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                               Security Agreement
                                  (All Assets)


As of August 3, 1999, for value received, the undersigned ("Debtor") grants to
Comerica Bank ("Bank"), a Michigan banking corporation, a continuing security
interest in the Collateral (as defined below) to secure payment when due,
whether by stated maturity, demand, acceleration or otherwise, of all existing
and future indebtedness ("Indebtedness") to the Bank of Debtor. Indebtedness
includes without limit any and all obligations or liabilities of the Debtor to
the Bank, whether absolute or contingent, direct or indirect, voluntary or
involuntary, liquidated or unliquidated, joint or several, known or unknown; any
and all obligations or liabilities for which the Debtor would otherwise be
liable to the Bank were it not for the invalidity or unenforceability of them by
reason of any bankruptcy, insolvency or other law, or for any other reason; any
and all amendments, modifications, renewals and/or extensions of any of the
above; all costs incurred by Bank in establishing, determining, continuing, or
defending the validity or priority of its security interest, or in pursuing its
rights and remedies under this Agreement or under any other agreement between
Bank and Debtor or in connection with any proceeding involving Bank as a result
of any financial accommodation to Debtor; and all other costs of collecting
Indebtedness, including without limit attorney fees. Debtor agrees to pay Bank
all such costs incurred by the Bank, immediately upon demand, and until paid all
costs shall bear interest at the highest per annum rate applicable to any of the
Indebtedness, but not in excess of the maximum rate permitted by law. Any
reference in this Agreement to attorney fees shall be deemed a reference to
reasonable fees, costs, and expenses of both in-house and outside counsel and
paralegals, whether or not a suit or action is instituted, and to court costs if
a suit or action is instituted, and whether attorney fees or court costs are
incurred at the trial court level, on appeal, in a bankruptcy, administrative or
probate proceeding or otherwise.

1.   COLLATERAL shall mean all of the following property Debtor now or later
     owns or has an interest in, wherever located:

     (a)  all Accounts Receivable (for purposes of this Agreement, "Accounts
          Receivable" consists of all accounts, general intangibles, chattel
          paper, contract rights, deposit accounts, documents and instruments),

     (b)  all Inventory,

     (c)  all Equipment and Fixtures,

     (d)  all goods, instruments, documents, policies and certificates of
          insurance, deposits, money, investment property or other property
          (except real property which is not a fixture) which are now or later
          in possession or control of Bank, or as to which Bank now or later
          controls possession by documents or otherwise, and

     (e)  all additions, attachments, accessions, parts, replacements,
          substitutions, renewals, interest, dividends, distributions, rights of
          any kind (including but not limited to stock splits, stock rights,
          voting and preferential rights), products, and proceeds of or
          pertaining to the above including, without limit, cash or other
          property which were proceeds and are recovered by a bankruptcy trustee
          or otherwise as a preferential transfer by Debtor.

2.   WARRANTIES, COVENANTS AND AGREEMENTS. Debtor warrants, covenants and agrees
     as follows:

     2.1  Debtor shall furnish to Bank, in form and at intervals as Bank may
          request, any information Bank may reasonably request and allow Bank to
          examine, inspect, and copy any of Debtor's books and records during
          Debtor's business hours, except upon the occurrence of an Event of


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          Default that is continuing. Debtor shall, at the request of Bank, mark
          its records and the Collateral to clearly indicate the security
          interest of Bank under this Agreement.

     2.2  At the time any Collateral becomes, or is represented to be, subject
          to a security interest in favor of Bank, Debtor shall be deemed to
          have warranted that (a) Debtor is the lawful owner of the Collateral
          and has the right and authority to subject it to a security interest
          granted to Bank; (b) none of the Collateral is subject to any security
          interest other than that in favor of Bank and there are no financing
          statements on file, other than in favor of Bank and Permitted Liens as
          defined in the Credit Agreement between Bank and Debtor of even date
          herewith (the "Credit Agreement"); and (c) Debtor acquired its rights
          in the Collateral in the ordinary course of its business.

