AMENDED AND RESTATED
                          CREDIT AND SECURITY AGREEMENT

Dated as of ____________, 1998

                  ROYAL GRIP,  INC., a Nevada  corporation,  and ROXXI,  INC., a
Nevada corporation  (collectively,  jointly and severally, the "Borrower"),  and
NORWEST BUSINESS CREDIT,  INC., a Minnesota  corporation (the "Lender"),  hereby
agree as follows:

                  The  Borrower  and the Lender have entered into the Credit and
Security  Agreement  dated as of  February  10,  1997,  as  amended by the First
Amendment  to Credit and  Security  Agreement  dated as of April 11,  1997,  the
Second  Amendment to Credit and Security  Agreement  dated as of August 28, 1997
and the Third Amendment to Credit and Security Agreement dated as of May 1, 1998
(collectively, the "Original Credit Agreement").

                  The Lender has agreed to make  certain  loan  advances  to the
Borrower  pursuant to the terms and conditions set forth in the Original  Credit
Agreement.

                  The loan  advances  under the Original  Credit  Agreement  are
evidenced  by the  Borrower's  Revolving  and Term Note dated as of February 10,
1997, in the maximum  principal amount of $2,450,000.00 and payable to the order
of the Lender (the "Note").

                  All  indebtedness  of the  Borrower  to the  Lender is secured
pursuant to the terms of the Original  Credit  Agreement and all other  Security
Documents  as  defined   therein  and  shall  be  guaranteed   pursuant  to  the
unconditional guaranty of the Guarantor.

                  Borrower and Lender wish to amend and restate the terms of the
Original Credit Agreement in its entirety.

                  Now, therefore,  in consideration of the premises and promises
contained  herein,  and other good and valuable  consideration,  the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

                                   Article I.

                                   DEFINITIONS

                  SECTION 1.1  DEFINITIONS.  For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:

                  (a) the  terms  defined  in this  Article  have  the  meanings
assigned  to  them  in this  Article,  and  include  the  plural  as well as the
singular; and

                  (b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP.

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<PAGE>
                  "Accounts" means all of the Borrower's accounts,  as such term
         is defined  in the UCC,  including  without  limitation  the  aggregate
         unpaid  obligations  of  customers  and other  account  debtors  to the
         Borrower or either of them arising out of the sale or lease of goods or
         rendition  of  services  by the  Borrower  or either of them on an open
         account or deferred payment basis.

                  "Advance" means a Revolving Advance or a Term Advance.

                  "Affiliate" or  "Affiliates"  means the Covenant  Entities and
         any other Person  controlled  by,  controlling  or under common control
         with the Borrower, including (without limitation) any Subsidiary of the
         Borrower.  For purposes of this  definition,  "control," when used with
         respect  to any  specified  Person,  means  the  power  to  direct  the
         management and policies of such Person, directly or indirectly, whether
         through the ownership of voting securities, by contract or otherwise.

                  "Agreement"   means  this  Amended  and  Restated  Credit  and
         Security Agreement,  as amended,  supplemented or restated from time to
         time which replaces the Original Credit Agreement in its entirety.

                  "Availability" means the positive  difference,  if any, of (i)
         the Borrowing  Base and (ii) the sum of (A) the  outstanding  principal
         balance of the Revolving Note and (B) the L/C Amount.

                  "Banking  Day"  means a day other than a  Saturday,  Sunday or
         other  day on which  banks  are  generally  not open  for  business  in
         Phoenix, Arizona.

                  "Base Rate" means the rate of interest publicly announced from
         time to time by Norwest  Bank  Minnesota as its "base rate" or, if such
         bank ceases to  announce a rate so  designated,  any similar  successor
         rate designated by the Lender.

                  "Book  Net  Worth"  means  the  aggregate  of the  common  and
         preferred   stockholders'   equity  in  the  Borrower,   determined  in
         accordance with GAAP.

                  "Borrowing Base" means, at any time the lesser of:

                  (a) the Maximum Line; or

                  (b) subject to change from time to time in the  Lender's  sole
         discretion, the sum of:

                           (A)      the lesser of (x) 80% of Eligible  Accounts,
                                    or (y) $1,500,000.00, plus

                           (B)      the lesser of (x) 60% of Eligible Royal Grip
                                    Inventory   plus  50%  of   Eligible   Roxxi
                                    Inventory  (exclusive of Eligible  Roxxi Raw
                                    Materials  Inventory),  or (y)  $600,000.00,
                                    plus

                                        2
<PAGE>
                           (C)      the lesser of (x) 25% of Eligible  Roxxi Raw
                                    Materials Inventory, or (y) $250,000.00.

                  "Capital  Expenditures"  for a period means any expenditure of
         money for the purchase or construction of assets,  or for  improvements
         or additions  thereto,  which are capitalized on the Borrower's balance
         sheet.

                  "Collateral"  means all of the Borrower's  Equipment,  General
         Intangibles,  Inventory,  Receivables,  all  sums  on  deposit  in  any
         Collateral Account, and any items in any lockbox; together with (i) all
         substitutions   and  replacements  for  and  products  of  any  of  the
         foregoing; (ii) proceeds of any and all of the foregoing;  (iii) in the
         case of all  tangible  goods,  all  accessions;  (iv) all  accessories,
         attachments,  parts, equipment and repairs now or hereafter attached or
         affixed  to or used in  connection  with any  tangible  goods;  (v) all
         warehouse receipts, bills of lading and other documents of title now or
         hereafter  covering  such  goods;  and (vi) all sums on  deposit in the
         Special Account.

                  "Collateral  Accounts" has the meaning given in the Collateral
         Account Agreements.

                  "Collateral  Account  Agreements" means the Collateral Account
         Agreements  dated  February 10, 1997,  by and among Royal Grip,  Roxxi,
         Norwest Bank Arizona and the Lender.

                  "Commitment"  means the Lender's  commitment  to make Advances
         and to cause  the  Issuer  to issue  Letters  of  Credit  to or for the
         Borrower's account pursuant to Article II.

                  "Covenant  Entities"  means FM  Precision  Golf  Manufacturing
         Corp., FM Precision Golf Sales Corp. and Royal Precision, Inc.

                  "Credit   Facility"  means  the  credit  facility  being  made
         available to the Borrower by the Lender pursuant to Article II.

                  "Current  Maturities  of Long  Term  Debt" as of a given  date
         means  the  amount of the  Borrower's  long-term  debt and  capitalized
         leases  which  became due during the  applicable  period  ending on the
         designated date.

                  "Debt"  of any  Person  means  all  items of  indebtedness  or
         liability   which  in  accordance   with  GAAP  would  be  included  in
         determining  total  liabilities as shown on the  liabilities  side of a
         balance  sheet of that  Person as at the date as of which Debt is to be
         determined.  For purposes of  determining a Person's  aggregate Debt at
         any time, "Debt" shall also include the aggregate  payments required to
         be made by such Person at any time under any lease that is considered a
         capitalized lease under GAAP.

                  "Debt Service  Coverage  Ratio" means the ratio of (i) the sum
         of (A)  Funds  from  Operations  and (B)  Interest  Expense  MINUS  (C)
         unfinanced  portion  of  Capital  Expenditures  to (ii)  the sum of (A)
         Current  Maturities of Long Term Debt (actually paid during the period)
         and (B) Interest Expense.

                                        3
<PAGE>
                  "Default"  means an event  that,  with  giving  of  notice  or
         passage of time or both, would constitute an Event of Default.

                  "Default  Period"  means any period of time  beginning  on the
         first day of any month  during  which a Default or Event of Default has
         occurred  and ending on the date the Lender  notifies  the  Borrower in
         writing that such Default or Event of Default has been cured or waived.

                  "Default Rate" means, with respect to the Revolving  Advances,
         an annual rate equal to two percent  (2%) over the  Revolving  Floating
         Rate,  which rate shall change when and as the Revolving  Floating Rate
         changes and with respect to the Term Advances,  an annual rate equal to
         two percent (2%) over the Term Floating  Rate,  which rate shall change
         when and as the Term Floating Rate changes.

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

                  "Eligible  Accounts"  means all  unpaid  Accounts,  net of any
         credits, except the following shall not in any event be deemed Eligible
         Accounts:

                           (i) That  portion of Accounts  which are 60 days past
                  stated due date or which are unpaid 120 days or more after the
                  invoice date;

                           (ii) That  portion of  Accounts  that is  disputed or
                  subject to a claim of offset or a contra account;

                           (iii) That  portion of Accounts not yet earned by the
                  final   delivery  of  goods  or  rendition  of  services,   as
                  applicable, by the Borrower to the customer;

                           (iv) Accounts owed by any unit of government, whether
                  foreign or domestic  (provided,  however,  that there shall be
                  included in Eligible Accounts that portion of Accounts owed by
                  such units of  government  for which the Borrower has provided
                  evidence  satisfactory to the Lender that (A) the Lender has a
                  first  priority  perfected  security  interest  and  (B)  such
                  Accounts may be enforced by the Lender  directly  against such
                  unit of government under all applicable laws);

                           (v)  Accounts  owed  by  an  account  debtor  located
                  outside the United  States  which are not (A) backed by a bank
                  letter of credit naming the Lender as  beneficiary or assigned
                  to the  Lender,  in the  Lender's  possession  or in a Related
                  Lender's  possession  and  acceptable  to  the  Lender  in all
                  respects, in its sole discretion,  or (B) covered by a foreign
                  receivables  insurance policy  acceptable to the Lender in its
                  sole discretion;

                           (vi)  Accounts  owed  by an  account  debtor  that is
                  insolvent,  the subject of bankruptcy  proceedings or has gone
                  out of business;

                                        4
<PAGE>
                           (vii)  Accounts  owed by a  shareholder,  Subsidiary,
                  Affiliate, officer or employee of the Borrower;

                           (viii)  Accounts  not  subject  to a  duly  perfected
                  security  interest in the Lender's  favor or which are subject
                  to any lien, security interest or claim in favor of any Person
                  other than the Lender including without limitation any payment
                  or performance bond;

                           (ix)  That   portion  of   Accounts   that  has  been
                  restructured, extended, amended or modified;

                           (x)  That  portion  of  Accounts   that   constitutes
                  advertising,  finance  charges,  service  charges  or sales or
                  excise taxes;

                           (xi) Accounts owed by an account  debtor,  regardless
                  of  whether  otherwise  eligible,  if 20% or more of the total
                  amount due under Accounts from such debtor is ineligible under
                  clauses (i), (ii)or (ix) above

                           (xii) Accounts consisting of tooling charges; and

                           (xiii) Accounts owed by an account debtor (other than
                  Taylor Made,  Callaway  and  Marubeni)  regardless  of whether
                  otherwise eligible, in excess of 15% of total Accounts.

                           (xiv)  Accounts  owed by  Taylor  Made and  Callaway,
                  regardless of whether otherwise eligible,  in excess of 25% of
                  total Accounts.

                           (xv) Accounts owed by Marubeni, regardless of whether
                  otherwise eligible, in excess of 50% of total Accounts.

                           (xvi)  Accounts  owed  by  Marubeni,   regardless  of
                  whether otherwise eligible, to the extent the aggregate amount
                  of such accounts exceed $500,000.00 of total Accounts.

                           (xvii)  Accounts,  or  portions  thereof,   otherwise
                  deemed ineligible by the Lender in its sole discretion.

                  "Eligible Roxxi Inventory" means all inventory of Roxxi valued
         at  weighted  average  cost as  determined  in  accordance  with  GAAP;
         provided,  however, that the following shall not in any event be deemed
         Eligible Roxxi Inventory:

                           (i)  Inventory  that is:  in-transit;  located at any
                  warehouse  or other  premises  not  approved  by the Lender in
                  writing; located outside of

                                      5
<PAGE>
                  the states, or localities,  as applicable, in which the Lender
                  has filed  financing  statements  to perfect a first  priority
                  security interest in such inventory; covered by any negotiable
                  or non-negotiable  warehouse receipt,  bill of lading or other
                  document of title;  on consignment to or from any other person
                  or subject to any bailment;

                           (ii) Packaging, label or irregular inventory;

                           (iii) Work-in-process inventory;

                           (iv)  Inventory  that  is  damaged,  obsolete  or not
                  currently  saleable  in the  normal  course of the  Borrower's
                  operations;

                           (v)  Inventory  that the Borrower has  returned,  has
                  attempted to return, is in the process of returning or intends
                  to return to the vendor thereof;

                           (vi) Inventory that is subject to a security interest
                  in favor of any Person other than the Lender;

                           (vii) Slow-Moving Inventory;

                           (viii)  Inventory  that  is  subject  to a  licensing
                  agreement,  which licensing agreement would preclude or hinder
                  the Lender from  liquidating  such  Inventory  in the ordinary
                  course of business; and

                           (ix)  Inventory  otherwise  deemed  ineligible by the
                  Lender in its sole discretion.

                  "Eligible Roxxi Raw Materials Inventory" means that portion of
         Eligible Roxxi Inventory consisting of raw materials.

                  "Eligible Royal Grip  Inventory"  means all inventory of Royal
         Grip valued at weighted  average cost as determined in accordance  with
         GAAP; provided,  however,  that the following shall not in any event be
         deemed Eligible Royal Grip Inventory:

                           (i)  Inventory  that  is:  in-transit  (exclusive  of
                  inventory in-transit between Premises  locations);  located at
                  any warehouse or other  premises not approved by the Lender in
                  writing;  located  outside of the states,  or  localities,  as
                  applicable, in which the Lender has filed financing statements
                  to  perfect  a  first  priority   security  interest  in  such
                  inventory;   covered  by  any  negotiable  or   non-negotiable
                  warehouse receipt,  bill of lading or other document of title;
                  on  consignment  to or from any other person or subject to any
                  bailment;

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<PAGE>
                           (ii) Packaging inventory;

                           (iii) Work-in-process inventory;

                           (iv)  Inventory  that  is  damaged,  obsolete  or not
                  currently  saleable  in the  normal  course of the  Borrower's
                  operations;

                           (v)  Inventory  that the Borrower has  returned,  has
                  attempted to return, is in the process of returning or intends
                  to return to the vendor thereof;

                           (vi) Inventory that is subject to a security interest
                  in favor of any Person other than the Lender;

                           (vii)  Inventory  that does not  consist of  finished
                  grips;

                           (viii) Slow-Moving Inventory;

                           (ix)   Inventory  that  is  subject  to  a  licensing
                  agreement,  which licensing agreement would preclude or hinder
                  the Lender from  liquidating  such  Inventory  in the ordinary
                  course of business; and

                           (x)  Inventory  otherwise  deemed  ineligible  by the
                  Lender in its sole discretion.

                  "Environmental  Laws" has the  meaning  specified  in  Section
         5.12.

                  "Equipment"  means all of the  Borrower's  equipment,  as such
         term is defined in the UCC,  whether now owned or  hereafter  acquired,
         including  but  not  limited  to  all  present  and  future  machinery,
         vehicles, furniture, fixtures, manufacturing equipment, shop equipment,
         office  and  recordkeeping  equipment,   parts,  tools,  supplies,  and
         including  specifically (without limitation) the goods described in any
         equipment  schedule or list  herewith  or  hereafter  furnished  to the
         Lender  by  the  Borrower,  and  whether  located  on the  Premises  or
         otherwise.

                  "Event of Default" has the meaning specified in Section 8.1.

                  "Funding Date" has the meaning given in Section 2.1.

                  "Funds From  Operations"  for a given  period means the sum of
         (i) Net Income,  (ii)  depreciation  and  amortization,  (iii) deferred
         income taxes,  and (iv) other  non-cash  items,  each as determined for
         such period in accordance with GAAP.

                  "GAAP" means generally accepted accounting principles, applied
         on a basis  consistent  with the  accounting  practices  applied in the
         financial statements described in Section 5.5, except for any change in
         accounting  practices to the extent that, due to a promulgation  of the
         Financial Accounting Standards Board changing or implementing 

                                       7
<PAGE>
         any new  accounting  standard,  the Borrower  either (i) is required to
         implement  such change,  or (ii) for future periods will be required to
         and for the current  period may in accordance  with GAAP implement such
         change, for its financial statements to be in conformity with GAAP (any
         such  change  is  herein  referred  to as a  "Required  GAAP  Change"),
         provided that (1) the Borrower  shall fully  disclose in such financial
         statements  any  such  Required  GAAP  Change  and the  effects  of the
         Required GAAP Change on the  Borrower's  income,  retained  earnings or
         other  accounts,  as  applicable,  and  (2)  the  Borrower's  financial
         covenants  set forth in Sections  6.12  through  6.15 and 7.10 shall be
         adjusted as  necessary  to reflect the  effects of such  Required  GAAP
         Change.

                  "General  Intangibles"  means  all of the  Borrower's  general
         intangibles,  as such term is defined in the UCC,  whether now owned or
         hereafter  acquired,  including  (without  limitation)  all present and
         future patents,  patent  applications,  copyrights,  trademarks,  trade
         names,  trade  secrets,  customer  or  supplier  lists  and  contracts,
         manuals, operating instructions,  permits, franchises, the right to use
         the Borrower's name, and the goodwill of the Borrower's business.

                  "Guarantor"   means   Royal   Precision,   Inc.,   a  Delaware
         corporation.

                  "Hazardous Substance" has the meaning given in Section 5.12.

                  "Interest  Expense" means, for a fiscal  year-to-date  period,
         the  Borrower's   total  gross  interest  expense  during  such  period
         (excluding  interest income),  and shall in any event include,  without
         limitation or duplication,  (i) interest expensed (whether or not paid)
         on all  Debt,  (ii)  the  amortization  of debt  discounts,  (iii)  the
         amortization  of all fees payable in connection  with the incurrence of
         Debt to the extent included in interest  expense,  and (iv) the portion
         of any capitalized lease obligation allocable to interest expense.

                  "Inventory"  means all of the  Borrower's  inventory,  as such
         term is defined in the UCC,  whether now owned or  hereafter  acquired,
         whether consisting of whole goods, spare parts or components,  supplies
         or materials,  whether acquired,  held or furnished for sale, for lease
         or under  service  contracts  or for  manufacture  or  processing,  and
         wherever located.

                  "Issuer" means the issuer of any Letter of Credit.

                  "L/C Amount" means the sum of (i) the aggregate face amount of
         any issued and outstanding Letters of Credit and (ii) the unpaid amount
         of the Obligation of Reimbursement.

