CREDIT AND SECURITY AGREEMENT
                          Dated as of February 10, 1997

                  ROYAL GRIP,  INC.,  a Nevada  corporation  and ROXXI,  INC., a
Nevada corporation  (collectively,  jointly and severally, the "Borrower"),  and
NORWEST BUSINESS CREDIT,  INC., a Minnesota  corporation (the "Lender"),  hereby
agree as follows:

                                    ARTICLE I

                                   Definitions
                                   -----------

                  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 or either
                  of them arising out of the sale or lease of goods or rendition
                  of  services  by the  Borrower  or  either  of them on an open
                  account or deferred payment basis.

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

                           "Affiliate"   or   "Affiliates"   means  any   Person
                  controlled by, controlling or under common control with either
                  Borrower,  including  (without  limitation)  any Subsidiary of
                  either 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  Phoenix,
                  Arizona.

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

                           (i) the Commitment, or

                           (ii) the sum of

                                    (A)     the  lesser  of (x) 80% of  Eligible
                                            Accounts, or (y) $1,750,000.00, plus

                                    (B)     the  lesser  of (x) 50% of  Eligible
                                            Royal   Grip   Inventory,   or   (y)
                                            $500,000.00, plus

                                    (C)     the  lesser  of (x) 25% of  Eligible
                                            Roxxi Raw  Materials  Inventory,  or
                                            (y) $250,000.00, plus

                                    (D)     the  lesser  of (x) 50% of  Eligible
                                            Roxxi   Inventory    (exclusive   of
                                            Eligible Raw  Materials  Inventory),
                                            or (y) $100,000.00.

                           "Capital   Expenditures"   means  net   tangible  and
                  intangible  expenditures  of the applicable  Person or Persons
                  for the lease,  purchase or acquisition of capital assets,  or
                  the lease of any other  asset,  plus  gain or minus  loss,  as
                  applicable, on sales of assets during the period in question.

                           "Collateral"  means  all  of the  Equipment,  General
                  Intangibles,  Inventory,  Receivables, and all sums on deposit
                  in the Collateral  Accounts,  together with all  substitutions
                  and  replacements  for and  products  of any of the  foregoing
                  Collateral  and together  with  proceeds of any and all of the
                  foregoing   Collateral  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  Accounts"  has the meaning  specified in
                  Section 4.1(d) hereof.

                           "Commitment" means $1,750,000.00,  unless said amount
                  is reduced pursuant to Section 2.10(c) hereof,  in which event
                  it means the amount to which said amount is reduced.

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

                           "Current Maturities Long-Term Debt" means contractual
                  debt amortization of long-term debt and capitalized  leases of
                  the Borrower.
                                       -2-
<PAGE>
                           "Default"  means an event that, with giving of notice
                  or  passage  of time or  both,  would  constitute  an Event of
                  Default.

                           "Default  Period"  means  the  period  following  the
                  occurrence of a Default or Event of Default which period shall
                  continue  until and unless the Lender shall  thereafter  waive
                  such Default or Event of Default in writing.

                           "Default Rate" means at any time 3% over the Floating
                  Rate and/or Incentive Rate, as applicable,  which Default Rate
                  shall  change when and as the Floating  Rate or the  Incentive
                  Rate change.

                           "Eligible  Accounts"  means all  unpaid  Accounts  of
                  Royal  Grip and  Roxxi,  as  applicable,  net of any  credits,
                  except the following shall not in any event be deemed Eligible
                  Accounts:

                                    (i) That  portion of  Accounts  over 90 days
                           past invoice date;

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

                                    (iii)  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;

                                    (iv)   Accounts   owed   by  any   unit   of
                           government,  whether  foreign or domestic  (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 Account may be enforced by the
                           Lender directly against such unit of government under
                           all applicable laws);

                                    (v)  Accounts  owed  by  an  account  debtor
                           located  outside  the  United  States  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;

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

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

                                    (viii)   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;
                                       -3-
<PAGE>
                                    (ix) That portion of Accounts that have been
                           restructured, extended, amended or modified;

                                    (x)   That   portion   of   Accounts    that
                           constitutes finance charges, service charges or sales
                           or excise taxes;

                                    (xi)  Accounts  owed by an  account  debtor,
                           regardless of whether otherwise  eligible,  if 10% or
                           more of the total amount due under Accounts from such
                           debtor is ineligible  under clauses (i), (ii) or (ix)
                           above;

                                    (xii)   Accounts   consisting   of   tooling
                           charges; and

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

                           "Eligible  Roxxi  Inventory"  means all  inventory of
                  Roxxi  valued  at  weighted  average  cost  as  determined  in
                  accordance  with  generally  accepted  accounting  principles;
                  provided,  however,  that the following shall not in any event
                  be deemed Eligible Roxxi Inventory:

                                    (i) Inventory that is:  in-transit;  located
                           at any  warehouse  or other  premises not approved by
                           the Lender in writing; located outside of the states,
                           or localities, as applicable, in which the Lender has
                           filed   financing   statements  to  perfect  a  first
                           priority security interest in such inventory; 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;

                                    (ii)    Packaging,    label   or   irregular
                           inventory;

                                    (iii) Work-in-process inventory;

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

                                    (v)   Inventory   that  the   Borrower   has
                           returned,  has attempted to return, is in the process
                           of  returning  or  intends  to return  to the  vendor
                           thereof;

                                    (vi) Inventory that is subject to a security
                           interest  in  favor  of any  Person  other  than  the
                           Lender;

                                    (vii) Slow-Moving Inventory;
                                       -4-
<PAGE>
                                    (viii)   Inventory  that  is  subject  to  a
                           licensing agreement,  which licensing agreement would
                           preclude or hinder the Lender from  liquidating  such
                           Inventory in the ordinary course of business; and

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

                           "Eligible Roxxi Raw Materials  Inventory"  means that
                  portion  of  Eligible  Roxxi   Inventory   consisting  of  Raw
                  Materials.

                           "Eligible Royal Grip  Inventory"  means all inventory
                  of Royal Grip valued at weighted average cost as determined in
                  accordance  with  generally  accepted  accounting  principles;
                  provided,  however,  that the following shall not in any event
                  be deemed Eligible Royal Grip Inventory:

                                    (i) Inventory that is:  in-transit;  located
                           at any  warehouse  or other  premises not approved by
                           the Lender in writing; located outside of the states,
                           or localities, as applicable, in which the Lender has
                           filed   financing   statements  to  perfect  a  first
                           priority security interest in such inventory; 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;

                                    (ii) Packaging inventory;

                                    (iii) Work-in-process inventory;

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

                                    (v)   Inventory   that  the   Borrower   has
                           returned,  has attempted to return, is in the process
                           of  returning  or  intends  to return  to the  vendor
                           thereof;

                                    (vi) Inventory that is subject to a security
                           interest  in  favor  of any  Person  other  than  the
                           Lender;

                                    (vii)  Inventory  that does not  consist  of
                           finished grips;

                                    (viii) Slow-Moving Inventory;

                                    (ix)   Inventory   that  is   subject  to  a
                           licensing agreement,  which licensing agreement would
                           preclude or hinder the Lender from  liquidating  such
                           Inventory in the ordinary course of business; and
                                       -5-
<PAGE>
                                    (x) 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 (whether
                  located  upon  the  Premises  or   otherwise),   manufacturing
                  equipment, shop equipment, office and recordkeeping equipment,
                  parts, tools,  supplies,  and including  specifically (without
                  limitation) the goods  described in any equipment  schedule or
                  list  herewith  or  hereafter  furnished  to the Lender by the
                  Borrower.

