower nor any of its Subsidiaries
   is in default with respect to any order, writ, injunction,  judgment,
   decree or rule  of any court,  governmental authority or  arbitration
   board or tribunal.

   1.                  Title  to   Properties.      Borrower   and   its
   Subsidiaries each has good, indefeasible and marketable title to  and
   fee simple ownership of, or valid and subsisting leasehold  interests
   in, all of  its real Property,  and good title  to all  of its  other
   Property, including all  of the Collateral,  in each  case, free  and
   clear of all Liens except Permitted Liens.

   1.                  Financial   Statements;   Fiscal   Year.      The
   Consolidated and  consolidating balance  sheets of  Borrower and  its
   Subsidiaries as of September 30, 1997, and the related statements  of
   income, changes  in stockholder's  equity, and  changes in  financial
   position for the periods ended on  such dates, have been prepared  in
   accordance with GAAP,  and present fairly  the financial position  of
   Borrower and  its  Subsidiaries at  such  dates and  the  results  of
   Borrower's operations for  such periods.   Since September 30,  1997,
   there has  been no  material change  in the  condition, financial  or
   otherwise, of Borrower and its Subsidiaries and such other Persons as
   shown on the Consolidated balance sheet as of such date and no change
   in the  aggregate  value of  Equipment  and real  Property  owned  by
   Borrower and its Subsidiaries, except changes in the ordinary  course
   of business, none of which individually or in the aggregate has  been
   materially adverse.   The fiscal  year of  Borrower and  each of  its
   Subsidiaries ends on September 30 of each year.
<PAGE>
   1.                  Full  Disclosure.     The  financial   statements
   referred to in Section 8.1(N) above, do not, nor does this  Agreement
   or any  other written  statement of  Borrower to  Lender  (including,
   without limitation, Borrower's filings,  if any, with the  Securities
   and Exchange Commission), contain any untrue statement of a  material
   fact or  omit  a  material fact  necessary  to  make  the  statements
   contained therein or herein not misleading.   There is no fact  which
   Borrower has failed to disclose to Lender in writing which materially
   affects adversely  or,  so far  as  Borrower can  now  foresee,  will
   materially affect  adversely  the  Properties,  business,  prospects,
   profits, or condition (financial or otherwise) of Borrower or any  of
   its Subsidiaries or the  ability of Borrower  or its Subsidiaries  to
   perform this Agreement.

   1.                  Pension Plans.  Except as disclosed on Exhibit  J
   attached hereto and made a part  hereof, neither Borrower nor any  of
   its Subsidiaries  has any  Plan.   Neither Borrower  nor any  of  its
   Subsidiaries has received any notice to the effect that it is not  in
   full compliance  with  any  of the  requirements  of  ERISA  and  the
   regulations promulgated thereunder with respect to any Plan.  No fact
   or situation that  could lead  to a  material adverse  change in  the
   financial condition of Borrower, including,  but not limited to,  any
   Reportable Event, or Prohibited Transaction exists in connection with
   any Plan.   Neither  Borrower nor  any of  its Subsidiaries  has  any
   withdrawal liability in connection with a Multiemployer Plan.

   1.                  Taxes.  The federal tax identification number  of
   Borrower is  94-3123210.   Borrower and  its Subsidiaries  each  have
   filed all federal, state and local  tax returns and other reports  it
   is required by law to  file and has paid,  or made provision for  the
   payment of,  all taxes,  assessments,  fees and  other  governmental,
   charges that are  due and payable.   The provision  for taxes on  the
   books of Borrower and its Subsidiaries are adequate for all years not
   closed by applicable statutes, and for its current fiscal year.

   1.                  Labor Relations.  Except as described on  Exhibit
   K attached hereto and made a part hereof, neither Borrower nor any of
   its Subsidiaries is a party  to any collective bargaining  agreement,
   and to  the  best of  Borrower's  knowledge, there  are  no  material
   grievances, disputes or  controversies with  any union  or any  other
   organization of  Borrower's employees,  or threats  of strikes,  work
   stoppages or any asserted  pending demands for collective  bargaining
   by any union or organization.

   1.                  Compliance  With  Laws.     Borrower    and   its
   Properties,  business  operations  and  leaseholds  are  in   current
   compliance in  all  material respects  with,  the provisions  of  all
   federal, state and  local laws, rules  and regulations applicable  to
   Borrower, its Properties or the  conduct of its business,  including,
   without limitation, OSHA and all  Environmental Laws, and there  have
   been no  citations,  notices or  orders  of noncompliance  issued  to
   Borrower or  any of  its Subsidiaries  under any  such law,  rule  or
   regulation.
   1.                  Surety Obligations.  Borrower is not obligated as
   surety or  indemnitor  under any  surety  or similar  bond  or  other
   contract issued  or entered  into any  agreement to  assure  payment,
   performance or  completion  of  performance  of  any  undertaking  or
   obligation of any Person.
<PAGE>
   1.                  No Defaults.    No  event  has  occurred  and  no
   condition exists which would, upon the execution and delivery of this
   Agreement or Borrower's performance  hereunder, constitute a  Default
   or an Event of Default.  Neither Borrower nor any of its Subsidiaries
   is in default,  and no  event has  occurred and  no condition  exists
   which constitutes, or which with the passage of time or the giving of
   notice or both  would constitute,  a default  in the  payment of  any
   Indebtedness for Borrowed Money  to any Person.

   1.                  Brokers.   There  are  no  claims  for  brokerage
   commissions, finder's fees or  investment banking fees in  connection
   with the transactions contemplated by this Agreement.

   1.                  Business Locations;  Agent for  Process.   During
   the preceding  seven (7)  year period,  Borrower has  had no  office,
   place of business  or agent  for service  of process  located in  any
   state or county other than as shown on Exhibit C.

   1.                  Trade Relations.  There  exists no actual or,  to
   the  best   of  Borrower's   knowledge,     threatened   termination,
   cancellation or limitation of, or any modification or change in,  the
   business relationship between Borrower and any customer or any  group
   of customers whose  purchases individually  or in  the aggregate  are
   material to the business of Borrower, or with any material  supplier,
   and  there  exists  no  present  condition  or  state  of  facts   or
   circumstances which  would materially  affect adversely  Borrower  or
   prevent Borrower from conducting such business after the consummation
   of the transaction  contemplated by this  Agreement in  substantially
   the same manner in which it has heretofore been conducted.

   1.                  Leases.  Exhibit L attached hereto is a  complete
   listing of all capitalized leases of Borrower and Exhibit M  attached
   hereto is a complete listing of all operating leases of Borrower.

   1.                  Investment Company  Act.    Borrower  is  not  an
   "investment company"  or a  company  "controlled" by  an  "investment
   company" within the meaning of the Investment Company Act of 1940, as
   amended.

   A.             Reaffirmation.   Each  request  for  a  Loan  made  by
   Borrower pursuant  to  this  Agreement  or  any  of  the  other  Loan
   Documents  shall  constitute  (i)  an  automatic  representation  and
   warranty by Borrower  to Lender that  there does not  then exist  any
   Default or Event of Default and  (ii) a reaffirmation as of the  date
   of said request  that all of  the representations  and warranties  of
   Borrower contained in this Agreement and the other Loan Documents are
   true in all  material respects except  for changes in  the nature  of
   Borrower's business or operations  that would render the  information
   in any Exhibit  attached hereto either  inaccurate or incomplete,  so
   long as Lender  has consented  to such  changes or  such changes  are
   expressly permitted by this Agreement.
<PAGE>
   A.             Survival of Representations and Warranties.   Borrower
   covenants, warrants and represents to Lender that all representations
   and warranties of Borrower contained in this Agreement or any of  the
   other Loan  Documents  shall  be  true  at  the  time  of  Borrower's
   execution of this Agreement and the  other Loan Documents, and  shall
   survive the execution, delivery and acceptance thereof by Lender  and
   the parties thereto  and the  closing of  the transactions  described
   therein or related thereto.

   I.   SECTION   COVENANTS AND CONTINUING AGREEMENTS

   A.             Affirmative  Covenants.    During  the  term  of  this
   Agreement, and thereafter for so long as there are any Obligations to
   Lender, Borrower  covenants that,  unless otherwise  consented to  by
   Lender in writing, it shall:

   1.                  Taxes and Liens.   Pay and  discharge, and  cause
   each Subsidiary  to pay  and discharge,  all taxes,  assessments  and
   governmental charges upon it, its income  and Properties as and  when
   such taxes, assessments and charges are  due and payable, unless  and
   to the extent only that such taxes, assessments and charges are being
   contested in good faith and  by appropriate proceedings and  Borrower
   maintains reasonable reserves on its books therefor.  Borrower  shall
   also pay  and discharge  any lawful  claims which,  if unpaid,  might
   become a  Lien against  Borrower's  Properties except  for  Permitted
   Liens, other  than those  claims being  contested  in good  faith  by
   Borrower or any Subsidiary, and  for which appropriate reserves  have
   been established in accordance with GAAP.

   1.                  Tax Returns.  File, and cause each Subsidiary  to
   file, all  federal, state  and local  tax returns  and other  reports
   Borrower or such Subsidiary is required  by law to file and  maintain
   adequate  reserves  for  the  payment  of  all  taxes,   assessments,
   governmental charges, and levies imposed upon it, its income, or  its
   profits, or upon any Property belonging to it.

   1.                  Payment of  Bank  Charges.   Pay  to  Lender,  on
   demand, any and all  fees, costs or expenses  which Lender pays to  a
   bank or other similar institution (including, without limitation, any
   fees paid by the Lender) arising out of or in connection with (i) the
   forwarding to Borrower or any other Person on behalf of Borrower,  by
   Lender, proceeds of loans made by Lender to Borrower pursuant to this
   Agreement and (ii) the depositing for  collection, by Lender, of  any
   check or item of payment received  or delivered to Lender on  account
   of the Obligations.

   1.                  Business and Existence.   Preserve and  maintain,
   and cause  each Subsidiary  to preserve  and maintain,  its  separate
   corporate existence  and all  rights, privileges,  and franchises  in
   connection therewith,  and maintain,  and  cause each  Subsidiary  to
   maintain, its qualification and good standing in all states in  which
   such qualification  is  necessary  in  order  for  Borrower  or  such
   Subsidiary to conduct its business in such states.

   1.                  Maintain Properties.   Maintain,  and cause  each
   Subsidiary to maintain,  its Properties in  good condition and  make,
   and cause each Subsidiary to  make, all necessary renewals,  repairs,
   replacements, additions and improvements thereto.
<PAGE>
   1.                  Compliance with  Laws.   Comply, and  cause  each
   Subsidiary to comply, with  all laws, ordinances, governmental  rules
   and regulations to which it is subject, and obtain and keep in  force
   any and  all licenses,  permits,  franchises, or  other  governmental
   authorizations necessary to the ownership of its Properties or to the
   conduct of its business, which violation  or failure to obtain  might
   materially and  adversely affect  the business,  prospects,  profits,
   Properties, or condition (financial or otherwise) of Borrower.

   1.                  ERISA Compliance.  (i)  At all times make  prompt
   payment  of  contributions  required  to  meet  the  minimum  funding
   standards set forth in ERISA with respect to each Plan; (ii) promptly
   after the  filing thereof,  furnish to  Lender copies  of any  annual
   report required to be filed pursuant to ERISA in connection with each
   Plan and any  other employee benefit  plan of it  and its  Affiliates
   subject to ERISA Section; (iii) notify Lender as soon as  practicable
   of any  Reportable  Event and  of  any additional  act  or  condition
   arising in connection  with any  Plan which  Borrower believes  might
   constitute grounds for the termination thereof by the Pension Benefit
   Guaranty Corporation or for the appointment by the appropriate United
   States district court of a trustee  to administer the Plan; and  (iv)
   furnish to  Lender, promptly  upon  Lender's request  therefor,  such
   additional information concerning any Plan or any other such employee
   benefit plan as may be reasonably requested.

