CREDIT AND SECURITY AGREEMENT
                            Dated as of July 31, 1996


                  GMCCCS Corp., a California corporation d/b/a Laser Access (the
"Borrower"),  and Norwest  Business Credit,  Inc., a Minnesota  corporation (the
"Lender"), hereby agree 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  Air
Corporation, CIS Aircraft Partners, Inc., CIS Assignor L.P.A., Inc., Continental
Information  Systems Corporation 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.

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

                  (a)  $2,500,000, or

                  (b)  the sum of

                         (i) the lesser of (A) 80% of  Eligible  Accounts or (B)
                         $2,500,000, plus

                         (ii) the lesser of (A) 45% of Eligible Inventory or (B)
                         $1,500,000.

          "CIS Air  Corporation  Credit  Facility" means the Credit and Security
Agreement dated as of July 31, 1996 between CIS Air Corporation and the Lender.

          "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 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;
<PAGE>
               (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);

               (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;

               (12) Accounts for leased goods;

               (13) Accounts subject to progress billings; and

               (14) 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;
<PAGE>
               (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;

               (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, 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 (0.75%),  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.

          "Guarantors"   means  CIS  Air   Corporation,   CIS   Corporation  and
Continental Information Systems Corporation.

          "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.
<PAGE>
          "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.

          "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 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
hereof.

          "Obligations" has the meaning specified in Section 3.1 hereof.
<PAGE>
          "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.

          "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
the Lockbox Services 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.
<PAGE>
                                   ARTICLE II

              Amount and Terms of the Discretionary Credit Facility

                  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 2.1 if, after giving effect to such requested Advance, the sum
          of the  outstanding  and unpaid  Advances  under this  Section  2.1 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 IV hereof, the Lender shall disburse loan proceeds, if any, by
          crediting the same to the Borrower's demand deposit account maintained
          with Core States 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  2.1  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
          2.1,  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 2.9 or 2.10, in an aggregate  amount at any time
<PAGE>
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 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  2.9, 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;

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.
<PAGE>
                  (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;

                  (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;
<PAGE>
                  (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 CIS Air Corporation 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 CIS Air
         Corporation  Credit  Facility on the date and in the manner provided in
         Section  2.8(a) of this  Agreement and the CIS Air  Corporation  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
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").
<PAGE>
                  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 (a) give at
least 30 days' prior written notice to the Lender of the Borrower's intention to
do so; and (b) pay the Lender a prepayment fee of One Hundred  Thousand  Dollars
($100,000) less than the amount of any prepayment  penalty paid to the Lender by
CIS Air  Corporation  under Section  2.10(b) of the CIS Air  Corporation  Credit
Facility;  provided,  however, that there shall be no prepayment fee if Borrower
has complied with Section 2.5(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.

                  Section  2.12  Payment.  All  payments  of  principal  of  and
interest on the Advances,  the Obligation of Reimbursement,  the commissions 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.
<PAGE>
                  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 Thirty  Thousand
Dollars ($30,000) due and payable upon the execution of this Agreement.

                  (b) The Borrower  hereby 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.
<PAGE>
                  (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 Tow 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").

                  Section  3.2   Notification   of  Account  Debtors  and  Other
Obligors.  In addition to the rights of the Lender  under  Section  6.10 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.
<PAGE>
                  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.

                  (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 3.4.

                  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.
<PAGE>
                                   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.

                  (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) Current  searches of appropriate  filing  offices  showing
          that (i) no state or  federal  tax liens have been filed and remain in
          effect against the Borrower,  (ii) no financing  statements  have been
          filed  and  remain  in  effect  against  the  Borrower,  except  those
          financing  statements  relating to liens permitted pursuant to Section
          7.1 hereof and those  financing  statements  filed by the Lender,  and
          (iii) 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.

                  (f) 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.

                  (g) 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.
<PAGE>
                  (h) 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.

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

                  (j) An  opinion of  counsel  to the  Borrower  and each of the
          Guarantors, addressed to the Lender.

                  (k) 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.

                  (l) 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.

                  (m) A General Business Security  Agreement,  properly executed
         by CIS Air  Corporation,  securing the  Obligations  guaranteed by such
         Guarantor.