                           "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 one and three quarters  percent (1.75%),
                  which  Floating  Rate shall  change  when and as the Base Rate
                  changes.

                           "Funds from Operations" means after tax net income of
                  the Borrower for the applicable period or periods, adjusted to
                  exclude  items of income or  expense  which are  extraordinary
                  items or items not related to  operations,  plus  depreciation
                  and  amortization,  deferred  income taxes and other  non-cash
                  items.

                           "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.

                           "Incentive  Rate"  means an annual  rate equal to the
                  sum of the Base  Rate,  plus 1%,  which  Incentive  Rate shall
                  change when and as the Base Rate changes.

                           "Initial   Advance"  has  the  meaning  specified  in
                  Section 4.1(r) hereof.

                           "Interest Expense" means total gross interest expense
                  of the Borrower (cash and capitalized,  including  interest on
                  capitalized leases and not net of interest income).

                           "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,
                                       -6-
<PAGE>
                  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.

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

                           "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 2.4 hereof.

                           "Minimum  Interest Charge" has the meaning  specified
                  in Section 2.9(b) hereof.

                           "Net Income" means  consolidated after tax net income
                  of both  of the  Borrowers  from  continuing  operations,  but
                  before extraordinary gains.

                           "Net Loss" means  after tax net loss of the  Borrower
                  from continuing operations.

                           "Net  Worth"  means  the net  worth  of the  Borrower
                  determined in accordance  with generally  accepted  accounting
                  principles  consistent with those used in preparing Borrower's
                  most recent  consolidating and consolidated  audited financial
                  statements.

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

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

                           "Obligation   of   Reimbursement"   has  the  meaning
                  specified in Section 2.5 hereof.

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

                           "Plan"  means an employee  benefit plan or other plan
                  maintained  for employees of the Borrower and covered by Title
                  IV of ERISA.
                                       -7-
<PAGE>
                           "Premises"  means all  premises  where  the  Borrower
                  conducts  its  business  and has  any  rights  of  possession,
                  including (without  limitation) the premises legally described
                  in Exhibit E attached hereto.

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

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

                           "Roxxi" means Roxxi, Inc., a Nevada corporation.

                           "Royal  Grip"  means  Royal  Grip,   Inc.,  a  Nevada
                  corporation.

                           "Security  Documents"  means the  Collateral  Account
                  Agreements,  the  Assignment of Security  Agreements and UCCs,
                  the Assignment of Capital Lease  Agreement,  the Assignment of
                  Patents, the Collateral  Assignment of Trademarks,  the Patent
                  Mortgage,  the Assignment of Trademarks,  each as described in
                  Section 4.1 hereof.

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

                           "Slow-Moving  Inventory"  means any  inventory  where
                  100% of the like  inventory  has not  turned  in the  previous
                  twelve (12) months.

                           "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 2.6 and 3.6 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,
                                       -8-
<PAGE>
                  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 either  Borrower,  by either
                  Borrower and one or more other Subsidiaries, or by one or more
                  other Subsidiaries.

                           "Term Loan" has the meaning  specified in Section 2.2
                  hereof.

                           "Termination Date" means February 28, 2000.

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

                                   ARTICLE II

              Amount and Terms of the Credit Facility and Term Loan
              -----------------------------------------------------

                  2.1 Advances.  The Lender agrees,  on the terms and subject to
the conditions  herein set forth,  to make Advances to the Borrower from time to
time  during the period from the date hereof to and  including  the  Termination
Date,  or the  earlier  date of  termination  in  whole of the  Credit  Facility
pursuant to Sections  2.10(a) or 8.2 hereof,  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 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  under this  Section
2.1 shall be made to the Lender prior to 11:00 a.m. (Phoenix time) of the day of
the requested  Advance by the Borrower.  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 either Royal Grip or Roxxi;
or (ii) any person  designated as the Borrower's  agent by any officer of either
Borrower in a writing  delivered to the Lender;  or (iii) any person  reasonably
believed by the Lender to be an officer of either  Royal Grip or Roxxi or such a
designated agent.

                           (c) Upon fulfillment of the applicable conditions set
forth in Article IV hereof, the Lender shall disburse loan proceeds by crediting
the same to the Borrower's  demand deposit  operating  account  maintained  with
Norwest  Bank  Arizona,  N.A.  unless the Lender and either  Royal Grip or Roxxi
shall agree in writing to another  manner of  disbursement.  Upon request of the
Lender, the Borrower shall promptly confirm each telephonic request for an
                                       -9-
<PAGE>
Advance by executing and delivering an appropriate  confirmation  certificate 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.

                  2.2 Term Loan. The Lender agrees,  on the terms and subject to
the conditions  herein set forth, to make a one time advance of a term loan (the
"Term Loan") in the aggregate  principal amount of $700,000.00,  which Term Loan
shall be secured by the  Collateral as provided in Article III hereof.  Upon the
Borrower's  request and  fulfillment of the  applicable  conditions set forth in
Article  IV  hereof,  the  Lender  shall  make a one time  disbursement  of loan
proceeds to payoff indebtedness owed by Royal Grip to Biltmore Investors Bank.

                  2.3 Note.  All Advances and the Term Loan, if any, 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 payable as
provided  herein and on the earlier of the  Termination  Date or acceleration by
the Lender  pursuant to Section 8.2 hereof,  and shall bear interest as provided
herein.  The portion of the Note which evidences  principal of the Term Loan, if
any,  shall be payable  beginning on April 1, 1997 and continuing on the 1st day
of each month thereafter by payment of principal  payments each in the amount of
$12,000.00;   provided,   however,   that   notwithstanding   such  amortization
calculation,  the entire  amount of such  unpaid  principal  shall be due on the
earlier of the  Termination  Date,  or  acceleration  by the Lender  pursuant to
Section 8.2 hereof.

                  2.4 Issuance of Letters of Credit.

                           (a) Upon the request of either  Borrower,  the Lender
may, in its sole discretion,  on the terms and subject to the conditions  herein
set forth, 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.  In the
event Lender elects to issue one or more Letters of Credit, the aggregate amount
at any time  outstanding  all of such  Letters  of Credit  shall not  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 by the  Borrower  and the Lender as  co-applicants  for the  benefit of the
Issuer,  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) Any  request  for the  issuance  of a  Letter  of
Credit  under this  Section  2.4 shall be deemed to be a  representation  by the
Borrower that (i) the condition set forth in Section 2.4(a) hereof has been met,
and (ii) the  statements  set forth in Section  4.2 hereof are correct as of the
time of the request.
                                      -10-
<PAGE>
                  2.5  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 2.5, 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 2.9 hereof.

                  2.6 Special Account.  If the Credit Facility is 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.
                                      -11-
<PAGE>
                  2.7 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.

                           (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
                                      -12-
<PAGE>
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.

                  2.8  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;

                           (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.