                  "L/C  Application"  means an  application  and  agreement  for
         letters of credit in a form acceptable to the Issuer and the Lender.

                  "Letter of Credit" has the meaning specified in Section 2.2.

                  "Loan  Documents"  means  this  Agreement,  the  Notes and the
         Security Documents.

                                        8
<PAGE>
                  "Maturity Date" means September 30, 2001.

                  "Maximum  Line"  means  $1,500,000.00,  unless  said amount is
         reduced pursuant to Section 2.12, in which event it means the amount to
         which said amount is reduced.

                  "Minimum  Interest  Charge" has the  meaning  given in Section
         2.8(c).

                  "Net Income" means for the  applicable  period,  after-tax net
         income from  continuing  operations as  determined  in accordance  with
         GAAP.

                  "Net Loss" means for the applicable period, after-tax net loss
         from continuing operations as determined in accordance with GAAP.

                  "Norwest  Bank   Minnesota"   means  Norwest  Bank  Minnesota,
         National Association.

                  "Note"  means the  Revolving  Note or either  Term  Note,  and
         "Notes" means the Revolving Note and the Term Notes.

                  "Obligations"  means the Notes and each and every  other debt,
         liability  and  obligation  of every  type and  description  which  the
         Borrower may now or at any time  hereafter  owe to the Lender,  whether
         such debt,  liability or obligation now exists or is hereafter  created
         or incurred,  whether it arises in a  transaction  involving the Lender
         alone or in a transaction  involving  other  creditors of the Borrower,
         and whether it is direct or indirect, due or to become due, absolute or
         contingent, primary or secondary,  liquidated or unliquidated, or sole,
         joint,  several or joint and several, and including  specifically,  but
         not limited to, the Obligation of Reimbursement and all indebtedness of
         the  Borrower  arising  under  this  Agreement,   the  Notes,  any  L/C
         Application  completed  by the  Borrower,  or any other  loan or credit
         agreement or guaranty between the Borrower and the Lender,  whether now
         in effect or hereafter entered into.

                  "Obligation of Reimbursement" has the meaning given in Section
         2.3(a).

                  "Permitted Lien" has the meaning given in Section 7.1.

                  "Person" means any individual, corporation, partnership, joint
         venture, limited liability company,  association,  joint-stock company,
         trust,  unincorporated  organization  or  government  or any  agency or
         political subdivision thereof.

                  "Plan" means an employee benefit plan or other plan maintained
         for the Borrower's employees and covered by Title IV of ERISA.

                  "Premises" means all premises where the Borrower  conducts its
         business  and  has  any  rights  of  possession,   including   (without
         limitation)  the  premises  legally  described  in  Exhibit D  attached
         hereto.

                  "Receivables"  means each and every  right of the  Borrower to
         the  payment of money,  whether  such  right to  payment  now exists or
         hereafter arises, whether such right 

                                       9
<PAGE>
         to payment arises out of a sale, lease or other disposition of goods or
         other property,  out of a rendering of services,  out of a loan, out of
         the  overpayment  of taxes or other  liabilities,  or otherwise  arises
         under any  contract  or  agreement,  whether  such  right to payment is
         created,  generated  or earned by the  Borrower or by some other person
         who  subsequently  transfers  such  person's  interest to the Borrower,
         whether  such  right  to  payment  is  or  is  not  already  earned  by
         performance,  and  howsoever  such right to payment  may be  evidenced,
         together with all other rights and interests  (including  all liens and
         security  interests)  which the Borrower may at any time have by law or
         agreement against any account debtor or other obligor obligated to make
         any such  payment or against  any  property of such  account  debtor or
         other obligor;  all including but not limited to all present and future
         accounts,  contract rights, loans and obligations  receivable,  chattel
         papers, bonds, notes and other debt instruments, tax refunds and rights
         to payment in the nature of general intangibles.

                  "Reportable  Event"  shall have the  meaning  assigned to that
         term in Title IV of ERISA.

                  "Revolving Advance" has the meaning given in Section 2.1.

                  "Revolving  Floating  Rate"  means an annual rate equal to the
         sum of the Base Rate plus  one-quarter  of one  percent  (.25%),  which
         annual rate shall change when and as the Base Rate changes.

                  "Revolving  Note" means the  Borrower's  revolving  promissory
         note,  payable to the order of the Lender in substantially  the form of
         Exhibit A hereto and any note or notes issued in substitution therefor,
         as the same may  hereafter be amended,  supplemented  or restated  from
         time to time.

                  "Roxxi" means Roxxi, Inc., a Nevada corporation.

                  "Royal Grip" means Royal Grip, Inc., a Nevada corporation.

                  "Security  Documents"  means this  Agreement,  the  Collateral
         Account  Agreements,   the  Assignment  of  Security  Agreements,   the
         Assignment of Capital Lease Agreement,  the Assignment of Patents,  the
         Collateral   Assignment  of  Trademarks,   the  Patent  Mortgage,   the
         Assignment  of  Trademarks,  each as described  in the Original  Credit
         Agreement and any other  document  delivered to the Lender from time to
         time in connection with the Original Credit  Agreement,  this Agreement
         or to secure the  Obligations,  as the same may  hereafter  be amended,
         supplemented or restated from time to time.

                  "Security Interest" has the meaning given in Section 3.1.

                  "Slow-Moving  Inventory" means any inventory where 100% of the
         like inventory has not turned in the previous twelve (12) months.

                  "Special  Account" means a specified cash  collateral  account
         maintained  by a  financial  institution  acceptable  to the  Lender in
         connection with Letters of Credit, as contemplated by Section 2.4.

                                       10
<PAGE>
                  "Subsidiary"  means any  corporation of which more than 50% of
         the  outstanding  shares of capital stock having  general  voting power
         under  ordinary  circumstances  to  elect a  majority  of the  board of
         directors of such  corporation,  irrespective  of whether or not at the
         time  stock of any other  class or  classes  shall  have or might  have
         voting power by reason of the happening of any  contingency,  is at the
         time  directly  or  indirectly  owned by  either  Borrower,  by  either
         Borrower  and one or more other  Subsidiaries,  or by one or more other
         Subsidiaries.

                  "Term Advance" has the meaning specified in Section 2.6.

                  "Term  Floating Rate" means an annual rate equal to the sum of
         the Base Rate plus  three-quarters of one percent (.75%),  which annual
         rate shall change when and as the Base Rate changes.

                  "Term Notes" means the Borrower's promissory notes, payable to
         the order of the Lender in  substantially  the form of Exhibits B-1 and
         B-2 hereto and any note or notes issued in  substitution  therefor,  as
         the same may hereafter be amended,  supplemented  or restated from time
         to time.

                  "Termination  Date"  means the  earliest  of (i) the  Maturity
         Date,  (ii) the date the Borrower  terminates the Credit  Facility,  or
         (iii) the date the Lender demands payment of the  Obligations  after an
         Event of Default pursuant to Section 8.2.

                  "UCC" means the Uniform Commercial Code as in effect from time
         to time in the state designated in Section 9.13 as the state whose laws
         shall govern this Agreement,  or in any other state whose laws are held
         to govern this Agreement or any portion hereof.

                  SECTION 1.2 CROSS REFERENCES. All references in this Agreement
to  Articles,  Sections  and  subsections,  shall be to  Articles,  Sections and
subsections of this Agreement unless otherwise explicitly specified.

                                  Article II.

                     AMOUNT AND TERMS OF THE CREDIT FACILITY

                  SECTION 2.1  REVOLVING  ADVANCES.  The Lender  agrees,  on the
terms and subject to the  conditions  herein set forth,  to make advances to the
Borrower  from  time to time  from the date all of the  conditions  set forth in
Section 4.1 are satisfied (the "Funding Date") to the  Termination  Date, on the
terms and subject to the conditions herein set forth (the "Revolving Advances").
The Lender shall have no obligation to make a Revolving Advance if, after giving
effect to such  requested  Revolving  Advance,  the sum of the  outstanding  and
unpaid  Revolving  Advances under this Section 2.1 or otherwise would exceed the
Borrowing  Base  less  the L/C  Amount.  The  Borrower's  obligation  to pay the
Revolving Advances shall be evidenced by the Revolving Note and shall be secured
by the  Collateral  as provided in Article  III.  Within the limits set forth in
this Section 2.1, the Borrower may borrow,  prepay  pursuant to Section 2.12 and
reborrow.  The  Borrower  agrees  to comply  with the  following  procedures  in
requesting Revolving Advances under this Section 2.1:

                                       11
<PAGE>
                  (a) The  Borrower  shall  make each  request  for a  Revolving
Advance  to the  Lender  before  11:00  a.m.  (Phoenix  time)  of the day of the
requested  Revolving  Advance.  Requests may be made in writing or by telephone,
specifying the date of the requested  Revolving  Advance and the amount thereof.
Each request shall be by (i) any officer of either Borrower;  or (ii) any person
designated  as either  Borrower's  agent by any officer of either  Borrower in a
writing  delivered to the Lender; or (iii) any person whom the Lender reasonably
believes to be an officer of either Borrower or such a designated agent.

                  (b) Upon fulfillment of the applicable conditions set forth in
Article IV, the Lender shall  disburse the proceeds of the  requested  Revolving
Advance  by  crediting  the  same  to  the  Borrower's  demand  deposit  account
maintained  with Norwest Bank Arizona,  N.A.  unless the Lender and the Borrower
shall  agree in writing to another  manner of  disbursement.  Upon the  Lender's
request,  the Borrower shall  promptly  confirm each  telephonic  request for an
Advance by executing and delivering an appropriate  confirmation  certificate to
the Lender.  The Borrower  shall repay all Advances  even if the Lender does not
receive such  confirmation and even if the person  requesting an Advance was not
in fact  authorized  to do so. Any request for an  Advance,  whether  written or
telephonic,  shall be deemed to be a  representation  by the  Borrower  that the
conditions  set forth in Section 4.2 have been  satisfied  as of the time of the
request.

                  SECTION 2.2 LETTERS OF CREDIT.

                  (a) Upon the  request of either  Borrower,  the Lender may, in
its sole  discretion,  on the terms and  subject  to the  conditions  herein set
forth,  cause an Issuer to issue, from the Funding Date to the Termination Date,
one or more  irrevocable  standby  or  documentary  letters of credit  (each,  a
"Letter of Credit") for the  Borrower's  account.  In the event Lender elects to
issue  one or  more  Letters  of  Credit,  the  aggregate  amount  at  any  time
outstanding of all such Letters of Credit shall not exceed the lesser of:

                           (i) $200,000.00 less the L/C Amount, or

                           (ii)  the  Borrowing  Base  less  the  sum of (A) all
outstanding and unpaid Revolving Advances and (B) the L/C Amount.

Each  Letter of Credit,  if any,  shall be issued  pursuant  to a  separate  L/C
Application  entered  into by the Borrower and the Lender for the benefit of the
Issuer,  completed in a manner  satisfactory  to the Lender and the Issuer.  The
terms and conditions set forth in each such L/C Application shall
supplement  the terms and  conditions  hereof,  but if the terms of any such L/C
Application and the terms of this Agreement are  inconsistent,  the terms hereof
shall control.

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

                  (c) Any request to cause an Issuer to issue a Letter of Credit
under this  Section 2.2 shall be deemed to be a  representation  by the Borrower
that the  conditions set forth in Section 4.2 have been satisfied as of the date
of the request.
                                       12
<PAGE>
                  SECTION 2.3 PAYMENT OF AMOUNTS  DRAWN UNDER LETTERS OF CREDIT;
OBLIGATION OF REIMBURSMENT.

                  The Borrower  acknowledges  that the Lender,  as co-applicant,
will be liable  to the  Issuer  for  reimbursement  of any and all  draws  under
Letters  of  Credit  and for all other  amounts  required  to be paid  under the
applicable  L/C  Application.  Accordingly,  the  Borrower  agrees to pay to the
Lender  any  and all  amounts  required  to be paid  under  the  applicable  L/C
Application, when and as required to be paid thereby, and the amounts designated
below, when and as designated:

                  (a) The Borrower  hereby agrees to pay the Lender on the day a
draft is  honored  under any Letter of Credit a sum equal to all  amounts  drawn
under such Letter of Credit  plus any and all  reasonable  charges and  expenses
that the  Issuer or the Lender  may pay or incur  relative  to such draw and the
applicable  L/C  Application,  plus  interest on all such  amounts,  charges and
expenses as set forth below (the  Borrower's  obligation to pay all such amounts
is herein referred to as the "Obligation of Reimbursement").

                  (b)  Whenever a draft is  submitted  under a Letter of Credit,
the Lender  shall make a Revolving  Advance in the amount of the  Obligation  of
Reimbursement  and shall apply the proceeds of such Revolving  Advance  thereto.
Such Revolving  Advance shall be repayable in accordance  with and be treated in
all other respects as a Revolving Advance hereunder.

                  (c) If a draft is submitted  under a Letter of Credit when the
Borrower  is  unable,  because a  Default  Period  then  exists or for any other
reason,  to obtain a Revolving  Advance to pay the Obligation of  Reimbursement,
the  Borrower  shall pay to the  Lender on demand and in  immediately  available
funds,  the amount of the  Obligation of  Reimbursement  together with interest,
accrued  from the date of the draft until  payment in full at the Default  Rate.
Notwithstanding  the Borrower's  inability to obtain a Revolving Advance for any
reason, the Lender is irrevocably authorized,  in its sole discretion, to make a
Revolving  Advance  in an amount  sufficient  to  discharge  the  Obligation  of
Reimbursement and all accrued but unpaid interest thereon.

                  (d) The  Borrower's  obligation to pay any  Revolving  Advance
made under this Section 2.3, shall be evidenced by Revolving Note and shall bear
interest as provided in Section 2.8.

                  SECTION  2.4  SPECIAL  ACCOUNT.  If  the  Credit  Facility  is
terminated for any reason  whatsoever while any Letter of Credit is outstanding,
the Borrower shall  thereupon pay the Lender in immediately  available funds for
deposit in the Special  Account an amount  equal to the L/C Amount.  The Special
Account shall be an interest  bearing  account  maintained for the Lender by any
financial  institution  acceptable to the Lender. Any interest earned on amounts
deposited  in the Special  Account  shall be  credited  to the Special  Account.
Amounts on deposit in the  Special  Account  may be applied by the Lender at any
time or from time to time to the  Obligations  in the Lender's sole  discretion,
and shall not be subject to  withdrawal  by the  Borrower  so long as the Lender
maintains a security interest therein. The Lender agrees

                                       13
<PAGE>
to transfer  any balance in the Special  Account to the Borrower at such time as
the Lender is required to release its security  interest in the Special  Account
under applicable law.

                  SECTION 2.5 OBLIGATIONS ABSOLUTE.  The Borrower's  obligations
arising under Section 2.3 shall be absolute,  unconditional and irrevocable, and
shall be paid  strictly in accordance  with the terms of Section 2.3,  under all
circumstances   whatsoever,   including   (without   limitation)  the  following
circumstances:

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

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

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

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

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

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

                  SECTION 2.6 TERM ADVANCES.

                  (a) The  Lender  has made,  on the terms  and  subject  to the
conditions herein set forth, a one-time  non-revolving  advance to the Borrower.
Said advance was in the amount of $700,000.00  (the "First Term  Advance"),  and
Borrower hereby acknowledges that the First Term Advance (i) is fully disbursed,
and (ii) as of the date of this  Agreement has a current  outstanding  principal
balance of $496,000.00.

                  (b)  The  Lender  agrees,  on the  terms  and  subject  to the
conditions  herein set forth,  to make a one time  non-revolving  advance to the
Borrower in the amount of $840,000.00 (the "Second Term Advance").

                  (c) The First Term  Advance  and the Second  Term  Advance are
collectively  referred to as the "Term Advances".  The Borrower's  obligation to
pay the Term Advances  shall be evidenced by the Term Notes and shall be secured
by the Collateral as provided in Article III.

                                       14
<PAGE>
                  (d)  The  request  for the  disbursement  of the  Second  Term
Advance shall be by an individual authorized pursuant to Section 2.1(a).

                  (e) Upon fulfillment of the applicable conditions set forth in
Article IV, the Lender  shall apply the  proceeds of the Second Term  Advance to
the  outstanding  Revolving  Advances and disburse any overage by crediting  the
same to the Borrower's demand deposit account specified in Section 2.1(b) unless
the  Lender  and the  Borrower  shall  agree in  writing  to  another  manner of
disbursement. Upon the Lender's request, the Borrower shall promptly confirm the
telephonic  request for the Second Term Advance by executing  and  delivering an
appropriate  confirmation  certificate  to the  Lender.  The  Borrower  shall be
obligated to repay the Second Term Advance  notwithstanding the Lender's failure
to  receive  such  confirmation  and  notwithstanding  the fact that the  person
requesting  the same was not in fact  authorized  to do so. The  request for the
Second Term  Advance,  whether  written or  telephonic,  shall be deemed to be a
representation by the Borrower that the conditions set forth in Section 4.2 have
been satisfied as of the time of the request.

                  SECTION 2.7 PAYMENT OF TERM NOTES.  The outstanding  principal
balance of the Term Notes shall be due and payable as follows:

                  (a) With respect to the First Term Advance, beginning
on  October 1, 1998,  and on the first day of each  month  thereafter,  in equal
monthly installments of $12,000.00;

                  (b) With respect to the Second Term Advance,  (i) beginning on
November  1, 1998,  and on the first day of each month  thereafter  through  and
until October 1, 1999, in equal monthly  installments  of  $28,000.00,  and (ii)
beginning on November 1, 1999, and on the first day of each month thereafter, in
equal monthly installments of $10,500.00; and

                  (c) On the  Termination  Date,  the  entire  unpaid  principal
balance of the Term Notes, and all unpaid interest accrued thereon, shall in any
event be due and payable.

                  SECTION  2.8  INTEREST;   MINIMUM  INTEREST  CHARGE;   DEFAULT
INTEREST; PARTICIPATIONS; USURY. Interest accruing on the Notes shall be due and
payable in arrears on the first day of each month.

                  (a) REVOLVING  NOTE.  Except as set forth in Sections  2.8(d),
2.8(f) and 2.8(g), the outstanding principal balance of the Revolving Note shall
bear interest at the Revolving Floating Rate.

