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                                                                   Exhibit 10.11


                   COMMERCIAL REVOLVING LOAN, ADDITIONAL LOAN
                             AND SECURITY AGREEMENT

      This Commercial Revolving Loan, Additional Loan and Security Agreement
dated December 17, 1997 is by and among CYCOMM INTERNATIONAL, INC. a Wyoming
corporation with its chief executive office and principal place of business at
1420 Springhill Road, Suite 420, McLean, Virginia 22102 ("CYCOMM"), XL COMPUTING
CORP., INC., a Delaware corporation with its chief executive office and
principal place of business at 10305 102nd Terrace, Sebastian, Florida 32958
("XL"), XL COMPUTING (CANADA) INC., a Quebec, Canada corporation with its chief
executive office and principal place of business at 7900 Taschereau, Suite
C-100, Brossard (Quebec) Canada J4X1C2 ("XL CANADA" and, together with Cycomm
and XL, collectively referred to as the "BORROWERS") and AMERICAN COMMERCIAL
FINANCE CORPORATION, a Delaware corporation with an office at 433 South Main
Street, West Hartford, Connecticut 06110 ("LENDER").

                                    PREAMBLE

      WHEREAS, Borrowers have requested Lender to extend to Borrowers (a) a
revolving loan in the maximum aggregate principal amount of up to $4,000,000
(the "REVOLVING LOAN") and (b) an additional loan in the original principal
amount of $568,000 (the "ADDITIONAL LOAN" and, together with the Revolving Loan,
the "LOANS"); and

      WHEREAS, Lender has agreed to extend the Loans to Borrowers on the
conditions set forth below.

      NOW, THEREFORE, for the mutual considerations contained in this Agreement,
Borrowers and Lender agree as follows:

      ARTICLE I.  DEFINITIONS

            SECTION 1.1. ACCOUNTING TERMS; ETC. Unless otherwise defined, all
      accounting terms shall be construed, and all computations or
      classifications of assets and liabilities and of income and expenses shall
      be made or determined in accordance with generally accepted accounting
      principles consistently applied. As used herein, or in the Financing
      Agreements (as hereinafter defined) or in any certificate, document or
      report delivered pursuant to this Agreement or any other Financing
      Agreement, the following terms shall have the following meanings:

            (a) "Account" and "Accounts" shall have the meanings assigned in
      Section 8.1(a) hereof.
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            (b) "Account Debtor" and "Account Debtors" shall mean the person or
      entity or persons or entities obligated to Borrowers upon the Accounts.

            (c) "Additional Loan" shall have the meaning assigned in Section 3.1
      hereof.

            (d) "Additional Loan Promissory Note" shall have the meaning
      assigned in Section 3.1 hereof.

            (e) "Agreement" shall mean this Commercial Revolving Loan,
      Additional Loan and Security Agreement as the same may from time to time
      be amended, supplemented or otherwise modified.

            (f) "Arrangement" and "Arrangements" shall have the meaning assigned
      in Section 5.1(n) hereof.

            (g) "Borrowers" shall have the meaning assigned in the first
      paragraph hereof.

            (h) "Borrowing Base" shall mean an amount equal to the lesser of (i)
      the amount by which FOUR MILLION DOLLARS ($4,000,000) exceeds the
      outstanding indebtedness under the Additional Loan and (ii) an amount
      equal to the sum of (1) the Eligible U.S. Borrower Accounts Amount plus
      (2) the Eligible Canadian Accounts Amount plus (3) the Eligible Foreign
      Accounts Amount plus (4) the Eligible XL Inventory Account Amount plus (5)
      the Eligible Canadian Inventory Amount.

            (i) "Business Day" shall mean any day other than a day on which
      commercial banks in Hartford, Connecticut are required or permitted by law
      to close.

            (j) "Canadian Conversion Rate" shall mean such conversion or
      currency exchange rate as may be selected by Lender in its sole discretion
      to convert Canadian currency into United States currency, which exchange
      rate is .72 as of the date hereof.

            (k) "Collateral" shall mean the property of Borrowers described in
      Section 8.1 hereof.

            (l) "Commitment Letter" shall mean that certain commitment letter
      issued by Lender to Borrower and dated November 17, 1997.

            (m) "Company" and "Companies" shall mean Borrowers and any entities
      affiliated with Borrowers in connection with any Plan.
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            (n) "Cycomm" shall have the meaning assigned in the first paragraph
      hereof.

            (o) "Cycomm Revolving Loan Account" shall have the meaning assigned
      in Section 2.3 hereof.

            (p) "Defaulting Event" shall mean the occurrence of an Event of
      Default or the occurrence of any condition or event which but for the
      giving of notice or passage of time or both would constitute an Event of
      Default.

            (q) "Dollar" and the sign "$" shall mean lawful money of the United
      States of America.

            (r) "Eligible Accounts" shall mean those Accounts of Borrowers which
      arise from the sale of inventory or rendition of services in the ordinary
      course of Borrowers' business, are subject to Lender's perfected, first
      lien security interest and no other lien or security interest, and are
      evidenced by an invoice or other documentary evidence reasonably
      satisfactory to Lender. Further, no Account shall be an Eligible Account
      if:

                  (i) it arises out of a sale made by Borrowers to any
            affiliate, division, subsidiary or parent of Borrowers or to any
            person or entity controlled by or under common control with an
            affiliate, division, subsidiary or parent of Borrowers;

                  (ii) it is due or unpaid more than ninety (90) days after its
            original invoice date;

                  (iii) the account debtor is also a creditor or supplier of any
            Borrower, has disputed liability or made any claim with respect to
            any other account due from such account debtor to Borrowers, or the
            account is otherwise subject to any defense, counterclaim or offset
            of or by the account debtor;

                  (iv) the account debtor is located outside the United States
            and Canada (unless (A) such account is supported by a letter of
            credit or credit insurance acceptable in form, scope and substance
            to Lender in Lender's reasonable discretion or (B) such account is
            an Eligible Foreign Account);

                  (v) the account debtor is located in New Jersey or Minnesota,
            unless Borrowers have (x) filed a Notice of Business Activity Report
            in the appropriate office or agency for such state in the then
            current year, or (y) received a Certificate of Authority to do
            business and is in good standing in such state;
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                  (vi) the sale giving rise to the account is on a
            bill-and-hold, guaranteed sale, sale-and-return, sale on approval,
            consignment or other repurchase or return basis, or is evidenced by
            a note or chattel paper;

                  (vii) Borrowers have made an agreement with the account debtor
            for any deduction from the invoice representing said account, except
            for discounts or allowances made in the ordinary course of
            Borrowers' business for prompt payment, which discounts or
            allowances are reflected in the calculation of the face value of
            each respective invoice related thereto;

                  (viii) fifteen percent (15%) or more of the aggregate invoices
            for an account debtor are due or unpaid for more than ninety (90)
            days after their original invoice date;

                  (ix) it arises out of a sale made by the Borrowers to an
            account debtor that is the United States Government or any agency or
            subdivision thereof (collectively the "GOVERNMENT"), unless
            Borrowers have complied in all respects with the Federal Assignment
            of Claims Act of 1940, or has otherwise satisfied Lender as to the
            assignability and collectability of said accounts; or

                  (x) the Lender in its sole discretion deems the Account to be
            unacceptable for any reason.

      If there is any dispute as to whether any Account is an Eligible Account,
the determination of Lender shall at all times control.

            (s) "Eligible Canadian Accounts" shall mean Accounts which are
      otherwise Eligible Accounts and further are accounts in respect of which
      the account debtors have been notified in writing to remit payment
      directly to Lender or to an address designated by Lender pursuant to a
      notice in form and content satisfactory to Lender.

            (t) "Eligible Canadian Accounts Amount" shall mean an amount equal
      to the lesser of (i) TWO HUNDRED AND FIFTY THOUSAND DOLLARS ($250,000) and
      (ii) the product of (1) eighty percent of Eligible Canadian Accounts
      multiplied by (2) the Canadian Conversion Rate then in effect.

            (u) "Eligible Canadian Inventory Amount" shall mean an amount equal
      to the lesser of (i) twenty-five percent of Eligible Inventory of XL
      Canada which is valued in U.S. dollars and (ii) FIVE HUNDRED THOUSAND
      DOLLARS ($500,000).
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            (v) "Eligible Foreign Accounts" shall mean Accounts that are
      otherwise Eligible Accounts (except that such Accounts do not satisfy the
      conditions set forth in clause (iv) of the definition of Eligible
      Accounts) and further (i) are accounts in respect of which the account
      debtors have been notified to remit payment directly to Lender or to an
      address designated by Lender pursuant to a notice in writing in form and
      content satisfactory to Lender in its sole discretion and (ii) are
      accounts that have originally been invoiced in, and are payable in,
      Dollars only.

            (w) "Eligible Foreign Accounts Amount" shall mean an amount equal to
      the lesser of (i) eighty percent (80%) of Eligible Foreign Accounts and
      (ii) an amount equal to thirty percent (30%) of all Accounts of the
      Borrowers.

            (x) "Eligible Inventory" shall mean Borrowers' inventory of
      computers and electronics components to the extent Lender, in its sole
      discretion, determines that such inventory is eligible for advance. In
      addition and without limiting Lender's discretion, Eligible Inventory
      shall be valued in Dollars, net of reserves and returns, valued at the
      lower of cost or market, and subject to Lender's perfected first security
      interest and to no other lien or security interest. Further and without
      limiting Lender's discretion, no inventory shall be eligible if it is:

                  (i) deemed by Lender as slow moving or obsolete;

                  (ii) not otherwise in good condition and salable through
            normal trade channels; or

                  (iii) not salable in the ordinary course of Borrower's
            business.

            (y) "Eligible Inventory of XL" shall mean the Eligible Inventory
      owned by XL and located at XL's principal place of business in Sebastian,
      Florida.

            (z) "Eligible Inventory of XL Canada" shall mean the Eligible
      Inventory owned by XL Canada and located at 7900 Taschereau, Suite G100,
      Brossard (Quebec) Canada J4X 1C2, XL Canada's principal place of business.

            (aa) "Eligible U.S. Borrower Accounts" shall mean, collectively, the
      Eligible Accounts of Cycomm and the Eligible Accounts of XL.

            (bb) "Eligible U.S. Borrower Accounts Amount" shall mean an amount
      equal to eighty percent (80%) of Eligible U.S. Borrower Accounts.
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            (cc) "Eligible XL Inventory Amount" shall mean an amount equal to
      the lesser of (i) twenty-five percent (25%) of Eligible Inventory of XL
      and (ii) FIVE HUNDRED THOUSAND DOLLARS ($500,000).

            (dd) "Environmental Laws" shall mean any and all applicable foreign,
      federal, state and local statutes, laws, regulations, rules, ordinances,
      orders, guidances, policies or common law (whether now existing or
      hereafter enacted or promulgated) pertaining to the environment, of any
      and all federal, state or local governments and governmental and
      quasi-governmental agencies, bureaus, subdivisions, commissions or
      departments which may now or hereafter have jurisdiction over either
      Borrower and all applicable judicial and administrative and regulatory
      decrees, judgments and orders, including common law rulings and
      determinations, relating to injury to, or the protection of, real or
      personal property or human health or the environment, including, without
      limitation, all requirements pertaining to reporting, licensing,
      permitting, investigation, remediation and removal of emissions,
      discharges, releases or threatened releases of Hazardous Materials,
      chemical substances, pollutants or contaminants whether solid, liquid or
      gaseous in nature, into the environment or relating to the manufacture,
      processing, distribution, use, treatment, storage, disposal, transport or
      handling of such Hazardous Materials, chemical substances, pollutants or
      contaminants.

      Without limiting the generality of the foregoing, the term "Environmental
Laws" shall encompass each of the following statutes, and regulations
promulgated thereunder, and amendments and successors to such statutes and
regulations, as may be enacted and promulgated from time to time: Federal
Occupational Safety and Health Act ("OSHA"); the Clean Air Act ("CAA"); the
Toxic Substances Control Act ("TSCA"); the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), as amended by the Superfund
Amendments and Reauthorization Act of 1986 ("SARA"); the Clean Water Act
("CWA"); the Resource Conservation and Recovery Act, as amended by the Hazardous
and Solid Waste Amendments of 1984 ("RCRA"); the Hazardous Materials
Transportation Act; the Nuclear Liability Act (Canada); An Act Respecting
Occupational Health and Safety (Quebec); the Canadian Environmental Protection
Act (Canada); the Environment Quality Act (Quebec); the Hazardous Materials
Information Review Act (Canada); the Transportation of Dangerous Goods Act
(Canada); the Use of Petroleum Products Act (Canada); and all applicable
Environmental Laws of each state and municipality in which any Borrower conducts
business or locates assets and all rules and regulations thereunder and
amendments thereto, and all similar state and local laws, rules and regulations.
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            (ee) "ERISA" shall mean the Employee Retirement Income Security Act
      of 1974 and all rules and regulations promulgated pursuant thereto, as the
      same may from time to time be supplemented or amended.

            (ff) "Event of Default" and "Events of Default" shall have the
      meanings assigned in Section 9.1 hereof.

            (gg) "Fidelity Guarantor" shall have the meaning assigned in Section
      6.1(d) hereof.

            (hh) "Fidelity Guaranty" shall have the meaning assigned in Section
      6.1(d) hereof.

            (ii) "Financing Agreement" or "Financing Agreements" shall mean this
      Agreement, the Notes, the Fidelity Guaranty, the Guaranties, the Province
      of Quebec Security Documents and any and all other instruments, agreements
      and documents executed in connection herewith or therewith or related
      hereto or thereto, together with any amendments, supplements or
      modifications hereto or thereto.

            (jj) "Fixed Assets" shall mean equipment and other assets of
      Borrowers which, by generally accepted accounting principles, must be
      treated as fixed assets in financial statements of Borrowers.

            (kk) "Further Loans" shall have the meaning assigned in Section 6.2
      hereof.

            (ll) "Guaranty" and "Guaranties" shall have the meaning assigned in
      Section 6.1(h) hereof.

            (mm) "Hazardous Material" shall mean any chemical, compound,
      material, mixture or substance: (i) the presence of which requires or may
      hereafter require notification, investigation, monitoring or remediation
      under any Environmental Law; (ii) which is or becomes defined as a
      "hazardous waste", "hazardous material" or "hazardous substance" or "toxic
      substance" or "pollutant" or "contaminant" under any present or future
      applicable federal, state or local law or under the rules and regulations
      adopted or promulgated pursuant thereto, including, without limitation,
      the Environmental Laws; (iii) which is toxic, explosive, corrosive,
      reactive, ignitable, infectious, radioactive, carcinogenic, mutagenic or
      otherwise hazardous and is or becomes regulated by any governmental
      authority, agency, department, commission, board, agency or
      instrumentality of any foreign country, the United States, any state of
      the United States, or any political subdivision thereof to the extent any
      of the foregoing has or had jurisdiction over any Borrower; (iv) which
      contains without limitation, gasoline, diesel fuel or other petroleum
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                                      -8-


      products, asbestos or polychlorinated biphenyls ("PCBS"); or (v) any other
      chemical, material or substance, exposure to, or disposal of, which is now
      or hereafter prohibited, limited or regulated by any federal, state or
      local governmental body, instrumentality or agency.

