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                 LOAN AND SECURITY AGREEMENT


                        by and between


                    INTERGRAPH CORPORATION

                             and


                 FOOTHILL CAPITAL CORPORATION


                Dated as of December 20, 1996



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                      TABLE OF CONTENTS
                      -----------------  

                                                        Page(s)
                                                        -------

1.  DEFINITIONS AND CONSTRUCTION.                            1
          1.1  Definitions                                   1
          1.2  Accounting Terms                             24
          1.3  Code                                         25
          1.4  Construction                                 25
          1.5  Schedules and Exhibits.                      25

2.  LOAN AND TERMS OF PAYMENT.                              25
          2.1  Revolving Advances.                          25
          2.2  Letters of Credit.                           26
          2.3  Term Loan                                    29
          2.4  [Intentionally omitted].                     29
          2.5  Overadvances                                 29
          2.6  Interest and Letter of Credit Fees: Rates, 
               Payments, and Calculations.                  29
          2.7  Collection of Accounts                       30
          2.8  Crediting Payments; Application of 
               Collections                                  31
          2.9  Designated Account.                          31
          2.10 Maintenance of Loan Account; Statements of 
               Obligations.                                 32
          2.11 Fees.                                        32

3.  CONDITIONS; TERM OF AGREEMENT.                          33
          3.1  Conditions Precedent to the Initial Advance,
               and Letter of Credit, and the Term Loan.     33
          3.2  Conditions Precedent to all Advances, all 
               Letters of Credit, and the Term Loan.        36
          3.3  Condition Subsequent.                        36
          3.4  Term.                                        39
          3.5  Effect of Termination.                       39
          3.6  Early Termination by Borrower.               39
          3.7  Termination Upon Event of Default.           40

4.  CREATION OF SECURITY INTEREST.                          40
          4.1  Grant of Security Interest.                  40
          4.2  Negotiable Collateral.                       41
          4.3  Collection of Accounts, General Intangibles, 
               and Negotiable Collateral.                   42
          4.4  Delivery of Additional Documentation 
               Required.                                    42
          4.5  Power of Attorney.                           43
          4.6  Right to Inspect.                            43

5.  REPRESENTATIONS AND WARRANTIES.                         44
          5.1  No Encumbrances.                             44
          5.2  Eligible Accounts.                           44
          5.3  Eligible Domestic Inventory.                 44
          5.4  Equipment.                                   44
          5.5  Location of Inventory and Equipment.         44
          5.6  Inventory Records.                           44
          5.7  Location of Chief Executive Office; FEIN.    45
          5.8  Due Organization and Qualification; 
               Subsidiaries.                                45
          5.9  Due Authorization; No Conflict.              45
          5.10 Litigation.                                  46
          5.11 No Material Adverse Change.                  47
          5.12 Solvency.                                    47
          5.13 Employee Benefits.                           47
          5.14 Environmental Condition.                     47
          5.15 Securities Accounts.                         48

6.  AFFIRMATIVE COVENANTS.                                  48
          6.1  Accounting System.                           48
          6.2  Collateral Reporting.                        48
          6.3  Financial Statements, Reports, Certificates. 49
          6.4  Tax Returns.                                 50
          6.5  Guarantor Reports.                           51
          6.6  Returns.                                     51
          6.7  Title to Equipment.                          51
          6.8  Maintenance of Equipment.                    51
          6.9  Taxes.                                       51
          6.10 Insurance.                                   52
          6.11 No Setoffs or Counterclaims.                 53
          6.12 Location of Inventory and Equipment.         53
          6.13 Compliance with Laws.                        54
          6.14 Employee Benefits.                           54
          6.15 Leases.                                      55

7.  NEGATIVE COVENANTS.                                     55
          7.1  Indebtedness.                                55
          7.2  Liens.                                       56
          7.3  Restrictions on Fundamental Changes.         56
          7.4  Disposal of Assets.                          57
          7.5  Change Name.                                 57
          7.6  [intentionally omitted].                     57
          7.7  Nature of Business.                          57
          7.8  Prepayments and Amendments.                  57
          7.9  Change of Control.                           57
          7.10 Consignments.                                57
          7.11 Distributions.                               58
          7.12 Accounting Methods.                          58
          7.13 Investments.                                 58
          7.14 Transactions with Affiliates.                58
          7.15 Suspension.                                  58
          7.16 [intentionally omitted].                     58
          7.17 Use of Proceeds.                             58
          7.18 Change in Location of Chief Executive Office;
               Inventory and Equipment with Bailees.        59
          7.19 No Prohibited Transactions Under ERISA       59
          7.20 Financial Covenants.                         60
          7.21 Capital Expenditures.                        60

8.  EVENTS OF DEFAULT.                                      60

9.  FOOTHILL'S RIGHTS AND REMEDIES.                         62
          9.1  Rights and Remedies.                         62
          9.2  Remedies Cumulative.                         65

10. TAXES AND EXPENSES.                                     65

11. WAIVERS; INDEMNIFICATION                                66
          11.1 Demand; Protest; etc.                        66
          11.2 Foothill's Liability for Collateral.         66
          11.3 Indemnification.                             66

12. NOTICES.                                                66

13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.             68

14. DESTRUCTION OF BORROWER'S DOCUMENTS.                    68

15. GENERAL PROVISIONS.                                     69
          15.1  Effectiveness.                              69
          15.2  Successors and Assigns.                     69
          15.3  Section Headings.                           69
          15.4  Interpretation.                             69
          15.5  Severability of Provisions.                 69
          15.6  Amendments in Writing.                      69
          15.7  Counterparts; Telefacsimile Execution.      69
          15.8  Revival and Reinstatement of Obligations.   70
          15.9  Integration.                                70
          15.10 Confidentiality.                            71


            SCHEDULES AND EXHIBITS
            ----------------------
  
Schedule E-1             Eligible Domestic Inventory Locations
Schedule P-1             Permitted Liens
Schedule P-2             Permitted Other Investments
Schedule R-1             Real Property Collateral
Schedule 5.8             Subsidiaries -- Capitalization and Assets
Schedule 5.10            Litigation
Schedule 5.13            ERISA Benefit Plans
Schedule 5.14            Environmental Condition
Schedule 6.12            Location of Inventory and Equipment
Schedule 7.1             Indebtedness

Exhibit A-1              Form of Aircraft Security Agreement
Exhibit C-1              Form of Compliance Certificate
Exhibit C-2              Form of Copyright Security Agreement
Exhibit P-1              Form of Patent Security Agreement
Exhibit P-2              Form of Pledge Agreement
Exhibit T-1              Form of Trademark Security Agreement
Exhibit V-1              Form of VCOC Letter


                 LOAN AND SECURITY AGREEMENT


      THIS LOAN AND SECURITY AGREEMENT (this "Agreement"),  is
entered into as of December 20, 1996, between FOOTHILL CAPITAL
CORPORATION,  a  California corporation ("Foothill"),  with  a
place  of  business  located at 11111 Santa Monica  Boulevard,
Suite 1500, Los Angeles, California 90025-3333, and INTERGRAPH
CORPORATION,  a  Delaware corporation ("Borrower"),  with  its
chief executive office located at One Madison Industrial Park,
Huntsville, Alabama 35894.


     The parties agree as follows:

     1.   DEFINITIONS AND CONSTRUCTION.

          1.1  Definitions.  As used in this Agreement, the
following terms shall have the following definitions:

               "Account Debtor" means any Person who is or who
may become obligated under, with respect to, or on account of,
an Account.

               "Accounts"  means all presently  existing  and
hereafter  arising accounts, contract rights,  and  all  other
forms  of  obligations owing to Borrower arising  out  of  the
sale,  license, or lease of goods or software or the rendition
of  services  by Borrower, irrespective of whether  earned  by
performance, and any and all credit insurance, guaranties,  or
security therefor.

               "Advances" has the meaning set forth in Section 2.1(a).

               "Affiliate" means, as applied to  any  Person,
any  other  Person  who  directly or indirectly  controls,  is
controlled  by, is under common control with or is a  director
or  officer  of such Person.  For purposes of this definition,
"control"  means:  (a)  solely when  "Affiliate"  is  used  in
determining  Eligible  Accounts, the possession,  directly  or
indirectly, of the power to vote 5% or more of the  securities
having ordinary voting power for the election of directors  or
the  direct  or  indirect power to direct the  management  and
policies  of  a  Person;  and (b)  in  all  other  cases,  the
possession, directly or indirectly, of the power to  vote  10%
or more of the securities having ordinary voting power for the
election  of  directors or the direct  or  indirect  power  to
direct the management and policies of a Person.

               "Agreement" has the meaning set forth in the preamble hereto.

               "Aircraft Security Agreement" means an Aircraft
Security  Agreement,  in  the form  of  Exhibit  A-1  attached
hereto,  dated as of even date herewith, between Borrower  and Foothill.

               "AnaTech Division" means the AnaTech Division of Borrower.

               "AnaTech Accounts" means Accounts created by 
the AnaTech Division.

               "Appraised  Assets" means items  of  Equipment
that are the subject of that certain appraisal, dated December
11,   1996,  performed  by  Acuval  Associates,  Inc.  or  any
subsequent  appraisal  performed  by  a  qualified   appraiser
satisfactory to Foothill.

               "Asset  Disposition" means any sale,  license,
lease, exchange, transfer, or other disposition (including any
disposition  as  part  of a sale and lease-back  transaction),
directly  or indirectly, by Borrower of any of the  properties
or assets of Borrower.

               "Authorized Person" means any officer or other
employee of Borrower.

               "Average  Unused Portion of Maximum  Revolving
Amount"  means,  as  of  any date of  determination,  (a)  the
Maximum  Revolving Amount, less (b) the sum of (i) the average
Daily  Balance  of Advances that were outstanding  during  the
immediately  preceding  month, plus  (ii)  the  average  Daily
Balance  of  the Letter of Credit Usage during the immediately
preceding month.

               "Availability" means the amount of money  that
Borrower is entitled to borrow as Advances under Section  2.1,
such  amount being the difference derived when (a) the sum  of
the  principal amount of Advances then outstanding  (including
any  amounts  that Foothill may have paid for the  account  of
Borrower  pursuant to any of the Loan Documents and that  have
not  been reimbursed by Borrower) is subtracted from  (b)  the
lesser of (i) the Maximum Revolving Amount less the Letter  of
Credit  Usage, or (ii) the Borrowing Base less the  Letter  of
Credit Usage.

               "Bankruptcy  Code"  means  the  United  States
Bankruptcy Code (11 U.S.C. Section 101 et seq.), as amended, and
any successor statute.

               "Benefit Plan" means a "defined benefit  plan"
(as defined in Section 3(35) of ERISA) for which Borrower, any
Subsidiary  of Borrower, or any ERISA Affiliate  has  been  an
"employer"  (as defined in Section 3(5) of ERISA)  within  the
past six years.

               "Bentley  Equity Interests" means  the  equity
interests in Bentley Systems, Inc. owned of record by Borrower
and  the rights of Borrower related thereto under that certain
Stockholders'  Agreement, dated June 11, 1987,  by  and  among
Bentley   Systems,   Inc.,  Borrower,  and   the   "Management
Stockholders" party thereto (as amended).

               "Bestinfo" means Bestinfo, Inc., a Delaware corporation.

               "Books"  means  all  of Borrower's  books  and
records  including:  ledgers; records indicating, summarizing,
or  evidencing Borrower's properties or assets (including  the
Collateral)  or  liabilities;  all  information  relating   to
Borrower's business operations or financial condition; and all
computer  programs,  disk or tape files, printouts,  runs,  or
other computer prepared information.

               "Borrower"  has the meaning set forth  in  the
preamble to this Agreement.

               "Borrowing Base" has the meaning set forth  in
Section  2.1(a).  For purposes of this definition, any  amount
that is denominated in a currency other than Dollars shall  be
valued  in Dollars based on the applicable Exchange  Rate  for
such  currency as of the date 1 Business Day prior to the date
of determination.

               "Business  Day" means any day that  is  not  a
Saturday,  Sunday,  or other day on which national  banks  are
authorized or required to close.

               "Change  of Control" shall be deemed  to  have
occurred  at  such time as a "person" or "group"  (within  the
meaning  of  Sections  13(d) and 14(d)(2)  of  the  Securities
Exchange  Act  of  1934)  becomes the "beneficial  owner"  (as
defined  in  Rule 13d-3 under the Securities Exchange  Act  of
1934),  directly or indirectly, of more than 25% of the  total
voting  power  of  all  classes of stock then  outstanding  of
Borrower entitled to vote in the election of directors.

               "Chelmsford Property" means the Real  Property
(and  related improvements thereto) of Borrower located in  or
about Chelmsford, Massachusetts.

               "Closing Date" means the date of the first  to
occur  of  the making of the initial Advance, the issuance  of
the initial Letter of Credit, or the funding of the Term Loan.

               "Code" means the California Uniform Commercial Code.

               "Collateral"  means  all  right,  title,   or
interest of Borrower with respect to the following:

               (a)  the Accounts,

               (b)  the Books,

               (c)  the Equipment,

               (d)  the General Intangibles,

               (e)  the Inventory,

               (f)  the Negotiable Collateral,

               (g)  the Real Property Collateral,

               (h)  any money, or other assets of Borrower that now or 
hereafter come into the possession, custody, or control of Foothill, and

               (i)  the  proceeds  and  products,  whether
tangible  or  intangible, of any of the  foregoing,  including
proceeds  of  insurance covering any or all of the Collateral,
and   any   and   all  Accounts,  Books,  Equipment,   General
Intangibles, Inventory, Negotiable Collateral, Real  Property,
money,  deposit  accounts,  or other  tangible  or  intangible
property  resulting  from the sale, exchange,  collection,  or
other  disposition  of any of the foregoing,  or  any  portion
thereof or interest therein, and the proceeds thereof.

               "Collateral Access Agreement" means a landlord
waiver,  mortgagee  waiver, bailee letter, or  acknowledgement
agreement  of any warehouseman, processor, lessor,  consignee,
or  other  Person  in possession of, having a  Lien  upon,  or
having  rights or interests in the Equipment or Inventory,  in
each  case,  in form and substance reasonably satisfactory  to
Foothill.

               "Collections"  means all cash, checks,  notes,
instruments, and other items of payment (including,  insurance
proceeds,  proceeds of cash sales, rental  proceeds,  and  tax
refunds).

               "Compliance Certificate"  means a  certificate
substantially in the form of Exhibit C-1 and delivered by  the
chief  financial  officer or the chief accounting  officer  of
Borrower to Foothill.

               "Consolidated Current Assets" means, as of any
date  of  determination, the aggregate amount of  all  current
assets  of  Borrower  and  its  Subsidiaries  that  would,  in
accordance  with  GAAP, be classified on a  balance  sheet  as
current assets.

               "Consolidated Current Liabilities" means, as of
any date of determination, the aggregate amount of all current
liabilities  of Borrower and its Subsidiaries that  would,  in
accordance  with  GAAP, be classified on a  balance  sheet  as
current  liabilities.   For purposes of this  definition,  all
Obligations outstanding under this Agreement shall  be  deemed
to be current liabilities without regard to whether they would
be deemed to be so under GAAP.

               "Copyright   Security  Agreement"   means   a
Copyright  Security  Agreement, in the  form  of  Exhibit  C-2
attached  hereto,  dated  as of even  date  herewith,  between
Borrower and Foothill.

               "Currency Protection Agreement" shall mean any
currency  swap,  cap,  or collar agreement  or  other  similar
insurance-type  agreement in connection with  hedging  against
foreign currency rate fluctuations.

               "Daily  Balance"  means  the  amount  of   an
Obligation owed at the end of a given day.

               "deems itself insecure" means that the  Person
deems  itself  insecure in accordance with the  provisions  of
Section 1208 of the Code.

               "Default" means an event, condition, or default
that, with the giving of notice, the passage of time, or both,
would be an Event of Default.

               "Designated Account" means account number 4068-
0637 of Borrower maintained with Borrower's Designated Account
Bank,  or  such  other  deposit account of  Borrower  (located
within  the  United  States) which  has  been  designated,  in
writing and from time to time, by Borrower to Foothill.

               "Designated Account Bank" means Citibank, N.A.,
whose office is located at 399 Park Avenue, New York, New York
10043, and whose ABA number is 021-000-089.

               "Dilution" means, in each case based upon  the
experience  of  the immediately prior 90 days, the  result  of
dividing  the  Dollar  amount of  (a)  bad  debt  write-downs,
discounts, returns, credits, or other dilution with respect to
the  Accounts, by (b) Collections with respect to Accounts (in
each  case,  excluding intercompany Accounts and extraordinary
items) plus the Dollar amount of clause (a).

               "Dilution  Reserve" means, as of any  date  of
determination  pursuant to the report  of  Dilution  delivered
under  Section 6.2, an amount sufficient to reduce  Foothill's
advance  rate against Eligible Accounts by 1 percentage  point
for  each  percentage point by which Dilution is in excess  of
8%.

               "Disbursement  Letter" means an  instructional
letter   executed  and  delivered  by  Borrower  to   Foothill
regarding  the extensions of credit to be made on the  Closing
Date,  the  form  and substance of which shall  be  reasonably
satisfactory to Foothill.

               "Dollars or $" means United States dollars.

               "Domestic Accounts" means Accounts with respect
to  which  the  Account Debtor maintains its  chief  executive
office in the United States or is organized under the laws  of
the United States or any State thereof.

               "Early Termination Premium" has the meaning set
forth in Section 3.6.

               "Eligible  Accounts" means  Eligible  Domestic
Accounts and Eligible Unbilled Accounts.

               "Eligible  Domestic  Accounts"  means   those
Accounts  created  by  Borrower  in  the  ordinary  course  of
business, that arise out of Borrower's sale, license, or lease
of  goods  or  software  or rendition of  services,  and  that
strictly  comply with each and all of the representations  and
warranties respecting Accounts made by Borrower to Foothill in
the  Loan  Documents;  provided, however,  that  standards  of
eligibility  may  be fixed and revised from time  to  time  by
Foothill  in Foothill's reasonable credit judgment.   Eligible
Domestic Accounts shall not include the following:

               (a)  Accounts that the Account Debtor has failed to pay
within  60  days  of  due date (or, in  the  case  of  Federal
Accounts, 90 days of due date) or Accounts with selling  terms
of more than 60 days;

               (b)  Accounts owed by an Account Debtor or its Affiliates
where  50% or more of all Accounts owed by that Account Debtor
(or  its  Affiliates) are deemed ineligible under  clause  (a)
above;

               (c)  Accounts with respect to which the Account Debtor is
an employee, Affiliate, or agent of Borrower;

               (d)  Accounts with respect to which goods are placed on
consignment,  guaranteed  sale,  sale  or  return,   sale   on
approval, bill and hold, or other terms by reason of which the
payment by the Account Debtor may be conditional;

               (e)  Accounts that are not payable in Dollars or with
respect to which the Account Debtor: (i) does not maintain its
chief  executive office in the United States, or (ii)  is  not
organized  under the laws of the United States  or  any  State
thereof, or (iii) is the government of any foreign country  or
sovereign  state, or of any state, province, municipality,  or
other  political  subdivision thereof, or of  any  department,
agency,  public corporation, or other instrumentality thereof,
unless  (y) the Account is supported by an irrevocable  letter
of  credit  that  is  satisfactory to Foothill  (as  to  form,
substance, and issuer or domestic confirming bank)  and  that,
upon the occurrence and during the continuance of an Event  of
Default,  has  been  delivered to  Foothill  and  is  directly
drawable  by Foothill (provided, however, that nothing  herein
shall limit Foothill's right to not make an Advance or issue a
Letter   of   Credit  upon  the  occurrence  and  during   the
continuance  of  an Event of Default), or (z) the  Account  is
covered  by  credit insurance in form and amount,  and  by  an
insurer, satisfactory to Foothill;

               (f)  Accounts with respect to which the Account Debtor is
a creditor of Borrower, has or has asserted a right of setoff,
has  disputed its liability (whether pursuant to a contractual
discrepancy or otherwise), or has made any claim with  respect
to  the  Account; provided, however, that the  foregoing  only
shall  apply  to the extent of such right of setoff,  disputed
liability, or other claim giving rise to such contra-account.

               (g)  Accounts with respect to an Account Debtor whose
total obligations owing to Borrower exceed 10% of all Eligible
Accounts,  to  the  extent of the obligations  owing  by  such
Account   Debtor  in  excess  of  such  percentage;  provided,
however,  that  in  the  case of the  United  States  and  its
departments,  agencies,  and  instrumentalities,  taken  as  a
whole,  the foregoing percentage shall be fifty percent  (50%)
before the excess would be deemed ineligible;

               (h)  Accounts with respect to which the Account Debtor is
subject to any Insolvency Proceeding, or becomes insolvent, or
goes out of business;

               (i)  Accounts the collection of which Foothill, in its
reasonable credit judgment, believes to be doubtful by  reason
of  the  Account Debtor's financial condition and with respect
to which Foothill has notified Borrower of such belief;

               (j)  Accounts (other than Eligible Unbilled Accounts)
with  respect  to which the goods giving rise to such  Account
have  not  been shipped and billed to the Account Debtor,  the
services  giving rise to such Account have not been  performed
and  accepted by the Account Debtor, or the Account  otherwise
does not represent a final sale;

               (k)  Accounts with respect to which the Account Debtor is
located  in  the states of New Jersey, Minnesota, Indiana,  or
West Virginia (or any other state that requires a creditor  to
file  a Business Activity Report or similar document in  order
to  bring suit or otherwise enforce its remedies against  such
Account  Debtor in the courts or through any judicial  process
of  such  state), unless Borrower has qualified to do business
in  New  Jersey,  Minnesota, Indiana, West Virginia,  or  such
other  states,  or  has filed a Notice of Business  Activities
Report   with   the  applicable  division  of  taxation,   the
department  of revenue, or with such other state  offices,  as
appropriate, for the then-current year, or is exempt from such
filing requirement;

               (l)  At such times as Foothill may determine in its sole
discretion, Federal Accounts (exclusive, however, of  Accounts
with   respect  to  which  Borrower  has  complied,   to   the
satisfaction of Foothill and subject to Section 4.4(c) hereof,
with the Assignment of Claims Act, 31 U.S.C. Section  3727);

               (m)  At such times as Foothill may determine in its sole
discretion, Accounts with respect to which the Account  Debtor
is any State of the United States (exclusive, however, of: (i)
Accounts  owed  by  any State that does not have  a  statutory
counterpart to the Assignment of Claims Act; and (ii) Accounts
owed  by  any  State that has a statutory counterpart  to  the
Assignment  of  Claims Act and with respect to which  Borrower
has  complied, to the satisfaction of Foothill and subject  to
Section 4.4(c) hereof, with such statutory counterpart);

               (n)  Federal Accounts arising under any one underlying
contract  or  any series of related underlying contracts,  the
total  amount of which obligations owing Borrower exceeds  10%
of  all  Eligible  Accounts, to the extent of the  obligations
owing  under  such  contract or contracts in  excess  of  such
percentage;

               (o)  Federal Accounts in respect of which the subject
contract  for goods and services is designated by the  Account
Debtor  as  "classified"  (i.e., the ability  of  Foothill  to
receive information regarding such contract or such Account is
restricted by rules or regulations of the United States or any
department, agency, or instrumentality of the United States in
respect of classified information);

               (p)  Optronics Accounts or AnaTech Accounts;

               (q)  Accounts which represent progress payments or other
advance  billings  that are due prior  to  the  completion  of
performance by Borrower of the subject contract for  goods  or
services, except to the extent that such progress payments  or
other advance billings are expressly permitted by the terms of
the   subject   contract  (including  so-called   "maintenance
contracts"); or

               (r)  Accounts with respect to which a surety or other
bond has been issued in respect of the performance by Borrower
of the subject contract for goods or services.

               "Eligible  Domestic Inventory" means  Eligible
Domestic  Finished Goods Inventory and Eligible  Domestic  Raw
Materials Inventory.

               "Eligible  Domestic Finished Goods  Inventory"
means  Inventory  consisting of first quality  finished  goods
held  for sale or license in the ordinary course of Borrower's
business, that are located at or in-transit between Borrower's
premises identified on Schedule E-1, and that strictly  comply
with  each  and  all  of  the representations  and  warranties
respecting Inventory made by Borrower to Foothill in the  Loan
Documents;  provided, however, that standards  of  eligibility
may  be  fixed  and revised from time to time by  Foothill  in
Foothill's  reasonable credit judgment.   In  determining  the
amount  to  be so included, Inventory shall be valued  at  the
lower  of cost or market on a basis consistent with Borrower's
current  and  historical accounting  practices.   An  item  of
Inventory shall not be included in Eligible Domestic  Finished
Goods Inventory if:

               (a)  it is  not  owned  solely by Borrower or 
Borrower does  not  have good, valid, and marketable title thereto;

               (b)  it is not located at one of the locations
set forth on Schedule E-1;

               (c)  it  is not located on property owned  or
leased  by Borrower or in a contract warehouse, in each  case,
subject  to  a  Collateral Access Agreement  executed  by  the
mortgagee, lessor, the warehouseman, or other third party,  as
the  case  may  be,  and  segregated or  otherwise  separately
identifiable  from  goods of others, if  any,  stored  on  the
premises;

               (d)  it is not subject to a valid and perfected
first priority security interest in favor of Foothill;

               (e)  it consists of goods returned or rejected
by Borrower's customers or goods in transit;

               (f)  it is Inventory of the Optronics Division
or the AnaTech Division; or

               (g)  it  is  obsolete  or  slow  moving,   a
restrictive or custom item, raw materials, work-in-process,  a
component  that is not part of finished goods, or  constitutes
spare  parts (other than spare parts located at the Huntsville
Property), packaging and shipping materials, supplies used  or
consumed in Borrower's business, Inventory subject to  a  Lien
in  favor  of any third Person, bill and hold goods, defective
goods, "seconds," or Inventory acquired on consignment.

