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                                                                    EXHIBIT 10.3

[FIRSTAR LOGO]

                      REVOLVING LOAN AND SECURITY AGREEMENT

FIRSTAR BANK MILWAUKEE, N.A. "LENDER" through its Financial Services Division, 
and TELECOMMUNICATIONS INCOME FUND XI, L.P. ("DEBTOR") agree as follows:

                                NATURE OF CREDIT

For good and valuable consideration and upon the security of the Collateral (as
defined below), Lender may lend to Debtor such amounts as LENDER determines in
its SOLE AND ABSOLUTE DISCRETION, and Debtor promises to repay to Lender any
amounts so lent at such times and in such manner as provided herein ("LINE OF
CREDIT"). This is an asset-based revolving Line of Credit under which Lender
may, among other things: establish, without obligation for payment to any
party, such reserves from Qualified Accounts and/or Qualified Inventory as
Lender deems necessary to preserve the value of the Collateral and/or protect
Lender's rights and interest in the Collateral reduce the percentage advance
ratios set forth in Section 3. COLLATERAL-OBLIGATION RATIO below; advance funds
in excess of such percentage advance ratios; decline to advance funds at any
time against any particular Qualified Accounts or Qualified Inventory; and, in
order to determine potential borrowing availability but not the calculation of
interest, give credit against Debtor's Loan Account Ledger for Collections (as
defined in Section 4. COLLECTIONS below) before Lender determines that such
Collections constitute good funds. Notwithstanding Lender's discretion and as
consideration from Lender, Lender agrees with Debtor that Lender shall at all
times while this Revolving Loan and Security Agreement ("AGREEMENT") is in
effect, maintain its own borrowing capability to meet Debtor's daily borrowing
requests up to the maximum amount set forth herein and staff its operation
through the scheduled term of this Agreement with sufficient personnel and
systems to process Debtor's loan requests in order to administer on a daily
basis this revolving Line of Credit and any other credit facilities extended by
Lender to Debtor. Debtor acknowledges that Lender is furnishing valuable
consideration by undertaking the foregoing covenants.

                         1. LOANS AND SECURITY INTEREST

(a)  LOANS AND INTEREST RATE. Lender and Debtor intend that all indebtedness
     incurred hereunder shall be governed exclusively by the terms of this
     Agreement. Such indebtedness shall not be evidenced by separate notes but
     by Lender's computer and/or book entries ("LOAN ACCOUNT LEDGER"); and each
     month, Lender shall render to Debtor a statement of account as of the last
     day of the preceding month. As provided herein, DEBTOR PROMISES TO PAY
     LENDER all or any part of the Obligations (as defined in Section 2
     DEFINITIONS below) at any time outstanding on Debtor's Loan Account Ledger,
     together with all expenses and accrued interest thereon computed on the
     basis of the daily balance of such Loan Account Ledger during such month.
     The interest rate hereunder shall be computed at an annual rate equal to
     1.0 % plus the rate announced from time to time by Lender as its "prime
     rate", which may or may not be the best rate available at said bank. (In
     the event of a participation, see Section 7(a). PARTICIPATIONS, PARTICIPANT
     INTEREST RATE). Such interest rate does not reflect additional costs
     payable by Debtor including, without limitation; wire transfer charges or
     other charges pertaining to the transfer of funds to Debtor or to Lender
     from Debtor or from Debtor's depository banks; lock box, demand deposit;
     control disbursement fees and other fees described in this or other
     agreements between Debtor and Lender; charges arising from any returned or
     dishonored checks of an account debtor accrual of interest pending the
     "clearance" of checks described in Section 4. COLLECTIONS below; and
     interest upon unpaid interest debited as principal to Debtor's Loan Account
     Ledger. Interest shall be computed on the basis of actual days elapsed and
     a year of 360 days. Interest for each calendar month shall be due and
     payable by Debtor as of the first day of the next succeeding month and, at
     Lender's option, may be debited as principal to Debtor's Loan Account
     Ledger on the first day of each month or thereafter.

(b)  DAILY ADVANCES. Debtor may make daily telephonic or written requests to
     Lender for advances under the Agreement for deposit into Debtor's demand
     deposit account(s) at a permitted depository institution. Any requests for
     advances to be disbursed elsewhere shall be made in writing signed by an
     authorized representative of Debtor. Debtor agrees not to hold Lender
     responsible for any errors or misunderstandings in complying with any
     telephonic or oral directions for advance requests; and Debtor has the
     responsibility for ensuring that representatives of Debtor contacting
     Lender to request advances are authorized.

(c)  MINIMUM MONTHLY CHARGE. Notwithstanding the principal amount of the debit
     balance of the Loan Account Ledger, and in addition to fees or charges for
     items other than interest described herein, Debtor agrees to pay Lender, as
     of the first day of the next succeeding month, at least $ 4,000.00 per
     calendar month for every calendar month during the scheduled term of this
     Agreement including any renewal terms, as stated in Section 9. TERMINATION
     hereof (but discounted in the event of an earlier termination of this
     Agreement as requested by Debtor), which monthly amount shall be reduced
     by any interest paid to Lender for such month only, and not reduced by the
     cumulative interest paid to Lender during the term of this Agreement
     (hereinafter "MINIMUM MONTHLY CHARGE"). * Lender may debit as principal any
     unpaid portion of such charge to Debtor's Loan Account Ledger. Such Minimum
     Monthly Charge shall constitute, among other things, partial compensation
     for Lender's benefit of its bargain, including, without limitation, loss of
     future interest income to Lender if this Agreement were to be terminated by
     Debtor before the end of that term set forth in Section 9. TERMINATION
     below, and partial remuneration of Lender's fixed costs associated with
     Lender's business (which costs may be amortized during the full term of 
     this Agreement), Unless otherwise specifically expressed in writing, only 
     one Minimum Monthly Charge applies to all Obligations and agreements 
     between Debtor. Debtor's affiliated companies (where applicable) and Lender
     *EXCEPT THAT NO MINIMUM MONTHLY CHARGE SHALL BE PAYABLE BY DEBTOR DURING
     THE FIRST SIX (6) MONTHS OF THIS AGREEMENT.

(d)  SECURITY INTEREST, ASSIGNMENT AND CROSS-COLLATERALIZATION. To secure
     payment of Debtor's Obligations, Debtor grants to Lender a security
     interest in the Collateral, and Debtor collaterally assigns to Lender its
     rights under any lease of personal or real property and its interests in
     all general intangibles, including, without limitation, trademarks, trade
     names, patents, copyrights, licenses, franchises, insurance claims and
     claims or rights of action against third parties, however arising. The
     intent of the parties hereto is that all the Collateral plus all other
     property, rights and claims pledged to Lender secures all Obligations of
     Debtor to Lender, whether or not such Obligations exist under this or
     other agreements and while such Obligations are due under any other
     agreement, whether or not the loans under this Agreement have been paid in
     full.

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                                 2. DEFINITIONS

The terms set forth in this Agreement shall have the meanings set forth in the
Uniform Commercial Code as adopted in the State of Wisconsin unless otherwise 
defined herein.

(a)  "Collateral" means all of the following whether now owned or existing or
     hereafter created or acquired by Debtor, wherever located, including all
     documents, general intangibles, additions and accessions, spare and repair
     parts, special tools, replacements, returned or repossessed goods and books
     and records relating to the following; and all proceeds and products of
     the following: all accounts, instruments, documents, chattel paper, general
     intangibles, contract rights, securities, certificates of deposit and funds
     on deposit with and all property in the possession of Lender or any other
     depository institutions; all inventory; all equipment and all fixtures. SEE
     EXHIBIT A HERETO

(b)  "QUALIFIED ACCOUNT" means an account owing to Debtor which meets all of
     these specifications on a continuing basis; as determined by Lender:

     (1)  SALE OF GOODS OR SERVICES RENDERED. It arose from the performance of
          services by Debtor, or from a bona fide sale or lease of goods on
          terms in effect as of the date of this Agreement as disclosed by
          Debtor to Lender; which services have been fully performed for an
          account Debtor or which goods have been delivered or shipped to an
          account Debtor residing in the United States or a foreign account
          Debtor acceptable to Lender; and for which Debtor has genuine and
          complete invoices, shipping documents or receipts;

     (2)  AGE AND DUE DATE. It is not more than 60 days past due;

     (3)  OWNERSHIP. It is owned and assignable by Debtor free of all claims,
          encumbrances and security interests (except Lender's paramount
          security interest);

     (4)  NO DEFENSES. It is enforceable by Debtor and Lender against the
          account Debtor for the amount shown as owing in the statements
          furnished by Debtor to Lender; it and the transaction out of which it
          arose comply with all applicable laws and regulations; it is not
          subject to any setoff, credit allowance or adjustment except discount
          for prompt payment, nor has the account Debtor returned the goods or
          disputed liability; and it did not arise from a conditional sale,
          guaranteed sale, sale on approval, sale or return or sale on
          consignment;

     (5)  FINANCIAL CONDITION OF ACCOUNT Debtor. Neither Debtor nor Lender has
          any notice or knowledge of anything which might impair the credit
          standing of the account Debtor or the prospect of payment of the
          account, nor does the dollar amount of past-due invoices as a portion
          of the total dollar amount due from an account Debtor exceed 50%,
          which limitation may change from time to time;

     (6)  SATISFACTION OF Lender. Lender has not notified Debtor, orally or in
          writing, that the account or account Debtor is unsatisfactory.

