FIRST AMENDMENT TO CREDIT AGREEMENT


This  Amendment  is made  as of the  15th  day of  March,  1996  by and  between
Electronic Hair Styling,  Inc., a Washington  corporation (the "Borrower"),  and
Norwest Business Credit, Inc., a Minnesota corporation (the "Lender").

                                                      Recitals

The Borrower and the Lender have entered into the Credit and Security  Agreement
dated as of November 16, 1995 (the "Credit Agreement").

The Lender has agreed to make a term loan,  a real estate loan and certain  loan
advances to the Borrower  pursuant to the terms and  conditions set forth in the
Credit Agreement.

The term loan is evidenced by the  Borrower's  term note dated November 16, 1995
in the  original  principal  amount  of  $2,300,000,  the  real  estate  loan is
evidenced  by the  Borrower's  real estate note dated  November  16, 1995 in the
original  principal  amount of $3,700,000 and the loan advances under the Credit
Agreement are evidenced by the  Borrower's  revolving  note dated as of November
16, 1995, in the maximum  principal  amount of $14,000,000,  each of which notes
are payable to the order of the Lender (collectively, the "Note").

All  indebtedness of the Borrower to the Lender is secured pursuant to the terms
of the Credit  Agreement  and all other  Security  Documents as defined  therein
(collectively, the "Security Documents").

The  Borrower  has  requested  that  certain  amendments  be made to the  Credit
Agreement,  which  the  Lender  is  willing  to make  pursuant  to the terms and
conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained, it is agreed as follows:

1. Terms used in this Amendment which are defined in the Credit  Agreement shall
have the same meanings as defined therein, unless otherwise defined herein.

2.       The Credit Agreement is hereby amended as follows:

         (a) Section 6.13 of the Credit  Agreement is hereby amended by deleting
         the portion of said Section set forth in table form and  replacing  the
         same with the following:


<PAGE>


                                                                Book Net Worth
                  For the Month Ending           Plus Subordinated Indebtedness

                  December 31, 1995                                  $10,050,000
                  January 31, 1996                                    $8,550,000
                  February 29,1996                                    $8,550,000
                  March 31, 1996                                      $8,250,000
                  April 30, 1996                                      $8,250,000
                  May 31, 1996                                        $8,250,000
                  June 30, 1996                                       $8,250,000
                  July 31, 1996                                       $8,550,000
                  August 31, 1996                                     $8,850,000
                  September 30,1996                                   $8,850,000
                  October 31, 1996                                    $9,250,000
                  November 30, 1996                                   $9,750,000
                  December 31, 1996                                  $10,050,000

         (b) Section 6.14 of the Credit  Agreement is hereby amended by deleting
         the portion of said Section set forth in table form and  replacing  the
         same with the following:


                  For the Month Ending                        Leverage Ratio
                  --------------------                        --------------
                  January 31, 1996                            4.06 to 1.0
                  February 29, 1996                           4.35 to 1.0
                  March 31, 1996                              4.39 to 1.0
                  April 30, 1996                              4.45 to 1.0
                  May 31, 1996                                4.26 to 1.0
                  June 30, 1996                               4.36 to 1.0
                  July 31, 1996                               4.52 to 1.0
                  August 31, 1996                             4.49 to 1.0
                  September 30, 1996                          4.14 to 1.0
                  October 31, 1996                            3.86 to 1.0
                  November 30, 1996                           3.59 to 1.0
                  December 31, 1996                           3.58 to 1.0

         (c) Section 6.15 of the Credit  Agreement is hereby amended by deleting
         the portion of said Section set forth in table form and  replacing  the
         same with the following:


                  For the Month Ending                        Net Income
                  --------------------                        ----------
                  January 31, 1996                            ($1,500,000)
                  February 29, 1996                           ($1,500,000)
                  March 31, 1996                              ($1,500,000)
                  April 30, 1996                              ($1,800,000)
                  May 31, 1996                                ($1,800,000)
                  June 30, 1996                               ($1,800,000)
                  July 31, 1996                               ($1,500,000)
                  August 31, 1996                             ($1,200,000)
                  September 30, 1996                          ($1,200,000)
                  October 31, 1996                              ($800,000)
                  November 30, 1996                             ($300,000)
                  December 31, 1996                                 -0-

     (d) Section  6.16 of the Credit  Agreement  is hereby  amended by adding to
said Section the following proviso:

                  ";  provided,  however,  that  the  Borrower  may  reduce  the
                  outstanding principal balance of the Subordinated Indebtedness
                  by up to  $5,000,000,  solely  out  of  the  proceeds  of  the
                  Borrower's initial public offering of its common stock, if and
                  only if the net proceeds from any such initial public offering
                  are equal to or in excess of $15,000,000."

     (e) Section  6.17 of the Credit  Agreement  is hereby  amended by adding to
said Section a new sentence, reading as follows:
                  "In addition to the foregoing, the Lender shall have the right
                  to modify (i) any or all of such covenants in its  discretion,
                  within  60 days  after  the  close of the  Borrower's  initial
                  public  offering of its common stock,  and (ii) Leverage Ratio
                  and Book Net Worth Plus Subordinated Indebtedness covenants if
                  at any time  the  value of the  Borrower's  Class A  preferred
                  stock is determined to be greater than $7,000,000."

     (f) Section 7.5 of the Credit  Agreement is hereby amended by adding to the
end of said Section the following proviso:

                  "provided,  further,  however, that the Borrower may redeem up
                  to  $5,000,000 of its Class B preferred  stock,  solely out of
                  the proceeds of the Borrower's  initial public offering of the
                  its common  stock,  if and only if the net  proceeds  from any
                  such  initial  public  offering  are  equal to or in excess of
                  $15,000,000."

     (g) Section  8.1(q) of the Credit  Agreement is hereby amended by adding to
the end of said Section the following proviso:

                  "; provided,  however,  that such minimum ownership percentage
                  requirement shall be reduced to 24% of the voting stock of the
                  Borrower if the Borrower  raises at least  $15,000,000  of net
                  proceeds from the Borrower's  initial  public  offering of its
                  common stock."

3.  Except  as  explicitly  amended  by this  Amendment,  all of the  terms  and
conditions  of the Credit  Agreement  shall  remain in full force and effect and
shall apply to any loan or advance thereunder.

4. This  Amendment  shall be effective upon receipt by the Lender of an executed
facsimile  copy hereof,  to be  supplemented  with an executed  original  hereof
within two (2) business days, together with the following, in substance and form
acceptable to the Lender in its sole discretion:

         (a)  Certificate of the Secretary of the Borrower  certifying as to (i)
         the resolutions of the board of directors of the Borrower approving the
         execution  and  delivery  of this  Amendment,  (ii) the  fact  that the
         Articles  of  Incorporation  and  Bylaws of the  Borrower,  which  were
         certified and delivered to the Lender  pursuant to the  Certificate  of
         the  Borrower's  Secretary  dated as of November 16, 1995 in connection
         with the  execution  and delivery of the Credit  Agreement  continue in
         full force and effect and have not been amended or  otherwise  modified
         except  as set  forth in the  Certificate  to be  delivered,  and (iii)
         certifying  that the  officers and agents of the Borrower who have been
         certified to the Lender,  pursuant to the Certificate of the Borrower's
         Secretary  dated as of November 16, 1995,  as being  authorized to sign
         and to act on behalf of the Borrower  continue to be so  authorized  or
         setting forth the sample  signatures of each of the officers and agents
         of the Borrower  authorized  to execute and deliver this  Amendment and
         all  other  documents,  agreements  and  certificates  on behalf of the
         Borrower.

