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                                                                  Exhibit 10.3

[COMERICA LOGO]  SECURITY AGREEMENT
                 (ALL ASSETS)

As of September 5, 2001, for value received, the undersigned ("Debtor")
pledges, assigns and grants to Comerica Bank-Texas, a Texas banking
association ("Bank"), whose address is P. 0. Box 650282, Dallas, Texas
75265-0282, Attention: Julie Smith, Mail Code MC 6571, a continuing security
interest and lien (any pledge, assignment, security interest or other lien
arising hereunder is sometimes referred to herein as a "security interest")
in the Collateral (as defined below) to secure payment when due, whether by
stated maturity, demand, acceleration or otherwise, of all existing and
future indebtedness ("Indebtedness") to the Bank of Debtor. Indebtedness
includes without limit any and all obligations or liabilities of the Debtor to
the Bank, whether absolute or contingent, direct or indirect, voluntary or
involuntary, liquidated or unliquidated, joint or several, known or unknown,
originally payable to the Bank or to a third party and subsequently acquired
by the Bank including, without limitation, any late charges, loan fees or
charges, and overdraft indebtedness, any and all obligations or liabilities
for which the Debtor would otherwise be liable to the Bank were it not for
the invalidity or unenforceability of them by reason of any bankruptcy,
insolvency or other law, or for any other reason; any and all amendments,
modifications, renewals and/or extensions of any of the above; all costs
incurred by Bank in establishing, determining, continuing, or defending the
validity or priority of any security interest, or in pursuing its rights and
remedies under this Agreement or under any other agreement between Bank and
Debtor or in connection with any proceeding involving Bank as a result of any
financial accommodation to Borrower and/or Debtor; and all other costs of
collecting Indebtedness, including without limit attorneys' fees. Debtor
agrees to pay Bank all such costs incurred by the Bank, immediately upon
demand, and until paid all costs shall bear interest at the highest per annum
rate applicable to any of the Indebtedness, but not in excess of the maximum
rate permitted by law. Any reference in this Agreement to attorneys' fees
shall be deemed a reference to reasonable fees, costs, and expenses of both
in-house and outside counsel and paralegals, whether inside or outside
counsel is used, whether or not a suit or action is instituted, and to court
costs if a suit or action is instituted, and whether attorneys' fees or court
costs are incurred at the trial court level, on appeal, in a bankruptcy,
administrative or probate proceeding or otherwise.

Debtor further covenants, agrees, represents and warrants as follows:

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

         (a)      all Accounts Receivable (for purposes of this Agreement,
                  "Accounts Receivable" consists of all accounts, general
                  intangibles, chattel paper (including without limit electronic
                  chattel paper and tangible chattel paper), contract rights,
                  deposit accounts, documents, instruments and rights to
                  payment evidenced by chattel paper, documents or instruments,
                  health care insurance receivables, commercial tort claims,
                  letters of credit, letter of credit rights, supporting
                  obligations, and rights to payment for money or funds advanced
                  or sold),

         (b)      all Inventory,

         (c)      all Equipment and Fixtures,

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

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

         In the definition of Collateral, a reference to a type of collateral
         shall not be limited by a separate reference to a more specific or
         narrower type of that collateral. "Collateral" shall EXCLUDE
         intellectual property. Intellectual property includes "Proprietary
         Information". "Proprietary Information" shall mean trade secrets,
         confidential knowledge, data, or any other proprietary information of
         the Debtor and each of its subsidiaries or affiliated companies. By
         way of illustration but not limitation, "Proprietary Information"
         includes (a) inventions, trade secrets, ideas, concepts, processes,
         formulas, data, lists, software programs, all other works of
         authorship, mask works, proprietary test tooling, know-how,
         improvements, discoveries, developments, designs, and techniques
         relating to the business or proposed business of the Debtor whether
         or not any of the foregoing is or are patentable, copyrightable, or
         registrable under any intellectual property laws and (b) information
         owned by the Debtor or licensed from third parties regarding plans
         for research, development, products, services, marketing and selling,
         business plans, budgets and unpublished financial statements, licenses,
         prices and costs, suppliers, customers, customer lists (except to the
         extent necessary for Bank to perfect or exercise its lien on Debtor's
         Accounts Receivable), information regarding the skills and compensation
         of other employees of the Debtor and (c) intellectual property of third
         parties in Debtor's possession. Notwithstanding anything in this
         Security Agreement, the usage of the terms "rights of any kind" or
         "general intangibles" will not serve to diminish to exclusion of
         Debtor's Intellectual Property rights from the definition of
         "Collateral."