   1.                  Business  Records.      Keep,  and   cause   each
   Subsidiary to  keep,  adequate  records and  books  of  account  with
   respect to its business activities in  which proper entries are  made
   in accordance with GAAP reflecting all its financial transactions.

   1.                  Visits and Inspections.   Permit  representatives
   of Lender,  from  time  to  time,  as  often  as  may  be  reasonably
   requested, but  only  during  normal business  hours,  to  visit  and
   inspect the Properties  of Borrower, inspect  and make extracts  from
   its books and records, and discuss  with its officers, its  employees
   and  its  independent   accountants,  Borrower's  business,   assets,
   liabilities, financial condition, business  prospects and results  of
   operations.  Borrower further agrees to permit auditors, satisfactory
   to Lender, to perform field audits no more than twice a year, so long
   as Borrower is in compliance with  the terms and conditions  thereof,
   the cost of  which shall  be paid  by Borrower  (up to  a maximum  of
   $1,000 per year).

   1.                  Financial Statements.  Cause  to be prepared  and
   furnished to Lender  the following (all  to be kept  and prepared  in
   accordance with GAAP applied on a consistent basis, unless Borrower's
   certified public accountants  concur in any  change therein and  such
   change is disclosed to Lender and is consistent with GAAP):
<PAGE>
   a)                       as soon as possible, but not later than  one
   hundred twenty   (120) days after  the close of  each fiscal year  of
   Borrower, unqualified audited  financial statements  of Borrower  and
   its Subsidiaries as of  the end of such  year, on a Consolidated  and
   Consolidating basis,  certified by  a firm  of independent  certified
   public accountants of  recognized standing selected  by Borrower  but
   acceptable to  Lender (except  for a  qualification for  a change  in
   accounting principles with which the accountant concurs) which  shall
   include a Consolidating report of income, a balance sheet, a Form 10-
   K and the  Annual Report,  if any,  provided to  the shareholders  of
   Borrower;

   a)                       as soon  as  possible, but  not  later  than
   forty-five (45) days after the end of each fiscal quarter  hereafter,
   unaudited interim Consolidated financial  statements of Borrower  and
   its Subsidiaries as of the end of such quarter and of the portion  of
   Borrower's financial year then elapsed, including but not limited  to
   a Form 10-QSB, on a  Consolidated and Consolidating basis,  certified
   by the  principal  financial  officer  of  Borrower  as  prepared  in
   accordance with GAAP and fairly presenting the Consolidated financial
   position and results of operations  of Borrower and its  Subsidiaries
   for such quarter and  period subject only to  changes from audit  and
   year-end adjustments and except that such statements need not contain
   notes;

   a)                       as soon  as  possible, but  not  later  than
   thirty (30) days  after the end  of each  month hereafter,  unaudited
   interim  consolidated  financial  statements  of  Borrower  and   its
   Subsidiaries as  of the  end of  such  month and  of the  portion  of
   Borrower's  financial  year  then  elapsed,  on  a  Consolidated  and
   Consolidating basis, certified by the principal financial officer  of
   Borrower as prepared  in accordance with  GAAP and fairly  presenting
   the Consolidated  financial position  and  results of  operations  of
   Borrower and its Subsidiaries for such month and period subject  only
   to changes from audit and year-end  adjustments and except that  such
   statements need not contain notes;

   a)                       promptly  after   the  sending   or   filing
   thereof, as  the  case  may  be,  copies  of  any  proxy  statements,
   financial statements or reports which Borrower has made available  to
   its shareholders  and copies  of any  regular, periodic  and  special
   reports or  registration statements  which  Borrower files  with  the
   Securities and  Exchange  Commission or  any  governmental  authority
   which  may  be  substituted  therefor,  or  any  national  securities
   exchange; and
   b)                       such other data  and information  (financial
   and otherwise) as Lender, from time to time, may reasonably  request,
   bearing upon  or  related  to the  Collateral,  Borrower's  financial
   condition or results  of operations,  including, without  limitation,
   federal income tax returns of Borrower, accounts payable ledgers, and
   bank statements.
<PAGE>
        Concurrently with  the  delivery  of  the  financial  statements
   described in  clause  (i)  of this  Section  9.1(J),  Borrower  shall
   forward to Lender  a copy of  the accountants'  letter to  Borrower's
   management  that  is  prepared  in  connection  with  such  financial
   statements and also shall cause to  be prepared and shall furnish  to
   Lender a certificate  of the aforesaid  certified public  accountants
   certifying to  Lender  that,  based upon  their  examination  of  the
   financial statements of  Borrower and its  Subsidiaries performed  in
   connection with their examination of said financial statements,  they
   are not aware of  any Default or  Event of Default,  or, if they  are
   aware of  such Default  or Event  of Default,  specifying the  nature
   thereof.  Concurrently with the delivery of the financial  statements
   described in clauses (i)  and (ii) of  this Section 9.1(J),  Borrower
   shall cause  to be  prepared and  furnished  to Lender  a  Compliance
   Certificate  in  the  form  of   Exhibit  N  attached  hereto,   with
   appropriate insertions, from the Chief Financial Officer of  Borrower
   certifying to Lender that to the best of his knowledge, Borrower  has
   kept, observed,  performed and  fulfilled  each and  every  covenant,
   obligation and agreement binding upon Borrower in this Agreement  and
   the other Loan Documents and that no Default or Event of Default  has
   occurred, or,  if such  Default or  Event  of Default  has  occurred,
   specifying the nature thereof.  Within twenty (20) days after the end
   of each  month hereafter,  Borrower shall  cause to  be prepared  and
   furnish to Lender a Borrowing Base Certificate in the form of Exhibit
   O  attached  hereto.    Borrower  authorizes  Lender  to  communicate
   directly  with  its  independent  certified  public  accountants  and
   authorizes those  accountants  to  disclose to  Lender  any  and  all
   financial statements  and other  supporting financial  documents  and
   schedules.  At  or before the  initial Closing  Date, Borrower  shall
   deliver a letter  addressed to such  accountants instructing them  to
   comply with the provisions of this Section 9.1(J).

   1.                  Notices to  Lender.   Notify Lender  in  writing:
   (i) promptly after Borrower's  learning thereof, of the  commencement
   of any  litigation  affecting  Borrower or  any  of  its  Properties,
   whether or not the claim is  considered by Borrower to be covered  by
   insurance, and of  the institution of  any administrative  proceeding
   which may  materially  and adversely  affect  Borrower's  operations,
   financial condition, Properties or business or Lender's Lien upon any
   of the Collateral; (ii)  at least sixty (60)  days prior thereto,  of
   Borrower's opening  of  any  new  office  or  place  of  business  or
   Borrower's closing of any existing office or place of business; (iii)
   promptly after Borrower's learning thereof,  of any labor dispute  to
   which Borrower may become a party,  any strikes or walkouts  relating
   to any of its plants or  other facilities, and the expiration of  any
   labor contract to which it is a party  or by which it is bound;  (iv)
   promptly after Borrower's learning  thereof, of any material  default
   by Borrower  under any  note,  indenture, loan  agreement,  mortgage,
   lease, deed,  guaranty or  other similar  agreement relating  to  any
   Indebtedness for Borrowed Money exceeding Two Hundred Fifty  Thousand
   and No/100 Dollars  ($ 250,000);  (v) promptly  after the  occurrence
   thereof, any Default  or Event of  Default; (vi)  promptly after  the
   occurrence thereof, of any default by  any obligor under any note  or
   other  evidence  of  Indebtedness  for  Borrowed  Money  payable   to
   Borrower; and  (vii) promptly  after the  rendition thereof,  of  any
   judgment rendered against Borrower or any of its Subsidiaries.
<PAGE>
   1.                  Landlord and Storage Agreements.  Provide  Lender
   with copies of all  agreements between Borrower  and any landlord  or
   warehouseman which  owns  any  premises at  which  any  Inventory  or
   Equipment may, from time to time, be kept.

   1.                  Subordinations.    Provide  Lender  with  a  debt
   subordination  agreement,  in  form  and  substance  satisfactory  to
   Lender, executed  by  Borrower and  any  Person who  is  an  officer,
   director or Affiliate of  Borrower to whom  Borrower is or  hereafter
   becomes indebted for Indebtedness  for Borrowed Money,  subordinating
   in right of payment and claim  all of such Indebtedness for  Borrowed
   Money and any future advances thereon  to the full and final  payment
   and performance of the  Obligations.  Within sixty  (60) days of  the
   date  hereof,  Borrower  agrees  to  provide  a  debt   subordination
   agreement, in form and substance satisfactory to Lender, executed  by
   Borrower and by  the applicable subordinated  lender with respect  to
   indebtedness of  Borrower held  by Reliance  Medical Products,  Inc.,
   Haag-Streit  Service,  Inc.,   Eastman  Kodak   Company  and   Mentor
   Ophthalmics, Inc.

   1.                  Further  Assurances.     At   Lender's   request,
   promptly execute or cause to be executed and delivered to Lender  any
   and all  documents,  instruments  and  agreements  deemed  reasonably
   necessary by  Lender to  give effect  to or  carry out  the terms  or
   intent of this Agreement or any of the other Loan Documents.  Without
   limiting the generality of the foregoing, if any of the Accounts, the
   face value of which  exceeds $10,000, arises out  of a contract  with
   the United States of America, or any department, agency,  subdivision
   or instrumentality  thereof, Borrower  shall promptly  notify  Lender
   thereof in writing  and shall execute  any instruments  and take  any
   other action  required or  requested by  Lender  to comply  with  the
   provisions of the Federal Assignment of Claims Act.

   1.                  Annual Operating Plan.  As soon as available, and
   in any event no later than thirty (30) days prior to the end of  each
   fiscal year of Borrower, deliver to Lender the Annual Operating  Plan
   of Borrower for the forthcoming year.

   a)                  Environmental Matters.       Borrower  shall  and
   shall cause each of  its Subsidiaries to (a)  comply strictly and  in
   all material  respects with  all applicable  Environmental Laws,  (b)
   take promptly any remediation  and/or corrective action necessary  to
   cure any material violation of  Environmental Laws of which  Borrower
   has knowledge, (c) notify the proper governmental agency promptly  in
   the event of any Release of any Hazardous Substance reportable  under
   42 USC S9603, 42 USC S11044, 33 USC S1321(b)(5) or any counterpart or
   similar state or local requirement,  (d) promptly forward to  Lender,
   upon its request, a copy of  any order, notice, permit,  application,
   or any  other communication  or report  in connection  with any  such
   Release of any Hazardous  Substance or any  other matter relating  to
   the Environmental  Laws as  they may  affect  its premises,  and  (e)
   promptly forward  to Lender  a copy  of  any order,  notice,  permit,
   application or other communication or  report in connection with  any
   material Release of  any Hazardous  Substance or  any other  material
   matter relating  to the  Environmental Laws  as they  may affect  its
   premises.
<PAGE>
   a)                       Borrower shall  indemnify  Lender  and  hold
   Lender harmless  from  and against  any  loss, liability,  damage  or
   expense, including attorneys' fees,  suffered or incurred by  Lender,
   whether as mortgagee pursuant  to any New  Mortgage, as mortgagee  in
   possession, or as  successor in interest  to Borrower or  any of  its
   Subsidiaries as  owner  or  lessee  of  any  premises  by  virtue  of
   foreclosure or acceptance of deed in lieu of foreclosure (a) under or
   on account of the Environmental Laws, including the assertion of  any
   Lien thereunder; (b)  with respect to  any Release  of any  Hazardous
   Substance reportable  under  42 USC  S9603,  42 USC  S11044,  33  USC
   S1321(b)(5) or any counterpart or similar state or local requirement,
   affecting such premises or the premises of any other place, including
   any loss of value of such  premises as a result  of a Release of  any
   Hazardous Substance; and (c) with respect to any other  environmental
   matter within the  jurisdiction of any  federal, state, or  municipal
   official administering  the  Environmental Laws;  provided,  however,
   that Borrower will not be liable  for such indemnification to  Lender
   to the  extent  that any  such  loss, liability,  damage  or  expense
   results from the gross negligence or willful misconduct of the Person
   who would otherwise be  entitled to be  indemnified pursuant to  this
   Section 9.1(P)(ii).    The  procedures  to  be  followed  as  to  any
   indemnity pursuant to this Section shall  be as set forth in  Section
   12.2 hereof.

   a)                       Borrower  shall  provide  Lender  with  such
   evidence, reports and/or other documentation as reasonably  requested
   by Lender to insure that Borrower is in compliance with the terms  of
   this Section 9.1(P).

