<PAGE>

Eastern Bank

                                December 27, 2000

International Electronics, Inc.
427 Turnpike Street
Canton, Massachusetts 02021
Attn:    John Waldstein, President and Treasurer

Gentlemen:

         Reference is made to our Demand Loan and Security Agreement Accounts
Receivable and Inventory dated February 28, 1997, together with all amendments
and additions thereto (hereinafter called the "Agreement"). Notwithstanding the
provisions of the Agreement, it is agreed, effective immediately, that the
Agreement shall be amended as follows:

         Section 5.A. of the Agreement is hereby stricken in its entirety and
the following new Section 5.A. substituted therefor:


                  "A. Subject to the terms and provisions of this Agreement, the
         Bank hereby establishes a discretionary revolving line of credit in
         Borrower's favor in the amount set forth below, as determined by Bank
         from time to time hereafter. Bank may make such loans to Borrower,
         based upon such facts and circumstances existing at the time of the
         request, as from time to time Bank elects to make which are secured by
         Borrower's Inventory, Accounts and all other Collateral and the
         proceeds thereof. Without limiting the discretionary nature of Bank's
         obligation to make loans hereunder, or the demand feature of any loans
         that Bank does make hereunder, Borrower agrees that the aggregate
         unpaid principal of all direct loans plus the sum of the aggregate
         amount undrawn on all letters of credit and acceptances shall not
         exceed the sum of One Million ($1,000,000.00) Dollars. All such loans
         shall bear interest and at the option of Bank shall be evidenced by
         demand notes in form satisfactory to Bank, but in the absence of notes
         shall be conclusively evidenced by the Bank's record of disbursements
         and repayments and shall be payable ON DEMAND. Interest will be charged
         to Borrower at a fluctuating rate which is the daily equivalent to the
         Base Rate in effect from time to time, less one-half of one (.50%)
         percent, or at such other rate agreed on from time to time by the
         parties, upon any balance owing to Bank at the close of each day and
         shall be payable monthly in arrears, on the first day of each month,
         until the Bank makes demand. The rate of interest payable by Borrower
         shall be changed effective as of that date in which a change in the
         Base Rate becomes effective. Interest shall be computed on the basis of
         the actual number of days elapsed over a year of three hundred sixty
         (360) days.

<PAGE>

         The term "Base Rate" as used herein and in any supplement and amendment
         hereto shall mean the rate of interest announced from time to time by
         Bank, at its head office, as its Base Rate, it being understood that
         such rate is a reference rate and not necessarily the lowest rate of
         interest charged by the Bank."

         Kindly note that the alterations contained herein do not in any way
alter, release or change any other sections contained in the Agreement.

         Please acknowledge your agreement to the foregoing by signing the
enclosed copy of this letter and returning the same to the undersigned.

                                Very truly yours,

                                EASTERN BANK


                                By:  /s/ Alan Roberts
                                   --------------------------------
                                     Alan Roberts, Vice President

UNDERSTOOD AND AGREED TO:

INTERNATIONAL ELECTRONICS, INC.


By: /s/ John Waldstein
   ----------------------------------------
   John Waldstein, President and Treasurer



                                      -2-