5.       The Borrower hereby represents and warrants to the Lender as follows:

         (a) The  Borrower  has  requisite  power and  authority to execute this
         Amendment  and to perform all of its  obligations  hereunder,  and this
         Amendment  has been duly  executed  and  delivered  by the Borrower and
         constitutes  the legal,  valid and binding  obligation of the Borrower,
         enforceable in accordance with its terms.

         (b) The  execution,  delivery and  performance  by the Borrower of this
         Amendment have been duly authorized by all necessary  corporate  action
         and do not (i)  require any  authorization,  consent or approval by any
         governmental   department,   commission,   board,  bureau,   agency  or
         instrumentality, domestic or foreign, (ii) violate any provision of any
         law,  rule or regulation  or of any order,  writ,  injunction or decree
         presently  in effect,  having  applicability  to the  Borrower,  or the
         articles of incorporation  or by-laws of the Borrower,  or (iii) result
         in a breach of or  constitute a default  under any indenture or loan or
         credit agreement or any other  agreement,  lease or instrument to which
         the Borrower is a party or by which it or its  properties  may be bound
         or affected.

         (c) All of the representations and warranties contained in Article V of
         the Credit Agreement are correct on and as of the date hereof as though
         made  on  and  as  of  such  date,  except  to  the  extent  that  such
         representations and warranties relate solely to an earlier date.

6. All references in the Credit Agreement to "this Agreement" shall be deemed to
refer to the Credit  Agreement as amended hereby;  and any and all references in
the Security  Documents to the Credit  Agreement shall be deemed to refer to the
Credit  Agreement as amended  hereby.  7. The  execution of this  Amendment  and
acceptance of any documents related hereto shall not be deemed to be a waiver of
any Default or Event of Default under the Credit Agreement or breach, default or
event of default  under any  Security  Document  or other  document  held by the
Lender,  whether or not known to the Lender and  whether or not  existing on the
date of this Amendment.

8. The  Borrower  hereby  absolutely  and  unconditionally  releases and forever
discharges  the  Lender,  and  any and all  participants,  parent  corporations,
subsidiary  corporations,   affiliated  corporations,   insurers,   indemnitors,
successors  and  assigns  thereof,  together  with all of the present and former
directors,  officers, agents and employees of any of the foregoing, from any and
all  claims,  demands  or causes of action of any kind,  nature or  description,
whether  arising in law or equity or upon contract or tort or under any state or
federal law or otherwise,  which the Borrower has had, now has or has made claim
to have against any such person for or by reason of any act,  omission,  matter,
cause or thing  whatsoever  arising from the  beginning of time to and including
the date of this  Amendment,  whether such claims,  demands and causes of action
are matured or unmatured or known or unknown.

9. The Borrower hereby reaffirms its agreement under the Credit Agreement to pay
or  reimburse  the Lender on demand for all costs and  expenses  incurred by the
Lender in connection with the Credit Agreement,  the Security  Documents and all
other  documents   contemplated   thereby,   including  without  limitation  all
reasonable  fees  and  disbursements  of legal  counsel.  Without  limiting  the
generality of the foregoing,  the Borrower  specifically  agrees to pay all fees
and  disbursements  of counsel to the Lender for the services  performed by such
counsel in connection  with the  preparation of this Amendment and the documents
and instruments  incidental  hereto.  The Borrower hereby agrees that the Lender
may, at any time or from time to time in its sole discretion and without further
authorization  by the  Borrower,  make a loan to the  Borrower  under the Credit
Agreement, or apply the proceeds of any loan, for the purpose of paying any such
fees, disbursements, costs and expenses.

10. This Amendment may be executed in any number of counterparts,  each of which
when so executed  and  delivered  shall be deemed an  original  and all of which
counterparts, taken together, shall constitute one and the same instrument.


<PAGE>


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

                                            ELECTRONIC HAIR STYLING, INC.


                                            By: _________/s/ DON G. HOFF_____
                                     Its:     _________________________________



                                            NORWEST BUSINESS CREDIT, INC.


                                        By: ___________________________________
                                         Its: _________________________________
69493_4




<PAGE>





                                        SECOND AMENDMENT TO CREDIT AGREEMENT


This  Amendment  is made  as of the  30th  day of  August,  1996 by and  between
Electronic Hair Styling,  Inc., a Delaware  corporation  (the  "Borrower"),  and
Norwest Business Credit, Inc., a Minnesota corporation (the "Lender").

                                                      Recitals

The Borrower and the Lender have entered into the Credit and Security  Agreement
dated as of  November  16,  1995,  as amended by the First  Amendment  To Credit
Agreement dated as of March 15, 1996 (the "Credit Agreement").

The Lender has agreed to make a term loan,  a real estate loan and certain  loan
advances to the Borrower  pursuant to the terms and  conditions set forth in the
Credit Agreement.

The term loan is evidenced by the  Borrower's  term note dated November 16, 1995
in the  original  principal  amount  of  $2,300,000,  the  real  estate  loan is
evidenced  by the  Borrower's  real estate note dated  November  16, 1995 in the
original  principal  amount of $3,700,000 and the loan advances under the Credit
Agreement are evidenced by the  Borrower's  revolving  note dated as of November
16, 1995, in the maximum  principal  amount of $14,000,000,  each of which notes
are payable to the order of the Lender (collectively, the "Note").

All  indebtedness of the Borrower to the Lender is secured pursuant to the terms
of the Credit  Agreement  and all other  Security  Documents as defined  therein
(collectively, the "Security Documents").

The  Borrower  has  requested  that  certain  amendments  be made to the  Credit
Agreement,  which  the  Lender  is  willing  to make  pursuant  to the terms and
conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained, it is agreed as follows:

1. Terms used in this Amendment which are defined in the Credit  Agreement shall
have the same meanings as defined therein, unless otherwise defined herein.

2.       The Credit Agreement is hereby amended as follows:

         (a) The  definition  of  "Revolving  Loan  Floating  Rate" set forth in
         Section 1.1 of the Credit Agreement is hereby amended,  effective as of
         July 1, 1996,  by  deleting  the phrase  "one and  one-quarter  percent
         (1.25%)"  therefrom and replacing the same with the phrase "one-half of
         one percent (0.50%)".

         (b) The  definition of "Term Loan  Floating  Rate" set forth in Section
         1.1 of the Credit Agreement is hereby amended,  effective as of July 1,
         1996,  by  deleting  the  phrase  "one and  one-half  percent  (1.50%)"
         therefrom and replacing the same with the phrase  "three-fourths of one
         percent (0.75%)".

         (c) Section 1.1 of the Credit  Agreement is hereby  further  amended by
         adding to said Section new definitions of "Availability", "L/C Amount",
         "Letter of Credit",  "Obligation of  Reimbursement",  "Special Account"
         and "L/C Application", reading as follows:

               "Availability"  means the  Borrowing  Base minus the  outstanding
          balance under the Revolving Note,  minus the L/C Amount.  "L/C Amount"
          means the sum of (i) the face  amount of any  issued  and  outstanding
          Letters  of Credit  and (ii) the unpaid  amount of the  Obligation  of
          Reimbursement.  "L/C  Application"  means an application and agreement
          for letters of credit in Lender's  then-current standard form. "Letter
          of  Credit"  has  the  meaning   specified  in  Section  2.15  hereof.
          "Obligation  of  Reimbursement"  has the meaning  specified in Section
          2.16  hereof.  "Special  Account"  means a specified  cash  collateral
          account maintained by the Lender in connection with Letters of Credit,
          as contemplated by Sections 2.17 and 3.1a. hereof.