   A.             Negative  Covenants.     During  the   term  of   this
   Agreement, and thereafter for so long as there are any Obligations to
   Lender, Borrower covenants  that, unless Lender  has first  consented
   thereto in writing, it will not:

   1.                  Mergers; Consolidations; Acquisitions.  Merge  or
   consolidate, or permit any Subsidiary  to merge or consolidate,  with
   any Person,  except  a consolidation  or  merger involving  only  (i)
   Borrower and one  or more wholly  owned Subsidiaries or  (ii) two  or
   more wholly owned  Subsidiaries; nor acquire  all or any  substantial
   part of the Properties of any Person.

   1.                  Loans.  Make, or  permit any Subsidiary to  make,
   any loans or other advances of  money (other than for salary,  travel
   advances, advances against commissions and other similar advances  in
   the ordinary course of business) to  any Person (other than  advances
   of up  to  $10,000  to  sales  representatives),  including,  without
   limitation, any of Borrower's Affiliates, officers or employees.
<PAGE>
   1.                  Total Indebtedness.   Create,  incur, assume,  or
   suffer to exist, or permit any Subsidiary to create, incur or  suffer
   to   exist,   any   Indebtedness   for   Borrowed   Money,    except:
   (i) Obligations owing to Lender; (ii) Indebtedness for Borrowed Money
   of any  Subsidiary  to  Borrower;  (iii) accounts  payable  to  trade
   creditors which  are not  more than  thirty (30)  days past  due  and
   current operating expenses (other than for Indebtedness for  Borrowed
   Money) which are  not more than  thirty (30) days  past due, in  each
   case incurred in the ordinary course of business and paid within such
   time period, unless  the same are  actively being  contested in  good
   faith and by  appropriate and  lawful proceedings;  and the  Borrower
   shall have set aside such reserves,  if any, with respect thereto  as
   are required by generally  accepted accounting principles and  deemed
   adequate   by    Borrower    and   its    independent    accountants;
   (iv) obligations  to  pay  Rentals   permitted  by  Section   9.2(V);
   (v) Permitted   Purchase    Money    Indebtedness;    (vi) contingent
   liabilities  arising  out  of   endorsements  of  checks  and   other
   negotiable instruments  for deposit  or  collection in  the  ordinary
   course of  business; and  (vii) Indebtedness for  Borrowed Money  not
   included in paragraphs (i) through (vi)  above which does not  exceed
   at any time, in the aggregate, the sum of Three Hundred Thousand  and
   No/100 Dollars ($300,000).

   1.                  Affiliate Transactions.    Enter into,  or  be  a
   party to, or permit any  Subsidiary to enter into  or be a party  to,
   any transaction  with any  Affiliate or  stockholder, except  in  the
   ordinary course of  and pursuant  to the  reasonable requirements  of
   Borrower's or such Subsidiary's business and upon fair and reasonable
   terms which are fully disclosed to  Lender and are no less  favorable
   to  Borrower  that  would  obtain   in  a  comparable  arm's   length
   transaction with a Person not an Affiliate or stockholder of Borrower
   or such Subsidiary.

   1.                  Partnership or Joint Ventures.   Become or  agree
   to become a  general or  limited partner  in any  general or  limited
   partnership or a joint venturer in any joint venture.

   1.                  Adverse   Transactions.       Enter   into    any
   transaction, or permit any Subsidiary to enter into any  transaction,
   which  materially  and  adversely  affects  or  may  materially   and
   adversely affect the  Collateral or Borrower's  ability to repay  the
   Obligations or permit or agree to any material extension,  compromise
   or settlement  or make  any change  or modification  of any  kind  or
   nature with  respect  to any  Account,  including any  of  the  terms
   relating thereto, other than discounts and allowances in the ordinary
   course of business, all of which shall be reflected in the  Schedules
   of Accounts  submitted to  Lender pursuant  to  Section 5.2  of  this
   Agreement.

   1.                  Guaranties.  Except  for the Guaranty  Agreement,
   guarantee, assume, endorse or otherwise, in any way, become  directly
   or contingently liable with respect to the indebtedness of any Person
   except by endorsement or instruments or items of payment for  deposit
   or collection.
<PAGE>
   1.                  Limitation on Liens.  Create or suffer to  exist,
   or permit any Subsidiary to create or suffer to exist, any Lien  upon
   any of  its  Property,  income  or  profits,  whether  now  owned  or
   hereafter acquired, except:  (i) Liens  at any time granted in  favor
   of Lender; (ii) Liens for taxes (excluding any Lien imposed  pursuant
   to any of the  provisions of ERISA)  not yet due  or which are  being
   contested as  permitted by  Section 9.1(A)  hereof,  but only  if  in
   Lender's reasonable  judgment such  Lien  does not  affect  adversely
   Lender's rights or the priority of  Lender's Lien in the  Collateral;
   (iii) Liens securing the claims or demands of materialmen, mechanics,
   carriers, warehousemen, landlords and  other like Persons for  labor,
   materials, supplies or  rentals incurred  in the  ordinary course  of
   Borrower's business, but only  if the payment thereof  is not at  the
   time required and only if such Liens are junior to the Liens in favor
   of Lender; (iv) Deposits made in  the ordinary course of business  in
   connection  with  workmen's  compensation,  unemployment   insurance,
   social security and  other like  laws; (v)  attachment, judgment  and
   other  similar  non-tax  Liens  arising  in  connection  with   court
   proceedings, but only if  and for so long  as the execution or  other
   enforcement of such Liens is and  continues to be effectively  stayed
   and bonded on appeal, the validity  and amount of the claims  secured
   thereby are being actively contested in good faith and by appropriate
   lawful  proceedings  and  such  Liens  do  not,  in  the   aggregate,
   materially detract  from the  value of  the Property  of Borrower  or
   materially impair  the use  thereof in  the operation  of  Borrower's
   business; (vi) Purchase Money Liens securing Permitted Purchase Money
   Indebtedness which is not incurred in violation of Section 9.2(C)  of
   this Agreement; (vii) reservations, exceptions, easements, rights  of
   way, and other similar encumbrances affecting real Property, provided
   that, in Lender's reasonable judgment, they  do not in the  aggregate
   materially detract from  the value of  said Properties or  materially
   interfere with  their  use  in the  ordinary  conduct  of  Borrower's
   business and, if  said real Property  constitutes Collateral,  Lender
   has  consented  thereto;  (viii)  Liens  securing  Indebtedness   for
   Borrowed Money of  a Subsidiary  to Borrower  or another  Subsidiary;
   (ix) such other Liens as appear on Exhibit P attached hereto; and (x)
   such other Liens as Lender may hereafter approve in writing.

   1.                  Subordinated  Debt.      Make,  or   permit   any
   Subsidiary  to  make,  any  payment  of  any  part  or  all  of   any
   Subordinated Debt,  or otherwise  repurchase,  redeem or  retire  any
   instrument evidencing any such Subordinated Debt, prior to  maturity;
   or enter into any agreement (oral or written) which could in any  way
   be construed to  amend, modify, alter  or terminate any  one or  more
   instruments or agreements evidencing or relating to any  Subordinated
   Debt.

   1.                  Distributions.  Declare  or make,  or permit  any
   Subsidiary  to  declare  or  make,  any  Distributions,  other   than
   Distributions by wholly-owned Subsidiaries  which are payable  solely
   to Borrower.

   1.                  Subsidiaries.  Hereafter create any Subsidiary or
   divest itself  of any  material assets  by transferring  them to  any
   Subsidiary to whose existence Lender has consented.
<PAGE>
   1.                  Capital Expenditures.  Make Capital  Expenditures
   (including, without limitation, by way of capitalized leases)  which,
   in the aggregate, as to Borrower and its Subsidiaries, exceed, during
   any fiscal  year of  Borrower, the  amount  set forth  opposite  such
   fiscal year in the following schedule:

                 Fiscal Year Ending                    Amount

                 September 30, 1998                  $150,000
                 September 30, 1999                  $150,000
                 September 30, 2000                  $150,000

   1.                  Business Locations.  Transfer its principal place
   of business  or chief  executive office,  or open  new  manufacturing
   plants,  or  transfer  existing  manufacturing  plants,  or  maintain
   warehouses  or  records  with  respect  to  Accounts,  Inventory   or
   Equipment, to or at any locations other than those at which the  same
   are presently kept or maintained, as  set forth on Exhibit C  hereto,
   except upon at least thirty (30) days prior written notice to  Lender
   and after the delivery to Lender of financing statements, if required
   by Lender, in form satisfactory to Lender to perfect or continue  the
   perfection of Lender's Lien and security interest hereunder.

   1.                  Change of Business.  Enter into any new  business
   or make any material change in any of Borrower's business objectives,
   purposes and operations.

   1.                  Disposition of Assets.  Sell, lease or  otherwise
   dispose of  any  of  its Properties,  including  any  disposition  of
   Property as part of a sale and leaseback transaction, to or in  favor
   of any Person, except (i) sales  of Inventory in the ordinary  course
   of Borrower's business  for so  long as  no Event  of Default  exists
   hereunder, (ii) a transfer of Property to Borrower by a Subsidiary or
   (iii) dispositions expressly authorized by this Agreement.

   1.                  Name of Borrower.  Use any corporate name  (other
   than its own) or  any fictitious name,  tradestyle or "d/b/a"  except
   for the names disclosed on Exhibit E attached hereto.

   1.                  Use of Lender's Name.  Without the prior  written
   consent of Lender,  use of  the name  of Lender  or the  name of  any
   Affiliates of Lender in connection with any of Borrower's business or
   activities, except in connection  with internal business matters,  as
   required  in  dealings  with  governmental  agencies  and   financial
   institutions and to  trade creditors  of Borrower  solely for  credit
   reference purposes.

