CHANGE IN TERMS AGREEMENT

Borrower:  Fotoball USA, Inc.                    Lender:  Scripps Bank
           3738 Ruffin Road                               Corporate Banking
           San Diego, CA 92123                            550 West "C" Street
                                                          Suite 100
                                                          San Diego, CA 92101
                 
         
Principal Amount: $2,000,000.00          Date of Agreement: November 13, 1996

DESCRIPTION OF EXISTING INDEBTEDNESS.
AS EVIDENCED BY:
PROMISSORY NOTE DATED DECEMBER 20, 1995 IN THE AMOUNT OF $1,000,000.00.

DESCRIPTION OF COLLATERAL. AS DESCRIBED IN: COMMERICAL SECURITY AGREEMENT 
DATED DECEMBER 20, 1995.

DESCRIPTION OF CHANGE IN TERMS. 
INCREASE THE NOTE AMOUNT TO $2,000,000.00 
CHANGE THE PAYMENT DAY TO THE 15TH DAY OF EACH MONTH BEGINNING DECEMBER 
15, 1996 
EXTEND THE MATURITY DATE TO APRIL 15, 1998.


PROMISE TO PAY. FOTOBALL U.S.A. INC. ("Borrower") promises to pay to 
Scripps Bank ("Lender"), or order, in lawful money of the United States 
of America, the principal amount of Two Million & 00/100 Dollars 
($2,000,000.00) or so much as may be outstanding, together with Interest 
on the unpaid outstanding principal balance of each advance. Interest 
shall be calculated from the date of each advance until repayment of each 
advance.

PAYMENT. Borrower will pay this loan on demand, or if no demand is made, 
in one payment of all outstanding principal plus all accrued unpaid 
Interest on April 15,1998. In addition, Borrower will pay regular monthly 
payments of accrued unpaid interest beginning December 15, 1996, and all 
subsequent interest payments are due on the same day of each month after 
that. Interest on this Agreement is computed on a 365/365 simple interest 
basis; that is, by applying the ratio of the annual interest rate over 
the number of days in a year, multiplied by the outstanding principal 
balance, multiplied by the actual number of days the principal balance is 
outstanding. Borrower will pay Lender at Lender's address shown above or 
at such other place as Lender may designate in writing. Unless otherwise 
agreed or required by applicable law, payments will be applied first to 
accrued unpaid interest, then to principal, and any remaining amount to 
any unpaid collection costs and late charges.

VARIABLE INTEREST RATE. The interest rate on this Agreement is subject to 
change from time to time based on changes in an independent index which 
is the Wall Street Journal Prime Rate as published in the Money Rates 
section. When a range of rate is shown, the higher rate will be used. 
(the "Index"). The Index is not necessarily the lowest rate charged by 
Lender on its loans. If the Index becomes unavailable during the term of 
this loan, Lender may designate a substitute index after notice to 
Borrower. Lender will tell Borrower the current Index rate upon 
Borrower's request. Borrower understands that Lender may make loans based 
on other rates as well. The interest rate change will not occur more 
often than each time that Prime Rate changes as shown in the Money Rates 
section of the Wall Street Journal. The Index currently Is 8.250% per 
annum. The interest rate to be applied to the unpaid principal balance of 
this Agreement will be at a rate of 0.750 percentage points over the 
Index, resulting In an initial rate of 9.000% per annum. NOTICE: Under no 
circumstances will the interest rate on this Agreement be more than the 
maximum rate allowed by applicable law.

PREPAYMENT; MINIMUM INTEREST CHARGE. Borrower agrees that all loan fees 
and other prepaid finance charges are earned fully as of the date of the 
loan and will not be subject to refund upon early payment (whether 
voluntary or as a result of default), except as otherwise required by 
law. In any event, even upon full prepayment of this Agreement, Borrower 
understands that Lender is entitled to a minimum Interest charge of 
$100.00. Other than Borrower's obligation to pay any minimum interest 
charge, Borrower may pay without penalty all or a portion of the amount 
owed earlier than it is due. Early payments will not, unless agreed to by 
Lender in writing, relieve Borrower of Borrower's obligation to continue 
to make payments of accrued unpaid interest. Rather, they will reduce the 
principal balance due.

LATE CHARGE. If a payment is 10 days or more late, Borrower will be 
charged 5.000% of the regularly scheduled payment or $5.00, whichever is 
greater.

DEFAULT. Borrower will be in default if any of the following happens: (a) 
Borrower fails to make any payment when due. (b) Borrower breaks any 
promise Borrower has made to Lender, or Borrower fails to comply with or 
to perform when due any other term, obligation, covenant, or condition 
contained in this Agreement or any agreement related to this Agreement, 
or in any other agreement or loan Borrower has with Lender. (c) Borrower 
defaults under any loan, extension of credit, security agreement, 
purchase or sales agreement, or any other agreement, in favor of any 
other creditor or person that may materially affect any of Borrower's 
property or Borrower's ability to repay this Note or perform Borrower's 
obligations under this Note or any of the Related Documents. (d) Any 
representation or statement made or furnished to Lender by Borrower or on 
Borrower's behalf is false or misleading in any material respect either 
now or at the time made or furnished. (e) Borrower becomes insolvent, a 
receiver is appointed for any part of Borrower's property, Borrower makes 
an assignment for the benefit of creditors, or any proceeding is 
commenced either by Borrower or against Borrower under any bankruptcy or 
insolvency laws. (f) Any creditor tries to take any of Borrower's 
property on or in which Lender has a lien or security interest. This 
includes a garnishment of any of Borrower's accounts with Lender. (g) Any 
guarantor dies or any of the other events described in this default 
section occurs with respect to any guarantor of this Agreement. (h ) A 
material adverse change occurs in Borrower's financial condition, or 
Lender believes the prospect of payment or performance of the 
Indebtedness is impaired. (i) Lender in good faith deems itself insecure.

If any default, other than a default in payment, is curable and if 
Borrower has not been given a notice of a breach of the same provision of 
this Agreement within the preceding twelve (12) months, it may be cured 
(and no event of default will have occurred) if Borrower, after receiving 
written notice from Lender demanding cure of such default: (a) cures the 
default within fifteen (15) days; or (b) if the cure requires more than 
fifteen (15) days, immediately initiates steps which Lender deems in 
Lender's sole discretion to be sufficient to cure the default and 
thereafter continues and completes all reasonable and necessary steps 
sufficient to produce compliance as soon as reasonably practical.

LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid 
principal balance on this Agreement and all accrued unpaid interest 
immediately due, without notice, and then Borrower will pay that amount. 
Upon Borrower's failure to pay all amounts declared due pursuant to this 
section, including failure to pay upon final maturity, Lender, at its 
option, may also, if permitted under applicable law, do one or both of 
the following: (a) increase the variable interest rate on this Agreement 
to 5.750 percentage points over the Index, and (b) add any unpaid accrued 
interest to principal and such sum will bear interest therefrom until 
paid at the rate provided in this Agreement (including any increased 
rate). Lender may hire or pay someone else to help collect this Agreement 
if Borrower does not pay. Borrower also will pay Lender that amount. This 
includes, subject to any limits under applicable law, Lender's attorneys' 
fees and Lender's legal expenses whether or not there is a lawsuit, 
including attorneys' fees and legal expenses for bankruptcy proceedings 
(including efforts to modify or vacate any automatic stay or injunction), 
appeals, and any anticipated post-judgment collection services. Borrower 
also will pay any court costs, in addition to all other sums provided by 
law. This Agreement has been delivered to Lender and accepted by Lender 
in the State of California. It there is a lawsuit, Borrower agrees upon 
Lender's request to submit to the jurisdiction of the courts of San Diego 
County, the State of California. This Agreement shall be governed by and 
construed in accordance with the laws of the State of California.

RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory 
security interest in, and hereby assigns, conveys, delivers, pledges, and 
transfers to Lender all Borrower's right, title and interest in and to, 
Borrower's accounts with Lender (whether checking, savings, or some other 
account), including without limitation all accounts held jointly with 
someone else and all accounts Borrower may open in the future, excluding 
however all IRA and Keogh accounts, and all trust accounts for which the 
grant of a security interest would be prohibited by law. Borrower 
authorizes Lender, to the extent permitted by applicable law, to charge 
or setoff all sums owing on this Agreement against any and all such 
accounts.

LINE OF CREDIT. This Agreement evidences a revolving line of credit. 
Advances under this Agreement may be requested either orally or in 
writing by Borrower or by an authorized person. Lender may, but need not, 
require that all oral requests be confirmed in writing. All 
communications, instructions, or directions by telephone or otherwise to 
Lender are to be directed to Lender's office shown above. The following 
party or parties are authorized to request advances under the line of 
credit until Lender receives from Borrower at Lender's address shown 
above written notice of revocation of their authority: DAVID G. FORSTER, 
Vice President/CFO. Borrower agrees to be liable for all sums either: (a) 
advanced in accordance with the instructions of an authorized person or 
(b) credited to any of Borrower's accounts with Lender. The unpaid 
principal balance owing on this Agreement at any time may be evidenced by 
endorsements on this Agreement or by Lender's internal records, including 
daily computer print-outs. Lender will have no obligation to advance 
funds under this Agreement if: (a) Borrower or any guarantor is in 
default under the terms of this Agreement or any agreement that Borrower 
or any guarantor has with Lender, including any agreement made in 
connection with the signing of this Agreement; (b) Borrower or any 
guarantor ceases doing business or is insolvent; (c) any guarantor seeks, 
claims or otherwise attempts to limit, modify or revoke such guarantor's 
guarantee of this Agreement or any other loan with Lender; (d) Borrower 
has applied funds provided pursuant to this Agreement for purposes other 
than those authorized by Lender; or (e) Lender in good faith deems itself 
insecure under this Agreement or any other agreement between Lender and 
Borrower.

