<PAGE>   1
                                                                   Exhibit 10.16

                     ACCOUNTS RECEIVABLE SECURITY AGREEMENT


DATE:          June 23, 1999

BORROWER: New Directions                     FCFC:    FIRST COMMUNITY
          Manufacturing, Inc.,                        FINANCIAL CORPORATION,
          an Arizona corporation                      an Arizona corporation

ADDRESS: 2940 West Willetta                  ADDRESS: 3550 N. Central Avenue
         Phoenix, Arizona 85009                       Suite 102
                                                      Phoenix, Arizona 85012

      Borrower is desirous of obtaining a Credit Facility and other financial
accommodations from FCFC, and FCFC is willing to make such Credit Facility
available to Borrower on the following terms and conditions to be secured by
the Collateral hereinafter described:

      1. Definitions.

         1.1 "Accounts" means and includes all of Borrower's presently existing
and hereafter arising accounts, instruments, contract rights, documents, chattel
paper (including security agreements and leases), and all other forms of
obligations owing to Borrower, all guaranties of such Accounts and other
security therefor, the proceeds of such Accounts, all Inventory returned to or
reclaimed by Borrower and the Borrower's Books relating to any of the foregoing.

         1.2 "Agreement" means and includes this Accounts Receivable Security
Agreement, any concurrent or subsequent Rider hereto and any extensions,
supplements, amendments or modifications thereto.

         1.3 "Borrower's Books" means and includes all of Borrower's books and
records including but not limited to: all customer lists and lists of account
debtors; all ledgers; records reflecting, summarizing or evidencing Borrower's
assets, accounts, business operations or financial condition; computer programs,
computer discs, computer printouts, and other computer prepared information and
computer equipment of any kind.

         1.4 "Collateral" means and includes all of Borrower's existing and
hereafter acquired Accounts, Inventory, money, deposit accounts, and general
intangibles (including tax refunds, and all trademarks and trade names of
Borrower), and any and all other property of Borrower in which FCFC now has or
hereafter receives a security interest or which hereafter come into the
possession, custody or control of FCFC, and the proceeds thereof, including
<PAGE>   2
proceeds of insurance covering the Collateral and the proceeds resulting from
the sale, rental, or other disposition of the Collateral.

         1.5 "Credit Facility" shall mean a revolving line of credit granted by
FCFC to Borrower in the amount of $700,000, in accordance with the terms and
conditions set forth in this Agreement.

         1.6 "Eligible Accounts" means Accounts on selling terms of net 30 days
or less, which have been validly assigned to FCFC and strictly comply with all
of Borrower's warranties and representations set forth in this Agreement, but
excluding those Accounts: (a) which are not paid within 90 days of their invoice
date; (b) which are owed by a single account debtor, if 25% of the amount owing
by said account debtor remains unpaid for more than 90 days after its invoice
date; (c) where the total indebtedness owed by an account debtor to Borrower
exceeds 10% of all Eligible Accounts; (d) which represent the sale of goods
delivered on consignment, guaranteed sale or on other conditional terms; (e)
which are subject to any defense, setoff or counterclaim claimed or asserted by
the account debtor; (f) which are evidenced by an instrument; (g) which are owed
by an account debtor who is not a resident of the United States; (h) where the
account debtor is the United States or any department, agency or instrumentality
of the United States, or any state, city, town, municipality or division
thereof; (i) where the account debtor is a subsidiary of, related to, affiliated
or has common shareholders, officers or directors with Borrower; (j) where the
account debtor is an officer, employee or agent of Borrower; (k) which represent
goods sold and/or transferred where possession and/or control is held,
maintained or retained by Borrower (or its agent) for the account of or subject
to further and/or future direction from the account debtor thereof; or (1)
Accounts which are not creditworthy, in the sole opinion of FCFC.

         1.7 "FCFC's Costs" means and includes: filing, recording, publication
and search fees incurred by FCFC relating to Borrower; all costs and expenses
incurred by FCFC in the enforcement of its rights and remedies under this
Agreement, or defending this Agreement or its security interest in the
Collateral; long distance telephone and facsimile charges, the expenses of field
examiners; all expenses for travel, lodging and food incurred by FCFC's
personnel in collecting the Accounts or realizing upon the Collateral; all costs
and expenses incurred in gaining possession of, maintaining, handling,
preserving, storing, repairing, shipping, selling, preparing for sale and
advertising to sell the Collateral, whether or not a sale is consummated; all
expenses involved in fulfilling in whole or in part any purchase order from an
account debtor; and reasonable attorney's fees and expenses incurred by FCFC as
provided for in this Agreement.

         1.8 "Inventory" means and includes all of Borrower's goods held for
sale or lease, raw materials, components, work in process, finished merchandise,
and packing and shipping materials, now owned or hereafter acquired, wherever
located; all patents, blueprints and drawings related thereto; all other items
hereafter acquired by Borrower by way of substitution, replacement, return,
repossession or otherwise, and all additions and accessions thereto; and the
resulting product or mass, and any documents of title representing any of the
above.


                                       -2-
<PAGE>   3
         1.9 "Obligations" means and includes all loans, advances (whether
evidenced by promissory note(s) or not), indebtedness, liabilities, obligations,
lease payments, guaranties, covenants and duties of Borrower to FCFC of every
kind, nature and description, (whether arising out of this Agreement, or any
other security agreement, mortgage, lease, instrument, document, contract or
similar agreement now or hereafter executed by Borrower and delivered to FCFC,
or by oral agreement or operation of law and whether or not for the payment of
money), direct or indirect, absolute or contingent, due or to become due,
liquidated or unliquidated, now existing or hereafter arising, including without
limitation any debt, liability or obligation owing by Borrower to others which
FCFC may have acquired by assignment or otherwise, and further including,
without limitation, all interest and FCFC's Costs which Borrower is required to
pay or reimburse by this Agreement, by law or otherwise. The term "Obligations"
also includes all amounts which would become due but for the operation of the
automatic stay under Section 362(a) of the United States Bankruptcy Code, 11
U.S.C. 362(a), and the operation of Section 502(b) and 506(b) of the United
States Bankruptcy Code, 11 U.S.C. 502(b) and 506(b), and including indebtedness
of Borrower arising under successive transactions which renew, continue,
refinance or refund the Obligations of Borrower.

         1.10 "Prime Rate" means the Prime Rate publicly announced by Bank One,
Phoenix, Arizona, from time to time (which may not necessarily be the lowest
rate charged by such bank to its customers).

         1.11 Any and all terms used in this Agreement shall be construed and
defined in accordance with the meaning and definitions set forth herein or, to
the extent not inconsistent herewith, as such terms are defined in the Arizona
Uniform Commercial Code, as amended from time to time (hereinafter referred to
as the "Code").