     (7)  AFFILIATES. It is not due from an Affiliate of Debtor, including,
          without limitation, a parent corporation, subsidiary corporation or
          corporation owned in part or in whole by any controlling
          shareholder(s) of Debtor, or any officer, director or shareholder of
          Debtor or of any Affiliate (collectively "AFFILIATE");

     (8)  OTHER PROVISIONS.

               SEE EXHIBIT A HERETO

(c)  "QUALIFIED INVENTORY" means inventory which meets all of these
     specifications on a continuing basis, as determined by Lender:

     (1)  OWNERSHIP. It is owned and assignable by Debtor free of all claims,
          encumbrances and security interests (except Lender's paramount
          security interest); it is not stored with any bailee, warehouseman,
          Affiliate or other party without a written agreement in favor of
          Lender; and it is not with Debtor nor put in the field by Debtor as a
          conditional sale, guaranteed sale, sale on approval, sale or return or
          sale on consignment;

     (2)  CONDITION. It is in good condition; it has not materially declined in
          value; it is of an age, type and quantity acceptable to Lender; and,
          in the case of goods held for sale, it is new and unused (except as
          Lender may otherwise consent in writing);

     (3)  SATISFACTION OF Lender. Lender has not notified Debtor, orally or in
          writing, that any of the inventory is unsatisfactory;

     (4)  OTHER PROVISIONS.

(d)  "OBLIGATIONS" means all Debtor's debts, covenants, warranties, duties and
     liabilities to Lender (including the Financial Services Division and any
     other division of Lender) whether liquidated or unliquidated, absolute or
     contingent, whether arising under this Agreement, any lease, any charge
     card program, any other service or credit extended by Lender, any mortgage
     or deed of trust, any guaranty, any letter of credit or bankers acceptance,
     any reserve established by Lender to support any letter of credit, bankers
     acceptance or other undertaking by Lender for the benefit of Debtor and/or
     its Affiliates, any account with a balance due Lender, any term
     indebtedness (installment, demand or promissory note), and /or under any
     other agreements of whatever nature with Lender (together and individually,
     the "LOAN DOCUMENTS") and including fees and charges related to any of the
     foregoing, and whether arising out of past, existing or future credit
     granted by Lender to Debtor, to Debtor and others, to others guaranteed or
     endorsed by Debtor or to any debtor-in-possession or successor-in-interest
     of Debtor.



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                         3. COLLATERAL-OBLIGATION RATIO

Without Lender's prior written consent, Debtor shall not permit advances
(including accrued interest, expenses fees and reserves) against Qualified
Accounts and Qualified Inventory at any time outstanding to exceed the lesser of
$ 2,000,000.00 or:

(a)  up to 32% of the amount owing on Qualified Accounts (minus payments on
     Qualified Accounts which are in the process of collection by Lender); SEE
     EXHIBIT A FOR CONTINUATION



In addition to other required payments herein, Debtor shall at all times pay
Lender such sums as may be necessary from time to time to maintain the foregoing
ratios or limits ("RATIOS"). Such Ratios are stated only for the purpose of
establishing advances under this Agreement and not for valuation of the
Collateral. Notwithstanding Debtor's obligation to maintain the foregoing
Ratios, Lender, in its sole discretion, may make advances to Debtor in excess of
the foregoing Ratios, which advances shall be payable to Lender ON DEMAND unless
otherwise agreed to in writing by Lender. Where Debtor has exceeded the
foregoing Ratios or any Excess Line of Credit (as defined below), Debtor shall
be assessed a daily service fee as a cost in addition to the interest
designated in Section 1. LOANS AND SECURITY INTEREST above. Furthermore, where
Lender has consented to an additional line of credit in excess of the foregoing
Ratios ("EXCESS LINE OF CREDIT"), Debtor shall be assessed a daily service fee
for such Excess Line of Credit whether or not Debtor draws upon such Excess Line
of Credit, Nothing herein, however, shall be construed as a commitment by Lender
to make or allow advances against Qualified Accounts and/or Qualified Inventory
(including accrued interest, expenses, fees and reserves) in excess of the
foregoing Ratios; nor shall this section be a waiver of any default by Debtor if
it exceeds such Ratios without Lender's prior written consent.

                                 4. COLLECTIONS

(a)  PAYMENT OF COLLECTIONS. Debtor promises to continuously repay the
     Obligations upon Debtor's receipt of any proceeds of the Collateral,
     including all checks, drafts, cash and other remittances and
     proceeds received in part or full payment of or with respect to the
     Collateral ("COLLECTIONS"). Debtor shall deposit or cause to be deposited
     all Collections in accordance with the provisions marked with an 'x' below.

     /X/  LENDER'S/REMOTE LOCK BOX SERVICE; RESTRICTED ACCOUNT. Prior to Lender
          making any advances hereunder, Debtor hereby agrees to enter into a
          lock box arrangement with Lender _____________________________________
          ("DEPOSITORY BANK") [strike as appropriate) which is satisfactory to
          Lender, and pursuant to which Lender shall be granted sole access to
          the post office box to which account debtors shall be instructed to
          forward Collections. All Collections shall constitute a payment to and
          the property of Lender and be processed in accordance with such lock
          box arrangement. Once processed, the amount of any such Collections at
          Depository Bank shall be placed in a restricted account in the sole
          name and control of Lender (if not otherwise immediately
          wire-transferred to Lender). Any charges relating to such restricted
          account which Lender elects to pay shall be charged to Debtor's Loan
          Account Ledger. Any Collections inadvertently received by Debtor shall
          be immediately delivered to Lender or to Lender's restricted account
          at Depository Bank in precisely the form received (but endorsed by
          Debtor if necessary for collection), and until such delivery, Debtor
          shall not commingle any such Collections with any other funds or
          property of Debtor and shall hold the Collections upon an express
          trust for Lender.

     / /  DIRECT DELIVERY/RESTRICTED ACCOUNT. Immediately upon receipt, Debtor
          shall (1) deliver to Lender or (2) deliver to ________________________
          ("Depository Bank") [strike as appropriate] all Collections in
          precisely the form received (but endorsed by Debtor if necessary for
          collection). Said Collections shall constitute a payment to and the
          property of Lender and, until such delivery, Debtor shall not
          commingle any Collections with any other funds or property of Debtor
          and shall hold the Collections upon an express trust for Lender. Once
          delivered, the amount of any such Collections at Depository Bank shall
          be immediately placed in a restricted account in the sole name and
          control of Lender (if not otherwise immediately wire-transferred to
          Lender). Any charges relating to such restricted account which Lender
          elects to pay shall be charged to Debtor's Loan Account Ledger.

(b)  CREDIT FOR COLLECTIONS. For calculating the amount available for borrowing
     hereunder, the amount of any Collections in the form of cash, immediately
     payable checks, drafts or other instruments received by Lender in
     Milwaukee, Wisconsin, prior to 12:00 Noon of each banking day will be
     immediately credited to Debtor's Loan Account Ledger. As consideration, in
     part, for Collections that may not be immediately available for use by
     Lender, interest shall continue to be charged on the amount so credited at
     Lender's rate of interest for a period of two (2) business days after such
     receipt. The amount of any Collections in the form of a wire transfer
     received by Lender at Milwaukee, Wisconsin, prior to 1:30 P.M. of each
     banking day, will be credited that same day to Debtor's Loan Account Ledger
     for borrowing and interest purposes unless otherwise agreed to in writing
     by Debtor and Lender. In the event that any such Collections, the amount of
     which has been credited to Debtor's Loan Account Ledger, is subsequently
     dishonored or otherwise returned unpaid to Lender, Lender may debit
     Debtor's Loan Account Ledger for such amount, including any charges for
     dishonored items, retroactively to the date that the amount was credited
     against the Obligations. Except as provided in any account agreement and
     except for Lender's willful misconduct, Lender shall not be liable for any
     of its own errors or errors by any other financial institution in the
     processing and/or transfer of funds or Collections to or from Lender, and
     Lender may retroactively debit Debtor's Loan Account Ledger for any lost
     interest or principal resulting therefrom.