CONTINUING VALIDITY. Except as expressly changed by this Agreement, the 
terms of the original obligation or obligations, including all agreements 
evidenced or securing the obligation(s), remain unchanged and in full 
force and effect. Consent by Lender to this Agreement does not waive 
Lender's right to strict performance of the obligation(s) as changed, nor 
obligate Lender to make any future change in terms. Nothing in this 
Agreement will constitute a satisfaction of the obligation(s). It is the 
intention of Lender to retain as liable parties all makers and endorsers 
of the original obligation(s), including accommodation parties, unless a 
party is expressly released by Lender in writing. Any maker or endorser, 
including accommodation makers, will not be released by virtue of this 
Agreement. If any person who signed the original obligation does not sign 
this Agreement below, then all persons signing below acknowledge that 
this Agreement is given conditionally, based on the representation to 
Lender that the non-signing party consents to the changes and provisions 
of this Agreement or otherwise will not be released by it. This waiver 
applies not only to any initial extension, modification or release, but 
also to all such subsequent actions.

MISCELLANEOUS PROVISIONS. This Agreement iS payable on demand. The 
inclusion of specific default provisions or rights of Lender shall not 
preclude Lender's right to declare payment of this Agreement on its 
demand. Lender may delay or forgo enforcing any of its rights or remedies 
under this Agreement without losing them. Borrower and any other person 
who signs, guarantees or endorses this Agreement, to the extent allowed 
by law, waive any applicable statute of limitations, presentment, demand 
for payment, protest and notice of dishonor. Upon any change in the terms 
of this Agreement, and unless otherwise expressly stated in writing, no 
party who signs this Agreement, whether as maker, guarantor, 
accommodation maker or endorser, shall be released from liability. All 
such parties agree that Lender may renew or extend (repeatedly and for 
any length of time) this loan, or release any party or guarantor or 
collateral; or impair, fail to realize upon or perfect Lender's security 
interest in the collateral; and take any other action deemed necessary by 
Lender without the consent of or notice to anyone. All such parties also 
agree that Lender may modify this loan without the consent of or notice 
to anyone other than the party with whom the modification is made.

PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE 
PROVISIONS OF THIS AGREEMENT, INCLUDING THE VARIABLE INTEREST RATE 
PROVISIONS. BORROWER AGREES TO THE TERMS OF THE AGREEMENT AND 
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE AGREEMENT

BORROWER: 

FOTOBALL U.S.A. INC.

By: /s/David G. Forster
    ------------------------------------
    DAVID G. FORSTER, Vice President/CFO
<PAGE>


                             LOAN AGREEMENT

Borrower: FOTOBALL U.S.A. INC.              Lender: Scripps Bank
          3738 RUFFIN ROAD                  Corporate Banking
          SAN DIEGO, CA 92123               50 West "C" Street, Suite 100
                                            San Diego. CA 92101


THIS LOAN AGREEMENT between FOTOBALL U.S.A. INC. ("Borrower") and Scripps 
Bank ("Lender") is made and executed on the following terms and 
conditions. Borrower has received prior commercial loans from Lender or 
has applied to Lender for a commercial loan or loans and other financial 
accommodations, including those which may be described on any exhibit or 
schedule attached to this Agreement. All such loans and financial 
accommodations, together with all future loans and financial 
accommodations from Lender to Borrower, are referred to in this Agreement 
Individually as the "Loan" and collectively as the "Loans." Borrower 
understands and agrees that: (a) in granting, renewing, or extending any 
Loan, Lender is relying upon Borrower's representations, warranties, and 
agreements, as set forth in this Agreement; (b) the granting, renewing, 
or extending of any Loan by Lender at all times shall be subject to 
Lender's sole judgment and discretion; and (c) all such Loans shall be 
and shall remain subject to the following terms and conditions of this 
Agreement.

TERM. This Agreement shall be effective as of November 13, 1996, and 
shall continue thereafter until all Indebtedness of Borrower to Lender 
has been performed in full and the parties terminate this Agreement In 
writing.

DEFINITIONS. The following words shall have the following meanings when 
used in this Agreement. Terms not otherwise defined in this Agreement 
shall have the meanings attributed to such terms in the Uniform 
Commercial Code. All references to dollar amounts shall mean amounts in 
lawful money of the United States of America.

    Agreement. The word "Agreement" means this Loan Agreement, as this Loan 
    Agreement may be amended or modified from time to time, together with all 
    exhibits and schedules attached to this Loan Agreement from time to time.

    Account. The word "Account" means a trade account, account receivable, or 
    other right to payment for goods sold or services rendered owing to 
    Borrower (or to a third party grantor acceptable to Lender).

    Account Debtor. The words "Account Debtor" mean the person or entity 
    obligated upon an Account.

    Advance. The word "Advance" means a disbursement of Loan funds under this 
    Agreement.

    Borrower. The word "Borrower" means FOTOBALL U.S.A. INC.. The word 
    "Borrower" also includes, as applicable, all subsidiaries and affiliates 
    of Borrower as provided below in the paragraph titled "Subsidiaries and 
    Affiliates."

    Borrowing Base. The words "Borrowing Base" mean BORROWING BASE 
    CERTIFICATE/COLLATERAL SCHEDULE.

    Business Day. The words "Business Day" mean a day on which commercial 
    banks are open for business in the State of California.

    CERCLA. The word "CERCLA" means the Comprehensive Environmental Response, 
    Compensation, and Liability Act of 1980, as amended.

    Cash Flow. The words "Cash Flow" mean net income after taxes, and 
    exclusive of extraordinary gains and income, plus depreciation and
    Amortization.

    Collateral. The word "Collateral" means and includes without limitation 
    all property and assets granted as collateral security for a Loan, 
    whether real or personal property, whether granted directly or 
    indirectly, whether granted now or in the future, and whether granted in 
    the form of a security interest, mortgage, deed of trust, assignment, 
    pledge, chattel mortgage, chattel trust, factor's lien, equipment trust, 
    conditional sale, trust receipt lien, charge, lien or title retention 
    contract, lease or consignment intended as a security device, or any 
    other security or lien interest whatsoever, whether created by law, 
    contract, or otherwise. The word "Collateral" includes without limitation 
    all collateral described below in the section titled "COLLATERAL."

    Debt. The word "Debt" means all of Borrower's liabilities excluding 
    Subordinated Debt.

    Eligible Accounts. The words "Eligible Accounts" mean, at any time, all 
    of Borrower's Accounts which contain selling terms and conditions 
    acceptable to Lender. The net amount of any Eligible Account against 
    which Borrower may borrow shall exclude all returns, discounts, credits, 
    and offsets of any nature. Unless otherwise agreed to by Lender in 
    writing, Eligible Accounts do not include: 

       (a)  Accounts with respect to which the Account Debtor is an officer,
       an employee or agent of Borrower. 

       (b) Accounts with respect to which the Account Debtor is a subsidiary
       of, or affiliated with or related to Borrower or its shareholders,
       officers, or directors.

       (c) Accounts with respect to which goods are placed on consignment, 
       guaranteed sale, or other terms by reason of which the payment by the 
       Account Debtor may be conditional.

       (d) Accounts with respect to which the Account Debtor is not a resident 
       of the United States, except to the extent such Accounts are supported
       by insurance, bonds or other assurances satisfactory to Lender.

       (e) Accounts with respect to which Borrower is or may become liable to 
       the Account Debtor for goods sold or services rendered by the Account 
       Debtor to Borrower.

       (f) Accounts which are subject to dispute, counterclaim, or setoff.

       (g) Accounts with respect to which the goods have not been shipped or 
       delivered, or the services have not been rendered, to the Account Debtor.

       (h) Accounts with respect to which Lender, in its sole discretion, deems 
       the creditworthiness or financial condition of the Account Debtor to be 
       unsatisfactory.

       (i) Accounts of any Account Debtor who has filed or has had filed 
       against it a petition in bankruptcy or an application for relief 
       under any provision of any state or federal bankruptcy, insolvency, or
       debtor-in-relief acts; or who has had appointed a trustee, custodian,
       or receiver for the assets of such Account Debtor; or who has made an 
       assignment for the benefit of creditors or has become insolvent or fails 
       generally to pay its debts (including its payrolls) as such debts 
       become due.

       (j) Accounts with respect to which the Account Debtor is the United 
       States government or any department or agency of the United States.

       (k) Accounts which have not been paid in full within 90 DAYS from the 
       invoice date.

       (l) EXCLUDING CONTRA, FOREIGN OR DIRECT FEDERAL GOVERNMENT/GOVERNMENT 
       AGENCY ACCOUNTS.

    Eligible Inventory. The words "Eligible Inventory" mean, at any time, all 
    of Borrower's Inventory as defined below except:

       (a) Inventory which is not owned by Borrower free and clear of all
       security interests, liens, encumbrances, and claims of third parties.

       (b)  Inventory which Lender, in its sole discretion, deems to be 
       obsolete, unsalable, damaged, defective, or unfit for further 
       processing. 


    ERISA. The word "ERISA" means the Employee Retirement Income Security Act 
    of 1974, as amended.

    Event of Default. The words "Event of Default" mean and include without 
    limitation any of the Events of Default set forth below in the section 
    titled "EVENTS OF DEFAULT."