            (nn) "Indemnifiable Liability" shall have the meaning assigned in
      Section 14.1(a) hereof.

            (oo) "Indemnitee" and "Indemnitees" shall have the meanings
      assigned in Section 14.1(a) hereof.

            (pp)   "Lender" shall have the meaning assigned in the first
      paragraph hereof.

            (qq) "Lessor's Agreements" shall have the meaning assigned in
      Section 6.1(e) hereof.

            (rr) "Liabilities and Expenses" shall have the meaning assigned in
      Section 11.1(b) hereof.

            (ss) "Loan" means a Revolving Loan or the Additional Loan and
      "Loans" means the Revolving Loans and the Additional Loan.

            (tt) "Minimum Balance" shall have the meaning assigned in Section
      4.1(a) hereof.

            (uu) "Minimum Interest Amount" shall have the meaning assigned in
      Section 13.1(c) hereof.

            (vv) ""Movable Hypothec" shall have the meaning assigned in
      Section 7.13 hereof.

            (ww)   "Notes" shall mean the Revolving Promissory Note and the
      Additional Loan Promissory Note.

            (xx) "Notice of Borrowing" shall have the meaning assigned in
      Section 2.3 hereof.

            (yy) "Obligation" and "Obligations" shall mean and include all
      loans, advances, interest, indebtedness, liabilities, obligations, fees,
      charges, expenses, guaranties, covenants and duties at any time owing by
      Borrowers to Lender of every kind and description, whether or not
      evidenced by any note or other instrument, whether or not for the payment
      of money, whether direct or indirect, absolute or contingent, due or to
      become due, now existing or hereafter arising, including, but not limited
      to, the Loans, the Termination Fee, all other indebtedness,
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      liabilities and obligations of Borrowers arising under this Agreement and
      the other Financing Agreements or otherwise, and all costs, expenses,
      fees, charges incurred by Lender hereunder or otherwise with respect to
      Borrowers, including without limitation, reasonable fees and expenses of
      attorneys, paralegals and other professionals incurred in connection with
      any of the foregoing, or in any way connected with, involving or relating
      to the preservation, enforcement, protection or defense of, or realization
      under this Agreement, any of the other Financing Agreements, any related
      agreement, document or instrument, the Collateral and the rights and
      remedies hereunder or thereunder, including without limitation, all
      reasonable costs, expenses and fees incurred in inspecting or surveying
      mortgaged real estate, if any, or conducting Environmental studies or
      tests, and all reasonable costs, expenses and fees incurred in connection
      with any "workout" or default resolution negotiations involving legal
      counsel or other professionals and further in connection with any
      modification, renegotiation or restructuring of the indebtedness evidenced
      by this Agreement and/or any of the other Financing Agreements and/or
      Obligations.

            (zz) "Plan" shall mean any employee benefit plan or other plan
      maintained by Borrowers or any entity affiliated with Borrowers for
      employees covered by Title I of ERISA.

            (aaa) "Premises" shall mean the real property located at (i) 1420
      Springhill Road, McLean, Virginia, (ii) 10305 102nd Terrace, Sebastian,
      Florida and (iii) 7900 Taschereau, Suite C-100, Brossard (Quebec) Canada.

            (bbb) "Prime Rate" shall mean the Prime Rate as published from time
      to time in the "Money Rates" section of The Wall Street Journal or any
      successor publication, or in the event that such rate is no longer
      published in The Wall Street Journal, a comparable index or reference
      selected by Lender. The Prime Rate need not and may not necessarily be
      Lender's lowest or most favorable rate.

            (ccc) "Province of Quebec Security Documents" shall have the meaning
      assigned in Section 6.1(g) hereof.

            (ddd) "Receivables" shall have the meaning assigned in Section
      8.1(a) hereof.

            (eee) "Release" shall mean any release, emission, disposal, leaching
      or migration into the environment (including, without limitation, the
      abandonment or disposal of any barrels, containers, or other closed
      receptacles containing any Hazardous Materials) or into or out of any
      property owned, occupied or used by Borrowers.
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            (fff) "Renewal Term" shall have the meaning assigned in Section 13.1
      (a) hereof.

            (ggg) "Revolving Loan" and "Revolving Loans" shall have the meanings
      assigned in Section 2.1 hereof.

            (hhh) "Revolving Loan Account" shall have the meaning assigned in
      Section 2.3 hereof.

            (iii) "Revolving Promissory Note" shall have the meaning assigned in
      Section 2.3 hereof.

            (jjj) "Subsidiary" and "Subsidiaries" shall mean any corporation or
      corporations of which the majority of outstanding shares of any stock
      having ordinary voting power is at the time owned by Borrowers and/or by
      one or more Subsidiaries.

            (kkk) "Term" shall have the meaning assigned in Section 13.1(a)
      hereof.

            (lll) "Termination Fee" shall have the meaning assigned in Section
      13.1(c) hereof.

            (mmm) "XL" shall have the meaning assigned in the first paragraph
      hereof.

            (nnn) "XL Canada" shall have the meaning assigned in the first
      paragraph hereof.

            (ooo)) "XL Revolving Loan Account" shall have the meaning assigned
      in Section 2.3 hereof.

      ARTICLE II.  REVOLVING LOANS

            SECTION 2.1. AMOUNT. Subject to the terms and conditions contained
      in this Agreement, and so long as no Defaulting Event has occurred, Lender
      agrees, in its sole discretion, to make loans (collectively, the
      "REVOLVING LOANS" and, individually, a "REVOLVING LOAN") to Borrowers from
      time to time until terminated as provided below in principal amounts not
      exceeding in the aggregate at any one time outstanding the Borrowing Base,
      it being agreed and understood that at no time shall the maximum aggregate
      principal amount of the Revolving Loans made by Lender exceed the
      Borrowing Base. Without limiting Lender's discretion, notwithstanding the
      actual net face value of any Eligible Account of Borrowers, for purposes
      of computing the Borrowing Base, the value of any Eligible Account with a
      net face value in excess of
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      $50,000 shall be reduced to $50,000 prior to the application of such
      Borrowing Base. Lender may, in its sole discretion, raise or lower the
      $50,000 limit set forth in the immediately preceding sentence without in
      any way creating a course of conduct which requires Lender to maintain
      such raised or lowered limit or to raise or lower such limit again in the
      future.

            SECTION 2.2. PAYMENT ON DEMAND. ALL OBLIGATIONS OF BORROWERS ARISING
      UNDER THE REVOLVING LOANS SHALL BE PAID BY BORROWERS IN FULL UPON DEMAND
      BY LENDER, NOTWITHSTANDING LENDER'S RIGHTS UPON THE OCCURRENCE OF AN EVENT
      OF DEFAULT AND WHETHER OR NOT SUCH EVENT OF DEFAULT HAS OCCURRED.

            SECTION 2.3. PROCEDURE FOR ADVANCES, NOTICE OF BORROWING, REVOLVING
      PROMISSORY NOTE, ETC. Within the limits of the Borrowing Base and the
      Term, so long as Borrowers are in compliance with all of the terms and
      conditions of this Agreement and no Defaulting Event has occurred,
      Borrowers may request borrowings, repay and request reborrowings of
      Revolving Loans. Whenever any Borrower desires an advance, Cycomm (on
      behalf of itself and XL Canada) or XL, as applicable, shall notify Lender
      (which notice shall be irrevocable) by telex, telecopy or telephone of the
      proposed borrowing. Such notice (each, a "NOTICE OF BORROWING") shall
      specify the date of the proposed borrowing and the amount to be borrowed.
      Each Notice of Borrowing must be received by Lender no later than 11:00
      a.m., Hartford, Connecticut time on the day such borrowing is requested.
      In addition to this Agreement, the Revolving Loans shall be evidenced by a
      revolving promissory note payable to Lender in the form of Exhibit A
      attached hereto (the "REVOLVING PROMISSORY NOTE"). Insofar as Cycomm (on
      behalf of itself and XL Canada) or XL may request, and Lender shall make,
      Revolving Loans hereunder, Lender shall enter such advances as debits on
      the revolving loan account maintained by or on behalf of such Borrower
      with Lender (each such account is herein referred to as a "REVOLVING LOAN
      ACCOUNT"; such account maintained by Cycomm on behalf of itself and XL
      Canada is herein referred to as the "CYCOMM REVOLVING LOAN ACCOUNT"; and
      such account maintained by XL is herein referred to as the "XL REVOLVING
      LOAN ACCOUNT"). Lender may record to the Cycomm Revolving Loan Account, in
      accordance with customary accounting procedures, all accrued and unpaid
      interest paid in respect of borrowings by Cycomm on behalf of itself and
      XL Canada. Lender may record to the XL Revolving Loan Account, in
      accordance with customary accounting procedures, all accrued and unpaid
      interest paid in respect of borrowings by XL. Lender may also record to
      either the Cycomm Revolving Loan Account or the XL Revolving Loan Account,
      in Lender's sole discretion (or Lender may allocate between
<PAGE>   12
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      the Revolving Loan Accounts in amounts determined by Lender in its sole
      discretion), all fees, late fees, usual and customary charges for the
      maintenance and administration of checking and any other accounts
      maintained by Borrowers with Lender and other fees and charges which are
      properly chargeable to Borrowers under this Agreement; all payments,
      subject to collection, made by Borrowers on account of indebtedness
      evidenced by either Revolving Loan Account; all proceeds of Collateral
      which are finally paid to Lender in its own office in cash or collected
      items; and other appropriate debits and credits, including, without
      limitation, payments of interest due hereunder; provided that Lender
      shall, to the extent practical, apply any proceeds of Collateral first to
      the Revolving Loan Account maintained by or on behalf of the Borrower who
      previously owned such Collateral.

            SECTION 2.4. MONTHLY STATEMENTS. On a monthly basis, Lender shall
      render a statement for each Revolving Loan Account, which statement shall
      be considered correct and accepted by Borrowers and conclusively binding
      upon Borrowers unless Borrowers notify Lender to the contrary twenty (20)
      days of the receipt of said statement by Borrowers. Lender shall have the
      right to debit each applicable Revolving Loan Account for all interest
      charges on the Loan as and when the same shall be due and payable, if not
      otherwise paid by Borrowers.

            SECTION 2.5. LENDER DISCRETION. Nothing herein shall be construed to
      (a) require Lender to make Revolving Loans, and/or (b) prohibit Lender
      from lending in excess of the Borrowing Base, it being agreed that all
      such loans and advances shall be at Lender's sole discretion and shall not
      establish a pattern or custom binding upon Lender.

            SECTION 2.6. COLLECTIONS ON CANADIAN ACCOUNTS. The Borrowers agree
      that payments on all Accounts with Account Debtors located in Canada shall
      be remitted directly by such Account Debtors to Lender or to an address
      designated by Lender. Borrowers agree to give irrevocable notice to such
      Account Debtors that all payments in respect of such Accounts shall be so
      paid directly to such account of Lender. Upon Lender's request, Borrowers
      agree to execute a lockbox agreement in form, scope and substance
      satisfactory to Lender in its sole discretion.

            SECTION 2.7.  CONVERSION OF CANADIAN CURRENCY.

              (a) Borrowers acknowledge and agree that all Accounts and all
      Inventory (including Inventory located in Canada and Inventory owned by XL
      Canada) shall be valued and denominated in U.S. Dollars for all purposes
      of this Agreement.
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            (b) All payments of Accounts in Canadian currency shall be converted
      to Dollars by multiplying the amount thereof by the Canadian Conversion
      Rate then in effect at the time such payment is received by Lender.

            (c) Borrowers acknowledge and agree that any and all fees, taxes and
      exchange risks and charges, foreign or otherwise, on or in respect of the
      conversion, valuation or determination of any such amounts shall be the
      sole responsibility of Borrowers and Lender may charge any such costs to
      the Cycomm Revolving Loan Account.

      ARTICLE III. ADDITIONAL LOAN

            SECTION 3.1. AMOUNT. Subject to the terms and conditions contained
      in this Agreement, Lender agrees to make a loan to Borrowers in the
      original principal amount of $568,000 (the "ADDITIONAL LOAN"). In addition
      to this Agreement, the Additional Loan shall be evidenced by an Additional
      Loan Promissory Note payable to Lender in the form of Exhibit B attached
      hereto (the "ADDITIONAL LOAN PROMISSORY NOTE").

            SECTION 3.2. PAYMENT ON DEMAND. ALL OBLIGATIONS OF BORROWERS ARISING
      UNDER THE ADDITIONAL LOAN SHALL BE PAID BY BORROWERS IN FULL UPON DEMAND
      BY LENDER, NOTWITHSTANDING LENDER'S RIGHTS UPON THE OCCURRENCE OF AN EVENT
      OF DEFAULT AND WHETHER OR NOT SUCH EVENT OF DEFAULT HAS OCCURRED AND, IF
      DEMAND IS NOT SOONER MADE, AS SET FORTH IN THE ADDITIONAL LOAN PROMISSORY
      NOTE.

            SECTION 3.3. MONTHLY STATEMENTS. On a monthly basis, Lender shall
      render a statement for the Additional Loan, which statement shall be
      considered and accepted by Borrowers and conclusively binding upon
      Borrowers unless Borrowers notifies Lender to the contrary within twenty
      (20) days of the receipt of said statement by Borrowers. Lender shall have
      the right to debit either Revolving Loan Account for all principal,
      interest and other charges on the Additional Loan as and when the same
      shall be due and payable, if not otherwise paid by Borrowers.

      ARTICLE IV.  INTEREST, FEES AND OTHER CHARGES

            SECTION 4.1.  INTEREST.

            (a) INTEREST RATES. So long as no Defaulting Event has occurred, the
      Loans shall bear interest (from the date made through and including the
      date of payment in full), at a floating rate per annum equal to three
      percentage points (3.0%) above the Prime Rate, on the greatest of:
<PAGE>   14
                                      -14-



      (i) the actual average balance outstanding under the Loans; (ii) the sum
      of (A) a minimum assumed average monthly balance outstanding under the
      Revolving Loan of $400,000 attributable to borrowings by Cycomm plus (B) a
      minimum assumed average monthly balance outstanding under the Revolving
      Loan of $1,132,000 attributable to borrowings by XL plus (C) the actual
      average balance outstanding under the Additional Loan; (iii) the sum of
      (A) a minimum assumed average monthly balance outstanding under the
      Revolving Loan of $400,000 attributable to borrowings by Cycomm (on behalf
      of itself and XL Canada) plus (B) the actual average balance outstanding
      under the Revolving Loan attributable to borrowings by XL plus (C) the
      actual average balance outstanding under the Additional Loan; and (iv) the
      sum of (A) the actual average balance outstanding under the Revolving Loan
      attributable to borrowings by Cycomm (on behalf of itself and XL Canada)
      plus (B) a minimum assumed average monthly balance outstanding under the
      Revolving Loan of $1,132,000 attributable to borrowings by XL plus (C) the
      actual average balance outstanding under the Additional Loan (the "MINIMUM
      BALANCE") .

