Exhibit 10.150


                           LOAN AND SECURITY AGREEMENT

                                  BY AND AMONG

                     AD ART ELECTRONIC SIGN CORPORATION AND
                  HAMILTON DIGITAL DESIGNS, LTD., AS BORROWER,

                                       AND

                           SOUTHTRUST BANK, AS LENDER

<PAGE>


                           LOAN AND SECURITY AGREEMENT

         THIS  AGREEMENT  made this 17th day of  January,  2001,  between AD ART
ELECTRONIC SIGN CORPORATION,  a Florida corporation ("Ad Art"), HAMILTON DIGITAL
DESIGNS, LTD., an Ontario corporation ("Hamilton," and together with Ad Art, the
"Borrower"),  and SOUTHTRUST BANK, an Alabama banking corporation formerly doing
business as SouthTrust Bank, National Association,  with its principal office in
Birmingham, Alabama ("Bank" or "Lender").

                                R E C I T A L S:

         As more  particularly  described in the  Restructuring  Agreement,  the
Borrower has requested Bank to restructure  certain  outstanding  obligations of
the  Borrower  to the  Bank  and,  as part of such  restructure,  to lend to the
Borrower the sum of  $8,122,489.56  and an additional sum of up to $1,000,000.00
on a term loan basis,  and to maintain the issuance of a letter of credit in the
amount of  $2,500,000.00,  and the Bank is  willing  to do so, but only upon the
terms and subject to the conditions  hereinafter  set forth and set forth in the
Restructuring Agreement.

         NOW, THEREFORE, Bank and Borrower agree as follows:

         1.       DEFINED  TERMS.  As used in this Loan and Security  Agreement,
the following terms shall have the following meanings:

                  1.1  ACCOUNT  DEBTOR  --  any  Person  who  is or  may  become
obligated under or on account of an Account,  Chattel Paper, General Intangible,
or Instrument (as defined in the Code).

                  1.2 ACCOUNTS -- all  accounts,  accounts  receivable,  chattel
paper, leases, instruments,  documents,  promissory notes, contracts for receipt
of money,  conditional sales contracts,  and evidences of Debt of or owing to or
acquired by Borrower whether now existing or hereafter  arising,  whether or not
it has been  earned  by  performance,  and  whether  or not it has been  billed,
including  (i) all  accounts and other rights to payment of money which arise or
result from  Borrower's  selling,  leasing,  or other  disposition of Borrower's
goods or the  providing  of  services  by  Borrower,  (ii) the  proceeds  of any
insurance  covering the Collateral,  and (iii) the return of unearned  insurance
premiums.

                  1.3      AD ART  -- Ad  Art  Electronic  Sign  Corporation,  a
 Florida corporation.

                  1.4  AD  ART  COLLATERAL  --  Ad  Art's  Accounts,  Documents,
Instruments,  Equipment,  Real Estate,  Chattel Paper, General Intangibles,  and
Inventory,  the other  property and interests of Ad Art described in Section 8.1
("Security Interest") and elsewhere in the Loan Documents,  wherever located and
whether now owned by Ad Art, or  hereafter  acquired,  and the parts,  proceeds,
products, profits, replacements, and substitutions of each, as the case may be.

                  1.5      AD ART OBLIGATIONS -- the Obligations.


<PAGE>

                  1.6      AD ART LOAN -- means the Restructured Loan.

                  1.7      AD ART NOTE -- means the Restructured Note.

                  1.8      AD ART WINDDOWN LOAN -- means the Winddown Loan.

                  1.9      AD ART WINDDOWN NOTE -- means the Winddown Note.

                  1.10  AFFILIATE  -- any director or officer of Borrower or any
Person who directly, indirectly or beneficially,  owns 5% or more of the capital
stock of  Borrower,  or 5% of the  voting  stock or rights of  Borrower,  or any
member of the immediate family of any such officer, director, or stockholder, or
any  corporation or other entity which is controlled by,  controls,  or is under
common control with, Borrower; provided, however, that any Affiliates of Raymond
James Capital Partners,  L.P., that are not Affiliates of the Borrower shall not
be an Affiliate hereunder.

                  1.11     AGREEMENT -- this Loan and Security Agreement.

                  1.12 BANK -- SouthTrust  Bank, an Alabama banking  corporation
formerly known as SouthTrust Bank, National Association,  and its successors and
assigns.

                  1.13  BASE  RATE -- the rate of  interest  designated  by Bank
periodically  as its Base  Rate.  The Base Rate is not  necessarily  the  lowest
interest rate charged by Bank.

                  1.14 BORROWER -- Ad Art and Hamilton, jointly and severally.

                  1.15     CALIFORNIA  MORTGAGE -- that  certain  Deed of Trust,
Absolute  Assignment of Leases and Rents,  Security Agreement and Fixture Filing
dated June 22, 1999 executed by Ad Art, as Trustor,  to Commonwealth  Land Title
Insurance  Company,  as Trustee,  for benefit of the Bank, as  beneficiary,  and
recorded on June 21, 1999 at 99080018 in Office of County  Clerk of San Joacquin
County, California.

                  1.16     CALIFORNIA  REAL  ESTATE  -- the  real  property  and
improvements described in the California Mortgage.

                  1.17     CASH CAPITAL  EXPENDITURES -- expenditures  made from

cash or from proceeds of the  Restructured  Loan (but not from the proceeds of a
term loan or purchase money  financing) for the  acquisition of any fixed assets
or improvements, replacements,  substitutions, or additions thereto which have a
useful life of more than one year,  including the direct or indirect acquisition
of such assets by way of increased product or service charges,  offset items, or
otherwise.

                  1.18     CAPITALIZED LEASE OBLIGATIONS -- any Debt represented
by obligations  under a lease that is required to be  capitalized  for financial
reporting purposes in accordance with GAAP, and the amount of such Debt shall be
the capitalized amount of such obligations determined in accordance with GAAP.

                                       2
<PAGE>

                  1.19     CHATTEL  PAPER  --  all  writing  or  writings  which
evidence both a monetary  obligation and a security  interest in or the lease of
specific  goods,  together  with any  guarantees,  letters of credit,  and other
security therefor.

                  1.20     CODE -- the Uniform  Commercial Code, as in effect in
Alabama from time to time.


                  1.21     COLLATERAL --  collectively,  the Ad Art  Collateral,
the Hamilton  Collateral,  and any and all of  Borrower's  Accounts,  Documents,
Instruments,  Equipment,  Real Estate,  Chattel Paper, General Intangibles,  and
Inventory,  the other property and interests described in Section 8.1 ("Security
Interest") and elsewhere in the Loan Documents, wherever located and whether now
owned by Borrower or  hereafter  acquired,  and the parts,  proceeds,  products,
profits, replacements, and substitutions of each, as the case may be.

                  1.22     CONTINGENT   OBLIGATIONS  --  means  any  obligation,
contingent or otherwise of any Person  directly or indirectly  guaranteeing  any
Debt of any  Person  and any  obligation,  direct  or  indirect,  contingent  or
otherwise, of such Person (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Debt of such Person (whether  arising by virtue
of agreements to keep well, to purchase assets,  goods,  securities or services,
to take-or-pay,  or to maintain financial statement  conditions or otherwise) or
(ii) entered into for the purpose of assuring in any other manner the obligee of
such Debt of the payment  thereof or to protect  such  obligee  against  loss in
respect  thereof (in whole or in part).  Excludes any  contingent  obligation to
issue stock under an acquisition agreement.

                  1.23     CONTRACTUAL   OBLIGATION  --  any  provision  of  any
security issued by a Person or of any agreement,  instrument,  or undertaking to
which such Person is a party or by which it or any of its property is bound.

                  1.24     DEBT  -- the  sum of (i)  indebtedness  for  borrowed
money  or for  the  deferred  purchase  price  of  property  or  services,  (ii)
Capitalized  Lease  Obligations,  and (iii) all other items which in  accordance
with GAAP would be  included  in  determining  total  liabilities  as shown on a
balance sheet of a Person as at the date as of which Debt is to be determined.

                  1.25     DEFAULT  RATE -- the highest  lawful rate of interest
per annum  specified in any Note to apply after a default under such Note or, if
no such rate is  specified,  a rate equal to the lesser of (a) one percent  over
the interest rate specified to be the applicable  contract interest rate in this
Agreement or (b) the highest rate of interest allowed by law.

                  1.26     DOCUMENT  -- means any paper  that is  treated in the
regular course of business as adequate evidence that the person in possession of
the paper is  entitled  to  receive,  hold,  and  dispose of the goods the paper
covers, and includes warehouse receipts, bills of lading, certificates of title,
and applications for certificates of title.

                                       3
<PAGE>

                  1.27     ENVIRONMENTAL  REGULATIONS -- all federal, state, and
local  laws,  rules,  regulations,  ordinances,  programs,  permits,  guidances,
orders,  and consent  decrees  relating to the  environment or to public health,
safety,  and  environmental  matters,  including the Resource  Conservation  and
Recovery  Act,  the  Comprehensive   Environmental   Response  Compensation  and
Liability Act of 1980,  the Toxic  Substances  Control Act, the Clean Water Act,
the Clean Air Act,  the River and Harbor Act, the Water  Pollution  Control Act,
the Marine Protection Research and Sanctuaries Act, the Deep Water Port Act, the
Safe Drinking  Water Act, the Superfund  Amendments and  Reauthorization  Act of
1986, the Federal Insecticide,  Fungicide and Rodenticide Act, the Mineral Lands
and  Leasing  Act,  the Surface  Mining  Control and  Reclamation  Act,  the Oil
Pollution Act of 1990,  state and federal super lien and  environmental  cleanup
programs  and laws,  U.S.  Department  of  Transportation  regulations  and laws
regulating hazardous,  radioactive and toxic materials and underground petroleum
products  storage  tanks,  and all similar  state,  federal,  and local laws and
regulations.

                  1.28     EQUIPMENT -- all machinery,  equipment, fixtures, and
other property used in or purchased for Borrower's  business,  together with all
increases, parts, fittings,  accessories,  repairs, equipment, and special tools
now or later affixed to or used in connection with the foregoing  property,  all
transferable  rights of  Borrower to the  licenses  and  warrantees  (express or
implied) received from the sellers and manufacturers of the foregoing  property,
all related claims, credits, setoffs, and other rights of recovery.

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

                  1.30     EVENT OF DEFAULT -- any one of the events  enumerated
in Article 10 ("Events of Default").

                  1.31     EXISTING   LOAN   AGREEMENT   --  Loan  and  Security
Agreement  dated  June 2, 1999  between  Borrower  and Bank,  as  amended by the
Amendment No. 1 to Loan and Security Agreement dated as of March 3, 2000 between
Borrower and Bank,  as amended by the Joinder and  Forbearance  Agreement  dated
September  26, 2000 between  Borrower and Bank,  as amended by the  Amendment to
Joinder and Forbearance Agreement dated as of October 31, 2000.

                  1.32     EXISTING  REVOLVING LOAN -- the revolving loan in the
maximum  principal amount of  $23,000,000.00  made by Lender to Borrower,  among
others,  pursuant to the Loan and Security  Agreement  dated June 2, 1999 by and
among Lender and Borrower,  among others,  as amended by Amendment No. 1 to Loan
and Security Agreement dated March 3, 2000.

                  1.33     FOCUS  MANAGEMENT  -- means Focus  Management  Group,
U.S.A.,  Inc., a Florida  corporation  engaged by Borrower to provide financial,
management, and turnaround advice to the Borrower.

                  1.34     GAAP -- generally accepted  accounting  principles in
the United  States of America as defined by the Financial  Accounting  Standards
Board or its successor, as in effect from time to time consistently applied.

                                       4
<PAGE>

                  1.35     GENERAL  INTANGIBLES  -- all general  intangibles  of
Borrower of any kind,  whether now owned or hereafter  acquired,  including  all
intangible personal property other than Accounts,  Documents,  Instruments,  and
Chattel Paper, and includes money,  contract rights, choses in action, causes of
action,  corporate or other  business  records,  deposit  accounts,  inventions,
designs, formulas, patents, patent applications and/or continuation applications
now pending  before the United States Patent  Office,  trademarks and associated
goodwill,  trademarks  for  which  statements-of-use  have been  filed  with the
Trademark  Office,   but  specifically   excluding   "intent-to-use"   trademark
applications, trade names, trade secrets, engineering drawings, goodwill, rights
to prepaid expenses, copyrights,  registrations,  licenses, franchises, customer
lists,  tax  refund  claims,  computer  programs  and other  software,  royalty,
licensing,  and product rights, all claims under guaranties,  security interests
or other security held by or granted to Borrower to secure payment of any of the
Accounts  by an Account  Debtor,  all rights to  indemnification,  and rights to
retrieval  from third  parties of  electronically  processed  and recorded  data
pertaining to any  Collateral,  things in action,  items,  checks,  drafts,  and
orders in transit to or from Borrower,  credits or deposits of Borrower (whether
general or special) that are held by Bank, and all other intangible  property of
every kind and nature.

                  1.36     GOVERNMENTAL   AUTHORITY   --  means  any  nation  or
government,  any state or other  political  subdivision  thereof  and any entity
exercising  executive,  legislative,   judicial,  regulatory  or  administrative
functions pertaining to government.

                  1.37     HAMILTON -- means Hamilton Digital Designs,  Ltd., an
ntario corporation.

                  1.38     HAMILTON  COLLATERAL  --  (a)  Hamilton's   Accounts,
Documents,   Instruments,   Equipment,   Real  Estate,  Chattel  Paper,  General
Intangibles,  and  Inventory,  the other  property  and  interests  of  Hamilton
described  in  Section  8.1  ("Security  Interest")  and  elsewhere  in the Loan
Documents,  wherever  located  and  whether  now owned by Ad Art,  or  hereafter
acquired,  and  the  parts,  proceeds,  products,  profits,   replacements,  and
substitutions of each, as the case may be, and (b) the Hamilton Stock.

                  1.39     HAMILTON  STOCK -- any and all common and  special or
preferred  stock  issued by  Hamilton  and owned by DTEK Signs,  U.L.C.,  a Nova
Scotia unlimited liability company and an Affiliate of the Borrower, and pledged
by DTEK Signs,  U.L.C.  pursuant to that certain Stock Pledge Agreement dated as
of September 26, 2000.

                  1.40     INSTRUMENT -- means every  instrument of any kind, as
that term is used in the UCC, and includes  every  promissory  note,  negotiable
instrument,  certificated  security,  or other writing that evidences a right to
payment  of  money,  that is not a lease  or  security  agreement,  and  that is
transferred  in the ordinary  course of business by delivery  with any necessary
assignment or indorsement.

                  1.41     INTERIM  OPERATION -- means the operation of Ad Art's
business in the ordinary course during the Interim Period.

                                       5
<PAGE>

                  1.42     INTERIM   PERIOD  --  means  the  period  of  Interim
Operation  commencing  on the date of this  Agreement  and ending on January 29,
2001,  unless  earlier  terminated  by Ad Art or the  Bank,  in  their  sole and
absolute discretion.

                  1.43     INTELLECTUAL PROPERTY -- has the meaning set forth in
Section 5.18.

                  1.44     INVENTORY -- all inventory of whatever kind or nature
of Borrower,  now owned or hereafter acquired by Borrower, and wherever located,
including all goods held for sale or lease or furnished or to be furnished under
a contract for  services,  and  supplies,  packaging,  raw  materials,  goods in
transit,  work in process,  materials used or consumed or to be used or consumed
in Borrower's business or in the processing, packaging, or shipping of same, all
finished goods,  and all property,  the sale or lease of which has given rise to
Accounts, Chattel Paper, or Instruments,  and that has been returned to Borrower
or repossessed by Borrower or stopped in transit, and all warranties and related
claims,  credits,  setoffs,  and other rights of recovery with respect to any of
the foregoing.

                  1.45     LETTER OF CREDIT -- the 1999 Letter of Credit.

                  1.46     LETTER  OF  INTENT  -- has the  meaning  set forth in
Section 6.21 of the Agreement.

                  1.47     LIEN -- any interest in property (real,  personal, or
mixed,  and tangible or intangible)  securing an obligation  owed to, or a claim
by, a Person  other than the owner of the  property,  whether  such  interest is
based on the common law, statute or contract, and including a security interest,
security  title or Lien arising  from a security  agreement,  mortgage,  deed of
trust,  deed to secure  debt,  encumbrance,  pledge,  conditional  sale or trust
receipt or a lease,  consignment  or bailment  for security  purposes.  The term
"Lien" shall include  covenants,  conditions,  restrictions,  leases,  and other
encumbrances affecting any property, except real property covenants running with
the land. For the purpose of this Agreement,  Borrower shall be deemed to be the
owner of any property  which it has acquired or holds  subject to a  conditional
sale agreement or other arrangement  pursuant to which title to the Property has
been retained by or vested in some other Person for security purposes.

                  1.48     LOAN OR LOANS -- the Restructured  Loan, the Winddown
Loan,  the 1999 Letter of Credit,  and any  substitutions  therefor,  extensions
thereof or renewals thereof.

                  1.49     LOAN ACCOUNT -- The loan account  established  on the
books of Bank pursuant to Section 2.2 ("Loan Account").

                  1.50     LOAN DOCUMENTS -- this Agreement,  and each and every
mortgage,  deed  of  trust,  note,  indenture,  security  agreement,   financing
statement or other  instrument  executed and  delivered to evidence the Loans or
any  other  Obligation,  to  constitute  collateral  for the  Loans or any other
Obligation,  or to evidence security for the Loans or any other Obligation,  and
any and all other  agreements,  instruments,  and documents  heretofore,  now or
hereafter,  executed  by  Borrower  and

                                       6
<PAGE>

delivered to Bank in respect to the transactions contemplated by this Agreement,
including,  without limitation, the Financing Documents, as that term is defined
in the Indenture.

                  1.51     MATERIAL  ADVERSE EFFECT -- with respect to a Person,
a  material  adverse  effect on its  business,  assets,  properties,  prospects,
results of operation, or condition (financial or other).

                  1.52     MITCHELL  APPLICATION  -- the  application  filed  by
James B.  Mitchell,  Farrell  M.  Boyce and Brian G.  Nugent  against  Hamilton,
Display,  DTEK  Signs,  U.L.C.,  and the Bank in the Ontario  Superior  Court of
Justice, commencing the Court File No. 00-2379.