    Expiration Date. The words "Expiration Date" mean the date of termination 
    of Lender's commitment to lend under this Agreement.

    Grantor. The word "Grantor" means and includes without limitation each 
    and all of the persons or entities granting a Security Interest in any 
    Collateral for the Indebtedness, including without limitation all 
    Borrowers granting such a Security Interest.

    Guarantor. The word "Guarantor" means and includes without limitation 
    each and all of the guarantors, sureties, and accommodation parties in 
    connection with any Indebtedness.

    Indebtedness. The word "Indebtedness" means and includes without 
    limitation all Loans, together with all other obligations, debts and 
    liabilities of Borrower to Lender, or any one or more of them, as well as 
    all claims by Lender against Borrower, or any one or more of them; 
    whether now or hereafter existing, voluntary or involuntary, due or not 
    due, absolute or contingent, liquidated or unliquidated; whether Borrower 
    may be liable individually or jointly with others; whether Borrower may 
    be obligated as a guarantor, surety, or otherwise; whether recovery upon 
    such Indebtedness may be or hereafter may become barred by any statute of 
    limitations; and whether such Indebtedness may be or hereafter may become 
    otherwise unenforceable.

    Inventory. The word "Inventory" means all of Borrower's raw materials, 
    work in process, finished goods, merchandise, parts and supplies, of 
    every kind and description, and goods held for sale or lease or furnished 
    under contracts of service in which Borrower now has or hereafter 
    acquires any right, whether held by Borrower or others, and all documents 
    of title, warehouse receipts, bills of lading, and all other documents of 
    every type covering all or any part of the foregoing. Inventory includes 
    inventory temporarily out of Borrower's custody or possession and all 
    returns on Accounts.

    Lender. The word "Lender" means Scripps Bank, its successors and assigns.

    Line of Credit. The words "Line of Credit" mean the credit facility 
    described in the Section titled "LINE OF CREDIT" below.

    Liquid Assets. The words "Liquid Assets" mean Borrower's cash on hand 
    plus Borrower's readily marketable securities.

    Loan. The word "Loan" or "Loans" means and includes without limitation 
    any and all commercial loans and financial accommodations from Lender to 
    Borrower, whether now or hereafter existing, and however evidenced, 
    including without limitation those loans and financial accommodations 
    described herein or described on any exhibit or schedule attached to this 
    Agreement from time to time.

    Note. The word "Note" means and includes without limitation Borrower's 
    promissory note or notes, if any, evidencing Borrower's Loan obligations 
    in favor of Lender, as well as any substitute, replacement or refinancing
    note or notes therefor.

    Related Documents. The words "Related Documents" mean and include without 
    limitation all promissory notes, credit agreements, loan agreements, 
    environmental agreements, guaranties, security agreements, mortgages, 
    deeds of trust, and all other instruments, agreements and documents, 
    whether now or hereafter existing, executed in connection with the 
    Indebtedness.

    Security Agreement. The words "Security Agreement" mean and include 
    without limitation any agreements, promises, covenants, arrangements, 
    understandings or other agreements, whether created by law, contract, or 
    otherwise, evidencing, governing, representing, or creating a Security 
    Interest.

    Security Interest. The words "Security Interest" mean and include without 
    limitation any type of collateral security, whether in the form of a 
    lien, charge, mortgage, deed of trust, assignment, pledge, chattel 
    mortgage, chattel trust, factor's lien, equipment trust, conditional 
    sale, trust receipt, lien or title retention contract, lease or 
    consignment intended as a security device, or any other security or lien 
    interest whatsoever, whether created by law, contract, or otherwise.

    SARA. The word "SARA" means the Superfund Amendments and Reauthorization 
    Act of 1986 as now or hereafter amended.

    Subordinated Debt. The words "Subordinated Debt" mean indebtedness and 
    liabilities of Borrower which have been subordinated by written agreement 
    to indebtedness owed by Borrower to Lender in form and substance 
    acceptable to Lender.

    Tangible Net Worth. The words "Tangible Net Worth" mean Borrower's total 
    assets excluding all intangible assets (i.e., goodwill, trademarks 
    patents, copyrights, organizational expenses, and similar intangible 
    items, but including leaseholds and leasehold improvements) less total 
    Debt.

    Working Capital. The words "Working Capital" mean Borrower's current 
    assets, excluding prepaid expenses, less Borrower's current liabilities.

LINE OF CREDIT. Lender agrees to make Advances to Borrower from time to 
time from the date of this Agreement to the Expiration Date, provided the 
aggregate amount of such Advances outstanding at any time does not exceed 
the Borrowing Base. Within the foregoing limits, Borrower may borrow, 
partially or wholly prepay, and reborrow under this Agreement as follows.

    Conditions Precedent to Each Advance. Lender's obligation to make any 
    Advance to or for the account of Borrower under this Agreement is subject 
    to the following conditions precedent, with all documents, instruments, 
    opinions, reports, and other items required under this Agreement to be in 
    form and substance satisfactory to Lender:

        (a) Lender shall have received evidence that this Agreement and all 
        Related Documents have been duly authorized, executed, and delivered 
        by Borrower to Lender.

        (b) Lender shall have received such opinions of counsel, supplemental 
        opinions, and documents as Lender may request.

        (c) The security interests in the Collateral shall have been duly 
        authorized, created, and perfected with first lien priority and shall
        be in full force and effect.

        (d) All guaranties required by Lender for the Line of Credit shall have 
        been executed by each Guarantor, delivered to Lender, and be in full 
        force and effect.

        (e) Lender, at its option and for its sole benefit, shall have
        conducted an audit of Borrower's Accounts, Inventory, books, records,
        and operations, and Lender shall be satisfied as to their condition.

        (f) Borrower shall have paid to Lender all fees, costs, and expenses 
        specified in this Agreement and the Related Documents as are then
        due and payable.

        (g) There shall not exist at the time of any Advance a condition which 
        would constitute an Event of Default under this Agreement, and Borrower 
        shall have delivered to Lender the compliance certificate called for in 
        the paragraph below titled "Compliance Certificate."

    Making Loan Advances. Advances under the Line of Credit may be requested
    either orally or in writing by authorized persons. Lender may, but need 
    not, require that all oral requests be confirmed in writing. Each Advance
    shall be conclusively deemed to have been made at the request of and for 
    the benefit of Borrower (a) when credited to any deposit account of 
    Borrower maintained with Lender or (b) when advanced in accordance with 
    the instructions of an authorized person. Lender, at its option, may set 
    a cutoff time, after which all requests for Advances will be treated as 
    having been requested on the next succeeding Business Day.

    Mandatory Loan Repayments. If at any time the aggregate principal amount 
    of the outstanding Advances shall exceed the applicable Borrowing Base, 
    Borrower, immediately upon written or oral notice from Lender, shall pay 
    to Lender an amount equal to the difference between the outstanding 
    principal balance of the Advances and the Borrowing Base. On the 
    Expiration Date, Borrower shall pay to Lender in full the aggregate 
    unpaid principal amount of all Advances then outstanding and all accrued 
    unpaid interest, together with all other applicable fees, costs and 
    charges, if any, not yet paid.

    Loan Account. Lender shall maintain on its books a record of account in 
    which Lender shall make entries for each Advance and such other debits 
    and credits as shall be appropriate in connection with the credit 
    facility. Lender shall provide Borrower with periodic statements of 
    Borrower's account, which statements shall be considered to be correct 
    and conclusively binding on Borrower unless Borrower notifies Lender to 
    the contrary within thirty (30) days after Borrower's receipt of any such 
    statement which Borrower deems to be incorrect.

COLLATERAL. To secure payment of the Line of Credit and performance of 
all other Loans, obligations and duties owed by Borrower to Lender, 
Borrower (and others, if required) shall grant to Lender Security 
Interests in such property and assets as Lender may require (the 
"Collateral"), including without limitation Borrower's present and future 
Accounts, general intangibles, and Inventory. Lender's Security Interests 
in the Collateral shall be continuing liens and shall include the 
proceeds and products of the Collateral, including without limitation the 
proceeds of any insurance. With respect to the Collateral, Borrower 
agrees and represents and warrants to Lender:

    Perfection of Security Interests. Borrower agrees to execute such 
    financing statements and to take whatever other actions are requested by 
    Lender to perfect and continue Lender's Security Interests in the 
    Collateral. Upon request of Lender, Borrower will deliver to Lender any 
    and all of the documents evidencing or constituting the Collateral, and 
    Borrower will note Lender's interest upon any and all chattel paper if 
    not delivered to Lender for possession by Lender. Contemporaneous with 
    the execution of this Agreement, Borrower will execute one or more UCC 
    financing statements and any similar statements as may be required by 
    applicable law, and will file such financing statements and all such 
    similar statements in the appropriate location or locations. Borrower 
    hereby appoints Lender as its irrevocable attorney-in-fact for the 
    purpose of executing any documents necessary to perfect or to continue 
    any Security Interest. Lender may at any time, and without further 
    authorization from Borrower, file a carbon, photograph, facsimile, or 
    other reproduction of any financing statement for use as a financing 
    statement. Borrower will reimburse Lender for all expenses for the 
    perfection, termination, and the continuation of the perfection of 
    Lender's security interest in the Collateral. Borrower promptly will 
    notify Lender of any change in Borrower's name including any change to 
    the assumed business names of Borrower. Borrower also promptly will 
    notify Lender of any change in Borrower's Social Security Number or 
    Employer Identification Number. Borrower further agrees to notify Lender 
    in writing prior to any change in address or location of Borrower's 
    principal governance office or should Borrower merge or consolidate with 
    any other entity.