      2. Advances and Charges.

         2.1 Upon request of Borrower, from time to time during the term
hereof, provided the representations and warranties of paragraph 5. hereof are
then true, and so long as no event of default hereunder has occurred and
Borrower is in full, faithful and timely compliance with each and all of the
covenants, conditions, warranties, and representations, contained in this
Agreement or in any other agreement between FCFC and Borrower, FCFC agrees to
make advances to Borrower in an amount which when added to the advances then
outstanding does not exceed the lesser of the Credit Facility or 75% of the
amount of Eligible Accounts of Borrower (less discounts, credits, allowances,
service charges, commissions, and freight charges which may be granted to or
taken by the account debtors). FCFC may at any time and from time to time change
the percentage of Eligible Accounts to be advanced to Borrower.

         FCFC is hereby authorized to make said advances based upon telephonic
or other instructions received from anyone purporting to be an officer,
employee, or representative of Borrower.

         2.2 The Obligations of Borrower to FCFC shall bear interest, for the
actual days outstanding at the rate equal to the Prime Rate plus 5.00% per
annum, computed on the basis


                                      -3-

<PAGE>   4
of a 360-day year for actual days elapsed. The Prime Rate of 7.75%, is the rate
in effect as of this date. In the event of a change in the Prime Rate from time
to time, the rate of interest to be charged to Borrower shall be correspondingly
adjusted as of the date of the Prime Rate change. Notwithstanding the foregoing,
in no event shall the interest rate chargeable hereunder be less than the Prime
Rate plus 5.00% per annum. Interest is due and payable to FCFC under this
Agreement on the first day of each month. Any interest not paid when due shall
become a part of Borrower's Obligations under this Agreement, and shall
thereafter bear interest as provided herein.

         FCFC shall render statements to Borrower of the Obligations, including
all principal, interest and FCFC's Costs owing, and such statements shall be
conclusively presumed to be correct and accurate and constitute an account
stated between Borrower and FCFC unless, within thirty (30) days after receipt
thereof by Borrower, Borrower notifies FCFC in writing specifying the error or
errors, if any, contained in any such statements.

         2.3 Upon the default by Borrower under any provision of this Agreement,
and for as long as Borrower is in default, interest shall accrue on the
Obligations from and after such default at a rate of interest which is four
percent per annum greater than the rate which is then being charged.

         2.4 In consideration for establishing the Credit Facility on the terms
and conditions provided for herein, Borrower agrees to pay to FCFC a commitment
and funding fee, which shall be deemed earned and non-refundable upon payment
thereof, (i) in the amount of one and one-half percent (1 1/2%) of the Credit
Facility upon the execution hereof; and (ii) in the amount of one percent (1%)
of the Credit Facility upon each annual anniversary of the date of this
Agreement until such time as the Credit Facility has been terminated. In the
event that the term of this Agreement is renewed as provided in paragraph 4
below, Borrower shall pay within ten days prior to the anniversary date to FCFC
a renewal fee of 1% of the Credit Facility each renewal period. In the event
that the amount under the Credit Facility is increased, Borrower shall pay to
FCFC a 1% line increase fee on the additional commitment amount, which shall be
deemed earned and non-refundable upon payment thereof.

         2.5 In order to further induce FCFC to grant the Credit Facility to
Borrower, Borrower agrees that the minimum amount of interest to be paid monthly
by Borrower to FCFC, during the original and each renewal term of this
Agreement, shall not be less than $2,500 per month. Notwithstanding any default
by Borrower, or a termination of this Agreement by FCFC because of such
default, this minimum interest shall be charged to and paid by Borrower for the
unexpired term of this Agreement. In the event the monthly interest earned by
FCFC on advances made by FCFC to Borrower under this Agreement is less than the
minimum set forth above, Borrower will pay to FCFC such difference at the same
time as such accrued interest is due and payable.

         2.6 It is the intention of the parties hereto that the interest
required to be paid by Borrower to FCFC, plus all charges imposed upon Borrower
hereunder which may be construed by a court of law to be interest, shall not
exceed the maximum rate of interest allowed by the laws of the State of Arizona
and if a court of law construes the same to exceed such


                                      -4-
<PAGE>   5
maximum rate, then the excess so determined shall be applied against the
principal balance of Obligations owing to FCFC.

      3. Creation of Security Interest.

         3.1 Borrower hereby grants to FCFC a continuing security interest in
the Collateral to secure the prompt payment and performance by Borrower of all
Obligations under this Agreement or otherwise created.

         3.2 Borrower shall execute and deliver to FCFC concurrently with
Borrower's execution of this Agreement, and at any time or times hereafter at
the request of FCFC, financing statements, continuation statements, security
agreements, mortgages, assignments, certificates of title, affidavits, reports,
notices, schedules of accounts, letters of authority and all other documents
that FCFC may request, in form satisfactory to FCFC, to perfect and maintain
FCFC'S security interest in the Collateral and fully comply with this Agreement.
Borrower hereby makes, constitutes and appoints FCFC (and any of FCFC's
officers, employees or agents designated by FCFC) as Borrower's true and lawful
attorney (which shall be irrevocable until all Obligations are fully paid and
satisfied) with power to sign the name of Borrower on any financing statement,
continuation statement, security agreement, mortgage, assignment, certificate of
title, affidavit, letter of authority, or notice or other similar document
necessary to perfect or continue the perfection of FCFC's security interest in
the Collateral. Borrower shall make appropriate entries in Borrower's Books
disclosing FCFC's security interest in the Accounts. FCFC (through any of its
officers, employees or agents) shall have the right at any time or times
hereafter during Borrower's usual business hours to inspect the Collateral.

         3.3 To further evidence the security interest of FCFC in the Accounts,
Borrower shall, from time to time, provide FCFC with schedules and written
assignments of its Accounts, in form satisfactory to FCFC. Borrower's failure to
execute and deliver such schedules and/or assignments shall not affect or limit
FCFC's security interest or any other rights in and to the Accounts. Together
with each schedule, Borrower shall furnish FCFC with true and correct copies of
Borrower's customers' invoices or the equivalent and original shipping or
delivery receipts for all Inventory sold.