                  (b) TERM  NOTES.  Except as set forth in  Sections  2.8(d) and
2.8(f), the outstanding  principal balance of the Term Notes shall bear interest
at the Term Floating Rate.

                  (c) MINIMUM  INTEREST  CHARGE.  Notwithstanding  the  interest
payable  pursuant  to  Section  2.8(a),  the  Borrower  shall pay to the  Lender
interest of not less than  $6,500.00 per calendar  month (the "Minimum  Interest
Charge")  during  the term of this  Agreement,  and the  Borrower  shall pay any
deficiency  between  the  Minimum  Interest  Charge and the  amount of  interest
otherwise  calculated  under  Sections  2.8(a) and 2.8(e) on the date and in the
manner provided in Section 2.10.

                                       15
<PAGE>
                  (d)  DEFAULT  INTEREST  RATE.  At any time  during any Default
Period,  in the Lender's sole  discretion  and without  waiving any of its other
rights and remedies, the principal of the Advances outstanding from time to time
shall bear interest at the Default Rate, effective for any periods designated by
the Lender from time to time during that Default Period.

                  (e)   PARTICIPATIONS.   If  any   Person   shall   acquire   a
participation  in the  Advances  under this  Agreement,  the  Borrower  shall be
obligated to the Lender to pay the full amount of all interest calculated under,
along with all other fees,  charges and other amounts due under this  Agreement,
regardless  if such  Person  elects  to  accept  interest  with  respect  to its
participation  at a lower  rate  than the  Revolving  Floating  Rate or the Term
Floating  Rate,  or  otherwise  elects to accept less than its pro rata share of
such fees, charges and other amounts due under this Agreement.

                  (f)  USURY.  In any  event  no rate  change  shall be put into
effect which would  result in a rate greater than the highest rate  permitted by
law.  Notwithstanding  anything to the contrary  contained in any Loan Document,
all agreements which either now are or which shall become agreements between the
Borrower and the Lender are hereby  limited so that in no  contingency  or event
whatsoever  shall the total  liability  for  payments in the nature of interest,
additional  interest and other charges exceed the  applicable  limits imposed by
any applicable usury laws. If any payments in the nature of interest, additional
interest and other charges made under any Loan Document are held to be in excess
of the limits imposed by any  applicable  usury laws, it is agreed that any such
amount held to be in excess shall be considered payment of principal  hereunder,
and the  indebtedness  evidenced  hereby shall be reduced by such amount so that
the total liability for payments in the nature of interest,  additional interest
and  other  charges  shall not  exceed  the  applicable  limits  imposed  by any
applicable  usury laws, in  compliance  with the desires of the Borrower and the
Lender.  This  provision  shall never be  superseded or waived and shall control
every other  provision  of the Loan  Documents  and all  agreements  between the
Borrower and the Lender, or their successors and assigns.

                  (g) SAVINGS CLAUSE. The Borrower agrees that the interest rate
contracted  for  includes  the  interest  rate set forth  herein  plus any other
charges  or fees set  forth  herein  and  costs and  expenses  incident  to this
transaction  paid by the  Borrower to the extent  that some are deemed  interest
under applicable law.

                  SECTION 2.9 FEES.

                  (a) UNUSED LINE FEE. For the purposes of this Section  2.9(b),
"Unused  Amount"  means the Maximum  Line reduced by (1)  outstanding  Revolving
Advances  and (2) the L/C Amount.  The  Borrower  agrees to pay to the Lender an
unused line fee at the rate of  one-half  of one percent  (.5%) per annum on the
average daily Unused Amount from the date of this Agreement to and including the
Termination  Date,  due and  payable  monthly in arrears on the first day of the
month and on the Termination Date.

                  (b)  LETTER OF CREDIT  FEES.  The  Borrower  agrees to pay the
Lender a fee with respect to each Letter of Credit,  if any, accruing on a daily
basis and  computed at the annual rate of three  percent  (3%) of the  aggregate
amount  that may then be drawn on all issued and  outstanding  Letters of Credit
assuming compliance with all conditions for drawing

                                       16
<PAGE>
thereunder  (the  "Aggregate  Face  Amount"),  from  and  including  the date of
issuance of such Letter of Credit until such date as such Letter of Credit shall
terminate by its terms or be returned to the Lender,  due and payable monthly in
arrears on the first day of each month and on the Termination Date.

                  (c) LETTER OF CREDIT  ADMINISTRATIVE FEES. The Borrower agrees
to pay the Lender,  on written demand,  the  administrative  fees charged by the
Issuer in  connection  with the  honoring of drafts  under any Letter of Credit,
amendments thereto, transfers thereof and all other activity with respect to the
Letters of Credit at the  then-current  rates  published  by the Issuer for such
services rendered on behalf of customers of the Issuer generally.

                  (d) AUDIT FEES. The Borrower  hereby agrees to pay the Lender,
on demand,  audit fees of $60.00 per hour (or Lender's then applicable rate) per
auditor  in  connection  with any  audits or  inspections  by the  Lender of any
collateral  or the  operations  or business of the  Borrower,  together with all
actual out-of-pocket costs and expenses incurred in conducting any such audit or
inspection  (collectively,  "Out-of-Pockets").  So long as there is not any then
existing  Event of Default or Default  Period,  such audit fees shall not exceed
$2,500.00  per audit plus all  applicable  Out-of-Pockets  and  audits  shall be
performed not more frequently  than quarterly.  Lender shall send to Borrower an
invoice  applicable  to such  audit  fees,  out-of-pocket  costs  and  expenses,
provided, however, any failure of Lender to send such invoices shall not relieve
Borrower of its obligations under this Section 2.9(d).

                  SECTION 2.10  COMPUTATION OF INTEREST AND FEES;  WHEN INTEREST
DUE AND PAYABLE.  Interest accruing on the outstanding  principal balance of the
Advances and fees hereunder  outstanding  from time to time shall be computed on
the basis of actual number of days elapsed in a year of 360 days. Interest shall
be payable  in  arrears  on the first day of each  month and on the  Termination
Date.

                  Section 2.11 [INTENTIONALLY DELETED]

                  SECTION 2.12  VOLUNTARY  PREPAYMENT;  REDUCTION OF THE MAXIMUM
LINE;  TERMINATION OF THE CREDIT  FACILITY BY THE BORROWER.  Except as otherwise
provided herein,  the Borrower may prepay the Revolving Advances in whole at any
time or from time to time in part.  The  Borrower  may prepay the Term  Advances
(other than in accordance  with Section 2.7),  terminate the Credit  Facility or
reduce the Maximum Line at any time if it (i) gives the Lender at least 30 days'
prior written  notice and (ii) pays the Lender the  prepayment,  termination  or
line reduction fees in accordance  with Section 2.13. Any prepayment of the Term
Advances (other than in accordance with Section 2.7) or reduction in the Maximum
Line must be in an amount  not less than  $250,000.00  or an  integral  multiple
thereof.  No  reduction  of the Maximum Line shall in any way effect the Minimum
Interest  Charges.  If the  Borrower  reduces  the  Maximum  Line to  zero,  all
Obligations shall be immediately due and payable. Any partial prepayments of the
Term Notes  (other  than in  accordance  with  Section  2.7) shall be applied to
principal  payments  due and owing in inverse  order of their  maturities.  Upon
termination  of  the  Credit   Facility  and  payment  and  performance  of  all
Obligations, the Lender shall release or terminate the Security Interest and the
Security Documents to which the Borrower is entitled by law.

                                       17
<PAGE>
                  SECTION 2.13 TERMINATION,  LINE REDUCTION AND PREPAYMENT FEES;
WAIVER OF TERMINATION, PREPAYMENT aND LINE REDUCTION FEES.

                  (a)  TERMINATION  AND  LINE  REDUCTION  FEES.  If  the  Credit
Facility is terminated for any reason as of a date other than the Maturity Date,
or the Borrower  reduces the Maximum Line,  the Borrower  shall pay the Lender a
fee in an amount equal to a percentage of the Maximum Line (or the reduction, as
the case may be) as  follows:  (i)  three  percent  (3%) if the  termination  or
reduction  occurs on or before the first  anniversary of the Funding Date;  (ii)
two  percent  (2%) if the  termination  or  reduction  occurs  after  the  first
anniversary  of the Funding Date but on or before the second  anniversary of the
Funding Date; and (iii) one percent (1%) if the termination or reduction  occurs
after the second anniversary of the Funding Date.

                  (b)  PREPAYMENT  FEES.  If the Term Notes are  prepaid for any
reason  except in  accordance  with Section  2.7, the Borrower  shall pay to the
Lender a fee in an  amount  equal  to a  percentage  of the  amount  prepaid  as
follows:  (i) three  percent  (3%) if  prepayment  occurs on or before the first
anniversary  of the Funding  Date;  (ii) two percent (2%) if  prepayment  occurs
after the first  anniversary  of the  Funding  Date but on or before  the second
anniversary of the Funding Date; and (iii) one percent (1%) if prepayment occurs
after the second anniversary of the Funding Date.

                  (c)  WAIVER  OF  TERMINATION  AND  LINE  REDUCTION  FEES.  The
Borrower will not be required to pay the  termination  fees  otherwise due under
this  Section 2.13 if such  termination  is made  because of  refinancing  by an
affiliate of the Lender.

                  SECTION 2.14 MANDATORY  PREPAYMENT.  Without notice or demand,
if the sum of the outstanding  principal balance of the Revolving  Advances plus
the L/C Amount shall at any time exceed the Borrowing  Base,  the Borrower shall
(i) first,  immediately prepay the Revolving Advances to the extent necessary to
eliminate such excess;  and (ii) if prepayment in full of the Revolving Advances
is  insufficient  to  eliminate  such excess,  pay to the Lender in  immediately
available  funds for  deposit  in the  Special  Account  an amount  equal to the
remaining excess.  Any payment received by the Lender under this Section 2.14 or
under Section 2.12 may be applied to the Obligations,  in such order and in such
amounts  as the  Lender,  in its  discretion,  may from time to time  determine;
provided that any prepayment under Section 2.12 which the Borrower designates as
a  partial   prepayment  of  the  Term  Notes  shall  be  applied  to  principal
installments  of the Term Notes in inverse  order of  maturity.  For each day or
portion thereof that the Revolving Advances shall exceed the Borrowing Base, the
Borrower shall pay to the Lender an overadvance charge (which charge shall be in
addition to and not in lieu of any other  interest,  fees or charges  payable by
Borrower hereunder) in the amount of $100.00; provided however, that if such day
occurs during a Default  Period,  the  overadvance  charge for such day shall be
$200.00.

                  SECTION 2.15 PAYMENT. All payments to the Lender shall be made
in immediately available funds and shall be applied to the Obligations 1 Banking
Day  after  receipt  by the  Lender.  The  Lender  may  hold  all  payments  not
constituting  immediately  available  funds for two (2)  additional  days before
applying them to the Obligations.  Notwithstanding  anything in Section 2.1, the
Borrower  hereby  authorizes  the Lender,  in its discretion at any time or from
time to time without the Borrower's request and even if the conditions set forth
in Section 4.2 would 

                                       18
<PAGE>
not be satisfied,  to make a Revolving Advance in an amount equal to the portion
of the Obligations from time to time due and payable.

                  SECTION 2.16 PAYMENT ON NON-BANKING DAYS. Whenever any payment
to be made  hereunder  shall be stated to be due on a day which is not a Banking
Day,  such  payment may be made on the next  succeeding  Banking  Day,  and such
extension of time shall in such case be included in the  computation of interest
on the Advances or the fees hereunder, as the case may be.

                  SECTION  2.17 USE OF  PROCEEDS.  The  Borrower  shall  use the
proceeds of Revolving Advances,  each Letter of Credit, and the Term Advances if
any, for ordinary working capital purposes.

                  SECTION 2.18 LIABILITY  RECORDS.  The Lender may maintain from
time to time, at its discretion,  liability  records as to the Obligations.  All
entries  made on any such record  shall be presumed  correct  until the Borrower
establishes the contrary.  Upon the Lender's demand, the Borrower will admit and
certify in writing  the exact  principal  balance  of the  Obligations  that the
Borrower  then asserts to be  outstanding.  Any billing  statement or accounting
rendered by the Lender  shall be  conclusive  and fully  binding on the Borrower
unless the Borrower gives the Lender specific written notice of exception within
30 days after receipt.

                                  Article III.

                      SECURITY INTEREST; OCCUPANCY; SETOFF

                  SECTION 3.1 GRANT OF SECURITY  INTEREST.  The Borrower  hereby
pledges,  assigns  and grants to the Lender a  security  interest  (collectively
referred to as the "Security  Interest") in the Collateral,  as security for the
payment and performance of the Obligations.

                  SECTION  3.2   NOTIFICATION   OF  ACCOUNT  DEBTORS  AND  OTHER
OBLIGORS. The Lender may at any time (upon the occurrence of an Event of Default
or during a Default Period) notify any account debtor or other person  obligated
to pay the  amount  due  that  such  right  to  payment  has  been  assigned  or
transferred to the Lender for security and shall be paid directly to the Lender.
The Borrower  will join in giving such notice if the Lender so requests.  At any
time after the Borrower or the Lender gives such notice to an account  debtor or
other  obligor,  the Lender may,  but need not, in the  Lender's  name or in the
Borrower's  name, (a) demand,  sue for, collect or receive any money or property
at any time payable or receivable on account of, or securing,  any such right to
payment,  or grant any extension to, make any  compromise or settlement  with or
otherwise agree to waive,  modify,  amend or change the  obligations  (including
collateral  obligations) of any such account debtor or other obligor; and (b) as
the  Borrower's  agent and  attorney-in-fact,  notify the United  States  Postal
Service to change the address for delivery of the Borrower's mail to any address
designated by the Lender,  otherwise intercept the Borrower's mail, and receive,
open and  otherwise  handle the  Borrower's  mail,  applying all  Collateral  as
permitted  under this  Agreement  and holding all other mail for the  Borrower's
account or forwarding such mail to the Borrower's last known address.

                                       19
<PAGE>
                  SECTION 3.3  ASSIGNMENT OF INSURANCE.  As additional  security
for the payment and performance of the Obligations,  the Borrower hereby assigns
to the Lender any and all monies  (including,  without  limitation,  proceeds of
insurance and refunds of unearned  premiums) due or to become due under, and all
other rights of the Borrower  with respect to, any and all policies of insurance
now or at any time hereafter  covering the Collateral or any evidence thereof or
any business  records or valuable papers  pertaining  thereto,  and the Borrower
hereby directs the issuer of any such policy to pay all such monies  directly to
the Lender. At any time, whether or not a Default Period then exists, the Lender
may (but need not), in the Lender's name or in the Borrower's name,  execute and
deliver  proof of claim,  receive  all such  monies,  endorse  checks  and other
instruments   representing  payment  of  such  monies,  and  adjust,   litigate,
compromise or release any claim against the issuer of any such policy.

                  SECTION 3.4 OCCUPANCY.

                  (a) The Borrower hereby  irrevocably  grants to the Lender the
right to take possession of the Premises at any time during a Default Period.

                  (b) The Lender  may use the  Premises  only to hold,  process,
manufacture,  sell, use, store, liquidate,  realize upon or otherwise dispose of
goods that are  Collateral  and for other  purposes  that the Lender may in good
faith deem to be related or incidental purposes.

                  (c) The Lender's  right to hold the  Premises  shall cease and
terminate  upon  the  earlier  of (i)  payment  in  full  and  discharge  of all
Obligations  and  termination  of  the  Commitment,   and  (ii)  final  sale  or
disposition of all goods constituting  Collateral and delivery of all such goods
to purchasers.

                  (d) The Lender  shall not be  obligated  to pay or account for
any rent or other  compensation  for the possession,  occupancy or use of any of
the Premises;  provided, however, that if the Lender does pay or account for any
rent or other  compensation  for the possession,  occupancy or use of any of the
Premises,  the Borrower shall  reimburse the Lender promptly for the full amount
thereof.  In addition,  the Borrower  will pay, or reimburse the Lender for, all
taxes (other than income taxes), fees, duties, imposts,  charges and expenses at
any time  incurred  by or imposed  upon the  Lender by reason of the  execution,
delivery, existence,  recordation,  performance or enforcement of this Agreement
or the provisions of this Section 3.4.

                  SECTION 3.5 LICENSE. Without limiting the generality of any of
the  Security   Documents,   the  Borrower   hereby   grants  to  the  Lender  a
non-exclusive,  worldwide and royalty-free  license to use or otherwise  exploit
all trademarks,  franchises, trade names, copyrights and patents of the Borrower
for the  purpose  of  selling,  leasing  or  otherwise  disposing  of any or all
Collateral during any Default Period.

                  SECTION 3.6 FINANCING  STATEMENT.  A carbon,  photographic  or
other  reproduction of this Agreement or of any financing  statements  signed by
the  Borrower  is  sufficient  as a  financing  statement  and may be filed as a
financing  statement  in any state to perfect  the  security  interests  granted
hereby. For this purpose, the following information is set forth:

                                       20
<PAGE>
                  Name and address of Debtors:

                  Royal Grip, Inc.
                  15170 North Hayden Road #1
                  Scottsdale, Arizona  85260
                  Federal Tax Identification No. 86-0615648

                  Roxxi, Inc.
                  2621 SE 15th Street
                  Oklahoma City, Oklahoma  73129
                  Federal Tax Identification No. 86-0801779

                  Name and address of Secured Party:

                  Norwest Business Credit, Inc.
                  Norwest Tower, Mail Station 9025
                  3300 North Central Avenue
                  Phoenix, Arizona  85012-2501

                  SECTION 3.7 SETOFF. The Borrower agrees that the Lender may at
any time or from time to time,  at its sole  discretion  and without  demand and
without  notice to anyone,  setoff any  liability  owed to the  Borrower  by the
Lender,  whether or not due,  against  any  Obligation,  whether or not due.  In
addition,  each other Person holding a participating interest in any Obligations
shall have the right to  appropriate  or setoff any  deposit or other  liability
then owed by such Person to the Borrower, whether or not due, and apply the same
to the payment of said  participating  interest,  as fully as if such Person had
lent directly to the Borrower the amount of such participating interest.

                                  Article IV.