    Collateral Records. Borrower does now and at all times hereafter shall, 
    keep correct and accurate records of the Collateral, all of which records 
    shall be available to Lender or Lender's representative upon demand for 
    inspection and copying at any reasonable time. With respect to the 
    Accounts, Borrower agrees to keep and maintain such records as Lender may 
    require, including without limitation information concerning Eligible 
    Accounts and Account balances and agings. With respect to the Inventory, 
    Borrower agrees to keep and maintain such records as Lender may require, 
    including without limitation information concerning Eligible Inventory 
    and records itemizing and describing the kind, type, quality, and 
    quantity of Inventory, Borrower's Inventory costs and selling prices, and 
    the daily withdrawals and additions to Inventory.

    Collateral Schedules. Concurrently with the execution and delivery of 
    this Agreement, Borrower shall execute and deliver to Lender schedules of 
    Accounts and Inventory and Eligible Accounts and Eligible Inventory, in 
    form and substance satisfactory to the Lender. Thereafter and at such 
    frequency as Lender shall require, Borrower shall execute and deliver to 
    Lender such supplemental schedules of Eligible Accounts and Eligible 
    Inventory and such other matters and information relating to the Accounts 
    and Inventory as Lender may request.

    Representations and Warranties Concerning Accounts. With respect to the 
    Accounts, Borrower represents warrants to Lender: (a) Each Account 
    represented by Borrower to be an Eligible Account for purposes of this 
    Agreement conforms to the requirements of the definition of an Eligible 
    Account; (b) All Account information listed on schedules delivered to 
    Lender will be true and correct, subject to immaterial variance, and (c) 
    Lender, its assigns, or agents shall have the right at any time and at 
    Borrower's expense to inspect, examine, and audit Borrower's records and 
    to confirm with Account Debtors the accuracy of such Accounts.

    Representations and Warranties Concerning Inventory. With respect to the 
    Inventory, Borrower represents and warrants to Lender: (a) All Inventory 
    represented by Borrower to be Eligible Inventory for purposes of this 
    Agreement conforms to the requirements of the definition of Eligible 
    Inventory; (b) All Inventory values listed on schedules delivered to 
    Lender will be true and correct, subject to immaterial variance; (c) The 
    value of the Inventory will be determined on a consistent accounting 
    basis; (d) Except as agreed to the contrary by Lender in writing, all 
    Eligible Inventory is now and at all times hereafter will be in 
    Borrower's physical possession and shall not be held by others on 
    consignment, sale on approval, or sale or return; (e) Except as reflected 
    in the Inventory schedules delivered to Lender, all Eligible Inventory is 
    now and at all times hereafter will be of good and merchantable quality, 
    free from defects; (f) Eligible Inventory is not now and will not at any 
    time hereafter be stored with a bailee, warehouseman, or similar party 
    without Lender's prior written consent, and, in such event, Borrower will 
    concurrently at the time of bailment cause any such bailee, warehouseman, 
    or similar party to issue and deliver to Lender, in form acceptable to 
    Lender, warehouse receipts in Lender's name evidencing the storage of 
    Inventory; and (g) Lender, its assigns, or agents shall have the right at 
    any time and at Borrower's expense to inspect and examine the Inventory 
    and to check and test the same as to quality, quantity, value, and 
    condition.

    Notification Basis. Borrower agrees and understands that this Loan shall 
    be on a notification basis pursuant to which Lender shall directly 
    collect and receive all proceeds and payments from the Accounts in which 
    Lender has a security interest. In order to facilitate the foregoing, 
    Borrower agrees to deliver to Lender, upon demand, any and all of 
    Borrower's records, ledger sheets, payment cards, and other 
    documentation, in the form requested by Lender, with regard to the 
    Accounts. Borrower further agrees that Lender shall have the right to 
    notify each Account Debtor, pay such proceeds and payments directly to 
    Lender, and to do any and all other things as Lender may deem to be 
    necessary and appropriate, within its sole discretion, to carry out the 
    terms and intent of this Agreement. Lender shall have the further right, 
    where appropriate and within Lender's sole discretion, to file suit, 
    either in its own name or in the name of Borrower, to collect any and all 
    such Accounts. Borrower further agrees that Lender may take such other 
    actions, either in Borrower's name or Lender's name, as Lender may deem 
    appropriate within its sole judgment, with regard to collection and 
    payment of the Accounts, without affecting the liability of Borrower 
    under this Agreement or on the Indebtedness.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to 
Lender, as of the date of this Agreement, as of the date of each 
disbursement of Loan proceeds, as of the date of any renewal, extension 
or modification of any Loan, and at all times any indebtedness exists:

    Organization. Borrower is a corporation which is duly organized, validly 
    existing, and in good standing under the laws of the State of Delaware 
    and is validly existing and in good standing in all states in which 
    Borrower is doing business. Borrower has the full power and authority to 
    own its properties and to transact the businesses in which it is 
    presently engaged or presently proposes to engage. Borrower also is duly 
    qualified as a foreign corporation and is in good standing in all states 
    in which the failure to so qualify would have a material adverse effect 
    on its businesses or financial condition.

    Authorization. The execution, delivery, and performance of this Agreement 
    and all Related Documents by Borrower, to the extent to be executed, 
    delivered or performed by Borrower, have been duly authorized by all 
    necessary action by Borrower; do not require the consent or approval of 
    any other person, regulatory authority or governmental body; and do not 
    conflict with, result in a violation of, or constitute a default under 
    (a) any provision of its articles of incorporation or organization, or 
    bylaws, or any agreement or other instrument binding upon Borrower or (b) 
    any law, governmental regulation, court decree, or order applicable to 
    Borrower.

    Financial Information. Each financial statement of Borrower supplied to 
    Lender truly and completely disclosed Borrower's financial condition as 
    of the date of the statement, and there has been no material adverse 
    change in Borrower's financial condition subsequent to the date of the 
    most recent financial statement supplied to Lender. Borrower has no 
    material contingent obligations except as disclosed in such financial 
    statements.

    Legal Effect. This Agreement constitutes, and any instrument or agreement 
    required hereunder to be given by Borrower when delivered will 
    constitute, legal, valid and binding obligations of Borrower enforceable 
    against Borrower in accordance with their respective terms.

    Properties. Except for Permitted Liens, Borrower owns and has good title 
    to all of Borrower's properties free and clear of all Security Interests 
    and has not executed any security documents or financing statements 
    relating to such properties. All of Borrower's properties are titled in 
    Borrower's legal name, and Borrower has not used, or filed a financing 
    statement under, any other name for at least the last five (5) years.

    Hazardous Substances. The terms "hazardous waste" "hazardous substance," 
    "disposal," "release," and "threatened release," as used in this 
    Agreement, shall have the same meanings as set forth in the "CERCLA," 
    "SARA," the Hazardous Materials Transportation Act, 49 U.S.C. Section 
    1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. 
    Section 6901, et seq., Chapters 6.5 through 7.7 of Division 20 of the 
    California Health and Safety Code, Section 25100, et seq., or other 
    applicable state or Federal laws, rules, or regulations adopted pursuant 
    to any of the foregoing. Except as disclosed to and acknowledged by 
    Lender in writing, Borrower represents and warrants that: (a) During the 
    period of Borrower's ownership of the properties, there has been no use, 
    generation, manufacture, storage, treatment, disposal, release or 
    threatened release of any hazardous waste or substance by any person on, 
    under about or from any of the properties. (b) Borrower has no knowledge 
    of, or reason to believe that there has been (i) any use, generation, 
    manufacture, storage, treatment, disposal, release, or threatened release 
    of any hazardous waste or substance on, under, about or from the 
    properties by any prior owners or occupants of any of the properties, or 
    (ii) any actual or threatened litigation or claims of any kind by any 
    person relating to such matters. (c) Neither Borrower nor any tenant, 
    contractor, agent or other authorized user of any of the properties shall 
    use, generate, manufacture, store, treat, dispose of, or release any 
    hazardous waste or substance on, under, about or from any of the 
    properties; and any such activity shall be conducted in compliance with 
    all applicable federal, state, and local laws, regulations, and 
    ordinances, including without limitation those laws, regulations and 
    ordinances described above. Borrower authorizes Lender and its agents to 
    enter upon the properties to make such inspections and tests as Lender 
    may deem appropriate to determine compliance of the properties with this 
    section of the Agreement. Any inspections or tests made by Lender shall 
    be at Borrower's expense and for Lender's purposes only and shall not be 
    construed to create any responsibility or liability on the part of Lender 
    to Borrower or to any other person. The representations and warranties 
    contained herein are based on Borrower's due diligence in investigating 
    the properties for hazardous waste and hazardous substances. Borrower 
    hereby (a) releases and waives any future claims against Lender for 
    indemnity or contribution in the event Borrower becomes liable for 
    cleanup or other costs under any such laws, and (b) agrees to indemnify 
    and hold harmless Lender against any and all claims, losses, liabilities, 
    damages, penalties, and expenses which Lender may directly or indirectly 
    sustain or suffer resulting from a breach of this section of the 
    Agreement or as a consequence of any use, generation, manufacture, 
    storage, disposal, release or threatened release occurring prior to 
    Borrower's ownership or Interest in the properties, whether or not the 
    same was or should have been known to Borrower. The provisions of this 
    section of the Agreement, including the obligation to indemnify, shall 
    survive the payment of the Indebtedness and the termination or expiration 
    of this Agreement and shall not be affected by Lender's acquisition of 
    any interest in any of the properties, whether by foreclosure or 
    otherwise.

