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                                                                 EXHIBIT 10.22 

[LOGO]                                                 BUSINESS LOAN AGREEMENT 
------------------------------------------------------------------------------ 

This Agreement dated as of May 1, 1996 is between Bank of America Texas, N.A. 
(the "Bank") and TEMTEX INDUSTRIES, INC. (the "Borrower").

1.   LINE OF CREDIT AMOUNT AND TERMS

1.1  LINE OF CREDIT AMOUNT.
(a)  During the availability period described below, the Bank will provide a
     line of credit to the Borrower. The amount of the line of credit (the
     "Commitment") is Four Million and No/100 Dollars ($4,000,000.00).

(b)  This is a revolving line of credit with a within line facility for letters
     of credit. During the availability period, the Borrower may repay principal
     amounts and reborrow them.

(c)  The Borrower agrees not to permit the outstanding principal balance of the
     line of credit plus the outstanding amounts of any letters of credit,
     including amounts drawn on letters of credit and not yet reimbursed, to
     exceed the Commitment.

1.2  AVAILABILITY PERIOD.  The line of credit is available between the date of
this Agreement and May 1, 1998 (the "Expiration Date") unless the Borrower is 
in default.

1.3  INTEREST RATE.
(a)  Unless the Borrower elects an Optional interest rate as described below,
     the interest rate is the lesser of (a) the maximum lawful rate of interest
     permitted under applicable usury laws, now or hereafter enacted (the
     "Maximum Rate"), or (b) the rate (the "Basic Rated that is equal to the
     Bank's Reference Rate.

     Notwithstanding the foregoing, if at any time the Basic Rate shall exceed
     the Maximum Rate and thereafter the Basic Rate shall become less than the
     Maximum Rate, the Rate of interest payable shall be the Maximum Rate until
     the Bank shall have received the amount of interest it otherwise would have
     received if the interest payable had not been limited by the Maximum Rate
     during the period of time the Basic Rate exceeded the Maximum Rate.

(b)  The Reference Rate is the rate of interest publicly announced from time to
     time by the Bank in Irving. Texas, as its Reference Rate. The Reference
     Rate is set by the Bank based on various factors, including its costs and
     desired return, general economic conditions and other factors, and is used
     as a reference point for pricing some loans.  The Bank may price loans to
     its customers at, above, or below the Reference Rate. Any change in the
     Reference Rate will take effect at the opening of business on the day
     specified in the public announcement of a change in the Bank's Reference
     Rate.

1.4  REPAYMENT TERMS.
(a)  The Borrower will pay interest on June 1, 1996 and on the 1st day of each
     month thereafter until payment in full of any principal outstanding under
     this line of credit,
(b)  The Borrower will repay in full all principal and any unpaid interest or
     other charges outstanding under this line of credit no later than the
     Expiration Date.
(c)  The Borrower may prepay the loan in full or in part at any time.

1.5  OPTIONAL INTEREST RATES.  Instead of the interest rate based on the Bank's
Reference Rate, the Borrower may elect to have all or portions of the line of
credit during the availability period bear interest at the rate(s) described
below during an interest period agreed to by the Bank and the Borrower;
provided, however, that the Borrower shall not have the option or right to elect
to have all or any portion of the line of credit] bear interest at the rates
described below when such rates exceeds the Maximum Rate. Each interest rate is
a rate per year. Interest will be paid on the last day of each interest period,
and on the 1st day of each month during the interest 

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period. At the end of any interest period, the interest rate will revert to 
the rate based on the Reference Rate, unless the Borrower has designated 
another optional interest rate for the portion.

1.6  LETTERS OF CREDIT.

(a)  This line of credit may be used for financing standby letters of credit
     with a maximum maturity of 365 days but not to extend beyond the Expiration
     Date.

(b)  The amount of the letters of credit outstanding at any one time (including
     amounts drawn on the letter of credit and not yet reimbursed) may not
     exceed Five Hundred Thousand and No/100 Dollars ($500.000.00).

The Borrower agrees:

(a)  any sum drawn under a letter of credit may, at the option of the Bank, be
     added to the principal amount outstanding under this Agreement. The amount
     will bear interest and be due as described elsewhere in this Agreement.

(b)  the issuance of any letter of credit and any amendment to a letter of
     credit is subject to the Bank's written approval and must be in form and
     content satisfactory to the Bank and in favor of a beneficiary acceptable
     to the Bank.

(c)  to sign the Bank's form Application and Agreement for Standby Letter of
     Credit.

(d)  to pay the following issuance and other fees for issuing and processing
     letters of credit in the amount of 1% percent per annum of face amount of
     each letter of credit.

(e)  to allow the Bank to automatically charge its checking account for
     applicable fees, discounts, and other charges.

1.7  LIBOR RATE.  The Borrower may elect to have all or portions of the 
principal balance of the line of credit bear interest at the LIBOR Rate plus 
1.25 percentage points (the "Eurodollar Rate")

Designation of a Eurodollar Rate portion is subject to the following 
requirements:

(a)  The interest period during which the Eurodollar Rate will be in effect will
     be 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, or 12 months. The last day of the
     interest period will be determined by the Bank using the practices of the
     London inter-bank market.
(b)  Each Eurodollar Rate portion will be for an amount not less than One
     Hundred Thousand Dollars ($100,000).
(c)  The Borrower shall irrevocably request a Eurodollar Rate portion no later
     than 11:00 a.m. Dallas time two (2) banking days before the commencement of
     the interest period using the attached Borrowing Certificate Form included
     as Exhibit "A".
(d)  The "LIBOR Rate" means the interest rate determined by the following
     formula, rounded upward to the nearest 1/100 of one percent. (All amounts
     in the calculation will be determined by the Bank as of the first day of
     the interest period.)