            (b) PAYMENT OF INTEREST. So long as any of the Obligations remain
      outstanding, interest on the Loans shall be due and payable without notice
      or demand monthly in arrears beginning on January 1, 1998 and continuing
      on the first Business Day of each and every month thereafter.

            (c) DEFAULT INTEREST RATE. Notwithstanding the foregoing, interest
      on the Loans, at all times after the occurrence of an Event of Default,
      and interest on all payments of interest that are not paid when due, shall
      accrue at a rate per annum equal to four percentage points (4.0%) above
      the applicable interest rates otherwise in effect under this Agreement.

            (d) CALCULATION OF INTEREST. Interest on the Loans shall be
      calculated on the basis of a 360-day year and the actual number of days
      elapsed.

            (e) LATE PAYMENT. If any amount due hereunder or under the Notes are
      not paid within ten (10) days after the date it is due and payable,
      without in any way affecting Lender's right to make demand hereunder or to
      declare an Event of Default to have occurred, Lender may in its sole
      discretion assess a late charge equal to five percent (5.0%) of such late
      payment against Borrowers, which late charge shall be immediately due and
      payable and may be paid by a charge to Borrowers' loan account as
      contemplated in Section 2.3 above.
<PAGE>   15
                                      -15-


            (f) LAWFUL INTEREST. It being the intent of the parties that the
      rate of interest and all other charges to Borrowers be lawful, if for any
      reason the payment of a portion of interest, fees or charges as required
      by this Agreement would exceed the limit established by applicable law
      which a commercial lender such as Lender may charge to commercial
      Borrowers such as Borrowers, then the obligation to pay interest or
      charges shall automatically be reduced to such limit and, if any amounts
      in excess of such limits shall have been paid, then such amounts shall be
      applied to the unpaid principal amount of the Obligations or refunded to
      Borrowers so that under no circumstances shall interest or charges
      required hereunder exceed the maximum rate allowed by law, as aforesaid.

            SECTION 4.2. CLOSING FEES. On or before the date hereof, Borrowers
      shall pay or have paid to Lender all fees, expenses and other costs
      incurred by Lender in connection with the closing of the Loans (including,
      without limitation, all reasonable attorney's and other professionals'
      fees and expenses).

            SECTION 4.3. COMMITMENT FEE. Borrowers shall also pay to Lender a
      nonrefundable commitment fee equal to one percent (1%) of the maximum
      principal amount of the Loans on the date hereof and on each anniversary
      date of this Agreement. It is understood that the determination of the
      maximum principal amount of the Loans shall be made without regard to the
      components of the Borrowing Base based upon Eligible Accounts and Eligible
      Inventory. For example, for purposes of this provision, on the date hereof
      the maximum principal amount of the Loans is $4,000,000 and the commitment
      fee payable on the date hereof is $40,000.

      ARTICLE V.  REPRESENTATIONS AND WARRANTIES

            SECTION 5.1.  REPRESENTATIONS AND WARRANTIES.  The Borrowers
      jointly and severally represent and warrant to Lender that:

            (a) GOOD STANDING AND QUALIFICATION. They are duly organized,
      validly existing and in good standing under the laws of the State of
      Wyoming in the case of Cycomm, the State of Delaware in the case of XL and
      the Province of Quebec and Canada in the case of XL Canada. Each Borrower
      has all requisite corporate power and authority to own and operate its
      properties and to carry on its business as presently conducted and is duly
      qualified to do business and is in good standing as a foreign corporation
      in each jurisdiction wherein the character of the properties owned or
      leased by it therein or in which the transaction of its business therein
      makes such qualification necessary.
<PAGE>   16
                                      -16-


            (b) CORPORATE AUTHORITY. They have full power and authority to enter
      into this Agreement and the other Financing Agreements to which they are a
      party, to make the borrowings contemplated herein, to execute and deliver
      the Notes and the other Financing Agreements to which they are a party,
      and to incur the obligations provided for herein and therein, all of which
      have been duly authorized by all necessary and proper corporate action. No
      other consent or approval or the taking of any other action in respect of
      shareholders or of any public authority is required as a condition to the
      validity or enforceability of this Agreement, the Notes, the other
      Financing Agreements or any other instrument, document or agreement
      delivered in connection herewith or therewith.

            (c) BINDING AGREEMENTS. This Agreement constitutes, and the Notes
      and the other Financing Agreements executed and/or delivered in connection
      herewith or therewith, when issued and delivered pursuant hereto for value
      received shall constitute, valid and legally binding obligations of
      Borrowers, enforceable in accordance with their respective terms, except
      as enforcement may be limited by principles of equity, bankruptcy,
      insolvency, or other laws affecting the enforcement of creditors' rights
      generally.

            (d) LITIGATION. To the best of Borrowers' knowledge after due and
      diligent inquiry by each Borrower's President and Chief Financial Officer,
      there are no actions, suits or proceedings pending against Borrowers
      before any court or administrative agency, nor are there any actions,
      suits or proceedings threatened, which, individually or in the aggregate,
      would materially and adversely affect the financial condition, assets or
      operations of Borrowers, nor are there any such actions, suits or
      proceedings which question the validity of this Agreement, the Notes, any
      of the other Financing Agreements, or any action to be taken in connection
      with the transactions contemplated hereby or thereby.

            (e) NO CONFLICTING LAW OR AGREEMENTS. The execution, delivery and
      performance by Borrowers of this Agreement, the Notes and each other
      Financing Agreement, as the case may be, does not (i) violate any
      provision of any of their Charters, certificates of incorporation, or
      By-laws or any order, decree or judgment, or any provision of any statute,
      rule or regulation to which any Borrower may be subject; (ii) violate or
      conflict with, result in a breach of or constitute (with notice or lapse
      of time, or both) a default under any shareholder agreement, stock
      preference agreement, mortgage, hypothec, indenture or other contract or
      undertaking to which any one of them is a party, or by which any of their
      properties may be bound; and (iii) result in the creation or imposition of
      any lien, charge or encumbrance of any nature whatsoever upon any
<PAGE>   17
                                      -17-



      property or assets of Borrowers except for the liens granted hereunder to
      Lender.

            (f) TAXES. With respect to all of its taxable periods they have
      filed all tax returns which are required to be filed and all federal,
      state, provincial, municipal, franchise and other taxes shown on such
      filed returns have been paid or are being diligently contested by
      appropriate proceedings and have been reserved against, as required by
      generally accepted accounting principles, consistently applied.

            (g) FINANCIAL STATEMENTS. The Borrowers have heretofore delivered to
      Lender and Lender acknowledges receipt of, Borrowers': (i) audited annual
      balance sheets as of December 31, 1996, and the related statements of
      income, retained earnings and cash flows for the fiscal year or period
      then ended. Each of such statements is complete and correct in all
      material respects and fairly presents their consolidated financial
      condition as of the dates and for the periods referred to therein and has
      been prepared in accordance with generally accepted accounting principles
      consistently applied by the applicable Borrower throughout the periods
      involved. There are no liabilities, direct or indirect, fixed or
      contingent, of Borrowers as of the dates of said balance sheets which are
      not reflected in such statements or in the notes thereto.

            (h) ADVERSE DEVELOPMENTS. Since December 31, 1996 there has been no
      material adverse change in their financial condition, business,
      operations, affairs or prospects or in any of their properties or assets.

            (i) EXISTENCE OF ASSETS AND TITLE THERETO. They have good and
      marketable title to all of their properties and assets, including the
      properties and assets reflected in the financial statements delivered in
      connection herewith. None of such properties or assets are subject to any
      mortgage, hypothec, pledge, lien, lease, encumbrance or charge except
      those permitted under the terms of this Agreement.

            (j) REGULATIONS G, T, U AND X. The proceeds of the borrowings
      hereunder are not being used and will not be used, directly or indirectly,
      for the purposes of purchasing or carrying any margin stock in
      contravention, or which would cause any Borrower or Lender to be in
      violation, of Regulations G, T, U or X promulgated by the Board of
      Governors of the Federal Reserve System or any applicable Canadian or
      Quebec laws.

            (k) COMPLIANCE. To the best of Borrowers' knowledge after due and
      diligent inquiry by each Borrower's President and Chief Financial Officer,
      they are not in default with respect to any order, writ, injunction
<PAGE>   18
                                      -18-


      or decree of any court or of any federal, state, provincial, municipal or
      other governmental department, commission, board, bureau, agency,
      authority or official, nor are they in violation of any law, statute, rule
      or regulation to which they or any of their properties are subject and
      they have not received notice of any such default from any party and are
      not in default in the payment or performance of any of their obligations
      to any third parties or in the performance of any mortgage, hypothec,
      indenture, lease, contract or other agreement to which they are a party or
      by which any of their assets or properties may be bound.

            (l) LEASES They enjoy quiet and undisturbed possession under all
      leases under which they are operating, and all of such leases are valid
      and subsisting and not in default.

            (m)   PENSION PLANS.

                  (i)   None of the Companies sponsors or maintains any Plan
            or has ever sponsored or maintained any Plan;

                  (ii) To the extent applicable, each of the Companies agrees to
            do all acts, including, but not limited to, making all contributions
            necessary to maintain compliance with ERISA or the Code, and agrees
            not to terminate any Plan in a manner or do or fail to do any act
            which could result in the imposition of a lien on any of its
            properties pursuant to Section 4068 of ERISA;

                  (iii) None of the Companies sponsors or maintains, or has ever
            contributed to, or has incurred any withdrawal liability under, a
            "multi-employer plan" as defined in Section 3 of ERISA and none of
            the Companies has any written or verbal commitment of any kind to
            establish, maintain or contribute to any "multi-employer plan" under
            the Multi-employer Pension Plan Amendment Act of 1980;

                  (iv) None of the Companies has any unfunded liability in
            contravention of ERISA and the Code;

            (n) DEFERRED COMPENSATION ARRANGEMENTS. Except as set forth in
      Schedule 5.1(n) attached hereto, none of the Companies has entered into
      employment contracts or deferred compensation plans, incentive
      compensation plans, executive compensation plans, arrangements or
      commitments (each, individually, an "ARRANGEMENT"). With respect to each
      such Arrangement:

                  (i) Such Arrangement complies currently, and has complied in
            the past, both as to form and operation with its terms
<PAGE>   19
                                      -19-


            and the provisions of the Code and ERISA and all applicable laws,
            rules and regulations;

                  (ii) To the extent applicable, the disclosure and reporting
            provisions of the Securities Act of 1933 and the Securities Exchange
            Act of 1934 have been satisfied;

                  (iii) Such Arrangement is legally valid and binding and is in
            full force and effect;

                  (iv) The Companies have made all contributions required to be
            made under any such Arrangement and no contributions are currently
            due and owing;

                  (v) There are no actions, suits or claims pending (other than
            routine claims for benefits) or, to the best of the Companies'
            knowledge which could be reasonably expected to be asserted against
            any such Arrangement; and

                  (vi) The Companies have performed all obligations required to
            be performed by it under any such Arrangement and the Companies are
            not in default or in violation of, and the Companies have no
            knowledge of a default or violation by any other party to any such
            Arrangement.

            (o) CHIEF EXECUTIVE OFFICE. Their chief executive offices and
      principal places of business, and the offices where their books and
      records concerning Collateral are kept, are set forth in the first
      paragraph of this Agreement.

            (p) PLACES OF BUSINESS AND LOCATION OF COLLATERAL. They have no
      other places of business and locate no Collateral, specifically including
      books and records, at any location other than as set forth in the first
      paragraph of this Agreement and as set forth on Schedule 5.1(p) attached
      hereto. They shall maintain a full and complete set of their books and
      records in their offices at the chief executive offices described in the
      immediately preceding paragraph.

            (q) CONTINGENT LIABILITIES. They are not party to any suretyship,
      guaranty or other similar type agreement, nor have they offered their
      endorsement to any individual, concern, corporation or other entity or
      acted or failed to act in any manner which would in any way create a
      contingent liability that does not appear in the financial statements
      referred to hereinbefore.
<PAGE>   20
                                      -20-


            (r) CONTRACTS. No contract to which any Borrower is a party is
      currently being renegotiated or is by its terms subject to renegotiation,
      nor is any Borrower in default in any material respect of any contract. No
      Borrower is party to any government contract.

            (s) UNIONS AND PENSIONS. They are not a party to any collective
      bargaining or union agreement.

            (t) LICENSES. They have all licenses, permits and other permissions
      required by any government, agency or subdivision thereof, or from any
      licensing entity to which Borrowers may be subject, if any, necessary for
      the conduct of their respective businesses, all of which they represent to
      be in good standing and in full force and effect.

            (u) COLLATERAL. The Borrowers are and shall continue to be the sole
      owners of the Collateral free and clear of all liens, encumbrances,
      security interests and claims except the liens granted to Lender hereunder
      and the security interests and liens listed on Schedule 5.1(u) attached
      hereto; Borrowers are fully authorized to sell, transfer, pledge and/or
      grant a security interest in each and every item of the Collateral to
      Lender; all documents and agreements related to the Collateral shall be
      true and correct and in all respects what they purport to be; all
      signatures and endorsements that appear thereon shall be genuine and all
      signatories and endorsers shall have full capacity to contract; none of
      the transactions underlying or giving rise to the Collateral shall violate
      any applicable state, provincial or federal laws or regulations; all
      documents relating to the Collateral shall be legally sufficient under
      such laws or regulations and shall be legally enforceable in accordance
      with their terms; and Borrowers agree to defend the Collateral against the
      claims of all persons other than Lender.

            (v) TRADENAMES. Except as set forth in Schedule 5.1(v) attached
      hereto, they do not have any tradenames.

            (w) FINANCIAL INFORMATION. All financial information including, but
      not limited to, information relating to the Receivables and Inventory,
      submitted by any Borrower to Lender, whether previously or in the future,
      is and will be true and correct in all material respects, and is and will
      be complete insofar as may be necessary to render it a true and accurate
      depiction of the subject matter to which it relates.

            (x) PARENT, AFFILIATE OR SUBSIDIARY CORPORATIONS. Except as set
      forth in Schedule 5.1(x) attached hereto, Borrowers have no parent
      corporation and have no affiliates or Subsidiaries.

            (y) ENVIRONMENTAL MATTERS.
<PAGE>   21
                                      -21-


                  (i) The Borrowers have obtained all permits, licenses and
            other authorizations which are required under all Environmental
            Laws, if any. They are in compliance with the terms and conditions
            of all such permits, licenses and authorizations, if any, and are
            also in compliance with all other limitations, restrictions,
            conditions, standards, prohibitions, requirements, obligations,
            schedules and timetables contained in any applicable Environmental
            Law or in any regulation, code, plan, order, decree, judgment,
            injunction, notice or demand letter issued, entered, promulgated or
            approved thereunder.

