LOAN AND SECURITY AGREEMENT

         THIS LOAN AND SECURITY  AGREEMENT (this "AGREEMENT") made this 30th day
of  April,  1996 by and  between  LASALLE  NATIONAL  BANK,  a  national  banking
association ("BANK"),  135 S. LaSalle St., Chicago, IL 60674, and USA Skate Co.,
Inc.,  a New York  corporation,  having its  principal  place of  business  at 7
Brayton   Court,   Commack,   New  York  11725   ("BORROWER")   [Insert   entity
designation(s) and address(es) of principal place of business].

WITNESSETH:

         WHEREAS,  Borrower may, from time to time, request Loans from Bank, and
the parties wish to provide for the terms and conditions  upon which such Loans,
if made by Bank, shall be made;

         NOW,  THEREFORE,  in  consideration  of any Loan (including any Loan by
renewal or extension) hereafter made to Borrower by Bank, and for other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged by Borrower, the parties agree as follows:

1.       DEFINITIONS

         (a)  "ACCOUNT,"   "ACCOUNT  DEBTOR,"   "CHATTEL  PAPER,"   "DOCUMENTS,"
"EQUIPMENT," "GENERAL  INTANGIBLES,"  "GOODS,"  "INSTRUMENTS,"  "INVENTORY," AND
"INVESTMENT PROPERTY" shall have the respective meanings assigned to such terms,
as of the date of this Agreement, in the Illinois Uniform Commercial Code.

         (b)   "AFFILIATE"   shall  mean  any  Person   directly  or  indirectly
controlling, controlled by or under common control with Borrower.

         (c) "COLLATERAL"  shall mean all of the property of Borrower  described
in paragraph 4 hereof,  together with all other real or personal property of any
Obligor or any other Person now or hereafter  pledged to Bank to secure,  either
directly or indirectly, repayment of any of the Liabilities.

         (d) "ELIGIBLE ACCOUNT" shall mean an Account owing to Borrower which is
acceptable to Bank in its sole discretion for lending purposes. Without limiting
Bank's discretion, Bank shall, in general, consider an Account to be an Eligible
Account  if it  meets,  and so long  as it  continues  to  meet,  the  following
requirements:

                  (i)    it is genuine and in all respects what it purports to
         be;

                  (ii)   it is owned  by Borrower and  Borrower has the right to
         subject  it  to a  security  interest in  favor of Bank or assign it to
         Bank;

                  (iii)  it  arises  from (A) the  performance  of  services  by
         Borrower and such services have been fully  performed and  acknowledged
         and accepted by the Account Debtor thereunder; or (B) the sale or lease
         of Goods by Borrower,  and such Goods have been completed in accordance
         with the Account Debtor's  specifications (if any) and delivered to and
         accepted by the Account Debtor,  such Account Debtor has not refused to
         accept and has not  returned or offered to return any of the Goods,  or
         has not refused to accept any of the services, which are the subject of
         such Account,  and Borrower has possession of, or has delivered to Bank
         at Bank's request,  shipping and delivery receipts  evidencing delivery
         of such Goods;

                  (iv)     [intentionally omitted];

                  (v)   it is not subject to any prior  assignment, claim, lien,
         security interest or encumbrance whatsoever, other than Permitted Liens
         and the security interest granted to Bank hereunder;


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                  (vi) it is a  valid,  legally  enforceable  and  unconditional
         obligation  of the  Account  Debtor  thereunder,  and is not subject to
         setoff,  counterclaim,  credit, allowance or adjustment by such Account
         Debtor,  or to any  claim  by such  Account  Debtor  denying  liability
         thereunder in whole or in part;

                  (vii) it does not arise out of a contract or order which fails
         in  any  material respect to comply with the requirements of applicable
         law;

                  (viii)  the  Account  Debtor  thereunder  is  not a  director,
         officer,  employee or agent of  Borrower,  or a  Subsidiary,  Parent or
         Affiliate,  unless the Account arises out of a transaction permitted by
         paragraph 10(l) hereof and is otherwise an Eligible Account;

                  (ix) it is not an Account  with  respect to which the  Account
         Debtor is the United  States of America  or any  department,  agency or
         instrumentality  thereof,  unless Borrower assigns its right to payment
         of such Account to Bank pursuant to, and in full  compliance  with, the
         Assignment of Claims Act of 1940, as amended;

                  (x) it is not an account  with  respect  to which the  Account
         Debtor is located in a state which requires Borrower, as a precondition
         to  commencing  or  maintaining  an action in the courts of that state,
         either to (A) receive a certificate  of authority to do business and be
         in good  standing  in such  state,  or (B)  file a notice  of  business
         activities report or similar report with such state's taxing authority,
         unless (x) Borrower  has taken one of the actions  described in clauses
         (A) or (B),  (y) the  failure to take one of the actions  described  in
         either clause (A) or (B) may be cured  retroactively by Borrower at its
         election or (z) Borrower has proven, to Bank's satisfaction, that it is
         exempt from any such requirements under any such state's laws;

                  (xi) it is an Account which arises out of a sale  made in  the
         ordinary course of Borrower's business;

                  (xii) the  Account  Debtor is a resident or citizen of, and is
         located within, the United State of America,  unless the Accounts owing
         by such  Account  Debtor are the  subject of foreign  credit  insurance
         which is in an amount  satisfactory  to Bank and has been  assigned  to
         Bank in a manner satisfactory to Bank;

                  (xiii) it is not an Account  with respect to which the Account
         Debtor's  obligation to pay is  conditional  upon the Account  Debtor's
         approval  of the  Goods or  services  or is  otherwise  subject  to any
         repurchase  obligation  or  return  right,  as  with  sales  made  on a
         bill-and-hold,  guaranteed  sale,  sale on approval,  sale or return or
         consignment basis;

                  (xiv) it is not an  Account  (A)  with  respect  to which  any
         representation or warranty contained in this Agreement is untrue or (B)
         which  violates  any of the  covenants  of Borrower  contained  in this
         Agreement;

                  (xv) it is not an Account  which,  when added to a  particular
         Account Debtor's other indebtedness to Borrower, exceeds a credit limit
         determined  by Bank in its  sole  discretion  for that  Account  Debtor
         (except that Accounts  excluded from Eligible Accounts solely by reason
         of this  paragraph  1(d)(xv)  hereof shall be Eligible  Accounts to the
         extent of such credit limit); and

                  (xvi) it is not an Account  with respect to which the prospect
         of payment or performance by the Account Debtor is or will be impaired,
         as determined by Bank in its sole discretion.

         (e)  "ELIGIBLE  INVENTORY"  shall mean  Inventory of Borrower  which is
acceptable to Bank in its sole discretion for lending purposes. Without limiting
Bank's  discretion,  Bank shall, in general,  consider  Inventory to be Eligible
Inventory  if it  meets,  and so long as it  continues  to meet,  the  following
requirements:

                  (i)      it is owned by Borrower and Borrower has the right to
         subject it to a security interest in favor of Bank;


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<PAGE>

                  (ii)     it is located on the premises listed on Exhibit B and
         is not in transit;

                  (iii) it is not subject to any prior assignment,  claim, lien,
         security interest or encumbrance whatsoever, other than Permitted Liens
         and the security interest granted to Bank hereunder;

                  (iv) if held for sale or lease or furnishing  under  contracts
         of service, it is (except as Bank may otherwise consent in writing) new
         and  unused  and  free  from  defects  which  would,   in  Bank's  sole
         determination, affect its market value;

                  (v) it is not stored with a bailee,  consignee,  warehouseman,
         processor  or similar  party  unless  Bank has given its prior  written
         approval  and   Borrower   has  caused  any  such  bailee,   consignee,
         warehouseman,  processor or similar party to issue and deliver to Bank,
         in  form  and  substance   acceptable  to  Bank,   such  UCC  financing
         statements,  warehouse  receipts,  waivers and other  documents as Bank
         shall require;

                  (vi)   Bank has determined in accordance with Bank's customary
         business practices that  it  is  not  unacceptable  due to  age,  type,
         category or quantity; and

                  (vii) it is not Inventory (A) with respect to which any of the
         representations  and warranties  contained in this Agreement are untrue
         or (B) which  violates any of the  covenants  of Borrower  contained in
         this Agreement.

         (f) "EVENT OF DEFAULT" shall have the meaning specified in paragraph 12
hereof.

         (g) "EXHIBIT A"  shall mean  the exhibit  entitled  Exhibit A - Special
Provisions which is attached hereto and made a part hereof.

         (h)  "EXHIBIT B" shall mean the exhibit  entitled  Exhibit B - Business
and Collateral Locations which is attached hereto and made a part hereof.

         (i) "INDEMNIFIED PARTY" shall have the meaning  specified in  paragraph
14 hereof.

         (j) "LIABILITIES"  shall mean any and all obligations,  liabilities and
indebtedness  of Borrower to Bank or to any parent,  affiliate or  subsidiary of
Bank of any and every kind and nature,  howsoever created,  arising or evidenced
and  howsoever  owned,  held or  acquired,  whether now or  hereafter  existing,
whether now due or to become due, whether primary, secondary,  direct, indirect,
absolute, contingent or otherwise (including, without limitation, obligations of
performance),  whether several,  joint or joint and several, and whether arising
or existing under written or oral agreement or by operation of law.

         (k) "LOAN" or "LOANS"  shall mean all advances made by Bank to Borrower
pursuant  to  paragraph 2 hereof and all other  loans,  advances  and  financial
accommodations made by Bank to or on behalf of Borrower hereunder.

         (l) "LOAN LIMIT" shall  have the  meaning  specified in  paragraph 1 of
Exhibit A.

         (m) "LOCK BOX" and "LOCK BOX ACCOUNT" shall have the meanings specified
in paragraph 7 hereof.

         (n)"OBLIGOR" shall mean Borrower and each Person who is or shall become
primarily or secondarily liable for any of the Liabilities.

         (o) "ORIGINAL TERM"  shall have the  meaning  specified in  paragraph 9
hereof.

         (p) "OTHER  AGREEMENTS"  shall  mean all  agreements,  instruments  and
documents,  including, without limitation,  guaranties,  mortgages, trust deeds,
pledges, powers of attorney, consents, assignments, contracts, notices, security
agreements,  leases, financing statements and all other writings heretofore, now
or  from  time  to time  hereafter  executed  by  or  on  behalf  of Borrower or

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<PAGE>

any other Person and delivered to Bank or to any parent, affiliate or subsidiary
of Bank in connection  with the  Liabilities  or the  transactions  contemplated
hereby.

         (q)  "PARENT"  shall  mean  any  Person  now or at any  time  or  times
hereafter  owning or  controlling  (alone or with any other  Person)  at least a
majority of the issued and outstanding stock of Borrower or any Subsidiary.

         (r)  "PERMITTED  LIENS" shall mean (i) statutory  liens of  landlord's,
carriers,  warehousemen,  mechanics,  materialmen  or suppliers  incurred in the
ordinary  course of business and securing  amounts not yet due or declared to be
due by the  claimant  thereunder,  (ii) liens or security  interests in favor of
Bank,  (iii) zoning  restrictions and easements,  licenses,  covenants and other
restrictions  affecting the use of real property that do not  individually or in
the aggregate have a material  adverse effect on Borrower's  ability to use such
real property for its intended  purpose in connection with Borrower's  business,
and (iv) liens specifically permitted by Bank in writing.