   1.                  Margin Securities.  Own, purchase or acquire  (or
   enter into any contract to purchase or acquire) any "margin security"
   as defined by any regulation of  the Federal Reserve Board as now  in
   effect or as the same may hereafter be in effect unless, prior to any
   such purchase  or acquisition  or entering  into any  such  contract,
   Lender shall  have received  an opinion  of counsel  satisfactory  to
   Lender to the effect that such purchase or acquisition will not cause
   this Agreement  to  violate  Regulations  G, T  or  U  or  any  other
   regulation of the Federal Reserve Board then in effect.
<PAGE>
   1.                  Restricted Investment.  Make  or have, or  permit
   any Subsidiary to make or have, any Restricted Investment.

   1.                  Fiscal Year.  Change, or permit any Subsidiary to
   change, its fiscal year,  or permit any Subsidiary  to have a  fiscal
   year different from that of Borrower.

   1.                  Stock of  Subsidiary,  Etc.   Sell  or  otherwise
   dispose of any shares of capital  stock of any Subsidiary, except  in
   connection with  a transaction  permitted  under Section  9.2(A),  or
   permit any Subsidiary to issue any  additional shares of its  capital
   stock except director's qualifying shares.

   1.                  Leases.   Become  a lessee  under  any  operating
   lease (other than a lease under which Borrower is lessor) of Property
   if the aggregate Rentals payable during any current or future  period
   of twelve (12) consecutive months under the lease in question and all
   other leases  under  which  Borrower  is  then  lessee  would  exceed
   $250,000.  The term "Rentals" means, as of the date of determination,
   all payments which the lessee is required to make by the terms of any
   lease.

   1.                  Tax Consolidation.  File or consent to the filing
   of any consolidated income  tax return with any  Person other than  a
   Subsidiary.

   A.             Specific Financial Covenants.  During the term of this
   Agreement, and thereafter for so long as there are any Obligations to
   Lender, Borrower  covenants that,  unless otherwise  consented to  by
   Lender in writing, it shall:

   1.                  Minimum Adjusted Tangible Net Worth.  Maintain at
   all times a Consolidated  Adjusted Tangible Net  Worth such that  the
   Consolidated Tangible Net Worth increases (i) by $200,000 during  the
   period from October 1, 1997 to  September 30, 1998, (ii) by  $250,000
   during the period  from October  1, 1998  to September  30, 1999  and
   (iii) by $250,000 during the period from October 1, 1999 to September
   30, 2000.

   1.                  Book Value.   Maintain at  all times  a net  book
   value,   (after   deleting   related   depreciation,    obsolescence,
   amortization, valuation  and  other  proper reserves)  at  which  all
   assets of a Person would be shown on a balance sheet at such date  in
   accordance  with  GAAP  minus  the  amount  at  which  such  Person's
   liabilities (other than capital stock and surplus) would be shown  on
   such  balance  sheet  in  accordance  with  GAAP,  and  including  as
   liabilities  all  reserves  for  contingencies  and  other  potential
   liabilities, equal to or greater than $1,450,000.
<PAGE>
   1.                  Fixed Charge Ratio.  Maintain at all times during
   each fiscal quarter of  each Fiscal Year shown  below a Fixed  Charge
   Ratio (calculated on a year to date basis through September 29,  1998
   and a rolling four quarter basis thereafter) equal to or greater than
   the Fixed  Charge  Ratio  set  forth  opposite  such  period  in  the
   following schedule:

                        Period
                                                      Fixed Charge Ratio

        Closing Date through September 29, 1998           1.4 to 1.0
        September 30, 1998 through March 31, 2000         2.0 to 1.0

  I.   SECTION   CONDITIONS PRECEDENT

        Notwithstanding any other provision of this Agreement or any  of
   the other Loan  Documents, and without  affecting in  any manner  the
   rights of Lender under  the other Sections of  this Agreement, it  is
   understood and  agreed that  Lender will  not  make any  Loans  under
   Section 2 of this  Agreement unless and until  each of the  following
   conditions has been and  continues to be satisfied,  all in form  and
   substance satisfactory to Lender and Lender's counsel:

   A.             Documentation.    Lender   shall  have  received   the
   following documents, each to be in form and substance satisfactory to
   Lender and its counsel:

   1.                  Copies of Borrower's casualty insurance policies,
   together with loss  payable endorsements on  Lender standard form  of
   Loss Payee Endorsement  naming Lender  as loss  payee, and  certified
   copies of  Borrower's  liability insurance  policies,  together  with
   endorsements naming Lender as a co-insured;

   1.                  Copies of all filing receipts or  acknowledgments
   issued by  any  governmental  authority to  evidence  any  filing  or
   recordation  necessary  to  perfect  the  Liens  of  Lender  in   the
   Collateral and  evidence in  a form  acceptable to  Lender that  such
   Liens constitute valid  and perfected security  interests and  Liens,
   having the Lien priority specified in Section 4.3(B) hereof;

   1.                  Landlord or warehouseman agreements with  respect
   to all premises leased by Borrower and which are disclosed on Exhibit
   Q attached hereto;

   1.                  A copy  of the  Certificate of  Incorporation  of
   Borrower, and all amendments thereto,  certified by the Secretary  of
   State  or  other   appropriate  official  of   its  jurisdiction   of
   incorporation;

   1.                  Good standing certificates  for Borrower,  issued
   by the Secretary of State or other appropriate official of Borrower's
   jurisdiction of incorporation and each jurisdiction where the conduct
   of Borrower's business activities or the ownership of its  Properties
   necessitates qualification;
<PAGE>
   1.                  A  Certificate  of  the  Secretary  of  Borrower,
   together  with  true  and  correct  copies  of  the  Certificate   of
   Incorporation and  Bylaws of  Borrower, and  all amendments  thereto,
   true and correct copies of the resolutions of the Board of  Directors
   and  the  shareholders  of  Borrower  authorizing  or  ratifying  the
   execution, delivery and performance of this Agreement, the Notes, the
   Security Documents  and the  Other Agreements  and the  names of  the
   officer or officers  of Borrower authorized  to sign this  Agreement,
   the Notes, the Security Documents  and the Other Agreements  together
   with a sample of the true signature of each such officer;

   1.                  The Security  Documents duly  executed,  accepted
   and acknowledged by or on behalf of each of the signatories thereto;

   1.                  The Other Agreements duly executed and  delivered
   by Borrower;

   1.                  The favorable,  written  opinion of  Ungaretti  &
   Harris, a counsel to Borrower, as to the transactions contemplated by
   this  Agreement  and  any  of  the   other  Loan  Documents,  to   be
   substantially in the form of Exhibit R attached hereto;

   1.                  Written instruction from  Borrower directing  the
   application of proceeds  of the initial  Loan made  pursuant to  this
   Agreement, and an  initial Borrowing Base  Certificate from  Borrower
   reflecting that Borrower has Eligible Accounts and Eligible Inventory
   in Amounts sufficient  in value and  amount to support  Loans in  the
   amount requested by Borrower on the date of such certificate;

   1.                  Pay-off   statements,    releases    and    UCC-3
   termination statements from Borrower's existing senior lenders;

   1.                  Accountant's letter;

   1.                  Duly executed Guaranty Agreement; and

   1.                  Such other documents, instruments and  agreements
   as Lender shall reasonably request  in connection with the  foregoing
   matters.

   A.             Other Conditions.  The following conditions have  been
   and shall continue to be satisfied, in the sole discretion of Lender:

   1.                  No Default or Event of Default shall exist;

   1.                  Each of the conditions precedent set forth in the
   other Loan Documents shall have been satisfied;

   1.                  Since November  30, 1997,  there shall  not  have
   occurred any  material  adverse  change in  the  business,  financial
   condition or results of operations of  Borrower, or the existence  or
   value of any Collateral,  or any event, condition  or state of  facts
   which would reasonably be expected materially and adversely to affect
   the  business,  financial  condition  or  results  of  operations  of
   Borrower;
<PAGE>
   1.                  No action, proceeding, investigation,  regulation
   or legislation  shall have  been instituted,  threatened or  proposed
   before any court, governmental agency or legislative body to  enjoin,
   restrain or prohibit, or to obtain damages in respect of, or which is
   related to or arises out of this Agreement or the consummation of the
   transactions  contemplated  hereby   or  which,   in  Lender's   sole
   discretion, would make it inadvisable to consummate the  transactions
   contemplated by this Agreement  or any of  the other Loan  Documents;
   and

   1.                  Lender shall have received such certificates  and
   documents reflecting the Solvency of Borrower, after giving effect to
   the transactions contemplated by this Agreement, as Lender shall find
   acceptable, including, without limitation, pro-forma balance  sheets,
   forecasted financial statements consisting of balance sheets,  income
   statements and cash  flow statements for  Borrower covering at  least
   the five (5) year period commencing on the Closing Date, prepared  by
   Borrower and a fair valuation balance sheet for Borrower showing that
   Borrower is Solvent.

   I.   SECTION   EVENTS OF DEFAULT: RIGHTS AND REMEDIES ON DEFAULT

   A.             Events of Default.  The occurrence  of one or more  of
   the following events shall constitute an "Event of Default":

   1.                  Payment of Term  Notes.  Borrower  shall fail  to
   pay any installment of principal, interest or premium, if any,  owing
   on the Notes on the due date of such installment.

   1.                  Payment of Obligations.   Borrower shall fail  to
   pay any of the Obligations that are not evidenced by the Notes on the
   due date thereof  (whether due at  stated maturity,  on demand,  upon
   acceleration or otherwise).

   1.                  Misrepresentations.            Any      warranty,
   representation, or other statement made or furnished to Lender by  or
   on behalf of Borrower or in any instrument, certificate or  financial
   statement furnished  in  compliance  with or  in  reference  to  this
   Agreement, the  Security Documents  or any  of the  Other  Agreements
   proves to have been false or misleading in any material respect  when
   made or furnished.
   2.                  Breach of  Covenants.   Borrower  shall  fail  or
   neglect to perform,  keep or observe  (i) any  covenant contained  in
   Sections 4.3, 4.4, 4.5, 5.2, 5.4, 9.1(A), 9.1(F), 9.1(J), 9.1(O), 9.2
   or 9.3 of this Agreement or (ii) any other covenant contained in this
   Agreement (other  than a  covenant a  default in  the performance  or
   observance of  which is  dealt with  specifically elsewhere  in  this
   Section 11.1) and the breach of  such other covenant is not cured  to
   Lender's reasonable satisfaction  within thirty (30)  days after  the
   sooner to occur of Borrower's receipt  of notice of such breach  from
   Lender or the date on which such failure or neglect becomes known  to
   any officer of Borrower.

   1.                  Default Under  Other Agreements.   Any  event  of
   default  shall  occur  under,  or  Borrower  shall  default  in   the
   performance  or  observance  of  any  term,  covenant,  condition  or
   agreement contained in, any of the Other Agreements and such  default
   shall continue beyond any applicable period of grace.
<PAGE>
   1.                  Default Under Security Documents.   Any event  of
   default  shall  occur  under,  or  Borrower  shall  default  in   the
   performance  or  observance  of  any  term,  covenant,  condition  or
   agreement contained  in,  any  of the  Security  Documents  and  such
   default shall continue beyond any applicable period of grace.

   1.                  Other Defaults.  There shall occur any default or
   event of default on the part of Borrower (including specifically, but
   without limitation, due to non-payment) under any agreement, document
   or instrument to which  Borrower is a party  or by which Borrower  or
   any  of  its  Property  is  bound,   creating  or  relating  to   any
   Indebtedness for Borrowed Money (other  than the Obligations) if  the
   payment or  maturity  of  such Indebtedness  for  Borrowed  Money  is
   accelerated in consequence  of such event  of default  or demand  for
   payment of such Indebtedness for Borrowed Money is made.

