Document:

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                                                                   EXHIBIT 10.18

                 WAIVER AND SECOND AMENDMENT TO CREDIT AGREEMENT

THIS WAIVER AND SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment") dated
effective as of September 7, 2000 (the "Effective Date") is by and between
COLLEGIATE PACIFIC, INC. ("Borrower"), and THE CHASE MANHATTAN BANK successor by
merger to Chase Bank of Texas, National Association, a New York state banking
corporation ("Bank").

PRELIMINARY STATEMENT. Bank and Borrower entered into a Credit Agreement dated
effective as of June 30, 1999 as amended by a Waiver and First Amendment to
Credit Agreement dated effective as of January 20, 2000 ("Credit Agreement").
"Agreement", as used in the Credit Agreement, shall also refer to the Credit
Agreement as amended by this Amendment. All capitalized terms defined in the
Credit Agreement and not otherwise defined herein shall have the same meanings
herein as in the Credit Agreement. Borrower has requested consent for
Indebtedness in the amount of $581,000.00 to be permitted under the terms of the
Credit Agreement. Additionally, Borrower has requested that Bank waive a
financial covenant violation that has occurred under the Credit Agreement. Bank
has agreed with Borrower to amend the Credit Agreement to the extent set forth
herein, among other things, to permit Indebtedness in the total amount of
$581,000.00 under the Agreement (such Indebtedness shall be evidenced by two
separate notes), to waive the Tangible Net Worth financial covenant violation
and to modify the Tangible Net Worth financial covenant require by Section 5.3
(as described on Exhibit C of the Agreement), provided that, the Indebtedness in
the total amount of $581,000.00 is defined as Subordinated Debt under the
Agreement and such Indebtedness is subordinated to Bank Indebtedness in Proper
Form.

NOW THEREFORE, in consideration of the premises as well as other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Bank and Borrower agree as follows:

1. WAIVER AGREEMENT. Pursuant to Section 5.3 of the Agreement and as set forth
on Exhibit C, Borrower agreed to maintain a Tangible Net Worth financial
covenant of at least $4,000,000.00 plus 50% of Borrower's Positive Net Income.
Borrower has informed Bank that Borrower is out of compliance with this covenant
for the periods ended July 31, 2000 and August 31, 2000. Although Borrower is in
default under the Credit Agreement because of the failure to comply with the
above-referenced covenant as required, Bank is electing to waive this specific
default but only for the time periods ended July 31, 2000 and August 31, 2000.
This waiver does not constitute a waiver of any other defaults that may
currently exist or that may hereafter occur, including but not limited to the
above-cited Section of the Agreement. Bank's delay in exercising any of its
rights under the Credit Agreement does not constitute a waiver of any rights or
interests of Bank except as specifically agreed to in writing by Bank. This
Waiver Agreement is not a general waiver of the above-referenced covenant or any
other requirements contained in the Agreement or any other Loan Document. In the
past, Bank may have made advances under the Commitment at times when Borrower
did not satisfy all of the conditions precedent to advances and/or because
Borrower was in default under the Credit Agreement. Bank has the right to refuse
to fund an advance at any time that Borrower is not in compliance with the terms
of the Agreement. If Bank elects to make any advance to Borrower while Borrower
is out of compliance with the Agreement, the making of such advances shall not
constitute a waiver of any defaults then existing or thereafter arising under
the Agreement, and will not constitute the agreement of Bank to make further
advances in similar circumstances. This Waiver Agreement constitutes the only
evidence of Bank's waiver of compliance with the above cited Section of the
Credit Agreement.