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

         (t)  "RENEWAL TERM" shall have the meaning  specified   in  paragraph 9
hereof.

         (u)  "SUBSIDIARY"  shall mean any  corporation of which more than fifty
percent (50%) of the  outstanding  capital stock having ordinary voting power to
elect a majority of the board of directors of such corporation  (irrespective of
whether at the time stock of any other class of such  corporation  shall have or
might have voting power by reason of the happening of any contingency) is at the
time,  directly or indirectly,  owned by Borrower or by any partnership or joint
venture  of which  more  than  fifty  percent  (50%) of the  outstanding  equity
interests are at the time, directly or indirectly, owned by Borrower.

         (v)  "TANGIBLE NET WORTH" shall have the meaning specified in paragraph
11(o) hereof.

2.       LOANS.

         Subject  to the  terms  and  conditions  of this  Agreement  (including
Exhibit A) and the Other  Agreements,  during the Original  Term and any Renewal
Term, Bank may, in its sole discretion,  make such Loans to Borrower as Borrower
shall from time to time  request.  The aggregate  unpaid  principal of all Loans
outstanding at any one time shall not exceed the Loan Limit set forth in Exhibit
A and shall bear  interest  at the rates set forth in Exhibit A. ALL LOANS SHALL
BE REPAID BY  BORROWER  UPON DEMAND BY BANK.  Prior to Bank making such  demand,
Loans shall be repaid as provided  elsewhere in this  Agreement.  If at any time
the  outstanding  principal  balance of the Loans exceeds the Loan Limit, or any
portion of the Loans  exceeds any  applicable  sublimit  set forth in Exhibit A,
Borrower shall  immediately,  and without the necessity of a demand by Bank, pay
to Bank such amount as may be necessary to eliminate  such excess and Bank shall
apply such payment to the  Liabilities in such order as Bank shall  determine in
its sole discretion. Borrower hereby authorizes Bank, in its sole discretion, to
charge any of Borrower's  accounts to make any payments of principal or interest
required by this  Agreement.  All Loans  shall,  in Bank's sole  discretion,  be
evidenced by one or more promissory notes in form and substance  satisfactory to
Bank. However,  if such Loans are not so evidenced,  such Loans may be evidenced
solely by entries upon the books and records maintained by Bank.

3.       FEES AND CHARGES.

         Borrower  shall pay to Bank, in addition to all other  amounts  payable
hereunder,  the fees and charges set forth in Exhibit A. It is the intent of the
parties that the rate of interest and the other  charges to Borrower  under this
Agreement  shall be lawful;  therefore,  if for any reason the interest or other
charges  payable  under  this  Agreement  are  found  by a  court  of  competent
jurisdiction,  in a final  determination,  to exceed  the limit  which  Bank may
lawfully charge Borrower,  then the obligation to pay interest and other charges
shall  automatically  be reduced  to such limit and,  if any amount in excess of
such limit shall have been paid, then such amount shall be refunded to Borrower.

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<PAGE>

4.       GRANT OF SECURITY INTEREST TO BANK.

         As  security  for the payment of all Loans now or in the future made by
Bank to  Borrower  hereunder  and for the payment or other  satisfaction  of all
other  Liabilities,  Borrower  hereby  assigns  to  Bank  and  grants  to Bank a
continuing security interest in the following property of Borrower,  whether now
or hereafter owned, existing,  acquired or arising and wherever now or hereafter
located: (a) all Accounts (whether or not Eligible Accounts) and all Goods whose
sale, lease or other disposition by Borrower has given rise to Accounts and have
been  returned  to or  repossessed  or stopped in transit by  Borrower;  (b) all
Chattel  Paper,   Instruments,   Investment  Property,   Documents  and  General
Intangibles  (including,  without limitation,  all patents, patent applications,
trademarks,   trademark  applications,   tradenames,  trade  secrets,  goodwill,
copyrights,  registrations,  licenses,  franchises,  customer lists,  tax refund
claims,  claims  against  carriers and  shippers,  guarantee  claims,  contracts
rights, security interests, security deposits and any rights to indemnification;
(c) all Inventory (whether or not Eligible Inventory); (d) all Goods (other than
Inventory), including, without limitation, Equipment, vehicles and fixtures; (e)
all deposits and cash and any other property of Borrower now or hereafter in the
possession,  custody or control of Bank or any agent or any parent, affiliate or
subsidiary  of Bank or any  participant  with Bank in the Loans for any  purpose
(whether for safekeeping,  deposit, collection, custody, pledge, transmission or
otherwise);  and (f) all additions and  accessions  to,  substitutions  for, and
replacements,  products  and  proceeds  of the  foregoing  property,  including,
without  limitation,  proceeds of all insurance  policies insuring the foregoing
property,  and  all of  Borrower's  books  and  records  relating  to any of the
foregoing and to Borrower's business.

5.       PRESERVATION OF COLLATERAL AND PERFECTION OF SECURITY INTERESTS
         THEREIN.

         Borrower shall,  at Bank's request,  at any time and from time to time,
execute  and  deliver to Bank such  financing  statements,  documents  and other
agreements and instruments  (and pay the cost of filing or recording the same in
all public offices deemed necessary or desirable by Bank) and do such other acts
and things as Bank may deem  necessary or  desirable  in order to establish  and
maintain a valid,  attached and perfected security interest in the Collateral in
favor of Bank  (free and clear of all other  liens,  claims  and rights of third
parties  whatsoever,   whether  voluntarily  or  involuntarily  created,  except
Permitted  Liens)  to  secure  payment  of  the  Liabilities,  and in  order  to
facilitate the collection of the Collateral.  Borrower irrevocably hereby makes,
constitutes  and  appoints  Bank (and all  Persons  designated  by Bank for that
purpose) as Borrower's  true and lawful  attorney and  agent-in-fact  to execute
such financing statements, documents and other agreements and instruments and do
such other acts and things as may be necessary  to preserve  and perfect  Bank's
security  interest in the  Collateral.  Borrower  further  agrees that a carbon,
photographic,  photostatic  or  other  reproduction  of this  Agreement  or of a
financing statement shall be sufficient as a financing statement.

6.       POSSESSION OF COLLATERAL AND RELATED MATTERS.

         Until an "Event of Default"  (as  hereinafter  defined)  has  occurred,
Borrower shall have the right,  except as otherwise  provided in this Agreement,
in the ordinary  course of Borrower's  business,  to (a) sell,  lease or furnish
under contracts of service any of Borrower's Inventory normally held by Borrower
for any such purpose, and (b) use and consume any raw materials, work in process
or  other  materials  normally  held by  Borrower  for such  purpose;  provided,
however,  that a sale in the ordinary  course of business  shall not include any
transfer  or  sale in  satisfaction,  partial  or  complete,  of a debt  owed by
Borrower.

7.       COLLECTIONS.

         (a)  Borrower  shall  direct  all of its  Account  Debtors  to make all
payments  on the  Accounts  directly  to a post  office  box  (the  "LOCK  BOX")
designated  by, and under the  exclusive  control of, Bank or another  financial
institution  acceptable to Bank.  Borrower shall establish an account (the "LOCK
BOX ACCOUNT") in Borrower's name with Bank or such other  financial  institution
acceptable  to Bank,  into which all payments  received in the Lock Box shall be
deposited,  and into which Borrower will  immediately  deposit all payments made
for  Inventory  or services and  received by Borrower in the  identical  form in
which such  payments  were  made,  whether by cash or check.  If  Borrower,  any
Affiliate or Subsidiary,  or any  shareholder,  officer,  director,  employee or
agent of Borrower or any Affiliate or Subsidiary, or any other Person acting for
or  in   concert  with   Borrower  shall  receive  any  monies,  checks,  notes,

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drafts  or other  payments  relating  to or as  proceeds  of  Accounts  or other
Collateral,  Borrower and each such Person shall receive all such items in trust
for,  and as the sole and  exclusive  property  of, Bank and,  immediately  upon
receipt thereof, shall remit the same (or cause the same to be remitted) in kind
to the Lock Box Account.  If the Lock Box Account is not established  with Bank,
the financial  institution with which the Lock Box Account is established  shall
acknowledge  and agree,  in a manner  satisfactory  to Bank, that the amounts on
deposit in such Lock Box  Account are the sole and  exclusive  property of Bank,
that such  financial  institution  has no right to setoff  against  the Lock Box
Account or against any other account  maintained by such  financial  institution
into which the contents of the Lock Box Account are  transferred,  and that such
financial institution shall wire, or otherwise transfer in immediately available
funds in a manner  satisfactory to Bank, funds deposited in the Lock Box Account
on a daily basis as such funds are collected.  Borrower agrees that all payments
made to such Lock Box Account or otherwise  received by Bank, whether in respect
of the Accounts or as proceeds of other Collateral or otherwise, will be applied
on account of the Liabilities in accordance with the terms of this Agreement. If
the Lock Box Account is established with Bank,  Borrower agrees to pay all fees,
costs and expenses which Bank incurs in connection  with opening and maintaining
the Lock Box Account and  depositing  for  collection by Bank any check or other
item of payment  received  by Bank on account  of the  Liabilities.  All of such
fees, costs and expenses shall  constitute Loans hereunder,  shall be payable to
Bank by  Borrower  upon  demand,  and,  until paid,  shall bear  interest at the
highest rate then applicable to Loans hereunder. All checks, drafts, instruments
and other  items of payment or  proceeds  of  Collateral  shall be  endorsed  by
Borrower to Bank,  and, if that  endorsement  of any such item shall not be made
for any reason,  Bank is hereby  irrevocably  authorized  to endorse the same on
Borrower's  behalf.  For the  purpose of this  paragraph,  Borrower  irrevocably
hereby makes,  constitutes and appoints Bank (and all Persons designated by Bank
for that purpose) as Borrower's true and lawful attorney and  agent-in-fact  (i)
to  endorse  Borrower's  name upon said  items of  payment  and/or  proceeds  of
Collateral and upon any Chattel Paper, document,  instrument, invoice or similar
document or  agreement  relating to any Account of Borrower or goods  pertaining
thereto;  (ii) to take  control in any manner of any item of payment or proceeds
thereof;  and (iii) to have  access to any lock box or postal box into which any
of  Borrower's  mail is  deposited,  and open and process all mail  addressed to
Borrower and deposited therein.

         (b) Bank  may,  at any time and from  time to time,  whether  before or
after  notification  to any  Account  Debtor  and  whether  before  or after the
maturity of any of the Liabilities,  (i) enforce collection of any of Borrower's
Accounts  or  contract  rights  by  suit  or  otherwise;  (ii)  exercise  all of
Borrower's  rights and remedies with respect to  proceedings  brought to collect
any  Accounts;  (iii)  surrender,  release  or  exchange  all or any part of any
Accounts, or compromise or extend or renew for any period (whether or not longer
than the original period) any indebtedness  thereunder;  (iv) sell or assign any
Account of Borrower  upon such terms,  for such amount and at such time or times
as Bank deems advisable; (v) prepare, file and sign Borrower's name on any proof
of claim in bankruptcy or other similar document against any Account Debtor; and
(vi)  do all  other  acts  and  things  which  are  necessary,  in  Bank's  sole
discretion,  to fulfill Borrower's obligations under this Agreement and to allow
Bank to collect the Accounts.  In addition to any other provision  hereof,  Bank
may at any time,  after the  occurrence  of an Event of Default,  at  Borrower's
expense,  notify any parties  obligated  on any of the  Accounts to make payment
directly to Bank of any amounts due or to become due thereunder.

