***Portions  of this exhibit are considered  confidential  by the registrant and
have been omitted from this filing and filed  separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.



                                   $20,000,000


                          CREDIT AND GUARANTY AGREEMENT


                            DATED AS OF MAY 31, 2001

                                      AMONG

                                 SONUS-USA, INC.

                                   AS BORROWER

                                   SONUS CORP.

                                  AS GUARANTOR

                                       AND

                               GN GREAT NORDIC A/S

                                    AS LENDER




                                      -1-
<PAGE>


                                TABLE OF CONTENTS


                                                                         PAGE
ARTICLE 1
         SECTION 1.01.  Defined Terms......................................4
         SECTION 1.02.  Certain Terms.....................................10
ARTICLE 2
         SECTION 2.01.  The Commitment....................................11
         SECTION 2.02.  Borrowing Procedures..............................11
         SECTION 2.03.  Repayment of Loans................................11
         SECTION 2.04.  Notes; Evidence of Debt...........................12
         SECTION 2.05.  Mandatory Prepayments.............................12
         SECTION 2.06.  Optional Prepayment...............................12
         SECTION 2.07.  Interest..........................................12
         SECTION 2.08.  Payments and Computations.........................13
ARTICLE 3
         SECTION 3.01.  Conditions Precedent to Effectiveness.............13
         SECTION 3.02.  Conditions Precedent to Each Loan.................14
ARTICLE 4
         SECTION 4.01.  Representations and Warranties of the Obligors....14
         SECTION 4.02.  Representations and Warranties of the Lender......16
ARTICLE 5
         SECTION 5.01.  Covenants.........................................16
ARTICLE 6
ARTICLE 7
ARTICLE 8
         SECTION 8.01.  Guaranty..........................................19
         SECTION 8.02.  Guaranty Unconditional............................20
         SECTION 8.03.  Discharge Only upon Payment in Full;
                         Reinstatement in Certain Circumstances...........21
         SECTION 8.04.  Waiver............................................21
         SECTION 8.05.  Subrogation.......................................21
         SECTION 8.06.  Stay of Acceleration..............................21
         SECTION 8.07.  Limit of Liability................................21
ARTICLE 9
         SECTION 9.01.  Notices, Etc......................................21
         SECTION 9.02.  Waivers; Remedies; Amendments.....................22
         SECTION 9.03.  Binding Effect....................................22
         SECTION 9.04.  Governing Law.....................................23
         SECTION 9.05.  Submission to Jurisdiction; Waiver of
                         Jury Trial; Service of Process...................23
         SECTION 9.06.  Service of Process................................23
         SECTION 9.07.  Conversion of Currencies..........................24
         SECTION 9.08.  Waiver of Immunity................................24

                                      -2-
<PAGE>

         SECTION 9.09.  Section Titles....................................25
         SECTION 9.10.  Execution in Counterparts.........................25
         SECTION 9.11.  Entire Agreement..................................25
         SECTION 9.12.  Confidential Treatment............................25


SCHEDULES

Schedule 1.02              Required Acquisition Parameters
Schedule 4.01(j)           Existing Investments
Schedule 4.01(k)           Existing Indebtedness


EXHIBITS

Exhibit A         Form of Note
Exhibit B         Form of Borrowing Request Certificate
Exhibit C         Form of Security and Pledge Agreement
Exhibit D         Form of Subsidiary Guaranty
Exhibit E         Form of Subsidiary Security and Pledge Agreement

                                      -3-
<PAGE>

      CREDIT AND GUARANTY AGREEMENT,  dated as of May 31, 2001, among Sonus-USA,
Inc., a  corporation  organized and existing  under the laws of Washington  (the
"BORROWER"), Sonus Corp., a corporation organized and existing under the laws of
the Yukon  Territory  of Canada  ("SONUS  CORP.")  and GN Great  Nordic  A/S,  a
corporation organized and existing under the laws of Denmark (the "LENDER").

                              W I T N E S S E T H :

      WHEREAS, the Borrower, as a condition to entering into the Sales Agreement
(as defined  herein),  has  requested  that the Lender  make  available a credit
facility; and

      WHEREAS,  the Lender is willing to make  available  to the  Borrower  such
credit facility upon the terms and subject to the conditions set forth herein;

      NOW,  THEREFORE,  in  consideration  of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:

                                    ARTICLE 1
                DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS

      SECTION 1.01.  Defined  Terms.  As used in this  Agreement,  the following
terms have the following  meanings  (such  meanings to be equally  applicable to
both the singular and plural forms of the terms defined):

      "ACCOUNT  SHORTFALL  AMOUNT" means,  at any time,  the excess,  if any, of
$3,000,000 over the Specified Account Balance at such time.

      "ACCOUNT  SURPLUS AMOUNT" means,  at any time, the excess,  if any, of the
Specified Account Balance over $3,000,000 at such time.

                                      -4-
<PAGE>


      "ACQUISITION  SUBSIDIARY" means the Initial Acquisition Subsidiary and any
wholly-owned  subsidiary  of the Initial  Acquisition  Subsidiary,  the stock of
which  is  acquired  in,  or  which  holds  assets   acquired  in,  a  Specified
Acquisition.

      "AFFILIATE" means, with respect to any Person, any other Person,  directly
or indirectly  controlling or controlled by, or under direct or indirect  common
control with, such specified Person. For purposes of this definition,  "control"
when used with  respect to any Person  means the power to direct the  management
and  policies  of such  Person,  directly  or  indirectly,  whether  through the
ownership  of  voting  securities,  by  contract  or  otherwise;  and the  terms
"controlling" and "controlled" have meanings correlative to the foregoing.

