CREDIT AND SECURITY AGREEMENT
                            Dated as of July 31, 1996

          CIS Air  Corporation,  a Delaware  corporation (the  "Borrower"),  and
Norwest Business Credit,  Inc., a Minnesota  corporation (the "Lender"),  hereby
agrees as follows:

                                    ARTICLE I

                                   Definitions

          Section 1.1 Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:

               (a) the terms defined in this Article have the meanings  assigned
          to  them  in this  Article,  and  include  the  plural  as well as the
          singular; and

               (b) all  accounting  terms not otherwise  defined herein have the
          meanings  assigned  to  them in  accordance  with  generally  accepted
          accounting principles.

          "Accounts"  means the aggregate  unpaid  obligations  of customers and
other account debtors to the Borrower  arising out of the sale or lease of goods
or rendition of services by the Borrower on an open account or deferred  payment
basis.

          "Advance"  means an advance to the  Borrower  by the Lender  under the
Discretionary Credit Facility.

          "Affiliate"  or  "Affiliates"  means  CIS  Corporation,  CIS  Aircraft
Partners,  Inc., CIS Assignor  L.P.A.,  Inc.,  Continental  Information  Systems
Corporation,  GMCCCS Corp. and any other Person  controlled  by,  controlling or
under common  control with the  Borrower,  including  (without  limitation)  any
Subsidiary of the Borrower.  For purposes of this  definition,  "control,"  when
used with  respect  to any  specified  Person,  means  the  power to direct  the
management and policies of such Person, directly or indirectly,  whether through
the ownership of voting securities, by contract or otherwise.

          "Agreement" means this Credit and Security Agreement.

          "Aircraft  Security  Agreement" means the Aircraft Security  Agreement
dated July 31, 1996 between the Borrower and the Lender.

          "Banking  Day" means a day other than a  Saturday  on which  banks are
generally open for business in Milwaukee, Wisconsin.

          "Base Rate" means the rate of interest publicly announced from time to
time by Norwest Bank Minnesota,  National  Association as its "base rate" or, if
such bank ceases to announce a rate so  designated,  any similar  successor rate
designated  by the Lender.  The Base Rate may not be the lowest rate  offered by
the Lender to its other customers.

          "Borrowing Base" means, at any time and subject to change from time to
time in the Lender's sole discretion, the lesser of

          (a) $4,500,000 or
<PAGE>
          (b) the sum of

               (i) the lesser of (A) 80% of Eligible Accounts or (B) $4,500,000,
               plus

               (ii)  the  lesser  of  (A)  60%  of  Eligible  Inventory  or  (B)
               $2,500,000.

          "Collateral"  means  all  of  the  Equipment,   General   Intangibles,
Inventory and Receivables,  together with all substitutions and replacements for
and products of any of the  foregoing  and together with proceeds of any and all
of the foregoing and, in the case of all tangible Collateral,  together with all
accessions and together with (i) all accessories,  attachments, parts, equipment
and repairs now or hereafter  attached or affixed to or used in connection  with
any such  goods,  and (ii) all  warehouse  receipts,  bills of lading  and other
documents of title now or hereafter covering such goods.

          "Collateral  Account"  has the  meaning  specified  in Section  4.1(d)
hereof.

          "Default"  means an event  that,  with  giving of notice or passage of
time or both, would constitute an Event of Default.

          "Default  Rate"  means  at any  time  Three  percent  (3.0%)  over the
Floating  Rate,  which  Default Rate shall change when and as the Floating  Rate
changes.

          "Discretionary   Credit  Facility"  means  the  discretionary   credit
facility being made available to the Borrower by the Lender  pursuant to Article
II hereof.

          "Eligible  Accounts"  means all unpaid  Accounts,  net of any credits,
except the following shall not in any event be deemed Eligible Accounts:

               (1) That  portion of Accounts  over 90 days past invoice date or,
               if the Lender in its discretion has determined  that a particular
               dated Account may be eligible, that portion of such Account which
               is more than 60 days past the stated due date;

               (2) That  portion of Accounts  that are  disputed or subject to a
               claim of offset or a contra account;

               (3) That portion of Accounts not yet earned by the final delivery
               of goods or rendition of services, as applicable, by the Borrower
               to the customer;

               (4) Accounts owed by any unit of the United States Government, or
               any foreign government  (provided,  however,  that there shall be
               included in Eligible  Accounts  that portion of Accounts  owed by
               such units of  government  with respect to which the Borrower has
               provided evidence  satisfactory to the Lender that (A) the Lender
               has a first  priority  perfected  security  interest and (B) such
               Accounts may be enforced by the Lender directly against such unit
               of government under all applicable laws);
<PAGE>
               (5) Accounts owed by an account debtor located outside the United
               States  except  Canada  which are not backed by a bank  letter of
               credit  assigned to the Lender,  in the  possession of the Lender
               and  acceptable  to the  Lender  in  all  respects,  in its  sole
               discretion;

               (6)  Accounts  owed by an account  debtor  that is the subject of
               bankruptcy proceedings or has gone out of business;

               (7)  Accounts  owed  by  a  shareholder,  subsidiary,  Affiliate,
               officer or employee of the Borrower;

               (8) Accounts not subject to a duly perfected security interest in
               favor of the Lender or which are  subject  to any lien,  security
               interest or claim in favor of any Person other than the Lender;

               (9)  That  portion  of  Accounts  that  have  been  restructured,
               extended, amended or modified;

               (10) That portion of Accounts that  constitutes  finance charges,
               service charges;

               (11)  Accounts owed by an account  debtor,  regardless of whether
               otherwise eligible,  if 25% or more of the total amount due under
               Accounts from such debtor is ineligible under clauses (1), (2) or
               (9) above; and

               (12) Accounts,  or portions thereof,  otherwise deemed ineligible
               by the Lender in its sole discretion.

          "Eligible Inventory" means all inventory of the Borrower, at the lower
of cost or market value as  determined  in accordance  with  generally  accepted
accounting  principles;  provided,  however, that the following shall not in any
event be deemed Eligible Inventory:

               (1) Inventory  that is:  in-transit;  located at any warehouse or
               other premises not approved by the Lender in writing;  covered by
               any  negotiable  or  non-negotiable  warehouse  receipt,  bill of
               lading or other document of title;  on consignment to or from any
               other person or subject to any bailment;

               (2) Inventory as to which any necessary  filing has not been made
               in order for Lender to have a perfected  first priority  security
               interest therein;

               (3) Supplies, packaging or parts inventory;

               (4) Work-in-process inventory;

               (5) Inventory that is damaged, obsolete or not currently saleable
               in the normal course of the Borrower's operations;

               (6) Inventory  that the Borrower has  returned,  has attempted to
               return,  is in the process of  returning  or intends to return to
               the vendor thereof;
<PAGE>
               (7) Inventory that is subject to a security  interest in favor of
               any Person other than the Lender;

               (8)  Inventory  that is  subject  to  long-term  rental  or lease
               agreements;

               (9) Inventory  having a value greater than Four Hundred  Thousand
               Dollars  ($400,000) that does not have an appraisal  satisfactory
               to the Lender; and

               (10) Inventory  otherwise deemed  ineligible by the Lender in its
               sole discretion.

          "Environmental Laws" has the meaning specified in Section 5.12 hereof.

          "Equipment"  means all of the  Borrower's  equipment,  as such term is
defined in the UCC, whether now owned or hereafter  acquired,  including but not
limited to all  present and future  machinery,  vehicles,  furniture,  fixtures,
manufacturing  equipment,  shop equipment,  office and recordkeeping  equipment,
parts, tools and supplies.

          "ERISA" means the Employee  Retirement Income Security Act of 1974, as
amended.

          "Event of Default" has the meaning specified in Section 8.1 hereof.

          "Floating Rate" means an annual rate equal to the sum of the Base Rate
plus three-quarters percent (.75%), which Floating Rate shall change when and as
the Base Rate changes.

          "General Intangibles" means all of the Borrower's general intangibles,
as such term is defined in the UCC,  whether  now owned or  hereafter  acquired,
including   (without   limitation)  all  present  and  future  patents,   patent
applications,  copyrights,  trademarks,  trade names, trade secrets, customer or
supplier  lists  and  contracts,   manuals,  operating  instructions,   permits,
franchises,  the  right to use the  Borrower's  name,  and the  goodwill  of the
Borrower's business.

          "GMCCCS Credit Facility" means the Credit and Security Agreement dated
as of July 31, 1996 between GMCCCS Corp. and the Lender.

          "Guarantors" means CIS Corporation,  Continental  Information  Systems
Corporation, and GMCCCS Corp.

          "Inventory"  means all of the  Borrower's  inventory,  as such term is
defined in the UCC, whether now owned or hereafter acquired,  whether consisting
of whole  goods,  spare  parts or  components,  supplies or  materials,  whether
acquired,  held or furnished for sale,  for lease or under service  contracts or
for manufacture or processing, and wherever located.

          "Issuer" means the issuer of any Letter of Credit.

          "L/C  Amount"  means the sum of (i) the  aggregate  face amount of any
issued and  outstanding  Letters  of Credit  and (ii) the  unpaid  amount of the
Obligation of Reimbursement.

          "L/C  Application"  means an application  and agreement for letters of
credit in a form acceptable to the Issuer and the Lender.
<PAGE>
          "Letter of Credit" has the meaning specified in Section 2.3 hereof.

          "Loan  Documents"  means  this  Agreement,  the Note and the  Security
Documents.

          "Lockbox" has the meaning specified in Section 4.1(e) hereof.

          "Minimum  Interest Charge" has the meaning specified in Section 2.8(b)
hereof.

          "Net Earnings" shall mean the excess of:

          (a) All revenues and income  derived from  operations  in the ordinary
          course of business (excluding extraordinary gains and profits upon the
          disposition of investments and fixed assets),

          Over:

          (b) All expenses and other proper charges  against  income  (including
          payment of or provision for all applicable income and other taxes, but
          excluding  extraordinary  losses and losses  upon the  disposition  of
          investments  and fixed assets),  all as determined in accordance  with
          generally accepted accounting principles.

          "Net Worth" shall mean the total of all assets  properly  appearing on
the  balance  sheet  of the  Borrower  in  accordance  with  generally  accepted
accounting principles, less the sum of the following:

          (a) Any  write-up in the book  carrying  value of any asset  resulting
          from a revaluation thereof subsequent to May 31, 1995;

          (b)  All  reserves  including,   but  not  limited  to,  reserves  for
          liabilities, fixed or contingent, deferred income taxes, obsolescence,
          depletion,  insurance, and inventory valuation, which are not deducted
          from assets;

          (c) The amount,  if any, at which the shares of stock or  indebtedness
          of an  Affiliate  in excess of Seven  Million  Nine  Hundred  Thousand
          Dollars  ($7,900,000)  appear on the asset side of such balance sheet;
          and

          (d) All liabilities of the Borrower shown on such balance sheet.

          "Note" means the Demand Note of the  Borrower  payable to the order of
the Lender in substantially the form attached hereto as Exhibit A.

          "Obligation of Reimbursement" has the meaning specified in Section 2.4
hereof.

          "Obligations" has the meaning specified in Section 3.1 hereof.

          "Person"  means  any  individual,   corporation,   partnership,  joint
venture,  limited liability company,  association,  joint-stock company,  trust,
unincorporated organization or government or any agency or political subdivision
thereof.

          "Plan"  means an employee  benefit plan or other plan  maintained  for
employees of the Borrower and covered by Title IV of ERISA.
<PAGE>
          "Premises" means all premises where the Borrower conducts its business
and has any rights of possession,  including  (without  limitation) the premises
legally described in Exhibit E attached hereto.

          "Receivables"  means  each  and  every  right of the  Borrower  to the
payment of money,  whether such right to payment now exists or hereafter arises,
whether such right to payment arises out of a sale,  lease or other  disposition
of goods or other property,  out of a rendering of services,  out of a loan, out
of the overpayment of taxes or other liabilities,  or otherwise arises under any
contract or  agreement,  whether such right to payment is created,  generated or
earned by the Borrower or by some other person who  subsequently  transfers such
person's  interest to the  Borrower,  whether such right to payment is or is not
already  earned by  performance,  and  howsoever  such right to  payment  may be
evidenced, together with all other rights and interests (including all liens and
security  interests) which the Borrower may at any time have by law or agreement
against any account  debtor or other obligor  obligated to make any such payment
or against any property of such account debtor or other  obligor;  all including
but not limited to all present and future accounts,  contract rights,  loans and
obligations receivable, chattel papers, bonds, notes and other debt instruments,
tax refunds and rights to payment in the nature of general intangibles.

          "Reportable  Event"  shall have the  meaning  assigned to that term in
Title IV of ERISA.

          "Security  Documents" means the Agreement as to Collateral Account and
Lockbox Services, the Aircraft Security Agreement and all other documents,  each
as described in Section 4.1 hereof.

          "Security Interest" has the meaning specified in Section 3.1 hereof.

          "Special Account" means a specified cash collateral account maintained
by a financial  institution  acceptable to the Lender in connection with Letters
of Credit, as contemplated by Sections 2.5 and 3.5 hereof.

          "Subsidiary"  means  any  corporation  of which  more  than 50% of the
outstanding  shares of capital stock having  general voting power under ordinary
circumstances to elect a majority of the board of directors of such corporation,
irrespective  of whether or not at the time stock of any other  class or classes
shall  have or  might  have  voting  power by  reason  of the  happening  of any
contingency, is at the time directly or indirectly owned by the Borrower, by the
Borrower  and  one  or  more  other  Subsidiaries,  or  by  one  or  more  other
Subsidiaries.

          "Termination Date" has the meaning specified in Section 2.9 hereof.

          "UCC" means the Uniform Commercial Code as in effect from time to time
in the state  designated  in Section  9.12  hereof as the state whose laws shall
govern this Agreement,  or in any other state whose laws are held to govern this
Agreement or any portion hereof.