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

         2.1      Debtor shall furnish to Bank, in form and at intervals as
                  Bank may request, any information Bank may reasonably request
                  and allow Bank to examine, inspect, and copy any of Debtor's
                  books and records. Debtor shall, at the request of Bank, mark
                  its records and the Collateral to clearly indicate the
                  security interest of Bank under this Agreement.

         2.2      At the time any Collateral becomes, or is represented to be,
                  subject to a security interest in favor of Bank, Debtor shall
                  be deemed to have warranted that (a) Debtor is the lawful
                  owner of the Collateral and has the right and authority to
                  subject it to a security interest granted to Bank; (b) none of
                  the Collateral is subject to any security interest other than
                  that in favor of Bank; (c) there are no financing statements
                  on file, other than in favor of Bank; (d) no person, other
                  than Bank, has possession or control (as defined in the
                  Uniform Commercial Code) of any Collateral of such nature that
                  perfection of a security interest may be accomplished by
                  control; and (e) Debtor acquired its rights in the Collateral
                  in the ordinary course of its business.

         2.3      Debtor will keep the Collateral free at all times from all
                  claims, liens, security interests and encumbrances other than
                  those in favor of Bank. Debtor will not, without the prior
                  written consent of Bank, sell, transfer, lease or grant
                  control to any person other than Bank over, or permit to be
                  sold, transferred, leased or controlled (by a person other
                  than Bank), any or all of the Collateral, except for Inventory
                  in the ordinary course of its business and will not return any
                  Inventory to its supplier. Bank or its representatives may at
                  all reasonable times inspect the Collateral and may enter upon
                  all premises where the Collateral is kept or might be located.

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

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

         2.6      Debtor will keep the Collateral in good condition and will
                  protect it from loss, damage, or deterioration from any cause.
                  Debtor has and will maintain at all times (a) with respect to
                  the Collateral, insurance under an "all risk" policy against
                  fire and other risks customarily insured against, and (b)
                  public liability insurance and other insurance as may be
                  required by law or reasonably required by Bank, all of which
                  insurance shall be in amount, form and content, and written by
                  companies as may be satisfactory to Bank, containing a
                  lender's loss payable endorsement acceptable to Bank. Debtor
                  will deliver to Bank immediately upon demand evidence
                  satisfactory to Bank that the required insurance has been
                  procured. If Debtor fails to maintain satisfactory insurance,
                  Bank has the option (but not the obligation) to do so and
                  Debtor agrees to repay all amounts so expended by Bank
                  immediately upon demand, together with interest at the highest
                  lawful default rate which could be charged by Bank on any
                  Indebtedness. Notwithstanding the foregoing, Borrower is under
                  no obligation to obtain foreign accounts receivable credit
                  insurance.

         2.7      Debtor will do all commercially reasonable acts and will
                  execute all writings requested by Bank to perform, enforce
                  performance of, and collect all Accounts Receivable. Debtor
                  shall neither make nor permit any modification, compromise or
                  substitution for any Account Receivable without the prior
                  written consent of Bank. Debtor shall, at Bank's request,
                  arrange for verification of Accounts Receivable directly with
                  account debtors or by other methods acceptable to Bank.


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

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

         2.10     At any time and without notice, Bank may (a) cause any or all
                  of the Collateral to be transferred to its name or to the name
                  of its nominees, provided that any such nominee is not a
                  competitor of Debtor not normally in the business of serving
                  as a collateral trustee or related activities; (b) receive or
                  collect by legal proceedings or otherwise all dividends,
                  interest, principal payments and other sums and all other
                  distributions at any time payable or receivable on account of
                  the Collateral, and hold the same as Collateral, or apply the
                  same to the Indebtedness, the manner and distribution of the
                  application to be in the sole discretion of Bank; (c) enter
                  into any extension, subordination, reorganization, deposit,
                  merger or consolidation agreement or any other agreement
                  relating to or affecting the Collateral, and deposit or
                  surrender control of the Collateral, and accept other property
                  in exchange for the Collateral and hold or apply the property
                  or money so received pursuant to this Agreement; and (d) take
                  such actions in its own name or in Debtor's name as Bank, in
                  its sole discretion, deems necessary or appropriate to
                  establish exclusive control (as defined in the Uniform
                  Commercial Code) over any Collateral of such nature that
                  perfection of the Bank's security interest may be accomplished
                  by control.