                  (ii) To the best of Borrowers' knowledge after due and
            diligent inquiry by each Borrower's President and Chief Financial
            Officer, no notice, notification, demand, request for information,
            citation, summons or order has been issued, no complaint has been
            filed, no penalty has been assessed and no investigation or review
            is pending or threatened by any governmental or other entity with
            respect to any alleged failure by any Borrower to have any permit,
            license or authorization required in connection with the conduct of
            its business or with respect to any Environmental Laws, including
            without limitation, Environmental Laws relating to the generation,
            treatment, storage, recycling, transportation, disposal or release
            of any Hazardous Materials.

                  (iii) No oral or written notification of a release of any
            Hazardous Material has been filed by or against Borrowers and no
            property now or previously owned, leased or used by any Borrower,
            including without limitation, the Premises, is listed or proposed
            for listing on the Comprehensive Environmental Response,
            Compensation and Inventory of Sites or National Priorities List
            under the Comprehensive Environmental Response, Compensation and
            Liability Act of 1980, as amended, or on any similar state or
            federal list of sites requiring investigation or cleanup.

                  (iv) There are no liens or encumbrances arising under or
            pursuant to any Environmental Laws on any of the property or
            properties owned, leased or used by the Borrowers, including without
            limitation, any of the properties owned or leased by the Borrowers,
            and to the best of Borrower's knowledge after due and diligent
            inquiry by each Borrower's President and Chief Financial Officer, no
            governmental actions have been taken or are in process which could
            subject any of such properties to such liens or encumbrances or, as
            a result of which Borrowers would be required to place any notice or
            restriction relating to the presence of
<PAGE>   22
                                      -22-


            Hazardous Materials at any property owned by the Borrowers in any
            deed to such property.

                  (v) Neither it nor, to the best knowledge of Borrowers, any
            previous owner, tenant, occupant or user of any property owned,
            leased or used by Borrowers, has (i) engaged in or permitted any
            operations or activities upon or any use or occupancy of such
            property, or any portion thereof, for the purpose of or in any way
            involving the release, discharge, refining, dumping or disposal
            (whether legal or illegal, accidental or intentional) of any
            Hazardous Materials on, under, or in or about such property; or (ii)
            transported or had transported any Hazardous Materials to such
            property except to the extent such Hazardous Materials are raw
            products commonly used in day-to-day manufacturing operations of
            such property and, in such case, in compliance with, all
            Environmental Laws; (iii) engaged in or permitted any operations or
            activities which would allow the facility to be considered a
            treatment, storage or disposal facility as that term is defined in
            40 CFR 264 and 265; or (iv) constructed, stored or otherwise located
            Hazardous Materials on, under, in or about any such property except
            to the extent commonly used in day-to-day operations of any such
            property and, in such case, in compliance with all Environmental
            Laws. Further, to the best knowledge of Borrowers, no Hazardous
            Materials have migrated from other properties upon, about or beneath
            any such property.

            (z) USE OF PROCEEDS. The Borrowers will use the proceeds of the
      Loans solely (i) to satisfy in full loans outstanding to Barnett Bank and
      Banque Nationale de Paris (Canada) on the date hereof and (ii) for working
      capital purposes.

      ARTICLE VI.  CONDITIONS OF LENDING

            SECTION 6.1. CONDITIONS OF THE INITIAL LOANS. Subject to the terms
      hereof, the obligation of Lender to make the first Revolving Loan and the
      Additional Loan under this Agreement is subject to the fulfillment of the
      following conditions precedent at the time of the execution of this
      Agreement:

            (a) NOTES. Lender shall have received a duly executed Revolving
      Promissory Note and a duly executed Additional Loan Promissory Note drawn
      to its order.

            (b) EVIDENCE OF CORPORATE ACTION. Lender shall have received
      certified copies of all corporate action (in form and substance
      satisfactory to Lender) taken by Borrowers to authorize the execution,
      delivery and
<PAGE>   23
                                      -23-


      performance of this Agreement, the Notes and the other Financing
      Agreements to which any Borrower is a party, and the borrowings to be made
      hereunder and thereunder, together with true copies of Borrowers'
      respective Charters and By-laws and such other papers as Lender or its
      counsel may require.

            (c) OPINIONS OF COUNSEL. Lender shall have received favorable
      written opinions of United States and Canadian counsel for the Borrowers
      and the Fidelity Guarantor, accompanied by such supporting documents as
      Lender or its counsel may require.

            (d) FIDELITY GUARANTY. Lender shall have received a duly executed
      Fidelity Guaranty (a "FIDELITY GUARANTY") from Michael R. Skoff (the
      "FIDELITY GUARANTOR"). The Fidelity Guaranty shall be in form, scope and
      substance satisfactory to Lender and its counsel.

            (e) LESSOR'S AGREEMENT. Borrowers shall cause to be delivered to
      Lender lessor's agreements with respect to the Premises located in
      Sebastian, Florida and Quebec, Canada (collectively, the "LESSOR'S
      AGREEMENTS") each in form, scope and substance satisfactory to Lender and
      its counsel.

            (f) UCC-1 FINANCING STATEMENTS, QUEBEC REGISTRATION CERTIFICATES.
      Lender shall have received from Borrowers duly executed UCC-1 financing
      statements, Quebec registration certificates and such other documents as
      Lender deems necessary or proper to perfect its security interest in the
      Collateral, all of which shall be in form, scope and substance
      satisfactory to Lender and its counsel.

            (g) PROVINCE OF QUEBEC SECURITY DOCUMENTS. Lender shall have
      received the duly executed Moveable Hypothec and each other document or
      instrument Lender deems necessary or proper to perfect its security
      interest in the Collateral under Canadian law (the "PROVINCE OF QUEBEC
      SECURITY DOCUMENTS"), all of which shall be in form, scope and substance
      satisfactory to Lender and its counsel.

            (h) GUARANTIES. Lender shall have received from each Borrower a duly
      executed Guaranty Agreement (each a "GUARANTY" and collectively, the
      "GUARANTIES") each in form, scope and substance satisfactory to Lender and
      its counsel.

            (i) NOTICE OF ASSIGNMENTS AND POST OFFICE BOX CHANGE OF ADDRESS
      CARDS. Lender shall have received a notice of assignment and a post office
      change of address cards from each of the Borrowers, which shall be in
      form, scope and substance satisfactory to Lender and its counsel; provided
      that such documents shall be held by Lender and
<PAGE>   24
                                      -24-


      utilized by Lender only after the occurrence of a demand for payment of
      the Loans or an Event of Default.

            (j) FURTHER DOCUMENTS. Lender shall have received such further
      documents, instruments and agreements as Lender may request, including
      without limitation, landlord's agreements, warehouse agreements and
      evidence that the insurance policies and certificates evidencing adequate
      insurance and coverage on each of Borrowers' assets are currently in full
      force and effect, continue to name Lender as loss payee or additional
      insured, as the case may be, and that the premiums are current.

            SECTION 6.2. CONDITIONS OF ADDITIONAL REVOLVING LOANS. In addition
      to the conditions in Section 6.1 above, Lender shall make no further
      Revolving Loans (collectively, the "FURTHER LOANS") unless the following
      conditions shall exist or have been satisfied by Borrowers at the time any
      Further Loan is requested:

            (a) ABSENCE OF TERMINATION OR DEFAULT. Lender shall not have
      terminated the Revolving Loan facility or the Additional Loan hereunder,
      nor shall a Defaulting Event exist or have occurred.

            (b) COMPLIANCE CERTIFICATES. On the date of each Revolving Loan
      hereunder and after giving effect thereto, Borrowers shall have delivered
      to Lender, upon Lender's request, a certificate executed by their chief
      financial officer which states, among other things, that: (i) Borrowers
      have complied, and are then in compliance, with all the terms, covenants
      and conditions of this Agreement and the other Financing Agreements to
      which they are a party; (ii) there exists no Event of Default or
      Defaulting Event; and (iii) the representations and warranties contained
      herein and in the other Financing Agreements are true and correct with the
      same effect as though such representations and warranties had been made at
      the time of each Further Loan.

            (c) BORROWING BASE. The indebtedness of Borrowers by virtue of the
      making of any Revolving Loan shall not exceed the Borrowing Base.
      Borrowers shall not request any Revolving Loan if the effect of such
      Revolving Loan shall be to cause the balance of all Revolving Loans to
      exceed the Borrowing Base.

            (d) FURTHER DOCUMENTS. Lender shall have received such further
      documents, instruments and agreements as Lender may reasonably request.
<PAGE>   25
                                      -25-


      ARTICLE VII.  COVENANTS

            A.  AFFIRMATIVE COVENANTS.

      The Borrowers jointly and severally covenant and agree that from the date
hereof until payment and performance in full of all Obligations, and until the
termination of this Agreement, unless Lender otherwise consents in writing,
Borrowers shall:

            SECTION 7.1. FINANCIAL STATEMENTS. Deliver or caused to be delivered
      to Lender: (a) within thirty (30) days after the close of each fiscal
      month of Borrowers, internally prepared financial statements of Borrowers
      including consolidated and consolidating balance sheets as of the close of
      each month, and statements of income and retained earnings for such month,
      and for that portion of the fiscal year-to-date then ended, which shall be
      prepared on a basis consistent with that of the preceding period or
      containing disclosure of the effect on financial condition or results of
      operations of any change in such preparation, and which shall be certified
      by the chief financial officer of Borrowers as being accurate and fairly
      presenting the financial condition of Borrowers; (b) within ninety (90)
      days after the close of each fiscal year of Borrowers, consolidated
      audited financial statements including a balance sheet as of the close of
      such fiscal year and statements of income, stockholders' capital and cash
      flow for the year then ended, prepared in conformity with generally
      accepted accounting principles, applied on a basis consistent with that of
      the preceding year or containing disclosure of the effect on financial
      condition or results of operations of any change in the application of
      accounting principles during the year, and accompanied by a report thereon
      of a recognized certified public accounting firm selected by Borrowers and
      reasonably satisfactory to Lender, which opinion shall state that such
      financial statements fairly present the financial condition and results of
      operations of Borrowers in accordance with generally accepted accounting
      principles, and also accompanied by a written statement from such
      accountants stating that they have reviewed such financial statements and
      have found no evidence of an Event of Default having occurred or of an
      event which with passage of time and/or giving of notice would constitute
      an Event of Default having occurred; (c) within ninety (90) days after the
      close of each fiscal year of Borrowers, internally prepared consolidating
      financial statements including a balance sheet as of the close of such
      fiscal year and statements of income, stockholders' capital and cash flow
      for the year then ended, prepared in conformity with generally accepted
      accounting principles, applied on a basis consistent with that of the
      preceding year or containing disclosure of the effect on financial
      condition or results of operations of any change in the application of
      accounting principles during the year; (d) within ten (10)
<PAGE>   26
                                      -26-


      days of the close of each month, monthly aging of accounts receivable and
      accounts payable and inventory status reports in form, scope and substance
      satisfactory to Lender; (e) within ten (10) days after filing the same
      with the Securities and Exchange Commission, a copy of Cycomm's Annual
      Report on Form 10-K, its Quarterly Reports on Form 10-Q, any Current
      Reports on Form 8-K and any proxy statements; (f) promptly upon Lender's
      written request, such other information about the financial condition and
      operations of Borrowers as Lender may, from time to time, reasonably
      request; and (g) upon becoming aware of any Event of Default, or the
      occurrence or existence of a Defaulting Event, notice thereof in writing.
      All reports required hereunder or requested by Lender involving items such
      as sales and cash receipts, accounting journals, monthly detailed account
      receivable aging reports and accounts payable and inventory status reports
      shall be provided by Borrowers to Lender in ASCII readable format either
      on disk or via modem transmission to Lender. Borrower agrees to cooperate
      fully with Lender to coordinate the timely receipt of all such reports in
      such form or format as Lender may reasonably request.

            SECTION 7.2. INSURANCE AND ENDORSEMENTS. (a) Keep their properties
      and cause the Premises to be insured against fire and other hazards
      (pursuant to so-called "All Risk" coverage) in amounts and with companies
      reasonably satisfactory to Lender to the same extent and covering such
      risks as is customary in the same or a similar business; maintain public
      liability coverage, including without limitation, products liability
      coverage, against claims for personal injuries or death; and maintain all
      worker's compensation, C.S.S.T., employment or similar insurance as may be
      required by applicable law; and (b) all insurance shall contain such
      terms, be in such form, and be for such periods reasonably satisfactory to
      Lender, and be written by carriers duly licensed by the appropriate
      governmental authority of each state where any Collateral is located.
      Without limiting the generality of the foregoing, such insurance must
      provide that it may not be canceled without thirty (30) days' prior
      written notice to Lender. Borrowers shall cause Lender to be endorsed as a
      loss payee with a long form Lender's Loss Payable Clause, in form and
      substance reasonably acceptable to Lender on all such insurance. In the
      event of failure to provide and maintain insurance as herein provided,
      Lender may, at its option, provide such insurance and charge the amount
      thereof to either Revolving Loan Account in Lender's sole discretion.
      Borrowers shall furnish to Lender certificates or other satisfactory
      evidence of compliance with the foregoing insurance provisions. Borrowers
      hereby irrevocably appoint Lender as their attorney-in-fact, coupled with
      an interest, to make proofs of loss and claims for insurance, and to
      receive payments of the insurance proceeds and execute and endorse all
      documents, checks and drafts in connection
<PAGE>   27
                                      -27-


      with payment of such insurance. Any insurance proceeds received by Lender
      shall be applied to the Obligations in such order and manner as Lender
      shall determine in its sole discretion.

            SECTION 7.3. TAX AND OTHER LIENS. Comply with all statutes and
      government regulations and pay all taxes, assessments, governmental
      charges or levies, or claims for labor, supplies, rent and other
      obligations made against any of them or their property which, if unpaid,
      might become a lien or charge against Borrowers or their properties,
      except liabilities being contested in good faith and against which
      adequate reserves have been established in accordance with generally
      accepted accounting principles.

            SECTION 7.4. PLACES OF BUSINESS; LOCATION OF COLLATERAL. Maintain
      their chief places of business and chief executive offices at the
      addresses set forth in the introductory sentence hereof and their other
      places of business and locations of Collateral as set forth in Schedule
      5.1(p) hereto unless Borrowers shall have given Lender thirty (30) days'
      prior written notice of any change thereof.

            SECTION 7.5. INSPECTIONS. Allow Lender by or through any of its
      officers, attorneys, and/or accountants designated by it, for the purpose
      of ascertaining whether or not each and every provision hereof and of any
      related agreement, instrument and document is being performed, to enter
      the offices and plants of Borrowers to examine or inspect any of the
      properties, books and records or extracts therefrom, to make copies of
      such books and records or extracts therefrom and to make complete
      environmental studies and/or investigations, and to discuss the affairs,
      finances and accounts thereof with Borrowers, all at such reasonable
      times, upon reasonable notice (at least 48 hours in advance) and as often
      as Lender or any representative of Lender may reasonably request. In
      addition, upon Lender's request, Borrowers shall provide Lender with an
      environmental site assessment or environmental audit report, or an update
      of such an assessment or audit, all in scope, form and content
      satisfactory to Lender.