   1.                  Uninsured Losses; Unauthorized Dispositions.  Any
   material loss,  theft, damage  or destruction  not fully  covered  by
   insurance  (as  required  by  this  Agreement  and  subject  to  such
   deductibles as  Lender shall  have agreed  to in  writing), or  sale,
   lease or encumbrance of  any of the Collateral  or the making of  any
   levy, seizure, or attachment thereof or  thereon except in all  cases
   as  may  be  specifically  permitted  by  other  provisions  of  this
   Agreement.

   1.                  Adverse Changes.  There shall occur any  material
   adverse change in  the financial condition  or business prospects  of
   Borrower or any Guarantor.

   1.                  Insolvency, etc.  Borrower or any Guarantor shall
   cease to be Solvent  or shall suffer the  appointment of a  receiver,
   trustee, custodian or similar fiduciary, or shall make an  assignment
   for the benefit of creditors, or any petition for an order for relief
   shall be filed  by or  against Borrower  or any  Guarantor under  the
   Bankruptcy  Code  (if   against  Borrower  or   any  Guarantor,   the
   continuation of such proceeding  for more than  sixty (60) days),  or
   Borrower or  any  Guarantor  shall  make  any  offer  of  settlement,
   extension or  composition  to their  respective  unsecured  creditors
   generally.

   1.                  Business Disruption; Condemnation.   There  shall
   occur a cessation of a substantial  part of the business of  Borrower
   for a  period  which  significantly affects  Borrower's  capacity  to
   continue its  business,  on a  profitable  basis; or  Borrower  shall
   suffer the loss or  revocation of any license  or permit now held  or
   hereafter acquired by Borrower which is necessary to the continued or
   lawful operation  of its  business; or  Borrower shall  be  enjoined,
   restrained  or  in  any  way  prevented  by  court,  governmental  or
   administrative order from conducting all or any material part of  its
   business affairs;  or any  material lease  or agreement  pursuant  to
   which Borrower  leases,  uses  or  occupies  any  Property  shall  be
   canceled or terminated prior to the expiration of its stated term; or
   any part of the Collateral shall be taken through condemnation or the
   value of such Property shall be impaired through condemnation.
<PAGE>
   1.                  Change of Ownership.  There shall occur a  change
   in ownership in any year of greater than 15% of the Common Stock that
   is owned  or controlled,  directly or  indirectly, by  the  officers,
   employees and  directors  of  Borrower and  their  Affiliates  unless
   otherwise consented to by Lender in writing.

   1.                  ERISA.   A  Reportable Event  shall  occur  which
   Lender, in  its  sole  discretion,  shall  determine  in  good  faith
   constitutes grounds  for  the  termination  by  the  Pension  Benefit
   Guaranty Corporation  of  any Plan  or  for the  appointment  by  the
   appropriate United States district court of  a trustee for any  Plan,
   or if  any  such trustee  shall  be  requested or  appointed,  or  if
   Borrower is in "default" (as defined in Section 4219(c) (5) of ERISA)
   with respect  to  payments to  a  Multiemployer Plan  resulting  from
   Borrower's complete or partial withdrawal from such Plan.

   1.                  Litigation.  Borrower  or any  Guarantor, or  any
   Affiliate of Borrower, shall challenge or contest in any action, suit
   or proceeding the  validity or enforceability  of this Agreement,  or
   any of the other  Loan Documents, the  legality or enforceability  of
   any of the  Obligations or  the perfection  or priority  of any  Lien
   granted to Lender.

   1.                  Repudiation or Default Under Guaranty  Agreement.
   Any  Guarantor  shall  revoke  or  attempt  to  revoke  the  Guaranty
   Agreement  signed  by  such   Guarantor,  or  shall  repudiate   such
   Guarantor's liability thereunder  or shall  be in  default under  the
   terms thereof.

   1.                  Criminal Forfeiture.   Borrower or any  Guarantor
   shall be criminally indicated or convicted  under any law that  could
   lead to a forfeiture of any Property of Borrower or any Guarantor.

   1.                  Judgments.     Any   money  judgment,   writ   of
   attachment or similar process is filed against Borrower or any of its
   Property and results in the creation  or imposition of any Lien  that
   is not a Permitted Lien.

   A.             Acceleration of  the Obligations.    If any  Event  of
   Default shall have  occurred and be  continuing, Lender may,  without
   notice, (i) terminate this facility with respect to further Revolving
   Credit Loans,  whereupon  no  Revolving  Credit  Loans  may  be  made
   hereunder, and/or (ii) declare  all Obligations to  be forthwith  due
   and payable, whereupon all  Obligations shall become  and be due  and
   payable, without presentment,  demand, protest or  further notice  of
   any kind, all of  which are expressly  waived by Borrower;  provided,
   however, that upon the occurrence of an Event of Default specified in
   Section 11.1(J) hereof, the Obligations shall become due and  payable
   without declaration, notice or demand by Lender.

        Lender may (but shall not be obligated to) take any such action,
   or refrain from taking  such action, with respect  to any Default  or
   Event of Default as it shall  deem advisable in the best interest  of
   Lender holding  Revolving Credit  Notes and  Term  Notes taken  as  a
   whole, including any action (or the  failure to act) pursuant to  the
   Loan Documents.
<PAGE>
   A.             Remedies.  Upon and after  the occurrence of an  Event
   of Default, Lender shall have and may exercise from time to time  the
   following rights and remedies:

   1.                  All of the rights and remedies of a secured party
   under the Code or under other applicable law, and all other legal and
   equitable rights to which Lender may be entitled, all of which rights
   and remedies  shall  be  cumulative,  and  none  of  which  shall  be
   exclusive, and shall be in addition  to any other rights or  remedies
   contained in this Agreement or any of the other Loan Documents.

   1.                  The right  to take  immediate possession  of  the
   Collateral, and (i) to require  Borrower to assemble the  Collateral,
   at Borrower's expense,  and make it  available to Lender  at a  place
   designated by Lender which is reasonably convenient to both  parties,
   and (ii) to enter any of the premises of Borrower or wherever any  of
   the Collateral shall be  located, and to keep  and store the same  on
   said premises until  sold (and if  said premises be  the Property  of
   Borrower, Borrower agrees not to charge Lender for storage thereof).

   1.                  The right to sell or otherwise dispose of all  or
   any  Collateral  in  its  then   condition,  or  after  any   further
   manufacturing or processing  thereof, at  public or  private sale  or
   sales, with such  notice as may  be required by  law, in  lots or  in
   bulk, for cash or on credit,  all as Lender, in its sole  discretion,
   may deem  advisable.   Borrower agrees  that  ten (10)  days  written
   notice to Borrower of any public or private sale or other disposition
   of Collateral shall be reasonable notice thereof, and such sale shall
   be at such locations as Lender may designate in said notice.   Lender
   shall have the right  to conduct such  sales on Borrower's  premises,
   without charge therefor, and such sales may be adjourned from time to
   time in accordance with applicable law.  Lender shall have the  right
   to sell, lease or  otherwise dispose of the  Collateral, or any  part
   thereof, for cash, credit or any combination thereof, and Lender  may
   purchase all or any part of the Collateral at public or, if permitted
   by law, private sale and, in lieu of actual payment of such  purchase
   price, may set off the amount of such price against the Obligations.

   1.                  Lender is hereby granted a license or other right
   to use,  without  charge,  Borrower's  labels,  patents,  copyrights,
   rights of use of any name, trade secrets, tradenames, trademarks  and
   advertising matter,  or  any Property  of  a similar  nature,  as  it
   pertains to the Collateral, in advertising  for sale and selling  any
   Collateral and Borrower's rights under all licenses and all franchise
   agreements shall inure to Lender's benefit.

   1.                  The  proceeds  realized  from  the  sale  of  any
   Collateral may be applied, after allowing three (3) Business Days for
   collection, first to the costs, expenses and attorneys' fees incurred
   by Lender in collecting the Obligations,  in enforcing the rights  of
   Lender  under  the  Loan  Documents  and  in  collecting,   retaking,
   completing, protecting,  removing,  storing,  advertising  for  sale,
   selling and delivering any Collateral,  secondly to the interest  due
   upon any of  the Obligations; and  thirdly, to the  principal of  the
   Obligations.   If  any  deficiency shall  arise,  Borrower  and  each
   Guarantor  shall  remain  jointly  and  severally  liable  to  Lender
   therefor.
<PAGE>
   1.                  With  respect  to  the  face  amount  of  all  LC
   Guaranties and Letters of  Credit issued by  Lender or Affiliates  of
   Lender and  then  outstanding, Lender  may,  at its  option,  require
   Borrower to deposit with Lender funds equal to such face amount,  and
   if Borrower fails to promptly make  such deposit, Lender may  advance
   such amount as a Revolving Credit Loan (whether or not an Overadvance
   is created thereby).   Any such deposit or  advance shall be held  by
   Lender as a reserve to fund future payments on such LC Guaranties and
   future drawings against such Letters of Credit.  At such time as  all
   LC Guaranties have been paid or terminated and all Letters of  Credit
   have been  drawn  upon or  expired,  any amounts  remaining  in  such
   reserve shall be applied against  any outstanding Obligations, or  to
   the extent  all  Obligations have  been  indefeasibly paid  in  full,
   returned to Borrower.

   A.             Remedies  Cumulative;  No  Waiver.    All   covenants,
   conditions,  provisions,  warranties,  guaranties,  indemnities,  and
   other undertakings of  Borrower contained in  this Agreement and  the
   other Loan  Documents,  or in  any  document referred  to  herein  or
   contained in any agreement supplementary hereto or in any schedule or
   in any Guaranty Agreement given to  Lender or contained in any  other
   agreement between Lender and  Borrower, heretofore, concurrently,  or
   hereafter entered  into, shall  be deemed  cumulative to  and not  in
   derogation  or  substitution   of  any  of   the  terms,   covenants,
   conditions, or agreements of Borrower herein contained.  The  failure
   or delay of Lender to exercise or enforce any rights, Liens,  powers,
   or remedies hereunder  or under any  of the  aforesaid agreements  or
   other documents  or security  or Collateral  shall not  operate as  a
   waiver of  such Liens,  rights, powers  and  remedies, but  all  such
   Liens, rights, powers, and remedies shall continue in full force  and
   effect until all Loans and all  other Obligations owing or to  become
   owing from Borrower to  Lender shall have  been fully satisfied,  and
   all Liens,  rights,  powers, and  remedies  herein provided  for  are
   cumulative and none are exclusive.
<PAGE>
   I.   SECTION   MISCELLANEOUS

