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                                                                   Exhibit 10.2

CREDIT AGREEMENT

THIS CREDIT AGREEMENT is made and delivered to be effective as of September
5, 2001, by and between SILICON LABORATORIES INC. (herein referred to with
all successors, assigns and/or personal representatives as the "Borrower"),
and COMERICA BANK-TEXAS (herein referred to with its successors and assigns
as the "Bank"). For and in consideration of the mutual promises herein
contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower and Bank agree as
follows:

SECTION 1. DEFINITIONS

1.1      DEFINED TERMS. The following terms, as used in this Agreement, shall
         have the meanings set forth below. The singular number shall be deemed
         to include the plural, the masculine gender shall include the feminine
         and neuter genders, and vice versa.

         "ADVANCE FORMULA AGREEMENT" shall mean the Advance Formula Agreement of
         even date herewith between Borrower and Bank, as from time to time
         amended, modified or restated.

         "AFFILIATE" shall mean, when used with respect to any Person, any other
         Person which, directly or indirectly, controls or is controlled by or
         is under common control with such Person. For purposes of this
         definition, "control" (including, with correlative meanings, the terms
         "controlled by" and "under common control with"), with respect to any
         Person, shall mean possession, directly or indirectly, of the power to
         direct or cause the direction of the management and policies of such
         Person, whether through the ownership of voting securities, by contract
         or otherwise.

         "AGREEMENT" shall mean this Credit Agreement, including all addenda,
         exhibits and schedules now or hereafter made a part hereof, as the same
         may be amended from time to time.

         "APPLICABLE INTEREST RATE" shall mean, with respect to the Indebtedness
         from time to time outstanding under any promissory note or other Loan
         Document evidencing the Indebtedness, the rate or rates provided in
         such note as the applicable interest rate.

         "COLLATERAL" shall mean all property, assets and rights in which a Lien
         or other encumbrance in favor of or for the benefit of Bank is or has
         been granted or arises or has arisen, or may hereafter be granted or
         arise, under or in connection with any Loan Document, or otherwise, to
         secure the payment or performance of any portion of the Indebtedness.
         "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 Borrower 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
         Borrower 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 Borrower 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 the Borrower's accounts receivable), information
         regarding the skills and compensation of other employees of the
         Borrower and (c) intellectual property of third parties in Borrower's
         possession.

         "CREDIT CARD EXPOSURE" shall mean the maximum amount that Borrower may
         at any time have outstanding under one or more corporate credit cards
         issued by Bank to Borrower, which amount shall initially be $300,000.

         "DEBT" shall mean, as of any applicable date of determination thereof,
         all liabilities of a Person that should be classified as liabilities in
         accordance with GAAP. In the case of Borrower, the term "Debt" shall
         include, without limitation, the Indebtedness.



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         "DEFAULT" shall mean, any condition or event which, with the giving of
         notice or the passage of time, or both, would constitute an Event of
         Default.

         "ENVIRONMENTAL LAW(S)" shall mean all laws, codes, ordinances, rules,
         regulations, orders, decrees and directives issued by any federal,
         state, local, foreign or other governmental or quasi governmental
         authority or body (or any agency, instrumentality or political
         subdivision thereof) pertaining to Hazardous Materials or otherwise
         intended to regulate or improve health, safety or the environment,
         including, without limitation, any hazardous materials or wastes, toxic
         substances, flammable, explosive or radioactive materials, asbestos,
         and/or other similar materials; any so-called "superfund" or
         "superlien" law, pertaining to Hazardous Materials on or about any of
         the Collateral, or any other property at any time owned, leased or
         otherwise used by any Loan Party, or any portion thereof, including,
         without limitation, those relating to soil, surface, subsurface ground
         water conditions and the condition of the ambient air; and any other
         federal, state, foreign or local statute, law, ordinance, code, rule,
         regulation, order or decree regulating, relating to, or imposing
         liability or standards of conduct concerning, any hazardous, toxic,
         radioactive, flammable or dangerous waste, substance or material, as
         now or at anytime hereafter in effect.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
         as amended, or any successor act or code.

         "EVENT OF DEFAULT" shall mean any of those conditions or events listed
         in SECTION 6.1 of this Agreement.

         "FACILITY USAGE" shall mean, at the time in question, the aggregate
         amount of outstanding Revolving Loans, existing Letter of Credit
         Liabilities and Credit Card Exposure at such time.

         "GAAP" shall mean generally accepted accounting principles consistently
         applied.

         "GOVERNMENTAL AUTHORITY" shall mean the United States, each state, each
         county, each city, and each other political subdivision in which all or
         any portion of the Collateral is located, and each other political
         subdivision, agency, or instrumentality exercising jurisdiction over
         Bank, any Loan Party, any of the Indebtedness or any Collateral.

         "GOVERNMENTAL REQUIREMENTS" shall mean all laws, ordinances, rules, and
         regulations of any Governmental Authority applicable to any Loan Party,
         any of the Indebtedness or any Collateral.

         "GUARANTOR(S)" shall mean, as the context dictates, any Person(s)
         (other than the Borrower) who shall, at any time, guarantee or
         otherwise be or become obligated for the repayment of all or any part
         of the Indebtedness.

         "HAZARDOUS MATERIAL" shall mean and include any hazardous, toxic or
         dangerous waste, substance or material defined as such in, or for
         purposes of, any Environmental Law(s).

         "INDEBTEDNESS" shall mean all obligations and liabilities of any Loan
         Party to Bank under any Loan Document, together with all other
         indebtedness, obligations and liabilities whatsoever of Borrower to
         Bank, whether matured or unmatured, liquidated or unliquidated, direct
         or indirect, absolute or contingent, joint or several, due or to become
         due, now existing or hereafter arising, voluntary or involuntary, known
         or unknown, or originally payable to Bank or to a third party and
         subsequently acquired by Bank including, without limitation, any: late
         charges; loan fees or charges; overdraft indebtedness; costs incurred
         by Bank in establishing, determining, continuing or defending the
         validity or priority of any Lien or in pursuing any of its rights or
         remedies under any Loan Document or in connection with any proceeding
         involving Bank as a result of any financial accommodation to Borrower;
         debts, obligations and liabilities for which Borrower would otherwise
         be liable to the Bank were it not for the invalidity or enforceability
         of them by reason of any bankruptcy, insolvency or other law or for any
         other reason; and reasonable costs and expenses of attorneys and
         paralegals, whether any suit or other action is instituted, and to
         court costs if suit or action is instituted, and whether any such fees,
         costs or expenses are incurred at the trial court level or on appeal,
         in bankruptcy, in administrative proceedings, in probate proceedings or
         otherwise; provided, however, that the term Indebtedness shall not
         include any consumer loan to the extent treatment of such loan as part
         of the Indebtedness would violate any Governmental Requirement.

         "LETTER OF CREDIT" shall mean a letter of credit issued by the Bank for
         the account of and/or upon the application of the Borrower in
         accordance with this Agreement, as such Letter of Credit may be
         amended, supplemented, extended or confirmed from time to time.


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         "LETTER OF CREDIT LIABILITIES" shall mean, at any time and in respect
         of all Letters of Credit, the sum of (a) the aggregate amount available
         to be drawn under all such Letters of Credit plus (b) the aggregate
         unpaid amount of all Reimbursement Obligations then due and payable in
         respect of previous drawings under such Letters of Credit.

         "LIEN" shall mean any valid and enforceable interest in any property,
         whether real, personal or mixed, securing an indebtedness, obligation
         or liability owed to or claimed by any Person other than the owner of
         such property, whether such indebtedness is based on the common law or
         any statute or contract and including, but not limited to, a security
         interest, pledge, mortgage, assignment, conditional sale, trust
         receipt, lease, consignment or bailment for security purposes.

         "LOAN DOCUMENTS" shall mean collectively, this Agreement, any
         promissory notes evidencing Indebtedness, any approved subordination
         agreement, any reimbursement agreement or other documentation executed
         in connection with any Letter of Credit, and any other documents,
         instruments or agreements evidencing, governing, securing, guaranteeing
         or otherwise relating to or executed pursuant to or in connection with
         any of the Indebtedness or any Loan Document (whether executed and
         delivered prior to, concurrently with or subsequent to this Agreement),
         as such documents may have been or may hereafter be amended from time
         to time.

         "LOAN PARTY" shall mean Borrower, each of its Subsidiaries (whether or
         not a party to any Loan Document) and each other Person who or which
         shall be liable for the payment or performance of all or any portion of
         the Indebtedness or who or which shall own any property that is subject
         to (or purported to be subject to) a Lien which secures all or any
         portion of the Indebtedness.

         "MATERIAL ADVERSE EFFECT" shall mean any act, event, condition or
         circumstance which would likely materially and adversely affect the
         business, operations, condition (financial or otherwise), performance
         or assets of any Loan Party, the ability of any Loan Party to perform
         its obligations under any Loan Document to which it is a party or by
         which it is bound or the enforceability of any Loan Document.

