FIRST UNION NATIONAL BANK OF FLORIDA
                          AMENDMENT TO LOAN AGREEMENTS
                            AND OTHER LOAN DOCUMENTS


This  Amendment to Loan  Agreement  and Other Loan  Documents  (hereinafter  the
"Agreement")  is made on the 12th day of October,  1995,  by and  between  First
Union National Bank of Florida,  a national  banking  association  organized and
existing under the laws of the United States of America, Commercial Banking-WPB,
Florida (hereinafter referred to as "Bank"); and Top Source Technologies,  Inc.,
a Delaware corporation authorized to do business in the state of Florida, and On
Site Analysis, Inc., a Georgia corporation (each hereinafter referred to jointly
and severally as  "Borrower"),  and having their  principal place of business as
follows:

Top Source Technologies, Inc.                         On Site Analysis, Inc.
2000 P.G.A. Boulevard, Suite 3200                     3125 Presidential Drive
Palm Beach Gardens, FL 33408                          Suite 130
                                                      Atlanta, GA 30340-3907

and is joined by Top Source  Automotive,  Inc.,  a Florida  corporation,  United
Testing  Group,  Inc.,  a Georgia  corporation,  and ARCS Safety  Seat,  Inc., a
Florida  corporation  (each  hereinafter  referred to jointly and  severally  as
"Guarantors"), and having their principal place of business as follows:

Top Source Automotive, Inc.                        United Testing Group, Inc.
2000 P.G.A. Boulevard, Suite 3200                  3121 Presidential Drive
Palm Beach Gardens, FL 33408                       Atlanta, GA 30340-3907

ARCS Safety Seat, Inc.
2000 P.G.A. Boulevard, Suite 3200
Palm Beach Gardens, FL 33408


                                    RECITALS:

         A. On November 22, 1994,  Borrower executed a Loan Agreement (the "Loan
Agreement")  with Bank setting forth certain  terms and  conditions  under which
Bank would make two loans to Borrower described as follows:

         Revolver Loan #1-  (hereinafter  sometimes  "Loan #1") in the principal
         amount of  $4,500,000.00,  the terms and  conditions  of which are more
         fully described in the Promissory  Note and Security  Agreement in such
         principal  amount executed by Borrower in favor of Bank on November 22,
         1994 ("Note #1"); and

         Revolver Loan #2-  (hereinafter  sometimes  "Loan #2") in the principal
         amount of $500,000.00, the terms and conditions of which are more fully
         described  in the  Promissory  Note  and  Security  Agreement  in  such
         principal  amount executed by Borrower in favor of Bank on November 22,
         1994 ("Note #2).


<PAGE>



         B. On April 13, 1995,  Borrower  executed an additional  Loan Agreement
with Bank setting forth certain terms and conditions under which Bank would make
an additional loan to Borrower described as follows:

         Revolver Loan #3-  (hereinafter  sometimes  "Loan #3") in the principal
         amount of $250,000.00, the terms and conditions of which are more fully
         described  in the  Promissory  Note  and  Security  Agreement  in  such
         principal  amount  executed  by Borrower in favor of Bank on April ,13,
         1995 ("Note #3).

         (Each of the  above  loans  and the  Promissory  Note(s)  described  in
         Recital "A" and "B" or Instrument(s) and Security Agreement(s) executed
         pursuant  thereto  is  hereinafter   jointly  and  severally  sometimes
         referred to as the "Note(s)" and/or the "Loans")

         C. In  addition  to the Notes,  the terms of the Loans are set forth in
various other loan documents (the "Loan Documents"  which term includes,  but is
not restricted to, the Loan  Agreement  dated November 22, 1994 [Loan  Agreement
#1],  concerning Loan #1 and Loan # 2, and the Loan Agreement executed April 13,
1995 [Loan  Agreement #2],  concerning Loan #3, the Notes [Note #1, Note #2, and
Note #3], the  Guarantees,  an  Assignment  of Leases,  Rents,  and Fees,  and a
Collateral  Assignment of Interest in Security Deposit and Additional Agreements
by Borrowers) executed and delivered at the closing of the Loans on November 22,
1994, or executed on later dates in accordance  with  agreements  reached at the
closing of the Loans on November  22, 1994,  and  executed and  delivered at the
closing of the Loan on April 13, 1995,  or executed on later dates in accordance
with agreements reached at the closing of the Loan on April 13, 1995.

         D. All of the  obligations  of  Borrower to Bank under the terms of the
Loans and the Loan Documents were  unconditionally  guaranteed by the Guarantors
under the terms of separate guaranty  agreements (the "Guarantees")  executed by
each of the Guarantors.

         E.  Borrower has requested  that Bank make an additional  Revolver Loan
(sometimes  herein  referred  to as Loan #4) in the  principal  amount  of SEVEN
HUNDRED AND FIFTY THOUSAND AND 00/100 DOLLARS ($750,000.00) to Borrower and that
Loan #4 be consolidated with Loan #2 and Loan #3 into a single consolidated Loan
(the "Consolidated  Loan") in total principal amount of ONE MILLION FIVE HUNDRED
THOUSAND AND 00/100 DOLLARS  ($1,500,000.00) in accordance with the terms of the
Consolidated  Promissory  Note a copy of which is attached hereto as Exhibit "A"
and made a part hereof, and in accordance with the terms of this agreement.

         F. Relying upon the  representations  and warranties and the agreements
and  covenants  set forth in the Loan  Documents  and herein  contained,  and in
consideration  of the  modifications  to the Loan  Agreement  and the other Loan
Documents  described  herein,  the  Bank  is  willing  to  make  Loan  #4 and to
consolidate Loan #4 with Loan #2

                                        2

<PAGE>



and Loan #3 upon the terms and subject to the conditions
hereinbefore and hereinafter set forth.

         The Bank, Borrower, and the Guarantors hereby agree as follows:

         1. The  Recitals  set forth in  paragraphs A through F inclusive as set
forth above are true and  correct  and  ratified  and  confirmed  by the parties
hereto.

         2. Borrower confirms that all  representations and warranties set forth
in Loan  Agreement  #1 and Loan  Agreement  #2 remain true and correct as of the
date hereof.

         3. The Loans  referred to in Loan  Agreement #1 as Revolver  Loan #2 in
principal  amount of $500,000.00,  and in Loan Agreement #2 as the Revolver Loan
in principal  amount of $250,000.00  are hereafter  referred to as the "Revolver
Loan" and is described as follows:

         Revolver Loan - (hereinafter  sometimes "Loan") in the principal amount
         of  $1,500,000.00,  the terms and  conditions  of which are more  fully
         described in the Consolidated Promissory Note and Security Agreement in
         such principal  amount executed by Borrower in favor of Bank on October
         12, 1995 ("Consolidated Promissory Note").

         4.  Paragraph 2 (f) is hereby added to the Loan Agreement as
follows:

                  f. NET WORTH:  Borrower  will at all times  maintain a minimum
                  consolidated  tangible  net worth of THREE  MILLION AND 00/100
                  DOLLARS ($3,000,000.00). Consolidated tangible net worth shall
                  mean  the  consolidated  net  worth  of the  Borrower  and its
                  subsidiaries, after subtracting therefrom the aggregate amount
                  of (i)  deferred  income tax assets,  and (ii) any  intangible
                  assets of the Borrower and its  subsidiaries,  including,  and
                  without limitation,  goodwill, franchises,  licenses, patents,
                  trademarks,  trade  names,  copyrights,   service  marks,  and
                  capitalized database.

         5.  Paragraph 6 (a) (3) of Loan Agreement #1 is hereby
modified to provide as follows:

                  6.  Security: ...

                  a.  PERSONALTY: ....

                  3. All of the presently  owned or  hereinafter  acquired other
                  assets, including, without limitations,  accounts,  inventory,
                  equipment, chattel paper, instruments, general intangibles and
                  documents,   as  those   terms  are  defined  by  the  Uniform
                  Commercial Code of the State of Florida, or

                                        3

<PAGE>



                  as otherwise determined by Bank, owned by Borrower and by
                  Top Source Automotive, Inc.

         6. The following  paragraph is added as  subparagraph 9 (l) (v) to Loan
Agreement #1 and as subparagraph 9 (k) (iii) to Loan Agreement #2:

         The total  cumulative  amount that will be  outstanding  as advanced to
         Borrower  at any time  under the terms of the  Consolidated  Promissory
         Note shall be the lesser of a) 75% of Eligible Accounts Receivable,  or
         b) $1,500,000.00.  Eligible accounts  receivable are defined and agreed
         to be those Accounts Receivable of Top Source Automotive,  Inc. aged 60
         days or less;  Accounts  Receivable of On Site  Analysis,  Inc. aged 60
         days or less; and Accounts  Receivable of United  Testing  Group,  Inc.
         aged  60 days or  less.  To  determine  Eligible  Accounts  Receivable,
         Borrower  will  submit  to Bank a  monthly  Accounts  Receivable  Aging
         Analysis.  No  portion  of an  Account  Receivable  will be  considered
         eligible if 50% of the Account Receivable is outstanding for 90 days or
         more as evidenced by the monthly  Accounts  Receivable  Aging Analysis.
         The  Accounts  Receivable  Aging  Analysis  will be  submitted  to Bank
         monthly with an executed  compliance  certificate  in the form attached
         hereto as Exhibit "B" and made a part hereof.