(c)  VERIFICATION AND NOTIFICATION. Lender may verify accounts and other
     Collateral in any manner, and Debtor shall assist Lender in so doing. Upon
     default by Debtor or termination of this Agreement, Lender may (or Debtor
     shall, upon request of Lender) notify account debtors to make payment
     directly to Lender; and Lender may enforce collection of, settle,
     compromise, extend or renew the indebtedness of such account debtors, all
     without notice to or the consent of Debtor. Lender shall have the right to
     exercise all rights and remedies available to Debtor relating to account
     debtors (including, without limitation, enforcing any mechanic or
     construction lien rights), and Debtor is hereby deemed to have assigned to
     Lender all such rights and remedies,

                      5. DEBTOR'S WARRANTIES AND COVENANTS

During the term of this Agreement or while any Obligations are unpaid or
outstanding under this Agreement or the other Loan Documents, Debtor
continuously warrants, represents and agrees as follows:

(a)  ACCURACY OF INFORMATION. All information, certificates or statements given
     to Lender pursuant to this Agreement and the other Loan Documents shall be
     accurate and complete when given.

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(b)  ORGANIZATION, AUTHORITY, VALIDITY OF OBLIGATIONS. Debtor is a validly
     existing corporation or partnership (as applicable) in good standing under
     the laws of its state of organization, and has all requisite power and
     authority, corporate or otherwise, to perform under this Agreement, and
     possesses all necessary licenses, to conduct its business and own its
     properties. The execution, delivery and performance of this Agreement and
     the other Loan Documents with Lender are within Debtor's authority, are
     legal, valid and binding obligations of Debtor, enforceable against Debtor
     in accordance with their terms, and do not require the consent of others.

(c)  EXISTENCE; BUSINESS ACTIVITIES; ADVERSE CHANGE; LITIGATION. Debtor will:
     preserve its corporate or partnership existence (as applicable) and its
     rights and franchises; not make any material change in the nature or manner
     of its business activities, and not suffer any material adverse change in
     its business operation, its financial condition or in the value or
     condition of the Collateral. Further, there is no litigation or
     administrative proceeding threatened or pending against Debtor which would,
     if adversely determined, have a material adverse affect on Debtor's
     business operation, financial condition or the Collateral.

(d)  ACQUISITIONS, INVESTMENTS, DIVIDENDS, CORPORATE CHANGES. Without the prior
     written consent of Lender, Debtor shall not: acquire any other business
     (whether by stock or asset acquisition); make any loan, advance or
     extension of, credit to, or investment in, any other person, corporation or
     other entity (except for extensions of credit to account debtors for goods
     and/or services purchased from Debtor in the ordinary course of business
     and except for loans up to $5,000 at any time outstanding to individual
     employees); pay any cash dividends; pay any management, administration,
     consulting fees or the like to any Affiliate, director or shareholder;
     purchase, redeem or otherwise acquire, directly or indirectly, any shares
     of any class of its stock or any other stock; merge with or into or
     consolidate with or into any other corporation or entity; or liquidate or
     dissolve.

(e)  OTHER AGREEMENTS, LAWS AND REGULATIONS. Debtor is not in default under any
     material agreement for the payment of money which would give any creditor
     of Debtor the right to accelerate indebtedness of Debtor to such creditor
     or terminate such agreement to which Debtor is a party; nor is Debtor
     delinquent in the payment of any tax, payroll or withholding obligation or
     of any obligation under any federal or state law which could impose a lien
     or claim upon the Collateral as a result of such default. Furthermore,
     Debtor's Affiliates are not in default under any agreement between such
     Affiliates and Lender.

(f)  DEBTOR'S NAME, LOCATIONS; NOTICE OF CHANGES. Debtor's name and
     organizational structure have remained the same during the past 5 years.
     Debtor will continue to use only the name set forth on the first page of
     this Agreement unless Debtor gives Lender prior written notice of any
     change. Furthermore, Debtor shall not do business under another name nor
     use any trade name without giving 10 days prior written notice to Lender.
     The address appearing below Debtor's signature is Debtor's chief executive
     office and principal place of business; and such office, place of business
     and all Collateral shall be at such address except to the extent Debtor has
     provided prior written notice to Lender of any change of address/new
     location. Further, Debtor will promptly notify Lender in writing of any
     change, death or disability of any of its principal officers, directors and
     key employees; death of any guarantor; and any other material change in the
     structure, business or financial affairs of Debtor or the Collateral.

(g)  USE OF PROCEEDS, SPECULATION. Advances by Lender under this and other
     agreements shall be used exclusively by Debtor for working capital
     purposes. No part of any of the proceeds shall be used for speculative
     investment purposes; including, without limitation, speculating or hedging
     in the commodities and/or futures market without the prior written consent
     of Lender.

(h)  OWNERSHIP, MAINTENANCE OF COLLATERAL, RESTRICTION ON LIENS AND
     DISPOSITIONS. Debtor is the sole owner of the Collateral free of all
     claims, encumbrances and security interests except as permitted in writing
     by Lender. Debtor shall: maintain the Collateral in good condition and
     repair (reasonable wear and tear excepted), and not permit its value to be
     impaired; not permit waste, removal or loss of identity of the Collateral,
     nor shall Debtor, by action or inaction, cause Lender in good faith to fear
     waste, removal or loss of identity of the Collateral: keep the Collateral
     free from all claims, encumbrances and security interests (other than
     Lender's paramount security interest); defend it against all claims and
     legal proceedings by persons other than Lender; pay and discharge when due
     all taxes, levies and other charges or fees upon the Collateral except for
     payments of taxes contested by Debtor in good-faith by appropriate
     proceedings so long as no levy or lien has been imposed upon the
     Collateral; not lease, sell or transfer the Collateral to any party or to
     any new location outside of the ordinary course of business; not permit the
     Collateral to become a fixture or accession to other goods; not permit the
     Collateral to be used in violation of any applicable law, regulation or
     policy of insurance; and, as to the Collateral consisting of instruments
     and chattel paper, preserve Lender's rights in it against all other
     parties. Notwithstanding the above, Debtor may sell or lease inventory in
     the ordinary course of its business provided that (1) no sale or lease
     shall include any transfer or sale in satisfaction (partial or complete) of
     a debt owed by Debtor; (2) title will not pass to buyer until Debtor
     physically delivers the goods to buyer or Debtor ships the goods F.O.B. to
     buyer's destination; and (3) sales and/or leases to Debtor's Affiliates
     shall be for fair market value, cash on delivery, with the proceeds
     remitted to Lender.

(i)  MAINTENANCE OF SECURITY-INTEREST/PURCHASE MONEY SECURITY INTERESTS. Debtor
     shall take any action requested by Lender to preserve the Collateral and to
     establish priority of, perfect, continue perfection of or enforce Lender's
     interest in the Collateral and Lender's rights under this Agreement; and
     shall pay all costs and expenses related thereto. Debtor and Lender intend
     to maintain the full effect of any purchase money security interest granted
     in favor of Lender notwithstanding the fact that the Collateral so
     purchased is also pledged as security for other Obligations under this
     Agreement and the other Loan Documents.

(j)  COLLATERAL INSPECTIONS, MODIFICATIONS, CHANGES AND RETURNS. At reasonable
     times, Lender may examine the Collateral and Debtor's records pertaining to
     it, wherever located, and make copies of such records at Debtor's expense;
     and Debtor shall assist Lender in so doing. Without Lender's prior written
     consent, Debtor shall not alter, modify, discount, extend, renew or cancel
     any Collateral, except for ordinary discounts for prompt payment on
     accounts, physical modifications to the inventory occurring in the
     manufacturing process or alterations to equipment which do not materially
     affect its value. Debtor shall promptly notify Lender if any Qualified
     Account or Qualified Inventory ceases to be qualified, and notify Lender of
     any change in the condition of the Collateral.

(k)  COLLATERAL RECORDS/REPORTS. Debtor shall keep accurate and complete
     records respecting the Collateral in such form as Lender may approve. At
     such times as Lender may require, Debtor shall furnish to Lender
     information regarding the Collateral, certified by Debtor as complete and
     accurate and in such form and substance as required by Lender, including,
     without limitation; the current status and value of the leases pledged to
     Lender.