               "Eligible  Domestic  Raw Materials  Inventory"
means  Inventory  that does not qualify as  Eligible  Domestic
Finished  Goods  Inventory solely because it  constitutes  raw
materials  consisting of components used as a  part  of  first
quality finished goods held for sale in the ordinary course of
Borrower's business.

               "Eligible  Unbilled  Accounts"  means   those
Domestic  Accounts created by Borrower that would  qualify  as
Eligible  Domestic  Accounts except for  the  fact  that  they
constitute Unbilled Accounts.

               "Equipment" means all of Borrower's present and
hereafter   acquired   machinery,   machine   tools,   motors,
equipment,   furniture,   furnishings,   fixtures,    vehicles
(including  motor vehicles and trailers), tools, parts,  goods
(other  than  consumer  goods, farm products,  or  Inventory),
wherever  located, including, (a) any interest of Borrower  in
any  of  the  foregoing, and (b) all attachments, accessories,
accessions,   replacements,  substitutions,   additions,   and
improvements to any of the foregoing.

               "ERISA"  means the Employee Retirement  Income
Security  Act  of  1974, 29 U.S.C. Section 1000 et seq., amendments
thereto,  successor  statutes,  and  regulations  or  guidance
promulgated thereunder.

               "ERISA  Affiliate" means (a)  any  corporation
subject  to  ERISA whose employees are treated as employed  by
the  same  employer  as the employees of  Borrower  under  IRC
Section  414(b),  (b) any trade or business subject  to  ERISA
whose  employees are treated as employed by the same  employer
as  the  employees of Borrower under IRC Section  414(c),  (c)
solely for purposes of Section 302 of ERISA and Section 412 of
the IRC, any organization subject to ERISA that is a member of
an  affiliated  service group of which Borrower  is  a  member
under  IRC  Section  414(m), or (d)  solely  for  purposes  of
Section  302  of ERISA and Section 412 of the IRC,  any  party
subject  to  ERISA  that  is a party to  an  arrangement  with
Borrower and whose employees are aggregated with the employees
of Borrower under IRC Section 414(o).

              "ERISA Event" means (a) a Reportable Event with
respect  to  any Benefit Plan or Multiemployer Plan,  (b)  the
withdrawal  of  Borrower,  any of its  Subsidiaries  or  ERISA
Affiliates from a Benefit Plan during a plan year in which  it
was a "substantial employer" (as defined in Section 4001(a)(2)
of  ERISA), (c) the providing of notice of intent to terminate
a  Benefit  Plan  in a distress termination (as  described  in
Section 4041(c) of ERISA), (d) the institution by the PBGC  of
proceedings to terminate a Benefit Plan or Multiemployer Plan,
(e)  any  event or condition (i) that provides a  basis  under
Section  4042(a)(1), (2), or (3) of ERISA for the  termination
of, or the appointment of a trustee to administer, any Benefit
Plan  or  Multiemployer  Plan, or  (ii)  that  may  result  in
termination of a Multiemployer Plan pursuant to Section  4041A
of  ERISA,  (f) the partial or complete withdrawal within  the
meaning  of Sections 4203 and 4205 of ERISA, of Borrower,  any
of  its  Subsidiaries or ERISA Affiliates from a Multiemployer
Plan,  or (g) providing any security to any Plan under Section
401(a)(29) of the IRC by Borrower or its Subsidiaries  or  any
of their ERISA Affiliates.

               "Event of Default" has the meaning set forth in Section 8.

               "Exchange  Rate"  means the  nominal  rate  of
exchange  available to Foothill in a chosen  foreign  exchange
market  for the purchase of the applicable non-Dollar currency
at 12:00 noon, local time, 1 Business Day prior to any date of
determination,  expressed  as the  number  of  units  of  such
currency per Dollar.

               "Excluded Foreign Portion" means, with respect
to  any Foreign Subsidiary, the portion (if any) of the equity
securities of such Subsidiary owned of record by Borrower with
voting  power  that is in excess of 65% of the total  combined
voting   power  of  issued  and  outstanding  stock  of   such
Subsidiary entitled to vote.

               "Excluded Foreign Subsidiary Securities" means
(a)  the  Excluded  Foreign Portion (if  any)  of  the  equity
securities of any Foreign Subsidiary of Borrower identified in
Schedule  II  of  the Pledge Agreement (as  the  same  may  be
amended or supplemented from time to time), and (b) subject to
the  last paragraph of Section 6.3, 100% of the fully  diluted
issued  and outstanding equity securities of any other Foreign
Subsidiary of Borrower.

               "Existing Lender" means Citicorp USA, Inc., as
the  representative  of  certain  banks  and  other  financial
institutions.

               "Federal  Accounts" means Accounts  where  the
United States or any department, agency, or instrumentality of
the United States is the Account Debtor.

               "FEIN" means Federal Employer Identification Number.

               "Foothill"  has the meaning set forth  in  the
preamble to this Agreement.

               "Foothill Account" has the meaning set forth in Section 2.7.
 
               "Foothill  Expenses"  means  all:   costs  or
expenses (including taxes, and insurance premiums) required to
be  paid by Borrower under any of the Loan Documents that  are
paid or incurred by Foothill; fees or charges paid or incurred
by  Foothill  in connection with Foothill's transactions  with
Borrower,   including,  fees  or  charges  for   photocopying,
notarization,   couriers  and  messengers,  telecommunication,
public  record  searches (including tax lien, litigation,  and
UCC  (or equivalent) searches and including searches with  the
patent  and  trademark office, the copyright  office,  or  the
department of motor vehicles), filing, recording, publication,
appraisal (including periodic Personal Property Collateral  or
Real  Property  Collateral appraisals), real  estate  surveys,
real estate title policies and endorsements, and environmental
audits;  costs  and  expenses  incurred  by  Foothill  in  the
disbursement  of  funds  to  Borrower  (by  wire  transfer  or
otherwise);  charges  paid or incurred by  Foothill  resulting
from  the  dishonor  of  checks; costs and  expenses  paid  or
incurred  by  Foothill to correct any default or  enforce  any
provision of the Loan Documents, or in gaining possession  of,
maintaining, handling, preserving, storing, shipping, selling,
preparing  for  sale,  or advertising  to  sell  the  Personal
Property  Collateral or the Real Property Collateral,  or  any
portion   thereof,   irrespective  of  whether   a   sale   is
consummated; costs and expenses paid or incurred  by  Foothill
in  examining  Borrower's Books; costs and expenses  of  third
party claims or any other suit paid or incurred by Foothill in
enforcing  or  defending the Loan Documents or  in  connection
with  the  transactions contemplated by the Loan Documents  or
Foothill's   relationship  with  Borrower  (or  any   of   its
Subsidiaries  party  to  one  or  more  Loan  Documents);  and
Foothill's reasonable attorneys fees and expenses incurred  in
advising,  structuring,  drafting,  reviewing,  administering,
amending, terminating, enforcing (including attorneys fees and
expenses   incurred  in  connection  with   a   "workout,"   a
"restructuring,"   or  an  Insolvency  Proceeding   concerning
Borrower),   defending,  or  concerning  the  Loan  Documents,
irrespective of whether suit is brought.

               "Foreign  Subsidiary"  means  any  Subsidiary
organized  under  the laws of a jurisdiction  other  than  the
United States or any State thereof.

               "GAAP"  means  generally  accepted  accounting
principles  as  in  effect from time to  time  in  the  United
States, consistently applied.

               "General  Intangibles" means all of Borrower's
present  and  future  general intangibles and  other  personal
property  (including  contract rights,  rights  arising  under
common  law,  statutes, or regulations, choses  or  things  in
action,    goodwill,   patents,   trade   names,   trademarks,
servicemarks,   copyrights,  blueprints,  drawings,   purchase
orders, customer lists, monies due or recoverable from pension
funds,  route lists, rights to payment and other rights  under
any  royalty  or  licensing agreements,  infringement  claims,
computer programs, information contained on computer disks  or
tapes,   literature,  reports,  catalogs,  deposit   accounts,
insurance  premium  rebates,  tax  refunds,  and  tax   refund
claims),   other   than   goods,  Accounts,   and   Negotiable
Collateral.

               "Governing Documents" means the certificate or
articles of incorporation, by-laws, or other organizational or
governing documents of any Person.

               "Hazardous Materials" means (a) substances that
are defined or listed in, or otherwise classified pursuant to,
any  applicable laws or regulations as "hazardous substances,"
"hazardous materials," "hazardous wastes," "toxic substances,"
or any other formulation intended to define, list, or classify
substances  by  reason  of  deleterious  properties  such   as
ignitability,    corrosivity,   reactivity,   carcinogenicity,
reproductive  toxicity, or "EP toxicity", (b) oil,  petroleum,
or  petroleum  derived substances, natural  gas,  natural  gas
liquids, synthetic gas, drilling fluids, produced waters,  and
other wastes associated with the exploration, development,  or
production of crude oil, natural gas, or geothermal resources,
(c)  any flammable substances or explosives or any radioactive
materials,   and  (d)  asbestos  in  any  form  or  electrical
equipment that contains any oil or dielectric fluid containing
levels of polychlorinated biphenyls in excess of 50 parts  per
million.

               "Huntsville Property" means the Real  Property
(and  related improvements thereto) of Borrower located in  or
about Huntsville, Alabama.

               "IG  Australia"  means Intergraph  Corporation
Pty., Ltd.. a corporation organized under the laws of Australia.

               "IG  Australia Existing Lender" means National
Bank of Australia.

               "IG  Australia Existing Lender Pay-Off Letter"
means  a letter, in form and substance reasonably satisfactory
to  Foothill, from IG Australia Existing Lender respecting the
amount  necessary to repay in full all of the  obligations  of
Borrower or IG Australia owing to IG Australia Existing Lender
and  obtain  a  termination or release of  all  of  the  Liens
existing  in favor of IG Australia Existing Lender in  and  to
the properties or assets of Borrower and its Subsidiaries.


               "IG Benelux" means Intergraph Benelux B.V.,  a
corporation organized under the laws of The Netherlands.

               "IG Benelux Existing Lender" means ING  Bank, N.V..


               "IG Delaware" means Intergraph Delaware, Inc.,
a Delaware corporation.

               "Indebtedness" means: (a) all  obligations  of
Borrower  for borrowed money, (b) all obligations of  Borrower
evidenced  by  bonds,  debentures,  notes,  or  other  similar
instruments  and  all  reimbursement or other  obligations  of
Borrower in respect of letters of credit, bankers acceptances,
interest  rate  swaps, or other financial  products,  (c)  all
obligations  of  Borrower  under  capital  leases,   (d)   all
obligations or liabilities of others secured by a Lien on  any
property  or  asset of Borrower, irrespective of whether  such
obligation or liability is assumed, and (e) any obligation  of
Borrower   guaranteeing  or  intended  to  guarantee  (whether
guaranteed,  endorsed,  co-made,  discounted,  or  sold   with
recourse  to  Borrower)  any  indebtedness,  lease,  dividend,
letter  of  credit, or other obligation of any  other  Person;
provided,  however,  that  the term "Indebtedness"  shall  not
include  (i)  liabilities or obligations  arising  out  of  or
relating to guarantees, warranties, or other commitments  that
products  or systems sold by Borrower or any of its Affiliates
will  meet  particular performance or operating specifications
("Commercial  Performance Guarantees"),  or  (ii)  liabilities
arising  out  of  or relating to agreements or commitments  of
Borrower  to  maintain the financial condition or solvency  of
any  Affiliate  of  Borrower that are made,  in  the  ordinary
course  of Borrower's business consistent with past practices,
in  connection  with  or  in  fulfillment  of  any  Commercial
Performance Guarantee.

                "Insolvency  Proceeding" means any  proceeding
commenced by or against any Person under any provision of  the
Bankruptcy  Code or under any other bankruptcy  or  insolvency
law,  assignments  for  the benefit of  creditors,  formal  or
informal  moratoria, compositions, extensions  generally  with
creditors, or proceedings seeking reorganization, arrangement,
or other similar relief.

                "Interest  Rate  Agreement"  shall  mean  any
interest  rate swap agreement or any other similar  insurance-
type  agreement  in  connection with  any  interest  "cap"  or
"collar"  transaction  or  any  other  interest  rate  hedging
transaction.

                "InterCAP"  means  InterCAP  Graphic  Systems,
Inc., a Delaware corporation.

                "Intercompany Notes" means promissory notes, if
any,  evidencing loan obligations between Borrower and any  of
its  Subsidiaries that constitute loans qualifying  under  the
definition   of  "Permitted  Subsidiary  Loans   and   Capital
Contributions" or that are permitted under Section 7.1(d).

                "Inventory"  means  all  present  and  future
inventory in which Borrower has any interest, including  goods
held  for sale, license, or lease or to be furnished  under  a
contract  of service and all of Borrower's present and  future
raw  materials, work in process, finished goods,  and  packing
and shipping materials, wherever located.

                "Inventory Advance Rate" means 25%;  provided,
however,  that  the Inventory Advance Rate shall  at  no  time
exceed the quotient, expressed as a percentage, equal to  100%
of  the  Liquidation Value based upon the  most  recent  third
party  appraisal of Borrower's Inventory located in the United
States conducted by an appraiser selected by Foothill, divided
by  the  value of Eligible Domestic Inventory on the  date  of
such appraisal.

                "IRC" means the Internal Revenue Code of 1986,
as amended, and the regulations thereunder.

                "L/C" has the meaning set forth in Section 2.2(a).

                "L/C Guaranty" has the meaning set forth in Section 2.2(a).

                "Letter  of  Credit" means an L/C  or  an  L/C
Guaranty, as the context requires.

                "Letter of Credit Usage" means the sum of  (a)
the  undrawn amount of Letters of Credit, plus (b) the  amount
of unreimbursed drawings under Letters of Credit.

                "Lien" means any interest in property securing
an  obligation owed to, or a claim by, any Person  other  than
the  owner  of  the property, whether such interest  shall  be
based  on  the common law, statute, or contract, whether  such
interest  shall  be recorded or perfected,  and  whether  such
interest  shall  be  contingent upon the  occurrence  of  some
future  event  or  events  or the  existence  of  some  future
circumstance or circumstances, including the lien or  security
interest  arising from a mortgage, deed of trust, encumbrance,
pledge,   hypothecation,  assignment,   deposit   arrangement,
security agreement, adverse claim or charge, conditional  sale
or  trust  receipt, or from a lease, consignment, or  bailment
for   security   purposes  and  also  including  reservations,
exceptions,     encroachments,    easements,    rights-of-way,
covenants,  conditions, restrictions, leases, and other  title
exceptions and encumbrances affecting Real Property.

                "Liquidation Value" means, in respect  of  any
item  of  Inventory or Equipment, the net orderly  liquidation
value of such item of Inventory or Equipment as determined  by
a qualified appraiser selected by Foothill.

                "Loan Account" has the meaning set forth in Section 2.10.

                "Loan  Documents"  means this  Agreement,  the
Disbursement  Letter,  the  Letters  of  Credit,  the  Lockbox
Agreements,  the  Mortgages, the Aircraft Security  Agreement,
the   Copyright   Security  Agreement,  the  Patent   Security
Agreement,  the  Pledge  Agreement,  the  Trademark   Security
Agreement,  the  VCOC Letter, any note or  notes  executed  by
Borrower  and  payable to Foothill, and  any  other  agreement
entered  into, now or in the future, in connection  with  this
Agreement.

                "Lockbox  Account"  shall  mean  a  depositary
account established pursuant to one of the Lockbox Agreements.

                "Lockbox  Agreements"  means  those   certain
Lockbox  Operating  Procedural Agreements  and  those  certain
Depository   Account   Agreements,  in  form   and   substance
reasonably  satisfactory to Foothill, each of which  is  among
Borrower, Foothill, and one of the Lockbox Banks.

                "Lockbox  Banks" means Citibank,  N.A.,  First
National Bank of Chicago, and NationsBank of Georgia.

                "Lockboxes" has the meaning set forth in Section 2.7.

                "M&S" means M&S Computing Investments, Inc., a
Delaware corporation.

                "Material Adverse Change" means (a) a material
adverse  change  in  the  business,  operations,  results   of
operations, assets, liabilities or condition of Borrower,  (b)
the  material impairment of Borrower's ability to perform  its
obligations under the Loan Documents to which it is a party or
of  Foothill to enforce the Obligations or to realize upon the
Collateral, (c) a material adverse effect on the value of  the
Collateral  or  the amount that Foothill would  be  likely  to
receive  (after giving consideration to delays in payment  and
costs  of  enforcement) in the liquidation of such Collateral,
or  (d)  a  material impairment of the priority of  Foothill's
Liens with respect to the Collateral; provided, however,  that
the determination of any Material Adverse Change shall be made
after  giving  effect  to the reserves,  if  any,  created  by
Foothill against the Borrowing Base, or the reduction, if any,
made  by  Foothill of the applicable advance rates based  upon
the  Borrowing Base, in each case, in respect of the event  or
circumstance  giving  rise  to such material  adverse  change,
material impairment, or material adverse effect.

               "Maturity Date" has the meaning set forth in Section 3.4.

               "Maximum Amount" means $100,000,000.

               "Maximum  Revolving Amount" means, as  of  any
date  of  determination, the result of (a) the Maximum Amount,
minus (b) the then outstanding principal balance of the Term Loan.

               "Meadlock  Note" means that certain promissory
note,  dated May 1, 1996, made by James Meadlock to the  order
of  Borrower in the original principal amount of approximately
$4,400,000.

               "Mortgage  Policies"  means  mortgagee  title
insurance  policies (or marked commitments to issue the  same)
for  the  Real Property Collateral issued by a title insurance
company   reasonably  satisfactory  to  Foothill  in   amounts
reasonably satisfactory to Foothill.

               "Mortgages" means one or more mortgages, deeds
of  trust,  or deeds to secure debt, executed by  Borrower  in
favor  of  Foothill, the form and substance of which shall  be
reasonably  satisfactory to Foothill, that encumber  the  Real
Property Collateral and the related improvements thereto.

               "Multiemployer  Plan" means  a  "multiemployer
plan"  (as  defined in Section 4001(a)(3) of ERISA)  to  which
Borrower, any of its Subsidiaries, or any ERISA Affiliate  has
contributed, or was obligated to contribute, within  the  past
six years.

               "Negotiable Collateral" means all of Borrower's
present  and  future letters of credit, notes  (including  the
Meadlock  Note),  drafts,  instruments,  investment  property,
security  entitlements, securities (including  the  shares  of
stock of Subsidiaries of Borrower, but expressly excluding the
Excluded Foreign Subsidiary Securities and the Bentley  Equity
Interests),  documents,  personal  property  leases   (wherein
Borrower  is the lessor), chattel paper, and Borrower's  Books
relating to any of the foregoing.

               "Net   Worth"  means,  as  of  any  date   of
determination, Borrower's total stockholder's equity.

               "Obligations" means all loans, Advances, debts,
principal, interest (including any interest that, but for  the
provisions  of  the  Bankruptcy  Code,  would  have  accrued),
contingent  reimbursement obligations  under  any  outstanding
Letters  of  Credit,  premiums  (including  Early  Termination
Premiums),  liabilities  (including  all  amounts  charged  to
Borrower's  Loan Account pursuant hereto), obligations,  fees,
charges,  costs, or Foothill Expenses (including any  fees  or
expenses that, but for the provisions of the Bankruptcy  Code,
would  have  accrued), lease payments, guaranties,  covenants,
and  duties  owing by Borrower to Foothill  of  any  kind  and
description  (whether  pursuant to or evidenced  by  the  Loan
Documents or pursuant to any other agreement between  Foothill
and  Borrower, and irrespective of whether for the payment  of
money),  whether direct or indirect, absolute  or  contingent,
due  or to become due, now existing or hereafter arising,  and
including  any  debt,  liability,  or  obligation  owing  from
Borrower  to  others  that  Foothill  may  have  obtained   by
assignment  or otherwise, and further including  all  interest
not  paid when due and all Foothill Expenses that Borrower  is
required to pay or reimburse by the Loan Documents, by law, or
otherwise.

               "Obligor" means any of Borrower or any of its Subsidiaries 
party to one or more Loan Documents, including M&S and IG Delaware.

                "Optronics  Division"  means  the   Optronics
Division of Borrower.

                "Optronics Accounts" means Accounts created by
the Optronics Division.

                "Ordinary  Course  Dispositions"  means  Asset
Dispositions  of  (a)  Inventory in  the  ordinary  course  of
business,  (b) Equipment that is substantially worn,  damaged,
or  obsolete in the ordinary course of business, (c) Equipment
that is a so-called "internal equipment item" that is replaced
by  Borrower in the ordinary course of business and consistent
with past practices with another such item of equal or greater
value,  and  (d)  Equipment that is a so-called "demonstration
item"  in the ordinary course of business and consistent  with
past practices.

               "Overadvance" has the meaning set forth in Section 2.5.

               "Participant"  means  any  Person  to   which
Foothill has sold a participation interest in its rights under
the Loan Documents.

               "Patent  Security Agreement"  means  a  Patent
Security  Agreement,  in  the form  of  Exhibit  P-1  attached
hereto,  dated as of even date herewith, between Borrower  and
Foothill.

               "Pay-Off Letter" means a letter, in  form  and
substance  reasonably satisfactory to Foothill, from  Existing
Lender respecting the amount necessary to repay in full all of
the  obligations  of  Borrower owing to  Existing  Lender  and
obtain  a  termination or release of all of the Liens existing
in favor of Existing Lender in and to the properties or assets
of Borrower.

               "PBGC"  means  the  Pension  Benefit  Guaranty
Corporation as defined in Title IV of ERISA, or any successor thereto.

               "Permitted AnaTech Dispositions" means, subject
to  the  prior  or  concurrent  satisfaction  of  the  Release
Condition  therefor, Asset Dispositions of the assets  of  the
AnaTech  Division, free and clear of Foothill's  Lien  thereon
(other than Foothill's Lien in the proceeds of such Asset Disposition).

               "Permitted   Appraised  Assets  Dispositions"
means, subject to the prior or concurrent satisfaction of  the
Release  Condition therefor, Asset Dispositions  of  Appraised
Assets  (in  the  ordinary course of Borrower's  business  and
consistent  with past practices), free and clear of Foothill's
Lien  thereon (other than Foothill's Lien in the  proceeds  of
such Asset Disposition), so long as: (a) Borrower replaces the
Appraised  Asset that is the subject of such Asset Disposition
(the "Disposed Appraised Asset") with a newly acquired item of
Equipment  of  equal  or  greater comparable  value  than  the
appraised value of the Disposed Appraised Asset set  forth  in
the  most  recent  appraisal thereof and  reports  such  Asset
Disposition and replacement pursuant to Section 6.2;  and  (b)
in  the  case  of any single Asset Disposition  or  series  of
integrated  Asset Dispositions involving one or more  Disposed
Appraised Assets with an aggregate appraised value of $100,000
or more, the chief financial officer of Borrower shall deliver
to  Foothill a certificate, in form and substance satisfactory
to Foothill, demonstrating in reasonable detail that the value
of such newly acquired item or items of Equipment are of equal
or  greater comparable value than the appraised value  of  the
relevant Disposed Appraised Asset set forth in the most recent
appraisal thereof.

               "Permitted Bentley Disposition" means, subject
to  the  prior  or  concurrent  satisfaction  of  the  Release
Condition therefor, Asset Dispositions of the Bentley Equity Interests.

               "Permitted Bestinfo Disposition" means, subject
to  the  prior  or  concurrent  satisfaction  of  the  Release
Condition therefor, Asset Dispositions of the capital stock of
Bestinfo,  free  and clear of Foothill's Lien  thereon  (other
than   Foothill's  Lien  in  the  proceeds   of   such   Asset
Disposition).

               "Permitted  Disposition"  means  (a)  Ordinary
Course  Dispositions,  (b) Permitted  Optronics  Dispositions,
Permitted   AnaTech   Dispositions,  the   Permitted   Bentley
Disposition, and the Permitted Bestinfo Disposition,  (c)  the
Reston  Sale/Leaseback, (d) subject to the prior or concurrent
satisfaction  of  the  applicable Release Condition  therefor,
Asset  Dispositions  of the assets that  are  the  subject  of
Permitted Toehold Investments and Permitted Other Investments,
(e)  Permitted Appraised Assets Dispositions, and (f)  subject
to  the  prior  or concurrent satisfaction of  the  applicable
Release  Condition  therefor, other  Asset  Dispositions  (but
excluding   Asset   Dispositions  of  Equipment   constituting
Appraised  Assets)  not in the ordinary course  of  Borrower's
business that do not exceed, on a book value basis, $1,000,000
in  the aggregate in any fiscal year and do not exceed,  on  a
book value basis, $250,000 in any one transaction or series of
related transactions.

               "Permitted  Investments" means: (a)  Permitted
Ordinary   Course   Investments;   (b)   Permitted   Repayment
Investments; (c) Permitted Toehold Investments; (d)  Permitted
Subsidiary Loans and Capital Contributions; and (e)  Permitted
Other Investments.