         (d) Section 2.1 of the Credit  Agreement is hereby  amended by deleting
         the first  paragraph,  as well as  sub-paragraph  (a)  thereof in their
         entirety and replacing the same with the following:

                  "Section 2.1  Advances.  The Lender  agrees,  on the terms and
                  subject to the conditions  herein set forth,  to make Advances
                  to the  Borrower  from time to time during the period from the
                  date hereof to and  including  the  Termination  Date,  or the
                  earlier date of  termination  in whole of the Credit  Facility
                  pursuant to Sections 2.6 or 8.2 hereof, in an aggregate amount
                  at any time  outstanding not to exceed the Borrowing Base less
                  the  L/C  Amount,  which  advances  shall  be  secured  by the
                  Collateral  as  provided  in Article  III  hereof.  The Credit
                  Facility should be a revolving facility and it is contemplated
                  that the Borrower will request advances,  make prepayments and
                  request  additional  Advances.  The Borrower  agrees to comply
                  with the following  procedures in  requesting  Advances  under
                  this Section 2.1:

                           (a) Borrower  will not request any Advance under this
                           Section  2.1,   if,  after  giving   effect  to  such
                           requested  Advance,  the sum of the  outstanding  and
                           unpaid  Advances  under this Section 2.1 or otherwise
                           would exceed the Borrowing Base less the L/C Amount."

               (e)  Section  2.5 of the Credit  Agreement  is hereby  amended by
          adding thereto a new sub-section (e), reading as follows:

                  "(e) Notwithstanding the interest payable pursuant to Sections
                  2.5(a),  (b) and (c) hereof,  the Borrower  shall be liable to
                  the Lender for interest  hereunder  of not less than  $600,000
                  for each calendar year during the term of the Agreement  other
                  than any calendar  year in which this  Agreement is terminated
                  prior to the  Termination  Date  (such  amount,  the  "Minimum
                  Interest  Charge"),  and the Borrower shall pay any deficiency
                  between the Minimum Interest Charge and the amount of interest
                  otherwise  calculated  under  Sections  2.5(a),  (b),  and (c)
                  hereof  for each  such  calendar  year on the day  immediately
                  succeeding the last day of each such calendar year."

         (f)  Section  2.6(d)  of the  Credit  Agreement  is hereby  amended  by
         deleting  clauses  (c)  and  (d)  thereof  in  their  entirety,  and by
         inserting the word "and" immediately before clause (b) thereof.

         (g) Section 2.8 of the Credit  Agreement is hereby  amended by deleting
         said Section in its entirety and replacing the same with the following:

                  "Section 2.8 Payment.  All payments of principal  and interest
                  on the  Advances,  the Term Loan,  the Real Estate  Loan,  the
                  Obligation  of   Reimbursement,   the   Commissions  and  Fees
                  hereunder  and  amounts  required to be paid to the Lender for
                  deposit in the Special  Account shall be made to the Lender in
                  immediately  available funds.  The Borrower hereby  authorizes
                  the Lender to charge against the  Borrower's  account with the
                  Lender an amount  equal to the  Obligation  of  Reimbursement,
                  principal, accrued interest, commissions and fees from time to
                  time due and  payable  to the  Lender  hereunder  and  amounts
                  required  to be paid to the Lender for  deposit in the Special
                  Account and further  authorizes the Lender, in its discretion,
                  and without  request by Borrower to make an Advance  under the
                  Credit  Facility  to the  extent  necessary  to pay  any  such
                  amounts and any fees, costs or expenses hereunder or under the
                  Loan Documents."

         (h) Section 2.11 of the Credit  Agreement is hereby amended by deleting
         said Section in its entirety and replacing the same with the following:

                  "Section 2.11 Liability Records. Lender may maintain from time
                  to time, at its  discretion,  liability  records as to any and
                  all  Advances,  the Term Loan,  the Real  Estate  Loan and the
                  Obligation of Reimbursement made or repaid in interest accrued
                  or paid under this  Agreement.  All  entries  made on any such
                  record   shall  be  presumed   correct   until  the   Borrower
                  establishes  the  contrary.  On  demand  by  the  Lender,  the
                  Borrower will admit and certify in writing the exact principal
                  balance that the Borrower  then asserts to be  outstanding  to
                  the Lender for Advances,  the Term Loan, the Real Estate Loan,
                  and all Obligations of Reimbursement under this Agreement. Any
                  billing  statement or accounting  rendered by the Lender shall
                  be  conclusive  and  fully  binding  on  the  Borrower  unless
                  specific written notice of exception is given to the Lender by
                  the  Borrower  within  thirty  days  after its  receipt by the
                  Borrower."

         (i) Section 2.12 of the Credit  Agreement is hereby amended by deleting
         said Section in its entirety and replacing the same with the following:

                  "Section 2.12 Setoff.  The Borrower agrees that the Lender may
                  at any time or from time to time, at its sole  discretion  and
                  without  demand  and  without  notice to  anyone,  setoff  any
                  liability owed to Borrower by the Lender,  whether or not due,
                  against any  indebtedness  owed to the Lender by the  Borrower
                  (for  Advances,  the Term  Loan,  the Real  Estate  Loan,  any
                  Obligations of Reimbursement  or for any other  transaction or
                  event),  whether or not due. In  addition,  each other  Person
                  holding a  participating  interest in any  Advances,  the Term
                  Loan,  the Real  Estate Loan and/or any Letters of Credit made
                  to or issued  for the  benefit of the  Borrower  by the Lender
                  shall  have the right to  appropriate  or setoff a deposit  or
                  other  liability  then owed by such  Person  to the  Borrower,
                  whether or not due,  and apply the same to the payment of said
                  participating  interest,  as fully as if such  Person had lent
                  directly  to the  Borrower  the  amount of such  participating
                  interest."

         (j) Section 2.13 of the Credit  Agreement is hereby amended by deleting
         sub-section (b) thereof in its entirety and replacing the same with the
         following:

                  "(b) Intentionally omitted."

         (k) Section 2.13 of the Credit  Agreement is hereby further  amended by
         deleting the number "four (4)"  contained in subsection (c) thereof and
         replacing the same with the number "three (3)".

         (l) Section 2.13 of the Credit  Agreement is hereby further  amended by
         adding to said Section a new sub-section (d) reading as follows:

                  "(d) The Borrower hereby agrees to pay the Lender a commission
                  with respect to each Letter of Credit,  if any,  accruing on a
                  daily  basis  and  computed  at the  annual  rate  of one  and
                  one-half percent (1.5%) of the available amount of such Letter
                  of Credit  (as it may be  changed  from time to time) from and
                  including  the date of issuance of such Letter of Credit until
                  such  date as such  Letter of Credit  shall  terminate  by its
                  terms,  payable monthly in arrears,  and prorated for any part
                  of a full  calendar  month  in which  such  Letter  of  Credit
                  remains  outstanding.  The Borrower  further agrees to pay the
                  Lender, on written demand, the administrative  fees charged by
                  the Lender in the  ordinary  course of business in  connection
                  with the  honoring  of  drafts  under any  Letter  of  Credit,
                  amendments  thereto,  transfers thereof and all other activity
                  with  respect  to the  Letters  of Credit at the  then-current
                  rates published by the Lender for services  rendered on behalf
                  of customers of the Lender generally."