    Litigation and Claims. No litigation, claim, investigation, 
    administrative proceeding or similar action (including those for unpaid 
    taxes) against Borrower Is pending or threatened, and no other event has 
    occurred which may materially adversely affect Borrower's financial 
    condition or properties, other than litigation, claims, or other events, 
    if any, that have been disclosed to and acknowledged by Lender in 
    writing.

    Taxes. To the best of Borrower's knowledge, all tax returns and reports 
    of Borrower that are or were required to be filed, have been filed, and 
    all taxes, assessments and other governmental charges have been paid in 
    full, except those presently being or to be contested by Borrower in good 
    faith in the ordinary course of business and for which adequate reserves 
    have been provided.

    Lien Priority. Unless otherwise previously disclosed to Lender in 
    writing, Borrower has not entered into or granted any Security 
    Agreements, or permitted the filing or attachment of any Security 
    Interests on or affecting any of the Collateral directly or indirectly 
    securing repayment of Borrower's Loan and Note, that would be prior or 
    that may in any way be superior to Lender's Security Interests and rights 
    in and to such Collateral.

    Binding Effect. This Agreement, the Note, all Security Agreements 
    directly or indirectly securing repayment of Borrower's Loan and Note and 
    all of the Related Documents are binding upon Borrower as well as upon 
    Borrower's successors, representatives and assigns, and are legally 
    enforceable In accordance with their respective terms.

    Commercial Purposes. Borrower intends to use the Loan proceeds solely for 
    business or commercial related purposes.

    Employee Benefit Plans. Each employee benefit plan as to which Borrower 
    may have any liability complies in all material respects with all 
    applicable requirements of law and regulations, and (i) no Reportable 
    Event nor Prohibited Transaction (as defined in ERISA) has occurred with 
    respect to any such plan, (ii) Borrower has not withdrawn from any such 
    plan or initiated steps to do so, (iii) no steps have been taken to 
    terminate any such plan, and (iv) there are no unfunded liabilities other 
    than those previously disclosed to Lender in writing.

    Investment Company Act. Borrower is not an "investment company" or a 
    company "controlled" by an "investment company", within the meaning of 
    the Investment Company Act of 1940, as amended.

    Public Utility Holding Company Act. Borrower is not a "holding company", 
    or a "subsidiary company" of a "holding company", or an "affiliate" of a 
    "holding company" or of a "subsidiary company" of a "holding company", 
    within the meaning of the Public Utility Holding Company Act of 1935, as 
    amended.

    Regulations G, T and U. Borrower is not engaged principally, or as one of 
    its important activities, in the business of extending credit for the 
    purpose of purchasing or carrying margin stock (within the meaning of 
    Regulations G, T and U of the Board of Governors of the Federal Reserve 
    System).

    Location of Borrower's Offices and Records. Borrower's place of business, 
    or Borrower's Chief executive office, if Borrower has more than one place 
    of business, is located at 3738 RUFFIN ROAD, SAN DIEGO, CA 92123. Unless 
    Borrower has designated otherwise in writing this location is also the 
    office or offices where Borrower keeps its records concerning the 
    Collateral.

    Information. All Information heretofore or contemporaneously herewith 
    furnished by Borrower to Lender for the purposes of or in connection with 
    this Agreement or any transaction contemplated hereby is, and all 
    information hereafter furnished by or on behalf of Borrower to Lender 
    will be, true and accurate in every material respect on the date as of 
    which such information is dated or certified; and none of such 
    information is or will be incomplete by omitting to state any material 
    fact necessary to make such information not misleading.

    Claims and Defenses. There are no defenses or counterclaims, offsets or 
    other adverse claims, demands or actions of any kind, personal or 
    otherwise, that Borrower, Grantor, or any Guarantor could assert with 
    respect to the Note, Loan, Indebtedness, this Agreement, or the Related 
    Documents.

    Survival of Representations and Warranties. Borrower understands and 
    agrees that Lender, without independent investigation, is relying upon 
    the above representations and warranties in extending Loan Advances to 
    Borrower. Borrower further agrees that the foregoing representations and 
    warranties shall be continuing in nature and shall remain in full force 
    and effect until such time as Borrower's Indebtedness shall be paid in 
    full, or until this Agreement shall be terminated in the manner provided 
    above, whichever is the last to occur.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, 
while this Agreement is in effect, Borrower will:

    Litigation. Promptly inform Lender in writing of (a) all material adverse 
    changes in Borrower's financial condition, and (b) all existing and all 
    threatened litigation, claims, investigations, administrative proceedings 
    or similar actions affecting Borrower or any Guarantor which could 
    materially affect the financial condition of Borrower or the financial 
    condition of any Guarantor.

    Financial Records. Maintain its books and records in accordance with 
    generally accepted accounting principles, applied on a consistent basis, 
    and permit Lender to examine and audit Borrower's books and records at 
    all reasonable times.

    Additional Information. Furnish such additional information and 
    statements, lists of assets and liabilities, agings of receivables and 
    payables, inventory schedules, budgets, forecasts, tax returns, and other 
    reports with respect to Borrower's financial condition and business 
    operations as Lender may request from time to time.

    Financial Covenants and Ratios. Comply with the following covenants and 
    ratios:

        Tangible Net Worth. Maintain a minimum Tangible Net Worth of not less 
        than $7,000,000.00.

        Net Worth Ratio. Maintain a ratio of Total Liabilities to Tangible Net 
        Worth of less than 1.00 to 1.00.

        Current Ratio. Maintain a ratio of Current Assets to Current
        Liabilities in excess of 1.25 to 1.00. Except as provided above, all
        computations made to determine compliance with the requirements 
        contained in this paragraph shall be made in accordance with 
        generally accepted accounting principles, applied on a consistent 
        basis, and certified by Borrower as being true and correct.

        Insurance. Maintain fire and other risk insurance, public liability 
        insurance, and such other insurance as Lender may require with
        respect to Borrower's properties and operations, in form, amounts, 
        coverages and with insurance companies reasonably acceptable to 
        Lender. Borrower, upon request of Lender, will deliver to Lender 
        from time to time the policies or certificates of insurance in form 
        satisfactory to Lender, including stipulations that coverages will 
        not be cancelled or diminished without at least ten (10) days' prior
        written notice to Lender. Each insurance policy also shall include 
        an endorsement providing that coverage in favor of Lender will not 
        be impaired in any way by any act, omission or default of Borrower
        or any other person. In connection with all policies covering assets
        in which Lender holds or is offered a security interest for the
        Loans, Borrower will provide Lender with such loss payable or other
        endorsements as Lender may require.

    Insurance Reports. Furnish to Lender, upon request of Lender, reports on 
    each existing insurance policy showing such information as Lender may 
    reasonably request including without limitation the following: (a) the 
    name of the insurer; (b) the risks insured; (c) the amount of the policy; 
    (d) the properties insured, (e) the then current property values on the 
    basis of which insurance has been obtained, and the manner of determining 
    those values; and (f) the expiration date of the policy. In addition, 
    upon request of Lender (however not more often than annually), Borrower 
    will have an independent appraiser satisfactory to Lender determine, as 
    applicable, the actual cash value or replacement cost of any Collateral. 
    The cost of such appraisal shall be paid by Borrower.

    Other Agreements. Comply with all terms and conditions of all other 
    agreements, whether now or hereafter existing, between Borrower and any 
    other party and notify Lender immediately in writing of any default in 
    connection with any other such agreements.

    Loan Proceeds. Use all Loan proceeds solely for Borrower's business 
    operations, unless specifically consented to the contrary by Lender in 
    writing.

    Taxes, Charges and Liens. Pay and discharge when due all of its 
    indebtedness and obligations, including without limitation all 
    assessment, tax, governmental charges, levies and liens, of every kind 
    and nature, imposed upon Borrower or its properties, income, or profits, 
    prior to the date on which penalties would attach, and all lawful claims 
    that, if unpaid, might become a lien or charge upon any of Borrower's 
    properties, income, or profits. Provided however, Borrower will not be 
    required to pay and discharge any such assessment, tax, charge, levy, 
    lien or claim so long as (a) the legality of the same shall be contested 
    in good faith by appropriate proceedings, and (b) Borrower shall have 
    established on its books adequate reserves with respect to such contested 
    assessment, tax, charge, levy, lien, or claim in accordance with 
    generally accepted accounting practices. Borrower, upon demand of Lender, 
    will furnish to Lender evidence of payment of the assessments, taxes, 
    charges, levies, liens and claims and will authorize the appropriate 
    governmental official to deliver to Lender at any time a written 
    statement of any assessments, taxes, charges, levies, liens and claims 
    against Borrower's properties, income, or profits.

    Performance. Perform and comply with all terms, conditions, and 
    provisions set forth in this Agreement and in the Related Documents in a 
    timely manner, and promptly notify Lender if Borrower learns of the 
    occurrence of any event which constitutes an Event of Default under this 
    Agreement or under any of the Related Documents.

    Operations. Maintain executive and management personnel with 
    substantially the same qualifications and experience as the present 
    executive and management personnel; provide written notice to Lender of 
    any change in executive and management personnel; conduct its business 
    affairs in a reasonable and prudent manner and in compliance with all 
    applicable federal, state and municipal laws, ordinances, rules and 
    regulations respecting its properties, charters, businesses and 
    operations, including without limitation, compliance with the Americans 
    With Disabilities Act and with all minimum funding standards and other 
    requirements of ERISA and other laws applicable to Borrower's employee 
    benefit plans.