               "Permitted  Liens" means  (a)  Liens  held  by
Foothill, (b) Liens for unpaid taxes that either (i)  are  not
yet  due  and  payable  or (ii) are the subject  of  Permitted
Protests,  (c) Liens set forth on Schedule P-1,  (d)  purchase
money  Liens  in  respect of Equipment and  the  interests  of
lessors  under  operating leases and of lessors under  capital
leases  to  the extent that the acquisition or  lease  of  the
underlying asset is permitted under Section 7.21 and  so  long
as  the  Lien only attaches to the asset purchased or acquired
and  only  secures the purchase price of the asset, (e)  Liens
arising   by  operation  of  law  in  favor  of  warehousemen,
landlords,  carriers,  mechanics,  materialmen,  laborers,  or
suppliers,  incurred  in the ordinary course  of  business  of
Borrower  and not in connection with the borrowing  of  money,
and  which  Liens  either (i) are for sums  not  yet  due  and
payable,  or  (ii) are the subject of Permitted Protests,  (f)
Liens  arising from deposits made in connection with obtaining
worker's  compensation  or other unemployment  insurance,  (g)
Liens  or deposits to secure performance of bids, tenders,  or
leases   (to  the  extent  permitted  under  this  Agreement),
incurred  in  the ordinary course of business of Borrower  and
not  in  connection  with the borrowing of  money,  (h)  Liens
arising  by reason of security for surety or appeal  bonds  in
the  ordinary course of business of Borrower, (i) Liens of  or
resulting  from any judgment or award that would  not  have  a
Material  Adverse  Effect and as to which  the  time  for  the
appeal or petition for rehearing of which has not yet expired,
or  in  respect of which Borrower is in good faith prosecuting
an  appeal or proceeding for a review, and in respect of which
a  stay  of  execution pending such appeal or  proceeding  for
review  has been secured, (j) Liens with respect to  the  Real
Property Collateral that are exceptions to the commitments for
title  insurance issued in connection with the  Mortgages,  as
accepted  by  Foothill, (k) with respect to any Real  Property
that  is  not part of the Real Property Collateral, easements,
rights  of way, zoning and similar covenants and restrictions,
and  similar encumbrances that customarily exist on properties
of   Persons  engaged  in  similar  activities  and  similarly
situated  and  that  in any event do not materially  interfere
with  or  impair  the use or operation of  the  Collateral  by
Borrower  or the value of Foothill's Lien thereon or  therein,
or  materially  interfere  with the ordinary  conduct  of  the
business of Borrower, (l) software escrow arrangements entered
into  in the ordinary course of business consistent with  past
practice,  and  (m)  if and to the extent required  under  the
Payoff  Letter, cash collateral pledged to Existing Lender  to
secure  the  outstanding obligations, as of the Closing  Date,
under  letters  of  credit issued by Existing  Lender  or  the
financial   institutions   for   which   it   is   acting   as
representative  in  respect of the Indebtedness  that  is  the
subject of the Payoff Letter.

                "Permitted  Optronics  Dispositions"   means,
subject to the prior or concurrent satisfaction of the Release
Condition  therefor, (a) Asset Dispositions of the  assets  of
the  Optronics  Division, free and clear  of  Foothill's  Lien
thereon  (other than Foothill's Lien in the proceeds  of  such
Asset  Disposition) to any Person other than a  Subsidiary  of
Borrower,  or  (b)  the capital contribution  by  Borrower  to
Scansystems of the operating assets of the Optronics Division.

                "Permitted  Ordinary Course Investment"  means
(a) direct obligations of, or obligations the principal of and
interest  on  which  are unconditionally  guaranteed  by,  the
United  States  of America with a maturity not  exceeding  one
year,  (b)  certificates of deposit, time  deposits,  banker's
acceptances or other instruments of a bank having  a  combined
capital  and  surplus  of not less than  $500,000,000  with  a
maturity not exceeding one year, (c) investments in commercial
paper rated at least A-1 or P-1 maturing within one year after
the  date  of  acquisition thereof, (d) money market  accounts
maintained at a bank having combined capital and surplus of no
less  than  $500,000,000 or at another  financial  institution
reasonably satisfactory to Foothill, (e) loans and advances to
officers  and  employees  of  Borrower  (exclusive  of   loans
evidenced  by  the  Meadlock Note) in the ordinary  course  of
business  in  an aggregate amount at any one time  outstanding
not  to exceed $3,000,000, (f) loans evidenced by the Meadlock
Note,   (g)   investments   in  negotiable   instruments   for
collection, (h) advances in connection with purchases of goods
or  services  in  the  ordinary course of  business,  and  (i)
deposits required in connection with leases.

               "Permitted Other Investments" means the equity
investments of Borrower as of the Closing Date identified on Schedule P-2.

               "Permitted Protest" means the right of Borrower
to  protest any Lien other than any such Lien that secures the
Obligations, tax (other than payroll taxes or taxes  that  are
the  subject of a United States federal tax lien),  or  rental
payment,  provided  that (a) a reserve with  respect  to  such
obligation  is  established  on  the  books  of  Borrower   in
accordance  with  GAAP  (or,  if higher,  in  an  amount  that
Foothill  in good faith and in its reasonable credit  judgment
believes to be appropriate under the circumstances),  (b)  any
such  protest  is  instituted  and  diligently  prosecuted  by
Borrower  in  good faith, and (c) Foothill is satisfied  that,
while any such protest is pending, there will be no impairment
of  the  enforceability, validity, or priority of any  of  the
Liens of Foothill in and to the Collateral.

               "Permitted Repayment Investment" means (a) the
contribution   or   loan  by  Borrower  to   IG   Benelux   of
approximately $15,000,000 to enable IG Benelux  to  repay,  in
full, all of its indebtedness owing to the IG Benelux Existing
Lender,  or  (b)  subject to the timely  satisfaction  of  the
condition  set  forth in Section 3.3(f), the  contribution  or
loan  by Borrower to IG Australia of approximately $24,000,000
to  enable  IG  Australia  to  repay,  in  full,  all  of  its
indebtedness owing to the IG Australia Existing Lender.

               "Permitted   Subsidiary  Loans  and   Capital
Contributions"  means  loans  and capital  contributions  made
after  the  Closing  Date by Borrower  to  any  Subsidiary  of
Borrower;  provided, however, that all such loans and  capital
contributions  made  by  Borrower shall  not  exceed,  in  the
aggregate, (a) $20,000,000 during the 1997 calendar year,  (b)
$25,000,000 during the 1998 calendar year, and (c) $30,000,000
during the 1999 calendar year.

               "Permitted  Toehold  Investment"  means   the
acquisition  of an equity interest in a Person  other  than  a
Subsidiary  of Borrower (but not to exceed 10% of all  of  the
issued  and outstanding equity interests of such Person  on  a
fully  diluted basis) so long as (a) no Default  or  Event  of
Default shall have occurred and be continuing or would  result
from  the  consummation of the proposed acquisition,  (b)  the
Person,  in  whom  the equity interest is being  acquired,  is
engaged in the same business as that of Borrower or any of its
Subsidiaries or in a business reasonably related thereto,  (c)
the relevant equity interest being acquired in such Person  is
acquired  directly  by Borrower, (d) to  the  extent  required
under  Section 4.2, Borrower shall have executed and delivered
a  supplement to the Pledge Agreement and shall have perfected
Foothill's security interest in the acquired equity  interest,
and  (e)  the aggregate amount expended by Borrower in respect
of  all  such  Permitted Toehold Investments does  not  exceed
$1,000,000 in any fiscal year.

               "Person"  means and includes natural  persons,
corporations,    limited    liability    companies,    limited
partnerships,   general   partnerships,   limited    liability
partnerships,  joint ventures, trusts, land  trusts,  business
trusts,  or other organizations, irrespective of whether  they
are legal entities, and governments and agencies and political
subdivisions thereof.

               "Personal  Property  Collateral"  means   all
Collateral other than the Real Property Collateral.

               "Plan"  means  any  employee  benefit   plan,
program,  or  arrangement  maintained  or  contributed  to  by
Borrower or with respect to which it may incur liability.

               "Pledge Agreement" means a Pledge Agreement, in
the form of Exhibit P-2 attached hereto, dated as of even date
herewith, among Borrower, IG Delaware, M&S, and Foothill.

               "Real Property" means any estates or interests
in real property now owned or hereafter acquired by Borrower.

               "Real Property Collateral" means the parcel or
parcels  of Real Property and the related improvements thereto
now  owned by Borrower and identified on Schedule R-1, and any
Real Property hereafter acquired by Borrower.

               "Reference  Rate" means the variable  rate  of
interest,  per annum, most recently announced by Norwest  Bank
Minnesota, National Association, or any successor thereto,  as
its  "base rate," irrespective of whether such announced  rate
is the best rate available from such financial institution.

               "Release Condition" means, in respect  of  any
Asset Disposition, that (a) no Default or Event of Default has
occurred and is continuing or would result therefrom, and  (b)
Borrower  is  receiving at least fair value (as determined  in
accordance with Section 3439 of the California Civil Code,  as
amended)  for the property or assets that are the  subject  of
the Asset Disposition.

               "Reportable  Event" means any  of  the  events
described  in  Section  4043(c) of ERISA  or  the  regulations
thereunder  other  than a Reportable Event  as  to  which  the
provision  of  30  days  notice to the PBGC  is  waived  under
applicable regulations.

               "Reserve"   means,  as   of   any   date   of
determination,  an amount equal the product  of  (a)  $238,000
times  (b) the number of months separating such date from  the
Closing Date.

               "Reston Property" means the Real Property (and
related improvements thereto) of Borrower located in or  about
Reston, Virginia.

               "Reston  Sale/Leaseback" means  the  sale  and
lease-back transaction in respect of the Reston Property.

               "Retiree  Health  Plan"  means  an  "employee
welfare  benefit plan" within the meaning of Section  3(1)  of
ERISA  that provides benefits to individuals after termination
of  their employment, other than as required by Section 601 of
ERISA.

               "Scansystems" means Scansystems, Inc., a Delaware corporation.

               "Securities  Account"  means  a   "securities
account"  as that term is defined in Section 8-501 of official
text  of  the  Uniform  Commercial  Code  and  as  defined  in
California Senate Bill 1591 which was approved by the Governor
on September 14, 1996 and will be effective on January 1, 1997.

               "Solvent" means, with respect to any Person on
a  particular date, that on such date (a) at fair  valuations,
all  of  the properties and assets of such Person are  greater
than  the  sum of the debts, including contingent liabilities,
of  such  Person, (b) the present fair salable  value  of  the
properties  and  assets of such Person is not  less  than  the
amount that will be required to pay the probable liability  of
such  Person on its debts as they become absolute and matured,
(c)  such  Person is able to realize upon its  properties  and
assets  and  pay  its debts and other liabilities,  contingent
obligations and other commitments as they mature in the normal
course  of business, (d) such Person does not intend  to,  and
does  not  believe  that  it will,  incur  debts  beyond  such
Person's  ability to pay as such debts mature,  and  (e)  such
Person is not engaged in business or a transaction, and is not
about  to engage in business or a transaction, for which  such
Person's  properties and assets would constitute  unreasonably
small capital after giving due consideration to the prevailing
practices in the industry in which such Person is engaged.  In
computing the amount of contingent liabilities at any time, it
is  intended  that such liabilities will be  computed  at  the
amount  that,  in  light  of all the facts  and  circumstances
existing  at such time, represents the amount that  reasonably
can be expected to become an actual or matured liability.

               "Subsidiary" of a Person means a  corporation,
partnership,  limited liability company, or  other  entity  in
which that Person directly or indirectly owns or controls  the
shares  of stock or other ownership interests having  ordinary
voting power to elect a majority of the board of directors (or
appoint   other  comparable  managers)  of  such  corporation,
partnership,  limited  liability  company,  or  other  entity.
Anything  to  the  contrary notwithstanding, Bentley  Systems,
Inc. shall not be deemed to be a Subsidiary of Borrower.

               "Term  Loan" has the meaning set forth in Section 2.3.

               "Trademark   Security  Agreement"   means   a
Trademark  Security  Agreement, in the  form  of  Exhibit  T-1
attached  hereto,  dated  as of even  date  herewith,  between
Borrower and Foothill.

               "Triggering  Event"  means  any  of  (a)  the
occurrence  and  continuation of an Event of Default,  or  (b)
Foothill deems itself insecure.

               "Unbilled  Accounts" means  Domestic  Accounts
that  are  fully earned by performance, but have not yet  been
billed  to  the  Account Debtor and that, as of  any  date  of
determination,  arise from the sale of goods or  rendition  of
services within the prior 60 days.

               "United  States"  means the United  States  of
America, or any department, agency, or instrumentality of  any
of the foregoing.

               "VCOC Letter" means a letter agreement between
Borrower  and Foothill's Participants that meets  the  Venture
Capital  Operating  Company  requirements  and  that   is   in
substantially the form of Exhibit V-1.

               "VeriBest" means VeriBest, Inc., a Delaware corporation.

               "Voidable Transfer" has the meaning set forth in Section 15.8.

          1.2  Accounting Terms.  All accounting terms not
specifically  defined herein shall be construed in  accordance
with  GAAP.  When used herein, the term "financial statements"
shall  include the notes and schedules thereto.  Whenever  the
term "Borrower" is used in respect of a financial covenant  or
a  related definition, it shall be understood to mean Borrower
on a consolidated basis unless the context clearly requires otherwise.

          1.3  Code.  Any terms used in this Agreement that are
defined  in  the  Code shall be construed and defined  as  set
forth in the Code unless otherwise defined herein.

          1.4  Construction.  Unless the context of this Agreement
clearly  requires otherwise, references to the plural  include
the  singular, references to the singular include the  plural,
the  term "including" is not limiting, and the term "or"  has,
except   where  otherwise  indicated,  the  inclusive  meaning
represented  by  the  phrase "and/or."   The  words  "hereof,"
"herein,"  "hereby," "hereunder," and similar  terms  in  this
Agreement  refer to this Agreement as a whole and not  to  any
particular  provision of this Agreement.  An Event of  Default
shall  "continue"  or  be "continuing"  until  such  Event  of
Default  has  been  waived in writing by  Foothill.   Section,
subsection,  clause, schedule, and exhibit references  are  to
this  Agreement unless otherwise specified.  Any reference  in
this  Agreement or in the Loan Documents to this Agreement  or
any  of  the  Loan  Documents shall include  all  alterations,
amendments,  changes,  extensions,  modifications,   renewals,
replacements,  substitutions,  and  supplements,  thereto  and
thereof, as applicable.

          1.5  Schedules and Exhibits.  All of the schedules and
exhibits   attached  to  this  Agreement   shall   be   deemed
incorporated herein by reference.

     2.   LOAN AND TERMS OF PAYMENT.

          2.1  Revolving Advances.

               (a)  Subject to the terms and conditions of this
Agreement,  Foothill agrees to make advances  ("Advances")  to
Borrower  in an amount outstanding not to exceed  at  any  one
time  the lesser of (i) the Maximum Revolving Amount less  the
Letter  of Credit Usage, or (ii) the Borrowing Base  less  the
Letter  of  Credit  Usage.  For purposes  of  this  Agreement,
"Borrowing Base", as of any date of determination, shall  mean
the result of:

                    (x)  the lesser of (i) the result of
          (A)  80% of Eligible Domestic Accounts, plus (B) the
          lowest of (1) 80% of Eligible Unbilled Accounts, (2)
          40% of the amount of credit availability created  by
          this clause (x), and (3) $20,000,000, minus (C)  the
          amount, if any, of the Dilution Reserve, and (ii) an
          amount equal to the Collections with respect to  the
          Accounts  of Borrower for the immediately  preceding
          60 day period, plus

                    (y)   the lowest of (i) $30,000,000,
          (ii)  the product of (A) the Inventory Advance  Rate
          times (B) the value (calculated at the lower of cost
          or market) of Eligible Domestic Inventory, and (iii)
          30% of the amount of credit availability created  by
          clause (x) above, minus

                    (z)  the sum of (i) prior to the full
          satisfaction of the condition subsequent  set  forth
          in Section 3.3(b), $20,000,000, and (ii) the Reserve.

               (b)  Anything to the contrary in Section 2.1(a) above
notwithstanding,  Foothill  may  create  reserves  against  or
reduce   its  advance  rates  based  upon  Eligible   Domestic
Accounts,  Eligible  Unbilled Accounts, or  Eligible  Domestic
Inventory  without  declaring  an  Event  of  Default  if   it
determines in good faith and in its reasonable credit judgment
that there has occurred a Material Adverse Change.

               (c)  Foothill shall have the right to have the Inventory
reappraised by a qualified appraiser selected by Foothill from
time  to  time  after  the Closing Date  for  the  purpose  of
redetermining the Liquidation Value of the Inventory.  In  the
absence  of  the occurrence and continuation of  an  Event  of
Default, such appraisals shall occur annually.

               (d)  Foothill shall have no obligation to make Advances
hereunder  to  the  extent they would  cause  the  outstanding
Obligations  (other than under the Term Loan)  to  exceed  the
Maximum Revolving Amount.

               (e)  Amounts borrowed pursuant to this Section 2.1 may be
repaid  and,  subject  to  the terms and  conditions  of  this
Agreement, reborrowed at any time during the term of this Agreement.

          2.2  Letters of Credit.

               (a)  Subject to the terms and conditions of this
Agreement, Foothill agrees to issue letters of credit for  the
account of Borrower (each, an "L/C") or to issue guarantees of
payment  (each such guaranty, an "L/C Guaranty") with  respect
to letters of credit issued by an issuing bank for the account
of  Borrower.  Foothill shall have no obligation  to  issue  a
Letter of Credit if any of the following would result:

                    (i)    the  Letter of  Credit  Usage
          would  exceed the Borrowing Base less the amount  of
          outstanding Advances, or

                   (ii)   the  Letter of  Credit  Usage
          would  exceed the lower of (y) the Maximum Revolving
          Amount  less the amount of outstanding Advances,  or
          (z) $60,000,000, or

                  (iii)  the  outstanding  Obligations
          (other  than under the Term Loan) would  exceed  the
          Maximum Revolving Amount.

Borrower  and Foothill acknowledge and agree that  certain  of
the  letters  of  credit that are to be  the  subject  of  L/C
Guarantees  may  be  outstanding on the  Closing  Date.   Each
Letter  of Credit shall have an expiry date no later  than  60
days prior to the date on which this Agreement is scheduled to
terminate  under  Section 3.4 and all such Letters  of  Credit
shall  be in form and substance acceptable to Foothill in  its
sole  discretion.  If Foothill is obligated to  advance  funds
under a Letter of Credit, Borrower immediately shall reimburse
such   amount  to  Foothill  and,  in  the  absence  of   such
reimbursement,   the  amount  so  advanced   immediately   and
automatically shall be deemed to be an Advance hereunder  and,
thereafter, shall bear interest at the rate then applicable to
Advances under Section 2.6.

               (b)  Borrower hereby agrees to indemnify, save, defend,
and  hold  Foothill harmless from any loss, cost, expense,  or
liability, including payments made by Foothill, expenses,  and
reasonable attorneys fees incurred by Foothill arising out  of
or  in  connection with any Letter of Credit.  Borrower agrees
to   be   bound   by   the  issuing  bank's  regulations   and
interpretations  of  any  Letters  of  Credit  guarantied   by
Foothill  and  opened  to  or for  Borrower's  account  or  by
Foothill's interpretations of any L/C issued by Foothill to or
for Borrower's account, even though this interpretation may be
different  from  Borrower's own, and Borrower understands  and
agrees  that  Foothill  shall not be  liable  for  any  error,
negligence, or mistake, whether of omission or commission,  in
following  Borrower's instructions or those contained  in  the
Letter   of  Credit  or  any  modifications,  amendments,   or
supplements  thereto.   Borrower  understands  that  the   L/C
Guarantees may require Foothill to indemnify the issuing  bank
for  certain  costs or liabilities arising out  of  claims  by
Borrower against such issuing bank.  Borrower hereby agrees to
indemnify,  save,  defend,  and hold  Foothill  harmless  with
respect  to  any  loss,  cost, expense  (including  reasonable
attorneys  fees), or liability incurred by Foothill under  any
L/C  Guaranty as a result of Foothill's indemnification of any
such issuing bank.

               (c)  Borrower hereby authorizes and directs any bank that
issues a letter of credit guaranteed by Foothill to deliver to
Foothill  all  instruments, documents, and other writings  and
property received by the issuing bank pursuant to such  letter
of credit, and to accept and rely upon Foothill's instructions
and  agreements  with  respect  to  all  matters  arising   in
connection  with  such  letter  of  credit  and  the   related
application.   Borrower may or may not be the  "applicant"  or
"account party" with respect to such letter of credit.

               (d)  Any and all charges, commissions, fees, and costs
incurred  by  Foothill  relating  to  the  letters  of  credit
guaranteed  by Foothill shall be considered Foothill  Expenses
for  purposes  of  this  Agreement and  immediately  shall  be
reimbursable by Borrower to Foothill.

               (e)  Immediately upon the termination of this Agreement,
Borrower  agrees to either (i) provide cash collateral  to  be
held  by  Foothill in an amount equal to 102% of  the  maximum
amount  of Foothill's obligations under Letters of Credit,  or
(ii)  cause  to be delivered to Foothill releases  of  all  of
Foothill's  obligations under outstanding Letters  of  Credit.
At  Foothill's discretion, any proceeds of Collateral received
by  Foothill  after the occurrence and during the continuation
of  an  Event  of  Default may be held as the cash  collateral
required by this Section 2.2(e).

               (f)  If by reason of (i) any change in any applicable law,
treaty,   rule,   or   regulation  or  any   change   in   the
interpretation or application by any governmental authority of
any  such applicable law, treaty, rule, or regulation, or (ii)
compliance by the issuing bank or Foothill with any direction,
request,  or requirement (irrespective of whether  having  the
force  of  law)  of  any  governmental authority  or  monetary
authority including, without limitation, Regulation D  of  the
Board of Governors of the Federal Reserve System as from  time
to time in effect (and any successor thereto):

                    (A)  any reserve, deposit, or similar requirement is or
shall  be  imposed or modified in respect of  any  Letters  of
Credit issued hereunder, or

                    (B)  there shall be imposed on the issuing bank or
Foothill  any other condition regarding any letter of  credit,
or Letter of Credit, as applicable, issued pursuant hereto;

and  the  result of the foregoing is to increase, directly  or
indirectly,  the  cost  to the issuing  bank  or  Foothill  of
issuing,  making, guaranteeing, or maintaining any  letter  of
credit,  or Letter of Credit, as applicable, or to reduce  the
amount  receivable in respect thereof by such issuing bank  or
Foothill,  then, and in any such case, Foothill  may,  at  any
time  within a reasonable period after the additional cost  is
incurred  or the amount received is reduced, notify  Borrower,
and  Borrower shall pay on demand such amounts as the  issuing
bank or Foothill may specify to be necessary to compensate the
issuing  bank or Foothill for such additional cost or  reduced
receipt,  together with interest on such amount from the  date
of  such demand until payment in full thereof at the rate  set
forth  in  Section  2.6(a)(i) or (c)(i), as  applicable.   The
determination by the issuing bank or Foothill, as the case may
be,  of any amount due pursuant to this Section 2.2(f), as set
forth  in a certificate setting forth the calculation  thereof
in  reasonable  detail, shall, in the absence of  manifest  or
demonstrable error, be final and conclusive and binding on all
of the parties hereto.

          2.3  Term Loan.  Foothill has agreed to make a term loan
(the "Term Loan") to Borrower in the original principal amount
of  $20,000,000.   The outstanding principal balance  and  all
accrued and unpaid interest under the Term Loan shall  not  be
due and payable until the earlier to occur of (a) the Maturity
Date,  and  (b)  the  date of termination of  this  Agreement,
whether  by  its  terms, by acceleration, or  otherwise.   The
unpaid  principal balance of the Term Loan may not be  prepaid
in  whole or in part.  All amounts outstanding under the  Term
Loan shall constitute Obligations.

          2.4  [Intentionally omitted].

          2.5  Overadvances.  If, at any time or for any reason,
the  amount  of  Obligations  owed  by  Borrower  to  Foothill
pursuant  to Sections 2.1 and 2.2 is greater than  either  the
Dollar or percentage limitations set forth in Sections 2.1  or
2.2  (an  "Overadvance"), Borrower immediately  shall  pay  to
Foothill,  in cash, the amount of such excess to  be  used  by
Foothill  first, to repay Advances outstanding  under  Section
2.1 and, thereafter, to be held by Foothill as cash collateral
to  secure  Borrower's obligation to repay  Foothill  for  all
amounts paid pursuant to Letters of Credit.

          2.6  Interest and Letter of Credit Fees:  Rates,
Payments, and Calculations.

               (a)  Interest Rate.  Except as provided in clause (b)
below,  all Obligations (except for undrawn Letters of Credit)
shall  bear  interest at a per annum rate of 0.625  percentage
points above the Reference Rate.

               (b)  Letter of Credit Fee.  Borrower shall pay Foothill a
fee  (in addition to the charges, commissions, fees, and costs
set forth in Section 2.2(d)) equal to 1.0% per annum times the
aggregate undrawn amount of all outstanding Letters of Credit.

               (c)  Default Rate.  Upon the occurrence and during the
continuation  of an Event of Default, all Obligations  (except
for  undrawn Letters of Credit) shall bear interest at  a  per
annum  rate  equal  to  3.625  percentage  points  above   the
Reference Rate, and (ii) the Letter of Credit fee provided  in
Section 2.6(b) shall be increased to 4.0% per annum times  the
amount  of the undrawn Letters of Credit that were outstanding
during the immediately preceding month.

               (d)  Minimum Interest.  In no event shall the rate of
interest  chargeable hereunder for any day be less  than  7.0%
per  annum.  To the extent that interest accrued hereunder  at
the  rate  set  forth herein would be less than the  foregoing
minimum daily rate, the interest rate chargeable hereunder for
such day automatically shall be deemed increased to the minimum rate.

