Document:

EXHIBIT 10.04

                              EMPLOYMENT AGREEMENT

     This Employment Agreement is made and entered into effective this 1st day
of December, 1999, by and between Accelr8 Technology Corporation, a Colorado
corporation (the "Company"), and Franz Huber, an individual ("Executive").

                                    RECITALS

     A. The Company desires to be assured of the association and services of
Executive for the Company.

     B. Executive is willing and desires to be employed by the Company, and the
Company is willing to employ Executive, upon the terms, covenants and conditions
hereinafter set forth.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions hereinafter set forth, the parties hereto do hereby agree as follows:

     1. Employment. The Company hereby employs Executive as its Chief Scientist.

     2. Term. The term of this Agreement shall be for a period of twenty-four
months commencing on December 1, 1999, and ending on November 30, 2001 ("Initial
Term"), unless terminated earlier pursuant to Section 7 below; provided,
however, that Executive's obligations in Sections 6 and 8 below shall continue
in effect after such termination. This Agreement shall be automatically renewed
for successive one year periods ("Renewal Term") unless, at least 90 days prior
to the expiration of the Initial Term or any Renewal Term, either party gives
written notice to the other party specifically electing to terminate this
Agreement at the end of the Initial Term or any such Renewal Term.

     3. Compensation; Reimbursement.

     3.1 Base Salary. For all services rendered by Executive under this
Agreement, the Company shall pay Executive a base salary of Fifty Eight Thousand
Dollars ($58,000) per year (the "Base Salary"). Base Salary shall be payable in
equal, consecutive monthly installments; provided, however, that no Salary shall
be paid to Executive under this Agreement for any period subsequent to the
termination of Executive's employment unless otherwise provided for herein.
Payment of the Salary shall be subject to the customary withholding tax and
other employment taxes as required with respect to compensation paid by a
corporation to an employee. It is expressly understood and agreed that the Base
Salary may be increased upon the approval of the Company's compensation
committee (if such a committee exists) or a subcommittee of the Board of
Directors consisting only of members of the Board who are not employees of the
Company (if a Compensation Committee does not exist).

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     3.2 Bonus. In addition to the Base Salary provided for in Section 3.1, the
Company shall pay Executive such Bonus or Bonuses as the Board of Directors
shall determine in their sole discretion.

     3.3 Additional Benefits. In addition to the Base Salary and Bonuses,
Executive shall be entitled to all other benefits of employment provided to the
employees of the Company.

     3.4 Reimbursement. Executive shall be reimbursed for all reasonable
"out-of-pocket" business expenses for business travel and business entertainment
incurred in connection with the performance of his duties under this Agreement
(1) so long as such expenses constitute business deductions from taxable income
for the Company and are excludable from taxable income to Executive under the
governing laws and regulations of the Internal Revenue Code (provided, however,
that Executive shall be entitled to full reimbursement in any case where the
Internal Revenue Service may, under Section 274(n) of the Internal Revenue Code,
disallow to the Company some percentage of meals and entertainment expenses);
and (2) to the extent such expenses do not exceed the amounts allocable for such
expenses in budgets that are approved from time to time by the Company. The
reimbursement of Executive's business expenses shall be upon monthly
presentation to and approval by the Company of valid receipts and other
appropriate documentation for such expenses.

     4. Scope of Duties.

     4.1 Assignment of Duties. Executive shall have such duties as may be
assigned to him from time to time by the Company's Board of Directors
commensurate with his experience and responsibilities in the position for which
he is employed pursuant to Section 1 above. Such duties shall be exercised
subject to the control and supervision of the Board of Directors of the Company.

     4.2 General Specification of Duties. Executive's duties shall include, but
not be limited to those duties that are generally associated with the position
of the Chief Scientist of a company similarly situated to the Company, and as
such duties and responsibilities may be more particularly described in the
Company's Bylaws.

     The foregoing specifications are not intended as a complete itemization of
the duties which Executive shall perform and undertake on behalf of the Company
in satisfaction of his employment obligations under this Agreement.

     4.3 Executive's Devotion of Time. Executive hereby agrees to devote his
full time abilities and energy to the faithful performance of the duties
assigned to him and to the promotion and forwarding of the business affairs of
the Company, and not to divert any business opportunities from the Company to
himself or to any other person or business entity.

     4.4 Conflicting Activities.

     (a) Executive may, during the Initial Term or any Renewal Term of this
Agreement, be engaged in other business activities without the prior consent of
the Board of Directors of the Company; provided, however, that Executive may not
compete directly with the Company. Further, nothing in this Agreement shall be
construed as preventing Executive from investing his personal assets in passive
investments in business entities which are not in competition with the Company
or its affiliates, or from pursuing business opportunities as permitted by
Section 4.4(b).

     (b) Executive hereby agrees to promote and develop all business
opportunities that come to his attention relating to current or anticipated

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future business of the Company, in a manner consistent with the best interests
of the Company and with his duties under this Agreement. Should Executive
discover a business opportunity that does not relate to the current or
anticipated future business of the Company, he shall first offer such
opportunity to the Company. Should the Board of Directors of the Company not
exercise its right to pursue this business opportunity within a reasonable
period of time, not to exceed sixty (60) days, then Executive may develop the
business opportunity for himself; provided, however, that such development may
in no way conflict or interfere with the duties owed by Executive to the Company
under this Agreement. Further, Executive may develop such business opportunities
only on his own time, and may not use any service, personnel, equipment,
supplies, facility or trade secrets of the Company in their development. As used
herein, the term "business opportunity" shall not include business opportunities
involving investment in publicly traded stocks, bonds or other securities, or
other investments of a personal nature.

     5. Change of Control. If any time during the Initial Term or any Renewal
Term of this Agreement there is a change of control of the Company, as defined
below, and Executive's employment is terminated by the Company under Section
7.1(a),(b), (d) or (e) within the greater of one (1) year following the change
of control or the remaining term of this Agreement, the Company shall pay to
Executive (a) an amount equal to two times his annual Base Salary as in effect
on the date of termination, and (b) any other amounts due to Executive under any
other provision of this Agreement. This amount shall be paid to Executive in one
lump sum as soon as practicable, but in no event later than one hundred twenty
(120) days, after the date that Executive's employment terminated. In addition
to the lump sum payment referenced in the preceding sentence, the Company shall
pay to Executive any accrued and unpaid Bonuses as provided for in Section 3.3
at the same time as the lump sum payment is made.

     For purposes of this subsection, a change of control shall mean the
occurrence of one or more of the following three events:

          (1) After the effective date of this Agreement, any person becomes a
     beneficial owner (as such term is defined in Rule 13d-3 promulgated under
     the Securities Exchange Act of 1934) directly or indirectly of securities
     representing 33% or more of the total number of votes that may be cast for
     the election of directors of the Company;

          (2) Within two years after a merger, consolidation, liquidation or
     sale of assets involving the Company, or a contested election of a Company
     director, or any combination of the foregoing, the individuals who were
     directors of the Company immediately prior thereto shall cease to
     constitute a majority of the Board; or

          (3) Within two years after a tender offer or exchange offer for voting
     securities of the Company, the individuals who were directors of the
     Company immediately prior thereto shall cease to constitute a majority of
     the Board.

     6. Confidentiality of Trade Secrets and Other Materials.

     6.1 Executive acknowledges that in his employment hereunder, he will be
making use of, acquiring and adding to the Company's trade secrets and its
confidential and proprietary information of a special and unique nature and
value relating to such matters as, but not limited to, the Company's business
operations, manufacturing processes, manufacturing techniques, manufacturing
methods, manufacturing technology, internal structure, financial affairs,
programs, software, systems, procedures, manuals, confidential reports, lists of
clients and prospective clients and sales and marketing methods, as well as the
amount, nature and type of services, equipment and methods used and preferred by
the Company's clients and the fees paid by such clients, all of which shall be

<PAGE>

deemed to be confidential information. Executive acknowledges that such
confidential information has been and will continue to be of central importance
to the business of the Company and that disclosure of it to or its use by others
could cause substantial loss to the Company. In consideration of employment by
the Company, Executive agrees that during the term of this Agreement and any
renewal or extension of his employment by the Company and upon and after leaving
the employ of the Company for any reason whatsoever, Executive shall not, for
any purpose whatsoever, directly or indirectly, divulge or disclose to any
person or entity any of such confidential information which was obtained by the
Executive as a result of Executive's employment with the Company or any trade
secrets of the Company, but shall hold all of the same confidential and
inviolate.

     6.2 All contracts, agreements, financial books, records, instruments and
documents; client lists; memoranda; data; reports; programs; software; tapes;
rolodexes; telephone and address books; letters; research; card decks; listings;
programming; and any other instruments, records or documents relating or
pertaining to clients serviced by the Company or the Executive, the services
rendered by the Executive, or the business of the Company (collectively, the
"Records") shall at all times be and remain the property of the Company. Upon
termination of this Agreement and the Executive's employment under this
Agreement for any reason whatsoever, Executive shall return to the Company all
Records (whether furnished by the Company or prepared by the Executive), and
Executive shall neither make nor retain any copies of any of such Records after
such termination.

     6.3 All inventions and other creations, whether or not patentable or
copyrightable, made or conceived in whole or in part by Executive while employed
by the Company and within eighteen months thereafter, which relate directly to
the business, existing or proposed, of the Company or any other business or
research or development effort in which the Company or any of its subsidiaries
or affiliates engages during Executive's employment by the Company will be
disclosed promptly by Executive to the Company and shall be the sole and
exclusive property of the Company. All copyrightable works created by Executive
and covered by this Section 6.3 shall be deemed to be works for hire. Executive
shall cooperate with the Company in patenting or copyrighting all such
inventions and other creative works, shall execute, acknowledge, seal and
deliver all documents tendered by the Company to evidence its ownership thereof
throughout the world, and shall cooperate with the Company in obtaining,
defending, and enforcing its rights therein.

     7. Termination.

     7.1 Bases for Termination.

     (a) Executive's employment hereunder may be terminated at any time by
mutual agreement of the parties.

     (b) This Agreement shall automatically terminate on the last day of the
month in which Executive dies or becomes permanently incapacitated. "Permanent
incapacity" as used herein shall mean mental or physical incapacity, or both,
reasonably determined by the Company's Board of Directors based upon a
certification of such incapacity by, in the discretion of the Company's Board of
Directors, either Executive's regularly attending physician or a duly licensed
physician selected by the Company's Board of Directors, rendering Executive
unable to perform substantially all of his duties hereunder and which appears
reasonably certain to continue for at least six consecutive months without
substantial improvement. Executive shall be deemed to have "become permanently
incapacitated" on the date the Company's Board of Directors has determined that
Executive is permanently incapacitated and so notifies Executive.

<PAGE>

     (c) Executive's employment may be terminated by the Company "with cause,"
effective upon delivery of written notice to Executive given at any time
(without any necessity for prior notice) if any of the following shall occur:

          (1) any action by Executive which would be grounds for termination
     under applicable law (currently covering any willful breach of duty, and
     habitual neglect of duty);

          (2) any material breach of Executive's obligations in Sections 4 or 6
     above; or

          (3) any material acts or events which inhibit Executive from fully
     performing his responsibilities to the Company in good faith, such as (i) a
     felony criminal conviction; (ii) any other criminal conviction involving
     Executive's lack of honesty or Executive's moral turpitude; (iii) drug or
     alcohol abuse; or (iv) acts of dishonesty, gross carelessness or gross
     misconduct.

     (d) Executive's employment may be terminated by the Company "without cause"
(for any reason or no reason at all) at any time by giving Executive 60 days
prior written notice of termination, which termination shall be effective on the
60th day following such notice. If Executive's employment under this Agreement
is so terminated, the Company shall (i) make a lump sum cash payment to
Executive within 10 days after termination is effective of an amount equal to
(1) Executive's Base Salary accrued to the date of termination; (2) unreimbursed
expenses accrued to the date of termination; (3) an amount equal to the greater
of (a) Executive's annual Base Salary (i.e., 12 months of Base Salary), or (b)
amounts remaining due to Executive as Base Salary (assuming that payments under
this Agreement were made until expiration of the Initial Term or if applicable
the Renewal Term), and (4) any other amounts due to Executive under any other
provision of this Agreement. For purposes of this provision, Executive's annual
Base Salary and the remaining portion of the term of the Agreement shall be
calculated as of the termination date. After the Company's termination of
Executive under this provision, the Company shall not be obligated to provide
the benefits to Executive described in Section 3.3 (except as may be required by
law). In addition to the lump sum payment referenced in the preceding sentence,
the Company shall pay to Executive the Bonus provided for in Section 3.2 based
upon the number of days in the year that Executive was employed by the Company,
within one hundred five days after the end of the fiscal year in which Executive
was terminated.

     (e) Executive may terminate his employment hereunder by giving the Company
60 days prior written notice, which termination shall be effective on the 60th
day following such notice.

     7.2 Payment Upon Termination. Upon termination under Sections 7.1(a), (b),
(c) or (e), the Company shall pay to Executive within 10 days after termination
an amount equal to the sum of (1) Executive's Base Salary accrued to the date of
termination; (2) unreimbursed expenses accrued to the date of termination, and
(3) any other amounts due to Executive under any other provision of this
Agreement. Except for the foregoing compensation then due and owing and the
compensation provided for in Section 8.1(d), the Company shall not be obligated
to compensate Executive, his estate or representatives after any such
termination. Further, Executive shall not be entitled to any of the benefits
described in Section 3.3 (except as provided by law) after such termination.

     7.3 Dismissal from Premises. At the Company's option, Executive shall
immediately leave the Company's premises on the date notice of termination is
given by either Executive or the Company.

     8. Restrictive Covenants.

     8.1 The Company and Executive acknowledge and agree that Executive's
services are of a special and unusual character which have a unique value to the

<PAGE>

Company, the loss of which cannot be adequately compensated by damages in an
action at law and if used in competition with the Company could cause serious
harm to the Company. Further, Executive and the Company also recognize that an
important part of Executive's duties will be to develop good will for the
Company through his personal contact with customers, agents and others having
business relationships with the Company, and that there is a danger that this
good will, a proprietary asset of the Company, may follow Executive if and when
his relationship with the Company is terminated. Accordingly, Executive
covenants that for a period of eighteen months after Executive ceases to be
employed by the Company for any reason whatsoever, Executive shall not, without
the prior written consent of the Company, directly or indirectly:

     (a) Offer to render any services or solicit the rendition of any services
which were rendered by the Company during the two year period immediately
preceding such cessation of Executive's employment with the Company to any
clients, customers or accounts of the Company who were such at any time during
such two year period to or for the benefit or account of Executive or to or for
the benefit or account of any other person or entity.

     (b) Render or attempt to render any services which were rendered by the
Company during the two year period immediately preceding such cessation of
Executive's employment with the Company to any clients, customers or accounts of
the Company who were such at any time during such two year period to or for the
benefit or account of Executive or to or for the benefit or account of any other
person or entity.

     (c) Solicit for employment or employ to or for the benefit or account of
Executive or to or for the benefit or account of any other person or entity any
employee of the Company, nor shall Executive urge, directly or indirectly, any
client or referrer of clients, customers, or accounts of the Company to
discontinue, in whole or in part, business with the Company or not to do
business with the Company. For purposes of this Section 8.1(c) of this
Agreement, the term "referrer of clients" shall mean any person or entity who or
which referred a client, customer or account to the Company at any time prior to
such cessation of Executive's employment with the Company.

     (d) Engage, either as a consultant, independent contractor, proprietor,
stockholder, partner, officer, director, employee or otherwise, in any business
which designs or sells software for the migration or conversion of computer
applications or software or Year 2000 compliance or remediation, or otherwise
competes with the Company in any state of the United States or in any foreign
country, in each such case where the Company sold, licensed or otherwise
provided software or related services at any time during the two year period
immediately preceding such cessation of Executive's employment with the Company.
The Company and the Executive agree that the Company may elect to either enforce
or waive this Section 8.1(d); provided however, that if the Company elects to
enforce this Section 8.1(d), then subject to the provisions of the immediately
following sentence, the Company agrees to pay Executive on a monthly basis an
amount equal to his monthly Base Salary at the time of termination for each
month that the Company elects to keep this provision in effect. It is expressly
understood and agreed that if Executive is paid any amounts pursuant to Section
7.1(d), then the provisions of this Section 8.1(d) shall remain in full force
and effect without the Company being obligated to make the additional payments
contemplated in the immediately preceding sentence.