     2.3  Debtor will keep the Collateral free at all times from all claims,
          liens, security interests and encumbrances other than those in favor
          of Bank and Permitted Liens as defined in the Credit Agreement. Debtor
          will not, without the prior written consent of Bank, sell, transfer or
          lease, or permit to be sold, transferred or leased, any or all of the
          Collateral, except for Inventory in the ordinary course of its
          business or otherwise permitted under the Credit Agreement, and will
          not return any Inventory to its supplier except in the ordinary course
          of its business. Bank or its representatives may at all reasonable
          times inspect the Collateral and may enter upon all premises where the
          Collateral is kept or might be located.

     2.4  Debtor will do all acts and will execute or cause to be executed all
          writings requested by Bank to establish, maintain and continue a
          perfected and first security interest of Bank in the Collateral other
          than Permitted Liens as defined in the Credit Agreement. Debtor agrees
          that Bank has no obligation to acquire or perfect any lien on or
          security interest in any asset(s), whether realty or personalty, to
          secure payment of the Indebtedness, and Debtor is not relying upon
          assets (other than Eligible Accounts Receivable and Eligible Inventory
          as defined in the Credit Agreement) in which the Bank may have a lien
          or security interest for payment of the Indebtedness.

     2.5  Debtor will pay within the time that they can be paid without interest
          or penalty all taxes, assessments and similar charges which at any
          time are or may become a lien, charge, or encumbrance upon any
          Collateral, except to the extent contested in good faith and with
          proper reserves thereof maintained in accordance with generally
          accepted accounting principles. If Debtor fails to pay any of these
          taxes, assessments, or other charges in the time provided above, Bank
          has the option (but not the obligation) to do so and Debtor agrees to
          repay all amounts so expended by Bank immediately upon demand,
          together with interest at the highest lawful default rate which could
          be charged by Bank on any Indebtedness.

     2.6  Debtor will keep the Collateral in good condition and will protect it
          from loss, damage, or deterioration from any cause. Debtor has and
          will maintain at all times (a) with respect to the Collateral,
          insurance under an "all risk" policy against fire and other risks
          customarily insured against, and (b) public liability insurance and
          other insurance as may be required by law or reasonably required by
          Bank, all of which insurance shall be in amount, form and content, and
          written by companies as may be satisfactory to Bank, containing a
          lender's loss payable endorsement acceptable to Bank. Debtor will
          deliver to Bank immediately upon demand evidence satisfactory to Bank
          that the required insurance has been procured. If Debtor fails to
          maintain satisfactory insurance, Bank has the option (but not the
          obligation) to do so and Debtor agrees to repay all amounts so
          expended by Bank immediately upon demand, together with interest at
          the highest lawful default rate which could be charged by Bank on any
          Indebtedness.


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     2.7  On each occasion on which Debtor evidences to Bank the account
          balances on and the nature and extent of the Accounts Receivable,
          Debtor shall be deemed to have warranted that except as otherwise
          indicated (a) each of those Accounts Receivable is valid and
          enforceable without performance by Debtor of any act; (b) each of
          those account balances are in fact owing, (c) there are no setoffs,
          recoupments, credits, contra accounts, counterclaims or defenses
          against any of those Accounts Receivable, (d) as to any Accounts
          Receivable represented by a note, trade acceptance, draft or other
          instrument or by any chattel paper or document, the same have been
          endorsed and/or delivered by Debtor to Bank, (e) Debtor has not
          received with respect to any Account Receivable, any notice of the
          death of the related account debtor, nor of the dissolution,
          liquidation, termination of existence, insolvency, business failure,
          appointment of a receiver for, assignment for the benefit of creditors
          by, or filing of a petition in bankruptcy by or against, the account
          debtor, and (f) as to each Account Receivable, the account debtor is
          not an affiliate of Debtor, the United States of America or any
          department, agency or instrumentality of it, or a citizen or resident
          of any jurisdiction outside of the United States. Debtor will do all
          acts and will execute all writings requested by Bank to perform,
          enforce performance of, and collect all Accounts Receivable. In the
          event of an Event of Default or if such modification, compromise or
          substitution would have a Material Adverse Effect (as defined in the
          Credit Agreement), Debtor shall neither make nor permit any
          modification, compromise or substitution for any Account Receivable
          without the prior written consent of Bank. Debtor shall, at Bank's
          request, arrange for verification of Accounts Receivable directly with
          account debtors or by other methods acceptable to Bank.