   A.             Power  of  Attorney.    Borrower  hereby   irrevocably
   designates, makes, constitutes and  appoints Lender (and all  Persons
   designated by Lender)  as Borrower's  true and  lawful attorney  (and
   agent-in-fact) and Lender, or agent of Lender, may, without notice to
   Borrower and in either Borrower's or  Lender's name, but at the  cost
   and expense of Borrower:
   1.                  At  such  time  or   times  upon  or  after   the
   occurrence  and  during  the  continuance  of  an  Event  of  Default
   hereafter as  Lender  or said  agent,  in its  sole  discretion,  may
   determine, endorse Borrower's name on any checks, notes, acceptances,
   drafts, money orders or any other evidence of payment or proceeds  of
   the Collateral  which come  into the  possession of  Lender or  under
   Lender's control; and
   2.                  At  such  time  or   times  upon  or  after   the
   occurrence of an Event of Default as Lender or its agent in its  sole
   discretion may determine: (i) demand payment of the Accounts from the
   Account Debtors, enforce payment of the Accounts by legal proceedings
   or otherwise, and  generally exercise  all of  Borrower's rights  and
   remedies with respect to the collection of the Accounts; (ii) settle,
   adjust, compromise, discharge or release any of the Accounts or other
   Collateral or any  legal proceedings brought  to collect  any of  the
   Accounts or  other  Collateral;  (iii) sell  or  assign  any  of  the
   Accounts and other Collateral upon such  terms, for such amounts  and
   at such time or times as  Lender deems advisable; (iv) take  control,
   in any manner,  of any item  of payment or  proceeds relating to  any
   Collateral; (v) prepare, file and sign Borrower's name to a proof  of
   claim in bankruptcy or similar document against any Account Debtor or
   to any notice of lien, assignment or satisfaction of lien or  similar
   document in connection with any of the Collateral; (vi) receive, open
   and dispose of all  mail addressed to Borrower  and to notify  postal
   authorities to  change  the  address for  delivery  thereof  to  such
   address as Lender may designate; (vii)  endorse the name of  Borrower
   upon any  of  the  items  of payment  or  proceeds  relating  to  any
   Collateral and deposit the same to  the account of Lender on  account
   of the  Obligations; (viii)  endorse the  name of  Borrower upon  any
   chattel paper, document, instrument,  invoice, freight bill, bill  of
   lading or similar  document or  agreement relating  to the  Accounts,
   Inventory and any  other Collateral; (ix)  use Borrower's  stationery
   and sign the name  of Borrower to verifications  of the Accounts  and
   notices thereof to Account Debtors; (x) use the information  recorded
   on or  contained  in  any  data  processing  equipment  and  computer
   hardware and software relating to the Accounts, Inventory,  Equipment
   and any other Collateral and to which Borrower has access; (xi)  make
   and adjust claims under policies of insurance; and (xii) do all other
   acts and things reasonably  necessary, in Lender's determination,  to
   fulfill Borrower's obligations under this Agreement.
<PAGE>
   A.             Indemnity.  Borrower hereby agrees to indemnify Lender
   and hold  Lender  harmless  from and  against  any  liability,  loss,
   damage, suit,  action  or proceeding  ever  suffered or  incurred  by
   Lender as the  result of Borrower's  failure to  observe, perform  or
   discharge  Borrower's  duties  hereunder.     Without  limiting   the
   generality of  the  foregoing, this  indemnity  shall extend  to  any
   claims asserted against Lender by any Person under any  Environmental
   Laws or similar laws  by reason of Borrower's  or any other  Person's
   failure to comply with  laws applicable to  solid or hazardous  waste
   materials or other  toxic substances.   Notwithstanding any  contrary
   provision in this  Agreement, the obligation  of Borrower under  this
   Section 12.2 shall survive the payment in full of the Obligations and
   the termination of this Agreement, until expiration of any applicable
   statute of limitations.

   A.             Complete Agreement; Modification of Agreement; Sale of
   Interest.   The  Loan  Documents constitute  the  complete  agreement
   between the parties with respect to the subject matter hereof and may
   not be modified, altered or amended except by an agreement in writing
   signed by Borrower  and Lender.   Borrower  may not  sell, assign  or
   transfer any of the Loan Documents or any portion thereof,  including
   without limitation,  Borrower's rights,  title, interests,  remedies,
   powers and  duties hereunder  or thereunder.   Lender  may, with  the
   prior written  consent  of  Borrower,  which  consent  shall  not  be
   unreasonably withheld, sell  participations, assignment, transfer  or
   other disposition, at any time or times, of any of the Loan Documents
   or of any  portion thereof  or interest  therein, including,  without
   limitation, Lender's rights,  title, interests,  remedies, powers  or
   duties thereunder, whether  evidenced by a  writing or not;  Borrower
   agrees that it will use its best efforts to assist and cooperate with
   Lender in any  manner reasonably requested  by Lender  to effect  the
   sale of participations in or assignments of any of the Loan Documents
   or of any  portion thereof  or interest  therein, including,  without
   limitation, assistance in the  preparation of appropriate  disclosure
   documents or placement memoranda and executing appropriate amendments
   to the signature pages hereto to reflect the addition of Lender.  The
   foregoing notwithstanding, except with respect to sales,  assignments
   or transfers to Affiliates under common control pursuant to which the
   selling, assigning or transferring Lender retains its voting  rights,
   Lender shall not sell participations or assign, transfer or otherwise
   dispose of  any of  the  Loan Documents  or  any portion  thereof  or
   interest therein, without the prior written consent of Lender.

        In the event Lender  assigns or otherwise  transfers all or  any
   part of  the Term  Note or  Revolving Credit  Note, Lender  shall  so
   notify Borrower and Borrower shall, upon the request of Lender, issue
   new Term Notes or Revolving Credit Notes in exchange for the old Term
   Notes or Revolving Credit Notes.

        No amendment or waiver of any provision of this Agreement or the
   Notes or any  other Loan Document,  nor consent to  any departure  by
   Borrower therefrom, shall in any event  be effective unless the  same
   shall be in  writing and signed  by Lender, and  then such waiver  or
   consent shall be effective only in the specific instance and for  the
   specific purpose for which given.
<PAGE>
   A.             Reimbursement of Expenses.  If,  at any time or  times
   prior or subsequent to the date hereof, regardless of whether or  not
   an  Event  of  Default  then  exists  or  any  of  the   transactions
   contemplated hereunder  are  concluded, Lender  employs  counsel  for
   advice or other representation,  or incurs reasonable legal  expenses
   or other  costs or  reasonable out-of-pocket  expenses in  connection
   with:  (A) the negotiation and  preparation of this Agreement or  any
   of the other Loan Documents, any amendment of or modification of this
   Agreement or  any  of  the  other Loan  Documents,  or  any  sale  or
   attempted  sale  of   any  interest   herein  to   Lender;  (B)   the
   administration of this Agreement or any  of the other Loan  Documents
   and  the  transactions  contemplated  hereby  and  thereby;  (C)  any
   litigation, contest,  dispute, suit,  proceeding or  action  (whether
   instituted by  Lender,  Borrower or  any  other Person)  in  any  way
   relating to the Collateral, this Agreement  or any of the other  Loan
   Documents or  Borrower's  affairs; (D)  any  attempt to  enforce  any
   rights of Lender against  Borrower or any other  Person which may  be
   obligated to Lender by virtue of  this Agreement or any of the  other
   Loan Documents, including, without  limitation, the Account  Debtors;
   or (E) any  attempt to inspect,  verify, protect, preserve,  restore,
   collect, sell, liquidate or otherwise dispose of or realize upon  the
   Collateral; then in  any such event,  the reasonable attorneys'  fees
   arising from such services and all expenses, costs, charges and other
   fees of such counsel or of Lender or relating to any of the events or
   actions described in  this Section shall  be payable,  on demand,  by
   Borrower to  Lender, as  the case  may be,  and shall  be  additional
   Obligations hereunder secured  by the Collateral.   Without  limiting
   the generality  of the  foregoing, such  reasonable expenses,  costs,
   charges and fees may include  accountants' fees, costs and  expenses;
   court costs  and  expenses; photocopying  and  duplicating  expenses;
   court reporter  fees, costs  and  expenses; long  distance  telephone
   charges; air express charges; telegram charges; secretarial over-time
   charges; and expenses for travel, lodging  and food paid or  incurred
   in  connection  with   the  performance  of   such  legal   services.
   Additionally, if any taxes (excluding taxes imposed upon or  measured
   by the  net income  of Lender)  shall be  payable on  account of  the
   execution or delivery of this Agreement, or the execution,  delivery,
   issuance or recording  of any  of the  other Loan  Documents, or  the
   creation of  any  of the  Obligations  hereunder, by  reason  of  any
   existing or hereafter enacted federal or state statute, Borrower will
   pay all such taxes, including, but  not limited to, any interest  and
   penalties thereon, and will indemnify  and hold Lender harmless  from
   and  against   liability  in   connection  therewith.      Borrower's
   obligations  pursuant  to  this   Section  12.4  shall  survive   the
   termination of this Agreement.
<PAGE>
   A.             Indulgences Not  Waivers.   Lender's failure,  at  any
   time or times hereafter, to require strict performance by Borrower of
   any provision of this Agreement shall  not waive, affect or  diminish
   any right  of  Lender  thereafter to  demand  strict  compliance  and
   performance therewith.   Any  suspension or  waiver by  Lender of  an
   Event of Default by Borrower under this Agreement or any of the other
   Loan Documents shall not suspend, waive or affect any other Event  of
   Default by Borrower  under this Agreement  or any of  the other  Loan
   Documents, whether  the  same  is prior  or  subsequent  thereto  and
   whether  of  the  same  or  of  a  different  type.    None  of   the
   undertakings, agreements, warranties,  covenants and  representations
   of Borrower contained  in this  Agreement or  any of  the other  Loan
   Documents and no Event of Default by Borrower under this Agreement or
   any of  the  other  Loan  Documents shall  be  deemed  to  have  been
   suspended or waived by Lender, unless such suspension or waiver is by
   an instrument in writing specifying such suspension or waiver and  is
   signed by a duly authorized representative of Lender and directed  to
   Borrower.

   A.             Severability.   Wherever possible,  each provision  of
   this Agreement shall be interpreted in such manner as to be effective
   and valid  under  applicable  law,  but  if  any  provision  of  this
   Agreement shall be  prohibited by  or invalid  under applicable  law,
   such provision  shall  be ineffective  only  to the  extent  of  such
   prohibition or invalidity, without invalidating the remainder of such
   provision or the remaining provisions of this Agreement.

   A.             Successors and  Assigns.   This Agreement,  the  Other
   Agreements and the Security Documents shall be binding upon and inure
   to the benefit of the successors and assigns of Borrower and  Lender.
   This provision, however, shall not be  deemed to modify Section  12.3
   hereof.

   A.             Cumulative Effect; Conflict of Terms.  The  provisions
   of the Other Agreements  and the Security  Documents are hereby  made
   cumulative  with  the  provisions  of  this  Agreement.    Except  as
   otherwise provided in  Section 3.5 of  this Agreement  and except  as
   otherwise provided in  any of the  other Loan  Documents by  specific
   reference to  the  applicable provision  of  this Agreement,  if  any
   provision contained in this Agreement is in direct conflict with,  or
   inconsistent with, any provision in any of the other Loan  Documents,
   the provision contained in this Agreement shall govern and control.