         3.4 FCFC, or its agents, may at any time (and whether or not Borrower
is in default under this Agreement) and without notice thereof to Borrower: (a)
notify the account debtors of Borrower that the Accounts have been assigned to
FCFC and that FCFC has a security interest therein; (b) direct all account
debtors to make payment of all Accounts to FCFC; (c) demand, collect (by legal
means or otherwise), receive, receipt for, sue for, compromise, adjust, settle
or extend the time for payment of any Account upon such terms as FCFC may
reasonably determine under the circumstances, in its own name or in the name of
Borrower (crediting Borrower's Accounts with only the net amount received by
FCFC in payment of the Accounts, after deducting all FCFC's Costs in connection
therewith); and (d) take control of all proceeds from said Accounts. In this
regard, Borrower agrees that it will cooperate with FCFC (and execute such forms
or notices as FCFC may request) in notifying the account debtors that the
Accounts have been assigned to FCFC and that FCFC has a security interest
therein. Until such


                                       -5-
<PAGE>   6
time as FCFC exercises such right, Borrower shall collect the Accounts,
receiving in trust all proceeds therefrom as FCFC's trustee and each day deliver
said proceeds to FCFC in their original form as received from the account
debtors, together with a remittance report, in form satisfactory to FCFC. The
receipt of any check or other item of payment by FCFC shall not be considered
payment to FCFC until such check or other item of payment is actually paid. For
the purpose of computing the interest to be charged to Borrower under paragraph
2.2 hereof all checks, and other items of payment delivered to FCFC from time to
time shall be treated as being paid four business days after the date FCFC
actually receives such check or other item of payment, subject to reversal of
entry in the event such remittance is not paid upon presentment to the drawee
bank. It is further understood that for the purpose of computing interest to be
charged to Borrower, the amount of any credit balance which Borrower may have
with FCFC shall be treated as an advance by FCFC to Borrower under this
Agreement.

         3.5 Borrower authorizes FCFC and FCFC shall have the right at any time
or times to verify the Accounts by mail, telephone, or otherwise in the name of
Borrower or FCFC. In addition, Borrower authorizes FCFC to obtain information
from Borrower's suppliers and customers and, in this regard, Borrower waives any
right or claim against any such supplier or customer for furnishing information
to FCFC.

         3.6 Borrower shall promptly provide FCFC with all information relating
to the financial condition of any account debtor, and shall notify FCFC of the
rejection of goods by any account debtor, delay in the delivery of goods, or any
returns or recoveries of goods, nonperformance of contracts, or the assertion by
an account debtor of any claim, offset or counterclaim, and the settlement or
adjustment of any dispute or claim with an account debtor on terms approved by
FCFC.

         3.7 Borrower agrees to keep all goods returned by any account debtor
and all goods repossessed or stopped in transit by Borrower, segregated from
other property of Borrower, holding the same as trustee for FCFC, outside the
ordinary course of business, until otherwise directed in writing by FCFC.

         3.8 Borrower does hereby irrevocably designate, make, constitute and
appoint FCFC, and any agent of FCFC, as Borrower's true and lawful attorney,
with power, without notice to Borrower, and at such time or times (except as
otherwise provided herein) as FCFC may, in its sole election, determine, in
Borrower's or FCFC's name and at Borrower's expense, to:

            (a) Endorse Borrower's name on any checks, notes, acceptances, money
orders, drafts or other forms of payment or security that may come into FCFC's
possession.

            (b) Exercise all of Borrower's rights and remedies with respect to
the collection of Accounts.

            (c) Sign Borrower's name on any invoice, freight bill or bill of
lading relating to any Account, on any draft against an account debtor, on any
schedule assignment of Accounts, verification of Accounts or on any notice to
account debtors.


-6-
<PAGE>   7
            (d) Prepare, file and sign Borrower's name on any proof of claim in
bankruptcy or similar document against an account debtor.

            (e) Prepare, file and sign Borrower's name on any notice of lien,
claim of mechanic's lien or similar document or waiver or satisfaction thereof
in connection with an Account.

            (f) Execute any other documents which may facilitate the collection,
liquidation or disposition of the Collateral.

         FCFC shall not be obligated to do any of the acts or exercise any of
the powers hereinabove authorized, but, if FCFC elects to collect said Accounts,
do any such act or exercise any of the foregoing powers, it may do so in any
manner or means as it may determine, and shall not be liable to Borrower for any
error in judgment or mistake of fact or law, excepting willful misconduct or bad
faith. This power, being coupled with an interest, is irrevocable until all
Obligations of Borrower to FCFC are fully paid and satisfied. All acts by or on
behalf of FCFC pursuant hereto are hereby ratified and approved by Borrower.

      4. Term. This Agreement shall have a term of two years from the date
hereof and shall be automatically renewed from year to year thereafter, unless
terminated by either party on any anniversary date of this Agreement by written
notice to this effect given not less than 30 days, nor more than 45 days, prior
to said anniversary date. Notwithstanding the foregoing, Borrower may terminate
this Agreement at any time prior to the anniversary date of this Agreement, by
giving written notice to FCFC to this effect not less than 30 days, nor more
than 45 days, prior to the effective date of such termination, provided that
Borrower pays to FCFC on the date of termination, in addition to all Obligations
of Borrower to FCFC, the minimum amount of interest required to be paid by
Borrower to FCFC during the remainder of the original or renewal term of this
Agreement, as provided in paragraph 2.5 above. In the event Borrower defaults in
the performance of any provision of this Agreement, FCFC may, at its election,
terminate this Agreement at any time, without notice. On the date of
termination, all Obligations, including but not limited to, obligations arising
by reason of the termination of this Agreement, shall become immediately due and
payable without notice or demand. Notwithstanding such termination, until all
Obligations have been fully satisfied, FCFC shall retain its security interest
in all existing Collateral and Collateral arising thereafter, and Borrower shall
continue to turn over all collections from the Accounts to FCFC. It is
understood and agreed that if Borrower has given notice of termination, pursuant
to the provisions of this paragraph, and fails to pay all Obligations to FCFC on
the specified date, or within 10 days thereafter, then this Agreement shall be
automatically renewed for an additional one year term.

      5. Representations and Warranties. Until all Obligations of Borrower to
FCFC have been fully paid and satisfied, Borrower does hereby warrant and
represent that:

         (a) If Borrower is a corporation or a limited liability company, it is
duly organized and is and all times hereinafter will be in good standing under
the laws of the state of


                                       -7-
<PAGE>   8
its incorporation and is duly qualified and in good standing in every other
state in which the nature of its business requires such qualification.

         (b) Borrower is the true and lawful owner of the Collateral and has the
right, power and authority to grant a security interest therein to FCFC.

         (c) Borrower's chief place of business (or if it has more than one
place of business its chief executive office) and the office where Borrower's
Books are kept is at Borrower's address as set forth in this Agreement.

         (d) Borrower is not doing business and has not done business during the
last six years under any trade name or style, except its name as set forth in
this Agreement or under the name New Directions -Manufacturer's of Contemporary
Furniture, Inc.

         (e) The execution, delivery and performance hereof does not constitute
a default under any indenture, agreement or undertaking to which Borrower is now
or hereafter a party or by which it is or will be bound and, if Borrower is a
corporation or a limited liability company, the same are within Borrower's
corporate powers, have been duly authorized and are not in contravention of its
articles, bylaws, or operating agreement.