                              CONDITIONS OF LENDING

                  SECTION 4.1 CONDITIONS  PRECEDENT TO THE INITIAL REVOLVING AND
TERM ADVANCES AND THE INITIAL LETTER OF CREDIT. The Lender's  obligation to make
the initial Revolving Advance,  cause to be issued any Letter of Credit, or make
the one time  disbursement of the Second Term Advance hereunder shall be subject
to the  condition  precedent  that the  Lender  shall have  received  all of the
following, each in form and substance satisfactory to the Lender:

                  (a) This Agreement, properly executed by the Borrower.

                  (b) The Revolving Note and the Term Notes,  properly  executed
by the Borrower.

                  (c) A true and correct copy of any and all leases  pursuant to
which  the  Borrower  is  leasing  the  Premises,  together  with  a  landlord's
disclaimer and consent (and Memorandum thereof) with respect to each such lease.

                                       21
<PAGE>
                  (d) Current  searches of appropriate  filing  offices  showing
that (i) no state or  federal  tax liens  have been  filed and  remain in effect
against the Borrower,  (ii) no financing  statements or  assignments of patents,
trademarks  or  copyrights  have been  filed and  remain in effect  against  the
Borrower  except  those   financing   statements  and  assignments  of  patents,
trademarks or copyrights relating to Permitted Liens or to liens held by Persons
who have agreed in writing that upon receipt of proceeds of the  Advances,  they
will deliver UCC releases and/or  terminations  and releases of such assignments
of patents,  trademarks or copyrights  satisfactory to the Lender, and (iii) the
Lender has duly filed all financing statements necessary to perfect the Security
Interest,  to the extent the Security  Interest is capable of being perfected by
filing.

                  (e) A certificate  of the Secretary or Assistant  Secretary of
each of  Royal  Grip  and  Roxxi  certifying  as to (i) the  resolutions  of the
Borrower's directors and, if required, shareholders,  authorizing the execution,
delivery  and  performance  of  the  Loan   Documents,   (ii)  the  articles  of
incorporation  and  bylaws  of each of  Royal  Grip and  Roxxi,  and  (iii)  the
signatures of the officers or agents  authorized to execute and deliver the Loan
Documents and other instruments, agreements and certificates,  including Advance
requests, on behalf of each of Royal Grip and Roxxi.

                  (f)  Evidence  that  each of  Royal  Grip  and  Roxxi  is duly
licensed or  qualified  to  transact  business  in all  jurisdictions  where the
character  of the  property  owned  or  leased  or the  nature  of the  business
transacted by it makes such licensing or qualification necessary.

                  (g) A  certificate  of an  officer  of each of Royal  Grip and
Roxxi confirming the representations and warranties set forth in Article V.

                  (h) An  opinion  of  counsel  to each of Royal Grip and Roxxi,
addressed to the Lender,  together  with the results of a  litigation  search or
searches  showing all actions or proceedings  where each of Royal Grip and Roxxi
is a defendant or involving a claim against the Borrower.

                  (i) Certificates of the insurance required hereunder, with all
hazard insurance  containing a lender's loss payable endorsement in the Lender's
favor and with all  liability  insurance  naming  the  Lender  as an  additional
insured.

                  (j) A guaranty,  properly  executed by Guarantor,  pursuant to
which  Guarantor  unconditionally  guarantees the full and prompt payment of all
Obligations.

                  (k)  Evidence  from the  Borrower  satisfactory  to the Lender
establishing  the amount of the  Borrowing  Base and a request  for a  Revolving
Advance from the Borrower in an amount such that the minimum Availability of the
Borrower  after such Advance (the "Initial  Advance") and payment of all fees of
the Lender required hereunder shall be not less than $750,000.00.

                  (l) An  opinion  of counsel  to  Guarantor,  addressed  to the
Lender.

                                       22
<PAGE>
                  (m) Payment of the fees and  commissions  due through the date
of the  Initial  Advance  or Letter of Credit  under  Section  2.9 and  expenses
incurred by the Lender through such date and required to be paid by the Borrower
under Section 9.7,  including all legal  expenses  incurred  through the date of
this Agreement.

                  (n) UCC-2 Financing  Statement Partial Release with respect to
grip inventory  located at Acushnet Rubber Company,  Inc.  properly  executed by
Fleet National Bank.

                  (o)  Acknowledgment  Agreement  properly  executed by Acushnet
Rubber Company, Inc.

                  (p) UCC-2 Assignment of Financing Statement  applicable to the
UCC-1  Financing  Statement filed with the  Massachusetts  Secretary of State at
Filing No. 448837.

                  (q) [INTENTIONALLY DELETED]

                  (r) Management  Support Agreements in favor of Lender properly
executed by Tom Schneider, Ronald L. Chalmers and Kevin Neill.

                  (s)  Assignment  with  respect  to Letter  of Credit  proceeds
properly executed by Borrower and Norwest Bank Arizona.

                  (t) Such other  documents as the Lender in its sole discretion
may require.

                  SECTION 4.2  CONDITIONS  PRECEDENT TO ALL ADVANCES AND LETTERS
OF CREDIT.  The Lender's  obligation to make each Advance or to cause the Issuer
to issue  any  Letter of  Credit  shall be  subject  to the  further  conditions
precedent that on such date:

                  (a) the representations and warranties  contained in Article V
are  correct  on and as of the date of such  Advance  or  issuance  of Letter of
Credit as though  made on and as of such date,  except to the  extent  that such
representations and warranties relate solely to an earlier date; and

                  (b) no event has occurred and is  continuing,  or would result
from such Advance or the issuance of such Letter of Credit,  as the case may be,
which constitutes a Default or an Event of Default.

                                   Article V.

                         REPRESENTATIONS AND WARRANTIES

                  The Borrower represents and warrants to the Lender as follows:

                  SECTION  5.1  CORPORATE   EXISTENCE  AND  POWER;  NAME;  CHIEF
EXECUTIVE OFFICE;  INVENTORY AND EQUIPMENT LOCATIONS; TAX IDENTIFICATION NUMBER.
Royal Grip is a  corporation  duly  incorporated,  validly  existing and in good
standing under the laws of the State of Nevada 

                                       23
<PAGE>
and is duly  licensed or  qualified  to transact  business in all  jurisdictions
where  the  character  of the  property  owned or  leased  or the  nature of the
business transacted by it makes such licensing or qualification necessary. Roxxi
is a corporation duly incorporated,  validly existing and in good standing under
the laws of the State of Nevada,  and is duly  licensed or qualified to transact
business in all  jurisdictions  where the  character  of the  property  owned or
leased or the nature of the business  transacted  by it makes such  licensing or
qualification  necessary.  The Borrower has all requisite  power and  authority,
corporate or otherwise,  to conduct its business,  to own its  properties and to
execute and  deliver,  and to perform  all of its  obligations  under,  the Loan
Documents. During its existence, the Borrower has done business solely under the
names set forth in Schedule 5.1 hereto.  The Borrower's  chief executive  office
and  principal  place of  business  is  located  at the  addresses  set forth in
Schedule 5.1 hereto,  and all of the Borrower's records relating to its business
or the  Collateral  are kept at said  location.  All  Inventory and Equipment is
located at that location or at one of the other  locations set forth in Schedule
5.1 hereto. The Borrower's tax  identification  number is correctly set forth in
Section 3.6 hereto.

                  SECTION 5.2 AUTHORIZATION OF BORROWING;  NO CONFLICT AS TO LAW
OR AGREEMENTS.  The execution,  delivery and  performance by the Borrower of the
Loan  Documents and the  borrowings  from time to time  hereunder have been duly
authorized by all necessary corporate action and do not and will not (i) require
any consent or approval of the stockholders of either Royal Grip or Roxxi;  (ii)
require any authorization, consent or approval by, or registration,  declaration
or filing with, or notice to, any governmental  department,  commission,  board,
bureau,  agency or  instrumentality,  domestic or foreign,  or any third  party,
except such authorization, consent, approval, registration,  declaration, filing
or notice as has been obtained,  accomplished or given prior to the date hereof;
(iii) violate any provision of any law, rule or regulation  (including,  without
limitation,  Regulation  X of the  Board of  Governors  of the  Federal  Reserve
System) or of any order,  writ,  injunction or decree presently in effect having
applicability  to either Royal Grip or Roxxi or of the articles of incorporation
or  bylaws  of  either  Royal  Grip or  Roxxi;  (iv) to the  best of  Borrower's
knowledge after due inquiry, result in a breach of or constitute a default under
any indenture or loan or credit agreement or any other material agreement, lease
or  instrument  to which either Royal Grip or Roxxi is a party or by which it or
its  properties  may be bound or  affected  including  without  limitation  that
certain Capital Lease  Agreement  dated December 21, 1996 or that  Manufacturing
Supply  Agreement dated December 21, 1996, as amended by Instrument  dated April
4,  1997;  or (v) result in, or  require,  the  creation  or  imposition  of any
mortgage,  deed of trust,  pledge,  lien,  security  interest or other charge or
encumbrance  of any  nature  (other  than the  Security  Interest)  upon or with
respect to any of the properties now owned or hereafter acquired by either Royal
Grip or Roxxi.

                  SECTION 5.3 LEGAL AGREEMENTS.  This Agreement constitutes and,
upon due execution by the Borrower, the other Loan Documents will constitute the
legal,  valid and  binding  obligations  of Royal  Grip and  Roxxi,  enforceable
against Royal Grip and Roxxi in accordance with their respective terms.

                  SECTION 5.4 SUBSIDIARIES.  Except as set forth in Schedule 5.4
hereto, neither Borrower has Subsidiaries.

                  SECTION  5.5  FINANCIAL  CONDITION;  NO  ADVERSE  CHANGE.  The
Borrower has heretofore  furnished to the Lender consolidated  audited financial
statements of Royal  Precision,  

                                       24
<PAGE>
Inc. for its fiscal year ended May 31, 1998 and consolidated unaudited financial
statements  for the fiscal  year-to-date  period  ended July 31,  1998 and those
statements  fairly  present  the  Borrower's  financial  condition  on the dates
thereof and the results of its  operations  and cash flows for the periods  then
ended and were prepared in accordance with GAAP except for footnote  disclosures
and year end adjustments. Since the date of the most recent financial statements
to the date of this Agreement,  there has been no material adverse change in the
Borrower's business, properties or condition (financial or otherwise).

                  SECTION 5.6  LITIGATION.  To the best of Borrower's  knowledge
after due inquiry, there are no actions, suits or proceedings pending or, to the
Borrower's knowledge,  threatened against or affecting either Borrower or any of
their Affiliates or the properties of either Borrower or any of their Affiliates
before any court or governmental department,  commission,  board, bureau, agency
or instrumentality,  domestic or foreign,  which, if determined adversely to the
Borrower or any of its Affiliates,  would have a material  adverse effect on the
financial  condition,  properties  or  operations  of the Borrower or any of its
Affiliates.

                  SECTION 5.7  REGULATION U. Neither  Borrower is engaged in the
business of extending  credit for the purpose of purchasing  or carrying  margin
stock  (within  the meaning of  Regulation  U of the Board of  Governors  of the
Federal Reserve System), and no part of the proceeds of any Advance will be used
to  purchase  or carry any  margin  stock or to extend  credit to others for the
purpose of purchasing or carrying any margin stock.

                  SECTION 5.8 TAXES.  To the best of Borrower's  knowledge after
due inquiry,  the Borrower and its Affiliates  have paid or caused to be paid to
the proper  authorities when due all federal,  state and local taxes required to
be withheld by each of them.  The  Borrower  and its  Affiliates  have filed all
federal,  state and local tax returns  which to the knowledge of the officers of
the Borrower or any Affiliate, as the case may be, are required to be filed, and
the Borrower and its Affiliates have paid or caused to be paid to the respective
taxing  authorities  all  taxes as shown on said  returns  or on any  assessment
received by any of them to the extent such taxes have become due.

                  SECTION  5.9  TITLES  AND LIENS.  The  Borrower  has clear and
absolute title to all Collateral described in the collateral reports provided to
the Lender and all other  Collateral,  properties  and assets  reflected  in the
latest financial statements referred to in Section 5.5 and all proceeds thereof,
free and clear of all mortgages,  security  interests,  liens and  encumbrances,
except for Permitted Liens. No financing statement naming the Borrower as debtor
is on file in any office except to perfect only Permitted Liens.

                  SECTION  5.10  PLANS.  Except as  disclosed  to the  Lender in
writing prior to the date hereof,  neither  Borrower nor any of their Affiliates
maintains or has  maintained  any Plan.  Neither  Borrower nor any Affiliate has
received  any notice or has any  knowledge  to the effect that it is not in full
compliance with any of the  requirements of ERISA. No Reportable  Event or other
fact or  circumstance  which  may  have an  adverse  effect  on the  Plan's  tax
qualified status exists in connection with any Plan. Neither Borrower nor any of
their Affiliates has:

                  (a) Any accumulated  funding  deficiency within the meaning of
ERISA; or

                                       25
<PAGE>
                  (b) Any liability or knows of any fact or circumstances  which
could result in any liability to the Pension Benefit Guaranty  Corporation,  the
Internal  Revenue  Service,  the  Department  of  Labor  or any  participant  in
connection with any Plan (other than accrued  benefits which or which may become
payable to participants or beneficiaries of any such Plan).

                  SECTION 5.11 DEFAULT.  The Borrower is in compliance  with all
provisions of all agreements,  instruments,  decrees and orders to which it is a
party or by which it or its property is bound or affected, the breach or default
of which  could  have a  material  adverse  effect on the  Borrower's  financial
condition, properties or operations.

                  SECTION 5.12 ENVIRONMENTAL MATTERS.

                  (a)  DEFINITIONS.  As used in this  Agreement,  the  following
terms shall have the following meanings:

                           (i)  "Environmental  Law" means any  federal,  state,
local or other governmental statute,  regulation,  law or ordinance dealing with
the protection of human health and the environment.

                           (ii)   "Hazardous   Substances"   means   pollutants,
contaminants,  hazardous substances,  hazardous wastes,  petroleum and fractions
thereof,  and all other chemicals,  wastes,  substances and materials listed in,
regulated by or identified in any Environmental Law.

                  (b) To the Borrower's  best  knowledge,  there are not present
in, on or under the Premises any  Hazardous  Substances in such form or quantity
as to create any liability or  obligation  for either the Borrower or the Lender
under  common law of any  jurisdiction  or under any  Environmental  Law, and no
Hazardous Substances have ever been stored, buried, spilled, leaked, discharged,
emitted or released  in, on or under the Premises in such a way as to create any
such liability.

                  (c) To the  Borrower's  best  knowledge,  the Borrower has not
disposed of  Hazardous  Substances  in such a manner as to create any  liability
under any Environmental Law.

                  (d)  There are not and,  to the  Borrower's  knowledge,  there
never  have  been  any  requests,  claims,  notices,  investigations,   demands,
administrative proceedings,  hearings or litigation,  relating in any way to the
Premises  or  the  Borrower,   alleging   liability  under,   violation  of,  or
noncompliance  with  any  Environmental  Law or any  license,  permit  or  other
authorization issued pursuant thereto. To the Borrower's best knowledge, no such
matter is threatened or impending.

                  (e)  To  the  Borrower's   best   knowledge,   the  Borrower's
businesses are and have in the past always been conducted in accordance with all
Environmental Laws and all licenses,  permits and other authorizations  required
pursuant to any  Environmental  Law and  necessary  for the lawful and efficient
operation of such  businesses are in the  Borrower's  possession and are in full
force and effect. No permit required under any Environmental Law is scheduled to
expire  within 12 months  (other than those that are renewed on an annual basis)
and

                                       26
<PAGE>
there is no threat known to the Borrower that any such permit  currently held by
Borrower will be withdrawn, terminated, limited or materially changed.

                  (f) To the Borrower's best knowledge, the Premises are not and
never  have been  listed on the  National  Priorities  List,  the  Comprehensive
Environmental  Response,  Compensation and Liability  Information  System or any
similar federal, state or local list, schedule, log, inventory or database.

                  (g) The  Borrower has  delivered  to Lender all  environmental
assessments in Borrower's possession or which Borrower has knowledge of, audits,
reports, permits, licenses and other documents describing or relating in any way
to the Premises or Borrower's businesses.

                  SECTION 5.13  SUBMISSIONS  TO LENDER.  All financial and other
information provided to the Lender by or on behalf of the Borrower in connection
with the Borrower's  request for the credit  facilities  contemplated  hereby is
true and correct in all material respects and, as to projections,  valuations or
proforma  financial  statements,  present  a  good  faith  opinion  as  to  such
projections, valuations and proforma condition and results.

                  SECTION 5.14 FINANCING  STATEMENTS.  The Borrower has provided
to the Lender signed financing  statements  sufficient when filed to perfect the
Security  Interest  and the other  security  interests  created by the  Security
Documents.  When  such  financing  statements  are  filed in the  offices  noted
therein,  the Lender will have a valid and  perfected  security  interest in all
Collateral and all other collateral described in the Security Documents which is
capable  of  being  perfected  by  filing  financing  statements.  None  of  the
Collateral  or other  collateral  covered by the  Security  Documents is or will
become a fixture on real estate, unless a sufficient fixture filing is in effect
with respect thereto.

                  SECTION  5.15  RIGHTS TO  PAYMENT.  Each  right to  payment in
excess  of  $500.00  and each  instrument,  document,  chattel  paper  and other
agreement  constituting or evidencing  Collateral or other collateral covered by
the  Security  Documents  is (or, in the case of all future  Collateral  or such
other collateral, will be when arising or issued) the valid, genuine and legally
enforceable obligation,  subject to no defense,  setoff or counterclaim,  of the
account  debtor or other  obligor  named  therein or in the  Borrower's  records
pertaining thereto as being obligated to pay such obligation.

                                  Article VI.