     8.2 The parties hereto agree that to the extent that any provision or
portion of Section 8.1 of this Agreement shall be held, found or deemed to be
unreasonable, unlawful or unenforceable by a court of competent jurisdiction,

<PAGE>

then any such provision or portion thereof shall be deemed to be modified to the
extent necessary in order that any such provision or portion thereof shall be
legally enforceable to the fullest extent permitted by applicable law; and the
parties hereto do further agree that any court of competent jurisdiction shall,
and the parties hereto do hereby expressly authorize, request and empower any
court of competent jurisdiction to, enforce any such provision or portion
thereof or to modify any such provision or portion thereof in order that any
such provision or portion thereof shall be enforced by such court to the fullest
extent permitted by applicable law.

     8.3 The provisions of Sections 8.1(a), 8.1(b), 8.1(c) and 8.1(d) of this
Agreement are cumulative. Compliance with Sections 8.1(a), 8.1(b), 8.1(c) and
8.1(d) of this Agreement is a condition precedent to the Company's obligation to
make any payments of any nature to Executive, whether under this Agreement or
otherwise. Nothing in this Agreement shall be construed as prohibiting the
Company from pursuing any other remedies available to it for a breach or
threatened breach of Sections 6 and 8 of this Agreement.

     8.4 As used in this Section 8, "clients", "customers" and "accounts" shall
include any person or entity that, directly or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common control with,
any such "clients", "customers" or "accounts".

     9 Injunctive Relief. The Company and Executive hereby acknowledge and
agree that any violation of the provisions of Sections 6 or 8 hereunder will
cause irreparable injury to the Company and there is no adequate remedy at law
for such violation. Accordingly, in addition to any other relief to which the
Company may be entitled, the Company shall be entitled to such injunctive relief
as may be ordered by any court of competent jurisdiction including, but not
limited to, an injunction restraining any violation of Sections 6 or 8 above
without the proof of actual damages.

     10. Miscellaneous.

     10.1 Transfer and Assignment. This Agreement is personal as to Executive
and shall not be assigned or transferred by Executive without the prior written
consent of the Company. This Agreement shall be binding upon and inure to the
benefit of all of the parties hereto and their respective permitted heirs,
personal representatives, successors and assigns.

     10.2 Severability. Nothing contained herein shall be construed to require
the commission of any act contrary to law. Should there be any conflict between
any provisions hereof and any present or future statute, law, ordinance,
regulation or other pronouncement having the force of law, the latter shall
prevail, but the provision of this Agreement affected thereby shall be curtailed
and limited only to the extent necessary to bring it within the requirements of
the law, and the remaining provisions of this Agreement shall remain in full
force and effect.

     10.3 Governing Law. This Agreement is made under and shall be construed
pursuant to the laws of the State of Colorado.

     10.4 Counterparts. This Agreement may be executed in several counterparts
and all documents so executed shall constitute one agreement, binding on all of
the parties hereto, notwithstanding that all of the parties did not sign the
original or the same counterparts.

     10.5 Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes all prior oral or written agreements, arrangements and understandings
with respect thereto. No representation, promise, inducement, statement or
intention has been made by any party hereto that is not embodied herein, and no
party shall be bound by or liable for any alleged representation, promise,
inducement or statement not so set forth herein.

<PAGE>

     10.6 Modification. This Agreement may be modified, amended, superseded or
cancelled, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by the
party or parties to be bound by any such modification, amendment, supersession,
cancellation or waiver.

     10.7 Attorneys' Fees and Costs. In the event of any dispute arising out of
the subject matter of this Agreement, the prevailing party shall recover, in
addition to any other damages assessed, its attorneys' fees and court costs
incurred in litigating or otherwise settling or resolving such dispute whether
or not an action is brought or prosecuted to judgment. In construing this
Agreement, none of the parties hereto shall have any term or provision construed
against such party solely by reason of such party having drafted the same.

     10.8 Waiver. The waiver by either of the parties, express or implied, of
any right under this Agreement or any failure to perform under this Agreement by
the other party, shall not constitute or be deemed as a waiver of any other
right under this Agreement or of any other failure to perform under this
Agreement by the other party, whether of a similar or dissimilar nature.

     10.9 Cumulative Remedies. Each and all of the several rights and remedies
provided in this Agreement, or by law or in equity, shall be cumulative, and no
one of them shall be exclusive of any other right or remedy, and the exercise of
any one or such rights or remedies shall not be deemed a waiver of, or an
election to exercise, any other such right or remedy.

     10.10 Headings. The section and other headings contained in this Agreement
are for reference purposes only and shall not in any way affect the meaning and
interpretation of this Agreement.

     10.11 Notices. Any notice under this Agreement must be in writing, may be
telecopied provided that evidence of the transmission and receipt is created at
the time of transmission, sent by express 24-hour guaranteed courier, or
hand-delivered, or may be served by depositing the same in the United States
mail, addressed to the party to be notified, postage-prepaid and registered or
certified with a return receipt requested. The addresses of the parties for the
receipt of notice shall be as follows:

If to the Company:                  Accelr8 Technology Corporation
                                    303 East Seventeenth Avenue, Suite 108
                                    Denver, Colorado 80203

If to Executive:                    Franz Huber
                                    303 East Seventeenth Avenue, Suite 108
                                    Denver, Colorado 80203

Each notice given by registered or certified mail shall be deemed delivered and
effective on the date of delivery as shown on the return receipt, and each
notice delivered in any other manner shall be deemed to be effective as of the
time of actual delivery thereof. Each party may change its address for notice by
giving notice thereof in the manner provided above.

     10.12 Survival. Any provision of this Agreement which imposes an obligation
after termination or expiration of this Agreement shall survive the termination
or expiration of this Agreement and be binding on Executive and the Company.

     10.13 Right of Set-Off. Upon termination or expiration of this Agreement,
the Company shall have the right to set-off against the amounts due Executive
hereunder the amount of any outstanding loan or advance from the Company to
Executive.

<PAGE>

     10.14 Effective Date. This Agreement shall become effective as of the date
set forth on page 1 when signed by Executive and the Company.

     IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be executed as of the date first set forth above.

FRANZ HUBER                         ACCELR8 TECHNOLOGY CORPORATION

________________________________    By:_________________________________________
                                       Thomas V. Geimer, Chief Executive OfficerEXHIBIT 10.1

                           LOAN AND SECURITY AGREEMENT

                                 by and between

                          BLACK WARRIOR WIRELINE CORP.,
                             a Delaware corporation

                                       and

                             COAST BUSINESS CREDIT,
                       a division of Southern Pacific Bank

                          Dated as of January 24, 2000

<PAGE>

                                TABLE OF CONTENTS

                                                                            PAGE

1.   DEFINITIONS ............................................................  1
     Account Debtor .........................................................  1
     Affiliate ..............................................................  1
     Audit ..................................................................  1
     Borrower ...............................................................  1
     Borrower's Address .....................................................  1
     Business Day ...........................................................  1
     Change of Control ......................................................  1
     Closing Date ...........................................................  1
     Coast ..................................................................  1
     Code ...................................................................  1
     Collateral .............................................................  1
     Credit Limit ...........................................................  1
     Debt Service Coverage ..................................................  1
     Default ................................................................  2
     Deposit Account ........................................................  2
     Dollars or $ ...........................................................  2
     Early Termination Fee ..................................................  2
     EBITDA .................................................................  2
     Eligible Receivables ...................................................  2
     Equipment ..............................................................  3
     Event of Default .......................................................  3
     GAAP ...................................................................  3
     General Intangibles ....................................................  3
     Inventory ..............................................................  3
     Investment Property ....................................................  3
     Loan Documents .........................................................  4
     Loans ..................................................................  4
     Material Adverse Effect ................................................  4
     Maturity Date ..........................................................  4
     Maximum Dollar Amount ..................................................  4
     Minimum Monthly Interest ...............................................  4
     Obligations ............................................................  4
     Permitted Liens ........................................................  4
     Person .................................................................  5
     Prime Rate .............................................................  5
     Real Property ..........................................................  5
     Receivable Loans .......................................................  5
     Receivables ............................................................  5
     Renewal Date ...........................................................  5
     Renewal Fee ............................................................  5
     Solvent ................................................................  5
     Tangible Net Worth .....................................................  5
     Term Loans .............................................................  5
     Year 2000 Problem ......................................................  5
     Other Terms ............................................................  5

2.   CREDIT FACILITIES ......................................................  6
     2.1      Loans .........................................................  6

<PAGE>

3.   INTEREST AND FEES ......................................................  6
     3.1      Interest ......................................................  6
     3.2      Fees ..........................................................  6

4.   SECURITY INTEREST ......................................................  6

5.   CONDITIONS PRECEDENT ...................................................  6
     5.1      Status of Accounts at Closing .................................  6
     5.2      Minimum Availability ..........................................  6
     5.3      Landlord Waiver ...............................................  6
     5.4      Real Property .................................................  6
     5.5      Executed Agreement ............................................  7
     5.6      Opinion of Borrower's Counsel .................................  7
     5.7      Priority of Coast's Liens .....................................  7
     5.8      Insurance .....................................................  7
     5.9      Borrower's and Guarantors' Existence ..........................  7
     5.10     Organizational Documents ......................................  7
     5.11     Taxes .........................................................  7
     5.12     Year 2000 Problem Assessment Certificate ......................  7
     5.13     Due Diligence .................................................  7
     5.14     Other Documents and Agreements ................................  7

6.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER ..............  7
     6.1      Existence and Authority .......................................  7
     6.2      Name; Trade Names and Styles ..................................  8
     6.3      Place of Business; Location of Collateral .....................  8
     6.4      Title to Collateral; Permitted Liens ..........................  8
     6.5      Maintenance of Collateral .....................................  8
     6.6      Books and Records .............................................  8
     6.7      Financial Condition, Statements and Reports ...................  8
     6.8      Tax Returns and Payments; Pension Contributions ...............  8
     6.9      Compliance with Law ...........................................  9
     6.10     Litigation. ...................................................  9
     6.11     Use of Proceeds ...............................................  9
     6.12     Year 2000 Compliance ..........................................  9

7.   RECEIVABLES ............................................................  9
     7.1      Representations Relating to Receivables......................... 9
     7.2      Representations Relating to Documents and Legal Compliance...... 9
     7.3      Schedules and Documents relating to Receivables................. 9
     7.4      Collection of Receivables.......................................10
     7.5      Remittance of Proceeds..........................................10
     7.6      Disputes....................................................... 10
     7.7      Returns........................................................ 10
     7.8      Verification................................................... 10
     7.9      No Liability................................................... 10

8.   ADDITIONAL DUTIES OF THE BORROWER....................................... 10
     8.1      Financial and Other Covenants.................................. 10
     8.2      Insurance...................................................... 10
     8.3      Reports........................................................ 11
     8.4      Access to Collateral, Books and Records........................ 11
     8.5      Negative Covenants............................................. 11
     8.6      Litigation Cooperation......................................... 12
     8.7      Further Assurances............................................. 12

9.   TERM.................................................................... 12
     9.1      Maturity Date.................................................. 12
     9.2      Early Termination.............................................. 12
     9.3      Payment of Obligations......................................... 12

10.  EVENTS OF DEFAULT AND REMEDIES.......................................... 12
     10.1     Events of Default.............................................. 12
     10.2     Remedies....................................................... 14
     10.3     Standards for Determining Commercial Reasonableness............ 15
     10.4     Power of Attorney.............................................. 15
     10.5     Application of Proceeds........................................ 16
     10.6     Remedies Cumulative............................................ 17

11.  GENERAL PROVISIONS...................................................... 17
     11.1     Interest Computation........................................... 17
     11.2     Application of Payments........................................ 17
     11.3     Charges to Accounts............................................ 17
     11.4     Monthly Accountings............................................ 17
     11.5     Notices........................................................ 17
     11.6     Severability................................................... 17
     11.7     Integration.................................................... 17
     11.8     Waivers........................................................ 18
     11.9     No Liability for Ordinary Negligence........................... 18
     11.10    Amendment...................................................... 18
     11.11    Time of Essence................................................ 18
     11.12    Attorneys Fees, Costs and Charges.............................. 18
     11.13    Benefit of Agreement........................................... 18
     11.14    Publicity...................................................... 19
     11.15    Paragraph Headings Construction................................ 19
     11.16    Governing Law; Jurisdiction; Venue............................. 19
     11.17    Mutual Waiver of Jury Trial.................................... 19

<PAGE>

          COAST

          LOAN AND SECURITY AGREEMENT

Borrower:      Black Warrior Wireline Corp., a Delaware corporation

Address:       3748 Highway 45 North
               Columbus, MS 39701

Date:          January 24, 2000

THIS LOAN AND SECURITY AGREEMENT is entered into on the above date between COAST
BUSINESS  CREDIT,  a division of Southern  Pacific Bank ("Coast"),  a California
corporation,  with offices at 12121 Wilshire Boulevard, Suite 1400, Los Angeles,
California 90025, and the borrower(s) named above, the "Borrower"),  whose chief
executive  office is located at the above address  ("Borrower's  Address").  The
Schedule to this Agreement (the "Schedule")  shall for all purposes be deemed to
be a part of this Agreement, and the same is an integral part of this Agreement.
(Definitions  of certain terms used in this Agreement are set forth in Section 1
below.)

1.   DEFINITIONS.  As used in this  Agreement,  the  following  terms  have  the
     following meanings:

     "Account Debtor" means the obligor on a Receivable or General Intangible.

     "Affiliate"  means,  with  respect  to any  Person,  a  relative,  partner,
shareholder,  director,  officer,  or employee of such Person,  or any parent or
subsidiary  of such Person,  or any Person  controlling,  controlled by or under
common control with such Person.

     "Audit" means to inspect,  audit and copy Borrower's  books and records and
the Collateral.

     "Borrower" has the meaning set forth in the introduction to this Agreement.

     "Borrower's  Address" has the meaning set forth in the introduction to this
Agreement.

     "Business Day" means a day on which Coast is open for business.

     "Change  of  Control"  shall be deemed to have  occurred  at such time as a
"person" or "group"  (within the meaning of Sections  13(d) and  14(d)(2) of the
Securities  Exchange  Act of  1934)  (other  than  the  current  holders  of the
ownership  interests in any Borrower) becomes the "beneficial owner" (as defined
in  Rule  13d-3  under  the  Securities  Exchange  Act  of  1934),  directly  or
indirectly,  as a result of any single transaction,  of more than twenty percent
(20%) of the  total  voting  power of all  classes  of stock or other  ownership
interests  then  outstanding  of any Borrower  normally  entitled to vote in the
election of directors or analogous governing body; provided,  however,  that the
exercise of warrants or conversion of debt by St. James Capital Partners,  L.P.,
SJMB,  L.P. or their  Affiliates on  Borrower's  existing  securities  shall not
constitute a Change of Control.

     "Closing Date" date of the initial funding under this Agreement.

     "Coast" has the meaning set forth in the introduction to this Agreement.

     "Code"  means the Uniform  Commercial  Code as adopted and in effect in the
State of California from time to time.

     "Collateral" has the meaning set forth in Section 4 hereof.

     "Credit  Limit"  means the  maximum  amount of Loans that Coast may make to
Borrower pursuant to the amounts and percentages shown on the Schedule.

     "Debt  Service  Coverage"  means,  in any fiscal  period,  the ratio of (a)
Borrower's  EBITDA  during  such  period,  less  the  sum of  all of  Borrower's
non-financed  capital  expenditures  and income  taxes paid in cash  during such
period,

<PAGE>

divided by (b) all  principal,  interest and capital lease  obligations  paid or
required to be paid by Borrower during such period, other than payments made out
of Excess Cash Flow as set forth in the Schedule.

     "Default"  means any event  which  with  notice or passage of time or both,
would constitute an Event of Default.

     "Deposit Account" has the meaning set forth in Section 9105 of the Code.

     "Dollars or $" means United States dollars.

     "Early  Termination  Fee" means the amount set forth on the  Schedule  that
Borrower  must pay Coast if this  Agreement is  terminated  by Borrower or Coast
pursuant to Section 9.2 hereof.

     "EBITDA" means, in any fiscal period, Borrower's consolidated net income or
net loss (other than  extraordinary or non-recurring  gains of Borrower for such
period),  plus (i) the  amount of all  interest  expense,  income  tax  expense,
depreciation  expense and amortization expense of Borrower for such period, on a
consolidated  basis,  and  plus or minus  (as the  case  may be) (ii) any  other
non-cash  charges  which have been added or  subtracted,  as the case may be, in
calculating Borrower's consolidated net income for such period.