     2.8  Debtor at all times shall be in strict compliance with all applicable
          laws, including without limit any laws, ordinances, directives,
          orders, statutes, or regulations an object of which is to regulate or
          improve health, safety, or the environment ("Environmental Laws").

     2.9  If Bank, acting in its sole discretion, redelivers Collateral to
          Debtor or Debtor's designee for the purpose of (a) the ultimate sale
          or exchange thereof; or (b) presentation, collection, renewal, or
          registration of transfer thereof; or (c) loading, unloading, storing,
          shipping, transshipping, manufacturing, processing or otherwise
          dealing with it preliminary to sale or exchange; such redelivery shall
          be in trust for the benefit of Bank and shall not constitute a release
          of Bank's security interest in it or in the proceeds or products of it
          unless Bank specifically so agrees in writing. If Debtor requests any
          such redelivery, Debtor will deliver with such request a duly executed
          financing statement in form and substance satisfactory to Bank. Any
          proceeds of Collateral coming into Debtor's possession as a result of
          any such redelivery shall be held in trust for Bank and immediately
          delivered to Bank for application on the Indebtedness. Bank may (in
          its sole discretion) deliver any or all of the Collateral to Debtor,
          and such delivery by Bank shall discharge Bank from all liability or
          responsibility for such Collateral. Bank, at its option, may require
          delivery of any Collateral to Bank at any time with such endorsements
          or assignments of the Collateral as Bank may request.

     2.10 Upon the occurrence and continuance of an Event of Default, Bank may
          (a) cause any or all of the Collateral to be transferred to its name
          or to the name of its nominees; (b) receive or collect by legal
          proceedings or otherwise all dividends, interest, principal payments
          and other sums and all other distributions at any time payable or
          receivable on account of the Collateral, and hold the same as
          Collateral, or apply the same to the Indebtedness, the manner and
          distribution of the application to be in the sole discretion of Bank;
          (c) enter into any extension, subordination, reorganization, deposit,
          merger or consolidation agreement or any other agreement relating to
          or affecting the Collateral, and deposit or surrender control of the
          Collateral, and accept other property in exchange for the Collateral
          and hold or apply the property or money so received pursuant to this
          Agreement.


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     2.11 Bank may assign any of the Indebtedness and deliver any or all of the
          Collateral to its assignee, who then shall have with respect to
          Collateral so delivered all the rights and powers of Bank under this
          Agreement, and after that Bank shall be fully discharged from all
          liability and responsibility with respect to Collateral so delivered
          subsequent to the date of delivery.

     2.12 Debtor shall defend, indemnify and hold harmless Bank, its employees,
          agents, shareholders, affiliates, officers, and directors from and
          against any and all claims, damages, fines, expenses, liabilities or
          causes of action of whatever kind, including without limit consultant
          fees, legal expenses, and attorney fees, suffered by any of them as a
          direct or indirect result of any actual or asserted violation of any
          law, including, without limit, Environmental Laws, or of any
          remediation relating to any property required by any law, including
          without limit Environmental Laws other than those acts caused by
          Bank's own gross negligence or willful and wanton misconduct.

3.   COLLECTION OF PROCEEDS.

     3.1  Debtor agrees to collect and enforce payment of all Collateral until
          Bank shall direct Debtor to the contrary. Immediately upon notice to
          Debtor by Bank upon the occurrence of an Event of Default and at all
          times after that, Debtor agrees to fully and promptly cooperate and
          assist Bank in the collection and enforcement of all Collateral and to
          hold in trust for Bank all payments received in connection with
          Collateral and from the sale, lease or other disposition of any
          Collateral, all rights by way of suretyship or guaranty and all rights
          in the nature of a lien or security interest which Debtor now or later
          has regarding Collateral. Immediately upon and after such notice,
          Debtor agrees to (a) endorse to Bank and immediately deliver to Bank
          all payments received on Collateral or from the sale, lease or other
          disposition of any Collateral or arising from any other rights or
          interests of Debtor in the Collateral, in the form received by Debtor
          without commingling with any other funds, and (b) immediately deliver
          to Bank all property in Debtor's possession or later coming into
          Debtor's possession through enforcement of Debtor's rights or
          interests in the Collateral. Debtor irrevocably authorizes Bank or any
          Bank employee or agent to endorse the name of Debtor upon any checks
          or other items which are received in payment for any Collateral, and
          to do any and all things necessary in order to reduce these items to
          money. Bank shall have no duty as to the collection or protection of
          Collateral or the proceeds of it, nor as to the preservation of any
          related rights, beyond the use of reasonable care in the custody and
          preservation of Collateral in the possession of Bank. Debtor agrees to
          take all steps necessary to preserve rights against prior parties with
          respect to the Collateral. Nothing in this Section 3.1 shall be deemed
          a consent by Bank to any sale, lease or other disposition of any
          Collateral.