                             London Rate        
     LIBOR Rate =   --------------------------- 
                    (1.00 - Reserve Percentage) 

     Where,

     (i)  "London Rate" means the interest rate (rounded upward to the nearest
          1/16th of one percent) at which the Bank's London Branch, London,
          Great Britain, would offer U.S. dollar deposits for the applicable
          interest period to other major banks in the London inter-branch market
          at approximately 11:00 a.m. London time two (2) Banking Days prior to
          the commencement of the interest period.
     (ii) "Reserve Percentage" means the total of the maximum reserve
          percentages for determining the reserves to be maintained by member
          banks of the Federal Reserve System for Eurocurrency Liabilities, as
          defined in the Federal Reserve Board Regulation D, rounded upward to
          the nearest 

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          1/100 of one percent. The percentage will be expressed as a decimal,
          and will include, but not be limited to, marginal, emergency, 
          supplemental, special and other reserve percentages.

(e)  The Borrower may not elect a Eurodollar Rate with respect to any portion of
     the principal balance of the line of credit which is scheduled to be repaid
     before the last day of the applicable interest period.
(f)  Any portion of the principal balance of the line of credit already bearing
     interest at the Eurodollar Rate will not be converted to a different rate
     during its interest period.
(g)  Each prepayment of a Eurodollar Rate portion, whether voluntary, by reason
     of acceleration or otherwise, will be accompanied by the amount of accrued
     interest on the amount prepaid; and a prepayment fee equal to the amount
     (if any) by which:

     (i)  the additional interest which would have been payable on the amount
          prepaid had it not been paid until the last day of the interest
          period. exceeds
     (ii) the interest which would have been recoverable by the Bank by placing
          the amount prepaid on deposit in the London inter-bank market for a
          period starting on the date on which it was prepaid and ending on the
          last day of the interest period for such portion.

(h)  The Bank will have no obligation to accept an election for a Eurodollar
     Rate portion if any of the following described events has occurred and is
     continuing:

     (i)  Dollar deposits in the principal amount, and for periods equal to the
          interest period, of a Eurodollar Rate portion are not available in the
          London inter-bank market; or
     (ii) the Eurodollar Rate does not accurately reflect the cost of a
          Eurodollar Rate portion.

(i)  If at any time during any applicable interest period the Eurodollar Rate
     shall exceed the Maximum Rate and thereafter the Eurodollar Rate shall
     become less than the Maximum Rate, the rate of interest payable shall be
     the Maximum Rate until the Bank shall have received the amount of interest
     it otherwise would have received if the interest payable had not been
     limited by the Maximum Rate during the period of time the Eurodollar Rate
     exceeded the Maximum Rate.

2.   FEES, EXPENSES

2.1  UNUSED COMMITMENT FEE.  Subject to the provisions of Section 2 hereof, the
     Borrower agrees to pay a fee on any difference between the Commitment and
     the amount of credit it actually uses, determined by the weighted average
     loan balance maintained during the specified period.  The fee will be
     calculated at 1/8% per year.
This fee is due on August 1, 1996 and on each quarterly date thereafter until
the expiration of the availability period.

2.2  WAIVER FEE.  Subject to the provisions of Section 2 hereof, if the Bank, at
its discretion, agrees to waive or amend any terms of this Agreement, then the
Borrower will pay the Bank a One Thousand and No/100 Dollar ($1,000.00) fee for
each waiver or amendment, Nothing in this paragraph shall imply that the Bank is
obligated to agree to any waiver or amendment requested by the Borrower. The
Bank may impose additional requirements as a condition to any waiver or
amendment.

2.3  EXPENSES.
(a)  The Borrower agrees to reimburse the Bank for any expenses it incurs in the
     closing of this transaction or the preparation of this Agreement and any
     agreement or instrument required by this Agreement, up to a maximum of Four
     Thousand and No/100 Dollars ($4,000.00).  Expenses include, but are not
     limited to, reasonable attorneys' fees, filing and recording fees and
     taxes, search fees and other out-of-pocket expenses incurred by Bank.



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2.4  NO EXCESS FEES.  Notwithstanding anything to the contrary in this Section
2, in no event shall any sum payable under this Section 2 (to the extent, if
any, constituting interest under any applicable laws), together with all amounts
constituting interest under applicable laws and payable in connection with the
credit evidenced hereby, exceed the Maximum Rate or the maximum amount of
interest permitted to be charged, taken, reserved, received or contracted for
under applicable usury laws.

3.   COLLATERAL

3.1  PERSONAL PROPERTY.  The Borrower's obligations to the Bank under this
Agreement will be secured by personal property the Borrower now owns or will own
in the future as listed below. The collateral is further defined in security
agreement(s) executed by the Borrower.

(a)  Inventory, excluding inventory domiciled in Mexico.

(b)  Receivables.

In addition, all personal property collateral securing this Agreement shall also
secure all other present and future obligations of the Borrower to the Bank
(excluding any consumer credit covered by the federal Truth in Lending law,
unless the Borrower has otherwise agreed in writing).  All personal property
collateral securing any other present or future obligations of the Borrower to
the Bank shall also secure this Agreement.

3.2  OTHER COLLATERAL.  The Borrower's obligations to the Bank under this
Agreement will be secured by personal property now owned or owned in the future
by Temco Fireplace Product, Inc. as listed below, The collateral is further
defined in security agreement(s) executed by Temco Fireplace Product, Inc.

(a)  Inventory, excluding inventory domiciled in Mexico.

(b)  Receivables.