         (c) Bank shall,  within two (2) business  days after receipt by Bank at
its office in Chicago,  Illinois of cash or other  immediately  available  funds
from  collections of items of payment and proceeds of any Collateral,  apply the
whole or any part of such  collections  or proceeds  against the  Liabilities in
such order as Bank shall determine in its sole discretion.

         (d) Bank,  in its sole  discretion,  without  waiving or releasing  any
obligation,  liability  or duty of Borrower  under this  Agreement  or the Other
Agreements  or any Event of  Default,  may at any time or times  hereafter,  but
shall not be obligated to, pay,  acquire or accept an assignment of any security
interest,  lien, encumbrance or claim asserted by any Person in, upon or against
the Collateral. All sums paid by Bank in respect thereof and all costs, fees and
expenses  including,  without  limitation,  reasonable  attorney fees, all court
costs and all other charges  relating  thereto incurred by Bank shall constitute
Loans,  payable  by  Borrower  to Bank on demand  and,  until  paid,  shall bear
interest at the highest rate then applicable to Loans hereunder.

         (e)  Immediately  upon  Borrower's   receipt  of  any  portion  of  the
Collateral evidenced by an agreement, Instrument or Document, including, without
limitation,  any Chattel Paper,  Borrower shall deliver the original  thereof to
Bank together with an  appropriate  endorsement  or other  specific  evidence of
assignment  thereof to Bank (in form and substance  acceptable  to Bank).  If an
endorsement  or  assignment  of any such items shall not be made for any reason,
Bank is hereby irrevocably authorized, as Borrower's attorney and agent-in-fact,
to endorse or assign the same on Borrower's behalf.

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8.       SCHEDULES AND REPORTS.

         (a) Within ten (10) days after the close of each calendar month, and at
such  other  times as may be  requested  by Bank  from  time to time  hereafter,
Borrower shall deliver to Bank (i) a schedule  identifying each Eligible Account
together  with copies of the invoices when  requested by Bank (with  evidence of
shipment attached)  pertaining to each such Eligible Account,  for the month (or
other applicable period) immediately preceding;  (ii) such additional schedules,
certificates, reports and information with respect to the Collateral as Bank may
from  time to time  require;  and  (iii) an  assignment  of any or all  items of
Collateral to Bank. Bank, through its officers,  employees or agents, shall have
the right,  at any time and from time to time in Bank's  name,  in the name of a
nominee of Bank or in Borrower's  name,  to verify the  validity,  amount or any
other  matter  relating  to any of  Borrower's  Accounts,  by  mail,  telephone,
telegraph or otherwise. Borrower shall reimburse Bank, on demand, for all costs,
fees and expenses incurred by Bank in this regard.

         (b) Without  limiting the generality of the  foregoing,  Borrower shall
deliver to Bank,  at least once a month (or more  frequently  when  requested by
Bank), a report with respect to Borrower's Inventory. Borrower shall immediately
notify Bank of any event  causing loss or  depreciation  in value of  Borrower's
Inventory  (other than normal  depreciation  occurring in the ordinary course of
business).

         (c) All schedules,  certificates,  reports,  and  assignments and other
items delivered by Borrower to Bank hereunder shall be executed by an authorized
representative  of  Borrower  and  shall  be  in  such  form  and  contain  such
information as Bank shall specify.

9.       TERMINATION.

         This  Agreement  shall be in effect from the date hereof  until May 31,
1999 (the  "ORIGINAL  TERM") and shall  automatically  renew itself from year to
year  thereafter  (each such  one-year  renewal  being  referred  to herein as a
"RENEWAL  TERM") unless (a) Bank makes demand for repayment  prior to the end of
the Original  Term or the then  current  Renewal  Term;  (b) the due date of the
Liabilities  is  accelerated  pursuant to paragraph  13 hereof;  or (c) Borrower
elects to terminate this Agreement at the end of the Original Term or at the end
of any Renewal  Term by giving  Bank  written  notice of such  election at least
ninety  (90)  days  prior to the end of the  Original  Term or the then  current
Renewal  Term and by paying  all of the  Liabilities  in full on the last day of
such term.  If one or more of the events  specified  in clauses (a), (b) and (c)
occurs,  this  Agreement  shall  terminate  on  the  date  thereafter  that  the
Liabilities are paid in full, provided, however, that the security interests and
liens created under this Agreement and the Other  Agreements  shall survive such
termination  until the payment of the  Liabilities has become  indefeasible.  At
such time as Borrower has repaid all of the  Liabilities  and this Agreement has
terminated,  Borrower  shall  deliver to Bank a release,  in form and  substance
satisfactory  to  Bank,  of all  obligations  and  liabilities  of Bank  and its
officers, directors,  employees, agents, parents, subsidiaries and affiliates to
Borrower,  and if Borrower is  obtaining  new  financing  from  another  lender,
Borrower  shall  deliver  such  lender's  indemnification  of Bank,  in form and
substance satisfactory to Bank, for checks which Bank has credited to Borrower's
account,  but which  subsequently are dishonored for any reason.  If, during the
term of this Agreement,  Borrower prepays all or any portion of the Liabilities,
and  in  connection  therewith,  either  (a)  permits  any  security  agreement,
financing statement or analogous instrument to be executed or filed with respect
to the  Collateral  for the benefit of someone  other than Bank, or (b) creates,
incurs or assumes any liability for borrowed money (except for  borrowings  from
Bank and borrowings  permitted  pursuant to paragraph  10(q)  hereof),  Borrower
agrees to pay to Bank,  as a  prepayment  fee, in addition to the payment of all
other Liabilities,  an amount equal to the product of (i) fifty percent (50%) of
the  average  monthly  interest  earned  by Bank  on the  Loans  made  hereunder
preceding  the date of  prepayment,  multiplied  by (ii) the  number of full and
partial months  remaining from the date of prepayment to the end of the Original
Term or the then current  Renewal  Term. At such time as Borrower has repaid all
of the  Liabilities  and this  Agreement has  terminated,  Bank shall deliver to
Borrower such  releases and  termination  statements as Borrower may  reasonably
request in order to terminate the perfected  status of Bank's liens and security
interests upon the Collateral.

10.      REPRESENTATIONS, WARRANTIES AND COVENANTS.

         Borrower hereby represents, warrants and covenants that:


9207_1

                                       -7-

<PAGE>

         (a) the financial  statements  delivered or to be delivered by Borrower
to Bank at or prior to the date of this  Agreement  and at all times  subsequent
thereto  accurately reflect the financial  condition of Borrower,  and there has
been no adverse change in the financial  condition,  the operations or any other
status of Borrower since the date of the financial  statements delivered to Bank
most recently prior to the date of this Agreement;

         (b) the office where Borrower keeps its books, records and accounts (or
copies  thereof)  concerning  the  Collateral,  Borrower's  principal  place  of
business and all of Borrower's other places of business, locations of Collateral
and post office  boxes are as set forth in Exhibit B;  Borrower  shall  promptly
(but in no event less than ten (10) days prior  thereto)  advise Bank in writing
of the  proposed  opening  of any new  place of  business,  the  closing  of any
existing  place of  business,  any change in the location of  Borrower's  books,
records and accounts  (or copies  thereof) or the opening or closing of any post
office box of Borrower.

         (c)  the  Collateral,  including,  without  limitation,  the  Equipment
(except  any part  thereof  which prior to the date of this  Agreement  Borrower
shall have advised Bank in writing consists of Collateral  normally used in more
than one state) is and shall be kept, or, in the case of vehicles,  based,  only
at the addresses set forth on the first page of this  Agreement or on Exhibit B,
and at other locations  within the  continental  United States of which Bank has
been advised by Borrower in writing;

         (d) if any of the Collateral  consists of Goods of a type normally used
in more  than  one  state,  whether  or not  actually  so used,  Borrower  shall
immediately  give  written  notice  to Bank of any use of any such  Goods in any
state other than a state in which  Borrower  has  previously  advised  Bank such
Goods  shall be used,  and such Goods  shall not,  unless  Bank shall  otherwise
consent in writing, be used outside of the continental United States;

         (e) no security agreement,  financing statement or analogous instrument
exists or shall  exist  with  respect  to any of the  Collateral  other than any
security  agreement,  financing  statement  or analogous  instrument  evidencing
security interests in favor of Bank or evidencing Permitted Liens;

         (f) each Account or item of Inventory which Borrower  shall,  expressly
or by  implication,  request  Bank to  classify  as an  Eligible  Account  or as
Eligible  Inventory,  respectively,  shall,  as of the time when such request is
made, conform in all respects to the requirements of such  classification as set
forth  in  the  respective  definitions  of  "Eligible  Account"  and  "Eligible
Inventory" as set forth herein and as otherwise established by Bank from time to
time, and Borrower  shall  promptly  notify Bank in writing if any such Eligible
Account or Eligible Inventory shall subsequently become ineligible;

         (g) Borrower is and shall at all times during the Original  Term or any
Renewal  Term be the lawful owner of all  Collateral  now  purportedly  owned or
hereafter  purportedly  acquired  by  Borrower,  free  from all  liens,  claims,
security  interests  and  encumbrances   whatsoever,   whether   voluntarily  or
involuntarily  created and whether or not  perfected,  other than the  Permitted
Liens;

         (h)  Borrower  has the  right  and  power  and is duly  authorized  and
empowered  to enter  into,  execute  and deliver  this  Agreement  and the Other
Agreements  and perform its  obligations  hereunder and  thereunder;  Borrower's
execution,  delivery and performance of this Agreement and the Other  Agreements
does not and shall not conflict with the provisions of any statute,  regulation,
ordinance or rule of law, or any agreement, contract or other document which may
now or hereafter be binding on Borrower, and Borrower's execution,  delivery and
performance of this Agreement and the Other  Agreements  shall not result in the
imposition  of any lien or other  encumbrance  upon any of  Borrower's  property
under any existing indenture,  mortgage, deed of trust, loan or credit agreement
or other agreement or instrument by which Borrower or any of its property may be
bound or affected;

         (i) there are no actions or proceedings which are pending or threatened
against  Borrower  which  might  result in any  material  adverse  change in its
financial  condition or materially  adversely affect the Collateral and Borrower
shall,  promptly upon becoming aware of any such pending or threatened action or
proceeding, give written notice thereof to Bank;

         (j) Borrower has obtained all licenses,  authorizations,  approvals and
permits, the lack of which would have a material adverse effect on the operation
of its business,  and Borrower is and shall remain in compliance in all material
respects with all applicable federal, state, local and foreign statutes, orders,
regulations, rules  and  ordinances (including,  without  limitation,  statutes,