   A.             Execution in  Counterparts.   This  Agreement  may  be
   executed in  any  number of  counterparts  and by  different  parties
   hereto in separate counterparts, each of  which when so executed  and
   delivered shall  be  deemed  to  be an  original  and  all  of  which
   counterparts taken together  shall constitute  but one  and the  same
   instrument.
<PAGE>
   A.         Notice.  Except as otherwise provided herein, all notices,
   requests and demands to or upon a party hereto to be effective  shall
   be in writing  and shall  be sent  by certified  or registered  mail,
   return receipt requested, personal delivery against receipt, delivery
   service against receipt, overnight  courier service against  receipt,
   or by telegraph  or telex  and, unless  otherwise expressly  provided
   herein, shall  be  deemed  to have  been  validly  served,  given  or
   delivered when delivered  against receipt,  or one  (1) Business  Day
   after deposit  in the  mail,  postage prepaid,  or,  in the  case  of
   telegraphic notice, when delivered to  the telegraph company, or,  in
   the case of telex notice,  when sent, answerback received,  addressed
   as follows:

   1.          If to Lender:         Harris  Trust   and  Savings Bank
                                     111 West Monroe Street
                                     P.O. Box 755
                                     Chicago, Illinois  60690
                                     Attention:  Todd A. Andritsch
                                     Telephone:  (847) 640-3525
                                     Telecopier:  (847) 640-2583
             With a copy to:
                                     Vedder, Price, Kaufman & Kammholz
                                     222 North LaSalle Street
                                     Chicago, Illinois  60601
                                     Attention:  Lane R. Moyer, Esq.
                                     Telephone:  (312) 609-7586
                                     Telecopier:  (312) 609-5005


   1.        If to Borrower:         Franklin Ophthalmic Instruments Co., Inc.
                                     1265 Naperville Drive
                                     Romeoville, Illinois  60446
                                     Attention:  Brian Carroll
                                     Telephone:  (630) 759-7666
                                     Telecopier:  (630) 759-1744

             With a copy to:         Ungaretti & Harris
                                     3500 Three First National Plaza
                                     Chicago, Illinois  60602
                                     Attention:  David J. Morris, Esq.
                                     Telephone: (312) 977-4471
                                     Telecopier: (312) 977-4405


        The foregoing notwithstanding, any notice, request or demand  to
   or upon Lender  pursuant to  Sections 2.3, 2.4  or 3.4  shall not  be
   effective until received by Lender.

   A.          Lender's  Consent.    Except  as  otherwise  specifically
   provided for  herein  whenever Lender's  consent  is required  to  be
   obtained under this Agreement, any of the Other Agreements or any  of
   the Security  Documents  as  a condition  to  any  action,  inaction,
   condition or event, Lender  shall be authorized  to give or  withhold
   such consent in its sole and absolute discretion and to condition its
   consent upon the  giving of  additional collateral  security for  the
   Obligations, the payment of money or any other matter.
<PAGE>
   A.         Demand  Obligations.    Nothing in  this  Agreement  shall
   affect  or  abrogate  the  demand  nature  of  any  portion  of   the
   Obligations expressly made payable on demand by this Agreement or  by
   any instrument evidencing or securing same, and the occurrence of  an
   Event of Default  shall not be  a prerequisite  for Lender  requiring
   payment of such Obligations.

   A.         Time  of  Essence.    Time  is  of  the  essence  of  this
   Agreement, the Other Agreements and the Security Documents.

   A.         Entire  Agreement.   This  Agreement  and the  other  Loan
   Documents,  together  with  all  other  instruments,  agreements  and
   certificates executed by the parties in connection therewith or  with
   reference thereto,  embody  the entire  understanding  and  agreement
   between the parties hereto  and thereto with  respect to the  subject
   matter  hereof  and  thereof  and  supersede  all  prior  agreements,
   understandings and inducements, whether  express or implied, oral  or
   written.

   A.         Interpretation.  No provision of this Agreement or any  of
   the other Loan Documents shall be construed against or interpreted to
   the  disadvantage  of  any  party  hereto  by  any  court  or   other
   governmental or judicial authority by reason of such party having  or
   being deemed to have structured or dictated such provision.
<PAGE>
   A.         GOVERNING LAW; CONSENT TO FORUM.  THIS AGREEMENT HAS  BEEN
   NEGOTIATED, EXECUTED AND  DELIVERED AT AND  SHALL BE  DEEMED TO  HAVE
   BEEN MADE IN CHICAGO, ILLINOIS.  THIS AGREEMENT SHALL BE GOVERNED  BY
   AND CONSTRUED IN ACCORDANCE WITH THE  LAWS OF THE STATE OF  ILLINOIS;
   PROVIDED, HOWEVER, THAT IF ANY OF THE COLLATERAL SHALL BE LOCATED  IN
   ANY JURISDICTION OTHER THAN ILLINOIS,  THE LAWS OF SUCH  JURISDICTION
   SHALL GOVERN  THE METHOD,  MANNER AND  PROCEDURE FOR  FORECLOSURE  OF
   LENDER'S LIEN UPON  SUCH COLLATERAL AND  THE ENFORCEMENT OF  LENDER'S
   OTHER REMEDIES IN RESPECT OF SUCH  COLLATERAL TO THE EXTENT THAT  THE
   LAWS OF SUCH JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT WITH THE
   LAWS OF  ILLINOIS.   AS  PART  OF  THE CONSIDERATION  FOR  NEW  VALUE
   RECEIVED, AND  REGARDLESS  OF  ANY  PRESENT  OR  FUTURE  DOMICILE  OR
   PRINCIPAL PLACE OF  BUSINESS OF BORROWER  OR LENDER, BORROWER  HEREBY
   CONSENTS AND AGREES THAT THE CIRCUIT COURT OF COOK COUNTY,  ILLINOIS,
   OR, AT  LENDER'S OPTION,  THE UNITED  STATES DISTRICT  COURT FOR  THE
   NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION, SHALL HAVE EXCLUSIVE
   JURISDICTION TO HEAR  AND DETERMINE  ANY CLAIMS  OR DISPUTES  BETWEEN
   BORROWER AND LENDER  PERTAINING TO THIS  AGREEMENT OR  TO ANY  MATTER
   ARISING OUT  OF OR  RELATED TO  THIS AGREEMENT.   BORROWER  EXPRESSLY
   SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
   SUIT COMMENCED  IN ANY  SUCH COURT,  AND BORROWER  HEREBY WAIVES  ANY
   OBJECTION WHICH  BORROWER  MAY  HAVE  BASED  UPON  LACK  OF  PERSONAL
   JURISDICTION, IMPROPER  VENUE  OR  FORUM NON  CONVENIENS  AND  HEREBY
   CONSENTS TO THE  GRANTING FOR SUCH  LEGAL OR EQUITABLE  RELIEF AS  IS
   DEEMED APPROPRIATE BY  SUCH COURT.   BORROWER HEREBY WAIVES  PERSONAL
   SERVICE OF THE  SUMMONS, COMPLAINT AND  OTHER PROCESS  ISSUED IN  ANY
   SUCH ACTION  OR  SUIT  AND  AGREES  THAT  SERVICE  OF  SUCH  SUMMONS,
   COMPLAINT AND OTHER PROCESS  MAY BE MADE  BY REGISTERED OR  CERTIFIED
   MAIL ADDRESSED TO BORROWER AT THE ADDRESS SET FORTH IN THIS AGREEMENT
   AND THAT SERVICE SO MADE SHALL  BE DEEMED COMPLETED UPON THE  EARLIER
   OF BORROWER'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER  DEPOSIT
   IN THE U.S. MAILS, PROPER POSTAGE PREPAID.  NOTHING IN THIS AGREEMENT
   SHALL BE DEEMED  OR OPERATE TO  AFFECT THE RIGHT  OF LENDER TO  SERVE
   LEGAL PROCESS IN ANY  OTHER MANNER PERMITTED BY  LAW, OR TO  PRECLUDE
   THE ENFORCEMENT BY LENDER OF ANY  JUDGMENT OR ORDER OBTAINED IN  SUCH
   FORUM OR THE  TAKING OF ANY  ACTION UNDER THIS  AGREEMENT TO  ENFORCE
   SAME IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION.
<PAGE>
   A.             WAIVERS BY BORROWER.  BORROWER WAIVES (i) THE RIGHT TO
   TRIAL BY JURY (WHICH LENDER HEREBY ALSO WAIVES) IN ANY ACTION,  SUIT,
   PROCEEDING OR COUNTERCLAIM OF ANY KIND  ARISING OUT OF OR RELATED  TO
   ANY OF THE LOAN DOCUMENTS, THE  OBLIGATIONS OR THE COLLATERAL:   (ii)
   PRESENTMENT, DEMAND AND PROTEST  AND NOTICE OF PRESENTMENT,  PROTEST,
   DEFAULT, NON  PAYMENT,  MATURITY,  RELEASE,  COMPROMISE,  SETTLEMENT,
   EXTENSION OR  RENEWAL  OF  ANY OR  ALL  COMMERCIAL  PAPER,  ACCOUNTS,
   CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS CHATTEL PAPER AND  GUARANTIES
   AT ANY TIME HELD BY LENDER ON WHICH BORROWER MAY IN ANY WAY BE LIABLE
   AND HEREBY  RATIFIES AND  CONFIRMS WHATEVER  LENDER  MAY DO  IN  THIS
   REGARD; (iii) NOTICE  PRIOR TO TAKING  POSSESSION OR  CONTROL OF  THE
   COLLATERAL OR ANY  BOND OR SECURITY  WHICH MIGHT BE  REQUIRED BY  ANY
   COURT PRIOR TO ALLOWING LENDER TO EXERCISE ANY OF LENDER'S  REMEDIES;
   (iv) THE BENEFIT OF ALL  VALUATION, APPRAISEMENT AND EXEMPTION  LAWS;
   (v) ANY  RIGHT  BORROWER  MAY  HAVE  UPON  PAYMENT  IN  FULL  OF  THE
   OBLIGATIONS TO REQUIRE LENDER TO  TERMINATE ITS SECURITY INTEREST  IN
   THE COLLATERAL OR IN ANY OTHER PROPERTY OF BORROWER UNTIL TERMINATION
   OF THIS AGREEMENT IN ACCORDANCE WITH  ITS TERMS AND THE EXECUTION  BY
   BORROWER, AND BY ANY PERSON WHOSE LOANS TO BORROWER IS USED IN  WHOLE
   OR IN PART TO SATISFY THE  OBLIGATIONS, OF AN AGREEMENT  INDEMNIFYING
   LENDER FROM ANY  LOSS OR  DAMAGE LENDER MAY  INCUR AS  THE RESULT  OF
   DISHONORED CHECKS OR OTHER ITEMS OF  PAYMENT RECEIVED BY LENDER  FROM
   BORROWER OR ANY ACCOUNT  DEBTOR AND APPLIED  TO THE OBLIGATIONS;  AND
   (vi) NOTICE OF  ACCEPTANCE HEREOF.   BORROWER  ACKNOWLEDGES THAT  THE
   FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO LENDER'S ENTERING INTO
   THIS AGREEMENT AND THAT LENDER IS RELYING UPON THE FOREGOING  WAIVERS
   IN THEIR  FUTURE  DEALINGS  WITH BORROWER.    BORROWER  WARRANTS  AND
   REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS  LEGAL
   COUNSEL AND  HAS  KNOWINGLY AND  VOLUNTARILY  WAIVED ITS  JURY  TRIAL
   RIGHTS FOLLOWING CONSULTATION WITH  LEGAL COUNSEL.   IN THE EVENT  OF
   LITIGATION, THIS AGREEMENT  MAY BE FILED  AS A WRITTEN  CONSENT TO  A
   TRIAL BY THE COURT.
<PAGE>
        IN WITNESS WHEREOF,  this Agreement  has been  duly executed  in
   Chicago, Illinois, on  the day and  year specified  at the  beginning
   hereof.


   BORROWER:

   FRANKLIN OPHTHALMIC
     INSTRUMENTS CO., INC.