     3.2  Debtor agrees that immediately upon Bank's request (whether or not any
          Event of Default exists) the Indebtedness shall be on a "remittance
          basis" as follows: Debtor shall at its sole expense establish and
          maintain (and Bank, at Bank's option may establish and maintain at
          Debtor's expense): (a) an United States Post Office lock box (the
          "Lock Box"), to which Bank shall have exclusive access and control.
          Debtor expressly authorizes Bank, from time to time, to remove
          contents from the Lock Box, for disposition in accordance with this
          Agreement. Debtor agrees to notify all account debtors and other
          parties obligated to Debtor that all payments made to Debtor (other
          than payments by electronic funds transfer) shall be remitted, for the
          credit of Debtor, to the Lock Box, and Debtor shall include a like
          statement on all invoices; and (b) a non-interest bearing deposit
          account with Bank which shall be titled as designated by Bank (the
          "Cash Collateral Account") to which Bank shall have exclusive access
          and control. Debtor agrees to notify all account debtors and other
          parties obligated to Debtor that all payments made to Debtor by
          electronic funds transfer shall be remitted to the Cash Collateral
          Account, and Debtor, at Bank's request, shall include a like statement
          on all invoices. Debtor shall execute

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          all documents and authorizations as required by Bank to establish and
          maintain the Lock Box and the Cash Collateral Account.

     3.3  All items or amounts which are remitted to the Lock Box, to the Cash
          Collateral Account, or otherwise delivered by or for the benefit of
          Debtor to Bank on account of partial or full payment of, or with
          respect to, any Collateral shall, at Bank's option, (i) be applied to
          the payment of the Indebtedness, whether then due or not, in such
          order or at such time of application as Bank may determine in its sole
          discretion, or, (ii) be deposited to the Cash Collateral Account.
          Debtor agrees that Bank shall not be liable for any loss or damage
          which Debtor may suffer as a result of Bank's processing of items or
          its exercise of any other rights or remedies under this Agreement,
          including without limitation indirect, special or consequential
          damages, loss of revenues or profits, or any claim, demand or action
          by any third party arising out of or in connection with the processing
          of items or the exercise of any other rights or remedies under this
          Agreement. Debtor agrees to indemnify and hold Bank harmless from and
          against all such third party claims, demands or actions, and all
          related expenses or liabilities, including, without limitation,
          attorney fees.

4.   DEFAULTS, ENFORCEMENT AND APPLICATION OF PROCEEDS.

     4.1  Upon the occurrence of any of the following events (each an "Event of
          Default"), Debtor shall be in default under this Agreement:

          (a)  Any failure to pay the Indebtedness or any other indebtedness
               when due, or such portion of it as may be due, by acceleration or
               otherwise or any default in an obligation described in Section
               6.1 or 6.2 of the Credit Agreement between Debtor and Bank of
               even date herewith (the "Credit Agreement"), and such failure or
               default shall continue for a period in excess of three (3)
               business days after notice by Bank to Debtor; or

          (b)  Any failure to perform in the time and manner required any of
               Debtor's obligations or covenants under, or failure to comply
               with any of the provisions of, this Agreement, the Credit
               Agreement or any other agreement or commitment between Debtor and
               Bank, and in the case of a failure to perform obligations other
               than those described in Section 6.3 or Sections 7.1 through 7.9
               of the Credit Agreement, such failure shall continue for a period
               in excess of thirty (30) days after the earlier of Bank's notice
               to Debtor or the date Debtor actually becomes aware thereof; or

          (c)  Any warranty or representation in connection with or contained in
               this Agreement, the Credit Agreement or any other Loan Document
               (as defined in the Credit Agreement), financial statement, or
               other information made, given or furnished to Bank by or on
               behalf of Debtor shall be, or shall prove to have been, false or
               materially misleading when made, given, or furnished; or