     "Eligible  Receivables" means Receivables arising in the ordinary course of
Borrower's  business  from the sale of goods or  rendition  of  services,  which
Coast,  in its sole judgment,  shall deem eligible for borrowing,  based on such
considerations  as  Coast  may  from  time to time  deem  appropriate.  Eligible
Receivables shall not include the following:

          (a)  Receivables  that the Account Debtor has failed to pay within 120
days of invoice date,  provided there is verifiable  credit history with a large
or rated  company,  as  approved by Coast in its sole and  absolute  discretion,
otherwise,  Receivables that the Account Debtor has failed to pay within 90 days
of invoice date, or Accounts with selling terms of more than net 30 days;

          (b)  Receivables  owed by an Account  Debtor or its  Affiliates  where
twenty-five percent (25%) or more of all Receivables owed by that Account Debtor
(or its Affiliates) are deemed ineligible under clause (a) above;

          (c)  Receivables  with  respect  to which  the  Account  Debtor  is an
employee,  Affiliate, or agent of Borrower, provided, however, that for purposes
of this subsection (c), Collins & Ware, Inc. shall not be deemed an Affiliate;

          (d) Receivables with respect to which goods are placed on consignment,
guaranteed sale, sale or return, sale on approval, bill and hold, or other terms
by reason of which the payment by the Account Debtor may be conditional;

          (e)  Receivables  that are not  payable in Dollars or with  respect to
which the Account Debtor:  (i) does not maintain its chief  executive  office in
the United States,  or (ii) is not organized under the laws of the United States
or any State  thereof,  or (iii) is the  government  of any  foreign  country or
sovereign  state, or of any state,  province,  municipality,  or other political
subdivision thereof, or of any department,  agency, public corporation, or other
instrumentality thereof;

          (f) Receivables with respect to which the Account Debtor is either (i)
the United States or any department,  agency, or  instrumentality  of the United
States  (exclusive,  however,  of Accounts  with  respect to which  Borrower has
complied,  to the  satisfaction of Coast,  with the Assignment of Claims Act, 31
U.S.C. ss. 3727), or (ii) any State of the United States (exclusive, however, of
Receivables owed by any State that does not have a statutory  counterpart to the
Assignment of Claims Act);

          (g) Receivables with respect to which the Account Debtor is a creditor
of Borrower,  has or has asserted a right of setoff, has disputed its liability,
or has made any claim with respect to the Receivables;

          (h)  Receivables  with  respect  to  an  Account  Debtor  whose  total
obligations  owing to  Borrower  exceed  twenty  percent  (20%) of all  Eligible
Receivables,  to the extent of the  obligations  owing by such Account Debtor in
excess of such percentage;

                                       2
<PAGE>

          (i) Receivables with respect to which the Account Debtor is subject to
any reorganization,  bankruptcy, insolvency, arrangement,  readjustment of debt,
dissolution  or liquidation  proceeding,  or becomes  insolvent,  or goes out of
business;

          (j)  Receivables  the  collection  of which Coast,  in its  reasonable
credit  judgment,  believes to be  doubtful  by reason of the  Account  Debtor's
financial condition;

          (k)  Receivables  with  respect to which the goods giving rise to such
Receivable have not been shipped and billed to the Account Debtor,  the services
giving  rise to such  Receivable  have not been  performed  and  accepted by the
Account Debtor, or the Receivable otherwise does not represent a final sale;

          (l) Receivables with respect to which the Account Debtor is located in
the states of New Jersey,  Minnesota,  Indiana,  or West  Virginia (or any other
state that  requires a creditor  to file a Business  Activity  Report or similar
document in order to bring suit or otherwise  enforce its remedies  against such
Account  Debtor in the courts or through any  judicial  process of such  state),
unless Borrower has qualified to do business in New Jersey, Minnesota,  Indiana,
West  Virginia,  or such  other  states,  or has  filed  a  Notice  of  Business
Activities  Report with the applicable  division of taxation,  the department of
revenue, or with such other state offices, as appropriate,  for the then-current
year, or is exempt from such filing requirement; and

          (m)  Receivables  that  represent  progress  payments or other advance
billings that are due prior to the  completion of performance by Borrower of the
subject contract for goods or services.

     "Equipment"  means  all  of  Borrower's   present  and  hereafter  acquired
machinery,  molds, machine tools,  motors,  furniture,  equipment,  furnishings,
fixtures,  trade fixtures,  motor vehicles,  tools, parts, dies, jigs, goods and
other  goods  (other  than  Inventory)  of every  kind and  description  used in
Borrower's  operations  or  owned by  Borrower  and any  interest  in any of the
foregoing,   and  all  attachments,   accessories,   accessions,   replacements,
substitutions,  additions  or  improvements  to any of the  foregoing,  wherever
located.

     "Event of  Default"  means any of the events  set forth in Section  10.1 of
this Agreement.

     "GAAP" means  generally  accepted  accounting  principles as in effect from
time to time in the United States, consistently applied.

     "General  Intangibles" means all general  intangibles of Borrower,  whether
now owned or  hereafter  created or acquired  by  Borrower,  including,  without
limitation,  all choses in action, causes of action, corporate or other business
records, Deposit Accounts, investment property,  inventions,  designs, drawings,
blueprints,  patents,  patent  applications,  trademarks and the goodwill of the
business  symbolized  thereby,  names,  trade names,  trade  secrets,  goodwill,
copyrights,  registrations,  licenses, franchises,  customer lists, security and
other deposits,  rights in all litigation presently or hereafter pending for any
cause or claim (whether in contract,  tort or otherwise),  and all judgments now
or hereafter arising therefrom,  all claims of Borrower against Coast, rights to
purchase or sell real or personal property,  rights as a licensor or licensee of
any  kind,  royalties,  telephone  numbers,  proprietary  information,  purchase
orders, and all insurance policies and claims (including without limitation life
insurance, key man insurance,  credit insurance,  liability insurance,  property
insurance  and other  insurance),  tax refunds and  claims,  computer  programs,
discs,  tapes and tape files,  claims under  guaranties,  security  interests or
other security held by or granted to Borrower, all rights to indemnification and
all other intangible property of every kind and nature (other than Receivables).

     "Inventory" means all of Borrower's now owned and hereafter acquired goods,
merchandise or other personal property,  wherever located, to be furnished under
any contract of service or held for sale or lease (including  without limitation
all raw materials,  work in process,  finished  goods and goods in transit,  and
including without limitation all farm products),  and all materials and supplies
of every kind,  nature and description which are or might be used or consumed in
Borrower's  business  or used  in  connection  with  the  manufacture,  packing,
shipping, advertising,  selling or finishing of such goods, merchandise or other
personal  property,  and all  warehouse  receipts,  documents of title and other
documents representing any of the foregoing.

     "Investment Property" has the meaning set forth in Section 9115 of the Code
as in effect as of the date hereof.

     "Loan Documents" means this Agreement,  the agreements and documents listed
on Section 5 of the Schedule,  and any other  agreement,  instrument or document
executed in connection herewith or therewith.

                                       3
<PAGE>

     "Loans" has the meaning set forth in Section 2.1 hereof.

     "Material  Adverse  Effect"  means a  material  adverse  effect  on (i) the
business, assets, condition (financial or otherwise) or results of operations of
Borrower  or  any  subsidiary  of  Borrower  or  any  guarantor  of  any  of the
Obligations,  (ii)  the  ability  of  Borrower  or any  guarantor  of any of the
Obligations to perform its obligations under this Agreement (including,  without
limitation, repayment of the Obligations as they come due) or (iii) the validity
or  enforceability  of this Agreement or any other agreement or document entered
into by any party in  connection  herewith,  or the rights or  remedies of Coast
hereunder or thereunder.

     "Maturity  Date"  means  the date  that this  Agreement  shall  cease to be
effective,  as set forth on the Schedule,  subject to the  provisions of Section
9.1 and 9.2 hereof.

     "Maximum  Dollar  Amount"  has the  meaning  set forth in  Section 2 of the
Schedule.

     "Minimum  Monthly  Interest"  has the meaning set forth in Section 3 of the
Schedule.

     "Obligations"  means  all  present  and  future  Loans,  advances,   debts,
liabilities,  obligations, guaranties, covenants, duties and indebtedness at any
time owing by Borrower to Coast, whether evidenced by this Agreement or any note
or other  instrument or document,  whether  arising from an extension of credit,
opening  of  a  letter  of  credit,   banker's   acceptance,   loan,   guaranty,
indemnification  or otherwise,  whether direct or indirect  (including,  without
limitation,  those  acquired by  assignment  and any  participation  by Coast in
Borrower's debts owing to others), absolute or contingent, due or to become due,
including, without limitation, all interest, charges, expenses, fees, attorneys'
fees  (including  attorneys' fees and expenses  incurred in bankruptcy),  expert
witness fees,  audit fees,  letter of credit fees,  collateral  monitoring fees,
closing fees, facility fees,  termination fees, minimum interest charges and any
other  sums  chargeable  to  Borrower  under this  Agreement  or under any other
present or future instrument or agreement between Borrower and Coast.

     "Permitted Liens" means the following:

          (i) purchase money security interests in specific items of Equipment;

          (ii) leases of specific items of Equipment;

          (iii) liens for taxes not yet payable;

          (iv) additional  security  interests and liens consented to in writing
by Coast, which consent shall not be unreasonably withheld;

          (v) security  interests being  terminated  substantially  concurrently
with this Agreement;

          (vi) liens of materialmen, mechanics, warehousemen, carriers, or other
similar  liens  arising  in  the  ordinary   course  of  business  and  securing
obligations which are not delinquent;

          (vii) liens  incurred in  connection  with the  extension,  renewal or
refinancing of the indebtedness  secured by liens of the type described above in
clauses (a) or (b) above,  provided that any  extension,  renewal or replacement
lien  is  limited  to the  property  encumbered  by the  existing  lien  and the
principal amount of the indebtedness being extended,  renewed or refinanced does
not increase;

          (viii) liens in favor of customs and revenue  authorities which secure
payment of customs duties in connection with the importation of goods; or

          (ix) subordinated liens securing $19,400,000 of existing  subordinated
debt of Borrower to SJMB,  L.P., St. James Capital  Partners,  L.P. and/or their
Affiliates,  $5,000,000  of other  existing  subordinated  debt of  Borrower  or
$2,000,000 of additional  subordinated debt of Borrower, in each case subject to
subordination agreements in form and substance satisfactory to Coast.

Coast will have the right to require, as a condition to its consent under clause
(d) above,  that the holder of the additional  security interest or lien sign an
intercreditor  agreement on Coast's then  standard  form,  acknowledge  that the
security interest is subordinate to the security interest in favor of Coast, and
agree not to take any action to enforce  its  subordinate

                                       4
<PAGE>

security  interest  so long as any  Obligations  remain  outstanding,  and  that
Borrower  agree  that any  uncured  default  in any  obligation  secured  by the
subordinate  security  interest shall also  constitute an Event of Default under
this Agreement.

     "Person" means any individual,  sole  proprietorship,  general partnership,
limited partnership,  limited liability partnership,  limited liability company,
joint venture, trust,  unincorporated  organization,  association,  corporation,
government, or any agency or political division thereof, or any other entity.

     "Prime Rate" means the actual  "Reference Rate" or the substitute  therefor
of the Bank of America  NT & SA whether or not that rate is the lowest  interest
rate charged by said bank. If the Prime Rate, as defined, is unavailable, "Prime
Rate"  shall mean the highest of the prime  rates  published  in the Wall Street
Journal on the first business day of the applicable  month,  as the base rate on
corporate loans at large U.S. money center commercial banks.

     "Real  Property" means  Borrower's  real property  located in Ector County,
Texas,  Nueces  County,  Texas,  Campbell  and  Gillette  Counties,  Wyoming and
Lafayette County, Louisiana.

     "Receivable  Loans"  means  the  Loans  described  in  Section  2(a) of the
Schedule.

     "Receivables"  means all of  Borrower's  now owned and  hereafter  acquired
accounts  (whether or not earned by  performance),  letters of credit,  contract
rights, chattel paper, instruments,  securities, documents, securities accounts,
security  entitlements,  commodity  contracts,  commodity  accounts,  investment
property and all other forms of obligations  at any time owing to Borrower,  all
guaranties  and  other  security  therefor,   all  merchandise  returned  to  or
repossessed  by  Borrower,  and all rights of  stoppage in transit and all other
rights or remedies of an unpaid vendor, lienor or secured party.

     "Renewal  Date" shall mean the Maturity  Date if this  Agreement is renewed
pursuant  to Section  9.1  hereof,  and each  anniversary  thereafter  that this
Agreement is renewed pursuant to Section 9.1 hereof.

     "Renewal  Fee" means the fee that  Borrower  must pay Coast upon renewal of
this  Agreement  pursuant to Section 9.1 hereof,  in the amount set forth on the
Schedule.

     "Solvent"  means,  with respect to any Person on a particular date, that on
such  date (a) at fair  valuations,  all of the  properties  and  assets of such
Person are greater than the sum of the debts, including contingent  liabilities,
of such Person,  (b) the present fair salable value of the properties and assets
of such  Person is not less than the  amount  that will be  required  to pay the
probable  liability  of such  Person on its debts as they  become  absolute  and
matured,  (c) such Person is able to realize upon its  properties and assets and
pay  its  debts  and  other  liabilities,   contingent   obligations  and  other
commitments  as they mature in the normal  course of  business,  (d) such Person
does not intend to, and does not believe  that it will,  incur debts beyond such
Person's ability to pay as such debts mature, and (e) such Person is not engaged
in  business  or a  transaction,  and is not about to engage  in  business  or a
transaction,  for which such  Person's  properties  and assets would  constitute
unreasonably  small capital  after giving due  consideration  to the  prevailing
practices  in the  industry in which such Person is engaged.  In  computing  the
amount  of  contingent  liabilities  at  any  time,  it is  intended  that  such
liabilities  will be computed at the amount that,  in light of all the facts and
circumstances  existing at such time,  represents the amount that reasonably can
be expected to become an actual or matured liability.

     "Tangible Net Worth" means consolidated  Owner's equity,  plus subordinated
debt  otherwise  permitted  hereunder,  less,  goodwill,  patents,   trademarks,
copyrights,  franchises,  formulas, leasehold interests, leasehold improvements,
non-compete agreements,  engineering plans, deferred tax benefits,  organization
costs,  prepaid items, and any other assets of Borrower that would be treated as
intangible assets on Borrower's balance sheet prepared in accordance with GAAP.

     "Term  Loans"  means the Loans  described  in Sections  2(b) and (c) of the
Schedule.

     "Year 2000  Problem"  means the risk that  computer  systems,  software and
applications  used by a Person may be unable to recognize  and perform  properly
date-sensitive  functions  involving  certain dates prior to and any dates after
December 31, 1999.

     "Other  Terms."  All  accounting  terms  used  in  this  Agreement,  unless
otherwise  indicated,  shall have the meanings given to such terms in accordance
with  GAAP.  All other  terms  contained  in this  Agreement,  unless  otherwise
indicated,  shall have the  meanings  provided  by the Code,  to the extent such
terms are defined therein.

                                       5
<PAGE>

2.   CREDIT FACILITIES.

     2.1 LOANS. Coast will make loans to Borrower (the "Loans"),  in amounts and
in percentages to be determined by Coast in its good faith discretion, up to the
Credit  Limit,  provided  no  Default or Event of Default  has  occurred  and is
continuing. In addition, Coast may create reserves against or reduce its advance
rates based upon Eligible  Receivables or Eligible Inventory without declaring a
Default  or an Event of  Default  if it  determines  that  there has  occurred a
Material Adverse Effect.

3.   INTEREST AND FEES

     3.1  INTEREST.  All Loans and all other  monetary  Obligations  shall  bear
interest at the rate shown on the Schedule,  except where expressly set forth to
the contrary in this Agreement.  Interest shall be payable monthly,  on the last
day of the month. Interest may, in Coast's discretion,  be charged to Borrower's
loan account,  and the same shall  thereafter  bear interest at the same rate as
the other Loans. Regardless of the amount of Obligations that may be outstanding
from time to time,  Borrower shall pay Coast Minimum Monthly Interest during the
term of this Agreement  with respect to the Receivable  Loans and the Term Loans
in the amount set forth on the Schedule.

     3.2 FEES. Borrower shall pay Coast the fee(s) shown on the Schedule,  which
are in addition to all  interest  and other sums payable to Coast and are deemed
fully earned and are nonrefundable.