         (f) All financial statements and information relating to Borrower or
any guarantor of Borrower's Obligations or with respect to the Accounts which
have been or may hereafter be delivered by Borrower to FCFC are true and correct
in all material respects and have been prepared in accordance with generally
accepted accounting principles consistently applied, and there has not been any
material adverse change in the financial condition of Borrower or any guarantor
since the last submission of such financial information to FCFC.

         (g) There are no actions or proceedings pending by or against Borrower
or any guarantor of Borrower's Obligations in any court or administrative
agency and Borrower has no knowledge of any pending, threatened or imminent
litigation, governmental investigation or claim, complaint, action or
prosecution involving Borrower or any guarantor of Borrower, except as may have
been specifically disclosed in writing to FCFC and if any of the foregoing arise
during the term of this Agreement, Borrower shall immediately notify FCFC in
writing with respect thereto.

         (h) Borrower has duly filed all federal, state and other governmental
tax returns which it is required by law to file and that all taxes and other
sums which may be due to the United States, any state or other governmental
authority have been fully paid and that Borrower now has and shall hereafter
maintain reserves adequate in amount to fully pay all such tax liabilities which
may hereafter accrue.

         (i) All assessments and taxes whether real, personal or otherwise due
and payable by or imposed, levied or assessed against Borrower or any of its
assets have been paid and shall hereafter be paid in full before delinquency.
Borrower shall make due and timely payment or deposit of all federal, state and
local taxes, assessments or contributions required of it by law (including
timely payment or deposit of all F.I.C.A. payments and withholding taxes) and
will


                                      -8-
<PAGE>   9
execute and deliver to FCFC on demand appropriate certificates attesting to the
payment or deposit thereof.

         (j) Borrower is now and shall be at all times hereafter solvent and
able to pay its debts as they mature.

         (k) With respect to all Collateral, FCFC's security interest therein is
now and shall hereafter at all times constitute a perfected, choate, and first
security interest in the Collateral and is not now and will not hereafter become
subordinate or junior to the security interest, lien, encumbrance or claim of
any person.

         (l) All information furnished to FCFC at any time by or on behalf of
Borrower was, and will be when furnished, true, complete and correct in all
material respects.

         (m) With respect to each Account now and from time to time hereafter
created:

            (i) It is genuine, in all respects what it purport to be and
      represents a bona fide, existing, valid and legally enforceable
      indebtedness of the account debtor named therein, payable in the amount,
      time and manner stated in the invoice therefor, and is absolutely owing to
      Borrower and not contingent for any reason.

            (ii) The delivery receipt and invoice therefor represents bona fide
      sale in the ordinary course of Borrower's business, represents the kind,
      quality and quantity of the goods or services described therein, and that
      the goods or services described herein have been completely delivered,
      installed or performed and at the time of delivery or installation have
      been accepted by the account debtor without condition.

            (iii) No payments have been or shall be made thereon, except
      payments which are turned over to FCFC by Borrower.

            (iv) There is no setoff, counterclaim or dispute existing or
      asserted with respect to the Account and Borrower has not made any
      agreement with the account debtor thereof for any deduction or discount of
      the sum payable thereunder, except regular discounts allowed by Borrower
      in the ordinary course of its business for prompt payment.

            (v) The goods sold or transferred or the services rendered as
      evidenced by the Account are not subject to any lien, claim, encumbrance
      or security interest, except that of FCFC.

            (vi) Borrower has no knowledge of the insolvency of the account
      debtor or of any action or proceeding involving the account debtor under
      any federal or state debtor's relief statute.

            (vii) Borrower has no knowledge of any fact or circumstance which
      would impair the validity or collectibility of the Account.


                                      -9-
<PAGE>   10
            (viii) Borrower has not made any assignment of the Account or
      granted a security interest in the Account to any other party other than
      FCFC.

            (ix) All of Borrower's Books, and all records and documents relating
      to the Account are and will be genuine and in all respects what they
      purport to be, and accurately reflect the amounts owing or to be owing at
      maturity by the account debtor.

Each warranty, representation and agreement contained in this Agreement shall be
automatically deemed repeated with each advance and shall be conclusively
presumed to have been relied upon by FCFC regardless of any investigation made
or information possessed by FCFC. The warranties, representations and agreements
set forth herein shall be cumulative and in addition to any other warranties,
representations and agreements which Borrower shall now or hereafter give, or
cause to be given to FCFC.

      6. Affirmative Covenants. Until all Obligations of Borrower to FCFC are
fully paid and satisfied, Borrower will:

         (a) At all times fully comply with all federal, state and local laws,
rules, orders or regulations pertaining to the conduct of its business,
including, but not limited to all applicable federal, state and local
environmental laws and regulations relating to the storage, usage and disposal
of hazardous substances or toxic chemicals by Borrower in its business. In this
regard, Borrower agrees to defend, indemnify and hold FCFC harmless for and
against any and all costs, claims, demands, damages including attorneys fees,
court costs, and investigatory and laboratory fees which FCFC may suffer or
incur in connection with any such violation which indemnification shall survive
the termination of this Agreement.

         (b) Maintain Borrower's Books at the address set forth in this
Agreement (which is Borrower's place of business or, if it has more than one
place of business, its chief executive office) and will not, without prior
written consent of FCFC relocate its place of business (or if it has more than
one place of business, its chief executive office) or move Borrower's Books
outside the State of Arizona.

         (c) Maintain a standard and modern system of accounting in accordance
with generally accepted accounting principles which contain such information as
may be requested by FCFC, and permit FCFC or any of its agents, during
Borrower's usual business hours or during the usual business hours of any third
party having control over the records of Borrower, to have access to and have
the right to examine all of Borrower's Books and in connection therewith and
permit FCFC or any of its agents to copy and make extracts therefrom.

         (d) Promptly furnish to FCFC such records, data and other information
with respect to the financial condition of Borrower, the Collateral and any
guarantor, as FCFC may request from time to time, and deliver to FCFC within 90
days after the end of each Borrower's fiscal year, a detailed report in form
satisfactory to FCFC containing a statement of the financial condition and
operation of Borrower for each such fiscal year, and within 20 days, after
demand


                                      -10-
<PAGE>   11
by FCFC, deliver to FCFC copies of any financial report or statement prepared by
or for Borrower. Each such statement and report shall be reviewed or compiled by
an independent CPA or, with the consent of FCFC, prepared by an authorized
officer of Borrower certifying that such report, statement or document delivered
or caused to be delivered to FCFC is complete, correct and thoroughly presents
the financial condition of Borrower and that on the date of said certification
no event or condition exists which constitutes a breach or event of default
under this Agreement. In addition, Borrower shall deliver to FCFC within 30 days
after the end of each month, a detailed report in form satisfactory to FCFC
containing a statement of the financial condition and operation of Borrower for
each such month.