               (e)  Payments.  Interest and Letter of Credit fees
payable hereunder shall be due and payable, in arrears, on the
first  day  of  each month during the term  hereof.   Borrower
hereby  authorizes  Foothill, at  its  option,  without  prior
notice  to  Borrower, to charge such interest  and  Letter  of
Credit fees, all Foothill Expenses (as and when incurred), the
charges, commissions, fees, and costs provided for in  Section
2.2(d) (as and when accrued or incurred), the fees and charges
provided  for  in  Section  2.11  (as  and  when  accrued   or
incurred),  and all installments or other payments  due  under
the Term Loan or any Loan Document to Borrower's Loan Account,
which  amounts thereafter shall accrue interest  at  the  rate
then  applicable to Advances hereunder.  Any interest not paid
when  due  shall  be  compounded and shall  thereafter  accrue
interest at the rate then applicable to Advances hereunder.

               (f)  Computation.  The Reference Rate as of the date of
this Agreement is 8.25% per annum.  In the event the Reference
Rate  is  changed from time to time hereafter, the  applicable
rate of interest hereunder automatically and immediately shall
be increased or decreased by an amount equal to such change in
the  Reference  Rate.  All interest and fees chargeable  under
the Loan Documents shall be computed on the basis of a 360 day
year for the actual number of days elapsed.

               (g)  Intent to Limit Charges to Maximum Lawful Rate.  In no
event  shall  the  interest rate or rates payable  under  this
Agreement, plus any other amounts paid in connection herewith,
exceed the highest rate permissible under any law that a court
of  competent  jurisdiction shall, in a  final  determination,
deem  applicable.   Borrower and Foothill,  in  executing  and
delivering  this Agreement, intend legally to agree  upon  the
rate  or rates of interest and manner of payment stated within
it;  provided, however, that, anything contained herein to the
contrary notwithstanding, if said rate or rates of interest or
manner   of  payment  exceeds  the  maximum  allowable   under
applicable  law,  then, ipso facto as  of  the  date  of  this
Agreement,  Borrower  is  and shall be  liable  only  for  the
payment  of  such  maximum  as allowed  by  law,  and  payment
received  from  Borrower  in excess  of  such  legal  maximum,
whenever  received, shall be applied to reduce  the  principal
balance of the Obligations to the extent of such excess.

          2.7  Collection of Accounts.  Borrower shall at all times
maintain  lockboxes (the "Lockboxes") and,  immediately  after
the  Closing  Date,  shall instruct all Account  Debtors  with
respect  to  the Accounts, General Intangibles, and Negotiable
Collateral  of  Borrower to remit all Collections  in  respect
thereof  to  such  Lockboxes.   Borrower,  Foothill,  and  the
Lockbox  Banks shall enter into the Lockbox Agreements,  which
among  other things shall provide for the opening of a Lockbox
Account  for  the  deposit of Collections at a  Lockbox  Bank.
Borrower  agrees  that  all  Collections  and  other   amounts
received  by  Borrower from any Account Debtor  or  any  other
source  immediately  upon receipt shall be  deposited  into  a
Lockbox   Account.   No  Lockbox  Agreement   or   arrangement
contemplated thereby shall be modified by Borrower without the
prior written consent of Foothill.  Upon the terms and subject
to  the  conditions set forth in the Lockbox  Agreements,  all
amounts  received in each Lockbox Account shall be wired  each
Business   Day  into  an  account  (the  "Foothill   Account")
maintained by Foothill at a depositary selected by Foothill.

          2.8  Crediting Payments; Application of Collections.  The
receipt of any Collections by Foothill (whether from transfers
to  Foothill  by  the Lockbox Banks pursuant  to  the  Lockbox
Agreements   or  otherwise)  immediately  shall   be   applied
provisionally  to  reduce  the Obligations  outstanding  under
Section  2.1, but shall not be considered a payment on account
unless  such Collection item is a wire transfer of immediately
available federal funds and is made to the Foothill Account or
unless  and  until  such  Collection  item  is  honored   when
presented  for  payment.   From and after  the  Closing  Date,
Foothill  shall be entitled to charge Borrower for 1  Business
Days  of  `clearance'  or `float' at the  rate  set  forth  in
Section 2.6(a)(i) or Section 2.6(c)(i), as applicable, on  all
Collections  that  are  received by  Foothill  (regardless  of
whether  forwarded  by the Lockbox Banks to Foothill,  whether
provisionally applied to reduce the Obligations under  Section
2.1,  or  otherwise).  This across-the-board  1  Business  Day
clearance  or  float charge on all Collections is acknowledged
by the parties to constitute an integral aspect of the pricing
of   Foothill's  financing  of  Borrower,  and   shall   apply
irrespective  of the characterization of whether receipts  are
owned  by  Borrower or Foothill, and whether or not there  are
any  outstanding  Advances, the effect of  such  clearance  or
float charge being the equivalent of charging 1 Business  Days
of  interest on such Collections.  Should any Collection  item
not be honored when presented for payment, then Borrower shall
be deemed not to have made such payment, and interest shall be
recalculated accordingly.  Anything to the contrary  contained
herein  notwithstanding, any Collection item shall  be  deemed
received  by Foothill only if it is received into the Foothill
Account  on  a Business Day on or before 11:00 a.m. California
time.   If  any Collection item is received into the  Foothill
Account  on  a non-Business Day or after 11:00 a.m. California
time  on  a  Business  Day, it shall be deemed  to  have  been
received  by  Foothill as of the opening of  business  on  the
immediately following Business Day.

          2.9  Designated Account.  Foothill is authorized to make
the  Advances, the Letters of Credit, and the Term Loan  under
this  Agreement  based upon telephonic or  other  instructions
received from anyone purporting to be an Authorized Person, or
without  instructions if pursuant to Section 2.6(e).  Borrower
agrees  to establish and maintain the Designated Account  with
the  Designated Account Bank for the purpose of receiving  the
proceeds  of  the Advances requested by Borrower and  made  by
Foothill  hereunder.  Unless otherwise agreed by Foothill  and
Borrower,  any  Advance  requested by  Borrower  and  made  by
Foothill hereunder shall be made to the Designated Account.

          2.10 Maintenance of Loan Account; Statements of
Obligations.  Foothill shall maintain an account on its  books
in the name of Borrower (the "Loan Account") on which Borrower
will  be  charged with all Advances and the Term Loan made  by
Foothill  to  Borrower or for Borrower's  account,  including,
accrued  interest,  Foothill Expenses, and any  other  payment
Obligations of Borrower.  In accordance with Section 2.8,  the
Loan  Account will be credited with all payments  received  by
Foothill  from  Borrower or for Borrower's account,  including
all  amounts received in the Foothill Account from any Lockbox
Bank.   Foothill  shall render statements regarding  the  Loan
Account to Borrower, including principal, interest, fees,  and
including   an   itemization  of  all  charges  and   expenses
constituting  Foothill  Expenses owing,  and  such  statements
shall be conclusively presumed to be correct and accurate  and
constitute  an  account stated between Borrower  and  Foothill
unless,  within  30  days after receipt thereof  by  Borrower,
Borrower  shall deliver to Foothill written objection  thereto
describing  the  error  or  errors  contained  in   any   such
statements.

          2.11 Fees. Borrower shall pay to Foothill the following fees:

               (a)  Closing Fee. On the Closing Date, a closing fee of 
$500,000;

               (b)  Unused Line Fee.  On the first day of each month
after  the Closing Date during the term of this Agreement,  an
unused  line  fee in an amount equal to 0.25% per annum  times
the Average Unused Portion of the Maximum Revolving Amount;

               (c)  Annual Facility Fee.  On the Closing Date and each
anniversary of the Closing Date, an annual facility fee in  an
amount equal to 0.15% of the Maximum Amount;

               (d)  Financial Examination, Documentation, and Appraisal
Fees.   Foothill's customary fee of $650 per day per examiner,
plus  out-of-pocket expenses for each financial  analysis  and
examination (i.e., audits) of Borrower performed by  personnel
employed  by Foothill; Foothill's customary appraisal  fee  of
$1,500 per day per appraiser, plus out-of-pocket expenses  for
each  appraisal  of  the  Collateral  performed  by  personnel
employed by Foothill; and, the actual charges paid or incurred
by Foothill if it elects to employ the services of one or more
third   Persons  to  perform  such  financial   analyses   and
examinations  (i.e., audits) of Borrower or  to  appraise  the
Collateral; and

               (e)  Agency Fee.  On the first day of each month after
the  Closing Date during the term of this Agreement, an agency
fee in an amount equal to $12,500.

     3.  CONDITIONS; TERM OF AGREEMENT.

         3.1  Conditions Precedent to the Initial Advance, and
Letter  of  Credit,  and  the Term Loan.   The  obligation  of
Foothill  to  make the initial Advance, to issue  the  initial
Letter  of Credit, or to make the Term Loan is subject to  the
fulfillment, to the satisfaction of Foothill and its  counsel,
of  each  of the following conditions on or before the Closing
Date:

               (a)  the Closing Date shall occur on or before January 17, 1997;

               (b)  Foothill shall have received confirmation of the
filing of its financing statements and fixture filings;

               (c)  Foothill shall have received each of the following
documents, duly executed, and each such document shall be in full force 
and effect:

                    (1)  if and to the extent available on or
                    before the Closing Date, the Lockbox Agreements;

                    (2)  the Disbursement Letter;

                    (3)  the Pay-Off Letter, together with UCC
                    termination statements and other documentation evidencing 
                    the termination by Existing Lender of its Liens in and to 
                    the properties and assets of Borrower and its Subsidiaries
                    and the termination of any lockbox or other dominion 
                    account arrangements in favor of Existing Lender;

                    (4)  either (y) the IG Australia Existing
                    Lender Pay-Off Letter, together with termination statements
                    and other documentation evidencing the termination by IG
                    Australia Existing Lender of its Liens in and to the
                    properties and assets of Borrower and its Subsidiaries, or 
                    (z) satisfactory evidence of the consent of IG Australia 
                    Existing Lender to the refinancing by Borrower of its 
                    Indebtedness owed to Existing Lender pursuant hereto and 
                    the transactions contemplated hereby;

                    (5)  the Mortgage on the Huntsville Property,
                    and such Mortgage shall have been recorded in the office of
                    the county recorder for Madison County, Alabama; and, if 
                    and to the extent available on or before the Closing Date, 
                    a Mortgage Policy in respect of the Huntsville Property 
                    assuring Foothill that the Mortgage on the Huntsville 
                    Property is a valid and enforceable first priority mortgage
                    Lien on the Huntsville Property free and clear of all 
                    defects and encumbrances except Permitted Liens, and such 
                    Mortgage Policy shall otherwise be in form and substance 
                    reasonably satisfactory to Foothill;

                    (6)  the Aircraft Security Agreement;

                    (7)  the Copyright Security Agreement;

                    (8)  the Patent Security Agreement;

                    (9)  the Trademark Security Agreement;

                    (10) the Pledge Agreement; and

                    (11) the VCOC Letter;

               (d)  if and to the extent available on or before the
Closing  Date,  Foothill  shall  have  received  the  original
certificates  representing or evidencing all  of  the  Pledged
Shares  (as  defined in the Pledge Agreement),  together  with
stock  powers  or equivalent assignments with respect  thereto
duly endorsed in blank;

               (e)  Foothill shall have received originals of the
Meadlock  Note  and  the  Intercompany  Notes,  together  with
endorsements with respect thereto duly endorsed in blank;

               (f)  Foothill shall have received a certificate from the
Secretary of each Obligor attesting to the resolutions of such
Obligor's   Board  of  Directors  authorizing  its  execution,
delivery, and performance of the Loan Documents to which it is
a  party and authorizing specific officers of such Obligor  to
execute the same;

               (g)  Foothill shall have received copies of each
Obligor's  Governing  Documents,  as  amended,  modified,   or
supplemented  to the Closing Date, certified by the  Secretary
of such Obligor;

               (h)  Foothill shall have received a certificate of status
with  respect  to each Obligor, dated within 10  days  of  the
Closing Date, such certificate to be issued by the appropriate
officer  of the jurisdiction of organization of such  Obligor,
which certificate shall indicate that such Obligor is in  good
standing in such jurisdiction;

               (i)  Foothill shall have received certificates of status
with  respect to Borrower, each dated within 15  days  of  the
Closing   Date,  such  certificates  to  be  issued   by   the
appropriate officer of the jurisdictions in which its  failure
to  be  duly qualified or licensed would constitute a Material
Adverse   Change,  which  certificates  shall  indicate   that
Borrower is in good standing in such jurisdictions;

               (j)  Foothill shall have received a certificate of
insurance,  together  with the endorsements  thereto,  as  are
required  by  Section 6.10, the form and  substance  of  which
shall be reasonably satisfactory to Foothill and its counsel;

               (k)  Foothill shall have received an opinion of the
Obligors'   counsel   in   form   and   substance   reasonably
satisfactory to Foothill in its sole discretion;

               (l)  after giving effect to the payment of fees due to
Foothill on or before the Closing Date and the payment of  the
"Payoff Amount" (under and as defined in the Payoff Letter) to
the  Existing Lender, the sum of Borrower's Availability  plus
Borrower's unrestricted cash and cash equivalents shall not be
less than Twenty Million Dollars ($20,000,000);

               (m)  Foothill shall have received appraisals of the Real
Property Collateral and appraisals of the Equipment,  in  each
case satisfactory to Foothill;

               (n)  Foothill shall have completed "field surveys" and
location inspections of the Inventory, and the results of each
of them shall be satisfactory to Foothill;

               (o)  Foothill shall have completed reference checks
regarding  key employees and executive officers  of  Borrower,
the results of which shall be satisfactory to Lender;

               (p)  Foothill shall have received satisfactory evidence
(which  evidence  may be in the form of a Certificate  of  the
chief  accounting  officer or the chief financial  officer  of
Borrower)  that  all  tax  returns required  to  be  filed  by
Borrower have been timely filed and all taxes upon Borrower or
its properties, assets, income, and franchises (including real
property  taxes  and payroll taxes) have been  paid  prior  to
delinquency,  except  such taxes that are  the  subject  of  a
Permitted Protest; and

               (q)  all other documents and legal matters in connection
with  the  transactions contemplated by this  Agreement  shall
have  been  delivered, executed, or recorded and shall  be  in
form and substance reasonably satisfactory to Foothill and its
counsel.

          3.2  Conditions Precedent to all Advances, all Letters of
Credit,  and the Term Loan.  The following shall be conditions
precedent to all Advances, all Letters of Credit, and the Term Loan hereunder:

               (a)  the representations and warranties contained in this
Agreement  and  the  other Loan Documents shall  be  true  and
correct  in  all  respects on and  as  of  the  date  of  such
extension  of  credit, as though made on and as of  such  date
(except to the extent that such representations and warranties
relate solely to an earlier date);

               (b)  no Default or Event of Default shall have occurred
and be continuing on the date of such extension of credit, nor
shall either result from the making thereof; and

               (c)  no injunction, writ, restraining order, or other
order  of any nature prohibiting, directly or indirectly,  the
extending of such credit shall have been issued and remain  in
force   by   any  governmental  authority  against   Borrower,
Foothill, or any of their Affiliates.

          3.3  Condition Subsequent.  As a condition subsequent to
initial closing hereunder, Borrower shall perform or cause  to
be  performed  the following (the failure by  Borrower  to  so
perform or cause to be performed constituting an Event of Default):

               (a)  within 30 days of the Closing Date, deliver to
Foothill  the  certified copies of the policies of  insurance,
together  with  the endorsements thereto, as are  required  by
Section  6.10,  the  form  and substance  of  which  shall  be
reasonably satisfactory to Foothill and its counsel.

               (b)  on or as soon as possible after the Closing Date
(and, in any event, within 30 days of the Closing Date):

                    (i)  to the extent not available  on  or
before the Closing Date under Section 3.1, Foothill shall have
received  a  Mortgage  Policy in  respect  of  the  Huntsville
Property assuring Foothill that the Mortgage on the Huntsville
Property  is  a valid and enforceable first priority  mortgage
Lien  on the Huntsville Property free and clear of all defects
and  encumbrances  except Permitted Liens, and  such  Mortgage
Policy  shall  otherwise be in form and  substance  reasonably
satisfactory to Foothill; and

                    (ii) Foothill shall have received a phase-
I  environmental  report and a real estate survey  shall  have
been  completed  with respect to the Huntsville  Property  and
copies   thereof  delivered  to  Foothill;  the  environmental
consultants  and  surveyors  retained  for  such  reports   or
surveys, the scope of the reports or surveys, and the  results
thereof   shall  be  acceptable  to  Foothill  in   its   sole
discretion; and

                    (iii) to the extent not available  on  or
before the Closing Date under Section 3.1, Foothill shall have
received the Lockbox Agreements, duly executed, and each  such
document shall be in full force and effect.

               (c)  upon the request of Foothill (if ever) after the
Closing Date, within 60 days after the date of such request:

                    (i)  the  Mortgage  on  the  Chelmsford
Property  shall  have  been  duly executed  and  delivered  by
Borrower, and the same shall be in full force and effect,  and
such  Mortgage shall have been recorded in the office  of  the
county recorder for Middlesex County, Massachusetts;

                    (ii)  Foothill  shall   have   received
supplemental  opinions  of Borrower's  counsel,  in  form  and
substance satisfactory to Foothill in its sole discretion,  in
respect of the Mortgage on the Chelmsford Property;

                    (iii)  Foothill  shall  have  received  a
preliminary title report in respect of the Chelmsford Property
in form and substance reasonably satisfactory to Foothill; and

                    (iv)  Foothill shall have received a phase-
I  environmental  report and a real estate survey  shall  have
been  completed  with respect to the Chelmsford  Property  and
copies   thereof  delivered  to  Foothill;  the  environmental
consultants  and  surveyors  retained  for  such  reports   or
surveys, the scope of the reports or surveys, and the  results
thereof   shall  be  acceptable  to  Foothill  in   its   sole
discretion.

               (d)  upon the request of Foothill (if ever) after the
Closing Date, within 30 days after the date of such request:

                    (i)  a  Mortgage  on  any  Real  Property
acquired  by Borrower after the Closing Date shall  have  been
duly executed and delivered by Borrower, and the same shall be
in  full  force and effect, and such Mortgage shall have  been
recorded  in the office of the county recorder for the  county
in which such Real Property is located;

                    (ii)  Foothill  shall   have   received
supplemental  opinions  of Borrower's  counsel,  in  form  and
substance satisfactory to Foothill in its sole discretion,  in
respect of the Mortgage on such Real Property;

                    (iii)  Foothill  shall  have  received  a
preliminary  title report in respect of such Real Property  in
form and substance reasonably satisfactory to Foothill; and

                    (iv)  Foothill shall have received a phase-
I  environmental  report and a real estate survey  shall  have
been  completed  with respect to the such  Real  Property  and
copies   thereof  delivered  to  Foothill;  the  environmental
consultants  and  surveyors  retained  for  such  reports   or
surveys, the scope of the reports or surveys, and the  results
thereof   shall  be  acceptable  to  Foothill  in   its   sole
discretion.

               (e)  in the event the Reston Sale/Leaseback is not
consummated within 180 days of the Closing Date:

                    (i)  the  Mortgage on the Reston Property
shall  have been duly executed and delivered by Borrower,  and
the  same shall be in full force and effect, and such Mortgage
shall  have been recorded in the office of the county recorder
for Fairfax County, Virginia;

                    (ii)  Foothill  shall   have   received
supplemental  opinions  of Borrower's  counsel,  in  form  and
substance satisfactory to Foothill in its sole discretion,  in
respect of the Mortgage on the Reston Property;

                    (iii)  Foothill  shall  have  received  a
preliminary title report in respect of the Reston Property  in
form and substance reasonably satisfactory to Foothill; and

                    (iv)  Foothill shall have received a phase-
I  environmental  report and a real estate survey  shall  have
been  completed with respect to the Reston Property and copies
thereof  delivered to Foothill; the environmental  consultants
and  surveyors retained for such reports or surveys, the scope
of  the  reports or surveys, and the results thereof shall  be
acceptable to Foothill in its sole discretion.

               (f)  within 60 days of either (i) the date that Borrower
makes  the  Permitted Repayment Investment in respect  of  the
indebtedness  of  IG  Australia  owing  to  the  IG  Australia
Existing  Lender  or (ii) one or more Letters  of  Credit  are
issued  to  IG  Australia Existing Lender in  support  of  the
indebtedness  of  IG Australia owing to IG Australia  Existing
Lender  and IG Australia Existing Lender releases its Lien  on
the  capital  stock of IG Australia (in either case,  the  "IG
Australia  Payoff Date"), execute and deliver  an  appropriate
supplement  to  the Pledge Agreement and deliver  to  Foothill
possession of the original stock certificates, respecting  65%
of the issued and outstanding shares of stock of IG Australia,
together  with stock powers with respect thereto  endorsed  in
blank;  provided, however, that to the extent,  if  any,  that
such  shares are required to be pledged to the holder  of  any
project financing indebtedness of IG Australia incurred  after
the   IG   Australia   Payoff  Date  as  security   for   such
indebtedness,  then, upon Borrower's written request  therefor
and  with Foothill's prior written consent thereto (not to  be
unreasonably withheld), Foothill agrees to release its Lien on
such shares; provided further, that if such holder will permit
such   subordination,  then,  notwithstanding  the   foregoing
proviso,  Foothill's Lien on such shares will not be  released
and  will  become a subordinate Lien pursuant to documentation
in  form and substance reasonably satisfactory to Foothill and
such holder.

               (g)  within 90 days of the Closing Date, Foothill shall
have completed appraisals of the Equipment and the results  of
such appraisals shall be satisfactory to Foothill.

               (h)  to the extent not available on or before the Closing
Date  under Section 3.1, Foothill shall have received,  within
30  days  of  the  Closing  Date,  the  original  certificates
representing  or  evidencing all of  the  Pledged  Shares  (as
defined  in the Pledge Agreement), together with stock  powers
or equivalent assignments with respect thereto duly endorsed in blank;

               (i)  from and after the Closing Date up until the date
that is 90 days after the Closing Date, Borrower shall use its
continued  best efforts to obtain Collateral Access Agreements
from  lessors, warehousemen, bailees, and other third  persons
as Foothill may require.

          3.4  Term.  This Agreement shall become effective upon
the execution and delivery hereof by Borrower and Foothill and
shall  continue in full force and effect for a term ending  on
January   7,  2000  (the  "Maturity  Date").   The   foregoing
notwithstanding,  Foothill shall have the right  to  terminate
its  obligations under this Agreement immediately and  without
notice upon the occurrence and during the continuation  of  an
Event of Default.

          3.5  Effect of Termination.  On the date of termination
of  this  Agreement,  all  Obligations  (including  contingent
reimbursement  obligations of Borrower  with  respect  to  any
outstanding  Letters of Credit) immediately shall  become  due
and  payable without notice or demand.  No termination of this
Agreement,  however,  shall relieve or discharge  Borrower  of
Borrower's  duties, Obligations, or covenants  hereunder,  and
Foothill's  continuing security interests  in  the  Collateral
shall  remain in effect until all Obligations have been  fully
and  finally discharged and Foothill's obligation  to  provide
additional credit hereunder is terminated.

          3.6  Early Termination by Borrower.  Borrower has the
option,  at  any time prior to the Maturity Date and  upon  60
days  prior  written  notice to Foothill,  to  terminate  this
Agreement  by  paying  to Foothill, in cash,  the  Obligations
(including  an amount equal to 102% of the undrawn  amount  of
the  Letters of Credit), in full, together with a premium (the
"Early Termination Premium") equal to (a) during the first  18
months after the Closing Date, the product of (i) 0.10%  times
(ii)  the  Maximum  Amount times (iii) the  number  of  months
(including partial months) remaining until the Maturity  Date,
(b) during the next 6 months, $1,000,000, and (c) thereafter, $500,000.

          3.7  Termination Upon Event of Default.  If Foothill
terminates this Agreement upon the occurrence of an  Event  of
Default  that  intentionally is caused  by  Borrower  for  the
purpose,   in  Foothill's  reasonable  judgment,  of  avoiding
payment  of the Early Termination Premium provided in  Section
3.7,  then,  in  view  of  the  impracticability  and  extreme
difficulty  of  ascertaining  actual  damages  and  by  mutual
agreement  of  the parties as to a reasonable  calculation  of
Foothill's  lost profits as a result thereof,  Borrower  shall
pay to Foothill upon the effective date of such termination, a
premium  in an amount equal to the Early Termination  Premium.
The  Early  Termination Premium shall be presumed  to  be  the
amount  of damages sustained by Foothill as the result of  the
early  termination and Borrower agrees that it  is  reasonable
under   the  circumstances  currently  existing.   The   Early
Termination Premium provided for in this Section 3.7 shall  be
deemed included in the Obligations.

     4.   CREATION OF SECURITY INTEREST.

          4.1  Grant of Security Interest.  (a)   Borrower hereby
grants  to  Foothill  a continuing security  interest  in  all
currently existing and hereafter acquired or arising  Personal
Property Collateral in order to secure prompt repayment of any
and  all Obligations and in order to secure prompt performance
by Borrower of each of its covenants and duties under the Loan
Documents.   Foothill's  security interests  in  the  Personal
Property  Collateral  shall attach to  all  Personal  Property
Collateral  without  further act on the part  of  Foothill  or
Borrower.   Anything contained in this Agreement or any  other
Loan  Document  to  the contrary notwithstanding,  except  for
Permitted Dispositions, Borrower has no authority, express  or
implied,  to  dispose of any item or portion of  the  Personal
Property   Collateral   or  the  Real   Property   Collateral.
Concurrent with the consummation of any Permitted Disposition,
Foothill  agrees to release its Liens on the subject  property
or asset (but not the proceeds from the Asset Disposition).