            SECTION 7.6. LITIGATION. Promptly advise Lender of the commencement
      or threat of litigation, including arbitration proceedings and any
      proceedings before any governmental agency (but excluding product
      liability claims which are either fully covered by insurance or adequately
      covered by insurance and which are not likely to have a material adverse
      effect on the business, assets or condition (financial or otherwise) of
      Borrowers), which is instituted against any Borrower or, upon receipt of
      any information pertaining thereto, and is reasonably
<PAGE>   28
                                      -28-


      likely to have a materially adverse effect upon the condition, financial,
      operating or otherwise, of Borrowers.

            SECTION 7.7. MAINTENANCE OF EXISTENCE. Maintain their corporate
      existence and comply with all valid and applicable statutes, rules and
      regulations, and maintain their properties in good repair, working order
      and operating condition. Borrowers shall immediately notify Lender of any
      event causing material loss in the value of their assets.

            SECTION 7.8. INVENTORY. Allow Lender to examine and inspect the
      Inventory at reasonable times and intervals and upon reasonable notice, at
      least 48 hours in advance. Borrowers shall immediately notify Lender of
      any event causing material loss or depreciation in value of Inventory and
      the amount of such loss or depreciation.

            SECTION 7.9.  ERISA.  Immediately notify Lender of any event
      which causes any Borrower not to be in compliance with ERISA in all
      material respects.

            SECTION 7.10.  NOTICE OF CERTAIN EVENTS.  Give prompt written
      notice to Lender of:

            (a) any material dispute that may arise between Borrowers and any
      governmental regulatory body or law enforcement agency;

            (b) any labor controversy resulting or likely to result in a strike
      or work stoppage against Borrowers;

            (c) any proposal by any public authority to acquire the assets or
      business of Borrowers;

            (d) the location of any Collateral other than at Borrowers' places
      of business disclosed in this Agreement (other than Collateral in transit
      in the ordinary course of Borrowers' business);

            (e) any proposed or actual change of the name, identity or corporate
      structure of Borrowers;

            (f) any circumstance or event by virtue of which or in connection
      with which Borrowers may have incurred or may incur any liability, expense
      or responsibility under any Environmental Law including, without
      limitation: (i) any Release of any Hazardous Material required to be
      reported to any federal, state or local governmental authority,
      instrumentality or agency under any applicable Environmental Law; (ii) any
      and all written communications with respect to claims or suits under
<PAGE>   29
                                      -29-


      any applicable Environmental Law or any Release of Hazardous Material
      required to be reported to any federal, state or local governmental
      authority, instrumentality or agency; (iii) any remedial action taken by
      Borrowers or any other person in response to (A) any Hazardous Material
      on, under or about the properties or assets of Borrowers, the existence of
      which may give rise to a claim or suit resulting in a material change of
      Borrowers' business operations or financial condition, or (B) any claim or
      suit resulting in a material change of Borrowers' business operations or
      financial condition; (iv) Borrowers' discovery of any occurrence or
      condition on any real property adjoining or in the vicinity of Borrowers'
      business premises which may cause such premises to be in violation of any
      Environmental Law or to be subject to any restrictions on the ownership,
      occupation, transferability or use thereof under any Environmental Law;
      and (v) any request for information from any federal, state or local
      governmental authority, instrumentality or agency that indicates such
      entity is investigating Borrowers' potential responsibility for a Release
      of Hazardous Material;

            (g) any other matter which has resulted or is reasonably likely to
      result in a material adverse change in the financial condition or
      operations of Borrowers;

            (h) any information received by Borrowers with respect to any
      Receivable that may materially affect the value thereof or the rights and
      remedies of Lender with respect thereto; and

            (i) any action, suit or claim pending or which could be reasonably
      expected to be asserted against Borrowers.

            SECTION 7.11. DEFAULTS. Upon the occurrence of an Event of Default
      or of a Defaulting Event, give prompt written notice of such occurrence to
      Lender signed by the president or chief financial officer of Borrowers
      describing such occurrence and the action, if any, being taken to cure the
      Event of Default or Defaulting Event.

            SECTION 7.12. DUTIES. Borrowers have complied and will continue to
      comply with any and all federal, state, provincial and local laws
      affecting their businesses, including, but not limited to, payment of all
      federal and state taxes with respect to sales to Account Debtors by
      Borrowers and disclosures in connection therewith. Borrowers jointly and
      severally agree to indemnify Lender against and hold Lender harmless from,
      all claims, actions and losses, including reasonable attorney's fees and
      costs incurred by Lender arising from any contention, whether well founded
      or otherwise, that there has been a failure to comply with such laws.
<PAGE>   30
                                      -30-


            SECTION 7.13. COLLATERAL DUTIES. Do whatever Lender may reasonably
      request from time to time by way of obtaining, executing, delivering and
      filing financing statements, assignments, landlord's or mortgagee's
      waivers, warehouse agreements and other notices and amendments and
      renewals of any of the foregoing, and Borrowers will take any and all
      steps and observe such formalities as Lender may reasonably request, in
      order to create and maintain a valid and enforceable first lien upon,
      pledge of, and first priority security interest in, any and all of the
      Collateral. Lender hereby is authorized to file financing statements
      without the signature of Borrowers and to execute and file such financing
      statements on behalf of any Borrower as specified by the Uniform
      Commercial Code to perfect or maintain its security interest in all of the
      Collateral. All reasonable charges, expenses and fees Lender may incur in
      filing any of the foregoing, together with reasonable costs and expenses
      of any lien search required by Lender, and any taxes relating thereto,
      shall be charged to either Revolving Loan Account (or divided between
      them) in Lender's sole discretion and added to the Obligations. XL Canada
      agrees to sign a moveable hypothec of first rank in favor of Lender and in
      form and substance satisfactory to Lender (the "MOVEABLE HYPOTHEC") and
      consents to the registration of the Moveable Hypothec at the Office of the
      Register of Personal and Moveable Real Rights of the Province of Quebec.

            SECTION 7.14. AUDIT AND APPRAISALS BY LENDER; FEES. Permit Lender to
      audit the books and records of Borrowers and to conduct or cause to be
      conducted appraisals of Borrowers' assets at such times, upon reasonable
      notice of at least 48 hours, and in such manner and detail as Lender deems
      reasonable. Without limiting the generality of the foregoing, Lender shall
      be allowed to verify the Receivables and Inventory of Borrowers and to
      confirm with Account Debtors the validity and amount of Receivables.
      Borrowers shall promptly pay to Lender reasonable audit fees and any
      out-of-pocket expenses incurred in connection with any audit performed by
      Lender, or by any third party retained by Lender in its sole discretion if
      Lender, in its sole discretion, deems it necessary to hire outside
      auditors, after Lender has made a demand for payment of any Obligations
      and Borrowers have not immediately paid in full in cash such Obligations
      or after the occurrence of an Event of Default. In addition, Borrowers
      shall promptly pay or reimburse Lender for the costs of any such
      appraisals conducted by or for Lender. Lender may charge any such audit
      fees and out-of-pocket expenses to either Revolving Loan Account (or
      divide such fees and expenses between the Revolving Loan Accounts) in
      Lender's sole discretion.
<PAGE>   31
                                      -31-


            SECTION 7.15. BANK ACCOUNTS. Maintain all of their bank accounts,
      including without limitation, their operating and depository accounts, at
      First Union National Bank of Virginia, Barnett Bank of Central Florida
      and/or Banque Nationale de Paris (Canada).

            B.  NEGATIVE COVENANTS.

      The Borrowers joint and severally covenant and agree that from the date
hereof until payment and performance in full of all Obligations, and until the
termination of this Agreement, unless Lender otherwise consents in writing, none
of the Borrowers shall:

            SECTION 7.16. ENCUMBRANCES. Incur or permit to exist any lien,
      mortgage, hypothec, charge or other encumbrance against any of their
      properties or assets, whether now owned or hereafter acquired, except: (a)
      liens required or expressly permitted by this Agreement; (b) pledges or
      deposits in connection with or to secure worker's compensation, C.S.S.T,
      unemployment or liability insurance; (c) those listed on Schedule 5.1(u)
      attached hereto.

            SECTION 7.17. LIMITATION ON INDEBTEDNESS. Except for (i) amounts
      owed by one Borrower to another Borrower arising out of shipments of
      inventory in the ordinary course of business; (ii) indebtedness in respect
      of loans existing and outstanding as of the date hereof owing to Cycomm by
      (A) XL in the aggregate amount of $1,450,000 and (B) XL Canada in the
      aggregate amount of $1,743,000 (which loans, if they are repaid in whole
      or part, may not be remade or increased from any reduced amount thereof);
      and (iii) additional intercompany loans from Cycomm to XL and XL Canada in
      a combined amount not to exceed $50,000 in the aggregate outstanding at
      any one time, create, incur or guarantee any indebtedness or obligation
      for borrowed money (including without limitation, any reimbursement
      obligations for any letter of credit issued by any financial institution)
      from, or issue or sell any of their obligations to, any lender.

            SECTION 7.18. CONTINGENT LIABILITIES. Assume, guarantee, endorse or
      otherwise become liable upon the obligations of any person, firm or
      corporation, or enter into any purchase or option agreement or other
      arrangement having substantially the same effect as such a guarantee,
      except by the endorsement of negotiable instruments for deposit or
      collection or similar transactions in the ordinary course of business;
      provided that, Cycomm may assume, guarantee, endorse or otherwise become
      liable upon the obligations of any person, firm or corporation in the
      ordinary course of its business consistent with past practices and upon
      thirty (30) days prior written notice to Lender of each
<PAGE>   32
                                      -32-


      such assumption, guarantee or endorsement so long as: (A) Lender has not
      made demand for payment of any of the Obligations (or, if any such demand
      has been made, Borrowers have not immediately paid in full in cash such
      Obligations) and (B) no Defaulting Event has occurred.

            SECTION 7.19. CONSOLIDATION OR MERGER. Merge into or consolidate
      with or into any corporation; provided that Cycomm may merge with any
      other corporation or entity so long as: (A) Cycomm is the surviving
      corporation and has a tangible net worth after giving effect to the merger
      that is not less than its tangible net worth immediately prior to such
      merger, (B) Lender has not made demand for payment of any of the
      Obligations (or, if any such demand has been made, Borrowers have not
      immediately paid in full in cash such Obligations) and (C) no Defaulting
      Event has occurred.

            SECTION 7.20. LOANS, ADVANCES, INVESTMENTS. Make or permit to exist
      any loans or advances to, or purchase any stock, other securities or
      evidences of indebtedness of, or make or permit to exist any investment
      (including without limitation the acquisition of stock of a corporation),
      or acquire any assets or any other interest whatsoever, in any other
      person; provided that Cycomm may purchase the stock of, or acquire the
      assets of, another corporation or other entity in the ordinary course of
      its business consistent with past practices so long as: (A) such purchase
      or acquisition is made with the proceeds of a debt or equity financing
      from a party other than Lender sufficient to acquire such stock or assets
      and no liens have been granted on any assets of Borrowers to or for the
      benefit of such financing party except as shall have been permitted
      pursuant to an intercreditor agreement with Lender in form and substance
      satisfactory to Lender, (B) Lender has not made demand for payment of any
      of the Obligations (or, if any such demand has been made, Borrowers have
      not immediately paid in full in cash such Obligations) and (C) no
      Defaulting Event has occurred.

            SECTION 7.21. ACQUISITION OF STOCK OF BORROWERS; DIVIDENDS.
      Purchase, acquire, redeem or retire, or make any commitment to purchase,
      acquire, redeem or retire any of the capital stock of Borrowers, whether
      now or hereafter outstanding, or declare or pay any dividend, or make any
      distribution to any of their stockholders; provided that Cycomm may
      purchase, acquire, redeem or retire, or declare or pay dividends in
      respect of Borrowers capital stock so long as: (A) such purchase,
      acquisition, redemption, retirement or dividend payment is made from the
      proceeds of a financing from a party other than Lender sufficient to pay
      the costs of such purchase, acquisition, retirement or dividend payment
      and no liens have been granted on any assets of Borrowers to or for the
      benefit of such financing party except as shall have
<PAGE>   33
                                      -33-


      been permitted pursuant to an intercreditor agreement with Lender in form
      and substance satisfactory to Lender, (B) Lender has not made demand for
      payment of any of the Obligations (or, if any such demand has been made,
      Borrowers have not immediately paid in full in cash such Obligations) and
      (C) no Defaulting Event has occurred.

            SECTION 7.22. SALE AND LEASE OF ASSETS. Sell or lease any of the
      assets of the Borrowers, except for sales of inventory in the ordinary
      course of business consistent with past practices and on an arms-length
      basis.

            SECTION 7.23.  NAME CHANGES.  Change their names or styles other
      than as set forth in this Agreement.

            SECTION 7.24. PROHIBITED TRANSFERS. Transfer, in any manner, either
      directly or indirectly, any cash, property, or other asset to any parent
      or any of their affiliates or Subsidiaries, other than (i) sales made in
      the ordinary course of business and for fair consideration on terms no
      less favorable than if such sale had been an arms-length transaction
      between Borrowers or such Subsidiary and an unaffiliated entity and (ii)
      transfers by Cycomm to any Subsidiary in an aggregate amount for all such
      transfers not to exceed $250,000 in any calendar year.

            SECTION 7.25. NO MANAGEMENT/OWNERSHIP CHANGE. Suffer (i) Albert I.
      Hawk, Michael R. Skoff or Rick Mandrell to cease to be employed by and
      actively and materially engaged in the management and operation of the
      Borrowers' businesses unless each such person ceases to be so employed and
      engaged and is replaced within thirty (30) days by someone acceptable to
      Lender in its sole discretion, or (ii) any change in the ownership of XL
      or XL Canada.

            SECTION 7.26.  LEASEBACKS.  Lease any real estate or other
      capital asset from any lessor who shall have acquired such property
      from Borrowers.

            SECTION 7.27. LOANS TO OFFICERS, DIRECTORS AND/OR SHAREHOLDERS. Make
      any loan or advance or make any transfer, in any manner, of any cash,
      property or other asset to or on behalf of any of their officers,
      directors or shareholders.