                                   ARTICLE II

              Amount and Terms of the Discretionary Credit Facility
<PAGE>
          Section 2.1  Advances.  The Lender may, in its sole  discretion,  make
Advances to the Borrower from time to time
during the period from the date hereof until the Lender  demands  payment of the
Advances or the  Discretionary  Credit Facility has been terminated  pursuant to
Section  2.9 or 2.10,  in an  aggregate  amount at any time  outstanding  not to
exceed the Borrowing  Base less the L/C Amount,  which Advances shall be secured
by the Collateral as provided in Article III hereof.  The  Discretionary  Credit
Facility shall be a revolving  facility and it is contemplated that the Borrower
will request Advances,  make prepayments and request  additional  Advances.  The
Borrower agrees to comply with the following  procedures in requesting  Advances
under this Section 2.1:

                     (a) The  Borrower  will not request any Advance  under this
           Section if, after giving effect to such requested Advance, the sum of
           the  outstanding  and unpaid Advances under this Section or otherwise
           would exceed the Borrowing Base less the L/C Amount.

                     (b) Each  request  for an Advance may be made in writing or
           by telephone,  specifying  the date of the requested  Advance and the
           amount thereof,  and shall be by (i) any officer of the Borrower;  or
           (ii) any person  designated as the Borrower's agent by any officer of
           the  Borrower  in a writing  delivered  to the  Lender;  or (iii) any
           person  reasonably  believed  by the  Lender to be an  officer of the
           Borrower or such a designated agent.

                     (c) Upon fulfillment of the applicable conditions set forth
           in Article hereof,  the Lender shall disburse loan proceeds,  if any,
           by  crediting  the  same to the  Borrower's  demand  deposit  account
           maintained  with  CoreStates  Bank,  N.A.  unless  the Lender and the
           Borrower  shall agree in writing to another  manner of  disbursement.
           Upon request of the Lender,  the Borrower shall promptly confirm each
           telephonic  request for an Advance by  executing  and  delivering  an
           appropriate daily collateral report to the Lender. The Borrower shall
           be obligated to repay all Advances under this Section notwithstanding
           the  failure  of  the  Lender  to  receive  such   confirmation   and
           notwithstanding  the fact that the person requesting the same was not
           in fact  authorized  to do so. Any request for an Advance  under this
           Section ,  whether  written  or  telephonic,  shall be deemed to be a
           representation  by the Borrower  that (i) the  condition set forth in
           Section 2.1(a) hereof has been met, and (ii) the conditions set forth
           in Section 4.2 hereof have been met as of the time of the request.

          Section 2.2 Note.  All Advances  made by the Lender under this Article
II shall be evidenced by and  repayable  with  interest in  accordance  with the
Note. The principal of the Note shall be due and payable as provided  herein and
on the earlier of termination of the Discretionary  Credit Facility or demand by
the Lender and shall bear interest as provided herein.

          Section 2.3 Issuance of Letters of Credit.  (a) The Lender may, in its
sole discretion, issue or cause to be issued by an Issuer one or more letters of
credit for the account of the Borrower  (each a "Letter of Credit") from time to
time during the period from the date hereof until the Lender demands  payment of
the Advances or the Discretionary  Credit Facility has been terminated  pursuant
to Section or , in an aggregate amount at any time outstanding not to exceed the
Borrowing Base less the sum of (i) all outstanding and unpaid Advances hereunder
and (ii) the unpaid amount of the  Obligation of  Reimbursement.  Each Letter of
<PAGE>
Credit,  if any, shall be issued pursuant to a separate L/C Application  entered
into between the Borrower and the Lender,  completed in a manner satisfactory to
the Lender and the Issuer.  The terms and  conditions set forth in each such L/C
Application shall supplement the terms and conditions  hereof,  but in the event
of  inconsistency  between the terms of any such L/C  Application  and the terms
hereof, the terms hereof shall control.

                     (b) The  Borrower  will not  request  the  issuance  of any
           Letter of Credit  under this  Section 2.3 if,  after the  issuance of
           such requested  Letter of Credit,  the sum of the face amounts of all
           issued and  outstanding  Letters of Credit would exceed the Borrowing
           Base  less  the  sum of  (i)  all  outstanding  and  unpaid  Advances
           hereunder   and  (ii)  the  unpaid   amount  of  the   Obligation  of
           Reimbursement.

                     (c) No Letter of Credit shall be issued with an expiry date
           later than the Termination Date in effect as of the date of issuance.

                     (d) Any  request  for the  issuance  of a Letter  of Credit
           under this Section 2.3 shall be deemed to be a representation  by the
           Borrower that (i) the  condition  set forth in Section  2.3(b) hereof
           has been met, and (ii) the statements set forth in Section 4.2 hereof
           are correct as of the time of the request.

          Section 2.4  Payment of Amounts  Drawn  Under  Letters of Credit.  The
Borrower  acknowledges that the Lender,  as co-applicant,  will be liable to the
Issuer of any Letter of Credit for reimbursement of any and all draws thereunder
and all other amounts  required to be paid under the applicable L/C Application.
Accordingly,  the  Borrower  agrees  to pay to the  Lender  any and all  amounts
required to be paid under the applicable L/C  Application,  when and as required
to be paid thereby, and the amounts designated below, when and as designated:

                     (a) The Borrower hereby agrees to pay the Lender on the day
           a draft is  honored  under  any  Letter  of Credit a sum equal to all
           amounts drawn under such Letter of Credit plus any and all reasonable
           charges and  expenses  that the Issuer or the Lender may pay or incur
           relative to such draw, plus interest on all such amounts, charges and
           expenses  as set  forth  below  (all  such  amounts  are  hereinafter
           referred to, collectively, as the "Obligation of Reimbursement").

                     (b) The Borrower  hereby agrees to pay the Lender on demand
           interest on all amounts, charges and expenses payable by the Borrower
           to the Lender under this Section 2.4,  accrued from the date any such
           draft,  charge or expense is paid by the Issuer until payment in full
           by the Borrower at the Default Rate.

If the Borrower fails to pay to the Lender promptly the amount of its Obligation
of  Reimbursement  in accordance  with the terms hereof and the L/C  Application
pursuant  to which  such  Letter  of Credit  was  issued,  the  Lender is hereby
irrevocably authorized and directed, in its sole discretion,  to make an Advance
in an amount sufficient to discharge the Obligation of Reimbursement,  including
all interest  accrued  thereon but unpaid at the time of such Advance,  and such
Advance  shall be evidenced  by the Note and shall bear  interest as provided in
Section 2.8 hereof.
<PAGE>
          Section   2.5  Special   Account.   If  the  Lender   terminates   the
Discretionary  Credit Facility pursuant to Section , or the Discretionary Credit
Facility is otherwise terminated for any reason whatsoever,  while any Letter of
Credit  is  outstanding,   the  Borrower  shall  thereupon  pay  the  Lender  in
immediately  available  funds for deposit in the Special Account an amount equal
to the  maximum  aggregate  amount  available  to be drawn  under all Letters of
Credit then  outstanding,  assuming  compliance  with all conditions for drawing
thereunder.  The  Special  Account  shall be  maintained  for the  Lender by any
financial  institution  acceptable to the Lender. Any interest earned on amounts
deposited  in the Special  Account  shall be  credited  to the Special  Account.
Amounts on deposit in the  Special  Account  may be applied by the Lender at any
time or from time to time to the Borrower's  Obligation of  Reimbursement or any
other Obligations,  in the Lender's sole discretion, and shall not be subject to
withdrawal by the Borrower so long as the Lender  maintains a security  interest
therein. The Lender agrees to transfer any balance in the Special Account to the
Borrower at such time as the Lender is required to release its security interest
in the Special Account under applicable law.

          Section  2.6  Increased  Costs and Reduced  Return.  (a) If the Lender
shall determine that, after the date hereof, the adoption of any applicable law,
rule or regulation,  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 the  Issuer or the  Lender  or its  parent  corporation  with any
requirement  or  directive  (whether or not having the force of law) of any such
authority, central bank or comparable agency:

                        (i) shall subject the Issuer or the Lender or its parent
                     corporation  to any tax, duty or other similar  charge with
                     respect to any Letter of Credit,  the  Advances or the Note
                     or shall  change the basis of  taxation  of payments to the
                     Issuer  or the  Lender  or its  parent  corporation  of the
                     Reimbursement  Obligation,  of the principal of or interest
                     on the  Advances  or of any other  amounts  due under  this
                     Agreement in respect of any Letter of Credit,  the Advances
                     or the Note  (except  for any  change in respect of any tax
                     imposed on the  overall  income of the Issuer or the Lender
                     or its parent corporation); or

                       (ii) shall impose, modify or deem applicable any reserve,
                     special deposit or similar requirement (including,  without
                     limitation,  any such  requirement  imposed by the Board of
                     Governors of the Federal Reserve System) against assets of,
                     deposits with or for the account of, or credit extended by,
                     the Issuer or the Lender or its parent corporation or shall
                     impose  on  the   Issuer  or  the   Lender  or  its  parent
                     corporation  any other  condition  affecting  any Letter of
                     Credit, the Advances or the Note;
<PAGE>
           and the result of any of the foregoing is to increase the cost to the
           Issuer  or the  Lender  or  its  parent  corporation  of  issuing  or
           maintaining  any  Letter of Credit  or of making or  maintaining  any
           Advances,  or to reduce the amount of any sum received or  receivable
           by the  Issuer or the  Lender  or its  parent  corporation  under the
           application and agreement  pursuant to which the Letter of Credit was
           issued, this Agreement or the Note with respect thereto, by an amount
           deemed by the Lender or its parent  corporation to be material,  then
           upon demand by the Lender,  the Borrower shall pay to the Lender such
           additional  amount or  amounts as will  compensate  the Issuer or the
           Lender  or  its  parent   corporation  for  such  increased  cost  or
           reduction.

                     (b) If the Lender shall  determine  that the adoption after
           the date hereof of any applicable  law, rule or regulation  regarding
           capital  adequacy,  or any change therein after the date hereof,  any
           change after the date hereof 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 the Lender or its parent corporation with any guideline
           or request issued after the date hereof  regarding  capital  adequacy
           (whether  nor 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 the  Lender's or the  Lender's  parent
           corporation's  capital  as a  consequence  of any  Letters of Credit,
           Advances or the Lender's obligations  hereunder to a level below that
           which the Lender or its parent  corporation  could have  achieved but
           for such adoption,  change or compliance  (taking into  consideration
           the Lender's  policies with respect to capital  adequacy and those of
           the Lender's parent corporation) by an amount deemed to the Lender or
           its  parent  corporation  to be  material,  then from time to time on
           demand by the  Lender,  the  Borrower  shall pay to the  Lender  such
           additional  amount or  amounts as will  compensate  the Lender or its
           parent corporation for such reduction.

                     (c)  Certificates  of the Lender sent to the Borrower  from
           time to time claiming  compensation  under this Section,  stating the
           reason   therefor  and  setting  forth  in   reasonable   detail  the
           calculation  of the  additional  amount or  amounts to be paid to the
           Lender  hereunder  shall be  conclusive  absent  manifest  error.  In
           determining  such amounts,  the Lender or its parent  corporation may
           use any reasonable averaging and attribution methods.

          Section 2.7  Obligations  Absolute.  The  obligations  of the Borrower
arising under this Agreement shall be absolute,  unconditional  and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement, under
all  circumstances  whatsoever,  including  (without  limitation)  the following
circumstances:

                     (a) any lack of validity or enforceability of any Letter of
           Credit or any other agreement or instrument relating to any Letter of
           Credit (collectively the "Related Documents");

                     (b) any  amendment or waiver of or any consent to departure
           from all or any of the Related Documents;
<PAGE>
                     (c) the  existence of any claim,  setoff,  defense or other
           right  which  the  Borrower  may  have  at  any  time,   against  any
           beneficiary or any transferee of any Letter of Credit (or any persons
           or entities for whom any such  beneficiary or any such transferee may
           be acting),  or other person or entity,  whether in  connection  with
           this  Agreement,  the  transactions  contemplated  herein  or in  the
           Related Documents or any unrelated transactions;

                     (d) any statement or any other document presented under any
           Letter  of  Credit  proving  to be  forged,  fraudulent,  invalid  or
           insufficient in any respect or any statement  therein being untrue or
           inaccurate in any respect whatsoever;  

                     (e)  payment  by or on behalf of the  Issuer or the  Lender
           under  any  Letter  of  Credit  against  presentation  of a draft  or
           certificate  which does not  strictly  comply  with the terms of such
           Letter of Credit; or

                     (f) any other circumstance or happening whatsoever, whether
           or not similar to any of the foregoing.

                     Section 2.8  Interest.  (a) The  principal  of the Advances
           outstanding  from time to time during any month  shall bear  interest
           (computed on the basis of actual days  elapsed in a 360-day  year) at
           the Floating Rate; provided,  however, that from the first day of any
           month during  which any Default or Event of Default  occurs or exists
           at any time, in the Lender's  discretion  and without  waiving any of
           its  other  rights  and  remedies,  the  principal  of  the  Advances
           outstanding  from time to time shall  bear  interest  at the  Default
           Rate; and provided,  further,  that in any event no rate change shall
           be put into effect  which  would  result in a rate  greater  than the
           highest rate  permitted by law.  Interest  accruing on the  principal
           balance  of the  Advances  outstanding  from  time to time  shall  be
           payable  on the  first  day of the next  succeeding  month and on the
           termination of the Discretionary Credit Facility or earlier demand or
           prepayment in full.

                     (b)   Notwithstanding  the  interest  payable  pursuant  to
           Section 2.8(a) hereof, the Borrower shall be liable to the Lender for
           interest  hereunder and under the GMCCCS Credit  Facility of not less
           than  One  Hundred  Fifty-Six  Thousand  Dollars  ($156,000)  in  the
           aggregate per year (the "Minimum Interest Charge") during the term of
           this Agreement, and the Borrower shall pay any deficiency between the
           Minimum  Interest  Charge  and  the  amount  of  interest   otherwise
           calculated under Sections 2.8(a) and 2.8(b) of this Agreement and the
           GMCCCS  Credit  Facility  on the date and in the manner  provided  in
           Section 2.8(a) of this Agreement and the GMCCCS Credit Facility.