      "AGREEMENT" means this Credit and Guaranty Agreement.

      "BORROWING" means a borrowing of Loans hereunder.

      "BORROWING REQUEST CERTIFICATE" means a certificate,  substantially in the
form of Exhibit B, executed by the chief executive officer,  the president,  the
chief  operating  officer or the chief  financial  officer of the  Borrower  and
delivered to the Lender in accordance with Section 9.01.

      "BUSINESS  DAY" means a day on which banks are not required or  authorized
to close in either Minneapolis, Minnesota or Portland, Oregon.

      "COLLATERAL  ACCOUNT  AGREEMENT" has the meaning set forth in the Security
Agreement.

      "COMMITMENT" has the meaning specified in Section 2.01.

      "COMMITMENT TERMINATION DATE" means May 31, 2006.

      "CONFIDENTIAL INFORMATION" has the meaning set forth in Section 9.12(b).

      "DEBT"  of a  Person  means  at any  date,  without  duplication,  (i) all
obligations  of such Person for borrowed  money,  (ii) all  obligations  of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services,  except trade accounts payable arising and paid in the ordinary course
of business, (iv) all capital leases of such Person, (v) all obligations of such
Person to  purchase  securities  (or other  property)  which  arise out of or in
connection  with  the  issuance  or sale of the  same or  substantially  similar
securities (or property), (vi) all non-contingent  obligations of such Person to
reimburse  any bank or other Person in respect of amounts paid under a letter of
credit or similar instrument, (vii) all equity securities of such Person subject
to repurchase or  redemption  otherwise  than at the sole option of such Person;
provided that for the purposes of calculating  the Leverage  Ratio,  this clause
(vii) shall not be  included,  (viii) all Debt secured by a Lien on any asset of
such Person, whether or not such Debt is otherwise an obligation of such Person,
and (ix) all Debt of others guaranteed by such Person.

      "DEFAULT"  means any Event of Default or any event  which with the passing
of time or the giving of notice or both would become an Event of Default.

                                      -5-
<PAGE>


      "EBITDA" means, for any period, the consolidated net income of Sonus Corp.
and its consolidated  subsidiaries for such period, plus, to the extent deducted
in determining consolidated net income for such period, depreciation,  interest,
amortization  and income taxes,  determined in accordance with GAAP  eliminating
(i) all intercompany  items, (ii) all earnings  attributable to equity interests
in Persons that are not consolidated  subsidiaries  unless actually  received in
cash by Sonus Corp. or a consolidated subsidiary,  (iii) all income arising from
the forgiveness,  adjustment, or negotiated settlement of any indebtedness, (iv)
any  extraordinary  items of income or expense  (including gains and losses from
asset sales),  (v) any increase or decrease in income arising from any change in
Sonus Corp.'s method of accounting and (vi) any interest income.

      "EFFECTIVE  DATE"  means the date on which  the  conditions  precedent  in
Section 3.01 are satisfied.

      "ENVIRONMENTAL  LAWS" means any and all federal,  state, local and foreign
statutes, laws, judicial decisions,  regulations,  ordinances, rules, judgments,
orders, decrees, plans, injunctions,  permits, concessions,  grants, franchises,
licenses,  agreements  and  other  governmental  restrictions  relating  to  the
environment,  the effect of the  environment  on human  health or to  emissions,
discharges  or releases of  pollutants,  contaminants,  hazardous  substances or
wastes into the environment including, without limitation,  ambient air, surface
water,  ground  water,  or  land,  or  otherwise  relating  to the  manufacture,
processing,  distribution,  use,  treatment,  storage,  disposal,  transport  or
handling of  pollutants,  contaminants,  hazardous  substances  or wastes or the
clean-up or other remediation thereof.

      "EVENT OF DEFAULT" has the meaning specified in Article 6.

      "EXCLUDED  JURISDICTION"  has the  meaning  specified  in Section  2(a) of
Exhibit C to the Sales Agreement.

      "FIRST REFUSAL TRANSACTION" has the meaning set forth in Section 5.01(i).

      "FIXED  CHARGE  COVERAGE  RATIO" means,  for any period,  the ratio of (i)
consolidated EBITDA for such period minus consolidated capital expenditures (but
excluding  capital  expenditures  on any  Specified  Acquisition  or any Related
Acquisition  Costs funded in whole or in part with Loans) of Sonus Corp. and its
consolidated  subsidiaries for such period to (ii) consolidated interest expense
of Sonus Corp. and its consolidated subsidiaries for such period.

      "FUNDING DATE" means any date on which any Loan is made.

      "GAAP" means generally  accepted  accounting  principles as in effect from
time to time in the United States.

      "GOVERNMENTAL  AUTHORITY"  means any  nation or  government,  any state or
other  political  subdivision  thereof  and  any  entity  exercising  executive,
legislative,  judicial,  regulatory or administrative functions of or pertaining
to government.

      "INITIAL ACQUISITION  SUBSIDIARY" means the Acquisition  Subsidiary formed
by and directly owned by the Borrower for the purpose of making the acquisitions
contemplated by this



                                      -6-
<PAGE>

Agreement;  provided  that the Initial  Acquisition  Subsidiary  shall not be an
entity organized in Texas.

      "LEVERAGE RATIO" means, at any date, the ratio of (i) consolidated Debt of
Sonus Corp. and its consolidated  subsidiaries at such date to (ii) consolidated
EBITDA for the period of four  consecutive  fiscal  quarters of Sonus Corp. most
recently ended on or prior to such date.