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<PAGE>   5
(l)  ACCOUNTING RECORDS/REPORTS; CONTROLLER. Debtor shall maintain a modern
     system of accounting in accordance with generally accepted principles of
     accounting consistently applied throughout all accounting periods. Debtor
     shall furnish Lender such reports and financial statements respecting the
     business, assets, income and financial condition of Debtor as Lender may
     reasonably request (at least within 30 days of the end of each monthly
     interim accounting period); all of which reports and financial statements
     shall be certified as complete and accurate by a principal officer of
     Debtor, and annually, within 90 days of fiscal year end Debtor shall
     provide Lender a certified audit, by an independent public accountant
     satisfactory to Lender with a reliance letter for the benefit of Lender.
     Furthermore, Debtor shall cause and hereby authorizes its accountants to
     deliver to Lender a copy of any letters, memoranda or advice such
     accountants direct to Debtor's management. At Debtor's expense, Lender
     shall have the right at any time during normal business hours to verify,
     inspect and make extracts of all of Debtor's books, accounts, records,
     orders, correspondence and such other papers as Lender may desire. Debtor
     shall employ a full-time controller whose experience and training are
     acceptable to Lender.

(m)  INSURANCE. Debtor shall keep the Collateral and Lender's interest in it
     insured against all risks and under policies with such provisions, for such
     amounts and with such insurers as shall be satisfactory to Lender, and
     shall furnish evidence of such insurance satisfactory to Lender. Insurer or
     its agent shall endorse the policy of insurance naming Lender as "Lender's
     Loss Payee", and shall agree to notify Lender of any changes in the policy
     coverage with respect to the Collateral or the addition of any other loss
     payees as to the Collateral. Debtor hereby assigns all insurance proceeds
     to and irrevocably directs, while any Obligations remain unpaid, any
     insurer to pay to Lender the proceeds of all such insurance and any premium
     refund, and authorizes Lender to endorse Debtor's name to effect the same;
     to make, adjust or settle, in Debtor's name, any claim on any insurance
     policy relating to the Collateral; and, at the option of Lender, to apply
     such proceeds and refunds to any balance of the Obligations and/or to
     restoration of the outstanding Collateral, returning any excess to Debtor.

(n)  ENVIRONMENTAL MATTERS. Except as disclosed in a written schedule attached
     to this Agreement (if no schedule is attached, there are no exceptions),
     there exists no uncorrected violation by Debtor of any federal, state or
     local laws (including, without limitation, statutes, regulations,
     ordinances or other governmental restrictions and requirements) relating to
     the discharge of air pollutants, water pollutants or process waste water or
     otherwise relating to the environment or hazardous substances as
     hereinafter defined, whether such laws currently exist or are enacted in
     the future (collectively "ENVIRONMENTAL LAWS"). The term "HAZARDOUS
     SUBSTANCES" shall mean any hazardous or toxic wastes, chemicals or other
     substances, the generation, possession or existence of which is prohibited
     or governed by any Environmental Laws. Debtor is not subject to any
     judgment, decree, order or citation, or a party to (or threatened with) any
     litigation or administrative proceeding, which asserts that Debtor (1) has
     violated any Environmental Laws; (2) is required to clean up, remove or
     take remedial or other action with respect to any Hazardous Substances
     (collectively "REMEDIAL ACTION"); or (3) is required to pay all or a
     portion of the cost of any Remedial Action, as a potentially responsible
     party. There are not now, nor to Debtor's knowledge after reasonable
     investigation, have there ever been, any Hazardous Substances (or tanks or
     other facilities for the storage of Hazardous Substances) stored,
     deposited, recycled or disposed of on, under or at any real estate owned or
     occupied by Debtor during the periods that Debtor owned or occupied such
     real estate, which if present on the real estate or in the soils or ground
     water, could require Remedial Action. To Debtor's knowledge, there are no
     proposed or pending changes in Environmental Laws which would adversely
     affect Debtor or its business, and there are no conditions existing
     currently or likely to exist during the term of this Agreement which would
     subject Debtor to Remedial Action or other liability. Debtor currently
     complies with and will continue to timely comply with all applicable
     Environmental Laws; and will provide Lender, immediately upon receipt,
     copies of any correspondence, notice, complaint, order or other document
     from any source asserting or alleging any circumstance or condition which
     requires or may require a financial contribution by Debtor or Remedial
     Action or other response by or on the part of Debtor under any
     Environmental Laws, or which seeks damages or civil, criminal or punitive
     penalties from Debtor for an alleged violation of any Environmental Laws.

(o)  CHATTEL PAPER, INSTRUMENTS, ETC. Chattel paper, instruments, drafts, notes,
     acceptances, and other documents which constitute Collateral shall be on
     forms satisfactory to Lender. Debtor shall promptly mark all original
     chattel paper to indicate conspicuously Lender's security interest therein,
     shall not deliver any chattel paper or instruments to any other entity and,
     upon request, deliver all original chattel paper, instruments, drafts,
     notes, acceptances and other documents which constitute collateral to
     Lender.

(p)  UNITED STATES GOVERNMENT CONTRACTS. It any accounts or contract rights
     arose out of contracts with the United States or any of its departments,
     agencies or instrumentalities, Debtor shall promptly notify Lender and
     execute any writings required by Lender so that all money due or to become
     due under such contracts shall be assigned to Lender under the Federal
     Assignment of Claims Act.

(q)  EXPENSES AND FEES. Debtor shall be responsible for the payment of all
     expenses and fees of Lender and its personnel, Lender's corporate inside
     counsel, retained outside counsel and other third parties, (including any
     Participant) in connection with the Loan Documents, including, without
     limitation: perfecting Lender's security interest in the Collateral and
     confirming its priority; the internal reviews of Debtor's business
     operations and the Collateral; appraisals and environmental audits; the
     closing, administration, modification, defense of or enforcement of this
     Agreement and the other Loan Documents; and the preservation, collection
     and/or liquidation of the Collateral; in each case regardless of whether
     such expenses and fees arise after termination of this Agreement or as part
     of a judicial or non-judicial proceeding. Such expenses and fees may, at
     Lender's option, be debited to Debtor's Loan Account Ledger and be in
     addition to the interest and Minimum Monthly Charge referred to in Section
     1. LOANS AND SECURITY INTEREST

                         6. RIGHTS AND DUTIES OF LENDER

(a)  AUTHORITY TO PERFORM FOR DEBTOR. To facilitate application of the
     Collateral against the Obligations, Debtor presently appoints any officer
     of Lender as Debtor's attorney-in-fact (coupled with an interest and
     irrevocable while any Obligations remain unpaid): to endorse the name of
     Debtor on any invoice or document of title relating to accounts, drafts or
     notices to account debtors, notes, acceptances, assignments of government
     contracts, instruments, financing statements, checks, insurance claims or
     payments or other evidence of payment or security interest related to the
     transactions under this Agreement or the other Loan Documents: to perfect,
     protect and/or realize upon Lender's interest in the Collateral; and to do
     all such other acts and things necessary to carry out Debtor's obligations
     under this Agreement and the other Loan Documents, including, upon default,
     to receive, open and dispose of all mail addressed to Debtor, to notify the
     Post Office authorities to change the address for delivery of mail
     addressed to Debtor to an address designated by Lender and to notify (and
     Debtor hereby directs) each of Debtor's depository institutions to remit to
     Lender, without liability to Debtor, all of Debtor's funds on deposit with
     such institutions. All acts by Lender are hereby ratified and approved, and
     Lender shall not be liable for any acts of commission or omission, nor for
     any errors of judgment or mistakes of fact or law.

(b)  COLLATERAL PRESERVATION. Lender shall use reasonable care in the custody 
     and preservation of any Collateral in its physical possession but in
     determining such standard of reasonable care, Debtor expressly acknowledges
     that Lender has no duty to: insure the Collateral against hazards; ensure
     that the Collateral will not cause damage to property or injury to third
     parties; protect it from seizure, theft or conversion by third parties,
     third parties' claims or acts of God; give to Debtor any notices received
     by Lender regarding the Collateral; perfect or continue perfection of any
     security interest in favor of Debtor; perform any services, complete any
     work-in-process or take any other action in connection with the management
     or maintenance of the Collateral; nor sue or otherwise effect collection
     upon any accounts even if Lender shall have made a demand for payment
     upon individual account debtors. Notwithstanding any failure by Lender to
     use reasonable care in preserving the Collateral, Debtor agrees that Lender
     shall not be liable for consequential or special damages arising therefrom.

                                     5 of 8


<PAGE>   6
(c)  SETOFFS. As additional security for the payment of the Obligations, Debtor
     hereby grants to Lender a security interest in, a lien on and an express
     contractual right to set off against all depository account balances, cash
     and any other property of Debtor now or hereafter in the possession of
     Lender. Lender may, at any time upon the occurrence of a default hereunder
     (notwithstanding any notice requirements or grace/ cure periods under this
     Agreement or the other Loan Documents) set off against the Obligations
     WHETHER OR NOT THE OBLIGATIONS (INCLUDING FUTURE INSTALLMENTS) ARE THEN DUE
     OR HAVE BEEN ACCELERATED, ALL WITHOUT ANY ADVANCE OR CONTEMPORANEOUS NOTICE
     OR DEMAND OF ANY KIND TO DEBTOR, SUCH NOTICE AND DEMAND BEING EXPRESSLY
     WAIVED.