                     Section  2.9   Discretionary   Nature  of  this   Facility;
Termination by the Lender;  Automatic Renewal. This Agreement contains the terms
and conditions upon which the Lender  presently  expects to make Advances to the
Borrower or issue,  or cause to be issued,  Letters of Credit for the account of
the  Borrower.  Each  Advance by the Lender to the  Borrower  and each Letter of
Credit issued, or caused to be issued,  for the account of the Borrower shall be
in the sole  discretion  of the  Lender,  and the  Lender  need not show that an
<PAGE>
adverse change has occurred in the Borrower's condition, financial or otherwise,
or that any of the  conditions  of  Article  IV have not been  met,  in order to
refuse  to  make  any   requested   Advance   or  to  demand   payment   of  any
then-outstanding  Advances  or to refuse to issue,  or cause to be  issued,  any
Letter of Credit  for the  account of the  Borrower.  The Lender may at any time
terminate the Discretionary Credit Facility whereupon the Lender shall no longer
consider  requests  for Advances or the issuance of Letters of Credit under this
Agreement.  Unless  terminated  by the  Lender  at any  time or by the  Borrower
pursuant to Section 2.10 hereof, the Discretionary  Credit Facility shall remain
in effect until July 31, 1998 and,  thereafter,  shall  automatically  renew for
successive  one year periods (July 31, 1998, and each  anniversary  date thereof
which is at the end of any year in which the  Discretionary  Credit Facility has
been automatically renewed, is herein referred to as a "Termination Date").

                     Section 2.10 Voluntary Prepayment; Termination of Agreement
by the Borrower.  Except as otherwise  provided herein, the Borrower may, in its
discretion,  prepay  the  Advances  in whole at any time or from time to time in
part, without penalty so long as this Agreement is not terminated.  The Borrower
may terminate this Agreement as of any Termination Date, so long as no Letter of
Credit has been issued and is  outstanding  with an  expiration  date after such
Termination Date, by giving at least 90 days' prior written notice to the Lender
of the  Borrower's  intention to terminate  this  Agreement as of the  specified
Termination  Date. If the Borrower desires to terminate this Agreement as of any
date other than a  Termination  Date,  or as of a  Termination  Date but without
giving at least 90 days' prior written notice thereof,  it shall 0.0.1.  give at
least 30 days' prior written notice to the Lender of the Borrower's intention to
do so;  and 0.0.2.  pay the  Lender a  prepayment  fee of One  Hundred  Thousand
Dollars  ($100,000) less the amount of any prepayment penalty paid to the Lender
by GMCCCS Corp.  under Section 2.5(b) of the GMCCCS Credit  Facility;  provided,
however,  that there shall be no  prepayment  fee if Borrower has complied  with
Section  2.10(a)  hereof  after  eighteen  (18)  months  from  the  date of this
Agreement and the source of the  prepayment is a Norwest Bank.  Upon  compliance
with the foregoing  requirements  and subject to payment and  performance of all
the Borrower's obligations to the Lender, the Borrower may obtain any release or
termination of the Security Interest to which the Borrower is otherwise entitled
by law.  Notwithstanding any other provision of this Agreement,  if the Borrower
terminates this Agreement because of additional payments required by Section 2.6
hereof,  no prepayment  fee,  premium or penalty shall be due in connection with
such termination.

                     Section 2.11 Mandatory Prepayment. The Borrower shall repay
the Advances immediately upon demand of the Lender. Without notice or demand, if
the sum of the outstanding principal balance of the Advances plus the L/C Amount
shall at any time exceed the  Borrowing  Base,  the Borrower  shall  immediately
prepay the Advances to the extent  necessary to eliminate such excess;  and (ii)
if prepayment in full of the Advances is  insufficient to eliminate such excess,
pay to the Lender in  immediately  available  funds for  deposit in the  Special
Account an amount equal to the  remaining  excess.  Any payment  received by the
Lender  under  this  Section  2.11 or under  Section  2.10 may be applied to the
Obligation of Reimbursement or the Advances,  including interest thereon and any
fees,  commissions,   costs  and  expenses  hereunder  and  under  the  Security
Documents,  in such order and in such amounts as the Lender,  in its discretion,
may from time to time determine.  Mandatory prepayments required by this Section
2.11 shall be made without premium, fee or penalty.
<PAGE>
                     Section  2.12  Payment.  All  payments of  principal of and
interest on the Advances,  the Obligation of  Reimbursement,  the commission and
fees hereunder and amounts  required to be paid to the Lender for deposit in the
Special Account shall be made to the Lender in immediately  available funds. The
Borrower hereby  authorizes the Lender to charge against the Borrower's  account
with the Lender an amount equal to the principal,  Obligation of  Reimbursement,
accrued interest,  commissions and fees from time to time due and payable to the
Lender  hereunder  and amounts  required to be paid to the Lender for deposit in
the Special Account and further  authorizes the Lender, in its discretion at any
time or from  time to time  and  without  request  by the  Borrower,  to make an
Advance under the  Discretionary  Credit Facility to the extent necessary to pay
any such amounts hereunder or under the Security Documents.

                     Section  2.13  Payment on  Non-Banking  Days.  Whenever any
payment to be made  hereunder  shall be stated to be due on a day which is not a
Banking Day,  such payment may be made on the next  succeeding  Banking Day, and
such  extension  of time shall in such case be  included in the  computation  of
interest on the Advances or the fees hereunder, as the case may be.

                     Section 2.14 Use of Proceeds.  The proceeds of Advances and
each  Letter  of Credit  issued  or  caused  to be  issued  shall be used by the
Borrower for ordinary working capital purposes.

                     Section  2.15  Liability  Records.  The Lender may maintain
from  time to  time,  at its  discretion,  liability  records  as to any and all
Advances  made or  repaid,  interest  accrued  or  paid  under  this  Agreement,
outstanding Letters of Credit and fees thereon and the Borrower's  Obligation of
Reimbursement.  All entries  made on any such record  shall be presumed  correct
until the  Borrower  establishes  the  contrary.  On demand by the  Lender,  the
Borrower will admit and certify in writing the exact principal  balance that the
Borrower then asserts to be  outstanding  to the Lender for Advances  under this
Agreement  and the amount of any  Letters  of Credit  outstanding.  Any  billing
statement or  accounting  rendered by the Lender shall be  conclusive  and fully
binding on the Borrower unless specific  written notice of exception is given to
the Lender by the Borrower within 30 days after its receipt by the Borrower.

                     Section  2.16 Setoff.  The Borrower  agrees that the Lender
may at any time or from time to time, at its sole  discretion and without demand
and without  notice to anyone,  setoff any liability owed to the Borrower by the
Lender,  whether or not due, against any indebtedness  owed to the Lender by the
Borrower (for Advances,  the Obligation of Reimbursement or the amounts required
to be paid to the Lender for  deposit  in the  Special  Account or for any other
transaction  or  event),  whether or not due.  In  addition,  each other  Person
holding a  participating  interest in any  Advances  made to the Borrower by the
Lender  shall  have the right to  appropriate  or setoff  any  deposit  or other
liability  then owed by such  Person to the  Borrower,  whether or not due,  and
apply the same to the  payment of said  participating  interest,  as fully as if
such Person had lent  directly to the Borrower the amount of such  participating
interest.

                     Section 2.17 Fees.  (a) The Borrower  hereby  agrees to pay
the  Lender a fully  earned and  non-refundable  origination  fee of  Forty-five
Thousand  Dollars  ($45,000)  (less the audit and approval fees in the amount of
Twenty-Five  Thousand  Dollars  ($25,000)  already  paid by  Borrower),  due and
payable upon the execution of this Agreement.
<PAGE>
                     (b) The Borrower agrees to pay the Lender a commission with
           respect to each Letter of Credit,  if any,  accruing on a daily basis
           and computed at the annual rate of one and one-half  percent  (1.50%)
           of the  available  amount  of such  Letter  of  Credit  (as it may be
           changed from time to time) from and including the date of issuance of
           such Letter of Credit  until such date as such Letter of Credit shall
           terminate by its terms, payable annually in advance, and prorated for
           any part of a full  calendar  year in which  such  Letter  of  Credit
           remains outstanding. The foregoing commission shall be in addition to
           any and all fees,  commissions  and charges of any Issuer of a Letter
           of Credit  with  respect  to or in  connection  with  such  Letter of
           Credit.

                     (c) The  Borrower  agrees  to pay the  Lender,  on  written
           demand, the  administrative  fees charged by the Issuer in connection
           with the  honoring of drafts  under any Letter of Credit,  amendments
           thereto, transfers thereof and all other activity with respect to the
           Letters of Credit.

                     (d)  The  Borrower  hereby  agrees  to pay the  Lender,  on
           demand,  audit fees of Two Thousand Five Hundred Dollars ($2,500) per
           quarter plus out-of-pocket  expenses in connection with any audits or
           inspections  by the Lender of any  collateral  or the  operations  or
           business  of the  Borrower.  The first such audit fee shall be due on
           October 1, 1996 and such  out-of-pocket  expenses will be due as such
           expenses are incurred.

                     (e) The Borrower  hereby agrees to (i) reimburse the Lender
           for all wire transfer charges and automated clearinghouse charges and
           to (ii) pay  overadvance  charges of Two Hundred  Dollars  ($200) per
           day; provided,  however,  that from the first day of any month during
           which any  Default or Event of Default  occurs or exists at any time,
           the daily overadvance charge (if an overadvance exists) shall be Four
           Hundred Dollars ($400).

                                   ARTICLE III

                                Security Interest

                     Section 3.1 Grant of Security Interest. The Borrower hereby
assigns and grants to the Lender a security interest  (collectively  referred to
as the "Security Interests") in the Collateral,  as security for the payment and
performance  of each and every debt,  liability and obligation of every type and
description  which  the  Borrower  may now or at any time  hereafter  owe to the
Lender  (whether such debt,  liability or obligation  now exists or is hereafter
created or incurred,  whether it arises in a  transaction  involving  the Lender
alone or in a transaction involving other creditors of the Borrower, and whether
it is direct or indirect, due or to become due, absolute or contingent,  primary
or secondary,  liquidated or unliquidated,  or sole, joint, several or joint and
several,  and  including  specifically,  but not limited to, the  Obligation  of
Reimbursement and all indebtedness of the Borrower arising under this Agreement,
the Note,  any L/C  Application  completed  by the Borrower or any other loan or
credit agreement or guaranty between the Borrower and the Lender, whether now in
effect or hereafter  entered into; all such debts,  liabilities  and obligations
are herein collectively referred to as the "Obligations").
<PAGE>
                     Section  3.2  Notification  of  Account  Debtors  and Other
Obligors.  In addition to the rights of the Lender under  Section  hereof,  with
respect to any and all rights to payment constituting Collateral, the Lender may
at any time  (either  before or after  the  occurrence  of an Event of  Default)
notify any account  debtor or other person  obligated to pay the amount due that
such  right to  payment  has been  assigned  or  transferred  to the  Lender for
security and shall be paid  directly to the Lender.  The  Borrower  will join in
giving such notice if the Lender so requests.  At any time after the Borrower or
the Lender gives such notice to an account debtor or other  obligor,  the Lender
may, but need not, in the Lender's name or in the  Borrower's  name, (a) demand,
sue for,  collect  or  receive  any money or  property  at any time  payable  or
receivable on account of, or securing,  any such right to payment,  or grant any
extension  to, make any  compromise  or  settlement  with or otherwise  agree to
waive,   modify,   amend  or  change  the  obligations   (including   collateral
obligations)  of any such account debtor or other obligor;  and (b) as agent and
attorney in fact of the Borrower,  notify the United  States  Postal  Service to
change the address for delivery of the Borrower's mail to any address designated
by the Lender,  otherwise  intercept the Borrower's mail, and receive,  open and
dispose of the Borrower's mail,  applying all Collateral as permitted under this
Agreement  and holding all other mail for the  Borrower's  account or forwarding
such mail to the Borrower's last known address.

                     Section 3.3 Assignment of Insurance. As additional security
for the payment and performance of the Obligations,  the Borrower hereby assigns
to the Lender any and all monies  (including,  without  limitation,  proceeds of
insurance and refunds of unearned  premiums) due or to become due under, and all
other rights of the Borrower  with respect to, any and all policies of insurance
now or at any time hereafter  covering the Collateral or any evidence thereof or
any business  records or valuable papers  pertaining  thereto,  and the Borrower
hereby directs the issuer of any such policy to pay all such monies  directly to
the Lender. At any time,  whether before or after the occurrence of any Event of
Default,  the  Lender  may  (but  need  not),  in the  Lender's  name  or in the
Borrower's name,  execute and deliver proofs of claim,  receive all such monies,
endorse checks and other instruments  representing  payment of such monies,  and
adjust, litigate, compromise or release any claim against the issuer of any such
policy.

                     Section 3.4 Occupancy.  (a) The Borrower hereby irrevocably
grants to the Lender the right to take  possession  of the  Premises at any time
after the occurrence and during the continuance of an Event of Default.

                     (b) The Lender may use the Premises only to hold,  process,
           manufacture,  sell, use, store, liquidate,  realize upon or otherwise
           dispose of goods that are  Collateral and for other purposes that the
           Lender may in good faith deem to be related or incidental purposes.

                     (c) The  right of the  Lender  to hold the  Premises  shall
           cease and  terminate  upon the  earlier  of (i)  payment  in full and
           discharge of all  Obligations,  and (ii) final sale or disposition of
           all goods  constituting  Collateral and delivery of all such goods to
           purchasers.
<PAGE>
                     (d) The Lender shall not be obligated to pay or account for
           any rent or other  compensation for the possession,  occupancy or use
           of any of the  Premises;  provided,  however,  in the event  that the
           Lender does pay or account for any rent or other compensation for the
           possession,  occupancy  or use of any of the  Premises,  the Borrower
           shall reimburse the Lender  promptly for the full amount thereof.  In
           addition,  the Borrower  will pay, or  reimburse  the Lender for, all
           taxes,  fees,  duties,  imposts,  charges  and  expenses  at any time
           incurred  by or imposed  upon the Lender by reason of the  execution,
           delivery, existence, recordation,  performance or enforcement of this
           Agreement or the provisions of this Section .