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

         2.12     Debtor shall defend, indemnify and hold harmless Bank, its
                  employees, agents, shareholders, affiliates, officers, and
                  directors from and against any and all claims, damages, fines,
                  expenses, liabilities or causes of action of whatever kind,
                  including without limit consultant fees, legal expenses, and
                  attorneys' fees, suffered by any of them as a direct or
                  indirect result of any actual or asserted violation of any
                  law, including, without limit, Environmental Laws, or of any
                  remediation relating to any property required by any law,
                  including without limit Environmental Laws, INCLUDING ANY
                  CLAIMS, DAMAGES, FINES, EXPENSES, LIABILITIES OR CAUSES OF
                  ACTION OF WHATEVER KIND RESULTING FROM BANK'S OWN NEGLIGENCE
                  OR ARISING OUT OF ANY CLAIM OR THEORY OF STRICT LIABILITY,
                  except and to the extent (but only to the extent) caused by
                  Bank's gross negligence or wilful misconduct.

3.       COLLECTION OF PROCEEDS.

         3.1      Debtor agrees to collect and enforce payment of all Collateral
                  until Bank shall direct Debtor to the contrary. Immediately
                  upon notice to Debtor by Bank and at all times after that,
                  Debtor agrees to fully and promptly cooperate and assist Bank
                  in the collection and enforcement of all Collateral and to
                  hold in trust for Bank all payments received in connection
                  with Collateral and from the sale, lease or other disposition
                  of any Collateral, all rights by way of suretyship or guaranty
                  and all rights in the nature of a lien or security interest
                  which Debtor now or later has regarding Collateral.
                  Immediately upon and after such notice, Debtor agrees to (a)
                  endorse to Bank and immediately deliver to Bank all payments
                  received on Collateral or from the sale, lease or other
                  disposition of any Collateral or arising from any other rights
                  or interests of Debtor in the Collateral, in the form received
                  by Debtor without commingling with any other funds, and (b)
                  immediately deliver to Bank all property in Debtor's
                  possession or later coming into Debtor's possession through
                  enforcement of Debtor's rights or interests in the Collateral.
                  Debtor irrevocably authorizes Bank or any Bank employee or
                  agent to endorse the name of Debtor upon any checks or other
                  items which are received in payment for any Collateral, and to
                  do any and all things necessary in order to reduce these items
                  to money. Bank shall have no duty as to the collection or
                  protection of Collateral or the proceeds of it, or as to the
                  preservation of any related rights, beyond the use of
                  reasonable care in the custody and preservation of Collateral
                  in the possession of Bank. Debtor agrees to take all steps
                  necessary to preserve rights against prior parties with
                  respect to the Collateral. Nothing in this Section 3.1 shall
                  be deemed a consent by Bank to any sale, lease or other
                  disposition of any Collateral.

         3.2      Debtor agrees that immediately upon Bank's request, following
                  the occurrence of an Event of Default, the Indebtedness shall
                  be on a "remittance basis" as follows: Debtor shall at its
                  sole expense establish and maintain (and Bank, at Bank's
                  option may establish and maintain at Debtor's expense): (a) an
                  United States Post Office lock box (the "Lock Box"), to which
                  Bank shall have exclusive access and control. Debtor expressly
                  authorizes Bank, from time to time, to remove contents from
                  the Lock Box, for disposition in accordance with this
                  Agreement. Debtor agrees to notify all account debtors and
                  other parties obligated to Debtor that all payments made to
                  Debtor (other than payments by electronic funds transfer)
                  shall be remitted, for the credit of Debtor, to the Lock Box,
                  and Debtor shall include a like statement on all invoices; and
                  (b) a non-interest bearing deposit account with Bank which
                  shall be titled as designated by Bank (the "Cash Collateral
                  Account") to which Bank shall have exclusive access and
                  control. Debtor agrees to notify all account debtors and other
                  parties obligated to Debtor that all payments made to Debtor
                  by electronic funds transfer shall be remitted to the Cash
                  Collateral Account, and Debtor, at Bank's request, shall
                  include a like statement on all invoices. Debtor shall execute
                  all documents and authorizations as required by Bank to
                  establish and maintain the Lock Box and the Cash Collateral
                  Account.