         (m) The  Credit  Agreement  is hereby  amended  by adding  thereto  the
         following new Sections 2.15, 2.16, 2.17 and 2.18, reading as follows:

         Section 2.15.  Issuance of Letters of Credit.

                  (a) The Lender may, in its sole discretion,  issue one or more
                  letters of credit  for the  account  of the  Borrower  (each a
                  "Letter of  Credit")  from time to time during the period from
                  the date hereof until the Termination Date or until the Credit
                  Facility is terminated  pursuant to Section 8.2(a),  whichever
                  first occurs,  in an aggregate  amount at any time outstanding
                  not to  exceed  the  Borrowing  Base  less  the sum of (i) all
                  outstanding and unpaid Advances  hereunder and (ii) the unpaid
                  amount of the  Obligation  of  Reimbursement.  Each  Letter of
                  Credit,  if any,  shall be issued  pursuant to a separate  L/C
                  Application  entered into between the Borrower and the Lender,
                  completed in a manner  satisfactory  to the Lender.  The terms
                  and  conditions set forth in each such L/C  Application  shall
                  supplement the terms and conditions  hereof,  but in the event
                  of inconsistency between the terms of any such L/C Application
                  and the terms hereof, the terms hereof shall control.

                  (b) The  Borrower  will not request the issuance of any Letter
                  of Credit  under this  Section  2.15 if, after the issuance of
                  such requested  Letter of Credit,  the sum of the face amounts
                  of all issued and  outstanding  Letters of Credit would exceed
                  the  Borrowing  Base less the sum of (i) all  outstanding  and
                  unpaid  Advances  hereunder  and (ii) the unpaid amount of the
                  Obligation of Reimbursement.

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

                  (d) Any request for the  issuance of a Letter of Credit  under
                  this  Section 2.15 shall be deemed to be a  representation  by
                  the  Borrower  that (i) the  condition  set  forth in  Section
                  2.15(b),  hereof  has been met,  and (ii) the  statements  set
                  forth in  Article V hereof  are  correct as of the time of the
                  request.

         Section 2.16.  Payment of Amounts Drawn Under Letters of Credit.  Draws
         under  any  Letter  of  Credit  shall be  reimbursed  to the  Lender in
         accordance with the applicable L/C Application and as follows:

                  (a) The Borrower  hereby agrees to pay the Lender on the day a
                  draft is honored under any Letter of Credit a sum equal to all
                  amounts  drawn  under such  Letter of Credit  plus any and all
                  reasonable  charges  and  expenses  that the Lender may pay or
                  incur  relative  to  such  draw,  plus  interest  on all  such
                  amounts,  accruing from the date such draft is honored through
                  and  including  the date of  payment  by the  Borrower  at the
                  interest rate then applicable to Advances  hereunder,  charges
                  and  expenses  as  set  forth  below  (all  such  amounts  are
                  hereinafter referred to,  collectively,  as the "Obligation of
                  Reimbursement").

                  (b) The  Borrower  hereby  agrees to pay the  Lender on demand
                  interest on all amounts,  charges and expenses  payable by the
                  Borrower to the Lender under this Section  2.16,  accrued from
                  the date any such  draft,  charge  or  expense  is paid by the
                  Lender  until  payment in full by the  Borrower at the Default
                  Rate.

                  If the Borrower fails to pay to the Lender promptly the amount
                  of its  Obligation of  Reimbursement  in  accordance  with the
                  terms  hereof and the L/C  Application  pursuant to which such
                  Letter of Credit was issued,  the Lender is hereby irrevocably
                  authorized and directed,  in its sole  discretion,  to make an
                  Advance in an amount sufficient to discharge the Obligation of
                  Reimbursement,  including  all  interest  accrued  thereon but
                  unpaid at the time of such Advance,  and such Advance shall be
                  evidenced  by the  Revolving  Note and shall bear  interest as
                  provided therein.

         Section  2.17 Special  Account.  If the Credit  Facility is  terminated
         pursuant  to  Section  8.2(a),  or the  Credit  Facility  is  otherwise
         terminated  for any  reason  whatsoever,  while any Letter of Credit is
         outstanding, the Borrower shall thereupon pay the Lender in immediately
         available  funds for deposit in the Special  Account an amount equal to
         the maximum aggregate amount available to be drawn under all Letters of
         Credit then  outstanding,  assuming  compliance with all conditions for
         drawing  thereunder.  Amounts in the Special Account may be invested as
         Lender shall determine,  including in certificates of deposit issued by
         Lender.  Any interest and earnings on such amounts shall be credited to
         the Special  Account.  The Borrower  shall not be  responsible  for any
         losses  from the  investment  or use of funds in the  Special  Account.
         Amounts on deposit in the Special  Account may be applied by the Lender
         at any  time or from  time to  time  to the  Borrower's  Obligation  of
         Reimbursement,  and shall not be subject to  withdrawal by the Borrower
         so long as the Lender maintains a security interest therein;  provided,
         however,  that, upon the occurrence of any Event of Default, the Lender
         may  apply  such  amounts  to  any  of  the  Obligations  in  its  sole
         discretion.  The Lender  agrees to transfer  any balance in the Special
         Account  to the  Borrower  at such time as the  Lender is  required  to
         release its security  interest in the Special Account under  applicable
         law.

         Section 2.18  Obligations  Absolute.  The  obligations  of the Borrower
         arising  under this  Agreement  shall be  absolute,  unconditional  and
         irrevocable, and shall be paid strictly in accordance with the terms of
         this Agreement, under all circumstances whatsoever,  including (without
         limitation) the following circumstances:

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

                    (b) any  amendment  or waiver of or any consent to departure
               from all or any of the Related Documents;

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

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

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

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

         (n) Section 3.1 of the Credit  Agreement is hereby  amended by deleting
         said Section in its entirety and replacing the same with the following:

                  "Section 3.1 Grant of Security  Interest.  The Borrower hereby
                  assigns   and  grants  to  the  Lender  a  security   interest
                  (collectively  referred to as the "Security Interests") in the
                  Collateral,  as security  for the payment and  performance  of
                  each and every debt,  liability  and  obligation of every type
                  and  description  which  the  Borrower  may now or at any time
                  hereafter owe to the Lender  (whether such debt,  liability or
                  obligation  now exists or is  hereafter  created or  incurred,
                  whether it arises in a transaction  involving the Lender alone
                  or in a transaction involving other creditors of the Borrower,
                  and  whether it is direct or  indirect,  due or to become due,
                  absolute or  contingent,  primary or secondary,  liquidated or
                  unliquidated,  or sole,  joint,  several or joint and several,
                  and including specifically, but not limited to, the Obligation
                  of Reimbursement  and all indebtedness of the Borrower arising
                  under this  Agreement,  any L/C  Application  completed by the
                  Borrower  or any other loan or credit  agreement  or  guaranty
                  between  Borrower  and  Lender,   whether  now  in  effect  or
                  hereafter  entered  into;  all  such  debts,  liabilities  and
                  obligations  are  herein  collectively   referred  to  as  the
                  "Obligations")."