4.   DISBURSEMENTS, PAYMENTS AND COSTS

4.1  REQUESTS FOR CREDIT. Each request for an extension of credit will be made
in writing by submitting to the Bank a Borrowing Certificate in the attached
Exhibit "A" hereto, or by another means acceptable to the Bank.

4.2  DISBURSEMENTS AND PAYMENTS. Each disbursement by the Bank and each payment
by the Borrower will be:

(a)  made at the Banks branch (or other location) selected by the Bank from time
     to time;
(b)  made in immediately available funds, or such other type of funds selected
     by the Bank;
(c)  evidenced by records kept by the Bank. In addition, the Bank may, at its
     discretion, require the Borrower to sign one or more promissory notes,

4.3  TELEPHONE AUTHORIZATION.
(a)  The Bank may honor telephone instructions for advances or repayments or for
     the designation Of Optional interest rates given by any one of the
     individual signer(s) of this Agreement or a person or persons authorized by
     any one of the signer(s) of this Agreement.
(b)  Advances will be deposited in and repayments will be withdrawn from the
     Borrower's account number 2605400143, or such other accounts with the Bank
     as designated in writing by the Borrower.
(c)  The Borrower indemnifies and excuses the Bank (including its officers,
     employees, and agents) from all liability, loss, and costs in connection
     with any act resulting from telephone instructions it reasonably believes
     are made by any individual authorized by the Borrower to give such
     instructions.

4.4  DIRECT DEBIT.
(a)  The Borrower agrees that interest and any fees will be deducted
     automatically on the due date from checking account number 2605400143,
(b)  The Bank will debit the account on the dates the payments become due, If a
     due date does not fall on a banking day, the Bank will debit the account on
     the first banking day following the due date.


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(c)  The Borrower will maintain sufficient funds in the account on the dates the
     Bank enters debits authorized by this Agreement. If there are insufficient
     funds in the account on the date the Bank enters any debit authorized by
     this Agreement, the debit will be reversed.

4.5  BANKING DAYS.  Unless otherwise provided in this Agreement, a banking day
is a day other than a Saturday or a Sunday on which the Bank is open for
business in Texas. For amounts bearing interest at a LIBOR Rate, a banking day
is a day other than a Saturday or a Sunday on which the Bank is open for
business in Texas and Bank of America National Trust and Savings Association
("BofA California") in San Francisco, California and dealing in dollars in the
London inter-bank market. All payments and disbursements which would be due on a
day which is not a banking day will be due on the next banking day. All payments
received on a day which is not a banking day will be applied to the credit on
the next banking day.

4.6  TAXES. The Borrower will not deduct any taxes from any payments it makes to
the Bank.  If any government authority imposes any taxes on any payments made by
the Borrower, the Borrower will pay the taxes or charges. Upon request by the
Bank, the Borrower will confirm that it has paid the taxes by giving the Bank
official tax receipts (or notarized copies) within 30 days after the due date.
However, the Borrower will not pay the Bank's net income taxes.

4.7  ADDITIONAL COSTS.  With respect to any portion of the principal balance
bearing interest at the Eurodollar Rate and subject to the provisions of Section
4 hereof, the Borrower will pay the Bank, on demand, for the Bank's costs or
losses arising from any statute or regulation, or any request or requirement of
a regulatory agency which is applicable to all national banks or a class of all
national banks. The costs and losses will be allocated to the loan in a manner
determined by the Bank, using any reasonable method. The costs include the
following:

(a)  any increased reserve or deposit requirements; and
(b)  any increased capital requirements relating to the Bank's assets and
     commitments for credit.

Notwithstanding the foregoing, in no event shall any sum payable under this
Section 4 (to the extent, if any, constituting interest under applicable laws),
together with all amounts constituting interest under applicable laws and
payable in connection with the credit evidenced hereby, exceed the Maximum Rate
or the maximum amount of interest permitted to be charged, taken, reserved,
received or contracted for under any applicable usury laws.

4.8  INTEREST CALCULATION.  Except as otherwise stated in this Agreement, all
interest and fees, if any, will be computed on the basis of a 360 day year and
the actual number of days elapsed. This results in more interest or a higher fee
than if a 365-day year is used. Notwithstanding the foregoing, interest at the
Maximum Rate will always be computed on the basis of a 365-day year and the
actual number of days elapsed.

4.9  INTEREST ON LATE PAYMENTS.  At the Bank's sole option in each instance, any
amount not paid when due under this Agreement (including interest) shall bear
interest from the due date at the lesser of (a) the Maximum Rate or (b) the
Bank's Reference Rate plus 1.00 percentage point.

4.10 DEFAULT RATE.  Upon the occurrence and during the continuation of any
default under this Agreement, advances under this Agreement will at the option
of the Bank bear interest at the lesser of (a) the Maximum Rate and (b) a rate
per annum which is 1.00 percentage point higher than the rate of interest
otherwise provided under this Agreement. This will not constitute a waiver of
any default.

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5.   CONDITIONS.  The Bank must receive the following items, in form and content
acceptable to the Bank, before it is required to extend any credit to the
Borrower under this Agreement:

5.1  AUTHORIZATIONS.  Evidence that the execution, delivery and performance by
the Borrower and each guarantor or subordinating creditor of this Agreement and
any instrument or agreement required under this Agreement have been duly
authorized.

5.2  SECURITY AGREEMENTS.  Signed original security agreements, assignments,
financing statements and fixture filings (together with collateral in which 
the Bank requires a possessory security interest), which the Bank requires.

5.3  EVIDENCE OF PRIORITY.  Evidence that security interests and liens in favor
of the Bank are valid, enforceable, and prior to all others' rights and
interests, except those the Bank consents to in writing.