                (b)  Anything in this Agreement and the other
Loan  Documents to the contrary notwithstanding, the foregoing
grant of a security interest shall not extend to, and the term
"Personal Property Collateral" shall not include, any  General
Intangible,  Federal  Account, or Permitted  Other  Investment
that is now or hereafter held by Borrower as licensee, lessee,
or  otherwise, solely in the event and to the extent that: (i)
as  the  proximate result of the foregoing grant of a security
interest, Borrower's rights in or with respect to such General
Intangible,  Federal  Account, or Permitted  Other  Investment
would be forfeited or would become void, voidable, terminable,
or revocable, or if Borrower would be deemed to have breached,
violated, or defaulted the underlying license, lease, or other
agreement  that  governs  such  General  Intangible,   Federal
Account, or Permitted Other Investment, in each case, pursuant
to the restrictions in the underlying lease, license, or other
agreement  that  governs  such  General  Intangible,   Federal
Account,   or  Permitted  Other  Investment;  (ii)  any   such
restriction   shall   be  effective  and   enforceable   under
applicable  law, including Section 9318(4) of  the  Code;  and
(iii)    any    such   forfeiture,   voidness,    voidability,
terminability,  revocability, breach,  violation,  or  default
cannot  be  remedied by Borrower using its best  efforts  (but
without  any  obligation to make any material expenditures  of
money  or  to commence legal proceedings); provided,  however,
that the foregoing grant of security interest shall extend to,
and the term "Personal Property Collateral" shall include, (y)
any  and  all  proceeds  of such General  Intangible,  Federal
Account, or Permitted Other Investment to the extent that  the
assignment  or  encumbering  of  such  proceeds  is   not   so
restricted, and (z) upon any such licensor, lessor,  or  other
applicable party's consent with respect to any such  otherwise
excluded  General  Intangible, Federal Account,  or  Permitted
Other  Investment  being  obtained,  thereafter  such  General
Intangible, Federal Account, or Permitted Other Investment  as
well  as any proceeds thereof that might theretofore have been
excluded  from such grant of a security interest and the  term
"Personal Property Collateral."

                (c)  Anything in this Agreement or the  other
Loan Documents to the contrary notwithstanding and subject  to
Section  4.1(b),  (i)  the security interest  granted  in  the
Permitted  Other  Investments under Section 4.1(a)  shall  not
attach  unless and until a Triggering Event has  occurred,  at
which   time   such   security   interest   immediately    and
automatically shall attach without notice or demand or further
act  on  the  part of Foothill or Borrower, and (ii)  Foothill
agrees   that   Borrower  need  not  deliver  any   Negotiable
Collateral in respect of the Permitted Other Investments under
Section 4.2 unless and until a Triggering Event has occurred.

               (d)  Anything in this Agreement and the other
Loan  Documents to the contrary notwithstanding, the foregoing
grant of a security interest shall not extend to, and the term
"Personal Property Collateral" shall not include, any Excluded
Foreign  Subsidiary Securities or the assets or properties  of
any Foreign Subsidiary.

          4.2  Negotiable Collateral.  In the event that any
Collateral, including proceeds, is evidenced by or consists of
Negotiable Collateral, Borrower, immediately upon the  request
of  Foothill,  shall  endorse and  deliver  (or  cause  to  be
endorsed and delivered) physical possession of such Negotiable
Collateral   to   Foothill.   The  foregoing  notwithstanding,
Borrower need not deliver any Negotiable Collateral in respect
of  any Permitted Toehold Investment with a value less than or
equal to $500,000 unless and until there is a Triggering Event.

          4.3  Collection of Accounts, General Intangibles, and
Negotiable Collateral.  During a Triggering Event, Foothill or
Foothill's  designee  may  (a)  notify  customers  or  Account
Debtors of Borrower that the Accounts, General Intangibles, or
Negotiable Collateral have been assigned to Foothill  or  that
Foothill has a security interest therein, and (b) collect  the
Accounts,   General  Intangibles,  and  Negotiable  Collateral
directly and charge the collection costs and expenses  to  the
Loan Account.  Borrower agrees that it will hold in trust  for
Foothill,  as  Foothill's  trustee, any  Collections  that  it
receives  and  immediately will deliver  said  Collections  to
Foothill in their original form as received by it.

          4.4  Delivery of Additional Documentation Required. (a)
At  any time upon the request of Foothill, Borrower shall (and
shall  cause  its  Subsidiaries to)  execute  and  deliver  to
Foothill  all  financing  statements,  continuation  financing
statements,  fixture  filings, security  agreements,  pledges,
assignments,   endorsements   of   certificates   of    title,
applications   for   title,  affidavits,   reports,   notices,
schedules  of  accounts, letters of authority, and  all  other
documents  (including documents required for  compliance  with
the  Assignment of Claims Act, 31 U.S.C. Section 3727 or any State's
statutory  counterpart thereto) that Foothill  reasonably  may
request,  in  form  reasonably satisfactory  to  Foothill,  to
perfect  and continue perfected Foothill's security  interests
in  the  Collateral  and the other properties  and  assets  of
Borrower   and  its  Subsidiaries,  and  in  order  to   fully
consummate  all  of the transactions contemplated  hereby  and
under the other Loan Documents.

               (b)  In  respect  of each of  the  Securities
Accounts  of  Borrower, if any, Foothill, Borrower,  and  each
applicable  financial intermediary or depositary  shall  enter
into  a  control agreement that, among other things,  provides
that, from and after the giving of notice by Foothill to  such
financial   intermediary   or  depositary,   it   shall   take
instructions  solely  from  Foothill  with  respect   to   the
applicable   Securities   Account   and   related   securities
entitlements  or  deposit  account, as  applicable.   Foothill
agrees  that it will not give such notice unless a  Triggering
Event has occurred.  Borrower agrees that it will not transfer
assets  out  of  such Securities Accounts or deposit  accounts
other  than  in  the ordinary course of business  and,  if  to
another financial intermediary or depositary, unless Borrower,
Foothill,   and  the  substitute  financial  intermediary   or
depositary have entered into a control agreement of  the  type
described above.  No arrangement contemplated hereby shall  be
modified  by  Borrower without the prior  written  consent  of
Foothill.  Upon the occurrence of a Triggering Event, Foothill
may  elect  to notify the financial intermediary to  liquidate
the securities entitlements in such Securities Account and may
elect  to  notify the financial intermediary or depositary  to
remit  the  proceeds  in  the Securities  Account  or  deposit
account to the Foothill Account.

               (c)  Anything in this Agreement to the contrary
notwithstanding,  Foothill agrees that:  (i)  so  long  as  no
Triggering Event has occurred and is continuing, (y)  Borrower
need  not  execute and deliver to Foothill documents  required
for  compliance with the Assignment of Claims Act,  31  U.S.C.
Section 3727 or any State's statutory counterpart thereto in respect
of any one underlying contract or series of related underlying
contracts  giving rise to less than $1,000,000 of Accounts  of
Borrower,  and  (z)  Foothill agrees not to  file  notices  or
copies  of assignments under the Assignment of Claims  Act  or
any  State's statutory counterpart thereto; and (ii) after the
occurrence  and during the continuance of a Triggering  Event,
(y)  Borrower  shall  execute  and  deliver  to  Foothill  all
documents  that Foothill may request, in form satisfactory  to
Foothill,  required  for  compliance with  the  Assignment  of
Claims  Act  or  any  State's statutory  counterpart  thereto,
irrespective  of  the amount of Accounts arising  out  of  any
underlying contract, and (z) Foothill may file any notices  or
copies  of assignments under the Assignment of Claims  Act  or
any State's statutory counterpart thereto.

          4.5  Power of Attorney.  Borrower hereby irrevocably
makes,   constitutes,  and  appoints  Foothill  (and  any   of
Foothill's  officers,  employees,  or  agents  designated   by
Foothill)  as Borrower's true and lawful attorney, with  power
to  (a) if Borrower refuses to, or fails timely to execute and
deliver  any of the documents described in Section  4.4,  sign
the name of that Borrower on any of the documents described in
Section  4.4,  (b) if there is a Triggering Event,  sign  that
Borrower's  name on any invoice or bill of lading relating  to
any  Account,  drafts against Account Debtors,  schedules  and
assignments  of  Accounts,  verifications  of  Accounts,   and
notices to Account Debtors, (c) send requests for verification
of  Accounts,  (d) endorse Borrower's name on  any  Collection
item that may come into Foothill's possession, (e) at any time
that  an  Event  of Default has occurred and is continuing  or
Foothill  deems  itself  insecure,  notify  the  post   office
authorities  to change the address for delivery of  Borrower's
mail to an address designated by Foothill, to receive and open
all  mail  addressed  to  Borrower, and  to  retain  all  mail
relating  to  the  Collateral and forward all  other  mail  to
Borrower,  (f)  if there is a Triggering Event, make,  settle,
and  adjust all claims under Borrower's policies of  insurance
and make all determinations and decisions with respect to such
policies of insurance, and (g) if there is a Triggering Event,
settle  and adjust disputes and claims respecting the Accounts
directly with Account Debtors, for amounts and upon terms that
Foothill  determines to be reasonable, and Foothill may  cause
to  be executed and delivered any documents and releases  that
Foothill  determines  to  be necessary.   The  appointment  of
Foothill  as  Borrower's attorney, and each and every  one  of
Foothill's rights and powers, being coupled with an  interest,
is  irrevocable until all of the Obligations have  been  fully
and finally repaid and performed and Foothill's obligation  to
extend credit hereunder is terminated.

          4.6  Right to Inspect.  Foothill (through any of its
officers,  employees, or agents) shall have  the  right,  from
time  to  time  hereafter to inspect Borrower's Books  and  to
check,  test, and appraise the Collateral in order  to  verify
Borrower's financial condition or the amount, quality,  value,
condition of, or any other matter relating to, the Collateral.

     5.   REPRESENTATIONS AND WARRANTIES.

          In  order  to  induce Foothill to enter  into  this
Agreement,  Borrower  makes the following representations  and
warranties which shall be true, correct, and complete  in  all
respects as of the Closing Date, and at and as of the date  of
the   making  of  each  Advance  or  Letter  of  Credit   made
thereafter,  as  though made on and as of  the  date  of  such
Advance  or Letter of Credit (except to the extent  that  such
representations  and warranties relate solely  to  an  earlier
date)  and  such representations and warranties shall  survive
the execution and delivery of this Agreement:

          5.1  No Encumbrances.  Borrower has good and indefeasible
title to the Collateral, free and clear of Liens except for Permitted Liens.

          5.2  Eligible Accounts.  The Eligible Accounts are bona
fide existing obligations created by the sale and delivery  of
Inventory  or the rendition of services to Account Debtors  in
the  ordinary  course of Borrower's business,  unconditionally
owed   to   Borrower  without  defenses,  disputes,   offsets,
counterclaims,  or  rights  of return  or  cancellation.   The
property  giving  rise  to  such Eligible  Accounts  has  been
delivered  to  the Account Debtor, or to the Account  Debtor's
agent  for  immediate shipment to and unconditional acceptance
by  the  Account Debtor (except for returns, in  the  ordinary
course  of  business, of products that fail  to  conform  with
standard specifications).  Borrower has not received notice of
actual   or  imminent  bankruptcy,  insolvency,  or   material
impairment  of  the financial condition of any Account  Debtor
regarding any Eligible Account.

          5.3  Eligible Domestic Inventory.  All Eligible Domestic
Inventory is of good and merchantable quality, free from defects.

          5.4  Equipment.  All of the Equipment is used or held for
use in Borrower's business and is fit for such purposes.

          5.5  Location of Inventory and Equipment.  The Inventory
and  Equipment are not stored with a bailee, warehouseman,  or
similar  party (without Foothill's prior written consent)  and
are  located only at the locations identified on Schedule 6.12
or otherwise permitted by Section 6.12.

          5.6  Inventory Records.  Borrower keeps correct and
accurate  records  itemizing and describing  the  kind,  type,
quality, and quantity of the Inventory, and Borrower's cost therefor.

          5.7  Location of Chief Executive Office; FEIN.  The chief
executive  office  of  Borrower  is  located  at  the  address
indicated in the preamble to this Agreement. Borrower's FEIN is 63-0573222.

          5.8  Due Organization and Qualification; Subsidiaries.

               (a)  Each Borrower is duly organized and existing and in
good  standing  under  the  laws of the  jurisdiction  of  its
incorporation  and qualified and licensed to do  business  in,
and in good standing in, any state where the failure to be  so
licensed or qualified reasonably could be expected to  have  a
Material Adverse Change.

               (b)  Set forth on Schedule 5.8, is a complete and
accurate  list of Borrower's direct and indirect Subsidiaries,
showing: (i) the jurisdiction of their organization; (ii)  the
number  of  shares  or  units of  each  class  of  common  and
preferred stock or other equity securities authorized for each
of  such Subsidiaries; and (iii) the number and the percentage
of  the  outstanding shares or units of each such class  owned
directly  or  indirectly by Borrower.  All of the  outstanding
capital  stock  or  other  equity  securities  of  each   such
Subsidiary has been validly issued and is fully paid and non-assessable.

               (c)  Except as set forth on Schedule 5.8, no capital
stock   or   other  equity  securities  (or  any   securities,
instruments, warrants, options, purchase rights, conversion or
exchange rights, calls, commitments or claims of any character
convertible  into or exercisable for capital  stock  or  other
equity  securities)  of any direct or indirect  Subsidiary  of
Borrower   is  subject  to  the  issuance  of  any   security,
instrument,  warrant,  option, purchase right,  conversion  or
exchange right, call, commitment or claim of any right, title,
or interest therein or thereto.

               (d)  Set forth on Schedule 5.8 are, with respect to each
Subsidiary of Borrower that is not a Foreign Subsidiary: (i) a
description  of  the  direct  and  indirect  stockholders  (or
holders   of  equivalent  equity  interests)  of   each   such
Subsidiary;  (ii)  the total assets of each  such  Subsidiary;
(iii)  the  amount  of the net value of Borrower's  direct  or
indirect  investment  in such Subsidiary;  and  (iv)  a  true,
correct,  and complete statement regarding whether  each  such
Subsidiary's assets are comprised principally of  (x)  foreign
assets,  (y) securities of other Subsidiaries of Borrower,  or
(z) other operating assets.

          5.9  Due Authorization; No Conflict.

               (a)  The execution, delivery, and performance by Borrower
of  this  Agreement and the Loan Documents to which  it  is  a
party have been duly authorized by all necessary corporate action.

               (b)  The execution, delivery, and performance by Borrower
of  this  Agreement and the Loan Documents to which  it  is  a
party  do  not  and  will  not (i) violate  any  provision  of
federal,   state,  or  local  law  or  regulation   (including
Regulations  G,  T,  U,  and X of the Federal  Reserve  Board)
applicable  to Borrower, the Governing Documents of  Borrower,
or  any  order,  judgment, or decree of  any  court  or  other
Governmental  Authority  binding on  Borrower,  (ii)  conflict
with, result in a breach of, or constitute (with due notice or
lapse   of   time  or  both)  a  default  under  any  material
contractual   obligation  or  material  lease   of   Borrower,
(iii)  result in or require the creation or imposition of  any
Lien of any nature whatsoever upon any properties or assets of
Borrower,  other  than Permitted Liens, or  (iv)  require  any
approval  of  stockholders or any approval or consent  of  any
Person under any material contractual obligation of Borrower.

               (c)  Other than the filing of appropriate financing
statements,  fixture  filings, and mortgages,  the  execution,
delivery,  and  performance by Borrower of this Agreement  and
the  Loan  Documents to which Borrower is a party do  not  and
will  not  require any registration with, consent, or approval
of,  or  (except  for Borrower's filings with  the  Securities
Exchange  Commission  in  the ordinary  course  of  Borrower's
business) notice to, or other action with or by, any  federal,
state, foreign, or other Governmental Authority or other Person.

               (d)  This Agreement and the Loan Documents to which
Borrower  is  a  party,  and all other documents  contemplated
hereby  and  thereby, when executed and delivered by  Borrower
will be the legally valid and binding obligations of Borrower,
enforceable   against  Borrower  in  accordance   with   their
respective  terms,  except as enforcement may  be  limited  by
equitable  principles or by bankruptcy, insolvency, reorganiza
tion,  moratorium,  or similar laws relating  to  or  limiting
creditors' rights generally.

               (e)  The Liens granted by Borrower to Foothill in and to
its  properties and assets pursuant to this Agreement and  the
other Loan Documents are validly created, perfected, and first
priority Liens, subject only to Permitted Liens.

          5.10 Litigation.  There are no actions or proceedings
pending   by   or  against  Borrower  before  any   court   or
administrative agency and Borrower does not have knowledge  or
belief  of  any  pending, threatened, or imminent  litigation,
governmental  investigations, or claims, complaints,  actions,
or  prosecutions  involving Borrower or any guarantor  of  the
Obligations,  except for:  (a) ongoing collection  matters  in
which  Borrower  is  the plaintiff; (b) matters  disclosed  on
Schedule  5.10; and (c) matters arising after the date  hereof
that,  if  decided  adversely to Borrower, would  not  have  a
Material Adverse Change.

          5.11 No Material Adverse Change.  All financial
statements  relating  to  Borrower or  any  guarantor  of  the
Obligations  that have been delivered by Borrower to  Foothill
have  been  prepared in accordance with GAAP (except,  in  the
case  of  unaudited  financial statements,  for  the  lack  of
footnotes and being subject to year-end audit adjustments) and
fairly present Borrower's (or such guarantor's, as applicable)
financial  condition  as  of the date thereof  and  Borrower's
results  of operations for the period then ended.   There  has
not  been  a Material Adverse Change with respect to  Borrower
(or  such  guarantor, as applicable) since  the  date  of  the
latest financial statements submitted to Foothill.

          5.12 Solvency.  Borrower is Solvent.  No transfer of
property is being made by Borrower and no obligation is  being
incurred  by  Borrower  in connection  with  the  transactions
contemplated  by  this Agreement or the other  Loan  Documents
with the intent to hinder, delay, or defraud either present or
future creditors of Borrower.

          5.13 Employee Benefits.  None of Borrower, any of its
Subsidiaries,  or any of their ERISA Affiliates  maintains  or
contributes  to any Benefit Plan, other than those  listed  on
Schedule  5.13.  Borrower, each of its Subsidiaries  and  each
ERISA  Affiliate have satisfied the minimum funding  standards
of  ERISA  and  the IRC with respect to each Benefit  Plan  to
which  it  is  obligated to contribute.  No  ERISA  Event  has
occurred  nor has any other event occurred that may result  in
an  ERISA Event that reasonably could be expected to result in
a   Material  Adverse  Change.   None  of  Borrower   or   its
Subsidiaries, or any ERISA Affiliate, is subject to any direct
or  indirect  liability with respect to  any  Plan  under  any
applicable law, treaty, rule, regulation, or agreement.   None
of  Borrower  or  its Subsidiaries or any ERISA  Affiliate  is
required  to  provide  security  to  any  Plan  under  Section
401(a)(29) of the IRC.

          5.14 Environmental Condition.  None of Borrower's
properties or assets has ever been used by Borrower or, to the
best  of Borrower's knowledge, by previous owners or operators
in  the  disposal  of,  or to produce, store,  handle,  treat,
release,  or  transport, any Hazardous  Materials,  except  in
compliance with all applicable laws and regulations in respect
thereof.   None  of Borrower's properties or assets  has  ever
been  designated or identified in any manner pursuant  to  any
environmental  protection  statute as  a  Hazardous  Materials
disposal  site,  or a candidate for closure  pursuant  to  any
environmental protection statute.  No Lien arising  under  any
environmental protection statute has attached to any  revenues
or  to  any  real  or personal property owned or  operated  by
Borrower.  Except as set forth on Schedule 5.14, Borrower  has
not  received  a summons, citation, notice, or directive  from
the  Environmental Protection Agency or any other  federal  or
state governmental agency concerning any action or omission by
Borrower  resulting in the releasing or disposing of Hazardous
Materials into the environment.

          5.15 Securities Accounts.  Borrower does not have or
maintain any Securities Accounts.

     6.   AFFIRMATIVE COVENANTS.

          Borrower covenants and agrees that, so long as  any
credit  hereunder shall be available and until full and  final
payment   of  the  Obligations,  and  unless  Foothill   shall
otherwise consent in writing, Borrower shall do all of the following:

          6.1  Accounting System.  Maintain one or more systems of
accounting   that   enable  Borrower  to   produce   financial
statements  in  accordance  with GAAP,  and  maintain  records
pertaining to the Collateral that contain information as  from
time  to  time  may be requested by Foothill.   Borrower  also
shall keep a modern inventory reporting system that shows  all
additions, sales, claims, returns, and allowances with respect
to the Inventory.

          6.2  Collateral Reporting.  Provide Foothill with the
following   documents   at  the  following   times   in   form
satisfactory to Foothill: (a) on a monthly basis and,  in  any
event, by no later than the 15th day of each month during  the
term  of this Agreement (or, in the event that Borrower's then
Availability  is less than $10,000,000, on such more  frequent
basis  as Foothill may require), a monthly accounts receivable
roll-forward  report  and  a  detailed  calculation   of   the
Borrowing Base as of such date; (b) on a monthly basis and, in
any  event, by no later than the 15th day of each month during
the term of this Agreement, a detailed aging, by total, of the
Accounts,  together  with  a reconciliation  to  the  detailed
calculation  of  the  Borrowing Base  previously  provided  to
Foothill;  (c)  on a monthly basis and, in any  event,  by  no
later than the 15th day of each month during the term of  this
Agreement,  a  listing  of  Borrower's  accounts  payable,  by
vendor; (d) on a monthly basis and, in any event, by no  later
than  the  15th  day of each month during  the  term  of  this
Agreement  (or, in the event that Borrower's then Availability
is  less  than  $10,000,000, on such more  frequent  basis  as
Foothill may require), Inventory reports specifying Borrower's
cost  and  the  wholesale market value  of  its  Inventory  by
category,  including a monthly Inventory roll-forward  report;
(e) upon Foothill's reasonable request, copies of invoices  in
connection  with  the Accounts, credit memos,  and  remittance
advices  and reports in connection with the Accounts  and  for
Inventory and Equipment acquired by Borrower, purchase  orders
and   invoices;   (f)  in  the  event  that  Borrower's   then
Availability  is  less than $10,000,000, then upon  Foothill's
reasonable  request, a sales journal, collection journal,  and
credit  register since the last such schedule  and  copies  of
deposit  slips, shipping and delivery documents in  connection
with the Accounts and for Inventory and Equipment acquired  by
Borrower;  (g)  on  a  quarterly basis,  a  detailed  list  of
Borrower's customers; (h) on a monthly basis, a calculation of
the Dilution for the prior month; (i) on a quarterly basis,  a
detailed  report specifying each Permitted Toehold Investment,
including the book value and market value thereof;  (j)  on  a
monthly  basis,  a detailed report specifying  each  Permitted
Appraised  Assets  Disposition and  Equipment  replacement  in
respect thereof consummated since the last such report; (k) on
a  quarterly basis, a detailed report specifying the aggregate
amount of Permitted Subsidiary Loans and Capital Contributions
made by Borrower to date during the then current calendar year
and  the aggregate amount of Indebtedness then outstanding and
permitted under Section 7.1(b), and (l) such other reports  as
to  the  Collateral or the financial condition of Borrower  as
Foothill  may  request  from time  to  time.   Original  sales
invoices evidencing daily sales shall be mailed by Borrower to
each Account Debtor and, at Foothill's direction if there is a
Triggering  Event, the invoices shall indicate on  their  face
that  the  Account has been assigned to Foothill and that  all
payments are to be made directly to Foothill.

          6.3  Financial Statements, Reports, Certificates.
Deliver  to  Foothill:  (a) as soon as available, but  in  any
event  within 30 days after the end of each month during  each
of  Borrower's fiscal years, a company prepared balance sheet,
income   statement,  and  statement  of  cash  flow   covering
Borrower's operations during such period; and (b) as  soon  as
available,  but in any event within 90 days after the  end  of
each  of  Borrower's  fiscal years,  financial  statements  of
Borrower  for  each such fiscal year, audited  by  independent
certified public accountants reasonably acceptable to Foothill
and certified, without any qualifications, by such accountants
to have been prepared in accordance with GAAP, together with a
certificate of such accountants addressed to Foothill  stating
that  such  accountants do not have knowledge of the existence
of  any  Default or Event of Default.  Such audited  financial
statements  shall  include a balance sheet,  profit  and  loss
statement,  and statement of cash flow and, if prepared,  such
accountants' letter to management.  If Borrower  is  a  parent
company  of one or more Subsidiaries, or Affiliates, or  is  a
Subsidiary or Affiliate of another company, then, in  addition
to the financial statements referred to above, Borrower agrees
to  deliver  such other information relative to  such  related
entity  as Foothill reasonably may request and, solely to  the
extent available, such financing statements on a consolidating
basis  so as to present Borrower and each such related  entity
separately.

               Together  with the above, Borrower also  shall
deliver  to  Foothill Borrower's Form 10-Q Quarterly  Reports,
Form  10-K  Annual Reports, and Form 8-K Current Reports,  and
any  other  filings made by Borrower with the  Securities  and
Exchange Commission, if any, within 1 Business Day of the date
that  the  same  are filed, or any other information  that  is
provided by Borrower to its shareholders, and any other report
reasonably  requested by Foothill relating  to  the  financial
condition of Borrower.