    Inspection. Permit employees or agents of Lender at any reasonable time 
    to inspect any and all Collateral for the Loan or Loans and Borrower's 
    other properties and to examine or audit Borrower's books, accounts, and 
    records and to make copies and memoranda of Borrower's books, accounts, 
    and records. If Borrower now or at any time hereafter maintains any 
    records (including without limitation computer generated records and 
    computer software programs for the generation of such records) in the 
    possession of a third party, Borrower, upon request of Lender, shall 
    notify such party to permit Lender free access to such records at all 
    reasonable times and to provide Lender with copies of any records it may 
    request, all at Borrower's expense.

    Compliance Certificate. Unless waived in writing by Lender, provide 
    Lender at least annually and at the time of each disbursement of Loan 
    proceeds with a certificate executed by Borrower's chief financial 
    officer, or other officer or person acceptable to Lender, certifying that 
    the representations and warranties set forth in this Agreement are true 
    and correct as of the date of the certificate and further certifying 
    that, as of the date of the certificate, no Event of Default exists under 
    this Agreement.

    Environmental Compliance and Reports. Borrower shall comply in all 
    respects with all environmental protection federal, state and local laws, 
    statutes, regulations and ordinances; not cause or permit to exist, as a 
    result of an intentional or unintentional action or omission on its part 
    or on the part of any third party, on property owned and/or occupied by 
    Borrower, any environmental activity where damage may result to the 
    environment, unless such environmental activity is pursuant to and in 
    compliance with the conditions of a permit issued by the appropriate 
    federal, state or local governmental authorities; shall furnish to Lender 
    promptly and in any event within thirty (30) days after receipt thereof a 
    copy of any notice, summons, lien, citation, directive, letter or other 
    communication from any governmental agency or instrumentality concerning 
    any intentional or unintentional action or omission on Borrower's part in 
    connection with any environmental activity whether or not there is damage 
    to the environment and/or other natural resources.

    Additional Assurances. Make, execute and deliver to Lender such 
    promissory notes, mortgages, deeds of trust, security agreements, 
    financing statements, instruments, documents and other agreements as 
    Lender or its attorneys may reasonably request to evidence and secure the 
    Loans and to perfect all Security Interests.

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while 
this Agreement is in effect, Borrower shall not, without the prior 
written consent of Lender:

    Indebtedness and Liens. (a) Except for trade debt incurred in the normal 
    course of business and indebtedness to Lender contemplated by this 
    Agreement, create, incur or assume indebtedness for borrowed money, 
    including capital leases, (b) sell, transfer, mortgage, assign, pledge, 
    lease, grant a security interest in, or encumber any of Borrower's 
    assets, or (c) sell with recourse any of Borrower's accounts, except to 
    Lender.

    Continuity of Operations. (a) Engage in any business activities 
    substantially different than those in which Borrower is presently 
    engaged, (b) cease operations, liquidate, merge, transfer, acquire or 
    consolidate with any other entity, change ownership, change its name, 
    dissolve or transfer or sell Collateral out of the ordinary course of 
    business, (c) pay any dividends on Borrower's stock (other than dividends 
    payable in its stock), provided, however that notwithstanding the 
    foregoing, but only so long as no Event of Default has occurred and is 
    continuing or would result from the payment of dividends, if Borrower is 
    a "Subchapter S Corporation" (as defined in the Internal Revenue Code of 
    1986, as amended), Borrower may pay cash dividends on its stock to its 
    shareholders from time to time in amounts necessary to enable the 
    shareholders to pay income taxes and make estimated income tax payments 
    to satisfy their liabilities under federal and state law which arise 
    solely from their status as Shareholders of a Subchapter S Corporation 
    because of their ownership of shares of stock of Borrower, or (d) 
    purchase or retire any of Borrower's outstanding shares or alter or amend 
    Borrower's capital structure.

    Loans, Acquisitions and Guaranties. (a) Loan, invest in or advance money 
    or assets, (b) purchase, create or acquire any interest in any other 
    enterprise or entity, or (c) incur any obligation as surety or guarantor 
    other than in the ordinary course of business.

CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan 
to Borrower, whether under this Agreement or under any other agreement, 
Lender shall have no obligation to make Loan Advances or to disburse Loan 
proceeds if: (a) Borrower or any Guarantor is in default under the terms 
of this Agreement or any of the Related Documents or any other agreement 
that Borrower or any Guarantor has with Lender, (b) Borrower or any 
Guarantor becomes insolvent, files a petition in bankruptcy or similar 
proceedings, or is adjudged a bankrupt, (c) there occurs a material 
adverse change in Borrower's financial condition, in the financial 
condition of any Guarantor, or in the value of any Collateral securing 
any Loan; (d) any Guarantor seeks, claims or otherwise attempts to limit, 
modify or revoke such Guarantor's guaranty of the Loan or any other loan 
with Lender, or (e) Lender in good faith deems itself insecure, even 
though no Event of Default shall have occurred.

ADDITIONAL PROVISIONS:.

1. BORROWER AGREES THAT ADVANCES AGAINST THIS LINE OF CREDIT WILL NOT 
EXCEED 80% OF ELIGIBLE ACCOUNTS RECEIVABLE AND 35% OF RAW MATERIALS AND 
FINISHED GOODS. ELIGIBLE ACCOUNTS RECEIVABLE ARE DEFINED AS THOSE 
ACCOUNTS AGED LESS THAN 90 DAYS MINUS ANY CONTRA, FOREIGN OR DIRECT 
FEDERAL GOVERNMENT/GOVERNMENT AGENCY ACCOUNTS. BORROWER FURTHER AGREES 
THAT ADVANCES AGAINST RAW MATERIALS AND FINISHED GOODS WILL NOT EXCEED 
$1,000,000.00. BORROWER ALSO AGREES THAT THE MAXIMUM ADVANCE AGAINST RAW 
MATERIALS AND FINISHED GOODS WILL BE DECREASED TO $600,000.00 ONCE THE 
COMPANY HAS DELIVERED GOODS ON THEIR CHEVRON CHRISTMAS CONTRACT OR 
JANUARY 15, 1997, WHICHEVER OCCURS FIRST. BORROWER ADDITIONALLY AGREES TO 
PROVIDE A COLLATERAL SCHEDULE AT THE TIME OF EACH REQUESTED ADVANCE.

2. BORROWER AGREES TO PROVIDE MONTHLY COMPANY PREPARED FINANCIAL 
STATEMENTS, ACCOUNTS RECEIVABLE AGINGS, COLLATERAL SCHEDULES AND ACCOUNTS 
PAYABLE AGINGS IN A TIMELY MANNER.

3.  BORROWER AGREES TO PROVIDE QUARTERLY 10Q AND ANNUAL 10K STATEMENTS IN 
A TIMELY MANNER. 

4. BORROWER AGREES TO PROVIDE YEAR END CPA AUDITED FINANCIAL STATEMENTS 
IN A TIMELY MANNER.

5. BORROWER AGREES TO MAINTAIN THE FOLLOWING FINANCIAL CONVENANTS AT ALL 
TIMES:
   A. MINIMUM CURRENT RATIO OF 1.25 TO 1.00

   B.  MAXIMUM DEBT TO WORTH RATIO OF 1.00 TO 1.00 

   C. MINIMUM NET WORTH OF $7,000,000.00

6. BORROWER AGREES TO ALLOW THE BANK OR ITS AGENT TO CONDUCT ONE ACCOUNTS 
RECEIVABLE AUDIT DURING THE TERM OF THIS LINE OF CREDIT AND TO BEAR THE 
EXPENSE FOR THIS AUDIT.

RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory 
security interest in, and hereby assigns, conveys, delivers, pledges, and 
transfers to Lender all Borrower's right, title and interest in and to, 
Borrower's accounts with Lender (whether checking, savings, or some other 
account), including without limitation all accounts held jointly with 
someone else and all accounts Borrower may open in the future, excluding 
however all IRA and Keogh accounts, and all trust accounts for which the 
grant of a security interest would be prohibited by law. Borrower 
authorizes Lender, to the extent permitted by applicable law, to charge 
or setoff all sums owing on the Indebtedness against any and all such 
accounts.

EVENTS OF DEFAULT. Each of the following shall constitute an Event of 
Default under this Agreement:

    Default on Indebtedness. Failure of Borrower to make any payment when due 
    on the Loans.

    Other Defaults. Failure of Borrower or any Grantor to comply with or to 
    perform when due any other term, obligation, covenant or condition 
    contained in this Agreement or in any of the Related Documents, or 
    failure of Borrower to comply with or to perform any other term, 
    obligation, covenant or condition contained in any other agreement 
    between Lender and Borrower.

    Default In Favor of Third Parties. Should Borrower or any Grantor default 
    under any loan, extension of credit, security agreement, purchase or 
    sales agreement, or any other agreement, in favor of any other creditor 
    or person that may materially affect any of Borrower's property or 
    Borrower's or any Grantor's ability to repay the Loans or perform their 
    respective obligations under this Agreement or any of the Related 
    Documents.

    False Statement. Any warranty, representation or statement made or 
    furnished to Lender by or on behalf of Borrower or any Grantor under this 
    Agreement or the Related Documents is false or misleading in any material 
    respect at the time made or furnished, or becomes false or misleading at 
    any time thereafter.

    Detective Collateralization. This Agreement or any of the Related 
    Documents ceases to be in full force and effect (including failure of any 
    Security Agreement to create a valid and perfected Security Interest) at 
    any time and for any reason.