5.4  INSURANCE.  Evidence of insurance coverage, as required in the "Covenants"
section of this Agreement.

5.5  BUSINESS INTERRUPTION INSURANCE.  Evidence of a business interruption
insurance policy for at least Four Million and No/100 Dollars ($4,000,000.00)
with an insurer acceptable to the Bank.

5.6  ENVIRONMENTAL QUESTIONNAIRE.  A completed Bank form Environmental
Questionnaire and Disclosure Statement.

5.7  GUARANTIES.  Guaranties signed by Temco Fireplace Products, Inc., Temtex
Trucking, Inc., and Malakoff Brick, Inc. on the Bank's standard form in an
amount as may be acceptable, from time to time, to the Bank.

5.8  GOOD STANDING.  Certificates of good standing for the Borrower from its
state of incorporation and from any other state in which the Borrower is 
required to qualify to conduct its business.

5.9  OTHER ITEMS. Any other items that the Bank reasonably requires.


6.   REPRESENTATIONS AND WARRANTIES When the Borrower signs this Agreement, and
until the Bank is repaid in full, the Borrower makes the following
representations and warranties. Each request for an extension of credit
constitutes a renewed representation.

6.1  ORGANIZATION OF BORROWER. The Borrower is a corporation duly formed and
existing under the laws of the state where organized.

6.2  AUTHORIZATION.  This Agreement, and any instrument or agreement required
hereunder, are within the Borrower's or Guarantor's powers, have been duly
authorized, and do not conflict with any of its organizational papers.

6.3  ENFORCEABLE AGREEMENT.  This Agreement is a legal, valid and binding
agreement of the Borrower, enforceable against the Borrower in accordance with
its terms, and any instrument or agreement required hereunder, when executed and
delivered, will be similarly legal, valid, binding and enforceable.

6.4  GOOD STANDING.  In each state in which the Borrower does business, it is
properly licensed, in good standing, and, where required, in compliance with
fictitious name statutes.

6.5  NO CONFLICTS.  This Agreement does not conflict with any law, agreement, or
obligation by which the Borrower is bound.



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6.6  FINANCIAL INFORMATION.  All financial and other information that has been 
or will be supplied to the Bank, including the Borrower's financial statement 
dated as of February 29, 1996 is:

(a)  sufficiently complete to give the Bank accurate knowledge of the Borrower's
     and any guarantor's financial condition.
(b)  in form and content required by the Bank.
(c)  in compliance with all government regulations that apply.

Since the date of the financial statement specified above, there has been no
material adverse change in the assets or the financial condition of the Borrower
or any guarantor.

6.7  LAWSUITS.  There is no lawsuit, tax claim or other dispute pending or
threatened against the Borrower, which, if lost, would impair the Borrower's
financial condition or ability to repay the loan, except as have been disclosed
in writing to the Bank.

6.8  COLLATERAL.  All collateral required in this Agreement is owned by the 
grantor of the security interest free of any title defects or any liens or
interests of others.

6.9  PERMITS, FRANCHISES.  The Borrower possesses all permits, memberships,
franchises, contracts and licenses required and all trademark rights, trade name
rights, patent rights and fictitious name rights necessary to enable it to
conduct the business in which it is now engaged.

6.10 OTHER OBLIGATIONS.  The Borrower is not in default on any obligation for
borrowed money, any purchase money obligation or any other material lease,
commitment, contract, instrument or obligation.

6.11 INCOME TAX RETURNS.  The Borrower has no knowledge of any pending
assessments or adjustments of its income tax for any year.

6.12 NO EVENT OF DEFAULT. There is no event which is, or with notice or lapse of
time or both would be, a default under this Agreement.

6.13 ERISA PLANS.
(a)  The Borrower has fulfilled its obligations, if any, under the minimum
     funding standards of ERISA and the Code with respect to each Plan and is in
     compliance in all material respects with the presently applicable
     provisions of ERISA and the Code, and has not incurred any liability with
     respect to any Plan under Title IV of ERISA.
(b)  No reportable event has occurred under Section 4043(b) of ERISA for which
     the PBGC requires 30 day notice.
(c)  No action by the Borrower to terminate or withdraw from any Plan has been
     taken and no notice of intent to terminate a Plan has been filed under
     Section 4041 of ERISA.
(d)  No proceeding has been commenced with respect to a Plan under Section 4042
     of ERISA, and no event has occurred or condition exists which might
     constitute grounds for the commencement of such a proceeding.
(e)  The following terms have the meanings indicated for purposes of this
     Agreement:

     (i)   "Code" means the Internal Revenue Code of 1986, as amended from time
           to time.
     (ii)  "ERISA" means the Employee Retirement Income Act of 1974, as amended
           from time to time.
     (iii) "PBGC" means the Pension Benefit Guaranty Corporation established
           pursuant to Subtitle A of Title IV of ERISA.
     (iv)  "Plan" means any employee pension benefit plan maintained or
           contributed to by the Borrower and insured by the Pension Benefit
           Guaranty Corporation under Title IV of ERISA.

6.14 LOCATION OF BORROWER.  The Borrower's place of business (or, if the 
Borrower has more than one place of business, its chief executive office) is 
located at the address listed under the Borrower's signature on this Agreement.

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6.15 LOCATION OF INVENTORY.  The Borrower's Inventory is located at the 
following locations:

<TABLE>

<S>                               <C>                                    <C>      
Texas Clay Industries            Temco Fireplace Products, Inc.         Temco Fireplace Products Inc. 
West End of Bartlett Street      1324 McArthur Drive                    1190 W. Oleander   
Malakoff, Texas 75148            Manchester, TN 37355                   Perris, CA 92572
</TABLE>

7.   COVENANTS.  The Borrower agrees, so long as credit is available under this
Agreement and until the Bank is repaid in full:

7.1  USE OF PROCEEDS.  To use the proceeds of the credit only to support ongoing
investment in accounts receivable and inventory along with general working
capital funding requirements.