         7. The  Assignment  of  Leases,  Rents,  and Fees,  and the  Collateral
Assignment  of  Interest  in  Security  Deposit  and  Additional  Agreements  by
Borrowers  both  executed and  delivered at the closing of the Loans on November
22, 1994,  are hereby  amended to provide that all  obligations  of the Borrower
under  the  terms of Loan #1,  and due under  Loan #2,  Loan #3,  and Loan #4 as
consolidated  in total  principal  amount  of SIX  MILLION  AND  00/100  DOLLARS
($6,000,000.00) are secured by the security interests therein granted.

         8. The  Guarantors  join in the  execution of this  instrument  for the
specific  purpose of  consenting  to the terms  hereof and to ratify and confirm
their continuing  obligations  under the terms and provisions of the Guarantees,
and to further  acknowledge that nothing  contained  herein, or contained in any
other document modifying or supplementing the Loan Documents,  in any way limits
or  otherwise  reduces or  restricts  the  obligations  and  liabilities  of any
Guarantor  to the extent  provided in the  Guarantees  as to any  obligation  or
liability of the Borrowers to be performed or owed in  connection  with Loan #1,
and Loan #2, Loan #3, and Loan #4 as consolidated.

         9. All terms and provisions of the Loan Agreements and any other of the
Loan  Documents not  specifically  modified by this agreement or modified by any
other  agreement  executed by the  parties,  remain in full force and effect and
fully enforceable in accordance with such terms.


                                        4

<PAGE>



         IN WITNESS WHEREOF, the Borrower,  Guarantors, and the Bank have caused
this  Modification  to Loan  Agreements  and  other  Loan  Documents  to be duly
executed all as of the day and year first above written:






Witnesses:                                               BORROWERS:

                                                       TOP SOURCE TECHNOLOGIES,
                                                       INC.
/s/Kevin R. Armbruster

Kevin R. Armbruster                                       BY:/s/David Natan
type or print name of witness
/s/Mary Ann Latham                                   its Chief Financial Officer

Mary Ann Latham
type or print name of witness

                                                                       ATTEST:
(CORPORATE SEAL)

                                                      BY:/s/Christer Rosen

                                                      its Secretary

                                                      ON SITE ANALYSIS, INC.
/s/Kevin R. Armbruster
Kevin R. Armbruster                                       BY:/s/David Natan
type or print name of witness
/s/Mary Ann Latham                                  its Chief Financial Officer

Mary Ann Latham
type or print name of witness

                                                        ATTEST:

                                                     BY:/s/Christer Rosen
                                                     its Secretary

                                        5

<PAGE>



                                                            GUARANTORS:


                                                TOP SOURCE AUTOMOTIVE, INC.
/s/Kevin R. Armbruster

Kevin R. Armbruster                               BY:/s/David Natan
type or print name of witness
/s/Mary Ann Latham                               its Chief Financial Officer

Mary Ann Latham
type or print name of witness

                                                          ATTEST:
(CORPORATE SEAL)

                                                          BY:/s/Christer Rosen
                                                           Secretary


                                                    ARCS SAFETY SEAT, INC.
/s/Kevin R. Armbruster

Kevin R. Armbruster                                      BY:/s/David Natan
type or print name of witness
/s/Mary Ann Latham                                its Chief Financial Officer

Mary Ann Latham
type or print name of witness

                                                            ATTEST:
(CORPORATE SEAL)

                                                        BY:/s/Christer Rosen
                                                             Secretary

                                                      UNITED TESTING GROUP,
                                                                       INC.
/s/Kevin R. Armbruster

Kevin R. Armbruster                                   BY:/s/David Natan
type or print name of witness
/s/Mary Ann Latham                                 its Chief Financial Officer

Mary Ann Latham
type or print name of witness

                                                             ATTEST:
(CORPORATE SEAL)

                                                      BY:/s/Christer Rosen
                                                      its Secretary

                                             6

<PAGE>





                                                   BANK:                        

                                                   FIRST UNION NATIONAL BANK
                                                   OF FLORIDA

/s/Kevin R. Armbruster
Kevin R. Armbruster                               BY:/s/Dena P. Bombard
type or print name of witness                     Dena P. Bombard
                                                  its Vice President
/s/Mary Ann Latham

Mary Ann Latham
type or print name of witness


                                        7

<PAGE>



                                  CONSOLIDATED
                     PROMISSORY NOTE AND SECURITY AGREEMENT

$1,500,000.00                                  October 12, 1995
                                             (Date of Execution and Delivery)

LENDER:                    FIRST UNION NATIONAL BANK OF FLORIDA (hereinafter
                           termed "LENDER"), Commercial Banking-WPB, Florida

BORROWERS:                 TOP SOURCE TECHNOLOGIES, INC., 2000 P.G.A.
                           Boulevard, Suite 3200, Palm Beach Gardens, Florida
                           33408; and ON-SITE ANALYSIS, INC., 3125
                           Presidential Parkway, Suite 130, Atlanta, Georgia
                           30340-3907.

BORROWERS REPRESENT HEREWITH THAT THE LOAN EVIDENCED HEREBY IS
BEING OBTAINED FOR THE PRIMARY PURPOSE OF BUSINESS.

                                    RECITALS:

         A. On  November  22,  1994,  Borrower  executed a  Promissory  Note and
Security Agreement  (Promissory Note #1) in favor of Bank in principal amount of
$500,000.00,  the terms and conditions of which are more fully  described in the
Promissory  Note and Security  Agreement in such  principal  amount  executed by
Borrower in favor of Bank on November 22, 1994.

         B. On April 13, 1995,  Borrower executed a Promissory Note and Security
Agreement  (Promissory  Note  #2) in  favor  of  Bank  in  principal  amount  of
$250,000.00,  the terms and conditions of which are more fully  described in the
Promissory  Note and Security  Agreement in such  principal  amount  executed by
Borrower in favor of Bank on April 13, 1995.

         C.  Bank has  agreed  to  extend  to  Borrower  an  additional  loan in
principal  amount of  $750,000.00  and to  consolidate  the loans  evidenced  by
Promissory  Note #1 and Promissory Note #2 with the additional loan in amount of
$750,000.00 into a single loan in principal amount of $1,500,000.00 evidenced by
this single Consolidated Promissory Note and Security Agreement.

         Therefore,  the  obligations  of  Borrower  to Bank  under the terms of
Promissory  Note #1 and  Promissory  Note #2 and the  obligations of Borrower to
Bank as to an additional loan to Borrower being made as of the execution of this
Consolidated Promissory Note and Security Agreement are hereby consolidated into
a single  obligation in principal amount of $1,500,000.00  and this Consolidated
Promissory  Note and Security  Agreement is executed by Borrower to evidence the
total obligation being hereby consolidated.

FOR VALUE RECEIVED: To wit, money loaned the undersigned Borrowers  (hereinafter
collectively  termed  "BORROWER"),  jointly  and  severally  (if  more  than one
borrower) promise to pay to the order of LENDER at its office in the above city,
or wherever else LENDER may

                                        8

<PAGE>



specify,  the sum of ONE MILLION AND FIVE HUNDRED  THOUSAND  AND NO/100  DOLLARS
($1,500,000.00)  with interest  until paid,  at the rate of LENDER'S  PRIME RATE
plus eighty-five one-hundredths percent (.85%) as that rate may change from time
to time with  changes  to occur on the date the  LENDER'S  PRIME  RATE  changes;
payable  in full on  demand,  with  monthly  payments  of  interest  only on all
outstanding  principal  commencing November 12, 1995, and continuing on the same
day of each  month  thereafter  until all  outstanding  sums of  principal  plus
accrued  interest are paid in full. The foregoing  principal sum may be advanced
to BORROWER in such installments as BORROWER may request,  or as a lump sum, and
may be  prepaid by  BORROWER  in whole or in part  without  penalty at any time.
Provided  that  BORROWER  is not in  default  under any of the  OBLIGATIONS  (as
defined  herein),  BORROWER  may from  time to time  and  until  maturity,  draw
additional  funds in  accordance  with the terms  hereof  notwithstanding  prior
principal repayments;  provided,  however, that the total principal sum due from
BORROWER at any time shall not exceed the total principal sum of ONE MILLION AND
FIVE HUNDRED THOUSAND AND NO/100 DOLLARS  ($1,500,000.00)  or such lesser amount
as may be determined in accordance with the Loan  Agreements  dated November 22,
1994 and April 13,  1995,  as modified by  modification  agreement  of even d
hereof. Provided,  further, that all obligation of LENDER to make any advance to
BORROWER  under the terms of this  agreement will terminate on January 31, 1996,
and  will at all  times  be  subject  LENDER's  determination,  in its  sole and
absolute discretion, that BORROWER's financial condition is satisfactory.