                            7. OTHER LOAN PROVISIONS

(a)  PARTICIPATIONS, PARTICIPANT INTEREST RATE. Debtor recognizes that an
     integral part of the financing under this Agreement is Lender's
     participation with_________________________________________________________
     ("Participant"), and Debtor consents to such participation, the extent of
     which shall not exceed ____ % of the advances under this Agreement or such
     dollar limit as Lender and Participant may agree. Such participation is
     subject to the execution of a participation agreement in a form
     satisfactory to Lender. The annual rate of interest charged to Debtor on
     any advances subject to participation shall be _____% plus the rate
     announced from time to time by Lender as its "prime rate." Minor deviations
     above and below such rate of interest will result from costs and fees
     provided for in this Agreement, timing of the settlement with Participant
     on any particular day, clearance factors and the time of day of the
     application of Collections. The time and manner of settlement of any
     participation shall be within the sole determination of Lender and
     Participant. In the event a participation is terminated for any reason, the
     rate of interest charged Debtor by Lender on any advances in replacement of
     the participated advances shall revert to that rate set forth in Section 1.
     LOANS AND SECURITY INTEREST hereof; and Lender shall not be obligated to
     fund Participant's prior share of the advances. Notwithstanding the
     existence of or lack of any participation, Lender shall not at any time
     lend funds to Debtor in excess of Lender's lending limits. Lender may
     distribute to Participant or potential participants any information Lender
     may obtain regarding Debtor, the Collateral, this Agreement and the Loan
     Documents between Debtor and Lender. Debtor also agrees to furnish
     Participant, upon request, the same information Debtor provides to Lender.

(b)  LETTERS OF CREDIT/BANKER'S ACCEPTANCES. From time to time, and subject to
     execution of appropriate agreements, Debtor may request Lender's
     International Banking Division, or another institutional lender (either
     hereinafter referred to as "ISSUER") to issue letters of credit and/or
     create banker's acceptances for the account of Debtor (either hereinafter
     referred to as "CREDIT") in favor of various beneficiaries. In order to
     support the issuance of such Credit by Issuer and at Lender's option,
     Lender shall reduce the amount of funds Lender may make available for
     borrowing by Debtor under Section 3. COLLATERAL-OBLIGATION RATIO of this
     Agreement to the extent of the Issuer's liability under such Credit or such
     lesser amount as Lender and the Issuer may determine is required
     ("COLLATERAL RESERVATION"). This Collateral Reservation shall be deemed an
     "Obligation" under this Agreement, and at any time Lender is called upon to
     advance funds to Issuer under any such Credit, the amount of funds so
     advanced shall be charged against Debtor's Loan Account Ledger as a loan,
     and interest will be charged thereon at the rate set forth under Section 1.
     LOANS AND SECURITY INTEREST of this Agreement. Lender shall charge Debtor a
     fee for such Collateral Reservation in an amount and on terms mutually
     agreeable to Lender and Debtor. Any fee for Collateral Reservation shall be
     in addition to any fees or charges imposed by Issuer. Debtor shall not hold
     Lender liable nor shall any advance made by Lender to any Issuer be subject
     to any contest, offset or defense by virtue of Issuer's failure to comply
     with its obligations to Debtor.

(c)  RETURN OF DOCUMENTS, ACCOUNT STATED. Any documents, schedules, invoices or
     other papers delivered to Lender by Debtor may be destroyed or otherwise
     disposed of by Lender unless Debtor immediately requests, in writing, the
     return of said documents, schedules, invoices or other papers and makes
     arrangements for such return, at Debtor's expense. ANY STATEMENT OF ACCOUNT
     RENDERED BY LENDER TO DEBTOR, INCLUDING, WITHOUT LIMITATION, STATEMENTS OF
     BALANCE OWING, ACCRUED INTEREST, EXPENSES AND COSTS, SHALL BE DEEMED TO BE
     CORRECT AND CONSTITUTE AN ACCOUNT STATED UNLESS, WITHIN 30 DAYS AFTER
     RECEIPT THEREOF BY DEBTOR, DEBTOR SHALL DELIVER TO LENDER, BY REGISTERED OR
     CERTIFIED MAIL, WRITTEN OBJECTION THERETO SPECIFYING THE ERRORS, IF ANY,
     CONTAINED IN SUCH STATEMENT.

(d)  LOAN ADMINISTRATION AND CLOSING FEE. In addition to interest, the Minimum
     Monthly Charge and other costs and fees referred to in this Agreement and
     while this Agreement is in effect, Debtor shall be assessed a loan
     administration fee of $ 500.00 per quarter.

(e)  INITIAL FUNDING. Initial funding under this and other agreements between
     Debtor and Lender is, among other things, contingent upon (1) maintenance
     of Debtor's business, financial condition and Collateral such that no
     material adverse change will have occurred from the date hereof until the
     time of initial funding; (2) no material change in the structure of the
     transaction under which Lender might provide financing; (3) appropriate
     perfection of Lender's paramount security interest in the Collateral; and
     (4) completion of all closing requirements and execution of all closing
     documentation necessary and satisfactory to Lender.

                                   8. DEFAULT

(a)  DEFAULT. DEBTOR SHALL IMMEDIATELY NOTIFY THE LENDER, IN WRITING, WHEN
     DEBTOR OBTAINS KNOWLEDGE OF THE OCCURRENCE OF ANY DEFAULT SPECIFIED BELOW.
     Regardless of whether Debtor has given Lender the required notice, the
     occurrence of one or more of the following shall constitute a default.

     (1)  NONPAYMENT. Debtor fails to pay when due any of the Obligations.

     (2)  NONPERFORMANCE. Debtor or any guarantor of Debtor's Obligations to
          Lender ("Guarantor") shall fail to perform or observe any agreement,
          term, provision, condition, or covenant (other than a default
          occurring under (1), (3), (4), (5) or (6) of this section) required to
          be performed or observed by Debtor or any Guarantor hereunder or under
          any other Loan Document or other agreement with or in favor of Lender.

     (3)  MISREPRESENTATION. Any financial information, statement, certificate,
          representation or warranty given to Lender by Debtor or any Guarantor
          (or any of their representatives) in connection with this Agreement or
          the other Loan Documents and/or any borrowing thereunder, or required
          to be furnished under the terms thereof, shall prove untrue or
          misleading in any material respect (as determined by Lender in the
          exercise of its judgment) as of the time when given.

     (4)  DEFAULT ON OTHER OBLIGATIONS. Debtor or any Guarantor shall be in
          default under the other Loan Documents or any indebtedness in excess
          of $10,000 owing by Debtor to any third party, and the period of
          grace, if any, to cure said default shall have passed.

     (5)  JUDGMENTS. Any judgment shall be obtained against Debtor or any
          Guarantor which, together with all other outstanding unsatisfied
          judgments against Debtor (or such Guarantor), shall exceed the sum of
          $10,000 and shall remain unvacated, unbonded or unstayed for a period
          of 30 days following the date of entry thereof.

                                     6 of 8

<PAGE>   7
     (6)  INABILITY TO PERFORM BANKRUPTCY/INSOLVENCY, (i) Debtor or any
          Guarantor shall die or cease to exist; or (ii) any Guarantor shall
          attempt to revoke any guaranty of the Obligations described herein, or
          any guaranty becomes unenforceable in whole or in part for any reason;
          or (iii) any bankruptcy, insolvency or receivership proceedings, or an
          assignment for the benefit of creditors, shall be commenced under any
          federal or state law by or against Debtor or any Guarantor; or (iv)
          Debtor or any Guarantor shall become the subject of any out-of-court
          settlement with its creditors; or (v) Debtor or any Guarantor is
          unable or admits in writing its inability to pay its debts as they
          mature.

(b)  TERMINATION OF LOANS; ADDITIONAL LENDER RIGHTS. Upon termination of this
     Agreement as provided in Section 9. TERMINATION below or the occurrence of
     any default identified above and in the exercise of its discretion under
     this Agreement, Lender may at any time (1) immediately cease making
     additional loans to Debtor; (2) set off; and/or (3) take such other steps
     to protect or preserve Lender's interest in the Collateral, including,
     without limitation, notifying account debtors to make payment directly to
     Lender, advancing funds to protect or preserve the Collateral and insuring
     the Collateral at Debtor's expense; ALL WITHOUT DEMAND OR NOTICE OF ANY
     KIND, all of which are hereby waived.