      "LIEN"  means ,with  respect to any asset,  any  mortgage,  lien,  pledge,
charge,  security  interest  or  encumbrance  of any kind,  or any other type of
preferential  arrangement that has  substantially the same practical effect as a
security  interest,  in respect of such asset.  For purposes  hereof,  an entity
shall be deemed to own  subject  to a Lien any asset  which it has  acquired  or
holds subject to the interest of a vendor or lessor under any  conditional  sale
agreement,  capital lease or other title  retention  agreement  relating to such
asset.

      "LOAN" has the meaning specified in Section 2.01.

      "LOAN  DOCUMENTS"  means  this  Agreement,   the  Note  and  the  Security
Documents.

      "MATERIAL  DEBT"  means  Debt  (other  than  indebtedness  under  the Loan
Documents) of the Borrower  and/or one or more of its  subsidiaries,  arising in
one or more related or unrelated transactions, in an aggregate principal or face
amount exceeding $1,000,000.

      "MATURITY DATE" means May 31, 2008.

      "MAXIMUM COSTS AMOUNT" means,  with respect to any Specified  Acquisition,
an amount equal to the greater of (i) $50,000 and (ii) 20% of the total Purchase
Price for such Specified Acquisition.

      "NOTE"  means  a  promissory   note   evidencing   the  Loans   hereunder,
substantially in the form of Exhibit A.

      "OBLIGATIONS"  means  the  Loans  and  all  other  amounts,   obligations,
covenants  and  duties  owing to the  Lender by any  Obligor,  of every type and
description,  present or future, arising under this Agreement and the other Loan
Documents,  whether direct or indirect (including those acquired by assignment),
absolute or contingent and however  acquired and whether or not evidenced by any
note,  guaranty or other instrument,  and includes,  interest and any other sums
properly chargeable to the Borrower under this Agreement.

      "OBLIGOR" means the Borrower,  Sonus Corp. and each subsidiary required to
provide a guaranty hereunder in accordance with paragraph 2 of Schedule 1.02.

      "OFFER NOTICE" has the meaning specified in paragraph 3 of Schedule 1.02.

      "PAYMENT  ACCOUNT"  means account no. *** of the Lender  maintained at ***
under  the name GN  ReSound  North  America  Corporation  (formerly  known as GN
ReSound  Corporation),  into which all payments by or on behalf of an Obligor to
the Lender under the Loan Documents  shall be made, or such other account as the
Lender shall from time to time specify by notice to the Borrower.

                                      -7-
<PAGE>


      "PERMITTED  LIENS"  means (i) Liens  imposed by law for taxes that are not
yet due or are being  contested in good faith by appropriate  proceedings;  (ii)
carriers', warehousemen's, mechanics', materialmen's, repairmen's and other like
Liens  imposed by law,  arising in the ordinary  course of business and securing
obligations  that are not overdue by more than 30 days or are being contested in
good faith by  appropriate  proceedings;  (iii) pledges and deposits made in the
ordinary   course  of  business  in  compliance   with  workers'   compensation,
unemployment  insurance  and other social  security  laws or  regulations;  (iv)
deposits to secure the performance of bids, trade contracts,  leases,  statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like  nature,  in each case in the ordinary  course of business;  (v) judgment
liens in respect of judgments  that do not  constitute an Event of Default;  and
(vi) easements,  zoning restrictions,  rights-of-way and similar encumbrances on
real property  imposed by law or arising in the ordinary course of business that
do not secure any monetary  obligation  and do not  materially  detract from the
value of the  affected  property  or  interfere  with the  ordinary  conduct  of
business of the  Borrower  or any of its  subsidiaries;  provided  that the term
"Permitted Liens" shall not include any Lien that secures indebtedness.

      "PERSON"  means  an  individual,  partnership,  corporation  (including  a
business trust), joint stock company,  estate, trust, limited liability company,
unincorporated  association,  joint venture or other entity,  or a  Governmental
Authority.

      "PURCHASE  PRICE"  means,  with  respect  to  any  Specified  Acquisition,
consideration  for such  Specified  Acquisition  in the form of (i)  cash,  (ii)
Seller Debt, (iii) earnouts and (iv) payments for agreements not to compete.

      "QUARTERLY  DATE"  means,  with  respect  to each  fiscal  quarter  of the
Borrower  beginning  after the Effective  Date, the tenth (10th) Business Day of
such  fiscal  quarter  (or such  later day of such  fiscal  quarter on which the
Borrower shall have received payment of (or credit for) the Repayment Rebate for
the immediately preceding fiscal quarter).

      "RELATED   ACQUISITION   COSTS"  means,  with  respect  to  any  Specified
Acquisition,  fees,  costs and expenses  related to such  Specified  Acquisition
including, but not limited to, transition costs.

      "REPAYMENT  REBATE" has the meaning specified in Section 4 of Exhibit C to
the Sales Agreement.

      "REQUIRED  ACQUISITION  PARAMETERS"  means, with respect to each Specified
Acquisition,  the parameters set forth on Schedule 1.02 (as such Schedule may be
amended from time to time in accordance with Section 9.02).

      "REQUIREMENT OF LAW" means, with respect to any Person, the common law and
all federal,  state,  local and foreign  laws,  rules and  regulations,  orders,
judgments,  decrees and other  determinations  of any Governmental  Authority or
arbitrator,  applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.

      "REVOLVING TERMINATION DATE" means May 31, 2003.

      "RIGHT  OF FIRST  OFFER"  has the  meaning  specified  in  paragraph  3 of
Schedule 1.02.

                                      -8-
<PAGE>


      "SALES AGREEMENT" means the GN Resound North America Sales Agreement dated
as of the date hereof among GN Resound North America Corporation (formerly known
as GN ReSound Corporation), the Borrower, Sonus-Canada, Ltd. and Sonus Corp., as
amended from time to time.