                  2.9 Interest.

                           (a) The  principal  of the Advances and the Term Loan
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, assuming there is not a then existing Event of Default
or Default Period from the first day of the first month following the receipt by
the Lender of the fiscal year end audited  financial  statements of the Borrower
complying  with the  provisions  of Section  6.1(a) for the fiscal  year  ending
December 31, 1997,
                                      -13-
<PAGE>
the  principal of the Advances and the Term Loan  outstanding  from time to time
shall bear interest at the Incentive Rate but only if such financial  statements
show a Net Income of $500,000.00 or more; and provided,  further,  however, that
from the first  day of any month  during  which any  Default  Period 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 and
the Term Loan  outstanding  from time to time shall bear interest at the Default
Rate during the entire Default Period; and provided,  further,  however, 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 and the Term Loan  outstanding  from time to
time  shall be  payable  on the  first day of each  succeeding  month and on the
Termination  Date or earlier demand or prepayment in full.  The Borrower  agrees
that the interest  rate  contracted  for  includes  the interest  rate set forth
herein plus any other  charges or fees set forth  herein and costs and  expenses
incident to this  transaction paid by the Borrower to the extent same are deemed
interest under applicable law.

                           (b)  Notwithstanding the interest payable pursuant to
Section  2.9(a)  hereof or the unused fee payable  pursuant  to Section  2.16(a)
hereof,  the Borrower  shall be liable to the Lender for interest and the unused
fee  hereunder at such rate as may be necessary to result in interest and unused
fee payments in the aggregate of not less than $6,500.00 per full calendar month
(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 and unused fee otherwise  calculated under Section 2.9(a) and
Section  2.16(a)  on the first  day of each  calendar  month  for the  immediate
preceding full calendar month elapsing after the date of this Agreement.

                           (c) If any Person shall  acquire a  participation  in
the  Advances  or the Term Loan  under this  Agreement,  the  Borrower  shall be
obligated to the Lender to pay the full amount of all interest  calculated under
Sections 2.9(a) and 2.9(b) hereof,  along with all other fees, charges and other
amounts due under this  Agreement,  regardless  if such Person  elects to accept
interest  with  respect to its  participation  at a lower rate than the Floating
Rate,  or otherwise  elects to accept less than its pro rata share of such fees,
charges and other amounts due under this Agreement.

                  2.10  Voluntary  Prepayment;  Termination  of Agreement by the
Borrower; Permanent Reduction of the Commitment.

                           (a) Except as otherwise provided herein, the Borrower
may, in its  discretion,  prepay the  Advances and the Term Loan in whole at any
time. The Borrower may terminate this Agreement at any time so long as no Letter
of Credit has been issued and is outstanding  with an expiration date after such
date and,  subject to payment and performance of all the Borrower's  Obligations
to the Lender, may obtain any release or termination of the Security Interest to
which the Borrower is otherwise  entitled by law by (A) giving at least 30 days'
prior written notice to the Lender of the Borrower's intention to terminate this
Agreement;  and  (B)  paying  the  Lender  a  termination  fee  of (i) 3% of the
aggregate amount of the Commitment and the outstanding  principal balance of the
Term Loan  immediately  preceding such  termination if such  termination  occurs
during the period from the date of this Agreement
                                      -14-
<PAGE>
through  January 31, 1998, or (ii) 2% of the aggregate  amount of the Commitment
and the outstanding  principal  balance of the Term Loan  immediately  preceding
such termination if such  termination  occurs during the period from February 1,
1998  through  January  31,  1999,  or (iii) 1% of the  aggregate  amount of the
Commitment and the outstanding  principal  balance of the Term Loan  immediately
preceding  such  termination if such  termination  occurs during the period from
February 1, 1999 until the  Termination  Date,  provided,  however,  no such fee
shall be payable if and to the extent such termination  represents a refinancing
of the Obligations by Norwest Bank, Arizona, N.A.

                           (b) Except as otherwise provided herein, the Borrower
may,  in its  discretion,  prepay the Term Loan from time to time in part by (1)
giving at least 30 days' prior  written  notice to the Lender of the  Borrower's
intent to so prepay; and (2) paying the Lender a prepayment fee of (i) 3% of the
amounts so prepaid if such prepayment  occurs during the period from the date of
this Agreement through January 31, 1998, or (ii) 2% of the amounts so prepaid if
such  prepayment  occurs during the period from February 1, 1988 through January
31, 1999, or (iii) 1% of the amounts so prepaid if such prepayment occurs during
the period from February 1, 1999 until the Termination Date, provided,  however,
no such fee shall be payable if and to the extent such  prepayment  represents a
refinancing of the Obligations by Norwest Bank, Arizona, N.A. Any prepayments of
the Term Loan  shall be applied to  principal  installments  of the Term Loan in
inverse order of maturity.

                           (c) The  Borrower  may at any time  and from  time to
time,  upon at least 30 days' prior  written  notice to the Lender,  permanently
reduce in part the Commitment; provided, however, that no reduction shall reduce
the Commitment to an amount less than the then-aggregate amount of the Advances;
and provided, further, that if the Borrower shall elect permanently to reduce in
part the  Commitment at any time other than the  Termination  Date, the Borrower
shall pay to the Lender a premium in an amount equal to (i) 3% of the  reduction
from the date of this  Agreement  through  January 31,  1998,  or (ii) 2% of the
reduction  from  February 1, 1998 through  January 31, 1999,  or (iii) 1% of the
reduction from February 1, 1999 until the Termination Date.

                  2.11 Mandatory  Prepayment.  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 (i) first,
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.  For each day or  portion
thereof that the Advances  shall exceed the Borrowing  Base,  the Borrower shall
pay to the  Lender an  overadvance  charge in the amount of  $100.00;  provided,
however,  that if any such day occurs during a Default  Period,  the overadvance
charge for such day shall be $200.00.
                                      -15-
<PAGE>
                  2.12  Payment.  All payments of principal  and interest on the
Advances,  the Term Loan, 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,  in its discretion at any time or from
time to time and without request by the Borrower, to make an Advance or Advances
in such  amount  as shall  be  necessary  to pay any  interest,  fees,  costs or
expenses hereunder or under the Loan Documents.

                  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 and the Term Loan or the fees hereunder, as the case may be.

                  2.14 Use of Proceeds.  The proceeds of Advances, the Term Loan
and each Letter of Credit  issued shall be used by the Borrower (i) to repay all
outstanding  indebtedness  of the Borrower owed to Biltmore  Investors Bank, and
(ii) to  refinance  indebtedness  secured by  Equipment  currently  owned by the
Borrower, and (iii) for ordinary working capital purposes.

                  2.15 Liability  Records.  The Lender may maintain from time to
time, at its  discretion,  liability  records as to any and all Advances and the
Term Loan  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 and the Term
Loan 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.

                  2.16 Fees.

                           (a)  The  Borrower  agrees  to pay to the  Lender  an
unused fee each  month at the annual  rate of .5% on the  average  daily  unused
amount of the Commitment from the date hereof to and including the date on which
such facility is terminated, due and payable monthly in arrears on the first day
of each  month,  commencing  March 1, 1997,  provided  that any such  unused fee
remaining  unpaid upon termination of the Credit Facility or acceleration of the
Note by the Lender  pursuant to Section  8.2 hereof  shall be due and payable on
the date of such  termination or  acceleration.  Such fee shall be calculated on
the basis of actual days elapsed in a 360-day year.

                           (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 three  percent  (3%) 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
                                      -16-
<PAGE>
date as such Letter of Credit shall terminate by its terms,  payable annually in
arrears,  and prorated for any part of a full calendar year in which such Letter
of Credit remains outstanding.  The foregoing commission shall be in addition to
any and all fees,  commissions  and  charges of any Issuer of a Letter of Credit
with respect to or in connection with such Letter of Credit.