<PAGE>   2

2. Pursuant to Section 5.8 of the Credit Agreement, Borrower agreed not to form,
create or acquire any Subsidiary without giving prior notice to Bank and
complying with all terms of the Agreement. Borrower has advised Bank that it
intends to acquire Kesmil Manufacturing, Inc. and has requested that Bank permit
such acquisition under the terms of the Credit Agreement. Bank agrees to permit
Borrower's acquisition of Kesmil Manufacturing, Inc. under the terms of the
Credit Agreement, provided that, Borrower subordinate its indebtedness for the
Kesmil Manufacturing, Inc. acquisition to Bank Indebtedness and Borrower is in
compliance with all covenants of the Credit Agreement, including Section 4.9, as
appropriate.

3. The Tangible Net Worth financial covenant required by Section 5.3 of the
Agreement and as described on Exhibit C of the Credit Agreement is modified by
decreasing the minimum amount from $4,000,000.00 plus 50% of Borrower's positive
Net Income to $3,750,000.00 plus 50% of Borrower's positive Net Income plus 100%
of new equity raised by Borrower. The required amount for the Tangible Net Worth
financial covenant is calculated as set forth on the Exhibit C attached to this
Amendment. The prior Exhibit C of the Agreement is replaced with the Exhibit C
attached hereto and hereby incorporated into this Amendment and the Credit
Agreement for all purposes.

4. Borrower has requested that Indebtedness in the total amount of $581,000.00
evidenced by that certain subordinated promissory note executed by Borrower made
payable to Michael Blumenfeld in the amount of $536,000.00 ("$536,000
Subordinated Note") and evidenced by that certain subordinated promissory note
executed by Borrower made payable to Abe Blumenfeld in the amount of $45,000.00
("$45,000 Subordinated Note") be permitted under the terms of the Agreement (the
$536,000 Subordinated Note and the $45,000 Subordinated Note collectively
referred to herein and in the Agreement as the "Subordinated Notes"). Bank
consents to such Indebtedness being permitted under the Agreement so long as the
following conditions precedent are met:

         (a)      the Indebtedness in the total amount of $581,000.00 evidenced
                  by the Subordinated Notes is defined as and included within
                  the definition of Subordinated Debt;

         (b)      the Subordinated Notes are in Proper Form; and

         (c)      Borrower delivers to Bank all necessary and required
                  subordination agreements executed by the appropriate parties
                  in Proper Form.

Bank agrees that the Indebtedness evidenced by the Subordinated Notes is
excluded from consideration as additional Indebtedness for Borrower and its
Subsidiaries pursuant to Section 5.1 of the Agreement. Section 5.1 of the
Agreement (as reflected on Exhibit C) limits additional indebtedness for
Borrower and its Subsidiaries to no more than $100,000.00 in the aggregate
during the term of the Agreement. In order to reflect that the Indebtedness
evidenced by the Subordinated Note is excluded from consideration as additional
Indebtedness for Borrower and its Subsidiaries pursuant to Section 5.1 of the
Agreement, Section 5.1 of the Agreement is hereby amended to read as follows:

"INDEBTEDNESS 5.1" Create, incur, or permit to exist, or assume or guarantee,
directly or indirectly, or become or remain liable with respect to, any
Indebtedness, contingent or otherwise unless there is a permitted amount set
forth in Exhibit C, except: (a) Indebtedness to Bank, or secured by Liens
permitted by this Agreement, or otherwise approved in writing by Bank, and
renewals and extensions (but not increases) thereof; (b) current accounts
payable and unsecured current liabilities, not the result of borrowing, to
vendors, suppliers and Persons providing services, for expenditures for goods
and services normally required by it in the ordinary course of business and on
ordinary trade terms; and (c) Indebtedness evidenced by each of the following:
(i) that certain subordinated convertible promissory note dated February 29,
2000 in the amount of $26,000.00 executed by Borrower and payable to the order