         "MAXIMUM LEGAL RATE" shall mean the maximum rate of nonusurious
         interest per annum permitted to be paid by Borrower or, if applicable,
         another Loan Party or received by Bank with respect to the applicable
         portion of the Indebtedness from time to time under applicable state or
         federal law as now or as may be hereafter in effect, including without
         limitation, that rate based upon the "weekly ceiling rate" (as defined
         in Chapter 303 of the Texas Finance Code).

         "PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
         Person succeeding to the present powers and functions of the Pension
         Benefit Guaranty Corporation.

         "PENSION PLAN(S)" shall mean any and all employee benefit pension plans
         of Borrower and/or any of its Subsidiaries in effect from time to time,
         as such term is defined in ERISA.

         "PERMITTED ENCUMBRANCES" shall mean: (a) Liens in favor of the Bank;
         (b) Liens for taxes, assessments or other governmental charges which
         are not yet due and payable, incurred in the ordinary course of
         business and for which no interest, late charge or penalty is attaching
         or which are being contested in good faith by appropriate proceedings
         and, if requested by Bank, bonded in an amount and manner satisfactory
         to Bank; (c) Liens, not delinquent, arising in the ordinary course of
         business and created by statute in connection with worker's
         compensation, unemployment insurance, social security and similar
         statutory obligations; (d) Liens of mechanics, materialmen, carriers,
         warehousemen or other like statutory or common law Liens securing
         obligations incurred in good faith in the ordinary course of business
         without violation of any Loan Document that are not yet due and
         payable; and (e) Liens existing as of the date hereof identified as
         follows: Comdisco, Third Coast Capital, Finova and certain other
         equipment rental agreements, to the extent each such Lien is limited to
         the equipment subject to such rental agreement and the amount secured
         by each such Agreement is less than $100,000 individually and the
         aggregate amount of such Debt does not exceed $500,000.

         "PERSON" or "PERSON" shall mean any individual, corporation,
         partnership, joint venture, limited liability company, association,
         trust, unincorporated association, joint stock company, government,
         municipality, political subdivision or agency, or other entity.


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         "REIMBURSEMENT OBLIGATIONS" shall mean, at any time and in respect of
         all Letters of Credit, the aggregate obligations of the Borrower, then
         outstanding or which may thereafter arise, to reimburse the Bank for
         any amount paid or incurred by the Bank in respect of any and all
         drawings under such Letters of Credit, together with any and all other
         Indebtedness, obligations and liabilities of any Loan Party to Bank
         related to such Letters of Credit arising under this Agreement, any
         Letter of Credit application or any other Loan Document.

         "REVOLVING CREDIT MATURITY DATE" shall mean September 5, 2003, or such
         earlier date on which the entire unpaid principal amount of all
         Revolving Loans becomes due and payable whether by the lapse of time,
         demand for payment, acceleration or otherwise; provided, however, if
         any such date is not a business day, then the Revolving Credit Maturity
         Date shall be the next succeeding business day.

         "REVOLVING CREDIT MAXIMUM AMOUNT" shall mean the lesser of (a)
         $5,000,000, or (b) the maximum amount permitted by the Advance Formula
         Agreement.

         "REVOLVING CREDIT NOTE" shall mean the Master Revolving Note dated of
         even date herewith in the maximum original principal amount of
         $5,000,000 made by Borrower payable to the order of the Bank, as the
         same may be renewed, extended, modified, increased or restated from
         time to time.

         "REVOLVING LOAN" shall mean an advance made, or to be made, under the
         revolving credit facility to or for the credit of Borrower by the Bank
         pursuant to this Agreement.

         "SUBORDINATED DEBT" shall mean any Debt of Borrower (other than the
         Indebtedness) which has been subordinated to the Indebtedness pursuant
         to a subordination agreement in form and content satisfactory to the
         Bank.

         "SUBSIDIARY" shall mean as to any particular parent entity, any
         corporation, partnership, limited liability company or other entity
         (whether now existing or hereafter organized or acquired) in which more
         than fifty percent (50%) of the outstanding equity ownership interests
         having voting rights as of any applicable date of determination, shall
         be owned directly, or indirectly through one or more Subsidiaries, by
         such parent entity. As of the date of this Agreement, Borrower's only
         Subsidiaries are: Silicon Labs Isolation, Inc. and Silicon Laboratories
         UK Limited. Borrower has notified Bank that it intends to establish a
         Subsidiary in Japan.

         "UCC" shall mean the Uniform Commercial Code as adopted and in force in
         the State of Texas, as amended.

1.2      ACCOUNTING TERMS. All accounting terms not specifically defined in this
         Agreement shall be determined and construed in accordance with GAAP.

SECTION 2 . FUNDING LOANS, PAYMENTS, RECOVERIES AND COLLECTIONS

2.1      FUNDING LOANS. Subject to the terms, conditions and procedures of this
         Agreement and each other Loan Document and to the satisfaction of all
         conditions precedent to the making and funding of any loan as set forth
         in any Loan Document, Bank shall make the proceeds of any such loan
         available to Borrower on the disbursement date agreed upon by Bank and
         Borrower by depositing such proceeds into an account maintained by
         Borrower with Bank or as otherwise agreed to in writing by Borrower and
         Bank.

2.2      REVOLVING LOANS. Subject to the terms and conditions of the Loan
         Documents and to the satisfaction of all conditions precedent to the
         making and funding of any loan as set forth in any Loan Document, the
         Bank agrees to make Revolving Loans to Borrower at any time and from
         time to time from the effective date hereof until (but not including)
         the Revolving Credit Maturity Date. The proceeds of Revolving Loans
         shall be used solely for working capital needs and other general
         corporate purposes of Borrower.

         Except as hereinafter provided, Borrower may request a Revolving Loan
         by submitting to Bank a request for advance by an authorized officer or
         other representative of Borrower, subject to the following: (a) each
         such request for advance shall include, without limitation, the
         proposed amount of such revolving loan and the proposed disbursement
         date, which date must be a business day; (b) each such request for
         advance shall be communicated to Bank by 2:00 p.m. (Dallas, Texas time)
         on the proposed disbursement date; (c) a request for advance, once
         communicated to Bank, shall not be revocable by Borrower; and (d) each
         request for advance, once communicated to Bank, shall constitute a
         representation, warranty and certification by Borrower as of the date
         thereof that:


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         (i) both before and after the making of such Revolving Loan, the
         obligations set forth in the Loan Documents are and shall be valid,
         binding and enforceable obligations of each Loan Party, as applicable;
         (ii) all terms and conditions precedent to the making of such Revolving
         Loan have been satisfied, and shall remain satisfied through the date
         of such Revolving Loan; (iii) the making of such Revolving Loan will
         not cause the Facility Usage to exceed the Revolving Credit Maximum
         Amount; (iv) no Default or Event of Default shall have occurred or be
         in existence, and none will exist or arise upon the making of such
         Revolving Loan; (v) the representations and warranties contained in the
         Loan Documents are true and correct in all material respects and shall
         be true and correct in all material respects as of the making of such
         Revolving Loan; and (vi) the request for advance will not violate the
         terms or conditions of any contract, indenture, agreement or other
         borrowing of any Loan Party.

         Bank may elect (but without any obligation to do so) to make a
         Revolving Loan upon the telephonic or facsimile request of Borrower,
         provided that Borrower has first executed and delivered to Bank a
         telephone notice authorization in form and content satisfactory to
         Bank. If any such Revolving Loan based upon a telephonic or facsimile
         request is made by Borrower, Bank may require Borrower to confirm said
         telephonic or facsimile request in writing by delivering to Bank, on or
         before 11:00 a.m. (Dallas, Texas time) on the next business day
         following the disbursement date of such Revolving Loan, a duly executed
         written request for advance, and all other provisions of this SECTION
         2.2 shall be applicable with respect to such Revolving Loan. In
         addition, Borrower may authorize the Bank to automatically make
         revolving loans pursuant to such other written agreements as may be
         entered into by Bank and Borrower.

         Notwithstanding anything contained in this Agreement to the contrary,
         the Facility Usage shall not at any time exceed the Revolving Credit
         Maximum Amount. If said limitations are exceeded at anytime, Borrower
         shall immediately, without demand by Bank, pay to Bank an amount not
         less than such excess, or, if Bank, in its sole discretion, shall so
         agree, Borrower shall provide Bank cash collateral in an amount not
         less than such excess, and Borrower hereby pledges and grants to Bank a
         security interest in such cash collateral so provided to Bank. Unless
         otherwise expressly provided in a Loan Document, all sums payable by
         Borrower to Bank under or pursuant to any Loan Document, whether
         principal, interest, or otherwise, shall be paid, when due, directly to
         Bank at any office of Bank located in the State of Texas in immediately
         available United States funds, and without setoff, deduction or
         counterclaim. Bank may, in its discretion, charge any and all deposit
         or other accounts (including, without limitation, any account evidenced
         by a certificate of deposit or time deposit) of Borrower maintained
         with Bank for all or any part of any Indebtedness then due and payable;
         provided, however, that such authorization shall not affect Borrower's
         obligations to pay all Indebtedness, when due, whether or not any such
         account balances maintained by Borrower with Bank are insufficient to
         pay any amounts then due.