     (o)  The Credit Agreement is hereby amended by adding thereto a new Section
          3.1a.,  reading  as  follows:  "3.1a.  Security  Interest  in  Special
          Account. The Borrower
                  hereby pledges and grants to the Lender a security interest in
                  all funds held in the  Special  Account  from time to time and
                  all  proceeds  thereof,  as  security  for the  payment of all
                  present and future  Obligations of Reimbursement and all other
                  amounts due hereunder or under the Loan Documents."

     (p)  Section 3.2 of the Credit  Agreement is hereby amended by deleting the
          parenthetical  phrase  contained in the first sentence of said Section
          and  replacing  the same  with the  following:  "(but  only  after the
          occurrence of an Event of Default)".

     (q)  Section  6.1(d) of the Credit  Agreement is hereby amended by deleting
          said  Section  in  its  entirety  and  replacing  the  same  with  the
          following:

                  "(d)  within 15 days of the end of each  month,  a schedule of
                  assigned  receivables,  a  collection  report  and such  other
                  documents  regarding the  Borrower's  accounts  receivable and
                  collections  as the Lender may request,  on forms  provided by
                  the  Lender;   provided,   however,  that  if  the  Borrower's
                  Availability  becomes less than  $5,000,000,  such reports and
                  schedules  shall be provided to the Lender on a weekly  basis;
                  provided, further, that if the Borrower's Availability becomes
                  less than $5,000,000 during any weekly reporting period,  such
                  reports  and  schedules  shall  thereafter  be provided to the
                  Lender on a daily basis.

     (r)  Section 6.1(j) of the Credit Agreement is hereby amended by adding the
          following  phrase  to the end of clause  (i)  thereof:  "which  seek a
          monetary  recovery against the Borrower in excess of $50,000",  and by
          adding the following  phrase to the end of clause (ii) thereof:  "with
          an aggregate invoice price in excess of $50,000".

     (s)  Section 6.13 of the Credit Agreement is hereby amended by deleting the
          portion of said Section set forth in table form and replacing the same
          with the following:

                                                                  Book Net Worth
                  For the Month Ending            Plus Subordinated Indebtedness

                  July 31, 1996                                     $28,310,000
                  August 31, 1996                                   $28,610,000
                  September 30,1996                                 $28,610,000
                  October 31, 1996                                  $29,010,000
                  November 30, 1996                                 $29,510,000
                  December 31, 1996                                 $29,810,000
                  January 31, 1997                                  $28,310,000
                  February 28, 1997                                 $28,310,000
                  March 31, 1997                                    $28,310,000
                  April 30, 1997                                    $28,310,000

     (t)  Section 6.14 of the Credit Agreement is hereby amended by deleting the
          portion of said Section set forth in table form and replacing the same
          with the following:


                  For the Month Ending                        Leverage Ratio

                  July 31, 1996                                       1.2 to 1.0
                  August 31, 1996                                     1.2 to 1.0
                  September 30, 1996                                  1.2 to 1.0
                  October 31, 1996                                    1.2 to 1.0
                  November 30, 1996                                   1.2 to 1.0
                  December 31, 1996                                   1.2 to 1.0
                  January 31, 1997                                    1.2 to 1.0
                  February 29, 1997                                   1.2 to 1.0
                  March 31, 1997                                      1.2 to 1.0
                  April 30, 1997                                      1.2 to 1.0

     (u)  Section 6.15 of the Credit Agreement is hereby amended by deleting the
          portion of said Section set forth in table form and replacing the same
          with the following:


                  For the Month Ending                        Net Income

                  July 31, 1996                               ($1,500,000)
                  August 31, 1996                             ($1,200,000)
                  September 30, 1996                          ($1,200,000)
                  October 31, 1996                              ($800,000)
                  November 30, 1996                             ($300,000)
                  December 31, 1996                                 -0-
                  January 31, 1997                            ($1,500,000)
                  February 29, 1997                           ($1,500,000)
                  March 31, 1997                              ($1,500,000)
                  April 30, 1997                              ($1,500,000)


     (v)  Section  7.4(a) of the Credit  Agreement is hereby amended by deleting
          the introductory  paragraph  thereof in its entirety and replacing the
          same with the following:

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

     (w)  Section 7.4(a) of the Credit  Agreement is hereby  further  amended by
          deleting  subparagraph  (4) thereof in its entirety  and  re-numbering
          subparagraph (5) as subparagraph (4).

     (x)  Section  7.10 of the Credit  Agreement  is hereby  amended by deleting
          said  Section  in  its  entirety  and  replacing  the  same  with  the
          following:

                  "Section  7.10 Capital  Expenditures.  The  Borrower  will not
                  expend or contract to expend  Capital  Expenditures  more than
                  $3,400,000 in the aggregate during the Borrower's  fiscal year
                  ending  December  31,  1996,  or more than  $2,000,000  in the
                  aggregate  during  any  fiscal  year  thereafter  or more than
                  $500,000 in any one transaction  (except that the Borrower may
                  expend up to  $1,700,000 in 1996 in a single  transaction  for
                  the purchase of a new computer system)."

     (y)  Section  7.12 of the Credit  Agreement  is hereby  amended by deleting
          said  Section  in  its  entirety  and  replacing  the  same  with  the
          following:
                  "Section 7.12  Discounts,  etc..  The Borrower will not, after
                  notice  from  the  Lender,  grant  any  discount,   credit  or
                  allowance to any customer of the Borrower or accept any return
                  of  goods  sold  or  modify,  amend,  subordinate,  cancel  or
                  terminate  the  obligation  of any  account  debtor  or  other
                  obligor of the Borrower."

     (z)  Section  7.17 of the Credit  Agreement  is hereby  amended by deleting
          said  Section  in  its  entirety  and  replacing  the  same  with  the
          following:

                    "Section 7.17 Salaries.  The Borrower will not pay excessive
               or unreasonable salaries, bonuses,  commissions,  consultant fees
               or other compensation."

     (aa) Section  8.1(a) of the Credit  Agreement is hereby amended by deleting
          said  Section  in  its  entirety  and  replacing  the  same  with  the
          following:

                  "(a) Default in the payment of any interest on or principal of
                  the Note,  or failure to pay any amount  specified  in Section
                  2.16  hereof   relating  to  the   Borrower's   Obligation  of
                  Reimbursement  or shall fail to pay any amounts required to be
                  paid for deposit in the Special  Account  under  Section  2.17
                  hereof,  in each case when the same  becomes  due and  payable
                  hereunder; or".

          (bb) Section  8.1(c) of the  Credit  Agreement  is hereby  amended  by
               deleting said Section in its entirety and replacing the same with
               the following:

                  "(c) Default in the performance, or breach, of any covenant or
                  agreement  of  the  Borrower   contained  in  this  Agreement;
                  provided,  however,  that  if and  as  long  as  the  Borrower
                  maintains availability in excess of $4,000,000, the Borrower's
                  non-compliance  with the covenants set forth in Sections 6.12,
                  6.13,   6.14,   6.15  and/or  7.10  of  this  Agreement  shall
                  constitute  a Event of Default or an Event of Default  only if
                  such non-compliance  continues for in excess of 31 consecutive
                  days; or".

         (cc) Section 8.2 of the Credit  Agreement is hereby amended by deleting
         said Section in its entirety and replacing the same with the following:

                  "(a) The Lender may, by notice,  to the Borrower,  declare the
                  Credit  Facility to be  terminated,  where upon the same shall
                  forthwith terminate, and/or may refuse to issue or cause to be
                  issued any Letter of Credit;".