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

                           (d) The Borrower hereby agrees to pay the Lender,  on
demand,  audit fees of $50.00 per hour (or Lender's  then  applicable  rate) per
auditor  in  connection  with any  audits or  inspections  by the  Lender of any
collateral  or the  operations  or business of the  Borrower,  together with all
actual out-of-pocket costs and expenses incurred in conducting any such audit or
inspection.  So long as there  is not any then  existing  Event  of  Default  or
Default Period,  such audit fees shall not exceed $2,500.00 per audit and audits
shall be performed  not more  frequently  than  quarterly.  Lender shall send to
Borrower  an invoice  applicable  to such audit  fees,  out-of-pocket  costs and
expenses,  provided,  however, any failure of Lender to send such invoices shall
not relieve Borrower of its obligations under this Section 2.16(d).

                  2.17 Setoff.  The  Borrower  agrees that the Lender may at any
time or from time to time, at is 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 Term Loan or for any other transaction or event), whether or
not due. In addition,  each other Person holding a participating interest in any
Advances  or the Term Loan 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.

                  2.18 Capital Adequacy.  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 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.  Certificates of the Lender sent to the Borrower
from time to time claiming compensation under this Section, stating the
                                      -17-
<PAGE>
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.

                                   ARTICLE III

                                Security Interest
                                -----------------

                  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").

                  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 otherwise handle 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.

                  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
                                      -18-
<PAGE>
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 proof 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.

                  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 (A) payment in full and discharge
of all Obligations,  and (B) 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.

                  3.5  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.

                  3.6  Security  Interest  in  Special  Account  and  Collateral
Accounts.  The  Borrower  hereby  pledges,  and  grants to the Lender a security
interest  in,  all  funds  held in the  Special  Account  and in the  Collateral
Accounts 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.
                                      -19-
<PAGE>
                                   ARTICLE IV

                              Conditions of Lending
                              ---------------------

                  4.1 Conditions  Precedent to the Initial  Advance and the Term
Loan. The obligation of the Lender to make the initial  Advance under the Credit
Facility or the one time  disbursement of the Term Loan, 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;  and with
respect  to  any  and  all of the  Premises  owned  by  Borrower  a  mortgagee's
disclaimer  as to all such  Premises  which are subject to a  mortgage,  deed of
trust or other lien.

                           (d) Collateral Account  Agreements,  duly executed by
both  Borrowers and Norwest Bank Arizona,  N.A.  pursuant to which the Borrowers
and Norwest Bank Arizona,  N.A. establish a depository accounts (the "Collateral
Accounts")  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.

                           (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 each of Royal Grip and Roxxi,  certifying as to (i) the resolutions
of the directors and, if required,  the  shareholders  of each of Royal Grip and
Roxxi, authorizing the execution, delivery and performance of this Agreement and
the Security Documents, (ii) the articles of incorporation and bylaws of each of
Royal Grip and Roxxi, and (iii) the signatures of the officers or agents of each
of Royal Grip and Roxxi  authorized to execute and deliver this  Agreement,  the
Loan Documents and other  instruments,  agreements and  certificates,  including
Advance requests, on behalf of each of Royal Grip and Roxxi.

                           (g) A current  certificate  issued by the Corporation
Commission  of the  state of each of Royal  Grip's  and  Roxxi's  incorporation,
certifying  that  they  are in  compliance  with  all  corporate  organizational
requirements of such state.
                                      -20-
<PAGE>
                           (h)  Evidence  that  each of Royal  Grip and Roxxi 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 each of Royal Grip
and  Roxxi  confirming,  in  his  official  capacity,  the  representations  and
warranties set forth in Article V hereof.

                           (j) An  opinion  of counsel to each of Royal Grip and
Roxxi, addressed to the Lender, together with the results of a litigation search
or searches  showing all  actions and  proceedings  where each of Royal Grip and
Roxxi is a defendant or involving a claim against the Borrower.

                           (k) Certificates of the insurance required hereunder,
with all hazard  insurance  containing a loss payee  endorsement in favor of the
Lender and with all  liability  insurance  naming  the  Lender as an  additional
insured.

                           (l) Assignments of all Security  Agreements and UCC-1
financing  statements  listing  either Royal Grip or Roxxi as Secured  Party and
Acushnet Rubber Company,  Inc. ("Acushnet") as Debtor properly executed by Royal
Grip and Acushnet (the "Assignments of Security Agreements and UCCs").

                           (m) An  Assignment of Capital  Lease  Agreement  (the
"Capital Lease  Agreement")  dated December 21, 1996 entered into by and between
Royal Grip and  Acushnet,  properly  executed  by Royal Grip and  Acushnet  (the
"Assignment of Capital Lease Agreement").

                           (n) An  Assignment of Patents,  properly  executed on
behalf of Borrower (the "Assignment of Patents").

                           (o) A Collateral  Assignment of Trademarks,  properly
executed on behalf of Borrower (the "Collateral Assignment of Trademarks").

                           (p)  A  Patent  Mortgage,   Assignment  and  Security
Agreement, properly executed on behalf of Borrower (the "Patent Mortgage").

                           (q) An Assignment of Trademarks, properly executed on
behalf of Borrower (the "Assignment of Trademarks").

                           (r) Evidence  from the Borrower  satisfactory  to the
Lender  establishing  the amount of the Borrowing Base and a request for Advance
from the Borrower in an amount such that the minimum excess loan availability of
the Borrower after such Advance (the "Initial  Advance") and payment of all fees
of the Lender required hereunder shall be $500,000.00.

                           (s)  Management  Support  Agreements  in favor of the
Lender  properly  executed  by  Danny  Edwards,  Robert  G.J.  Burg  II and  Tom
Schneider.
                                      -21-
<PAGE>
                           (t) Payment of the fees and  commissions  due through
the date of the Initial  Advance,  Term Loan,  or Letter of Credit under Section
2.16 hereof and expenses  incurred by the Lender  through such date and required
to be paid by the Borrower under Section 9.7 hereof.

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

                  4.2  Conditions  Precedent  to All Advances and The Term Loan.
The  obligation  of the  Lender to make each  Advance  or the Term Loan shall be
subject to the further conditions precedent that on such date:

                           (a) the representations  and warranties  contained in
Article V hereof are correct on and as of the date of such  Advance or Term Loan
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 Term Loan,  as the case may be, which  constitutes a
Default or an Event of Default.

                                    ARTICLE V

                         Representations and Warranties
                         ------------------------------

         The Borrower represents and warrants to the Lender as follows:

                  5.1  Corporate  Existence  and Power;  Name;  Chief  Executive
Office;  Inventory and  Equipment  Locations.  Royal Grip is a corporation  duly
incorporated,  validly existing and in good standing under the laws of the State
of  Nevada  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.  Roxxi is a corporation  duly  incorporated,  validly existing and in
good  standing  under the laws of the State of Nevada,  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.  The  Borrower's  tax  identification
number is correctly set forth in Section 9.4.

                  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
                                      -22-
<PAGE>
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 either  Royal Grip or Roxxi,  (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
either  Royal Grip or Roxxi or of the  Articles  of  Incorporation  or Bylaws of
either Royal Grip or Roxxi, (d) to the best of both of the Borrower's  knowledge
after  due  inquiry,  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 either Royal Grip or Roxxi 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
either Royal Grip or Roxxi.

                  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 Royal Grip and Roxxi, enforceable against Royal
Grip and Roxxi in accordance with their respective terms.