         Borrower shall pay to Bank an annual facility fee in an amount equal to
         the product of (a) one quarter of one percent (0.25%)per annum
         multiplied by (b) the stated principal amount of the Revolving Credit
         Note. Such fee shall be computed and shall be payable on the date of
         this Agreement and on each annual anniversary date hereafter.

         The provisions of Chapter 346 of the Texas Finance Code are
         specifically declared by the parties not to be applicable to any of the
         Loan Documents or the transactions contemplated thereby.

2.3      LETTERS OF CREDIT. Subject to the terms and conditions of this
         Agreement and the other Loan Documents, the Bank shall, upon request
         from Borrower from time to time prior to the Revolving Credit Maturity
         Date, issue one or more Letters of Credit. The Letter of Credit
         Liabilities shall not exceed $2,000,000; and the Facility Usage shall
         not exceed the Revolving Credit Maximum Amount. No Letter of Credit
         shall have a stated expiration date later than the Revolving Credit
         Maturity Date, and no Letter of Credit shall provide that it will
         automatically renew upon its stated expiration date.

         Borrower shall give the Bank written notice requesting each issuance
         of a Letter of Credit hereunder not less than two business days
         prior to the requested issuance date and shall furnish such
         additional information regarding such transaction as Bank may
         request. The issuance by Bank of each Letter of Credit shall, in
         addition to the conditions precedent set forth elsewhere in this
         Agreement, be subject to the conditions precedent that (i) such Letter
         of Credit shall be in form and substance satisfactory to
         Bank, (ii) Borrower shall have executed and delivered such
         applications and other instruments and agreements relating to such
         Letter of Credit as Bank shall have requested and are not
         inconsistent with the terms of this Agreement (iii) each of the
         statements in SECTION 2.2 (d) above are true as of the date of
         issuance of such Letter of Credit with respect to issuance of such
         Letter of Credit (as opposed to making a Revolving Loan), and the
         submission of an application for issuance of a Letter of Credit
         shall constitute a representation, warranty and certification of
         Borrower to that effect, and (iv) no Letter of Credit may be issued
         if after giving effect thereto, the sum of the aggregate outstanding
         principal balance of all Revolving Loans plus the Letter of Credit
         Liabilities would exceed the Revolving Credit Maximum Amount.

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         With respect to the issuance or renewal of each Letter of Credit,
         Borrower shall pay to Bank such letter of credit fees and other
         expenses customarily charged by Bank in connection with the issuance
         or renewals of letters of credit.

         Borrower shall be irrevocably and unconditionally obligated forthwith
         to reimburse Bank for any amount paid by Bank upon any drawing under
         any Letter of Credit, without presentment, demand, protest or other
         formalities of any kind, all of which are hereby waived. Unless
         Borrower shall elect to otherwise satisfy such Reimbursement
         Obligation, such reimbursement shall, subject to satisfaction of any
         conditions provided herein for the making of Revolving Loans and to the
         Revolving Credit Maximum Amount, automatically be made by advancing to
         Borrower a Revolving Loan in the amount of such Reimbursement
         Obligation.

         In consideration of Bank's issuance of any Letter of Credit, Borrower
         shall pay to Bank a letter of credit issuance fee equal to one percent
         (1%) per annum. Such fee shall be calculated based on the term and face
         amount of such Letter of Credit and the above rate and will be payable
         quarterly in arrears.

2.4      MAXIMUM INTEREST RATE. At no time shall any Applicable Interest Rate or
         default rate in respect of any Indebtedness hereunder, exceed the
         Maximum Legal Rate. In the event that any interest is charged or
         otherwise received by Bank in excess of the Maximum Legal Rate,
         Borrower hereby acknowledges and agrees that any such excess interest
         shall be the result of an accidental and bona fide error, and any such
         excess shall be deemed to have been payment of principal, and not of
         interest, and shall be applied, first, to reduce the principal
         Indebtedness then outstanding, second, any remaining excess, if any,
         shall be applied to reduce any other Indebtedness, and third, any
         remaining excess, if any, shall be returned to Borrower.
         Notwithstanding the foregoing or anything to the contrary contained in
         this Agreement or any other Loan Document, but subject to all
         limitations contained in this Section, if at anytime any Applicable
         Interest Rate or default rate or other rate of interest applicable to
         any portion of the Indebtedness is computed on the basis of the Maximum
         Legal Rate, any subsequent reduction in the Applicable Interest Rate,
         default rate or such other rate of interest shall not reduce such
         interest rate thereafter payable below the Maximum Legal Rate until the
         aggregate amount of interest accrued equals the total amount of
         interest that would have accrued if interest had, at all times, been
         computed solely on the basis of the Applicable Interest Rate, default
         rate or such other interest rate. This Section shall control all
         agreements between the Borrower and the Bank.

2.5      RECEIPT OF PAYMENTS BY BANK. Any payment by Borrower of any of the
         Indebtedness made by mail will be deemed tendered and received by Bank
         only upon actual receipt thereof by Bank at the address designated for
         such payment, whether or not Bank has authorized payment by mail or in
         any other manner, and such payment shall not be deemed to have been
         made in a timely manner unless actually received by Bank on or before
         the date due for such payment, time being of the essence. Borrower
         expressly assumes all risks of loss or liability resulting from
         non-delivery or delay of delivery of any item of payment transmitted by
         mail or in any other manner. Acceptance by Bank of any payment in an
         amount less than the amount then due shall be deemed an acceptance on
         account only, and any failure to pay the entire amount then due shall
         constitute and continue to be an Event of Default. Prior to the
         occurrence of any Default, Borrower shall have the right to direct the
         application of any and all payments made to Bank hereunder to the
         Indebtedness evidenced by the respective notes evidencing the
         Indebtedness. Borrower waives the right to direct the application of
         any and all payments received by Bank hereunder at any time or times
         after the occurrence and during the continuance of any Default.
         Borrower further agrees that after the occurrence and during the
         continuance of any Default, or prior to the occurrence of any Default
         if Borrower has failed to direct such application, Bank shall have the
         continuing exclusive right to apply and to reapply any and all payments
         received by Bank at any time or times, whether as voluntary payments,
         proceeds from any Collateral, offsets, or otherwise, against the
         Indebtedness in such order and in such manner as Bank may, in its sole
         discretion, deem advisable, notwithstanding any entry by Bank upon any
         of its books and records. Borrower hereby expressly agrees that, to the
         extent that Bank receives any payment or benefit of or otherwise upon
         any of the Indebtedness, and such payment or benefit, or any part
         thereof, is subsequently invalidated, declared to be fraudulent or
         preferential, set aside, or required to be repaid to a trustee,
         receiver, or any other Person under any bankruptcy act, state or
         federal law, common law, equitable cause or otherwise, then to the
         extent of such payment or benefit, the Indebtedness, or part thereof,
         intended to be satisfied shall be revived and continued in full force
         and effect as if such payment or benefit had not been made or received
         by Bank, and, further, any such repayment by Bank shall be added to and
         be deemed to be additional Indebtedness.


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2.6      CONDITIONS PRECEDENT TO LOANS AND LETTERS OF CREDIT. The obligation of
         the Bank to issue any Letter of Credit, if applicable, or to make any
         loan under or pursuant to this Agreement shall be subject to the
         following conditions precedent:

         a.       Borrower shall have executed and delivered to Bank, or caused
                  to have been executed and delivered to Bank, all such
                  instruments, agreements, certificates, opinions, financial
                  statements, appraisals, evidence of title, evidence of
                  insurance, environmental audits, and other information and
                  other documents as the Bank shall require, and all of the
                  foregoing shall be in form and content acceptable to Bank and
                  all instruments and agreements shall be in full force and
                  effect and binding and enforceable obligations of Borrower
                  and, to the extent that it is a party thereto or otherwise
                  bound thereby, of each other Person who may be a party thereto
                  or bound thereby including without limitation: (i) evidence of
                  existence, good standing, qualification to conduct business
                  and authority for each Loan Party and signatory on behalf of
                  each Loan Party; (ii) all notes, guaranties, security
                  agreements, mortgages, deeds of trust, pledge agreements,
                  assignments, financing statements and other documents
                  requested by Bank to evidence the Indebtedness or to create,
                  protect or perfect Liens upon the Collateral required by Bank
                  as security for the Indebtedness and to accord Bank a
                  perfected security position in the Collateral, subject only to
                  Permitted Encumbrances;; (iii) a guaranty agreement from each
                  Guarantor required by Bank; (iv) such other documents or
                  agreements of security, assurances of Loan Document validity,
                  legality and enforceability, and appropriate assurances of
                  validity, perfection and priority of Lien as Bank may request,
                  and Bank shall have received proof that appropriate security
                  agreements, financing statements, mortgages, deeds of trust,
                  collateral and other documents covering the Collateral shall
                  have been executed and delivered by the appropriate Persons
                  and recorded or filed in such jurisdictions and such other
                  steps shall have been taken as necessary to perfect and
                  protect, subject only to Permitted Encumbrances, the Liens
                  granted thereby.