7.2  FINANCIAL INFORMATION.  To provide the following financial information and
statements and such additional information as requested by the Bank from time to
time:

(a)  Within 90 days of the Borrower's fiscal year end, the Borrower's annual
     financial statements and Borrower's Form 10-K Annual Report. These
     financial statements must be audited (with an unqualified opinion) by a
     Certified Public Accountant ("CPA") acceptable to the Bank. The statements
     shall be prepared on a consolidated and consolidating basis. The
     consolidating statements will not be audited.

(b)  Within 45 days of the period's end, the Borrower's quarterly financial
     statements and Form 10-Q Quarterly Report. These financial statements may
     be Borrower prepared. The statements shall be prepared on a consolidated
     basis.

(c)  Within 45 days of each quarter end, the Borrower will provide the Bank with
     a Compliance Certificate in the form described as Exhibit "B" hereto.

(d)  Borrower to provide to Bank annual operating forecasts by the end of the
     first quarter following the start of each fiscal year.

7.3  QUICK RATIO.  To maintain on a consolidated basis a ratio of quick assets
to current liabilities of at least 0.60:1.0, measured quarterly, beginning
August 31, 1996.

"Quick assets" means cash, short-term cash investments, net trade receivables
and marketable securities not classified as long-term investments.

7.4  TOTAL LIABILITIES TO TANGIBLE NET WORTH RATIO.  To maintain on a
consolidated basis a ratio of Total Liabilities to Tangible Net Worth not
exceeding 1.20:1.0, measured quarterly, beginning August 31,1996.

"Total Liabilities" means the sum of current liabilities plus long term
liabilities.

"Tangible net worth" means the gross book value of the Borrower's assets
(excluding goodwill, patents, trademarks, trade names, organization expense,
treasury stock, unamortized debt discount and expense, deferred research and
development costs, deferred marketing expenses, and other like intangibles) less
total liabilities, including but not limited to accrued and deferred income
taxes, and any reserves against assets.

7.5  PROFITABILITY.  To maintain on a consolidated basis a positive net income
after taxes and extraordinary items for each year end accounting period.

7.6  OTHER DEBTS.  Not to have outstanding or incur any direct or contingent
debts (other than those to the Bank), or become liable for the debts of others
without the Bank's written consent. This does not prohibit:

(a)  Acquiring goods, supplies, or merchandise on normal trade credit.
(b)  Endorsing negotiable instruments received in the usual course of business.
(c)  Obtaining surety bonds in the usual course of business.



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(d)  Debts and lines of credit in existence on the date of this Agreement
     disclosed in writing to the Bank in the Borrower's financial statement
     dated February 29, 1996.
(e)  Additional debts and lease obligations for the acquisition of fixed or
     capital assets, to the extent permitted elsewhere in this Agreement.
(f)  Additional debts and lease obligations for business purposes which do not
     exceed a total principal amount of One Million and No/100 Dollars
     ($1,000,000.00) outstanding at any one time.

7.7  OTHER LIENS.  Not to create, assume, or allow any security interest or lien
(including judicial liens) on property the Borrower now or later owns, except:
(a)  Deeds of trust and security agreements in favor of the Bank.
(b)  Liens for taxes not yet due.
(c)  Liens outstanding on the date of this Agreement disclosed in writing to the
     Bank.
(d)  Additional purchase money security interests in personal property acquired
     after the date of this Agreement, if the total principal amount of debts
     secured by such liens does not exceed One Million and No/100 Dollars
     ($1,000,000.00) at any one time.

7.8  CAPITAL EXPENDITURES.  Not to spend or incur obligations (including the
total amount of any capital leases) for more than Three Million and No/100
Dollars ($3,000,000.00) in any single fiscal year to acquire fixed or capital
assets.

7.9  DIVIDENDS.  Not to declare or pay any dividends on any of its shares except
dividends payable in capital stock of the Borrower, and not to purchase, redeem
or otherwise acquire for value any of its shares, or create any sinking fund in
relation thereto.

7.10 LOANS TO OFFICERS OR AFFILIATES.  Not to make any loans, advances or other
extensions of credit to any of the Borrower's executives, officers, affiliates,
directors, shareholders or Temtex International, Inc. (or any relatives of any
of the foregoing), in excess of Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00). This specifically excludes inter-company advances to 
subsidiaries. Intercompany advances among Borrower and guaranteeing subsidiaries
are permitted.

7.11 NOTICES TO BANK.  To promptly notify the Bank in writing of:

(a)  any lawsuit over Two Hundred Fifty Thousand and No/100 Dollars
     ($250,000.00) against the Borrower or any guarantor.
(b)  any substantial dispute between the Borrower or any guarantor and any
     government authority.
(c)  any failure to comply with this Agreement,
(d)  any material adverse change in the Borrower's or any guarantor's financial
     condition or operations.
(e)  any change in the Borrower's name, legal structure, place of business, or
     chief executive office if the Borrower has more than one place of business.

7.12 BOOKS AND RECORDS.  To maintain adequate books and records.

7.13 AUDITS.  To allow the Bank and its agents to inspect upon reasonable notice
the Borrower's properties and examine, audit, and make copies of books and
records at any reasonable time. If any of the Borrower's properties, books or
records are in the possession of a third party, the Borrower authorizes that
third party to permit the Bank or its agents to have access to perform
inspections or audits and to respond to the Bank's requests for information
concerning such properties, books and records.