                  5.4  Subsidiaries.  Except as set forth in  Exhibit B attached
hereto, neither Borrower has any Subsidiaries.

                  5.5 Financial  Condition;  No Adverse Change. The Borrower has
heretofore  furnished to the Lender consolidated audited financial statements of
Royal  Grip and Roxxi  for their  fiscal  year  ended  December  31,  1995,  and
consolidated  unaudited  financial  statements  of Royal  Grip and Roxxi for the
months ended October 31, 1996, and those statements fairly present the financial
condition of the Borrower on the dates thereof and the results of its operations
and cash flows for the periods then ended and were prepared in  accordance  with
generally accepted  accounting  principles.  Except as specifically set forth in
that certain  Commitment  Letter dated December 30, 1996,  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.

                  5.6  Litigation.  To  the  best  of  both  of  the  Borrower's
knowledge after due inquiry,  there are no actions, suits or proceedings pending
or, to the knowledge of the  Borrower,  threatened  against or affecting  either
Borrower or any of their  Affiliates or the properties of either Borrower or any
of their  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.
                                      -23-
<PAGE>
                  5.7 Regulation U. Neither  Borrower is 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 or Term Loan 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.

                  5.8  Taxes.  To the best of both of the  Borrower's  knowledge
after due inquiry,  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.

                  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,  (ii)
liens  in  favor  of  Biltmore   Investors  Bank,   securing  the  repayment  of
indebtedness  which  will be fully  repaid  with  the  proceeds  of the  Initial
Advance,  and (iii) 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 and clause (ii) above.

                  5.10 Plans. Except as disclosed to the Lender in writing prior
to the date hereof,  neither Borrower nor any of their  Affiliates  maintains or
has  maintained  any Plan.  Neither  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 Borrower nor any of their 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).

                  5.11 Default. To the best of both of the Borrower's  knowledge
after due inquiry,  each  Borrower is in compliance  with all  provisions of all
agreements,  instruments,  decrees and orders to which it is a party or by which
it or its property is bound or affected, the
                                      -24-
<PAGE>
breach or default of which could have a material adverse effect on the financial
condition, properties or operations of the Borrower.

                  5.12  Environmental  Protection.  To the  best  of both of the
Borrower's  knowledge after due inquiry,  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.  The Borrower  shall provide
copies of all such permits, licenses and other authorizations to the Lender upon
the Lender's  request.  The Borrower  also shall provide to the Lender copies of
all environmental investigation and inspection reports available to the Borrower
that pertain to the Borrower's facilities,  upon the Lender's request. Except as
previously  disclosed  to the  Lender  in  writing,  to the  best of both of the
Borrower's  knowledge after due inquiry,  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. Except as previously  disclosed to the Lender in
writing,  the Borrower has received no inquiry from any federal,  state or local
agency concerning the Borrower's facilities or any adjacent properties involving
possible  environmental  contamination or violations of any Environmental  Laws,
and has no knowledge of any such inquiry to any party  concerning the Borrower's
facilities  or any adjacent  properties.  The Borrower  agrees to notify  Lender
promptly in writing of any  inquiries by third  parties or  regulatory  agencies
concerning  the  possible   presence  of  environmental   contamination  on  the
Borrower's  facilities or any adjacent  properties  or  concerning  any possible
violations of  Environmental  Laws  involving the  Borrower's  facilities or any
adjacent  properties.  The Lender  shall have the right to enter the  Borrower's
facilities for the purpose of conducting environmental investigations, including
taking soil and water samples,  during the Borrower's  normal  business hours of
operation.

                  5.13  Submissions  to the  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.

                  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
                                      -25-
<PAGE>
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.

                  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 Credit  Facility
or any Letter of Credit shall be outstanding,  the Borrower will comply with the
following requirements, unless the Lender shall otherwise consent in writing:

                  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 90
days after the end of each fiscal  year of the  Borrower,  consolidated  audited
financial  statements  of Royal Grip and Roxxi with the  unqualified  opinion of
independent certified public accountants selected by the Borrower and acceptable
to the Lender, which annual financial statements shall include the balance sheet
of the Borrower as at the end of such fiscal year and the related  statements of
income,  retained  earnings  and cash flows of the  Borrower for the fiscal year
then  ended,  prepared,  if the  Lender  so  requests,  on a  consolidating  and
consolidated basis to include any other 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 through 6.14 and
Section 7.10 hereof;  and (ii) a certificate of the Vice President of Finance or
any other  officer of each of Royal Grip and Roxxi  stating that such  financial
statements have been prepared in accordance with generally  accepted  accounting
principles applied on a basis consistent with the accounting practices reflected
in the annual financial statements referred to in Section 5.5 hereof and whether
or not such officer has  knowledge of the  occurrence of any Default or Event of
Default  hereunder  and,  if so,  stating  in  reasonable  detail the facts with
respect thereto;
                                      -26-
<PAGE>
                           (b) as soon as  available  and in any event within 20
days after the end of each  month,  a  consolidated  unaudited/internal  balance
sheet and statements of income and retained  earnings of Royal Grip and Roxxi 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 other 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 Vice President of Finance
or any other officer of each of Royal Grip and Roxxi,  substantially in the form
of  Exhibit  D hereto  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  5.5  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 through 6.14 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 at 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 Vice President
of Finance or any other 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 $50,000.00;

                           (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 Vice  President of
Finance or any other officer of the Borrower
                                      -27-
<PAGE>
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 Vice President of Finance or any other 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 by  customers  of the  Borrower in excess of  $10,000.00;
(ii) any goods  returned to or  recovered  by the  Borrower  valued in excess of
$10,000.00;  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 the Borrower shall have
sent to its stockholders;

                           (l)  promptly  after the  sending or filing  thereof,
copies of all regular and periodic  financial  reports which the Borrower  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.

                           (o) on each Banking Day  assignment  of  Receivables,
collections and deposit information of the Borrower.

                  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
                                      -28-
<PAGE>
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.

                  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.

                  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. Each Borrower will, jointly and severally, 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 either Borrower or on property owned,  leased or
controlled by either Borrower. This indemnification  agreement shall survive the
termination of this Agreement and payment of the indebtedness hereunder.

                  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  and so long as the  Collateral  and Lender's lien thereon is not in
any manner  impaired  by any  enforcement  remedy  available  to the tax levying
entity during the period of such contest.

                  6.6 Maintenance of Properties.

                           (a)  The   Borrower   will  keep  and   maintain  the
Collateral,  the other collateral  covered by the Security  Documents and all of
its other  properties  necessary  or useful in its  business in good  condition,
repair and working order  (normal wear and tear  excepted) and will from time to
time replace or repair any worn, defective or broken parts;  provided,  however,
that nothing in this Section 6.6 shall prevent the Borrower  from  discontinuing
the operation and
                                      -29-
<PAGE>
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.

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

                  6.8  Preservation of Corporate  Existence.  Each 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.

                  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.