         b.       All actions, proceedings, instruments and documents required
                  to carry out the borrowings and transactions contemplated by
                  this Agreement or any other Loan Document or incidental
                  thereto, and all other related legal matters, shall have been
                  satisfactory to and approved by Bank.

         c.       Each Loan Party shall have performed and complied with all
                  agreements and conditions contained in the Loan Documents
                  applicable to it and which are then in effect.

         d.       Each of the representations and warranties of each Loan Party
                  under any Loan Document shall be true and correct in all
                  material respects as if made on each loan disbursement date.

         e.       No Default or Event of Default shall have occurred and be
                  continuing; there shall have been no material adverse change
                  in the condition (financial or otherwise), properties,
                  business, or operations of any Loan Party since the date of
                  the financial statements most recently delivered to Bank prior
                  to the date of this Agreement; and no provision of law, any
                  order of any Governmental Authority, or any regulation, rule
                  or interpretation thereof, shall have had any Material Adverse
                  Effect on the validity or enforceability of any Loan Document.

SECTION 3. REPRESENTATIONS AND WARRANTIES

         Borrower represents and warrants, and such representations and
         warranties shall be deemed to be continuing representations and
         warranties during the entire life of this Agreement, and so long as
         Bank shall have any commitment or obligation to make any loans or issue
         any Letters of Credit, if applicable and so long as any Indebtedness
         remains unpaid and outstanding under any Loan Document, as follows:

3.1      AUTHORITY. Each Loan Party and, if applicable, each of its partners and
         members who is not a natural Person is duly organized, validly existing
         and in good standing under the laws of the jurisdiction of its
         organization and is duly qualified and authorized to do business in
         each other jurisdiction in which the character of its assets or the
         nature of its business makes such qualification necessary.

3.2      DUE AUTHORIZATION. Each Loan Party has all requisite power and
         authority to execute, deliver and perform its obligations under each
         Loan Document to which it is a party or is otherwise bound, all of
         which have been duly authorized by all necessary action, and are not in
         contravention of law or the terms of any Loan Party's organizational or
         other governing documents.


                                       7
<Page>

3.3      TITLE TO PROPERTY. Each Loan Party has good title to all property and
         assets purported to be owned by it, including those assets identified
         on the financial statements most recently delivered to Bank.

3.4      ENCUMBRANCES. There are no security interests or other Liens or
         encumbrances on, and no financing statements on file with respect to,
         any of the property or assets of any Loan Party, except for Permitted
         Encumbrances.

3.5      SUBSIDIARIES. Borrower has no Subsidiaries except those specifically
         disclosed in the Defined Terms.

3.6      TAXES. Each Loan Party has filed, on or before their respective due
         dates, all federal, state, local and foreign tax returns which are
         required to be filed, or has obtained extensions for filing such tax
         returns, and is not delinquent in filing such returns in accordance
         with such extensions, and has paid all taxes which have become due
         pursuant to those returns or pursuant to any assessments received by
         any such party, as the case may be, to the extent such taxes have
         become due, except to the extent such tax payments are being actively
         and diligently contested in good faith by appropriate proceedings, and
         if requested by Bank, have been bonded or reserved in an amount and
         manner satisfactory to Bank.

3.7      NO-DEFAULTS. There exists no default (or event which, with the giving
         of notice or passage of time, or both, would result in a default) under
         the provisions of any instrument or agreement evidencing, governing,
         securing or otherwise relating to any Debt of any Loan Party or
         pertaining to any of the Permitted Encumbrances.

3.8      ENFORCEABILITY OF AGREEMENT AND LOAN DOCUMENTS. Each Loan Document has
         been duly executed and delivered by duly authorized officer(s) or other
         representative(s) of each Loan Party and constitutes the valid and
         binding obligation of each Loan Party, enforceable in accordance with
         its terms, except to the extent that enforcement thereof may be limited
         by applicable bankruptcy, reorganization, insolvency, moratorium or
         similar laws affecting the enforcement of creditors' rights generally
         at the time in effect.

3.9      NON-CONTRAVENTION. The execution, delivery and performance by each Loan
         Party of the Loan Documents to which such Loan Party is a party or
         otherwise bound, are not in contravention of the terms of any
         indenture, agreement or undertaking to which any such Loan Party is a
         party or by which it is bound, except to the extent that such terms
         have been waived or that failure to comply with any such terms would
         not have a Material Adverse Effect.

3.10     ACTIONS, SUITS, LITIGATION OR PROCEEDINGS. There are no actions, suits,
         litigation or proceedings, at law or in equity, and no proceedings
         before any arbitrator or by or before any Governmental Authority,
         pending, or, to the best knowledge of Borrower, threatened against or
         affecting any Loan Party, which, if adversely determined, could
         materially impair the right of any Loan Party to carry on its business
         substantially as now conducted or could have a Material Adverse Effect.
         No Loan Party is under investigation by, or is operating under any
         restrictions imposed by, any Governmental Authority.

3.11     COMPLIANCE WITH LAWS. Each Loan Party has complied with all
         Governmental Requirements, including, without limitation, Environmental
         Laws, to the extent that failure to so comply could have a Material
         Adverse Effect.

3.12     CONSENTS, APPROVALS AND FILINGS, ETC. Except as have been previously
         obtained or as otherwise expressly provided in this Agreement, no
         authorization, consent, approval, license, qualification or formal
         exemption from, or any filing, declaration or registration with, any
         Governmental Authority and no material authorization, consent or
         approval from any other Person, is required in connection with the
         execution, delivery and performance by any Loan Party of any Loan
         Document to which it is a party. All such authorizations, consents,
         approvals, licenses, qualifications, exemptions, filings, declarations
         and registrations which have previously been obtained or made, as the
         case may be, are in full force and effect and are not the subject of
         any attack, or to the knowledge of Borrower, any threatened attack, in
         any material respect, by appeal, direct proceeding or otherwise.

3.13     ENVIRONMENTAL REPRESENTATIONS. No Loan Party has used Hazardous
         Materials on, in, under or otherwise affecting any real or personal
         property now or at any time owned, occupied or operated by such Person
         or upon which such Person has a place of business which, in any manner,
         violates any Environmental Law, to the extent any such violation could
         result in a Material Adverse Effect, and to the best of Borrower's
         knowledge, no prior or current owner, occupant or operator of any of
         such property does or has used any Hazardous Materials on or affecting
         such property in any manner which violates any Environmental Law to the
         extent that any such violation could result in a Material Adverse
         Effect. No Loan Party has received any notice of any violation of any
         Environmental Law, and to the best knowledge of the Borrower, there
         have been no actions commenced or threatened by any Person against
         any such property or against any Loan Party for non-compliance with any
         Environmental Law which could result in a Material Adverse Effect.


                                       8
<Page>

3.14     ACCURACY OF INFORMATION. All financial statements previously furnished
         to Bank have been prepared in accordance with GAAP and fairly present
         the financial condition of Borrower and, as applicable, the
         consolidated financial condition of Borrower and such other Person(s)
         as such financial statements purport to present, and the results of
         their respective operations as of the dates and for the periods covered
         thereby; and since the date(s) of said financial statements, there has
         been no material adverse change in the financial condition of Borrower
         or any other Person covered by such financial statements. Each Loan
         Party is solvent, able to pay its debts as they mature, has capital
         sufficient to carry on its business and has assets the fair market
         value of which exceed its liabilities, and no Loan Party will be
         rendered insolvent, under-capitalized or unable to pay debts generally
         as they become due by the execution or performance of any Loan Document
         to which it is a party or by which it is otherwise bound.

SECTION 4. AFFIRMATIVE COVENANTS

         Borrower covenants and agrees that, until all instruments and
         agreements evidencing each and every loan, Letter of Credit and other
         financial accommodation by the Bank to the Borrower or any Loan Party
         are fully discharged and terminated, and thereafter, so long as any
         Indebtedness remains outstanding, it will, and, as applicable, it will
         cause each Loan Party within its control or under common control to:

4.1      PRESERVATION OF EXISTENCE, ETC. Preserve and maintain its existence and
         preserve and maintain such of its rights, licenses, and privileges as
         are material to the business and operations conducted by it; qualify
         and remain qualified to do business in each jurisdiction in which such
         qualification is material to its business and operations or ownership
         of its properties, continue to conduct and operate its business
         substantially as conducted and operated during the present and
         preceding calendar year; at all times maintain, preserve and protect
         all of its franchises and trade names and preserve all the remainder of
         its property and keep the same in good repair, working order and
         condition; and from time to time make, or cause to be made, all needed
         and proper repairs, renewals, replacements, betterments and
         improvements thereto.