          (d)  Any default in the payment when due of any of Debtor's borrowed
               money indebtedness (other than to the Bank) in amounts in excess
               of Two Hundred Fifty Thousand Dollars ($250,000) or in the
               observance or performance of any term, covenant or condition in
               any agreement or instrument evidencing, securing or relating to
               such indebtedness, and such default be continued for a period
               sufficient to permit acceleration of the indebtedness,
               irrespective of whether any such default shall be forgiven or
               waived or there has been acceleration by the holder thereof; or

          (e)  One or more judgments or decrees shall be rendered against Debtor
               involving an aggregate liability of Two Hundred Fifty Thousand
               Dollars ($250,000) or more, which has or have

                                      -5-
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               become non-appealable and shall remain undischarged, unsatisfied
               by insurance and unstayed for more than thirty (30) days, whether
               or not consecutive, or if a writ of attachment or garnishment
               against the property of the Debtor shall be issued and levied in
               an action claiming Two Hundred Fifty Thousand Dollars ($250,000)
               or more and not released or appealed and bonded in an amount and
               manner satisfactory to the Bank within thirty (30) days after
               such issuance and levy; or

          (f)  Debtor voluntarily suspends transaction of its business, or if
               Debtor shall not pay its debts as they mature or shall make a
               general assignment for the benefit of creditors, or proceedings
               in bankruptcy, or for reorganization or liquidation of the Debtor
               under the Bankruptcy Code or under any other state, federal or
               applicable law for the relief of debtors shall be commenced by
               Debtor, or shall be commenced against Debtor and shall not be
               discharged within sixty (60) days of commencement, or a receiver,
               trustee or custodian shall be appointed for the Debtor or for any
               substantial portion of its properties or assets; or

          (g)  A majority of the persons serving on the board of directors of
               Debtor as of the date of this Agreement shall cease to serve on
               such board of directors and Bank considers (in its reasonable
               discretion) such change to affect materially and adversely the
               prospects of Debtor; or

          (h)  Any failure to meet Debtor's minimum funding requirements under
               ERISA with respect to any employee benefit plan established or
               maintained by it, or if any such plan shall be subject of
               termination proceedings (whether voluntary or involuntary) and
               there shall result from such termination proceedings a liability
               of Debtor to the PBGC which in the opinion of the Bank will have
               a materially adverse effect upon the operations, business,
               property, assets, financial condition or credit of the Debtor; or

          (i)  There shall occur, with respect to any pension plan maintained by
               the Debtor any reportable event (within the meaning of Section
               4043(b) of ERISA) which the Bank shall determine constitutes a
               ground for the termination of any such plan, and if such event
               continues for thirty (30) days after the Bank gives written
               notice to the Debtor, provided that termination of such plan or
               appointment of such trustee would, in the opinion of the Bank,
               have a materially adverse effect upon the operations, business,
               property, assets, financial condition or credit of the Debtor, as
               the case may be; or

          (j)  Debtor repudiates, contests, revokes or purports to revoke any of
               its obligations to Bank, or any rights or remedies of Bank, under
               Loan Documents (as defined in the Credit Agreement) to which it
               is a party.

     4.2  Upon the occurrence of any Event of Default, Bank may at its
          discretion and without prior notice to Debtor declare any or all of
          the Indebtedness to be immediately due and payable, and shall have and
          may exercise any one or more of the following rights and remedies:

          (a)  Exercise all the rights and remedies upon default, in foreclosure
               and otherwise, available to secured parties under the provisions
               of the Uniform Commercial Code and other applicable law;

          (b)  Institute legal proceedings to foreclose upon the lien and
               security interest granted by this Agreement, to recover judgment
               for all amounts then due and owing as Indebtedness, and to
               collect the same out of any Collateral or the proceeds of any
               sale of it;

                                      -6-
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          (c)  Institute legal proceedings for the sale, under the judgment or
               decree of any court of competent jurisdiction, of any or all
               Collateral; and/or