BORROWER agrees as follows:

1. The  BORROWER  agrees to pay a late charge equal to five percent (5%) of each
payment of principal  and/or  interest which is not paid within ten (10) days of
the date on which it is due. At LENDER'S option,  the contract rate shall become
the highest rate allowed by the law of the state of LENDER'S office as set forth
herein,  commencing  with  and  continuing  for so long as the  loan or  portion
thereof is in default (as hereinafter defined). Further, upon BORROWER'S default
and where  LENDER  deems it necessary or proper to employ an attorney to enforce
collection of any unpaid balance hereunder, then BORROWER agrees to pay LENDER'S
reasonable  attorney's fees (including  appellate  costs, if any) and collection
costs. Liability for reasonable attorney's fees and costs shall exist whether or
not any suit or proceeding is commenced.

2. INTEREST is computed on the basis of a three hundred sixty (360) day year for
the  actual  number of days in the  interest  period  (ACTUAL/360  COMPUTATION).
LENDER'S  ACTUAL/360  or 365/360  COMPUTATION  determines  the annual  effective
interest yield by taking the stated (nominal)  interest rate for a year's period
and then dividing  said rate by 360 to determine  the daily  periodic rate to be
applied for each day in the interest  period.  Application  of such  computation
produces an annualized  effective  interest rate  exceeding  that of the nominal
rate. If the interest provision  contained herein refers to LENDER'S PRIME RATE,
then BORROWER

                                        9

<PAGE>



acknowledges  that LENDER'S PRIME RATE is not  represented or intended to be the
lowest or most favorable rate of interest offered by LENDER.

3.  All payments received during normal banking hours after 2:00
p.m. shall be deemed received at the opening of the next banking
day.  At LENDER'S option, any repayments of this Note, other than
by U.S. currency, will not be credited to the outstanding loan
balance until LENDER receives collected funds.

4.  BORROWER'S  payment  will  increase  if  the  scheduled  payment  amount  is
insufficient  to pay  accrued  interest.  If the  scheduled  payment  amount  is
insufficient  to pay accrued  interest,  the scheduled  payment  amount shall be
immediately  increased  as is  necessary to pay all accruals of interest for the
period  and  all  accruals  of  unpaid  interest  from  previous  periods.  Such
adjustments  to the scheduled  payment amount shall remain in effect for as long
as the interest accruals shall exceed the original  scheduled payment amount and
shall be further  adjusted upward or downward to reflect changes in the variable
interest  rate. In no event shall the scheduled  payment amount be reduced below
the original scheduled payment specified herein.

5. Each of the undersigned,  whether BORROWER,  sureties,  or endorser,  and all
others who may become  liable for all or any part of the  obligations  evidenced
and secured hereby, do hereby, jointly and severally; waive presentment, demand,
protest,  notice of protest and/or of dishonor,  and also notice of acceleration
of maturity on default or otherwise.  Further,  they agree that LENDER may, from
time to time,  extend,  modify,  amend or renew this Note and Security Agreement
for any period  (whether or not longer than the original period of the Note) and
grant any releases,  compromises or indulgences  with respect to the Note or any
extensions,  modifications,  amendments  or  renewals  thereof  or any  security
therefore, or to any party liable thereunder or hereunder, all without notice to
or consent of any of the undersigned and without  affecting the liability of the
undersigned hereunder.

6. If more than one person has signed this instrument,  such parties are jointly
and severally obligated hereunder.  Further, use of the masculine pronoun herein
shall  include the feminine and neuter and also the plural.  If any provision of
this  instrument  shall be  prohibited  or invalid  under  applicable  law, such
provision  shall be  ineffective  but only to the extent of such  prohibition or
invalidity,  without  invalidating  the  remainder  of  such  provision  or  the
remainder of such provision or the remaining provisions of this Note.

7.   TIME IS OF THE ESSENCE HEREOF.  Any notices to BORROWER shall
be sufficiently given, if mailed or delivered to the principal
place of business.

8.   To secure payment of this Note, all obligations of the
undersigned BORROWER hereunder, and all other obligations of

                                       10

<PAGE>



BORROWER to LENDER, its successors and assigns,  howsoever  created,  arising or
evidenced;  whether  direct  or  indirect,  absolute  or  contingent,  or now or
hereafter  existing  or due to become due (the loan and debt  evidenced  by this
Note and  secured by the  Security  Agreement  and all other  present and future
obligations of BORROWER owed to LENDER are hereinafter  collectively  termed the
"OBLIGATIONS"); the undersigned BORROWER hereby mortgages, conveys and grants to
LENDER,  as permitted by law, a security  interest in, and herewith  pledges and
deposits as collateral, the following described and identified intangible and/or
tangible personal and/or real property,  and any and all additions,  accessions,
and  substitutions  thereto or therefore,  including all cash,  stock,  or other
dividends and all proceeds  thereof,  and all rights to subscribe for securities
incident  thereto,  (  hereinafter  termed  the  "COLLATERAL"),  and a  security
interest in proceeds and product of the COLLATERAL is granted to LENDER:

         (a)      Each on-site analysis unit (OSA) purchased by BORROWER
                  with funds not borrowed from LENDER, and each OSA
                  purchased by BORROWER with funds advanced by LENDER in
                  accordance with this Promissory Note and Security
                  Agreement, which OSA's are purchased in accordance with
                  the terms and provisions of those certain existing
                  agreements by and between Borrower and Thermo Jarrell Ash
                  Corporation, a Massachusetts corporation, for the
                  purchase of OSA's, which agreements may (but for purposes
                  of this agreement are not required to) be superseded by
                  a master agreement expressing all of the agreements
                  between the parties as to the purchase and sale of OSA's
                  (all of the agreements existing and to be executed in the
                  future are collectively referred to herein as the
                  "Purchase Agreement").

         (b)      A first security interest in and a collateral assignment
                  of each lease and/or lease and license agreement of all
                  OSA's purchased by BORROWER with funds not borrowed from
                  LENDER, and each OSA purchased by BORROWER with funds
                  advanced by LENDER in accordance with a separate
                  Promissory Note and Security Agreement dated November 22,
                  1994 in principal amount of $4,500,000.00, which are
                  purchased under the terms of the Purchase Agreement,
                  wherein BORROWER leases an OSA(s) or enters into any
                  agreement for the use of an OSA(s) with any third party,
                  and the right to receive any and all rentals and revenues
                  payable thereunder.

         (c)      All presently owned or hereafter acquired other assets,
                  including, without limitations, accounts, inventory,
                  equipment, chattel paper, instruments, general
                  intangibles and documents, as those are defined by the
                  Uniform Commercial Code of the State of Florida, or, as
                  otherwise determined by LENDER, owned by BORROWER and
                  owned by BORROWER'S subsidiary corporation known as Top
                  Source Automotive, Inc., a Florida corporation.

                                       11

<PAGE>




         (d)      A first  security  interest in and assignment of the rights to
                  receive the security deposit in the amount of $650,000.00 paid
                  by BORROWER  under the terms and  provisions  of the  Purchase
                  Agreement  consented to and acknowledged by Thermo Jarrell Ash
                  Corporation.

9.       BORROWER HEREBY WARRANTS, COVENANTS, AND AGREES THAT:

         (a)      BORROWER'S principal place of business is that shown
                  above.

         (b)      That part of the COLLATERAL which is personal property is used
                  or is being  purchased  for  business  use and portions of the
                  COLLATERAL  is being  acquired with the proceeds of an advance
                  evidenced  by  this  Agreement,   which  LENDER  may  disburse
                  directly to the seller of said personal property.

         (c)      The OSA's will be manufactured at the manufacturing
                  facilities of Thermo Jarrell Ash Corporation in Colorado
                  and will be shipped from the manufacturing facility to
                  the site designated by the person or entity leasing the
                  OSA from BORROWER. Except on termination of lease or in
                  connection with maintenance and repairs, the OSA will not
                  be removed or transported from the site designated by the
                  person or entity leasing the OSA from BORROWER without
                  the approval and consent of LENDER.  Except for
                  transactions in the ordinary course of business, all
                  other portions of the COLLATERAL which is personal
                  property will be kept at the principal place of business
                  of BORROWER or Guarantors and will not be removed or
                  transferred from the principal place of business of
                  BORROWER or Guarantors without the written consent of
                  LENDER.