         3.3      All items or amounts which are remitted to the Lock Box, to
                  the Cash Collateral Account, or otherwise delivered by or for
                  the benefit of Debtor to Bank on account of partial or full
                  payment of, or with respect to, any Collateral shall, at
                  Bank's option, (a) be applied to the payment of the
                  Indebtedness, whether then due or not, in such order or at
                  such time of application as Bank may determine in its sole
                  discretion, or, (b) be deposited to the Cash Collateral
                  Account. Debtor agrees that Bank shall not be liable for any
                  loss or damage which Debtor may suffer as a result of Bank's
                  processing of items or its exercise of any other rights or
                  remedies under this Agreement, including without limitation
                  indirect, special or consequential damages, loss of revenues
                  or profits, or any claim, demand or action by any third party
                  arising out of or in connection with the processing of items
                  or the exercise of any other rights or remedies under this
                  Agreement. Debtor agrees to indemnify and hold Bank harmless
                  from and against all such third party claims, demands or
                  actions, and all related expenses or liabilities, including,
                  without limitation, attorneys' fees and INCLUDING CLAIMS,
                  DAMAGES, FINES, EXPENSES, LIABILITIES OR CAUSES OF ACTION OF
                  WHATEVER KIND RESULTING FROM BANK'S OWN NEGLIGENCE OR ARISING
                  OUT OF ANY CLAIM OR THEORY OF STRICT LIABILITY except to the
                  extent (but only to the extent) caused by Bank's gross
                  negligence or willful misconduct.

4.       DEFAULTS, ENFORCEMENT AND APPLICATION OF PROCEEDS.

         4.1      Upon the occurrence of any Event of Default (as defined in the
                  Credit Agreement of even date herewith between, Debtor and
                  Bank, as from time to time amended modified or restated),
                  Debtor shall be in default under this Agreement.

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

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

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

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

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


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                  At any sale pursuant to this Section 4.2, whether under the
                  power of sale, by virtue of judicial proceedings or otherwise,
                  it shall not be necessary for Bank or a public officer under
                  order of a court to have present physical or constructive
                  possession of Collateral to be sold. The recitals contained in
                  any conveyances and receipts made and given by Bank or the
                  public officer to any purchaser at any sale made pursuant to
                  this Agreement shall, to the extent permitted by applicable
                  law, conclusively establish the truth and accuracy of the
                  matters stated (including, without limit, as to the amounts of
                  the principal of and interest on the Indebtedness, the accrual
                  and nonpayment of it and advertisement and conduct of the
                  sale); and all prerequisites to the sale shall be presumed to
                  have been satisfied and performed. Upon any sale of any
                  Collateral, the receipt of the officer making the sale under
                  judicial proceedings or of Bank shall be sufficient discharge
                  to the purchaser for the purchase money, and the purchaser
                  shall not be obligated to see to the application of the money.
                  Any sale of any Collateral under this Agreement shall be a
                  perpetual bar against Debtor with respect to that Collateral.
                  At any sale or other disposition of the Collateral pursuant to
                  this Section 4.2, Bank disclaims all warranties which would
                  otherwise be given under the Uniform Commercial Code,
                  including without limit a disclaimer of any warranty relating
                  to title, possession, quiet enjoyment or the like, and Bank
                  may communicate these disclaimers to a purchaser at such
                  disposition. This disclaimer of warranties will not render the
                  sale commercially unreasonable.

         4.3      Debtor shall at the request of Bank, notify the account
                  debtors or obligors of Bank's security interest in the
                  Collateral and direct payment of it to Bank. Bank may, itself,
                  upon the occurrence of any Event of Default so notify and
                  direct any account debtor or obligor. At the request of Bank,
                  whether or not an Event of Default shall have occurred, Debtor
                  shall immediately take such actions as the Bank shall request
                  to establish exclusive control (as defined in the Uniform
                  Commercial Code) by Bank over any Collateral which is of such
                  a nature that perfection of a security interest may be
                  accomplished by control.