4.   SECURITY INTEREST.

     To secure the payment and performance of all of the  Obligations  when due,
Borrower  hereby  grants  to  Coast a  security  interest  in all of  Borrower's
interest in the following, whether now owned or hereafter acquired, and wherever
located: All Receivables, Inventory, Equipment, Investment Property, and General
Intangibles,  including, without limitation, all of Borrower's Deposit Accounts,
and all  money,  and all  property  now or at any time in the  future in Coast's
possession  (including claims and credit  balances),  and all proceeds of any of
the  foregoing  (including  proceeds  of any  insurance  policies,  proceeds  of
proceeds,  and  claims  against  third  parties),  all  products  of  any of the
foregoing, and all books and records related to any of the foregoing (all of the
foregoing,  together  with all other  property  in which Coast may now or in the
future  be  granted  a  lien  or  security  interest,  is  referred  to  herein,
collectively, as the "Collateral")

5.   CONDITIONS PRECEDENT.

     The  obligation of Coast to make the Loans is subject to the  satisfaction,
in the sole  discretion  of  Coast,  at or prior to the first  advance  of funds
hereunder, of each, every and all of the following conditions:

     5.1 STATUS OF  ACCOUNTS AT CLOSING.  No accounts  payable  shall be due and
unpaid ninety (90) days past its invoice date except for such  accounts  payable
being contested in good faith in appropriate  proceedings and for which adequate
reserves have been provided.

     5.2  MINIMUM   AVAILABILITY.   Borrower  shall  have  minimum  availability
immediately  following  the  initial  funding  in the  amount  set  forth on the
Schedule.

     5.3 LANDLORD WAIVER. Coast shall have received duly executed:

          (a)  landlord  waivers  and access  agreements  in form and  substance
satisfactory to Coast, in Coast's sole and absolute discretion, and, when deemed
appropriate by Coast, in form for recording in the appropriate recording office,
with respect to all leased  locations where Borrower  maintains any inventory or
equipment.

          (b) mortgagee waivers in form and substance  satisfactory to Coast, in
Coast's sole and absolute  discretion,  and when deemed appropriate by Coast, in
form for  recording in the  appropriate  recording  office,  with respect to all
mortgaged locations where Borrower maintains any inventory or equipment.

     5.4 REAL PROPERTY. Coast shall have received duly executed mortgages and/or
deeds of trust in form and substance  satisfactory to Coast, in Coast's sole and
absolute discretion,  in form for recording in the appropriate recording office,
with respect to the Real Property.

                                       6
<PAGE>

     5.5 EXECUTED  AGREEMENT.  Coast shall have  received  this  Agreement  duly
executed  and in form  and  substance  satisfactory  to  Coast  in its  sole and
absolute discretion.

     5.6 OPINION OF BORROWER'S COUNSEL.  Coast shall have received an opinion of
Borrower's counsel, in form and substance  satisfactory to Coast in its sole and
absolute discretion.

     5.7 PRIORITY OF COAST'S LIENS. Coast shall have received the results of "of
record"  searches  satisfactory  to Coast in its sole and  absolute  discretion,
reflecting its Uniform Commercial Code filings against Borrower  indicating that
Coast has a perfected,  first  priority lien in and upon all of the  Collateral,
subject only to Permitted Liens.

     5.8 INSURANCE. Coast shall have received copies of the insurance binders or
certificates evidencing Borrower's compliance with Section 8.2 hereof, including
lender's loss payee endorsements.

     5.9 BORROWER'S AND GUARANTORS' EXISTENCE.  Coast shall have received copies
of Borrower's and any guarantor's  articles or certificate of incorporation  and
all amendments  thereto,  and a Certificate of Good Standing,  each certified by
the  Secretary  of  State  of  the  state  of  Borrower's  or  such  guarantor's
organization, and dated a recent date prior to the Closing Date, and Coast shall
have  received  Certificates  of Foreign  Qualification  for  Borrower  from the
Secretary of State of each state  wherein the failure to be so  qualified  could
have a Material Adverse Effect.

     5.10  ORGANIZATIONAL  DOCUMENTS.   Coast  shall  have  received  copies  of
Borrower's and any  guarantor's  By-laws and all amendments  thereto,  and Coast
shall have  received  copies of the  resolutions  of the board of  directors  of
Borrower and such  guarantor,  authorizing  the  execution  and delivery of this
Agreement and the other  documents  contemplated  hereby,  and  authorizing  the
transactions  contemplated  hereunder and thereunder,  and authorizing  specific
officers  of  Borrower  and such  guarantor  to  execute  the same on  behalf of
Borrower and such  guarantor,  in each case  certified by the Secretary or other
acceptable officer of Borrower and such guarantor as of the Closing Date.

     5.11 TAXES.  Coast shall have received evidence from Borrower that Borrower
has complied with all tax withholding and Internal Revenue Service  regulations,
in form and substance satisfactory to Coast in its sole and absolute discretion.

     5.12 YEAR 2000 PROBLEM ASSESSMENT CERTIFICATE.  Coast shall have received a
certificate  from the relevant  officer of Borrower to the effect  that,  as the
result of a  comprehensive  assessment  undertaken  by  Borrower  of  Borrower's
computer  systems,  software  and  applications  and after due  inquiry  made to
Borrower's material suppliers, vendors and customers, Borrower knows of no facts
that would cause Borrower to reasonably  believe that the Year 2000 Problem will
cause a Material Adverse Effect.

     5.13 DUE  DILIGENCE.  Coast shall have  completed  its due  diligence  with
respect to Borrower.

     5.14 OTHER DOCUMENTS AND  AGREEMENTS.  Coast shall have received such other
agreements,  instruments  and documents as Coast may require in connection  with
the transactions  contemplated hereby, all in form and substance satisfactory to
Coast in Coast's  sole and  absolute  discretion,  and in form for filing in the
appropriate filing office, including, but not limited to, those documents listed
in Section 5 of the Schedule.

6.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER

     In order to induce  Coast to enter into this  Agreement  and to make Loans,
Borrower  represents  and warrants to Coast as follows,  and Borrower  covenants
that the following  representations  will continue to be true, and that Borrower
will at all times comply with all of the following covenants:

     6.1  EXISTENCE  AND  AUTHORITY.  Borrower is and will  continue to be, duly
organized,  validly  existing  and  in  good  standing  under  the  laws  of the
jurisdiction of its organization.  Borrower is and will continue to be qualified
and licensed to do business in all  jurisdictions  in which any failure to do so
would have a Material Adverse Effect. The execution, delivery and performance by
Borrower of this Agreement, and all other documents contemplated hereby (a) have
been duly and  validly  authorized,  (b) are  enforceable  against  Borrower  in
accordance  with their terms (except as enforcement  may be limited by equitable
principles and by bankruptcy, insolvency, reorganization,  moratorium or similar
laws relating to creditors' rights generally), and (c) do not violate Borrower's
articles or certificate of incorporation,  or Borrower's  by-laws, or any law or
any material  agreement  or  instrument  which is binding  upon  Borrower or its
property,

                                       7
<PAGE>

and (d) do not constitute grounds for acceleration of any material  indebtedness
or obligation  under any material  agreement or instrument which is binding upon
Borrower or its property.

     6.2 NAME;  TRADE  NAMES AND STYLES.  The name of Borrower  set forth in the
heading to this  Agreement is its correct  name.  Listed on the Schedule are all
prior names of Borrower  and all of  Borrower's  present and prior trade  names.
Borrower shall give Coast thirty (30) days' prior written notice before changing
its name or doing business under any other name. Borrower has complied, and will
in the future comply,  with all laws relating to the conduct of business under a
fictitious business name.

     6.3 PLACE OF BUSINESS; LOCATION OF COLLATERAL. The address set forth in the
heading to this Agreement is Borrower's  chief  executive  office.  In addition,
Borrower has places of business and  Collateral is located only at the locations
set forth on the  Schedule.  Borrower will give Coast at least thirty (30) days'
prior written notice before opening any additional  place of business,  changing
its chief executive  office, or moving any of the Collateral to a location other
than Borrower's Address or one of the locations set forth on the Schedule.

     6.4 TITLE TO COLLATERAL;  PERMITTED LIENS. Borrower is now, and will at all
times in the future be, the sole owner of all the  Collateral,  except for items
of Equipment which are leased by Borrower. The Collateral now is and will remain
free and clear of any and all liens, charges,  security interests,  encumbrances
and adverse claims, except for Permitted Liens. Coast now has, and will continue
to have, a first-priority  perfected and enforceable security interest in all of
the Collateral,  subject only to the Permitted  Liens,  and Borrower will at all
times defend Coast and the Collateral against all claims of others.  None of the
Collateral  now is or will be affixed to any real property in such a manner,  or
with such intent, as to become a fixture.  Borrower is not and will not become a
lessee under any real property lease pursuant to which the lessor may obtain any
rights in any of the  Collateral  and no such  lease now  prohibits,  restrains,
impairs or will  prohibit,  restrain  or impair  Borrower's  right to remove any
Collateral  from the leased  premises.  Whenever any  Collateral is located upon
premises in which any third party has an interest (whether as owner,  mortgagee,
beneficiary under a deed of trust, lien or otherwise),  Borrower shall, whenever
requested  by Coast,  use its best  efforts to cause such third party to execute
and  deliver  to  Coast,  in  form   acceptable  to  Coast,   such  waivers  and
subordinations  as Coast shall  specify,  so as to ensure that Coast's rights in
the Collateral  are, and will continue to be, superior to the rights of any such
third party.  Borrower will keep in full force and effect,  and will comply with
all the terms of, any lease of real property  where any of the Collateral now or
in the future may be located.

     6.5  MAINTENANCE  OF  COLLATERAL.  Borrower will maintain the Collateral in
good  working  condition,  and  Borrower  will  not use the  Collateral  for any
unlawful  purpose.  Borrower  will  immediately  advise  Coast in writing of any
material loss or damage to the Collateral.

     6.6 BOOKS  AND  RECORDS.  Borrower  has  maintained  and will  maintain  at
Borrower's  Address  complete and  accurate  books and  records,  comprising  an
accounting system in accordance with GAAP.

     6.7 FINANCIAL  CONDITION,  STATEMENTS AND REPORTS. All financial statements
now or in the future  delivered  to Coast have been,  and will be,  prepared  in
conformity  with  GAAP  (except,  in the  case of  monthly  unaudited  financial
statements, for the absence of footnotes, statements of cash flow and statements
of shareholders equity, and subject to normal year-end  adjustments) and now and
in the future will fairly  reflect the financial  condition of Borrower,  at the
times and for the periods therein  stated.  Between the last date covered by any
such statement provided to Coast and the date hereof, there has been no Material
Adverse Effect. Borrower is now and will continue to be Solvent.

     6.8 TAX RETURNS AND PAYMENTS;  PENSION  CONTRIBUTIONS.  Borrower has timely
filed,  and will timely file,  all tax returns and reports  required by foreign,
federal, state and local law, and Borrower has timely paid, and will timely pay,
all  foreign,  federal,  state  and  local  taxes,  assessments,   deposits  and
contributions  now or in the future owed by  Borrower.  Borrower  may,  however,
defer payment of any contested  taxes,  provided that Borrower (i) in good faith
contests  Borrower's  obligation  to pay the  taxes by  appropriate  proceedings
promptly and diligently instituted and conducted, (ii) notifies Coast in writing
of the  commencement of, and any material  development in, the proceedings,  and
(iii) posts bonds or takes any other steps required to keep the contested  taxes
from becoming a lien upon any of the Collateral. As of the date hereof, Borrower
is unaware of any claims or adjustments proposed for any of Borrower's prior tax
years  which  could  result in  additional  taxes  becoming  due and  payable by
Borrower.  Borrower has paid, and shall continue to pay all amounts necessary to
fund all present and future  pension,  profit sharing and deferred  compensation
plans in accordance with their terms, and Borrower has not and will not withdraw
from participation in, permit partial or complete  termination of, or permit the
occurrence  of any other event with respect to, any such plan which could result
in any liability of Borrower,  including  any  liability to the Pension  Benefit
Guaranty  Corporation  or its  successors  or  any

                                       8
<PAGE>

other  governmental  agency.  Borrower shall, on a monthly basis,  provide Coast
with a certificate  of its certified  public  accountants  that all  outstanding
payroll taxes have been paid in full.

     6.9 COMPLIANCE  WITH LAW.  Borrower has complied,  and will comply,  in all
material respects,  with all provisions of all material foreign,  federal, state
and local laws and regulations relating to Borrower,  including, but not limited
to, the Fair Labor Standards Act, and those relating to Borrower's  ownership of
real or personal property, the conduct and licensing of Borrower's business, and
environmental matters.

     6.10  LITIGATION.  Except as disclosed in the Schedule,  there is no claim,
suit, litigation,  proceeding or investigation pending or (to best of Borrower's
knowledge) threatened by or against or affecting Borrower in any court or before
any  governmental  agency (or any basis  therefor  known to Borrower)  which may
result,  either  separately or in the aggregate,  in a Material  Adverse Effect.
Borrower  will  promptly  inform  Coast in  writing  of any  claim,  proceeding,
litigation or investigation in the future threatened or instituted by or against
Borrower involving an amount set forth on the Schedule.

     6.11 USE OF  PROCEEDS.  All  proceeds of all Loans shall be used solely for
lawful  business  purposes.  Borrower is not  purchasing or carrying any "margin
stock" (as  defined in  Regulation  U of the Board of  Governors  of the Federal
Reserve System) and no part of the proceeds of any Loan 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."

     6.12 YEAR 2000  COMPLIANCE.  As the  result of a  comprehensive  review and
assessment  undertaken by Borrower of Borrower's computer systems,  software and
applications  and after  due  inquiry  made of  Borrower's  material  suppliers,
vendors  and  customers  Borrower  represents  and  warrants  that the Year 2000
problem will not result in a Material Adverse Effect.

7.   RECEIVABLES.

     7.1  REPRESENTATIONS  RELATING  TO  RECEIVABLES.  Borrower  represents  and
warrants to Coast as follows:  Each  Receivable  with respect to which Loans are
requested  by  Borrower  shall,  on the date  each Loan is  requested  and made,
represent an  undisputed  bona fide  existing  unconditional  obligation  of the
Account  Debtor  created by the sale,  delivery and  acceptance  of goods or the
rendition of services in the ordinary course of Borrower's business.

     7.2  REPRESENTATIONS  RELATING TO DOCUMENTS AND LEGAL COMPLIANCE.  Borrower
represents and warrants to Coast as follows:  All statements made and all unpaid
balances appearing in all invoices,  instruments and other documents  evidencing
the  Receivables  are and  shall be true  and  correct  and all  such  invoices,
instruments and other documents and all of Borrower's  books and records are and
shall be  genuine  and in all  respects  what they  purport to be. All sales and
other  transactions  underlying  or giving rise to each  Receivable  shall fully
comply with all applicable  laws and  governmental  rules and  regulations.  All
signatures  and  indorsements  on all  documents,  instruments,  and  agreements
relating to all  Receivables  are and shall be genuine,  and all such documents,
instruments  and agreements  are and shall be legally  enforceable in accordance
with their terms.

     7.3 SCHEDULES AND DOCUMENTS RELATING TO RECEIVABLES. Borrower shall deliver
to Coast via facsimile,  unless  otherwise  directed by Coast, at such locations
and at such  intervals  as  Coast  may  request,  transaction  reports  and loan
requests, schedules of Receivables, and schedules of collections, all on Coast's
standard  forms;  provided,  however,  that  Borrower's  failure to execute  and
deliver the same shall not affect or limit Coast's  security  interest and other
rights in all of Borrower's Receivables, nor shall Coast's failure to advance or
lend against a specific Receivable affect or limit Coast's security interest and
other  rights  therein.  Loan  requests  received  after 10:30 A.M. Los Angeles,
California  time,  will not be  considered by Coast until the next Business Day.
Together with each such schedule, or later if requested by Coast, Borrower shall
furnish Coast with copies (or, at Coast's request,  originals) of all contracts,
orders,  invoices,  and  other  similar  documents,  and all  original  shipping
instructions,  delivery  receipts,  bills  of  lading,  and  other  evidence  of
delivery,  for any  goods  the sale or  disposition  of which  gave rise to such
Receivables,  and Borrower  warrants the  genuineness  of all of the  foregoing.
Borrower shall also furnish to Coast an aged accounts  receivable  trial balance
in such form and at such intervals as Coast shall request. In addition, Borrower
shall deliver to Coast the originals of all instruments, chattel paper, security
agreements,  guarantees and other documents and property  evidencing or securing
any Receivables, upon receipt thereof and in the same form as received, with all
necessary indorsements, all of which shall be with recourse. Borrower shall also
provide Coast with copies of all credit memos as and when requested by Coast.