4.2      KEEPING OF BOOKS; AUDITS OF COLLATERAL; FEES. Keep proper books of
         record and account in which full and correct entries shall be made of
         all of its financial transactions and its assets and businesses so as
         to permit the presentation of financial statements prepared in
         accordance with GAAP; and permit Bank, or its representatives, at
         reasonable times and intervals, at Borrower's cost and expense, to
         examine its books and records and to discuss its financial matters with
         its officers, employees and independent certified public accountants;
         and permit Bank from time to time to audit Borrower's accounts,
         inventory, or other Collateral, provided that such audits will be
         conducted upon reasonable notice. Borrower agrees to reimburse Bank, on
         demand, for customary and reasonable fees and costs incurred by Bank
         for such audits, and for each appraisal of Collateral and financial
         analysis and examination of Borrower performed from time to time by its
         agents.

4.3      REPORTING REQUIREMENTS. Borrower maintains a policy regarding insider
         trading (Statement of Company Policy--Regarding Insider Trading) and
         Lender acknowledges receipt of such policy. Furnish to Bank, or cause
         to be furnished to Bank, the following:

         a.       as soon as possible, and in any event within three (3)
                  calendar days after becoming aware of the occurrence or
                  existence of each Default or Event of Default hereunder or any
                  material adverse change in the financial condition of any Loan
                  Party, a written statement of the chief financial officer of
                  Borrower (or in his or her absence, a responsible senior
                  officer of Borrower), setting forth details of such Default,
                  Event of Default or change, and the action which Borrower has
                  taken, or has caused to be taken, or proposes to take, or to
                  cause to be taken, with respect thereto;

         b.       as soon as available, and in any event within ninety (90) days
                  after and as of the end of each fiscal year of Borrower,
                  audited financial statements of Borrower and such other of the
                  Loan Parties as may be required by the Bank, consolidated, as
                  applicable, including a balance sheet, income statement,
                  surplus reconciliation statement and statement of cash flows,
                  for and as of such fiscal year then ending and including such
                  other comments and financial details as are usually included
                  in similar reports. Such financial statements shall be
                  prepared in accordance with GAAP by independent certified
                  public accountants of recognized standing selected by Borrower
                  and approved by Bank and containing unqualified opinions as to
                  the fairness of the statements therein contained;


                                       9
<Page>

         c.       during any period of time the Facility Usage is less than
                  $2,000,000, as soon as available, and in any event within
                  forty-five (45) days after and as of the end of each fiscal
                  quarter, including the last such reporting period of each of
                  Borrower's fiscal years, financial statements of Borrower and
                  such of the other Loan Parties as may be required by the Bank,
                  consolidated, as applicable, for and as of such reporting
                  period, including a balance sheet, income statement, surplus
                  reconciliation statement and statement of cash flows for and
                  as of such reporting period then ending and for and as of that
                  portion of the fiscal year then ending, in each case, prepared
                  by the chief financial officer of Borrower (or in his or her
                  absence, a responsible senior officer of Borrower) and, as
                  applicable, each other Loan Party as to consistency with prior
                  financial reports and accounting periods, accuracy and
                  fairness of presentation;

         d.       during any period of time the Facility Usage is equal to or
                  greater than $2,000,000, as soon as available, and in any
                  event within thirty (30) days after and as of the end of each
                  calendar month, including the last such reporting period of
                  each of Borrower's fiscal years, financial statements of
                  Borrower and such of the other Loan Parties as may be required
                  by the Bank, consolidated, as applicable, for and as of such
                  reporting period, including a balance sheet, income statement,
                  surplus reconciliation statement and statement of cash flows
                  for and as of such reporting period then ending and for and as
                  of that portion of the fiscal year then ending, in each case,
                  prepared by the chief financial officer of Borrower (or in his
                  or her absence, a responsible senior officer of Borrower) and,
                  as applicable, each other Loan Party as to consistency with
                  prior financial reports and accounting periods, accuracy and
                  fairness of presentation;

         e.       together with each set of financial statements furnished under
                  subsections (c) and (d) above, furnish a certificate
                  substantially in the form of Exhibit A attached hereto, signed
                  by the chief financial officer of Borrower stating that such
                  financial statements are accurate and complete (subject to
                  normal year-end adjustments), that he has reviewed the Loan
                  Documents, that no Event of Default exists at the end of such
                  fiscal quarter or calendar month, as applicable, and
                  reflecting the compliance by Borrower (together with
                  reasonable detail of the calculations) with the financial
                  covenants set forth herein;

         f.       during any period of time the Facility Usage is less than
                  $2,000,000, as soon as available, and in any event, within
                  forty-five (45) days after and as of the end of each fiscal
                  quarter, including the last such reporting period of each
                  fiscal year of Borrower, agings of the accounts receivable and
                  accounts payable of Borrower;

         g.       during any period of time the Facility Usage is equal to or
                  greater than $2,000,000, as soon as available, and in any
                  event, within thirty (30) days after and as of the end of each
                  calendar month, including the last such reporting period of
                  each fiscal year of Borrower, agings of the accounts
                  receivable and accounts payable of Borrower;

         h.       simultaneously with the financial statements to be delivered
                  to Bank pursuant to subsections (c) and (d) above, as
                  applicable, a Borrowing Base Certificate substantially in the
                  form attached hereto as Exhibit B;

         i.       as soon as available, and in any event within ninety (90) days
                  after the end of each fiscal year, a business and financial
                  plan of Borrower, in form satisfactory to Bank, prepared by
                  the chief financial officer of Borrower, setting forth
                  financial projections and budget for Borrower for the fiscal
                  year in which such plan is delivered to Bank;

         j.       promptly upon their becoming available, copies of all
                  financial statements, reports, notices and proxy statements
                  sent by any Loan Party to its stockholders and all
                  registration statements, periodic reports and other statements
                  and schedules filed by any Loan Party with any securities
                  exchange, the Securities and Exchange Commission or any
                  similar governmental authority; and

         k.       promptly, and in form and detail satisfactory to Bank, such
                  other information as Bank may request from time to time.

4.4      FINANCIAL COVENANTS. Maintain all financial covenants set forth below
         (for purposes of the financial covenants, definitions for capitalized
         terms not otherwise defined in this Agreement follow the covenants):

         TANGIBLE NET WORTH. Maintain a Tangible Net Worth at all times of not
         LESS than $100,000,000.

         QUICK RATIO. Maintain a Quick Ratio at all times of not LESS than
         1.5 to 1.0.



                                       10
 <Page>

         "AFFILIATE RECEIVABLES" shall mean, as of any time of determination,
         any amounts in respect of loans or advances owing to Borrower or
         another Loan Party from any of its Subsidiaries or Affiliates (other
         than Affiliates which are Guarantors of all Indebtedness) at such time.

         "CURRENT LIABILITIES" shall mean, in respect of a Person and as of any
         applicable date of determination, all liabilities of such Person that
         should be classified as current in accordance with GAAP.

         "QUICK RATIO" shall mean, with respect to any Person, and as to any
         applicable date of determination, the ratio of (i) the sum of all
         unrestricted cash of such Person plus all investments of such Person
         made in accordance with the investment policy of such Person that has
         been reviewed and approved by Bank prior to the date hereof plus all
         accounts receivable of such Person (in each case only to the extent
         such case, investments, or accounts receivable is not subject to a
         lien, pledge, mortgage or security interest, other than those in favor
         of Bank) to (ii) the sum of the Current Liabilities of such Person on
         such date plus the outstanding principal amount of the Indebtedness on
         such date.

         "TANGIBLE NET WORTh" shall mean, with respect to any Person and as of
         any applicable date of determination, (a) the net book value of all
         assets of such Person (excluding Affiliate Receivables, patent rights,
         trademarks, trade names, franchises, copyrights, licenses, goodwill,
         and all other intangible assets of such Person), after all appropriate
         deductions in accordance with GAAP including, without limitation,
         reserves for doubtful receivables, obsolescence, depreciation and
         amortization, LESS (b) all Debt of such Person at such time.

4.5      FURTHER ASSURANCES; FINANCING STATEMENTS. Furnish Bank, at Borrower's
         cost and expense, upon Bank's request and in form satisfactory to Bank
         (and execute and deliver or cause to be executed and delivered), such
         additional pledges, assignments, mortgages, Lien instruments or other
         security instruments, consents, acknowledgments, subordinations and
         financing statements covering any or all of the Collateral required by
         Bank to secure any Indebtedness together with such other documents or
         instruments as Bank may require to effectuate more fully the purposes
         of any Loan Document.