         4.4      The proceeds of any sale or other disposition of Collateral
                  authorized by this Agreement shall be applied by Bank in such
                  order as the Bank, in its discretion, deems appropriate
                  including, without limitation, the following order: first upon
                  all expenses authorized by the Uniform Commercial Code and all
                  reasonable attorneys' fees and legal expenses incurred by
                  Bank; the balance of the proceeds of the sale or other
                  disposition shall be applied in the payment of the
                  Indebtedness, first to interest, then to principal, then to
                  remaining Indebtedness and the surplus, if any, shall be paid
                  over to Debtor or to such other person(s) as may be entitled
                  to it under applicable law. Debtor shall remain liable for any
                  deficiency, which it shall pay to Bank immediately upon
                  demand. Debtor agrees that Secured Party shall be under no
                  obligation to accept any noncash proceeds in connection with
                  any sale or disposition of Collateral unless failure to do so
                  would be commercially unreasonable. If Secured Party agrees in
                  its sole discretion to accept noncash proceeds (unless the
                  failure to do so would be commercially unreasonable), Secured
                  Party may ascribe any commercially reasonable value to such
                  proceeds. Without limiting the foregoing, Secured Party may
                  apply any discount factor in determining the present value of
                  proceeds to be received in the future or may elect to apply
                  proceeds to be received in the future only as and when such
                  proceeds are actually received in cash by Secured Party.

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

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

         4.7      Debtor (a) irrevocably appoints Bank or any agent of Bank
                  (which appointment is coupled with an interest) the true and
                  lawful attorney of Debtor (with full power of substitution) in
                  the name, place and stead of, and at the expense of, Debtor
                  and (b) authorizes Bank or any agent of Bank, in its own name,
                  at Debtor's expense, to do any of the following, as Bank, in
                  its sole discretion, deems appropriate:

                  (i)      to demand, receive, sue for, and give receipts or
                           acquittances for any moneys due or to become due on
                           any Collateral (including, without limit, to draft
                           against Collateral) and to endorse any item
                           representing any payment on or proceeds of the
                           Collateral;

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

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

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

         4.9      The following shall be the basis for any finder of fact's
                  determination of the value of any Collateral which is the
                  subject matter of a disposition giving rise to a calculation
                  of any surplus or deficiency under Section 9.615 (f) of the
                  Uniform Commercial Code (a) the Collateral which is the
                  subject matter of the disposition shall be valued in an "as
                  is" condition as of the date of the disposition, without any
                  assumption or expectation that such Collateral will be
                  repaired or improved in any manner; (b) the valuation shall be
                  based upon an assumption that the transferee of such
                  Collateral desires a resale of the Collateral for cash
                  promptly (but no later than 30 days) following the
                  disposition; (c) all reasonable closing costs customarily
                  borne by the seller in commercial sales transactions relating
                  to property similar to such Collateral shall be deducted
                  including, without limitation, brokerage commissions, tax
                  prorations, attorneys' fees, whether inside or outside counsel
                  is used, and marketing costs; (d) the value of the Collateral
                  which is the subject matter of the disposition shall be
                  further discounted to account for any estimated holding costs
                  associated with maintaining such Collateral pending sale (to
                  the extent not accounted for in (c) above), and other
                  maintenance, operational and ownership expenses; and (e) any
                  expert opinion testimony given or considered in connection
                  with a determination of the value of such Collateral must be
                  given by persons having at least 5 years experience in
                  appraising property similar to the Collateral and who have
                  conducted and prepared a complete written appraisal of such
                  Collateral taking into consideration the factors set forth
                  above. The "value" of any such Collateral shall be a factor in
                  determining the amount of proceeds which would have been
                  realized in a disposition to a transferee other than a secured
                  party, a person related to a secured party or a secondary
                  obligor under Section 9-615(f) of the Uniform Commercial
                  Code.

5.       MISCELLANEOUS.

         5.1      Until Bank is advised in writing by Debtor to the contrary,
                  all notices, requests and demands required under this
                  Agreement or by law shall be given to, or made upon, Debtor at
                  the first address indicated in Section 5.15 below.