                        BORROWER'S AFFIRMATIVE COVENANTS

                  So long as the Obligations  shall remain unpaid, or the Credit
Facility shall remain  outstanding,  the Borrower will comply with the following
requirements, unless the Lender shall otherwise consent in writing:

                  SECTION 6.1 REPORTING REQUIREMENTS. The Borrower will deliver,
or cause to be delivered, to the Lender each of the following, which shall be in
form and detail acceptable to the Lender:

                                       27
<PAGE>
                  (a) as soon as  available,  and in any event  within  120 days
after the end of each fiscal year of the Borrower consolidated and consolidating
audited financial statements of Royal Grip, Roxxi and the Covenant Entities with
the unqualified  opinion of Arthur  Andersen,  L.L.P. or such other  independent
certified  public  accountants  selected by the Borrower and  acceptable  to the
Lender, which annual financial statements shall include the consolidated balance
sheet of Royal  Grip,  Roxxi  and the  Covenant  Entities  as at the end of such
fiscal year and the related consolidated statements of income, retained earnings
and cash flows,  all in reasonable  detail and prepared in accordance  with GAAP
applied  on a basis  consistent  with the  accounting  practices  applied in the
financial  statements referred to in Section 5.5 hereof,  together with a report
signed by such accountants  stating that in making the investigations  necessary
for said opinion they obtained no knowledge,  except as specifically  stated, of
any Default or Event of Default  hereunder and all relevant  facts in reasonable
detail to evidence,  and the  computations as to, whether or not the Borrower is
in compliance with the  requirements set forth in Sections 6.12 through 6.15 and
Section 7.10 hereof;

                  (b) as soon as available and in any event within 25 days after
the end of each  month,  a  consolidated  unaudited/internal  balance  sheet and
statements of income and retained earnings of Royal Grip and Roxxi as at the end
of and for such month and for the year to date period then ended,  prepared,  if
the Lender so requests, on a consolidating and consolidated basis to include the
Covenant Entities and any other Affiliates,  in reasonable detail and stating in
comparative  form the  figures  for the  corresponding  date and  periods in the
previous year, all prepared in accordance  with GAAP,  subject to year-end audit
adjustments;  and  accompanied by a certificate of the Vice President of Finance
or any other officer of each of Royal Grip and Roxxi,  substantially in the form
of  Exhibit  C hereto  stating  (i) that  such  financial  statements  have been
prepared in accordance  with GAAP,  subject to year-end  audit  adjustments  and
footnotes,  (ii) whether or not such officer has knowledge of the  occurrence of
any Default or Event of Default hereunder not theretofore  reported and remedied
and, if so,  stating in reasonable  detail the facts with respect  thereto,  and
(iii) all relevant facts in reasonable detail to evidence,  and the computations
as to, whether or not the Borrower is in compliance  with the  requirements  set
forth in Sections 6.12 through 6.15 and 7.10;

                  (c) within 15 days after the end of each month,  agings of the
Borrower's  accounts  receivable  and  its  accounts  payable  and an  inventory
certification report as at the end of such month;

                  (d) at least 30 days before the  beginning of each fiscal year
of the Borrower,  the projected  balance  sheets and income  statements for each
month of such year, each in reasonable detail,  representing the Borrower's good
faith  projections  and certified by the Borrower's Vice President of Finance or
any other officer as being the most accurate projections available and identical
to the projections used by the Borrower for internal planning purposes, together
with  such  supporting  schedules  and  information  as  the  Lender  may in its
discretion require;

                  (e)  immediately  after the  commencement  thereof,  notice in
writing of all  litigation and of all  proceedings  before any  governmental  or
regulatory  agency  affecting the Borrower of the type described in Section 5.12
or which seek a monetary recovery against the Borrower in excess of $25,000.00;

                                       28
<PAGE>
                  (f) as  promptly  as  practicable  (but in any event not later
than five business days) after an officer of the Borrower  obtains  knowledge of
the  occurrence  of any breach,  default or event of default  under any Security
Document or any event which constitutes a Default or Event of Default hereunder,
notice of such occurrence,  together with a detailed  statement by a responsible
officer of the  Borrower of the steps  being  taken by the  Borrower to cure the
effect of such breach, default or event;

                  (g) as soon as possible  and in any event within 30 days after
the Borrower knows or has reason to know that any Reportable  Event with respect
to any Plan has occurred,  the  statement of the  Borrower's  Vice  President of
Finance setting forth details as to such  Reportable  Event and the action which
the Borrower proposes to take with respect thereto,  together with a copy of the
notice of such Reportable Event to the Pension Benefit Guaranty Corporation;

                  (h) as soon as possible, and in any event within 10 days after
the Borrower fails to make any quarterly  contribution  required with respect to
any Plan under Section 412(m) of the Internal  Revenue Code of 1986, as amended,
the statement of the Borrower's  Vice President of Finance setting forth details
as to such  failure  and the action  which the  Borrower  proposes  to take with
respect thereto,  together with a copy of any notice of such failure required to
be provided to the Pension Benefit Guaranty Corporation;

                  (i)  promptly  upon  knowledge  thereof,  notice  of  (i)  any
disputes or claims by the  Borrower's  customers in excess of  $20,000.00;  (ii)
credit memos in excess of  $20,000.00;  (iii) any goods returned to or recovered
by the  Borrower  valued  in excess of  $20,000.00;  and (iv) any  change in the
persons constituting the Borrower's officers and directors;

                  (j) promptly upon knowledge thereof,  notice of any loss of or
material  damage to any Collateral or other  collateral  covered by the Security
Documents or of any  substantial  adverse change in any Collateral or such other
collateral or the prospect of payment thereof;

                  (k) promptly upon their distribution,  copies of all financial
statements,  reports and proxy  statements which the Borrower shall have sent to
its stockholders;

                  (l) promptly  after the sending or filing  thereof,  copies of
all  regular  and  periodic  reports  which  the  Borrower  shall  file with the
Securities and Exchange Commission or any national securities exchange;

                  (m) daily  copies  of all  invoices  in excess of  $10,000.00,
together with all shipping documentation applicable thereto;

                  (n) promptly upon knowledge thereof,  notice of the Borrower's
violation of any law, rule or regulation,  the  non-compliance  with which could
materially  and  adversely  affect  the  Borrower's  business  or its  financial
condition; and

                  (o) from time to time, with reasonable promptness, any and all
receivables schedules, collection reports, deposit records, equipment schedules,
copies of

                                       29
<PAGE>
invoices to account debtors,  shipment documents and delivery receipts for goods
sold, and such other material, reports, records or information as the Lender may
request.

                  SECTION 6.2 BOOKS AND RECORDS; INSPECTION AND EXAMINATION. The
Borrower will keep accurate books of record and account for itself pertaining to
the Collateral and pertaining to the Borrower's business and financial condition
and such other matters as the Lender may from time to time request in which true
and complete entries will be made in accordance with GAAP and, upon the Lender's
request,  will permit any  officer,  employee,  attorney or  accountant  for the
Lender to audit,  review,  make  extracts from or copy any and all corporate and
financial  books  and  records  of the  Borrower  at all times  during  ordinary
business  hours,  to send and discuss  with account  debtors and other  obligors
requests for  verification  of amounts owed to the Borrower,  and to discuss the
Borrower's affairs with any of its directors, officers, employees or agents. The
Borrower will permit the Lender,  or its  employees,  accountants,  attorneys or
agents, to examine and inspect any Collateral,  other collateral  covered by the
Security  Documents  or any other  property  of the  Borrower at any time during
ordinary business hours.

                  SECTION 6.3 ACCOUNT  VERIFICATION.  The Lender may at any time
and  from  time to time  send or  require  the  Borrower  to send  requests  for
verification  of accounts or notices of assignment to account  debtors and other
obligors.  The  Lender  may also at any time  and  from  time to time  telephone
account debtors and other obligors to verify accounts.

                  SECTION 6.4 COMPLIANCE WITH LAWS.

                  (a) The  Borrower  will (i) comply  with the  requirements  of
applicable laws and regulations,  the non-compliance with which would materially
and adversely  affect its business or its  financial  condition and (ii) use and
keep the Collateral,  and require that others use and keep the Collateral,  only
for lawful  purposes,  without  violation  of any  federal,  state or local law,
statute or ordinance.

                  (b) Without limiting the foregoing undertakings,  the Borrower
specifically  agrees that it will comply with all applicable  Environmental Laws
and obtain and comply with all permits,  licenses and similar approvals required
by any Environmental Laws, and will not generate,  use, transport,  treat, store
or  dispose  of any  Hazardous  Substances  in such a manner  as to  create  any
liability  or  obligation  under  the  common  law  of any  jurisdiction  or any
Environmental Law.

                  SECTION 6.5 PAYMENT OF TAXES AND OTHER  CLAIMS.  The  Borrower
will pay or discharge,  when due, (a) all taxes,  assessments  and  governmental
charges  levied  or  imposed  upon it or upon its  income or  profits,  upon any
properties  belonging to it (including,  without limitation,  the Collateral) or
upon  or  against  the  creation,  perfection  or  continuance  of the  Security
Interest,  prior to the date on which penalties attach thereto, (b) all federal,
state and local taxes  required to be withheld by it, and (c) all lawful  claims
for labor,  materials and supplies which, if unpaid,  might by law become a lien
or charge upon any properties of the Borrower; provided, that the Borrower shall
not be required to pay any such tax,  assessment,  charge or claim whose amount,
applicability  or  validity  is being  contested  in good  faith by  appropriate

                                       30
<PAGE>
proceedings  and so long as the  Collateral  and Lender's lien thereon is not in
any manner  impaired  by any  enforcement  remedy  available  to the tax levying
entity during the period of such contest.

                  SECTION 6.6 MAINTENANCE OF PROPERTIES.

                  (a) The Borrower  will keep and maintain the  Collateral,  the
other  collateral  covered  by the  Security  Documents  and  all  of its  other
properties  necessary  or useful in its business in good  condition,  repair and
working order (normal wear and tear excepted) and will from time to time replace
or repair any worn, defective or broken parts;  provided,  however, that nothing
in this Section 6.6 shall prevent the Borrower from  discontinuing the operation
and  maintenance  of any of its  properties  if such  discontinuance  is, in the
Lender's judgment,  desirable in the conduct of the Borrower's  business and not
disadvantageous in any material respect to the Lender.

                  (b) The Borrower will defend the Collateral against all claims
or demands of all persons (other than the Lender) claiming the Collateral or any
interest therein.

                  (c) The Borrower will keep all Collateral and other collateral
covered by the  Security  Documents  free and clear of all  security  interests,
liens and encumbrances except Permitted Liens.

                  SECTION 6.7  INSURANCE.  The  Borrower  will obtain and at all
times  maintain   insurance  with  insurers  believed  by  the  Borrower  to  be
responsible  and  reputable,  in such amounts and against such risks as may from
time to time be required by the  Lender,  but in all events in such  amounts and
against  such  risks as is  usually  carried  by  companies  engaged  in similar
business and owning  similar  properties  in the same general areas in which the
Borrower  operates.  Without  limiting  the  generality  of the  foregoing,  the
Borrower will at all times keep all tangible Collateral insured against risks of
fire (including so-called extended coverage),  theft,  collision (for Collateral
consisting  of motor  vehicles)  and such other risks and in such amounts as the
Lender may reasonably request, with any loss payable to the Lender to the extent
of its  interest,  and all policies of such  insurance  shall contain a lender's
loss payable  endorsement for the Lender's benefit acceptable to the Lender. All
policies of liability  insurance  required hereunder shall name the Lender as an
additional insured.

                  SECTION 6.8  PRESERVATION  OF  EXISTENCE.  Each  Borrower will
preserve  and  maintain  its  existence  and all of its rights,  privileges  and
franchises  necessary  or  desirable  in the normal  conduct of its business and
shall conduct its business in an orderly, efficient and regular manner.

                  SECTION 6.9 DELIVERY OF INSTRUMENTS,  ETC. Upon request by the
Lender,  the  Borrower  will  promptly  deliver  to the  Lender  in  pledge  all
instruments, documents and chattel papers constituting Collateral, duly endorsed
or assigned by the Borrower.

                  SECTION 6.10 COLLATERAL ACCOUNT.

                  (a)  Each  Borrower   agrees  to  deposit  in  its  respective
Collateral  Account  or, at the  Lender's  option,  to deliver to the Lender all
collections  on Accounts,  contract  rights,  chattel  paper and other rights to
payment constituting Collateral (but not the proceeds of

                                       31
<PAGE>
any loan to  Borrower  as a borrower  made by any party  other  than  Lender and
permitted  under the terms of this  Agreement),  and all other cash  proceeds of
Collateral,  which the Borrower may receive immediately upon receipt thereof, in
the form received,  except for the Borrower's endorsement when deemed necessary.
Until  delivered  to the Lender or  deposited in the  Collateral  Accounts,  all
proceeds or collections of Collateral shall be held in trust by the Borrower for
and as the property of the Lender and shall not be commingled  with any funds or
property of the Borrower. Amounts deposited in the Collateral Accounts shall not
bear interest and shall not be subject to  withdrawal  by the  Borrower,  except
after full payment and discharge of all Obligations.  All such collections shall
constitute  proceeds  of  Collateral  and shall not  constitute  payment  of any
Obligation. Collected funds from the Collateral Accounts shall be transferred to
the Lender's general account,  and the Lender may deposit in its general account
or in the Collateral  Accounts any and all  collections  received by it directly
from the Borrower.  The Lender may commingle  such funds with other  property of
the Lender or any other person. The Lender or the Borrower shall, after allowing
two Banking Days after deposit in the Collateral Accounts, deposit such funds to
the Lender's  Account No.  00-28-995 at Norwest Bank  Minnesota,  NA. The Lender
from time to time at its  discretion  shall,  after allowing (i) one Banking Day
after  direct  deposit in the  Lender's  Account No.  00-28-995  at Norwest Bank
Minnesota,  NA,  and/or (ii) such later date as may be required for  collection,
apply such  funds to the  payment  of any and all  Obligations,  in any order or
manner of application  satisfactory  to the Lender.  All items  delivered to the
Lender  or  deposited  in the  Collateral  Accounts  shall be  subject  to final
payment. If any such item is returned uncollected, the Borrower will immediately
pay the Lender,  or, for items  deposited in the Collateral  Accounts,  the bank
maintaining  such  account,  the  amount  of  that  item,  or  such  bank at its
discretion may charge any uncollected item to the Borrower's  commercial account
or other  account.  The  Borrower  shall be liable as an  endorser  on all items
deposited in the  Collateral  Accounts,  whether or not in fact  endorsed by the
Borrower.

                  (b) If a Default or Default  Period  exists and upon demand of
the  Lender,  the  Borrower  shall  establish  one or more  lockbox  accounts as
directed by the Lender with such banks or  depository  institutions  as shall be
satisfactory to the Lender and shall  irrevocably  direct all present and future
Account  Debtors  and other  Persons  obligated  to make  payments  constituting
Collateral to make such payments  directly to such lockbox  account.  All of the
Borrower's invoices, account statements and other written or oral communications
directing,  instructing,  demanding or requesting  payment of any Account or any
other  amount  constituting  Collateral  shall  conspicuously  direct  that  all
payments  be made to such  lockbox and shall  include  such  lockbox  address or
addresses.  All payments received in such lockbox accounts shall be processed to
the Collateral Accounts.

                  (c) Amounts deposited in the Collateral Account shall not bear
interest and shall not be subject to withdrawal  by the  Borrower,  except after
full payment and discharge of all Obligations.

                  SECTION 6.11 PERFORMANCE BY THE LENDER. If the Borrower at any
time fails to perform or observe any of the  foregoing  covenants  contained  in
this Article VI or elsewhere  herein,  and if such failure shall  continue for a
period of ten calendar days after the Lender gives the Borrower  written  notice
thereof (or in the case of the  agreements  contained  in Sections  6.5, 6.7 and
6.10,  immediately upon the occurrence of such failure,  without notice or lapse
of time),  

                                       32
<PAGE>
the Lender may, but need not,  perform or observe such covenant on behalf and in
the name,  place and stead of the Borrower (or, at the Lender's  option,  in the
Lender's  name) and may, but need not,  take any and all other actions which the
Lender may reasonably deem necessary to cure or correct such failure (including,
without  limitation,   the  payment  of  taxes,  the  satisfaction  of  security
interests, liens or encumbrances, the performance of obligations owed to account
debtors or other obligors,  the  procurement  and maintenance of insurance,  the
execution of assignments,  security agreements and financing statements, and the
endorsement of instruments);  and the Borrower shall thereupon pay to the Lender
on  demand  the  amount  of all  monies  expended  and all  costs  and  expenses
(including reasonable attorneys' fees and legal expenses) incurred by the Lender
in  connection  with or as a result of the  performance  or  observance  of such
agreements  or the taking of such action by the Lender,  together  with interest
thereon from the date  expended or incurred at the Floating  Rate. To facilitate
the Lender's  performance or observance of such  covenants of the Borrower,  the
Borrower  hereby  irrevocably  appoints the Lender,  or the  Lender's  delegate,
acting alone, as the Borrower's  attorney in fact (which  appointment is coupled
with an interest) with the right (but not the duty) from time to time to create,
prepare,  complete,  execute, deliver, endorse or file in the name and on behalf
of the  Borrower  any  and all  instruments,  documents,  assignments,  security
agreements,   financing   statements,   applications  for  insurance  and  other
agreements and writings required to be obtained, executed, delivered or endorsed
by the Borrower under this Section 6.11.

          SECTION 6.12 DEBT SERVICE COVERAGE RATIO. The Borrower  covenants that
Royal Grip,  Roxxi and the Covenant  Entities  shall, as of the last day of each
fiscal quarter, on and after November 30, 1998, maintain a consolidated  average
minimum debt service  coverage  ratio (based upon the period set forth below) as
follows:

QUARTER ENDING                            DEBT SERVICE COVERAGE RATIO
--------------                            ---------------------------
November 30, 1998                         0.001 to 1 based upon the immediately
                                          preceding six month period

February 28, 1999                         0.001 to 1 based upon the immediately
                                          preceding nine month period

May 31, 1999                              .5 to 1 based upon the immediately
                                          preceding twelve month period

August 31, 1999                           .75 to 1 based upon the immediately
                                          preceding three month period

November 30, 1999                         .75 to 1 based upon the immediately
                                          preceding six month period

February 28, 2000                         .85 to 1 based upon the immediately
                                          preceding nine month period

May 31, 2000 and each May 31 thereafter   1.05 to 1 based upon the immediately
                                          preceding twelve month period

August 31, 2000 and each August 31        1.05 to 1 based upon the immediately
thereafter                                preceding twelve month period

                                       33
<PAGE>
November 30, 2000 and each November       1.05 to 1 based upon the immediately
30 thereafter                             preceding twelve month period

February 28, 2001 and each February 28    1.05 to 1 based upon the immediately
thereafter                                preceding twelve month period


                  The debt service coverage ratio shall be calculated  according
to the following formula:

<TABLE>
<S><C>
FUNDS FROM OPERATIONS + INTEREST EXPENSE - UNFINANCED PORTION OF CAPITAL EXPENDITURES
--------------------------------------------------------------------------------------
Current Maturities Long-Term Debt (actually paid during the period) + Interest Expense
</TABLE>

                  SECTION 6.13 NET WORTH. The Borrower covenants that, as of May
31,  1998  Royal  Grip,  Roxxi  and  the  Covenant  Entities  had  an  aggregate
consolidated Net Worth of  $14,327,322.00.  The Borrower covenants that the said
aggregate consolidated Net Worth as of the end of each future fiscal quarter end
shall increase by not less than (or in the event a decrease is allowed, decrease
by not more than) the amounts set forth below as measured  from the  immediately
preceding fiscal year ending aggregate consolidated Net Worth.