         (dd) Section 8.2 of the Credit  Agreement is hereby further  amended by
         adding to said Section a new sub-section (g), reading as follows:

                  "(g)  The  Lender  may make  demand  upon  the  Borrower  and,
                  forthwith  upon  such  demand,  the  Borrower  will pay to the
                  Lender  in  immediately  available  funds for  deposit  in the
                  Special  Account  pursuant  to Section  2.17  hereof an amount
                  equal to the maximum  aggregate  amount  available to be drawn
                  under Letters of Credit then outstanding  assuming  compliance
                  with all conditions for drawing thereunder."

         (ee) Section 9.7 of the Credit Agreement is hereby amended by adding to
         said Section a new second sentence reading as follows:

                  "Without  limiting  the  foregoing  in any way,  the  Borrower
                  agrees to pay on demand  all  costs  and  expenses,  including
                  without limitation reasonable attorney's fees, incurred by the
                  Lender in connection with the Obligations, this Agreement, the
                  Loan  Documents,  any Letters of Credit and any other document
                  or Agreement  related hereto or thereto,  and the transactions
                  contemplated hereby."

3.  Except  as  explicitly  amended  by this  Amendment,  all of the  terms  and
conditions  of the Credit  Agreement  shall  remain in full force and effect and
shall apply to any loan or advance thereunder.

4. The Borrower hereby  acknowledges that, on July 6, 1996, the Borrower prepaid
the Revolving Note in part in the amount of  $8,000,000,  out of the proceeds of
the Borrower's initial public offering (the "Prepayment").  The Borrower further
acknowledges  and  agrees  that,  pursuant  to  Section  2.6(d)  of  the  Credit
Agreement,  the Borrower was obligated to pay to the Lender a prepayment premium
in the  amount of  $160,000,  in  connection  with the  Prepayment  and that the
Borrower has not paid such  prepayment  premium.  The Lender  hereby  waives the
prepayment  premium which would  otherwise have been payable with respect to the
Prepayment.  The Borrower  shall pay a fee in the amount of $80,000 if, but only
if, and when the Revolving Note is prepaid in whole,  and the Credit Facility is
terminated,  before  November  15,  1998,  except  for any  prepayment  from the
proceeds of a  refinancing  with the Lender or an  affiliate  of Lender.  If the
Borrower  prepays the Revolving  Note in full from the proceeds of a refinancing
with the  Lender or an  affiliate  of the Lender and  subsequently  prepays  the
loan(s)  relating to such  refinancing  in whole before  November 15, 1998,  the
$80,000 fee described in the  immediately  preceding  sentence  shall be due and
payable in full to the Lender at the time of such prepayment.  The provisions of
this Section 4 are in addition to, and not in  replacement or  substitution  of,
the prepayment provisions set forth in the Credit Agreement,  which shall remain
in full force and effect, as otherwise amended in this Amendment.

5. This  Amendment  shall be  effective  upon  receipt  by the  Lender of (a) an
executed  original hereof within two (2) business days, and (b) a Certificate of
the Secretary of the Borrower in a form  acceptable to the Lender.  The Borrower
shall pay to the Lender an  amendment  fee in the amount of $80,000 on or before
February 28, 1997.

6.       The Borrower hereby represents and warrants to the Lender as follows:

         (a) The  Borrower  has  requisite  power and  authority to execute this
         Amendment  and to perform all of its  obligations  hereunder,  and this
         Amendment  has been duly  executed  and  delivered  by the Borrower and
         constitutes  the legal,  valid and binding  obligation of the Borrower,
         enforceable in accordance with its terms.

         (b) The  execution,  delivery and  performance  by the Borrower of this
         Amendment have been duly authorized by all necessary  corporate  action
         and do not (i)  require any  authorization,  consent or approval by any
         governmental   department,   commission,   board,  bureau,   agency  or
         instrumentality, domestic or foreign, (ii) violate any provision of any
         law,  rule or regulation  or of any order,  writ,  injunction or decree
         presently  in effect,  having  applicability  to the  Borrower,  or the
         articles of incorporation  or by-laws of the Borrower,  or (iii) result
         in a breach of or  constitute a default  under any indenture or loan or
         credit agreement or any other  agreement,  lease or instrument to which
         the Borrower is a party or by which it or its  properties  may be bound
         or affected.

         (c) All of the representations and warranties contained in Article V of
         the Credit Agreement are correct on and as of the date hereof as though
         made  on  and  as  of  such  date,  except  to  the  extent  that  such
         representations and warranties relate solely to an earlier date.

7. All references in the Credit Agreement to "this Agreement" shall be deemed to
refer to the Credit  Agreement as amended hereby;  and any and all references in
the Security  Documents to the Credit  Agreement shall be deemed to refer to the
Credit  Agreement as amended  hereby.

8. The execution of this Amendment and acceptance of any documents  related
hereto  shall not be deemed to be a waiver of any  Default  or Event of  Default
under the  Credit  Agreement  or breach,  default or event of default  under any
Security Document or other document held by the Lender,  whether or not known to
the Lender and whether or not existing on the date of this Amendment.

9. The  Borrower  hereby  absolutely  and  unconditionally  releases and forever
discharges  the  Lender,  and  any and all  participants,  parent  corporations,
subsidiary  corporations,   affiliated  corporations,   insurers,   indemnitors,
successors  and  assigns  thereof,  together  with all of the present and former
directors,  officers, agents and employees of any of the foregoing, from any and
all  claims,  demands  or causes of action of any kind,  nature or  description,
whether  arising in law or equity or upon contract or tort or under any state or
federal law or otherwise,  which the Borrower has had, now has or has made claim
to have against any such person for or by reason of any act,  omission,  matter,
cause or thing  whatsoever  arising from the  beginning of time to and including
the date of this  Amendment,  whether such claims,  demands and causes of action
are matured or unmatured or known or unknown.

10. The Borrower hereby  reaffirms its agreement  under the Credit  Agreement to
pay or reimburse the Lender on demand for all costs and expenses incurred by the
Lender in connection with the Credit Agreement,  the Security  Documents and all
other  documents   contemplated   thereby,   including  without  limitation  all
reasonable  fees  and  disbursements  of legal  counsel.  Without  limiting  the
generality of the foregoing,  the Borrower  specifically  agrees to pay all fees
and  disbursements  of counsel to the Lender for the services  performed by such
counsel in connection  with the  preparation of this Amendment and the documents
and instruments  incidental  hereto.  The Borrower hereby agrees that the Lender
may, at any time or from time to time in its sole discretion and without further
authorization  by the  Borrower,  make a loan to the  Borrower  under the Credit
Agreement, or apply the proceeds of any loan, for the purpose of paying any such
fees, disbursements, costs and expenses.

11. This Amendment may be executed in any number of counterparts,  each of which
when so executed  and  delivered  shall be deemed an  original  and all of which
counterparts, taken together, shall constitute one and the same instrument.


<PAGE>


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

                                            ELECTRONIC HAIR STYLING, INC.


                                            By: __/s/ JOHN D. HELLMANN ______
                     Its: _Vice President Finance__________



                                            NORWEST BUSINESS CREDIT, INC.