                Each   month,  together  with  the  financial
statements provided pursuant to Section 6.3(a), Borrower shall
deliver  to  Foothill  a  certificate  signed  by  its   chief
financial  officer  to  the effect that:   (i)  all  financial
statements  delivered  or caused to be delivered  to  Foothill
hereunder have been prepared in accordance with GAAP  (except,
in the case of unaudited financial statements, for the lack of
footnotes and being subject to year-end audit adjustments) and
fairly  present the financial condition of Borrower, (ii)  the
representations and warranties of Borrower contained  in  this
Agreement and the other Loan Documents are true and correct in
all   material  respects  on  and  as  of  the  date  of  such
certificate, as though made on and as of such date (except  to
the  extent  that  such representations and warranties  relate
solely to an earlier date), (iii) for each month that also  is
the  date on which a financial covenant in Section 7.20 is  to
be   tested,   a   Compliance  Certificate  demonstrating   in
reasonable  detail compliance at the end of such  period  with
the  applicable financial covenants contained in Section 7.20,
and  (iv)  on  the  date of delivery of  such  certificate  to
Foothill  there  does not exist any condition  or  event  that
constitutes a Default or Event of Default (or, in the case  of
clauses  (i),  (ii),  or  (iii), to the  extent  of  any  non-
compliance, describing such non-compliance as to which  he  or
she may have knowledge and what action Borrower has taken,  is
taking, or proposes to take with respect thereto).

               Borrower shall have issued written instructions
to  its  independent certified public accountants  authorizing
them  to  communicate with Foothill and to release to Foothill
whatever   financial  information  concerning  Borrower   that
Foothill  may request.  Borrower hereby irrevocably authorizes
and  directs all auditors, accountants, or other third parties
to  deliver  to  Foothill, at Borrower's  expense,  copies  of
Borrower's  financial statements, papers related thereto,  and
other  accounting  records of any nature in their  possession,
and  to  disclose to Foothill any information  they  may  have
regarding    Borrower's   business   affairs   and   financial
conditions.

               Each   year,  together  with  the   financial
statements provided pursuant to Section 6.3(b), Borrower shall
deliver  to  Foothill  a  certificate  signed  by  its   chief
financial officer specifying, as to each Foreign Subsidiary of
Borrower,   the   amounts  of  assets  and   liabilities   and
stockholder's equity of such Foreign Subsidiary as of the  end
of  the  year  then ended.  Borrower hereby  agrees  that,  in
respect  of  any  Foreign Subsidiary whose capitalization  has
materially  improved (in Foothill's reasonable  determination)
and  upon  Foothill's  reasonable request  therefor,  Borrower
shall  execute  and  deliver to Foothill a supplement  to  the
Pledge  Agreement pursuant to which Borrower shall  pledge  to
Foothill all of Borrower's right, title, and interest  in  and
to such Foreign Subsidiary's equity securities (other than the
Excluded   Foreign  Portion)  and  deliver  to  Foothill   all
Negotiable Collateral, if any, in respect of same, unless  and
to  the  extent that doing so would, in any material  respect,
violate applicable law or cause a breach or default under  any
material contract, agreement, or arrangement binding on such Subsidiary.

          6.4  Tax Returns.  Deliver to Foothill copies of each of
Borrower's  future  federal  income  tax  returns,   and   any
amendments thereto, within 30 days of the filing thereof  with
the Internal Revenue Service.

          6.5  Guarantor Reports.  Cause any guarantor of any of
the Obligations to deliver its annual financial statements  at
the   time   when  Borrower  provides  its  audited  financial
statements  to Foothill and copies of all federal  income  tax
returns as soon as the same are available and in any event  no
later than 30 days after the same are required to be filed by law.

          6.6  Returns.  Cause returns and allowances, if any, as
between  Borrower and its Account Debtors to be  on  the  same
basis and in accordance with the usual customary practices  of
Borrower,  as  they  exist at the time of  the  execution  and
delivery  of this Agreement.  If, at a time when no  Event  of
Default  has  occurred and is continuing, any  Account  Debtor
returns  any  Inventory to Borrower, Borrower  promptly  shall
determine the reason for such return and, if Borrower  accepts
such  return, issue a credit memorandum (with, upon reasonable
request,  a  copy  to be sent to Foothill) in the  appropriate
amount to such Account Debtor.  If, at a time when an Event of
Default  has  occurred and is continuing, any  Account  Debtor
returns  any  Inventory to Borrower, Borrower  promptly  shall
determine the reason for such return and, if Foothill consents
(which  consent shall not be unreasonably withheld),  issue  a
credit memorandum (with a copy to be sent to Foothill) in  the
appropriate amount to such Account Debtor.

          6.7  Title to Equipment.  Upon Foothill's request after
the  occurrence  of an Event of Default, Borrower  immediately
shall  deliver  to Foothill, properly endorsed,  any  and  all
evidences   of  ownership  of,  certificates  of   title,   or
applications  for  title to any items of Equipment;  provided,
however,  that  the foregoing shall not be deemed  to  prevent
Permitted Dispositions to the extent otherwise permitted hereunder.

          6.8  Maintenance of Equipment.  Maintain the Equipment in
good  operating condition and repair (ordinary wear  and  tear
excepted), and make all necessary replacements thereto so that
the  value and operating efficiency thereof shall at all times
be  maintained  and  preserved.  Other  than  those  items  of
Equipment  that  constitute  fixtures  on  the  Closing  Date,
Borrower  shall not permit any item of Equipment to  become  a
fixture to real estate or an accession to other property,  and
such Equipment shall at all times remain personal property.

          6.9  Taxes.  Cause all assessments and taxes, whether
real,  personal, or otherwise, due or payable by, or  imposed,
levied, or assessed against Borrower or any of its property to
be  paid  in full, before delinquency or before the expiration
of  any  extension  period, except  to  the  extent  that  the
validity of such assessment or tax  shall be the subject of  a
Permitted Protest.  Borrower shall make due and timely payment
or  deposit  of  all  such federal, state,  and  local  taxes,
assessments, or contributions required of it by law, and  will
execute  and  deliver  to  Foothill,  on  demand,  appropriate
certificates attesting to the payment thereof or deposit  with
respect thereto.  Borrower will make timely payment or deposit
of  all tax payments and withholding taxes required of  it  by
applicable  laws,  including those laws  concerning  F.I.C.A.,
F.U.T.A.,  state  disability, and local,  state,  and  federal
income  taxes,  and will, upon request, furnish Foothill  with
proof  satisfactory to Foothill indicating that  Borrower  has
made such payments or deposits.

          6.10 Insurance.

               (a)  At its expense, keep the Personal Property
Collateral  insured  against loss or damage  by  fire,  theft,
explosion, sprinklers, and all other hazards and risks, and in
such  amounts,  as  are ordinarily insured  against  by  other
owners  in  similar businesses.  Borrower also shall  maintain
business  interruption, public liability,  product  liability,
and property damage insurance relating to Borrower's ownership
and  use  of  the  Personal Property Collateral,  as  well  as
insurance   against   larceny,  embezzlement,   and   criminal
misappropriation.

              (b)  At its expense, obtain and maintain (i) insurance of
the type necessary to insure the Improvements and Chattels (as
such  terms  are  defined  in the  Mortgages),  for  the  full
replacement cost thereof, against any loss by fire, lightning,
windstorm,  hail, explosion, aircraft, smoke  damage,  vehicle
damage, earthquakes, elevator collision, and other risks  from
time  to time included under "extended coverage" policies,  in
such  amounts  as Foothill may require, but in  any  event  in
amounts  sufficient  to  prevent  Borrower  from  becoming   a
co-insurer  under  such policies, (ii) combined  single  limit
bodily injury and property damages insurance against any loss,
liability, or damages on, about, or relating to each parcel of
Real  Property  Collateral,  in  an  amount  satisfactory   to
Foothill;  (iii)  business  rental insurance  covering  annual
receipts  for  a  12  month period for  each  parcel  of  Real
Property  Collateral; and (iv) insurance for such other  risks
as  Foothill  may require.  Replacement costs,  at  Foothill's
option,   may  be  redetermined  by  an  insurance  appraiser,
satisfactory to Foothill, not more frequently than once  every
12 months at Borrower's cost.

               (c)  All such policies of insurance shall be in such
form,  with  such  companies, and in such amounts  as  may  be
reasonably satisfactory to Foothill.  All hazard insurance and
such  other insurance as Foothill shall specify, shall contain
a   Form   438BFU  mortgagee  endorsement,  or  an  equivalent
endorsement satisfactory to Foothill, showing Foothill as sole
loss  payee thereof, and shall contain a waiver of warranties.
Every  policy  of insurance referred to in this  Section  6.10
shall  contain an agreement by the insurer that  it  will  not
cancel  such policy except after 30 days prior written  notice
to  Foothill  and  that any loss payable thereunder  shall  be
payable  notwithstanding any act or negligence of Borrower  or
Foothill  which  might,  absent such agreement,  result  in  a
forfeiture  of  all  or a part of such insurance  payment  and
notwithstanding  (i)  occupancy or use of  the  Real  Property
Collateral for purposes more hazardous than permitted  by  the
terms of such policy, (ii) any foreclosure or other action  or
proceeding  taken by Foothill pursuant to the  Mortgages  upon
the  happening of an Event of Default, or (iii) any change  in
title  or ownership of the Real Property Collateral.  Borrower
shall deliver to Foothill certified copies of such policies of
insurance and evidence of the payment of all premiums therefor.

               (d)  Original policies or certificates thereof
satisfactory  to Foothill evidencing such insurance  shall  be
delivered to Foothill at least 10 days prior to the expiration
of  the  existing or preceding policies.  Borrower shall  give
Foothill  prompt notice of any loss covered by such insurance,
and,  upon  the  occurrence and during the continuance  of  an
Event of Default, Foothill shall have the right to adjust  any
loss.   Foothill shall have the exclusive right to adjust  all
losses  payable under any such insurance policies without  any
liability   to   Borrower  whatsoever  in  respect   of   such
adjustments.   Any  monies received as payment  for  any  loss
under  any  insurance policy including the insurance  policies
mentioned above, shall be paid over to Foothill to be  applied
at  the  option  of Foothill either to the prepayment  of  the
Obligations  without  premium, in  such  order  or  manner  as
Foothill  may  elect, or shall be disbursed to Borrower  under
stage  payment terms satisfactory to Foothill for  application
to  the  cost of repairs, replacements, or restorations.   All
repairs, replacements, or restorations shall be effected  with
reasonable  promptness and shall be of a value at least  equal
to  the value of the items or property destroyed prior to such
damage  or  destruction.  Upon the occurrence of an  Event  of
Default,  Foothill shall have the right to apply  all  prepaid
premiums  to the payment of the Obligations in such  order  or
form as Foothill shall determine.

               (e)  Borrower shall not take out separate insurance
concurrent in form or contributing in the event of  loss  with
that required to be maintained under this Section 6.10, unless
Foothill  is included thereon as named insured with  the  loss
payable  to  Foothill  under  a  standard  California   438BFU
(NS) Mortgagee endorsement, or its local equivalent.  Borrower
immediately  shall  notify  Foothill  whenever  such  separate
insurance is taken out, specifying the insurer thereunder  and
full  particulars as to the policies evidencing the same,  and
originals of such policies immediately shall be provided to Foothill.

          6.11 No Setoffs or Counterclaims.  Make payments
hereunder  and under the other Loan Documents by or on  behalf
of  Borrower without setoff or counterclaim and free and clear
of, and without deduction or withholding for or on account of,
any federal, state, or local taxes.

          6.12 Location of Inventory and Equipment.  Keep the
Inventory  and  Equipment only at the locations identified  on
Schedule  6.12;  provided, however, that  Borrower  may  amend
Schedule  6.12  so  long as such amendment occurs  by  written
notice to Foothill not less than 30 days prior to the date  on
which  the  Inventory  or  Equipment  is  moved  to  such  new
location,  so  long  as  such  new  location  is  within   the
continental United States, and so long as, at the time of such
written   notification,   Borrower  provides   any   financing
statements  or  fixture  filings  necessary  to  perfect   and
continue  perfected  Foothill's  security  interests  in  such
assets and also provides to Foothill a Collateral Access Agreement.

          6.13 Compliance with Laws.  Comply with the requirements
of  all applicable laws, rules, regulations, and orders of any
governmental authority, including the Fair Labor Standards Act
and  the  Americans With Disabilities Act,  other  than  laws,
rules,  regulations, and orders the non-compliance with which,
individually or in the aggregate, would not have and could not
reasonably be expected to have a Material Adverse Change.

          6.14 Employee Benefits.

               (a)  Promptly, and in any event within 10 Business Days
after  Borrower or any of its Subsidiaries knows or has reason
to know that an ERISA Event has occurred that reasonably could
be  expected to result in a Material Adverse Change, a written
statement   of  the  chief  financial  officer   of   Borrower
describing  such  ERISA Event and any  action  that  is  being
taking  with respect thereto by Borrower, any such  Subsidiary
or  ERISA Affiliate, and any action taken or threatened by the
IRS,   Department  of  Labor,  or  PBGC.   Borrower  or   such
Subsidiary, as applicable, shall be deemed to know  all  facts
known by the administrator of any Benefit Plan of which it  is
the  plan  sponsor, (ii) promptly, and in any event  within  3
Business Days after the filing thereof with the IRS, a copy of
each  funding waiver request filed with respect to any Benefit
Plan  and all communications received by Borrower, any of  its
Subsidiaries  or,  to  the knowledge of  Borrower,  any  ERISA
Affiliate  with  respect to such request, and (iii)  promptly,
and  in  any  event  within 3 Business Days after  receipt  by
Borrower,  any  of  its Subsidiaries or, to the  knowledge  of
Borrower,  any  ERISA  Affiliate, of the PBGC's  intention  to
terminate  a  Benefit Plan or to have a trustee  appointed  to
administer a Benefit Plan, copies of each such notice.

               (b)  Cause to be delivered to Foothill, upon Foothill's
request, each of the following:  (i) a copy of each Plan  (or,
where  any  such plan is not in writing, complete  description
thereof) (and if applicable, related trust agreements or other
funding  instruments) and all amendments thereto, all  written
interpretations thereof and written descriptions thereof  that
have  been  distributed to employees or  former  employees  of
Borrower   or   its   Subsidiaries;  (ii)  the   most   recent
determination  letter issued by the IRS with respect  to  each
Benefit  Plan;  (iii) for the three most  recent  plan  years,
annual  reports on Form 5500 Series required to be filed  with
any  governmental  agency  for each  Benefit  Plan;  (iv)  all
actuarial  reports prepared for the last three plan years  for
each  Benefit Plan; (v) a listing of all Multiemployer  Plans,
with   the   aggregate  amount  of  the  most  recent   annual
contributions  required to be made by Borrower  or  any  ERISA
Affiliate  to  each  such plan and copies  of  the  collective
bargaining agreements requiring such contributions;  (vi)  any
information  that has been provided to Borrower or  any  ERISA
Affiliate    regarding   withdrawal   liability   under    any
Multiemployer Plan; and (vii) the aggregate amount of the most
recent annual payments made to former employees of Borrower or
its Subsidiaries under any Retiree Health Plan.

          6.15 Leases.  Pay when due all rents and other amounts
payable  under any leases to which Borrower is a party  or  by
which Borrower's properties and assets are bound, unless  such
payments  are  the  subject of a Permitted  Protest.   To  the
extent  that  Borrower fails timely to make  payment  of  such
rents  and  other amounts payable when due under  its  leases,
Foothill  shall be entitled, in its discretion, to reserve  an
amount  equal  to  such unpaid amounts against  the  Borrowing
Base.


     7.   NEGATIVE COVENANTS.

          Borrower covenants and agrees that, so long as  any
credit  hereunder shall be available and until full and  final
payment of the Obligations, Borrower will not to do any of the
following without Foothill's prior written consent:

          7.1  Indebtedness.  Create, incur, assume, permit,
guarantee,   or  otherwise  become  or  remain,  directly   or
indirectly, liable with respect to any Indebtedness, except:

               (a)  Indebtedness evidenced by this Agreement, together
with Indebtedness to issuers of letters of credit that are the
subject of L/C Guarantees;

               (b)  (i) unsecured guarantees of indebtedness of
Borrower's   Subsidiaries;  and  (ii)  unsecured  back-to-back
letters of credit or letter of credit guarantees to issuers of
underlying letters of credit, the account parties of which are
Borrower's  Foreign Subsidiaries, that are not the subject  of
L/C  Guarantees; provided, however, that the aggregate  amount
of  such  Indebtedness  at any one time outstanding  permitted
under this Section 7.1(b) shall not exceed $50,000,000;

               (c)  Indebtedness set forth on Schedule 7.1;

               (d)  unsecured Indebtedness of Borrower owing to one or
more  of  its Subsidiaries; provided, however, that  upon  the
request  of  Foothill,  Borrower  shall  cause  each  of   its
Subsidiaries that is a holder of such Indebtedness to  execute
and deliver to Foothill a subordination agreement, in form and
substance satisfactory to Foothill, in respect of such Indebtedness;

               (e)  unsecured Indebtedness evidenced by Interest Rate
Agreements and Currency Protection Agreements entered into  by
Borrower  in  the  ordinary course of its business  consistent
with  past practices and entered into in connection  with  the
operational   needs  of  Borrower's  business  and   not   for
speculative purposes;

               (f)  Indebtedness secured by Permitted Liens; and

               (g)  refinancings, renewals, or extensions of
Indebtedness permitted under clauses (c), (e), and (f) of this
Section 7.1 (and continuance or renewal of any Permitted Liens
associated therewith) so long as: (i) the terms and conditions
of   such  refinancings,  renewals,  or  extensions   do   not
materially   impair  the  prospects  of   repayment   of   the
Obligations  by Borrower, (ii) the net cash proceeds  of  such
refinancings,  renewals, or extensions do  not  result  in  an
increase in the aggregate principal amount of the Indebtedness
so  refinanced, renewed, or extended, (iii) such refinancings,
renewals,  refundings,  or  extensions  do  not  result  in  a
shortening   of   the  average  weighted   maturity   of   the
Indebtedness so refinanced, renewed, or extended, and (iv)  to
the   extent   that  Indebtedness  that  is   refinanced   was
subordinated in right of payment to the Obligations, then  the
subordination   terms  and  conditions  of   the   refinancing
Indebtedness  must  be at least as favorable  to  Foothill  as
those applicable to the refinanced Indebtedness.

          7.2  Liens.  Create, incur, assume, or permit to exist,
directly or indirectly, any Lien on or with respect to any  of
its  property  or assets, of any kind, whether  now  owned  or
hereafter acquired, or any income or profits therefrom, except
for Permitted Liens (including Liens that are replacements  of
Permitted  Liens to the extent that the original  Indebtedness
is  refinanced  under  Section  7.1(g)  and  so  long  as  the
replacement Liens only encumber those assets or property  that
secured  the  original  Indebtedness).  Without  limiting  the
generality  of the foregoing, Borrower agrees not  to  create,
incur, assume, or permit to exist, directly or indirectly, any
Lien  on  or  with  respect to the equity  securities  of  any
Subsidiary  of  Borrower and the equity securities  evidencing
any Permitted Toehold Investment (except for Liens thereon  in
favor  of Foothill and Liens expressly permitted hereunder  on
the equity securities of IG Australia).

          7.3  Restrictions on Fundamental Changes.  (a) Enter into
any     merger,     consolidation,     reorganization,      or
recapitalization,  or  reclassify  its  capital   stock;   (b)
liquidate,  wind  up,  or  dissolve  itself  (or  suffer   any
liquidation  or  dissolution); or  (c)  except  for  Permitted
Dispositions,  convey,  sell,  assign,  lease,  transfer,   or
otherwise  dispose  of,  in one transaction  or  a  series  of
transactions, all or any substantial part of its property or assets.

          7.4  Disposal of Assets.  Except for Permitted
Dispositions, make any Asset Disposition.

          7.5  Change Name.  Change Borrower's name, FEIN,
corporate structure (within the meaning of Section 9402(7)  of
the Code), or identity, or add any new fictitious name.

          7.6  [intentionally omitted].

          7.7  Nature of Business.  Make any change in the
principal nature of Borrower's business.

          7.8  Prepayments and Amendments.

               (a)  Except in connection with a refinancing permitted by
Section   7.1(g),  prepay,  redeem,  defease,   purchase,   or
otherwise acquire any Indebtedness owing to any third  Person,
other  than the Obligations in accordance with this Agreement, and

               (b)  Directly or indirectly, amend, modify, alter,
increase,  or  change any of the terms or  conditions  of  any
agreement,  instrument, document, indenture, or other  writing
evidencing or concerning Indebtedness permitted under Sections
7.1(b),  (c),  (d),  (e), or (f), except  for  any  amendment,
modification, waiver, or consent the effect of which would  be
to:   (i)  extend the maturity of all or part of the remaining
scheduled   payments  of  principal  outstanding   thereunder;
(ii)  make  any  covenant  or default contained  therein  less
stringent;  (iii) decrease the interest rate or interest  rate
margin  or the default interest rate or interest rate  margin,
or both; (iv) amends or modify any other terms thereof so long
as   the  amendments  or  modifications  referenced  in   this
clause   (iv)  are  not  in  the  aggregate  materially   more
expensive, burdensome, or otherwise adverse to Borrower or Foothill.

          7.9  Change of Control.  Cause, permit, or suffer,
directly or indirectly, any Change of Control.

          7.10 Consignments.  Consign any Inventory or sell any
Inventory  on bill and hold, sale or return, sale on approval,
or  other  conditional terms of sale; provided, however,  that
the  foregoing  shall  not  prevent Borrower  from  consigning
Inventory with a value not to exceed $500,000 at any one  time
outstanding,  in  the ordinary course of Borrower's  business,
consistent with past practices, so long as at the time of  any
such  consignment, Borrower shall take such steps  as  may  be
necessary  to  ensure  that such consigned  Inventory  is  not
subject  to  the claims of the consignees' creditors  or  that
Borrower has priority over any perfected security interests in
the inventory of such consignee.

          7.11 Distributions.  Make any distribution or declare or
pay  any  dividends  (in cash or other  property,  other  than
capital stock) on, or purchase, acquire, redeem, or retire any
of  Borrower's  capital stock, of any class,  whether  now  or
hereafter outstanding.

          7.12 Accounting Methods.  Modify or change significantly
its  method of accounting or enter into, modify, or  terminate
any  agreement  currently existing, or at any  time  hereafter
entered  into with any third party accounting firm or  service
bureau for the preparation or storage of Borrower's accounting
records  without  said  accounting  firm  or  service   bureau
agreeing   to  provide  Foothill  information  regarding   the
Collateral or Borrower's financial condition.  Borrower waives
the  right to assert a confidential relationship, if  any,  it
may  have  with  any  accounting firm  or  service  bureau  in
connection with any information requested by Foothill pursuant
to  or  in  accordance with this Agreement,  and  agrees  that
Foothill  may  contact directly any such  accounting  firm  or
service bureau in order to obtain such information.

          7.13 Investments.  Except for Permitted Investments and
Permitted Dispositions, directly or indirectly make,  acquire,
or  incur  any  liabilities (including contingent obligations)
for   or  in  connection  with  (a)  the  acquisition  of  the
securities (whether debt or equity) of, or other interests in,
a  Person,  (b)  loans,  advances, capital  contributions,  or
transfers  of property to a Person, or (c) the acquisition  of
all or substantially all of the properties or assets of a Person.

          7.14 Transactions with Affiliates.  Except for Permitted
Investments,  directly or indirectly enter into or  permit  to
exist  any material transaction with any Affiliate of Borrower
except  for  transactions that are in the ordinary  course  of
Borrower's business, upon fair and reasonable terms, that  are
fully disclosed to Foothill, and that are no less favorable to
Borrower  than would be obtained in a comparable arm's  length
transaction with a non-Affiliate.

          7.15 Suspension.  Suspend or go out of a substantial
portion of its business.

          7.16 [intentionally omitted].

          7.17 Use of Proceeds.  Use the proceeds of the Advances
and  the  Term Loan made hereunder for any purpose other  than
(a)  on the Closing Date, (i) to repay in full the outstanding
principal,  accrued interest, and accrued  fees  and  expenses
owing  to Existing Lender, and (ii) to pay transactional costs
and  expenses incurred in connection with this Agreement,  and
(b)  thereafter,  consistent with  the  terms  and  conditions
hereof, for its lawful and permitted corporate purposes.

          7.18 Change in Location of Chief Executive Office;
Inventory  and  Equipment with Bailees.   Relocate  its  chief
executive office to a new location without providing  30  days
prior written notification thereof to Foothill and so long as,
at  the  time of such written notification, Borrower  provides
any  financing  statements  or fixture  filings  necessary  to
perfect  and continue perfected Foothill's security  interests
and  also  provides to Foothill a Collateral Access  Agreement
with  respect  to  such  new  location.   The  Inventory   and
Equipment  shall  not at any time now or hereafter  be  stored
with   a   bailee,  warehouseman,  or  similar  party  without
Foothill's prior written consent.