                  1.53     MORTGAGE -- the California Mortgage.

                  1.54     MULTIEMPLOYER  PLAN -- has the  meaning  set forth in
Section 4001(a)(3) of ERISA.

                  1.55     1999  LETTER  OF  CREDIT  --- the  letter of credit #
SB2128 in amount of up to $2,546,028.00  dated June 17, 1999,  issued by Bank in
favor of the Trustee under the 1999 Indenture, as security for the 1999 Notes.

                  1.56     NOTES -- each  promissory note executed and delivered
by Borrower to Bank  evidencing all or part of the Loans,  as further  described
hereinafter.

                  1.57     OBLIGATIONS  -- all  Loans  and all  other  advances,
debts,  liabilities,  obligations,  covenants, and duties owing, arising, due or
payable from Borrower to Bank of any kind or nature,  present or future  whether
or not  evidenced by any note,  guaranty or other  instrument,  whether  arising
under this  Agreement or any of the other Loan  Documents or otherwise,  whether
direct or  indirect  (including  those  acquired  by  assignment),  absolute  or
contingent,  primary  or  secondary,  due or to  become  due,  now  existing  or
hereafter arising and however evidenced or acquired. The term includes,  without
limitation, all interest, charges, expenses, fees, attorneys' fees and any other
sums  chargeable to Borrower under any of the Loan Documents and all rights Bank
may at any time or times have to  reimbursement in connection with any letter of
credit or guaranty issued for Borrower's benefit.

                  1.58     ORDERLY  LIQUIDATION -- means the orderly liquidation
of Ad Art in  accordance  with the  terms  of the  Orderly  Liquidation  Budget,
pursuant  to which Ad Art shall use its best  efforts  to  liquidate  all of its
assets (including,  without  limitation,  the Ad Art Collateral) for the highest
and best prices obtainable, shall disburse the proceeds of the Ad Art Collateral
to the  Bank,  and  shall  otherwise  wind  up its  affairs  in an  orderly  and
reasonable means in all respects.

                  1.59     ORDERLY   LIQUIDATION  BUDGET  --  means  the  budget
prepared by Focus for the Borrower  regarding the projected  Cash needed to fund
the Orderly  Liquidation of Ad Art, a true and correct copy of which is attached
hereto as EXHIBIT A.

                  1.60     PARENT  --  Display  Technologies,   Inc.,  a  Nevada
corporation.

                                       7
<PAGE>

                  1.61     PERMITTED  LIENS -- any Lien of a kind  specified  as
permitted in Section 7.2 ("Liens and Security Interests").

                  1.62     PERSON -- an  individual,  partnership,  corporation,
joint  stock  company,   firm,  land  trust,   business  trust,   unincorporated
organization,  limited  liability  company,  or  other  business  entity,  or  a
government or agency or political subdivision thereof.

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

                  1.64     PROHIBITED  TRANSACTION -- any  transaction set forth
in Section 406 of ERISA or Section 4975 of the Internal Revenue Code of 1986.

                  1.65     REAL ESTATE -- the California Real Estate.


                  1.66     REPORTABLE  EVENT -- any of the  events  set forth in
Section 4043(h) of ERISA.


                  1.67     REQUIREMENT OF LAW -- as to any Person,  the articles
of incorporation and bylaws or other  organizational  or governing  documents of
the Person,  and any law,  treaty,  rule or regulation,  or  determination of an
arbitrator or a court or other Governmental  Authority,  in each case applicable
to or binding on the Person or any of its  property  or to which the Person or a
any of its property is subject.

                  1.68     RESTRUCTURING    AGREEMENT   --   the   Restructuring
Agreement  of even date  herewith by and among the  Borrower  and Lender,  among
others.

                  1.69     RESTRUCTURED  LOAN -- has the  meaning  set  forth in
Section 2.1.

                  1.70     RESTRUCTURED  NOTE -- has the  meaning  set  forth in
Section 2.1.

                  1.71     SPECIAL  COLLECTION  ACCOUNT  --  one  or  more  bank
accounts  established by Borrower  pursuant to Section 4.2 ("Special  Collection
Accounts"),  from which Bank has the exclusive right to withdraw or debit funds,
and into which Borrower shall deposit on receipt all checks,  drafts,  cash, and
other remittances in payment or on account of the Accounts.

                  1.72     STANDBY LETTER OF CREDIT -- has the meaning set forth
in Section 2.3.

                  1.73     SUBORDINATED  DEBT -- the Debt of  Borrower  which is
fully  subordinated  to the Loans  (including  principal,  interest,  and agreed
charges) in a manner  satisfactory to Bank (which may be either according to its
terms or by separate  agreement)  and which debt arises from  Borrower's  actual
receipt  of cash  loans  and not from "in  kind" or  non-cash  consideration  or
purchase  money  financing  sources,  including  Debt  of  Borrower  owed to the
Subordinate Lenders.

                                       8
<PAGE>

                  1.74     SUBORDINATE  LENDERS  --  collectively,   Renaissance
Capital Growth and Income Fund III,  Inc.,  Renaissance  U.S.  Growth and Income
Trust PLC, and Worrell Enterprises, Inc.

                  1.75     SUBSIDIARY -- any corporate entity or partnership, or
other  business  entity which  constitutes  a  subsidiary  for purposes of GAAP.
Includes all Borrowers except Parent.

                  1.76     WINDDOWN LOAN -- has the meaning set forth in Section
2.2.

                  1.77     WINDDOWN NOTE -- has the meaning set forth in Section
2.2.

                  1.78     1999  LETTER  OF  CREDIT  -- the  Standby  Letter  of
Credit.

                  1.79 CERTAIN OTHER WORDS -- all  accounting  terms used herein
have the respective meanings attributed to them under, and shall be construed in
accordance with, GAAP. The terms "herein",  "hereof", and "hereunder", and other
words of  similar  import  refer  to this  Agreement  as a whole  and not to any
particular section, paragraph or subdivision.  Any pronouns used shall be deemed
to cover all genders.  As used in this  Agreement,  (a) the word  "including" is
always without limitation; (b) words in the singular number include words of the
plural  number  and vice  versa;  (c) the word  "costs"  includes  all  internal
out-of-pocket  expenses,  fees,  costs,  and expenses of experts and  collection
agents, supersedeas bonds, and all attorneys' fees, costs, and expenses, whether
incurred before, during, or after demand or litigation,  and whether pursuant to
trial, appellate,  arbitration,  bankruptcy, or judgment-execution  proceedings;
and (d) the word  "property"  includes  both tangible and  intangible  property,
unless the context  otherwise  requires.  All references to statutes and related
regulations shall include any amendments of same and any successor  statutes and
regulations.  All  references  to  any  instruments  or  agreements,   including
references to any of the Loan Documents, shall include any and all modifications
or amendments thereto and any and all extensions or renewals thereof.  All other
terms  contained in this Agreement  shall,  unless  otherwise  defined herein or
unless the context  otherwise  indicate,  have the meanings  provided for by the
Uniform Commercial Code of the State of Alabama.

                  1.80  DIRECTLY AND  INDIRECTLY  -- when any  provision of this
Agreement or any Loan  Document  requires or  prohibits  action to be taken by a
Person, the provision applies regardless of whether the action is taken directly
or indirectly by the Person.

         2.       THE LOANS.

                  2.1      RESTRUCTURED LOAN.

                           (a)      Subject to the terms and  conditions of this
Agreement,  Bank  agrees  to  make a loan  to  Borrower  of  $8,122,489.56  (the
"Restructured Loan").

                           (b)      Borrower shall execute and deliver to Bank a
promissory note (the "Restructured Note") in the face amount of the Restructured
Loan, payable to the order of Bank and evidencing Borrower's obligation to repay
the Restructured Loan.

                                       9
<PAGE>

                           (c)      Borrower  shall pay accrued  interest on the
unpaid principal  balance of the Restructured  Loan at a per annum rate equal to
the Base Rate plus  2.75% on the first day of each month and  continuing  on the
same day of each month  thereafter  until the full  balance of the  Restructured
Loan is paid. The applicable interest rate on the Restructured Loan shall change
as and when the Base Rate changes from time to time.  Borrower shall pay to Bank
all  outstanding  principal and interest on the  Restructured  Loan on or before
June 30, 2001, or on any earlier date on which the Restructured Loan becomes due
and payable.

                           (d)      The  Restructured  Loan  is not a  revolving
loan.

                  2.2      WINDDOWN LOAN.

                           (a)      Subject to the terms and  conditions of this
Agreement, Bank agrees to make an additional loan to Borrower in an amount up to
$1,000,000.00 (the "Winddown Loan").

                           (b)      Borrower  shall  execute and deliver to Bank
one  promissory  note (the  "Winddown  Note") in the face amount of the Winddown
Loan, payable to the order of Bank and evidencing Borrower's obligation to repay
the Winddown Loan.

                           (c)      Borrower  shall pay accrued  interest on the
unpaid  principal  balance of the Winddown Loan at a per annum rate equal to the
Base Rate plus 2.75% on the first day of each month and  continuing  on the same
day of each month  thereafter  until the full  balance of the  Winddown  Loan is
paid. The applicable interest rate on the Winddown Loan shall change as and when
the  Base  Rate  changes  from  time to  time.  Borrower  shall  pay to Bank all
outstanding  principal  and interest on the Winddown  Loan on or before June 30,
2001,  or on any earlier  date on which the  Restructured  Loan  becomes due and
payable.

                           (d)      The Winddown Loan is not a revolving loan.

                           (e)      All requests for advances under the Winddown
Loan  shall be in  writing,  signed  by an  officer  of  Borrower,  and shall be
submitted  to Bank at least  two (2)  Business  Days  prior to the date on which
funds are  requested to be  advanced.  Borrower  may obtain  advances  under the
Winddown Loan only if it complies with all the  following  requirements:  (i) at
the time of each advance request (unless in each case Bank consents otherwise in
writing),  Ad Art certifies to Bank that (A) the cumulative  outstanding balance
of the Loans at such time is not more than 105% of the  projected  "Ending Debt"
for the last week ending prior to the date of such request,  as set forth in the
Orderly  Liquidation  Budget,  (B)  the  actual  collections  from  the  Orderly
Liquidation  of Ad Art,  during the period  commencing  on the date which is the
later of (1) the date which is 28 days prior to the date of such  request or (2)
the date of this Agreement, and ending on the date of such request, are not less
than  95% of  the  projected  "Total  Collections"  set  forth  on  the  Orderly
Liquidation Budget for such time period, and (C) the total actual  disbursements
of Ad Art during the period  commencing on the later of (1) the date which is 28
days prior to such request or (2) the date of this Agreement,  and ending on the
date of such  request,  are  not  greater  than  105%  of the  projected  "Total
Disbursements" set forth on the Orderly Liquidation Budget for such period; (ii)
Borrower

                                       10
<PAGE>

delivers  to Bank  prior to any such  advance,  a list of the uses of the  funds
which Borrower certifies in writing are necessary to the Interim Operation of Ad
Art or in furtherance of the Orderly  Liquidation  and shall in no event be used
for any purpose which is  inconsistent  with the Interim  Operation of Ad Art or
the  Orderly  Liquidation  Budget;  and (iii) at the time of each  such  advance
request,  no Event of Default shall have occurred and be continuing and Borrower
certifies that there are no Events of Default under this Agreement or any of the
other Loan Documents.

                  2.3      TERMS GOVERNING ALL LOANS.

                           (a)      The Ad Art Loan,  the Ad Art Winddown  Loan,
and the 1999 Letter of Credit shall be payable from the Orderly  Liquidation and
from the sale or other disposition by Borrower of the Collateral.

                           (b)      Borrower shall make all payments of interest
and principal under the Notes without setoff or  counterclaim,  and in such coin
or currency of the United States of America that at the time of payment is legal
tender for the payment of public and private debt.  Payments shall be applied in
accordance with the terms of the Restructuring Agreement.

                           (c)      Each   borrowing   under  a  Loan  shall  be
effected by  crediting  the amount  thereof to the regular  checking  account of
Borrower maintained with Bank or with another bank approved by Bank.

                           (d)      Any  payments  not made as and when due with
respect to any Loan (whether at stated maturity, by acceleration,  or otherwise)
shall bear interest at the Default Rate from the date due until paid, payable on
demand.

                           (e)      In case of any conflict between the terms of
the Notes and the  description of the Loans contained  herein,  the terms of the
Notes shall control.

                  2.4 LOAN  ACCOUNT.  Amounts due under the Notes and  otherwise
under this Agreement and under the Loan Documents shall be reflected in the Loan
Account.  Bank shall enter disbursements  hereunder or under the Notes as debits
to the Loan Account and shall also record in the Loan Account all payments  made
by Borrower and all proceeds of Collateral  which are finally paid to Bank,  and
may record  therein,  in accordance  with  customary  accounting  practice,  all
charges and expenses properly chargeable to Borrower hereunder.

                  2.5  PREPAYMENT.  Subject to the provisions  hereof,  Borrower
shall have the right at any time and from time to time to prepay  the Loans,  in
whole or in part,  without  premium or penalty but with accrued  interest to the
date of such prepayment on the amounts prepaid.  Such prepayments  shall be made
to Bank in immediately  available funds and, shall be applied to the last of the
installment(s)  to  mature.  Any such  prepayment  shall not  affect or vary the
obligation of Borrower to pay any installment when due.

                  2.6 USE OF PROCEEDS. Borrower shall use the proceeds of the Ad
Art Loan to satisfy,  in part,  the  Borrower's  obligations  under the Existing
Revolving  Loan,  and  shall use the


                                       11
<PAGE>

proceeds of the Ad Art Winddown Loan to support its working capital needs and to
fund the Interim Operation and Orderly Liquidation of Ad Art. Borrower shall use
the 1999 Letter of Credit as credit  support for the Demand Notes,  as described
in Article 2A of this Agreement.

                  2.7 TERM.  This  Agreement  shall  remain in force and  effect
until the Loans,  and any renewals or extensions,  and all interest  thereon and
costs  provided for herein with regard to either of them have been  indefeasibly
paid or  satisfied in full and until Bank has no further  obligation  to advance
funds to  Borrower  hereunder  and  until the 1999  Letter  of  Credit  has been
released or all  reimbursement  obligations of Borrower with respect to the 1999
Letter  of  Credit  have  been paid in full.  Borrower  may  terminate  the Loan
facilities at any time before the scheduled  maturity date by paying in full the
Loans and all other  Obligations  and by obtaining the release or paying in full
the 1999 Letter of Credit.  The  indemnities  provided  for in Article 11 hereof
shall survive the payment in full of the Loans and the other Obligations and the
termination of this Agreement.

                  2.8  PAYMENTS.  All sums  paid to Bank by  Borrower  hereunder
shall be paid directly to Bank in immediately  available funds.  Bank shall send
Borrower  statements of all amounts due  hereunder,  which  statements  shall be
considered correct and conclusively binding on Borrower unless Borrower notifies
Bank to the contrary  within ten (10) days of its receipt of any statement which
it deems to be incorrect.  Bank may, in its sole  discretion  charge against any
deposit  account  of  Borrower  all or any  part of any  amount  due  hereunder.
Borrower  shall be deemed to have requested an advance under the Ad Art Winddown
Loan upon the occurrence of an overdraft in any of Borrower's  checking accounts
maintained with Bank or another bank owned by SouthTrust Corporation.

                  2.9  FEES.  An  administrative/servicing  fee of $500  will be
assessed monthly  throughout the term of the Loans.  Borrower shall also pay the
fees due with  respect to the  Letter of Credit,  as  provided  in Section  2A.4
hereof.  Further,  the Borrower shall pay to Bank an agent fee of $5,000.00 that
will be assessed annually throughout the term of the Loans, and shall be due and
payable on the 1st day of March of each year of the term hereafter.

                  2.10 LIMITATION ON INTEREST CHARGES.  Bank and Borrower intend
to comply strictly with applicable law regulating the maximum  allowable rate or
amount of  interest  that Bank may charge and  collect on the Loans to  Borrower
pursuant to this Agreement.  Accordingly,  and  notwithstanding  anything in any
Note or in this  Agreement to the  contrary,  the maximum,  aggregate  amount of
interest and other charges  constituting  interest under applicable law that are
payable,  chargeable,  or receivable under any Note and this Agreement shall not
exceed the maximum  amount of  interest  now  allowed by  applicable  law or any
greater  amount of interest  allowed  because of a future  amendment to existing
law.  Borrower is not liable for any  interest  in excess of the maximum  lawful
amount,  and any excess interest charged or collected by Bank will constitute an
inadvertent   mistake   and,  if  charged   but  not  paid,   will  be  canceled
automatically,  or, if paid,  will be either  refunded  to  Borrower or credited
against  the  outstanding  principal  balance  of the  applicable  Note,  at the
election of Borrower.

                  2.11 NON-PAYMENT FEE. If the Borrower fails to (a) pay in full
both the  Restructured  Loan and the Winddown  Loan in full by their  respective
maturities and (b) pay all

                                       12
<PAGE>

obligations  due to the Bank  with  respect  to the 1999  Letter  of  Credit  or
otherwise cause the Bank to be released from all obligations with respect to the
1999  Letter of Credit or deliver to Bank a backup  letter of credit  reasonably
satisfactory  to the  Bank  for the 1999  Letter  of  Credit  on or  before  the
maturities of the  Restructured  Loan and the Winddown  Loan,  then the Borrower
shall pay to Bank on the maturity date of the Restructured Loan and the Winddown
Loan a non-payment fee equal to $100,000.00 in cash.

                  2A.      LETTER OF CREDIT.

                           2A.1     DEFINITIONS.

         As used in this  Article  2A, the  following  terms have the  following
meanings:

                  A DRAWING --- means a drawing  under a Letter of Credit to pay
the principal of the Demand Notes due to maturity, redemption, or acceleration.

                  ACTUAL/360  BASIS --- a method of computing  interest or other
charges  hereunder  on the basis of an  assumed  year of 360 days for the actual
number of days elapsed,  meaning that interest or other charges accrued for each
day will be  computed  by  multiplying  the rate  applicable  on that day by the
unpaid  principal  balance (or other  relevant sum) on that day and dividing the
result by 360.

                  B  DRAWING  --- a  drawing  under a Letter  of  Credit  to pay
                  interest on the Demand Notes.  C DRAWING --- a drawing under a
                  Letter of Credit to pay the purchase price of Tendered Notes.

                  DEMAND NOTES --- the 1999 Notes.