                  6.10 Collateral Accounts.

                           (a) Each Borrower agrees to deposit in its respective
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 (but not the proceeds of any loan to Borrower as
a borrower made by any party other than Lender and permitted  under the terms of
this Agreement),  and all other cash proceeds of Collateral,  which the Borrower
may receive 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  Accounts,  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  Accounts shall not bear interest and shall
not be subject to  withdrawal  by the  Borrower,  except  after full payment and
discharge of all Obligations. All
                                      -30-
<PAGE>
such  collections  shall  constitute   proceeds  of  Collateral  and  shall  not
constitute  payment  of any  Obligation.  Collected  funds  from the  Collateral
Accounts shall be transferred to the Lender's  general  account,  and the Lender
may deposit in its general  account or in the  Collateral  Accounts  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
from time to time at its discretion  shall,  after allowing (i) two Banking Days
after  deposit in the  Collateral  Accounts  and/or  (ii) one  Banking Day after
direct deposit in Lender's Account No. 00-28-995 at Norwest Bank Minnesota,  NA,
and/or (iii) such later date as may be required for collection, apply such funds
to the payment of any and all Obligations, in any order or manner of application
satisfactory  to the Lender.  All items  delivered to the Lender or deposited in
the Collateral  Accounts 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  Accounts,  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  commercial  account or other  account.  The
Borrower shall be liable as an endorser on all items deposited in the Collateral
Accounts, whether or not in fact endorsed by the Borrower.

                           (b) If a Default  or Default  Period  exists and upon
demand of the Lender,  the Borrower shall establish one or more lockbox accounts
as directed by the Lender with such banks or depository institutions as shall be
satisfactory to the Lender and shall  irrevocably  direct all present and future
Account  Debtors  and other  Persons  obligated  to make  payments  constituting
Collateral to make such payments  directly to such lockbox  account.  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 such  lockbox and shall  include  such  lockbox  address or
addresses.  All payments received in such lockbox accounts shall be processed to
the Collateral Accounts.

                  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
Floating Rate or the Incentive Rate, if then applicable to the Credit  Facility.
To facilitate the performance or observance by the Lender of
                                      -31-
<PAGE>
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.

                  6.12 Debt Service  Coverage Ratio. The Borrower agrees that it
shall,  as of the last day of each fiscal  quarter,  on and after June 30, 1997,
maintain an average  minimum debt service  coverage ratio (based upon the period
set forth below) as follows:


Quarter Ending                             Debt Service Coverage Ratio
--------------                             ---------------------------

June 30, 1997                              1.0 to 1 based upon the immediately
                                           preceding five month period

December 31, 1997                          1.25 to 1 based upon the immediately
                                           preceding eleven month period

March 31, 1998 and on the last day of      1.25 to 1 based upon the immediately
each fiscal quarter thereafter             preceding twelve month period


                  The debt service coverage ratio shall be calculated  according
to the following formula:
<TABLE>
<S>    <C>  
 Funds from Operations + Interest Expense - Unfinanced Portion of Capital Expenditures
 -------------------------------------------------------------------------------------
 Current Maturities Long-Term Debt (actually paid during the period) + Interest Expense
</TABLE>

                  6.13 Net Worth. The Borrower warrants that, as of December 31,
1996  Borrower  has a  minimum  Net Worth of not less  than  $6,300,000.00.  The
Borrower  covenants  that the  minimum  Net  Worth as of the end of each  future
fiscal  quarter  end  shall be not less  than the  amounts  set  forth  below as
measured from the immediately preceding fiscal quarter ending Net Worth.

                                            Net Worth Increase
                  Quarter Ending               (Decrease)
                  --------------            ----------------
                  March 31                  ($300,000.00)
                  June 30                    $400,000.00
                  September 30               $150,000.00
                  December 31               ($250,000.00)

Notwithstanding anything to the contrary,  beginning with the fiscal year ending
December 31, 1997, and continuing  each fiscal year  thereafter,  the Borrower's
minimum Net Worth as of the end of each  fiscal  year end shall  increase by not
less  than  $300,000.00  over  the  Borrower's  Net  Worth  as of the end of the
immediately preceding fiscal year end.
                                      -32-
<PAGE>
                  6.14 Net Income.  The Borrower  covenants  that beginning with
the fiscal quarter  ending March 31, 1997,  and  continuing  each fiscal quarter
thereafter,  it shall  achieve a Net Income of at least (or,  in the event a Net
Loss is allowed for such fiscal quarter, a Net Loss of not more than) the amount
set forth below for each fiscal quarter of each fiscal year.

                  Quarter Ending            Net Income (Loss)
                  --------------            -----------------
                  March 31                  ($300,000.00)
                  June 30                    $400,000.00
                  September 30               $150,000.00
                  December 31               ($250,000.00)

Notwithstanding  anything to the  contrary,  beginning  with April of 1997,  and
continuing for each month  thereafter,  the Borrower shall not suffer a Net Loss
in excess of  $100,000.00  in any one  month.  Notwithstanding  anything  to the
contrary,  beginning  with  the  fiscal  year  ending  December  31,  1997,  and
continuing each fiscal year thereafter,  the Borrower shall achieve a Net Income
of not less than $300,000.00.

                                   ARTICLE VII

                               Negative Covenants
                               ------------------

                  So long as the Note shall remain unpaid,  the 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:

                  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(b) hereof;

                           (b) the Security Interests; and

                           (c) purchase  money  security  interests  relating to
Capital  Expenditures  (and which  attach  only to the assets  acquired  by such
Capital  Expenditures)  made after the date of this Agreement by the Borrower or
any  Affiliate so long as the  Borrower is in, and  maintains,  compliance  with
every other provision of this Agreement.

                  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:
                                      -33-
<PAGE>
                           (a) indebtedness arising hereunder;

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

                           (c)  indebtedness  relating  to  liens  permitted  in
accordance with Section 7.1(c) hereof.

                  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.

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

                                    (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
$20,000.00; and

                                    (iii)  advances  in  the  form  of  progress
payments, prepaid rent or security deposits.

                           (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.

                  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
                                      -34-
<PAGE>
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.

                  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.

                  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.

                  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.

                  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.

                  7.10 Capital  Expenditures.  The  Borrower  will not expend or
contract to make unfinanced Capital  Expenditure greater than $800,000.00 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.

                  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.
                                      -35-
<PAGE>
                  7.12 Discounts,  etc. The Borrower will not, 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 at any time  (whether  before
after notice from the Lender) modify,  amend,  subordinate,  cancel or terminate
the obligation of any account debtor or other obligor of the Borrower.

                  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.

                  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 binding upon the Borrower.

                  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.

                  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.

                  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 10% or as  recommended  by  Borrower's  Board of
Directors 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.

                  7.18  Issuance  of  Stock/Loss  of Voting  Control.  Except as
required in order for the  Borrower to comply with its  contractual  obligations
contained in that certain Manufacturing Supply Agreement dated December 21, 1996
entered  into  by and  between  Royal  Grip  and  Acushnet  (the  "Manufacturing
Agreement"),  the Borrower will not issue or sell any stock of the Borrower. The
Borrower shall not permit or suffer to occur any transfer, assignment, pledge or
other  disposition  of any or all of the  issued  and  outstanding  stock of the
Borrower so as to materially change the voting control of the Borrower.

                  7.19 Payments to Affiliates. Royal Grip shall not, without the
express written  consent of Lender,  which consent may be granted or withheld in
Lender's sole discretion, make any transfer,  conveyance, loan or payment of any
kind to Roxxi or any other  Affiliates in excess of $500,000.00 per fiscal year.
Roxxi shall not, without the express written consent of Lender,
                                      -36-
<PAGE>
which consent may be granted or withheld in Lender's sole  discretion,  make any
transfer,  conveyance,  loan or payment of any kind to any Affiliate  other than
Royal Grip.

                  7.20  Management  Control.  The  Borrower  shall not permit or
suffer to occur any change in its current executive management structure.