      QUARTER ENDING                       NET WORTH INCREASE (DECREASE)
      --------------                       -----------------------------
      November 30, 1998                    ($500,000.00)
      
      February 28, 1999                    ($300,000.00)
      
      May 31, 1999                         $400,000.00
      
      August 31, 1999 and each August 31   $0.00
      thereafter
      
      November 30, 1999 and each           ($300,000.00)
      November 30 thereafter
      
      February 28, 2000 and each           ($100,000.00)
      February 28 thereafter
      
      May 31, 2000 and each May 31         $600,000.00
      thereafter

                  SECTION 6.14 NET INCOME. The Borrower covenants that beginning
with the fiscal  quarter ending  November 30, 1998,  and continuing  each fiscal
quarter thereafter, Royal Grip, Roxxi and the Covenant Entities shall achieve an
aggregate  consolidated  Net Income of at least (or,  in the event a Net Loss is
allowed  for such  fiscal  quarter,  a Net Loss of not more than) the amount set
forth below for each fiscal quarter as measured from the  immediately  preceding
fiscal year end.

      QUARTER ENDING                       NET WORTH INCREASE (DECREASE)
      --------------                       -----------------------------
      November 30, 1998                    ($500,000.00)
      
      February 28, 1999                    ($300,000.00)
      
                                       34
<PAGE>
      May 31, 1999                         $400,000.00
      
      August 31, 1999 and each August 31   $0.00
      thereafter
      
      November 30, 1999 and each           ($300,000.00)
      November 30 thereafter
      
      February 28, 2000 and each           ($100,000.00)
      February 28 thereafter
      
      May 31, 2000 and each May 31         $600,000.00
      thereafter
      
                  SECTION 6.15 STOP LOSS. The Borrower  covenants that beginning
with September, 1998 and continuing for each month thereafter, Royal Grip, Roxxi
and the Covenant  Entities shall not achieve an aggregate  consolidated Net Loss
in excess of the amounts  set forth  below for each month as  measured  from the
last day of the immediately preceding month.

      MONTH                           MAXIMUM NET LOSS
      -----                           ----------------
      August of each year             $400,000.00
                                     
      September of each year          $150,000.00
                                     
      October of each year            $200,000.00
                                     
      November of each year           $100,000.00
                                     
      December of each year           $250,000.00
                                     
      January of each year            $50,000.00
                                     
      February of each year           $0.00
                                     
      March of each year              $0.00
                                     
      April of each year              $0.00
                                     
      May of each year                $0.00
                                     
      June of each year               $0.00
                                     
      July of each year               $0.00
                               
                                  Article VII.

                               NEGATIVE COVENANTS

                  So long as the Obligations  shall remain unpaid, or the Credit
Facility  shall  remain  outstanding,  the  Borrower  agrees  that,  without the
Lender's prior written consent:

                  SECTION 7.1 LIENS.  The  Borrower  will not  create,  incur or
suffer to exist any mortgage,  deed of trust,  pledge,  lien, security interest,
assignment  or  transfer  upon or of any of its 

                                       35
<PAGE>
assets, now owned or hereafter acquired, to secure any indebtedness;  EXCLUDING,
HOWEVER,  from the  operation of the  foregoing,  the  following  (collectively,
"Permitted Liens"):

                  (a) in the case of any of the Borrower's property which is not
Collateral or other collateral  described in the Security Documents,  covenants,
restrictions,  rights,  easements and minor irregularities in title which do not
materially  interfere  with the  Borrower's  business or operations as presently
conducted;

                  (b)  mortgages,  deeds  of  trust,  pledges,  liens,  security
interests and assignments in existence on the date hereof and listed in Schedule
7.1 hereto,  securing  indebtedness  for borrowed money  permitted under Section
7.2;

                  (c) the Security  Interest  and liens and  security  interests
created by the Security Documents; and

                  (d)  purchase  money  security  interests  relating to Capital
Expenditures  (and which  attach  only to the assets  acquired  by such  Capital
Expenditures)  made  after the date of this  Agreement  by the  Borrower  or any
Affiliate so long as the Borrower is in, and  maintains,  compliance  with every
other provision of this Agreement.

                  SECTION 7.2 INDEBTEDNESS. The Borrower will not incur, create,
assume or permit to exist any  indebtedness  or liability on account of deposits
or advances or any  indebtedness  for borrowed money or letters of credit issued
on the Borrower's  behalf, or any other  indebtedness or liability  evidenced by
notes, bonds, debentures or similar obligations, except:

                  (a) indebtedness arising hereunder;

                  (b)  indebtedness  of the  Borrower in  existence  on the date
hereof and listed in Schedule 7.2 hereto;

                  (c)  indebtedness  relating to liens  permitted in  accordance
with Section 7.1; and

                  (d) indebtedness permitted pursuant to Section 7.19.

                  SECTION  7.3   GUARANTIES.   The  Borrower  will  not  assume,
guarantee,  endorse or  otherwise  become  directly  or  contingently  liable in
connection with any obligations of any other Person, except:

                  (a) the endorsement of negotiable  instruments by the Borrower
for deposit or  collection  or similar  transactions  in the ordinary  course of
business;

                  (b)  guaranties,  endorsements  and other direct or contingent
liabilities in connection with the obligations of other Persons, in existence on
the date hereof and listed in Schedule 7.2 hereto; and

                  (c)  indemnifications   arising  in  the  ordinary  course  of
business.

                                       36
<PAGE>
                  SECTION 7.4 INVESTMENTS AND SUBSIDIARIES.

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

                           (i)  investments in direct  obligations of the United
States of America or any agency or  instrumentality  thereof  whose  obligations
constitute  full faith and credit  obligations  of the United  States of America
having  a  maturity  of one  year  or  less,  commercial  paper  issued  by U.S.
corporations  rated "A-1" or "A-2" by Standard & Poors  Corporation  or "P-1" or
"P-2" by Moody's  Investors  Service  or  certificates  of  deposit or  bankers'
acceptances  having a  maturity  of one year or less  issued by  members  of the
Federal  Reserve  System  having  deposits  in  excess  of  $100,000,000  (which
certificates of deposit or bankers' acceptances are fully insured by the Federal
Deposit Insurance Corporation);

                           (ii)  travel  advances  or  loans  to the  Borrower's
officers and employees not exceeding at any one time an aggregate of $75,000.00;
and

                           (iii)  advances  in the  form of  progress  payments,
prepaid rent not exceeding 2 months or security deposits.

                           (iv) loans, advances or any other credits at any time
disbursed and outstanding  after the date of this Agreement shown on the balance
sheet  of  Borrower  granted  to the  Covenant  Entities  not to  exceed  in the
aggregate (i)  $1,500,000.00  through the first  anniversary date of the Funding
Date, (ii) $2,250,000.00 after the first anniversary of the Funding Date through
the second  anniversary of the Funding Date, and (iii)  $3,000,000.00  after the
second anniversary of the Funding Date through the Termination Date.

                           (v) payments to the Covenant Entities so long as they
are expensed in  accordance  with GAAP,  and appear on all  statements of income
required pursuant to Section 6.1

                  (b) The  Borrower  will not  create  or  permit  to exist  any
Subsidiary, other than the Subsidiar(y)(ies) in existence on the date hereof and
listed in Schedule 5.4.

                  SECTION 7.5 DIVIDENDS.  Except for dividends payable solely to
Guarantor for actual operating expenses of Guarantor,  Borrower will not declare
or pay any  dividends  (other  than  dividends  payable  solely  in stock of the
Borrower)  on any  class of its  stock or make any  payment  on  account  of the
purchase, redemption or other retirement of any shares of such stock or make any
distribution in respect thereof, either directly or indirectly.

                  SECTION 7.6 SALE OR TRANSFER OF ASSETS; SUSPENSION OF BUSINESS
OPERATIONS.  The Borrower will not sell,  lease,  assign,  transfer or otherwise
dispose of (i) the stock of any  Subsidiary,  (ii) all or a substantial  part of
its assets,  or (iii) any  Collateral  or any interest  therein  (whether in one
transaction or in a series of  transactions)  to any other Person other than the
sale of  Inventory in the  ordinary  course of business and will not  liquidate,
dissolve or suspend  

                                       37
<PAGE>
business  operations.  The Borrower will not in any manner transfer any property
without prior or present receipt of full and adequate consideration.

                  SECTION 7.7 CONSOLIDATION AND MERGER; ASSET ACQUISITIONS.  The
Borrower will not consolidate with or merge into any Person, or permit any other
Person to merge into it, or acquire (in a  transaction  analogous  in purpose or
effect to a consolidation or merger) all or substantially  all the assets of any
other Person.

                  SECTION 7.8 SALE AND  LEASEBACK.  The Borrower  will not enter
into any arrangement,  directly or indirectly, with any other Person whereby the
Borrower shall sell or transfer any real or personal property, whether now owned
or  hereafter  acquired,  and then or  thereafter  rent or lease as lessee  such
property or any part thereof or any other property which the Borrower intends to
use for substantially the same purpose or purposes as the property being sold or
transferred.

                  SECTION 7.9  RESTRICTIONS ON NATURE OF BUSINESS.  The Borrower
will not engage in any line of business materially different from that presently
engaged in by the Borrower  and will not  purchase,  lease or otherwise  acquire
assets not related to its business.

                  SECTION  7.10 CAPITAL  EXPENDITURES.  During each fiscal year,
Royal Grip, Roxxi and the Covenant  Entities will not incur or contract to incur
Capital  Expenditures in the aggregate of more than $2,000,000.00.  In addition,
during the 1999 fiscal year,  Royal Grip,  Roxxi and the Covenant  Entities will
not incur or contract to incur Capital Expenditures paid with working capital in
the aggregate of more than $1,750,000.00.  In addition,  during each fiscal year
thereafter,  Royal  Grip,  Roxxi  and the  Covenant  Entities  will not incur or
contract  to  incur  Capital  Expenditures  paid  with  working  capital  in the
aggregate of more than $850,000.00.

                  SECTION  7.11  ACCOUNTING.  The  Borrower  will not  adopt any
material  change in accounting  principles  other than as required by GAAP.  The
Borrower will not adopt, permit or consent to any change in its fiscal year.

                  SECTION 7.12  DISCOUNTS,  ETC. The  Borrower  will not,  after
notice from the Lender  during the  existence of any Default  Period,  grant any
discount,  credit or  allowance  to any  customer of the  Borrower or accept any
return of goods sold,  or at any time  (whether  before or after notice from the
Lender) modify,  amend,  subordinate,  cancel or terminate the obligation of any
account debtor or other obligor of the Borrower.

                  SECTION 7.13 DEFINED BENEFIT PENSION PLANS.  The Borrower will
not adopt, create, assume or become a party to any defined benefit pension plan,
unless disclosed to the Lender pursuant to Section 5.10.

                  SECTION 7.14 OTHER DEFAULTS.  The Borrower will not permit any
breach,  default or event of default to occur  under any note,  loan  agreement,
indenture,  lease,  mortgage,  contract  for deed,  security  agreement or other
contractual obligation binding upon the Borrower.

                  SECTION 7.15 PLACE OF BUSINESS;  NAME.  The Borrower  will not
transfer its chief  executive  office or principal  place of business,  or move,
relocate,  close or sell any business location. The Borrower will not permit any
tangible Collateral or any records pertaining to the 

                                       38
<PAGE>
Collateral  to be  located  in any state or area in which,  in the event of such
location,  a financing  statement  covering such Collateral would be required to
be, but has not in fact been,  filed in order to perfect the Security  Interest.
The Borrower will not change its name.

                  SECTION 7.16 ORGANIZATIONAL  DOCUMENTS.  The Borrower will not
amend its certificate of incorporation, articles of incorporation or bylaws.

                  SECTION 7.17 SALARIES.  The Borrower will not pay excessive or
unreasonable   salaries,   bonuses,   commissions,   consultant  fees  or  other
compensation;  or increase the salary,  bonus,  commissions,  consultant fees or
other compensation of any director in a director capacity, officer or any member
of their families,  by more than 20% in any one year, either individually or for
all such  persons in the  aggregate,  or pay any such  increase  from any source
other than profits earned in the year of payment.

                  SECTION 7.18 ISSUANCE OF STOCK/LOSS OF VOTING CONTROL.  Except
as required in order for the Borrower to comply with its contractual obligations
contained in that certain Manufacturing Supply Agreement dated December 21, 1996
entered  into  by and  between  Royal  Grip  and  Acushnet  (the  "Manufacturing
Agreement"),  the Borrower will not issue or sell any stock of the Borrower. The
Borrower shall not permit or suffer to occur any transfer, assignment, pledge or
other  disposition  of any or all of the  issued  and  outstanding  stock of the
Borrower so as to materially change the voting control of the Borrower.

                  SECTION 7.19  PAYMENTS TO  AFFILIATES.  Neither Royal Grip nor
Roxxi shall, without the express written consent of Lender, which consent may be
granted or withheld in Lender's sole discretion, make any transfer,  conveyance,
loan or payment of any kind to Royal Grip (from Roxxi), Roxxi (from Royal Grip),
to any Covenant Entity or to any other Affiliates (i) in the aggregate in excess
of  $1,500,000.00  per fiscal  year,  or (ii) which is not for fair and adequate
consideration.

                  SECTION 7.20 MANAGEMENT CONTROL. The Borrower shall not permit
or suffer to occur any change in its current executive management personnel (Tom
Schneider, Ronald L. Chalmers and Kevin Neill).

                  SECTION 7.21 TRADE  PAYABLE.  Royal Grip shall not at any time
allow the  difference  between  the then  applicable  "End of the  Month  Payoff
Balance",  as described in Exhibit A of the Capital Lease  Agreement,  and Royal
Grip's  trade  payables  owed  to  Acushnet  Rubber  Company,  to be  less  than
$500,000.00.

                                 Article VIII.

                     EVENTS OF DEFAULT, RIGHTS AND REMEDIES

                  SECTION 8.1 EVENTS OF DEFAULT.  "Event of  Default",  wherever
used herein, means any one of the following events:

                  (a) Default in the payment of the Obligations when they become
due and payable;

                                       39
<PAGE>
                  (b)  Failure to pay when due any amount  specified  in Section
2.3 relating to the Borrower's  Obligation of  Reimbursement,  or failure to pay
immediately  when due or upon  termination  of the Credit  Facility  any amounts
required to be paid for deposit in the Special Account under Section 2.4 or;

                  (c) Default in the payment of any fees, commissions,  costs or
expenses required to be paid by the Borrower under this Agreement;

                  (d) Default in the performance,  or breach, of any covenant or
agreement of the Borrower  contained in this Agreement  other than a covenant or
agreement  which  is  specifically  dealt  with  in  this  Section  8.1  and the
continuance thereof for a period of 5 days after the actual knowledge thereof by
an executive  officer of either  Borrower or receipt of written  notice  thereof
from the Lender; or

                  (e) Any of Royal Grip,  Roxxi or any Covenant  Entity shall be
or become  insolvent,  or admit in writing its inability to pay its or his debts
as they mature,  or make an assignment  for the benefit of creditors;  or any of
Royal  Grip,  Roxxi or any  Covenant  Entity  shall  apply for or consent to the
appointment of any receiver,  trustee,  or similar  officer for it or for all or
any  substantial  part of its  property;  or such  receiver,  trustee or similar
officer  shall be appointed  without the  application  or consent of Royal Grip,
Roxxi or a Covenant  Entity,  as the case may be; or any of Royal Grip, Roxxi or
any Covenant Entity shall institute (by petition,  application,  answer, consent
or  otherwise)  any   bankruptcy,   insolvency,   reorganization,   arrangement,
readjustment of debt, dissolution, liquidation or similar proceeding relating to
it  under  the  laws  of any  jurisdiction;  or any  such  proceeding  shall  be
instituted (by petition,  application or otherwise) against Royal Grip, Roxxi or
any Covenant  Entity and shall not be dismissed  within 60 calendar days; or any
judgment,  writ,  warrant of  attachment,  garnishment  or  execution or similar
process shall be issued or levied against a substantial  part of the property of
Royal Grip, Roxxi or any Covenant Entity; or

                  (f) A petition  shall be filed by or against (which when filed
against shall not be dismissed within 60 calendar days) any of Royal Grip, Roxxi
or any Covenant Entity under the United States Bankruptcy Code naming Royal Grip
or Roxxi as debtor; or

                  (g) Any  representation  or warranty  made by the  Borrower in
this Agreement,  by Guarantor in any guaranty delivered to the Lender, or by the
Borrower (or any of its  officers) or Guarantor in any  agreement,  certificate,
instrument or financial statement or other statement  contemplated by or made or
delivered  pursuant to or in connection with this Agreement or any such guaranty
shall prove to have been  incorrect  in any  material  respect when deemed to be
effective;

                  (h) The  rendering  against  either  Royal  Grip or Roxxi of a
final judgment, decree or order for the payment of money in excess of $25,000.00
and the continuance of such judgment,  decree or order unsatisfied and in effect
for any period of 30 consecutive days without a stay of execution;

                  (i) A  default  under  any  bond,  debenture,  note  or  other
evidence of  indebtedness  of either  Borrower owed to any Person other than the
Lender, or under any

                                       40
<PAGE>
indenture or other  instrument under which any such evidence of indebtedness has
been  issued  or by  which it is  governed,  or  under  any  lease of any of the
Premises,  and  the  expiration  of the  applicable  period  of  grace,  if any,
specified in such  evidence of  indebtedness,  indenture,  other  instrument  or
lease;