   By:        /S/ Brian M. Carroll
       Name:      Brian M. Carroll
       Title:     Chief Financial Officer

   LENDER:

   HARRIS TRUST & SAVINGS BANK



   By:       /s/ Todd A. Andritsch
       Name:     Todd A. Andritsch
       Title:    Vice President

<PAGE>

                                 EXHIBIT A

                           REVOLVING CREDIT NOTE


   $2,200,000     December 30, 1997
                                                       Chicago, Illinois


             FOR VALUE  RECEIVED, the  undersigned, FRANKLIN  OPHTHALMIC
   INSTRUMENTS CO., INC., a  Delaware corporation (hereinafter  referred
   to as "Borrower"),  hereby PROMISES  TO PAY  to the  order of  HARRIS
   TRUST AND SAVINGS BANK, an Illinois banking corporation  (hereinafter
   referred to  as "Lender"),  or its  registered assigns,  at 111  West
   Monroe Street, Chicago, Illinois 60690, or at such other place as the
   holder of this Note  may designate from time  to time in writing,  in
   lawful money  of the  United States  of  America and  in  immediately
   available funds,  the principal  amount of  Two Million  Two  Hundred
   Thousand Dollars ($2,200,000), or such lesser principal amount as may
   be  outstanding  pursuant  to  the  Loan  Agreement  (as  hereinafter
   defined) with respect  to the  Revolving Credit  Loan, together  with
   interest on the unpaid principal amount of this Note outstanding from
   time to time.

             This Note is the Revolving  Credit Note issued pursuant  to
   Section 2.1 of that  certain Amended and  Restated Loan and  Security
   Agreement dated as of December 30, 1997, between Borrower and  Lender
   (the "Loan Agreement"), and is entitled  to the benefit and  security
   of the "Loan Documents" (as defined  in the Loan Agreement)  provided
   for therein, to which reference is hereby made for a statement of all
   of the terms and conditions under which the loan evidenced hereby  is
   made.  All capitalized terms herein, unless otherwise defined,  shall
   have the meanings ascribed to them in the Loan Agreement. 

             The principal amount of  the indebtedness evidenced  hereby
   shall be payable  in the amounts  and on the  dates specified in  the
   Loan Agreement and,  if not sooner  paid in full,  on March 31,  2000
   unless the  term  hereof is  extended  in accordance  with  the  Loan
   Agreement.  Interest  thereon  shall  be paid  until  such  principal
   amount is paid in full  at such interest rates  and at such times  as
   are specified in the Loan Agreement. 

             If any payment on  this Note becomes due  and payable on  a
   day other than a Business Day, the maturity thereof shall be extended
   to the next succeeding Business Day and, with respect to payments  of
   principal, interest thereon shall be  payable at the then  applicable
   rate during such extension. 
<PAGE>
             Upon and after the occurrence of an Event of Default,  this
   Note shall or may,  as provided in the  Loan Agreement, and   without
   demand, notice or legal  process of any kind,  become or be  declared
   immediately due and payable.

             Demand, presentment, protest and  notice of nonpayment  and
   protest are hereby waived by Borrower.

             This Note shall be interpreted, governed by, and  construed
   in accordance with, the laws of the State of Illinois.



                                      FRANKLIN OPHTHALMIC
                                      INSTRUMENTS CO, INC.



                                      By: /s/ Brian M. Carroll
                                    Name:     Brian M. Carroll
                                   Title:     Vice President & CFO
<PAGE>
                                 EXHIBIT B

                          SECURED PROMISSORY NOTE


   $300,000  December 30, 1997
                                                       Chicago, Illinois

        FOR VALUE RECEIVED, the undersigned, FRANKLIN OPHTHALMIC
   INSTRUMENTS CO., INC., a Delaware corporation (hereinafter referred
   to as "Borrower"), hereby promises to pay to the order of HARRIS
   TRUST AND SAVINGS BANK, an Illinois banking corporation (hereinafter
   referred to as "Lender"), in such coin or currency of the United
   States which shall be legal tender in payment of all debts and dues,
   public and private, at the time of payment, the principal sum of
   THREE HUNDRED THOUSAND AND NO/100 DOLLARS ($300,000) together with
   interest from and after the date hereof on the unpaid principal
   balance from time to time outstanding.

        This Secured Promissory Note (the "Note") is the Term Note
   referred to in, and is issued pursuant to, that certain Amended and
   Restated Loan and Security Agreement between Borrower and Lender
   dated the date hereof (hereinafter, as amended from time to time, the
   "Loan Agreement"), and is entitled to all of the benefits and
   security of the Loan Agreement.  All of the terms, covenants and
   conditions of the Loan Agreement and all other instruments evidencing
   or securing the indebtedness hereunder (including, without
   limitation, the "Security Documents" as defined in the Loan
   Agreement) are hereby made a part of this Note and are deemed
   incorporated herein in full.  All capitalized terms used herein,
   unless otherwise specifically defined in this Note, shall have the
   meanings ascribed to them in the Loan Agreement.

        Interest from and after the date hereof on the unpaid principal
   balance from time to time outstanding shall bear interest at such
   rates as are specified in the Loan Agreement.

        For so long as no Event of Default shall have occurred under the
   Loan Agreement, the principal amount and accrued interest of this
   Note shall be due and payable on the dates and in the manner
   hereinafter set forth:

             (a)  Interest shall be due and payable at such times as are
        specified in the Loan Agreement;

             (b)  Commencing on February 1, 1998, and continuing on the
        first day of each month thereafter to and including March 1,
        2000, principal payments in the amount of Three Thousand Seven
        Hundred Fifty Dollars ($3,750) each; and

             (c)  On March 31, 2000, a final principal payment equal to
        the entire unpaid principal balance hereof, together with any
        and all other amounts due hereunder.
<PAGE>
   Notwithstanding the foregoing, the entire unpaid principal balance
   and accrued interest on this Note shall be due and payable
   immediately upon any termination of the Loan Agreement pursuant to
   Section 3.4 thereof.

        This Note shall be subject to mandatory prepayment in accordance
   with the provisions of Section 2.2(B) of the Loan Agreement.
   Borrower may prepay this Note in whole at any time or in part from
   time to time upon ten (10) days' prior written notice to Lender,
   provided that each such prepayment shall be made together with
   accrued interest on the principal amount so prepaid at the prepayment
   date.

        All partial prepayments, whether mandatory or voluntary, shall
   be applied to installment of principal in the inverse order of their
   maturities.

        The occurrence of an Event of Default under the Loan Agreement,
   including, without limitation, the failure to pay any installment of
   principal or interest on this Note in full on the due date thereof in
   accordance with the terms of this Note, shall constitute an event of
   default under this Note and shall entitle Lender, at its option, upon
   or at any time after the occurrence of any such Event of Default to
   declare the then outstanding principal balance and accrued interest
   hereof to be, and the same shall thereupon become, immediately due
   and payable without notice to or demand upon Borrower, all of which
   Borrower hereby expressly waives.  If this Note is collected by or
   through an attorney at law, then Borrower shall be obligated to pay,
   in addition the principal balance and accrued interest hereof,
   reasonable attorney's fees and court costs.

        Time is of the essence of this Note.  To the fullest extent
   permitted by applicable law, Borrower, for itself and its legal
   representatives, successors and assigns, expressly waives
   presentment, demand, protest, notice of dishonor, notice of
   non-payment, notice of maturity, notice of protest, presentment for
   the purpose of accelerating maturity, diligence in collection, and
   the benefit of any exemption or insolvency laws.

        Wherever possible, each provision of this Note shall be
   interpreted in such a manner as to be effective and valid under
   applicable law, but if any provision of this Note shall be prohibited
   or invalid under applicable law, such provision shall be ineffective
   to the extent of such prohibition or invalidity without invalidating
   the remainder of such provision or remaining provisions of this Note.
   No delay or failure on the part of Lender in the exercise of any
   right or remedy hereunder shall operate as a waiver thereof, nor as
   an acquiescence in any default, nor shall any single or partial
   exercise by Lender of any right or remedy preclude any other right or
   remedy.  Lender, at its option, may enforce its rights against any
   collateral securing this Note without enforcing its rights against
   Borrower, any guarantor of the indebtedness evidenced hereby or any
   other property or indebtedness due or to become due to Borrower.
   Borrower agrees that, without releasing or impairing Borrower's
   liability hereunder, Lender may at any time release, surrender,
   substitute or exchange any collateral securing this Note and may at
   any time release any party primarily or secondarily liable for the
   indebtedness evidenced by this Note.
<PAGE>
        This Note shall be governed by, and construed and enforced in
   accordance with, the internal laws of the State of Illinois, and is
   intended to take effect as an instrument under seal.

        IN WITNESS WHEREOF, Borrower has caused this Note to be duly
   executed, sealed and delivered in Chicago, Illinois, on the date
   first above written.

                                      FRANKLIN OPHTHALMIC INSTRUMENTS
                                      CO., INC.



                                      By:  /s/ Brian M. Carroll
                                    Name:      Brian M. Carroll
                                   Title:      Vice President & CFO
<PAGE>

                                 EXHIBIT C

                       BORROWER'S BUSINESS LOCATIONS


        (1)  Borrower currently has the following business locations,
   and no others:

        (2)  Borrower maintains its books and records relating to
   Accounts and General Intangibles at:




        (3)  During the preceding seven-year period, Borrower has had no
   office, place of business or agent for process located in any county
                  other than as set forth above, except:

                                 EXHIBIT D

                      JURISDICTIONS IN WHICH BORROWER
                         IS AUTHORIZED TO DO BUSINESS


        


        

                                 EXHIBIT E

                     CORPORATE NAMES AND PREDECESSORS


        (1)  Each  Borrower's correct corporate name, as registered with
   the Secretary of State (Commonwealth) of its State (Commonwealth) of
   incorporation is:

                  Name                State (Commonwealth) of
   Incorporation

        (a)
        (b)
        (c)
        (d)

        (2)  During the preceding seven-year period, Borrower has used
   the following names:

<PAGE>

                                 EXHIBIT F

               PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES


        (1)  Borrower has no patents [, except].

        (2)  Borrower has no trademarks [, except].

        (3)  Borrower has no copyrights [, except].

        (4)  Borrower has no licenses, other than routine business
   licenses, authorizing them to transact business in local
   jurisdictions [and the following:].


                                 EXHIBIT G

                     CAPITAL STRUCTURE AND AFFILIATES

        (1)  The number of authorized shares of common stock of
   [BORROWER] is __________.  The number of issued shares of common
   stock of [BORROWER] is __________.  [BORROWER] has no treasury stock.

        (2)  All of the issued shares of [BORROWER] are fully paid and
   non-assessable and are owned by the following Persons:

        (3)  [BORROWER] has no Subsidiaries [, except the following:]

           Name                State of         Percent of Voting
                             Incorporation     Stock Borrower Owns





   
                                 EXHIBIT H

           CONTRACTS RESTRICTING BORROWER'S RIGHT TO INCUR DEBTS


        There are no contracts that restrict the right of Borrower to
   incur Indebtedness, except the following:

        (1)

        (2)


        None of the foregoing contracts restricts or prohibits Borrower
   from executing, delivering and performing this Agreement, the Other
   Agreements or the Security Documents or incurring any Obligations to
   Lender in accordance with this Agreement.
<PAGE>

                                 EXHIBIT I

                                LITIGATION


        (1)  There are no proceedings pending against Borrower in any
   court, except as follows:




        (2)  The only threatened litigation of which Borrower is aware
   is as follows:

                                  EXHIBIT J

                               PENSION PLANS

                                 EXHIBIT K

                              LABOR CONTRACTS


        Borrower has no agreements with any organization of its
   employees [, except the following:]


                                 EXHIBIT L

                            CAPITALIZED LEASES


                   Borrower has the following capitalized leases:

                                 EXHIBIT M

                             OPERATING LEASES


             Borrower has the following operating leases:



                                 EXHIBIT P

                              PERMITTED LIENS


                                 EXHIBIT Q

                              LEASED PREMISES


                                 EXHIBIT R

                    [LETTERHEAD OF BORROWER'S COUNSEL]