         (d)      BORROWER will provide LENDER with executed Uniform
                  Commercial Code Financing Statements for recordation in
                  the State of Florida, the State of Colorado (the state in
                  which the OSA's are manufactured), and the state in which
                  the OSA(s) will be located pursuant to any lease or other
                  agreement by and between BORROWER and the lessee of the
                  OSA(s).  BORROWER will also provide executed Uniform
                  Commercial Code Financing Statements to be recorded in
                  any state in which any COLLATERAL is located.

         (e)      None of the COLLATERAL which is personal  property,  including
                  OSA's,  will be affixed to real  property and become a fixture
                  to real property.

         (f)      All  COLLATERAL  is free  and  clear  of all  liens,  security
                  interests,  claims,  and/or  encumbrances  other  than  any to
                  LENDER.


                                       12

<PAGE>



         (g)      This Note is subject to the terms and conditions of  all
                  Commitment Letters issued by Bank in connection with the
                  loans consolidated into the single loan evidenced by this
                  Note, Loan Agreements, as amended, executed in connection
                  with the loans so consolidated between BORROWER and
                  LENDER and Other Loan Documents executed in connection
                  with the loans so consolidated, which are incorporated
                  herein by reference.

10. WAIVER: BORROWER agrees that LENDER shall, after the occurrence of any event
of default, be entitled to immediate possession of the COLLATERAL subject to the
terms of any lease and the terms of the separate  Assignment  of Leases,  Ren
and Fees of even date  herewith from  BORROWER to LENDER.  BORROWER  agrees that
LENDER'S interest in the COLLATERAL arose out of a commercial transaction.

11.      BORROWER HEREBY FURTHER WARRANTS, COVENANTS AND AGREES AS
FOLLOWS:

         (a)      Anything contained herein to the contrary
                  notwithstanding, if for any reason, the
                  effective rate of interest on this Note should
                  exceed the maximum lawful rate, the effective
                  rate shall be deemed reduced to and shall be
                  such maximum lawful rate, and any sums of
                  interest which have been collected in excess
                  of such maximum lawful rate shall be applied
                  as a credit against the unpaid balance due
                  hereunder.

         (b)      No waivers, amendments, or modifications shall
                  be valid unless in writing.  No waiver by
                  LENDER of any default(s) shall operate as a
                  waiver of any other default or the same
                  default on a future occasion.  All rights of
                  LENDER hereunder shall enure to the benefit of
                  its successors and assigns, and all
                  obligations of BORROWER shall bind BORROWER'S
                  heirs, executors, administrators, successors
                  and/or assigns.

         (c)      In the case of conflict between the terms of
                  this Note and the Loan Agreement of even date
                  herewith and/or Commitment Letters issued in
                  connection herewith, the priority of
                  controlling terms shall be first the Loan
                  Agreement, then this Note, then the Security
                  Instrument, if any, then the Commitment
                  Letter, except as otherwise provided herein.

         (d)      In the event any provision(s) of this
                  instrument shall be left blank or incomplete,
                  BORROWER hereby authorizes and empowers LENDER

                                       13

<PAGE>



                  to  supply  and  complete  the  necessary   information  as  a
                  ministerial task consistent with the understanding between the
                  parties.

         (e)      BORROWER WILL IMMEDIATELY  NOTIFY LENDER in writing of any (1)
                  change  in  BORROWER'S  principal  place  of  business  and/or
                  residence;  (2) change in  BORROWER'S  name or  identity;  (3)
                  change  in  BORROWER'S   corporate  structure  other  than  as
                  permitted in the Loan Agreement.

         (f)      BORROWER  warrants  that BORROWER or any principal of BORROWER
                  does not have either a record or reputation for violating laws
                  of the United States or of any state  relating to liquor(s) as
                  referred to in 18 USCA 3617, et seq., or narcotics  and/or any
                  commercial crimes.

12.  Upon the  occurrence  of any of the  "EVENTS  OF  DEFAULT"  as  hereinafter
defined;  LENDER is  herewith  expressly  authorized  to  exercise  its right of
SET-OFF  or bank lien as to any monies  deposited  in  demand,  checking,  time,
savings, or other accounts of any nature maintained in and with it by any of the
undersigned,  without  advance  notice.  Said  right of  SET-OFF  shall  also be
exercised and applicable where LENDER is indebted to any signer hereof by reason
of any certificate of deposit, note, or otherwise.

13. BORROWER shall promptly pay all documentary  and/or intangible taxes on this
transaction, whether assessed at closing or arising from time to time.

14. WAIVER OF JURY TRIAL: BY THE EXECUTION  HEREOF,  BORROWER HEREBY  KNOWINGLY,
VOLUNTARILY,  AND  INTENTIONALLY  AGREES THAT:  (A) NEITHER THE BORROWER NOR ANY
ASSIGNEE,  SUCCESSOR, HEIR OR LEGAL REPRESENTATIVE OF ANY OF THE SAME SHALL SEEK
A JURY TRIAL IN ANY LAWSUIT, PROCEEDING,  COUNTERCLAIM,  OR ANY OTHER LITIGATION
PROCEDURE  ARISING  FROM OR BASED  UPON THIS  PROMISSORY  NOTE,  ANY OTHER  LOAN
AGREEMENT,  OR ANY OTHER LOAN DOCUMENT EVIDENCING,  SECURING, OR RELATING TO THE
OBLIGATIONS,  OR TO THE  DEALINGS OR  RELATIONSHIP  BETWEEN OR AMONG THE PARTIES
THERETO; (B) NEITHER THE BORROWER,  NOR LENDER WILL SEEK TO CONSOLIDATE ANY SUCH
ACTION, IN WHICH A JURY TRIAL HAS BEEN WAIVED,  WITH ANY OTHER ACTION IN WHICH A
JURY  TRIAL  HAS NOT  BEEN OR  CANNOT  BE  WAIVED;  (C) THE  PROVISIONS  OF THIS
PARAGRAPH HAVE BEEN FULLY  NEGOTIATED BY THE PARTIES HERETO AND THESE PROVISIONS
SHALL BE SUBJECT TO NO EXCEPTIONS;  (D) NEITHER THE BORROWER,  NOR LENDER HAS IN
ANY WAY AGREED WITH OR  REPRESENTED  TO ANY OTHER PARTY THAT THE  PROVISIONS  OF
THIS  PARAGRAPH  WILL  NOT BE  FULLY  ENFORCED  IN ALL  INSTANCES;  AND (E) THIS
PROVISION IS A MATERIAL INDUCEMENT FOR LENDER TO ENTER INTO THIS TRANSACTION.

15.      EVENTS OF DEFAULT: BORROWER shall be in default under this
Note, upon the happening of any of the following events,
circumstances, or conditions; namely:

                                       14

<PAGE>




         (a)      Default in the payment or performance of any of the
                  OBLIGATIONS provided hereunder or in that certain
                  Promissory Note and Security Agreements dated November
                  22, 1994 by and between LENDER and BORROWER in principal
                  amount of $4,500,000.00, or in connection herewith or
                  therewith, or any other OBLIGATIONS of BORROWER or any
                  affiliate as defined in 11 USC 101(2), (hereinafter
                  "AFFILIATE") of BORROWER or any endorser, guarantor, or
                  surety for BORROWER to LENDER or any AFFILIATE of
                  BORROWER, however created, primary or secondary, whether
                  direct or indirect, absolute or contingent, now or
                  hereafter existing, due or to become due, or of any other
                  covenant, warranty, or undertaking expressed herein,
                  therein, or in any other document establishing said
                  endorsement, guaranty, or surety; provided, however, that
                  in the case of nonpayment of principal or interest
                  payments due, such default shall continue uncured for a
                  period of thirty days, and in the case of any other
                  default, such default shall continue for a period of
                  thirty days from written notice from LENDER; or

         (b)      Any warranty, representation, or statement made or
                  furnished to LENDER by or on behalf of BORROWER, or any
                  guarantor, endorser or surety for BORROWER in connection
                  with this Note or to induce LENDER to make a loan to
                  BORROWER which was false in any material respect when
                  made or furnished or has become materially false, if such
                  warranty of BORROWER, or guarantor, endorser, or surety
                  for BORROWER was ongoing in nature and not cured within
                  thirty days from written notice from LENDER; or

         (c)      Any representation or warranty made in this Note or in
                  any Loan Document shall prove to be false or misleading
                  in any material respect; or

         (d)      Any report, certificate, financial statement or other document
                  furnished in  connection  with any Loan  Document or the loans
                  made pursuant  thereto,  shall prove to be false or misleading
                  in any material respect; or