4.6      INSURANCE. Maintain insurance coverage by insurers acceptable to Bank
         on its physical assets and against other business risks in such amounts
         and of such types as are customarily carried by companies similar in
         size and nature or as may otherwise be required by Bank, and in the
         event of acquisition of additional property, real or personal, or of
         the incurrence of additional risks of any nature, increase such
         insurance coverage in such manner and to such extent as prudent
         business judgment and present practice would dictate; and in the case
         of all policies covering property subject to any Loan Document or
         property in which the Bank shall have a Lien of any kind whatsoever,
         other than those policies protecting against casualty liabilities to
         strangers, all such insurance policies shall provide that the loss
         payable thereunder shall be payable to Borrower (or other Person
         providing Collateral) and Bank, with mortgagee's clauses in favor of
         and satisfactory to Bank for all such policies, and such policies shall
         also provide that they may not be canceled or changed without thirty
         (30) days' prior written notice to Bank. Upon the request of Bank, all
         of said policies, or copies thereof, including all endorsements thereon
         and those required hereunder, shall be deposited with Bank.

4.7      COMPLIANCE WITH ERISA. In the event that any Loan Party or any of its
         Subsidiaries maintain(s) or establish(es) a Pension Plan subject to
         ERISA, (a) comply in all material respects with all requirements
         imposed by ERISA as presently in effect or hereafter promulgated,
         including, but not limited to, the minimum funding requirements
         thereof; (b) promptly notify Bank upon the occurrence of a "reportable
         event" or "prohibited transaction" within the meaning of ERISA, or that
         the PBGC or any Loan Party has instituted or will institute proceedings
         to terminate any Pension Plan, together with a copy of any proposed
         notice of such event which may be required to be filed with the PBGC;
         and (c) furnish to Bank (or cause the plan administrator to furnish
         Bank) a copy of the annual return (including all schedules and
         attachments) for each Pension Plan covered by ERISA, and filed with the
         Internal Revenue Service by any Loan Party not later than ten (10) days
         after such report has been so filed.

4.8      ENVIRONMENTAL COVENANTS. Comply with all applicable Environmental Laws,
         and maintain all permits, licenses and approvals required under
         applicable Environmental Laws, where the failure to do so could have a
         Material Adverse Effect. Promptly notify Bank, in writing, as soon as
         Borrower becomes aware of any condition or circumstance which makes any
         of the environmental representations or warranties set forth in this
         Agreement incomplete, incorrect or inaccurate in any material respect
         as of any date;

                                      11

<Page>

         and promptly provide to Bank, immediately upon receipt thereof,
         copies of any material correspondence, notice, pleading, citation,
         indictment, complaint, order, decree, or other document from any
         source asserting or alleging a violation of any Environmental Law
         by any Loan Party, or of any circumstance or condition which requires
         or may require, a financial contribution by any Loan Party, or a
         clean-up, removal, remedial action or other response by or on behalf
         of any Loan Party, under applicable Environmental Law, or which seeks
         damages or civil, criminal or punitive penalties from any Loan Party
         or any violation or alleged violation of any Environmental Law.
         Borrower hereby agrees to indemnify, defend and hold Bank, and any of
         Bank's past, present and future officers, directors, shareholders,
         employees, representatives and consultants, harmless from any and all
         claims, losses, damages, suits, penalties, costs, liabilities,
         obligations and expenses (including, without limitation, reasonable
         legal expenses and attorneys' fees, whether inside or outside counsel
         is used) incurred or arising out of any claim, loss or damage of any
         property, injuries to or death of any persons, contamination of or
         adverse effects on the environment, or other violation of any
         applicable Environmental Law, in any case, caused by any Loan Party or
         in any way related to any property owned or operated by any Loan Party
         or due to any acts of any Loan Party or any of its officers,
         directors, shareholders, employees, consultants and/or representatives
         INCLUDING ANY CLAIMS, LOSSES, DAMAGES, SUITS, PENALTIES, COSTS,
         LIABILITIES, OBLIGATIONS OR EXPENSES, RESULTING FROM BANK'S OWN
         NEGLIGENCE OR ARISING OUT OF ANY CLAIM OR THEORY OF STRICT LIABILITY;
         provided however, that the foregoing indemnification shall not be
         applicable, and Borrower shall not be liable for any such claims,
         losses, damages, suits, penalties, costs, liabilities, obligations or
         expenses, to the extent (but only to the extent) the same arise or
         result from any gross negligence or willful misconduct of Bank or
         any of its agents or employees.

4.9      BANK ACCOUNTS. Borrower will maintain with Bank all of its primary bank
         accounts, money market accounts, and similar accounts as additional
         security for the Indebtedness. Borrower may freely withdraw funds from
         such accounts with Bank and (subject to the other requirements hereof)
         may choose to invest such funds in investments other than bank
         accounts, money market or similar accounts, or certificates of deposit,
         it being understood that any such accounts maintained with Bank and any
         certificates of deposit purchased from Bank are not frozen or
         restricted (except as expressly provided therein or in any Loan
         Documents to which they are subject) or subject to any minimum balance
         requirements.

4.10     ACCOUNTS RECEIVABLE AUDIT. Within thirty (30) days of the first
         Revolving Loan made hereunder, permit Bank or its representatives to
         conduct an audit of Borrower's accounts receivable. Borrower will
         permit Bank or its representatives to conduct one audit of Borrower's
         accounts receivable in each calendar year; provided that, during the
         continuation of any Event of Default, Borrower will permit Bank to
         conduct one or more additional audits of Borrower's accounts receivable
         upon Bank's request. All audits conducted pursuant to this Section 4.10
         shall be at Borrower's expense.

SECTION 5 . NEGATIVE COVENANTS

Borrower covenants and agrees that, until all instruments and agreements
evidencing each and every loan, Letter of Credit and other financial
accommodation by the Bank to the Borrower or any Loan Party are fully
discharged and terminated, and thereafter, so long as any Indebtedness
remains outstanding, it will not, and it will not allow any Loan Party within
its control or under common control to, without the prior written consent of
the Bank:

5.1      CAPITAL STRUCTURE; BUSINESS OBJECTS OR PURPOSE; MERGERS; ASSET
         DISPOSITION; ACQUISITIONS. Other than any repurchase, acquisition or
         redemption of any shares of its capital stock payable upon an
         employee's termination pursuant to its employee stock option, purchase
         acquire or redeem any of its equity ownership interests; or enter into
         any reorganization or recapitalization if such Loan Party is not
         obtaining new equity in connection with such reorganization or
         recapitalization; or reclassify its equity ownership interests; or make
         any material change in its capital structure or general business
         objects or purpose; or change its name, or enter into any merger or
         consolidation, whether or not the surviving entity thereunder; or sell,
         lease, transfer, relocate or dispose of all, substantially all, or any
         material part of its assets (whether in a single transaction or in a
         series of transactions); or purchase or otherwise acquire or become
         obligated for the purchase of all or substantially all of the assets or
         business interests of any Person or any shares of stock or other
         ownership interests of any Person or in any other manner effectuate or
         attempt to effectuate an expansion of present business by acquisition
         if either (a) the consideration paid by Borrower and the other Loan
         Parties in connection with such acquisition, when aggregated with all
         the consideration paid by Borrower and the other Loan Parties in
         connection with all other acquisitions made by the Loan Parties,
         exceeds $30,000,000 or (b) the cash paid by Borrower and the other Loan
         Parties in connection with such acquisition, when aggregated with all
         cash paid by Borrower and the other Loan Parties in connection with all
         other acquisitions made by the Loan Parties, exceeds $15,000,000.


                                      12

<Page>

5.2      GUARANTIES. Guarantee, endorse, or otherwise become secondarily liable
         for or upon the obligations or Debt of others (whether directly or
         indirectly), except guaranties in favor of and satisfactory to Bank and
         endorsements for deposit or collection in the ordinary course of
         business.

5.3      DEBT. Become or remain obligated for any Debt, except: Indebtedness and
         other Debt from time to time outstanding and owing to Bank; current
         unsecured trade, utility or non-extraordinary accounts payable arising
         in the ordinary course of business; Subordinated Debt; purchase money
         indebtedness incurred for the purpose of purchasing or acquiring fixed
         assets, so long as the amount of such purchase money indebtedness
         incurred by Borrower and its Subsidiaries does not exceed five hundred
         thousand dollars ($500,000), in the aggregate, for any fiscal year of
         Borrower; and Debt (including, without limitation, capitalized lease
         obligations) outstanding as of the date hereof if specifically
         disclosed in the most recent financial statements delivered to the Bank
         prior to the date hereof.

5.4      ENCUMBRANCES. Create, incur, assume or suffer to exist any Lien upon
         any of its property or assets, whether now owned or hereafter acquired,
         except for Permitted Encumbrances.