                  FINANCING  DOCUMENTS --- has the same meaning ascribed to such
term in the Indenture.

                  INDENTURE --- the 1999 Indenture.

                  1999  INDENTURE  --- the Trust  Indenture  dated as of June 1,
1999, between Bank and Display Technologies, Inc. for the 1999 Notes.

                  1999 NOTES --- the  Variable/Fixed  Rate Credit Enhanced Notes
in initial principal amount of $2,500,000 issued pursuant to the 1999 Indenture.

                  PLEDGED  NOTES ---  Demand  Notes  purchased  pursuant  to the
Optional or Mandatory Tender  provisions of the Indenture with money drawn under
the Letter of Credit.

                  TENDERED NOTES --- Demand Notes tendered (or Demand  tendered)
for  purchase  pursuant to the Optional or Mandatory  Tender  provisions  of the
Indenture.

                                       13
<PAGE>

                  TERMINATION  DATE  --- the  Stated  Expiration  Date,  or such
earlier date on which the Letter of Credit  terminates  in  accordance  with its
terms.

         In addition,  other  capitalized  terms in this Article 2A that are not
defined in this Agreement have the meanings set forth in the Indenture.

                  2A.2     ISSUANCE OF LETTER OF CREDIT.

                           (a)      Bank has  issued the Letter of Credit to the
Trustee as credit  support for the 1999 Notes,  in accordance  with the terms of
the 1999  Indenture,  and shall maintain the 1999 Letter of Credit in accordance
with its terms.

                           (b)      The  initial  term of Letter of Credit  will
expire, subject to earlier termination, as provided in the Letter of Credit.

                           (c)      Bank may determine in its sole discretion to
extend  the term of the  Letter of  Credit,  but no course of  dealing  or other
circumstance shall require Bank to extend the term of the Letter of Credit.

                  2A.3    REIMBURSEMENT OF AMOUNTS DRAWN UNDER LETTER OF CREDIT.

                           (a)      On each date that Bank  honors any A Drawing
or B Drawing under the Letter of Credit,  Borrower shall  immediately  reimburse
Bank for the amount of such draw.

                           (b)      Borrower shall reimburse Bank for the amount
of any C Drawing within 90 days after the date such C Drawing is honored (or, if
sooner,  on the  Termination  Date).  In  addition,  Borrower  shall pay to Bank
interest on the  unreimbursed  amount of each C Drawing at a variable  per annum
rate equal to the Base Rate per annum plus 2.75% from the date such C Drawing is
paid by Bank until the amount of such C Drawing is  reimbursed  in full to Bank.
Such  interest  shall be  payable  in  arrears  on the first  day of each  month
following  such C Drawing and on the date that such C Drawing is  reimbursed  in
full to Bank.

                           (c)      No interest shall be payable with respect to
a C Drawing  if Bank is  reimbursed  in full  after such C Drawing is honored by
2:00 p.m.  (Birmingham,  Alabama  time) on the same date that such C Drawing  is
paid by Bank.

                           (d)      All  amounts  received by Bank in respect of
principal,  premium or interest on Pledged Notes shall be credited first against
interest  payable on the  unreimbursed  amount of the C Drawing  with respect to
such Pledged Notes and the balance, if any, shall be credited against the amount
of such C Drawing.

                           (e)      Anything     herein    to    the    contrary
notwithstanding,  Borrower will not reimburse Bank for any A Drawing, B Drawing,
or C  Drawing  until  the  same has been  honored  in full by Bank,  and no such
reimbursement need be prepaid.

                                       14
<PAGE>

                  2A.4     LETTER OF CREDIT COMMISSIONS AND FEES.

                           (a)      As  consideration  for the  issuance  of the
Letter of  Credit,  Borrower  shall pay to Bank  commissions  at the rate of one
percent (1%) per annum on the daily average of the Credit Amount available under
the Letter of Credit for (1) the period beginning on the date of issuance of the
Letter of Credit and ending on the first  anniversary  of its  issuance  and (2)
each succeeding period thereafter.  Such commissions shall be payable in advance
on the  date  of  issuance  of the  Letter  of  Credit  and  thereafter  on each
anniversary of the issuance date during,  said period (or, if sooner, the Letter
of Credit Termination Date).

                           (b)      The  commission  payable  on each  due  date
specified in this  subsection  shall be  calculated on the  assumption  that the
Credit Amount available on such due date will be available for the entire period
for which such  commission is payable.  At the end of such period the commission
shall be recalculated based on the actual daily average of the Credit Amount for
such period and the difference, if any, shall be added to or subtracted from, as
the case may be, the  commission  payable for the next ensuing  period or, if no
commission  is  payable  for the  ensuing  period,  shall  be paid to the  party
entitled thereto within 10 days. If a Substitute Letter of Credit is obtained by
Borrower,  no refund of commissions already paid shall be allowed for the period
after the cancellation of the Letter of Credit unless Bank has notified Borrower
(after such commission was paid) that increased  costs will be payable  pursuant
to Section 2A.5.

                           (c)      On each  date  that the  Letter of Credit is
transferred in accordance with its terms, Borrower shall pay to Bank such amount
as shall at the  time of such  transfer  then be the  charge  which  the Bank is
customarily making for transfers of similar letters of credit.

                           (d)      Borrower  shall pay to Bank its  normal  fee
for each draw under a Letter of Credit,  on the date that  reimbursement for the
amount of such draw is made pursuant to Section 2A.3.

                  2A.5     INCREASED COSTS.

                           (a)      ADDITIONAL  PAYMENTS.  If any  change in any
law  or   regulation  or  in  the   interpretation   thereof  by  any  court  or
administrative  or  governmental   authority  charged  with  the  administration
thereof,  or in GAAP,  shall either (i) impose,  modify or deem  applicable  any
reserve, special deposit or similar requirement against letters of credit issued
by Bank or (ii)  impose  on Bank  any  other  condition  relating,  directly  or
indirectly,  to this  Agreement  or the Letter of Credit,  and the result of any
event  referred to in the preceding  clause (i) or (ii) shall be to increase the
cost to Bank of issuing or maintaining  the Letter of Credit,  then, upon demand
by Bank,  Borrower shall pay promptly to Bank, from time to time as specified by
Bank, such additional amounts as shall be sufficient to compensate Bank for such
increased  cost.  A  certificate  of  Bank  claiming   compensation  under  this
subsection and setting forth the  additional  amount or amounts to be paid to it
hereunder  shall be conclusive  absent  manifest  error. In determining any such
amount, Bank may use any reasonable averaging and attribution methods.

                                       15
<PAGE>

                           (b)      CAPITAL ADEQUACY. If, after the date of this
Agreement, Bank shall have determined that the adoption or implementation of any
applicable law, rule or regulation  regarding  capital  adequacy,  or any change
therein,  or any change in the  interpretation or administration  thereof by any
governmental  authority,  central  bank or  comparable  agency  charged with the
interpretation or administration thereof, or compliance by Bank with any request
or directive regarding capital adequacy (whether or not having the force of law)
of any such authority,  central bank or comparable agency, has or would have the
effect of reducing the rate of return on Bank's capital, on this credit facility
or otherwise, as a consequence of its obligations hereunder and under the Letter
of Credit to a level  below that which  Bank  could have  achieved  but for such
adoption,  change or compliance (taking into consideration  Bank's policies with
respect to capital  adequacy)  by an amount  determined  by Bank to be material,
then from time to time,  promptly upon demand by Bank,  Borrower  shall pay Bank
such additional amount or amounts as will compensate Bank for such reduction.  A
certificate  of Bank claiming  compensation  under this  subsection  and setting
forth the  additional  amount or  amounts  to be paid to it  hereunder  shall be
conclusive  absent manifest error. In determining any such amount,  Bank may use
any reasonable averaging and attribution methods.

                  2A.6     PLACE AND TIME OF PAYMENTS.

                           (a)      All  payments by Borrower to Bank  hereunder
shall  be made in  lawful  currency  of the  United  States  of  America  and in
immediately  available  funds to Bank at its address set forth herein or at such
other address within the continental United States as shall be specified by Bank
by notice to Borrower;  provided,  nothing  herein shall be construed to require
payment of any amount in advance of its due date.

                           (b)      All  amounts  payable  by  Borrower  to Bank
hereunder  for which a payment  date is expressly  set forth  herein  (including
payments due pursuant to Sections 2A.4 and 2A.5) shall be payable without notice
or written demand by Bank. All amounts payable by Borrower to Bank hereunder for
which no payment date is expressly  set forth herein shall be payable on written
demand by Bank to Borrower.

                           (c)      Bank may, at its option, send written notice
to Borrower of amounts  payable  pursuant  to  sections  2A.4 and 2A.5,  but the
failure to send such notice will not affect or excuse  Bank's  obligation to pay
the  amounts  required  by such  sections  on the  due  date  specified  in such
sections.

                           (d)      Payments which are due on a day which is not
a business  day shall be payable on the next  succeeding  Business  Day, and any
interest  payable  thereon  shall  be  payable  for  such  extended  time at the
specified rate.

                  2A.7 LATE  CHARGES  AND  INTEREST  ON  OVERDUE  AMOUNTS.  With
respect to all amounts payable to the Bank by Borrower  pursuant to this article
which  are not  paid on the due  date,  in the  case  of  amounts  payable  on a
specified  date, or which are not paid within ten days of written  notice to the
Borrower,  in the case of amounts  payable on demand,  Borrower agrees to pay to
Bank on demand  (i) a late  charge of five  percent  (5%) of any such  amount or
amounts  which  shall  not  have  been  paid  within  10 days of the due date as
specified  above and (ii)  interest on such amounts or

                                       16
<PAGE>

amounts at a variable per annum rate equal to the Base Rate plus 2.75%,  plus 2%
for each day from the specified  date of payment,  or the date of written demand
for payment, as the case may be, to the date such payment is made.

                  2A.8 COMPUTATION OF CHARGES. The interest and charges provided
for in this  Agreement  payable in  arrears  based upon  annual  rates  shall be
computed on an  Actual/360  Basis.  All interest  rates based upon the Base Rate
shall change when and as the Base Rate shall change, effective on the opening of
business on the date of any such change,  unless such change is announced  after
the close of regular banking hours, in which case such change shall be effective
on the following day.

                  2A.9  STATEMENTS  OF  ACCOUNT.  Upon  receipt  of the  written
request of Borrower, Bank shall account to Borrower annually with a statement of
charges and payments made pursuant to this Agreement.

                  2A.10    PLEDGED NOTES.

                           (a)      As additional  security for the  performance
of the Obligations,  Borrower  pledges,  assigns,  hypothecates and transfers to
Bank all its right,  title and interest in the Pledged Notes, and grants to Bank
a security interest in the Pledged Notes and all amounts payable thereon and the
proceeds thereof.

                           (b)      If Bank is reimbursed for the purchase price
of less than all Pledged  Notes with respect to which a C Drawing has been made,
the Pledged  Notes with respect to which Bank has been  reimbursed  shall,  upon
reinstatement of the Letter of Credit in the manner therein  described and if no
Event of Default exists, be released from the pledge and delivered to Borrower.

                           (c)      All payments of principal of and interest on
Pledged Notes shall be made directly to Bank.  If, while Bank or its  designated
agent or the Tender  Agent  holds  Pledged  Notes,  Borrower  shall  receive any
interest or principal  payment in respect of such Pledged Notes.  Borrower shall
accept  the same as agent  for Bank and hold the same in trust on behalf of Bank
and to deliver the same  forthwith to Bank. All sums of money so paid in respect
of  principal,  premium or interest on such Pledged  Notes which are received by
Borrower  and paid to Bank,  or which  are  received  directly  by Bank from the
Trustee,  shall be credited against the reimbursement  obligation of Borrower as
provided in Section 2A.2(d).

                           (d)      If an Event of  Default  exists,  Bank  may,
without  notice,  exercise all rights,  privileges or options  pertaining to any
Pledged  Notes as if it were the  absolute  owner  thereof,  upon such terms and
conditions  as it may  determine,  all  without  liability  except to account to
Borrower  for  property  actually  received by it. In addition to the rights and
remedies  granted to it in this  Agreement,  Bank or its designated  agent shall
have the  authority to exercise all rights and remedies of a secured party under
the Alabama Uniform Commercial Code. Borrower shall be liable for the deficiency
if the proceeds of any sale or other  disposition  of the Pledged  Notes and the
Collateral  are  insufficient  to pay all amounts to which the Bank is entitled.
The Bank has no duty to exercise any of such rights,  privileges or options, and
shall not be responsible for any failure to do so

                                       17
<PAGE>

or any delay in so doing.

                           (e)      Except as contemplated  herein,  without the
prior  written  consent  of Bank.  Borrower  shall not sell,  assign,  transfer,
exchange,  or  otherwise  dispose of, or grant any option  with  respect to, the
Pledged Notes,  nor will it create,  incur or permit to exist any pledge,  lien,
mortgage,  hypothecation,   security  interest,  charge,  option  or  any  other
encumbrance  with respect to any of the Pledged Notes, or any interest  therein,
or any proceeds thereof,  except for the lien and security interest provided for
by this Agreement.

                           (f)      Borrower  shall  do or  cause to be done all
such  other  reasonable  acts  and  things  as  may be  necessary  to  make  any
disposition or sale of any portion or all of the Pledged Notes permitted by this
Agreement valid and binding and in compliance with any and all applicable  laws,
regulations, orders, writs, injunctions, decrees or awards of any and all courts
or governmental  authorities  having  jurisdiction  over any such disposition or
sales, all at Borrower's expense.

                  2A.11  PARTICIPATIONS.  Borrower understands that Bank may, in
accordance  with this  section,  from time to time  enter  into a  participation
agreement or agreements with one or more persons (the "Participants"),  pursuant
to which the Participants shall be given  participations in the Letter of Credit
and that the  Participants  may from time to time similarly grant to one or more
other persons (also included in the term  "PARTICIPANTS")  subparticipations  in
the Letter of Credit.  Borrower  grants to each  Participant (in addition to any
other rights which such Participant may have) a continuing  security interest in
any money,  securities and other real or personal property of Borrower which are
in the  possession  of  such  Participant.  Borrower  further  agrees  that  any
Participant  may  exercise  any and all rights of banker's  lien or set-off with
respect to Borrower as fully as if such  Participant had made a loan directly to
Borrower in the amount of the  participation or  subparticipation  given to such
Participant  in the  Letter of Credit  under the  conditions  herein  permitting
exercise of the same.  For the purposes of this Section only,  Borrower shall be
deemed  to be  directly  obligated  to each  Participant  in the  amount  of its
participating  interest  in the amount of  principal  of, and  interest  on, the
Letter of Credit;  provided,  however,  that  nothing  contained in this section
shall affect Bank's right of set-off (under this Section or applicable law) with
respect to the entire amount of any of such credit  facilities,  notwithstanding
any such participation or subparticipation.  Bank may divulge to any Participant
all  information,  reports,  financial  statements,  certificates  and documents
obtained by it from  Borrower or any other  person  under any  provision of this
Agreement or otherwise.

                  2A.12    SPECIAL REMEDIES WITH RESPECT TO LETTER OF CREDIT.

                           (a)      If any Event of Default  shall have occurred
and be continuing, in addition to the remedies described in Article 10, Bank may
exercise any one or more of the following remedies:

                                    (1)      it   may,   pursuant   to   and  in
         accordance  with the applicable  section of an Indenture,  give written
         notice of such Event of Default to the  Trustee  and direct the Trustee
         to effect a Mandatory Tender of the Demand Notes in accordance with the
         terms

                                       18
<PAGE>

         thereof and the Indenture and to make a draw under the Letter of Credit
         to pay the  purchase  price of the  Demand  Notes due on the  Mandatory
         Tender Date therefor; or

                                    (2)      it may give written  notice of such
         Event of Default to the  Trustee  and direct the Trustee to declare the
         Demand Notes to be immediately due and payable under the section of the
         Indenture,  whereupon  an  event  of  default  shall  occur  under  the
         Indenture and the Trustee  shall  declare the Demand Notes  immediately
         due and  payable  under the section of the  Indenture  and shall make a
         draw  under the  Letter of Credit to pay the  principal  of the  Demand
         Notes and the interest accrued thereon to the date of such declaration;
         or

                                    (3)      it may,  upon  notice to  Borrower,
         declare the entire unpaid  amount of the  Obligations  immediately  due
         under  this  Agreement  to be,  and all such  amounts  shall  thereupon
         become, due and payable to Bank, without presentment,  demand, protest,
         or other  notice  of any  kind,  all of  which  are  expressly  waived,
         anything in this Agreement to the contrary notwithstanding; or

                                    (4)      it may exercise  its banker's  lien
        of right of set-off; or

                                    (5)      it  may   proceed  to  protect  its
         rights  by  suit  in  equity,   action  at  law  or  other  appropriate
         proceedings,  whether for the specific  performance  of any covenant or
         agreement of Borrower herein contained or in aid of the exercise of any
         power or  remedy  granted  to Bank  under  any of the  other  Financing
         Documents.

                           (b)      Bank may proceed  directly  against Borrower
hereunder  without resorting to any other remedies which it may have and without
proceeding against any other security held by Bank.


                  2A.13    SPECIAL  REMEDIES  REGARDING LETTER OF CREDIT UPON AN
                           EVENT OF DEFAULT.


                           (a)      If any Event of Default  shall have occurred
and be  continuing,  and the  maturity  of the Demand  Notes shall not have been
accelerated,  Bank may make demand upon  Borrower  to, and  forthwith  upon such
demand  Borrower  shall,  pay to Bank in  immediately  available  funds at Banks
office  designated  such  demand,  for deposit by Bank in a special  noninterest
bearing cash collateral account (the "CASH COLLATERAL ACCOUNT") to be maintained
at such  office of Bank as may be  designated  by Bank,  an amount  equal to the
maximum amount then  available to be drawn under the Letter of Credit  (assuming
compliance  with all conditions  for drawing  thereunder).  The Cash  Collateral
Account  shall be in the name of Borrower (as a cash  collateral  account),  but
under the sole  dominion  and  control of Bank and  subject to the terms of this
Agreement.

                           (b)      If  requested by Borrower and subject to the
right of Bank to  withdraw  funds from the Cash  Collateral  Account as provided
below,  Bank  shall  from  time to time  invest  funds  on  deposit  in the Cash
Collateral Account in investments satisfactory to Bank, reinvest proceeds of any
such  investments  which may  mature or be sold,  and invest  interest  or other
income  received from any such  investments,  in each case as Borrower may elect
and notify to Bank.