      "SECURITY  AGREEMENT"  means the Security and Pledge Agreement dated as of
the date hereof between the Borrower and the Lender,  substantially  in the form
of Exhibit C.

      "SECURITY DOCUMENTS" means the Security Agreement,  the Collateral Account
Agreement,  any Subsidiary Security  Agreement,  any Subsidiary Guaranty and any
additional  security  documents  or pledge  agreements  required to be delivered
pursuant to the Loan  Documents to secure the  Obligations of the Borrower under
the Loan Documents,  and any  instruments of assignment or other  instruments or
agreements executed pursuant to the foregoing.

      "SELLER"  means  any  seller  of  the  assets  or  stock  in  a  Specified
Acquisition.

      "SELLER DEBT" has the meaning specified in paragraph 3 of Schedule 1.02.

      "SELLER NOTE" has the meaning specified in paragraph 4 of Schedule 1.02.

      "SELLER NOTE DEFAULT  NOTICE" has the meaning  specified in paragraph 4 of
Schedule 1.02.

      "SPECIFIED ACCOUNT" means account no.*** of the Borrower maintained at ***
under the name "Sonus-USA,  Inc." (***),  pursuant to and in accordance with the
terms of the Collateral Account Agreement.

      "SPECIFIED  ACCOUNT  BALANCE"  means,  at any time,  the aggregate  Dollar
amount of all cash on deposit in the Specified Account.

      "SPECIFIED ACQUISITION" means each acquisition agreed upon by the Borrower
and the Lender.

      "SUBSIDIARY  GUARANTY" means a Subsidiary  Guaranty  substantially  in the
form of Exhibit D.

      "SUBSIDIARY  SECURITY  AGREEMENT"  means a Subsidiary  Security and Pledge
Agreement substantially in the form of Exhibit E.

      "THIRD PARTY" has the meaning set forth in Section 9.12(b).

      "YEARLY TERM" means each one-year  period  commencing on May 31 and ending
on the following May 30.

      SECTION 1.02.  Certain Terms. The words "herein," "hereof" and "hereunder"
and similar words refer to this Agreement as a whole,  and not to any particular
Article,  Section,  subsection or clause in, this Agreement.  References in this
Agreement to an Exhibit,  Article,  Section,  subsection  or clause refer to the
appropriate  Exhibit  to,  or  Article,  Section,  subsection  or

***Confidential   portions  omitted  pursuant  to  a  request  for  confidential
treatment
                                       -9-



<PAGE>

clause in this  Agreement.  References in this Agreement to any statute shall be
to such  statute  as  amended  or  modified  and in  effect at the time any such
reference is operative.

                                    ARTICLE 2
                                  THE FACILITY

      SECTION 2.01. The  Commitment.  On the terms and subject to the conditions
contained in this Agreement,  the Lender agrees to make loans (each a "LOAN") to
the  Borrower  from time to time on any  Business Day during the period from the
Effective  Date until the Commitment  Termination  Date in amounts such that the
aggregate  principal amount of all such Loans  outstanding at any time shall not
exceed $20,000,000 (or such lesser amount resulting from any reduction from time
to time  pursuant  to Section  2.05) (the  "COMMITMENT").  Within the  foregoing
limits,  at any time prior to the Commitment  Termination  Date the Borrower may
borrow under this  Section,  repay or, to the extent  permitted by Section 2.06,
prepay Loans and, at any time prior to the Revolving Termination Date, reborrow.

      SECTION 2.02. Borrowing  Procedures.  (a) Each borrowing of Loans shall be
made two Business  Days  following  receipt by the Lender from the Borrower of a
Borrowing Request Certificate,  certifying that the requested Borrowing complies
with the requirements set forth in this Section 2.02(a).  The initial  Borrowing
on the  Effective  Date shall be in an  aggregate  amount  equal to  $5,000,000.
Subject to the final sentence of this Section 2.02(a), each subsequent Borrowing
shall be (i) for purposes of increasing  the Specified  Account  Balance,  in an
aggregate amount not to exceed the Account  Shortfall Amount on the date of such
Borrowing;  or (ii) for purposes of financing a Specified Acquisition that meets
the Required  Acquisition  Parameters,  in an aggregate amount not to exceed the
excess of (x) the total Purchase Price for such Specified  Acquisition  over (y)
the  Account  Surplus  Amount;  or  (iii)  for  purposes  of  financing  Related
Acquisition  Costs in  connection  with a Specified  Acquisition  that meets the
Required Acquisition Parameters, in an aggregate amount not to exceed the excess
of (x) the Maximum Costs Amount in respect of such  Specified  Acquisition  over
(y) the Account Surplus Amount;  provided that Borrowings pursuant to clause (i)
shall be available only if the Specified  Account Balance on the related Funding
Date for such Borrowing is less than $2,300,000;  and provided further that, (A)
in the case of a  Borrowing  pursuant  to  clause  (ii),  the  proceeds  of such
Borrowing  shall be applied  promptly  (and no later than five (5) Business Days
following  such   Borrowing)   toward  the  Purchase  Price  of  such  Specified
Acquisition  and (B) in the case of a Borrowing  pursuant to clause  (iii),  the
proceeds  of such  Borrowing  shall  be  applied  promptly  toward  the  Related
Acquisition  Costs of such  Specified  Acquisition  as such Related  Acquisition
Costs  become due.  Each  Borrowing  (other than the  initial  Borrowing  on the
Effective  Date)  shall be made in the  aggregate  minimum  principal  amount of
$700,000 and integral multiples of $100,000 in excess thereof.

      (b) Each Loan  shall be made by wire  transfer  of funds  directly  to the
Specified Account.