                     Section  3.5  Security  Interest  in  Special  Account  and
Collateral  Account.  The Borrower  hereby  pledges,  and grants to the Lender a
security  interest  in,  all  funds  held  in  the  Special  Account  and in the
Collateral  Account from time to time and all proceeds thereof,  as security for
the payment of all present and future Obligations of Reimbursement and all other
Obligations.

                     Section 3.6  License.  The  Borrower  hereby  grants to the
Lender a non-exclusive,  worldwide and royalty-free  license to use or otherwise
exploit all trademarks,  franchises,  trade names, copyrights and patents of the
Borrower for the purpose of selling,  leasing or  otherwise  disposing of any or
all Collateral following an Event of Default.

                     Section 3.7 Release of Collateral.  Lender may from time to
time in its sole  discretion  release  specific items of Collateral and, in such
event, shall execute all documents  reasonably  requested by Borrower (including
but  not  limited  to  loan  payout   letters  and  UCC  and  Federal   Aviation
Administration forms) necessary to evidence such release.

                                   ARTICLE IV

                  Conditions of Willingness to Consider Lending

                     Section   4.1   Conditions   Precedent   to  the   Lender's
Willingness to Consider Making  Advances.  The Lender's  willingness to consider
making  the  initial  Advance  hereunder  or issuing or causing to be issued any
Letter of Credit hereunder shall be subject to the condition  precedent that the
Lender shall have  received  all of the  following,  each in form and  substance
satisfactory to the Lender:

                     (a) This  Agreement,  properly  executed  on  behalf of the
           Borrower.

                     (b) The Note, properly executed on behalf of the Borrower.

                     (c) A true and correct copy of any and all leases  pursuant
           to which the  Borrower  is  leasing  the  Premises,  together  with a
           landlord's disclaimer and consent with respect to each such lease.
<PAGE>
                     (d) An  Agreement  as to  Collateral  Account  and  Lockbox
           Services,  duly executed by the Borrower and a financial  institution
           acceptable to the Lender,  pursuant to which (i) the Borrower and the
           institution establish a depository account (the "Collateral Account")
           in the  name of and  under  the  sole and  exclusive  control  of the
           Lender,  from  which  such  institution  agrees to  transfer  finally
           collected  funds to the Lender for  application to the Advances,  and
           (ii) the Borrower  agrees to maintain and direct  account  debtors to
           make payment to, and such institution  agrees to maintain and process
           payments  received  in, a lockbox  for the benefit of the Lender (the
           "Lockbox"),  from which Lockbox such institution shall transfer funds
           to the Collateral Account.

                     (e) An Aircraft Security Agreement properly executed by the
           Borrower.

                     (f) Current searches of appropriate  filing offices and the
           FAA aircraft  registry showing that (i) no state or federal tax liens
           have been filed and remain in effect  against the Borrower,  (ii) the
           "Collateral"  (as defined in the Aircraft  Security  Agreement) which
           constitutes  Eligible Inventory is free and clear of all liens except
           those created by the Aircraft Security Agreement,  (iii) no financing
           statements have been filed and remain in effect against the Borrower,
           except  those  financing   statements  relating  to  liens  permitted
           pursuant to Section hereof and those  financing  statements  filed by
           the Lender,  (iv) the Aircraft Security Agreement has been duly filed
           for  recordation  with the FAA, and (v) the Lender has duly filed all
           financing  statements  necessary  to perfect the  Security  Interests
           granted  hereunder,  to the extent the Security Interests are capable
           of being perfected by filing.

                     (g)  A  certificate   of  the  Secretary  or  an  Assistant
           Secretary of the Borrower,  certifying as to (i) the  resolutions  of
           the directors  and, if required,  the  shareholders  of the Borrower,
           authorizing the execution, delivery and performance of this Agreement
           and the Security  Documents,  (ii) the articles of incorporation  and
           the bylaws of the Borrower,  and (iii) the signatures of the officers
           or agents of the  Borrower  authorized  to execute and  deliver  this
           Agreement,  the Security Documents and other instruments,  agreements
           and  certificates,  including  Advance  requests,  on  behalf  of the
           Borrower.

                     (h) A current  certificate issued by the Secretary of State
           of the state of the  Borrower's  incorporation,  certifying  that the
           Borrower  is  in  compliance   with  all   corporate   organizational
           requirements of such state.

                     (i)  Evidence   that  the  Borrower  is  duly  licensed  or
           qualified  to  transact  business  in  all  jurisdictions  where  the
           character  of the  property  owned or  leased  or the  nature  of the
           business  transacted  by it makes  such  licensing  or  qualification
           necessary.

                     (j) A certificate of an officer of the Borrower confirming,
           in his personal  capacity,  the  representations  and  warranties set
           forth in Article hereof.

                     (k) An opinion of counsel to the  Borrower  and each of the
           Guarantors, addressed to the Lender.
<PAGE>
                     (l) Certificates of the insurance required hereunder,  with
           all hazard insurance  containing a lender's loss payable  endorsement
           in favor of the Lender and all liability  insurance naming the Lender
           as an additional insured.

                     (m)   Guaranties,   properly   executed   by  each  of  the
           Guarantors,   pursuant  to  which  each   Guarantor   unconditionally
           guarantees  the full and prompt  repayment  of all present and future
           Obligations.

                     (n) A General Business Security Agreement properly executed
           by  GMCCCS  Corp.,  securing  the  Obligations   guaranteed  by  such
           Guarantor.

                     (o) A Debt  Subordination  Agreement,  properly executed by
           CIS Corporation.

                     (p)  Acknowledgments  of  Ownership  and  Waiver  of Liens,
           properly  executed  by  each  of  the  Borrower's  subcontractors  in
           possession  of  goods  and  inventory   comprising  the   Collateral,
           including,  without  limitation,  American Technical  Suppliers Inc.,
           Evergreen  Air  Center,  Greenwich  Air  Services  and  M&M  Aircraft
           Services.

                     (q) A Landlord's Waiver and Consent properly executed by B.
           G. Sulzle, Inc.

                     (r)  Payment of the fees and  commissions  due  through the
           date of the initial  Advance or Letter of Credit  under  Section 2.17
           hereof and  expenses  incurred  by the Lender  through  such date and
           required to be paid by the Borrower under Section hereof.

                     (s)  Such  other  documents  as  the  Lender  in  its  sole
           discretion may require.


                     Section   4.2   Conditions   Precedent   to  the   Lender's
Willingness  to Consider  Making All  Advances.  The Lender will not  consider a
request  for any Advance or the  issuance of any Letter of Credit  unless on the
date thereof:

                     (a) the representations and warranties contained in Article
           hereof are  correct  on and as of the date of such  Advance as though
           made  on  and  as of  such  date,  except  to the  extent  that  such
           representations and warranties relate solely to an earlier date; and

                     (b) no  event  has  occurred  and is  continuing,  or would
           result from such Advance or the issuance of such Letter of Credit, as
           the case may be, which constitutes a Default or an Event of Default.

<PAGE>
                                    ARTICLE V

                         Representations and Warranties

                     The  Borrower  represents  and  warrants  to the  Lender as
follows:

                     Section 5.1  Corporate  Existence  and Power;  Name;  Chief
Executive  Office;   Inventory  and  Equipment  Locations.  The  Borrower  is  a
corporation duly  incorporated,  validly existing and in good standing under the
laws of the State of  Delaware,  and is duly  licensed or  qualified to transact
business in all  jurisdictions  where the  character  of the  property  owned or
leased or the nature of the business  transacted  by it makes such  licensing or
qualification  necessary.  The Borrower has all requisite  power and  authority,
corporate or otherwise,  to conduct its business,  to own its  properties and to
execute and  deliver,  and to perform  all of its  obligations  under,  the Loan
Documents. During its corporate existence, the Borrower has done business solely
under the names set forth in Exhibit B hereto.  The chief  executive  office and
principal  place of business of the Borrower is located at the address set forth
in Exhibit B hereto,  and all of the Borrower's records relating to its business
or the  Collateral  are kept at that  location.  All  Inventory and Equipment is
located at that location or at one of the other locations set forth in Exhibit B
hereto.

                     Section 5.2  Authorization of Borrowing;  No Conflict as to
Law or Agreements.  The execution,  delivery and  performance by the Borrower of
the Loan Documents and the borrowings from time to time hereunder have been duly
authorized by all necessary corporate action and do not and will not (a) require
any consent or approval of the  stockholders  of the  Borrower,  (b) require any
authorization,  consent or approval by, or  registration,  declaration or filing
with, or notice to, any  governmental  department,  commission,  board,  bureau,
agency or instrumentality,  domestic or foreign, or any third party, except such
authorization, consent, approval, registration, declaration, filing or notice as
has been obtained,  accomplished or given prior to the date hereof,  (c) violate
any  provision of any law, rule or regulation  (including,  without  limitation,
Regulation X of the Board of Governors of the Federal  Reserve System) or of any
order,  writ,  injunction or decree presently in effect having  applicability to
the Borrower or of the Articles of Incorporation or Bylaws of the Borrower,  (d)
result in a breach of or  constitute  a default  under any  indenture or loan or
credit agreement or any other material  agreement,  lease or instrument to which
the  Borrower  is a party  or by  which  it or its  properties  may be  bound or
affected,  or (e) result in, or  require,  the  creation  or  imposition  of any
mortgage,  deed of trust,  pledge,  lien,  security  interest or other charge or
encumbrance  of any nature  (other  than the  Security  Interests)  upon or with
respect  to any  of the  properties  now  owned  or  hereafter  acquired  by the
Borrower.

                     Section 5.3 Legal  Agreements.  This Agreement  constitutes
and,  upon  due  execution  by the  Borrower,  the  other  Loan  Documents  will
constitute the legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms.

                     Section 5.4 Subsidiaries.  Except as set forth in Exhibit B
attached hereto, the Borrower has no Subsidiaries.
<PAGE>
                     Section  5.5  Financial   Condition;   No  Adverse  Change.
Continental  Information  Systems  Corporation  has heretofore  furnished to the
Lender audited  consolidated  financial statements for its fiscal year ended May
31, 1995 and the  Borrower  has  heretofore  furnished  to the Lender  unaudited
financial  statements of the Borrower for its fiscal year ended May 31, 1995 and
for the months  ended May 31,  1996,  and those  statements  fairly  present the
financial  condition of the Borrower on the dates thereof and the results of its
operations  and cash  flows for the  periods  then  ended and were  prepared  in
accordance with generally accepted accounting principles.  Since the date of the
most recent financial  statements,  there has been no material adverse change in
the business, properties or condition (financial or otherwise) of the Borrower.

                     Section 5.6  Litigation.  Except as  disclosed  in Schedule
5.6, there are no actions,  suits or proceedings pending or, to the knowledge of
the  Borrower,  threatened  against  or  affecting  the  Borrower  or any of its
Affiliates or the properties of the Borrower or any of its Affiliates before any
court  or  governmental  department,   commission,   board,  bureau,  agency  or
instrumentality,  domestic or foreign,  which,  if  determined  adversely to the
Borrower or any of its Affiliates,  would have a material  adverse effect on the
financial  condition,  properties  or  operations  of the Borrower or any of its
Affiliates.

                     Section 5.7  Regulation  U. The  Borrower is not engaged in
the  business  of  extending  credit for the purpose of  purchasing  or carrying
margin  stock  (within the meaning of  Regulation U of the Board of Governors of
the Federal Reserve System),  and no part of the proceeds of any Advance will be
used to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock.

                     Section 5.8 Taxes.  The  Borrower and its  Affiliates  have
paid or caused to be paid to the proper authorities when due all federal,  state
and local taxes  required to be withheld by each of them.  The  Borrower and its
Affiliates  have filed all  federal,  state and local tax  returns  which to the
knowledge of the officers of the Borrower or any Affiliate,  as the case may be,
are  required to be filed,  and the  Borrower  and its  Affiliates  have paid or
caused to be paid to the  respective  taxing  authorities  all taxes as shown on
said  returns or on any  assessment  received  by any of them to the extent such
taxes have become due.

                     Section  5.9 Titles and Liens.  The  Borrower  has good and
absolute title to all Collateral described in the collateral reports provided to
the Lender and all other  Collateral,  properties  and assets  reflected  in the
latest balance sheet referred to in Section 5.5 hereof and all proceeds thereof,
free and clear of all mortgages,  security  interests,  liens and  encumbrances,
except for (i)  mortgages,  security  interests  and liens  permitted by Section
hereof,  and (ii) in the case of any such  property  which is not  Collateral or
other collateral described in the Security Documents,  covenants,  restrictions,
rights,  easements  and minor  irregularities  in title which do not  materially
interfere  with  the  business  or  operations  of  the  Borrower  as  presently
conducted.  No financing  statement  naming the Borrower as debtor is on file in
any office  except to  perfect  only  security  interests  permitted  by Section
hereof.
<PAGE>
                     Section  5.10 Plans.  Except as  disclosed to the Lender in
writing prior to the date hereof, neither the Borrower nor any of its Affiliates
maintains or has maintained any Plan. Neither the Borrower nor any Affiliate has
received  any notice or has any  knowledge  to the effect that it is not in full
compliance with any of the  requirements of ERISA. No Reportable  Event or other
fact or  circumstance  which  may  have an  adverse  effect  on the  Plan's  tax
qualified  status exists in connection  with any Plan.  Neither the Borrower nor
any of its Affiliates has:

                     (a) Any accumulated  funding  deficiency within the meaning
           of ERISA; or

                     (b) Any  liability  or knows  of any fact or  circumstances
           which could result in any liability to the Pension  Benefit  Guaranty
           Corporation, the Internal Revenue Service, the Department of Labor or
           any  participant  in  connection  with any Plan (other  than  accrued
           benefits  which  or which  may  become  payable  to  participants  or
           beneficiaries of any such Plan).

                     Section 5.11 Default.  The Borrower is in  compliance  with
all provisions of all material  agreements,  instruments,  decrees and orders to
which it is a party or by which it or its  property  is bound or  affected,  the
breach or default of which could have a material adverse effect on the financial
condition, properties or operations of the Borrower.