                                            By: _/s/ MICHELLE GUETTER__________
                      Its: _/s/ AVP________________________

STATE OF MINNESOTA                  )
                                    ) ss
COUNTY OF HENNEPIN                  )

The foregoing  instrument  was  acknowledged  before me this 30th day of August,
1996, by John Hellmann,  the VP of Finance of Electronic  Hair Styling,  Inc., a
California corporation, for and on behalf of said corporation.


                                 /s/ J.D. GRAHAM
                                  Notary Public
STATE OF MINNESOTA                  )
                                    ) ss
COUNTY OF HENNEPIN                  )

The foregoing  instrument  was  acknowledged  before me this 30th day of August,
1996, by Michelle Guetter, the AVP of Norwest Business Credit, Inc., a Minnesota
corporation, for and on behalf of said corporation.


                                 /s/ J.D. GRAHAM
                                  Notary Public
89128_4


<PAGE>




                                                 AMENDMENT AGREEMENT

                                            October 18, 1996

Reference is hereby made to (a) that certain Credit and Security Agreement dated
November  16, 1995 by and between  Electronic  Hair  Styling,  Inc.,  a Delaware
corporation  (the  "Company")  and Norwest  Business  Credit,  Inc., a Minnesota
corporation  ("NBCI"),  as amended (the "Credit Agreement") and (b) that certain
Collateral  Account  Agreement dated November 16, 1995 by and among the Company,
NBCI and  Norwest  Bank  Minnesota,  National  Association,  a national  banking
association  (the  "Bank"),  as the same may have been amended (the  "Collateral
Account Agreement").

1. Section 4 of the Collateral  Account Agreement is hereby amended by replacing
the number "2" set forth therein and replacing the same with the number "1".

2. Section 6.10 of the Credit Agreement is hereby amended by deleting the number
"2" set forth in the seventh  sentence of said  section and  replacing  the same
with the number "1".

3. In  consideration  of the Bank's agreement to the amendments set forth above,
NBCI agrees to  indemnify  and  reimburse  the Bank,  within ten (10) days after
demand, for any item which constitutes cash receipts of NBCI's  "Collateral" (as
defined in the Credit  Agreement)  deposited  in the  "Collateral  Account"  (as
defined in the Collateral  Account  Agreement)  which is returned unpaid and for
which the Company  does not  reimburse  the Bank,  provided  that the Bank shall
notify NBCI within five  business  days of the day the Bank learns that any such
item shall be or has been returned unpaid (whichever occurs first).

This  Agreement  shall be  governed  by and  construed  in  accordance  with the
substantive  laws (other than  conflict  laws) of the State of  Minnesota.  Each
party  consents to the  personal  jurisdiction  of the state and federal  courts
located in the State of Minnesota in connection with any controversy  related to
this  Agreement,  waives  any  argument  that  venue  in any  such  forum is not
convenient,  and  agrees  that  any  litigation  initiated  by  any of  them  in
connection  with this Agreement  shall be venued in either the District Court of
Hennepin  County,  Minnesota,  or the United States District Court,  District of
Minnesota,  Fourth Division. The parties waive any right to trial by jury in any
action or proceeding  based on or pertaining to this  Agreement.  This Agreement
may be  executed  in any  number  of  counterparts,  each of  which  shall be an
original, but all of which together shall constitute one instrument.

                                        COMPANY:  ELECTRONIC HAIR STYLING, INC.

                                         By: __/s/ JOHN D. HELLMANN_____________
                                      Its: _Vice President______________________


                                      BANK: NORWEST BANK MINNESOTA, NATIONAL
                                      ASSOCIATION


                                           By: __/s/ LYNN S. HULSTRAND__________
                                                Its: _Vice President____________

                                            NBCI: NORWEST BUSINESS CREDIT, INC.

                                         By: _/s/ MICHELLE GUETTER_____________
                                              Its: __AVP________________________


                                         THIRD AMENDMENT TO CREDIT AGREEMENT


This  Amendment  is made as of the  30th  day of  January,  1997 by and  between
Electronic Hair Styling,  Inc., a Delaware  corporation  (the  "Borrower"),  and
Norwest Business Credit, Inc., a Minnesota corporation (the "Lender").

                                                      Recitals

The Borrower and the Lender have entered into the Credit and Security  Agreement
dated as of  November  16,  1995,  as amended by the First  Amendment  To Credit
Agreement  dated as of March  15,  1996 and by the  Second  Amendment  to Credit
Agreement dated as of August 30, 1996 (the "Credit Agreement").

The Lender has agreed to make a term loan,  a real estate loan and certain  loan
advances to the Borrower  pursuant to the terms and  conditions set forth in the
Credit Agreement.

The term loan is evidenced by the  Borrower's  term note dated November 16, 1995
in the  original  principal  amount  of  $2,300,000,  the  real  estate  loan is
evidenced  by the  Borrower's  real estate note dated  November  16, 1995 in the
original  principal  amount of $3,700,000 and the loan advances under the Credit
Agreement are evidenced by the  Borrower's  revolving  note dated as of November
16, 1995, in the maximum  principal  amount of $14,000,000,  each of which notes
are payable to the order of the Lender (collectively, the "Note").

All  indebtedness of the Borrower to the Lender is secured pursuant to the terms
of the Credit  Agreement  and all other  Security  Documents as defined  therein
(collectively, the "Security Documents").

The  Borrower  has  requested  that  certain  amendments  be made to the  Credit
Agreement,  which  the  Lender  is  willing  to make  pursuant  to the terms and
conditions set forth herein.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained, it is agreed as follows:

1. Terms used in this Amendment which are defined in the Credit  Agreement shall
have the same meanings as defined therein, unless otherwise defined herein.

2.       The Credit Agreement is hereby amended as follows:

         (a) Section 6.12 of the Credit  Agreement is hereby amended by deleting
         the  number  "1.2"  therefrom  and  replacing  the same with the number
         "1.0".

         (b)  Section  6.13 of the  Credit  Agreement  is hereby  amended by (i)
         deleting the number  "$29,510,000"  (the minimum  figure  applicable to
         November 30, 1996)  therefrom  and  replacing  the same with the number
         "$29,310,000",  and (ii) deleting the number "$29,810,000" (the minimum
         figure  applicable  to December 31, 1996)  therefrom  and replacing the
         same with the number "$29,577,000".

         (c) Section  8.2 of the Credit  Agreement  is hereby  amended by adding
         thereto  sub-sections  (b) through  (f),  together  with the  paragraph
         immediately  following  sub-section  (f),  in each  case  in  form  and
         substance identical to that which existed prior to the Second Amendment
         to Credit  Agreement  dated as of August 30,  1996,  by and between the
         Borrower and the Lender.

3.  Except  as  explicitly  amended  by this  Amendment,  all of the  terms  and
conditions  of the Credit  Agreement  shall  remain in full force and effect and
shall apply to any loan or advance thereunder.

4. This  Amendment  shall be  effective  upon  receipt  by the  Lender of (a) an
executed original hereof within two (2) business days after the date hereof, and
(b) a Certificate  of the Secretary of the Borrower in a form  acceptable to the
Lender.

5.       The Borrower hereby represents and warrants to the Lender as follows:

         (a) The  Borrower  has  requisite  power and  authority to execute this
         Amendment  and to perform all of its  obligations  hereunder,  and this
         Amendment  has been duly  executed  and  delivered  by the Borrower and
         constitutes  the legal,  valid and binding  obligation of the Borrower,
         enforceable in accordance with its terms.