9207_1

                                       -8-

<PAGE>

orders,  regulations,  rules and  ordinances  relating  to taxes,  employer  and
employee  contributions and similar items,  securities,  employee retirement and
welfare  benefits,  employee health and safety or  environmental  matters),  the
failure  to comply  with  which  would  have a  material  adverse  effect on its
business, property, assets, operations or condition, financial or otherwise;

         (k) all written  information now,  heretofore or hereafter furnished by
Borrower to Bank is and shall be true and correct as of the date with respect to
which such information was or is furnished;

         (l)  Borrower  is  not  conducting,   permitting  or  suffering  to  be
conducted,  nor  shall  it  conduct,  permit  or  suffer  to be  conducted,  any
activities pursuant to or in connection with which any of the Collateral is now,
or will (while any  Liabilities  remain  outstanding) be owned by any Affiliate;
provided,  however, that Borrower may enter into transactions with Affiliates in
the ordinary course of business  pursuant to terms that are no less favorable to
Borrower  than the terms upon which such  transfers or  transactions  would have
been made had they been made to or with a Person that is not an  Affiliate  and,
in connection  therewith,  may transfer cash or property to Affiliates  for fair
value;

         (m)  Borrower's  name has always been as set forth on the first page of
this  Agreement  and  Borrower  uses no  tradenames  or  division  names  in the
operation of its  business,  except as  otherwise  disclosed in writing to Bank;
Borrower  shall notify Bank in writing within ten (10) days of the change of its
name or the use of any tradenames or division names not previously  disclosed to
Bank in writing;

         (n) with  respect to  Borrower's  Equipment:  (i) Borrower has good and
indefeasible  and  merchantable   title  to  and  ownership  of  all  Equipment,
including, without limitation, the Equipment described or listed on the schedule
of Equipment  delivered to Bank concurrently with this Agreement;  (ii) Borrower
shall keep and maintain the Equipment in good operating condition and repair and
shall make all necessary  replacements  thereof and renewals thereto so that the
value and  operating  efficiency  thereof  shall at all times be  preserved  and
maintained;  (iii)  Borrower shall not permit any such items to become a fixture
to real estate or an accession to other  personal  property;  and (iv) Borrower,
immediately  on demand by Bank,  shall  deliver to Bank any and all  evidence of
ownership  of  including,   without   limitation,   certificates  of  title  and
applications of title to, any of the Equipment;

         (o) this  Agreement  and the Other  Agreements  to which  Borrower is a
party  are  the  legal,  valid  and  binding  obligations  of  Borrower  and are
enforceable against Borrower in accordance with their respective terms;

         (p)  Borrower is  solvent,  is able to pay its debts as they become due
and has capital sufficient to carry on its business,  now owns property having a
value both at fair valuation and at present fair saleable value greater than the
amount  required  to pay its debts,  and will not be rendered  insolvent  by the
execution  and delivery of this  Agreement or any of the Other  Agreements or by
completion of the transactions contemplated hereunder or thereunder;

         (q) Borrower is not now obligated,  nor shall it create,  incur, assume
or  become  obligated   (directly  or  indirectly),   for  any  loans  or  other
indebtedness  for borrowed money other than the Loans,  except that Borrower may
(i) borrow money from a Person other than Bank on an unsecured and  subordinated
basis if a  subordination  agreement in favor of Bank and in form and  substance
satisfactory  to Bank is executed and delivered to Bank relative  thereto;  (ii)
maintain any present indebtedness to any Person which has been disclosed to Bank
in  writing  and  consented  to in writing by Bank;  and (iii)  incur  unsecured
indebtedness to trade creditors in the ordinary course of Borrower's business;

         (r)  Borrower  does  not own any  margin  securities,  and  none of the
proceeds of the Loans  hereunder  shall be used for the purpose of purchasing or
carrying  any margin  securities  or for the purpose of reducing or retiring any
indebtedness which was originally  incurred to purchase any margin securities or
for any other purpose not permitted by Regulation G or Regulation U of the Board
of Governors of the Federal Reserve System as in effect from time to time;

         (s) except as otherwise  disclosed in writing to Bank,  Borrower has no
Parents,  Subsidiaries  or divisions,  nor is the Borrower  engaged in any joint
venture or partnership with any other Person;


9207_1

                                       -9-

<PAGE>

         (t) if  Borrower  is a  corporation  or  partnership,  Borrower is duly
organized and in good standing in its state of organization and Borrower is duly
qualified  and in good standing in all states where the nature and extent of the
business   transacted   by  it  or  the  ownership  of  its  assets  makes  such
qualification necessary;

         (u) Borrower is not in default  under any material  contract,  lease or
commitment  to which it is a party or by which it is  bound,  nor does  Borrower
know of any  dispute  regarding  any  contract,  lease  or  commitment  which is
material to the continued financial success of Borrower;

         (v) there are no controversies  pending or threatened  between Borrower
and any of its employees, other than employee grievances arising in the ordinary
course of business  which are not, in the  aggregate,  material to the continued
financial  success of Borrower,  and Borrower is in  compliance  in all material
respects with all federal and state laws  respecting  employment  and employment
terms, conditions and practices; and

         (w)  Borrower  possesses,  and  shall  continue  to  possess,  adequate
licensees, patents, patent applications,  copyrights, service marks, trademarks,
trademark  applications,  tradestyles  and tradenames to continue to conduct its
business as heretofore conducted by it.

         Borrower   represents,   warrants  and   covenants  to  Bank  that  all
representations,   warranties  and  covenants  of  Borrower  contained  in  this
Agreement  (whether  appearing in paragraphs 10 or 11 hereof or elsewhere) shall
be true at the time of Borrower's execution of this Agreement, shall survive the
execution,  delivery and acceptance hereof by the parties hereto and the closing
of the transactions  described herein or related hereto, shall remain true until
the  repayment  in  full  of all of the  Liabilities  and  termination  of  this
Agreement,  and  shall be  remade  by  Borrower  at the time  each  Loan is made
pursuant to this Agreement.

11.      ADDITIONAL COVENANTS OF BORROWER.

         Until  payment  or   satisfaction   in  full  of  all  Liabilities  and
termination  of this  Agreement,  unless  Borrower  obtains Bank's prior written
consent  waiving or  modifying  any of  Borrower's  covenants  hereunder  in any
specific instance, Borrower agrees as follows:

         (a)  Borrower  shall at all times keep  accurate  and  complete  books,
records and accounts with respect to all of Borrower's business  activities,  in
accordance with sound  accounting  practices and generally  accepted  accounting
principles  consistently  applied,  and  shall  keep  such  books,  records  and
accounts,  and any copies  thereof,  only at the  addresses  indicated  for such
purpose on Exhibit B;

         (b)  Borrower  agrees  to  deliver  to  Bank  the  following  financial
information,  all of which  shall  be  prepared  in  accordance  with  generally
accepted accounting  principles  consistently  applied: (i) no later than twenty
(20) days after each calendar  month,  copies of internally  prepared  financial
statements,  including,  without  limitation,  balance  sheets and statements of
income,  retained  earnings  and cash flow of  Borrower,  certified by the Chief
Financial Officer of Borrower; (ii) no later than forty-five (45) days after the
end of each of the first  three  quarters  of  Borrower's  fiscal year a balance
sheet,  operating  statement and  reconciliation  of surplus of Borrower,  which
quarterly  financial  statements  may be unaudited but shall be certified by the
Chief  Financial  Officer of Borrower;  and (iii) no later than ninety (90) days
after the end of each of Borrower's  fiscal years,  annual financial  statements
certified by independent  certified public accountants  selected by Borrower and
reasonably satisfactory to Bank, which financial statements shall be accompanied
by a letter  from such  accountants  acknowledging  that  they are aware  that a
primary  intent  of  Borrower  in  obtaining  such  financial  statements  is to
influence  Bank and that Bank is  relying  upon  such  financial  statements  in
connection with the exercise of its right hereunder;

         (c)  Borrower  shall  promptly  advise Bank in writing of any  material
adverse change in the business, assets or condition,  financial or otherwise, of
Borrower,  the occurrence of any Event of Default hereunder or the occurrence of
any event which,  if uncured,  will become an Event of Default  hereunder  after
notice of lapse of time (or both);


9207_1

                                      -10-

<PAGE>



         (d) Bank, or any Persons designated by it, shall have the right, at any
time, to call at Borrower's  places of business at any  reasonable  times,  and,
without  hindrance or delay,  to inspect the Collateral  and to inspect,  audit,
check and make  extracts  from  Borrower's  books,  records,  journals,  orders,
receipts and any correspondence and other data relating to Borrower's  business,
the Collateral or any  transactions  between the parties hereto,  and shall have
the right to make such verification  concerning  Borrower's business as Bank may
consider reasonable under the circumstances. Borrower shall furnish to Bank such
information  relevant to Bank's rights under this Agreement as Bank shall at any
time and from time to time  request.  Borrower  authorizes  Bank to discuss  the
affairs,  finances  and  business of Borrower  with any  officers,  employees or
directors  of Borrower or with any  Affiliates  or the  officers,  employees  or
directors of any Affiliate,  and to discuss the financial  condition of Borrower
with Borrower's  independent public  accountants.  Any such discussions shall be
without  liability  to Bank or to  Borrower's  independent  public  accountants.
Borrower  shall  pay to Bank  all  customary  fees  and  out-of-pocket  expenses
incurred by Bank in the exercise of its rights  hereunder,  and all of such fees
and expenses  shall  constitute  Loans  hereunder,  payable on demand and, until
paid,  shall  bear  interest  at the  highest  rate  then  applicable  to  Loans
hereunder;

         (e)      Borrower shall:

                  (i) keep the  Collateral  properly  housed  and shall keep the
         Collateral insured for the full insurable value thereof against loss or
         damage by fire, theft, explosion, sprinklers, collision (in the case of
         motor vehicles) and such other risks as are customarily insured against
         by Persons engaged in businesses  similar to that of Borrower with such
         companies,  in such amounts and under policies in such form as shall be
         satisfactory to Bank.  Original (or certified)  copies of such policies
         of insurance  have been or shall be  delivered  to Bank within  fifteen
         (15) days after the date hereof,  together  with evidence of payment of
         all premiums  therefor,  and shall contain an endorsement,  in form and
         substance  acceptable  to  Bank,  showing  loss  under  such  insurance
         policies  payable  to  Bank.  Such   endorsement,   or  an  independent
         instrument  furnished to Bank, shall provide that the insurance company
         shall give Bank at least  thirty (30) days  written  notice  before any
         such  policy of  insurance  is  altered or  cancelled  and that no act,
         whether  willful or  negligent,  or default  of  Borrower  or any other
         Person shall  affect the right of Bank to recover  under such policy of
         insurance  in case  of loss or  damage.  Borrower  hereby  directs  all
         insurers  under such policies of insurance to pay all proceeds  payable
         thereunder directly to Bank. Borrower irrevocably,  makes,  constitutes
         and appoints Bank (and all officers,  employees or agents designated by
         Bank) as Borrower's  true and lawful attorney (and  agent-in-fact)  for
         the  purpose  of  making,  settling  and  adjusting  claims  under such
         policies  of  insurance,  endorsing  the name of Borrower on any check,
         draft,  instrument  or other item of payment  for the  proceeds of such
         policies of insurance and making all  determinations and decisions with
         respect to such policies of insurance; and

                  (ii) maintain, at its expense, such public liability and third
         party property damage  insurance as is customary for Persons engaged in
         businesses  similar to that of Borrower with such companies and in such
         amounts, with such deductibles and under policies in such form as shall
         be  satisfactory  to Bank and  original (or  certified)  copies of such
         policies  have been or shall be delivered  to Bank within  fifteen (15)
         days after the date hereof,  together  with  evidence of payment of all
         premiums  therefor;  each such  policy  shall  contain  an  endorsement
         showing Bank as additional  insured  thereunder  and providing that the
         insurance  company  shall give Bank at least  thirty (30) days  written
         notice before any such policy shall be altered or cancelled.