(c)  ACCELERATION, EXPENSES AND LENDER'S CUMULATIVE REMEDIES. Upon the
     occurrence of any one of the above defaults or termination of this
     Agreement as provided in Section 9. TERMINATION below, then at the option
     of Lender and upon written notice to Debtor, all of the Obligations shall
     become immediately payable by Debtor and fully accelerated and this
     Agreement shall be terminated. Debtor shall also pay Lender all expenses
     incurred by Lender, including, without limitation, those described in
     Section 5. DEBTOR'S WARRANTIES AND COVENANTS above. Any termination of this
     Agreement shall also effect an acceleration of all Obligations owed Lender
     (including, without limitation, any installment obligations and other
     agreements between Debtor and Lender even if scheduled payments thereunder
     would otherwise remain outstanding). Furthermore, Lender shall have all
     rights and remedies for default provided by the Uniform Commercial Code, as
     well as any other applicable law and this Agreement, INCLUDING, WITHOUT
     LIMITATION, THE RIGHT TO REPOSSESS, RENDER UNUSABLE AND/OR DISPOSE OF THE
     COLLATERAL WITHOUT JUDICIAL PROCESS. The rights and remedies specified
     herein are cumulative and are not exclusive of any rights or remedies which
     Lender would otherwise have. With respect to such rights and remedies:

     (1)  ASSEMBLING COLLATERAL, STORAGE, USE OF DEBTOR'S NAME/OTHER PROPERTY.
          Lender may require Debtor to assemble the Collateral and to make it
          available to Lender at any convenient place designated by Lender.
          Debtor recognizes that Lender will not have an adequate remedy in law
          if this obligation is breached and, accordingly, Debtor's obligation
          to assemble the Collateral shall be specifically enforceable. Lender
          shall have the right to take immediate possession of said Collateral;
          and Debtor irrevocably authorizes Lender to enter any of the premises
          of Debtor or wherever said Collateral shall be located, and to store
          (rent-free) repair, maintain, assemble, manufacture, advertise and
          sell, lease or dispose of (by public sale or otherwise) the same on
          said premises until sold. Lender is hereby granted an irrevocable
          license to use, without charge, Debtor's equipment, inventory labels,
          patents, copyrights, franchises, names, trade secrets, trade names,
          trademarks and advertising matter and any property of a similar
          nature; and Debtor's rights under all licenses and franchise
          agreements shall inure to Lender's benefit. Further, Debtor releases
          Lender from obtaining a bond or surety with respect to any
          repossession and/or disposition of the Collateral.

     (2)  NOTICE OF DISPOSITION. Written notice, when required by law, sent to
          any address of Debtor in this Agreement, at least 10 calendar days
          (counting the day of sending) before the date of a proposed
          disposition of the Collateral is reasonable notice. Notification to
          account debtors by Lender shall not be deemed a disposition of the
          Collateral.

     (3)  POSSESSION OF COLLATERAL; COMMERCIAL RESONABLENESS. Lender shall not,
          at any time, be obligated to either take or retain possession or
          control of the Collateral. With respect to Collateral in the
          possession or control of Lender, Debtor and Lender agree that as a
          standard for determining commercial resonableness, Lender need not
          liquidate, collect, sell or otherwise dispose of any of the Collateral
          if Lender believes, in good faith, that disposition of the Collateral
          would not be commercially reasonable, would subject Lender to
          third-party claims or liability or that other potential purchasers
          could be attracted or a better price obtained if Lender held the
          Collateral for up to 1 year; and Lender shall not then be deemed to
          have retained the Collateral in satisfaction of the Obligations.
          Furthermore, Lender may sell the Collateral on credit (and reduce the
          Obligations only when payment is received from the buyer), at
          wholesale and/or with or without an agent or broker; and Lender need
          not complete, process or repair the Collateral prior to disposition.

     (4)  INTEREST AFTER MATURITY AND EXPENSES. Upon maturity of any or all of
          the Obligations, whether by default or otherwise, the unpaid
          Obligations shall bear interest from and after maturity until paid at
          an annual rate equal to 2% plus that rate of interest payable under
          Section 1. LOANS AND SECURITY INTEREST.

(d)  WAIVER BY LENDER. Lender may permit Debtor to attempt to remedy any default
     without waiving its rights and remedies hereunder, and Lender may waive any
     default without waiving any other subsequent or prior default by Debtor.
     Furthermore, delay on the part of Lender in exercising any right, power or
     privilege hereunder or at law shall not operate as a waiver thereof, nor
     shall any single or partial exercise of such right, power or privilege
     preclude other exercise thereof or the exercise of any other right, power
     or privilege. For purposes of this subsection, delays may include, but
     shall not be limited to, Lender's failure to immediately enforce any
     warranty or covenant or to demand immediate repayment of any Obligation in
     excess of the ratios set forth in Section 3. COLLATERAL-OBLIGATION RATIO
     above, or of any other past-due Obligation. NO WAIVER OR SUSPENSION SHALL
     BE DEEMED TO HAVE OCCURRED UNLESS LENDER HAS EXPRESSLY AGREED IN WRITING
     SPECIFYING SUCH WAIVER OR SUSPENSION.

                                 9. TERMINATION

(a)  TERM, TERMINATION, PREPAYMENT. Absent a termination by default under
     Section 8. DEFAULT, this Agreement may be terminated at any time upon 90
     days prior written notice from Lender to Debtor. While this Agreement is in
     effect, Debtor agrees to borrow funds and pay at minimum to Lender the
     Minimum Monthly Charge specified in Section 1. LOANS AND SECURITY INTEREST
     of this Agreement until June 30, 2000 and from year to year thereafter,
     unless Debtor notifies Lender that it does not intend to extend the
     Agreement for another year by giving Lender written notice at least 90 days
     prior to the expiration of the then existing term of this Agreement. In any
     event, Debtor shall always have the unchallengeable right to fully prepay
     its Obligations to Lender prior to the end of the term of this Agreement or
     any renewal term provided, however, that Debtor gives Lender at least 90
     days prior written notice of such prepayment and pays Lender, in addition
     to all other Obligations (including, without limitation, prepayment charges
     on fixed rate Obligations), the Minimum Monthly Charge specified in Section
     1. LOANS AND SECURITY INTEREST above for each and every month from the
     month of prepayment until the expiration of the then existing term of this
     Agreement. Said payment of the aggregate Minimum Monthly Charge shall be
     discounted to its "present value" at a discount rate equal to that price
     reported in THE WALL STREET JOURNAL as the "Asked (Discount)" price of
     13-week United States Treasury Bills as sold in the most current Monday
     auction preceding the date of prepayment by Debtor of all its Obligations
     to Lender.

(b)  SURVIVAL OF SECURITY INTEREST, DUTIES AND WARRANTIES. Notwithstanding
     termination of this Agreement by either Debtor or Lender, by default or
     otherwise, Lender's security interest and all Debtor's duties, liabilities,
     representations and warranties under this Agreement shall survive
     termination of this Agreement and shall continue while any Obligation
     remains unsatisfied, whether such Obligation arises under this Agreement or
     the other Loan Documents or whether such Obligation is an advance made by
     Lender to Debtor following either (1) a temporary zero credit balance in
     Debtor's Loan Account Ledger, or (2) termination of this Agreement.



                                      7of 8

<PAGE>   8
           10. DEBTOR'S INDEMNIFICATION; WAIVER; LIMITATION OF DAMAGES

(a)  INDEMNIFICATION. Except for damages arising from Lender's willful
     misconduct, Debtor hereby indemnifies and agrees to defend and hold Lender
     harmless from any and all losses, costs, damages, claims and expenses of
     any kind suffered by or asserted against Lender relating to claims by third
     parties arising out of the financing provided by Lender to Debtor or
     related to the Collateral. This indemnification and hold harmless provision
     shall survive the termination of this Agreement and the satisfaction of the
     Obligations due Lender.

(b)  NOTICE OF CLAIM; WAIVER; LIMITATION OF DAMAGES. In order to allow Lender to
     mitigate any alleged breach of this Agreement by Lender or its other duties
     to Debtor, if any, Debtor agrees to give Lender WRITTEN notice of any claim
     or defense it has against Lender, whether in tort or contract, relating to
     any action or inaction by Lender under this Agreement, or the transactions
     related thereto, or of any defense to payment of the Obligations for any
     reason. DEBTOR AGREES TO PROVIDE SUCH NOTICE TO LENDER WITHIN 60 DAYS AFTER
     DEBTOR HAS KNOWLEDGE OF SUCH ACTION OR INACTION BY LENDER OR HAS KNOWLEDGE
     OF SUCH DEFENSE TO PAYMENT. The requirement of providing such notice to
     Lender represents Debtor's agreed-to standard of performance. IF DEBTOR
     DOES NOT TIMELY DELIVER SUCH NOTICE TO LENDER, DEBTOR SHALL NOT ASSERT AND
     SHALL BE DEEMED TO HAVE WAIVED ANY SUCH CLAIM OR DEFENSE. Notwithstanding
     any claim that Debtor may have against Lender, Lender shall not be liable
     to Debtor for consequential and special damages arising therefrom.