          7.19 No Prohibited Transactions Under ERISA.  Directly or indirectly:

               (a)  engage, or permit any Subsidiary of Borrower to
engage,  in  any  prohibited transaction which  is  reasonably
likely to result in a civil penalty or excise tax described in
Sections 406 of ERISA or 4975 of the IRC for which a statutory
or class exemption is not available or a private exemption has
not been previously obtained from the Department of Labor;

               (b)  permit to exist with respect to any Benefit Plan any
accumulated funding deficiency (as defined in Sections 302  of
ERISA and 412 of the IRC), whether or not waived;

               (c)  fail, or permit any Subsidiary of Borrower to fail,
to  pay  timely required contributions or annual  installments
due with respect to any waived funding  deficiency to any Benefit Plan;

               (d)  terminate, or permit any Subsidiary of Borrower to
terminate, any Benefit Plan where such event would  result  in
any  liability  of  Borrower, any of its Subsidiaries  or  any
ERISA Affiliate under Title IV of ERISA;

               (e)  fail, or permit any Subsidiary of Borrower to fail,
to make any required contribution or payment to any Multiemployer Plan;

               (f)  fail, or permit any Subsidiary of Borrower to fail,
to  pay any required installment or any other payment required
under  Section 412 of the IRC on or before the  due  date  for
such installment or other payment;

               (g)  amend, or permit any Subsidiary of Borrower to
amend,  a  Plan resulting in an increase in current  liability
for the plan year such that either of Borrower, any Subsidiary
of  Borrower  or  any ERISA Affiliate is required  to  provide
security to such Plan under Section 401(a)(29) of the IRC; or

               7.(yyyy)  withdraw, or permit any Subsidiary of Borrower to
withdraw, from any Multiemployer Plan where such withdrawal is
reasonably  likely  to  result in any liability  of  any  such
entity under Title IV of ERISA;

which,  individually  or  in  the  aggregate,  results  in  or
reasonably  would be expected to result in a claim against  or
liability  of Borrower, any of its Subsidiaries or  any  ERISA
Affiliate in excess of $1,500,000.

          7.20 Financial Covenants.  Fail to maintain:

               (a)  Current Ratio.  A ratio of Consolidated Current
Assets divided by Consolidated Current Liabilities of at least
1.0: 1.0, measured on a fiscal quarter-end basis; and

               (b)  Net Worth.  Net Worth of at least $325,000,000,
measured on a fiscal quarter-end basis.

          7.21 Capital Expenditures.  Make capital expenditures in
any fiscal year in excess of $80,000,000.

     8.   EVENTS OF DEFAULT.

          Any  one  or  more  of the following  events  shall
constitute  an event of default (each, an "Event of  Default")
under this Agreement:

          8.1  If Borrower fails to pay when due and payable or
when  declared due and payable, any portion of the Obligations
(whether of principal, interest (including any interest which,
but  for  the  provisions of the Bankruptcy Code,  would  have
accrued  on  such  amounts), fees and  charges  due  Foothill,
reimbursement   of   Foothill  Expenses,  or   other   amounts
constituting Obligations);

          8.2  (a) If Borrower fails or neglects to perform, keep,
or  observe,  in  any material respect, any  term,  provision,
condition,  covenant, or agreement contained in  Sections  6.2
(Collateral  Reports) or 6.3 (Financial  Statements)  of  this
Agreement and such failure continues for a period of five  (5)
days  from  the  date  Foothill sends Borrower  telephonic  or
written  notice  of such failure or neglect; (b)  If  Borrower
fails  or  neglects  to  perform, keep,  or  observe,  in  any
material respect, any term, provision, condition, covenant, or
agreement  contained  in  Sections  6.4  (Tax  Returns),   6.5
(Guarantor Reports), 6.7 (Title to Equipment), 6.12  (Location
of Inventory and Equipment), 6.13 (Compliance with Laws), 6.14
(Employee  Benefits), or 6.15 (Leases) of this  Agreement  and
such  failure continues for a period of fifteen (15) days from
the date of such failure or neglect; (c) If Borrower fails  or
neglects  to  perform,  keep,  or  observe,  in  any  material
respect,   any   term,  provision,  condition,  covenant,   or
agreement  contained in Sections 6.1 (Accounting System),  6.6
(Returns), or 6.8 (Maintenance of Equipment) of this Agreement
and  such failure continues for a period of fifteen (15)  days
from  the  date Foothill sends Borrower telephonic or  written
notice of such failure or neglect; or (d) If Borrower fails or
neglects  to  perform,  keep,  or  observe,  in  any  material
respect,  any  other term, provision, condition, covenant,  or
agreement  contained in this Agreement, in  any  of  the  Loan
Documents, or in any other present or future agreement between
Borrower  and  Foothill (other than any such term,  provision,
condition,  covenant,  or agreement that  is  the  subject  of
another provision of this Section 8);

          8.3  If there is a Material Adverse Change;

          8.4  If any material portion of Borrower's properties or
assets  is  attached, seized, subjected to a writ or  distress
warrant,  or  is levied upon, or comes into the possession  of
any third Person;

          8.5  If an Insolvency Proceeding is commenced by Borrower;

          8.6  If an Insolvency Proceeding is commenced against
Borrower  and  any of the following events  occur:   (a)  such
Borrower   consents  to  the  institution  of  the  Insolvency
Proceeding  against  it;  (b)  the  petition  commencing   the
Insolvency  Proceeding  is not timely  controverted;  (c)  the
petition commencing the Insolvency Proceeding is not dismissed
within  45  calendar days of the date of the  filing  thereof;
provided,  however, that, during the pendency of such  period,
Foothill shall be relieved of its obligation to extend  credit
hereunder;  (d)  an  interim  trustee  is  appointed  to  take
possession  of all or a substantial portion of the  properties
or  assets of, or to operate all or any substantial portion of
the  business  of, Borrower; or (e) an order for relief  shall
have been issued or entered therein;

          8.7  If Borrower is enjoined, restrained, or in any way
prevented by court order from continuing to conduct all or any
material part of its business affairs;

          8.8  (a) If a notice of Lien, levy, or assessment for
more than $1,500,000 is filed of record with respect to any of
Borrower's  properties or assets by the United States,  or  if
any taxes or debts owing for an amount in excess of $1,500,000
at  any  time hereafter to the United States becomes  a  lien,
whether choate or otherwise, upon any of Borrower's properties
or  assets; provided, however, that Foothill shall be entitled
to  create  a reserve against the Borrowing Base in an  amount
sufficient to discharge such lien, levy, or assessment and any
and all penalties or interest payable in connection therewith; or

               (b)  If  a notice of Lien, levy, or assessment
for  more  than $1,500,000 is filed of record with respect  to
any  of  Borrower's properties or assets by any state, county,
municipal, or other non-federal governmental agency, or if any
taxes or debts owing for an amount in excess of $1,500,000  at
any time hereafter to any one or more of such entities becomes
a lien, whether choate or otherwise, upon any of Borrower's or
any of its Subsidiaries' properties or assets and, in any such
case,  such taxes or debts are not the subject of a  Permitted
Protest,  and  the lien, levy, or assessment is not  released,
discharged, or bonded against before the earlier of 30 days of
the  date  it  first arises or 5 days of the  date  when  such
property  or  asset  is subject to being forfeited;  provided,
however,  that Foothill shall be entitled to create a  reserve
against  the  Borrowing  Base  in  an  amount  sufficient   to
discharge  such  lien, levy, or assessment  and  any  and  all
penalties or interest payable in connection therewith.

          8.9  If a judgment or other claim for an amount in excess
of  $1,500,000 becomes a Lien or encumbrance upon any material
portion of Borrower's properties or assets;

          8.10 If there is a default in any material agreement to
which  Borrower is a party with one or more third Persons  and
such  default  (a)  occurs  at  the  final  maturity  of   the
obligations  thereunder, or (b) results in  a  right  by  such
third   Person(s),  irrespective  of  whether  exercised,   to
accelerate  the maturity of Borrower's obligations  thereunder
or to terminate the subject agreement;

          8.11 If Borrower makes any payment on account of
Indebtedness that has been contractually subordinated in right
of  payment to the payment of the Obligations, except  to  the
extent  such  payment  is  permitted  by  the  terms  of   the
subordination provisions applicable to such Indebtedness;

          8.12 If any material misstatement or misrepresentation
exists  now  or  hereafter  in any  warranty,  representation,
statement,  or  report made to Foothill  by  Borrower  or  any
officer, employee, agent, or director of Borrower, or  if  any
such warranty or representation is withdrawn; or

          8.13 If the obligation of M&S or IG Delaware under the
Pledge Agreement is limited or terminated by operation of  law
or  by such Person thereunder, or any such Person becomes  the
subject of an Insolvency Proceeding.

     9.   FOOTHILL'S RIGHTS AND REMEDIES.

          9.1  Rights and Remedies.  Upon the occurrence, and
during the continuation, of an Event of Default Foothill  may,
at  its  election, without notice of its election and  without
demand, do any one or more of the following, all of which  are
authorized by Borrower:

               (a)  Declare all Obligations, whether evidenced by this
Agreement,  by any of the other Loan Documents, or  otherwise,
immediately due and payable;

               (b)  Cease advancing money or extending credit to or for
the benefit of Borrower under this Agreement, under any of the
Loan  Documents, or under any other agreement between Borrower and Foothill;

               (c)  Terminate this Agreement and any of the other Loan
Documents  as  to  any  future  liability  or  obligation   of
Foothill, but without affecting Foothill's rights and security
interests  in  the Personal Property Collateral  or  the  Real
Property Collateral and without affecting the Obligations;

               (d)  Settle or adjust disputes and claims directly with
Account  Debtors  for  amounts and upon terms  which  Foothill
considers  advisable, and in such cases, Foothill will  credit
Borrower's Loan Account with only the net amounts received  by
Foothill  in payment of such disputed Accounts after deducting
all Foothill Expenses incurred or expended in connection therewith;

               (e)  Cause Borrower to hold all returned Inventory in
trust for Foothill, segregate all returned Inventory from  all
other  property  of Borrower or in Borrower's  possession  and
conspicuously label said returned Inventory as the property of Foothill;

               (f)  Without notice to or demand upon Borrower, make such
payments  and do such acts as Foothill considers necessary  or
reasonable   to   protect  its  security  interests   in   the
Collateral.  Borrower agrees to assemble the Personal Property
Collateral  if Foothill so requires, and to make the  Personal
Property  Collateral  available to Foothill  as  Foothill  may
designate.  Borrower authorizes Foothill to enter the premises
where the Personal Property Collateral is located, to take and
maintain  possession of the Personal Property  Collateral,  or
any  part  of it, and to pay, purchase, contest, or compromise
any   encumbrance,   charge,  or  Lien  that   in   Foothill's
determination appears to conflict with its security  interests
and  to  pay  all  expenses incurred in connection  therewith.
With  respect  to any of Borrower's owned or leased  premises,
Borrower  hereby  grants  Foothill a  license  to  enter  into
possession  of  such premises and to occupy the same,  without
charge,  for  up  to  120 days in order  to  exercise  any  of
Foothill's  rights  or remedies provided herein,  at  law,  in
equity, or otherwise;

               (g)  Without notice to Borrower (such notice being
expressly  waived  by  Borrower), and without  constituting  a
retention  of any collateral in satisfaction of an  obligation
(within the meaning of Section 9505 of the Code), set off  and
apply to the Obligations any and all (i) balances and deposits
of  Borrower held by Foothill (including any amounts  received
in  the  Lockbox Accounts), or (ii) indebtedness at  any  time
owing to or for the credit or the account of Borrower held by Foothill;

               (h)  Hold, as cash collateral, any and all balances and
deposits  of  Borrower  held  by  Foothill,  and  any  amounts
received in the Lockbox Accounts, to secure the full and final
repayment of all of the Obligations;

               (i)  Ship, reclaim, recover, store, finish, maintain,
repair, prepare for sale, advertise for sale, and sell (in the
manner  provided for herein) the Personal Property Collateral.
Borrower hereby grants to Foothill a license or other right to
use,  without charge, Borrower's labels, patents,  copyrights,
rights  of  use  of  any  name, trade  secrets,  trade  names,
trademarks,  service  marks, and advertising  matter,  or  any
property  of a similar nature, as it pertains to the  Personal
Property  Collateral, in completing production of, advertising
for  sale,  and  selling any Personal Property Collateral  and
Borrower's  rights  under  all  licenses  and  all   franchise
agreements shall inure to Foothill's benefit;

               (j)  Sell the Personal Property Collateral at either a
public  or  private  sale, or both, by  way  of  one  or  more
contracts  or  transactions, for cash or  on  terms,  in  such
manner  and  at  such  places  (including  any  of  Borrower's
premises)  as Foothill determines is commercially  reasonable.
It  is not necessary that the Personal Property Collateral  be
present at any such sale;

               (k)  Foothill shall give notice of the disposition of the
Personal Property Collateral as follows:

                    (1)  Foothill shall give the applicable Borrower and each
holder  of  a  security  interest  in  the  Personal  Property
Collateral  who has filed with Foothill a written request  for
notice,  a  notice in writing of the time and place of  public
sale,  or,  if  the  sale  is a private  sale  or  some  other
disposition  other than a public sale is to  be  made  of  the
Personal Property Collateral, then the time on or after  which
the private sale or other disposition is to be made;

                    (2)  The notice shall be personally delivered or mailed,
postage  prepaid, to such Borrower as provided in Section  12,
at  least  5  days before the date fixed for the sale,  or  at
least  5  days before the date on or after which  the  private
sale or other disposition is to be made; no notice needs to be
given  prior to the disposition of any portion of the Personal
Property Collateral that is perishable or threatens to decline
speedily in value or that is of a type customarily sold  on  a
recognized market.  Notice to Persons other than such Borrower
claiming an interest in the Personal Property Collateral shall
be sent to such addresses as they have furnished to Foothill;

                    (3)  If the sale is to be a public sale, Foothill also
shall give notice of the time and place by publishing a notice
one  time  at least 5 days before the date of the  sale  in  a
newspaper  of general circulation in the county in  which  the
sale is to be held;

               (l)  Foothill may credit bid and purchase at any public
sale; and

               (m)  Any deficiency that exists after disposition of the
Personal  Property Collateral as provided above will  be  paid
immediately by Borrower.  Any excess will be returned, without
interest  and  subject  to the rights  of  third  Persons,  by
Foothill to Borrower.

          9.2  Remedies Cumulative.  Foothill's rights and remedies
under  this  Agreement,  the Loan  Documents,  and  all  other
agreements shall be cumulative.  Foothill shall have all other
rights  and  remedies  not inconsistent herewith  as  provided
under the Code, by law, or in equity.  No exercise by Foothill
of  one  right or remedy shall be deemed an election,  and  no
waiver  by Foothill of any Event of Default shall be deemed  a
continuing  waiver.  No delay by Foothill shall  constitute  a
waiver, election, or acquiescence by it.

     10.  TAXES AND EXPENSES.

          If Borrower fails to pay any monies (whether taxes,
assessments,  insurance premiums, or, in the  case  of  leased
properties  or  assets, rents or other amounts  payable  under
such  leases)  due  to third Persons, or  fails  to  make  any
deposits  or furnish any required proof of payment or deposit,
all  as  required under the terms of this Agreement, then,  to
the  extent that Foothill determines that such failure by such
Borrower  could  result in a Material Adverse Change,  in  its
discretion and without prior notice to Borrower, Foothill  may
do  any or all of the following:  (a) make payment of the same
or  any  part thereof; (b) set up such reserves in  Borrower's
Loan  Account as Foothill deems necessary to protect  Foothill
from  the exposure created by such failure; or (c) obtain  and
maintain  insurance policies of the type described in  Section
6.10,  and  take any action with respect to such  policies  as
Foothill  deems  prudent.  Any such amounts paid  by  Foothill
shall constitute Foothill Expenses.  Any such payments made by
Foothill shall not constitute an agreement by Foothill to make
similar payments in the future or a waiver by Foothill of  any
Event  of  Default  under this Agreement.  Foothill  need  not
inquire  as to, or contest the validity of, any such  expense,
tax, or Lien and the receipt of the usual official notice  for
the payment thereof shall be conclusive evidence that the same
was validly due and owing.

     11.  WAIVERS; INDEMNIFICATION.

          11.1 Demand; Protest; etc.  Borrower waives demand,
protest,  notice  of protest, notice of default  or  dishonor,
notice  of  payment  and nonpayment, nonpayment  at  maturity,
release,  compromise,  settlement, extension,  or  renewal  of
accounts,   documents,   instruments,   chattel   paper,   and
guarantees at any time held by Foothill on which Borrower  may
in any way be liable.

          11.2 Foothill's Liability for Collateral.  So long as
Foothill complies with its obligations, if any, under  Section
9207  of the Code, Foothill shall not in any way or manner  be
liable  or  responsible  for:   (a)  the  safekeeping  of  the
Collateral;  (b)  any  loss  or damage  thereto  occurring  or
arising  in  any  manner or fashion from any  cause;  (c)  any
diminution in the value thereof; or (d) any act or default  of
any carrier, warehouseman, bailee, forwarding agency, or other
Person.   All  risk  of loss, damage, or  destruction  of  the
Collateral shall be borne by Borrower.

          11.3 Indemnification.  Borrower shall pay, indemnify,
defend, and hold Foothill, each Participant, and each of their
respective  officers, directors, employees,  counsel,  agents,
and attorneys-in-fact (each, an "Indemnified Person") harmless
(to  the fullest extent permitted by law) from and against any
and  all  claims,  demands,  suits,  actions,  investigations,
proceedings,  and damages, and all reasonable  attorneys  fees
and  disbursements  and  other  costs  and  expenses  actually
incurred  in  connection  therewith  (as  and  when  they  are
incurred and irrespective of whether suit is brought), at  any
time  asserted against, imposed upon, or incurred  by  any  of
them  in connection with or as a result of or related  to  the
execution,    delivery,    enforcement,    performance,    and
administration of this Agreement and any other Loan  Documents
or  the transactions contemplated herein, and with respect  to
any  investigation, litigation, or proceeding related to  this
Agreement, any other Loan Document, or the use of the proceeds
of  the credit provided hereunder (irrespective of whether any
Indemnified Person is a party thereto), or any act,  omission,
event  or circumstance in any manner related thereto (all  the
foregoing,   collectively,  the  "Indemnified   Liabilities").
Borrower  shall  have no obligation to any Indemnified  Person
under  this  Section  11.3  with respect  to  any  Indemnified
Liability  that  a  court  of competent  jurisdiction  finally
determines  to  have  resulted from the  gross  negligence  or
willful misconduct of such Indemnified Person.  This provision
shall  survive  the  termination of  this  Agreement  and  the
repayment of the Obligations.

     12.   NOTICES.

           Unless  otherwise provided in this  Agreement,  all
notices or demands by any party relating to this Agreement  or
any  other  Loan Document shall be in writing and (except  for
financial  statements and other informational documents  which
may  be  sent by first-class mail, postage prepaid)  shall  be
personally  delivered or sent by registered or certified  mail
(postage   prepaid,   return  receipt  requested),   overnight
courier, or telefacsimile to Borrower or to Foothill,  as  the
case may be, at its address set forth below:

        If to Borrower:         INTERGRAPH CORPORATION
                                One Madison Industrial Park
                                Huntsville, Alabama 35894
                                Attn:  Mr. Larry J. Laster
                                Fax No. 205.730.2164

        with copies to:         BALCH & BINGHAM
                                1710 Sixth Avenue North
                                Birmingham, Alabama 35201
                                Attn:  John F. Mandt, Esq.
                                Fax No. 205.226.8799
 
        If to Foothill:         FOOTHILL CAPITAL CORPORATION
                                11111 Santa Monica Boulevard
                                Suite 1500
                                Los Angeles, California 90025-3333
                                Attn: Business Finance Division Manager
                                Fax No. 310.478.9788

        with copies to:         BROBECK, PHLEGER & HARRISON LLP
                                550 South Hope Street
                                Los Angeles, California 90071
                                Attn:  John Francis Hilson, Esq.
                                Fax No. 213.745.3345

           The  parties hereto may change the address at which
they are to receive notices hereunder, by notice in writing in
the  foregoing  manner  given to the other.   All  notices  or
demands  sent in accordance with this Section 12,  other  than
notices  by Foothill in connection with Sections 9504 or  9505
of  the  Code, shall be deemed received on the earlier of  the
date of actual receipt or 3 days after the deposit thereof  in
the  mail.  Borrower acknowledges and agrees that notices sent
by  Foothill in connection with Sections 9504 or 9505  of  the
Code  shall  be  deemed sent when deposited  in  the  mail  or
personally  delivered, or, where permitted by law, transmitted
telefacsimile or other similar method set forth above.

     13.   CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

           THE  VALIDITY OF THIS AGREEMENT AND THE OTHER  LOAN
DOCUMENTS  (UNLESS EXPRESSLY PROVIDED TO THE  CONTRARY  IN  AN
ANOTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION,  AND
ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE  PARTIES
HERETO  AND  THERETO  WITH  RESPECT  TO  ALL  MATTERS  ARISING
HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL  BE
DETERMINED  UNDER,  GOVERNED BY, AND CONSTRUED  IN  ACCORDANCE
WITH  THE LAWS OF THE STATE OF CALIFORNIA.  THE PARTIES  AGREE
THAT  ALL  ACTIONS OR PROCEEDINGS ARISING IN  CONNECTION  WITH
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN  THE
COUNTY  OF  LOS ANGELES, STATE OF CALIFORNIA OR, AT  THE  SOLE
OPTION OF FOOTHILL, IN ANY OTHER COURT IN WHICH FOOTHILL SHALL
INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS  SUBJECT
MATTER  JURISDICTION OVER THE MATTER IN CONTROVERSY.  EACH  OF
BORROWER  AND  FOOTHILL WAIVES, TO THE EXTENT PERMITTED  UNDER
APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE
OF  FORUM  NON CONVENIENS OR TO OBJECT TO VENUE TO THE  EXTENT
ANY  PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 13.
BORROWER AND FOOTHILL HEREBY WAIVE THEIR RESPECTIVE RIGHTS  TO
A  JURY  TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED  UPON  OR
ARISING  OUT  OF  ANY  OF THE LOAN DOCUMENTS  OR  ANY  OF  THE
TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT  CLAIMS,
TORT  CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON  LAW
OR STATUTORY CLAIMS.  EACH OF BORROWER AND FOOTHILL REPRESENTS
THAT  IT  HAS  REVIEWED  THIS WAIVER AND  EACH  KNOWINGLY  AND
VOLUNTARILY   WAIVES   ITS   JURY   TRIAL   RIGHTS   FOLLOWING
CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF  LITIGATION,
A  COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO
A TRIAL BY THE COURT.

     14.  DESTRUCTION OF BORROWER'S DOCUMENTS.

          All documents, schedules, invoices, agings, or other
papers  delivered  to Foothill may be destroyed  or  otherwise
disposed  of by Foothill 4 months after they are delivered  to
or  received  by  Foothill,  unless  the  applicable  Borrower
requests, in writing, the return of said documents, schedules,
or other papers and makes arrangements, at Borrower's expense,
for their return.

     15.  GENERAL PROVISIONS.

          15.1 Effectiveness.  This Agreement shall be binding and
deemed effective when executed by Borrower and Foothill.

          15.2 Successors and Assigns.  This Agreement shall bind
and  inure  to  the benefit of the respective  successors  and
assigns  of  each  of  the  parties; provided,  however,  that
Borrower may not assign this Agreement or any rights or duties
hereunder  without Foothill's prior written  consent  and  any
prohibited assignment shall be absolutely void.  No consent to
an  assignment  by  Foothill shall release Borrower  from  its
Obligations.   Foothill  may assign  this  Agreement  and  its
rights  and  duties hereunder and no consent  or  approval  by
Borrower  is  required in connection with any such assignment.
Foothill   reserves  the  right  to  sell,  assign,  transfer,
negotiate, or grant participations in all or any part  of,  or
any interest in Foothill's rights and benefits hereunder.   In
connection with any such assignment or participation, Foothill
may  disclose all documents and information which Foothill now
or  hereafter  may  have  relating to Borrower  or  Borrower's
business, but such documents and information shall be  subject
to  the  confidentiality provisions of Section 15.10.  To  the
extent  that  Foothill  assigns  its  rights  and  obligations
hereunder  to  a  third Person, Foothill thereafter  shall  be
released  from  such  assigned  obligations  to  the  relevant
Borrower  and such assignment shall effect a novation  between
the relevant Borrower and such third Person.

          15.3 Section Headings.  Headings and numbers have been
set forth herein for convenience only.  Unless the contrary is
compelled by the context, everything contained in each section
applies equally to this entire Agreement.

          15.4 Interpretation.  Neither this Agreement nor any
uncertainty or ambiguity herein shall be construed or resolved
against  Foothill  or  Borrower, whether  under  any  rule  of
construction  or otherwise.  On the contrary,  this  Agreement
has  been  reviewed by all parties and shall be construed  and
interpreted  according to the ordinary meaning  of  the  words
used so as to fairly accomplish the purposes and intentions of
all parties hereto.

          15.5 Severability of Provisions.  Each provision of this
Agreement  shall  be severable from every other  provision  of
this  Agreement  for  the  purpose of  determining  the  legal
enforceability of any specific provision.

          15.6 Amendments in Writing.  This Agreement can only be
amended by a writing signed by both Foothill and Borrower.

          15.7 Counterparts; Telefacsimile Execution.  This
Agreement may be executed in any number of counterparts and by
different  parties on separate counterparts,  each  of  which,
when  executed  and  delivered,  shall  be  deemed  to  be  an
original,  and  all  of  which,  when  taken  together,  shall
constitute  but  one and the same Agreement.  Delivery  of  an
executed counterpart of this Agreement by telefacsimile  shall
be  equally  as effective as delivery of an original  executed
counterpart  of  this  Agreement.   Any  party  delivering  an
executed  counterpart of this Agreement by telefacsimile  also
shall  deliver  an  original  executed  counterpart  of   this
Agreement  but  the  failure to deliver an  original  executed
counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement.