    Insolvency. The dissolution or termination of Borrower's existence as a 
    going business, the insolvency of Borrower, the appointment of a receiver 
    for any part of Borrower's property, any assignment for the benefit of 
    creditors, any type of creditor workout, or the commencement of any 
    proceeding under any bankruptcy or insolvency laws by or against 
    Borrower.

    Creditor or Forfeiture Proceedings. Commencement of foreclosure or 
    forfeiture proceedings, whether by Judicial proceeding, self-help, 
    repossession or any other method, by any creditor of Borrower, any 
    creditor of any Grantor against any collateral securing the Indebtedness, 
    or by any governmental agency. This includes a garnishment, attachment, 
    or levy on or of any of Borrower's deposit accounts with Lender. However, 
    this Event of Default shall not apply if there is a good faith dispute by 
    Borrower or Grantor, as the case may be, as to the validity or 
    reasonableness of the claim which is the basis of the creditor or 
    forfeiture proceeding, and if Borrower or Grantor gives Lender written 
    notice of the creditor or forfeiture proceeding and furnishes reserves or 
    a surety bond for the creditor or forfeiture proceeding satisfactory to 
    Lender.

    Events Affecting Guarantor. Any of the preceding events occurs with 
    respect to any Guarantor of any of the Indebtedness or any Guarantor dies 
    or becomes incompetent, or revokes or disputes the validity of, or 
    liability under, any Guaranty of the Indebtedness. Lender, at its option, 
    may, but shall not be required to, permit the Guarantor's estate to 
    assume unconditionally the obligations arising under the guaranty in a 
    manner satisfactory to Lender, and, in doing so, cure the Event of 
    Default.

    Change In Ownership. Any change In ownership of twenty-five percent (25%) 
    or more of the common stock of Borrower.

    Adverse Change. A material adverse change occurs in Borrower's financial 
    condition, or Lender believes the prospect of payment or performance of 
    the Indebtedness is impaired.

    Insecurity. Lender, in good faith, deems itself insecure.

    Right to Cure. If any default, other than a Default on Indebtedness, is 
    curable and if Borrower or Grantor, as the case may be, has not been 
    given a notice of a similar default within the preceding twelve (12) 
    months, it may be cured (and no Event of Default will have occurred) if 
    Borrower or Grantor, as the case may be, after receiving written notice 
    from Lender demanding cure of such default: (a) cures the default within 
    fifteen (15) days; or (b) if the cure requires more than fifteen (15) 
    days, immediately initiates steps which Lender deems in Lender's sole 
    discretion to be sufficient to cure the default and thereafter continues 
    and completes all reasonable and necessary steps sufficient to produce 
    compliance as soon as reasonably practical.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, 
except where otherwise provided in this Agreement or the Related 
Documents, all commitments and obligations of Lender under this Agreement 
or the Related Documents or any other agreement immediately will 
terminate (including any obligation to make Loan Advances or 
disbursements), and, at Lender's option, all Indebtedness immediately 
will become due and payable, all without notice of any kind to Borrower, 
except that in the case of an Event of Default of the type described in 
the "Insolvency" subsection above, such acceleration shall be automatic 
and not optional. In addition, Lender shall have all the rights and 
remedies provided in the Related Documents or available at law, in 
equity, or otherwise. Except as may be prohibited by applicable law, all 
of Lender's rights and remedies shall be cumulative and may be exercised 
singularly or concurrently. Election by Lender to pursue any remedy shall 
not exclude pursuit of any other remedy, and an election to make 
expenditures or to take action to perform an obligation of Borrower or of 
any Grantor shall not affect Lender's right to declare a default and to 
exercise its rights and remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a 
part of this Agreement:

    Amendments. This Agreement, together with any Related Documents, 
    constitutes the entire understanding and agreement of the parties as to 
    the matters set forth in this Agreement. No alteration of or amendment to 
    this Agreement shall be effective unless given in writing and signed by 
    the party or parties sought to be charged or bound by the alteration or 
    amendment.

    Applicable Law. This Agreement has been delivered to Lender and accepted 
    by Lender In the State of California. It there is a lawsuit, Borrower 
    agrees upon Lender's request to submit to the jurisdiction of the courts 
    of San Diego County, the State of California. This Agreement shall be 
    governed by and construed in accordance with the laws of the State of 
    California.

    Caption Headings. Caption headings in this Agreement are for convenience 
    purposes only and are not to be used to interpret or define the 
    provisions of this Agreement.

    Consent to Loan Participation. Borrower agrees and consents to Lender's 
    sale or transfer, whether now or later, of one or more participation 
    interests in the Loans to one or more purchasers, whether related or 
    unrelated to Lender. Lender may provide, without any limitation 
    whatsoever to any one or more purchasers, or potential purchasers, any 
    information or knowledge Lender may have about Borrower or about any 
    other matter relating to the Loan, and Borrower hereby waives any rights 
    to privacy it may have with respect to such matters. Borrower 
    additionally waives any and all notices of sale of participation 
    interests, as well as all notices of any repurchase of such participation 
    interests. Borrower also agrees that the purchasers of any such 
    participation interests will be considered as the absolute owners of such 
    interests in the Loans and will have all the rights granted under the 
    participation agreement or agreements governing the sale of such 
    participation interests. Borrower further waives all rights of offset or 
    counterclaim that it may have now or later against Lender or against any 
    purchaser of such a participation interest and unconditionally agrees 
    that either Lender or such purchaser may enforce Borrower's obligation 
    under the Loans irrespective of the failure or insolvency of any holder 
    of any interest in the Loans. Borrower further agrees that the purchaser 
    of any such participation interests may enforce its interests 
    irrespective of any personal claims or defenses that Borrower may have 
    against Lender.

    Borrower Information. Borrower consents to the release of information on 
    or about Borrower by Lender in accordance with any court order, law or 
    regulation and in response to credit inquiries concerning Borrower.

    Non-Liability of Lender. The relationship between Borrower and Lender is 
    a debtor and creditor relationship and not fiduciary in nature, nor is 
    the relationship to be construed as creating any partnership or joint 
    venture between Lender and Borrower. Borrower is exercising its own 
    judgment with respect to Borrower's business. All information supplied to 
    Lender is for Lender's protection only and no other party is entitled to 
    rely on such information. There is no duty for Lender to review, inspect, 
    supervise, or inform Borrower of any matter with respect to Borrower's 
    business. Lender and Borrower intend that Lender may reasonably rely on 
    all information supplied by Borrower to Lender, together with all 
    representations and warranties given by Borrower to Lender, without 
    investigation or confirmation by Lender and that any investigation or 
    failure to investigate will not diminish Lender's right to so rely.

    Notice of Lender's Breach. Borrower must notify Lender in writing of any 
    breach of this Agreement or the Related Documents by Lender and any other 
    claim, cause of action or offset against Lender within thirty (30) days 
    after the occurrence of such breach or after the accrual of such claim 
    cause of action or offset. Borrower waives any claim, cause of action or 
    offset for which notice is not given in accordance with this paragraph. 
    Lender is entitled to rely on any failure to give such notice.

    Borrower Indemnification. Borrower shall indemnify and hold Lender 
    harmless from and against all claims, costs, expenses, losses, damages, 
    and liabilities of any kind, including but not limited to attorneys' fees 
    and expenses, arising out of any matter relating directly or indirectly 
    to the Indebtedness, whether resulting from internal disputes of the 
    Borrower, disputes between Borrower and any Guarantor, or whether 
    involving any third parties, or out of any other matter whatsoever 
    related to this Agreement or the Related Documents, but excluding any 
    claim or liability which arises as a direct result of Lender's gross 
    negligence or willful misconduct. This indemnity shall survive full 
    repayment and satisfaction of the Indebtedness and termination of this 
    Agreement.

    Counterparts. This Agreement may be executed in multiple counterparts, 
    each of which, when so executed, shall be deemed an original, but all 
    such counterparts, taken together, shall constitute one and the same 
    Agreement.

    Costs and Expenses. Borrower agrees to pay upon demand all of Lender's 
    expenses, including without limitation attorneys' fees, incurred in 
    connection with the preparation, execution, enforcement, modification and 
    collection of this Agreement or in connection with the Loans made 
    pursuant to this Agreement. Lender may pay someone else to help collect 
    the Loans and to enforce this Agreement, and Borrower will pay that 
    amount. This includes, subject to any limits under applicable law, 
    Lender's attorneys' fees and Lender's legal expenses, whether or not 
    there is a lawsuit, including attorneys' fees for bankruptcy proceedings 
    (including efforts to modify or vacate any automatic stay or injunction), 
    appeals, and any anticipated post-judgment collection services. Borrower 
    also will pay any court costs, in addition to all other sums provided by 
    law.

    Notices. All notices required to be given under this Agreement shall be 
    given in writing, may be sent by telefacsimilie, and shall be effective 
    when actually delivered or when deposited with a nationally recognized 
    overnight courier or deposited in the United States mail, first class, 
    postage prepaid, addressed to the party to whom the notice is to be given 
    at the address shown above. Any party may change its address for notices 
    under this Agreement by giving formal written notice to the other 
    parties, specifying that the purpose of the notice is to change the 
    party's address. To the extent permitted by applicable law, if there is 
    more than one Borrower, notice to any Borrower will constitute notice to 
    all Borrowers. For notice purposes, Borrower will keep Lender informed at 
    all times of Borrower's current address(es).
 