          (d)  Personally or by agents, attorneys, or appointment of a receiver,
               enter upon any premises where Collateral may then be located, and
               take possession of all or any of it and/or render it unusable;
               and without being responsible for loss or damage to such
               Collateral, hold, operate, sell, lease, or dispose of all or any
               Collateral at one or more public or private sales, leasings or
               other disposition, at places and times and on terms and
               conditions as Bank may deem fit, without any previous demand or
               advertisement, provided, however, that the foregoing be conducted
               in accordance with applicable law; and except as provided in this
               Agreement, all notice of sale, lease or other disposition, and
               advertisement, and other notice or demand, any right or equity of
               redemption, and any obligation of a prospective purchaser or
               lessee to inquire as to the power and authority of Bank to sell,
               lease, or otherwise dispose of the Collateral or as to the
               application by Bank of the proceeds of sale or otherwise, which
               would otherwise be required by, or available to Debtor under,
               applicable law are expressly waived by Debtor to the fullest
               extent permitted.

               At any sale pursuant to this Section 4.2, whether under the power
               of sale, by virtue of judicial proceedings or otherwise, it shall
               not be necessary for Bank or a public officer under order of a
               court to have present physical or constructive possession of
               Collateral to be sold. The recitals contained in any conveyances
               and receipts made and given by Bank or the public officer to any
               purchaser at any sale made pursuant to this Agreement shall, to
               the extent permitted by applicable law, conclusively establish
               the truth and accuracy of the matters stated (including, without
               limit, as to the amounts of the principal of and interest on the
               Indebtedness, the accrual and nonpayment of it and advertisement
               and conduct of the sale); and all prerequisites to the sale shall
               be presumed to have been satisfied and performed. Upon any sale
               of any Collateral, the receipt of the officer making the sale
               under judicial proceedings or of Bank shall be sufficient
               discharge to the purchaser for the purchase money, and the
               purchaser shall not be obligated to see to the application of the
               money. Any sale of any Collateral under this Agreement shall be a
               perpetual bar against Debtor with respect to that Collateral.

     4.3  Debtor shall at the request of Bank, notify the account debtors or
          obligors of Bank's security interest in the Collateral. Upon the
          occurrence of an Event of Default, Debtor shall direct the account
          debtors and obligors to tender payment directly to Bank. Bank may,
          itself, upon the occurrence of any Event of Default so notify and
          direct any account debtor or obligor.

     4.4  The proceeds of any sale or other disposition of Collateral authorized
          by this Agreement shall be applied by Bank first upon all expenses
          authorized by the Uniform Commercial Code and all reasonable attorney
          fees and legal expenses incurred by Bank; the balance of the proceeds
          of the sale or other disposition shall be applied in the payment of
          the Indebtedness, first to interest, then to principal, then to
          remaining Indebtedness and the surplus, if any, shall be paid over to
          Debtor or to such other person(s) as may be entitled to it under
          applicable law. Debtor shall remain liable for any deficiency, which
          it shall pay to Bank immediately upon demand.

     4.5  Nothing in this Agreement is intended, nor shall it be construed, to
          preclude Bank from pursuing any other remedy provided by law for the
          collection of the Indebtedness or for the recovery of any other sum to
          which Bank may be entitled for the breach of this Agreement by Debtor.
          Nothing in this Agreement shall reduce or release in any way any
          rights or security interests of Bank contained in any existing
          agreement between Debtor or any Guarantor and Bank.



                                      -7-
<PAGE>

     4.6  No waiver of default or consent to any act by Debtor shall be
          effective unless in writing and signed by an authorized officer of
          Bank. No waiver of any default or forbearance on the part of Bank in
          enforcing any of its rights under this Agreement shall operate as a
          waiver of any other default or of the same default on a future
          occasion or of any rights.

     4.7  Debtor irrevocably appoints Bank or any agent of Bank (which
          appointment is coupled with an interest) the true and lawful attorney
          of Debtor (with full power of substitution) in the name, place and
          stead of, and at the expense of, Debtor, upon the occurrence of an
          Event of Default:

          (a)  to demand, receive, sue for, and give receipts or acquittances
               for any moneys due or to become due on any Collateral and to
               endorse any item representing any payment on or proceeds of the
               Collateral;

          (b)  to execute and file in the name of and on behalf of Debtor all
               financing statements or other filings deemed necessary or
               desirable by Bank to evidence, perfect, or continue the security
               interests granted in this Agreement; and

          (c)  to do and perform any act on behalf of Debtor permitted or
               required under this Agreement.