<PAGE>   3

of Arthur J. Coerver; (ii) that certain subordinated convertible promissory note
dated February 29, 2000 in the amount of $20,000.00 executed by Borrower and
payable to the order of Arthur J. Coerver, IRA, by Southwest Securities, Inc.,
Custodian; (iii) that certain subordinated convertible promissory note dated
February 29, 2000 in the amount of $4,000.00 executed by Borrower and payable to
the order of Colleen C. Coerver, IRA, by Southwest Securities, Inc., Custodian;
(iv) that certain subordinated convertible promissory note dated February 29,
2000 in the amount of $100,000.00 executed by Borrower and payable to the order
of William Davidowitz; (v) that certain subordinated convertible promissory note
dated February 29, 2000 in the amount of $50,000.00 executed by Borrower and
payable to the order of Davidowitz Foundation (Federal ID# 13-6102755); (vi)
that certain subordinated convertible promissory note dated February 29, 2000 in
the amount of $50,000.00 executed by Borrower and payable to the order of JIBS
Equities, L.P. (Federal ID# 23-2227307); (vii) that certain subordinated
convertible promissory note dated February 29, 2000 in the amount of $50,000.00
executed by Borrower and payable to the order of Penn Footwear Retirement Trust
(Federal ID# 11-6424117); (viii) that certain subordinated convertible
promissory note dated February 29, 2000 in the amount of $50,000.00 executed by
Borrower and payable to the order of Robert W. Philip or Sharon A. Philip, Joint
Tenants with Right of Survivorship; (ix) that certain subordinated convertible
promissory note dated February 29, 2000 in the amount of $100,000.00 executed by
Borrower and payable to the order of Myrna G. Kulp; (x) that certain
subordinated convertible promissory note dated February 29, 2000 in the amount
of $l,500,000.00 executed by Borrower and payable to the order of Michael J.
Blumenfeld; (xi) that certain subordinated convertible promissory note dated
February 29, 2000 in the amount of $10,000.00 executed by Borrower and payable
to the order of Harvey J. Rothenberg, IRA, by Southwest Securities, Inc.,
Custodian; (xii) that certain subordinated convertible promissory note dated
February 29, 2000 in the amount of $5,000.00 executed by Borrower and payable to
the order of Harvey Rothenberg and Elisabeth Rothenberg; (xiii) that certain
subordinated convertible promissory note dated February 29, 2000 in the amount
of $50,000.00 executed by Borrower and payable to the order of H. I. Schendle
IRA Rollover; (xiv) that certain subordinated convertible promissory note dated
February 29, 2000 in the amount of $l00,000.00 executed by Borrower and payable
to the order of Watkins Brothers Trust 62-6228117; (xv) that certain
subordinated convertible promissory note dated February 29, 2000 in the amount
of $120,000.00 executed by Borrower and payable to the order of The Eric C.
Green GST Trust; (each of the aforementioned subordinated convertible promissory
notes collectively referred to as "Subordinated Convertible Notes"); (xvi) that
certain subordinated promissory note dated September 6, 2000 in the amount of
$536,000.00 executed by Borrower and payable to the order of Michael Blumenfeld
(the "$536,000 Subordinated Note"); and (xvii) that certain subordinated
promissory note dated September 6, 2000 in the amount of $45,000.00 executed by
Borrower and payable to the order of Abe Blumenfeld (the "$45,000 Subordinated
Note").

5. Section 6.1 of the Agreement is amended to modify Subsection (m) as follows:

"(m) Any violation of any covenant or any default occurs under any of the
Subordinated Convertible Notes or under the $536,000 Subordinated Note or under
the $45,000 Subordinated Note;"

6. Borrower hereby represents and warrants to Bank that after giving effect to
the execution and delivery of this Amendment: (a) the representations and
warranties set forth in the Credit Agreement are true and correct on the date
hereof as though made on and as of such date; and (b) no Event of Default, or
event which with passage of time, the giving of notice or both would become an
Event of Default, has occurred and is continuing as of the date hereof.

7. This Amendment shall become effective as of the Effective Date upon its
execution and delivery by each of the parties named in the signature lines
below.

8. Borrower further acknowledges that each of the other Loan Documents is in all
other respects ratified and confirmed, and all of the rights, powers and
privileges created thereby or thereunder are

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ratified, extended, carried forward and remain in full force and effect except
as the Credit Agreement is amended by this Amendment.