                                  ARTICLE VIII

                     Events of Default, Rights and Remedies
                     --------------------------------------

                  8.1  Events of  Default.  "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

                           (b) Failure to pay when due any amount  specified  in
Section 2.5 hereof relating to the Borrower's  Obligation of  Reimbursement,  or
failure to pay immediately  when due or upon  termination of the Credit Facility
any amounts required to be paid for deposit in the Special Account under Section
2.6 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  other than a
covenant or agreement which is  specifically  dealt with in this Section 8.1 and
the  continuance  thereof  for a period  of 5 days  after the  actual  knowledge
thereof by an executive  officer of either Borrower or receipt of written notice
thereof from the Lender; or

                           (e)  Either  Royal  Grip or Roxxi  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 either Royal Grip
or Roxxi shall apply for or consent to the appointment of any receiver, trustee,
or similar officer for it or for all or any substantial part of its property; or
such  receiver,  trustee or  similar  officer  shall be  appointed  without  the
application  or consent  of Royal  Grip or Roxxi,  as the case may be; or either
Royal Grip or Roxxi 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  under  the  laws  of any  jurisdiction;  or any  such  proceeding  shall  be
instituted (by petition,  application or otherwise)  against Royal Grip or Roxxi
and shall not be  dismissed  within 60 calendar  days;  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 Royal Grip or
Roxxi; or
                                      -37-
<PAGE>
                           (f) A petition  shall be filed by or  against  (which
when filed against shall not be dismissed  within 60 calendar days) either Royal
Grip or Roxxi under the United States Bankruptcy Code naming Royal Grip or Roxxi
as debtor; or

                           (g)  Any  representation  or  warranty  made  by  the
Borrower in this  Agreement or by the  Borrower (or any of its  officers) 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 shall prove to have been incorrect in any material respect when deemed
to be effective; or

                           (h) The rendering  against either Royal Grip or Roxxi
of a final  judgment,  decree  or order  for the  payment  of money in excess of
$50,000.00 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 either Borrower owed to any Person other than
the Lender,  or under any  indenture  or other  instrument  under which any such
evidence of  indebtedness  has been issued or by which it is governed,  or under
any lease of any of the Premises, and the expiration of the applicable period of
grace,  if any,  specified in such evidence of  indebtedness,  indenture,  other
instrument or lease; or

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

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

                           (l)  Either  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)  Either  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
                                      -38-
<PAGE>
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
either Borrower to the Lender other than any indebtedness arising hereunder; or

                           (o) Any  event of  default  shall  occur  (and not be
cured within the prescribed  cure period) under the  Manufacturing  Agreement or
the Capital Lease Agreement; or

                           (p) Any  breach,  default  or event of  default by or
attributable to any Affiliate under any agreement between such Affiliate and the
Lender.

                  8.2 Rights and  Remedies.  Upon the  occurrence of an Event of
Default or at any time  thereafter  during the  resulting  Default  Period,  the
Lender may exercise any or all of the following rights and remedies:

                           (a)  The  Lender  may,  by  notice  to the  Borrower,
declare the Credit Facility to be terminated, whereupon the same shall forthwith
terminate;

                           (b)  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;

                           (c) 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 and the Term Loan,  including  interest
accrued  thereon,  and of all other sums then owing by the  Borrower  hereunder,
including, without limitation, the Obligation of Reimbursement;

                           (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 2.11 and
3.6 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 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
                                      -39-
<PAGE>
and make it  available to the Lender at a place to be  designated  by the Lender
which is reasonably convenient to both parties;

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

                           (g) 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.

                  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 calendar days prior
to the date of intended disposition or other action.

                                   ARTICLE IX

                                  Miscellaneous
                                  -------------

                  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.

                  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.

                  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,
                                      -40-
<PAGE>
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 Royal Grip or Roxxi:

                  Royal Grip, Inc.
                  444 West Geneva Drive
                  Tempe, Arizona  85282
                  Telecopier:  (602) 829-9100
                  Attention: Tom Schneider

                  If to the Lender:

                  Norwest Business Credit, Inc.
                  Norwest Tower, Mail Station 9025
                  3300 North Central Avenue
                  Phoenix, Arizona  85012-2501
                  Telecopier: (602) 263-6215
                  Attention: Pete Lowney

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.

                  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 Debtors:

                  Royal Grip, Inc.
                  444 West Geneva Drive
                  Tempe, Arizona  85282
                  Federal Tax Identification No. 86-0615648

                  Roxxi, Inc.
                  2621 SE 15th Street
                  Oklahoma City, Oklahoma  73129
                  Federal Tax Identification No. 86-0801779
                                      -41-
<PAGE>
                  Name and address of Secured Party:

                  Norwest Business Credit, Inc.
                  Norwest Tower, Mail Station 9025
                  3300 North Central Avenue
                  Phoenix, Arizona  85012-2501
                  Telecopier: (602) 263-6215
                  Attention: Pete Lowney

                  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).

                  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.

                  9.7 Costs and Expenses.  The Borrower  agrees to pay on demand
all costs and expenses,  including (without  limitation)  reasonable  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 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.

                  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, Royal Grip and Roxxi,  jointly and severally agree 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
                                      -42-
<PAGE>
and delivery of this Agreement and the other Loan Documents or the making of the
Advances,  Term Loan 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,  Term Loan, or
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,  Royal Grip and Roxxi,
or counsel  designated by either one 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.

                  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.

                  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.

                  9.11 Binding Effect; Assignment;  Complete Agreement;  Sharing
of  Information.  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.
Without  limitation  of the Lender's  right to share  information  regarding the
Borrower and its Affiliates with Lender's participants, accountants, lawyers and
other advisors,  the Lender may share at any time with Norwest Corporation,  and
all  direct  and  indirect  subsidiaries  of  Norwest  Corporation,  any and all
information the Lender may have in its possession regarding the Borrower and its
Affiliates,  and the Borrower  waives any right of  confidentiality  it may have
with respect to such sharing of such information.
                                      -43-
<PAGE>
                  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 Arizona.  Each party
consents to the personal jurisdiction of the state and federal courts located in
the  State of  Arizona  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  Superior  Court of  Maricopa  County,
Arizona, or the United States District Court,  District of Arizona.  The parties
waive  any  right to  trial  by jury in any  action  or  proceeding  based on or
pertaining to this Agreement.

                  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.

                  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.




          REMAINDER OF PAGE INTENTIONALLY BLANK; SIGNATURE PAGE FOLLOWS
                                      -44-
<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.

                                      ROYAL GRIP, INC., a Nevada corporation



                                      By /s/ Tom Schneider
                                        ----------------------------------

                                         Its   Secretary
                                            ------------------------------ 

                                      ROXXI, INC., a Nevada corporation



                                      By /s/ Tom Schneider
                                        ----------------------------------

                                         Its   Secretary
                                            ------------------------------ 


                                      NORWEST BUSINESS CREDIT, INC., a
                                         Minnesota corporation


                                      By /s/ Pete Lowney
                                        ----------------------------------

                                         Its   Vice President
                                            ------------------------------ 
                                      -45-
<PAGE>
                                                         Exhibit A to Credit and
                                                              Security Agreement


                             REVOLVING AND TERM NOTE

$2,450,000.00                                                   Phoenix, Arizona
                                                                 _________, 1997

                  For value  received,  the  undersigned,  ROYAL GRIP,  INC.,  a
Nevada  corporation and ROXXI,  INC., a Nevada  corporation  (collectively,  the
"Borrower"),  hereby jointly and severally promise to pay on January 31, 2000 to
the order of  Norwest  Business  Credit,  Inc.,  a  Minnesota  corporation  (the
"Lender"),  at its office in Phoenix,  Arizona, 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
FOUR HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS  ($2,450,000.00) or, if less, the
aggregate  unpaid principal amount of all Advances and the Term Loan made by the
Lender to the Borrower under the Credit Agreement  (defined below) 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 interest accruing thereon shall be due and payable as provided in the
Credit  Agreement.  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.