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<PAGE>

     7.4 COLLECTION OF RECEIVABLES. Borrower shall have the right to collect all
Receivables,  unless and until an Event of Default has occurred.  Borrower shall
hold all  payments  on, and proceeds  of,  Receivables  in trust for Coast,  and
Borrower  shall  deliver all such  payments and proceeds to Coast within one (1)
Business Day after receipt by Borrower, in their original form, duly endorsed to
Coast, to be applied to the Obligations in such order as Coast shall  determine.
Coast may,  in its  discretion,  require  that all  proceeds  of  Collateral  be
deposited by Borrower into a lockbox account, or such other "blocked account" as
Coast may specify, pursuant to a blocked account agreement in such form as Coast
may specify. Coast or its designee may, at any time, notify Account Debtors that
Coast has been granted a security interest in the Receivables.

     7.5 REMITTANCE OF PROCEEDS.  All proceeds  arising from the  disposition of
any  Collateral  shall be  delivered  to Coast within one (1) Business Day after
receipt by Borrower,  in their  original  form,  duly  endorsed to Coast,  to be
applied to the  Obligations  in such order as Coast  shall  determine.  Borrower
agrees that it will not commingle  proceeds of Collateral with any of Borrower's
other funds or  property,  but will hold such  proceeds  separate and apart from
such other funds and property and in an express trust for Coast. Nothing in this
Section limits the restrictions on disposition of Collateral set forth elsewhere
in this Agreement.

     7.6  DISPUTES.  Borrower  shall  notify  Coast  promptly of all disputes or
claims  relating  to  Receivables.  Borrower  shall not forgive  (completely  or
partially),  compromise or settle any  Receivable for less than payment in full,
or agree to do any of the  foregoing,  except that Borrower may do so,  provided
that: (a) Borrower does so in good faith, in a commercially  reasonable  manner,
in the ordinary course of business, and in arm's length transactions,  which are
reported to Coast on the regular  reports  provided to Coast;  (b) no Default or
Event of Default has occurred and is continuing; and (c) taking into account all
such discounts settlements and forgiveness, the total outstanding Loans will not
exceed the Credit Limit. Coast may, at any time after the occurrence of an Event
of Default,  settle or adjust  disputes or claims  directly with Account Debtors
for amounts and upon terms which Coast  considers  advisable  in its  reasonable
credit  judgment and, in all cases,  Coast shall credit  Borrower's Loan account
with only the net amounts received by Coast in payment of any Receivables.

     7.7 RETURNS.  Provided no Event of Default has occurred and is  continuing,
if any Account Debtor  returns any Inventory to Borrower in the ordinary  course
of its business,  Borrower shall  promptly  determine the reason for such return
and promptly issue a credit  memorandum to the Account Debtor in the appropriate
amount.  In the event any attempted  return  occurs after the  occurrence of any
Event of Default,  Borrower  shall (a) hold the returned  Inventory in trust for
Coast,  (b)  segregate  all  returned  Inventory  from all of  Borrower's  other
property,  (c) conspicuously  label the returned Inventory as subject to Coast's
security  interest,  and (d)  immediately  notify  Coast  of the  return  of any
Inventory,  specifying the reason for such return, the location and condition of
the returned  Inventory,  and on Coast's request deliver such returned Inventory
to Coast.

     7.8  VERIFICATION.  Coast may, from time to time,  verify directly with the
respective  Account Debtors the validity,  amount and other matters  relating to
the Receivables, by means of mail, telephone or otherwise, either in the name of
Borrower or Coast or such other name as Coast may choose anything.

     7.9 NO LIABILITY. Coast shall not under any circumstances be responsible or
liable for any shortage or discrepancy in, damage to, or loss or destruction of,
any goods, the sale or other disposition of which gives rise to a Receivable, or
for any error,  act,  omission or delay of any kind occurring in the settlement,
failure to settle,  collection  or failure  to collect  any  Receivable,  or for
settling any Receivable in good faith for less than the full amount thereof, nor
shall Coast be deemed to be responsible for any of Borrower's  obligations under
any contract or agreement  giving rise to a  Receivable.  Nothing  herein shall,
however,  relieve Coast from  liability for its own gross  negligence or willful
misconduct.

8.   ADDITIONAL DUTIES OF THE BORROWER

     8.1 FINANCIAL AND OTHER COVENANTS.  Borrower shall at all times comply with
the financial and other covenants set forth in the Schedule.

     8.2  INSURANCE.  Borrower  shall,  at all times  insure all of the tangible
personal  property  Collateral  and carry such other  business  insurance,  with
insurers  reasonably  acceptable to Coast, in such form and amounts as Coast may
reasonably  require,  and Borrower  shall provide  evidence of such insurance to
Coast,  so that Coast is satisfied that such insurance is, at all times, in full
force and effect. All liability  insurance policies of Borrower shall name Coast
as an  additional  insured,  and all  property  casualty  and related  insurance
policies of Borrower shall name Coast as a loss payee

                                       10
<PAGE>

thereon and  Borrower  shall  cause a lender's  loss payee  endorsement  in form
reasonably  acceptable  to  Coast.  Upon  receipt  of the  proceeds  of any such
insurance,  Coast shall apply such proceeds in reduction of the  Obligations  as
Coast shall determine in its sole discretion,  except that,  provided no Default
or Event of Default has  occurred  and is  continuing,  Coast  shall  release to
Borrower  insurance  proceeds  with respect to Equipment  totaling less than the
amount  set forth in  Section 8 of the  Schedule,  which  shall be  utilized  by
Borrower  for the  replacement  of the  Equipment  with  respect  to  which  the
insurance  proceeds were paid. Coast may require  reasonable  assurance that the
insurance  proceeds so released will be so used. If Borrower fails to provide or
pay for any  insurance,  Coast may, but is not  obligated to, obtain the same at
Borrower's  expense.  Borrower  shall  promptly  deliver to Coast  copies of all
reports made to insurance companies.

     8.3 REPORTS. Borrower, at its expense, shall provide Coast with the written
reports set forth in Section 8 of the Schedule,  and such other written  reports
with respect to Borrower (including budgets, sales projections,  operating plans
and other financial documentation),  as Coast shall from time to time reasonably
specify.

     8.4 ACCESS TO COLLATERAL,  BOOKS AND RECORDS.  At reasonable  times but not
less frequently  than quarterly and on one (1) Business Day's notice,  Coast, or
its agents,  shall have the right to perform Audits. Coast shall take reasonable
steps to keep confidential all confidential  information  obtained in any Audit,
but Coast shall have the right to disclose any such information to its auditors,
regulatory agencies, and attorneys,  and pursuant to any subpoena or other legal
process. The Audits shall be at Borrower's expense and the charge for the Audits
shall be Seven Hundred  Fifty Dollars  ($750) per person per day (or such higher
amount as shall  represent  Coast's then current  standard charge for the same),
plus  reasonable  out-of-pocket  expenses.  Borrower  will  not  enter  into any
agreement  with any  accounting  firm,  service  bureau or third  party to store
Borrower's  books or records at any  location  other  than  Borrower's  Address,
without first  notifying  Coast of the same and obtaining the written  agreement
from such accounting firm, service bureau or other third party to give Coast the
same  rights with  respect to access to books and records and related  rights as
Coast has under this Loan  Agreement.  Borrower  shall  also take all  necessary
steps  to  assure  that  its  material  accounting  and  software,  systems  and
applications,  and those of its  accounting  firm,  service  bureau or any other
third  party  vendor  or  supplier,  will,  on a timely  basis,  adequately  and
completely address the Year 2000 Problem in all material respects.

     8.5 NEGATIVE  COVENANTS.  Borrower shall not, without Coast's prior written
consent, do any of the following:

          (a) merge or consolidate with another entity,  except in a transaction
in which (i) the owners of the Borrower hold at least fifty percent (50%) of the
ownership  interest in the  surviving  entity  immediately  after such merger or
consolidation, and (ii) the Borrower is the surviving entity;

          (b) acquire any assets, except (i) in the ordinary course of business,
or (ii) in a transaction or a series of  transactions  not involving the payment
of an  aggregate  amount in excess of the  amount  set forth in Section 8 of the
Schedule;

          (c) enter into any other  transaction  outside the ordinary  course of
business;

          (d) sell or transfer any  Collateral,  except for the sale of finished
Inventory in the ordinary course of Borrower's business, and except for the sale
of obsolete or unneeded Equipment in the ordinary course of business;

          (e) store any Inventory or other  Collateral with any  warehouseman or
other third party;

          (f)  sell  any  Inventory  on  a   sale-or-return,   guaranteed  sale,
consignment, or other contingent basis;

          (g) make any loans of any money or other  assets,  except (i) advances
to  customers or  suppliers  in the  ordinary  course of  business,  (ii) travel
advances, employee relocation loans and other employee loans and advances in the
ordinary  course  of  business,  and  (iii)  loans to  employees,  officers  and
directors for the purpose of purchasing equity securities of the Borrower;

          (h) incur any debts,  outside the ordinary  course of business,  which
would have a Material Adverse Effect;

          (i)  guarantee  or  otherwise   become  liable  with  respect  to  the
obligations of another party or entity;

                                       11
<PAGE>

          (j) pay or declare any  dividends or  distributions  on the  ownership
interests in Borrower (except for dividends or  distributions  payable solely in
stock form of ownership interests in Borrower);

          (k) make any change in Borrower's capital structure which would have a
Material Adverse Effect; or

          (l) dissolve or elect to dissolve.

     Transactions permitted by the foregoing provisions of this Section are only
permitted  if no Default or Event of Default is  continuing  or would occur as a
result of such transaction.

     8.6 LITIGATION  COOPERATION.  Should any third-party  suit or proceeding be
instituted  by or against  Coast with respect to any  Collateral  or relating to
Borrower,  Borrower shall, without expense to Coast, make available Borrower and
its officers,  employees  and agents and  Borrower's  books and records,  to the
extent that Coast may deem them  reasonably  necessary  in order to prosecute or
defend any such suit or proceeding.

     8.7 FURTHER  ASSURANCES.  Borrower  agrees,  at its expense,  on request by
Coast,  to  execute  all  documents  and take all  actions,  as Coast,  may deem
reasonably  necessary  or  useful  in  order to  perfect  and  maintain  Coast's
perfected security interest in the Collateral,  and in order to fully consummate
the transactions contemplated by this Agreement.

9.   TERM.

     9.1  MATURITY  DATE.  This  Agreement  shall  continue in effect  until the
Maturity Date;  provided that the Maturity Date shall automatically be extended,
and this Agreement shall  automatically  and continuously  renew, for successive
additional terms of one year each,  unless one party gives written notice to the
other, not less than one hundred twenty (120) days prior to the Maturity Date or
the next  Renewal  Date,  that such party  elects to  terminate  this  Agreement
effective on the Maturity Date or such next Renewal  Date. If this  Agreement is
renewed under this Section 9.1, Borrower shall pay to Coast a Renewal Fee in the
amount  shown in Section 3 of the  Schedule.  The  Renewal  Fee shall be due and
payable on the Renewal Date and  thereafter  shall bear interest at a rate equal
to the rate applicable to the Receivable Loans.

     9.2  EARLY  TERMINATION.  This  Agreement  may be  terminated  prior to the
Maturity  Date as follows:  (a) by Borrower,  effective  three (3) Business Days
after written notice of  termination  is given to Coast;  or (b) by Coast at any
time after the  occurrence  of an Event of Default,  without  notice,  effective
immediately.  If this Agreement is terminated by Borrower or by Coast under this
Section 9.2,  Borrower shall pay to Coast an Early Termination Fee in the amount
shown in Section 3 of the Schedule.  The Early  Termination Fee shall be due and
payable on the effective date of termination and thereafter  shall bear interest
at a rate equal to the rate applicable to the Receivable Loans.

     9.3  PAYMENT  OF  OBLIGATIONS.  On the  Maturity  Date  or on  any  earlier
effective  date of  termination,  Borrower  shall  pay and  perform  in full all
Obligations, whether evidenced by installment notes or otherwise, and whether or
not all or any part of such  Obligations  are  otherwise  then due and  payable.
Notwithstanding  any  termination  of this  Agreement,  all of Coast's  security
interests in all of the  Collateral  and all of the terms and provisions of this
Agreement  shall  continue in full force and effect until all  Obligations  have
been paid and performed in full;  provided that,  without limiting the fact that
Loans are subject to the discretion of Coast, Coast may, in its sole discretion,
refuse to make any further Loans after termination.  No termination shall in any
way  affect  or  impair  any  right or  remedy  of  Coast,  nor  shall  any such
termination  relieve  Borrower  of any  Obligation  to  Coast,  until all of the
Obligations  have been paid and performed in full.  Upon payment and performance
in full of all the Obligations  and  termination of this Agreement,  Coast shall
promptly deliver to Borrower termination statements,  requests for reconveyances
and such other documents as may be required to fully terminate  Coast's security
interests,  including  without  limitation  releases  of any and all  landlords'
waivers and subordinations.

10.  EVENTS OF DEFAULT AND REMEDIES.

     10.1 EVENTS OF DEFAULT. The occurrence of any of the following events shall
constitute an "Event of Default" under this  Agreement,  and Borrower shall give
Coast immediate written notice thereof:

                                       12
<PAGE>

          (a) Any warranty,  representation,  statement,  report or  certificate
made or delivered to Coast by Borrower or any of Borrower's officers,  employees
or agents, now or in the future,  shall be untrue or misleading and results in a
Material Adverse Effect; or

          (b)  Borrower  shall  fail to pay when  due any  Loan or any  interest
thereon or any other monetary Obligation; or

          (c) the  total  Loans and other  Obligations  outstanding  at any time
shall exceed the Credit Limit; or

          (d) Borrower shall fail to deliver the proceeds of Collateral to Coast
as  provided  in Section  7.5 above,  or shall fail to give Coast  access to its
books and records or  Collateral  as  provided  in Section  8.4 above,  or shall
breach any negative covenant set forth in Section 8.5 above; or

          (e) Borrower  shall fail to comply with the  financial  covenants  (if
any) set forth in the  Schedule or shall fail to perform any other  non-monetary
Obligation which by its nature cannot be cured; or

          (f) Borrower shall fail to perform any other non-monetary  Obligation,
which failure is not cured within five (5) Business Days after the date due; or

          (g) Any levy,  assessment,  attachment,  seizure,  lien or encumbrance
(other than a Permitted Lien) is made on all or any part of the Collateral which
is not cured within ten (10) days after the occurrence of the same; or

          (h) any  default  or event of  default  occurs  under  any  obligation
secured by a  Permitted  Lien,  which is not cured  within any  applicable  cure
period or waived in writing by the holder of the Permitted Lien; or

          (i) Borrower breaches any material  contract or obligation,  which has
or may  reasonably be expected to have a Material  Adverse  Effect,  unless such
breach is capable of being  cured and is cured  within  five (5)  Business  days
after the occurrence thereof; or

          (j)  Dissolution,  termination  of  existence,  insolvency or business
failure of Borrower or any guarantor of any of the  Obligations;  or appointment
of a receiver,  trustee or  custodian,  for all or any part of the  property of,
assignment  for  the  benefit  of  creditors  by,  or  the  commencement  of any
proceeding  by Borrower or any  guarantor  of any of the  Obligations  under any
reorganization,  bankruptcy,  insolvency,  arrangement,  readjustment  of  debt,
dissolution or  liquidation  law or statute of any  jurisdiction,  now or in the
future in effect; or

          (k)  the  commencement  of  any  proceeding  against  Borrower  or any
guarantor  of any of  the  Obligations  under  any  reorganization,  bankruptcy,
insolvency, arrangement, readjustment of debt, dissolution or liquidation law or
statute of any  jurisdiction,  now or in the future in effect,  which is (i) not
timely  controverted,  or (ii) not cured by the dismissal  thereof within thirty
(30) days after the date commenced; or

          (l) revocation or termination of, or limitation or denial of liability
upon, any guaranty of the Obligations or any attempt to do any of the foregoing,
or commencement of proceedings by any guarantor of any of the Obligations  under
any bankruptcy or insolvency law; or

          (m) revocation or termination of, or limitation or denial of liability
upon, any pledge of any certificate of deposit,  securities or other property or
asset  of any kind  pledged  by any  third  party  to  secure  any or all of the
Obligations,  or any  attempt to do any of the  foregoing,  or  commencement  of
proceedings  by or  against  any  such  third  party  under  any  bankruptcy  or
insolvency law; or

          (n)  Borrower or any  guarantor  of any of the  Obligations  makes any
payment on account of any indebtedness or obligation which has been subordinated
to the  Obligations,  other than as  permitted in the  applicable  subordination
agreement,   or  if  any  Person  who  has  subordinated  such  indebtedness  or
obligations terminates or in any way limits his subordination agreement; or

          (o) Except as permitted under Section 8.5(a), Borrower shall suffer or
experience any Change of Control  without Coast's prior written  consent,  which
consent shall be in the  discretion  of Coast in the exercise of its  reasonable
business judgment; or

                                       13
<PAGE>

          (p) Borrower shall  generally not pay its debts as they become due, or
Borrower shall conceal, remove or transfer any part of its property, with intent
to hinder, delay or defraud its creditors, or make or suffer any transfer of any
of its  property  which  may be  fraudulent  under  any  bankruptcy,  fraudulent
conveyance or similar law; or

          (q) there shall be any Material Adverse Effect.