                     Section  5.12  Environmental  Protection.  The Borrower has
obtained all permits, licenses and other authorizations which are required under
federal, state and local laws and regulations relating to emissions, discharges,
releases of pollutants,  contaminants,  hazardous or toxic materials,  or wastes
into ambient air, surface water,  ground water or land, or otherwise relating to
the manufacture,  processing,  distribution,  use, treatment, storage, disposal,
transport  or  handling  of  pollutants,  contaminants  or  hazardous  or  toxic
materials or wastes  ("Environmental  Laws") at the Borrower's  facilities or in
connection with the operation of its facilities.  Except as previously disclosed
to the Lender in writing, the Borrower and all activities of the Borrower at its
facilities comply with all Environmental  Laws and with all terms and conditions
of any required permits,  licenses and authorizations applicable to the Borrower
with respect thereto.  Except as previously  disclosed to the Lender in writing,
the  Borrower  is  also  in  compliance  with  all  limitations,   restrictions,
conditions, standards,  prohibitions,  requirements,  obligations, schedules and
timetables  contained in  Environmental  Laws or  contained in any plan,  order,
decree,  judgment or notice of which the Borrower is aware. Except as previously
disclosed  to the Lender in writing,  the  Borrower is not aware of, nor has the
Borrower received notice of, any events, conditions, circumstances,  activities,
practices,  incidents,  actions  or plans  which may  interfere  with or prevent
continued  compliance  with, or which may give rise to any liability  under, any
Environmental Laws.

                     Section 5.13 Submissions to Lender. All financial and other
information provided to the Lender by or on behalf of the Borrower in connection
with the Borrower's  request for the credit  facilities  contemplated  hereby is
true and correct in all material respects and, as to projections,  valuations or
proforma  financial  statements,  present  a  good  faith  opinion  as  to  such
projections, valuations and proforma condition and results.
<PAGE>
                     Section  5.14  Financing  Statements.  Except as  otherwise
provided in Schedule  5.14,  the Borrower has provided to the Lender  signed UCC
financing  statements  sufficient when filed to perfect such Security  Interests
and the other  security  interests  created  by the  Security  Documents  as are
capable of being  perfected by filing UCC  financing  statements.  When such UCC
financing  statements  are filed in the offices noted  therein,  the Lender will
have a valid and perfected  security  interest in all  Collateral  and all other
collateral  described  in the  Security  Documents  which  is  capable  of being
perfected by filing UCC financing  statements.  None of the  Collateral or other
collateral covered by the Security Documents is or will become a fixture on real
estate, unless a sufficient fixture filing is in effect with respect thereto.

                     Section  5.15 Rights to Payment.  Each right to payment and
each  instrument,  document,  chattel paper and other agreement  constituting or
evidencing  Collateral or other collateral  covered by the Security Documents is
(or, in the case of all future Collateral or such other collateral, will be when
arising or issued)  the  valid,  genuine  and  legally  enforceable  obligation,
subject to no defense,  setoff or  counterclaim,  of the account debtor or other
obligor named therein or in the Borrower's  records  pertaining thereto as being
obligated to pay such obligation.

                                   ARTICLE VI

                      Affirmative Covenants of the Borrower

                     So  long  as  the  Note   shall   remain   unpaid   or  the
Discretionary Credit Facility shall be outstanding or any Letter of Credit shall
be outstanding, the Borrower will comply with the following requirements, unless
the Lender shall otherwise consent in writing:

                     Section  6.1  Reporting  Requirements.  The  Borrower  will
deliver,  or cause to be delivered,  to the Lender each of the following,  which
shall be in form and detail acceptable to the Lender:

                     (a) as soon as available,  and in any event within 120 days
           after the end of each fiscal year of Continental  Information Systems
           Corporation,  audited  annual  financial  statements  of  Continental
           Information  Systems  Corporation  with the  unqualified  opinion  of
           independent  certified  public  accountants  selected by  Continental
           Information Systems  Corporation and acceptable to the Lender,  which
           annual  financial  statements  shall  include  the  balance  sheet of
           Continental  Information  Systems  Corporation  as at the end of such
           fiscal year and the related  statements of income,  retained earnings
           and cash flows of Continental Information Systems Corporation for the
           fiscal year then ended,  prepared on a consolidating and consolidated
           basis to include the Borrower and any  Affiliates,  all in reasonable
           detail and prepared in accordance with generally accepted  accounting
           principles   applied  on  a  basis  consistent  with  the  accounting
           practices applied in the financial  statements referred to in Section
           5.5 hereof,  together  with (i) a report  signed by such  accountants
           stating that in making the investigations  necessary for said opinion
           they obtained no knowledge,  except as  specifically  stated,  of any
           Default  or Event of  Default  hereunder  and all  relevant  facts in
           reasonable detail to evidence, and the computations as to, whether or
           not the Borrower is in compliance with the  requirements set forth in
<PAGE>
           Sections  6.12  and  6.13  and  Section  7.10  hereof;   and  (ii)  a
           certificate of the chief financial officer of Continental Information
           Systems Corporation stating that such financial  statements have been
           prepared in accordance with generally accepted accounting  principles
           applied on a basis consistent with the accounting practices reflected
           in the annual financial  statements referred to in Section 5.5 hereof
           and whether or not such officer has  knowledge of the  occurrence  of
           any  Default or Event of Default  hereunder  and,  if so,  stating in
           reasonable detail the facts with respect thereto;

                     (b) as soon as  available  and in any event  within 20 days
           after the end of each month, an unaudited/internal  balance sheet and
           statements of income and retained  earnings of the Borrower as at the
           end of and for such month and for the year to date period then ended,
           prepared,   if  the  Lender  so  requests,  on  a  consolidating  and
           consolidated  basis to include any Affiliates,  in reasonable  detail
           and stating in  comparative  form the  figures for the  corresponding
           date and periods in the previous  year,  all  prepared in  accordance
           with  generally  accepted  accounting  principles  applied on a basis
           consistent with the accounting  practices  reflected in the financial
           statements  referred to in Section  5.5  hereof,  subject to year-end
           audit  adjustments;  and  accompanied  by a certificate  of the chief
           financial  officer  of the  Borrower,  substantially  in the  form of
           Exhibit D hereto and stating (i) that such financial  statements have
           been  prepared  in  accordance  with  generally  accepted  accounting
           principles   applied  on  a  basis  consistent  with  the  accounting
           practices  reflected  in  the  financial  statements  referred  to in
           Section hereof,  subject to year-end audit adjustments,  (ii) whether
           or not such officer has knowledge of the occurrence of any Default or
           Event of Default hereunder not theretofore reported and remedied and,
           if so, stating in reasonable  detail the facts with respect  thereto,
           and (iii) all relevant  facts in reasonable  detail to evidence,  and
           the  computations as to, whether or not the Borrower is in compliance
           with the requirements set forth in Sections 6.12 and 6.13 and Section
           7.10 hereof;

                     (c) within 15 days after the end of each  month,  agings of
           the Borrower's  accounts  receivable and its accounts  payable and an
           inventory certification report as of the end of such month;

                     (d) at least 30 days  before the  beginning  of each fiscal
           year  of the  Borrower,  the  projected  balance  sheets  and  income
           statements  for each month of such year,  each in reasonable  detail,
           representing the good faith projections of the Borrower and certified
           by the Borrower's chief financial  officer as being the most accurate
           projections  available and identical to the  projections  used by the
           Borrower  for  internal   planning   purposes,   together  with  such
           supporting  schedules  and  information  as  the  Lender  may  in its
           discretion require;
<PAGE>
                     (e) immediately after the commencement  thereof,  notice in
           writing  of  all  litigation  and  of  all  proceedings   before  any
           governmental or regulatory  agency affecting the Borrower of the type
           described in Section hereof or which seek a monetary recovery against
           the  Borrower  in  excess  of  One  Hundred  Fifty  Thousand  Dollars
           ($150,000);

                     (f) as promptly as practicable  (but in any event not later
           than five  business  days) after an officer of the  Borrower  obtains
           knowledge  of the  occurrence  of any  breach,  default  or  event of
           default under any Security  Document or any event which constitutes a
           Default or Event of  Default  hereunder,  notice of such  occurrence,
           together with a detailed  statement by a  responsible  officer of the
           Borrower of the steps being taken by the  Borrower to cure the effect
           of such breach, default or event;

                     (g) as soon as  possible  and in any  event  within 30 days
           after the  Borrower  knows or has reason to know that any  Reportable
           Event with  respect to any Plan has  occurred,  the  statement of the
           chief financial  officer of the Borrower  setting forth details as to
           such Reportable  Event and the action which the Borrower  proposes to
           take with respect thereto, together with a copy of the notice of such
           Reportable Event to the Pension Benefit Guaranty Corporation;

                     (h) as soon as  possible,  and in any event  within 10 days
           after the Borrower fails to make any quarterly  contribution required
           with respect to any Plan under Section 412(m) of the Internal Revenue
           Code of 1986,  as  amended,  the  statement  of the  chief  financial
           officer of the Borrower  setting forth details as to such failure and
           the action which the Borrower  proposes to take with respect thereto,
           together  with a copy of any notice of such  failure  required  to be
           provided to the Pension Benefit Guaranty Corporation;

                     (i)  promptly  upon  knowledge  thereof,  notice of (i) any
           disputes or claims in excess of One Hundred  Fifty  Thousand  Dollars
           ($150,000) by customers of the Borrower;  (ii) any goods  returned to
           or  recovered  by the  Borrower;  and (iii) any change in the persons
           constituting the officers and directors of the Borrower;

                     (j) promptly upon knowledge thereof,  notice of any loss of
           or material damage to any Collateral or other  collateral  covered by
           the Security  Documents or of any  substantial  adverse change in any
           Collateral  or such  other  collateral  or the  prospect  of  payment
           thereof;

                     (k)  promptly  upon  their  distribution,   copies  of  all
           financial statements,  reports and proxy statements which Continental
           Information Systems Corporation shall have sent to its stockholders;

                     (l) promptly after the sending or filing thereof, copies of
           all  regular  and  periodic   financial   reports  which  Continental
           Information  Systems  Corporation  shall file with the Securities and
           Exchange Commission or any national securities exchange;

                     (m)  promptly  upon  knowledge   thereof,   notice  of  the
           violation  by the  Borrower  of any  law,  rule  or  regulation,  the
           non-compliance  with which could  materially and adversely affect its
           business or its financial condition; and
<PAGE>
                     (n) from time to time, with reasonable promptness,  any and
           all  receivables  schedules,  collection  reports,  deposit  records,
           equipment schedules,  copies of invoices to account debtors, shipment
           documents  and  delivery  receipts  for goods  sold,  and such  other
           material, reports, records or information as the Lender may request.

                     Section 6.2 Books and Records;  Inspection and Examination.
The  Borrower  will  keep  accurate  books of  record  and  account  for  itself
pertaining  to the  Collateral  and  pertaining to the  Borrower's  business and
financial  condition  and such other matters as the Lender may from time to time
request in which  true and  complete  entries  will be made in  accordance  with
generally accepted accounting principles  consistently applied and, upon request
of the Lender, will permit any officer, employee, attorney or accountant for the
Lender to audit,  review,  make  extracts from or copy any and all corporate and
financial  books  and  records  of the  Borrower  at all times  during  ordinary
business  hours,  to send and discuss  with account  debtors and other  obligors
requests for  verification  of amounts owed to the Borrower,  and to discuss the
affairs  of the  Borrower  with any of its  directors,  officers,  employees  or
agents.  The Borrower  will permit the Lender,  or its  employees,  accountants,
attorneys or agents,  to examine and inspect any  Collateral,  other  collateral
covered by the Security  Documents or any other  property of the Borrower at any
time during ordinary business hours.

                     Section 6.3 Account Verification.  The Borrower will at any
time  and from  time to time  upon  request  of the  Lender  send  requests  for
verification  of accounts or notices of assignment to account  debtors and other
obligors.

                     Section 6.4 Compliance with Laws;  Environmental Indemnity.
The  Borrower  will (a) comply  with the  requirements  of  applicable  laws and
regulations, the non-compliance with which would materially and adversely affect
its  business  or its  financial  condition,  (b)  comply  with  all  applicable
Environmental  Laws and  obtain  any  permits,  licenses  or  similar  approvals
required by any such  Environmental  Laws, and (c) use and keep the  Collateral,
and will  require  that  others  use and keep the  Collateral,  only for  lawful
purposes,  without  violation  of any  federal,  state or local law,  statute or
ordinance. The Borrower will indemnify, defend and hold the Lender harmless from
and against any claims, loss or damage to which the Lender may be subjected as a
result of any  past,  present  or  future  existence,  use,  handling,  storage,
transportation  or  disposal  of any  hazardous  waste  or  substance  or  toxic
substance  by the Borrower or on property  owned,  leased or  controlled  by the
Borrower.  This indemnification  agreement shall survive the termination of this
Agreement and payment of the indebtedness hereunder.

                     Section 6.5 Payment of Taxes and Other Claims. The Borrower
will pay or discharge,  when due, (a) all taxes,  assessments  and  governmental
charges  levied  or  imposed  upon it or upon its  income or  profits,  upon any
properties  belonging to it (including,  without limitation,  the Collateral) or
upon  or  against  the  creation,  perfection  or  continuance  of the  Security
Interests, prior to the date on which penalties attach thereto, (b) all federal,
state and local taxes  required to be withheld by it, and (c) all lawful  claims
for labor,  materials and supplies which, if unpaid,  might by law become a lien
or charge upon any properties of the Borrower; provided, that the Borrower shall
not be required to pay any such tax,  assessment,  charge or claim whose amount,
applicability  or  validity  is being  contested  in good  faith by  appropriate
proceedings.
<PAGE>
                     Section 6.6  Maintenance  of  Properties.  (a) The Borrower
will keep and  maintain  the  Collateral,  the other  collateral  covered by the
Security  Documents and all of its other  properties  necessary or useful in its
business in good  condition,  repair and  working  order  (normal  wear and tear
excepted)  and will from time to time  replace or repair any worn,  defective or
broken parts; provided,  however, that nothing in this Section 6.6 shall prevent
the Borrower from  discontinuing  the operation  and  maintenance  of any of its
properties if such  discontinuance is, in the judgment of the Lender,  desirable
in the  conduct  of the  Borrower's  business  and  not  disadvantageous  in any
material respect to the Lender.