                                       19
<PAGE>

                           (c)      If at any  time  Bank  determines  that  any
funds held in the Cash  Collateral  Account are subject to any right or claim of
any person or entity other than Bank and the Trustee or that the total amount of
such funds is less than the maximum  amount at such time  available  to be drawn
under the Letter of Credit, Borrower will, forthwith upon demand by Bank, pay to
Bank,  as  additional  funds to be  deposited  and  held in the Cash  Collateral
Account,  an amount equal to the excess of (i) such maximum  amount at such time
available  to be drawn under the Letter of Credit over (ii) the total  amount of
funds, if any, then held in the Cash Collateral Account which Bank determines to
be free and clear of any such right and claim.

                           (d)      Borrower hereby pledges,  and grants to Bank
a security interest in, all funds held in the Cash Collateral Account (including
Collateral  Securities) from time to time and all proceeds thereof,  as security
for the payment of all  amounts due and to become due from the  Borrower to Bank
under this Agreement.

                           (e)      Bank  may,  at any time or from time to time
after  funds  are  deposited  in the Cash  Collateral  Account  or  invested  in
Collateral Securities,  after selling, if necessary,  any Collateral Securities,
apply  funds  then held in the Cash  Collateral  Account  to the  payment of any
amounts,  in such order as Bank may elect,  as shall have become or shall become
due and payable by the Borrower to Bank under this  Agreement.  Borrower  agrees
that,  to the  extent  notice  of sale of any  Collateral  Securities  shall  be
required by law, at least five days' notice to Borrower of the time and place of
any public  sale or the time after  which any  private  sale is to be made shall
constitute reasonable notification.  Bank may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice,  be made at the time and place to which it was
so adjourned.

                           (f)      Neither  Borrower nor any Person claiming on
behalf of or through  Borrower shall have any right to withdraw any of the funds
held in the Cash Collateral Account,  except as otherwise provided in subsection
(g) below and  except  that  after the  termination  of the  Letter of Credit in
accordance  with its terms and the payment of all amounts payable by Borrower to
Bank under this Agreement,  any funds  remaining in the Cash Collateral  Account
shall  be  returned  by Bank to  Borrower  or paid to  whomever  may be  legally
entitled thereto.

                           (g)      So   long   as  any   Notes   shall   remain
outstanding, Bank will release to Borrower or at its order (i) interest or other
income  received on  Collateral  Securities  and (ii) at the written  request of
Borrower,  funds held in the Cash Collateral  Account in an amount up to but not
exceeding  the  excess,  if any  (immediately  prior to the  release of any such
funds),  of (x) the total  amount of funds held in the Cash  Collateral  Account
over (y) the maximum amount available to be drawn under the Letter of Credit.

                           (h)      Borrower agrees that it will not (i) sell or
otherwise  dispose of any interest in the Cash  Collateral  Account or any funds
held therein,  or (ii) create or permit to exist any lien,  security interest or
other charge or encumbrance upon or with respect to the Cash Collateral  Account
or any  funds  held  therein,  except as  provided  in or  contemplated  by this
Agreement.

                                       20
<PAGE>

                           (i)      Bank shall exercise  reasonable  care in the
custody and  preservation of any funds held in the Cash  Collateral  Account and
shall be deemed to have exercised such care if such funds are accorded treatment
substantially  equivalent to that which Bank accords its own property,  it being
understood that Bank shall not have any  responsibility for taking any necessary
steps to preserve rights against any parties with respect to any such funds.

                  2A.14  SPECIAL  INDEMNITY  FOR  LETTER  OF  CREDIT.   Borrower
indemnifies  and  holds  Bank  harmless  from and  against  any and all  claims,
damages,  losses,  liabilities,  costs or expenses which Bank may incur or which
may be  claimed  against  Bank  by any  person  or  entity  by  reason  of or in
connection with the execution and delivery or transfer of, or payment or failure
to make lawful  payment under,  the Letter of Credit;  provided,  however,  that
Borrower  shall not be required to indemnify  Bank  pursuant to this section for
any claims, damages, losses, liabilities, costs or expenses to the extent caused
by (1) Bank's  willful  misconduct or gross  negligence in  determining  whether
documents  presented  under the  Letter of Credit  comply  with the terms of the
Letter of Credit or (2) Bank's willful  failure to make lawful payment under the
Letter of Credit  after the  presentation  to it by the  Trustee or a  successor
trustee under the Indenture of a draft and certificate  strictly  complying with
the terms and conditions of the Letter of Credit. Nothing in this section limits
the Borrower's obligations contained in this Agreement. Without prejudice to the
survival of any other  obligation of Borrower  hereunder,  the  indemnities  and
obligations  of Borrower  contained in this section shall survive the payment in
full of amounts  payable  pursuant  herein and the  termination of the Letter of
Credit.

                  2A.15    OBLIGATIONS OF BORROWER ABSOLUTE.

                           (a)      The obligations, covenants and agreements of
Borrower under this Agreement shall be absolute,  unconditional and irrevocable,
and  Borrower  separately  covenants  and agrees to timely pay in full in strict
accordance  herewith all amounts which may become due and owing hereunder and to
timely observe and perform all other agreements and covenants to be observed and
performed by Borrower hereunder, such payment,  observance and performance to be
made hereunder under all circumstances whatsoever, including, the following:

                                    (1)      any    lack    of    validity    or
                  enforceability of any Financing Documents;

                                    (2)      any  amendment  or waiver of or any
                  consent  to  departure  from  all  or  any  of  the  Financing
                  Documents;

                                    (3)      the   existence   of   any   claim,
                  set-off,  defense or other rights  which  Borrower may have at
                  any time against any Person,  whether in connection  with this
                  Agreement,  the Letter of Credit,  the Demand  Notes or any of
                  the other Financing Documents, or any unrelated transaction;

                                    (4)      any statement or any other document
                  presented  Lender a Letter  of  Credit  proves  to be  forged,
                  fraudulent,  invalid  or  insufficient  in any  respect or any
                  statement  therein  proves to be untrue or  inaccurate  in any
                  respect whatsoever;

                                       21
<PAGE>

                                    (5)      payment by Bank under the Letter of
                  Credit against  presentation  of a draft or certificate  which
                  does not  comply  with  the  terms of the  Letter  of  Credit,
                  provided  such  payment  shall  not  have  constituted   gross
                  negligence or willful misconduct by Bank; and

                                    (6)      any other circumstance or happening
                  whatsoever,  whether or not  similar to any of the  foregoing,
                  provided  the same does not  constitute  gross  negligence  or
                  willful misconduct by Bank.

                           (b)      No act of commission or omission of any kind
at any time on the part of Bank in respect of any matter whatsoever shall in any
way affect or impair any  right,  power or benefit of Bank under this  Agreement
and, to the extent  permitted by applicable  law, no setoff,  claim,  reduction,
diminution  of any  obligation,  or any  defense  of any  kind or  nature  which
Borrower may have  against  Bank shall be available  against Bank in any suit or
action  brought  by Bank to  enforce  any  right,  power or  benefit  under this
Agreement.

                  2A.16  LIABILITY  OF THE  BANK.  Neither  Bank  nor any of its
officers or directors shall be liable or responsible  for: (i) the use which may
be made of the Letter of Credit or for any acts or  omissions of the Trustee and
any  transferee  in connection  therewith;  (ii) the  validity,  sufficiency  or
genuineness  of  documents,  or of  any  endorsements)  thereon,  even  if  such
documents  should  in  fact  prove  to  be  in  any  or  all  respects  invalid,
insufficient, fraudulent or forged; (iii) payment by Bank against presentment of
documents  which do not strictly  comply with the terms of the Letter of Credit,
including but not limited to,  failure of any documents to bear any reference or
adequate  reference  to the  Letter of Credit;  or (iv) any other  circumstances
whatsoever  in making or  failing  to make  payment  under the Letter of Credit,
except only that Borrower  shall have a claim  against  Bank,  and Bank shall be
liable to the Borrower, to the extent, but only to the extent, of any direct, as
opposed to  consequential,  damages  suffered by the Borrower which the Borrower
proves were  caused by (A) Bank's  willful  misconduct  or gross  negligence  in
determining  whether documents  presented under the Letter of Credit comply with
the terms of the Letter of Credit,  or (B) Bank's  willful or grossly  negligent
failure to pay under the Letter of Credit  after the  presentation  to it by the
Trustee  of a draft  and  certificate  strictly  complying  with the  terms  and
conditions of the Letter of Credit.  In furtherance and not in limitation of the
foregoing,  Bank may accept  documents that appear on their face to be in order,
without  responsibility for further  investigation,  regardless of any notice or
information to the contrary.

                  3.       CONDITIONS OF LENDING.

                  3.1      CONDITIONS  PRECEDENT TO INITIAL ADVANCE. In addition
                           to  any   other   requirements   set  forth  in  this
                           Agreement, Bank shall not be obligated to make any of
                           the  Loans  or any  advance  under  any of the  Loans
                           (including,  without limitation,  the Winddown Loan),
                           or issue or renew the Letter of Credit, unless at the
                           time thereof the following conditions shall have been
                           met:

                           (a)      CORPORATE PROCEEDINGS.  All proper corporate
proceedings  shall have been taken by Borrower to authorize  this  Agreement and
the transactions contemplated hereby.

                                       22
<PAGE>

                           (b)      DOCUMENTATION.     All    instruments    and
proceedings in connection with the  transactions  contemplated by this Agreement
shall  be  satisfactory  in form and  substance  to Bank,  and Bank  shall  have
received on the date of this Agreement copies of all documents including records
of corporate  proceedings,  which it may have requested in connection therewith,
including  certified copies of resolutions  adopted by the Board of Directors of
Borrower, certificates of good standing, and certified copies of the Articles of
Incorporation and Bylaws, and all amendments thereto, of Borrower.

                           (c)      LOAN  DOCUMENTS.  Bank shall  have  received
executed copies of all instruments  evidencing security for the Loans and copies
of the insurance  policies and related  certificates of insurance referred to in
Sections 6.1 ("Insurance") and 9.5 ("Insurance") hereof.

                           (d)      NO DEFAULT.  No event shall have occurred or
be continuing which constitutes an Event of Default or which would constitute an
Event of Default with the giving of notice or the lapse of time or both.

                           (e)      PERFECTION   OF   LIENS.   UCC-I   financing
statements,  collateral assignments,  trademark and patent assignments,  and, if
applicable,  certificates of title covering the Collateral  executed by Borrower
shall have been duly recorded or filed in the manner and places  required by law
to establish, preserve, protect, and perfect the interests and rights created or
intended to be created by this Agreement and any other security agreement.

                           (f)      FEES AND EXPENSES.  Bank shall have received
all amounts  required to be paid by Borrower or another  Person  pursuant to the
Restructuring Agreement delivered in connection with the Restructured Loan.

                           (g)      SUBORDINATION  AGREEMENT.  Bank  shall  have
received a subordination agreement from each Subordinated Lender.

                           (h)      CERTIFICATES  OF TITLE.  Borrower shall have
delivered to the Bank all  Certificates  of Title for any vehicles  constituting
part of the Equipment as shown on EXHIBIT B.

                           (i)      ADDITIONAL   DOCUMENTS.   Bank   shall  have
received such additional legal opinions, certificates, proceedings, instruments,
and other  documents as Bank or its counsel may  reasonably  request to evidence
(i) compliance by Borrower with legal requirements, (ii) the truth and accuracy,
as of the date of this Agreement,  of the  representations of Borrower contained
herein,  and (iii) the due performance or satisfaction by Borrower,  at or prior
to  the  date  hereof,  of all  agreements  required  to be  performed  and  all
conditions required to be satisfied by Borrower pursuant hereto.

                           (j)      DELIVERIES  UNDER  RESTRUCTURING  AGREEMENT.
Bank shall have received all instruments and other documents due to be delivered
to Bank under the Restructuring Agreement.

                                       23
<PAGE>

                  3.2      CONDITIONS  PRECEDENT TO EACH ADVANCE.  The following
conditions,  in addition to any other  requirements set forth in this Agreement,
including  those of Section 2.2 hereof,  must have been met or performed  before
each advance under the Ad Art Winddown Loan:

                           (a)      SUPPLEMENTARY  CORPORATE  PROCEEDINGS.   Any
supplementary  corporate proceedings necessary to authorize the transaction have
been taken by Borrower.

                           (b)      ACCURACY     OF     REPRESENTATIONS.     All
representations  and warranties  made by Borrower in this Agreement or otherwise
in  writing  in  connection  with this  Agreement  are true and  correct  in all
material  respects as if made on and as of the  proposed  date of the advance of
Loan  proceeds,  except for any changes in the nature of Borrower's  business or
operations that would render the information  contained in any exhibit  attached
hereto either  inaccurate or  incomplete,  so long as Bank has consented to such
changes or such changes are expressly permitted by this Agreement.

                           (c)      NO DEFAULT. No Event of Default has occurred
and  is  continuing,  and to the  extent  requested  by  Bank,  Borrower  has so
certified in writing.

                           (d)      FURTHER  ASSURANCES.   Borrower  shall  have
delivered  such  further   documentation  or  assurances  that  Bank  reasonably
requires.

         4.       SECURITY FOR OBLIGATIONS AND SPECIAL COLLECTION ACCOUNTS.

                  4.1      SECURITY.  The Loans,  each Note,  the  reimbursement
obligations  under this Agreement and all other  Obligations shall be secured by
each of the following:

                           (a)      A first-priority security interest in the Ad
                                    Art Collateral;

                           (b)      A first  priority  security  interest in the
                                    Hamilton Stock;

                           (c)      A  second-priority  security interest in the
                                    Hamilton Collateral  (excluding the Hamilton
                                    Stock);

                           (d)      A  first  priority   mortgage  lien  on  the
                                    California Real Estate;

         Borrower  agrees to execute and  deliver,  or cause the  execution  and
delivery of, such security agreements,  deeds of trust, mortgages,  assignments,
guaranties,  consents, subordination agreements, and financing statements as may
be required by Bank to evidence such security, all in form satisfactory to Bank,
as well as such consents and agreements of the landlords of each of the premises
leased by Borrower on which the Collateral is located,  all in form satisfactory
to Bank.

                  4.2 SPECIAL COLLECTION  ACCOUNT.  Borrower  represents that Ad
Art has opened with Bank a special  collection  account  bearing  account number
78385-199 (Ad Art Electronic Sign Corp. - Subsidiary Special Collection Account)
(the "Special Collection  Account"),  in which all funds received by Ad Art from
sales of Inventory,  all refunds of taxes,  all  remittances by Ad Art's Account

                                       24
<PAGE>

Debtors, and all other proceeds of Collateral,  shall be deposited no later than
the next regular  banking day following  receipt.  All returned  checks shall be
charged to the  Special  Collection  Account.  Ad Art shall pay all fees for the
Special  Collection  Account and expenses or  adjustments  for collected  funds.
Under no  circumstances  will Bank be charged for them.  Ad Art shall pay normal
and  customary  fees  to Bank  for its  maintenance  of the  Special  Collection
Account. Bank shall have the exclusive right to withdraw or debit funds from the
Special Collection Account, which may be accomplished by any directive signed by
any two authorized  employees of Bank. At least weekly and more often if Bank so
elects,  the  collected  balances in the  Special  Collection  Account  shall be
withdrawn  by Bank and  applied,  first,  to the Loans and second,  to any other
Obligations  of  the  Borrower  to  the  Bank,  subject  to  the  terms  of  the
Restructuring  Agreement.  At  the  request  of  Bank,  Borrower  shall  execute
documents  provided by Bank to allow  officers  of Bank to sign checks  drawn on
accounts of Borrower  maintained in other banks for the purpose of  transferring
funds to an account or accounts of Borrower maintained with Bank or another bank
owned by SouthTrust  Corporation,  including,  without  limitation,  the Special
Collection Account.

         5.       REPRESENTATIONS,  WARRANTIES, AND GENERAL COVENANTS.  Borrower
                  represents,  warrants,  and covenants to and with Bank,  which
                  representations, warranties, and covenants shall survive until
                  the Obligations are indefeasibly satisfied in full, that:

                  5.1 ORGANIZATION AND QUALIFICATION.  Borrower is a corporation
duly  organized,  validly  existing and in good  standing  under the laws of its
respective state of incorporation; has the corporate power to own its properties
and to carry on its business as now being conducted; and is duly qualified to do
business and is in good standing in every jurisdiction in which the character of
the properties owned by it or in which the transaction of its business makes its
qualification necessary.

                  5.2 CORPORATE  POWER AND  AUTHORIZATION;  COMPLIANCE WITH LAW.
Borrower has full power and  authority to enter into this  Agreement,  to borrow
hereunder, to execute and deliver the Notes and the other Loan Documents, and to
incur the obligations  provided for herein, all of which have been authorized by
all proper and necessary corporate action. Borrower further (x) is in compliance
with all Requirements of Law applicable to it and (y) possesses all governmental
franchises,  licenses, and permits that are necessary to own or lease its assets
and to carry on its business as now conducted.

                  5.3 ENFORCEABILITY; NO LEGAL BAR. This Agreement has been, and
each  other Loan  Document  to which it is a party will be,  duly  executed  and
delivered to Bank on behalf of Borrower.  This  Agreement  and each of the other
Loan Documents  constitute,  and each Note when executed and delivered for value
received will  constitute,  a valid and legally  binding  obligation of Borrower
enforceable in accordance with their respective terms. The execution,  delivery,
and  performance  by Borrower of this  Agreement and the other Loan Documents to
which it is a party,  Borrower's borrowings pursuant to this Agreement,  and use
of the loan  proceeds,  will not violate any  Requirement  of Law  applicable to
Borrower or constitute a breach or violation of, a default under, or require any
consent  under,  any of its  Contractual  Obligations,  and will not result in a
breach or violation of, or require the creation or imposition of any Lien on any
of its properties or revenues  pursuant to any Requirement of Law or Contractual
Obligation.

                                       25
<PAGE>

                  5.4 PENDING ACTIONS. No action or investigation is pending or,
so far as Borrower's  officers and directors know,  threatened  before or by any
court or  administrative  agency  against  Borrower,  businesses,  properties or
revenues,  other than the  Mitchell  Application  and the matters  described  on
EXHIBIT  C,  (a)  with  respect  to  any  of the  Loan  Documents  or any of the
transactions  contemplated  by them,  or (b) which might  result in any Material
Adverse Effect on Borrower.