      ARTICLE VIII.  COLLATERAL

            SECTION 8.1. GRANT. To secure the prompt payment and performance of
      each and all of the Obligations, each of the Borrowers pledges, assigns,
      transfers and grants to Lender a continuing, first lien
<PAGE>   34
                                      -34-


      security interest in the following property of Borrowers, now owned or
      hereafter acquired or arising (the "COLLATERAL"):

            (a) All accounts and accounts receivable related to or arising from
      the sale or lease of inventory or rendition of services by Borrowers (the
      "ACCOUNTS") and all other accounts, bank accounts, contracts, contract
      rights, notes, documents, chattel paper, instruments, acceptances, drafts
      or other forms of obligations and receivables (collectively with the
      Accounts, the "RECEIVABLES"), whether or not the same are listed on any
      schedules, assignments or reports furnished to Lender from time to time,
      and whether such Receivables are now existing or are created or arise at
      any time hereafter, together with all goods, inventory and merchandise
      returned by or reclaimed by or repossessed from customers wherever such
      goods, inventory and merchandise are located, and all proceeds thereto
      including without limitation, proceeds of insurance thereon and all
      guaranties, securities, and liens which Borrowers may hold for the payment
      of any such Receivables, including without limitation, all rights of
      stoppage in transit, replevin, revendication and reclamation and all other
      rights and remedies of an unpaid vendor or lienor or, and any liens held
      by Borrowers as a mechanic, contractor, subcontractor, processor,
      materialman, machinist, manufacturer, artisan, or otherwise;

            (b) All documents, instruments, investment property, documents of
      title, general intangibles, policies and certificates of insurance,
      guaranties, securities, chattel paper, deposits, tax returns, proceeds of
      insurance, proceeds of an eminent domain or condemnation award, cash,
      liens or other property, which are now or may hereinafter be in the
      possession of Borrowers or as to which Borrowers may now or hereafter
      control possession by documents of title or otherwise, including, but not
      limited to, all property allocable to unshipped orders relating to
      Receivables and Inventory;

            (c) All books, records, customer lists, supplier lists, ledgers,
      evidences of shipping, invoices, purchase orders, sales orders and all
      other evidences of Borrowers' business records, including all cabinets,
      drawers, etc. that may hold the same; computer records, lists, software,
      programs, wherever located, all whether now existing or hereafter arising
      or acquired;

            (d) All of Borrowers' inventory, whether now owned or hereafter
      acquired, including without limitation (collectively, the "INVENTORY"):
      (i) all goods manufactured or acquired for sale or lease, and any piece
      goods, raw materials, work in process and finished merchandise, findings
      or component materials, and all supplies, goods, incidentals, office
<PAGE>   35
                                      -35-


      supplies, packaging materials, and any and all items including machinery
      and equipment used or consumed in the operation of the business of
      Borrowers or which contribute to the finished product or to the sale,
      promotion and shipment thereof, in which Borrowers may now or at any time
      hereafter may have an interest, whether or not such inventory is listed in
      this Agreement on any reports furnished to Lender from time to time; (ii)
      all inventory whether or not the same is in transit or in the
      constructive, actual or exclusive occupancy or possession of Borrowers or
      is held by Borrowers or by others for the Accounts, including without
      limitation, all goods covered by purchase orders and contracts with
      suppliers and all goods billed and held by suppliers; (iii) all inventory
      which may be located on the premises of Borrowers or of any carrier,
      forwarding agents, truckers, warehousemen, vendors, selling agents or
      third parties; (iv) all general intangibles relating to or arising out of
      inventory; (v) all proceeds and products of the foregoing resulting from
      the sale, lease or other disposition of inventory, including cash,
      accounts receivable, other non-cash proceeds and trade-ins; and (vi) with
      respect to after-acquired inventory, the security interest shall be deemed
      to be a purchase money security interest;

            (e) All general intangibles, including without limitation, tax
      refunds, proceeds of insurance, eminent domain awards, condemnation
      proceeds, and patents, copyrights, tradenames, trademarks, applications
      therefor, and licenses to any patent, copyright, trademark, or tradename
      that Borrowers now own, have the right to use or may hereafter own or
      acquire the right to use;

            (f) All equipment, machinery, appliances, and furniture and
      fixtures, now existing or hereafter arising, wherever located, and all
      contracts, contract rights and chattel paper arising out of any lease of
      any of the foregoing;

            (g) All other collateral in which Borrowers may hereafter grant to
      Lender a security interest; and

            (h) All renewals, substitutions, replacements, additions,
      accessions, proceeds and products of any and all of the foregoing,
      including without limitation, all proceeds of credit, fire and other
      insurance and also including, without limitation, rents and profits
      resulting from the temporary use of the Collateral.

      ARTICLE IX.  EVENTS OF DEFAULT

            SECTION 9.1. EVENTS OF DEFAULT. Without affecting the demand nature
      of the Loans which shall at all times be due and payable on demand, any
      and all Obligations, including without limitation, the
<PAGE>   36
                                      -36-


      Obligations arising pursuant to or in connection with the Loans shall, at
      the option of Lender and notwithstanding any time or credit allowed by any
      note or agreement, become immediately due and payable without notice if
      any one or more of the following events (collectively, "EVENTS OF DEFAULT"
      and individually, an "EVENT OF DEFAULT") shall occur:

            (a) Borrowers' failure to pay principal, interest or any other
      sum due hereunder or under the Notes;

            (b) Borrowers' failure to pay or perform when due any other
      covenant, duty, indebtedness, liability or obligation arising under this
      Agreement, the Notes or any of the other Financing Agreements, or any
      other Obligation, or such failure by the Fidelity Guarantor;

            (c) the making by Borrowers or the Fidelity Guarantor of any
      misrepresentation of a material fact to Lender;

            (d) loss, theft, or destruction of any Collateral in excess of Fifty
      Thousand Dollars ($50,000) in value which is not covered by insurance with
      Lender's loss payee endorsement as required herein;

            (e) the filing, making or issuance of any lien, levy, seizure,
      attachment, garnishment, injunction, execution, tax lien or judgment upon
      or against Borrowers or any of the Collateral, or any other property or
      assets of Borrowers which lien, levy, seizure, attachment, garnishment,
      injunction, executing tax lien or judgment is not released or bonded to
      the satisfaction of Lender within thirty (30) days from its initial
      issuance or creation;

            (f) any of the following of, by, or involving Borrowers: insolvency
      (failure to pay debts generally as they mature or where the fair value of
      assets is not in excess of liabilities); business failure; appointment of
      a receiver or custodian; assignment for the benefit of creditors; calling
      of a meeting of creditors; appointment of a committee of creditors, or
      liquidating banks, or offering of a composition extension to creditors; or
      the commencement of any proceedings under any bankruptcy or insolvency
      law;

            (g) the ownership of greater than fifty percent (50%) of the capital
      or voting stock of any class of Cycomm shall be transferred from the
      owners thereof as of the date hereof pursuant to one or more tender
      offers;

            (h) Borrowers' failure to keep the Collateral insured against loss
      by fire or otherwise for the full insurable value thereof with companies
      and for coverages (including Lender's Long Form Loss Payable
<PAGE>   37
                                      -37-


      Endorsement) reasonably acceptable to Lender and making the loss, if any,
      payable to Lender;

            (i) the loss, revocation or failure to renew any license and/or
      permit now held or hereafter acquired by Borrowers which adversely affects
      the ability of Borrowers to continue their operations as presently
      conducted;

            (j) the occurrence of a default or event of default (howsoever
      defined) under any other agreement between Lender and the Fidelity
      Guarantor;

            (k) the declaration of a default that permits acceleration of
      maturity under any obligation of Borrowers to any other creditor; or

            (l) the occurrence of any event or circumstance with respect to the
      Borrowers such that Lender shall believe in good faith that the prospect
      of payment of all or any part of Obligations or the performance by the
      Borrowers under this Agreement, or any other agreement between the Lender
      and the Borrowers, is impaired or there shall occur any material adverse
      change in the business or financial condition of the Borrowers.

      Upon the occurrence of any Event of Default, at the option of Lender: (x)
any and all Obligations, including without limitation the Obligations arising
from or in connection with the Loans, shall become immediately due and payable,
and (y) Borrowers' eligibility to request any Further Loans shall automatically
and immediately terminate, without presentment, demand, protest, notice of
protest or other notice or requirements of any kind, all of which Borrowers
expressly waive. Notwithstanding the foregoing sentence, if any Event of Default
under clause (f) occurs, the acceleration of the Obligations and termination of
Borrowers' eligibility to request Further Loans shall be automatic.

      At any time after an Event of Default, Lender may proceed to enforce the
rights of Lender whether by suit in equity or by action at law, whether for
specific performance of any covenant or agreement contained in this Agreement,
the Notes or the other Financing Agreements, or in aid of the exercise of any
power granted in either this Agreement or the Notes or any other Financing
Agreement, or it may proceed to obtain judgment or any other relief whatsoever
appropriate to the enforcement of such rights, or proceed to enforce any legal
or equitable right which Lender may have by reason of the occurrence of any
Event of Default hereunder.
<PAGE>   38
                                      -38-


      ARTICLE X.  COLLECTION OF RECEIVABLES

            SECTION 10.1. DEPOSITS. Except as otherwise set forth in Section 2.6
      hereof, until Lender exercises its rights to collect the Receivables as
      provided for in this Agreement, Borrowers shall continue direct collection
      of all Receivables. All collections and other proceeds of Receivables
      which Borrowers receive shall be received in trust for Lender and
      Borrowers shall: keep all such collections separate and apart from all of
      their other funds and property; identify such collections and proceeds as
      the property of Lender; and immediately deposit such collections in the
      identical form received in such accounts of Lender as designated by Lender
      from time to time.

            SECTION 10.2. SCHEDULE. All collections of Receivables shall be set
      forth on a schedule in form and substance satisfactory to Lender.
      Collections of Receivables shall be credited to the Obligations of
      Borrowers on the day of their actual receipt by Lender; provided, however,
      that all credits shall be conditional credits subject to collection and
      that returned items, at Lender's option, may be charged to Borrowers; and
      further provided that for purposes of the computation of interest, items
      shall not be deemed to be collected until three (3) days after their
      actual receipt by Lender; provided further that Receivables in respect of
      Eligible Canadian Accounts shall be deemed collected when deposited in and
      credited to Lender's Canadian bank account.

      ARTICLE XI.  RETURNED MERCHANDISE

            SECTION 11.1. PROCEDURES. Until Lender exercises its rights to
      collect the Receivables as provided for in this Agreement, Borrowers may
      continue their present policies for returned merchandise and adjustments,
      but shall promptly notify Lender of any credits, adjustments or disputes
      arising concerning the goods or services represented by Receivables. In
      any event, Borrowers will immediately pay Lender from their own funds (and
      not from the proceeds of Receivables), for application to the Revolving
      Loans, an amount equal to any credit or adjustment made to any Eligible
      Accounts; provided, however, that so long as Borrowers are not in default
      hereunder, such payment need not be made if Borrowers shall have, after
      making such credit or adjustment, sufficient Receivables to maintain the
      aggregate outstanding balance of the Revolving Loans under the Borrowing
      Base.
<PAGE>   39
                                      -39-


      ARTICLE XII.  RIGHTS AND REMEDIES OF LENDER

            SECTION 12.1. REMEDIES OF LENDER. Upon Lender's demand for payment
      of the Loans or upon the occurrence of any Event of Default, Lender shall
      have in any jurisdiction where enforcement of this Agreement, the Notes or
      any other Financing Agreement is sought, in addition to all other rights
      and remedies which Lender may have under law and equity, the following
      rights and remedies, all of which may be exercised with or without further
      notice to Borrowers and without a prior judicial or administrative
      hearing, which notice and hearing are expressly waived: to occupy any of
      Borrowers' premises for up to six (6) months rent free for the purposes of
      liquidating Collateral, including without limitation, conducting an
      auction thereon; to enforce or foreclose the liens and security interests
      created under this Agreement or under any other agreement relating to
      Collateral by any available judicial procedure or without judicial
      process; to enter any premises where any Collateral may be located for the
      purpose of taking possession or removing the same; to sell, assign, lease,
      or otherwise dispose of Collateral or any part thereof, either at public
      or private sale, in lots or in bulk, for cash, on credit or otherwise,
      with or without representations or warranties, and upon such terms as
      shall be acceptable to Lender, all at Lender's sole option and as Lender
      in its sole discretion may deem advisable; to bid or become purchaser at
      any such sale if public; and, at the option of Lender, to apply or be
      credited with the amount of all or any part of the Obligations owing to
      Lender against the purchase price bid by Lender at any such sale.

            SECTION 12.2. SPECIFIC POWERS. Lender may at any time, before (with
      respect to clauses (iii), (v), (vii) and (x) of this Section 12.2) or
      after the occurrence of a demand for payment of the Loans or an Event of
      Default, at Lender's sole discretion: (i) give notice of assignment to any
      Account Debtor; (ii) collect Receivables directly and charge, or cause to
      be charged, the collection costs and expenses to either Revolving Loan
      Account (or divided between the Revolving Loan Accounts) in Lender's sole
      discretion; (iii) collect receivables submitted by Borrowers to Lender for
      collection and charge, or cause to be charged, the collection costs and
      expenses to either Revolving Loan Account (or divided between the
      Revolving Loan Accounts) in Lender's sole discretion; (iv) settle or
      adjust disputes and claims directly with Account Debtors for amounts and
      upon terms which Lender considers advisable, and credit, or cause to be
      credited, the applicable Revolving Loan Account with the net amounts
      received in payment of Receivables; (v) exercise all other rights granted
      in this Agreement and the other Financing Agreements; (vi) receive, open
      and dispose of all mail addressed to Borrowers and notify the Post Office
      authorities to change the address for delivery of Borrowers' mail to an
      address designated by Lender; (vii) endorse the name of Borrowers on any
<PAGE>   40
                                      -40-


      checks or other evidence of payment that may come into possession of
      Lender and on any invoice, freight or express bill, bill of lading or
      other document; (viii) in the name of Borrowers or otherwise, demand, sue
      for, collect and give acquittance for any and all monies due or to become
      due on Receivables; (ix) compromise, prosecute or defend any action, claim
      or proceeding concerning Receivables; and (x) do any and all things
      necessary and proper to carry out the purposes contemplated in this
      Agreement, the other Financing Agreements and any other agreement between
      the parties. Neither Lender nor any person acting as its representative
      hereunder shall be liable for any acts or omissions or for any error of
      judgment or mistake of fact or law, except for gross negligence or willful
      misconduct. Borrowers agree that the powers granted hereunder, being
      coupled with an interest, shall be irrevocable so long as any Obligation
      remains unsatisfied. Notwithstanding the foregoing, it is understood that
      Lender is under no duty to take any of the foregoing actions and that
      after having made demand upon the Account Debtors for payment, Lender
      shall have no further duty as to the collection or protection of
      Receivables or any income therefrom and no further duty to preserve any
      rights pertaining thereto, other than the safe custody thereof in the
      event Lender takes possession thereof.