Coast may cease making any Loans or extending any credit hereunder during any of
the above cure periods.

     10.2 REMEDIES.  Upon the  occurrence,  and during the  continuance,  of any
Event of Default, Coast, at its option, and without notice or demand of any kind
(all of which are hereby expressly  waived by Borrower),  may do any one or more
of the following:

          (a) Cease making Loans or otherwise extending credit to Borrower under
this Agreement or any other document or agreement;

          (b)  Accelerate  and declare all or any part of the  Obligations to be
immediately  due,  payable  and  performable,  notwithstanding  any  deferred or
installment  payments  allowed by any  instrument  evidencing or relating to any
Obligation;

          (c) Take possession of any or all of the Collateral wherever it may be
found,  and for that purpose  Borrower hereby  authorizes Coast without judicial
process to enter onto any of Borrower's premises without  interference to search
for, take possession of, keep, store or remove any of the Collateral, and remain
on the  premises or cause a  custodian  to remain on the  premises in  exclusive
control  thereof,  without  charge  for so long as  Coast  deems  it  reasonably
necessary  in order  to  complete  the  enforcement  of its  rights  under  this
Agreement or any other agreement;  provided,  however, that should Coast seek to
take  possession of any of the  Collateral  by Court  process,  Borrower  hereby
irrevocably waives:

               (i) any bond and any surety or security relating thereto required
by any statute, court rule or otherwise as an incident to such possession;

               (ii) any demand for possession  prior to the  commencement of any
suit or action to recover possession thereof;

               (iii) and any require-ment  that Coast retain  possession of, and
not dispose of, any such Collateral until after trial or final judgment;

          (d) Require Borrower to assemble any or all of the Collateral and make
it  available  to Coast at  places  designated  by Coast  which  are  reasonably
convenient to Coast and Borrower, and to remove the Collateral to such locations
as Coast may deem advisable;

          (e) Complete the processing, manufacturing or repair of any Collateral
prior to a  disposition  thereof  and,  for such  purpose and for the purpose of
removal,  Coast  shall  have the  right to use  Borrower's  premises,  vehicles,
hoists, lifts, cranes, equipment and all other property without charge. Coast is
hereby  granted a license  or other  right to use,  without  charge,  Borrower's
labels,  patents,  copyrights,  rights of use of any name, trade secrets,  trade
names,  trademarks,  service marks, and advertising matter, or any property of a
similar nature, as it pertains to the Collateral,  in completing  production of,
advertising for sale, and selling any Collateral and Borrower's rights under all
licenses and all franchise agreements shall inure to Coast's benefit;

          (f) Sell, lease or otherwise dispose of any of the Collateral,  in its
condition  at  the  time  Coast  obtains  possession  of  it  or  after  further
manufacturing, processing or repair, at one or more public and/or private sales,
in lots or in bulk, for cash,  exchange or other property,  or on credit, and to
adjourn  any  such  sale  from  time to time  without  notice  other  than  oral
announcement  at the time  scheduled  for sale.  Coast  shall  have the right to
conduct such disposition on Borrower's premises without charge, for such time or
times as Coast deems reasonable,  or on Coast's  premises,  or elsewhere and the
Collateral need not be located at the place of  disposition.  Coast may directly
or through any affiliated  company  purchase or lease any Collateral at any such
public  disposition,  and if permissible  under  applicable  law, at any private
disposition.  Any sale or other  disposition  of  Collateral  shall not  relieve
Borrower of any liability Borrower may have if any Collateral is defective as to
title or physical condition or otherwise at the time of sale;

                                       14
<PAGE>

          (g) Demand  payment  of,  and  collect  any  Receivables  and  General
Intangibles  comprising  Collateral  and,  in  connection  therewith,   Borrower
irrevocably  authorizes  Coast  to  endorse  or  sign  Borrower's  name  on  all
collections,  receipts,  instruments and other documents,  to take possession of
and open mail  addressed to Borrower  and remove  therefrom  payments  made with
respect to any item of the Collateral or proceeds thereof,  and, in Coast's sole
discretion,  to grant  extensions of time to pay,  compromise  claims and settle
Receivables and the like for less than face value; and

          (h) Demand and receive  possession  of any of  Borrower's  federal and
state income tax returns and the books and records  utilized in the  preparation
thereof or referring thereto.

     All attorneys' fees, expenses,  costs, liabilities and obligations incurred
by Coast  (including  attorneys'  fees and expenses  incurred in connection with
bankruptcy)  with  respect to the  foregoing  shall be due from the  Borrower to
Coast on demand.  Coast may charge the same to Borrower's loan account,  and the
same shall  thereafter  bear  interest at the same rate as is  applicable to the
Receivable Loans. Without limiting any of Coast's rights and remedies,  from and
after the  occurrence of any Event of Default,  the interest rate  applicable to
the Obligations shall be increased by an additional three percent per annum.

     10.3  STANDARDS FOR  DETERMINING  COMMERCIAL  REASONABLENESS.  Borrower and
Coast  agree  that a sale or other  disposition  (collectively,  "sale")  of any
Collateral  which  complies with the following  standards will  conclusively  be
deemed to be commercially reasonable:

          (a) Notice of the sale is given to  Borrower  at least  seven (7) days
prior to the  sale,  and,  in the case of a public  sale,  notice of the sale is
published  at least  seven (7) days  before the sale in a  newspaper  of general
circulation in the county where the sale is to be conducted;

          (b)  Notice  of  the  sale   describes  the   collateral  in  general,
non-specific terms;

          (c) The sale is  conducted  at a place  designated  by Coast,  with or
without the Collateral being present;

          (d) The sale  commences at any time between 8:00 a.m. and 6:00 p.m Los
Angeles, California time;

          (e) Payment of the  purchase  price in cash or by  cashier's  check or
wire transfer is required; and

          (f) With respect to any sale of any of the Collateral,  Coast may (but
is not obligated to) direct any prospective purchaser to ascertain directly from
Borrower any and all information concerning the same.

     Coast shall be free to employ  other  methods of  noticing  and selling the
Collateral, in its discretion, if they are commercially reasonable.

     10.4 POWER OF ATTORNEY.  Borrower  grants to Coast an irrevocable  power of
attorney  coupled with an interest,  authorizing  and  permitting  Coast (acting
through any of its  employees,  attorneys or agents) at any time, at its option,
but without  obligation,  with or without notice to Borrower,  and at Borrower's
expense, to do any or all of the following, in Borrower's name or otherwise, but
Coast  agrees to exercise  the  following  powers in a  commercially  reasonable
manner:

          (a) Execute on behalf of Borrower any documents that Coast may, in its
sole  discretion,  deem  advisable  in order to  perfect  and  maintain  Coast's
security interest in the Collateral, or in order to exercise a right of Borrower
or Coast,  or in order to fully  consummate  all the  transactions  contemplated
under this Agreement, and all other present and future agreements;

          (b)  Execute  on  behalf  of   Borrower   any   document   exercising,
transferring or assigning any option to purchase,  sell or otherwise  dispose of
or to lease (as lessor or lessee) any real or personal property which is part of
Coast's Collateral or in which Coast has an interest;

                                       15
<PAGE>

          (c)  Execute  on behalf of  Borrower,  any  invoices  relating  to any
Receivable,  any draft against any Account  Debtor and any notice to any Account
Debtor,  any  proof  of claim  in  bankruptcy,  any  Notice  of  Lien,  claim of
mechanic's,  materialman's  or other lien,  or  assignment  or  satisfaction  of
mechanic's, materialman's or other lien;

          (d)  Take  control  in any  manner  of any cash or  non-cash  items of
payment  or  proceeds  of  Collateral;  endorse  the name of  Borrower  upon any
instruments, or documents,  evidence of payment or Collateral that may come into
Coast's possession;

          (e)  Endorse  all checks and other  forms of  remittances  received by
Coast;

          (f) Pay,  contest or settle any lien,  charge,  encumbrance,  security
interest and adverse claim in or to any of the Collateral, or any judgment based
thereon, or otherwise take any action to terminate or discharge the same;

          (g) Grant  extensions  of time to pay,  compromise  claims  and settle
Receivables  and  General  Intangibles  for less than face value and execute all
releases and other documents in connection therewith;

          (h) Pay any sums required on account of Borrower's  taxes or to secure
the release of any liens therefor, or both;

          (i) Settle and adjust,  and give releases of, any insurance claim that
relates to any of the Collateral and obtain payment therefor;

          (j) Instruct any third party having custody or control of any books or
records  belonging to, or relating to, Borrower to give Coast the same rights of
access and other rights with respect  thereto as Coast has under this Agreement;
and

          (k) Take any action or pay any sum  required of  Borrower  pursuant to
this Agreement and any other present or future agreements.

Any and all sums paid and any and all costs, expenses, liabilities,  obligations
and attorneys'  fees incurred by Coast  (including  attorneys' fees and expenses
incurred pursuant to bankruptcy) with respect to the foregoing shall be added to
and become part of the  Obligations,  and shall be payable on demand.  Coast may
charge  the  foregoing  to  Borrower's  loan  account  and the  foregoing  shall
thereafter bear interest at the same rate applicable to the Receivable Loans. In
no event shall Coast's  rights under the  foregoing  power of attorney or any of
Coast's other rights under this Agreement be deemed to indicate that Coast is in
control of the business,  management or properties of Borrower.  Borrower  shall
pay,  indemnify,  defend,  and hold Coast and each of its  officers,  directors,
employees,   counsel,  agents,  and  attorneys-in-fact  (each,  an  "Indemnified
Person")  harmless (to the fullest extent permitted by law) from and against any
and all  claims,  demands,  suits,  actions,  investigations,  proceedings,  and
damages,  and all attorneys fees and  disbursements and other costs and expenses
actually  incurred in  connection  therewith  (as and when they are incurred and
irrespective of whether suit is brought), at any time asserted against,  imposed
upon, or incurred by any of them in connection with or as a result of or related
to the execution, delivery, enforcement, performance, and administration of this
Agreement and any other Loan Documents or the transactions  contemplated herein,
and with respect to any investigation, litigation, or proceeding related to this
Agreement,  any other Loan  Document,  or the use of the  proceeds of the credit
provided  hereunder  (irrespective of whether any Indemnified  Person is a party
thereto),  or any act,  omission,  event or  circumstance  in any manner related
thereto  (all  the  foregoing,  collectively,  the  "Indemnified  Liabilities").
Borrower  shall have no  obligation to any  Indemnified  Person  hereunder  with
respect to any  Indemnified  Liability  that a court of  competent  jurisdiction
finally  determines  to have  resulted  from the  gross  negligence  or  willful
misconduct  of  such  Indemnified  Person.  This  provision  shall  survive  the
termination of this Agreement and the repayment of the Obligations.

     10.5  APPLICATION OF PROCEEDS.  All proceeds  realized as the result of any
sale of the Collateral  shall be applied by Coast first to the costs,  expenses,
liabilities,  obligations  and attorneys' fees incurred by Coast in the exercise
of its rights under this  Agreement,  second to the interest due upon any of the
Obligations,  and third to the  principal of the  Obligations,  in such order as
Coast shall  determine  in its sole  discretion.  Any  surplus  shall be paid to
Borrower or other persons legally entitled thereto; Borrower shall remain liable
to Coast for any  deficiency.  If, Coast,  in its sole  discretion,  directly or
indirectly  enters into a deferred payment or other credit  transaction with any
purchaser at any sale of Collateral, Coast shall have the option, exercisable at
any time, in its sole  discretion,  of either  reducing the  Obligations  by the
principal amount of purchase price or deferring the reduction of the Obligations
until the actual receipt by Coast of the cash therefor.

                                       16
<PAGE>

     10.6 REMEDIES CUMULATIVE.  In addition to the rights and remedies set forth
in this Agreement, Coast shall have all the other rights and remedies accorded a
secured party in equity,  under the Code, and under all other  applicable  laws,
and under any other  instrument or agreement  now or in the future  entered into
between Coast and Borrower,  and all of such rights and remedies are  cumulative
and none is exclusive.  Exercise or partial  exercise by Coast of one or more of
its  rights or  remedies  shall not be deemed an  election,  nor bar Coast  from
subsequent  exercise or partial  exercise of any other rights or  remedies.  The
failure or delay of Coast to exercise  any rights or remedies  shall not operate
as a waiver  thereof,  but all rights and remedies  shall continue in full force
and  effect  until  all of the  Obligations  have  been  indefeasibly  paid  and
performed.

11.  GENERAL PROVISIONS

     11.1 INTEREST  COMPUTATION.  In computing interest on the Obligations,  all
checks,  wire transfers and other items of payment  received by Coast (including
proceeds of  Receivables  and payment of the  Obligations  in full but excluding
regularly scheduled installment payments on the Term Loans and required payments
thereon  from Excess  Cash Flow) shall be deemed  applied by Coast on account of
the  Obligations  three (3) Business Days after receipt by Coast of  immediately
available  funds,  and, for purposes of the  foregoing,  any such funds received
after 10:30 AM Los Angeles, California time, on any day shall be deemed received
on the next Business Day. Coast shall be entitled to charge  Borrower's  account
for such three (3) Business  Days of  "clearance"  or "float" at the rate(s) set
forth in Section 3 of the Schedule on all checks, wire transfers and other items
received  by Coast,  regardless  of  whether  such  three (3)  Business  Days of
"clearance" or "float"  actually occur, and shall be deemed to be the equivalent
of  charging  three (3)  Business  Days of interest  on such  collections.  This
across-the-board  three  (3)  Business  Day  clearance  or float  charge  on all
collections is  acknowledged  by the parties to constitute an integral aspect of
the pricing of Coast's  financing  of  Borrower.  Coast shall not,  however,  be
required  to credit  Borrower's  account  for the  amount of any item of payment
which is  unsatisfactory  to Coast in its sole discretion,  and Coast may charge
Borrower's  loan account for the amount of any item of payment which is returned
to Coast  unpaid.  The  provisions  of this  Section  11.1  regarding  three (3)
Business Days of  "clearance"  or "float" shall not apply in the  calculation of
availability under the Receivable Loans.

     11.2 APPLICATION OF PAYMENTS.  Subject to Section 7.5 hereof,  all payments
with respect to the obligations  may be applied,  and in Coast's sole discretion
reversed and re-applied,  to the Obligations,  in such order and manner as Coast
shall determine in its sole discretion.

     11.3  CHARGES TO  ACCOUNTS.  Coast may,  in its  discretion,  require  that
Borrower pay monetary Obligations in cash to Coast, or charge them to Borrower's
Loan  account,  in which event they will bear  interest from the date due to the
date paid at the same rate applicable to the Loans.

     11.4 MONTHLY  ACCOUNTINGS.  Coast shall  provide  Borrower  monthly with an
account of  advances,  charges,  expenses  and  payments  made  pursuant to this
Agreement.  Such  account  shall be deemed  correct,  accurate  and  binding  on
Borrower  and an account  stated  (except for  reverses  and  reapplications  of
payments made and  corrections of errors  discovered by Coast),  unless Borrower
notifies  Coast in writing to the  contrary  within  thirty (30) days after each
account is rendered, describing the nature of any alleged errors or omissions.