         (e)      BORROWER shall default on any other obligation of
                  BORROWER when due or in the performance of any obligation
                  incurred for money borrowed if, in the opinion of LENDER
                  such default in any way threatens the security or the
                  ability of BORROWER to meet its obligations hereunder or
                  under any loan document to LENDER and such default
                  continues for a period of 30 days after receipt by
                  BORROWER of notice from LENDER that such default exists;
                  or

         (f)      Should a custodian, as that term is defined in the
                  Bankruptcy Code, be appointed for or take possession of
                  any or all of the assets of the BORROWER or any GUARANTOR

                                       15

<PAGE>



                  (other  than  ARCS  Safety  Seat,  Inc.)  as a  result  of any
                  proceeding  under the Bankruptcy  Code, or should the BORROWER
                  or any  GUARANTOR  (other than ARCS Safety Seat,  Inc.) either
                  voluntarily or involuntarily  become subject to any insolvency
                  proceeding,   proceeding  to  dissolve  the  BORROWER  or  any
                  GUARANTOR  (other  than ARCS Safety  Seat,  Inc.) which is not
                  discharged  within thirty (30) days, or should BORROWER or any
                  GUARANTOR  (other than ARCS Safety Seat,  Inc.) be the subject
                  of a proceeding  to have a receiver  appointed  of assets,  or
                  should there be an  attachment,  execution,  or other judicial
                  seizure of all or any portion of the BORROWER'S or GUARANTOR'S
                  assets  (other than ARCS Safety  Seat,  Inc.),  which,  in the
                  opinion  of  the  LENDER,  jeopardize  any  security  interest
                  granted  LENDER  or  otherwise  jeopardizes  repayment  of any
                  amounts  owed to  LENDER by  BORROWER,  and such  receiver  or
                  seizure is not  discharged  within thirty (30) days, or should
                  the BORROWER or GUARANTOR  (other than ARCS Safety Seat, Inc.)
                  make an assignment for the benefit of creditors, or

         (g)      Breach  of any  covenant,  condition,  or  agreement  made  by
                  BORROWER  pursuant to this Note, and, except where the default
                  is failure to make any payment of any installment of principal
                  and/or  interest  due  under  the Note  which is  governed  by
                  Section 14(a) hereof,  such default  continues for a period of
                  30 days after  receipt by  BORROWER of notice from LENDER that
                  such default exists; or

         (h)      Final  judgment  for the  payment of money  shall be  rendered
                  against the BORROWER or any GUARANTOR in excess of $250,000.00
                  and shall  remain  undischarged  for a period  of thirty  (30)
                  days,  unless such  judgment and  execution  thereon  shall be
                  effectively stayed; or

         (i)      Dissolution or termination of the existence of a
                  corporate Borrower or Guarantor (other than ARCS Safety
                  Seat, Inc.) or their respective subsidiaries, if any; or

         (j)      If LENDER  should  otherwise  deem itself or the debt  created
                  hereunder unsafe or insecure; or should LENDER, in good faith,
                  believe that the prospect of payment or other  performance  is
                  impaired; or

         (k)      The BORROWER or any GUARANTOR (other than ARCS Safety
                  Seat, Inc.) shall be a debtor, either voluntarily or
                  involuntarily, under (as the term debtor is defined in)
                  the Bankruptcy Code; or

         (l)      The  BORROWER  shall  be in  default  under  the  terms of the
                  Purchase Agreement (which continues after any applicable grace
                  period)  and such  default,  under the  terms of the  Purchase
                  Agreement,  could  result  in a loss  of  BORROWER'S  material
                  rights thereunder.

                                       16

<PAGE>





         (m)      Except  and to the  extent  permitted  in the Loan  Agreement,
                  Failure of said BORROWER, endorser,  guarantors or sureties to
                  furnish  financial  statements or other financial  information
                  and  reports  requested  by  LENDER  or  required  by the Loan
                  Agreement or any other loan document; or

         (n)      Loss, theft, substantial damage, destruction, sale or
                  encumbrance to or of any COLLATERAL except when the
                  COLLATERAL is insured and the proceeds of such insurance
                  is paid to LENDER, or the assertion or making of any
                  levy, seizure, mechanic's or materialman's lien or
                  attachment thereof or thereon which is not discharged or
                  satisfied within thirty (30) days after written notice
                  from LENDER.

16.      ADDITIONAL PROVISIONS FOR PERSONAL PROPERTY COLLATERAL:
BORROWER HEREBY FURTHER WARRANTS, COVENANTS AND AGREES AS FOLLOWS:

         (a)      THE COLLATERAL SHALL, AT ALL TIMES, BE AT
                  BORROWER'S RISK.  The loss, injury to or
                  destruction of COLLATERAL shall not release
                  BORROWER from payment or other performance
                  hereof.  BORROWER agrees to obtain and keep in
                  force physical damage and/or property damage
                  insurance and any other insurance required
                  LENDER.  Such insurance is to be in form and
                  amount satisfactory to LENDER, with same
                  payable to LENDER.

         (b)      All such policies shall provide for ten (10)
                  days written minimum cancellation notice to
                  LENDER.  BORROWER shall furnish to LENDER the
                  original policies or certificates or other
                  evidence satisfactory to LENDER of compliance
                  with the foregoing provisions.  LENDER is
                  authorized, but not obligated, to purchase any
                  or all of said insurance, or "single interest
                  insurance," protecting only its security
                  interest, all at BORROWER'S expense.  In such
                  event, BORROWER agrees to reimburse LENDER for
                  the cost of such insurance to the extent that
                  the same is not included in the principal
                  amount of this Note.

         (c)      BORROWER hereby assigns to LENDER the proceeds
                  of all such insurance to the extent of the
                  unpaid balance hereunder, and directs any
                  insurer to make payments directly to LENDER.
                  BORROWER further hereby grants to LENDER its
                  power of attorney exercisable only in the
                  event of default as declared by LENDER, which
                  shall be irrevocable for so long as any amount

                                       17

<PAGE>



                  is paid  hereunder.  Said power of attorney  gives  LENDER the
                  sole  right  to file  proof of loss  and/or  any  other  forms
                  required  to collect  from any insurer any amount due from any
                  loss, damage or destruction of the COLLATERAL; to agree to and
                  bind BORROWER as to the amount of said recovery;  to designate
                  payee(s) of such recovery; to grant releases to payor-insurers
                  for their liability;  to grant subrogation  rights to any such
                  payor- insurer;  to endorse any settlement  check or draft. In
                  the event of default,  BORROWER further agrees not to exercise
                  any of the  foregoing  powers  granted to LENDER  without  the
                  LENDER'S  written  consent.   In  the  event  of  any  default
                  hereunder,  LENDER is authorized,  in its sole discretion,  to
                  cancel any insurance and to credit any premium  refund against
                  the unpaid balance due on BORROWER'S OBLIGATIONS.

         (d)      If, with respect to any security pledged
                  hereunder, a stock dividend is declared or any
                  stock split-up made or right to subscribe is
                  issued, all the certificates for the shares
                  representing such stock dividend or stock
                  split-up or right to subscribe will be
                  immediately delivered, duly endorsed, to the
                  LENDER as additional COLLATERAL security.

         (e)      If, at any time, the COLLATERAL shall be
                  deemed unsatisfactory to and by LENDER, or in
                  the event LENDER shall otherwise deem itself,
                  its security interest, its COLLATERAL, or said
                  debt unsafe or insecure, then and on demand of
                  LENDER, BORROWER shall immediately furnish
                  such further COLLATERAL or make such payment
                  on said account as will be satisfactory to
                  LENDER to be held by said LENDER as if
                  originally pledged hereunder.

         (f)      At its option, LENDER may discharge taxes,
                  liens, security interests, or other
                  encumbrances at any time levied or placed on
                  said COLLATERAL, and may pay for insurance and
                  for the maintenance and preservation of same
                  if BORROWER fails to pay or discharge same
                  within 30 days after written notice from
                  LENDER that such payment must be made unless
                  LENDER determines that such payment must be
                  sooner made to protect any right or interest
                  of LENDER established by any Loan Document.
                  BORROWER agrees to reimburse LENDER, on
                  demand, for any such payment made, or any such
                  expense incurred by LENDER pursuant to the

                                       18

<PAGE>



                  foregoing   authorization.   Until  default,   as  hereinafter
                  defined, BORROWER shall have the right to retain possession of
                  the COLLATERAL, unless otherwise agreed by the parties hereto,
                  and to use it in any lawful manner not inconsistent  with this
                  Note and with any policy of insurance thereon.