     4.8  Upon the occurrence of an Event of Default, Debtor also agrees, upon
          request of Bank, to assemble the Collateral and make it available to
          Bank at any place designated by Bank which is reasonably convenient to
          Bank and Debtor.

5.   MISCELLANEOUS.

     5.1  Until Bank is advised in writing by Debtor to the contrary, all
          notices, requests and demands required under this Agreement or by law
          shall be given to, or made upon, Debtor at the first address indicated
          in Section 5.14 below.

     5.2  Debtor will give Bank not less than 30 days prior written notice of
          all contemplated changes in Debtor's name, chief executive office
          location, and/or location of any Collateral, but the giving of this
          notice shall not cure any Event of Default caused by this change.

     5.3  Bank assumes no duty of performance or other responsibility under any
          contracts contained within the Collateral.

     5.4  Bank has the right to sell, assign, transfer, negotiate or grant
          participations or any interest in, any or all of the Indebtedness and
          any related obligations, including without limit this Agreement
          ("Transfer"), to an Eligible Transferee (as defined below); provided,
          however, upon an Event of Default, Bank may make such Transfer to any
          person or company. In connection with the above, but without limiting
          its ability to make other disclosures to the full extent allowable,
          Bank may disclose all documents and information which Bank now or
          later has relating to Debtor, the Indebtedness or this Agreement,
          however obtained. Debtor further agrees that Bank may provide
          information relating to this Agreement or relating to Debtor to the
          Bank's parent, affiliates, subsidiaries, and service providers.

          "Eligible Transferee" shall mean (a) a commercial bank organized under
          the laws of the United States, or any state thereof; (b) a commercial
          bank organized under the laws of any other country which is a member
          of the Organization for Economic Cooperation and Development or a
          political subdivision of any such country, provided that such bank is
          acting through a branch or agency located in the United States; (c)
          finance company, insurance company, factoring company or other
          financial institution or fund that is engaged in making, purchasing or


                                      -8-
<PAGE>

          otherwise investing in commercial loans in the ordinary course of its
          business; (d) any Affiliate (as defined in the Agreement) of Bank; or
          (e) any other person or company approved by Bank and Debtor.

     5.5  In addition to Bank's other rights, any indebtedness owing from Bank
          to Debtor can be set off and applied by Bank on any Indebtedness at
          any time(s) either before or after maturity or demand without notice
          to anyone.

     5.6  Debtor waives any right to require the Bank to: (a) proceed against
          any person or property; (b) give notice of the terms, time and place
          of any public or private sale of personal property security held from
          any other person, or otherwise comply with the provisions of Section
          9-504 of the Uniform Commercial Code, the enforceability of which is
          subject to applicable law; or (c) pursue any other remedy in the
          Bank's power, other than as required by the Uniform Commercial Code.
          Debtor waives notice of acceptance of this Agreement and presentment,
          demand, protest, notice of protest, dishonor, notice of dishonor,
          notice of default, notice of intent to accelerate or demand payment of
          any Indebtedness, any and all other notices to which the undersigned
          might otherwise be entitled, and diligence in collecting any
          Indebtedness, and agrees that the Bank may, once or any number of
          times, extend, accelerate, renew or forbear to enforce payment of any
          or all Indebtedness, all without notice to Debtor and without
          affecting in any manner the unconditional obligation of Debtor under
          this Agreement.

     5.7  In the event that applicable law shall obligate Bank to give prior
          notice to Debtor of any action to be taken under this Agreement,
          Debtor agrees that a written notice given to Debtor at least five days
          before the date of the act shall be reasonable notice of the act and,
          specifically, reasonable notification of the time and place of any
          public sale or of the time after which any private sale, lease, or
          other disposition is to be made, unless a shorter notice period is
          reasonable under the circumstances. A notice shall be deemed to be
          given under this Agreement when delivered to Debtor or when placed in
          an envelope addressed to Debtor and deposited, with postage prepaid,
          in a post office or official depository under the exclusive care and
          custody of the United States Postal Service or delivered to an
          overnight courier. The mailing shall be by overnight courier,
          certified, or first class mail.