9. This Amendment may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed shall be
deemed an original and all of which taken together shall constitute but one and
the same agreement.

10. This Amendment shall be included within the definition of "Loan Documents"
as used in the Agreement.

11. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS AND AS APPLICABLE, THE LAWS OF THE UNITED STATES OF
AMERICA.

THIS WRITTEN AMENDMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE A "LOAN
AGREEMENT" AS DEFINED IN SECTION 26.02(a) OF THE TEXAS BUSINESS & COMMERCE CODE,
AND REPRESENTS THE FINAL AGREEMENT BETWEEN BANK AND THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF BANK AND THE PARTIES.

         THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN BANK AND THE PARTIES.

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed effective as of the Effective Date.

         BORROWER:                  COLLEGIATE PACIFIC, INC.

                                    By:     /s/ Michael J. Blumenfeld
                                       ----------------------------------------
                                    Name:   Michael J. Blumenfeld
                                         --------------------------------------
                                    Title:  CEO
                                          -------------------------------------
                                    Address:    13950 Senlac #200
                                            -----------------------------------
                                                Dallas, TX 75234
                                            -----------------------------------

         BANK:                      THE CHASE MANHATTAN BANK successor by merger
                                    to Chase Bank of Texas, National Association

                                    By:     /s/ D. Scott Harvey
                                       ----------------------------------------
                                    Name:   D. Scott Harvey
                                         --------------------------------------
                                    Title:  SVP
                                          -------------------------------------
                                    Address:    13950 Senlac #200
                                            -----------------------------------
                                                Dallas, TX 75234
                                            -----------------------------------<PAGE>   1

                                                                   EXHIBIT 10.19

                                 PROMISSORY NOTE

$536,000.00                       Dallas, Texas                September 6, 2000

         FOR VALUE RECEIVED, the undersigned, KESMIL MANUFACTURING, INC., a
Texas corporation (the "Borrower"), hereby promises to pay to the order of
MICHAEL J. BLUMENFELD ("Blumenfeld"; Blumenfeld and any subsequent holder hereof
being hereinafter referred to as "Holder"), without grace at his office at 13950
Senlac Drive, Suite 200, Dallas, Texas 75234, or such other place as Holder may
direct, in lawful money of the United States of America, with interest, the
principal amount of Five Hundred Thirty-Six Thousand and No/100 Dollars
($536,000.00).

         1. Payments. Borrower promises to pay accrued interest monthly, on or
before the last day of each month, on the principal amount owing hereunder from
time to time, computed daily, at the rate of twelve percent (12%) per annum,
calculated on the basis of actual days elapsed, with the first such interest
payment to be due and payable on September 30, 2000. The unpaid principal of
this Revolving Promissory Note (this "Promissory Note") shall be due and payable
on the last day of each calendar quarter, beginning November 30, 2000, each in
the amount of $33,500.00, and continuing through and including August 31, 2004
("Maturity"), when all unpaid principal of and accrued unpaid interest on this
Promissory Note and all other charges hereunder shall be due and payable in
full. Should any payment become due and payable on any day other than a business
day for national banks, the date of such payment shall be extended to the next
succeeding business day, and, in the case of a payment of principal or past due
interest or any installment of either thereof, interest shall accrue and be
payable thereon for the period of such extension at the applicable rate or rates
specified herein.

         2. Event of Default. In the event of a default in the payment of the
principal of or interest on this Promissory Note, as and when due and payable
after written notice by Holder to Borrower and the expiration of ten (10) days
without payment in full of the amount due; (i) then or at any time thereafter
during the continuance of any such default, the Holder may, with or without
notice to Borrower except as provided above, declare this Promissory Note to be
forthwith due and payable, both as to principal and interest, without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration, or other notice of any kind, all of which are hereby expressly
waived, and (ii) thereafter, or after Maturity, all amounts outstanding
hereunder, to the extent permitted by applicable law, shall, at the option of
Holder, bear interest at a per annum rate (the "Default Rate") equal to the
lesser of (i) eighteen percent (18%), or (ii) the Highest Lawful Rate.