         (g)      Upon occurrence of an event of default, LENDER
                  may, with or without notice, before or after
                  maturity of this Note, transfer or register in
                  the name of its nominee(s) all or any part of
                  the COLLATERAL and also exercise any or all
                  rights of collection, conversion, or exchange
                  and other similar rights, privileges and
                  options pertaining to the COLLATERAL; but
                  shall have no duty to exercise any such
                  rights, privileges or options, or to sell or
                  otherwise realize upon any of the COLLATERAL
                  as herein authorized or to preserve the same
                  and shall not be responsible for any failure
                  to do so or delay in so doing.  As to any
                  COLLATERAL consisting of instruments or
                  chattel paper, it is agreed that LENDER shall
                  not be required to take any steps whatever to
                  preserve any rights against prior parties.

         (h)      LENDER shall have no custodial or ministerial
                  duties to perform with regard to COLLATERAL
                  pledged except for its safe keeping; and by
                  way of explanation and not by way of
                  limitation thereof, LENDER shall incur no
                  liability for any of the following except to
                  the extent caused by its gross negligence or
                  willful misconduct:  Either loss or
                  depreciation of the COLLATERAL; or its failure
                  to present any paper for payment or protest or
                  to protest or give notice of non-payment or
                  any other notice with respect to any paper or
                  collateral; or its failure to present or
                  surrender for redemption, conversion or
                  exchange any bond, stock, paper, or other
                  security, whether in connection with any
                  merger, consolidation, recapitalization,
                  reorganization, or arising out of their
                  intendment or refunding of the original
                  security; or its failure to notify any party
                  hereto that the COLLATERAL should be so
                  presented or surrendered.

         (i)      Upon any  transfer  of this Note,  the LENDER may  deliver the
                  property  held  as  security,  or  any  part  thereof,  to the
                  transferee, as well as any subsequent holder hereof, who shall

                                       19

<PAGE>



                  thereupon  become vested with all the powers and rights herein
                  given to the LENDER in respect to the property so  transferred
                  and  delivered;  and the LENDER  shall  thereafter  be forever
                  relieved   and  fully   discharged   from  any   liability  or
                  responsibility  thereafter  with  respect to such  property so
                  transferred,   but  with   respect  to  any  property  not  so
                  transferred,  the  LENDER  shall  retain all rights and powers
                  hereby given.

         (j)      With prior written consent of LENDER,  other COLLATERAL may be
                  substituted for the original COLLATERAL herein, in which event
                  all  rights,  duties,   OBLIGATIONS,   remedies  and  security
                  interests  provided for,  created or granted shall apply fully
                  to such substitute COLLATERAL.

         (k)      BORROWER will not use any COLLATERAL in any
                  jurisdiction other than a state in which
                  BORROWER shall have previously advised LENDER
                  such COLLATERAL will be used.  If certificates
                  are issued or outstanding as to any of said
                  COLLATERAL, BORROWER will cause the security
                  interest of LENDER to be properly protected
                  and perfected.  Absent advance written consent
                  of LENDER, the COLLATERAL therein described
                  will not be used outside the territorial
                  limits of the United States of America.

         (l)      BORROWER and GUARANTORS (or one or more of the
                  undersigned) has, or forthwith will acquire,
                  full title to COLLATERAL, and will at all
                  times, keep same free of all liens, security
                  interests, attachments and/or claims
                  whatsoever, other than the security interests
                  hereunder.  BORROWER and Guarantors have good
                  indivisible marketable title to the COLLATERAL
                  and will warrant and defend same against all
                  claims.  BORROWER and Guarantors are not and
                  will not attempt to transfer, sell, or
                  encumber the COLLATERAL or use it for hire or
                  in violation of any statute or ordinance
                  except as specifically approved by LENDER or
                  permitted in the Loan Agreement.  BORROWER and
                  Guarantors further agree to pay promptly all
                  taxes and assessments upon the COLLATERAL
                  and/or for its use or operation, and/or on the
                  agreement to keep, use, and maintain said
                  COLLATERAL in a reasonably careful manner so
                  as not to unreasonably or unnecessarily expose
                  the same to waste, damage, wear or
                  depreciation, and to keep the same in good

                                       20

<PAGE>



                  order and repair. If permitted by any applicable lease, LENDER
                  may  examine  and  inspect  COLLATERAL  or any  part  thereof,
                  wherever  located at any  reasonable  time(s).  All equipment,
                  accessories  and parts shall become part of said COLLATERAL by
                  accession.

         (m)      BORROWER will, at all times, keep LENDER'S
                  security interest properly perfected and
                  hereby designates LENDER as its attorney-in-
                  fact to do any acts or deeds or execute such
                  documents reasonably appropriate to accomplish
                  said perfection.  Said designation shall be
                  irrevocable as long as any OBLIGATION of
                  BORROWER is outstanding.

17.  REMEDIES  ON  DEFAULT  (INCLUDING  POWERS  OF SALE) FOR  PERSONAL  PROPERTY
COLLATERAL: Upon the occurrence of any of the foregoing events, circumstances or
conditions  of  default,  all of the  OBLIGATIONS  evidenced  herein and secured
hereby  shall,  at the  option of the  LENDER,  immediately  be due and  payable
without  notice.  Further,  LENDER  shall then have all rights and remedies of a
SECURED  PARTY  under the  Uniform  Commercial  Code as  adopted by the state of
LENDER'S office as set forth herein.  Without limitation  thereto,  LENDER shall
have the following specific rights and remedies:

         (a)      Subject to the right of any lessee of an OSA to continue
                  possession and quiet enjoyment of the OSA while not in
                  default of its lease, to take immediate possession of the
                  COLLATERAL without notice or resort to legal process; and
                  for such purpose, to enter upon any premises on which the
                  COLLATERAL or any part thereof may be situated and remove
                  the same therefrom; or, at its option, to render the
                  COLLATERAL unusable.  Further, also at its option, to
                  dispose of said COLLATERAL on BORROWER'S premises.

         (b)      To require  BORROWER to assemble  the  COLLATERAL  and make it
                  available  to  LENDER  at a place  to then  be  designated  by
                  LENDER, which is reasonably convenient to both parties.

         (c)      To exercise its rights of SET-OFF by applying any monies
                  of BORROWER and/or a GUARANTOR on deposit with LENDER
                  toward payment of the OBLIGATIONS evidenced or referred
                  to herein or secured hereby, without notice.  If any
                  process is issued or ordered to be served on LENDER
                  seeking to seize BORROWER'S and/or a GUARANTOR'S rights
                  and/or interest in any bank account maintained with
                  LENDER, the balance in any said account shall immediately
                  be deemed to have been and shall be SET-OFF against any
                  and all OBLIGATIONS of BORROWER to LENDER, as of the time
                  of issuance of any such writ or process, whether or not
                  BORROWER and/or LENDER shall have been served therewith.

                                       21

<PAGE>




         (d)      To dispose of COLLATERAL as allowed by the Uniform  Commercial
                  Code as adopted by the state of  LENDER'S  office as set forth
                  herein,  in any county or place selected by LENDER,  at either
                  private or public sale (at which public sale LENDER may be the
                  purchaser),  with or without having the COLLATERAL  physically
                  present at said sale.

         (e)      To make or have made any repairs deemed necessary or desirable
                  at time of  repossession,  possession,  or  sale,  the cost of
                  which is to be charged against BORROWER.

         (f)      To receive all rents and fees  payable to  BORROWER  under the
                  terms of all leases of OSA(s) by BORROWER to any third party.

         (g)      To  apply  the  proceeds  realized  from  disposition  of  the
                  COLLATERAL  to  satisfy  the  following  items,  in order here
                  listed:

                  (aa)     The cost of reimbursing  any person whose interest in
                           the premises is  physically  damaged by the entry and
                           removal of the COLLATERAL, upon BORROWER'S failure to
                           do so; next, to

                  (bb)     The expenses of taking,  removing,  holding for sale,
                           repairing or otherwise preparing for sale and selling
                           of  said  COLLATERAL,   specifically   including  the
                           LENDER'S   reasonable   attorney's   fees  (including
                           appellate   costs,   if  any),  and  both  legal  and
                           collection expenses; next, to

                  (cc)     The expense of liquidating any liens, security
                           interests, attachments or encumbrances superior to
                           the security interests herein created; and, finally

                  (dd)     The unpaid principal and all accumulated interest
                           hereunder, and to any other debts owed to LENDER by
                           any signer hereof.

Any surplus,  after the  satisfaction  of the foregoing  items (aa) through (dd)
shall be paid to BORROWER or to any other party  lawfully  entitled  thereto and
known to the LENDER.  Further,  if proceeds  realized  from  disposition  of the
COLLATERAL  shall fail to satisfy any of the  foregoing  items (a) through  (d),
BORROWER shall forthwith pay the deficiency balance to LENDER.