                  (j) Any Reportable Event,  which the Lender determines in good
faith  might  constitute  grounds  for the  termination  of any  Plan or for the
appointment  by the  appropriate  United States  District  Court of a trustee to
administer any Plan, shall have occurred and be continuing 30 days after written
notice to such effect shall have been given to the Borrower by the Lender;  or a
trustee shall have been appointed by an appropriate United States District Court
to administer any Plan; or the Pension Benefit Guaranty  Corporation  shall have
instituted  proceedings  to  terminate  any  Plan or to  appoint  a  trustee  to
administer any Plan; or the Borrower shall have filed for a distress termination
of any Plan under Title IV of ERISA;  or the Borrower  shall have failed to make
any  quarterly  contribution  required  with  respect to any Plan under  Section
412(m) of the  Internal  Revenue  Code of 1986,  as  amended,  which the  Lender
determines in good faith may by itself, or in combination with any such failures
that the Lender may determine  are likely to occur in the future,  result in the
imposition of a lien on the Borrower's assets in favor of the Plan;

                  (k) An  event  of  default  shall  occur  under  any  Security
Document  or under  any  other  security  agreement,  mortgage,  deed of  trust,
assignment or other  instrument  or agreement  securing any  obligations  of the
Borrower hereunder or under any note;

                  (l) An event of default shall occur under that certain  Credit
and  Security  Agreement  dated  ___________,  1998 by and  between  Lender,  FM
Precision Golf  Manufacturing  Corp. and FM Precision Golf Sales Corp.  (the "FM
Credit  Agreement"),  as the FM  Credit  Agreement  may  from  time  to  time be
modified,  amended or restated.  Borrower hereby acknowledges that it shall have
no right to approve any such modifications, amendments or restatements;

                  (m) An  event of  default  shall  occur  under  any  document,
instrument or agreement  executed  from time to time in  connection  with the FM
Credit Agreement (collectively, the "FM Security Documents"), as the FM Security
Documents  may from time to time be  modified,  amended  or  restated.  Borrower
hereby   acknowledges   that  it  shall  have  no  right  to  approve  any  such
modifications, amendments or restatements;

                  (n) Either Borrower shall  liquidate,  dissolve,  terminate or
suspend its business operations or otherwise fail to operate its business in the
ordinary  course,  or sell all or substantially  all of its assets,  without the
Lender's prior written consent;

                  (o) Either  Borrower shall fail to pay,  withhold,  collect or
remit any tax or tax deficiency when due (other than any tax deficiency which is
being  contested in good faith and by proper  proceedings and for which it shall
have set aside on its books adequate  reserves  therefor) or notice of any state
or federal tax liens shall be filed or issued;

                  (p) Any event of default  shall occur (and not be cured within
the  prescribed  cure period) under the  Manufacturing  Agreement or the Capital
Lease Agreement; or

                                       41
<PAGE>
                  (q) Default in the payment of any amount owed by the  Borrower
to the Lender other than any indebtedness arising hereunder;

                  (r) Any Guarantor shall  repudiate,  purport to revoke or fail
to perform any such Guarantor's  obligations under such Guarantor's  guaranty in
favor of the Lender, any Guarantor shall cease to validly exist;

                  (s) Any event or  circumstance  with  respect to the  Borrower
shall occur such that the Lender  shall  believe in good faith that the prospect
of  payment  of all or any part of the  Obligations  or the  performance  by the
Borrower under the Loan Documents is impaired or any material  adverse change in
the business or financial condition of the Borrower shall occur.

                  (t) Any breach, default or event of default by or attributable
to any Affiliate under any agreement between such Affiliate and the Lender.

                  SECTION 8.2 RIGHTS AND  REMEDIES.  During any Default  Period,
the Lender may exercise any or all of the following rights and remedies:

                  (a) the Lender  may,  by notice to the  Borrower,  declare the
Commitment to be terminated, whereupon the same shall forthwith terminate;

                  (b) the Lender  may,  by notice to the  Borrower,  declare the
Obligations  to be forthwith due and payable,  whereupon all  Obligations  shall
become  and be  forthwith  due  and  payable,  without  presentment,  notice  of
dishonor,  protest  or  further  notice of any kind,  all of which the  Borrower
hereby expressly waives;

                  (c) the Lender may, without notice to the Borrower and without
further  action,  apply any and all money owing by the Lender to the Borrower to
the payment of the Obligations;

                  (d)  the  Lender  may  make  demand  upon  the  Borrower  and,
forthwith  upon such demand,  the Borrower will pay to the Lender in immediately
available funds for deposit in the Special  Account  pursuant to Section 2.14 an
amount equal to the  aggregate  maximum  amount  available to be drawn under all
Letters of Credit then outstanding,  assuming compliance with all conditions for
drawing thereunder;

                  (e) the Lender may exercise and enforce any and all rights and
remedies  available  upon default to a secured  party under the UCC,  including,
without limitation,  the right to take possession of Collateral, or any evidence
thereof,  proceeding  without judicial process or by judicial process (without a
prior hearing or notice thereof, which the Borrower hereby expressly waives) and
the right to sell,  lease or otherwise  dispose of any or all of the Collateral,
and,  in  connection  therewith,  the  Borrower  will  on  demand  assemble  the
Collateral  and make it available to the Lender at a place to be  designated  by
the Lender which is reasonably convenient to both parties;

                  (f) the  Lender  may  exercise  and  enforce  its  rights  and
remedies under the Loan Documents; and

                                       42
<PAGE>
                  (g) the  Lender may  exercise  any other  rights and  remedies
available to it by law or agreement.

Notwithstanding  the  foregoing,  upon the  occurrence  of an  Event of  Default
described in  subsections  (e) or (f) of Section 8.1, the  Obligations  shall be
immediately due and payable automatically without presentment,  demand,  protest
or notice of any kind.

                  SECTION 8.3 CERTAIN NOTICES.  If notice to the Borrower of any
intended  disposition of Collateral or any other intended  action is required by
law  in  a  particular  instance,  such  notice  shall  be  deemed  commercially
reasonable  if given  (in the  manner  specified  in  Section  9.3) at least ten
calendar days before the date of intended disposition or other action.

                                  Article IX.

                                 MISCELLANEOUS

                  SECTION  9.1 NO  WAIVER;  CUMULATIVE  REMEDIES.  No failure or
delay by the  Lender in  exercising  any right,  power or remedy  under the Loan
Documents  shall  operate as a waiver  thereof;  nor shall any single or partial
exercise  of any such  right,  power or remedy  preclude  any  other or  further
exercise  thereof or the exercise of any other right,  power or remedy under the
Loan Documents.  The remedies  provided in the Loan Documents are cumulative and
not exclusive of any remedies provided by law.

                  SECTION  9.2  AMENDMENTS,  ETC.  No  amendment,  modification,
termination  or waiver of any  provision of any Loan  Document or consent to any
departure by the Borrower  therefrom or any release of a Security Interest shall
be effective  unless the same shall be in writing and signed by the Lender,  and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given. No notice to or demand on the Borrower
in any case shall entitle the Borrower to any other or further  notice or demand
in similar or other circumstances.

                  SECTION 9.3 ADDRESSES FOR NOTICES, ETC.

                  (a)  Except  as  otherwise   expressly  provided  herein,  all
notices,  requests, demands and other communications provided for under the Loan
Documents shall be in writing and shall be (i) personally  delivered,  (ii) sent
by first class United States mail,  (iii) sent by overnight  courier of national
reputation,  or  (iv)  transmitted  by  telecopy,  in  each  case  addressed  or
telecopied  to the  party to whom  notice  is  being  given  at its  address  or
telecopier number as set forth below:

                                       43
<PAGE>
                  If to Royal Grip or Roxxi:

                  c/o Royal Grip, Inc.
                  15170 North Hayden Road #1
                  Scottsdale, Arizona  85260
                  Telecopier:  (602) 627-0270
                  Attention: Tom Schneider

                  If to the Lender:

                  Norwest Business Credit, Inc.
                  Norwest Tower, Mail Station 9025
                  3300 North Central Avenue
                  Phoenix, Arizona  85012-2501
                  Telecopier: (602) 263-6215
                  Attention: Clif Moschnik

or,  as to each  party,  at such  other  address  or  telecopier  number  as may
hereafter  be  designated  by such party in a written  notice to the other party
complying  as to  delivery  with the terms of this  Section.  All such  notices,
requests, demands and other communications shall be deemed to have been given on
(a) the date received if personally delivered, (b) when deposited in the mail if
delivered by mail,  (c) the date sent if sent by overnight  courier,  or (d) the
date of transmission  if delivered by telecopy,  except that notices or requests
to the  Lender  pursuant  to any of the  provisions  of  Article II shall not be
effective until received by the Lender.

                  (b) A copy of each notice to Borrower shall also be sent to:

                  Mr. Ken Warren
                  5920 Cromdale #1
                  Dublin, Ohio  43017
                  Telecopier:  (614) 766-1974

                  The copies of notices  sent in  accordance  with this  Section
9.3(b) are  informational  and are not  required in order for the notices  given
pursuant to Section 9.3(a) above to be effective.

                  SECTION 9.4 FURTHER DOCUMENTS.  The Borrower will from time to
time  execute  and  deliver  or  endorse  any  and all  instruments,  documents,
conveyances,  assignments,  security agreements,  financing statements and other
agreements  and  writings  that the  Lender may  reasonably  request in order to
secure, protect, perfect or enforce the Security Interest or the Lender's rights
under the Loan Documents (but any failure to request or assure that the Borrower
executes,  delivers  or  endorses  any such item  shall not affect or impair the
validity,  sufficiency or  enforceability of the Loan Documents and the Security
Interest, regardless of whether any such item was or was not executed, delivered
or endorsed in a similar context or on a prior occasion).

                  SECTION 9.5 COLLATERAL.  This Agreement does not contemplate a
sale of accounts, contract rights or chattel paper, and, as provided by law, the
Borrower is entitled to any 

                                       44
<PAGE>
surplus and shall remain  liable for any  deficiency.  The Lender's duty of care
with respect to Collateral in its possession (as imposed by law) shall be deemed
fulfilled if it exercises reasonable care in physically keeping such Collateral,
or in the case of  Collateral  in the custody or possession of a bailee or other
third person,  exercises reasonable care in the selection of the bailee or other
third person,  and the Lender need not otherwise  preserve,  protect,  insure or
care for any  Collateral.  The Lender  shall not be  obligated  to preserve  any
rights the Borrower may have against prior parties, to realize on the Collateral
at all or in any particular manner or order or to apply any cash proceeds of the
Collateral in any particular order of application.

                  SECTION 9.6 COSTS AND EXPENSES.  The Borrower agrees to pay on
demand all costs and expenses,  including (without limitation)  attorneys' fees,
incurred by the Lender in connection with the Obligations,  this Agreement,  the
Loan  Documents,  any Letters of Credit,  and any other  document  or  agreement
related hereto or thereto, and the transactions  contemplated hereby,  including
without limitation all such costs, expenses and fees incurred in connection with
the negotiation, preparation, execution, amendment, administration, performance,
collection  and  enforcement  of the  Obligations  and all  such  documents  and
agreements and the creation, perfection, protection,  satisfaction,  foreclosure
or enforcement of the Security Interest.

                  SECTION 9.7 INDEMNITY.  In addition to the payment of expenses
pursuant to Section 9.7, Royal Grip and Roxxi,  jointly and severally,  agree to
indemnify,  defend and hold  harmless the Lender,  and any of its  participants,
parent corporations, subsidiary corporations, affiliated corporations, successor
corporations,  and  all  present  and  future  officers,  directors,  employees,
attorneys and agents of the foregoing (the  "Indemnitees")  from and against any
of the following (collectively, "Indemnified Liabilities"):

                           (i) any and all transfer  taxes,  documentary  taxes,
assessments  or  charges  made by any  governmental  authority  by reason of the
execution and delivery of the Loan Documents or the making of the Advances;

                           (ii)  any  claims,   loss  or  damage  to  which  any
Indemnitee  may be  subjected  if any  representation  or warranty  contained in
Section  5.12  proves  to be  incorrect  in any  respect  or as a result  of any
violation of the covenant contained in Section 6.4(b); and

                           (iii) any and all other liabilities, losses, damages,
penalties,  judgments,  suits,  claims, costs and expenses of any kind or nature
whatsoever (including, without limitation, the reasonable fees and disbursements
of  counsel)  in  connection  with the  foregoing  and any other  investigative,
administrative or judicial proceedings,  whether or not such Indemnitee shall be
designated  a party  thereto,  which may be imposed on,  incurred by or asserted
against any such  Indemnitee,  in any manner  related to or arising out of or in
connection  with the making of the Advances and the Loan Documents or the use or
intended use of the proceeds of the Advances.

If any investigative,  judicial or administrative proceeding arising from any of
the foregoing is brought against any Indemnitee, upon such Indemnitee's request,
the  Borrower,  or counsel  designated by the Borrower and  satisfactory  to the
Indemnitee, will resist and defend such action, suit or proceeding to the extent
and in the manner directed by the  Indemnitee,  at the Borrower's sole costs and
expense.  Each  Indemnitee will use its best efforts to cooperate in the defense
of 

                                       45
<PAGE>
any such action, suit or proceeding.  If the foregoing undertaking to indemnify,
defend and hold harmless may be held to be unenforceable because it violates any
law  or  public  policy,  the  Borrower  shall  nevertheless  make  the  maximum
contribution  to the  payment  and  satisfaction  of  each  of  the  Indemnified
Liabilities  which is permissible under applicable law. The obligations of Royal
Grip and Roxxi under this  Section 9.8 shall  survive  the  termination  of this
Agreement and the discharge of the Borrower's other obligations hereunder.

                  SECTION 9.8 PARTICIPANTS.  The Lender and its participants, if
any,  are not  partners or joint  venturers,  and the Lender  shall not have any
liability or  responsibility  for any obligation,  act or omission of any of its
participants.  All rights and powers specifically  conferred upon the Lender may
be transferred or delegated to any of the Lender's  participants,  successors or
assigns.

                  SECTION 9.9  EXECUTION IN  COUNTERPARTS.  This  Agreement  and
other Loan  Documents  may be  executed in any number of  counterparts,  each of
which when so executed and  delivered  shall be deemed to be an original and all
of which  counterparts,  taken together,  shall  constitute but one and the same
instrument.

                  SECTION 9.10 BINDING EFFECT;  ASSIGNMENT;  COMPLETE AGREEMENT;
EXCHANGING  INFORMATION.  The Loan Documents  shall be binding upon and inure to
the benefit of the Borrower and the Lender and their  respective  successors and
assigns,  except that the Borrower shall not have the right to assign its rights
thereunder or any interest  therein without the Lender's prior written  consent.
This  Agreement,  together with the Loan  Documents,  comprises the complete and
integrated  agreement of the parties on the subject matter hereof and supersedes
all prior  agreements,  written or oral, on the subject matter  hereof.  Without
limiting the Lender's right to share information  regarding the Borrower and its
Affiliates  with the  Lender's  participants,  accountants,  lawyers  and  other
advisors,  the  Lender,  Norwest  Corporation,   and  all  direct  and  indirect
subsidiaries of Norwest  Corporation,  may exchange any and all information they
may have in their possession regarding the Borrower and its Affiliates,  and the
Borrower  waives any right of  confidentiality  it may have with respect to such
exchange of such information.

                  SECTION 9.11 SEVERABILITY OF PROVISIONS. Any provision of this
Agreement  which is  prohibited or  unenforceable  shall be  ineffective  to the
extent  of  such  prohibition  or  unenforceability   without  invalidating  the
remaining provisions hereof.

                  SECTION 9.12  HEADINGS.  Article and Section  headings in this
Agreement are included  herein for  convenience  of reference only and shall not
constitute a part of this Agreement for any other purpose.

                  SECTION 9.13 GOVERNING  LAW;  JURISDICTION,  VENUE;  WAIVER OF
JURY TRIAL.  The Loan Documents shall be governed by and construed in accordance
with the  substantive  laws (other than conflict  laws) of the State of Arizona.
This  Agreement  shall be  governed  by and  construed  in  accordance  with the
substantive laws (other than conflict laws) of the State of Arizona. The parties
hereto hereby (i) consents to the personal jurisdiction of the state and federal
courts  located in the State of Arizona,  County of Maricopa in connection  with
any controversy  related to this Agreement;  (ii) waives any argument that venue
in any such forum is not convenient,  (iii) agrees that any litigation initiated
by the Lender or the  Borrower in  

                                       46
<PAGE>
connection  with this Agreement or the other Loan  Documents  shall be venued in
either the Superior  Court of Maricopa  County,  Arizona,  or the United  States
District  Court,  District of Arizona;  and (iv) agrees that a final judgment in
any such suit,  action or proceeding  shall be conclusive and may be enforced in
other  jurisdictions  by suit on the judgment or in any other manner provided by
law.  THE PARTIES  WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR  PROCEEDING
BASED ON OR PERTAINING TO THIS AGREEMENT.

                  SECTION 9.14 RELEASE.  Royal Grip and Roxxi hereby  absolutely
and unconditionally  releases and forever discharges the Lender, and any and all
participants,   parent   corporations,   subsidiary   corporations,   affiliated
corporations,  insurers,  indemnitors,  successors and assigns thereof, together
with all of the present and former directors,  officers, agents and employees of
any of the  foregoing,  from any and all claims,  demands or causes of action of
any  kind,  nature  or  description,  whether  arising  in law or equity or upon
contract  or tort or under any state or federal  law or  otherwise,  which Royal
Grip and Roxxi  have had,  now has or has made  claim to have  against  any such
person for or by reason of any act, omission,  matter, cause or thing whatsoever
arising from the beginning of time to and including the date of this  Agreement,
whether  such  claims,  demands and causes of action are matured or unmatured or
known or unknown.

                  SECTION 9.15 EFFECT OF AGREEMENT.  This Agreement shall become
effective only upon the  satisfaction of all of the conditions  contained within
Section 4.1 hereof. At such time as this Agreement becomes  effective,  it shall
in all respects supersede the Original Credit Agreement, and all Advances (past,
present and future) made by Lender to Borrower shall in all respects be governed
by this Agreement. Until such time as all of the conditions contained in Section
4.1 have been fully  satisfied,  this Agreement shall be of no force and effect,
and all Advances (past,  present and future) made by Lender to Borrower shall in
all respects be governed by the Original Credit Agreement.