                     (b) The  Borrower  will defend the  Collateral  against all
           claims or demands of all persons (other than the Lender) claiming the
           Collateral or any interest therein.

                     (c)  The  Borrower  will  keep  all  Collateral  and  other
           collateral  covered by the Security  Documents  free and clear of all
           security  interests,  liens  and  encumbrances  except  the  Security
           Interests  and other  security  interests  permitted  by Section  7.1
           hereof.

                     Section 6.7 Insurance.  The Borrower will obtain and at all
times  maintain   insurance  with  insurers  believed  by  the  Borrower  to  be
responsible  and  reputable,  in such amounts and against such risks as may from
time to time be required by the  Lender,  but in all events in such  amounts and
against  such  risks as is  usually  carried  by  companies  engaged  in similar
business and owning  similar  properties  in the same general areas in which the
Borrower  operates.  Without  limiting  the  generality  of the  foregoing,  the
Borrower will at all times keep all tangible Collateral insured against risks of
fire (including so-called extended coverage),  theft,  collision (for Collateral
consisting  of motor  vehicles)  and such other risks and in such amounts as the
Lender may reasonably request, with any loss payable to the Lender to the extent
of its  interest,  and all policies of such  insurance  shall contain a lender's
loss  payable  endorsement  for the  benefit  of the  Lender.  All  policies  of
liability  insurance  required  hereunder shall name the Lender as an additional
insured.

                     Section  6.8  Preservation  of  Corporate  Existence.   The
Borrower  will  preserve  and maintain its  corporate  existence  and all of its
rights,  privileges and franchises  necessary or desirable in the normal conduct
of its business  and shall  conduct its  business in an orderly,  efficient  and
regular manner.

                     Section 6.9 Delivery of  Instruments,  etc. Upon request by
the  Lender,  the  Borrower  will  promptly  deliver to the Lender in pledge all
instruments, documents and chattel papers constituting Collateral, duly endorsed
or assigned by the Borrower.

                     Section 6.10 Lockbox;  Collateral Account. (a) The Borrower
will irrevocably direct all present and future Account debtors and other Persons
obligated  to  make  payments  constituting  Collateral  to make  such  payments
directly to the Lockbox. All of the Borrower's invoices,  account statements and
other  written  or oral  communications  directing,  instructing,  demanding  or
requesting  payment of any Account or any other amount  constituting  Collateral
shall  conspicuously  direct that all  payments be made to the Lockbox and shall
include the  Lockbox  address.  All  payments  received in the Lockbox  shall be
processed to the Collateral Account.
<PAGE>
                     (b)  The  Borrower  agrees  to  deposit  in the  Collateral
           Account  or, at the  Lender's  option,  to  deliver to the Lender all
           collections  on Accounts,  contract  rights,  chattel paper and other
           rights  to  payment  constituting  Collateral,  and  all  other  cash
           proceeds of  Collateral,  which the  Borrower  may  receive  directly
           notwithstanding  its direction to Account  debtors and other obligors
           to make payments to the Lockbox, immediately upon receipt thereof, in
           the form received,  except for the Borrower's endorsement when deemed
           necessary.  Until  delivered  to  the  Lender  or  deposited  in  the
           Collateral  Account,  all proceeds or collections of Collateral shall
           be held in  trust  by the  Borrower  for and as the  property  of the
           Lender and shall not be commingled  with any funds or property of the
           Borrower.  Amounts deposited in the Collateral Account shall not bear
           interest  and shall not be subject  to  withdrawal  by the  Borrower,
           except after full payment and discharge of all Obligations.  All such
           collections  shall  constitute  proceeds of Collateral  and shall not
           constitute  payment  of any  Obligation.  Collected  funds  from  the
           Collateral  Account  shall be  transferred  to the  Lender's  general
           account,  and the Lender may deposit in its general account or in the
           Collateral  Account any and all  collections  received by it directly
           from the  Borrower.  The Lender may  commingle  such funds with other
           property  of the  Lender  or any  other  person.  The  Lender,  after
           allowing  (i) two (2) Banking  Days after  deposit in the  Collateral
           Account  and/or  (ii) one (1)  Banking  Day after  direct  deposit in
           Lender's  account no.  10-62-609 at Norwest Bank Minnesota,  National
           Association,  shall apply such funds (i) first, to the payment of all
           fees, costs and expenses due and unpaid  hereunder,  (ii) second,  to
           the  payment  of any and all  Obligations,  in any order or manner of
           application  satisfactory  to the  Lender,  and  (iii)  third,  after
           payment in full of all amounts  required  under  clauses (i) and (ii)
           above, to the Borrower or otherwise as required by law or as directed
           by a court of  competent  jurisdiction.  All items  delivered  to the
           Lender or deposited  in the  Collateral  Account  shall be subject to
           final payment. If any such item is returned uncollected, the Borrower
           will  immediately  pay the  Lender,  or, for items  deposited  in the
           Collateral Account,  the bank maintaining such account, the amount of
           that item, or such bank at its discretion may charge any  uncollected
           item to the Borrower's account with the Lender. The Borrower shall be
           liable  as an  endorser  on all  items  deposited  in the  Collateral
           Account, whether or not in fact endorsed by the Borrower.

                     Section 6.11 Performance by the Lender.  If the Borrower at
any time fails to perform or observe any of the foregoing covenants contained in
this  Article or elsewhere  herein,  and if such  failure  shall  continue for a
period of ten calendar days after the Lender gives the Borrower  written  notice
thereof (or in the case of the  agreements  contained  in Sections  6.5, 6.7 and
6.10 hereof,  immediately upon the occurrence of such failure, without notice or
lapse of time),  the Lender may, but need not,  perform or observe such covenant
on behalf and in the name,  place and stead of the Borrower (or, at the Lender's
option,  in the  Lender's  name) and may,  but need not,  take any and all other
actions which the Lender may  reasonably  deem necessary to cure or correct such
failure (including,  without limitation,  the payment of taxes, the satisfaction
of security  interests,  liens or  encumbrances,  the performance of obligations
owed to account  debtors or other  obligors,  the procurement and maintenance of
insurance,  the  execution of  assignments,  security  agreements  and financing
<PAGE>
statements,  and  the  endorsement  of  instruments);  and  the  Borrower  shall
thereupon pay to the Lender on demand the amount of all monies  expended and all
costs and expenses  (including  reasonable  attorneys'  fees and legal expenses)
incurred by the Lender in connection  with or as a result of the  performance or
observance  of such  agreements  or the  taking of such  action  by the  Lender,
together  with  interest  thereon  from the date  expended  or  incurred  at the
Floating Rate. To facilitate the performance or observance by the Lender of such
covenants of the Borrower,  the Borrower hereby irrevocably appoints the Lender,
or the  delegate of the Lender,  acting  alone,  as the  attorney in fact of the
Borrower (which appointment is coupled with an interest) with the right (but not
the duty)  from time to time to create,  prepare,  complete,  execute,  deliver,
endorse  or  file  in the  name  and on  behalf  of the  Borrower  any  and  all
instruments,  documents, assignments, security agreements, financing statements,
applications  for insurance  and other  agreements  and writings  required to be
obtained,  executed,  delivered or endorsed by the  Borrower  under this Section
6.11.

                     Section 6.12 Net Worth.  While any part of the  Obligations
remains  unpaid,  the  Borrower  shall,  unless  waived in  writing  by  Lender,
continuously maintain: (a) from the execution of this Agreement through November
30, 1996 a minimum Net Worth of not less than Two Million Seven Hundred Thousand
Dollars ($2,700,000) and (b) a minimum Net Worth as of the end of each six-month
period  commencing with the six months ending November 30, 1996 of not less than
One Hundred  Thousand  Dollars  ($100,000)  more than the Net Worth  requirement
during the preceding six-month period.

                     Section   6.13  Net   Earnings.   While  any  part  of  the
Obligations  remains unpaid, the Borrower shall, unless waived in writing by the
Lender,  demonstrate Net Earnings of not less than One Hundred  Thousand Dollars
($100,000) on its internally  prepared  financial  statements for the six months
ending November 30, 1996 and each six-month period thereafter.

                                   ARTICLE VII

                               Negative Covenants

                     So  long  as  the  Note   shall   remain   unpaid   or  the
Discretionary Credit Facility shall be outstanding or any Letter of Credit shall
be outstanding,  the Borrower agrees that,  without the prior written consent of
the Lender:

                     Section 7.1 Liens.  The Borrower will not create,  incur or
suffer to exist any mortgage,  deed of trust,  pledge,  lien, security interest,
assignment  or  transfer  upon or of any of its assets,  now owned or  hereafter
acquired, to secure any indebtedness;  excluding, however, from the operation of
the foregoing:

                     (a) mortgages,  deeds of trust,  pledges,  liens,  security
           interests and  assignments in existence on the date hereof and listed
           in  Exhibit  C  hereto,  securing  indebtedness  for  borrowed  money
           permitted under Section 7.2 hereof;

                     (b) the Security Interests; and

                     (c)  purchase  money  security  interests  relating  to the
           acquisition of machinery and equipment of the Borrower so long as the
           Borrower is in, and maintains,  compliance with every other provision
           of this Agreement.
<PAGE>
                     Section  7.2  Indebtedness.  The  Borrower  will not incur,
create,  assume or permit to exist any  recourse  indebtedness  or  liability on
account of deposits or advances or any  indebtedness  for borrowed money, or any
other indebtedness or liability evidenced by notes, bonds, debentures or similar
obligations, except:

                     (a) indebtedness arising hereunder;

                     (b)  indebtedness  of the Borrower in existence on the date
           hereof and listed in Exhibit C hereto;

                     (c) indebtedness  relating to liens permitted in accordance
           with Section hereof; and

                     (d) "Subordinated  Indebtedness" as such term is defined in
           the Debt  Subordination  Agreement,  dated even date  herewith by and
           among Borrower, Lender and CIS Corporation.

                     Section  7.3  Guaranties.  The  Borrower  will not  assume,
guarantee,  endorse or  otherwise  become  directly  or  contingently  liable in
connection with any obligations of any other Person, except:

                     (a)  the  endorsement  of  negotiable  instruments  by  the
           Borrower for deposit or  collection  or similar  transactions  in the
           ordinary course of business; and

                     (b) guaranties, endorsements and other direct or contingent
           liabilities  in connection  with the  obligations of other Persons in
           existence on the date hereof and listed in Exhibit C hereto.

                     Section 7.4 Investments and Subsidiaries.  (a) The Borrower
will  not  purchase  or hold  beneficially  any  stock or  other  securities  or
evidences of indebtedness  of, make or permit to exist any loans or advances to,
or make any investment or acquire any interest  whatsoever in, any other Person,
including  specifically but without limitation any partnership or joint venture,
except:

                     (1) investments in direct  obligations of the United States
           of America or any agency or instrumentality thereof whose obligations
           constitute full faith and credit  obligations of the United States of
           America  having a  maturity  of one year or  less,  commercial  paper
           issued by U.S.  corporations rated "A-1" or "A-2" by Standard & Poors
           Corporation  or  "P-1"  or  "P-2" by  Moody's  Investors  Service  or
           certificates of deposit or bankers'  acceptances having a maturity of
           one year or less  issued by members  of the  Federal  Reserve  System
           having  deposits in excess of  $100,000,000  (which  certificates  of
           deposit or  bankers'  acceptances  are fully  insured by the  Federal
           Deposit Insurance Corporation);

                     (2) travel  advances or loans to officers and  employees of
           the  Borrower  not  exceeding  at any one  time an  aggregate  of Ten
           Thousand Dollars ($10,000); and

                     (3) advances in the form of progress payments, prepaid rent
           or security deposits;

                     (4)  payments to CIS  Corporation  to reduce  inter-company
           debt to the extent permitted by Section 7.20; and
<PAGE>
                     (5) other loans and advances made in the ordinary course of
           Borrower's  business,  provided  that  the  conditions  set  forth in
           subparagraphs  (a)  through (d) of Section  7.20 have been  satisfied
           (and for this  purpose the  "payment"  referred  to therein  shall be
           deemed to be the loan or advance  proposed to be made by the Borrower
           under this subparagraph (5)).

                      (b) The  Borrower  will not  create or permit to exist any
           Subsidiary, other than any Subsidiary in existence on the date hereof
           and listed in Exhibit B hereto.  Notwithstanding  any other provision
           of this Agreement,  in no event will the Borrower make any investment
           in, or any loan, advance, or transfer of assets of any nature to, any
           Affiliate which is not a Guarantor.

                     Section 7.5 Dividends. The Borrower will not declare or pay
any dividends (other than dividends  payable solely in stock of the Borrower) on
any  class  of its  stock  or make  any  payment  on  account  of the  purchase,
redemption  or  other  retirement  of any  shares  of such  stock  or  make  any
distribution  in respect  thereof,  either  directly  or  indirectly;  provided,
however,  that if the  Borrower  is an S  Corporation  within the meaning of the
Internal Revenue Code of 1986, as amended, or shall become such an S Corporation
with the Lender's  consent under Section 7.16 hereof,  and after first providing
such supporting  documentation  as the Lender may request,  the Borrower may pay
dividends in an amount equal to the amount of state and federal income tax which
would be due by each shareholder with respect to income deemed to be received by
such shareholder from the Borrower as a result of the Borrower's  status as an S
Corporation at the highest  marginal  income tax rate for federal and state (for
the state or states in which each  shareholder  is liable for income  taxes with
respect to such  income)  income tax  purposes,  after  taking into  account any
deduction  for  state  income  taxes  in  calculating  the  federal  income  tax
liability.

                     Section  7.6 Sale or  Transfer  of  Assets;  Suspension  of
Business  Operations.  The Borrower will not sell,  lease,  assign,  transfer or
otherwise dispose of (i) the stock of any Subsidiary,  (ii) all or a substantial
part of its assets,  or (iii) any Collateral or any interest therein (whether in
one transaction or in a series of  transactions)  to any other Person other than
the sale of Inventory in the ordinary course of business and will not liquidate,
dissolve or suspend  business  operations.  The Borrower  will not in any manner
transfer  any  property  without  prior or present  receipt of full and adequate
consideration. For purposes of this Agreement, a sale in the "ordinary course of
business"  shall be deemed to  include a sale to an  Affiliate  at not less than
Borrower's cost.