17. No waivers,  amendments or  modifications  shall be valid unless in writing.
Further,  this Note shall be  governed  by and  construed  under the laws of the
state of the  LENDER'S  office as set forth  herein.  All terms and  expressions
contained  herein  which  are  defined  in  Articles  1, 3, or 9 of the  Uniform
Commercial  Code of the state of LENDER'S office set forth herein shall have the
same meaning herein as in said Articles of said Code.

                                       22

<PAGE>




IN WITNESS WHEREOF,  the BORROWER,  on the day and year first written above, has
caused this Security  Agreement to be executed under seal by its duly authorized
officers by hereunto setting their hands and seals.


                                               "BORROWER"

                                                TOP SOURCE TECHNOLOGIES, INC.


                                                BY:  /s/David Natan
                                              
                                                    (CORPORATE SEAL)

                                                  TAXPAYER IDENTIFICATION NO.:
                                                           84-1027821


                                                  ON-SITE ANALYSIS, INC.


                                                BY: /s/David Natan

                                                   (CORPORATE SEAL)

                                               TAXPAYER IDENTIFICATION NO.:
                                                        58-2074446


                                       23

<PAGE>



                     BORROWER'S REPRESENTATIONS, WARRANTIES
                                  AND AFFIDAVIT



STATE OF   GEORGIA
COUNTY OF   FULTON


         WHEREAS,  FIRST  UNION  NATIONAL  BANK OF FLORIDA,  a national  banking
association  ("BANK")  has agreed to extend a loan to TOP  SOURCE  TECHNOLOGIES,
INC., of 2000 PGA Boulevard,  Suite 3200, Palm Beach Gardens, Florida 33408; and
ON-SITE  ANALYSIS,  INC.,  of 3125  Presidential  Parkway,  Suite 130,  Atlanta,
Georgia 30340-3907  (collectively  referred to herein as the "BORROWERS") in the
total  principal  amount of SEVEN HUNDRED AND FIFTY  THOUSAND AND NO/100 DOLLARS
($750,000.00); and

         WHEREAS,  as a material  condition to said loan,  the BANK has required
the  BORROWERS  and Top Source  Automotive,  Inc.,  a  subsidiary  of Top Source
Technologies,  Inc.,  to grant a security  interest  in and to certain  personal
property owned by BORROWERS and Top Source  Automotive,  Inc., or to be acquired
by BORROWERS with the proceeds of the loan; and

         WHEREAS,  as a further condition to granting of said loan, the BANK has
required the GUARANTORS  listed herein to ratify and confirm  existing  Guaranty
Agreements  guarantying  the obligations of BORROWERS to BANK in form acceptable
to BANK; and

         WHEREAS,  as a further condition to the granting of said loan, the BANK
has required the  BORROWERS to make certain  representations  and  warranties to
BANK, its successors and assigns.

         NOW, THEREFORE,  in consideration of the BANK'S agreement to extend the
loan ("Loan") to the BORROWERS,  the BORROWERS,  through the undersigned officer
of each of the  BORROWERS,  hereby  jointly  and  severally  make the  following
representations and warranties to BANK, its successors and assigns:

         1.  David  Natan  is  the  Chief   Financial   Officer  of  TOP  SOURCE
TECHNOLOGIES,  INC.,  a Delaware  corporation  authorized  to do business in the
State of Florida, and is the Chief Financial Officer of ON-SITE ANALYSIS,  INC.,
a Georgia corporation, and, therefore, has personal knowledge of the matters set
forth herein and has the ability and authority to bind each of said corporations
to the covenants and warranties set forth herein.

         2. ON-SITE  ANALYSIS,  INC., a Georgia  corporation,  is a wholly owned
subsidiary of TOP SOURCE TECHNOLOGIES, INC., a Delaware corporation,  authorized
to do business in the State of Florida. In addition,  the following corporations
("GUARANTORS") which are confirming their existing guarantees of the obligations

                                       24

<PAGE>



of BORROWERS, are wholly owned subsidiary corporations of TOP
SOURCE TECHNOLOGIES, INC.:

                  A.       ARCS SAFETY SEAT, INC., a Florida corporation;
                  B.       TOP SOURCE AUTOMOTIVE, INC., a Florida corporation;
                           and
                  C.       UNITED TESTING GROUP, INC., a Georgia corporation.

         3. Personal  properties of BORROWERS and Top source  Automotive,  Inc.,
being pledged as security for the loan are owned by BORROWERS  and/or Top Source
Automotive, Inc., free and clear from any pledge, hypothecation,  assignment, or
other security interest other than the security interest being granted to BANK.

         4. There are no parties other than BORROWERS,  Guarantors,  and lessees
in  possession  of or  claiming  possession  to any of the  property  in which a
security interest is given to BANK by BORROWERS as security for the loan.

         5. Except as described  in Exhibit "A" attached  hereto and made a part
hereof,  there are no actions,  suits or proceedings pending or to the knowledge
of the  undersigned,  threatened  against or affecting  any of the  BORROWERS or
GUARANTORS  before any court or any governmental  department or agency which may
result in any material  adverse  change in any of the  BORROWERS' or GUARANTORS'
financial conditions. Except as previuosly described in representations given to
BANK as  supplimented  by Exhibit "A"  attached  hereto and made a part  hereof,
there are no claims involving the BORROWERS or GUARANTORS.

         6. None of the  BORROWERS or  GUARANTORS  is a party to any contract or
agreement which materially  and/or adversely  affects their  properties,  or any
part thereof, or which results in the creation or imposition of any lien, charge
or  encumbrance  of any nature  whatsoever  upon their  properties,  or any part
thereof,  superior to the liens given by  BORROWERS  to BANK to secure the loan.
Neither the execution nor delivery of any security interest on the properties of
BORROWERS, the execution and delivery of a Amendment to Loan Agreement and other
Loan Documents of even date, the execution and delivery of a Promissory Note and
Security  Agreement  evidencing  the loan,  the  execution  and  delivery of any
Unconditional  Guaranty  Agreement  by a  GUARANTOR,  and/or the  execution  and
delivery of any other loan  document  will conflict or result in a breach of the
terms, conditions, or provisions of, or constitute a default under any agreement
or other  instrument  to which any  BORROWER or GUARANTOR is a party or by which
any BORROWER or GUARANTOR is bound.

         7. Except as expressly permitted in the Loan Agreement as
amended between BORROWERS and BANK, the BORROWERS or any GUARANTOR
will not execute any instrument or do any act whatsoever which



                                       25

<PAGE>



would or might in any way affect the title to any  property  in which a security
interest is granted to the BANK.

         8.  BORROWERS and  GUARANTORS  are each duly  incorporated  and in good
standing in their state of  incorporation  and each is authorized to do business
in each state where  business is  transacted by such  corporation  to the extent
failure  to be so  authorized  would  have a  material  adverse  affect  on such
corporation or the interests and rights of the Bank under any Loan Document, and
each has the  requisite  power  and  authority  to  execute  the loan  documents
executed  by  each,  including  the  Promissory  Note  and  Security  Agreement,
Amendment to Loan Agreement and other Loan Documents, and Guaranty, and all such
action has been duly  approved by the Board of Directors  of each and  otherwise
approved and authorized as required by the Articles of  Incorporation,  Charter,
and By-Laws of each.

         9. If any of the  representations  and warranties  contained herein are
not true and  correct in any  respect  that  materially  adversely  affects  the
interests  and rights of the Bank under any Loan Document at any time during the
term of the loan,  the same  shall be deemed a material  default  under all loan
documents to the extent  required in the Loan Agreement as amended.  In addition
to all other rights of the BANK, the BANK shall be relieved of its obligation to
disburse any of the loan proceeds until such  representations and warranties are
cured and corrected.

         10.  If  a  representation   or  warranty  is  ongoing  in  nature  and
subsequently  becomes materially false,  BORROWERS and GUARANTORS shall have the
right to cure same  within 30 days from  written  notice  from BANK  before same
shall constitute a default or event of default.  The BORROWERS  acknowledge that
this  Affidavit is given as a material  inducement  to BANK to make the loan. In
addition,  the  BORROWERS  declare  that this  Affidavit  is true,  correct  and
complete in all respects  that  materially  adversely  affect the  interests and
rights of the Bank under any Loan  Document,  and that there is no matter  which
constitutes any excuse for the performance under the terms and provisions of the
loan  documents.  The BORROWERS agree to indemnify and hold BANK, its directors,
officers, employees, affiliates, successors and assignees harmless if any of the
foregoing   provisions   of  this   Affidavit   are  not  true.   The  foregoing
indemnification  and hold harmless  shall  survive the closing of the loan,  and
shall include all costs and expenses  incurred by the BANK,  including,  without
limitation,  attorney's fees and paralegal fees, through all trial and appellate
levels and post judgment  proceedings  to the extent that BANK is the prevailing
party.