      SECTION  2.03.  Repayment  of Loans.  The  Borrower  promises to repay the
entire unpaid principal amount of the Loans on the Maturity Date.

      SECTION 2.04. Notes; Evidence of Debt. (a) The Loans shall be evidenced by
a single  Note  payable  to the order of the  Lender  in an amount  equal to the
aggregate unpaid principal amount of the Loans.

                                      -10-
<PAGE>


      (b) The Lender shall maintain an account  evidencing  indebtedness  of the
Borrower to the Lender resulting from each Loan of the Lender from time to time,
including the amounts of principal  and interest  payable and paid to the Lender
from  time to time  under  this  Agreement.  The  entries  made in the  accounts
maintained  pursuant to this  Section  2.04 shall,  to the extent  permitted  by
applicable  law, be prima facie  evidence  of the  existence  and amounts of the
obligations recorded therein; provided,  however, that the failure of the Lender
to maintain  such  accounts or any error  therein shall not in any manner affect
the  obligation  of the  Borrower  to repay the Loans in  accordance  with their
terms.

      SECTION  2.05.  Mandatory  Prepayments.  (a) On the date of any  Repayment
Rebate,  the Borrower shall  immediately apply the full amount of such Repayment
Rebate to pay the Lender any  accrued  and unpaid  interest on the Loans that is
due (or overdue) and payable on such date ("CURRENT INTEREST"). If any Repayment
Rebate  exceeds  Current  Interest,  (i) for any  Repayment  Rebate prior to the
Revolving  Termination  Date,  subject to Section 4(b) of Exhibit C to the Sales
Agreement,  such excess  amount shall be retained by the Borrower to be used for
such purposes as the Borrower may determine in its sole  discretion and (ii) for
any Repayment Rebate on or after the Revolving  Termination Date, on the date of
such Repayment Rebate,  first, during each Yearly Term, such excess amount shall
be applied to prepay (and shall permanently reduce the Commitment hereunder) the
unpaid principal amount of the Loans until 20% of the unpaid principal amount of
the Loans  outstanding on the last day of the immediately  preceding Yearly Term
(such amount, the "YEARLY REPAYMENT  AMOUNT") is repaid, and second,  subject to
Section  4(b) of  Exhibit C to the Sales  Agreement,  any  excess  amount  after
application to such  principal  shall be retained by the Borrower to be used for
such purposes as the Borrower may determine in its sole discretion. In the event
that the excess of the Repayment  Rebate over Current Interest is not sufficient
to fully repay any Yearly Repayment Amount, the Borrower shall make a payment to
the Lender, on the last Business Day of such Yearly Term, in an amount such that
the applicable Yearly Repayment Amount shall have been paid in full.

      (b) In the event  the  Borrower  has  provided  notice to the  Lender of a
material  adverse  change  pursuant  to Section  5.01(k),  the  Borrower  hereby
authorizes the Lender to apply the full amount of each Repayment  Rebate owed by
the Lender or any of its  Affiliates to the Borrower or any of its Affiliates to
pay Current  Interest.  The Lender  shall  notify the Borrower no later than the
eighth  Business Day of the  applicable  fiscal quarter of its election to apply
such Repayment Rebate.

      SECTION 2.06.  Optional  Prepayment.  The Loans may be voluntarily prepaid
without  penalty in whole or in part at any time,  upon three (3) Business Days'
notice to the Lender;  provided  that no partial  prepayment  of the Loans shall
affect  the  obligations  of the  Borrower  and its  Affiliates  under the Sales
Agreement;  and  provided  further  that upon  prepayment  in full of the Loans,
Sections 2 and 3 of Exhibit C to the Sales Agreement shall apply.

      SECTION 2.07.  Interest.  All Loans shall bear interest on the outstanding
principal  amount thereof,  for each day from the date such Loans are made until
paid in full, at a rate per annum equal to six percent (6%). Such interest shall
be due and payable on (i) each Quarterly Date after the Effective Date, (ii) the
Maturity  Date and (iii) the date on which any payment of any  principal  of the
Loans is due (or prepayment of principal is made), in each case on the amount of
such  principal  so  paid  on  such  date.  Any  principal,  interest  or  other
Obligations  not paid when required under the terms of the Loan Documents  shall
bear  interest,  payable on demand,  at a rate per annum equal to eight  percent
(8%).

                                      -11-
<PAGE>


      SECTION  2.08.  Payments and  Computations.  The Obligors  shall make each
payment  hereunder not later than 2:00 P.M. (New York City time) on the day when
due, in Dollars,  to the Lender at the Payment Account in immediately  available
funds without set-off or counterclaim.  All computations of interest and of fees
shall be made by the  Lender on the basis of a year of 365 (or 366) days for the
actual  number of days  (including  the first  day but  excluding  the last day)
occurring in the period for which such interest is payable.  Each  determination
by the Lender of an interest rate hereunder  shall be conclusive and binding for
all purposes,  absent  manifest error.  Whenever any payment  hereunder shall be
stated to be due on a day other than a Business  Day, such payment shall be made
on the next  succeeding  Business Day, and such  extension of time shall in such
case be included in the computation of payment of interest, as the case may be.