         (b) The  execution,  delivery and  performance  by the Borrower of this
         Amendment have been duly authorized by all necessary  corporate  action
         and do not (i)  require any  authorization,  consent or approval by any
         governmental   department,   commission,   board,  bureau,   agency  or
         instrumentality, domestic or foreign, (ii) violate any provision of any
         law,  rule or regulation  or of any order,  writ,  injunction or decree
         presently  in effect,  having  applicability  to the  Borrower,  or the
         articles of incorporation  or by-laws of the Borrower,  or (iii) result
         in a breach of or  constitute a default  under any indenture or loan or
         credit agreement or any other  agreement,  lease or instrument to which
         the Borrower is a party or by which it or its  properties  may be bound
         or affected.

         (c) All of the representations and warranties contained in Article V of
         the Credit Agreement are correct on and as of the date hereof as though
         made  on  and  as  of  such  date,  except  to  the  extent  that  such
         representations and warranties relate solely to an earlier date.



<PAGE>


6. All references in the Credit Agreement to "this Agreement" shall be deemed to
refer to the Credit  Agreement as amended hereby;  and any and all references in
the Security  Documents to the Credit  Agreement shall be deemed to refer to the
Credit Agreement as amended hereby.  7. The Borrower has indicated to the Lender
that the  Borrower  intends  to  redeem  certain  of its  presently  issued  and
outstanding common stock.  Pursuant to Section 7.5 of the Credit Agreement,  the
Borrower  is  prohibited  from  making any  payment on account of the  purchase,
redemption  or any other  retirement  of any  shares of its stock,  without  the
Lender's prior written  consent.  The Lender hereby  consents to the Borrowers's
payment of up to $1,500,000 on account of the Borrower's  redemption of its $.01
par value common stock,  provided that such redemption is consummated,  and such
payment  is  made,  on or  before  July 31,  1997.  Except  as set  forth in the
immediately  preceding sentence,  the execution of this Amendment and acceptance
of any documents related hereto shall not be deemed to be a consent to or waiver
of any Default or Event of Default under the Credit Agreement or breach, default
or event of default  under any Security  Document or other  document held by the
Lender,  whether or not known to the Lender and  whether or not  existing on the
date of this Amendment.

8. The  Borrower  hereby  absolutely  and  unconditionally  releases and forever
discharges  the  Lender,  and  any and all  participants,  parent  corporations,
subsidiary  corporations,   affiliated  corporations,   insurers,   indemnitors,
successors  and  assigns  thereof,  together  with all of the present and former
directors,  officers, agents and employees of any of the foregoing, from any and
all  claims,  demands  or causes of action of any kind,  nature or  description,
whether  arising in law or equity or upon contract or tort or under any state or
federal law or otherwise,  which the Borrower has had, now has or has made claim
to have against any such person for or by reason of any act,  omission,  matter,
cause or thing  whatsoever  arising from the  beginning of time to and including
the date of this  Amendment,  whether such claims,  demands and causes of action
are matured or unmatured or known or unknown.

9. The Borrower hereby reaffirms its agreement under the Credit Agreement to pay
or  reimburse  the Lender on demand for all costs and  expenses  incurred by the
Lender in connection with the Credit Agreement,  the Security  Documents and all
other  documents   contemplated   thereby,   including  without  limitation  all
reasonable  fees  and  disbursements  of legal  counsel.  Without  limiting  the
generality of the foregoing,  the Borrower  specifically  agrees to pay all fees
and  disbursements  of counsel to the Lender for the services  performed by such
counsel in connection  with the  preparation of this Amendment and the documents
and instruments  incidental  hereto.  The Borrower hereby agrees that the Lender
may, at any time or from time to time in its sole discretion and without further
authorization  by the  Borrower,  make a loan to the  Borrower  under the Credit
Agreement, or apply the proceeds of any loan, for the purpose of paying any such
fees, disbursements, costs and expenses.

10. This Amendment may be executed in any number of counterparts,  each of which
when so executed  and  delivered  shall be deemed an  original  and all of which
counterparts, taken together, shall constitute one and the same instrument.


<PAGE>


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

                                            ELECTRONIC HAIR STYLING, INC.

                                          By: _/s/ JOHN D. HELLMANN____________
                      Its: __Vice President________________



                                            NORWEST BUSINESS CREDIT, INC.


                                        By: __/s/ MICHELLE GUETTER_____________
                      Its: ___AVP_________________________

STATE OF MINNESOTA                  )
                                    ) ss
COUNTY OF ANOKA                     )

The foregoing  instrument was  acknowledged  before me this 30th day of January,
1997,  by John D.  Hellmann,  the Vice  President  Finance  of  Electronic  Hair
Styling, Inc., a California corporation, for and on behalf of said corporation.


                                                          /s/ KATHLEEN M. KELLY
                                  Notary Public
STATE OF MINNESOTA                  )
                                    ) ss
COUNTY OF HENNEPIN                  )

The foregoing  instrument was  acknowledged  before me this 30th day of January,
1997, by Michell Guetter,  the AVP of Norwest Business Credit, Inc., a Minnesota
corporation, for and on behalf of said corporation.


                                                        /s/ CONSTANCE NESBITT
                                  Notary Public
106098-3



<PAGE>


Electronic Hair Styling, Inc.
Certificate of Secretary

I, John D.  Hellmann,  Secretary of Electronic  Hair  Styling,  Inc., a Delaware
corporation (the "Company"), hereby certify that:

 (a) attached  hereto as Exhibit A is a true and  complete  copy of  resolutions
     duly adopted by the Board of Directors of the Company, and such resolutions
     have not been amended,  modified or rescinded, and remain in full force and
     effect;
 (b) the Certificate of  Incorporation of the Company (the  "Certificate"),  and
     the By-Laws of the  Company  (the  "By-Laws"),  in the forms  delivered  to
     Norwest on August 30, 1996  pursuant  to a  Secretary's  Certificate  dated
     August 30, 1996, delivered in connection with the execution and delivery of
     that certain Second  Amendment to the Credit  Agreement (the  "Amendment"),
     between the Company and Norwest,  are true and correct  copies of the same,
     including all amendments thereto, and said Certificate and By-Laws have not
     been further amended except as set forth in any amendments attached hereto,
     and no action has been taken by the Company or its shareholders,  directors
     or officers in contemplation  of any such amendment,  and are in full force
     and effect on the date hereof; and
 (c) each person who, as an officer of the  Company,  signed the  Amendment  was
     duly elected or appointed, qualified and acting as such officer at the time
     of signing and delivery,  and the signature of such person appearing on the
     Amendment is a genuine signature.

In witness whereof, I have hereunto signed this Certificate as of this 30 day of
January, 1997.

_/s/ JOHN D. HELLMANN__________________
John D. Hellmann, Secretary



<PAGE>



Exhibit A to Certificate of Secretary


RESOLVED,  that the Chairman of the Board and Chief Executive  Officer,  and the
Vice President,  Finance and Chief Financial Officer,  acting alone or together,
be, and each of them  hereby is  authorized  to  execute,  deliver and perform a
certain Third Amendment to Credit Agreement (the "Amendment") by and between the
Company and Norwest Business  Credit,  Inc.  ("Norwest"),  and any and all other
documents and agreements  required by Norwest in connection  with the Amendment,
the approval and acceptability of the Amendment and all such other documents and
agreements to the Company to be conclusively  evidenced by the execution thereof
by either of the above referenced officers.