                     Section 7.7.  Consolidation and Merger; Asset Acquisitions.
The Borrower will not consolidate  with or merge into any Person,  or permit any
other Person to merge into it, or acquire (in a transaction analogous in purpose
or effect to a consolidation or merger) all or  substantially  all the assets of
any other Person.

                     Section 7.8 Sale and Leaseback. The Borrower will not enter
into any arrangement,  directly or indirectly, with any other Person whereby the
Borrower shall sell or transfer any real or personal property, whether now owned
or  hereafter  acquired,  and then or  thereafter  rent or lease as lessee  such
property or any part thereof or any other property which the Borrower intends to
use for substantially the same purpose or purposes as the property being sold or
transferred.
<PAGE>
                     Section  7.9  Restrictions  on  Nature  of  Business.   The
Borrower will not engage in any line of business materially  different from that
presently  engaged in by the Borrower and will not purchase,  lease or otherwise
acquire assets not related to its business.

                     Section 7.10 Capital  Expenditures.  The Borrower  will not
expend or contract to expend more than One Hundred Thousand  Dollars  ($100,000)
in the  aggregate  during  any  fiscal  year for the  lease,  purchase  or other
acquisition of any capital asset,  or for the lease of any other asset,  whether
payable currently or in the future.

                     Section 7.11  Accounting.  The Borrower  will not adopt any
material  change in  accounting  principles  other than as required by generally
accepted accounting  principles.  The Borrower will not adopt, permit or consent
to any change in its fiscal year.

                     Section 7.12  Discounts,  etc.  The  Borrower  will not (a)
after  notice from the Lender,  grant any  discount,  credit or allowance to any
customer of the Borrower or accept any return of goods sold,  or (b) at any time
(whether  before or after notice from the Lender)  modify,  amend,  subordinate,
cancel or terminate the obligation of any account debtor or other obligor of the
Borrower.

                     Section 7.13 Defined  Benefit  Pension Plans.  The Borrower
will not adopt, create, assume or become a party to
any defined  benefit  pension plan,  unless  disclosed to the Lender pursuant to
Section 5.10 hereof.

                     Section 7.14 Other  Defaults.  The Borrower will not permit
any breach, default or event of default to occur under any note, loan agreement,
indenture,  lease,  mortgage,  contract  for deed,  security  agreement or other
contractual  obligation which may constitute a recourse  obligation binding upon
the Borrower.

                     Section 7.15 Place of Business; Name. The Borrower will not
transfer its chief  executive  office or principal  place of business,  or move,
relocate,  close or sell any business location. The Borrower will not permit any
tangible Collateral or any records pertaining to the Collateral to be located in
any state or area in which, in the event of such location, a financing statement
covering  such  Collateral  would be  required  to be, but has not in fact been,
filed in order to perfect the Security  Interests.  The Borrower will not change
its name.

                     Section  7.16  Organizational   Documents;   S  Corporation
Status.  The Borrower will not amend its certificate of incorporation,  articles
of incorporation or bylaws. The Borrower will not become an S Corporation within
the  meaning  of the  Internal  Revenue  Code of 1986,  as  amended,  or, if the
Borrower  already is such an S  Corporation,  it shall not change or rescind its
status as an S Corporation.

                     Section 7.17 Salaries.  The Borrower will not pay excessive
or  unreasonable  salaries,  bonuses,  commissions,  consultant  fees  or  other
compensation;  or increase the salary,  bonus,  commissions,  consultant fees or
other  compensation  of any director,  officer or  consultant,  or any member of
their families, by more than 20% in any one year, either individually or for all
such persons in the  aggregate,  or pay any such  increase from any source other
than profits earned in the year of payment.
<PAGE>
                     Section 7.18 Change in  Ownership.  The  Borrower  will not
issue or sell any stock of the Borrower so as to change the percentage of voting
and  non-voting  stock  owned by each of the  Borrower's  shareholders,  and the
Borrower  will not  permit or suffer  to occur the sale,  transfer,  assignment,
pledge or other  disposition of any or all of the issued and outstanding  shares
of stock of the Borrower.

                     Section 7.19  Overhead  Charges.  The Borrower will not pay
corporate  overhead  charges  which  combined  with the  payments  of  corporate
overhead charges by GMCCCS Corp. exceed Two Hundred Thousand Dollars  ($200,000)
per fiscal quarter.

                     Section 7.20 Existing Inter-Company Debt. The Borrower will
not make quarterly payments to CIS Corporation to reduce Existing  Inter-Company
Debt (as defined in Exhibit C hereto), unless:

                     (a) The Borrower is not in default under this Agreement and
           GMCCCS Corp. is not in default under the GMCCCS Credit Facility;

                     (b) The Borrower has maintained an average net availability
           during the 30-day  period prior to making any such  payment  equal to
           the amount of such payment plus Seven Hundred Fifty Thousand  Dollars
           ($750,000);

                     (c) GMCCCS Corp. has maintained an average net availability
           during the 30-day period prior to making any such payment of not less
           than the  amount of such  payment  plus Two  Hundred  Fifty  Thousand
           Dollars ($250,000); and

                     (d) The inter-company  debt balance is at least One Million
           Five Hundred Thousand Dollars ($1,500,000).

                     Section 7.21 New Inter-Company  Debt. The Borrower will not
make any  payments  to  reduce  additional  inter-company  debt in excess of the
Existing Inter-Company Debt, unless:

                     (a) The Borrower is not in default under this Agreement and
           GMCCCS Corp. is not in default under the GMCCCS Credit Facility; and

                     (b) The Borrower has net  availability  prior to making any
           such payment  equal to the amount of such payment plus Seven  Hundred
           Fifty Thousand Dollars ($750,000).

                                  ARTICLE VIII

                     Events of Default, Rights and Remedies

                     Section  8.1 Events of  Default.  Notwithstanding  that the
Lender may demand immediate payment of the Advances at any time,  whether or not
a Default or an Event of Default  shall have  occurred,  and without  waiving or
limiting in any respect the Lender's  right to so demand payment of the Advances
at any time, this Agreement sets forth a non-exclusive  list of certain critical
events  after the  occurrence  of which the Lender  expects that it would demand
immediate  payment of the  Advances.  "Event of Default",  wherever used herein,
means any one of the following events:
<PAGE>
                     (a) Default in the payment of any  interest on or principal
           of the Note  when it  becomes  due and  payable,  or  failure  to pay
           immediately upon demand any principal of or interest on the Note; or

                     (b) Failure to pay when due any amount specified in Section
           2.4 hereof relating to the Borrower's Obligation of Reimbursement, or
           failure  to pay  immediately  when  due or  upon  termination  of the
           Discretionary  Credit  Facility  any amounts  required to be paid for
           deposit in the Special Account under Section 2.5 or 2.11 hereof; or

                     (c) Default in the payment of any fees, commissions,  costs
           or expenses required to be paid by the Borrower under this Agreement;
           or

                     (d) Default in the performance,  or breach, of any covenant
           or agreement of the Borrower contained in this
           Agreement; or

                     (e)  The  Borrower  or any  Guarantor  shall  be or  become
           insolvent,  or admit in writing its inability to pay its or his debts
           as they mature,  or make an assignment  for the benefit of creditors;
           or the  Borrower or any  Guarantor  shall apply for or consent to the
           appointment of any receiver,  trustee,  or similar  officer for it or
           him or for all or any  substantial  part of its or his  property;  or
           such receiver,  trustee or similar officer shall be appointed without
           the application or consent of the Borrower or such Guarantor,  as the
           case may be; or the Borrower or any  Guarantor  shall  institute  (by
           petition, application,  answer, consent or otherwise) any bankruptcy,
           insolvency,   reorganization,   arrangement,  readjustment  of  debt,
           dissolution,  liquidation or similar proceeding relating to it or him
           under the laws of any  jurisdiction;  or any such proceeding shall be
           instituted  (by  petition,  application  or  otherwise)  against  the
           Borrower or any such  Guarantor;  or any judgment,  writ,  warrant of
           attachment,  garnishment  or  execution or similar  process  shall be
           issued or levied  against a  substantial  part of the property of the
           Borrower or any Guarantor; or

                     (f) A petition shall be filed by or against the Borrower or
           any  Guarantor  under the United  States  Bankruptcy  Code naming the
           Borrower or such Guarantor as debtor; or

                     (g) Any  representation or warranty made by the Borrower in
           this  Agreement,  by any  Guarantor in any guaranty  delivered to the
           Lender or by the Borrower (or any of its  officers) or any  Guarantor
           in any agreement,  certificate,  instrument or financial statement or
           other statement  contemplated by or made or delivered  pursuant to or
           in connection with this Agreement or any such guaranty shall prove to
           have  been  incorrect  in any  material  respect  when  deemed  to be
           effective; or

                     (h) The rendering against the Borrower of a final judgment,
           decree or order  for the  payment  of money in excess of One  Hundred
           Fifty  Thousand  Dollars  ($150,000)  and  the  continuance  of  such
           judgment, decree or order unsatisfied and in effect for any period of
           30 consecutive days without a stay of execution; or
<PAGE>
                     (i) A  default  under any  bond,  debenture,  note or other
           evidence of  indebtedness  of the  Borrower  owed to any Person other
           than the Lender,  or under any  indenture or other  instrument  under
           which any such evidence of  indebtedness  has been issued or by which
           it is governed,  or under any lease of any of the  Premises,  and the
           expiration of the applicable  period of grace,  if any,  specified in
           such evidence of indebtedness,  indenture, other instrument or lease;
           or

                     (j) Any Reportable  Event,  which the Lender  determines in
           good faith might  constitute  grounds for the termination of any Plan
           or for the  appointment  by the  appropriate  United States  District
           Court of a trustee to administer any Plan, shall have occurred and be
           continuing  30 days after  written  notice to such effect  shall have
           been given to the  Borrower  by the Lender;  or a trustee  shall have
           been  appointed by an  appropriate  United States  District  Court to
           administer  any Plan;  or the Pension  Benefit  Guaranty  Corporation
           shall have instituted proceedings to terminate any Plan or to appoint
           a trustee to administer  any Plan;  or the Borrower  shall have filed
           for a distress  termination  of any Plan under Title IV of ERISA;  or
           the  Borrower  shall have failed to make any  quarterly  contribution
           required  with  respect  to any  Plan  under  Section  412(m)  of the
           Internal  Revenue  Code  of  1986,  as  amended,   which  the  Lender
           determines in good faith may by itself,  or in  combination  with any
           such  failures  that the Lender may  determine are likely to occur in
           the future,  result in the  imposition of a lien on the assets of the
           Borrower in favor of the Plan; or

                     (k) An event of  default  shall  occur  under any  Security
           Document or under any other  security  agreement,  mortgage,  deed of
           trust,  assignment  or other  instrument  or  agreement  securing any
           obligations of the Borrower hereunder or under any note; or

                     (l) The Borrower shall  liquidate,  dissolve,  terminate or
           suspend its  business  operations  or  otherwise  fail to operate its
           business in the ordinary course,  or sell all or substantially all of
           its assets, without the prior written consent of the Lender; or

                     (m) The Borrower  shall fail to pay,  withhold,  collect or
           remit any tax or tax deficiency  when assessed or due (other than any
           tax deficiency  which is being  contested in good faith and by proper
           proceedings  and for  which it  shall  have  set  aside on its  books
           adequate  reserves  therefor)  or notice of any state or federal  tax
           liens shall be filed or issued; or

                     (n)  Default  in the  payment  of any  amount  owed  by the
           Borrower to the Lender other than any indebtedness arising hereunder;
           or

                     (o) Any  Guarantor  shall  repudiate,  purport to revoke or
           fail  to  perform  any  such  Guarantor's   obligations   under  such
           Guarantor's guaranty in favor of the Lender, any individual Guarantor
           shall die or any other Guarantor shall cease to exist; or

                     (p)  Any  breach,   default  or  event  of  default  by  or
           attributable  to any  Affiliate  under  any  agreement  between  such
           Affiliate and the Lender.
<PAGE>
                     Section 8.2 Rights and Remedies. As provided in Section 2.9
hereof,  the Lender  may,  at any time,  refuse to make any  requested  Advance,
refuse to issue or cause to be issued any Letter of  Credit,  demand  payment of
the Advances or terminate the  Discretionary  Credit Facility,  whether or not a
Default  or an Event of Default  shall  have  occurred.  In  addition,  upon the
occurrence  of an Event of  Default  or at any time  thereafter,  the Lender may
exercise any or all of the following rights and remedies:

                     (a) The Lender may, by notice to the  Borrower,  declare to
           be forthwith  due and payable the entire unpaid  principal  amount of
           the Note then  outstanding,  all interest accrued and unpaid thereon,
           all amounts  payable under this Agreement and any other  Obligations,
           whereupon  the Note,  all such accrued  interest and all such amounts
           and  Obligations  shall  become  and be  forthwith  due and  payable,
           without presentment, notice of dishonor, protest or further notice of
           any kind, all of which are hereby expressly waived by the Borrower;

                     (b) The Lender  may,  without  notice to the  Borrower  and
           without further  action,  apply any and all money owing by the Lender
           to the Borrower to the payment of the  Advances,  including  interest
           accrued  thereon,  and of all other sums then  owing by the  Borrower
           hereunder,   including,   without   limitation,   the  Obligation  of
           Reimbursement;

                     (c) The Lender may, exercise and enforce any and all rights
           and remedies available upon default to a secured party under the UCC,
           including,  without  limitation,  the  right  to take  possession  of
           Collateral,  or any evidence  thereof,  proceeding  without  judicial
           process or by  judicial  process  (without a prior  hearing or notice
           thereof, which the Borrower hereby expressly waives) and the right to
           sell,  lease or  otherwise  dispose of any or all of the  Collateral,
           and, in connection  therewith,  the Borrower will on demand  assemble
           the  Collateral  and make it available to the Lender at a place to be
           designated  by the  Lender  which is  reasonably  convenient  to both
           parties;

                     (d) The  Lender  may make  demand  upon the  Borrower  and,
           forthwith  upon such demand,  the Borrower  will pay to the Lender in
           immediately  available  funds  for  deposit  in the  Special  Account
           pursuant  to Sections  and 3.5 hereof an amount  equal to the maximum
           aggregate  amount  available  to be drawn under all Letters of Credit
           then outstanding, assuming compliance with all conditions for drawing
           thereunder;

                     (e) the  Lender may  exercise  and  enforce  its rights and
           remedies under the Loan Documents; and

                     (f) the Lender may  exercise  any other rights and remedies
           available to it by law or agreement.