                  5.5  TITLE TO  PROPERTIES.  Borrower  has good and  marketable
title to all of its assets, subject to no Lien, except inchoate Liens arising by
operation of law for obligations  which are not yet due and except for the Liens
and security interests described on EXHIBIT D to this Agreement. Borrower enjoys
peaceable  and  undisturbed  possession  under all leases  under  which they are
operating,  and none of such leases contains any provisions which may materially
and  adversely  affect or impair the  operations  of  Borrower,  and all of such
leases are valid and subsisting and in full force and effect.

                  5.6  BENEFIT  PLANS.  Except as set forth on EXHIBIT E to this
Agreement, Borrower has not established and is not a party to any Plan or to any
stock  option or deferred  compensation  plan or contract for the benefit of its
employees or officers,  any pension,  profit sharing or retirement  plan,  stock
redemption  agreement,  or any other agreement or arrangement  with any officer,
director,  or  stockholder,  members  of their  families,  or  trusts  for their
benefit.  Borrower is in  compliance  with all  applicable  provisions of ERISA.
Borrower  has not  received  any  notice  to the  effect  that it is not in full
compliance with any of the requirements of ERISA and the regulations promulgated
thereunder.  No fact or situation that could result in a material adverse change
in the  financial  condition  of  Borrower,  including,  but not limited to, any
Reportable Event or Prohibited Transaction,  exists in connection with any Plan.
Borrower has no withdrawal liability in connection with a Multiemployer Plan.

                  5.7 TAXES.  Borrower has filed all federal,  state,  and local
tax  returns  which are  required  to be filed and have paid,  or made  adequate
provision for the payment of, all taxes which have or may become due pursuant to
said  returns  or to  assessments  received  by  them.  Borrower  has  paid  all
withholding,  FICA  and  other  payments  required  by  federal,  state or local
governments with respect to any wages paid to employees.

                  5.8 COLLATERAL.  The security interests granted to Bank herein
and  pursuant  to  any  other  security  agreement  (a)  constitute  and,  as to
subsequently acquired property include in the Collateral covered by the security
agreement,  will constitute,  a security interest under the Code entitled to all
of the rights,  benefits and priorities provided by the Code and (b) are, and as
to such subsequently acquired Collateral will be, fully perfected, superior, and
prior to the rights of all third  persons,  now existing or  hereafter  arising,
subject only to Liens permitted  pursuant to Section 7.2 of this Agreement.  All
of the  Collateral is intended for use solely in Borrower's  business.  Borrower
shall defend the Collateral  against all claims and demands of all other parties
who at any time claim any interest in the Collateral.

                  5.9 LABOR LAW MATTERS.  No goods or services have been or will
be produced by Borrower in violation of any applicable labor laws or regulations
or any collective bargaining

                                       26
<PAGE>

agreement  or other  labor  agreements  or in  violation  of any  minimum  wage,
wage-and-hour, or other similar laws or regulations.

                  5.10 PLACE OF  BUSINESS.  Ad Art's chief  executive  office is
located at 3133 North Ad Art Road,  Stockton,  CA 95215,  and it has not changed
the location of its chief executive  office from a location in a different state
within the last five (5) years.  The  Inventory  is and shall be located only at
the locations  listed on EXHIBIT F to this  Agreement,  or on locations of which
Bank is notified  pursuant to Section  6.14,  except for  inventory  on customer
locations  being supplied under  contracts with an aggregate  value of less than
$50,000.  Except as indicated on said exhibit, the real estate constituting each
said  location is owned by  Borrower.  With  respect to  locations  not owned by
Borrower, said exhibit sets forth the name and address of each landlord,  vendor
or customer,  the location of the property,  and the remaining term of the lease
or  purchase  agreement.  Borrower  has  separately  furnished  to Bank true and
correct  copies of the lease  agreements  or purchase  agreements  for each said
parcel.

                  5.11  FULL  DISCLOSURE.  All  information  furnished  to  Bank
concerning Borrower, its financial condition,  the Collateral,  or otherwise for
the purpose of obtaining credit or an extension of credit, is, or will be at the
time the same is  furnished,  accurate and correct in all material  respects and
complete  insofar  as  completeness  may be  necessary  to give  Bank a true and
accurate  knowledge of the subject matter.  The books of account,  minute books,
and stock  record  books of  Borrower  are  complete  and  correct and have been
maintained in accordance  with good business  practices,  and there have been no
transactions  adversely affecting the business of Borrower that should have been
set forth therein and have not been so set forth.

                  5.12  BORROWER'S  NAME.  Borrower  has not changed its name or
been known by any other name within the last five (5) years, nor has it been the
surviving  corporation  in a merger  effected  within  the last five (5)  years,
except for a merger transaction involving Ad Art.

                  5.13 EXISTING DEBT. Except for Ad Art, Borrower is not subject
to any federal,  state or local tax liens,  Borrower has not received any notice
of deficiency or other official  notice to pay any taxes.  Borrower has paid all
sales and excise taxes payable by it.

                  5.14  INTELLECTUAL  PROPERTY.  Borrower owns or is licensed to
use, all patents, trademarks, trade names, copyrights, technology, know-how, and
processes  necessary  for the conduct of their  business as currently  conducted
(the  "Intellectual  Property")  all of which is  described in EXHIBIT G to this
Agreement.  Any material licenses of the Intellectual  Property are set forth in
EXHIBIT G to this  Agreement.  No claim has been  asserted and is pending by any
Person with respect to the use of any such Intellectual Property, or challenging
or questioning the validity or effectiveness of any such  Intellectual  Property
and Borrower does not know of any valid basis for any such claim. The use of the
Intellectual Property by Borrower does not infringe on the rights of any Person.

                  5.15 SUBSIDIARIES. Hamilton has no subsidiaries. Ad Art has no
subsidiaries other than (1) ESC of Nevada, Inc., a Nevada corporation;  (2) DTEK
Signs, ULC; (3) DTEK Canada, Inc.; and (4) Hamilton.

                                       27
<PAGE>

                  5.16 ENVIRONMENTAL MATTERS. Borrower is in compliance with all
Environmental  Regulations and with all other federal, state, and local laws and
regulations  relating to the environment and pollution,  including such laws and
regulations   regulating   hazardous,   radioactive   and  toxic  materials  and
underground petroleum products storage tanks. No assessment,  notice of (primary
or  secondary)  liability or notice of financial  responsibility,  or the amount
thereof,  or to impose civil penalties has been received by Borrower,  and there
are no facts, conditions,  or circumstances known to Borrower which could result
in  any   investigation   or  inquiry  if  all  such  facts,   conditions,   and
circumstances,  if any,  were fully  disclosed  to the  applicable  governmental
authority.  Borrower  has paid any  environmental  excise taxes due and payable,
including without limitation,  those imposed pursuant to Sections 4611, 4661, or
4681 of the  Internal  Revenue  Code of  1986,  as  amended  from  time to time.
Borrower  represents  and  warrants  that  Borrower  has not obtained and is not
required  to  obtain  any  permits,   licenses,  or  similar  authorizations  to
construct,  occupy,  operate, or use any buildings,  improvements,  fixtures, or
equipment  in  connection  with its  business  by  reason  of any  Environmental
Regulations.  Borrower  represents  and warrants that no oil, toxic or hazardous
substances,  or solid  wastes  have been  disposed of or released by Borrower in
connection with the operation of its business and that Borrower will not dispose
of or release oil, toxic or hazardous substances, or solid wastes at any time in
its operation of its business  (the terms  "hazardous  substance"  and "release"
shall have the meanings specified in the Comprehensive  Environmental  Response,
Compensation  and Liability Act of 1980,  as amended  ("CERCLA"),  and the terms
"solid waste" and "disposal,"  "dispose," or "disposed"  shall have the meanings
specified in the  Resource  Conservation  and  Recovery Act of 1976,  as amended
("RCRA"),  except that if such acts are amended to broaden the meanings thereof,
the broader meaning shall apply herein).

                  5.17 OWNERSHIP. All issued and outstanding capital stock of Ad
Art is owned by Parent, and all issued and outstanding capital stock of Hamilton
is owned by DTEK Signs,  U.L.C.,  a Nova  Scotia  unlimited  liability  company.
Except as set forth in the annual fiscal year-end audited  financial  statements
of Parent as of June 30, 2000, there are not outstanding any warrants,  options,
or rights to  purchase  any shares of capital  stock of  Borrower,  nor does any
Person have a Lien upon any of the capital stock of the Borrower, except for the
Lien held by Subordinate Lenders.

                  5.18  INVENTORY.  All  Inventory is marketable in the ordinary
course of business.  All Inventory has been produced, and during the term hereof
will be produced,  in compliance with the requirements of the Federal Fair Labor
Standards Act. No Inventory is now, nor shall any Inventory at any time or times
hereafter be, stored with a bailee, warehouseman or similar party without Bank's
prior  written   consent  and,  if  Bank  gives  such  consent,   Borrower  will
concurrently therewith cause any such bailee, warehouseman,  or similar party to
issue and deliver to Bank, in form and substance  acceptable to Bank,  warehouse
receipts  therefor in Bank's  name.  No Inventory is or will be consigned to any
Person  without  Bank's prior  written  consent,  and, if such consent is given,
Borrower  shall,  prior to the delivery of any Inventory,  on  consignment,  (i)
provide Bank with all consignment  agreements to be used in connection with such
consignment,  all of which shall be acceptable to Bank,  (ii) prepare,  execute,
and  file  appropriate  financing  statements  with  respect  to  any  consigned
Inventory,  showing Bank as assignee, (iii) conduct a search of all filings made
against the consignee in all  jurisdictions in which any consigned  Inventory is
to be located and  deliver to Bank  copies of the results of all such  searches,
and (iv) notify, in writing, all the creditors of the consignee which are or may
be holders of Liens in the Inventory to be consigned  that  Borrower  expects

                                       28
<PAGE>

to deliver certain  Inventory to the consignee,  all of which Inventory shall be
described in such notice by item or type.

                  5.19  REPRESENTATIONS  TRUE. No  representation or warranty by
Borrower  contained herein or in any certificate or other document  furnished by
Borrower pursuant hereto contains any untrue statement of material fact or omits
to state a material fact necessary to make such  representation  or warranty not
misleading in light of the circumstances under which it was made.

         6.       AFFIRMATIVE  COVENANTS.  Borrower  agrees and  covenants  that
until the Obligations have been  indefeasibly paid in full and until Bank has no
further obligation to make advances under the Loans, Borrower shall:

                  6.1 INSURANCE.  Maintain  insurance  with insurance  companies
satisfactory to Bank on such of its properties, in such amounts and against such
risks as is customarily  maintained in similar businesses  operating in the same
vicinity,  and shall file with Bank upon request,  from time to time, a detailed
list of the  insurance  then in  effect,  stating  the  names  of the  insurance
companies, the amounts and rates of the insurance,  dates of expiration thereof,
and the properties and risks covered  thereby,  and, within 10 days after notice
in  writing  from Bank,  shall  obtain  such  additional  insurance  as Bank may
reasonably  request.  All such  policies  shall name Bank as a named insured and
provide  that any losses  payable  thereunder  shall  (pursuant  to loss payable
clauses,  in form and content acceptable to Bank, to be attached to each policy)
be payable to Bank, and provide that the insurance  provided thereby,  as to the
interest of Bank,  shall not be  invalidated  by any act or neglect of Borrower,
nor by the commencing of any  proceedings by or against  Borrower in bankruptcy,
insolvency,  receivership , or any other proceedings for the relief of a debtor,
nor by any  foreclosure,  repossession,  or other  proceedings  relating  to the
property  insured,  nor by, any  occupation  of such property or the use of such
property for purposes  more  hazardous  than  permitted in the policy.  Borrower
hereby assigns to Bank all right to receive proceeds, directs any insurer to pay
all proceeds directly to Bank, and authorizes Bank to endorse any check or draft
for such  proceeds and apply the same toward  satisfaction  of the  Obligations.
Borrower  shall furnish to Bank  insurance  certificates,  in form and substance
satisfactory to Bank, evidencing compliance by it with the terms of this Section
and,  upon the request of Bank at any time,  Borrower  shall  furnish  Bank with
photostatic  copies  of the  policies  required  by the  terms of this  Section.
Borrower  will cause each insurer under each of the policies to agree (either by
endorsement  upon such  policy or by letter  addressed  to Bank) to give Bank at
least 30 days' prior  written  notice of the  cancellation  of such  policies in
whole or in part or the lapse of any coverage  thereunder.  Borrower agrees that
it will not take any action or fail to take any action  which action or inaction
would result in the  invalidation of any insurance  policy  required  hereunder.
Borrower shall furnish to Bank such evidence of insurance as Bank may require.

                  6.2 CORPORATE EXISTENCE; QUALIFICATION. Maintain its corporate
existence and, in each jurisdiction in which the character of the property owned
by it or in which  the  transaction  of its  business  makes  its  qualification
necessary, maintain good standing.

                  6.3 TAXES.  During its fiscal  year,  accrue all  current  tax
liabilities of all kinds, all required withholding of income taxes of employees,
all required old age and unemployment

                                       29
<PAGE>

contributions, all required payments to employee benefit plans, and pay the same
when they become due.

                  6.4 COMPLIANCE WITH LAWS. Comply with all Requirements of Law,
including Environmental  Regulations,  and pay all taxes, assessments,  charges,
claims for labor, supplies,  rent, and other obligations which, if unpaid, might
give rise to a Lien against property of Borrower,  except claims being contested
in good faith by appropriate  proceedings  (provided  Borrower promptly notifies
Bank in writing of such contest),  and against which reserves deemed adequate by
Bank have been set up.  Specifically,  Borrower shall pay when due all taxes and
assessments  upon  the  Collateral,  this  Agreement,  the  Notes,  or any  Loan
Document,  including,  without limitation,  any stamp taxes or intangibles taxes
imposed by virtue of the transactions outlined herein.

                  6.5  INTERIM  FINANCIAL  STATEMENTS.  Within 45 days after the
close of each calendar month, Borrower shall furnish Bank with unaudited monthly
and  year-to-date   financial  statements  of  Parent  and  the  Borrower  on  a
consolidated and consolidating basis, consisting of balance sheets and operating
statements and a listing of all  contingent  liabilities of the Borrower for the
periods  involved and such other  statements  as Bank may request,  consistently
prepared with the monthly financial  statement(s)  previously furnished to Bank,
taken from the books and records of the  Borrower,  and  certified as correct by
the Chief Financial Officer of the Borrower.

                  6.6 CERTIFICATES; OTHER INFORMATION. Borrower shall furnish to
Bank:

                           (a)      concurrently   with  the   delivery  of  the
financial  statements  referred to in Section 6.5 hereof, a certificate from the
President and Chief Financial  Officer of Parent (i) stating that after diligent
investigation, they have determined that Borrower during the period has observed
or  performed  all of its  covenants  in this  Agreement  and in the other  Loan
Documents,  and (ii)  stating  that the  officers  do not know of any default or
Event of Default by Borrower under this  Agreement or the other Loan  Documents;
and

                           (b)      all other information  regarding the affairs
of  Borrower  and its  Subsidiaries  that  Bank  from  time  to time  reasonably
requests.

                  6.7  ORDERLY  LIQUIDATION  REPORTS.  Furnish to Bank weekly on
each Monday a detailed  report  regarding the Orderly  Liquidation of Ad Art, in
form substantially  similar to the Orderly  Liquidation Budget, and containing a
detailed  accounts  receivable  aging  report as of the last day of the previous
week, a detailed accounts payable aging report,  and an inventory report, all in
form and  substance,  and containing  such detail and  information as Bank shall
request.

                  6.8 SEC  FILINGS.  (i) As soon as  available  and in any event
within ninety-five (95) days following the end of each of Parent's fiscal years,
a copy of its Annual  Report on Form 10-K as filed with the SEC; (ii) as soon as
available  and in any event within fifty (50) days  following the end of each of
Parent's  first  three  fiscal  quarters of each year,  a copy of its  Quarterly
Report on Form 10-Q; and (iii) promptly on becoming available,  any other report
or statement that Parent files with the SEC or mails to its shareholders.

                                       30
<PAGE>

                  6.9   VISITS   AND   INSPECTIONS.    (a)   Give   agents   and
representatives  of Bank full and  unrestricted  access from time to time during
normal  business hours to its business  premises,  offices,  properties,  books,
records, and information;  (b) permit agents and representatives of Bank to make
such audit and examination  thereof,  and conduct such other  investigation,  as
they  consider  appropriate  to determine  and verify its  business  properties,
operation,  or condition (financial or other) and to consummate the transactions
contemplated  by this  Agreement;  and (c)  furnish  to Bank and its  agents and
representatives  such  additional  information  with respect to its business and
affairs as they reasonably request from to time. Borrower shall bear the cost of
such audits, reports, and inspections.

         Borrower shall keep true books,  records, and accounts that completely,
accurately,  and fairly  reflect all dealings and  transactions  relating to its
assets,  business,  and  activities  and shall record all  transactions  in such
manner as is necessary to permit  preparation  of its  financial  statements  in
accordance with GAAP.

                  6.10 PAYMENTS ON NOTES.  Duly and punctually pay the principal
and interest on the Notes, in accordance with the terms of this Agreement and of
the Notes.

                  6.11 CONDUCT OF BUSINESS. Subject to the provisions of Section
6.21 below, do all things  necessary to preserve,  renew, and keep in full force
and effect its rights, patents, permits,  licenses,  franchises, and trade names
necessary to continue its business.  Borrower shall comply with all  Contractual
Obligations applicable to it and its business and properties.

                  6.12  MAINTENANCE OF  PROPERTIES.  Keep its properties in good
repair, working order and condition, reasonable wear and tear excepted, and from
time to time  make  all  needed  and  proper  repairs,  renewals,  replacements,
additions, and improvements thereto and comply with the provisions of all leases
to which it is a party or under which it occupies  property so as to prevent any
loss or forfeiture thereof or thereunder.

                  6.13  LOCATION OF  COLLATERAL.  Notify Bank on a monthly basis
within  thirty  (30)  days of a change  in a  location  at which  Collateral  is
maintained,  except for Inventory  that is (i) shipped to customers and vendors,
(ii) shipped between  locations listed on EXHIBIT F or (iii) Inventory stored at
customers'  premises for those  contracts  involving an aggregate  sale price of
less than $50,000.