         If  Borrower  at any time or times  hereafter  shall  fail to obtain or
maintain any of the policies of insurance  required  above or to pay any premium
in whole or in part relating  thereto,  then Bank,  without waiving or releasing
any  obligation  or default by  Borrower  hereunder,  may (but shall be under no
obligation  to) obtain and  maintain  such  policies of  insurance  and pay such
premiums  and take  such  other  actions  with  respect  thereto  as Bank  deems
advisable.  All sums  disbursed  by Bank in  connection  with any such  actions,
including,  without limitation,  court costs,  expenses,  other charges relating
thereto and reasonable  attorneys'  fees,  shall  constitute Loans hereunder and
shall be payable  on demand by  Borrower  to Bank and,  until  paid,  shall bear
interest at the highest rate then applicable to Loans hereunder.

         (f) Borrower shall not use the Collateral,  or any part thereof, in any
unlawful  business or for any  unlawful  purpose or use or  maintain  any of the
Collateral  in any manner that does or could  result in  material  damage to the
environment  or a  violation  of any  applicable  environmental  laws,  rules or
regulations;  shall keep the  Collateral  in good  condition,  repair and order;
shall permit

9207_1

                                      -11-

<PAGE>

Bank to examine any of the  Collateral  at any time and wherever the  Collateral
may be located;  shall not permit the  Collateral,  or any part  thereof,  to be
levied upon under execution, attachment, distraint or other legal process; shall
not sell, lease, grant a security interest in or otherwise dispose of any of the
Collateral  except  as  expressly  permitted  by this  Agreement;  and shall not
secrete or abandon any of the Collateral,  or remove or permit removal of any of
the Collateral  from any of the locations  listed on Exhibit B or in any written
notice to Bank  pursuant to paragraph  10(b)  hereof,  except for the removal of
Inventory  sold in the  ordinary  course of  Borrower's  business  as  permitted
herein;

         (g) All  monies  and other  property  obtained  by  Borrower  from Bank
pursuant  to this  Agreement  will be  used  solely  for  business  purposes  of
Borrower;

         (h)  Borrower  shall,  at the request of Bank,  indicate on its records
concerning  the  Collateral a notation,  in form  satisfactory  to Bank,  of the
security interest of Bank hereunder,  and Borrower shall not maintain duplicates
or copies of such records at any address other than  Borrower's  principal place
of business set forth on the first page of this Agreement;

         (i)  Borrower  shall file all  required  tax returns and pay all of its
taxes when due, including,  without limitation,  taxes imposed by federal, state
or  municipal  agencies  and shall  cause  any  liens  for taxes to be  promptly
released; provided, that Borrower shall have the right to contest the payment of
such taxes in good faith by appropriate proceedings so long as (i) the amount so
contested is shown on Borrower's  financial  statements,  (ii) the contesting of
any such payment does not give rise to a lien for taxes, (iii) Borrower keeps on
deposit with Bank (such deposit to be held without  interest) an amount of money
which,  in the sole  judgment of Bank,  is  sufficient to pay such taxes and any
interest or penalties  that may accrue  thereon,  and (iv) if Borrower  fails to
prosecute such contest with  reasonable  diligence,  Bank may apply the money so
deposited in payment of such taxes.  If Borrower fails to pay any such taxes and
in the absence of any such contest by Borrower,  Bank may (but shall be under no
obligation to) advance and pay any sums required to pay any such taxes and/or to
secure the release of any lien therefor,  and any sums so advanced by Bank shall
constitute Loans hereunder, shall be payable by Borrower to Bank on demand, and,
until paid,  shall bear  interest at the highest rate then  applicable  to Loans
hereunder;

         (j)  Borrower  shall not assume,  guarantee  or endorse,  or  otherwise
become liable in  connection  with,  the  obligations  of any Person,  except by
endorsement of instruments for deposit or collection or similar  transactions in
the ordinary course of business;

         (k) Borrower shall not enter into any merger or consolidation, or sell,
lease or otherwise  dispose of all or substantially  all of its assets, or enter
into any  transaction  outside  the  ordinary  course  of  Borrower's  business,
including,  without  limitation,  any purchase,  redemption or retirement of any
shares of any class of its stock, and any issuance of any shares of, or warrants
or other rights to receive or purchase any shares of, any class of its stock;

         (l)   Borrower   shall  not  declare  or  pay  any  dividend  or  other
distribution (whether in cash or in kind) on any class of its stock (if Borrower
is a corporation)  or on account of any equity interest in Borrower (if Borrower
is a partnership or other type of entity);

         (m) Borrower  shall not purchase or otherwise  acquire,  or contract to
purchase or otherwise  acquire,  the  obligations or stock of any Person,  other
than direct obligations of the United States;

         (n)  Borrower  shall  not  amend its organizational documents or change
its fiscal year;

         (o)  Borrower's  tangible  net worth shall not at any time be less than
that shown on the financial  statement most recently  presented to Bank prior to
the date  hereof;  "TANGIBLE  NET WORTH"  being  defined  for  purposes  of this
paragraph as Borrower's  shareholders' equity (including retained earnings) less
the book value of all intangible assets plus the amount of any LIFO reserve, all
as determined under generally accepted accounting  principles applied on a basis
consistent with the aforesaid financial statement; and


9207_1

                                      -12-

<PAGE>

         (p)  Borrower  shall   reimburse  Bank  for  all  costs  and  expenses,
including,  without limitation,  legal expenses and reasonable  attorneys' fees,
incurred by Bank in  connection  with  documentation  and  consummation  of this
transaction and any other  transactions  between  Borrower and Bank,  including,
without  limitation,  Uniform  Commercial Code and other public record searches,
lien  filings,  Federal  Express  or  similar  express  or  messenger  delivery,
appraisal  costs,  surveys,  title insurance and  environmental  audit or review
costs,  and in seeking to  collect,  protect or enforce  any rights in or to the
Collateral  or  incurred by Bank in seeking to collect  any  Liabilities  and to
administer and enforce any of Bank's rights under this Agreement. Borrower shall
also pay all normal service  charges with respect to all accounts  maintained by
Borrower with Bank and for any  additional  services  requested by Borrower from
Bank. All such costs,  expenses and charges shall  constitute  Loans  hereunder,
shall be payable by Borrower  to Bank on demand,  and,  until  paid,  shall bear
interest at the highest rate then applicable to Loans hereunder.

12.      DEFAULT.

         The  occurrence  of any  one or  more  of the  following  events  shall
constitute an "EVENT OF DEFAULT" by Borrower hereunder:

         (a)      the failure  of any Obligor to pay when due, declared due,  or
demanded by Bank, any of the Liabilities;

         (b) the failure of any  Obligor to perform,  keep or observe any of the
covenants, conditions, promises, agreements or obligations of such Obligor under
this Agreement or any of the Other Agreements; provided that any such failure by
Borrower under this Agreement shall not constitute an Event of Default hereunder
until  the  fifth  (5th)  day  following  written  notice  thereof  from Bank to
Borrower;

         (c) the failure of any  Obligor to perform,  keep or observe any of the
covenants, conditions, promises, agreements or obligations of such Obligor under
any other agreement with any Person if such failure may have a material  adverse
effect on such Obligor's  business  property,  assets,  operations or condition,
financial or otherwise;

         (d)  the  making  or   furnishing   by  any  Obligor  to  Bank  of  any
representation,  warranty, certificate,  schedule, report or other communication
within or in  connection  with this  Agreement  or the  Other  Agreements  or in
connection  with any other  agreement  between such  Obligor and Bank,  which is
untrue or misleading in any respect;

         (e)  the loss, theft, damage or destruction of, or (except as permitted
hereby) sale, lease or furnishing under a contract of  service  of,  any  of the
Collateral;

         (f) the creation (whether  voluntary or involuntary) of, or any attempt
to create, any lien or other encumbrance upon any of the Collateral,  other than
the Permitted  Liens, or the making or any attempt to make any levy,  seizure or
attachment thereof;

         (g) the commencement of any proceedings in bankruptcy by or against any
Obligor or for the  liquidation or  reorganization  of any Obligor,  or alleging
that such Obligor is insolvent or unable to pay its debts as they mature, or for
the readjustment or arrangement of any Obligor's debts, whether under the United
States Bankruptcy Code or under any other law, whether state or federal,  now or
hereafter  existing  for the  relief  of  debtors,  or the  commencement  of any
analogous  statutory  or  non-statutory   proceedings   involving  any  Obligor;
provided, however, that if such commencement of proceedings against such Obligor
is involuntary, such action shall not constitute an Event of Default unless such
proceedings are not dismissed  within thirty (30) days after the commencement of
such proceedings;

         (h) the  appointment of a receiver or trustee for any Obligor,  for any
of the  Collateral or for any  substantial  part of any Obligor's  assets or the
institution  of any  proceedings  for the  dissolution,  or the full or  partial
liquidation,  or  the  merger  or  consolidation,  of  any  Obligor  which  is a
corporation or a partnership;  provided,  however,  that if such  appointment or
commencement  of proceedings  against such Obligor is  involuntary,  such action
shall not constitute an Event of Default unless such  appointment is not revoked
or such  proceedings  are not  dismissed  within  thirty  (30)  days  after  the
commencement of such proceedings;


9207_1

                                      -13-

<PAGE>

         (i) the  entry of any  judgment  or order  against  any  Obligor  which
remains  unsatisfied  or  undischarged  and in effect for thirty (30) days after
such entry without a stay of enforcement or execution;

         (j) the death of any Obligor who is a natural Person, or of any partner
of any  Obligor  which is a  partnership,  or of any  natural  Person who owns a
material  interest in a corporate  Obligor,  or the  dissolution  of any Obligor
which is a partnership or corporation;

         (k) the occurrence of an event of default  under,  or the revocation or
termination of, any agreement,  instrument or document executed and delivered by
any Person to Bank  pursuant  to which such  Person has  guaranteed  to Bank the
payment of all or any of the Liabilities or has granted Bank a security interest
in or lien upon some or all of such  Person's real and/or  personal  property to
secure the payment of all or any of the Liabilities;

         (l)  the institution in any court of a criminal proceeding  against any
Obligor,  or  the  indictment  of  any  Obligor for any  crime,  other  than any
misdemeanor not punishable by incarceration; and

         (m)  Bank  shall  reasonably  feel  insecure  for any  material  reason
whatsoever,  including,  without  limitation,  fear of  removal  or waste of the
Collateral, or any part thereof.