         5.2      Debtor will give Bank not less than 30 days (or such longer
                  period of time as is reasonable under the particular
                  circumstances) prior written notice of all contemplated
                  changes in Debtor's name, location, chief executive office,
                  principal place of business , and/or location of any
                  Collateral, but the giving of this notice shall not cure any
                  Event of Default caused by this change.

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

         5.4      Bank has the right to sell, assign, transfer, negotiate or
                  grant participations or any interest in, any or all of the
                  Indebtedness and any related obligations, including without
                  limit this Agreement. In connection with the above, but
                  without limiting its ability to make other disclosures to the
                  full extent allowable, Bank may disclose all documents and
                  information which Bank now or later has relating to Debtor,
                  the Indebtedness or this Agreement, however obtained. Debtor
                  further agrees that Bank may provide information relating to
                  this Agreement or relating to Debtor or the Indebtedness to
                  the Bank's parent, affiliates, subsidiaries, and service
                  providers.

         5.5      In addition to Bank's other rights, any indebtedness owing
                  from Bank to Debtor can be set off and applied by Bank on any
                  Indebtedness at any time(s) either before or after maturity or
                  demand without notice to anyone. Any such action shall not
                  constitute acceptance of collateral in discharge of any
                  portion of the Indebtedness.

         5.6      Debtor, to the extent not expressly prohibited by applicable
                  law, waives any right to require the Bank to: (a) proceed
                  against any person or property; (b) give notice of the terms,
                  time and place of any public or private sale of personal
                  property security held from Borrower or Debtor or any other
                  person, or otherwise comply with the provisions of Section
                  9.611 or 9.621 of the Uniform Commercial Code; or (c) pursue
                  any other remedy in the Bank's power. Debtor waives notice of
                  acceptance of this Agreement and presentment, demand, protest,
                  notice of protest, dishonor, notice of dishonor, notice of
                  default, notice of intent to accelerate or demand payment or
                  notice of acceleration of any Indebtedness, any and all other
                  notices to which the undersigned might otherwise be entitled,
                  and diligence in collecting any Indebtedness, and agree(s)
                  that the Bank may, once or any number of times, modify the
                  terms of any Indebtedness, compromise, extend, increase,
                  accelerate, renew or forbear to enforce payment of any or all
                  Indebtedness, or permit Borrower to incur additional
                  Indebtedness, all without notice to Debtor and without
                  affecting in any manner the unconditional obligation of Debtor
                  under this Agreement. Debtor unconditionally and irrevocably
                  waives each and every defense and setoff of any nature which,
                  under principles of guaranty or otherwise, would operate to
                  impair or diminish in any way the obligation of Debtor under
                  this Agreement, and acknowledges that such waiver is by this
                  reference incorporated into each security agreement,
                  collateral assignment, pledge and/or other document from
                  Debtor now or later securing the Indebtedness, and
                  acknowledges that as of the date of this Agreement no such
                  defense or setoff exists.

         5.7      In the event that applicable law shall obligate Bank to give
                  prior notice to Debtor of any action to be taken under this
                  Agreement, Debtor agrees that a written notice given to Debtor
                  at least ten days before the date of the act shall be
                  reasonable notice of the act and, specifically, reasonable
                  notification of the time and place of any public sale or of
                  the time after which any private sale, lease, or other
                  disposition is to

                                       3


<Page>


                  be made, unless a shorter notice period is reasonable under
                  the circumstances. A notice shall be deemed to be given under
                  this Agreement when delivered to Debtor or when placed in an
                  envelope addressed to Debtor and deposited, with postage
                  prepaid, in a post office or official depository under the
                  exclusive care and custody of the United States Postal Service
                  or delivered to an overnight courier. The mailing shall be by
                  overnight courier, certified, or first class mail.