            SECTION 12.3. DUTIES AFTER DEMAND OR DEFAULT. Borrowers will, at
      Lender's request, assemble all Collateral and make it available to Lender
      at places which Lender may reasonably select, whether at the premises of
      Borrowers or elsewhere and will make available to Lender all premises and
      facilities of Borrowers for the purpose of Lender taking possession of
      Collateral or of removing or putting the Collateral in salable form. In
      the event that Lender elects to exercise its right to take possession and
      control of any Collateral, and any goods called for in any sales order,
      contract, invoice or other instrument or agreement evidencing or
      purporting to give rise to any Receivable shall not have been delivered or
      shall be claimed to be defective by any customer, Lender shall have the
      right in its sole discretion to use and deliver to such customer any goods
      of Borrowers to fulfill such order, contract or the like so as to make
      good any such Receivable. If any Collateral shall require repairing,
      maintenance, preparation, or the like, or is in process or other
      unfinished state, Lender shall have the right, but shall not be obligated,
      to effectuate such repair, maintenance, preparation, processing or
      completion of manufacturing for the purpose of putting the same in such
      salable form as Lender shall deem appropriate, provided that Lender shall
      nonetheless have the right to sell or dispose of such Collateral without
      such processing. The net cash proceeds resulting from the collection,
      liquidation, sale, lease or other disposition of Collateral shall be
      applied first to the expenses (including all reasonable attorneys' and
      professionals' fees) of retaking, holding, storing, processing and
      preparing for sale, selling, collecting, liquidating
<PAGE>   41
                                      -41-


      and the like such collateral and then to the satisfaction of all
      Obligations (application as to particular Obligations or against principal
      or interest to be at Lender's sole discretion), and then, upon full and
      final payment of the Obligations, and unless otherwise prohibited by court
      order or law, to Borrowers, it being agreed that if any such payment made
      to Lender is recovered from or repaid by Lender in whole or in part in any
      bankruptcy, insolvency or similar proceeding instituted by or against
      Borrowers, this Agreement automatically shall be reinstated without any
      further action by Borrowers and Lender. Borrowers shall be liable to
      Lender and shall pay to Lender on demand any deficiency which may remain
      after such sale, disposition, collection or liquidation of Collateral.

            SECTION 12.4. CUMULATIVE REMEDIES. The enumeration of Lender's
      rights and remedies set forth in this Article XII is not intended to be
      exhaustive and the exercise by Lender of any right or remedy hereunder
      shall not preclude the exercise of any other rights or remedies, all of
      which shall be cumulative and shall be in addition to any other right or
      remedy given hereunder or under any other agreement between the parties or
      which may now or hereafter exist in law or at equity or by suit or
      otherwise. No delay or failure to take action on the part of Lender in
      exercising any right, power or privilege shall operate as a waiver
      thereof; nor shall any single or partial exercise of any such right, power
      or privilege preclude other or further exercise thereof or the exercise of
      any other right, power or privilege or shall be construed to be a waiver
      of any Event of Default. No course of dealing between Borrowers and Lender
      or its employees shall be effective to change, modify or discharge any
      provision of this Agreement or to constitute a waiver of any Event of
      Default.

      ARTICLE XIII.  TERM

            SECTION 13.1.  TERM AND TERMINATION.

            (a) REVOLVING LOAN. Unless sooner terminated by Lender as a result
      of the occurrence of a demand, an Event of Default, or a Defaulting Event,
      Borrowers' eligibility to request Revolving Loans shall commence on the
      date hereof and shall continue for a period through and including December
      31, 1999 (the "TERM"). Borrowers' eligibility to request Revolving Loans
      may be extended after the Term (and after any Renewal Term, as defined
      below) only with the express written consent of all Borrowers and Lender.
      Any such extension (and any further extension) shall be made only with the
      express written consent of all Borrowers and Lender (each being a "RENEWAL
      TERM"). At the end of the Term (or at the end of a Renewal Term, if
      applicable), Borrowers shall pay the entire balance of the Revolving
      Loans, the Additional Loan and all other
<PAGE>   42
                                      -42-


      outstanding Obligations. Further, upon termination of the Revolving Loan
      facility, all of the rights, interests and remedies of Lender and
      Obligations of Borrowers shall survive and Borrowers shall have no right
      to receive, and Lender shall have no obligation to make, any further
      Revolving Loans. Upon full, final and indefeasible payment of the
      Obligations to Lender, all rights and remedies of Borrowers and Lender
      hereunder shall cease, so long as any payment so made to Lender and
      applied to the Obligations is not thereafter recovered from or repaid by
      Lender in whole or in part in any bankruptcy, insolvency or similar
      proceeding instituted by or against Borrowers, whereupon this Agreement
      shall be automatically reinstated without any further action by Borrowers
      and Lender and shall continue to be fully applicable to such Obligations
      to the same extent as though the payment so recovered or repaid had never
      been originally made on such Obligations.

            (b) ADDITIONAL LOAN. Unless sooner terminated by Lender as a result
      of the occurrence of a demand, an Event of Default or a Defaulting Event,
      the Additional Loan shall be repaid as set forth in the Additional Loan
      Promissory Note. The Borrowers may prepay the unpaid principal balance of
      the Additional Loan, in whole or in part, at any time without penalty or
      premium. Any and all such prepayments shall be applied first to interest
      accrued to the date of prepayment and then to the principal balance in
      inverse order of maturity and shall not relieve the Borrowers from the
      obligation to make the regularly-scheduled payments required thereunder.

            (c) TERMINATION FEE AND MINIMUM INTEREST. In the event that (a) this
      Agreement is terminated by Borrowers as of any date other than the end of
      the Term or the end of a Renewal Term, or (b) this Agreement is terminated
      as a result of: (i) a demand by Lender for payment of the Loans related to
      (A) Borrowers' financial condition or prospects, (B) Borrowers' failure to
      comply with any term or provision of the Financing Agreements or failure
      to cooperate fully with Lender in Lender's administration of the Loans; or
      (C) the occurrence of an Event of Default or Defaulting Event; or (ii) the
      occurrence of an Event of Default or a Defaulting Event, Borrowers shall
      pay to Lender on the effective date of such termination, in addition to
      the Minimum Interest Amount, if applicable, and in addition to any other
      payments Borrowers are required to make hereunder, a termination charge
      equal to: five percent (5.0%) of the maximum principal amount of the
      Loans, if terminated during the first year of the Loans, and one and
      one-half percent (1.5%) of the maximum principal amount of the Loans, if
      terminated during the second year of the Loans (the "TERMINATION FEE");
      provided, however, that there shall be no Termination Fee if, during the
      second year of the Loans, the Loans are paid in full directly or
      indirectly from the proceeds of a loan
<PAGE>   43
                                      -43-


      from a commercial bank or from the proceeds of a public or private
      offering of Borrowers' stock or convertible debentures. It is understood
      that the determination of the maximum principal amount of the Loans shall
      be made without regard to the components of the Borrowing Base based upon
      Eligible Accounts and Eligible Inventory. For example, for purposes of
      this provision, on the date hereof the maximum principal amount of the
      Loans is $4,000,000 and the Termination Fee would be $200,000 if the Loans
      were terminated during the first year. In the event that (x) Borrowers
      attempt to breach this Agreement by terminating this Agreement prior to
      the expiration of the Term (or prior to the expiration of any Renewal
      Term), or (y) Borrowers give to Lender less than sixty (60) days notice
      that Borrowers intend to decline to extend the term of this Agreement at
      the end of the Term or any Renewal Term, or (z) this Agreement is
      terminated as a result of: (i) a demand by Lender for payment of the Loans
      related to (A) Borrowers' financial condition or prospects, (B) Borrowers'
      failure to comply with any term or provision of the Financing Agreements
      or failure to cooperate fully with Lender in Lender's administration of
      the Loans; or (C) the occurrence of an Event of Default or Defaulting
      Event; or (ii) the occurrence of an Event of Default or a Defaulting
      Event, Borrowers shall pay to Lender the Minimum Interest Amount on the
      effective date of such termination, in addition to the Termination Fee and
      any other payments Borrowers are required to make hereunder. All other
      amounts due from Borrowers to Lender prior to or in connection with any
      termination of this Agreement, which have not been previously paid, shall
      be paid by Borrowers on or before the effective date of the termination.
      As used herein, the "MINIMUM INTEREST AMOUNT" means interest upon the
      Minimum Balance at the interest rate in effect on the date that express
      written notice of such termination is given to Lender (or, if no such
      notice is given, the rate in effect on the effective date of termination),
      for the period commencing on the date of such written notice of
      termination (or, if no such notice is given, commencing on the effective
      date of termination) and ending at the end of the Term (or at the end of a
      period of sixty (60) days thereafter, if such termination notice is given
      by Borrowers during or at the end of a Renewal Term on less than sixty
      (60) days notice or if no termination notice is given).

      ARTICLE XIV.  MISCELLANEOUS

            SECTION 14.1.  INDEMNIFICATION.

            (a) In consideration of Lender's execution and delivery of this
      Agreement and Lender's making of the Loans hereunder and in addition to
      all other obligations of Borrowers under this Agreement, Borrowers hereby
      jointly and severally agree to defend, protect, indemnify and hold
<PAGE>   44
                                      -44-


      harmless Lender, its successors, assigns, officers, directors, employees
      and agents (including without limitation, those retained in connection
      with the transactions contemplated by this Agreement) (individually, an
      "INDEMNITEE" and collectively, the "INDEMNITEES") from and against any and
      all actions, causes of action, suits, claims, losses, costs, penalties,
      fees, liabilities and damages and expenses in connection therewith
      (irrespective of whether any such Indemnitees is a party to any action for
      which indemnification hereunder is sought), and including reasonable
      attorneys' fees and disbursements as and when incurred (collectively, the
      "INDEMNIFIABLE LIABILITIES") incurred by the Indemnitees or any of them as
      a result of, or arising out of, or relating to the operation of Borrowers'
      business from and after the date hereof, including without limitation
      those arising under any Environmental Laws. To the extent that the
      foregoing undertaking by Borrowers may be unenforceable for any reason,
      Borrowers shall make the maximum contribution to the payment and
      satisfaction of each of the Indemnifiable Liabilities which is permissible
      under applicable law.

            (b) Borrowers hereby jointly and severally covenant and agree at all
      times to indemnify, hold harmless and defend the Indemnitees, whether as
      secured party in possession or as successor in interest to Borrowers as
      owner of any personal property assets located on the real property of
      Borrowers, by virtue of any action taken by Lender pursuant to the
      Financing Agreement, the Uniform Commercial Code (as in effect in any
      applicable jurisdiction) or otherwise from and against any and all
      liabilities, losses, damages, costs, expenses, penalties, fines, causes of
      action, suits, claims, demands or judgments, including without limitation,
      reasonable attorneys' fees and expenses (collectively, "LIABILITIES AND
      EXPENSES"), suffered or incurred in connection with: (i) the Environmental
      Law, including, without limitation, liens or claims of any federal, state
      or municipal government or quasi-governmental agency or any third person,
      whether arising under any Environmental Law or any other federal, state,
      provincial or municipal law or regulation; (ii) any spill or contamination
      affecting the Premises or any other property owned, leased, controlled or
      used by Borrowers, including without limitation, any Hazardous Material or
      other waste-like or toxic substances located on, under, emanating from or
      relating to the Premises or such property from and on and after the date
      hereof or any portion of any thereof or any property contiguous to the
      Premises or such property from and after the date hereof, and including
      without limitation, any loss of value of the Premises or such property as
      a result of any such spill or contamination; and (iii) the direct or
      indirect installation, use, generation, manufacture, production, storage,
      release, threatened release, discharge, disposal or presence of any
      Hazardous Material, on, under or about the Premises or any other property
      owned, leased, controlled or used by Borrowers or any portion of any
      thereof, from
<PAGE>   45
                                      -45-


      and including all consequential damages, the costs of any required or
      necessary repair, cleanup or detoxification, and the costs of the
      preparation and implementation of any closure, remedial or other required
      plans unless such Liabilities and Expenses arise solely as a result of
      Lender's gross negligence or willful misconduct. Further, the mere fact
      that such Indemnitee has been declared an "owner" or "operator" (as such
      term is defined in any Environmental Law) resulting from such Indemnitee
      having taking possession of any of the Collateral (without any negligence
      on the part of such Indemnitee) shall not exonerate Borrowers from any
      claim by any Indemnitee seeking such indemnification.

            SECTION 14.2. PAYMENT SET-ASIDE. To the extent that Borrowers make a
      payment or payments to Lender (whether hereunder, under the Notes, or
      under the other Financing Agreements) or Lender enforces its security
      interests or rights or exercises its right of setoff, and such payment or
      payments or the proceeds of such enforcement or setoff or any part thereof
      are subsequently invalidated, declared to be fraudulent or preferential,
      set aside, recovered from, disgorged by or are required to be refunded,
      repaid or otherwise restored to Borrowers, a trustee, receiver or any
      other person under any law (including without limitation, any bankruptcy
      law, state or federal law, common law or equitable cause of action) in
      each case in connection with any bankruptcy or similar proceeding
      involving Borrowers, then to the extent of any such restoration the
      obligation or part thereof originally intended to be satisfied shall be
      revived and continued in full force and effect as if such payment had not
      been made or such enforcement or setoff had not occurred.

            SECTION 14.3. SET-OFF. The Borrowers hereby grant to Lender a lien
      and right of setoff for all their liabilities to Lender upon and against
      all their deposits, credits, collateral and property now or hereafter in
      the possession or control of Lender or in transit to Lender. Lender may,
      upon the occurrence of any Event of Default or Defaulting Event or both,
      apply or exercise the right of set-off against any or all of the
      foregoing, or any part thereof against any liability of Borrowers to
      Lender, regardless whether such liability is matured or unmatured.

            SECTION 14.4. COVENANTS TO SURVIVE; BINDING AGREEMENT. All
      covenants, agreements, warranties and representations made herein, in the
      Notes, in the other Financing Agreements, and in all certificates or other
      documents of Borrowers shall survive the advances of money made by Lender
      to Borrowers hereunder and the delivery of the Notes and the other
      Financing Agreements, and all such covenants, agreements, warranties and
      representations shall be binding upon and inure to the
<PAGE>   46
                                      -46-


      benefit of Lender and its successors and assigns, whether or not so
      expressed.

            SECTION 14.5. CROSS-COLLATERALIZATION. All Collateral which Lender
      may at any time acquire from Borrowers or from any other source in
      connection with Obligations arising under this Agreement and the other
      Financing Agreements shall constitute collateral for each and every
      Obligation, without apportionment or designation as to particular
      Obligations and all Obligations, however and whenever incurred, shall be
      secured by all Collateral however and whenever acquired, and Lender shall
      have the right, in its sole discretion, to determine the order in which
      Lender's rights in or remedies against any Collateral are to be exercised
      and which type of Collateral or which portions of Collateral are to be
      proceeded against and the order of application of proceeds of Collateral
      as against particular Obligations.

            SECTION 14.6. CROSS-DEFAULT. Each of the Borrowers acknowledges and
      agrees that an Event of Default and/or Defaulting Event under any one of
      the Financing Agreements shall constitute an Event of Default or
      Defaulting Event under each of the other Financing Agreements.

            SECTION 14.7. AMENDMENTS AND WAIVERS. Neither this Agreement, the
      Notes, the other Financing Agreements, nor any term, covenant or condition
      hereof or thereof may be changed, waived, discharged, modified or
      terminated except by a writing executed by the parties hereto or thereto.
      No failure on the part of Lender to exercise, and no delay in exercising,
      any right, remedy or power hereunder or under the Notes or the other
      Financing Agreements shall preclude any other or future exercise thereof,
      or the exercise of any other right, remedy or power.

            SECTION 14.8. NOTICES. All notices, requests, consents, demands and
      other communications hereunder shall be in writing and shall be mailed by
      first class mail to the respective parties to this Agreement to the
      addresses set forth in the introductory sentence hereof.