         11. This  instrument  may be executed  in  counterparts  by each of the
parties hereto and each  counterpart  will be considered as the agreement and as
the representation of the party or parties executing the counterpart.


                                       26

<PAGE>




         IN  WITNESS   WHEREOF,   the  BORROWERS  have  caused  this  Affidavit,
Representations and Warranties, to be executed this 12th day of October, 1995.

                                              TOP SOURCE TECHNOLOGIES, INC.,
                                              a Delaware corporation
                                              authorized to do business in
                                              the State of Florida


                                              BY:/s/ David Natan
                                              David Natan
                                              its Chief Financial Officer

                                              ON-SITE ANALYSIS, INC., a
                                              Georgia corporation


                                              BY:/s/ David Natan
                                              David Natan
                                              its Chief Financial Officer

STATE OF Georgia
COUNTY OF Fulton

         Sworn  to (or  affirmed)  and  subscribed  before  me this  12th day of
October,   1995,  David  Natan,  as  Chief  Financial   Officer  of  TOP  SOURCE
TECHNOLOGIES,  INC.,  a Delaware  corporation  authorized  to do business in the
State of Florida, on behalf of the corporation.

                                               NOTARY PUBLIC

                                              /s/ Mary Ann Latham
         (SEAL)
                                               Mary Ann Latham
                                              (Print Name)
                                               My commission expires:09/14/98
                                               Commission No.


         Personally Known    X    OR Produced Identification        .
         Type of identification Produced                            .



STATE OF Georgia
COUNTY OF Fulton

         Sworn  to (or  affirmed)  and  subscribed  before  me this  12th day of
October,  1995,  David Natan, as Chief  Financial  Officer of ON- SITE ANALYSIS,
INC., a Georgia corporation, on behalf of the corporation.


                                       27

<PAGE>



                                                    NOTARY PUBLIC


                                                   /s/ Mary Ann Latham
         (SEAL)
                                                   Mary Ann Latham
                                                   (Print Name)
                                                My commission expires:09/14/98
                                                Commission No.


         Personally Known    X    OR Produced Identification        .
         Type of identification Produced                            .




                                              TOP SOURCE AUTOMOTIVE, INC., a
                                              Florida corporation

                                              BY:/s/ David Natan
                                              its Chief Financial Officer



STATE OF Georgia
COUNTY OF Fulton

         Sworn  to (or  affirmed)  and  subscribed  before  me this  12th day of
October, 1995, David Natan, as Chief Financial Officer of TOP SOURCE AUTOMOTIVE,
INC., a Florida corporation, on behalf of the corporation.

                                              NOTARY PUBLIC


                                              /s/ Mary Ann Latham
         (SEAL)
                                              Mary Ann Latham
                                              (Print Name)
                                              My commission expires:09/14/98
                                              Commission No.


         Personally Known    X    OR Produced Identification        .
         Type of identification Produced                            .








                                       28

<PAGE>



                                                    ARCS SAFETY SEAT INC., a
                                                    Florida corporation

                                                    BY:/s/ David Natan
                                                    its Chief Financial Officer



STATE OF Georgia
COUNTY OF Fulton

         Sworn  to (or  affirmed)  and  subscribed  before  me this  12th day of
October,  1995,  David Natan,  as Chief  Financial  Officer of ARCS SAFETY SEAT,
INC., a Florida corporation, on behalf of the corporation.

                                                     NOTARY PUBLIC


                                                    /s/ Mary Ann Latham
         (SEAL)
                                                Mary Ann Latham
                                               (Print Name)
                                                My commission expires:09/14/98
                                                Commission No.


         Personally Known    X    OR Produced Identification        .
         Type of identification Produced                            .





                                                UNITED TESTING GROUP, INC., a
                                                Georgia corporation

                                                BY:/s/ David Natan
                                                its Chief Financial Officer



STATE OF Georgia
COUNTY OF Fulton

         Sworn  to (or  affirmed)  and  subscribed  before  me this  12th day of
October,  1995, David Natan, as Chief Financial Officer of UNITED TESTING GROUP,
INC., a Georgia corporation, on behalf of the corporation.






                                       29

<PAGE>



                                                NOTARY PUBLIC


                                               /s/ Mary Ann Latham
         (SEAL)
                                               Mary Ann Latham
                                               (Print Name)
                                               My commission expires:09/14/98
                                               Commission No.


         Personally Known    X    OR Produced Identification        .
         Type of identification Produced                            .






First Union National Bank
of Florida
303 Banyon Boulevard
West Palm Beach, Florida  33401


October 12, 1995

David Natan, Vice President and Chief Financial Officer
Top Source Technologies, Inc.
On-Site Analysis, Inc.
2000 P.G.A. Boulevard, Suite 3200
Palm Beach Gardens, FL  33408

Re:  Loan Commitment and Agreement

Dear Mr. Natan:

We are pleased to advise you that First Union  National Bank of Florida  ("First
Union") has increased the Line of Credit for Top Source  Technologies,  Inc. and
On-Site  Analysis,  Inc.  (collectively  "Borrower")  by  $750,000.00 to a total
amount of $1,500,000.00.  First Union's obligation to advance under this Line of
Credit will expire on January 31, 1996.  All terms and conditions of the Line of
Credit as per the Loan  Agreements  dated  November  24, 1994 and April 13, 1995
will remain in full force and effect, with the exception of the following:

         1. The covenant  pertaining to the Debt Service Coverage Ratio (and any
         default  relating  thereto)  as defined  in Section g. under  Financial
         Statements,  Reports, and Financial  Covenants,  has hereby been waived
         through the expiration  date of the Line of Credit or January 31, 1996.
         This waiver only applies to the Line of Credit and,  hence,  not to the
         $4,500,000.00 Revolver Loan.

                                       30

<PAGE>




         2. The  Borrower  shall at all times  maintain  a minimum  consolidated
         tangible net worth of  $3,000,000.00.  Consolidated  tangible net worth
         shall  mean  the  consolidated  net  worth  of  the  Borrower  and  its
         subsidiaries,  after subtracting  therefrom the aggregate amount of (I)
         deferred  income  tax  assets,  and (ii) any  intangible  assets of the
         Borrower  and its  subsidiaries,  including,  and  without  limitation,
         goodwill,  franchises,  licenses,  patents,  trademarks,  trade  names,
         copyrights, service marks, and capitalized database.

The Line of Credit  shall be  subject to a  borrowing  base  formula  defined as
follows:

         Borrowing Formula:  The maximum amount of the Line
         shall be the lesser of a) 75% of eligible Accounts
         Receivable or b) $1,500,000.00.  Eligible Accounts
         Receivable shall be defined as Accounts Receivable
         of Top Source Automotive, Inc. aged 60 days or
         less; Accounts Receivable of On-Site Analysis, Inc.
         aged 60 days or less.  Accounts Receivable will be
         evidenced by a monthly Accounts


Top Source Technologies, Inc. and
On-Site Analysis, Inc.
Loan Commitment and Agreement
October 10, 1995
Page 2


         Receivable  aging  submitted by the Borrower.  No portion of an account
         shall be defined as eligible if fifty  percent  (50%) of the account is
         aged 90 days or more, as evidenced by the monthly  Accounts  Receivable
         aging.  The Borrower  shall furnish said aging to the Bank on a monthly
         basis with a compliance certificate as per the attached Exhibit 1.

Please  indicate your acceptance of this commitment by executing your acceptance
immediately  below and returning one executed copy of the Commitment  Letter and
Agreement to the Bank. This Loan and Commitment  Agreement letter supersedes and
replaces that certain Loan and Commitment Agreement Letter dated August 3, 1995.
Upon receipt,  First Union shall refer the closing of this  transaction to legal
counsel who shall prepare all necessary documents, including a consolidated Loan
Agreement which will detail the terms and conditions of this transaction.


                                       31

<PAGE>


Thank you for allowing  First Union to be of service.  Please do not hesitate to
give me a call if you have additional questions about the Line of Credit.

Sincerely,

FIRST UNION NATIONAL BANK OF FLORIDA

By: /s/ Dena P. Bombard
           Vice President

The above Loan  Commitment  and  Agreement  is hereby  accepted on the terms and
conditions outlined therein.

                                                BORROWERS

                                      TOP SOURCE TECHNOLOGIES, INC.

                                            By:  /s/  David Natan
                                            David Natan, Vice President, Chief
                                            Financial Officer

                                            Date:  10/12/95

                                          ON-SITE ANALYSIS, INC.

                                            By: /s/ David Natan
                                            David Natan, Vice President, Chief
                                            Financial Officer

                                            Date:  10/12/95
                                     
<PAGE>