         (e) Allow FCFC to possess, remove to FCFC's premises or the premises of
any agent of FCFC, copies of Borrower's Books, for so long as FCFC may desire in
connection with the enforcement of FCFC's rights under this Agreement.

         (f) Notify FCFC of any material adverse change in Borrower's financial
condition.

         (g) Make timely payment or deposit of all taxes (including F.I.C.A.
payments and deposits of withholding taxes) and assessments required to be paid
by Borrower and deliver to FCFC, as requested, evidence of such payment or
deposit.

         (h) Pay all rent when due and otherwise abide by the terms under which
Borrower leases or occupies the premises at which the Collateral is located; if
Borrower fails to do so, FCFC may, without any obligation, pay such rent and any
sum so paid shall be part of FCFC's Costs, secured by the Collateral and payable
on demand.

         (i) Cause to be paid all amounts necessary to fund, in accordance with
their terms, all pension plans presently in existence or hereafter created and
Borrower will not withdraw from participation in, permit the termination or
partial termination of, or permit the occurrence of any other event with respect
to any deferred compensation plan maintained for the benefit of its employees
under circumstances that could result in liability to the Pension Benefit
Guarantee Corporation, or any of its successors or assigns, or to the entity
which provides funds for such deferred compensation plan.

         (j) Maintain a working capital ratio of 1.0:1 and a tangible net
worth at least equal to 80% of that set forth in the financial statements of
Borrower dated April 30, 1999.

         (k) Maintain itself in good standing in all jurisdictions in which
Borrower is doing business, and at the request of FCFC, furnish to FCFC evidence
of its good standing in all such jurisdictions.

         (l) Maintain all Collateral at the address set forth in this Agreement
or at: Center Point Building, 401 South Hamilton, Spaces A103 & A104, High
Point, NC 27261 and 1355 Market Street, Mart 2, Space 721, San Francisco, CA
94103 and will not, without the prior written consent of FCFC, move said
Collateral to any other address.


                                      -11-
<PAGE>   12
         (m) Promptly deliver to FCFC all documents and instruments relating to
the Collateral, including invoices, original orders, shipping documents,
delivery receipts, as FCFC may request from time to time.

         (n) Furnish to FCFC daily or less frequently as FCFC shall permit from
time to time, written schedules and reports of the status of Borrower's Accounts
in such form as shall be required by FCFC.

         (o) On request of FCFC, execute and deliver to FCFC any and all
additional documents which FCFC may request from time to time to evidence the
advances made hereunder or the security interest granted hereby.

      7. Negative Covenants. Until all Obligations of Borrower to FCFC are fully
paid and satisfied, Borrower will not, without the prior written consent of
FCFC:

         (a) Grant a security interest in the Accounts or the Inventory or
permit a lien, claim or encumbrance to be imposed on any of the Collateral.

         (b) Sell, lease, rent or otherwise dispose of, move, transfer or
relocate outside the State of Arizona, whether by sale or other-wise, any of
Borrower's property or any interest therein, including the Collateral, but
excluding Inventory which may be sold, leased, or otherwise disposed of in the
ordinary course of Borrower's business, provided that FCFC shall nevertheless
continue to have a security interest in the proceeds thereof.

         (c) Permit any Collateral to become affixed to real property, become an
accession to any property or be used in violation of any applicable law,
regulation or policy of insurance.

         (d) Permit any levy, or attachment to be made on any of Borrower's
assets.

         (e) Permit any receiver, trustee, custodian, assignee for the benefit
of creditors or any other person or entity having similar powers or duties to be
appointed or to take possession of any or all of Borrower's assets.

         (f) Change its corporate or trade name, business structure, corporate
identity or structure, do business under any additional trade name, or
liquidate, merge or consolidate with or into any other business organization.

         (g) Acquire any entity or purchase the stock or securities of any
entity (other than securities of any state or federal government).

         (h) Permit any sale or disposition of a controlling interest in
Borrower or permit a change in the management of Borrower, except as previously
disclosed to FCFC.


                                      -12-
<PAGE>   13
         (i) Enter into any transaction or incur any debts not in the usual
course of Borrower's business, except as previously disclosed to FCFC.

         (j) Guarantee or otherwise become in any way liable with respect to the
obligations of any person except by endorsement of instruments or items of
payment for deposit to the account of Borrower or which are transmitted or
turned over to FCFC on account of Borrower's Obligations.

         (k) Pay or declare any dividends upon Borrower's capital stock.

         (l) Redeem, retire, purchase or otherwise acquire directly or
indirectly any of Borrower's capital stock, except as previously disclosed to
FCFC.

         (m) Make any distribution of Borrower's property or assets.

         (n) Not Used.

         (o) Make any advance, loan, contribution or payment of money (other
than compensation for personal services), goods or credit to, or guarantee any
obligation of any subsidiary, affiliate or parent corporation, or any officer,
shareholder or employee, or cause or permit any such advance, loan, contribution
or guarantee to be made by any subsidiary corporation other than the guaranty
executed in connection herewith with this Agreement.

      8. Insurance. Borrower, at its expense, shall keep the Collateral insured
against loss or damage by fire, theft, and all other hazards and risks
ordinarily insured against by owners in similar businesses for the full
insurable value thereof, business interruption insurance and public liability
and property damage insurance relating to Borrower's ownership and use of its
assets. All such policies of insurance shall be. in such form, with such
companies and in such amounts as may be satisfactory to FCFC. Borrower shall
deliver to FCFC certified copies of such policies of insurance and evidence of
the payment of all premiums therefor. All such policies of insurance (except
those of public liability and property damage) shall contain an endorsement in a
form satisfactory to FCFC showing FCFC as the loss payee. All proceeds payable
thereunder shall be payable to FCFC and upon receipt by FCFC shall, at FCFC's
option, be applied on the account of Borrower's Obligations, whether or not then
due, or to the repair or replacement of the Collateral. To secure the payment of
Borrower's Obligations, Borrower grants FCFC a security interest in and to all
such policies of insurance (except those of public liability and property
damage) and the proceeds thereof, and Borrower shall direct all insurers under
such policies of insurance to pay all proceeds thereof directly to FCFC.
Borrower hereby irrevocably appoints FCFC (and any of FCFC's officers, employees
or agents designated by FCFC) as Borrower's attorney for the purpose of making,
settling and adjusting claims under such policies of insurance, endorsing the
name of Borrower on any check, draft, instrument or other item of payment for
the proceeds of such policies of insurance and for making all determinations and
decisions with respect to such policies of insurance. Each such insurer shall
agree, by endorsement upon the policy or


                                      -13-
<PAGE>   14
policies of insurance issued by it to Borrower as required above, or by
independent instruments furnished to FCFC, that it will give FCFC at least 10
days written notice before any such policy or policies of insurance shall be
altered or canceled, and that no act of Borrower or any other person or the
default hereunder by Borrower, shall affect the right of FCFC to recover under
such policy or policies of insurance. FCFC, without waiving or releasing any
Obligations or default by Borrower hereunder, may, but shall have no obligation
to do so, obtain and maintain such policies of insurance and pay such premiums
and take any other action with respect to such policies which FCFC deems
advisable. All sums so disbursed by FCFC, as well as reasonable attorneys fees,
court costs, expenses and other charges relating thereto, shall be a part of
FCFC's Costs, secured by the Collateral and payable on demand.