                  6.14 ADDITIONAL DOCUMENTS. Join Bank in executing any security
agreements, assignments, consents, financing statements or other instruments, in
form  satisfactory  to Bank, as Bank may from time to time request in connection
with the Collateral and the other security for the Loans.

                  6.15 NOTICE TO BANK.  Promptly notify Bank of: (a) any default
or  Event  of  Default,  (b) the  acceleration  of the  maturity  of any Debt or
Contractual Obligation; (c) a default in the performance of, or compliance with,
any Requirement of Law, Environmental  Regulation,  or Contractual Obligation of
Borrower; (d) any litigation, dispute, or proceeding that is pending or known by
Borrower's  officers to be threatened  against Borrower and that might involve a
claim

                                       31
<PAGE>

for damages or a request for injunctive,  enforcement,  or other relief that, if
granted,  might  reasonably  be  expected to have a Material  Adverse  Effect on
Borrower;  (e) a change in either the name or the principal place of business of
Borrower or the office  where its books and records are kept;  (f) any change in
its accounting methods,  policies, or practices for financial reporting purposes
or any material change in its accounting methods, policies, or practices for tax
reporting  purposes;  and (g) a change that has a Material Adverse Effect on the
business,  operations,  assets,  property,  or condition (financial or other) of
Borrower.  Borrower  shall  provide with each notice  pursuant to this section a
statement  of an officer of Borrower  setting  forth  details of the  occurrence
referred to in the notice and stating what action Borrower proposes to take with
respect to it.  Borrower  shall also  promptly  notify Bank of any  agreement to
acquire  another  company,  including  in the  notice a copy of the  acquisition
agreement and financial information regarding the acquired company.

                  6.16   SUBORDINATION  OF  DEBT.   Provide  Bank  with  a  debt
subordination agreement, in form and substance satisfactory to Bank, executed by
Borrower and each Subordinate Lender, and a debt and subordination agreement, in
form and substance satisfactory to Bank, executed by Borrower and any Person who
is an officer,  director,  shareholder or Affiliate of Borrower to whom Borrower
is or hereafter  becomes  indebted,  subordinating in right of payment and claim
all of such Debt and any future  advances  thereon to the full and final payment
of the Obligations.

                  6.17     COLLECTION OF ACCOUNTS.  Diligently pursue collection
of all Accounts and other amounts due Borrower from others, including Affiliates
of Borrower.

                  6.18 LANDLORD AND STORAGE AGREEMENTS. Provide Bank with copies
of all agreements  between Borrower and any landlord or warehouseman  which owns
any premises at which any Inventory or other  Collateral may, from time to time,
be kept.

                  6.19  AUDITORS'  LETTERS.  Furnish  Bank  with a copy  of each
finally  issued letter  written to Parent by its  independent  certified  public
accountant  concerning  internal controls and management review immediately upon
receipt of same.

                  6.20     ERISA COMPLIANCE.

                           (a)      At  all  times   make   prompt   payment  of
contributions  required to meet the minimum funding standards set forth in ERISA
with respect to each Plan;

                           (b)      Promptly after the filing  thereof,  furnish
to Bank copies of an annual  report  required  to be filed  pursuant to ERISA in
connection  with  each Plan and any other  employee  benefit  plan of it and its
Affiliates;

                           (c)      Notify  Bank as soon as  practicable  of any
Reportable  Event and of any additional  act or condition  arising in connection
with  any  Plan  which  Borrower  believes  might  constitute  grounds  for  the
termination  thereof by the  Pension  Benefit  Guaranty  Corporation  or for the
appointment  by the  appropriate  United States  District  Court of a trustee to
administer the Plan; and

                                       32
<PAGE>

                           (d)      Furnish  to  Bank,   promptly   upon  Bank's
request therefor,  such additional  information concerning any Plan or any other
such employee benefit plan as may be reasonably requested.

                  6.21     OPERATION OF BUSINESS.

                           (a)      INTERIM   OPERATIONS.   During  the  Interim
Period,  the Borrower (i) shall  continue to operate the businesses of Ad Art in
the  ordinary  course (the  "Interim  Operations"),  subject to the terms of the
Orderly  Liquidation  Budget, (ii) shall use its best efforts to market and sell
the assets of Ad Art on a going  concern  basis for the  highest  and best price
obtainable  and to obtain a binding  letter of intent for the  purchase  thereof
(the  "Letter of Intent"),  and (iii) shall  provide the Bank with copies of any
and all offers it receives for the purchase of any assets of Borrower.

                           (b)      ORDERLY  LIQUIDATION.  If the Borrower  does
not receive during the Interim Period a Letter of Intent  acceptable to the Bank
in its  sole  and  absolute  discretion,  then the  Borrower  shall  immediately
commence, as of the end of the Interim Period, the Orderly Liquidation of Ad Art
in accordance with the Orderly  Liquidation  Budget.  The Borrower shall perform
all  reasonable  acts to implement the Orderly  Liquidation  and to maximize the
value of the Ad Art  Collateral  for the benefit of the Bank. The Borrower shall
continue to engage Focus, or another financial consultant acceptable to the Bank
in its reasonable discretion,  to assist Ad Art in the Orderly Liquidation.  The
Borrower shall,  within fifteen (15) days of the date of this Agreement,  engage
on reasonable  terms a licensed and reputable  commercial  real estate broker to
market and sell the  California  Real  Estate and shall  provide the Bank with a
copy of the brokerage contract with such broker.

                  7.       NEGATIVE  COVENANTS.  Until the Obligations have been
indefeasibly  repaid in full and until  Bank has no further  obligation  to make
advances under the Loans,  without the prior written  consent of Bank,  Borrower
shall not:

                  7.1 INDEBTEDNESS.  Except as permitted or contemplated by this
Agreement  and  unless  Borrower  is in  compliance  with  all of its  financial
covenants,  create, incur, assume, or suffer to exist any Debt or obligation for
money borrowed, or guarantee, or endorse, or otherwise be or become contingently
liable in connection  with the  obligations of any person,  firm, or corporation
(including any Affiliate), except:

                  7.1.1  Indebtedness  for taxes not at the time due and payable
or which are being actively  contested in good faith by appropriate  proceedings
and against which  reserves  deemed  adequate by Bank have been  established  by
Borrower,  but only if the  non-payment  of such taxes does not result in a Lien
upon any property of Borrower that has priority over the Lien held by Bank;

                  7.1.2 Debt,  other than for  borrowed  money,  incurred in the
ordinary course of business,  including that evidenced by trade promissory notes
with a maturity of less than one year;

                  7.1.3 Debt for money borrowed from Bank: and

                                       33
<PAGE>

                  7.1.4 Debt incurred prior to the date of this Agreement.

                  7.2      LIENS AND SECURITY INTERESTS.  Create, incur, assume,
or  suffer  to exist  any  mortgage,  security  deed,  deed of  trust,  security
interest, pledge, encumbrance,  Lien or charge of any kind (including charges on
property purchased under conditional sales or other title retention  agreements)
on any of its property or assets, now owned or hereafter acquired, except:

                  7.2.1 Liens for taxes not yet due or which are being contested
in good faith by  appropriate  proceeding  and  against  which  reserves  deemed
adequate by Bank have been set up (excluding any Lien imposed pursuant to any of
the  provisions of ERISA),  but only if the  non-payment  of such taxes does not
result in a Lien upon any property of Borrower  that has priority  over the Lien
held by Bank;

                  7.2.2 Other Liens incidental to the conduct of its business or
the ownership of its property and assets and created by operation of law so long
as the obligations secured thereby are not past due;

                  7.2.3 Liens in favor of Bank; and

                  7.2.4 Liens reflected on EXHIBIT D to this Agreement.


                  7.3      DIVIDENDS AND DISTRIBUTIONS. Declare any dividends on
any shares of any class of its capital  stock,  or apply any of its  property or
assets to the purchase,  redemption or other retirement of, or set apart any sum
for the payment of any dividends on, or for the purchase, retirement of, or make
any other  distribution  by reduction of capital or otherwise in respect of, any
shares  of any  class of  capital  stock of  Borrower,  unless  after any of the
foregoing  payments,  Borrower  remains in compliance  with all of its financial
covenants.

                  7.4      AFFILIATE TRANSACTIONS.  Purchase,  acquire, or lease
property  from,  or sell,  transfer  or lease  property  to,  any  Affiliate  of
Borrower,  except  for  arms-length  transactions  at fair  market  value in the
ordinary course of business.

                  7.5      FINANCING STATEMENTS.  Permit any financing statement
(except  Bank's  financing  statements)  to be  on  file  with  respect  to  the
Collateral, except for those filed to perfect Permitted Liens.

                  7.6      NAME   CHANGE/LOCATION  OF  CHIEF  EXECUTIVE  OFFICE.
Change the name,  identity or corporate  structure  of  Borrower,  or change the
location of its chief executive office,  unless notice has been given to Bank in
advance of the move.

                  7.7      DESTRUCTION  OF  COLLATERAL.  Waste  or  destroy  the
Collateral or use it in violation of any statute or ordinance.

                  7.8      MERGER OR  CONSOLIDATION.  Enter  into any  merger or
consolidation of which it is not the surviving corporation or otherwise suffer a
"Change in Control", as defined below. For

                                       34
<PAGE>

purposes of this Agreement,  the term "Change in Control" means (a) any "person"
or "group" of persons  (within  the meaning of Section  13(d) of the  Securities
Exchange Act of 1934, as amended) have acquired beneficial ownership,  direct or
indirect,  or shall have  entered  into a contract  or  arrangement  that,  upon
consummation,  will result in its or their  acquisition  of, control over 30% or
more  of the  votes  attributable  to  the  voting  stock  of  Borrower;  or (b)
individuals who at the beginning of any period of twenty-four  (24)  consecutive
calendar  months were  directors of Borrower  (together  with any new  directors
whose  election to the board of  directors of Borrower or whose  nomination  for
election  by the  shareholders  of Borrower  was  approved by a vote of at least
two-thirds  of the directors  then still in office who either were  directors at
the beginning of such period or whose  election or  nomination  for election was
previously  so  approved)  cease for any reason to  constitute a majority of the
board of directors of Borrower then in office.

                  7.9      LOANS OR ADVANCES.  Make loans or advances or pay any
management  or similar  fees to any  Affiliate  or officer of  Borrower,  except
advances or payment of management or similar fees made in the ordinary course of
business and the payment of the reasonable  management fees of Focus. Make loans
or advances to any Affiliate of the Borrower.

                  7.10     CASH CAPITAL EXPENDITURES. Make or commit to make any
Cash Capital Expenditures.


                  7.11     ACQUISITIONS.  Purchase or acquire the obligations or
stock of or any other interest in any Person.

                  7.12     PREPAYMENT OF DEBT.  Prepay any Debt, except (i) Debt
to Bank, and (ii) as otherwise contemplated by the Orderly Liquidation Budget.

                  7.13     LEASE   TRANSACTIONS.   Enter   into   any  sale  and
lease-back  arrangement,  except as may be provided  in the Orderly  Liquidation
Budget.

                  7.14     AMENDMENTS.  Amend any  instrument  evidencing a Lien
listed on EXHIBIT D hereto.

                  7.15     DEPOSIT  OF  FUNDS.   Except  as   provided   in  the
Restructuring  Agreement,  deposit  proceeds of the Ad Art  Collateral  into any
account other than the Special Collection Account of Ad Art.

                  7.16     SUBORDINATED  DEBT. Make any cash payment  (principal
or interest) with respect to Subordinated Debt, or with respect to any Debt that
would be Subordinated  Debt but for the absence of a subordination  agreement in
effect with  respect  thereto,  except that  Borrower  shall be entitled to make
payments  with  respect to such Debt to the extent  expressly  permitted  in any
subordination  agreement  in effect with respect  thereto,  but only during such
time as no default or Event of Default exists hereunder.

                  7.17     ACCOUNTS.  Sell,  assign,  or  discount  any  of  its
Accounts,  Instruments,  Chattel Paper, or any promissory notes held by it other
than discount of such Accounts, Chattel Paper, or

                                       35
<PAGE>

notes in the ordinary course of business for  collection.  Borrower shall notify
Bank  promptly in writing with any discount,  offset,  or other  deductions  not
shown on the face of an Account invoice and any dispute over an Account, and any
information  relating  to an adverse  change in any Account  Debtor's  financial
condition or ability to pay its obligations.

                  7.18     MARGIN  STOCK.  Use  any  proceeds  of the  Loans  to
purchase or carry any margin  stock  (within the meaning of  Regulation U of the
Board of Governors of the Federal Reserve System) or extend credit to others for
the purpose of purchasing or carrying any margin stock.

         8.       GRANT OF SECURITY INTEREST.

                  8.1      SECURITY INTEREST. As security for the payment of the
Loans and all other  Obligations,  now existing or in the future  incurred,  and
including  any  extensions  or  renewals  or changes  in form of the Loans,  any
over-advances,  and  any  other  Obligations,  and all  costs  and  expenses  of
collection thereof, including,  without limitation,  reasonable attorneys' fees,
Borrower  hereby  assigns to Bank and grants to Bank a security  interest in and
Lien upon the following:

                           (a)      All of Borrower's Accounts;

                           (b)      All of Borrower's Documents;

                           (c)      All of Borrower's Instruments;

                           (d)      All of Borrower's General Intangibles;

                           (e)      All of Borrower's Chattel Paper;

                           (f)      All of Borrower's Inventory;

                           (g)      All of Borrower's Equipment;

                           (h)      All of the proceeds,  products,  and profits
as the case may be, of  Borrower's  Accounts,  Documents,  Instruments,  Chattel
Paper, General Intangibles, Equipment, and Inventory;

                           (i)      All monies and other  property  of any kind,
real,  personal,  or mixed,  and tangible or  intangible,  now or at any time or
times  hereafter,  in the possession or under the control of Bank or a bailee of
Bank;

                           (j)      All accessions to, substitutions for and all
replacements,  products,  profits, income, and cash and non-cash proceeds of (a)
through (g) above,  including,  without  limitation,  proceeds  of any  unearned
premiums with respect to insurance policies insuring any of the Collateral; and

                                       36
<PAGE>

                           (k)      All books and  records  (including,  without
limitation,  customer lists, credit files, magnetic, digital and laser tapes and
disks, electronic and computer storage media, computer programs, print-outs, and
other  computer  materials  and  records) of Borrower  pertaining  to any of (a)
through (h) above.

         In  addition,  the  Loans  and  Obligations  will  be  secured  by  the
California  Mortgage.  As Borrower obtains more trademarks or patents,  Borrower
shall execute  appropriate  instruments  granting to Bank a security interest in
those assets.

                  8.2 SALE OF  INVENTORY.  Until the  occurrence  of an Event of
Default, Borrower may use and dispose of the Inventory in the ordinary course of
business  where such is not  inconsistent  with this  Agreement  or the  Orderly
Liquidation  Budget,  provided  that the  ordinary  course of business  does not
include a  transfer  in  partial  or total  satisfaction  of Debt nor a transfer
(other than a sale on terms and  conditions  which would apply if  disinterested
parties were involved) to an Affiliate of Borrower.

                  8.3 NOTICE TO ACCOUNT  DEBTORS.  If an Event of Default exists
hereunder,  Bank may notify the Account  Debtors  obligated on any or all of the
Accounts to make  payment  thereof  directly to Bank and to take  control of all
proceeds of any such Accounts.  Any such notice by Bank to such Account  Debtors
shall be given by an officer of Bank.  Borrower,  if  requested  by Bank,  shall
stamp or cause to be stamped on each Account item in legible letters "Pledged to
SouthTrust  Bank," and shall turn over  physical  possession  of the Accounts to
Bank.  Borrower  authorizes  Bank to sign and endorse  Borrower's  name upon any
check,  draft,  money order, or other form of payment of any Account item and to
sign and endorse satisfactions and releases of Account items in Borrower's name.
Until such time as Bank  elects to  exercise  such right by mailing to  Borrower
written notice thereof, Borrower is authorized, as agent of Bank, to collect and
enforce said  Accounts in  Borrower's  name.  The costs of such  collection  and
enforcement,  including attorneys' fees and out-of-pocket expenses and all other
expenses and liabilities resulting therefrom,  shall be borne solely by Borrower
whether  the same are  incurred  by Bank or  Borrower.  At the  request of Bank,
Borrower shall upon receipt of all checks,  drafts,  cash, and other remittances
in  payment  or on  account  of the  Accounts  deposit  the same in the  Special
Collection  Account referred to in Section 4.2 ("Special  Collection  Account").
The funds in the  Special  Collection  Account  shall be  applied  upon  receipt
against the Loans by Bank, subject to the terms of the Restructuring  Agreement.
Said proceeds shall be deposited in precisely the form received,  except for the
endorsement of Borrower  where  necessary to permit  collection of items,  which
endorsement Borrower agrees to make, and which Bank is also hereby authorized to
make on Borrower's  behalf.  Pending such deposit,  Borrower agrees that it will
not commingle any such checks,  drafts,  cash, and other remittances with any of
Borrower's  funds or property,  but will hold them separate and apart  therefrom
and upon an express  trust for Bank until  deposit  thereof  made in the Special
Collection  Account.  Bank  may,  in  accordance  with  the  provisions  of this
Agreement,  apply the whole or any part of the collected funds on deposit in the
Special Collection Account against the principal and/or interest of the Loans or
other Obligations secured hereby, the order and method of such application to be
at the  discretion of Bank.  Any portion of said funds on deposit in the Special
Collection Account which Bank elects not to so apply may, at Bank's election, be
paid  over by Bank to  Borrower;  provided,  however,  that if at any time  Bank
grants  to  Borrower  the right to  retain  the  proceeds  of the  Accounts  for
Borrower's  use,  or if at any time Bank

                                       37
<PAGE>

elects to pay funds on deposit in the Special  Collection  Account to  Borrower,
such right to retain and use  proceeds or payment  from the  Special  Collection
Account  shall be deemed to be  continuing  new value for the security  interest
attaching hereunder on all after-acquired property.