                                11. MISCELLANEOUS

(a)  RELATIONSHIP TO OTHER DOCUMENTS. The warranties, covenants and other
     obligations of Debtor (and the rights and remedies of Lender) that are
     outlined in this Agreement and the other Loan Documents are intended to
     supplement each other. In the event of any inconsistencies between any of
     the terms in this Agreement and the other Loan Documents, all terms shall
     be construed so as to give Lender the most favorable rights set forth in
     the conflicting documents, except that if there is a direct conflict
     between any preprinted terms and specifically negotiated terms (whether
     included in an addendum or otherwise), the specifically negotiated terms
     will control.

(b)  NOTICES. Although any notice required to be given hereunder might be
     accomplished by other means, notice to Debtor shall always be deemed given
     when placed in the United States Mail, with postage prepaid, or sent by
     overnight delivery service, or sent by telex or facsimile; in each case to
     the address set forth below or as amended.

(c)  SUCCESSORS. The rights, options, powers and remedies granted in this
     Agreement shall extend to Lender and to its successors, Participants and
     assigns, shall be binding upon Debtor and its successors and assigns and
     shall be applicable and to all renewals, amendments and/or extensions
     hereof.

(d)  ORDER OF PAYMENT/APPLICATION OF PROCEEDS. All payments received by Lender
     under this Agreement or to other Loan Documents with Debtor, any Guarantor,
     third parties or from the Collateral, may be applied against the
     Obligations in any order and manner which Lender may choose.

(e)  APPLICABLE LAW AND JURISDICTION; INTERPRETATION AND MODIFICATION. This
     Agreement and all other Loan Documents shall be governed by and interpreted
     in accordance with the laws of the State of Wisconsin. Invalidity of any
     provision of this Agreement shall not affect the validity of any other
     provision. The provisions of the other Loan Documents shall not be altered,
     amended or waived without the express written consent of Lender (and
     Debtor, when appropriate). DEBTOR HEREBY CONSENTS TO THE EXCLUSIVE
     JURISDICTION OF ANY STATE OR FEDERAL COURT SITUATED IN MILWAUKEE COUNTY,
     WISCONSIN, AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, WITH
     REGARD TO ANY ACTIONS, CLAIMS, DISPUTES OR PROCEEDINGS RELATING TO THIS
     AGREEMENT, THE COLLATERAL, ANY OTHER LOAN DOCUMENT, OR ANY TRANSACTIONS
     ARISING THEREFROM, OR ENFORCEMENT AND/OR INTERPRETATION OF ANY OF THE
     FOREGOING. Nothing herein shall affect Lender's rights to serve process in
     any manner permitted by law, or limit Lender's right to bring proceedings
     against Debtor in the competent courts of any other jurisdiction or
     jurisdictions. This Agreement, the other Loan Documents and any amendments
     hereto (regardless of when executed) will be deemed effective only upon
     Lender's receipt and acceptance of the executed originals thereof in
     Milwaukee, Wisconsin.

(f)  WAIVER OF JURY TRIAL. DEBTOR AND LENDER HEREBY JOINTLY AND SEVERALLY WAIVE
     ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING RELATING TO
     THIS AGREEMENT, THE LOAN DOCUMENTS, THE OBLIGATIONS THEREUNDER, THE
     COLLATERAL OR ANY TRANSACTION ARISING THEREFROM OR CONNECTED THERETO.
     DEBTOR AND LENDER EACH REPRESENTS TO THE OTHER THAT THIS WAIVER IS
     KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.

                              12. ADDITIONAL TERMS

          SEE EXHIBIT A HERETO



Signed in Milwaukee, Wisconsin, on ___________________________ 19____


LENDER:                              DEBTOR:
                                     TELECOMMUNICATIONS INCOME FUND XI, L.P.

FIRSTAR FINANCIAL SERVICES,          By: Berthel Fisher & Company Leasing, Inc.
A DIVISION OF FIRSTAR BANK           ITS: General Partner
 MILWAUKEE, N.A.

By:______________________________      By:  [SIGNATURE]
                                             ---------------------------- 
Title:___________________________      TITLE:  President                  
                                                              

777 East Wisconsin Avenue              Address:
Milwaukee, Wisconsin 53202
                                       100 SECOND STREET S.E.
                                       CEDAR RAPIDS, IA 52401

                                     8 OF 8


<PAGE>   9
                                    EXHIBIT A
                                     TO THE
                      REVOLVING LOAN AND SECURITY AGREEMENT
                                 BY AND BETWEEN
                           FIRSTAR FINANCIAL SERVICES,
                   A DIVISION OF FIRSTAR BANK MILWAUKEE, N.A.,
                                       AND
                     TELECOMMUNICATIONS INCOME FUND XI, L.P.
                       DATED: __________________________

1. Section 2. DEFINITIONS subsection (a) continued:

          The term "Collateral" shall include, without limitation, all Debtor's
          chattel paper now and hereafter existing or created, including all
          leases represented by such chattel paper; all interests in any
          payments made under or respecting the chattel paper (including,
          without limitation, all rents, security deposits, advance payments,
          indemnity payments, purchase options and renewal payments), any cash
          accounts, inventory, equipment and general intangibles (all
          hereinafter "Lease Collateral") pertaining to such chattel paper; all
          purchase orders pertaining to the Lease Collateral; all returns,
          repossessions, upgrades, additions, modifications and accessories to
          the Lease Collateral; all rental, maintenance, warranty and software
          agreements regarding the Lease Collateral; any guaranties, letters of
          credit, notes or other property supporting such chattel paper; any
          proceeds from acquisition of the Lease Collateral under any
          remarketing or similar agreement; all insurance and other proceeds
          thereof; any assignment in favor of Debtor of all telephone revenue
          received by or on behalf of lessees of Debtor and all proceeds
          thereof; any assignment from Berthel Fisher & Company Leasing, Inc.
          ("Berthel Fisher"), Debtor as successor of lessees' interests under
          location (site) leases pertaining to the Lease Collateral and proceeds
          thereof.

2. Section 2. DEFINITIONS, subsection (b)(8):

          (a)  Each Qualified Account must be an Eligible Lease. Requirements
               for an Eligible Lease:

               (1)  The lease executed by each respective lessee is in form and
                    substance similar to that lease form attached hereto as
                    Exhibit B;

               (2)  For each lease entered into with Berthel Fisher, as lessor,
                    the lease has been assigned to Debtor pursuant to an
                    Assignment of Lease or Security Agreement (in the form of
                    Exhibit C hereto), the original of such assignment having
                    been placed in the possession of Lender;

               (3)  The lease terms and underlying collateral ("Lease
                    Collateral") pledged to Lender are fully acceptable to
                    Lender;

               (4)  The lease is for a term of 60 months or less; 

               (5)  The unpaid lease payments under each new lease and the
                    aggregate of the unpaid lease payments to any lessee (x) do
                    not exceed $1,200,000.00 when such aggregate unpaid lease
                    payments are less than or equal to $10,000,000.00 (not
                    including the unpaid lease payments existing as of the date
                    of this Agreement); and (y) do not exceed 12 percent of the
                    aggregate of the unpaid lease payments to all leases of
                    Debtor when such aggregate unpaid lease payments exceed
                    $10,000,000.00 (not including the unpaid lease payments
                    existing as of the date of this Agreement);

               (6)  The lease is not in default, and all lease payments under
                    the lease are not more than 60 days past due,

               (7)  Except as provided below, each lease constitutes a "true
                    lease" transaction under applicable law and does not
                    constitute a secured transaction. Qualified Account also
                    will include loans made by Debtor to customers for the
                    purchase of telephone equipment which loans are secured by a
                    first security interest in such equipment. Such loans shall
                    also be subject to the same eligibility requirements for
                    leases under this subsection, except where such requirements
                    are applicable to leases only;

               (8)  The original of each lease is placed in the possession of
                    Lender, and the lease and Lease Collateral are and remain
                    subject to the first perfected security interest of Lender.
                    There shall be only one original of each lease, and Debtor
                    shall mark any copies or duplicates thereof "COPY
                    ONLY/ORIGINAL ASSIGNED TO FIRSTAR BANK MILWAUKEE, N.A.";


<PAGE>   10
          (9)  For each lease, Lender shall be provided evidence of the vesting
               of Debtor's first perfected security interest in each specific
               lease and Lease Collateral provided by Debtor to each respective
               lessee and assignment of such interest to Lender. Debtor shall
               provide Lender original financing statements and assign to Lender
               each financing statement against each lessee as "Lessee" and
               Debtor as "Lessor"; all in a form acceptable to Lender. Lender
               reserves the right to require assignment of any financing
               statements recorded by Debtor prior to the date of this
               Agreement.