5.5      INVESTMENTS; EXTENSIONS OF CREDIT. Make or allow to remain outstanding
         any investment (whether such investment shall be of the character of
         investment in shares of stock, evidences of indebtedness or other
         securities or otherwise) in, or any loans, advances or extensions of
         credit to, any Person, other than (a) Borrower's current ownership
         interests in those Subsidiaries of Borrower, if any, which are
         specifically disclosed in the definition of Subsidiaries, and (b) any
         investment in direct obligations of the United States of America or any
         agency thereof, or in certificates of deposit issued by Bank,
         maintained consistent with Borrower's or such Subsidiary's business
         practices prior to the date hereof; provided, that no such investment
         shall mature more than one (1) year after the date when made or the
         issuance thereof, and (c) marketable, traded stock and other securities
         issued by entities organized under the laws of the United States or a
         state thereof, and (d) acquisitions permitted pursuant to Section 5.1.

5.6      PENSION PLANS. Except in compliance with this Agreement, enter into,
         maintain, or make contribution to, directly or indirectly, any Pension
         Plan that is subject to ERISA.

5.7      SUBORDINATE INDEBTEDNESS. Subordinate any indebtedness due to it from
         any Person to indebtedness of other creditors of such Person.

5.8      CAPITAL EXPENDITURES. Make Capital Expenditures or commit to make
         Capital Expenditures, in an aggregate amount that exceeds $15,000,000
         in any fiscal year. "CAPITAL EXPENDITURE" shall mean any expenditure by
         a Person for (a) an asset which will be used in a year or years
         subsequent to the year in which the expenditure is made and which asset
         is properly classified in relevant financial statements of such Person
         as equipment, real property, a fixed asset or a similar type of
         capitalized asset in accordance with GAAP or (b) an asset relating to
         or acquired in connection with an acquired business, and any and all
         acquisition costs related to (a) or (b) above.

5.9      DIVIDENDS. Declare or pay dividends on, or make any other distribution
         (whether by reduction of capital or otherwise) in respect of any shares
         of its capital stock or other ownership interests, except (a) dividends
         payable by a Subsidiary of Borrower to Borrower or by the Subsidiary of
         another Loan Party to such other Loan Party; (b) dividends payable
         solely in stock; and (c) the redemption, repurchase or acquisition of
         any shares of its capital stock permitted under Section 5.1.

SECTION 6. EVENTS OF DEFAULT

6.1      EVENTS OF DEFAULT. The occurrence or existence of any of the following
         conditions or events shall constitute an "Event of Default" hereunder:

         (a) non-payment of any principal, interest or other sums due upon the
         Indebtedness at such time the same becomes due or, if applicable, upon
         expiration of the grace period, if any;
         (b) default in the observance or performance of any of the conditions,
         covenants or agreements of any Loan Party set forth in Section 4.3(a)
         or Section 5 of this Agreement and such default continues unremedied
         for a period of ten (10) days;

         (c) default in the observance or performance (other than as referred to
         in subsections (a) or (b) above) of any of the conditions, covenants or
         agreements of any Loan Party set forth in this Agreement or any other
         Loan Document and such default continues unremedied for a period of ten
         (10) days after notice of such failure is given by Bank to Borrower;


                                      13
<Page>

         (d) any representation or warranty made by any Loan Party in any Loan
         Document shall be untrue or incorrect in any material respect;

         (e) any default or event of default, as the case may be, shall occur
         under any other Loan Document and shall continue beyond the applicable
         grace period, if any;

         (f) any default by any Loan Party in the payment of any Debt in excess
         of $500,000 (other than the Indebtedness), or in the observance or
         performance of any conditions, covenants or agreements related or given
         with respect thereto and, in each such case, continuation thereof
         beyond any applicable grace or cure period;

         (g) the rendering of one or more judgments or decrees for the payment
         of money in excess of $500,000, against any Loan Party, and such
         judgment(s) or decree(s) shall remain unvacated, unbanded or unstayed,
         by appeal or otherwise, for a period of sixty (60) consecutive days
         after the date of entry;

         (h) sale or other disposition by any Loan Party of any substantial
         portion of its assets or property or voluntary suspension of the
         transaction of business by any Loan Party or the dissolution,
         termination of existence, insolvency, business failure or assignment
         for the benefit of creditors of or by any Loan Party, or commencement
         of any proceedings under any state or federal bankruptcy or insolvency
         law or laws for the relief of debtors by or against any Loan Party and
         the same is either initiated by or consented to by such Loan Party or
         otherwise remains undismissed for sixty (60) days, or the appointment
         of a receiver, trustee, court appointee, sequestrator or otherwise, for
         all or any substantial party of the property of any Loan Party, and the
         same is not discharged within sixty (60) days; and

         (i) any change in the management, ownership or control of Borrower,
         whether by reason of incapacity, death, resignation, termination or
         otherwise which, in Bank's sole judgment, could become a Material
         Adverse Effect;

6.2      REMEDIES UPON EVENT OF DEFAULT. Upon the occurrence and at any time
         during the existence or continuance of any Event of Default, but
         without impairing or otherwise limiting the Bank's right to demand
         payment of all or any portion of the Indebtedness which is payable
         on demand, at Bank's option, Bank may give notice to Borrower
         declaring all or any portion of the Indebtedness remaining unpaid
         and outstanding, whether under the notes evidencing the Indebtedness
         or otherwise, to be due and payable in full without presentation,
         demand, protest, notice of dishonor, notice of intent to accelerate,
         notice of acceleration or other notice of any kind, all of which are
         hereby expressly waived, whereupon all such Indebtedness shall
         immediately become due and payable. Furthermore, upon the occurrence
         of a Default or Event of Default and at any time during the
         existence or continuance of any Default or Event of Default, but
         without impairing or otherwise limiting the right of Bank, if
         reserved under any Loan Document, to make or withhold financial
         accommodations at its discretion, to the extent not yet disbursed,
         any commitment by Bank to make any further loans or, if applicable,
         issue any further Letters of Credit shall automatically terminate.
         The foregoing rights and remedies are in addition to any other
         rights, remedies and privileges Bank may otherwise have or which may
         be available to it, whether under this Agreement, any other Loan
         Document, by law, or otherwise.

6.3      WAIVER OF DEFAULTS. No Default or Event of Default shall be waived by
         Bank except in a written instrument specifying the scope and terms of
         such waiver and signed by an authorized officer of Bank, and such
         waiver and shall be effective only for the specific time(s) and
         purpose(s) given. No single or partial exercise of any right, power or
         privilege hereunder, or any delay in the exercise thereof, shall
         preclude other or further exercise of Bank's rights. No waiver of any
         Default or Event of Default shall extend to any other or further
         Default or Event of Default. No forbearance on the part of Bank in
         enforcing any of Bank's rights or remedies under any Loan Document
         shall constitute a waiver of any of its rights or remedies. Borrower
         expressly agrees that this Section may not be waived or modified by
         Bank by course of performance, estoppel or otherwise.

SECTION 7. MISCELLANEOUS

7.1      GOVERNING LAW. Each Loan Document shall be deemed to have been
         delivered in and shall be governed by and construed and enforced in
         accordance with the laws of the State of Texas, except to the extent
         that the UCC, other personal property law or real property law of
         another jurisdiction where Collateral is located is applicable, and
         except to the extent expressed to the contrary in any Loan Document.


                                      14

<Page>

7.2      COSTS AND EXPENSES. Borrower shall pay Bank, on demand, all costs and
         expenses, including, without limitation, reasonable attorneys' fees and
         legal expenses (whether inside or outside counsel is used), incurred by
         Bank in perfecting, revising, protecting or enforcing any of its rights
         or remedies against any Loan Party or any Collateral, or otherwise
         incurred by Bank in connection with any Default or Event of Default or
         the enforcement of the Loan Documents or the Indebtedness. Following
         Bank's demand upon Borrower for the payment of any such costs and
         expenses, and until the same are paid in full, the unpaid amount of
         such costs and expenses shall constitute Indebtedness and shall bear
         interest at the highest default rate of interest provided in any Loan
         Document.

7.3      SUCCESSORS AND ASSIGNS; PARTICIPATION. This Agreement shall be binding
         upon and shall inure to the benefit of Borrower and Bank and their
         respective successors and assigns. The foregoing shall not authorize
         any assignment or transfer by Borrower of any of its respective rights,
         duties or obligations hereunder, such assignments or transfers being
         expressly prohibited. Bank, however, may freely assign, whether by
         assignment, participation or otherwise, its rights and obligations
         hereunder, and is hereby authorized to disclose to any such assignee or
         participant (or proposed assignee or participant) any financial or
         other information in its knowledge or possession regarding any Loan
         Party or the Indebtedness.

7.4      RELIANCE ON AND SURVIVAL OF VARIOUS PROVISIONS. All terms, covenants,
         agreements, representations and warranties of any Loan Party made in
         any Loan Document, or in any certificate, report, financial statement
         or other document furnished by or on behalf of any Loan Party in
         connection with any Loan Document, shall be deemed to have been relied
         upon by Bank, notwithstanding any investigation heretofore or hereafter
         made by Bank or on Bank's behalf, and those covenants and agreements of
         Borrower set forth in SECTION 4.8 hereof (together with any other
         indemnities of Borrower contained elsewhere in any Loan Document) shall
         survive the termination of this Agreement and the repayment in full of
         the Indebtedness.