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

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

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

         5.11     Except as otherwise expressly provided in this Agreement, all
                  terms in this Agreement which are defined in the Uniform
                  Commercial Code shall have the meanings assigned to them in
                  Article 9 (or, absent definition in Article 9, in any other
                  Article) of the Uniform Commercial Code, as those meanings may
                  be amended, revised or replaced from time to time. "Uniform
                  Commercial Code" means the Texas Business and Commerce Code as
                  amended, revised or replaced from time to time.
                  Notwithstanding the foregoing, the parties intend that the
                  terms used herein which are defined in the Uniform Commercial
                  Code have, at all times, the broadest and most inclusive
                  meanings possible. Accordingly, if the Uniform Commercial Code
                  shall in the future be amended or held by a court to define
                  any term used herein more broadly or inclusively than the
                  Uniform Commercial Code in effect on the date of this
                  Agreement, then such term, as used herein, shall be given such
                  broadened meaning. If the Uniform Commercial Code shall in the
                  future be amended or held by a court to define any term used
                  herein more narrowly, or less inclusively, than the Uniform
                  Commercial Code in effect on the date of this Agreement, such
                  amendment or holding shall be disregarded in defining terms
                  used in this Agreement.

         5.12     No single or partial exercise, or delay in the exercise, of
                  any right or power under this Agreement, shall preclude other
                  or further exercise of the rights and powers under this
                  Agreement. The unenforceability of any provision of this
                  Agreement shall not affect the enforceability of the remainder
                  of this Agreement. This Agreement constitutes the entire
                  agreement of Debtor and Bank with respect to the subject
                  matter of this Agreement. No amendment or modification of this
                  Agreement shall be effective unless the same shall be in
                  writing and signed by Debtor and an authorized officer of
                  Bank. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
                  ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF TEXAS,
                  WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

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

         5.14     Debtor represents and warrants that Debtor's exact name is the
                  name set forth in this Agreement. Debtor further represents
                  and warrants the following and agrees that Debtor is, and at
                  all times shall be, located in the following place :

                  Debtor is a registered organization which is organized under
                  the laws of one of the states comprising the United States
                  (e.g. corporation, limited partnership, registered limited
                  liability partnership or limited liability company), and
                  Debtor is located (as determined pursuant to the Uniform
                  Commercial Code) in the state under the laws of which it was
                  organized, which is (street address, state and county or
                  parish): Delaware.

                  If Collateral is located at other than the address specified
                  above, such Collateral is located and shall be maintained at

            Lantana Bldg. 1 and Lantana Bldg. 2,, 7000 W. Wm. Cannon, Suite 210
            -------------------------------------------------------------------
            STREET ADDRESS

             Austin               TX                     78735
            -------------------------------------------------------------------
            CITY                 STATE                  ZIP CODE         COUNTY

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

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

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

         5.17     Debtor agrees to reimburse the Bank upon demand for any and
                  all costs and expenses (including, without limit, court costs,
                  legal expenses and reasonable attorneys' fees, whether inside
                  or outside counsel is used, whether or not suit is instituted
                  and, if suit is instituted, whether at the trial court level,
                  appellate level, in a bankruptcy, probate or administrative
                  proceeding or otherwise) incurred in enforcing or attempting
                  to enforce this Agreement or in exercising or attempting to
                  exercise any right or remedy under this Agreement or incurred
                  in any other matter or proceeding relating to this Security
                  Agreement.

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

7.       THIS IS A TEXAS SPECIFIC PROVISION: THIS WRITTEN LOAN AGREEMENT (AS
         DEFINED BY SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE)
         REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
         CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
         AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
         BETWEEN THE PARTIES.

                                       4
<Page>



8.       SPECIAL PROVISIONS APPLICABLE TO THIS AGREEMENT. (*NONE, IF LEFT BLANK)

DEBTOR:                                          BANK:

        Silicon Laboratories Inc.                COMERICA BANK-TEXAS, a Texas
        ----------------------------             banking association
         Debtor Name Typed/Printed

By:   /s/ Navdeep Sooch
    -------------------------------              By:   /s/  Julie A. Smith
Signature of:   Navdeep Sooch                       ----------------------------
              ----------------------             Signature of: Julie A. Smith
Its:    Chief Executive Officer                                 ----------------
     -----------------------------               Its:  Vice President
         Title (If applicable)                       ---------------------------
                                                         Title (If applicable)
By:   /s/ John W. McGovern
    --------------------------------
Signature of:    John W. McGovern
              ----------------------
Its:    Chief Financial Officer
     -------------------------------
         Title (If applicable)





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