         3. Attorneys' Fees and Costs. Borrower agrees to pay reasonable
attorneys' fees and costs incurred by the Holder in collecting or attempting to
collect this Promissory Note, whether by suit or otherwise.

<PAGE>   2

         4. Limitations on Interest.

                  a. It is the intention of Holder and Borrower to conform
         strictly to any applicable usury laws. Accordingly, if the transactions
         contemplated hereby would be usurious under any applicable law, then,
         in that event, notwithstanding anything to the contrary in this
         Promissory Note, it is agreed as follows: (i) the aggregate of all
         consideration which constitutes interest under applicable law that is
         contracted for, taken, reserved, charged or received by Holder under
         this Promissory Note shall under no circumstances exceed the Highest
         Lawful Rate (hereinafter defined), and any excess shall be canceled
         automatically and, if theretofore paid, shall, at the option of Holder,
         be credited by Holder on the principal amount of any indebtedness owed
         to Holder by Borrower or refunded by Holder to Borrower, and (ii) in
         the event that the maturity of this Promissory Note is accelerated or
         in the event of any required or permitted prepayment, then such
         consideration that constitutes interest under law applicable to Holder
         may never include more than the Highest Lawful Rate and excess
         interest, if any, provided for in this Promissory Note shall be
         canceled automatically as of the date of such acceleration or
         prepayment and, if theretofore paid, shall, at the option of Holder, be
         credited by Holder on the principal amount of any indebtedness owed to
         Holder by Borrower or refunded by Holder to Borrower.

                  b. Notwithstanding anything herein to the contrary, in no
         event will interest payable to Holder exceed the maximum amount
         permitted by the law applicable to Holder (after taking into account
         all charges payable to Holder which constitute interest under such
         applicable law), but if any amount referred to in this Promissory Note
         which would be payable to Holder but for the applicability of usury or
         other laws limiting the consideration payable to Holder is not paid to
         Holder as a result of the applicability of such laws, then interest on
         the outstanding principal balance of this Promissory Note payable to
         Holder shall, to the extent permitted by the law, accrue at the maximum
         rate of interest permitted by applicable law (after taking into account
         all charges payable to Holder which constitute interest under
         applicable law) until the total amount received by Holder equals the
         amount it would have received had no such laws been applicable.

                  c. "Highest Lawful Rate" means the maximum non-usurious
         interest rate (computed on the basis of a year of 365 or 366 days, as
         applicable) that at any time or from time to time may be contracted
         for, taken, reserved, charged, or received on amounts due to Holder,
         under laws applicable to Holder that are presently in effect or, to the
         extent allowed by law, under such applicable laws which allow a higher
         maximum non-usurious rate than applicable laws now allow.

         5. Applicable Law; Assigns. THIS PROMISSORY NOTE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS (EXCEPT THAT
TEX. REV. CIV. STAT. ANN. ART. 5069, CH. 15, WHICH REGULATES CERTAIN REVOLVING
CREDIT LOAN ACCOUNTS AND REVOLVING TRIPARTY ACCOUNTS, SHALL NOT APPLY TO THIS
PROMISSORY NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY), SUBJECT, HOWEVER, TO
THE EFFECT OF APPLICABLE FEDERAL LAW. UNLESS CHANGED IN ACCORDANCE WITH LAW, THE
APPLICABLE RATE UNDER TEXAS

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LAW SHALL BE THE INDICATED (WEEKLY) RATE CEILING FROM TIME TO TIME IN EFFECT AS
PROVIDED IN TEX. REV. CIV. STAT. ANN. ART. 5069-1.04, AS AMENDED. AS USED
HEREIN, THE TERMS "BORROWER" AND "HOLDER" SHALL BE DEEMED TO INCLUDE THEIR
RESPECTIVE SUCCESSORS, LEGAL REPRESENTATIVES AND ASSIGNS, WHETHER BY VOLUNTARY
ACTION OF THE PARTIES OR BY OPERATION OF LAW.