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

                  8.5 POST OFFICE BOX. If an Event of Default has occurred or is
continuing,  Borrower  agrees to acquire at its expense a post office box in the
place  designated  by Bank,  to which Bank and its  designees  alone  shall have
access.  (Borrower  acknowledges  that  Ad Art  will  be  subject  to a  lockbox
arrangement,  even in the absence of an Event of  Default.)  Borrower  agrees to
give notice to all of its Account  Debtors to mail  payments  due to Borrower to
such post office box. Borrower agrees that Bank, or its designees, may open such
post  office box,  may  receive,  open,  and  dispose of all mail  addressed  to
Borrower at such post office box, and may deposit any payments contained in such
mail in a Special  Collection  Account  referred  to in  Section  4.2  ("Special
Collection Accounts") hereof.  Borrower agrees to give all required instructions
to the U.S. Postal Service authorities to enable Bank or its designees to attain
access to such post office box of  Borrower,  agrees that it will not attempt to
remove any mail from such post office box, and agrees to execute such additional
agreements as Bank may  reasonably  require in connection  with such post office
box.

                  8.6 GOVERNMENTAL  ACCOUNTS.  If any of Borrower's  Accounts in
excess  of  $10,000.00  arise out of  contracts  with the  United  States or any
department, agency, or instrumentality thereof, Borrower will immediately notify
Bank thereof in writing and execute any  instruments and take any steps required
by Bank in order that all monies due and to become due under such Account  shall
be assigned to Bank and notice thereof given to the Government under the Federal
Assignment of Claims Act.

                  8.7 ACCOUNTS  EVIDENCED BY  INSTRUMENTS.  If any of Borrower's
Accounts are or should become evidenced by promissory notes,  trade acceptances,
chattel  paper,  chattel  mortgages,   conditional  sales  contracts,  or  other
instruments,  Borrower  will  immediately  deliver  same to  Bank,  endorsed  or
assigned  with  recourse  to Bank's  order and,  regardless  of the form of such
endorsement or assignment, Borrower hereby waives presentment, demand, notice of
dishonor,  protest and notice of protest,  and all other  notices  with  respect
thereto.

                  8.8 LEASE OF RECORDS. Borrower hereby leases to Bank, and Bank
hires from Borrower, for a term which shall be effective so long as the Loans or
other  Obligations  secured  hereby are owing to Bank by Borrower and until Bank
has no further  obligation  under the Agreement,  all of Borrower's  present and
future books of Accounts, computer printouts,  magnetic, digital and laser tapes
and disks,  computer and electronic  storage media,  computer software programs,
trial balance records, ledgers and cabinets in which they are located, reflected
or maintained, in any way relating to the Collateral, and all present and future
supporting  evidence

                                       38
<PAGE>

and  documents  relating  thereto  in the form of written  applications,  credit
information,  account cards,  payment records,  trial balances,  correspondence,
delivery  receipts,  certificates  and the like, as well as the past and current
information stored in computer software programs for and on Borrower's behalf by
third  parties.  Borrower,  if  requested  by Bank,  agrees to legend all of the
foregoing to indicate the lease thereof to Bank. If an Event of Default  occurs,
then,  in addition to all of the other rights and remedies of Bank herein,  Bank
will  have  the  right  forthwith  or at any  time  thereafter  to  remove  from
Borrower's  premises all of the foregoing and keep and retain the same in Bank's
possession until the Loans and other Obligations  secured hereby shall have been
fully  paid  and  discharged  and  Bank  has no  further  obligation  under  the
Agreement.  The  provisions  of this section  shall not be deemed to diminish or
contravene the security interest of Bank in Borrower's General Intangibles or in
the property,  materials,  and interests described in this section, but shall be
deemed to be in addition to any rights Bank may have with respect to  Borrower's
grant of a security interest in its General Intangibles to Bank.

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

                  8.10 ATTORNEY-IN-FACT. Borrower hereby irrevocably designates,
makes,  constitutes,  and appoints Bank (and all Persons  designated by Bank) as
Borrower's  true and lawful  attorney  (and  agent-in-fact)  and Bank, or Bank's
agent,  may, without notice to Borrower and in either Borrower's or Bank's name,
but at the cost and expense of Borrower:

                           8.10.1   At such time or times  hereafter  as Bank or
said agent, in its sole discretion,  may determine,  endorse  Borrower's name on
any checks, notes,  acceptances,  drafts, money orders, or any other evidence of
payment or proceeds of the Collateral  which come into the possession of Bank or
under Bank's control; and

                           8.10.2   If an Event of Default exists, Bank may: (i)
demand payment of the Accounts from the Account Debtors,  enforce payment of the
Accounts by legal  proceedings  or  otherwise,  and  generally  exercise  all of
Borrower's  rights and remedies with respect to the  collection of the Accounts;
(ii) settle, adjust,  compromise,  discharge,  or release any of the Accounts or
other Collateral;  (iii) sell or collect any of the Accounts or other Collateral
upon such  terms,  and for such  amounts and at such time or times as Bank deems
advisable;  (iv) take  possession,  in any  manner,  of any item of  payment  or
proceeds  relating to any Collateral and apply the same to the Obligations;  (v)
prepare,  file,  and sign  Borrower's  name to a proof of claim in bankruptcy or
similar  document  against  any  Account  Debtor  or  to  any  notice  of  lien,
assignment,  or satisfaction of lien or similar  document in connection with any
of the  Collateral;  (vi) receive,  open,  and dispose of all mail  addressed to
Borrower  and to notify  postal  authorities  to change the address for delivery
thereof  to such  address  as Bank  may  designate;  (vii)  endorse  the name of
Borrower upon any of the items of payment or proceeds relating to any Collateral
and  deposit the same to the account of Bank or any other bank on account of the
Obligations;  (viii)  endorse  the  name of  Borrower  upon any  Chattel  Paper,
document, instrument, invoice, freight bill, bill of lading, or similar document
or agreement relating


                                       39
<PAGE>

to the  Accounts,  Inventory,  and any  other  Collateral;  (ix) use  Borrower's
stationery  and sign the name of Borrower to  verifications  of the Accounts and
notices thereof to Account  Debtors;  (x) use the information  verifications  if
recorded on or contained in any data processing  equipment and computer hardware
and software relating to the Accounts,  Inventory,  and any other Collateral and
to which  Borrower has access;  (xi) make and adjust  claims  under  policies of
insurance; (xii) for and in the name of Borrower to give instructions and direct
any bank or  financial  institution  in which  proceeds  of the  Collateral  are
deposited to turn over said  proceeds to Bank;  and (xiii) do all other acts and
things necessary,  in Bank's  determination,  to fulfill Borrower's  obligations
under this Agreement.

         9.       ADDITIONAL REPRESENTATIONS, COVENANTS, AND AGREEMENTS RELATING
                  TO COLLATERAL.


                  9.1 AFFIRMATION OF REPRESENTATIONS. Each request for a loan or
advance  made by Borrower  pursuant to this  Agreement  or any of the other Loan
Documents  shall  constitute  (i) an  automatic  representation  and warranty by
Borrower  to Bank that there does not then exist any default or Event of Default
and  (ii) a  reaffirmation  as of the  date  of  said  request  that  all of the
representations  and warranties of Borrower  contained in this Agreement and the
other Loan Documents are true in all material  respects,  except for any changes
in the  nature of  Borrower's  business  or  operations  that  would  render the
information  contained  in any exhibit  attached  hereto  either  inaccurate  or
incomplete,  so long as Bank has  consented  to such changes or such changes are
expressly permitted by this Agreement.

                  9.2 WAIVERS.  Borrower  hereby releases and waives any and all
actions, causes of action, demands and suits which it may ever have against Bank
as a result of any possession,  collection,  settlement,  compromise, or sale by
Bank  of any of  the  Accounts  upon  the  occurrence  of an  Event  of  Default
hereunder,   notwithstanding   the  effect  of  such   possession,   collection,
settlement, compromise, or sale upon the business of Borrower. Said waiver shall
include all causes of action and claims  which may result  from the  exercise of
the power of attorney  conferred upon Bank in Section 8.10  ("Attorney-in-Fact")
hereof.

                  9.3  DISCHARGE  OF TAXES AND LIENS.  At its  option,  Bank may
discharge taxes, liens,  security  interests,  or other encumbrances at any time
levied  or  placed  on the  Collateral  and  may pay  for  the  maintenance  and
preservation  of the  Collateral.  Borrower agrees to reimburse Bank, on demand,
for any  payment  made or expense  incurred by Bank  pursuant  to the  foregoing
authorization, including, without limitation, attorneys' fees.

                  9.4 INSURANCE.  Without  limiting any other provision  hereof,
Borrower  shall  keep  the  Collateral  insured  in  amounts  equal  to its full
insurable value,  with companies,  and against such risks as may be satisfactory
to Bank.  Borrower will pay the costs of all such insurance and deliver policies
evidencing  such insurance to Bank with mortgagee loss payable  clauses in favor
of Bank. Borrower hereby assigns to Bank all right to receive proceeds,  directs
any insurer to pay all proceeds directly to Bank, and authorizes Bank to endorse
any check or draft for such proceeds and apply the same toward  satisfaction  of
the Loans and other Obligations secured hereby.

                                       40
<PAGE>

                  9.5 COMPLETE RECORDS. Borrower will at all times keep accurate
and complete  records of the  Collateral,  and Bank or its agents shall have the
right to call at  Borrower's  place or places of  business  at  intervals  to be
determined  by Bank,  upon  reasonable  notice  and  during  Borrower's  regular
business  hours,  and  without  hindrance  or delay,  to inspect and examine the
Inventory  and to inspect,  audit,  check,  and make  abstracts  from the books,
records, journals,  orders, receipts,  computer printouts,  correspondence,  and
other data relating to the Collateral or to any other  transactions  between the
parties  hereto.  If  requested  by Bank.  Borrower  agrees  to make its  books,
records, journals,  orders, receipts,  computer printouts,  correspondence,  and
other data relating to the  Collateral  available  for  inspection,  audit,  and
checking by Bank or its agents.

                  9.6 UNIFORM  COMMERCIAL  CODE  FINANCING  STATEMENT.  Borrower
agrees that a carbon,  photographic,  or other reproduction of this Agreement or
of a  signed  financing  statement  with  respect  to the  Collateral  shall  be
sufficient as a financing statement and may be filed as such by Bank.

         10.  EVENTS  OF  DEFAULT.  The  occurrence  of any  one or  more of the
following  events shall constitute an Event of Default (unless and except to the
extent that the same is cured to the  satisfaction of Bank within the applicable
cure  period,  if  any,  or,  at the  sole  discretion  of  Bank,  at  any  time
thereafter):

                  10.1     PAYMENT  DEFAULT.  If Borrower shall fail to make any
payment of any  installment of principal or interest on any Note as and when the
same becomes due and payable,  whether at stated maturity, by declaration,  upon
acceleration, or otherwise; or

                  10.2     FEES AND EXPENSES. If Borrower shall fail to pay when
due any expense,  fee or charge  provided for in this  Agreement as and when the
same becomes due and payable; or

                  10.3     DEFAULTS.  If  Borrower  or any other  party  (except
Bank)  shall  fail to  perform,  keep or  observe  any  covenant,  agreement  or
provision of the Note(s) or of this Agreement; or

                  10.4     REPRESENTATIONS     FALSE.     If    any    warranty,
representation,  or other statement made or furnished to Bank by or on behalf of
Borrower or in any of the Loan Documents proves to be false or misleading in any
respect when made or furnished; or

                  10.5     FINANCIAL DIFFICULTIES. If Borrower shall be involved
in financial difficulties as evidenced:

                           (a)      by its commencing a voluntary case under the
United States  Bankruptcy Code or any similar law regarding  debtor's rights and
remedies or an admission seeking the relief therein provided;

                           (b)      by its making a general  assignment  for the
 benefit of its creditors; or

                                       41
<PAGE>

                           (c)      by  applying  for  or   consenting   to  the
appointment of, or the taking of possession by, a receiver,  custodian,  trustee
or liquidator  of such Person or of all or of a substantial  part of its assets;
or

                  10.6  INVOLUNTARY  PROCEEDINGS.  If without  its  application,
approval, or consent, a proceeding shall be commenced, in any court of competent
jurisdiction,  seeking in  respect of  Borrower  any  remedy  under the  federal
Bankruptcy Code, the liquidation,  reorganization,  dissolution,  winding-up, or
composition or  readjustment  of debt, the  appointment of a trustee,  receiver,
liquidator or the like of such Person,  or of all or any substantial part of the
assets  of  such  Person,  or  other  like  relief  under  any law  relating  to
bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment
of debts, which results in the entry of an order for relief or such adjudication
or appointment  remains  undismissed or undischarged for a period of thirty (30)
days; or

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

                  10.8     DEFAULT ON REIMBURSEMENT  OBLIGATION. If the Borrower
fails to  reimburse  the Bank,  in  accordance  with the terms of  Section  2A.3
hereof, for the amount of any draw or drawing on the 1999 Letter of Credit; or

                  10.9     PUT OPTION EVENT.  An event occurs that would entitle
a  Subordinated  Lender to exercise a put option  under any of the  Subordinated
Debt; or

                  10.10    JUDGMENTS.  If a final  judgment  for the  payment of
money in excess of $100,000.00  shall be rendered  against Borrower and the same
shall  remain  undischarged  for a period  of  thirty  (30)  days  during  which
execution shall not be effectively stayed, unless such judgment is fully covered
by collectible insurance; or

                  10.11    ACTIONS.  If Borrower shall be criminally indicted or
convicted under any law; or

                  10.12    COLLATERAL.  If a creditor of Borrower  shall  obtain
possession of any of the Collateral by any legal means; or

                  10.13    CHANGE  IN  CONTROL.  If there  occurs  a  Change  in
Control of Parent (as that term is defined in Section 7.8); or

                  10.14    SUBORDINATION  AGREEMENTS.  If a  breach  or  default
shall occur with respect to any subordination agreement executed by any creditor
of Borrower (including any Affiliate),  or if any said agreement shall otherwise
terminate or cease to have legal effect; or

                                       42
<PAGE>

                  10.15    PRIORITY  OF  SECURITY  INTEREST.   If  any  security
interest or Lien of Bank hereunder or under any other Security  Agreement  shall
not constitute a perfected security interest of first priority in the Collateral
thereby encumbered, subject only to Permitted Liens; or

                  10.16    LOSS OF COLLATERAL. If there shall occur any material
loss, theft,  damage or destruction of any of the Collateral,  which loss is not
fully insured; or

                  10.17    MATERIAL ADVERSE EFFECT. If Borrower suffers a change
that  has a  Material  Adverse  Effect  on  its  business,  assets,  properties,
prospects,  results of operation, or condition (financial or other), measured on
a consolidated basis, except as contemplated by this Agreement.

         On the  occurrence  of any Event of Default,  Bank or the holder of the
Notes may at its option  proceed to protect  and  enforce  its rights by suit in
equity,  action at law and/or the  appropriate  proceeding  either for  specific
performance  of any covenant or condition  contained in the Notes or in any Loan
Document,  and/or declare the unpaid balance of the Loans and Note together with
all accrued interest to be forthwith due and payable, and thereupon such balance
shall become so due and payable without presentation,  protest or further demand
or notice of any kind, all of which are hereby expressly waived.

         Borrower  agrees that default under any Loan Document shall  constitute
default with respect to all Loan Documents.

         Without  limiting the  foregoing,  upon the  occurrence of any Event of
Default, and at any time thereafter,  Bank shall have the rights and remedies of
a secured  party  under the Code (and the Uniform  Commercial  Code of any other
applicable  jurisdiction) in addition to the rights and remedies provided herein
or in any other  instrument  or paper  executed  by  Borrower.  Bank may require
Borrower to assemble  the  Inventory  and make the same  available  to Bank at a
place to be designated  by Bank which is reasonably  convenient to both parties.
Unless the  Collateral is perishable or threatens to decline  speedily in value,
or is a style customarily sold on a recognized  market,  Bank will give Borrower
reasonable  notice of the time after  which any private  sale or other  intended
disposition thereof is to be made. The requirement of reasonable notice shall be
met if such notice is mailed postage  prepaid to Borrower at least five (5) days
before the time of such sale or  disposition.  Borrower shall pay Bank on demand
any and all expenses,  including legal expenses and reasonable  attorneys' fees,
incurred  or paid by Bank in  protecting  or  enforcing  the Loans and all other
Obligations  secured  hereby and other rights of Bank  hereunder,  including its
right to take possession of the Collateral.

         Bank shall not be liable for  failure to  collect  the  Accounts  or to
enforce any  contract  rights or for any action or omission on the part of Bank,
its officers, agents and employees,  except willful misconduct. No remedy herein
conferred  upon,  or reserved  to, Bank is intended to be exclusive of any other
remedy or remedies,  including  those of any note or other evidence of Debt held
by Bank,  and each and every remedy shall be cumulative and shall be in addition
to every other remedy given hereunder or now or hereafter  existing in law or in
equity.  Exercise or omission to exercise any right of Bank shall not affect any
subsequent right of Bank to exercise the same.

                                       43
<PAGE>

         Borrower waives notice prior to Bank's taking  possession or control of
any of the  Collateral  or any bond or  security  that might be  required by any
court prior to allowing Bank to exercise any of Bank's  remedies,  including the
issuance of an immediate writ of possession.

         In addition to any other  remedy  available  to it, Bank shall have the
right to the extent provided by law, upon the occurrence of an Event of Default,
to seek and  obtain the  appointment  of a receiver  to take  possession  of and
operate  and/or dispose of the business and assets of Borrower and any costs and
expenses  incurred  by Bank in  connection  with such  receivership  shall  bear
interest at the Default Rate.

         11.      ENVIRONMENTAL PROVISIONS; INDEMNIFICATION.

                  11.1  CONTAMINATION.  Borrower  acknowledges that certain soil
and  groundwater in the parcel of California  Real Estate may have been impacted
by contaminant substances (collectively, the "Contamination").  Borrower further
acknowledges that, as of the date of this Agreement, Bank's knowledge concerning
the  Contamination  is  limited  to the  information  set  forth in the  Phase I
Environmental Update issued on April 9, 1999 by National Assessment  Corporation
(the  "Report").  Borrower has previously  conducted  assessment and remediation
work to bring Area One into compliance with applicable Environmental Regulations
and otherwise  satisfy the  requirements of the  Governmental  Authorities  with
jurisdiction  regarding  the  environmental  condition  of the  California  Real
Estate.