               Each such prior recorded financing statement should reference the
               specific lease or leases, the Lease Collateral and proceeds
               thereof. The description of the Lease Collateral shall include
               listings of quantity, make, model, serial number or any other
               identifications acceptable to Lender.

               Absent Debtor providing Lender with evidence of its priority
               purchase money secured position in the Lease Collateral, Debtor
               shall provide copies of all applicable UCC searches,
               subordinations and/or releases necessary to evidence the first
               perfected security interest of Debtor in the Lease Collateral;

          (10) For each lease, Lender shall be provided the original (in form
               and substance similar to Exhibit D hereto) of each lessee's
               authorization that third-party collections of the lessee's
               telephone revenue be remitted to Debtor as lease payments under
               each lease;

          (11) For each lease, Lender shall be provided the original (in form
               and substance similar to Exhibit E hereto) of each lessee's
               Assignment of Site Lease and Security Agreement to Berthel
               Fisher;

          (12) For each lease, Lender shall be provided the original of each
               lessee's written acceptance of the Lease Collateral, which
               acceptance certificate is in form and substance similar to that
               acceptance certificate attached hereto as Exhibit F;

          (13) Lender shall be provided a copy of each invoice for the Lease
               Collateral sent by the supplier of the Lease Collateral
               ("Vendor") to Debtor. Such invoice should contain an adequate
               description of the Lease Collateral and the cost thereof,

          (14) Lender shall be provided with a copy of all check(s) from Debtor
               payable to Vendor evidencing payment for the Lease Collateral;

          (15) Lender shall be provided with a copy of each lessee's corporate
               borrowing resolution indicating lessee's authority to execute
               each lease pledged hereunder;

          (16) if requested by Lender, Debtor shall provide Lender evidence of
               its qualification and authority to do business in those states
               where each lessee resides;

          (17) Debtor shall also provide such other documents or information as
               Lender may require to evidence the validity, enforceability
               and/or terms of any lease or Debtors interest in the Lease
               Collateral;

          (18) Unless terms of similar substance are incorporated into new
               leases created after the date of this Agreement, each lessee
               shall execute an Acknowledgement of Collateral lease Assignment
               in favor of Lender, which Acknowledgement of Collateral Lease
               Assignment is in form and substance similar to that
               Acknowledgement of Collateral Lease Assignment attached hereto as
               Exhibit G. (For leases existing as of the date of this Agreement,
               Debtor shall use its best efforts to obtain an executed
               Acknowledgement of Collateral Lease Assignment from each such
               prior-existing lessee); and

          (19) Debtor shall prepare and remit to Lender a Lease Financing
               Documentation Checklist in the form of Exhibit H hereto, along
               with the related underlying documents specified in the checklist
               for each lease pledged to Lender hereunder.

(b)  Qualified Accounts shall not include, among other things, any unearned
     revenue, advances on leases and security deposits, and lessees who do not
     maintain a Traditional Cash Flow. The term "Traditional Cash Flow" shall be
     defined as net income plus non-cash expenses minus principal payments
     minus non-financed capital expenditures.

3. Section 3. COLLATERAL/OBLIGATION RATIO (continued):



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<PAGE>   11
     provided advances shall not exceed 40% of the Gross Proceeds of Debtor's
     offering pursuant to its S-1 registration statement, as calculated by
     Debtor, provided that Lender shall have no responsibility for calculation
     of such amount.

4. Section 12. ADDITIONAL TERMS:

     (a)  Debtor shall:

          (1)  On a monthly basis, provide Lender with a detailed listing of
               outstanding leases;

          (2)  Provide Lender with a monthly past-due report;

          (3)  At all times, notify Lender of any change of location of Debtor's
               equipment in the possession of Debtor's lessees;

          (4)  Periodically, but not less than twice weekly, provide Lender with
               a schedule of the application of cash receipts;

          (5)  Provide Lender with financial statements of each lessee upon
               request from Lender; and

          (6)  Provide Lender with such other documents or information as Lender
               may deem necessary for its financing of Debtor.

     (b)  At all times during the term of this Agreement Berthel Fisher shall
          have entered into an agreement with Lender whereby Berthel Fisher will
          acknowledge that all site leases, along with the underlying leases it
          had assigned to Debtor, have been assigned by Debtor to Lender and
          that all lease payments or other revenue relating to the leases
          received by Berthel Fisher will be transferred to Lender at Lender's
          discretion.

     (c)  At Debtor's expense, Lender shall conduct a periodic update search of
          UCC filings against Berthel Fisher and any other party Lender deems
          appropriate.

     (d)  Debtor shall not waive, amend or supplement any provisions of the
          form(s) of Chattel Paper used by Debtor and approved by Lender as
          attached hereto without the prior written consent of Lender. Debtor
          shall promptly notify Lender in writing of any material default by any
          party to any Chattel Paper and/or any claim of setoff, deduction,
          defense or suspension of performance regarding any Chattel Paper, or
          any material impairment in the creditworthiness of any party to any
          Chattel Paper. Debtor agrees to promptly provide Lender with a copy of
          any notices or demands received by or given by Debtor to any Chattel
          Paper, the effect of which would adversely affect Lender's rights
          under such Chattel Paper or as regards the goods subject thereto.

     (e)  Debtor will not attempt to assign or pledge the Chattel Paper, any
          property securing the same or the rights thereunder to anyone other
          than Lender so long as Debtor remains obligated to Lender. In
          addition, Debtor shall have no authority, without Lender's prior
          written consent, to repossess or consent to the return of property
          described in the Chattel Paper, to consent to any assignment of the
          Chattel Paper and/or sublease of property securing the Chattel Paper,
          to release property pertaining to the Chattel Paper or to modify,
          release or discharge any obligations of any obligor an the Chattel
          Paper.

     (f)  Upon Lender's request, Debtor shall obtain a written acknowledgment
          from any party to any Chattel Paper consenting to payment of rentals
          directly to Lender and containing such other confirmations,
          representations, warranties and/or agreements as are deemed necessary
          by Lender. Debtor hereby unconditionally and irrevocably appoints
          Lender as its attorney-in-fact (coupled with an interest) for the
          purpose of collecting all amounts due under any Chattel Paper and
          otherwise exercising all of Debtor's rights, powers and remedies under
          such Chattel Paper in its own name or in the name of Debtor, without
          further authorization, action or consent of Debtor. Debtor hereby
          releases any and all parties to any Chattel Paper from any liability
          whatsoever taken at the request of Lender, so long as such is not
          expressly prohibited under the provisions of said Chattel Paper. Upon
          the request of Lender, Debtor hereby agrees to instruct all parties to
          any Chattel Paper to make all further payments under such Chattel
          Paper directly to Lender and/or to a lock box established for the
          benefit of Lender. Debtor hereby unconditionally indemnifies and
          agrees to hold Lender harmless regarding any and all actions taken by
          Lender with respect to the collection of any amount due under any of
          the Chattel Paper and/or in the exercise of Debtor's rights, remedies
          and powers thereunder, including, without limitation, reasonable
          attorneys' fees, costs and expenses.




                                       -3-

<PAGE>   12
     (g)  During the term of this Agreement, Debtor shall maintain insurance on
          the life of Thomas J. Berthel in the amount of $500,000.00. Lender
          shall be named as collateral assignee of the proceeds under such
          policies, and in the event Lender receives any such proceeds the same
          shall be applied against the Obligations. Debtor shall cause such
          policies of insurance to be issued with original policies placed in
          the possession of Lender within sixty (60) days of the date hereof.

     (h)  AUTHORIZATION TO ACCEPT ELECTRONIC TRANSMISSIONS. In the event Debtor
          or Lender transmits any information, directions, authorizations and/or
          documents to each other via electronic transmission, including via
          facsimile, modem, computer and the like ("Electronic Communications"),
          Debtor and Lender agree that each may rely and accept such Electronic
          Communications in lieu of written communication and without any
          further written confirmation, unless requested in writing. Lender may
          rely on any Electronic Communications transmitted, regardless of
          whether the transmitter of such information is unauthorized to do so
          on behalf of Debtor and regardless of any mistake, omission or
          transmission error. Due to the potentially large amount of Electronic
          Communications received and transmitted by Lender, and unless caused
          by Lender's willful misconduct, Debtor agrees not to hold Lender
          liable for any error in the transmission or contents of any Electronic
          Communications, and Lender may retroactively correct or adjust such
          errors. Debtor indemnifies Lender from any costs, liability, suits,
          actions or other claims brought against Lender by others as a result
          of Lender's reliance on such electronically transmitted information.
          Lender may rely on any Electronic Communications regardless of whether
          other resolutions or documents provide otherwise, or require
          authorizations from persons other than the transmitter of such
          Electronic Communications.

Accepted by Initialing:  /s/ SIGNATURE
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