      9. Events of Default. The occurrence of any one or more of the following
shall constitute an event of default by Borrower under this Agreement (each an
"Event of Default"):

         (a) Borrower fails to pay any of Borrower's Obligations (whether of
principal, interest, taxes, reimbursement of FCFC's Costs, or otherwise) when
due and payable or is declared to be due and payable.

         (b) Borrower fails or neglects to perform, keep or observe any term,
provision, condition, or covenant contained in this Agreement, or any other
present or future agreement between Borrower and FCFC.

         (c) Any representation, statement, report or certificate made or
delivered by Borrower, or any of its officers or agents, (either individually or
as an officer or agent of Borrower) to FCFC proves to be untrue or incorrect in
any material respect.

         (d) Any Collateral cannot be located within five days after FCFC makes
demand upon Borrower to inspect the same or any Collateral has been moved
outside the State of Arizona, without the consent of FCFC.

         (e) There is a material impairment in the prospect of repayment of
Borrower's Obligations or a material impairment in the value of the Collateral
or that the priority of FCFC's security interest in the Collateral is contested.

         (f) Any of Borrower's assets are attached, seized, or are levied upon,
and the same are not released, discharged or bonded against within ten days
thereafter.

         (g) Any proceeding under the Bankruptcy Act is filed by or against
Borrower.

         (h) A notice of lien, levy or assessment is filed of record with
respect to any or all of Borrower's assets by the United States Government, or
any department, agency or instrumentality thereof, or by any state, county,
municipal or other governmental agency, or if any taxes or debts owing at any
time hereafter to any one or more of such entities becomes a lien,


                                      -14-
<PAGE>   15
whether choate or otherwise, upon any or all of the Borrower's assets and the
same is not paid on the payment date thereof.

         (i) Borrower is enjoined, restrained or in any way prevented by court
order from continuing to conduct all or any material part of its business
affairs.

         (j) Borrower ceases normal business operations.

         (k) A material portion of the Collateral is stolen, damaged or
destroyed.

         (l) A judgment or other claim becomes a lien or encumbrance upon any or
all of Borrower's assets and the same is not satisfied, dismissed or bonded
against within 10 days thereafter.

         (m) If any of Borrower's records are prepared and kept by an outside
computer service at any time during the term of this Agreement, and said
computer service fails to provide FCFC with any requested information or
financial data pertaining to the Collateral, Borrower's financial condition or
the results of Borrower's operations.

         (n) If there is a default in any agreement to which Borrower is a party
with any third party resulting in a right by such third party to accelerate the
maturity of any indebtedness of Borrower to such third party.

         (o) Borrower makes any payment on account of indebtedness which has
been subordinated to Borrower's Obligations to FCFC, without FCFC's consent, or
if any person subordinating such indebtedness terminates or in any way limits
his subordination.

         (p) The chief executive officer of Borrower dies, or is no longer
associated with the Borrower in that capacity, except as previously disclosed to
FCFC, with respect to Donald A. Metke.

         (q) Not Used.

      10. FCFC's Rights and Remedies.

         10.1 Upon the occurrence of an Event of Default by Borrower under this
Agreement, FCFC may, at its election, without notice of its election and without
demand upon Borrower or any guarantor, do any one or more of the following, all
of which are authorized by Borrower:

            (a) Declare any or all of Borrower's Obligations, whether evidenced
by note(s), or otherwise, immediately due and payable.

            (b) Terminate this Agreement, but without affecting FCFC's rights
and security interests in the Collateral, and the Obligations of Borrower to
FCFC.


                                      -15-
<PAGE>   16
            (c) Cease making advances to or for benefit of Borrower under the
Credit Facility or reduce the Credit Facility.

            (d) Continue making advances to Borrower in such amounts as FCFC may
determine, in its sole discretion, without waiving any default by Borrower under
this Agreement.

            (e) Proceed to collect the Accounts, pursuant to A.R.S. Section
47-9502, and, in this regard, notify the post office authorities to change the
address for delivery of Borrower's mail to an address designated by FCFC, and
receive, open and distribute all mail addressed to Borrower, retaining all mail
relating to Collateral and forwarding all other mail to Borrower.

            (f) Exercise any and all of the rights accruing to a secured party
under the Code and any other applicable law.

            (g) Enter, with or without process of law, upon any premises where
the Collateral is or believed by FCFC to be located (the "Premises"), using all
necessary force to accomplish the same without committing a breach of the peace
(Borrower hereby waives all claims for damages or otherwise due to, arising from
or connected with such entry and/or seizure); and:

            (i) Take possession of the Premises and of the Collateral located
      therein;

            (ii) Place a custodian in exclusive control of the Premises and of
      any of the Collateral located therein;

            (iii) Remove from the Premises the Collateral (and any of Borrower's
      Books, materials and supplies) in any way relating to the Collateral or
      useful by FCFC in enforcing its rights hereunder;

            (iv) Remain upon the Premises and use the same (together with said
      Borrower's Books, materials and supplies) for the purpose of collecting
      the Collateral and/or preparing the Collateral for disposition and/or
      disposing of the Collateral.

            (h) Make (without any obligation to do so) any payment and take such
action as FCFC considers necessary or reasonable to protect or preserve the
Collateral or its security interest therein, including paying, purchasing,
contesting or compromising any encumbrance, charge or lien which, in the opinion
of FCFC, interferes with the enforcement of its security interests or the
liquidation or disposition of the Collateral.

            (i) Require Borrower to assemble the Collateral and, at Borrower's
expense, deliver the same to FCFC or to a third party as FCFC's bailee at a
place or places to be designated by FCFC which is reasonably convenient to the
parties.


                                      -16-

<PAGE>   17
            (j) Ship, reclaim, recover, store, finish, maintain, repair and
prepare for sale the Collateral.