     5.8  Notwithstanding any prior revocation, termination, surrender, or
          discharge of this Agreement in whole or in part, the effectiveness of
          this Agreement shall automatically continue or be reinstated in the
          event that any payment received or credit given by Bank in respect of
          the Indebtedness is returned, disgorged, or rescinded under any
          applicable law, including, without limitation, bankruptcy or
          insolvency laws, in which case this Agreement, shall be enforceable
          against Debtor as if the returned, disgorged, or rescinded payment or
          credit had not been received or given by Bank, and whether or not Bank
          relied upon this payment or credit or changed its position as a
          consequence of it. In the event of continuation or reinstatement of
          this Agreement, Debtor agrees upon demand by Bank to execute and
          deliver to Bank those documents which Bank determines are appropriate
          to further evidence (in the public records or otherwise) this
          continuation or reinstatement, although the failure of Debtor to do so
          shall not affect in any way the reinstatement or continuation.

     5.9  This Agreement and all the rights and remedies of Bank under this
          Agreement shall inure to the benefit of Bank's successors and assigns
          and to any other holder who derives from Bank title to or an interest
          in the Indebtedness or any portion of it, and shall bind Debtor and
          the heirs, legal representatives, successors, and assigns of Debtor.
          Nothing in this Section 5.9 is deemed a consent by Bank to any
          assignment by Debtor.


                                      -9-
<PAGE>

     5.10 If there is more than one Debtor, all undertakings, warranties and
          covenants made by Debtor and all rights, powers and authorities given
          to or conferred upon Bank are made or given jointly and severally.

     5.11 Except as otherwise provided in this Agreement, all terms in this
          Agreement have the meanings assigned to them in Article 9 (or, absent
          definition in Article 9, in any other Article) of the Uniform
          Commercial Code. "Uniform Commercial Code" means Act No. 174 of the
          Michigan Public Acts of 1962, as amended.

     5.12 No single or partial exercise, or delay in the exercise, of any right
          or power under this Agreement, shall preclude other or further
          exercise of the rights and powers under this Agreement. The
          unenforceability of any provision of this Agreement shall not affect
          the enforceability of the remainder of this Agreement. This Agreement
          constitutes the entire agreement of Debtor and Bank with respect to
          the subject matter of this Agreement. No amendment or modification of
          this Agreement shall be effective unless the same shall be in writing
          and signed by Debtor and an authorized officer of Bank. This Agreement
          shall be governed by and construed in accordance with the internal
          laws of the State of Michigan, without regard to conflict of laws
          principles.

     5.13 To the extent that any of the Indebtedness is payable upon demand,
          nothing contained in this Agreement shall modify the terms and
          conditions of that Indebtedness nor shall anything contained in this
          Agreement prevent Bank from making demand, without notice and with or
          without reason, for immediate payment of any or all of that
          Indebtedness at any time(s), whether or not an Event of Default has
          occurred.

     5.14 Debtor's chief executive office is located and shall be maintained at

            3001 Daimler Street
          ----------------------------------------------------------------------
          STREET ADDRESS

            Santa Ana     CA          92705
          ----------------------------------------------------------------------
          CITY          STATE       ZIP CODE                COUNTY

          If Collateral is located at other than the chief executive office,
          such Collateral is located and shall be maintained at

          ----------------------------------------------------------------------
          STREET ADDRESS

          ----------------------------------------------------------------------
          CITY          STATE       ZIP CODE                 COUNTY

          Collateral shall be maintained only at the locations identified in
          this Section 5.14.

     5.15 A carbon, photographic or other reproduction of this Agreement shall
          be sufficient as a financing statement under the Uniform Commercial
          Code and may be filed by Bank in any filing office.

     5.16 This Agreement shall be terminated only by the filing of a termination
          statement in accordance with the applicable provisions of the Uniform
          Commercial Code, but the obligations contained in Section 2.12 of this
          Agreement shall survive termination.


                                      -10-
<PAGE>




6.   DEBTOR AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
     CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING
     (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR CHOICE,
     KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT WAIVES ANY RIGHT TO
     TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
     ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE
     INDEBTEDNESS.



                                     Debtor:

                                     SIMPLE TECHNOLOGY, INC.


                                     By:
                                        ----------------------------------------
                                     Its:
                                         ---------------------------------------












                                      -11-