7.14 COMPLIANCE WITH LAWS.  To comply with the laws, (including any fictitious
name statute), regulations, and orders of any government body with authority
over the Borrower's business.

7.15 PRESERVATION OF RIGHTS.  To maintain and preserve all rights, privileges,
and franchises the Borrower now has.

7.16 MAINTENANCE OF PROPERTIES.  To make any repairs, renewals, or replacements
to keep the Borrower's properties in good working condition.

7.17 PERFECTION OF LIENS.  To help the Bank perfect and protect its security
interests and liens, and reimburse it for related costs it incurs to protect its
security interests and liens.

SLA.TX (1/95)                                                                 9 
<PAGE>

7.18 COOPERATION.  To take any action requested by the Bank to carry out the
intent of this Agreement.

7.19 INSURANCE.
(a)  INSURANCE COVERING COLLATERAL.  To maintain all risk property damage
     insurance policies covering the tangible property comprising the
     collateral. Each insurance policy must be in an amount acceptable to the
     Bank. The insurance must be issued by an insurance company acceptable to
     the Bank and must include a lender's loss payable endorsement in favor of
     the Bank in a form acceptable to the Bank.

(b)  GENERAL BUSINESS INSURANCE.  To maintain insurance satisfactory to the Bank
     as to amount, nature and carrier covering property damage (including loss
     of use and occupancy) to any of the Borrower's properties, public liability
     insurance including coverage for contractual liability, product liability
     and workers' compensation, and any other insurance which is usual for the
     Borrower's business.

(c)  EVIDENCE OF INSURANCE.  Upon the request of the Bank, to deliver to the
     Bank a copy of each insurance policy or, if permitted by the Bank, a
     certificate of insurance listing all insurance in force.

7.20 INVENTORY INVESTMENT IN MEXICO.  Not to maintain at any time an inventory
investment in Mexico in excess of Seven Hundred Fifty Thousand and No/100
Dollars ($750,000.00).

7.21 INVESTMENTS.  Not to make or maintain at any time investments in securities
other than in U.S. Government Obligations or other "investment grade"
investments.

7.22 ADDITIONAL NEGATIVE COVENANTS. Not to, without the Bank's written consent:
(a)  engage in any business activities substantially different from the
     Borrower's present business.
(b)  liquidate or dissolve the Borrower's business.
(c)  enter into any consolidation, merger, pool, joint venture, syndicate, or
     other combination.
(d)  lease, or dispose of all or a substantial part of the Borrower's business
     or the Borrower's assets.
(e)  acquire or purchase a business or its assets.
(f)  sell or otherwise dispose of any assets for less than fair market value or
     enter into any sale and lease back agreement covering any of its fixed or
     capital assets.
(g)  voluntarily suspend its business.

7.23 ERISA PLANS.  To give prompt written notice to the Bank of:
(a)  The occurrence of any reportable event under Section 4043(b) of ERISA for
     which the PBGC requires 30 day notice,
(b)  Any action by the Borrower to terminate or withdraw from a Plan or the
     filing of any notice of intent to terminate under Section 4041 of ERISA.
(c)  Any notice of noncompliance made with respect to a Plan under Section
     4041(b) of ERISA.
(d)  The commencement of any proceeding with respect to a Plan under Section
     4042 of ERISA.


8.   HAZARDOUS WASTE.  The Borrower will indemnify and hold harmless the Bank 
from any loss or liability directly or indirectly arising out of the use, 
generation, manufacture, production, storage, release, threatened release, 
discharge, disposal or presence of a hazardous substance.  This indemnity will 
apply whether the hazardous substance is on, under or about the Borrower's 
property or operations or property leased to the Borrower. The indemnity 
includes but is not limited to attorneys' fees (including the reasonable 
estimate of the allocated cost of in-house counsel and staff). The indemnity 
extends to the Bank, its parent, subsidiaries and all of their directors, 
officers, employees, agents, successors. attorneys and assigns.  For these 
purposes, the term "hazardous substances" means any substance which is or 
becomes designated as "hazardous" or "toxic" under any federal, state or local
law. This indemnity will survive repayment of the Borrower's obligations to the
Bank.

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<PAGE>

9.   DEFAULT.  If any of the following events occur, the Bank may do one or more
of the following: (i) declare the Borrower in default, (ii) stop making any
additional credit available to the Borrower, (iii) exercise any and all rights
and remedies as may be available to the Bank under the terms of any collateral
documents, security instruments, debt instruments or any other document or
instrument executed in connection herewith or in any way related hereto, (iv)
exercise any and all rights and remedies as may be available to the Bank at law
or in equity, and (v) declare the entire debt created and evidenced hereby to be
immediately due and payable in full, whereupon the entire unpaid principal
indebtedness evidenced hereby, and all accrued unpaid interest thereon, shall at
once mature and become due and payable without presentment, demand, protest,
grace or notice of any kind (including, without limitation, notice of intent to
accelerate, notice of acceleration or notice of protest), all of which are
hereby severally waived by the Borrower. If a bankruptcy petition is filed with
respect to the Borrower, the entire debt outstanding under this Agreement will
automatically become due immediately.

9.1  FAILURE TO PAY.  The Borrower fails to make a payment under this Agreement
when due.

9.2  LIEN PRIORITY.  The Bank fails to have an enforceable first lien (except
for any prior liens to which the Bank has consented in writing) on or security
interest in any property given as security for the extensions of credit under
this Agreement.

9.3  FALSE INFORMATION.  The Borrower has given the Bank false or misleading
information or representations.

9.4  BANKRUPTCY.  The Borrower or any guarantor files a bankruptcy petition, a
bankruptcy petition is filed against the Borrower or any guarantor, or the
Borrower or any guarantor makes a general assignment for the benefit of
creditors.