13.      REMEDIES UPON AN EVENT OF DEFAULT.

         (a) Upon the  occurrence of an Event of Default  described in paragraph
12(g) hereof, all of Borrower's  Liabilities shall immediately and automatically
become due and payable,  without notice of any kind.  Upon the occurrence of any
other Event of Default,  all Liabilities may, at the option of Bank, and without
demand, notice or legal process of any kind, be declared,  and immediately shall
become, due and payable.

         (b) Upon the occurrence of an Event of Default,  Bank may exercise from
time to  time  any  rights  and  remedies  available  to it  under  the  Uniform
Commercial Code and any other applicable law in addition to, and not in lieu of,
any rights and  remedies  expressly  granted in this  Agreement or in any of the
Other  Agreements  and all of Bank's rights and remedies shall be cumulative and
non-exclusive to the extent  permitted by law. In particular,  but not by way of
limitation of the foregoing,  Bank may, without notice,  demand or legal process
of any kind,  take  possession of any or all of the  Collateral  (in addition to
Collateral of which it already has  possession),  wherever it may be found,  and
for that  purpose may pursue the same  wherever  it may be found,  and may enter
into any of Borrower's  premises  where any of the Collateral may be, and search
for, take possession of, remove,  keep and store any of the Collateral until the
same shall be sold or  otherwise  disposed  of, and Bank shall have the right to
store the same at any of  Borrower's  premises  without cost to Bank.  At Bank's
request, Borrower shall, at Borrower's expense, assemble the Collateral and make
it  available  to  Bank at one or  more  places  to be  designated  by Bank  and
reasonably convenient to Bank and Borrower. Borrower recognizes that if Borrower
fails to  perform,  observe  or  discharge  any of its  Liabilities  under  this
Agreement or the Other Agreements, no remedy at law will provide adequate relief
to Bank,  and agrees  that Bank shall be  entitled to  temporary  and  permanent
injunctive  relief in any such case  without  the  necessity  of proving  actual
damages.  Any  notification  of intended  disposition  of any of the  Collateral
required by law will be deemed  reasonably  and properly given if given at least
five (5) calendar days before such disposition.  Any proceeds of any disposition
by Bank of any of the  Collateral  may be  applied  by  Bank to the  payment  of
expenses in connection with the Collateral, including, without limitation, legal
expenses and reasonable attorneys' fees, and any balance of such proceeds may be
applied by Bank toward the payment of such of the Liabilities, and in such order
of application, as Bank may from time to time elect.

14.      INDEMNIFICATION.

         Borrower agrees to defend (with counsel satisfactory to Bank), protect,
indemnify and hold harmless Bank, each affiliate or subsidiary of Bank, and each
of their respective officers, directors,  employees,  attorneys and agents (each
an "INDEMNIFIED  PARTY") from and against any and all liabilities,  obligations,
losses, damages,  penalties,  actions, judgments, suits, claims, costs, expenses
and  disbursements of any kind or nature  (including,  without  limitation,  the
disbursements   and    the    reasonable    fees    of    counsel    for    each

9207_1

                                      -14-

<PAGE>

Indemnified  Party in  connection  with  any  investigative,  administrative  or
judicial proceeding,  whether or not the Indemnified Party shall be designated a
party thereto),  which may be imposed on, incurred by, or asserted against,  any
Indemnified  Party (whether direct,  indirect or consequential and whether based
on any  federal,  state  or  local  laws  and  regulations,  including,  without
limitation, securities, environmental and commercial laws and regulations, under
common  law or in  equity,  or based on  contract  or  otherwise)  in any manner
relating to or arising out of this Agreement or any Other Agreement, or any act,
event or transaction related or attendant thereto, the making and the management
of the Loans or any letters of credit or the use or intended use of the proceeds
of the Loans or any letters of credit;  provided,  however,  that Borrower shall
not have any  obligation  hereunder  to any  Indemnified  Party with  respect to
matters caused by or resulting from the willful  misconduct or gross  negligence
of such  Indemnified  Party. To the extent that the undertaking to indemnify set
forth in the preceding sentence may be unenforceable  because it is violative of
any law or public policy, Borrower shall satisfy such undertaking to the maximum
extent  permitted by applicable law. Any liability,  obligation,  loss,  damage,
penalty,  cost or  expense  covered  by  this  Indemnity  shall  be paid to each
Indemnified Party on demand, and, failing prompt payment,  shall,  together with
interest thereon at the highest rate then applicable to Loans hereunder from the
date incurred by each Indemnified Party until paid by Borrower,  be added to the
Liabilities of Borrower and be secured by the Collateral. The provisions of this
paragraph 14 shall survive the satisfaction and payment of the Other Liabilities
and the termination of this Agreement.

15.      NOTICE.

         All written  notices and other written  communications  with respect to
this  Agreement  shall be sent by  ordinary,  certified or  overnight  mail,  by
telecopy or delivered in person,  and in the case of Bank shall be sent to it at
LaSalle and Monroe  Streets,  Chicago,  Illinois 60603,  Attention:  Asset Based
Lending  Division,  and in the  case  of  Borrower  shall  be  sent to it at its
principal place of business set forth on the first page of this Agreement.

16.      CHOICE OF GOVERNING LAW; CONSTRUCTION; FORUM SELECTION.

         This  Agreement and the Other  Agreements  are submitted by Borrower to
Bank for Bank's acceptance or rejection at Bank's principal place of business as
an offer by  Borrower  to  borrow  monies  from  Bank now and from  time to time
hereafter, and shall not be binding upon Bank or become effective until accepted
by Bank,  in writing,  at said place of business.  If so accepted by Bank,  this
Agreement  and the  Other  Agreements  shall be deemed to have been made at said
place of business. THIS AGREEMENT AND THE OTHER AGREEMENTS SHALL BE GOVERNED AND
CONTROLLED BY THE INTERNAL  LAWS OF THE STATE OF ILLINOIS AS TO  INTERPRETATION,
ENFORCEMENT,   VALIDITY,  CONSTRUCTION,  EFFECT,  AND  IN  ALL  OTHER  RESPECTS,
INCLUDING,  WITHOUT  LIMITATION,  THE  LEGALITY OF THE  INTEREST  RATE AND OTHER
CHARGES,  BUT EXCLUDING  PERFECTION OF THE SECURITY INTERESTS IN THE COLLATERAL,
WHICH SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE RELEVANT JURISDICTION.
If any provision of this Agreement  shall be held to 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 remaining provisions of this Agreement.

         To induce Bank to accept this Agreement,  Borrower  irrevocably  agrees
that, subject to Bank's sole and absolute  election,  ALL ACTIONS OR PROCEEDINGS
IN ANY  WAY,  MANNER  OR  RESPECT,  ARISING  OUT OF OR FROM OR  RELATED  TO THIS
AGREEMENT,  THE OTHER  AGREEMENTS OR THE COLLATERAL SHALL BE LITIGATED IN COURTS
HAVING SITUS  WITHIN THE CITY OF CHICAGO,  STATE OF  ILLINOIS.  BORROWER  HEREBY
CONSENTS AND SUBMITS TO THE  JURISDICTION OF ANY LOCAL,  STATE OR FEDERAL COURTS
LOCATED WITHIN SAID CITY AND STATE.  Borrower  hereby  irrevocably  appoints and
designates  the Secretary of State of Illinois,  whose  address is  Springfield,
Illinois (or any other person having and maintaining a place of business in such
state whom Borrower may from time to time hereafter designate upon ten (10) days
written notice to Bank and who Bank has agreed in its sole discretion in writing
is  satisfactory  and who has  executed  an  agreement  in  form  and  substance
satisfactory to Bank agreeing to act as such attorney and agent),  as Borrower's
true and lawful attorney and duly authorized  agent for acceptance of service of
legal  process.  Borrower  agrees that  service of such process upon such person
shall constitute personal service of such process upon Borrower. BORROWER HEREBY
WAIVES ANY RIGHT IT MAY HAVE TO TRANSFER  OR CHANGE THE VENUE OF ANY  LITIGATION
BROUGHT AGAINST BORROWER BY BANK IN ACCORDANCE WITH THIS PARAGRAPH.

9207_1

                                      -15-

<PAGE>

17.      MODIFICATION AND BENEFIT OF AGREEMENT.

         This Agreement and the Other Agreements may not be modified, altered or
amended except by an agreement in writing signed by Borrower and Bank.  Borrower
may not sell, assign or transfer this Agreement,  or the Other Agreements or any
portion thereof,  including,  without  limitation,  Borrower's  rights,  titles,
interest,  remedies,  powers or duties  thereunder.  Borrower hereby consents to
Bank's sale,  assignment,  transfer or other  disposition,  at any time and from
time to time hereafter,  of this Agreement,  or the Other Agreements,  or of any
portion thereof,  or  participations  therein,  including,  without  limitation,
Bank's rights, titles, interest,  remedies, powers and/or duties and agrees that
it shall  execute and deliver such  documents as Bank may request in  connection
with any such sale, assignment, transfer or other disposition.

18.      HEADINGS OF SUBDIVISIONS.

         The headings of  subdivisions  in this Agreement are for convenience of
reference only, and shall not govern the interpretation of any of the provisions
of this Agreement.

19.      POWER OF ATTORNEY.

         Borrower  acknowledges  and agrees that its  appointment of Bank as its
attorney and  agent-in-fact  for the purposes  specified in this Agreement is an
appointment  coupled with an interest and shall be irrevocable  until all of the
Liabilities are paid in full and this Agreement is terminated.

20.      WAIVER OF JURY TRIAL; OTHER WAIVERS.

         (a) BORROWER HEREBY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING WHICH PERTAINS  DIRECTLY OR INDIRECTLY TO THIS AGREEMENT,  ANY OF THE
OTHER AGREEMENTS, THE LIABILITIES,  THE COLLATERAL, ANY ALLEGED TORTIOUS CONDUCT
BY BORROWER OR BANK OR WHICH, IN ANY WAY, DIRECTLY OR INDIRECTLY,  ARISES OUT OF
OR RELATES TO THE RELATIONSHIP BETWEEN BORROWER AND BANK. IN NO EVENT SHALL BANK
BE LIABLE FOR LOST PROFITS OR OTHER SPECIAL OR CONSEQUENTIAL DAMAGES.

         (b) Borrower hereby waives demand,  presentment,  protest and notice of
nonpayment,  and further  waives the  benefit of all  valuation,  appraisal  and
exemption laws.

         (c) BORROWER HEREBY WAIVES ALL RIGHTS TO NOTICE AND HEARING OF ANY KIND
PRIOR TO THE  EXERCISE  BY BANK OF ITS RIGHTS TO  REPOSSESS  THE  COLLATERAL  OF
BORROWER  WITHOUT  JUDICIAL  PROCESS  OR TO  REPLEVY,  ATTACH  OR LEVY UPON SUCH
COLLATERAL WITHOUT PRIOR NOTICE OR HEARING.