                  (n) 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, [Park Plaza] and [The Business Works].

                  (o) A Landlord's Disclaimer and Consent,  properly executed by
          RE Hazard Container Co.

                  (p) 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 9.7 hereof.

                  (q) 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  California,  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 of  Continental  Information
Systems  Corporation 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 30,
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.  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 7.1
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 7.1
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.  The Borrower has provided
to the Lender signed financing  statements  sufficient when filed to perfect the
Security  Interests  and the other  security  interests  created by the Security
Documents.  When  such  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  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,  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 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
<PAGE>
         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;

                  (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  5.6  hereof or which  seek a  monetary  recovery
         against the Borrower in excess of One Hundred  Fifty  Thousand  Dollars
         ($150,000).
<PAGE>
                  (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

                  (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.
<PAGE>
                  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.

                  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;
<PAGE>
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 0.0.0.0.1.  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.

                  (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,
<PAGE>
         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 VI 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
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
<PAGE>
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 One Million  Dollars  ($1,000,000)
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,  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.

                  Section 7.2 Indebtedness. The Borrower will not incur, create,
assume or permit to exist any  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:
<PAGE>
                  (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 7.3  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:

                         (i)  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);

                         (ii) 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);

                         (iii)  advances  in  the  form  of  progress  payments,
                         prepaid rent or security deposits; and
<PAGE>
                         (iv)  other  loans and  advances  made in the  ordinary
                         course  of  Borrower's  business,   provided  that  the
                         conditions set forth in  subparagraphs  (a) through (c)
                         of  Section  7.20  have  been  satisfied  (and for this
                         purpose,  the  "payment"  referred to therein  shall be
                         deemed to be the  proposed  loan or  advance to made by
                         the Borrower under this subparagraph (4)).

                  (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.  Nothing  contained in this Section
7.17 shall be deemed to affect  the rights of Greg M. Cody and  Charles C. Sinks
to certain "Earn Out" payments pursuant to the Stock Purchase Agreement dated as
of March 8, 1996 among CIS  Corporation,  Borrower,  Greg M. Cody and Charles C.
Sinks.
<PAGE>
                  Section 7.18 Change in  Ownership.  Except as set forth in the
Pledge Agreement dated March 8, 1996 among Borrower, CIS Corporation and Greg M.
Cody  and  the  Pledge  Agreement  dated  March  8,  1996  among  Borrower,  CIS
Corporation and Charles C. Sinks,  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 CIS Air  Corporation  exceed Two Hundred  Thousand  Dollars
($200,000) per fiscal quarter.

                  Section 7.20  Inter-company  Debt.  The Borrower will not make
quarterly payments to CIS Corporation to reduce inter-company debt, unless:

                  (a) The Borrower is not in default  under this  Agreement  and
          CIS Air  Corporation  is not in default under the CIS Air  Corporation
          Credit Facility;

                  (b) The Borrower 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

                  (c)  CIS  Air   Corporation  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).

                                  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:

                  (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
<PAGE>
                  (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

                  (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
<PAGE>
         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.

                  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;
<PAGE>
                  (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 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.

                  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.
<PAGE>
                  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:

                  GMCCCS Corp. d/b/a Laser Access
                  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

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 II hereof shall not
be effective until received by the Lender.
<PAGE>
                  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:

                  GMCCCS Corp. d/b/a Laser Access
                  One Northern Concourse
                  Syracuse, New York  13221

                  Federal Tax Identification No. 33-0524954

                  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.

                  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.
<PAGE>
                  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.

                  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.
<PAGE>
                  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:

                                             GMCCCS CORP.,
                                             D/B/A LASER ACCESS (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 A to Credit and Security Agreement

                                   DEMAND NOTE
$2,500,000                                                  Milwaukee, Wisconsin
                                                                   July 31, 1996

                  For  value  received,   the   undersigned,   GMCCCS  Corp.,  a
California corporation d/b/a/ Laser Access (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 Two
Million Five Hundred  Thousand  Dollars  ($2,500,000) 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.

                                                  GMCCCS CORP.
                                                  D/B/A LASER ACCESS (SEAL)



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