9.5  RECEIVERS.  A receiver or similar official is appointed for the Borrower's
or any guarantor's business, or the business is terminated.

9.6  LAWSUITS.  Any lawsuit or lawsuits are filed on behalf of one or more trade
creditors against the Borrower in an aggregate amount of Two Hundred Fifty
Thousand and No/100 Dollars ($250,000.00) or more in excess of any insurance
coverage.

9.7  JUDGMENTS.  Any judgments or arbitration awards are entered against the
Borrower or any guarantor, or the Borrower or any guarantor enters into any
settlement agreements with respect to any litigation or arbitration, in an
aggregate amount of Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00)
or more in excess of any insurance coverage.

9.8  GOVERNMENT ACTION.  Any government authority takes action that the Bank
believes materially adversely affects the Borrower's or any guarantor's
financial condition or ability to repay.

9.9  MATERIAL ADVERSE CHANGE.  A material adverse change occurs in the
Borrower's or any guarantor's financial condition, properties or prospects, or
ability to repay the loan.

9.10 NON-COMPLIANCE.  The Borrower or any guarantor fails to meet the conditions
of, or fails to perform any obligation under any other agreement the Borrower or
any guarantor has with the Bank or any affiliate of the Bank.

9.11 CROSS-DEFAULT.  Any default occurs under any agreement in connection with
any credit the Borrower or any guarantor has obtained from anyone else or which
the Borrower or any guarantor has guaranteed.

9.12 DEFAULT UNDER RELATED DOCUMENTS.  Any guaranty, subordination agreement,
security agreement, deed of trust, or other document required by this Agreement
is revoked in whole or in part, violated or no longer in effect.

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<PAGE>

9.13 ERISA PLANS.  The occurrence of any one or more of the following events 
with respect to the Borrower, provided such event or events could reasonably be
expected, in the judgment of the Bank, to subject the Borrower to any tax,
penalty or liability (or any combination of the foregoing) which, in the
aggregate, could have a material adverse effect on the financial condition of
the Borrower with respect to a Plan:

(a)  A reportable event shall occur with respect to a Plan which is, in the
     reasonable judgment of the Bank, likely to result in the termination of
     such Plan for purposes of Title IV of ERISA.
(b)  Any Plan termination (or commencement of proceedings to terminate a Plan)
     or the Borrower's full or partial withdrawal from a Plan.

9.14 OTHER BREACH UNDER AGREEMENT.  The Borrower fails to meet the conditions 
of, or fails to perform any obligation under, any term of this Agreement not
specifically referred to in this Article.

9.15 CHANGE OF OWNERSHIP.  Any person or group acting in concert other than the
existing executive management of Borrower shall own or exercise voting control
over 51% or more of the capital stock of Borrower.


10.  ENFORCING THIS AGREEMENT; MISCELLANEOUS

10.1 GAAP.  Except as otherwise stated in this Agreement, all financial
information provided to the Bank and all financial covenants will be made under
generally accepted accounting principles, consistently applied.

10.2 TEXAS LAW. This Agreement is governed by Texas law.

10.3 SUCCESSORS AND ASSIGNS.  This Agreement is binding on the Borrower's and 
the Bank's successors and assignees. The Borrower agrees that it may not assign 
this Agreement without the Bank's prior consent. The Bank may sell 
participations in or assign this loan, and may exchange financial information 
about the Borrower with actual or potential participants or assignees. If a 
participation is sold or the loan is assigned, the purchaser will have the 
right of set-off against the Borrower.

10.4 ARBITRATION.

(a)  This paragraph concerns the resolution of any controversies or claims
between the Borrower and the Bank, including but not limited to those that arise
from:

     (i)   This Agreement (including any renewals, extensions or modifications 
           of this Agreement);
     (ii)  Any document, agreement or procedure related to or delivered in
           connection with this Agreement;
     (iii) Any violation of this Agreement; or
     (iv)  Any claims for damages resulting from any business conducted between
           the Borrower and the bank, including claims for injury to persons,
           property or business interests (torts).

(b)  At the request of the Borrower or the bank, an such controversies or claims
     will be settled by arbitration in accordance with the United States
     Arbitration Act.  THE UNITED STATES ARBITRATION ACT WILL APPLY EVEN THOUGH
     THIS AGREEMENT PROVIDES THAT IT IS GOVERNED BY TEXAS LAW.

(c)  Arbitration proceedings will be administered by the American Arbitration
     Association and will be subject to its commercial rules of arbitration. The
     arbitration will be conducted within the following Texas county: Dallas.

(d)  For purposes of the application of the statute of limitations, the filing
     of an arbitration pursuant to this paragraph is the equivalent of the
     filing of a lawsuit, and any claim or controversy which may be arbitrated
     under this paragraph is subject to any applicable statutes of limitations.
     The arbitrators will have the authority to decide whether any such claim or
     controversy is barred by the statute of limitations and, if so, to dismiss
     the arbitration on that basis.

(e)  If there is a dispute as to whether an issue is arbitratable, the
     arbitrators will have the authority to resolve any such dispute.

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<PAGE>

(f)  The decision that results from an arbitration proceeding may be submitted
     to an authorized court of law to be confirmed and enforced.

(g)  This provision does not limit the right of the Borrower or the Bank to:

     (i)   exercise self-help remedies such as setoff;
     (ii)  foreclose against or sell any real or personal property collateral;
           or
     (iii) act in a court of law before, during or after the arbitration 
           proceeding to obtain:

           (A)  an interim remedy; and/or
           (B)  additional or supplementary remedies.