         7. Prepayment. Borrower may prepay this Promissory Note in full at any
time or in part from time to time, without premium or penalty. All payments made
under this Promissory Note shall be applied first to interest due and any
balance shall be applied in reduction of principal.

         IN WITNESS WHEREOF, Borrower has caused this Promissory Note to be duly
executed and delivered as of the date first above written.

                                        KESMIIL MANUFACTURING, INC.

                                        By: /s/ Michael J. Blumenfeld
                                           -------------------------------------
                                            Michael J. Blumenfeld, President

<PAGE>   4

                                 PROMISSORY NOTE

$45,000.00                        Dallas, Texas                September 6, 2000

         FOR VALUE RECEIVED, the undersigned, KESMIL MANUFACTURING, INC., a
Texas corporation (the "Borrower"), hereby promises to pay to the order of ABE
BLUMENFELD ("Blumenfeld"); Blumenfeld and any subsequent holder hereof being
hereinafter referred to as `Holder"), without grace at his office at 13950
Senlac, Suite 200, Dallas, Texas 75234, or such other place as Holder may
direct, in lawful money of the United States of America, with interest, the
principal amount of Forty-Five Thousand and No/100 Dollars ($45,000.00).

         1. Payments. Borrower promises to pay accrued interest monthly, on or
before the last day of each month, on the principal amount owing hereunder from
time to time, computed daily, at the rate of twelve percent (12%) per annum,
calculated on the basis of actual days elapsed, with the first such interest
payment to be due and payable on September 30, 2000. The unpaid principal of
this Revolving Promissory Note (this "Promissory Note") shall be due and payable
on the last day of each calendar quarter, beginning November 30, 2000, each in
the amount of $2,812.50, and continuing through and including August 31, 2004
("Maturity"), when all unpaid principal of and accrued unpaid interest on this
Promissory Note and all other charges hereunder shall be due and payable in
full. Should any payment become due and payable on any day other than a business
day for national banks, the date of such payment shall be extended to the next
succeeding business day, and, in the case of a payment of principal or past due
interest or any installment of either thereof, interest shall accrue and be
payable thereon for the period of such extension at the applicable rate or rates
specified herein.

         2. Event of Default. In the event of a default in the payment of the
principal of or interest on this Promissory Note, as and when due and payable
after written notice by Holder to Borrower and the expiration of ten (10) days
without payment in full of the amount due; (i) then or at any time thereafter
during the continuance of any such default, the Holder may, with or without
notice to Borrower except as provided above, declare this Promissory Note to be
forthwith due and payable, both as to principal and interest, without
presentment, demand, protest, notice of intent to accelerate, notice of
acceleration, or other notice of any kind, all of which are hereby expressly
waived, and (ii) thereafter, or after Maturity, all amounts outstanding
hereunder, to the extent permitted by applicable law, shall, at the option of
Holder, bear interest at a per annum rate (the "Default Rate") equal to the
lesser of (i) eighteen percent (18%), or (ii) the Highest Lawful Rate.

         3. Attorneys' Fees and Costs. Borrower agrees to pay reasonable
attorneys' fees and costs incurred by the Holder in collecting or attempting to
collect this Promissory Note, whether by suit or otherwise.