                  SECTION 9.16 PRIORITY OF LIENS.  Nothing herein is intended to
change the priority of any lien or security  interest Lender has in any property
of the Borrower.  All such liens and security interests remain in full force and
effect, unmodified, and in all respects are ratified, confirmed and approved.

                                       47
<PAGE>
                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Agreement to be executed by their respective  officers thereunto duly authorized
as of the date first above written.

                                      ROYAL GRIP, INC., a Nevada corporation



                                      By __________________________________

                                         Its ______________________________


                                      ROXXI, INC., a Nevada corporation



                                      By __________________________________

                                         Its ______________________________



                                      NORWEST BUSINESS CREDIT, INC., a
                                        Minnesota corporation



                                      By __________________________________

                                         Its ______________________________

                                       48
<PAGE>
                         Table of Exhibits and Schedules

          Exhibit A              Form of Revolving Note

          Exhibit B              Form of Term Notes

          Exhibit C              Compliance Certificate

          Exhibit D              Premises

                               -------------------

          Schedule 5.1           Trade Names, Chief Executive Office, Principal
                                 Place of Business, and Locations of Collateral

          Schedule 5.4           Subsidiaries

          Schedule 7.1           Permitted Liens

          Schedule 7.2           Permitted Indebtedness and Guaranties

                                       49
<PAGE>
                                      Exhibit A to Credit and Security Agreement

                                 REVOLVING NOTE

$1,500,000.00                                                   Phoenix, Arizona

                                                              ____________, 1998

                  For value  received,  the  undersigned,  ROYAL GRIP,  INC.,  a
Nevada corporation, and ROXXI, INC., a Nevada corporation (collectively, jointly
and severally,  "Borrower"),  hereby jointly and severally promise to pay on the
Termination  Date under the Credit Agreement  (defined  below),  to the order of
NORWEST BUSINESS CREDIT,  INC., a Minnesota  corporation (the "Lender"),  at its
main office in Phoenix, Arizona, or at any other place designated at any time by
the  holder  hereof,  in lawful  money of the United  States of  America  and in
immediately  available  funds,  the  principal  sum of One Million  Five Hundred
Thousand and No/100 Dollars  ($1,500,000.00)  or, if less, the aggregate  unpaid
principal  amount of all  Revolving  Advances made by the Lender to the Borrower
under the  Credit  Agreement  (defined  below)  together  with  interest  on the
principal amount hereunder  remaining unpaid from time to time,  computed on the
basis of the actual  number of days  elapsed and a 360-day  year,  from the date
hereof  until  this  Note is fully  paid at the rate from time to time in effect
under the  Amended  and  Restated  Credit and  Security  Agreement  of even date
herewith (as the same may  hereafter be amended,  supplemented  or restated from
time to  time,  the  "Credit  Agreement")  by and  between  the  Lender  and the
Borrower.  The principal  hereof and interest  accruing thereon shall be due and
payable as provided in the Credit  Agreement.  This Note may be prepaid  only in
accordance with the Credit Agreement.

                  This Note is issued  pursuant,  and is subject,  to the Credit
Agreement,  which provides,  among other things, for acceleration  hereof.  This
Note is the  Revolving  Note referred to in the Credit  Agreement.  This Note is
secured,  among other things,  pursuant to the Credit Agreement and the Security
Documents as therein defined, and may now or hereafter be secured by one or more
other  security  agreements,  mortgages,  deeds of trust,  assignments  or other
instruments or agreements.

                  Both entities  constituting  the Borrower  hereby  jointly and
severally  agree to pay all costs of collection,  including  attorneys' fees and
legal expenses in the event this Note is not paid when due, whether or not legal
proceedings are commenced.

                  This Note,  upon its execution,  is a partial  replacement of,
partially  issued in substitution  and not in satisfaction of a promissory note,
and a portion of the indebtedness  hereunder is the same indebtedness  evidenced
by that certain  Revolving and Term Note in the amount of $2,450,000.00  made by
Borrower to the Lender and dated February 10, 1997. The  indebtedness  evidenced
by said Revolving and Term Note is not extinguished hereby.

Revolving Note                     Exhibit A
                                        1
<PAGE>
                  Presentment  or other demand for  payment,  notice of dishonor
and protest are expressly waived.

                                      ROYAL GRIP, INC., a Nevada corporation



                                      By __________________________________

                                         Its ______________________________


                                      ROXXI, INC., a Nevada corporation



                                      By __________________________________

                                         Its ______________________________





Revolving Note                     Exhibit A
                                        2
<PAGE>
                                    Exhibit B-1 to Credit and Security Agreement

                                    TERM NOTE

$496,000.00                                                     Phoenix, Arizona

                                                              ____________, ____

                  For value  received,  the  undersigned,  ROYAL GRIP,  INC.,  a
Nevada corporation, and ROXXI, INC., a Nevada corporation (collectively, jointly
and severally,  "Borrower"),  hereby jointly and severally promise to pay on the
Termination  Date under the Credit Agreement  (defined  below),  to the order of
NORWEST BUSINESS CREDIT,  INC., a Minnesota  corporation (the "Lender"),  at its
main office in Phoenix, Arizona, or at any other place designated at any time by
the  holder  hereof,  in lawful  money of the United  States of  America  and in
immediately  available  funds,  the  principal  sum of Four  Hundred  Ninety-Six
Thousand and No/100  Dollars  ($496,000.00)  or, if less,  the aggregate  unpaid
principal  amount of all Term Advances made by the Lender to the Borrower  under
the Credit  Agreement  (defined  below)  together with interest on the principal
amount hereunder  remaining  unpaid from time to time,  computed on the basis of
the actual number of days elapsed and a 360-day year, from the date hereof until
this  Note is fully  paid at the rate  from  time to time in  effect  under  the
Amended and Restated Credit and Security Agreement of even date herewith (as the
same may hereafter be amended,  supplemented  or restated from time to time, the
"Credit  Agreement")  by and between the Lender and the Borrower.  The principal
hereof and interest accruing thereon shall be due and payable as provided in the
Credit  Agreement.  This Note may be prepaid only in accordance  with the Credit
Agreement.

                  This Note is issued  pursuant,  and is subject,  to the Credit
Agreement,  which provides,  among other things, for acceleration  hereof.  This
Note is one of the Term Notes referred to in the Credit Agreement.  This Note is
secured,  among other things,  pursuant to the Credit Agreement and the Security
Documents as therein defined, and may now or hereafter be secured by one or more
other  security  agreements,  mortgages,  deeds of trust,  assignments  or other
instruments or agreements.

                  Both entities  constituting  the Borrower  hereby  jointly and
severally  agree to pay all costs of collection,  including  attorneys' fees and
legal expenses in the event this Note is not paid when due, whether or not legal
proceedings are commenced.

                  This Note,  upon its execution,  is a partial  replacement of,
partially  issued in substitution  and not in satisfaction of a promissory note,
and a portion of the indebtedness  hereunder is the same indebtedness  evidenced
by that certain  Revolving and Term Note in the amount of $2,450,000.00  made by
Borrower to the Lender and dated February 10, 1997. The  indebtedness  evidenced
by said Revolving and Term Note is not extinguished hereby.

Term Note                          Exhibit B-1
                                        1
<PAGE>
                  Presentment  or other demand for  payment,  notice of dishonor
and protest are expressly waived.

                                   ROYAL GRIP, INC., a Nevada corporation



                                   By __________________________________

                                      Its ______________________________


                                   ROXXI, INC., a Nevada corporation



                                   By __________________________________

                                      Its ______________________________




Term Note                          Exhibit B-1
                                        2
<PAGE>
                                    Exhibit B-2 to Credit and Security Agreement

                                    TERM NOTE

$840,000.00                                                     Phoenix, Arizona

                                                              ____________, 1998

                  For value  received,  the  undersigned,  ROYAL GRIP,  INC.,  a
Nevada corporation, and ROXXI, INC., a Nevada corporation (collectively, jointly
and severally,  "Borrower"),  hereby jointly and severally promise to pay on the
Termination  Date under the Credit Agreement  (defined  below),  to the order of
NORWEST BUSINESS CREDIT,  INC., a Minnesota  corporation (the "Lender"),  at its
main office in Phoenix, Arizona, or at any other place designated at any time by
the  holder  hereof,  in lawful  money of the United  States of  America  and in
immediately  available  funds, the principal sum of EIGHT HUNDRED FORTY THOUSAND
and NO/100 Dollars  ($840,000.00)  or, if less, the aggregate  unpaid  principal
amount of all Term Advances made by the Lender to the Borrower  under the Credit
Agreement  (defined  below)  together  with  interest  on the  principal  amount
hereunder  remaining  unpaid  from  time to time,  computed  on the basis of the
actual  number of days  elapsed and a 360-day  year,  from the date hereof until
this  Note is fully  paid at the rate  from  time to time in  effect  under  the
Amended and Restated Credit and Security Agreement of even date herewith (as the
same may hereafter be amended,  supplemented  or restated from time to time, the
"Credit  Agreement")  by and between the Lender and the Borrower.  The principal
hereof and interest accruing thereon shall be due and payable as provided in the
Credit  Agreement.  This Note may be prepaid only in accordance  with the Credit
Agreement.

                  This Note is issued  pursuant,  and is subject,  to the Credit
Agreement,  which provides,  among other things, for acceleration  hereof.  This
Note is the Term Note referred to in the Credit Agreement. This Note is secured,
among other things,  pursuant to the Credit Agreement and the Security Documents
as therein  defined,  and may now or  hereafter  be secured by one or more other
security agreements, mortgages, deeds of trust, assignments or other instruments
or agreements.

                  Both entities  constituting  the Borrower  hereby  jointly and
severally  agree to pay all costs of collection,  including  attorneys' fees and
legal expenses in the event this Note is not paid when due, whether or not legal
proceedings are commenced.

Term Note                          Exhibit B-2
                                        1
<PAGE>
                  Presentment  or other demand for  payment,  notice of dishonor
and protest are expressly waived.

                                    ROYAL GRIP, INC., a Nevada corporation



                                    By __________________________________

                                       Its ______________________________


                                    ROXXI, INC., a Nevada corporation



                                    By __________________________________

                                       Its ______________________________


Term Note                          Exhibit B-2
                                        2
<PAGE>
                                      Exhibit C to Credit and Security Agreement

                             COMPLIANCE CERTIFICATE


To:               _____________________________
                  Norwest Business Credit, Inc.

Date:             _____________________________

Subject:          _____________________________
                  Financial Statements


                  In accordance with our Credit and Security  Agreement dated as
of ____________________ (the "Credit Agreement"),  attached are the consolidated
financial  statements of Royal Grip, Inc. and Roxxi,  Inc. (the  "Borrower") and
the  Covenant  Entities  and the  year-to-date  period then ended (the  "Current
Financials").  All  terms in this  certificate  have the  meanings  given in the
Credit Agreement.

                  I certify that the Current  Financials  have been  prepared in
accordance with GAAP, subject to year-end audit adjustments,  and fairly present
the financial condition of the Borrower as of the date thereof.

                  EVENTS OF DEFAULT.  (Check one):

                           ___ The  undersigned  does not have  knowledge of the
                  occurrence  of a Default or Event of Default  under the Credit
                  Agreement.

                           ___ The  undersigned  has knowledge of the occurrence
                  of a Default  or Event of Default  under the Credit  Agreement
                  and  attached  hereto is a statement of the facts with respect
                  to thereto.

                  FINANCIAL COVENANTS.  I further hereby certify as follows:

                           ___ The Reporting Date does not correspond to the end
                  of the Borrower's fiscal quarters,  hence I am completing only
                  paragraphs ___ below.

                           ___ The Reporting Date  corresponds to the end of one
                  of the Borrower's  fiscal quarters,  hence I am completing all
                  paragraphs below.

                           1. MINIMUM DEBT SERVICE  COVERAGE RATIO.  Pursuant to
                  Section  6.12 of the  Credit  Agreement,  for  the  applicable
                  period ending on the Reporting  Date,  the  Borrower's and the
                  Covenant  Entities'  consolidated  Debt Service Coverage Ratio
                  was ___ to 1.00,  which ____  satisfies  ____ does not satisfy
                  the requirement that such ratio be no less than ____ to 1.00.

Compliance Certificate             Exhibit C
                                        1
<PAGE>
                           2. MINIMUM NET WORTH. Pursuant to Section 6.13 of the
                  Credit Agreement, as of the Reporting Date, the Borrower's and
                  Covenant   Entities'   consolidated   Book   Net   Worth   was
                  $_______________,  which ____  satisfies ____ does not satisfy
                  the   requirement   that  such   amounts   be  not  less  than
                  $_______________ on the Reporting Date.

                           3.  MINIMUM NET INCOME.  Pursuant to Section  6.14 of
                  the Credit Agreement, as of the Reporting Date, the Borrower's
                  and Covenant Entities' aggregate Net Income for the applicable
                  period  was  $___________,  which ___  satisfies  ___ does not
                  satisfy  the  requirement  that such  amounts be not less than
                  $______ on the Reporting Date.

                           4. STOP LOSS.  Pursuant to Section 6.15 of the Credit
                  Agreement, as of the Reporting Date, the Borrower and Covenant
                  Entities achieved an aggregate Net Loss of $__________,  which
                  _____ satisfies  _____ does not satisfy the  requirement  that
                  such  amount be not more  than  $__________  on the  Reporting
                  Date.

                           5. CAPITAL EXPENDITURES.  Pursuant to Section 7.10 of
                  the Credit  Agreement,  for the year-to-date  period ending on
                  the Reporting Date, the Borrower has expended or contracted to
                  expend  during the fiscal year ending  December 31, 199_,  for
                  Capital   Expenditures,   $__________  in  the  aggregate  and
                  $_________  for  Capital  Expenditures  paid for with  working
                  capital  which  ____  satisfies  ____  does  not  satisfy  the
                  requirement that such expenditures not exceed $2,000,000.00 in
                  the aggregate and  $800,000.00 for Capital  Expenditures  paid
                  for with working capital during the fiscal year ended December
                  31, 199_, and each fiscal year thereafter.

                           6. SALARIES.  As of the Reporting  Date, the Borrower
                  ____ is ____ is not in  compliance  with  Section  7.17 of the
                  Credit Agreement concerning salary increases.

                  OFFICERS                  PERCENTAGE INCREASE

                  ________________________  ___________________________
                  ________________________  ___________________________
                  ________________________  ___________________________

                  (To  be  completed  within  30  days  of  any  officer  salary
                  increase)

                           7. PAYMENTS TO  AFFILIATES.  Pursuant to Section 7.19
                  of the Credit Agreement, for the year-to-date period ending on
                  the Reporting Date, Royal Grip and Roxxi have in the aggregate
                  made transfers,  conveyances, loans and payments to Affiliates
                  in the amount of $_________ which ____ satisfies ____ does not

Compliance Certificate             Exhibit C
                                       2
<PAGE>
                  satisfy   the   requirement   that  such   amount  not  exceed
                  $1,500,000.00 in the aggregate during any fiscal year.

                  Attached hereto are all relevant facts in reasonable detail to
evidence,  and the  computations of the financial  covenants  referred to above.
These computations were made in accordance with GAAP.

                                    ROYAL GRIP, INC., a Nevada corporation



                                    By __________________________________

                                       Its ______________________________


                                    ROXXI, INC., a Nevada corporation



                                    By __________________________________

                                       Its ______________________________


Compliance Certificate             Exhibit C
                                        3
<PAGE>
                                      Exhibit D to Credit and Security Agreement

                                    PREMISES

                  The Premises referred to in the Credit and Security  Agreement
are legally described as follows:

Lot 1 and that  part of Lot 3,  REYWEST  SCOTTSDALE  AIRPARK  CORPORATE  CENTER,
according to Book 307 of Maps, page 3, records of Maricopa County, Arizona;

         BEGINNING at the most Southerly corner of Lot 3;
         thence   North 57(degree)48'05" East 15.95 feet along the Southeasterly
                  line of Lot 3 to the most Westerly corner of Lot 2;
         thence   North 32(degree)11'55" West parallel to the Southwesterly line
                  of Lot 3 205 feet  more or less to the  Northwesterly  line of
                  Lot 3;
         thence   South  43(degree)55'22"  West along the Northwesterly  line of
                  Lot 3 16 feet more or less to the most Westerly  corner of Lot
                  3;
         thence   South    32(degree)11'55"   East   201.34   feet   along   the
                  Southwesterly line of Lot 3 to the POINT OF BEGINNING.
<PAGE>
                                             Schedule 5.1 to Credit and Security
                                             Agreement

             Trade Names, Chief Executive Office, Principal Place of
                      Business, and Locations of Collateral

                                   TRADE NAMES

                                      None



               CHIEF EXECUTIVE OFFICE/PRINCIPAL PLACE OF BUSINESS

                     Royal Grip: 15170 North Hayden Road #1
                                 Scottsdale, Arizona  85260

                     Roxxi:      2621 SE 15th Street
                                 Oklahoma City, Oklahoma  73129



                     OTHER INVENTORY AND EQUIPMENT LOCATIONS


                              744 Belleville Avenue
                      New Bedford, Massachusetts 02742-6912


                                535 Migeon Avenue
                          Torrington, Connecticut 06790
<PAGE>
                                             Schedule 5.4 to Credit and Security
                                             Agreement

                                  SUBSIDIARIES



                       Roxxi is a subsidiary of Royal Grip
<PAGE>
                                             Schedule 7.1 to Credit and Security
                                             Agreement

                                 PERMITTED LIENS




Creditor        Collateral       Jurisdiction       Filing Date       Filing No.
--------        ----------       ------------       -----------       ----------


                                      NONE
<PAGE>
                                             Schedule 7.2 to Credit and Security
                                             Agreement

                      PERMITTED INDEBTEDNESS AND GUARANTIES

                                  INDEBTEDNESS

Creditor         Principal         Maturity          Monthly          Collateral
--------         ---------         --------          -------          ----------
                  Amount             Date            Payment
                  ------             ----            -------

                                                                         None


                    $6,300,000.00 Owed by Roxxi to Royal Grip



                                   GUARANTIES



Primary Obligor        Amount and Description of         Beneficiary of Guaranty
---------------        -------------------------         -----------------------
                         Obligation Guaranteed
                         ---------------------


                                 None