                                    ARTICLE 3
                               CONDITIONS TO LOANS

      SECTION 3.01.  Conditions  Precedent to Effectiveness.  The Effective Date
shall  occur on the date on which the  Lender  shall have  received  each of the
following, each dated the date hereof unless otherwise indicated or agreed to by
the Lender, in form and substance satisfactory to the Lender:

            (a) this Agreement,  duly executed and delivered by the Borrower and
      Sonus Corp.;

            (b) the  Security  Agreement,  duly  executed  and  delivered by the
      Borrower,  together  with  evidence  satisfactory  to  the  Lender  of the
      effectiveness and perfection of the Liens contemplated thereby;

            (c) the Note,  duly  executed and  delivered by the Borrower for the
      account of the Lender;

            (d) a copy of the Sales  Agreement,  duly  executed and delivered by
      the Borrower and the other parties thereto;

            (e) the Collateral Account Agreement, duly executed and delivered by
      the Borrower and the other parties thereto;

            (f) the Subsidiary  Guaranty and the Subsidiary  Security Agreement,
      duly executed and delivered by the Initial Acquisition  Subsidiary and the
      other parties thereto,  together with evidence  satisfactory to the Lender
      of the effectiveness and perfection of the Liens contemplated thereby;

            (g) a  Certificate  of the  Secretary  of each  Obligor as to (i) no
      amendments to the certificate of incorporation or bylaws since the date of
      the last amendment; (ii) no liquidation or dissolution proceedings;  (iii)
      attached copy of certificate of incorporation and resolutions of the board
      of directors; and (iv) incumbency and signatures of officers; and

            (h) such  additional  documents,  information  and  materials as the
      Lender may reasonably request.

                                      -12-
<PAGE>


      SECTION 3.02.  Conditions  Precedent to Each Loan.  The  obligation of the
Lender on any Funding Date  (including  the Effective  Date) to make any Loan is
subject to the satisfaction of all of the following conditions precedent:

            (a)  Receipt  by  the  Lender  of a  Borrowing  Request  Certificate
      complying with Section 2.02(a);

            (b) The fact that  immediately  after giving  effect to such Loan on
      such  Funding  Date,  the  aggregate  principal  amount of all Loans  made
      hereunder will not exceed $20,000,000;

            (c) The following statements shall be true on the date of such Loan,
      both before and after giving effect thereto and to the  application of the
      proceeds therefrom:

                  (i) the  representations and warranties set forth in Article 4
      shall be true and correct on and as of the Funding  Date as though made on
      and as of such date; and

                  (ii) no Default  shall have occurred and be continuing on such
      Funding Date: and

                  (iii) the  making  of the Loans on such date does not  violate
      any  Requirement of Law on the date of or immediately  following such Loan
      and is not enjoined, temporarily, preliminarily or permanently.

                                    ARTICLE 4
                         REPRESENTATIONS AND WARRANTIES

      SECTION 4.01.  Representations  and Warranties of the Obligors.  To induce
the Lender to enter into this  Agreement,  each Obligor,  jointly and severally,
represents  and warrants to the Lender that, on and as of the Effective Date and
as of each date as required by Section  3.02(c)(i):  (a) each  Obligor is a duly
organized  and  existing  corporation,  and the Borrower is duly  authorized  to
borrow hereunder, and each Obligor is duly authorized to enter into, deliver and
perform the Loan Documents to which it is a party,  each of which  constitutes a
valid and binding obligation of such Obligor, enforceable in accordance with its
terms, except as such enforcement may be limited by the effect of any applicable
bankruptcy,  insolvency,  reorganization,  moratorium  or similar law  affecting
creditors'  rights generally and general  principles of equity,  (b) none of the
execution  and  delivery of the Loan  Documents,  any  borrowing by the Borrower
hereunder,  or the performance by any Obligor of its obligations  under the Loan
Documents  to which it is a party will  violate  any  Requirement  of Law or any
agreement,  indenture, note or other instrument binding upon such Obligor or any
of its  subsidiaries,  or its certificate of  incorporation  or by-laws or other
constitutional  documents or give cause for  acceleration of any indebtedness of
such Obligor or any of its  subsidiaries,  (c) no authority  from or approval by
any  Governmental  Authority is required in connection  with the validity of and
the execution,  delivery and  performance of the Loan Documents or any borrowing
hereunder,  (d) the consolidated  balance sheet of Sonus Corp. as of January 31,
2001 and the related  consolidated  statements  of income and cash flows for the
period then ended, all of which has been heretofore furnished to the Lender, are
complete and correct and fairly  present the financial  condition and results of
operations of Sonus Corp. and its consolidated  subsidiaries as at such date and
since  such date  there has been no  material  adverse  change in the  condition
(financial or otherwise),  business, results of operations or prospects of Sonus
Corp.  and its  subsidiaries,  taken as a whole,  from  that  reflected  in said
financial  statements,  (e) since January 31, 2001,  there has been no change or