            SECTION 14.9. TRANSFER OF LENDER'S INTEREST. The Borrowers hereby
      agree that Lender, in its sole discretion, may freely sell, assign or
      otherwise transfer participations, portions, co-lender interests or other
      interests in all or any portion of the indebtedness, liabilities or
      obligations arising in connection with or in any way related to the
      financing transactions of which this Agreement is a part provided that
      such transferee is a recognized financial institution. In the event of any
      such transfer, the transferee may, in Lender's sole discretion, have and
      enforce
<PAGE>   47
                                      -47-


      all the rights, remedies and privileges of Lender. Each of the Borrowers
      consents to the release by Lender to any potential transferee of any and
      all information (including without limitation, financial information)
      pertaining to Borrowers as Lender, in its sole discretion, may deem
      appropriate. If such transferee so participates with Lender in making
      loans or advances hereunder or under any other agreement between such
      Lender and Borrowers, the Borrowers hereby grant to such transferee and
      such transferee shall have and is hereby given a continuing lien and
      security interest in any money, securities or other property of Borrowers
      in the custody or possession of such transferee, including the right of
      setoff under circumstances consistent with this Agreement, to the extent
      of such transferee's participation in the Obligations of Borrowers to
      Lender.

            SECTION 14.10.  WAIVERS.

            (a) THE BORROWERS ACKNOWLEDGE THAT THE LOANS EVIDENCED HEREBY ARE
      COMMERCIAL TRANSACTIONS AND WAIVE THEIR RIGHT TO NOTICE AND HEARING UNDER
      CHAPTER 903A OF THE CONNECTICUT GENERAL STATUTES, OR AS OTHERWISE ALLOWED
      BY ANY STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH
      LENDER MAY DESIRE TO USE, AND FURTHER WAIVES THEIR RIGHTS TO REQUEST THAT
      LENDER POST A BOND, WITH OR WITHOUT SURETY, TO PROTECT BORROWERS AGAINST
      DAMAGES THAT MAY BE CAUSED BY ANY PREJUDGMENT REMEDY SOUGHT OR OBTAINED BY
      LENDER. THE BORROWERS FURTHER WAIVE DILIGENCE, DEMAND, PRESENTMENT FOR
      PAYMENT, NOTICE OF NONPAYMENT, PROTEST AND NOTICE OF ANY RENEWALS OR
      EXTENSIONS.

            (b) THE BORROWERS HEREBY WAIVE TRIAL BY JURY IN ANY COURT IN ANY
      SUIT, ACTION OR PROCEEDING ON ANY MATTER ARISING IN CONNECTION WITH OR IN
      ANY WAY RELATED TO THE FINANCING TRANSACTIONS OF WHICH THIS AGREEMENT IS A
      PART AND/OR THE ENFORCEMENT OF ANY OF LENDER'S RIGHTS, INCLUDING WITHOUT
      LIMITATION, TORT CLAIMS. BORROWERS ACKNOWLEDGES THAT THEY MAKE THIS WAIVER
      KNOWINGLY, VOLUNTARILY, WITHOUT DURESS AND ONLY AFTER CONSIDERATION OF THE
      RAMIFICATIONS OF THIS WAIVER WITH THEIR ATTORNEYS. THE BORROWERS FURTHER
      ACKNOWLEDGE THAT LENDER HAS NOT REPRESENTED TO BORROWERS THAT THE
<PAGE>   48
                                      -48-


      PROVISIONS OF THIS PARAGRAPH WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.

            (c) THE BORROWERS JOINTLY AND SEVERALLY ACKNOWLEDGE THAT THEY MAKE
      THE FOREGOING WAIVERS IN CLAUSE (a) AND CLAUSE (b) ABOVE, KNOWINGLY,
      VOLUNTARILY, WITHOUT DURESS AND ONLY AFTER CONSIDERATION OF THE
      RAMIFICATIONS OF SUCH WAIVERS WITH THEIR ATTORNEYS.

            SECTION 14.11. SECTION HEADINGS; SEVERABILITY; ENTIRE AGREEMENT.
      Section and subsection headings have been inserted herein for convenience
      only and shall not be construed as part of this Agreement. Every provision
      of this Agreement, the Notes and the other Financing Agreements is
      intended to be severable; if any term or provision of this Agreement, the
      Notes, the other Financing Agreements, or any other document delivered in
      connection herewith shall be invalid, illegal or unenforceable for any
      reason whatsoever, the validity, legality and enforceability of the
      remaining provisions hereof or thereof shall not in any way be affected or
      impaired thereby. All Exhibits and Schedules to this Agreement shall be
      annexed hereto and shall be deemed to be part of this Agreement. This
      Agreement, the other Financing Agreements, and the Exhibits and Schedules
      attached hereto and thereto embody the entire agreement and understanding
      between Borrowers and Lender and supersede all prior agreements and
      understandings relating to the subject matter hereof unless otherwise
      specifically reaffirmed or restated herein.

            SECTION 14.12. GOVERNING LAW, NOTICE AND SERVICE OF PROCESS,
      PLEADINGS AND OTHER PAPERS. This Agreement and the other Financing
      Agreements, and all transactions, assignments and transfers hereunder and
      thereunder, and all the rights of the parties, shall be governed as to
      validity, construction, enforcement and in all other respects by the laws
      of the State of Connecticut (but not its conflicts of law provisions). The
      Borrowers hereby designate and appoint, without power of revocation, the
      Secretary of the State of Connecticut as Borrowers' agent upon whom may be
      served all process, pleadings, notices or other papers which may be served
      upon such Borrower as a result of any of its Obligations under this
      Agreement or other Financing Agreements. The Borrowers agree that the
      Superior Court for the Judicial District of Hartford/New Britain or the
      United States District Court for the District of Connecticut shall have
      jurisdiction to hear and determine any claims or disputes pertaining to
      the financing transactions of which this Agreement is a part and/or to any
      matter arising or in any way related to this Agreement or any other
      agreement between Lender and Borrowers, and
<PAGE>   49
                                      -49-


      each of the Borrowers expressly submits and consents in advance to such
      jurisdiction in any action or proceeding.

            SECTION 14.13. JOINT AND SEVERAL OBLIGATIONS. Each of the Borrowers
      acknowledges that (a) the Obligations are the joint and several
      obligations of each Borrower, (b) the Borrowers are affiliate
      corporations, and (c) for reasons of simplicity and administrative ease,
      the Borrowers desire that the Loans be extended to Cycomm (on behalf of
      itself and XL Canada) and XL as co-borrowers. The security interests,
      liens and other rights and interests in and relative to any of the real or
      personal property of the Borrowers now or hereafter granted to Lender by
      the Borrowers or in any instrument or agreement, shall serve as security
      for any and all of the Obligations, including but not limited to, the
      obligations arising under the Loans and, for the repayment thereof, Lender
      may resort to any security held by it in such order and manner as it may
      elect. References in this Agreement to the Borrower in the singular shall
      include the plural and all obligations herein contained are and shall be
      joint and several.

            SECTION 14.14. ADDITIONAL ACKNOWLEDGMENTS, AGREEMENTS, ETC. XL
      Canada acknowledges that it has granted or will grant security on its
      assets, as it is receiving a benefit from the financing contemplated
      hereby. XL Canada further agrees that the Movable Hypothec executed in
      connection herewith shall be for the amount of $6,530,000.00 Canadian
      dollars at 20%, it being understood that the interest rate and the debt
      shall be determined by the terms and provisions of this Agreement,
      notwithstanding the amount and interest in the Movable Hypothec. It is
      hereby agreed and understood that any and all provisions in the Agreement
      which are in conflict with any law of public order in the province of
      Quebec and Canada shall not affect any other provisions in this Agreement
      which will remain unaffected thereby and in full force and effect.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
                          NEXT PAGE IS SIGNATURE PAGE].
<PAGE>   50
                                      -50-



      IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers as of the date first above written.

Witnessed:


-------------------------           CYCOMM INTERNATIONAL, INC.


                                    By: /s/ Michael Skoff
-------------------------              -------------------------------------
                                       Michael Skoff
                                       Its Chief Financial Officer


-------------------------           XL COMPUTING CORP., INC.


                                    By: /s/ Michael Skoff
-------------------------              -------------------------------------
                                       Michael Skoff
                                       Its Assistant Secretary

-------------------------           XL COMPUTING (CANADA) INC.


                                    By: /s/ Michael Skoff
-------------------------              -------------------------------------
                                       Michael Skoff
                                       Its Assistant Secretary

                                    AMERICAN COMMERCIAL FINANCE
-------------------------           CORPORATION


                                    By:
-------------------------              -------------------------------------
                                       Richard E. Mount
                                       Its President
<PAGE>   51
DISTRICT OF COLUMBIA          )
                              )     ss.
                              )

      Before me, the undersigned, this 17th day of December, 1997, personally
appeared Michael Skoff, known to me to be the Chief Financial Officer of Cycomm
International, Inc. and that he as such officer, signer and sealer of the
foregoing instrument, acknowledged the execution of the same to be his free act
and deed individually and as such officer, and the free act and deed of said
corporation.

      In Witness Whereof, I hereunto set my hand.


                                    /s/ Clara M. Santos
                                    ----------------------------------------
                                    Notary Public
                                    My Commission Expires: April 30, 2001


DISTRICT OF COLUMBIA          )
                              )     ss.
                              )

      Before me, the undersigned, this 17th day of December, 1997, personally
appeared Michael Skoff, known to me to be the Assistant Secretary of XL
Computing Corp., Inc. and that he as such officer, signer and sealer of the
foregoing instrument, acknowledged the execution of the same to be his free act
and deed individually and as such officer, and the free act and deed of said
corporation.

      In Witness Whereof, I hereunto set my hand.


                                    /s/ Clara M. Santos
                                    ----------------------------------------
                                    Notary Public
                                    My Commission Expires: April 30, 2001
<PAGE>   52
DISTRICT OF COLUMBIA          )
                              )     ss.
                              )

      Before me, the undersigned, this 17th day of December, 1997, personally
appeared Michael Skoff, known to me to be the Vice President of XL Computing
(Canada) Inc. and that he as such officer, signer and sealer of the foregoing
instrument, acknowledged the execution of the same to be his free act and deed
individually and as such officer, and the free act and deed of said corporation.

      In Witness Whereof, I hereunto set my hand.


                                    /s/ Clara M. Santos
                                    ----------------------------------------
                                    Notary Public
                                    My Commission Expires: April 30, 2001



STATE OF CONNECTICUT          )
                              )     ss.
COUNTY OF HARTFORD      )

      Before me, the undersigned, this ___ day of December, 1997, personally
appeared Richard E. Mount, known to me to be the President of American
Commercial Finance Corporation and that he as such officer, signer and sealer of
the foregoing instrument, acknowledged the execution of the same to be his free
act and deed individually and as such officer, and the free act and deed of said
corporation.

      In Witness Whereof, I hereunto set my hand.


                                    ----------------------------------------
                                    Notary Public
                                    My Commission Expires:
                                    Commissioner of the Superior Court
<PAGE>   53
SCHEDULE 5.1(m) - PENSION PLANS

Not Applicable
<PAGE>   54
SCHEDULE 5.1(n) - DEFERRED COMPENSATION ARRANGEMENTS


<TABLE>
<CAPTION>
EMPLOYMENT CONTRACTS
--------------------
<S>                       <C>
1. Albert I. Hawk         Chief Executive Officer, Cycomm International Inc.
2. Michael R. Skoff       Chief Financial Officer, Cycomm International Inc.
3. Richard Mandrell       Chief Operating Officer, Cycomm International Inc.
4. G.T. Gangemi           President and C.E.O. - XL Computing Corp
                          Chief Executive Officer - XL Computing (Canada) Inc.
</TABLE>

DEFERRED COMPENSATION PLANS

None


INCENTIVE COMPENSATION PLANS

None


EXECUTIVE COMPENSATION PLANS, ARRANGEMENTS OR COMMITMENTS

None
<PAGE>   55
SCHEDULE 5.1(p) - PLACE OF BUSINESS AND LOCATION OF COLLATERAL

Location of Books and Records:

Cycomm International, Inc.
1420 Springhill Rd., Suite 420
McLean, VA  22102


Location of Collateral:

XL Computing Corporation
10305 102nd Terrace
Sebastian, FL  32958

300 Industrial Park Road
Vero Beach, FL  32960

12198 County Road 512 *
Fellsmere, FL  32948



XL Computing (Canada) Inc.
7900C Taschereau
Suite 100
Brossard, Quebec
Canada  J4X 1C2



* Space will be vacant by 12/31/97
<PAGE>   56
SCHEDULE 5.1(u) - SECURITY INTERESTS AND LIENS ON COLLATERAL

CAPITAL LEASES: XL Computing Corporation and XL Computing (Canada) Inc. have
capital leases for various assets.  The lessors maintain unperfected security
interests in the leased assets.


XL Computing Corporation

<TABLE>
<CAPTION>

Lessor            Description of Asset          Lease Inception      Lease Term
------            --------------------          ---------------      ----------
<S>               <C>                           <C>                  <C>
AT&T              Haeger Insertion Press        Aug. 1996            65 months
AT&T              Accupress Hydr. Brake         Sept. 1996           65 months
AT&T              3 Dell Servers                Jan. 1997            24 months
</TABLE>


XL Computing (Canada) Inc.

<TABLE>
<CAPTION>
Lessor                  Description of Asset          Lease Inception     Lease Term
------                  --------------------          ---------------     ----------
<S>                     <C>                           <C>                 <C>
BNP                     Mfg., office, comp equip.     Oct. 1997           24 months
Telecom Leasing
      Canada            Telephone System              Dec. 1996           24 months
Xerox Canada            Photocopier                   July 1997           24 months
Services Financiers
      Commcorp          Fax/printer                   Nov. 1997           24 months
</TABLE>
<PAGE>   57
SCHEDULE 5.1(v) - TRADENAMES

Tradenames
PCMobile
<PAGE>   58
SCHEDULE 5.1(x) - PARENT, AFFILIATE OR SUBSIDIARY CORPORATIONS

SUBSIDIARIES OF CYCOMM INTERNATIONAL INC.


1.    Cycomm Corporation. Incorporated on January 1, 1985, in Oregon, USA. A
      wholly-owned subsidiary of Cycomm International Inc.

      1.a.  Val-Comm Inc.  Incorporated on July 17, 1984, in New Mexico,
            USA.  A wholly-owned subsidiary of Cycomm Corporation.

2.    XL Computing Corporation. Incorporated on February 26, 1996 in Delaware,
      USA. A wholly-owned subsidiary of Cycomm International Inc.

3.    XL Computing (Canada) Inc. Incorporated on June 3, 1996 in Quebec, Canada.
      A wholly-owned subsidiary of Cycomm International Inc.

4.    Cypher Communications de Venezuela CA. Incorporated on July 22, 1993, in
      Venezuela. A wholly-owned subsidiary of Cycomm International Inc.