    Severability. If a court of competent jurisdiction finds any provision of 
    this Agreement to be invalid or unenforceable as to any person or 
    circumstance, such funding shall not render that provision invalid or 
    unenforceable as to any other persons or circumstances. If feasible, any 
    such offending provision shall be deemed to be modified to be within the 
    limits of enforceability or validity; however, if the offending provision 
    cannot be so modified, it shall be stricken and all other provisions of 
    this Agreement in all other respects shall remain valid and enforceable.
  
    Subsidiaries and Affiliates of Borrower. To the extent the context of any 
    provisions of this Agreement makes it appropriate, including without 
    limitation any representation, warranty or covenant, the word "Borrower" 
    as used herein shall include all subsidiaries and affiliates of Borrower. 
    Notwithstanding the foregoing however, under no circumstances shall this 
    Agreement be construed to require Lender to make any Loan or other 
    financial accommodation to any subsidiary or affiliate of Borrower.

    Successors and Assigns. All covenants and agreements contained by or on 
    behalf of Borrower shall bind its successors and assigns and shall inure 
    to the benefit of Lender, its successors and assigns. Borrower shall not, 
    however, have the right to assign its rights under this Agreement or any 
    interest therein, without the prior written consent of Lender.

    Survival. All warranties, representations, and covenants made by Borrower 
    in this Agreement or in any certificate or other instrument delivered by 
    Borrower to Lender under this Agreement shall be considered to have been 
    relied upon by Lender and will survive the making of the Loan and 
    delivery to Lender of the Related Documents, regardless of any 
    investigation made by Lender or on Lender's behalf.

    Time Is of the Essence. Time is of the essence in the performance of this 
    Agreement.

    Waiver. Lender shall not be deemed to have waived any rights under this 
    Agreement unless such waiver is given in writing and signed by Lender. No 
    delay or omission on the part of Lender in exercising any right shall 
    operate as a waiver of such right or any other right. A waiver by Lender 
    of a provision of this Agreement shall not prejudice or constitute a 
    waiver of Lender's right otherwise to demand strict compliance with that 
    provision or any other provision of this Agreement. No prior waiver by 
    Lender, nor any course of dealing between Lender and Borrower, or between 
    Lender and any Grantor, shall constitute a waiver of any of Lender's 
    rights or of any obligations of Borrower or of any Grantor as to any 
    future transactions. Whenever the consent of Lender is required under 
    this Agreement, the granting of such consent by Lender in any instance 
    shall not constitute continuing consent in subsequent instances where 
    such consent is required, and in all cases such consent may be granted or 
    withheld in the sole discretion of Lender.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS LOAN 
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS 
OF NOVEMBER 13 1996

BORROWER:

FOTOBALL U.S.A. INC.

By: /s/David G. Forster
    -----------------------------------
    DAVID G. FORSTER, Vice President/CFO

LENDER:
Scripps Bank

By: /s/ John K. Peck 
    -----------------------------------
    Authorized Officer
<PAGE>
                      CORPORATE RESOLUTION TO BORROW

Borrower: FOTOBALL U.S.A. INC.         Lender: Scripps Bank
3738 RUFFIN ROAD                       Corporate Banking
SAN DIEGO, CA 92123                    550 West "C" Street, Suite 100
                                       San Diego, CA 92101

I, the undersigned Secretary or Assistant Secretary of FOTOBALL U.S.A. 
INC. (the "Corporation"), HEREBY CERTIFY that the Corporation is 
organized and existing under and by virtue of the laws of the State of 
Delaware as a corporation for profit, with its principal office at 3738 
RUFFIN ROAD, SAN DIEGO, CA 92123, and is duly authorized to transact 
business in the State of California.

I FURTHER CERTIFY that at a meeting of the Directors of the Corporation, 
duly called and held on November 6, 1996 at which a quorum was present 
and voting, or by other duly authorized corporate action in lieu of a 
meeting, the following resolutions were adopted:

BE IT RESOLVED, that any one (1) of the following named officers, 
employees. or agents of this Corporation, whose actual signatures are 
shown below:

NAME                      POSITION                  ACTUAL SIGNATURE
                       
DAVID G. FORSTER      Vice President/CFO            /s/David G. Forster

acting for and on behalf of the Corporation and as its act and deed be, 
and he or she hereby is, authorized and empowered:

    Borrow Money. To borrow from time to time from Scripps Bank ("Lender"), 
    on such terms as may be agreed upon between the Corporation and Lender, 
    such sum or sums of money as in his or her judgment should be borrowed 
    however, not exceeding at any one time the amount of Two Million & 00/100 
    Dollars ($2,000.000.00), in addition to such sum or sums of money as may 
    be currently borrowed by the Corporation from Lender.

    Execute Notes. To execute and deliver to Lender the promissory note or 
    notes, or other evidence of credit accommodations and/or revision 
    agreement or other evidence of obligation of the Corporation, on Lender's 
    forms, at such rates of interest and on such terms as may be agreed upon, 
    evidencing the sums of money so borrowed or any indebtedness of the 
    Corporation to Lender, and also to execute and deliver to Lender one or 
    more renewals, extensions, modifications, refinancing, consolidations, or 
    substitutions for one or more of the notes, any portion of the notes, or 
    any other evidence of credit accommodations.
  
    Grant Security. To mortgage, pledge, transfer, endorse, hypothecate, or 
    otherwise encumber and deliver to Lender, as security for the payment of 
    any loans or credit accommodations so obtained, any promissory notes so 
    executed (including any amendments to or modifications, renewals and 
    extensions of such promissory notes), or any other or further 
    indebtedness of the Corporation to Lender at any time owing, however the 
    same may be evidenced, any property now or hereafter belonging to the 
    Corporation or in which the Corporation now or hereafter may have an 
    Interest including without limitation all real property and all personal 
    property (tangible or intangible) of the Corporation. Such property may 
    be mortgaged, pledged, transferred, endorsed, hypothecated, or encumbered 
    at the time such loans are obtained or such indebtedness is incurred, or 
    at any other time or times, and may be either in addition to or in lieu 
    of any property theretofore mortgaged, pledged, transferred, endorsed, 
    hypothecated, or encumbered.

    Execute Security Documents. To execute and deliver to Lender the forms of 
    mortgage, deed of trust, pledge agreement, hypothecation agreement, and 
    other security agreements and financing statements which may be required 
    by Lender, and which shall evidence the terms and conditions under and 
    pursuant to which such liens and encumbrances, or any of them, are given; 
    and also to execute and deliver to Lender any other written instruments, 
    any chattel paper, or any other collateral, of any kind or nature, which 
    Lender may deem necessary or proper in connection with or pertaining to 
    the giving of the liens and encumbrances.

    Negotiate Items. To draw, endorse, and discount with Lender all drafts, 
    trade acceptances, promissory notes, or other evidences of indebtedness 
    payable to or belonging to the Corporation in which the Corporation may 
    have an interest, and either to receive cash for the same or to cause 
    such proceeds to be credited to the account of the Corporation with 
    Lender, or to cause such other disposition of the proceeds derived 
    therefrom as they may deem advisable.

    Further Acts. In the case of lines of credit, to designate additional or 
    alternate individuals as being authorized to request advances thereunder, 
    and in all cases, to do and perform such other acts and things, to pay 
    any and all fees and costs, and to execute and deliver such other 
    documents and agreements as he or she may in his or her discretion deem 
    reasonably necessary or proper in order to carry into effect the 
    provisions of these Resolutions. The following person or persons 
    currently are authorized to request advances and authorize payments under 
    the line of credit until Lender receives written notice of revocation of 
    their authority: DAVID G. FORSTER, Vice President/CFO.

BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to 
these Resolutions and performed prior to the passage of these Resolutions 
are hereby ratified and approved, that these Resolutions shall remain in 
full force and effect and Lender may rely on these Resolutions until 
written notice of his or her revocation shall have been delivered to and 
received by Lender. Any such notice shall not affect any of the 
Corporation's agreements or commitments in effect at the time notice is 
given.

BE IT FURTHER RESOLVED, that the Corporation will notify Lender in 
writing at Lender's address shown above (or such other addresses as 
Lender may designate from time to time) prior to any (a) change in the 
name of the Corporation, (b) change in the assumed business name(s) of 
the Corporation, (c) change in the management of the Corporation, (d) 
change in the authorized signer(s), (e) conversion of the Corporation to 
a new or different type of business entity, or (f) change in any other 
aspect of the Corporation that directly or indirectly relates to any 
agreements between the Corporation and Lender. No change in the name of 
the Corporation will take effect until after Lender has been notified.

I FURTHER CERTIFY that at a special meeting of the shareholders of the 
Corporation, duly called and held (or by consent of the shareholders in 
accordance with the laws of the State of Delaware), not less than the 
required percentage of shareholders adopted or consented to all the 
Resolutions set forth above.

I FURTHER CERTIFY that the officer, employee, or agent named above is 
duly elected, appointed, or employed by or for the Corporation, as the 
case may be, and occupies the position set opposite the name; that the 
foregoing Resolutions now stand of record on the books of the 
Corporation; and that the Resolutions are in full force and effect and 
have not been modified or revoked in any manner whatsoever. The 
Corporation has no corporate seal, and therefore, no seal is affixed to 
this certificate.

IN TESTIMONY WHEREOF, I have hereunto set my hand on November 13, 1996 
and attest that the signatures set opposite the names listed above are 
their genuine signatures.

CERTIFIED TO AND ATTESTED BY:

/s/Karen M. Betro
--------------
Karen M. Betro