                  11.2 ENVIRONMENTAL  MANAGEMENT OF MORTGAGED PROPERTY FACILITY.
The  parties  to  this  Agreement  acknowledge  that,  as of the  date  of  this
Agreement,  Bank has not participated in the operation or management of the Real
Estate or any facilities  located on it and has not otherwise been in a position
to influence financial management,  environmental  remediation,  hazardous waste
disposal,  or  hazardous  material  treatment  affecting or relating to the Real
Estate.  Moreover,  the  parties  acknowledge  that  nothing  contained  in this
Agreement  would  grant to Bank the right or  ability  to  meaningfully  direct,
influence,  or control future decisions regarding  environmental  remediation on
the Real Estate,  the disposal or treatment of hazardous  waste  delivered to or
otherwise represent on the Real Estate, or the financial  management of the Real
Estate.  The parties also  acknowledge  that the obligations of Borrower and the
limited  rights of Bank under this  Agreement with respect to the assessment and
remediation of the  Contamination  are intended only to protect the value of the
Collateral securing Bank's Loans.

                  11.3  INDEMNIFICATION.  Borrower  shall defend,  indemnify and
hold harmless Bank, its directors, officers, employees, accountants,  attorneys,
and agents (the  "Indemnitees")  from and  against any and all claims,  demands,
judgments,  damages,  actions, causes of action,  injuries,  orders,  penalties,
costs and expenses  (including  attorneys'  fees and costs of court) of any kind
whatsoever  arising  out of or  relating to any breach or default by Borrower or
any other  Person under this  Agreement  or any Loan  Document or the failure of
Borrower  to  observe,  perform or  discharge  Borrower's  duties  hereunder  or
thereunder.  Without  limiting  the  generality  of  the  foregoing,  Borrower's
obligation to indemnify  Bank shall include  indemnity  from any and all claims,
demands,  judgments,  damages,  actions,  causes of  action,  injuries,  orders,
penalties,  costs,  and  expenses  arising

                                       44
<PAGE>

out of or in connection  with the activities of Borrower,  its  predecessors  in
interest,  third parties who have trespassed on Borrower's property,  or parties
in a contractual relationship with Borrower, whether or not occasioned wholly or
in part by any condition,  accident or event caused by an act or omission of the
Indemnitees,  which:  (a)  arise  out  of  the  actual,  alleged  or  threatened
discharge,  dispersal,  release, storage,  treatment,  generation,  disposal, or
escape of  radioactive  materials,  radioactivity,  pollutants or other toxic or
hazardous substances,  including any solid, liquid, gaseous, or thermal irritant
or contaminant,  including smoke, vapor, soot, fumes, acids, alkalis, chemicals,
and waste (including materials to be recycled,  reconditioned or reclaimed);  or
(b) actually or allegedly arise out of the use,  specification,  or inclusion of
any product,  material, or process containing chemicals or radioactive material,
the failure to detect the existence or  proportion  of chemicals or  radioactive
material in the soil, air,  surface water or groundwater,  or the performance or
failure to perform the abatement of any pollution  source or the  replacement or
removal of any soil, water,  surface water, or groundwater  containing chemicals
or radioactive  material:  or (c) arises out of or relates to breach by Borrower
of any of the provisions of Section 5.22  ("Environmental  Matters")  hereof; or
(d) arise out of the Contamination,  the breach of any of Borrower's obligations
under  this  Agreement  relating  to  the  Contamination  or the  assessment  or
remediation  of  the  Contamination,  including  all  costs  of  remediation  or
"clean-up" of the Contamination, costs of determining whether the Real Estate is
in  compliance  with  applicable  Environmental  Regulations,  and all of Bank's
attorney's  fees,  consultants'  fees,  and  court  costs  associated  with  the
existence,  assessment, or remediation of the Contamination.  The obligations of
Borrower under this section shall survive any termination of this Agreement.

         12.      MISCELLANEOUS.

                  12.1 COSTS AND EXPENSES.  Borrower  shall bear all expenses of
Bank (including  reasonable fees and expenses of its counsel) in connection with
the preparation of this Agreement and the Loan  Documents,  and the issuance and
delivery  of the  Notes to Bank and also in  connection  with any  amendment  or
modification  thereto.  Borrower  agrees to  indemnify  and save  Bank  harmless
against  all  broker's  and  finder's  fees,  if any.  If,  at any time or times
hereafter,  whether before or after the occurrence of an Event of Default,  Bank
employs counsel to advise or provide other  representation  with respect to this
Agreement or the other Loan Documents, or to collect the balance of the Loans or
other  obligations,  or to take any  action  in or with  respect  to any suit or
proceeding  relating  to this  Agreement  or any of the  Loan  Documents,  or to
protect,  collect,  or  liquidate  the  Collateral  or to attempt to enforce any
security interest or Lien granted to Bank by Borrower;  then in any such events,
all of the  reasonable  attorneys'  fees  arising  from  such  services  and any
expenses,  costs  and  charges  relating  thereto  shall  constitute  additional
obligations  of  Borrower  payable  on  demand  of Bank.  Without  limiting  the
foregoing,  Borrower  shall pay or reimburse  Bank for all  recording and filing
fees,  intangibles taxes,  documentary and revenue stamps,  other taxes or other
expenses and charges payable in connection with this Agreement, the Notes or any
Loan Document, or the filing of any Loan Document, financing statements or other
instruments required by Bank in connection with the Loans.

                  12.2 WAIVERS OF  PROVISIONS.  All amendments of this Agreement
and all waivers and suspensions by Bank of any provision of this Agreement or of
the Loan  Documents  and all waivers and  suspensions  by Bank of any default or
Event of Default  hereunder shall be effective only

                                       45
<PAGE>

if (i) in writing  and signed by a duly  authorized  representative  of Bank and
(ii)  accompanied  by  such  fees  and  charges  as may be  imposed  by  Bank in
connection  with the  amendment.  The fees may  include  out-of-pocket  expenses
incurred by Bank in  administration of the Loan or in evaluation of the proposed
waiver,  amendment  or  suspension,  as well as  additional  facility  fees  and
administrative  fees that may be required by Bank in connection  with Borrower's
request. The fees may include additional  compensation to Bank for the extension
of the credit facilities represented by the Loan. Any such amendment, waiver, or
suspension may be granted only in the sole discretion of Bank.

                  12.3  ACTIONS  NOT  CONSTITUTING  A  WAIVER.  Neither  (i) the
failure at any time or times hereafter to require strict performance by Borrower
of any of its  provisions,  warranties,  terms and conditions  contained in this
Agreement  or any other  agreement,  document  or  instrument  now or  hereafter
executed by Borrower,  and  delivered  to Bank,  nor (ii) the failure of Bank to
take action or to exercise its remedies  with respect to any default or Event of
Default  hereunder,  nor (iii) any delay or  omission  of Bank to  exercise  any
right,  remedy,  power, or privilege hereunder after the occurrence of a default
or Event of Default,  shall act to waive,  affect, or diminish any right of Bank
to demand  strict  compliance  with the terms of this  Agreement  or to exercise
remedies with respect to any default or Event of Default.

                  12.4 HEADINGS;  EXHIBITS. Except for the definitions set forth
in  Article  1,  the  headings  of  the  articles,   sections,   paragraphs  and
subdivisions of this Agreement are for convenience of reference only, are not to
be considered a part hereof,  and shall not limit or otherwise affect any of the
terms hereof.  Unless  otherwise  expressly  indicated,  all  references in this
Agreement  to a section  or an  exhibit  are to a section  or an exhibit of this
Agreement, all exhibits referred to in this Agreement are an integral part of it
and are incorporated by reference in it.

                  12.5 RIGHT OF  SETOFF.  Upon and after the  occurrence  of any
Event of Default,  Bank may, and is hereby  authorized by Borrower,  at any time
and from time to time, to the fullest extent  permitted by applicable  laws, and
without  advance notice to Borrower (any such notice being  expressly  waived by
Borrower),  setoff and apply any and all deposits  (general or special,  time or
demand, provisional or final) at any time held and any other indebtedness at any
time owing by Bank to, or for the credit or the account of, Borrower against any
or all of the Obligations of Borrower now or hereafter  existing  whether or not
such Obligations have matured and irrespective of whether Bank has exercised any
other  rights  that  it  has or may  have  with  respect  to  such  Obligations,
including,  without limitation,  any acceleration rights. The aforesaid right of
setoff may be  exercised  by Bank  against  Borrower  or against  any trustee in
bankruptcy,  debtor in  possession,  assignee for the benefit of the  creditors,
receiver,  or execution,  judgment or attachment  creditor of Borrower,  or such
trustee  in  bankruptcy,  debtor in  possession,  assignee  for the  benefit  of
creditors,   receiver,   or   execution,   judgment  or   attachment   creditor,
notwithstanding the fact that such right of setoff shall not have been exercised
by Bank prior to the making,  filing or issuance, or service upon Bank of, or of
notice  of,  any  such  petition,  assignment  for  the  benefit  of  creditors,
appointment  or  application  for the  appointment  of a receiver or issuance of
execution,  subpoena, order or warrant. Bank agrees to notify Borrower after any
such setoff and application, provided that the failure to give such notice shall
not affect the validity of such setoff and application. The rights of Bank under
this  Section  are in  addition  to the other  rights and  remedies  (including,
without limitation, other rights of setoff) which Bank may have.

                                       46
<PAGE>

                  12.6  SURVIVAL  OF  COVENANTS.   All  covenants,   agreements,
representations  and  warranties  made  herein  and in  certificates  or reports
delivered pursuant hereto shall be deemed to have been material and relied on by
Bank,  notwithstanding any investigation made by or on behalf of Bank, and shall
survive the  execution  and delivery to Bank of any Note or Loan  Document.  All
provisions in this Agreement for indemnification of Bank or payment of its costs
and expenses survive any termination of this Agreement.

                  12.7 ADDRESSES. Any notice or demand which by any provision of
this  Agreement is required or provided to be given shall be deemed to have been
sufficiently given or served for all purposes by being delivered in person or by
facsimile to the party to whom the notice or demand is directed or by being sent
as first class mail, postage prepaid,  to the following address: If to Borrower,
Ad Art Electronic  Sign  Corporation,  5029 Edgewater  Drive,  Orlando,  Florida
32810, Attention:  President and WITH A COPY TO: Raymond James Capital Partners,
L.P., 880 Carillon Parkway, St. Petersburg,  Florida, 33716, Attention:  Gary A.
Downing,  and  Kilpatrick  Stockton  LLP,  Suite 2800,  1100  Peachtree  Street,
Atlanta, Georgia, 30309, Attention: Larry D. Ledbetter, Esquire, or if any other
address shall at any time be designated by Borrower in writing to the holders of
record of the Note at the time of such designation to such other address; and if
to Bank, P. O. Box 2554,  Birmingham,  Alabama 35290,  Attention:  Andrew Raine,
Vice President, Special Assets Department (telecopy no. 205-254-4852);  and WITH
A COPY TO: Jay Bender,  Bradley  Arant Rose & White LLP 2001 Park  Place,  Suite
1400,  Birmingham,  Alabama  35203;  or any other  address  shall at any time be
designated in writing to Borrower, to such other address.

                  12.8 VENUE AND  JURISDICTION.  Borrower  agrees that any legal
action  brought by Bank to collect the Loans or any  Obligation or to assert any
claim against  Borrower  under any Loan  Document,  or any part thereof,  may be
brought in any court in the State of Alabama having subject matter  jurisdiction
and that any such court will have non-exclusive  jurisdiction,  waives its right
to object to any such action on grounds it is brought in the improper venue, and
irrevocably  consents  that any legal  action or  proceeding  against  it under,
arising out of, or in any manner relating to the Loans, the Obligations,  or any
Loan Document may be brought in the Circuit Court of Jefferson County,  Alabama,
or in any other  Circuit  Court of the State of Alabama or in the U.S.  District
Court for the Northern District of Alabama.  Any judicial proceeding by Borrower
against  Bank  under  any  Loan  Document  shall be  brought  only in one of the
foregoing  courts in Alabama.  Borrower,  by the  execution  of this  Agreement,
expressly  and  irrevocably  assents and submits to the  non-exclusive  personal
jurisdiction  of any such  court  in any such  action  or  proceeding.  Borrower
consents to the service of process  relating to any such action or proceeding by
mail to the address set forth in this Agreement.

                  12.9  BENEFITS.  All of  the  terms  and  provisions  of  this
Agreement  shall bind and inure to the benefit of the  parties  hereto and their
respective successors and assigns.  Borrower may not assign any of its rights or
obligations hereunder without the prior written consent of Bank.

                  12.10 CONTROLLING LAW. This Agreement shall be governed by and
construed  in  accordance  with the  laws of the  State  of  Alabama;  provided,
however,  that if any of the  Collateral  shall be located  in any  jurisdiction
other than  Alabama,  the laws of such  jurisdiction  shall  govern the

                                       47
<PAGE>

method, manner and procedure for foreclosure of Bank's lien upon such Collateral
and the  enforcement of Bank's other  remedies in respect of such  Collateral to
the extent that the laws of such jurisdiction are different from or inconsistent
with the laws of Alabama.

                  12.11 PARTICIPATION.  Borrower  acknowledges that Bank may, at
its option,  sell participation  interests in the Loans to participating  banks.
The  amounts  of any such  participations  shall be  determined  solely by Bank.
Borrower agrees with each present and future participant in the Loans, the names
and  addresses  of which  will be  furnished  to  Borrower,  that if an Event of
Default should occur, each present and future  participant shall have all of the
rights and remedies of Bank with respect to any deposit due from any participant
to Borrower.  The execution by a participant of a  participation  agreement with
Bank, and the execution by Borrower of this  Agreement,  regardless of the order
of execution,  shall evidence an agreement between Borrower and said participant
in accordance with the terms of this Section.

                  12.12  MISCELLANEOUS.  Time is of the essence  with respect to
this Agreement.  This Agreement and the  instruments and agreements  referred to
herein or called for  hereby  supersede  and  incorporate  all  representations,
promises,  and statements,  oral or written, made by Bank in connection with the
Loans. This Agreement may not be varied, altered, or amended except by a written
instrument executed by an authorized officer of Bank. In the event of a conflict
between this Agreement and any other Loan Document,  the terms of this Agreement
will control. This Agreement may be executed in any number of counterparts, each
of  which,  when  executed  and  delivered,  shall  be  an  original,  but  such
counterparts  shall  together  constitute  one  and  the  same  instrument.  Any
provision in this Agreement which may be  unenforceable or invalid under any law
shall be  ineffective  to the  extent  of such  unenforceability  or  invalidity
without affecting the enforceability or validity of any other provisions hereof.

                  12.13    JOINT AND SEVERAL LIABILITY.  All obligations of each
Person  named as  Borrower  shall be joint and several  obligations  of all such
Persons.

                  12.14 LIMITATION OF GRANT. Nothing in this Agreement,  whether
express or implied,  is intended or should be construed  to confer  upon,  or to
grant to, any person,  except Bank and  Borrower,  any right,  remedy,  or claim
under or because of either this  Agreement  or any  provision of it. The rights,
duties,  and  obligations of Borrower under this Agreement are not assignable or
delegable.

                  12.15  WAIVER  OF RIGHT TO  TRIAL BY JURY.  BORROWER  AND BANK
HEREBY  WAIVE ANY  RIGHT TO TRIAL BY JURY ON ANY  CLAIM,  COUNTERCLAIM,  SETOFF,
DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING OUT OF OR IN ANY WAY PERTAINING OR
RELATING  TO THIS  AGREEMENT,  THE  NOTES,  THE  LOAN  DOCUMENTS,  OR ANY  OTHER
INSTRUMENT,  DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS
AGREEMENT  OR (B) IN ANY WAY  CONNECTED  WITH OR  PERTAINING  OR  RELATED  TO OR
INCIDENTAL TO ANY DEALINGS OF THE PARTIES HERETO WITH RESPECT TO THIS AGREEMENT,
THE NOTES, THE LOAN DOCUMENTS,  OR ANY OTHER  INSTRUMENT,  DOCUMENT OR AGREEMENT
EXECUTED  OR

                                       48
<PAGE>

DELIVERED IN CONNECTION HEREWITH OR IN CONNECTION WITH THE TRANSACTIONS  RELATED
THERETO OR  CONTEMPLATED  THEREBY OR THE EXERCISE OF EITHER  PARTY'S  RIGHTS AND
REMEDIES  THEREUNDER,  IN ALL OF THE  FOREGOING  CASES  WHETHER NOW  EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. BORROWER
AND BANK  AGREE  THAT  EITHER OR BOTH OF THEM MAY FILE A COPY OF THIS  PARAGRAPH
WITH ANY COURT AS WRITTEN  EVIDENCE  OF THE  KNOWING,  VOLUNTARY  AND  BARGAINED
AGREEMENT  BETWEEN THE PARTIES  IRREVOCABLY TO WAIVE TRIAL BV JURY, AND THAT ANY
DISPUTE OR CONTROVERSY WHATSOEVER BETWEEN THEM SHALL INSTEAD BE TRIED IN A COURT
OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.


                                       49
<PAGE>

         IN  WITNESS  WHEREOF,  each  of  Borrower  and  Bank  has  caused  this
instrument to be executed by its duly authorized officer.

                                    BORROWER:

                                     AD ART ELECTRONIC SIGN CORPORATION,
                                                           a Florida corporation


                                     By:   /s/ J. William Brandner
                                         --------------------------------------
                                     Name:    J. William Brandner
                                     Its:     Chairman


                                     HAMILTON DIGITAL DESIGNS, LTD.
                                                          an Ontario corporation


                                     By:   /s/ J. William Brandner
                                         --------------------------------------
                                     Name:   J. William Brandner
                                     Title:   Chairman


                                      BANK:

                                       SOUTHTRUST BANK


                                       By:   /s/ J. William Brandner
                                           ------------------------------------
                                       Name:   Andrew Raine
                                       Title:   Vice President


                                       50
<PAGE>


                                    EXHIBIT A

                           ORDERLY LIQUIDATION BUDGET


<PAGE>


                                    EXHIBIT B

                              CERTIFICATES OF TITLE


<PAGE>


                                    EXHIBIT C

                                 PENDING ACTIONS


<PAGE>


                                    EXHIBIT D

                          LIENS AND SECURITY INTERESTS


The liens  reflected on the financing  statements  described on the  attachments
hereto.





<PAGE>


                                    EXHIBIT E

                                  BENEFIT PLANS


<PAGE>


                                    EXHIBIT F

                    PLACES OF BUSINESS / INVENTORY LOCATIONS


<PAGE>


                                    EXHIBIT G

                              INTELLECTUAL PROPERTY