     11.5  NOTICES.  All  notices to be given under this  Agreement  shall be in
writing and shall be given either  personally or by reputable  private  delivery
service or by regular  first-class  mail,  facsimile  or  certified  mail return
receipt requested,  addressed to Coast or Borrower at the addresses shown in the
heading to this Agreement,  or at any other address designated in writing by one
party to the other party.  Notices to Coast shall be directed to the  Commercial
Finance  Division,  to the  attention  of the  Division  Manager or the Division
Credit Manager.  All notices shall be deemed to have been given upon delivery in
the case of notices  personally  delivered,  faxed (at time of  confirmation  of
transmission),  or at the expiration of one (1) Business Day following  delivery
to the private delivery service,  or two (2) Business Days following the deposit
thereof in the United States mail, with postage prepaid.

     11.6  SEVERABILITY.  Should any provision of this  Agreement be held by any
court of competent  jurisdiction to be void or unenforceable,  such defect shall
not affect the remainder of this  Agreement,  which shall continue in full force
and effect.

     11.7  INTEGRATION.  This  Agreement  and  such  other  written  agreements,
documents  and  instruments  as may be executed in  connection  herewith are the
final,  entire and complete  agreement  between Borrower and Coast and supersede
all  prior  and  contemporaneous   negotiations  and  oral  representations  and
agreements,  all of which are merged and

                                       17
<PAGE>

integrated in this Agreement. There are no oral understandings,  representations
or agreements  between the parties which are not set forth in this  Agreement or
in other written agreements signed by the parties in connection herewith.

     11.8 WAIVERS. The failure of Coast at any time or times to require Borrower
to strictly  comply with any of the  provisions  of this  Agreement or any other
present  or future  agreement  between  Borrower  and  Coast  shall not waive or
diminish  any  right of Coast  later to demand  and  receive  strict  compliance
therewith.  Any  waiver of any  Default  shall  not  waive or  affect  any other
Default,  whether prior or subsequent,  and whether or not similar.  None of the
provisions  of  this  Agreement  or any  other  agreement  now or in the  future
executed by Borrower and  delivered to Coast shall be deemed to have been waived
by any act or  knowledge  of Coast or its  agents  or  employees,  but only by a
specific  written waiver signed by an authorized  officer of Coast and delivered
to Borrower.  Borrower waives demand,  protest,  notice of protest and notice of
default or  dishonor,  notice of payment and  nonpayment,  release,  compromise,
settlement,  extension or renewal of any commercial paper, instrument,  account,
General  Intangible,  document  or  guaranty  at any time held by Coast on which
Borrower  is or may in any way be  liable,  and  notice of any  action  taken by
Coast, unless expressly required by this Agreement.

     11.9 NO LIABILITY FOR ORDINARY  NEGLIGENCE.  Neither Coast,  nor any of its
directors, officers, employees, agents, attorneys or any other Person affiliated
with or representing  Coast shall be liable for any claims,  demands,  losses or
damages, of any kind whatsoever, made, claimed, incurred or suffered by Borrower
or any other  party  through the  ordinary  negligence  of Coast,  or any of its
directors, officers, employees, agents, attorneys or any other Person affiliated
with or  representing  Coast,  but  nothing  herein  shall  relieve  Coast  from
liability for its own gross negligence or willful misconduct.

     11.10  AMENDMENT.  The terms and  provisions  of this  Agreement may not be
waived  or  amended,  except  in a  writing  executed  by  Borrower  and a  duly
authorized officer of Coast.

     11.11  TIME  OF  ESSENCE.  Time is of the  essence  in the  performance  by
Borrower of each and every obligation under this Agreement.

     11.12 ATTORNEYS FEES, COSTS AND CHARGES. Borrower shall reimburse Coast for
all attorneys' fees (including attorneys' fees and expenses incurred pursuant to
bankruptcy)  and all filing,  recording,  search,  title  insurance,  appraisal,
audit, and other costs incurred by Coast, pursuant to, or in connection with, or
relating to this Agreement (whether or not a lawsuit is filed),  including,  but
not limited to, any attorneys'  fees and costs  (including  attorneys'  fees and
expenses  incurred  pursuant  to  bankruptcy)  Coast  incurs  in order to do the
following:  prepare and negotiate this  Agreement and the documents  relating to
this  Agreement;  obtain  legal  advice in  connection  with this  Agreement  or
Borrower;  enforce,  or seek to enforce,  any of its rights;  prosecute  actions
against,  or defend  actions by,  Account  Debtors;  commence,  intervene in, or
defend any action or  proceeding;  initiate any  complaint to be relieved of the
automatic  stay in bankruptcy;  file or prosecute any probate claim,  bankruptcy
claim,  third-party claim, or other claim; examine, audit, copy, and inspect any
of the  Collateral  or any of  Borrower's  books and  records;  protect,  obtain
possession of, lease, dispose of, or otherwise enforce Coast's security interest
in, the Collateral;  and otherwise represent Coast in any litigation relating to
Borrower.  If either  Coast or  Borrower  files any  lawsuit  against  the other
predicated on a breach of this  Agreement,  the prevailing  party in such action
shall be entitled to recover its costs and attorneys' fees (including attorneys'
fees and expenses incurred  pursuant to bankruptcy),  including (but not limited
to) attorneys' fees and costs incurred in the enforcement of,  execution upon or
defense of any order, decree, award or judgment. Borrower shall also pay Coast's
standard charges for returned checks and for wire transfers, in effect from time
to time. All attorneys' fees, costs and charges  (including  attorneys' fees and
expenses  incurred  pursuant to bankruptcy) and other fees, costs and charges to
which Coast may be entitled  pursuant to this  Agreement may be charged by Coast
to Borrower's  loan account and shall  thereafter bear interest at the same rate
as the Receivable Loans.

     11.13  BENEFIT OF AGREEMENT.  The  provisions  of this  Agreement  shall be
binding  upon and inure to the benefit of the  respective  successors,  assigns,
heirs,  beneficiaries  and  representatives  of  Borrower  and Coast;  provided,
however,  that  Borrower may not assign or transfer any of its rights under this
Agreement  without  the  prior  written  consent  of Coast,  and any  prohibited
assignment  shall be void. No consent by Coast to any  assignment  shall release
Borrower from its liability for the Obligations. Coast may assign its rights and
delegate its duties  hereunder  without the consent of Borrower.  Coast reserves
the right to syndicate  all or a portion of the  transaction  created  herein or
sell, assign,  transfer,  negotiate,  or grant participations in all or any part
of, or any interest in Coast's rights and benefits hereunder. In connection with
any such  syndication,  assignment  or  participation,  Coast may  disclose  all
documents  and  information  which Coast now or hereafter  may have  relating to
Borrower or Borrower's business. To the extent that Coast assigns its

                                       18
<PAGE>

rights and obligations  hereunder to a third Person,  Coast  thereafter shall be
released from such assigned obligations to Borrower.

     11.14  PUBLICITY.  Coast is hereby  authorized,  at its  expense,  to issue
appropriate  press releases and to cause a tombstone to be published  announcing
the consummation of this transaction and the aggregate amount thereof.

     11.15 PARAGRAPH HEADINGS CONSTRUCTION.  Paragraph headings are only used in
this Agreement for convenience. Borrower and Coast acknowledge that the headings
may not describe completely the subject matter of the applicable paragraph,  and
the  headings  shall not be used in any  manner to  construe,  limit,  define or
interpret  any  term or  provision  of this  Agreement.  The  term  "including",
whenever used in this  Agreement,  shall mean  "including (but not limited to)".
This Agreement has been fully reviewed and negotiated between the parties and no
uncertainty  or ambiguity in any term or  provision of this  Agreement  shall be
construed  strictly  against Coast or Borrower under any rule of construction or
otherwise.

     11.16 GOVERNING LAW;  JURISDICTION;  VENUE. This Agreement and all acts and
transactions  hereunder  and all rights and  obligations  of Coast and  Borrower
shall be  governed  by the  internal  laws of the State of  California,  without
regard  to  its  conflicts  of  law  principles.  As  a  material  part  of  the
consideration  to Coast to enter into this  Agreement,  Borrower (a) agrees that
all actions and  proceedings  relating  directly or indirectly to this Agreement
shall, at Coast's option, be litigated in courts located within California,  and
that the exclusive venue therefor shall be Los Angeles  County;  (b) consents to
the  jurisdiction and venue of any such court and consents to service of process
in any such  action or  proceeding  by  personal  delivery  or any other  method
permitted by law; and (c) waives any and all rights  Borrower may have to object
to the jurisdiction of any such court, or to transfer or change the venue of any
such action or proceeding.

     11.17 MUTUAL WAIVER OF JURY TRIAL. BORROWER AND COAST EACH HEREBY WAIVE THE
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING  BASED UPON,  ARISING OUT OF,
OR IN ANY WAY  RELATING  TO,  THIS  AGREEMENT  OR ANY  OTHER  PRESENT  OR FUTURE
INSTRUMENT  OR AGREEMENT  BETWEEN COAST AND  BORROWER,  OR ANY CONDUCT,  ACTS OR
OMISSIONS OF COAST OR BORROWER OR ANY OF THEIR DIRECTORS,  OFFICERS,  EMPLOYEES,
AGENTS, ATTORNEYS OR ANY OTHER PERSONS AFFILIATED WITH COAST OR BORROWER, IN ALL
OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.

BORROWER:

BLACK WARRIOR WIRELINE CORP.,
a Delaware corporation

By
  ---------------------------------------
      President or Vice President

By
  ---------------------------------------
      Secretary or Ass't Secretary

COAST:

COAST BUSINESS CREDIT,
a division of Southern Pacific Bank

By
  ---------------------------------------

Title:

                                       19
<PAGE>

          COAST

                                   SCHEDULE TO
                           LOAN AND SECURITY AGREEMENT

BORROWER:     Black Warrior Wireline Corp., a Delaware corporation

ADDRESS:      3748 Highway 45 North
              Columbus, MS 39701

DATE:         January 24, 2000

This Schedule forms an integral part of the Loan and Security  Agreement between
Coast  Business   Credit,   a  division  of  Southern   Pacific  Bank,  and  the
above-borrower of even date.
--------------------------------------------------------------------------------
SECTION 2 - CREDIT FACILITIES

         SECTION 2.1 -  CREDIT LIMIT:   Loans in a  total  amount  at  any  time
                                             outstanding   not  to  exceed   the
                                             lesser  of a total  of  Twenty-Five
                                             Million    and    no/00     Dollars
                                             ($25,000,000.00)  at any  one  time
                                             outstanding  (the  "Maximum  Dollar
                                             Amount"),  or the sum of  (a),  (b)
                                             and (c) below:

                                        (a)  Receivable  Loans in an amount  not
                                             to  exceed  80%  of the  amount  of
                                             Borrower's Eligible Receivables (as
                                             defined   in   Section   1  of  the
                                             Agreement), plus

                                        (b)  Term   Loan  A  in   the   original
                                             principal  amount not to exceed the
                                             lesser of (1) seventy-five  percent
                                             (75%) of the appraised net eligible
                                             forced    liquidation    value   of
                                             Borrower's existing  Equipment;  or
                                             (2)  Fourteen  Million Five Hundred
                                             Thousand Dollars  ($14,500,000.00).
                                             Term  Loan A will be  repayable  as
                                             follows:  for  the  first  six  (6)
                                             months of the Term,  Borrower  will
                                             make  monthly  payments on the last
                                             day of each  month in the amount of
                                             interest  on the  then  outstanding
                                             balance of Term Loan A; thereafter,
                                             commencing  on the  last day of the
                                             seventh month following the Closing
                                             Date,  the  balance  of Term Loan A
                                             shall   be   fully   amortized   in
                                             seventy-two   (72)  equal   monthly
                                             installments  of  principal,   plus
                                             interest  on the  then  outstanding
                                             balance of Term Loan A. In addition
                                             to the foregoing  payments,  on the
                                             last day of each  month  during the
                                             first year  following  the  Closing
                                             Date,  Borrower will make principal
                                             payments  in the  amount  of  fifty
                                             percent  (50%) of its  Excess  Cash
                                             Flow    during   the    immediately
                                             preceding  month,  and on the  last
                                             day  of  each   month   thereafter,
                                             Borrower   will   make    principal
                                             payments  in the  amount  of  forty
                                             percent  (40%) of its  Excess  Cash
                                             Flow    during   the    immediately
                                             preceding  month.  Further,  in the
                                             event  the  actual  amount  of  the
                                             Excess  Cash Flow  during the three
                                             (3) months  ending July 31,

                                       20
<PAGE>

                                             2000 is less  than  the  applicable
                                             amount set forth in the Projections
                                             attached  hereto as Exhibit A, then
                                             on August 31, 2000,  Borrower  will
                                             make a principal  payment  equal to
                                             fifty    percent   (50%)   of   the
                                             difference of such projected amount
                                             minus such actual  amount.  "Excess
                                             Cash Flow"  during any month  means
                                             the EBITDA of Borrower  during such
                                             month,   minus   the   sum  of  (1)
                                             principal  and  interest   payments
                                             made by Borrower during such month,
                                             plus (2) taxes paid by  Borrower in
                                             cash during such month.

                                        (c)  Term   Loan  B  in   the   original
                                             principal  amount not to exceed Two
                                             Million  Dollars   ($2,000,000.00).
                                             Term  Loan B will be  repayable  as
                                             follows: Borrower will make monthly
                                             payments  on the  last  day of each
                                             month,  commencing  with the  first
                                             month  following  the Closing Date,
                                             in   the   amount    obtained    by
                                             amortizing  the original  principal
                                             amount  of Term  Loan B fully  over
                                             forty-eight   (48)   months,   plus
                                             interest  on the  then  outstanding
                                             balance    of    Term    Loan    B.
                                             Additionally,  after  repayment  in
                                             full of Term  Loan A,  the  monthly
                                             payments  from  Excess Cash Flow as
                                             provided  in  Subsection  (b) above
                                             shall be applied  to the  repayment
                                             of the remaining  principal balance
                                             of Term Loan B.

SECTION 3 -  INTEREST AND FEES

         SECTION 3.1 -  INTEREST RATE:  (a)  Receivables  Loan-- a rate equal to
                                             the Prime Rate plus 1.0% per annum,
                                             calculated   on  the   basis  of  a
                                             360-day year for the actual  number
                                             of days elapsed.

                                        (b)  Term  Loans -- a rate  equal to the
                                             Prime  Rate  plus  2.0% per  annum,
                                             calculated   on  the   basis  of  a
                                             360-day year for the actual  number
                                             of days elapsed.

                                        (c)  The interest rate applicable to all
                                             Loans shall be  adjusted  effective
                                             monthly as of the first day of each
                                             month,   and  the  interest  to  be
                                             charged  for  each  month  shall be
                                             based on the highest  Prime Rate in
                                             effect during said month, but in no
                                             event  shall  the rate of  interest
                                             charged  on any  Loans in any month
                                             be less than 9% per annum.

         SECTION 3.1 -  MINIMUM MONTHLY
                        INTEREST:       An  amount  equal to the  interest  that
                                             would  have  accrued  had the daily
                                             aggregate  outstanding  balance  of
                                             all  Loans   been  equal  to  forty
                                             percent (40%) of the Maximum Dollar
                                             Amount.

         SECTION 3.2 -  LOAN FEE:       Two  percent   (2.0%)  of  the   Maximum
                                             Dollar   Amount   payable   on  the
                                             Closing  Date and  one-half  of one
                                             percent (.5%) of the Maximum Dollar
                                             Amount on each  anniversary  of the
                                             Closing Date. The Loan Fee shall be
                                             fully  earned on the Closing  Date,
                                             and any unpaid balance shall be due
                                             and  payable in full if the Term is
                                             earlier  terminated  as provided in
                                             this Agreement.

         SECTION 3.2 -  FACILITY FEE:   $15,000.00, per quarter,  payable on the
                                             Closing  Date   (prorated  for  any
                                             partial quarter at the beginning of
                                             the term of this Agreement)

         SECTION 3.2 -  UNUSED LINE FEE:     Three Hundred   Seventy-Five    One
                                             Thousandths   percent  (.375%)  per
                                             annum of the undrawn portion of the
                                             Maximum   Dollar   Amount   payable
                                             monthly, commencing one month after
                                             the Closing Date.

                                       21
<PAGE>

         SECTION 3.2 -  SUCCESS FEE:    (a)  As an inducement to enter into this
                                             Agreement  and to make  the  Loans,
                                             Borrower   shall  pay  to  Coast  a
                                             Success    Fee   (as    hereinafter
                                             defined)  in  accordance  with  the
                                             provisions of  Subsections  (b) and
                                             (c) below. The Success Fee shall be
                                             deemed  to be  earned  in full upon
                                             receipt by Coast. In no event shall
                                             Coast be  obligated  to return  any
                                             payments  received pursuant to this
                                             Section.  The  Success  Fee  is  in
                                             addition  to,  and is not to be set
                                             off  against,  any  other  payments
                                             made or due to,  or  claimed  to be
                                             due to, Coast.