Notwithstanding  the  foregoing,  upon the  occurrence  of an  Event of  Default
described in Section 8.1(f) hereof,  the entire unpaid  principal  amount of the
Note and the Obligation of  Reimbursement  (whether  contingent or funded),  all
interest  accrued  and unpaid  thereon,  all other  amounts  payable  under this
Agreement  and any  other  Obligations  shall  be  immediately  due and  payable
automatically without presentment, demand, protest or notice of any kind.
<PAGE>
                     Section 8.3 Certain  Notices.  If notice to the Borrower of
any intended  disposition of Collateral or any other intended action is required
by law in a  particular  instance,  such  notice  shall be  deemed  commercially
reasonable  if given  (in the  manner  specified  in  Section  9.3) at least ten
business days prior to the date of intended disposition or other action.

                                   ARTICLE IX

                                  Miscellaneous

                     Section 9.1 No Waiver;  Cumulative Remedies.  No failure or
delay on the part of the Lender in exercising  any right,  power or remedy under
the Loan Documents  shall operate as a waiver  thereof;  nor shall any single or
partial  exercise  of any such  right,  power or  remedy  preclude  any other or
further  exercise  thereof or the exercise of any other  right,  power or remedy
under the Loan  Documents.  The  remedies  provided  in the Loan  Documents  are
cumulative and not exclusive of any remedies  provided by law. The Lender agrees
to act at all times in a commercially reasonable manner in exercising its rights
and  remedies  under the Loan  Documents  as  required  by the UCC and any other
applicable law.

                     Section 9.2  Amendments,  Etc. No amendment,  modification,
termination  or waiver of any  provision of any Loan  Document or consent to any
departure by the Borrower  therefrom or any release of a Security Interest shall
be effective  unless the same shall be in writing and signed by the Lender,  and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given. No notice to or demand on the Borrower
in any case shall entitle the Borrower to any other or further  notice or demand
in similar or other circumstances.

                     Section 9.3 Addresses for Notices, Etc. Except as otherwise
expressly   provided   herein,   all  notices,   requests,   demands  and  other
communications  provided  for under the Loan  Documents  shall be in writing and
shall be (a) personally  delivered,  (b) sent by first class United States mail,
(c) sent by overnight  courier of national  reputation,  or (d)  transmitted  by
telecopy,  in each case  addressed to the party to whom notice is being given at
its address as set forth below and, if telecopied,  transmitted to that party at
its telecopier number set forth below:

                     If to the Borrower:

                     CIS Air Corporation
                     One Northern Concourse
                     Syracuse, New York  13221
                     Telecopier:  (315) 455-4862
                     Attention: Frank J. Corcoran

                     If to the Lender:

                     Norwest Business Credit, Inc.
                     100 East Wisconsin Avenue, Suite 1400
                     Milwaukee, WI  53202
                     Telecopier: (414) 224-7439
                     Attention:  Thomas J. Zak
<PAGE>
or,  as to each  party,  at such  other  address  or  telecopier  number  as may
hereafter  be  designated  by such party in a written  notice to the other party
complying  as to  delivery  with the terms of this  Section.  All such  notices,
requests, demands and other communications shall be deemed to have been given on
(a) the date received if personally delivered, (b) when deposited in the mail if
delivered by mail,  (c) the date sent if sent by overnight  courier,  or (d) the
date of transmission  if delivered by telecopy,  except that notices or requests
to the Lender  pursuant to any of the  provisions of Article hereof shall not be
effective until received by the Lender.

                     Section 9.4 Financing Statement. A carbon,  photographic or
other  reproduction of this Agreement or of any financing  statements  signed by
the  Borrower  is  sufficient  as a  financing  statement  and may be filed as a
financing  statement  in any state to perfect  the  security  interests  granted
hereby. For this purpose, the following information is set forth:

                     Name and address of Debtor:

                     CIS Air Corporation
                     One Northern Concourse
                     Syracuse, New York  13221

                     Federal Tax Identification No. 94-3043971

                     Name and address of Secured Party:

                     Norwest Business Credit, Inc.
                     100 East Wisconsin Avenue, Suite 1400
                     Milwaukee, WI  53202

                     Section 9.5 Further Documents.  The Borrower will from time
to time  execute  and  deliver or endorse  any and all  instruments,  documents,
conveyances,  assignments,  security agreements,  financing statements and other
agreements  and  writings  that the  Lender may  reasonably  request in order to
secure, protect,  perfect or enforce the Security Interests or the rights of the
Lender  under this  Agreement  (but any  failure  to request or assure  that the
Borrower executes, delivers or endorses any such item shall not affect or impair
the validity,  sufficiency or  enforceability of this Agreement and the Security
Interests,  regardless  of  whether  any  such  item  was or was  not  executed,
delivered or endorsed in a similar context or on a prior occasion).

                     Section 9.6 Collateral. This Agreement does not contemplate
a sale of accounts,  contract rights or chattel paper,  and, as provided by law,
the  Borrower  is  entitled  to any  surplus  and shall  remain  liable  for any
deficiency.  The  Lender's  duty of  care  with  respect  to  Collateral  in its
possession  (as  imposed  by law)  shall be  deemed  fulfilled  if it  exercises
reasonable  care  in  physically  keeping  such  Collateral,  or in the  case of
Collateral  in the  custody or  possession  of a bailee or other  third  person,
exercises  reasonable care in the selection of the bailee or other third person,
and the Lender  need not  otherwise  preserve,  protect,  insure or care for any
Collateral.  The  Lender  shall not be  obligated  to  preserve  any  rights the
Borrower may have against prior parties,  to realize on the Collateral at all or
in any  particular  manner  or  order  or to  apply  any  cash  proceeds  of the
Collateral in any particular order of application.
<PAGE>
                     Section 9.7 Costs and Expenses.  The Borrower agrees to pay
on demand all costs and  expenses,  including  (without  limitation)  attorneys'
fees, incurred by the Lender in connection with the Obligations, this Agreement,
the Loan  Documents,  any Letters of Credit and any other  document or agreement
related hereto or thereto, and the transactions  contemplated hereby,  including
without  limitation the Lender's appraisal fees on an ongoing basis and all such
costs,   expenses  and  fees  incurred  in  connection  with  the   negotiation,
preparation, execution, amendment,  administration,  performance, collection and
enforcement  of the  Obligations  and all such  documents and agreements and the
creation, perfection,  protection,  satisfaction,  foreclosure or enforcement of
the Security Interests.

                     Section  9.8  Indemnity.  In  addition  to the  payment  of
expenses pursuant to Section 9.7 hereof and the environmental indemnity pursuant
to  Section  6.4  hereof,  the  Borrower  agrees to  indemnify,  defend and hold
harmless  the  Lender,  and  any  of  its  participants,   parent  corporations,
subsidiary corporations,  affiliated corporations,  successor corporations,  and
all  present  and  future  officers,  directors,  employees  and  agents  of the
foregoing (the "Indemnitees"),  from and against (i) any and all transfer taxes,
documentary taxes,  assessments or charges made by any governmental authority by
reason of the  execution  and  delivery  of this  Agreement  and the other  Loan
Documents or the making of the Advances or issuance of any Letter of Credit, and
(ii) any and all liabilities,  losses,  damages,  penalties,  judgments,  suits,
claims, costs and expenses of any kind or nature whatsoever (including,  without
limitation, the reasonable fees and disbursements of counsel) in connection with
any investigative,  administrative or judicial proceedings,  whether or not such
Indemnitee  shall be  designated  a party  thereto,  which  may be  imposed  on,
incurred by or asserted  against such  Indemnitee,  in any manner relating to or
arising out of or in connection with the making of the Advances, the issuance of
any Letter of Credit this  Agreement and all other Loan  Documents or the use or
intended  use of the  proceeds  of the  Advances  or any  Letter of Credit  (the
"Indemnified  Liabilities").  If any  investigative,  judicial or administrative
proceeding  arising from any of the foregoing is brought against any Indemnitee,
upon request of such  Indemnitee,  the  Borrower,  or counsel  designated by the
Borrower and satisfactory to the Indemnitee, will resist and defend such action,
suit or proceeding to the extent and in the manner  directed by the  Indemnitee,
at the  Borrower's  sole cost and  expense.  Each  Indemnitee  will use its best
efforts to cooperate in the defense of any such action,  suit or proceeding.  If
the foregoing undertaking to indemnify,  defend and hold harmless may be held to
be  unenforceable  because it violates  any law or public  policy,  the Borrower
shall nevertheless make the maximum contribution to the payment and satisfaction
of each of the Indemnified  Liabilities  which is permissible  under  applicable
law. The  obligation  of the Borrower  under this Section 9.8 shall  survive the
termination  of  this  Agreement  and  the  discharge  of the  Borrower's  other
Obligations.

                     Section 9.9 Participants.  The Lender and its participants,
if any, are not partners or joint  venturers,  and the Lender shall not have any
liability or  responsibility  for any obligation,  act or omission of any of its
participants.  All rights and powers specifically  conferred upon the Lender may
be transferred or delegated to any of the participants, successors or assigns of
the Lender.

                     Section 9.10 Execution in Counterparts.  This Agreement and
other Loan  Documents  may be  executed in any number of  counterparts,  each of
which when so executed and  delivered  shall be deemed to be an original and all
of which  counterparts,  taken together,  shall  constitute but one and the same
instrument.
<PAGE>
                     Section   9.11   Binding   Effect;   Assignment;   Complete
Agreement.  The Loan Documents shall be binding upon and inure to the benefit of
the Borrower and the Lender and their respective successors and assigns,  except
that the Borrower  shall not have the right to assign its rights  thereunder  or
any  interest  therein  without the prior  written  consent of the Lender.  This
Agreement,  together  with  the  Loan  Documents,  comprises  the  complete  and
integrated  agreement of the parties on the subject matter hereof and supersedes
all prior agreements, written or oral, on the subject matter hereof.

                     Section 9.12 Governing Law; Jurisdiction,  Venue; Waiver of
Jury Trial.  The Loan Documents shall be governed by and construed in accordance
with the substantive  laws (other than conflict laws) of the State of Wisconsin.
Each party consents to the personal jurisdiction of the state and federal courts
located in the State of Wisconsin in connection with any controversy  related to
this  Agreement,  waives  any  argument  that  venue  in any  such  forum is not
convenient,  and  agrees  that  any  litigation  initiated  by  any of  them  in
connection  with this  Agreement  shall be venued in either the Circuit Court of
Milwaukee County, Wisconsin, or the United States District Court for the Eastern
District  of  Wisconsin.  The  parties  waive  any right to trial by jury in any
action or proceeding based on or pertaining to this Agreement.

                     Section 9.13  Severability of Provisions.  Any provision of
this Agreement which is prohibited or unenforceable  shall be ineffective to the
extent  of  such  prohibition  or  unenforceability   without  invalidating  the
remaining provisions hereof.

                     Section 9.14 Headings. Article and Section headings in this
Agreement are included  herein for  convenience  of reference only and shall not
constitute a part of this Agreement for any other purpose.
<PAGE>

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

                                            BORROWER:

                                            CIS AIR CORPORATION (SEAL)


                                         By:           /s/ Frank J. Corcoran
                                                       ---------------------
                                            Name:      Frank J. Corcoran
                                            Title:     Vice President


                                         By:
                                            Its:_______________________


                                            LENDER:

                                            NORWEST BUSINESS CREDIT, INC. (SEAL)


                                         By:           /s/ Thomas J. Zak
                                                       -----------------
                                            Name:      Thomas J. Zak
                                            Title:     Assistant Vice
                                                       President


<PAGE>
                  Exhibit 0.1. to Credit and Security Agreement

                                   DEMAND NOTE

$4,500,000                                                 Milwaukee, Wisconsin
                                                                         July 31

                     For value received, the undersigned, CIS Air Corporation, a
Delaware corporation (the "Borrower"),  hereby promises to pay ON DEMAND, and in
accordance with the terms of the Credit Agreement  (defined below), to the order
of Norwest Business Credit, Inc. a Minnesota corporation (the "Lender"),  at its
main office in  Milwaukee,  Wisconsin,  or at any other place  designated at any
time by the holder  hereof,  in lawful money of the United States of America and
in immediately  available  funds, the principal sum of Four Million Five Hundred
Thousand Dollars ($4,500,000) or, if less, the aggregate unpaid principal amount
of all advances  made by the Lender to the  Borrower  hereunder,  together  with
interest on the principal amount  hereunder  remaining unpaid from time to time,
computed on the basis of the actual  number of days elapsed and a 360-day  year,
from the date hereof until this Note is fully paid at the rate from time to time
in effect under the Credit and Security  Agreement  of even date  herewith  (the
"Credit  Agreement")  by and between the Lender and the Borrower.  The principal
hereof and the  interest  accruing  thereon  shall be payable as provided in the
Credit  Agreement  and in any event on demand.  This Note may be prepaid only in
accordance with the Credit Agreement.

                     This Note is issued pursuant, and is subject, to the Credit
Agreement,  which provides,  among other things, for acceleration  hereof.  This
Note is the Note referred to in the Credit Agreement.

                     This Note is secured,  among other things,  pursuant to the
Credit Agreement and the Security  Documents as therein defined,  and may now or
hereafter be secured by one or more other security agreements,  mortgages, deeds
of trust, assignments or other instruments or agreements.

                     The Borrower  hereby agrees to pay all costs of collection,
including attorneys' fees and legal expenses, in the event
this Note is not paid when due, whether or not legal proceedings are commenced.

                      Presentment  or  other  demand  for  payment,   notice  of
dishonor and protest are expressly waived.

                                                CIS AIR CORPORATION (SEAL)

                                     By:        /s/ Frank J. Corcoran
                                                    -----------------
                                                    Frank J. Corcoran
                                                    Vice President