(h)  The pursuit of a successful action for interim, additional or supplementary
     remedies, or the filing of a court action, does not constitute a waiver of
     the right of the Borrower or the Bank, including the suing party, to submit
     the controversy or claim to arbitration of the other party contests the
     lawsuit.

10.5 SEVERABILITY; WAIVERS.  If any part of this Agreement is not enforceable,
the rest of the Agreement may be enforced. The Bank retains all rights, even if
it makes a loan after default. If the Bank waives a default, it may enforce a
later default. Any consent or waiver under this Agreement must be in writing.

10.6 COSTS.  If the Bank incurs any expenses in connection with administering or
enforcing this Agreement, or if the Bank takes collection action under this
Agreement, it is entitled to costs and reasonable attorneys' fees, including any
allocated costs of in-house counsel.

10.7 ATTORNEYS' FEES. In the event of a lawsuit or arbitration proceeding, the
prevailing party is entitled to recover costs and reasonable attorneys' fees
(including any allocated costs of in-house counsel) incurred in connection with
the lawsuit or arbitration proceeding, as determined by the court or arbitrator.

10.8 NOTICES.  All notices required under this Agreement shall be personally
delivered or sent by first class mail, postage prepaid, to the addresses on the
signature page of this Agreement, or to such other addresses as the Bank and the
Borrower may specify from time to time in writing.

10.9 HEADINGS.  Article and paragraph headings are for reference only and shall
not affect the interpretation or meaning of any provisions of this Agreement.

10.10 USURY LAWS.  It is the intention of the parties to comply with applicable 
usury laws; accordingly, it is agreed that notwithstanding any provisions to the
contrary in this Agreement or in any of the documents evidencing or securing 
payment hereof or otherwise relating hereto, in no event shall this Agreement or
such instruments or documents require or permit the payment, contracting for, 
charging, taking, reserving or receiving any sums constituting interest, as 
defined under applicable usury laws, in excess of the maximum amount permitted 
by such laws. If any such excess of interest is contracted for, paid, charged, 
taken, reserved or received under this Agreement or under any of the documents 
evidencing or securing payment hereof or otherwise relating hereto, on the 
amount of principal actually outstanding from time to time shall exceed the 
maximum amount of interest permitted by applicable usury laws, then in any such 
event,

     (i)   the provisions of this Section shall govern and control;
     (ii)  any such excess shall be canceled automatically to the extent of such
           excess, and shall not be collected or collectible;
     (iii) any such excess which is or has been received shall be credited
           against the unpaid principal balance hereof or refunded to the
           Borrower, at the Bank's option; and
     (iv)  the effective rate of interest shall be automatically reduced to the
           maximum lawful rate allowed under applicable laws as construed by
           courts having jurisdiction hereof or thereof.

It is further agreed that without limitation of the foregoing, all calculations 
of the rate of interest calculated for, paid, charged, taken, reserved or 
received under this Agreement or under such other documents or instruments that 
are made for the purpose of determining whether such rate exceeds the maximum 
lawful rate of interest, shall be made, to the extent permitted by applicable 
usury laws, by amortizing, prorating, allocating and spreading in equal parts 
during the period of the full stated term of the indebtedness, all interest at 
any time contractor for, paid, charged, taken, reserved or received from the 
Borrower or otherwise by the holder or holders thereof. The terms 

SLA.TX (1/95)                                                                13 
<PAGE>

of this section shall be deemed to be incorporated in every loan document, 
security instrument, debt instrument, and communication relating to this 
Agreement and the law evidenced hereby. The term "applicable usury laws" 
shall mean such law of the State of Texas or the laws of the United States; 
whichever laws allow the higher rate of interest, as such laws now exist; 
provided, however, that if such laws shall hereafter allow higher rates of 
interest, then the applicable usury laws shall be the laws allowing the 
higher rate to be effective as of the effective date of such laws. To the 
extent that TEX. REV. STAT. ANN. art 5069-1.04, as amended (the "Act"), is 
relevant to the Bank for the purposes of determining the Maximum Rate, the 
parties elect to determine the Maximum Rate under the Act pursuant to the 
"indicate rate ceiling" from time to time in effect, as referred to and 
defined in article 1.04(a)(1) of the Act; subject, however, to any right the 
Bank may have subsequently under applicable law, to change the method of 
determining the Maximum Rate.

10.11 NO ORAL AGREEMENTS.  This Agreement and any related security or other
agreements required by this Agreement, collectively:

(a)   represent the sum of the understandings and agreements between the Bank 
      and the Borrower concerning this credit;
(b)   replace any prior oral or written agreements between the Bank and the
      Borrower concerning this credit; and
(c)   are intended by the Bank and the Borrower as the final, complete and
      exclusive statement of the terms agreed to by them.

In the event of any conflict between this Agreement and any other agreements
required by this Agreement, this Agreement will prevail.

THIS WRITTEN AGREEMENT AND THE INSTRUMENTS AND DOCUMENTS EXECUTED IN CONNECTION
HEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


This Agreement is executed as of the date stated at the top of the first page.


BANK OF AMERICA TEXAS, N.A.               TEMTEX INDUSTRIES, INC.


/s/ DONALD P. HELLMAN                     /s/  ROGER N. STIVERS                
--------------------------------------    -------------------------------------
By: Donald P. Hellman, Vice President     By:  Roger N. Stivers, Vice President

Address where notices to the              Address where notices to the 
Bank are to be sent:                      Borrower are to be sent:


Bank of America Texas, N.A.               3010 LBJ Freeway, Suite 650
Attn: Commercial Loan Services            Dallas, Texas 75234
333 Clay Street, Ste. 3600
Houston, Texas 77002



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