         4. Limitations on Interest.

                  a. It is the intention of Holder and Borrower to conform
         strictly to any applicable usury laws. Accordingly, if the transactions
         contemplated hereby would be usurious under any applicable law, then,
         in that event, notwithstanding anything to the contrary in this
         Promissory Note, it is agreed as follows: (i) the aggregate of all
         consideration which constitutes interest under applicable law that is
         contracted for, taken, reserved, charged or received by Holder under
         this Promissory Note shall under no circumstances exceed the Highest
         Lawful Rate (hereinafter defined), and any excess shall be canceled
         automatically and, if theretofore paid, shall, at the option of Holder,
         be

<PAGE>   5

         credited by Holder on the principal amount of any indebtedness owed to
         Holder by Borrower or refunded by Holder to Borrower, and (ii) in the
         event that the maturity of this Promissory Note is accelerated or in
         the event of any required or permitted prepayment, then such
         consideration that constitutes interest under law applicable to Holder
         may never include more than the Highest Lawful Rate and excess
         interest, if any, provided for in this Promissory Note shall be
         canceled automatically as of the date of such acceleration or
         prepayment and, if theretofore paid, shall, at the option of Holder, be
         credited by Holder on the principal amount of any indebtedness owed to
         Holder by Borrower or refunded by Holder to Borrower.

                  b. Notwithstanding anything herein to the contrary, in no
         event will interest payable to Holder exceed the maximum amount
         permitted by the law applicable to Holder (after taking into account
         all charges payable to Holder which constitute interest under such
         applicable law), but if any amount referred to in this Promissory Note
         which would be payable to Holder but for the applicability of usury or
         other laws limiting the consideration payable to Holder is not paid to
         Holder as a result of the applicability of such laws, then interest on
         the outstanding principal balance of this Promissory Note payable to
         Holder shall, to the extent permitted by the law, accrue at the maximum
         rate of interest permitted by applicable law (after taking into account
         all charges payable to Holder which constitute interest under
         applicable law) until the total amount received by Holder equals the
         amount it would have received had no such laws been applicable.

                  c. "Highest Lawful Rate" means the maximum non-usurious
         interest rate (computed on the basis of a year of 365 or 366 days, as
         applicable) that at any time or from time to time may be contracted
         for, taken, reserved, charged, or received on amounts due to Holder,
         under laws applicable to Holder that are presently in effect or, to the
         extent allowed by law, under such applicable laws which allow a higher
         maximum non-usurious rate than applicable laws now allow.

         5. Applicable Law; Assigns. THIS PROMISSORY NOTE SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS (EXCEPT THAT
TEX. REV. CIV. STAT. ANN. ART. 5069, CH. 15, WHICH REGULATES CERTAIN REVOLVING
CREDIT LOAN ACCOUNTS AND REVOLVING TRIPARTY ACCOUNTS, SHALL NOT APPLY TO THIS
PROMISSORY NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY), SUBJECT, HOWEVER, TO
THE EFFECT OF APPLICABLE FEDERAL LAW. UNLESS CHANGED IN ACCORDANCE WITH LAW, THE
APPLICABLE RATE UNDER TEXAS LAW SHALL BE THE INDICATED (WEEKLY) RATE CEILING
FROM TIME TO TIME IN EFFECT AS PROVIDED IN TEX. REV. CIV. STAT. ANN. ART.
5069-1.04, AS AMENDED. AS USED HEREIN, THE TERMS "BORROWER" AND "HOLDER" SHALL
BE DEEMED TO INCLUDE THEIR RESPECTIVE SUCCESSORS, LEGAL REPRESENTATIVES AND
ASSIGNS, WHETHER BY VOLUNTARY ACTION OF THE PARTIES OR BY OPERATION OF LAW.

         6. Prepayment. Borrower may prepay this Promissory Note in full at any
time or in part from time to time, without premium or penalty. All payments made
under this Promissory Note shall be applied first to interest due and any
balance shall be applied in reduction of principal.

         IN WITNESS WHEREOF, Borrower has caused this Promissory Note to be duly
executed and delivered as of the date first above written.

                                        KESMIL MANUFACTURING, INC.

                                        By: /s/ Michael J. Blumenfeld
                                            ------------------------------------
                                                Michael J. Blumenfeld, President

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