7.5      COMPLETE AGREEMENT; CONFLICTS. This Agreement, the other Loan
         Documents, and any commitment letter previously issued by Bank with
         respect thereto (provided that in the event of any inconsistency or
         conflict between this Agreement and the other Loan Documents, on one
         hand, and such commitment letter, on the other hand, this Agreement and
         the Loan Documents shall control), contain the entire agreement of the
         parties thereto and supercede all prior agreements and understandings
         related to the subject matter hereof, and none of the parties shall be
         bound by anything not expressed in writing. In the event that, and to
         the extent that, any of the terms, conditions or provisions of any of
         the other Loan Documents are inconsistent with or in conflict with any
         of the terms, conditions or provisions of this Agreement, the
         applicable terms, conditions and provisions of this Agreement shall
         govern and control. Any amendments or modifications hereto shall be in
         writing signed by all parties.

7.6      COUNTERPARTS. This Agreement may be executed in any number of
         counterparts and by different parties on separate counterparts, each of
         which, when executed and delivered, shall be deemed to be an original,
         and all of which, when taken together, shall constitute but one and the
         same agreement.

7.7      WAIVER OF JURY TRIAL. BANK AND BORROWER EACH ACKNOWLEDGE THAT THE RIGHT
         TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED.
         EACH OF THEM, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO
         CONSULT, WITH COUNSEL OF THEIR CHOICE, KNOWINGLY, VOLUNTARILY AND
         INTENTIONALLY WAIVES ANY RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY
         JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF ANY LOAN DOCUMENT
         OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS OR ANY
         COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR
         ACTION OF EITHER OF THEM. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE
         BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY BANK OR BORROWER,
         EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY EACH OF THEM.

7.8      ORAL AGREEMENTS INEFFECTIVE. THIS AGREEMENT AND THE OTHER "LOAN
         AGREEMENTS" (AS DEFINED IN SECTION 26.02(A)(2) OF THE TEXAS BUSINESS &
         COMMERCE CODE, AS AMENDED) REPRESENT THE FINAL AGREEMENT BETWEEN THE
         PARTIES, AND THIS AGREEMENT AND THE OTHER WRITTEN LOAN AGREEMENTS MAY
         NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
         ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL
         AGREEMENTS BETWEEN THE PARTIES.

                [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                      15

<Page>

WITNESS the due execution hereof as of the day and year first above written.

COMERICA BANK - TEXAS                  SILICON LABORATORIES INC.

By:     /s/ Julie A. Smith             By:     /s/ John W. McGovern
       ---------------------------            ----------------------------
Name:  Julie A. Smith                  Name:   John W. McGovern
                                              ----------------------------
Title: Vice President                  Title:  Chief Financial Officer
                                              ----------------------------



                                       By:     /s/ Navdeep Sooch
                                              ----------------------------
                                       Name:   Navdeep Sooch
                                              ----------------------------
                                       Title:  Chairman and Chief
                                                   Executive Officer
                                              ----------------------------


       Address:     504 Congress Avenue       Address:     4635 Boston Lane
                    Suite 320                              Austin, Texas 78735
                    Austin, Texas 78701                    ___________________
       Attn:        Julie Smith               Attn:        ___________________
       Telefax No.: (512) 427-7120            Telefax No.: ___________________


                                      16

<Page>

                                  EXHIBIT A

                           COMPLIANCE CERTIFICATE

         Reference is made to that certain Credit Agreement between SILICON
LABORATORIES INC. ("Borrower") and COMERICA BANK-TEXAS, dated as of September
5, 2001 (the "Credit Agreement"). The terms used herein shall have the same
meanings as provided therefor in the Credit Agreement, unless the context
hereof otherwise requires or provides.

         The undersigned HEREBY CERTIFIES that he is the duly elected and
qualified officer of Borrower holding the office set forth beneath his
signature below, and as such is the chief financial officer of Borrower, AND
DOES FURTHER CERTIFY, on behalf of Borrower that:

         1.       Attached hereto are complete and detailed consolidated
financial statements of Borrower and the other Loan Parties as of, and for
the last day of _________________, ______ (the "Reporting Date"), which are
accurate and complete (subject to normal year-end adjustments).

         2.       He has reviewed the Loan Documents, and that to the best of
his knowledge as of the Reporting Date and the date hereof, no Event of
Default existed or exists, except as set forth in Schedule I attached hereto.
(If no Schedule I is attached, then such exception does not apply and no
Event of Defaults exist).

         3.       Set forth below is the calculation of the financial
covenants of the Credit Agreement determined as of the Reporting Date, which
calculations have been made in accordance with the requirements of the Credit
Agreement and which are true and correct in all respects:

                  TANGIBLE NET WORTH. MAINTAIN A TANGIBLE NET WORTH AT ALL
         TIMES, OF NOT LESS THAN $100,000,000.

                               $________________

                  QUICK RATIO. MAINTAIN A QUICK RATIO OF NOT LESS THAN 1.5 TO 1.

                                  _____ to 1.0

         IN WITNESS WHEREOF, the undersigned has executed this Certificate on
_____________, ________.

                                       Signature



                                       ----------------------------------------
                                       Name:
                                       Title:


               Compliance Certificate EXHIBIT A - Page 1 of 1

<Page>

                                   EXHIBIT B
                              Accounts Receivable

Borrowing Base Certificate for Period Beginning: ___________ and Ending
_____________ ("Current Period") Credit Agreement dated as of September 5,
2001 (the "Agreement") by and between Silicon Laboratories Inc.. ("Borrower")
and Comerica Bank-Texas. Capitalized terms used and are otherwise defined
herein have the meanings given them in the Agreement.

Accounts Receivable

<Table>
<Caption>
<S>                                                                          <C>              <C>
  1. Balance of Accounts as of the end of the Current Period                                  $________








Ineligible Accounts as of the end of the Current Period:

  2.  Accounts more than 90 days from invoice date
                                                                               $___________

  3.  All of the Accounts of Account Debtor(s) if 25% of the
      dollar amount of all Accounts of such Account Debtor(s)
      are more than 90 days from invoice date
                                                                               $___________

  4.  That portion of Accounts of Account Debtor(s) (other than
      PC-Tel) in excess of 25% of the dollar amount of the total
      Accounts for the Current Period (Line 1), except to the
      extent such portions have previously been excluded under other
      provisions hereof.
                                                                               $___________

  5.  That portion of Accounts of PC-Tel in excess of 50% of the
      total amount of the total Accounts for the Current Period
      (Line 1), except to the extent such portions have previously
      been excluded under other provisions hereof.
                                                                               $___________

  6.  Intercompany and Affiliate Accounts                                      ____________

  7.  Government Accounts

  8.  Accounts subject to any dispute or set off.                              ____________

  9.  Other ineligible Accounts                                                ____________

  10. Total Ineligible Accounts for the Current Period
      (Add Lines 2 through 9)                                                  $___________

  11. Total Eligible Accounts for the Current Period
      (Line 1 - Line 10)                                                       $___________

  12. Total Domestic Eligible Accounts
                                                                               $___________

  13. Multiplied by 80%

  14. Total Foreign Eligible Accounts
                                                                               $___________

  15. Multiplied by 90%

  16. Sum of 13 and 15 equals Borrowing Base of the
      end of the Current Period

  17. Loan balance per last Borrowing Base Report                                                $___________

  18. Less net payments (see attached tape)                                                      $___________

  19. Plus Master Revolving Note advances                                                        $___________

  20. Other Ineligible Accounts
                                                                                                 $___________

  21. Credit Card Exposure                                                                       $___________


-------------------------------------------------------------------------------
                     Accounts Receivable EXHIBIT B - Page 1 of 2

<Page>

  22. Letter of Credit Liabilities
                                                                                                 $___________

  23. Total Balance
      (Line 17 minus line 18 plus lines 19, 20 , 21 and 22)                                      $___________

  24. Total Borrowing Base (Line 16) minus Total Balance
      (Line 23) which equals the Amount Available for Borrowing,
      subject to the terms of the Agreement, if positive; or subject
      to the terms of the Agreement, amount to be repaid, if negative:
                                                                                                 $___________
</Table>

The undersigned hereby certifies that the above information and computations
are true and correct as of the date hereof and may be relied upon by you as a
basis for advancing any credit to us, and that no Default or Event of Default
has occurred and is continuing under the Agreement.

SILICON LABORATORIES INC.

By:
   -------------------------------------------------------
Name:
     -----------------------------------------------------
Title:
      ----------------------------------------------------
Date:
     -----------------------------------------------------








                     Accounts Receivable EXHIBIT B - Page 2 of 2