                  Both entities  constituting the Borrower  hereby,  jointly and
severally,  agree 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.

                  The Borrower  agrees that the  interest  rate  contracted  for
includes the interest  rate set forth herein plus any other  charges or fees set
forth herein and costs and  expenses  incident to this  transaction  paid by the
Borrower to the extent the same are deemed interest under applicable law.
                                       A-1
<PAGE>
                  Presentment  or other demand for  payment,  notice of dishonor
and protest are expressly waived.

                                       ROYAL GRIP, INC., a Nevada corporation



                                       By __________________________________

                                          Its ________________________________


                                       ROXXI, INC., a Nevada corporation



                                       By __________________________________

                                          Its ________________________________

                                                      A-2
<PAGE>
                                                         Exhibit B to Credit and
                                                              Security Agreement


                                      Names
                                      -----


                                      None




               Chief Executive Office/Principal Place of Business
               --------------------------------------------------


               Royal Grip: 444 West Geneva Drive, Tempe, AZ 85282

               Roxxi: 2621 SE 15th Street, Oklahoma City, OK 73129






                     Other Inventory and Equipment Locations
                     ---------------------------------------


                                ACUSHNET LOCATION
                              744 Belleville Avenue
                      New Bedford, Massachusetts 02742-6912






                                  Subsidiaries
                                  ------------


                       Roxxi is a subsidiary of Royal Grip


                                       B-1
<PAGE>
                                                         Exhibit C to Credit and
                                                              Security Agreement



                  Permitted Liens, Indebtedness and Guaranties
                  --------------------------------------------



                                      Liens
                                      -----


                                      NONE





                                  Indebtedness
                                  ------------


                    $6,000,000.00 owed by Roxxi to Royal Grip







                                   Guaranties
                                   ----------


                                      NONE



                                       C-1
<PAGE>
                                                         Exhibit D to Credit and
                                                              Security Agreement

                             Compliance Certificate
                             ----------------------


To:               ______________________
                  Norwest Business Credit, Inc.

Date:             ____________________

Subject:          ______________________________
                  Financial Statements


                  In accordance with our Credit and Security  Agreement dated as
of  ____________________  (the "Credit  Agreement"),  attached are the financial
statements  of  Royal  Grip,  Inc.  and/or  Roxxi,   Inc.,  as  applicable  (the
"Borrower") and the year-to-date  period then ended (the "Current  Financials").
All terms in this certificate have the meanings given in the Credit Agreement.

                  I certify that the Current  Financials  have been  prepared in
accordance with GAAP, subject to year-end audit adjustments,  and fairly present
the financial condition of the Borrower as of the date thereof.

                  Events of Default.  (Check one):

                           ___ The  undersigned  does not have  knowledge of the
                  occurrence  of a Default or Event of Default  under the Credit
                  Agreement.

                           ___ The  undersigned  has knowledge of the occurrence
                  of a Default  or Event of Default  under the Credit  Agreement
                  and  attached  hereto is a statement of the facts with respect
                  to thereto.

                  Financial Covenants.  I further hereby certify as follows:

                           ___ The Reporting Date does not correspond to the end
                  of the Borrower's fiscal quarters,  hence I am completing only
                  paragraphs ___ below.

                           ___ The Reporting Date  corresponds to the end of one
                  of the Borrower's  fiscal quarters,  hence I am completing all
                  paragraphs below.

                           1. Minimum Debt Service  Coverage Ratio.  Pursuant to
                  Section  6.12 of the  Credit  Agreement,  for  the  applicable
                  period  ending on the  Reporting  Date,  the  Borrower's  Debt
                  Service Coverage Ratio was ___ to 1.00, which
                                       D-1
<PAGE>
                  ____ satisfies ____ does not satisfy the requirement that such
                  ratio be no less than ____ to 1.00.

                           2. Minimum Net Worth. Pursuant to Section 6.13 of the
                  Credit  Agreement,  as of the Reporting  Date,  the Borrower's
                  Book Net Worth was $_______________, which ____ satisfies ____
                  does not satisfy the requirement that such amounts be not less
                  than $_______________ on the Reporting Date.

                           3.  Minimum Net Income.  Pursuant to Section  6.14 of
                  the Credit Agreement, as of the Reporting Date, the Borrower's
                  Net Income for the applicable period was  $___________,  which
                  ___ satisfies ___ does not satisfy the  requirement  that such
                  amounts be not less than $______ on the Reporting Date.

                           4. Capital Expenditures.  Pursuant to Section 7.10 of
                  the Credit  Agreement,  for the year-to-date  period ending on
                  the Reporting Date, the Borrower has expended or contracted to
                  expend  during the fiscal year ending  December 31, 199_,  for
                  Capital Expenditures,  $__________ in the aggregate which ____
                  satisfies  ____ does not  satisfy  the  requirement  that such
                  expenditures  not exceed  $800,000.00 in the aggregate  during
                  the fiscal year ended  December 31, 199_, and each fiscal year
                  thereafter.

                           5. Salaries.  As of the Reporting  Date, the Borrower
                  ____ is ____ is not in  compliance  with  Section  7.17 of the
                  Credit Agreement concerning salary increases.

                  Officers                      Percentage Increase
                  --------                      -------------------

                  ---------------------------   -------------------------------
                  ---------------------------   -------------------------------
                  ---------------------------   -------------------------------

                  (To  be  completed  within  30  days  of  any  officer  salary
                  increase)

                           6. Payments to  Affiliates.  Pursuant to Section 7.19
                  of the Credit Agreement, for the year-to-date period ending on
                  the  Reporting  Date,  Royal  Grip has in the  aggregate  made
                  transfers,  conveyances,  loans and payments to  Affiliates in
                  the amount of $_________  which ____  satisfies  ____ does not
                  satisfy   the   requirement   that  such   amount  not  exceed
                  $500,000.00  in the  aggregate  during the  fiscal  year ended
                  December 31, 199__, and each fiscal year thereafter, and Roxxi
                  has in the aggregate made  transfers,  conveyances,  loans and
                  payments to Affiliates  other than Royal Grip in the amount of
                  $_________  which ____  satisfies  ____ does not  satisfy  the
                  requirement that no such transfers be made.
                                       D-2
<PAGE>
                  Attached hereto are all relevant facts in reasonable detail to
evidence,  and the  computations of the financial  covenants  referred to above.
These computations were made in accordance with GAAP.

                                ROYAL GRIP, INC., a Nevada corporation



                                By __________________________________

                                    Its ________________________________



                                ROXXI, INC., a Nevada corporation



                                By __________________________________

                                    Its ________________________________

                                       D-3
<PAGE>
                                                Exhibit E to Credit and Security
                                                                       Agreement


                                    Premises
                                    --------

                  The Premises referred to in the Credit and Security  Agreement
are legally described as follows:


                                       E-1