                                      -13-
<PAGE>

development which could be reasonably expected to have a material adverse effect
on the condition  (financial or otherwise),  business,  results of operations or
prospects of Sonus Corp. and its  subsidiaries  taken as a whole, or the ability
of the Obligors to perform their obligations under the Loan Documents, (f) there
are no actions, suits or proceedings pending against or, to the knowledge of any
Obligor,   threatened  against  or  affecting,  any  Obligor  or  any  of  their
subsidiaries, in any court or before or by any Governmental Authority, agency or
instrumentality,  an adverse  decision in which could  materially  and adversely
affect the condition (financial or otherwise),  business,  results of operations
or prospects  of the  Obligors or the ability of the  Obligors to perform  their
obligations  under  the  Loan  Documents,  (g) the  Obligors  and  each of their
subsidiaries are in compliance in all material respects with all Requirements of
Law  (including,  without  limitation,   Environmental  Laws  and  the  Employee
Retirement Income Security Act of 1974, as amended,  or any successor  statute),
(h) all information heretofore furnished by any Obligor or its Affiliates to the
Lender  for  purposes  of or in  connection  with  the  Loan  Documents  and any
transaction  contemplated thereby is, and all information hereafter furnished by
any Obligor or its  Affiliates  to the Lender will be, true and  accurate in all
material  respects  on the  date as of  which  such  information  is  stated  or
certified,  (i) all material Federal,  state and local tax returns,  reports and
statements  required  to be  filed  by or on  behalf  of  Sonus  Corp.  and  its
subsidiaries have been filed with the appropriate  governmental  agencies in all
jurisdictions  in which such returns,  reports and statements are required to be
filed,  except where the failure to so file could not  reasonably be expected to
have a  material  adverse  effect on the  condition  (financial  or  otherwise),
business,   results  of  operations   or  prospects  of  Sonus  Corp.   and  its
subsidiaries,  taken as a whole,  and all taxes  (including real property taxes)
and other charges shown to be due and payable have been timely paid prior to the
date on which  any fine,  penalty,  interest,  late  charge or loss may be added
thereto for nonpayment thereof, except in cases where (i) the applicable Obligor
or subsidiary is contesting in good faith such assessment or (ii) the failure to
pay such assessment  could not reasonably be expected to have a material adverse
effect  on  the  condition  (financial  or  otherwise),   business,  results  of
operations or prospects of Sonus Corp. and its  subsidiaries,  taken as a whole,
(j) none of the Obligors or any of their  subsidiaries  holds any capital stock,
evidence of indebtedness or other securities (including any warrant or option or
other  right to  acquire  any of the  foregoing)  of,  or has made any  loans or
advances to,  guaranteed any obligations of, or made any investment or any other
interest in, any other Person,  or has  purchased or otherwise  acquired (in one
transaction  or a  series  of  transactions)  any  assets  of any  other  Person
constituting a business unit,  except for the  investments set forth on Schedule
4.01(j),  (k) none of the Obligors or any of their  subsidiaries has any Debt or
contingent  obligations except for those set forth on Schedule 4.01(k),  (l) the
obligations  of the  Obligors  under the Loan  Documents  are not subject to any
defense,  set-off or  counterclaim  by the Borrower or any other  Obligor or any
circumstance  whatsoever which might  constitute a legal or equitable  discharge
from its obligations  thereunder,  (m) no Obligor or any of its property has any
immunity from the  jurisdiction of any court or from any legal process  (whether
through service or notice,  attachment  prior to judgment,  attachment in aid of
execution,  execution or otherwise)  under the laws of Canada or other  relevant
jurisdiction in respect of its obligations  under the Loan Documents to which it
is a party,  (n) the Loan  Documents  are in proper legal form under the laws of
Canada for the  enforcement  thereof in accordance with their  respective  terms
against the  Obligors  under such laws,  (o) to ensure the  legality,  validity,
enforceability  or admissibility  into evidence in Canada of the Loan Documents,
it is not necessary  that the Loan  Documents or any other  document be filed or
recorded with any Governmental  Authority in Canada, and (p) it is not necessary
in order for the  Lender  to  enforce  any  rights  or  remedies  under the Loan
Documents or solely by reason of the execution,  delivery and performance by any
Obligor of the


                                      -14-
<PAGE>

Loan Documents  that the Lender be licensed or qualified  with any  Governmental
Authority in Canada, or be entitled to carry on business in Canada.

      SECTION 4.02. Representations and Warranties of the Lender. (a) The Lender
is a duly organized and existing corporation,  and the Lender is duly authorized
to enter into,  deliver and perform the Loan  Documents  to which it is a party,
each of  which  constitutes  a  valid  and  binding  obligation  of the  Lender,
enforceable in accordance with its terms,  and (b) no authority from or approval
by any Governmental Authority is required in connection with the validity of and
the execution, delivery and performance of the Loan Documents by the Lender.

                                    ARTICLE 5
                                    COVENANTS

      SECTION  5.01.  Covenants.  So long as the  Commitment  or any  amount  is
outstanding  under the Loan Documents,  unless compliance shall have been waived
in writing by the Lender, each Obligor agrees that:

             (a) Sonus Corp. will provide the Lender with consolidated financial
      statements of Sonus Corp.  and its  subsidiaries  within 60 days after the
      end of each  calendar  quarter  and  within 105 days after the end of each
      fiscal year of Sonus Corp.  Such  reports  shall  include  profit and loss
      statements for the preceding fiscal period,  including comparative figures
      for  the  corresponding  period  of the  preceding  fiscal  year.  If such
      financial  statements  are not audited,  Sonus Corp.  shall certify to the
      Lender that the  information  set forth in such  financial  statements  is
      materially true and correct and fairly presents the financial condition of
      Sonus  Corp.  and its  subsidiaries.  If  such  financial  statements  are
      audited,  Sonus Corp. will provide the Lender with the annual audit report
      of the  independent  auditor  (including a description of any default that
      the auditor has become  aware of in its  examination),  together  with any
      representations  made by Sonus Corp.  to the auditor  with  respect to the
      Agreement and/or the Sales Agreement in connection with such audit.  Sonus
      Corp. and the Borrower will provide the Lender with such other information
      respecting the business, properties, condition, financial or otherwise, or
      operations of Sonus Corp., the Borrower and its subsidiaries as the Lender
      may from time to time reasonably request.

             (b)  Each  Obligor  will  comply  with  all  Requirements  of  Law,
      noncompliance  with which could materially  adversely affect the condition
      (financial or otherwise),  business, results of operations or prospects of
      such Obligor or any of its subsidiaries.

             (c) Each Obligor shall  promptly pay and discharge all lawfully due
      material  taxes,  assessments,  and other  governmental  charges or levies
      imposed on such Obligor's personal and real property or income.