            (k) Sell the Collateral (whether or not the Collateral is present at
any such sale) in its then condition, or after further manufacturing, processing
or preparation thereof (utilizing, in connection therewith, without charge or
liability to FCFC therefor, any of Borrower's assets), at either public or
private sale, or both, by way of one or more contracts or transactions, for cash
or on terms, in such manner and at such places (including Borrower's premises)
as is commercially reasonable, in the opinion of FCFC. In such event, FCFC shall
(unless notice has been waived after default pursuant to the provisions of the
Code) give notice to Borrower in writing of the time and place of public sale,
or, if the sale is a private sale or some other disposition other than a public
sale is to be made of the Collateral, the time after which the private sale or
other disposition is to be made, at least five days before the date fixed for
the sale, or at least five days before the date after which the private sale or
other disposition is to be made, unless the Collateral is perishable or
threatens to decline speedily in value. FCFC may purchase all or any portion of
the Collateral at any public sale.

            (1) Seek temporary or permanent injunctive relief without the
necessity of proving actual damages, as no remedy at law will provide adequate
relief to FCFC and, in this regard, the bond which FCFC may be required to post
shall be no more than $500.00.

            (m) Require Borrower to pay all FCFC's Costs incurred in connection
with FCFC's enforcement and exercise of any of its rights and remedies as herein
provided, whether or not suit is commenced by FCFC.

Any deficiency which exists after disposition of the Collateral, as provided
above, shall be due and payable by Borrower upon demand, with any excess to be
paid by FCFC to Borrower.

      10.2 FCFC's rights and remedies under this Agreement and all other
agreements shall be cumulative and may be exercised simultaneously or
successively, in such order as FCFC shall determine. In addition, FCFC shall
have all other rights and remedies not inconsistent herewith as provided by law
or in equity. No exercise by FCFC of one right or remedy shall be deemed an
election, and no waiver by FCFC of any default on Borrower's part shall be
deemed a continuing waiver. No delay by FCFC shall constitute a waiver, election
or acquiescence by it.

      11. Taxes and Expenses Regarding Borrower's Property.

         If Borrower fails to pay any assessments, taxes, contributions, or make
any deposits, or furnish any required proof thereof as set forth in paragraph
6(g) hereof or in any other provision of this Agreement, FCFC may, in its sole
and absolute discretion and without notice to Borrower (a) make payment of the
same or any part thereof, or (b) set up such reserves in Borrower's account as
FCFC deems necessary to satisfy the liability therefor, or both. If Borrower
fails to promptly pay when due to any other person or entity, any sum which
Borrower is required to pay by reason of any provision in this Agreement, FCFC
may, but is not obligated to, advance any sums which it deems appropriate for
the protection or preservation of the


                                        -17-
<PAGE>   18
Collateral or its security interest therein, and the amount so advanced by FCFC
shall bear interest at the highest rate provided for in paragraph 2.3 above and
shall constitute FCFC's Costs, payable on demand, and shall be secured by the
Collateral. Any payment made by FCFC shall not constitute (a) an agreement by it
to make similar payments in the future, or (b) a waiver by FCFC of any default
under this Agreement. FCFC need not contest nor inquire as to the validity of
any such expense, tax, security interest, encumbrance or lien, and the receipt
of the usual official notice for the payment thereof shall be conclusive
evidence that the same was validly due and owing.

      12. Waivers By Borrower.

         12.1 FCFC shall not be deemed to have waived any provision of this
Agreement, or any right or remedy which it may have hereunder, or at law or
equity, unless such waiver is in writing and signed by FCFC.

         12.2 Borrower waives the right to direct the application of any
payments at any time or times received by FCFC on account of Borrower's
Obligations and Borrower agrees that FCFC shall have the continuing exclusive
right to apply and reapply such payments in any manner as FCFC may deem
advisable.

         12.3 Except as otherwise provided for in this Agreement, Borrower
waives demand, protest, notice of protest, notice of default or dishonor, notice
of payment and nonpayment, notice of any default, nonpayment at maturity,
release, compromise, settlement, extension or renewal of any or all commercial
paper, accounts, documents, instruments, chattel paper and guaranties at any
time held by FCFC on which Borrower may in any way be liable.

         12.4 Failure or delay by FCFC in exercising or enforcing any right,
power, privilege, lien, option or remedy hereunder shall not operate as a waiver
thereof and a waiver by FCFC of any default by Borrower under this Agreement
shall not be construed to create any right or expectation of future waiver of
any subsequent breach or default by Borrower under this Agreement.

         12.5 FCFC shall not in any way or manner be liable or responsible for
(a) the safekeeping of the Collateral; (b) any loss or damage thereto occurring
or arising in any manner or fashion from any cause; (c) any diminution in the
value thereof; or (d) any act or default of any carrier, warehouseman, bailee,
forwarding agency or other person whomsoever. All such risk or loss, damage or
destruction of the Collateral shall be borne by Borrower.

         12.6 Borrower waives (to the extent the same may be lawfully waived):
any and all causes of action and claims which it may now or ever have against
FCFC for failing to protect any Collateral in its possession, or failing to
collect or sell any of the Collateral, notwithstanding the effect of such
possession, collection or sale upon the business of Borrower. In addition,
Borrower hereby releases FCFC of and from (a) any and all liabilities or
penalties for failure of FCFC to perfect or maintain the priority of its
security interest or to comply with any statutory or other requirement imposed
on FCFC; and (b) any error of judgment or mistake of fact or law.


                                      -18-
<PAGE>   19
         12.7 In the event FCFC seeks to obtain possession of any of the
Collateral by replevin or other judicial process, Borrower hereby waives (a) any
bond or security required to be posted by any statute, court rule or otherwise
as an incident to such possession and (b) any demand for possession of the
Collateral prior to the commencement of any suit or action to recover possession
thereof.

         12.8 Not Used.

      13. Notices.

         Unless otherwise provided in this Agreement, all notices, demands or
other communications to either party shall be in writing and shall be mailed,
telecopied or communicated by means of facsimile transmission (followed by a
mailed or delivered hard copy), or delivered by hand or courier service, at
their respective addresses set forth in this Agreement, or at such other
addresses as shall be designated by such party in a written notice to the other
party. All notices and other communications shall be effective on three business
days after deposit in the mail (postage prepaid in the case of mail), upon
telecopy or other facsimile transmission or upon hand delivery.

      14. Destruction of Borrower's Documents.

         Any documents, schedules, invoices or other papers delivered to FCFC,
may be destroyed or otherwise disposed of by FCFC five months after they are
delivered to or received by FCFC, unless Borrower requests, in writing, the
return of the said documents, schedules, invoices or other papers and makes
arrangements, at Borrower's expense, for their return.

      15. Release.

      Only at such time as all Obligations of Borrower to FCFC shall have been
fully paid and satisfied and Borrower and all guarantors of Borrower's
obligations execute and deliver to FCFC a release acknowledging that Borrower
does not have any claims against FCFC and provides FCFC with an appropriate
indemnity indemnifying FCFC for any remittances for which Borrower has received
credit and which are not paid, shall FCFC release its security interest in the
Collateral and deliver to Borrower an appropriate termination statement.