                                        (b)  The  Success  Fee  shall be due and
                                             payable  during the first three (3)
                                             years of the Term in the event of a
                                             Transfer Event. A "Transfer  Event"
                                             means any of the following: (x) any
                                             sale,     assignment,     transfer,
                                             exchange  or other  disposition  of
                                             substantially  all of the assets of
                                             Borrower,   or;   (y)   any   sale,
                                             assignment,  transfer,  exchange or
                                             other   disposition   of   all   or
                                             substantially  all of the ownership
                                             interests  in  Borrower,  including
                                             any     merger,      consolidation,
                                             recapitalization  or reorganization
                                             of  Borrower;   provided,  however,
                                             that the  Success  Fee shall not be
                                             due    in    the    event    of   a
                                             recapitalization  or reorganization
                                             of Borrower through the exercise of
                                             warrants or  conversion  of debt by
                                             St. James Capital  Partners,  L.P.,
                                             SJMB,  L.P. or their  Affiliates as
                                             otherwise permitted hereunder.

                                        (c)  The  Success  Fee  shall  be  in an
                                             amount equal to one percent (1%) of
                                             the Maximum Dollar Amount and shall
                                             be payable  simultaneously with the
                                             closing  of the  transaction  which
                                             gives  rise  to  the  payment,  and
                                             receipt of such  Success  Fee shall
                                             be   a    condition    to   Coast's
                                             obligation  to release its security
                                             interest  in  the  Collateral  upon
                                             payment  in  full  of  all  of  the
                                             Obligations.

         SECTION 9.1 -  RENEWAL FEE:    .50% of the  Maximum  Dollar  Amount per
                                             year.

         SECTION 9.2 -  EARLY TERMINATION
                        FEE:            An amount  equal  to three  percent (3%)
                                             of the  Maximum  Dollar  Amount (as
                                             defined   in  the   Schedule),   if
                                             termination occurs on or before the
                                             first  anniversary of the effective
                                             date  of  this  Agreement;  and two
                                             percent (2%) of the Maximum  Dollar
                                             Amount, if termination occurs after
                                             the   first   anniversary   of  the
                                             effective  date of this  Agreement.
                                             In the event that substantially all
                                             of the  assets  of, or  controlling
                                             interest   in,   Borrower  is  sold
                                             during the Term, in an arm's length
                                             transaction  and all of  Borrower's
                                             Obligations  to  Coast  are paid in
                                             full,  the  Early  Termination  Fee
                                             shall  be an  amount  equal  to two
                                             percent (2%) of the Maximum  Dollar
                                             Amount.

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

SECTION 5 - CONDITIONS PRECEDENT

         SECTION 5.2 -  MINIMUM
                        AVAILABILITY:   $1,000,000.00

         SECTION 5.14 - OTHER DOCUMENTS
                        AND AGREEMENTS: 1.   Satisfactory  completion of a field
                                             audit   and   all    searches   and
                                             background checks.

                                       22
<PAGE>

                                        2.   Validity    Guaranty   of   William
                                             Jenkins,  Allen  R.  Neel  and  Ron
                                             Whitter.

                                        3.   UCC-1 financing statements, fixture
                                             filings and termination statements;

                                        4.   Security  Agreements  on all assets
                                             of Borrower (including all tangible
                                             and intangible assets,  copyrights,
                                             patents and trademarks);

                                        5.   Borrower's  receipt of Five Million
                                             and no/100 Dollars  ($5,000,000.00)
                                             in equity and/or debt  subordinated
                                             to the Loans, in form and substance
                                             acceptable to Coast in its sole and
                                             absolute discretion;

                                        6.   All taxes to be  current at date of
                                             funding and ongoing;

                                        7.   No  accounts  payable  of  Borrower
                                             shall be over ninety (90) days past
                                             invoice date at date of funding;

                                        8.   All   collections   of  receivables
                                             shall  be made  through  a  lockbox
                                             approved by Coast;

                                        9.   Subordination  of all existing debt
                                             to Borrower's  shareholders in form
                                             and  substance  acceptable to Coast
                                             in   its    sole    and    absolute
                                             discretion;

                                        10.  Principal   and  Interest   Payment
                                             Guaranty  of  St.   James   Capital
                                             Partners,   L.P.,  SJMB,  L.P.  and
                                             Chuck    Underbrink    (personally)
                                             covering up to $5,000,000.00 of any
                                             principal or interest payments that
                                             are not made when due;

                                        11.  Unlimited  Continuing  Guaranty  of
                                             St. James  Capital  Partners,  L.P.
                                             and SJMB,  L.P.,  provided that the
                                             principal amount of the Obligations
                                             covered  by such  Guaranty  will be
                                             reduced   to    $4,000,000.00    if
                                             Borrower complies with the covenant
                                             regarding   Revenues   and   EBITDA
                                             during the  applicable  twelve (12)
                                             consecutive  months as set forth in
                                             Subsection   (c)  of  Section   8.1
                                             below.

                                        12.  Final Settlement of litigation with
                                             former   owners   of    Diamondback
                                             Directional,  Inc.  and  issuing of
                                             $2,000,000.00   in   stock   and  a
                                             $1,182,890.25  note to said  owners
                                             and  the   subordination   of  said
                                             $1,182,890.25  note  by the  former
                                             owners of Diamondback  Directional,
                                             Inc.   in   form   and    substance
                                             acceptable  to  Coast,  in its sole
                                             and absolute discretion;

                                        13.  Re-issued   appraisal   issued   by
                                             Superior  Auctioneers  to  Coast of
                                             Borrower's  machinery and equipment
                                             with no material  adverse  changes,
                                             as determined by Coast, in its sole
                                             and absolute discretion;

                                        14.  Endorsed  certificates  of title on
                                             all vehicles;

                                        15.  Completion of patent search;

                                       23
<PAGE>

                                        16.  Evidence that Borrower has received
                                             at least $850,000.00 in vendor debt
                                             reductions,   as  compared  to  the
                                             vendor debts  previously  furnished
                                             to Coast by Borrower;

                                        17.  Evidence    that   a    $100,000.00
                                             arbitration   settlement  has  been
                                             paid  to   Southwick   Investments,
                                             Inc.;

                                        18.  Current     personal      financial
                                             statement of Chuck Underbrink;

                                        19.  Final draft of BDO  Seidman's  Rate
                                             of   Return   Estimate   on  Doerge
                                             Capital Management;

                                        20.  Evidence that Borrower's  insurance
                                             policies cover any  liabilities and
                                             damages arising from its explosives
                                             in a manner satisfactory to Coast;

                                        21.  Appraisal   of  the   Equipment  of
                                             Borrower  not  covered by the prior
                                             appraisal,  which shall be in form,
                                             issued  by an  appraiser,  and with
                                             results satisfactory to Coast;

                                        22.  Stock  Pledge  Agreement  of  SJMB,
                                             L.P.,  covering  the capital  stock
                                             owned  by it  in  Collins  &  Ware,
                                             Inc.,  and  any  proceeds  of  sale
                                             thereof;  in the  event  of sale of
                                             such capital  stock,  the amount of
                                             $10,000,000.00 of the sale proceeds
                                             will be  pledged  in cash  and in a
                                             manner  satisfactory  to  Coast  to
                                             secure  the   Guaranties  of  SJMB,
                                             L.P.,  and the  balance of the sale
                                             proceeds will be released by Coast,
                                             provided, however, that if Borrower
                                             complies    with    the    covenant
                                             regarding   Revenues   and   EBITDA
                                             during the  applicable  twelve (12)
                                             consecutive  months as set forth in
                                             Subsection   (c)  of  Section   8.1
                                             below,  such pledged amount will be
                                             reduced  to  $4,000,000.00.   Coast
                                             understands  that a proposal may be
                                             made  for  the  disposition  of the
                                             foregoing  capital  stock through a
                                             merger,    exchange    or   pooling
                                             arrangement whereby Coast would not
                                             receive cash proceeds  equal to the
                                             amounts   required  to  be  pledged
                                             above. Coast will consider any such
                                             proposal   in   light  of  the  new
                                             securities   to   be   pledged   in
                                             substitution   for  the  Collins  &
                                             Ware, Inc. capital stock; provided,
                                             however,  that  any  such  proposed
                                             disposition shall be subject to the
                                             prior written  approval of Coast in
                                             its sole but reasonable discretion.

                                        23.  Copy of valuation  report issued by
                                             Bankers  Trust on  Collins  & Ware,
                                             Inc. with results  satisfactory  to
                                             Coast;

                                        24.  Intercreditor  Agreements  of  U.S.
                                             Bank and First Capital with respect
                                             to the  capital  stock of Collins &
                                             Ware, Inc.; and

                                        25.  Projections  of  Borrower  for  the
                                             period from January 1, 2001 through
                                             July  31,  2001,   subject  to  the
                                             review and approval of Coast.

                                       24
<PAGE>

                                        26.  All  of  the  conditions  precedent
                                             shall be satisfied, and the Closing
                                             Date shall be, on or before January
                                             31, 2000.

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

SECTION 6 - REPRESENTATIONS, WARRANTIES AND COVENANTS

         SECTION 6.2 -  PRIOR NAMES OF
                        BORROWER:       Boone Wireline Co., Inc. ("Boone")
                                        EIN #613-1030744
                                        Note: Boone    was    a     wholly-owned
                                             subsidiary  of  Borrower.   In  the
                                             summer of 1999,  Boone  was  merged
                                             into Borrower. Boone was treated as
                                             an operating division of Borrower.

         SECTION 6.2 -  EXISTING TRADE NAMES
                        OF BORROWER:    Black Warrior Wireline Corp.
                                        EIN #11-2904094
                                        Incorporated in  Delaware  on August 28,
                                             1987

                                        TRADE NAMES (CURRENT):

                                        Black Warrior Drilling & Completion
                                            (Alabama only)

                                        Petro-Log, Incorporated, a BWWC company
                                            (Used in Rockies, primarily Wyoming)

                                        Diamondback Directional Company
                                            (Used   primarily   in   Texas   and
                                            Louisiana,  also some of the western
                                            states)

                                        Multi-Shot
                                            (Used in Texas and Louisiana)

         SECTION 6.3 -  OTHER LOCATIONS
                        AND ADDRESSES:  See attached Exhibit B.

         SECTION 6.10 - MATERIAL ADVERSE
                        LITIGATION:     See attached Exhibit C.

         SECTION 6.10 - FUTURE CLAIMS AND
                        LITIGATION:     Borrower will  promptly  inform Coast in
                                            writing  of any  claim,  proceeding,
                                            litigation or  investigation  in the
                                            future  threatened  or instituted by
                                            or against  Borrower  involving  any
                                            single  claim of Fifty  Thousand and
                                            no/100 Dollars ($50,000.00) or more,
                                            or  involving  One Hundred  Thousand
                                            and no/100 Dollars  ($100,000.00) or
                                            more in the aggregate.

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

SECTION 8 - ADDITIONAL DUTIES OF BORROWER

         SECTION 8.1 -  OTHER PROVISIONS:   (a) Borrower shall maintain Tangible
                                            Net  Worth  of not  less  than  Five
                                            Million Dollars  ($5,000,000) on the
                                            Closing Date,

                                       25
<PAGE>

                                            increasing  quarterly  by an  amount
                                            equal  to  eighty  percent  (80%) of
                                            Borrower's   net   income  for  said
                                            quarter,   but  in  no  event  shall
                                            Tangible  Net Worth be less than the
                                            prior quarter;

                                            (b) Debt Service  Coverage  shall be
                                            1.25:1.00  to be  tested  quarterly,
                                            commencing  on  the  quarter  ending
                                            March 31, 2000;

                                            (c) Actual Revenue and EBIDTA during
                                            each of the twelve (12)  consecutive
                                            months  commencing  with August 2000
                                            shall be no less than eighty percent
                                            (80%) of the  applicable  amount set
                                            forth  in the  Projections  attached
                                            hereto as Exhibit A as  supplemented
                                            by the Projections approved by Coast
                                            under  Subsection 25 of Section 5.14
                                            above;  provided,  however,  that if
                                            Coast  does not make Loans in excess
                                            of  $20,000,000.00  in the aggregate
                                            outstanding  pursuant to  Subsection
                                            (h) below, the Projections  shall be
                                            modified  accordingly subject to the
                                            written approval of Coast;

                                            (d) Borrower  shall, at its expense,
                                            on  a  semi-annual  basis,   provide
                                            machinery and  equipment  appraisals
                                            in form, and issued by an appraiser,
                                            satisfactory to Coast;

                                            (e) Thirty  percent (30%) of the net
                                            proceeds  of any  equity  securities
                                            issued by Borrower after the Closing
                                            Date shall be  applied  first to the
                                            principal balance of Term Loan A and
                                            then  to the  principal  balance  of
                                            Term  Loan B,  and  credited  to the
                                            principal  installments becoming due
                                            on the  applicable  Term Loan in the
                                            inverse order at their maturity;

                                            (f)  Subject to the  limitations  in
                                            Subsection  8.5(b) of the  Agreement
                                            all  capital  expenditures  that are
                                            not  financed  shall  be  funded  by
                                            SJMB,  L.P. and/or St. James Capital
                                            Partners,  LP or by Excess Cash Flow
                                            not paid to Coast hereunder;

                                            (g) The net  proceeds of the sale of
                                            any  Equipment of Borrower  shall be
                                            applied   first  to  the   principal
                                            balance  of Term  Loan A and then to
                                            the  principal  balance of Term Loan
                                            B,  and  credited  to the  principal
                                            installments  becoming  due  on  the
                                            applicable  Term Loan in the inverse
                                            order of their maturity; and

                                            (h)   Any   Loans   in   excess   of
                                            $20,000,000.00   in  the   aggregate
                                            outstanding shall be at the sole and
                                            absolute  discretion  of Coast,  and
                                            subject   to  Coast   obtaining   an
                                            acceptable  co-lender or participant
                                            on the Loans upon terms satisfactory
                                            to Coast.

         SECTION 8.2 -  INSURANCE:      Subject to the  limitations set forth in
                                             Section 8.2 of the Agreement, Coast
                                             shall release to Borrower insurance
                                             proceeds  with respect to Equipment
                                             totaling   less  than  One  Hundred
                                             Thousand Dollars ($100,000.00).

         SECTION 8.3 -  REPORTING:      Borrower shall  provide  Coast  with the
                                             following:

                                        1.   Monthly Receivable agings,  aged by
                                             invoice date,  within ten (10) days
                                             after the end of each month.

                                        2.   Monthly  accounts  payable  agings,
                                             aged   by   invoice    date,    and
                                             outstanding or held check registers
                                             within  ten (10) days after the end
                                             of each month.

                   26
<PAGE>

                                        3.   Monthly   report    detailing   the
                                             locations of all Equipment.

                                        4.   Monthly     internally     prepared
                                             financial  statements,  as  soon as
                                             available,  and in any event within
                                             thirty  (30) days  after the end of
                                             each month.

                                        5.   Quarterly    internally    prepared
                                             financial statements (10Q), as soon
                                             as  available,  and  in  any  event
                                             within  forty-five  (45) days after
                                             the end of each  fiscal  quarter of
                                             Borrower.

                                        6.   Quarterly customer lists, including
                                             customer name,  address,  and phone
                                             number.

                                        7.   Annual financial  statements (10K),
                                             as  soon as  available,  and in any
                                             event   within   ninety  (90)  days
                                             following  the  end  of  Borrower's
                                             fiscal   year,    containing    the
                                             unqualified    opinion    of,   and
                                             certified   by,   an    independent
                                             certified     public     accountant
                                             acceptable to Coast.

                                        8.   Annual personal financial statement
                                             of Chuck  Underbrink as of the last
                                             day  of  each  year,   as  soon  as
                                             available,  and in any event within
                                             ninety (90) days of such last day.

         SECTION 8.5 -  NEGATIVE COVENANTS
                        (ACQUIRED ASSETS):   Fifty Thousand Dollars ($50,000.00)
--------------------------------------------------------------------------------

SECTION 9 - TERM

         SECTION 9.1 -  MATURITY DATE:  The  last  Business  Day  of  the  month
                                             three  (3) years  from the  Closing
                                             Date,  subject to early termination
                                             as  provided  in Section 9.2 of the
                                             Agreement.

                                       27

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