         (d) Bank's failure,  at any time or times hereafter,  to require strict
performance  by Borrower of any provision of this  Agreement or any of the Other
Agreements  shall not waive,  affect or diminish any right of Bank thereafter to
demand strict compliance and performance therewith.  Any suspension or waiver by
Bank of an Event of Default under this Agreement or any default under any of the
Other Agreements  shall not suspend,  waive or affect any other Event of Default
under this  Agreement or any other  default  under any of the Other  Agreements,
whether the same is prior or subsequent  thereto and whether of the same or of a
different kind or character. No delay on the part of Bank in the exercise of any
right or remedy under this Agreement or any Other Agreement shall preclude other
or further exercise thereof or the exercise of any right or remedy.  None of the
undertakings,  agreements, warranties, covenants and representations of Borrower
contained  in this  Agreement  or any of the  Other  Agreements  and no Event of
Default under this Agreement or default under any of the Other  Agreements shall
be deemed to have been  suspended  or waived by Bank unless such  suspension  or
waiver is in writing,  signed by a duly authorized  officer of Bank and directed
to Borrower specifying such suspension or waiver.

9207_1

                                      -16-

<PAGE>

         IN  WITNESS  WHEREOF,  the  parties  hereto  have  duly  executed  this
Agreement as of the 30th day of April, 1996.

USA Skate Co., Inc.                               LASALLE NATIONAL BANK


By  /s/ Michael S. Casazza                        By  /s/ Joseph Fudacz
    -----------------------------                     --------------------------
Title  President                                  Title  Sr. VP
       --------------------------                        -----------------------
                  and

By  /s/ Barry Hollander
    -----------------------------     
Title  CFO
       --------------------------

9207_1

                                      -17-

<PAGE>

                         EXHIBIT A - SPECIAL PROVISIONS
                         ------------------------------

Attached to and made a part of that certain Loan and Security  Agreement of even
date herewith between USA SKATE CO., INC., A NEW YORK  CORPORATION  ("Borrower")
and LASALLE NATIONAL BANK ("Bank").

CREDIT TERMS
------------

(1)      LOAN LIMIT:

         Bank may,  in its sole  discretion,  advance an amount up to the sum of
         the following sublimits (the "Loan Limit"):

         (a)      Up to  seventy-five  percent  (75%) of the face  amount  (less
                  maximum  discounts,  credits and allowances which may be taken
                  by or granted to Account  Debtors in connection  therewith) of
                  Borrower's Eligible Accounts; plus

         (b)      Up to fifty  percent  (50%) of the lower of the cost or market
                  value of  Borrower's  Eligible  Inventory,  provided  that the
                  advance  rate  for  Inventory  which  is over one year old and
                  which is otherwise  Eligible  Inventory  shall be  twenty-five
                  percent (25%) less one percent (1%) for each month over twelve
                  (12) that such Eligible  Inventory  remains part of Inventory;
                  plus

         (c)      Up  to  fifty   percent  (50%)  against  the  face  amount  of
                  Commercial Letters of Credit issued by Bank for the purpose of
                  purchasing Inventory, provided that such Commercial Letters of
                  Credit are in form and substance satisfactory to Bank; minus

         (d)      Such  reserves  as  Bank  elects,  in its sole  discretion, to
                  establish from time to time;

         provided,  that the  availability  described in  Paragraphs  (1)(b) and
         (1)(c)  above shall in no event  exceed Two Million and No/100  Dollars
         ($2,000,000.00).  However,  the aggregate  Loan Limit shall in no event
         exceed Five Million Dollars ($5,000,000),  except as such amount may be
         increased or decreased by Bank,  in its sole  discretion,  from time to
         time.

(2)      INTEREST RATE:

         Each Loan shall bear interest at the rate of one percent (1%) per annum
         in  excess  of  Bank's  publicly  announced  prime  rate  (which is not
         intended to be Bank's  lowest or most  favorable  rate in effect at any
         time) (the "Prime  Rate") in effect  from time to time,  payable on the
         last business day of each month in arrears. Said rate of interest shall
         increase or decrease by an amount equal to each increase or decrease in
         the  Prime  Rate  effective  on  the effective date of each such change

                                          Borrower:   USA Skate Co., Inc.
                                             Initialed for Borrower by:   MC
                                                                        ----
Date:   April 30, 1996                              Initialed for Bank by:   JF
                                                                           ----


9207_1

<PAGE>

         in the Prime Rate. Upon the occurrence of an Event of Default each Loan
         shall bear interest at the rate of two percent (2%) per annum in excess
         of the interest rate otherwise payable thereon, which interest shall be
         payable on demand.  All interest  shall be calculated on the basis of a
         360- day year.

(3)      FEES AND CHARGES:

         FACILITIES  FEES:  For the first year of the  Original  Term,  Borrower
         shall pay to Bank a facilities  fee of One Hundred  Thousand and No/100
         Dollars  ($100,000.00),  which  fee  shall be fully  earned by Bank and
         payable on the date that Bank makes its initial disbursement under this
         Agreement.  Thereafter, Borrower shall pay to Bank an annual facilities
         fee equal to Fifty Thousand Dollars ($50,000), which fee shall be fully
         earned  by Bank and  payable  on each  anniversary  of the date of this
         Agreement during the Original Term and any Renewal Term.

(4)      LETTERS OF CREDIT:

         Subject  to the  terms  and  conditions  of this  Agreement,  including
         Exhibit A, and the Other  Agreements,  during the Original  Term or any
         Renewal Term, Bank may, in its sole discretion from time to time issue,
         upon Borrower's  request,  Commercial and/or Standby Letters of Credit,
         provided that the aggregate  undrawn face amount of all such Letters of
         Credit  shall  at  no  time  exceed  Two  Million  and  No/100  Dollars
         ($2,000,000.00).  Bank's  contingent  liability  under the  Letters  of
         Credit shall automatically  reduce, dollar for dollar, the amount which
         Borrower may borrow based upon the Loan Limit. Payments made by Bank to
         any Person on account of any Letter of Credit  shall  constitute  Loans
         hereunder.  At no time shall the  aggregate  of direct Loans by Bank to
         Borrower plus the  contingent  liability of Bank under the  outstanding
         Letters of Credit be in excess of the Loan Limit.  Borrower shall remit
         to Bank a Letter of Credit fee equal to one-quarter of one percent (1/4
         of 1%) per month on the aggregate undrawn face amount of all Letters of
         Credit  outstanding,  which fee shall be payable  monthly in arrears on
         each day that interest is payable hereunder. Borrower shall also pay on
         demand Bank's normal and customary  administrative charges for issuance
         of any Letter of Credit.



                                          Borrower:   USA Skate Co., Inc.
                                             Initialed for Borrower by:   MC
Date:   April 30, 1996                                                  ----
                                                    Initialed for Bank by:   JF
                                                                           ----

                                       -2-

9207_1

<PAGE>

(5)      ELIGIBLE ACCOUNTS:

         The  following is inserted in lieu of clause (iv) of the  definition of
         the term "Eligible Account" which is contained in Paragraph 1(d) of the
         Agreement:

                  (iv) it is  evidenced  by an invoice  rendered  to the Account
         Debtor thereunder, is due and payable within ninety (90) days after the
         date of the  invoice  and  does  not  remain  unpaid  past the due date
         thereof,  or it is  evidenced  by an invoice  rendered  to the  Account
         Debtor thereunder, is due and payable more than ninety (90) but no more
         than one  hundred  eighty  (180) days after the date of the invoice and
         does not remain  unpaid past the due date thereof;  provided,  however,
         that if more than  twenty-five  percent (25%) of the  aggregate  dollar
         amount of invoices  owing by a particular  Account Debtor remain unpaid
         after the respective due dates thereof, then all Accounts owing by that
         Account Debtor shall be deemed ineligible;

(6)      ELIGIBLE INVENTORY:

         In addition to the criteria set forth in the term "Eligible Inventory",
         which are set forth in  Paragraph  1(e) of the  Agreement,  and without
         limiting Bank's  discretion under paragraph  1(e)(vi),  work-in-process
         shall not be Eligible Inventory.

ADDITIONS AND CHANGES TO COVENANTS
----------------------------------

(7)      PERMITTED BORROWINGS:

         Notwithstanding  the  provisions of Paragraph  10(q) of the  Agreement,
         Borrower  may (a) finance or  refinance  the  acquisition  of Equipment
         and/or  real  estate in an  aggregate  amount not to exceed One Hundred
         Thousand and No/100  Dollars  ($100,000.00),  whether by purchase money
         financing,  lease or  otherwise;  (b) borrow  money from a Person other
         than Bank,  provided  that any such  borrowing is on an  unsecured  and
         subordinated basis, and further provided that a Subordination Agreement
         in favor of Bank and in form and substance  satisfactory  to Bank shall
         have been executed and  delivered  relative  thereto;  (c) maintain the
         present  indebtedness  to Warren  Amendola,  Sr. as  evidenced  by that
         certain  License  Agreement  dated April 30, 1996 between  Borrower and
         Warren Amendola,  Sr. (the "License Agreement");  (d) maintain existing
         indebtedness of Six Hundred  Seventy-Seven  and no/100 Canadian Dollars
         (CDN $677,000.00) owing to Peter Wu; (e) maintain existing indebtedness
         of approximately  Three Hundred Forty- Four Thousand and no/100 Dollars
         ($344,000.00) owing to Warren Amendola, Jr., Russell Amendola,  Richard
         Amendola and the Three R Profit Sharing  Retirement Plan; and (f) incur
         unsecured  indebtedness  to trade creditors of Borrower in the ordinary
         course of Borrower's business.

                                          Borrower:   USA Skate Co., Inc.
                                             Initialed for Borrower by:   MC
Date:   April 30, 1996                                                  ----
                                                    Initialed for Bank by:   JF
                                                                           ----

                                       -3-

9207_1

<PAGE>

(8)      ENVIRONMENTAL AUDITS:

         Bank's rights under  Paragraph  11(d) of the Agreement  shall  include,
         without  limitation,   the  right  to  cause  environmental  audits  of
         Borrower's  owned and leased  properties  to be conducted  from time to
         time  by  environmental  auditors  satisfactory  to  Bank  in its  sole
         discretion;  provided that Bank shall endeavor,  for such purposes,  to
         retain environmental  auditors charging reasonable fees to perform such
         audits.

(9)      RESTRICTION ON MANAGEMENT FEES AND OTHER COMPENSATION;
         PERMITTED DIVIDENDS:

         In addition to the  restrictions  contained in  Paragraph  11(l) of the
         Agreement, Borrower shall not (a) pay any management or consulting fees
         to  any  Person  (other  than  Twelve   Thousand  and  No/100   Dollars
         ($12,000.00) per month,  payable to CPS) or make any loan to any Person
         (except  travel  advances  made to employees in the ordinary  course of
         business),  or (b) pay any  compensation,  whether as salary,  bonus or
         otherwise, to any of Borrower's officers other than Ninety Thousand and
         No/100   Dollars   ($90,000.00)   payable  to  Warren   Amendola,   Sr.
         Notwithstanding  the  restrictions  contained in Paragraph 11(l) of the
         Agreement,  in the absence of an Event of Default  and if after  giving
         effect  thereto  the  outstanding  Liabilities  do not  exceed the Loan
         Limit,  Borrower may pay  dividends to USA Skate to permit USA Skate to
         pay regularly  scheduled  interest on all debt instruments of USA Skate
         existing on the date hereof.