      16. General Provisions.

         16.1 The parties intend and agree that their respective rights, duties,
powers, liabilities, obligations and discretions shall be performed, carried
out, discharged and exercised reasonably and in good faith.

         16.2 If at any time or times hereafter FCFC employs counsel for advice
or other representation (a) with respect to any of the Collateral or this
Agreement or modification thereof, (b) to represent FCFC in any litigation,
contest, dispute, suit or proceeding or to commence, defend, or intervene or to
take any other action in or with respect to any litigation, contest, dispute,
suit or proceeding (whether instituted by FCFC, Borrower or any other party) in
any way


                                      -19-
<PAGE>   20
relating to any of the Collateral, this Agreement or Borrower's affairs, (c) to
protect, collect, lease, sell, take possession of or liquidate any of the
Collateral, (d) to attempt to enforce any security interest of FCFC in any of
the Collateral or (e) to enforce any rights of FCFC against Borrower or against
any other person which may be obligated to FCFC by virtue of this Agreement
including Borrower's account debtors, then, in any of the foregoing events, all
of the reasonable attorneys' fees arising from such services and all expenses,
costs and charges in any way arising in connection therewith or relating thereto
shall constitute a part of FCFC's Costs secured by the Collateral and be payable
on demand.

         16.3 Neither this Agreement nor any uncertainty or ambiguity herein
shall be construed or resolved against FCFC or Borrower, whether under any rule
of construction or otherwise; on the contrary, this Agreement has been reviewed
by all parties and shall be construed and interpreted according to the ordinary
meaning of the words used so as to fairly accomplish the purposes and intentions
of all parties hereto. When permitted by the context, the singular includes the
plural and vice versa.

         16.4 The validity of this Agreement, its construction, interpretation
and enforcement, and the rights of the parties hereunder and concerning the
Collateral, shall be determined under and according to the laws of Arizona. In
any litigation involving FCFC and Borrower, Borrower does hereby irrevocably
submit itself to the process, jurisdiction and venue of the courts of the State
of Arizona in Maricopa County or to the process, jurisdiction and venue of the
U.S. District Court for Arizona for the purposes of suit, action or other
proceedings arising out of or relating to this Agreement or the subject matter
hereof, and without limiting the generality of the foregoing, hereby waives and
agrees not to assert by way of motion, defense or otherwise in any such suit,
action or proceeding any claim that Borrower is not personally subject to the
jurisdiction of such courts, that such suit, action or proceeding is brought in
an inconvenient forum or that the venue of such suit, action or proceeding is
improper.

         16.5 The provisions of this Agreement are independent of and separate
from each other. If any provision hereof shall for any reason be held invalid or
unenforceable, it is the intent of the parties that such invalidity or
unenforceability shall not affect the validity or unenforceability of any other
provision hereof and that this Agreement shall be construed as if such invalid
or unenforceable provision had never been contained herein.

         16.6 Paragraph headings and paragraph numbers have been set forth
herein for convenience only; unless the contrary is compelled by the context,
everything contained in each paragraph applies equally to this entire Agreement.

         16.7 This Agreement cannot be changed or terminated orally. All prior
agreements, understandings, representations, warranties, and negotiations, if
any, are merged into this Agreement.

         16.8 FCFC shall have the right, without the consent of or notice to
Borrower to grant participation interests in the Credit Facility and in this
regard may provide the participant with any and all information with respect to
Borrower and the Credit Facility. In addition, FCFC may assign this Agreement
and its rights and duties hereunder at any time, without the consent of or
notice to Borrower. This Agreement shall inure to the benefit of FCFC, its
successors and


                                      -20-
<PAGE>   21
assigns. Borrower may not assign this Agreement or any rights hereunder, without
FCFC's prior written consent and any such assignment shall be void and of no
effect whatsoever. No consent to any assignment by FCFC shall, without the
written consent of FCFC, release Borrower or any guarantor of its Obligations to
FCFC.

         16.9 This Agreement shall inure to the benefit of FCFC and any
successors or assigns of FCFC, including any participant in the Credit Facility.
This Agreement shall bind and inure to the benefit of the respective successors
and assigns of each of the parties; however, Borrower may not assign this
Agreement or any rights hereunder without FCFC'S prior written consent and any
prohibited assignment shall be absolutely void. No consent to any assignment by
FCFC shall release Borrower or any guarantor of its Obligations to FCFC. FCFC
may assign this Agreement and its rights and duties hereunder.

      17. Additional Provisions.

         17.1 Notwithstanding the provisions of paragraph 3.4 and 3.8 hereof,
FCFC shall only exercise the rights or powers set forth in said paragraphs if:
(a) FCFC reasonably believes, in the exercise of its best judgment and in good
faith, that there has been a material impairment in the value of its Collateral
or in the prospect of repayment of Borrower's Obligations, that the priority of
its security interest in the Collateral is being contested, or that Borrower has
defaulted under any provision of this Agreement; and (b) after FCFC: (i) gives
Borrower written notice that it intends to exercise such rights and/or powers;
(ii) agrees to meet with Borrower within twenty-four (24) hours after such
notice is given to discuss the action which FCFC contemplates taking, and (iii)
subsequently gives Borrower written notice that it nevertheless intends to
exercise the rights or powers set forth in this Agreement.

         17.2 By way of clarification, but not by way of limitation, examples of
a "material impairment," for purposes of paragraph 9(e) and 17.1, would
include:

         (a)  The collection of the Accounts during any thirty (30) day period
              substantially diminishes as compared with the previous thirty-day
              period.

         (b)  Accounts receivable turnover substantially increases within a
              thirty (30) day period as compared with the previous thirty-day
              period.

         (c)  Borrower's financial statement reflects a deficit net worth.(d)
              Borrower sustains a net operating loss for four consecutive
              months, that exceed $147,000.

         (e)  Borrower uses a substantial amount of funds from the business for
              a non-business purpose.


                                      -21-
<PAGE>   22
      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed at Phoenix, Arizona, as of the date written above.

FCFC:                                       BORROWER:

FIRST COMMUNITY FINANCIAL                   New Directions Manufacturing, Inc.,
CORPORATION, an Arizona                     an Arizona corporation
corporation

By: /s/ James C. Adamany                    By: /s/ Donald A. Metke
    ------------------------------              --------------------------------
    James C. Adamany                            Donald A. Metke

Title: President                            Title: President

                                            By: /s/ Sean F. Lee
                                                --------------------------------
                                                Sean F. Lee

                                            Title: Chairman of the Board


                                      -22-