          15.8 Revival and Reinstatement of Obligations.  If the
incurrence  or payment of the Obligations by Borrower  or  any
guarantor of the Obligations or the transfer by either or both
of  such parties to Foothill of any property of either or both
of such parties should for any reason subsequently be declared
to be void or voidable under any state or federal law relating
to  creditors' rights, including provisions of the  Bankruptcy
Code  relating  to  fraudulent conveyances,  preferences,  and
other  voidable or recoverable payments of money or  transfers
of  property  (collectively, a "Voidable  Transfer"),  and  if
Foothill is required to repay or restore, in whole or in part,
any  such  Voidable  Transfer, or elects to  do  so  upon  the
reasonable  advice  of  its counsel,  then,  as  to  any  such
Voidable  Transfer,  or the amount thereof  that  Foothill  is
required  or  elects  to  repay or  restore,  and  as  to  all
reasonable  costs, expenses, and attorneys  fees  of  Foothill
related  thereto, the liability of Borrower or such  guarantor
automatically shall be revived, reinstated, and  restored  and
shall exist as though such Voidable Transfer had never been made.

          15.9 Integration.  This Agreement, together with the
other Loan Documents, reflects the entire understanding of the
parties  with respect to the transactions contemplated  hereby
and  shall  not  be  contradicted or qualified  by  any  other
agreement, oral or written, before the date hereof.

          15.10 Confidentiality.  Foothill agrees to treat all
material,  non-public information regarding Borrower  and  its
Subsidiaries  and their operations, assets, and  existing  and
contemplated business plans in a confidential manner; it being
understood  and agreed by Borrower that in any event  Foothill
may  make  disclosures (a) to counsel for and other  advisors,
accountants, and auditors to Foothill, (b) reasonably required
by  any bona fide potential or actual assignee, transferee, or
participant  in  connection with any  contemplated  or  actual
assignment  or transfer by Foothill of an interest  herein  or
any participation interest in Foothill's rights hereunder, (c)
of  information that has become public by disclosures made  by
Persons  other than Foothill, or (d) as required or  requested
by  any court, governmental or administrative agency, pursuant
to  any  subpoena  or  other legal process,  or  by  any  law,
statute, regulation, or court order; provided, however,  that,
unless  prohibited by applicable law, statute, regulation,  or
court order, Foothill shall notify Borrower of any request  by
any  court, governmental or administrative agency, or pursuant
to  any subpoena or other legal process for disclosure of  any
such non-public material information concurrent with, or where
practicable, prior to the disclosure thereof.

      IN  WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in Los Angeles, California.


                                INTERGRAPH CORPORATION,
                                a Delaware corporation

 
                                By___________________________

                                Title:_______________________
 

                                FOOTHILL CAPITAL CORPORATION,
                                a California corporation


                                By___________________________

                                Title:_______________________






                                 Schedule R-1


FACILITY    ADDRESS   CITY        COUNTY   STATE    FOOTHILL  NAME    AMOUNT
NAME                                       AND ZIP  LIEN      OF      OF PRIOR
                                           CODE     POSITION  PRIOR   LIEN
                                                              LIENOR  
                                          
Huntsville  One       Huntsville  Madison  Alabama  First     n/a     n/a
Campus      Madison     
            Industrial
            Park
                                                     


                    AMENDMENT NUMBER ONE TO
                  LOAN AND SECURITY AGREEMENT


          This  AMENDMENT  NUMBER  ONE  TO  LOAN  AND  SECURITY
AGREEMENT  (this "Amendment") is entered into as of  January  14,
1997,  by  and between Foothill Capital Corporation, a California
corporation  ("Foothill"),  on  the  one  hand,  and   Intergraph
Corporation, a Delaware corporation ("Borrower"), with  reference
to the following facts:

     A.        Foothill and Borrower heretofore have entered into that
          certain Loan and Security Agreement, dated as of December 20,
          1996 (as heretofore amended, supplemented, or otherwise modified,
          the "Agreement");

     B.        Borrower has requested Foothill to amend the Agreement
          to, among other things, permit a subfacility for indemnities in
          respect of Borrower's Permitted F/X Contracts, as set forth in
          this Amendment;

     C.         Foothill is willing to so amend the Agreement  in
          accordance with the terms and conditions hereof; and

     D.         All capitalized terms used herein and not defined
          herein shall have the meanings ascribed to them in the Agreement,
          as amended hereby.


           NOW, THEREFORE, in consideration of the above recitals
and  the  mutual premises contained herein, Foothill and Borrower
hereby agree as follows:

          1.   Amendments to the Agreement.

               a.    Section 1.1 of the Agreement hereby is amended by
adding the following new defined terms in alphabetical order:

               "First  Amendment" means that  certain  Amendment
     Number  One  to  Loan and Security Agreement,  dated  as  of
     January 14, 1997, between Foothill and Borrower.

               "F/X Bank" means Norwest Bank Minnesota, National
     Association, or any successor thereto.

               "F/X  Bank Parameters Letter" means that  certain
     letter agreement, dated as of January 14, 1997, between  F/X
     Bank  and  Borrower, a copy of which is attached  hereto  as
     Exhibit  F-1, regarding the parameters under which F/X  Bank
     provides foreign exchange currency services to Borrower.

               "F/X Line" has the meaning set forth in Section 2.4.

               "F/X   Reserve"  means,  as  of  any   date   of
     determination,  a  reserve equal to the  maximum  amount  of
     obligations of Foothill to indemnify F/X Bank against losses
     or   expenses  incurred  by  F/X  Bank  in  connection  with
     Permitted F/X Contracts.  As of January 14, 1997, the amount
     of the F/X Reserve is $3,500,000.

               "Permitted F/X Contracts" means foreign  currency
     exchange  contracts between F/X Bank and Borrower that:  (a)
     are  in respect of marked-to-market risk on foreign exchange
     future  trades or options; (b) are entered into by  Borrower
     in the ordinary course of its business; (c) are entered into
     in  connection  with  the operational  needs  of  Borrower's
     business and not for speculative purposes; (d) do not have a
     maturity date that is after the date five (5) Business  Days
     prior to the Maturity Date; and (e) are provided by F/X Bank
     pursuant to the F/X Bank Parameters Letter.

               "Permitted  Spot  Trades" means foreign  currency
     exchange  transactions between F/X Bank and  Borrower  that:
     (a)  are  in respect of foreign exchange spot value  trades;
     (b)  are entered into by Borrower in the ordinary course  of
     its  business;  and (c) are entered into in connection  with
     the  operational needs of Borrower's business  and  not  for
     speculative purposes; and (d) are conducted pursuant to  the
     F/X Bank Parameters Letter.

               b.    The following definitions contained in Section 1.1 of
the  Amendment are amended and restated in their entirety to read as follows:

               "Availability"  means the amount  of  money  that
     Borrower  is  entitled to borrow as Advances  under  Section
     2.1,  such amount being the difference derived when (a)  the
     sum  of  the  principal amount of Advances then  outstanding
     (including any amounts that Foothill may have paid  for  the
     account  of  Borrower pursuant to any of the Loan  Documents
     and that have not been reimbursed by Borrower) is subtracted
     from (b) the lesser of (i) the Maximum Revolving Amount less
     the  sum  of (y) the Letter of Credit Usage and (z) the  F/X
     Reserve, or (ii) the Borrowing Base less the sum of (y)  the
     Letter of Credit Usage and (z) the F/X Reserve.

               c.    The first sentence of Section 2.1(a) of the Agreement
hereby  is  amended  and  restated in its  entirety  to  read  as follows:

     Subject  to  the  terms and conditions  of  this  Agreement,
     Foothill agrees to make advances ("Advances") to Borrower in
     an  amount  outstanding not to exceed at any  one  time  the
     lesser  of (i) the Maximum Revolving Amount less the sum  of
     the  Letter of Credit Usage and the F/X Reserve, or (ii) the
     Borrowing  Base less the sum of the Letter of  Credit  Usage
     and the F/X Reserve.

               d.    The second sentence of Section 2.2(a) of the Agreement
hereby  is  amended  and  restated in its  entirety  to  read  as follows:

     Foothill  shall  have no obligation to  issue  a  Letter  of
     Credit if any of the following would result:

                                    (i)    the  Letter of  Credit
               Usage would exceed the Borrowing Base less the sum
               of  the amount of outstanding Advances and the F/X
               Reserve, or

                                    (ii)   the  Letter of  Credit
               Usage  would  exceed the lower of (y) the  Maximum
               Revolving  Amount less the sum of  the  amount  of
               outstanding Advances and the F/X Reserve,  or  (z)
               $60,000,000, or

                                      (iii)    the    outstanding
               Obligations (other than under the Term Loan) would
               exceed the Maximum Revolving Amount.


               e.    Section 2.4 of the Agreement hereby is amended and
restated in its entirety to read as follows:

               2.4   Subfacility  for Borrower's  Permitted  F/X
     Contracts (the "F/X Line").

                     (a)   If  requested to do  so  by  Borrower,
     Foothill  may, in its sole discretion, enter into agreements
     with F/X Bank pursuant to which Foothill would indemnify F/X
     Bank  against  losses or expenses incurred by  F/X  Bank  in
     connection with Permitted F/X Contracts, notwithstanding any
     objections  by Borrower as to the amount of such  losses  or
     expenses.   If Foothill is obligated to advance funds  under
     an  F/X Line indemnity, Borrower immediately shall reimburse
     such  amount  to  Foothill  and,  in  the  absence  of  such
     reimbursement,  the  amount  so  advanced  immediately   and
     automatically  shall  be deemed to be an  Advance  hereunder
     and,  thereafter,  shall  bear interest  at  the  rate  then
     applicable  to  Advances under Section 2.6.   If,  upon  the
     maturity  date of any Permitted F/X Contract, Borrower  does
     not  have  Availability in an amount sufficient to  pay  the
     full amount of Borrower's obligations to F/X Bank under such
     contract, Foothill may, in its sole discretion, instruct F/X
     Bank to liquidate such Permitted F/X Contract, at Borrower's
     sole expense, and to apply any amounts thereunder that would
     have  been payable to Borrower against the amounts  owed  to
     F/X  Bank by Borrower.  Any amounts paid by Foothill to  F/X
     Bank and any other costs or expenses incurred by Foothill in
     connection  with  any  such Permitted  F/X  Contracts  shall
     constitute  Advances,  shall  be  secured  by  all  of   the
     Collateral,  and thereafter shall be payable by Borrower  to
     Foothill together with interest as provided for herein.

                     (b)   Borrower  hereby agrees to  indemnify,
     save,  defend,  and hold Foothill harmless  from  any  loss,
     cost,  expense,  or liability, including  payments  made  by
     Foothill,  expenses, and reasonable attorneys fees  incurred
     by  Foothill  arising out of or in connection with  any  F/X
     Line indemnity.

                     (c)  Any and all charges, commissions, fees,
     and  costs  incurred by Foothill relating to  Permitted  F/X
     Contracts  that are the subject of an F/X Line indemnity  by
     Foothill  shall be considered Foothill Expenses for purposes
     of  this Agreement and immediately shall be reimbursable  by
     Borrower to Foothill.

                    (d)  Immediately upon the termination of this
     Agreement,  Borrower  agrees  to  either  (i)  provide  cash
     collateral to be held by Foothill in an amount equal to 105%
     of  the  maximum amount of Foothill's obligations under  the
     F/X  Line  indemnities, or (ii) cause  to  be  delivered  to
     Foothill  releases  of all of Foothill's  obligations  under
     outstanding F/X Line indemnities.  At Foothill's discretion,
     any  proceeds of Collateral received by Foothill  after  the
     occurrence  and  during  the continuation  of  an  Event  of
     Default may be held as the cash collateral required by  this
     Section 2.4(d).

                     (e)   The amount of the F/X Reserve  may  be
     reduced  from time to time by Foothill upon the receipt  and
     written  acceptance by Foothill of an F/X Reserve  Reduction
     Certificate,  in  the  form  of  that  attached  hereto   as
     Exhibit  F-2, duly executed by both Borrower and  F/X  Bank,
     not  less  than  2  Business Days  prior  to  the  requested
     effective date of such reduction.

                     (f)   So  long  as no Triggering  Event  has
     occurred  and  is continuing or would result therefrom,  the
     amount of the F/X Reserve may be increased from time to time
     by  Foothill  in  its sole discretion upon the  receipt  and
     written  acceptance by Foothill of an F/X  Reserve  Increase
     Certificate, in the form of that attached hereto as  Exhibit
     F-3,  duly executed by both Borrower and F/X Bank, not  less
     than  2 Business Days prior to the requested effective  date
     of such increase.

                     (g)   Anything in the Loan Documents to  the
     contrary  notwithstanding, Permitted Spot  Trades  shall  be
     deemed  to  qualify as Permitted F/X Contracts eligible  for
     coverage under an F/X Line indemnity solely until such time,
     if  ever, as Foothill is obligated to advance funds under an
     F/X Line indemnity to cover obligations owing but unpaid  by
     Borrower  to  F/X Bank in respect of Permitted  Spot  Trades
     and,  thereafter, Permitted Spot Trades shall no  longer  be
     deemed  to  qualify as Permitted F/X Contracts eligible  for
     coverage   under  an  F/X  Line  indemnity  and   F/X   Line
     indemnities  shall no longer be permitted to  be  issued  in
     respect of Permitted Spot Trades.

               f.    The first sentence of Section 3.5 of the Agreement
hereby  is  amended  and  restated in its  entirety  to  read  as follows:

     On   the   date  of  termination  of  this  Agreement,   all
     Obligations  (including contingent reimbursement obligations
     of  Borrower  with  respect to any  outstanding  Letters  of
     Credit  or any outstanding F/X Line indemnities) immediately
     shall become due and payable without notice or demand.

               g.    The preamble to Section 5 of the Agreement hereby is
amended and restated in its entirety to read as follows:

     In  order  to induce Foothill to enter into this  Agreement,
     Borrower  makes the following representations and warranties
     which  shall be true, correct, and complete in all  respects
     as  of  the Closing Date, and at and as of the date  of  the
     making  of  each  Advance or Letter of Credit  or  F/X  Line
     indemnity made thereafter, as though made on and as  of  the
     date  of  such  Advance  or Letter of  Credit  or  F/X  Line
     indemnity  (except  to the extent that such  representations
     and  warranties relate solely to an earlier date)  and  such
     representations and warranties shall survive  the  execution
     and delivery of this Agreement:

               h.    Section 7.1(a) of the Agreement hereby is amended and
restated in its entirety to read as follows:

                     (a)    Indebtedness   evidenced   by   this
     Agreement, together with Indebtedness to issuers of  letters
     of  credit  that  are  the subject  of  L/C  Guarantees  and
     Indebtedness to F/X Bank under Permitted F/X Contracts;

               i.    The subsection of Section 7.19 of the Agreement that
reads  "withdraw,  or  permit  any  Subsidiary  of  Borrower   to
withdraw,  from any Multiemployer Plan where such  withdrawal  is
reasonably  likely to result in any liability of any such  entity
under Title IV of ERISA;" and that is numbered in Section 7.19 of
the  Agreement as `subsection 7.(yyyy)' hereby is re-numbered  as
`subsection (h)'.

               j.    A new subsection (n) hereby is added to Section 9.1 of
the Agreement in proper numerical order as follows:

                     (n)   Foothill  may, at its option,  require
     Borrower  to deposit with Foothill funds in an amount  equal
     to  the F/X Line Reserve (if any), and, if Borrower fails to
     make such deposit promptly, Foothill may advance such amount
     as  an  Advance  (whether or not an Overadvance  is  created
     thereby).  Any such deposit or the proceeds of such  Advance
     shall  be  held  by  Lender as a reserve to  fund  indemnity
     obligations owing to F/X Bank under the F/X Line.   At  such
     time  (if ever) as all such indemnity obligations have  been
     paid  or  terminated, any amounts remaining in such  reserve
     shall be applied against any outstanding Obligations or,  if
     all   Obligations  have  been  indefeasibly  paid  in  full,
     returned to Borrower.


          2.   Representations and Warranties.  Borrower hereby
represents  and  warrants to Foothill that:  (a)  the  execution,
delivery, and performance of this Amendment and of the Agreement,
as  amended  by this Amendment, are within its corporate  powers,
have been duly authorized by all necessary corporate action,  and
are  not in contravention of any law, rule, or regulation, or any
order,  judgment,  decree,  writ, injunction,  or  award  of  any
arbitrator, court, or governmental authority, or of the terms  of
its charter or bylaws, or of any contract or undertaking to which
it  is a party or by which any of its properties may be bound  or
affected;  (b)  this Amendment and the Agreement, as  amended  by
this  Amendment, constitute Borrower's legal, valid, and  binding
obligation, enforceable against Borrower in accordance  with  its
terms; and (c) attached hereto as Exhibit F-1 is a true, correct,
and complete copy of the F/X Bank Parameters Letter.

          3.   Conditions Precedent to Amendment.  The satisfaction of
each  of  the following on or before, unless otherwise  specified
below,   the   First  Amendment  Closing  Date  shall  constitute
conditions precedent to the effectiveness of this Amendment:

               a.    Foothill shall have received the reaffirmation and
consent  of  each of the Obligors (other than Borrower)  attached
hereto  as  Exhibit  A,  duly  executed  and  delivered  by   the
respective authorized officials thereof;

               b.    Foothill shall have received a certificate from the
Secretary  of Borrower attesting to the incumbency and signatures
of  authorized  officers of Borrower and to  the  resolutions  of
Borrower's  Board  of  Directors authorizing  its  execution  and
delivery  of this Amendment and the performance of this Amendment
and  the  Agreement as amended by this Amendment, and authorizing
specific officers of Borrower to execute and deliver the same;

               c.    Foothill shall have received all required consents of
Foothill's   participants  in  the  Obligations   to   Foothill's
execution, delivery, and performance of this Amendment;

               d.    The representations and warranties in this Amendment,
the  Agreement as amended by this Amendment, and the  other  Loan
Documents shall be true and correct in all respects on and as  of
the  date  hereof,  as though made on such date  (except  to  the
extent that such representations and warranties relate solely  to
an earlier date);

               e.    No Event of Default or event which with the giving of
notice  or  passage of time would constitute an Event of  Default
shall  have  occurred and be continuing on the date  hereof,  nor
shall result from the consummation of the transactions contemplated herein;

               f.    No injunction, writ, restraining order, or other order
of   any   nature   prohibiting,  directly  or  indirectly,   the
consummation of the transactions contemplated herein  shall  have
been  issued  and  remain in force by any governmental  authority
against Borrower, Foothill, or any of their Affiliates;

               g.    The Collateral shall not have declined materially in
value from the values set forth in the most recent appraisals  or
field examinations previously done by Foothill; and

               h.    All other documents and legal matters in connection
with  the transactions contemplated by this Amendment shall  have
been  delivered or executed or recorded and shall be in form  and
substance satisfactory to Foothill and its counsel.

          4.   Effect on Agreement.  The Agreement, as amended hereby,
shall  be and remain in full force and effect in accordance  with
its  respective terms and hereby is ratified and confirmed in all
respects.   The  execution, delivery,  and  performance  of  this
Amendment  shall  not  operate as  a  waiver  of  or,  except  as
expressly set forth herein, as an amendment, of any right, power,
or  remedy of Foothill under the Agreement, as in effect prior to
the date hereof.

          5.   Further Assurances.  Borrower shall execute and deliver
all agreements, documents, and instruments, in form and substance
satisfactory  to Foothill, and take all actions as  Foothill  may
reasonably request from time to time, to perfect and maintain the
perfection and priority of Foothill's security interests  in  the
Collateral  and  the Real Property, and to fully  consummate  the
transactions contemplated under this Amendment and the Agreement,
as amended by this Amendment.

          6.   Miscellaneous.

               a.    Upon the effectiveness of this Amendment, each
reference  in  the  Agreement to "this  Agreement",  "hereunder",
"herein",  "hereof"  or  words of like import  referring  to  the
Agreement shall mean and refer to the Agreement as amended by this Amendment.

               b.    Upon the effectiveness of this Amendment, each
reference   in  the  Loan  Documents  to  the  "Loan  Agreement",
"thereunder",  "therein",  "thereof"  or  words  of  like  import
referring  to the Agreement shall mean and refer to the Agreement
as amended by this Amendment.

               c.    Upon the effectiveness of this Amendment, each
reference  in  the  Agreement and the  other  Loan  Documents  to
Exhibit  F-1, Exhibit F-2, or Exhibit F-3 of the Agreement  shall
mean  and  refer  to  Exhibit F-1, Exhibit F-2,  or  Exhibit  F-3
attached hereto, respectively.

               d.    This Amendment may be executed in any number of
counterparts,  all of which taken together shall  constitute  one
and the same instrument and any of the parties hereto may execute
this Amendment by signing any such counterpart.


                  [remainder of page intentionally left blank]



          IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the date first written above.


                              FOOTHILL CAPITAL CORPORATION,
                              a California corporation


                              By____________________________

                              Title:________________________



                              INTERGRAPH CORPORATION, a Delaware corporation


                              By____________________________

                              Title:________________________




                           EXHIBIT  A
                           ----------
 
                   Reaffirmation and Consent

                 All  capitalized  terms  used  herein  but   not
otherwise defined herein shall have the meanings ascribed to them
in  that  certain  Amendment Number  One  to  Loan  and  Security
Agreement, dated as of January 14, 1997 (the "Amendment").   Each
of the undersigned hereby (a) represents and warrants to Foothill
that   the   execution,   delivery,  and  performance   of   this
Reaffirmation and Consent are within its corporate  powers,  have
been  duly authorized by all necessary corporate action, and  are
not  in  contravention of any law, rule, or  regulation,  or  any
order,  judgment,  decree,  writ, injunction,  or  award  of  any
arbitrator, court, or governmental authority, or of the terms  of
its charter or bylaws, or of any contract or undertaking to which
it  is a party or by which any of its properties may be bound  or
affected; (b) consents to the amendment of the Agreement  by  the
Amendment;  (c) acknowledges and reaffirms its obligations  owing
to  Foothill  under  the  Pledge Agreement  and  any  other  Loan
Documents to which it is party; and (d) agrees that each  of  the
Pledge  Agreement and any other Loan Documents to which it  is  a
party  is  and  shall remain in full force and effect.   Although
each  of  the  undersigned has been informed of the  matters  set
forth  herein  and  has  acknowledged  and  agreed  to  same,  it
understands that Foothill has no obligation to inform it of  such
matters in the future or to seek its acknowledgement or agreement
to future amendments, and nothing herein shall create such a duty.


                              M&S COMPUTING INVESTMENTS, INC.,  a  
                              Delaware corporation

                              By ___________________________
                              Title:________________________


                              INTERGRAPH DELAWARE, INC., a Delaware
                              corporation

                              By ___________________________
                              Title:________________________



                          Exhibit F-1
                          -----------

                        [TO BE ATTACHED]



                          Exhibit F-2
                          -----------

               F/X RESERVE REDUCTION CERTIFICATE

Today's date:____________________

(1)       FROM INTERGRAPH TO: NORWEST BANK MINNESOTA
                              ATTENTION: Mike Schaefer/Ann Johnson
                              FACSIMILE: (612) 667-0513

(2)       FROM NORWEST TO:    FOOTHILL CAPITAL CORPORATION
                              ATTENTION: Bryan Hamm
                              FACSIMILE: (617) 722-9485

(3)       FROM FOOTHILL TO INTERGRAPH AND NORWEST:

Reference  hereby  is  made  to that certain  Loan  and  Security
Agreement,   dated   as  of  December  20,  1996   (as   amended,
supplemented,  and  modified,  the  "Loan  Agreement"),   between
Foothill   Capital   Corporation  ("Foothill")   and   Intergraph
Corporation ("Borrower").  Capitalized terms used herein and  not
otherwise defined herein shall have the meanings ascribed to them
in the Loan Agreement.

Pursuant  to  Section  2.4  of  the  Agreement,  Borrower  hereby
requests  a reduction in the F/X Reserve from the current  amount
of  $____________  to  the  new amount  of  $_____________,  such
reduction to become effective on _____________,______.

INTERGRAPH CORPORATION        FACSIMILE: (205) 730-2742
                              ATTENTION: Roger Fulton
By:_______________________

Its:______________________

NORWEST BANK MINNESOTA, N.A.

By:_______________________

Its:______________________

FOOTHILL CAPITAL CORPORATION

By:_______________________

Its:______________________



                          Exhibit F-3
                          -----------
   
                F/X RESERVE INCREASE CERTIFICATE

Today's date:____________________

(1)       FROM INTERGRAPH TO: FOOTHILL CAPITAL CORPORATION
                              ATTENTION: Bryan Hamm
                              FACSIMILE: (617) 722-9485

(2)       FROM FOOTHILL TO:   NORWEST BANK MINNESOTA
                              ATTENTION: Mike Schaefer/Ann Johnson
                              FACSIMILE: (612) 667-0513

(3)       FROM NORWEST TO INTERGRAPH AND FOOTHILL:

Reference hereby is made to that certain Loan and Security
Agreement, dated as of December 20, 1996 (as amended, restated,
supplemented, and modified from time to time, the "Loan
Agreement"), between Foothill Capital Corporation ("Foothill")
and Intergraph Corporation ("Borrower").  Capitalized terms used
herein and not otherwise defined herein shall have the meanings
ascribed to them in the Loan Agreement.

Pursuant to Section 2.4 of the Agreement, Borrower hereby
requests an increase in the F/X Reserve from the current amount
of $____________ to the new amount of $_____________, such
increase to become effective on _____________,______.

INTERGRAPH CORPORATION        FACSIMILE: (205) 730-2742
                              ATTENTION: Roger Fulton
By:_______________________

Its:______________________

FOOTHILL CAPITAL CORPORATION

By:_______________________

Its:______________________

NORWEST BANK MINNESOTA, N.A.

By:_______________________

Its:______________________