(10)     CHECKING ACCOUNT PROVISIONS:

         Borrower shall maintain its general checking account with Bank.  Normal
         charges shall be assessed thereon.  Although no compensating balance is
         required,  Borrower  must  keep  monthly  balances  in  order  to merit
         earnings  credits  which will cover Bank's  service  charges for demand
         deposit account activities.

(11)     OWNERSHIP:

         Henry Fong  ("Fong")  and Michael S. Casazza  ("Casazza")  shall at all
         times own, on a fully diluted basis, not less than twenty percent (20%)
         of the  outstanding  capital  stock of California  Pro Sports,  Inc., a
         Delaware  corporation  ("CPS"),  which,  together with Fong and Casazza
         shall at all  times  own,  on a fully  diluted  basis,  not  less  than
         thirty-five  percent (35%) of the outstanding  equity securities of USA
         Skate Corporation, a Delaware corporation ("USA Skate"), which shall at
         all times own, on a fully diluted basis,  not less than fifty-eight and
         one-third  percent (58 1/3%) of the  outstanding  equity  securities of
         Borrower  and not less one hundred  percent  (100%) of the  outstanding
         equity  securities  of Three R  Sales,  Inc.,  a New  York  corporation
         ("Three R Sales").  Three R Sales  shall at all times  own,  on a fully
         diluted basis,

                                          Borrower:   USA Skate Co., Inc.
                                             Initialed for Borrower by:   MC
                                                                        ----
Date:   April 30, 1996                              Initialed for Bank by:   JF
                                                                           ----

                                       -4-

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<PAGE>

         not  less  than  forty-one  and  two-thirds  percent  (41  2/3%) of the
         outstanding equity securities of Borrower.

(12)     PERMITTED GUARANTIES:

         Notwithstanding  the  provisions of Paragraph  11(j) of the  Agreement,
         Borrower may execute a Continuing Unconditional Guaranty of any and all
         indebtedness of California Pro, Inc.
         ("California Pro") to Bank.

(13)     PROHIBITED LOANS:

         In addition to the  restrictions  contained in the Agreement,  Borrower
         shall not make any loans to, or other investments in, any other Person,
         including without  limitation loans to direct or indirect  stockholders
         of Borrower and loans to, or other  investments  in, direct or indirect
         subsidiaries  of Borrower.  Borrower  may,  however,  make loans to USA
         Skate to permit  USA Skate to  satisfy  the costs  associated  with its
         contemplated initial public offering and other financing  arrangements,
         provided  that  such  loans  are  repaid  with  the  proceeds   derived
         therefrom.

ADDITIONS AND CHANGES TO DEFAULT PROVISIONS
-------------------------------------------

(14)     LOSS OF COLLATERAL:

         Notwithstanding the provisions of Paragraph 12(e) of the Agreement,  no
         Event of Default shall arise under such  paragraph as the result of any
         loss, theft, damage or destruction of Collateral, unless the Collateral
         which is the  subject  thereof has a value,  determined  by Bank in its
         sole  discretion,  in excess of Two Hundred  Fifty  Thousand and No/100
         Dollars ($250,000.00).

(15)     ADDITIONAL LIENS:

         Notwithstanding the provisions of Paragraph 12(f) of the Agreement,  no
         Event of Default shall arise under such  paragraph as the result of any
         levy, seizure or attachment of Collateral,  unless the Collateral which
         is the  subject  thereof  has a value,  determined  by Bank in its sole
         discretion,  in excess  of One  Hundred  Thousand  and  No/100  Dollars
         ($100,000.00).


                                          Borrower:   USA Skate Co., Inc.
                                             Initialed for Borrower by:   MC
                                                                        ----
Date:   April 30, 1996                              Initialed for Bank by:   JF
                                                                           ----

                                       -5-

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<PAGE>

(16)     CROSS DEFAULTS:

         In addition to the Events of Default  contained  in Paragraph 12 of the
         Agreement,  the occurrence of any of the following shall  constitute an
         Event of Default by Borrower hereunder:

         (a)      The occurrence of an Event of Default under, or the revocation
                  or  termination  of, that certain Loan and Security  Agreement
                  dated  April 1, 1993,  as  amended,  by and  between  Bank and
                  California Pro;

         (b)      The occurrence of an event of default under, or the revocation
                  or  termination  of, the License Agreement as it exists on the
                  date hereof; and

         (c)      The occurrence of an event of default under, or the revocation
                  or termination of, that certain Consulting and Non-Competition
                  Agreement   dated  April  30,  1996,  by  and  between  Warren
                  Amendola,  Sr., and USA Skate (the "Consulting  Agreement") as
                  it exists on the date hereof.

CONDITIONS TO CLOSING
---------------------

(17)     ADDITIONAL CONDITIONS TO CLOSING:

         Bank  shall be under  no  obligation  to  consummate  the  transactions
         contemplated by this Agreement  until each of the conditions  listed in
         this Paragraph 17 has been  satisfied.  Whenever a condition  contained
         herein  requires  delivery of an agreement  or other  document to Bank,
         each such  agreement or other  document  shall be in form and substance
         satisfactory to Bank in its sole discretion.

         (a)      ADDITIONAL  RIGHTS  AS  COLLATERAL:  Each of USA Skate and CPS
                  shall  assign to Bank all of USA Skate's and CPS's  rights and
                  remedies,   but  none  of  USA  Skate's  or  CPS's  duties  or
                  obligations, under that certain Stock Purchase Agreement dated
                  April 30, 1996, as amended (the "Stock  Purchase  Agreement"),
                  by and  among  CPS,  USA  Skate,  the  Three R Profit  Sharing
                  Retirement Plan,  Warren  Amendola,  Sr.,  Patricia  Amendola,
                  Warren  Amendola,  Jr.,  Richard Amendola and Russell Amendola
                  (the  members  of the  Amendola  family  and  Three R Plan are
                  collectively referred to herein as the "Sellers").

         (b)      GUARANTIES:   Borrower  shall cause to be executed in favor of
                  Bank  and  delivered  to  Bank  the  Continuing  Unconditional
                  Guaranty  of  each  of CPS, USA Skate, California Pro, Three R
                  Sales, Fong and Casazza of any and all indebtedness of


                                          Borrower:   USA Skate Co., Inc.
                                             Initialed for Borrower by:   MC
                                                                        ----
Date:   April 30, 1996                              Initialed for Bank by:   JF
                                                                           ----

                                       -6-

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<PAGE>

         (b)      GUARANTIES:  Borrower  shall  cause to be executed in favor of
                  Bank  and  delivered  to  Bank  the  Continuing  Unconditional
                  Guaranty of each of CPS, USA Skate,  California  Pro,  Three R
                  Sales,  Fong  and  Casazza  of any  and  all  indebtedness  of
                  Borrower  to Bank.  Additionally,  Borrower  shall  execute in
                  favor of Bank and deliver to Bank a  Continuing  Unconditional
                  Guaranty  of any and all  indebtedness  of  California  Pro to
                  Bank.

         (c)      SUBORDINATION    AGREEMENTS:    Borrower   shall   cause   its
                  indebtedness  to  Warren  Amendola,   Sr.  under  the  License
                  Agreement  and USA Skate's  indebtedness  to the Sellers under
                  the Consulting  Agreement,  that certain  Registration  Rights
                  Agreement  dated  April  30,  1996,  among  USA  Skate and the
                  Sellers  (the  "Registration   Agreement")  and  that  certain
                  $1,050,000  Promissory Note dated April 30, 1996,  executed by
                  USA Skate in favor of the Sellers (the  "Promissory  Note") to
                  be  subordinated  to the  indebtedness  of Borrower to Bank on
                  terms  acceptable  to Bank in its sole  discretion  and  shall
                  cause Warren  Amendola,  Sr. and the other  Sellers to execute
                  and  deliver  to Bank  appropriate  Subordination  Agreements.
                  Borrower  shall  further  cause Warren  Amendola,  Sr. and the
                  other  Sellers to execute and deliver to Bank a  Subordination
                  Agreement  with respect to (i) the Guaranties of CPS, Fong and
                  Casazza under the Promissory  Note, the License  Agreement and
                  with  respect  to the return of a  treasury  bill to  Patricia
                  Amendola;  (ii) the  Guaranties  of Fong and Casazza under the
                  Registration Agreement and the Consulting Agreement; (iii) the
                  obligations  of CPS under the Consulting  Agreement;  (iv) the
                  Guaranty of USA Skate under the License Agreement; and (v) the
                  Guaranty of CPS under that certain  $125,000  Promissory  Note
                  dated  April 30,  1996,  executed by Les  Equipments  Sportifs
                  Davtec, Inc. in favor of Warren Amendola, Sr.

         (d)      RELATED  TRANSACTIONS:  Borrower  and  USA  Skate  shall  have
                  consummated the  transactions  set forth in the Stock Purchase
                  Agreement.  Borrower  shall  provide  Bank with copies of said
                  Stock Purchase  Agreement and all related  documentation,  and
                  evidence  satisfactory  to Bank that any and all  approvals of
                  the transactions contemplated therein have been obtained.

         (e)      ATTORNEY'S   OPINION  LETTER:   Borrower  shall  cause  to  be
                  executed and delivered to Bank an Attorney's Opinion Letter.



                                          Borrower:   USA Skate Co., Inc.
                                             Initialed for Borrower by:   MC
                                                                        ----
Date:   April 30, 1996                              Initialed for Bank by:   JF
                                                                           ----
                                       -7-

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<PAGE>

         (f)      LANDLORD'S  AGREEMENT:  Borrower  shall  provide  Bank  with a
                  Landlord's  Agreement  from the  lessor of  property  commonly
                  known  as 7  Brayton  Court,  Commack,  New York  11725  which
                  Landlord's  Agreement  shall  include  a copy of the  relevant
                  lease.

         (g)      PLEDGE OF TREASURY BILL:      Borrower  shall  cause  Patricia
                  Amendola   to   pledge,   as  additional  collateral  for  the
                  Liabilities, a   treasury bill having a face value of not less
                  than Three Hundred Thousand and No/100 Dollars ($300,000.00)

                                          Borrower:   USA Skate Co., Inc.
                                             Initialed for Borrower by:   MC
                                                                        ----
Date:   April 30, 1996                              Initialed for Bank by:   JF
                                                                           ----
                                       -8-

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<PAGE>


EXHIBIT B-BUSINESS AND COLLATERAL LOCATIONS

         Attached to and made a part of that certain Loan and Security Agreement
(Standard Form) of even date herewith  between USA Skate Co., Inc.  ("BORROWER")
and LASALLE NATIONAL BANK ("BANK").

A.       Borrower's Business Locations (please indicate  which  location  is the
         principal place of business and at  which  locations originals and all 
         copies of Borrower's books, records and accounts are kept).

         1.  7 Brayton Court                    Sole place of business and sole
             Commack, New York, 11725           location of  books, records and
                                                accounts
         2.

         3.

B.       Other locations of Collateral (including, without limitation, warehouse
         locations, processing locations,  consignment  locations)  and all post
         office boxes of Borrower.  Please  indicate the  relationship  of  such
         location to Borrower (i.e. public warehouse, processor, etc.)

         1.

         2.

         3.

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