             (d)  Each  Obligor  will  not  and  will  not  permit  any  of  its
      subsidiaries  to, create,  assume or suffer to exist any lien on any asset
      or property now owned or hereafter  acquired by it except for (i) Liens on
      the assets of the Borrower existing on the date of this Agreement securing
      the obligations set forth in Schedule  4.01(k)  (including  Liens securing
      existing  obligations owing to U.S. Bank National Association that are set
      forth in  Schedule  4.01(k)) in an  aggregate  amount not  exceeding  $2.4
      million,  and refinancings or renewals  thereof,  provided that the amount
      secured  thereby is not  increased  and no other assets or property of any
      Obligor or any of its  subsidiaries  are made  subject to such Lien,  (ii)
      Permitted Liens,  (iii) Liens created  pursuant to

                                      -15-
<PAGE>

      the Security  Documents (iv) Liens on assets acquired in an acquisition in
      favor  of the  seller  in  such  acquisition  securing  Seller  Debt  (for
      avoidance of doubt, such Liens may be first-priority  Liens) and (v) Liens
      securing obligations owing to U.S. Bank National Association, E.M. Warburg
      Pincus  & Co.  LLC and any of its  affiliates  or  another  bank or  other
      financial institution that (1) is not a competitor of Borrower and (2) has
      both a short-term and long-term  deposit rating of at least p-1 and A-2 by
      Moody's  or at least A-1 and A by S&P,  or another  financial  institution
      acceptable  to the Lender in its sole  discretion.  For the  avoidance  of
      doubt,  Liens on the assets of any  Acquisition  Subsidiary are prohibited
      except for Liens permitted in clauses (ii) through (iv) of this paragraph.

            (e) No Acquisition  Subsidiary  will, and no Acquisition  Subsidiary
      will permit any of its subsidiaries to, sell, lease or otherwise  transfer
      any property or assets to, or purchase,  lease,  or otherwise  acquire any
      property or assets from,  make any investment  in, or otherwise  engage in
      any transactions  with its Affiliates;  provided that this Section 5.01(e)
      shall not prohibit  (i)  transactions  in the ordinary  course of business
      that are at prices  and on terms not less  favorable  to such  Acquisition
      Subsidiary or such  subsidiary  than could be obtained on an  arm's-length
      basis from unrelated third parties or (ii) such  Acquisition  Subsidiary's
      or such subsidiary's  ability to pay dividends ratably with respect to its
      common stock.

            (f)  Sonus  Corp.  will not  permit  the  Leverage  Ratio to  exceed
      4.00:1.00 at any time.

            (g) Sonus Corp.  will not permit the Fixed Charge Coverage Ratio for
      any period of four  consecutive  fiscal quarters of Sonus Corp. to be less
      than 5.00:1.00.

            (h) The  proceeds  of the  Loans  hereunder  (including  amounts  on
      deposit from time to time in the Specified  Account) shall be used only to
      pay the  Purchase  Price  (excluding  any  portion of the  Purchase  Price
      allocable to the purchase of accounts  receivable) and Related Acquisition
      Costs (not to exceed the  applicable  Maximum  Costs Amount) in respect of
      one or more  Specified  Acquisitions  that meet the  Required  Acquisition
      Parameters.  No part of the proceeds of the Loans  hereunder will be used,
      directly or indirectly, for the purpose, whether immediate,  incidental or
      ultimate of buying or carrying  any "margin  stock"  within the meaning of
      Regulation U or X.

            (i) ***

            (j) As soon as  practicable,  and in any event within five  Business
      Days after an officer or member of the senior  management  of any  Obligor
      has actual  knowledge of the existence of any Default or Event of Default,
      such Obligor  shall give the Lender notice  specifying  the nature of such
      Default or Event of  Default or other  event,  including  the  anticipated
      effect  thereof,  which notice,  if given by telephone,  shall be promptly
      confirmed in writing on the next Business Day.

            (k) As soon as  practicable,  and in any  event  on or  prior to the
      fifth  Business day of any fiscal  quarter of the  Borrower,  the Borrower
      shall give the Lender notice specifying the nature of any material adverse
      change in the condition  (financial or  otherwise),  business,  results of
      operations or prospects of Sonus Corp.  and its  subsidiaries,  taken as a
      whole, from that reflected in financial  statements of Sonus Corp. for the
      period ending January 31, 2001 as previously  furnished to the Lender,  or
      the ability of the Obligors to perform  their  Obligations  under the Loan
      Documents,  including the  anticipated  effect thereof,  which notice,  if
      given by  telephone,  shall be promptly  confirmed  in writing on the next
      Business Day.

***Confidential   portions  omitted  pursuant  to  a  request  for  confidential
treatment
                                      -16-
<PAGE>


            (l) In the event that any Seller which holds Seller Debt provides an
      Offer Notice to the Borrower or any Acquisition  Subsidiary,  the Borrower
      shall, or shall cause such Acquisition  Subsidiary to, promptly assign the
      related  Right of First Offer to the Lender,  provide a copy of such Offer
      Notice  to the  Lender,  and act in good  faith to  assist  the  Lender in
      exercising such Right of First Offer if the Lender so chooses,  including,
      without limitation, assisting the Lender in communicating with the seller.

            (m) In the event that any Seller which holds a Seller Note  provides
      a Seller Note Default Notice to the Borrower,  the Borrower shall promptly
      (but in any event,  within 3 Business  Days) provide a copy of such notice
      to the  Lender  and  communicate  with  the  Lender  with  respect  to its
      intentions to cure the default  described in such notice.  At the Lender's
      instruction,  the Borrower shall designate the Lender as the lender having
      the right to cure such  default and act in good faith to assist the Lender
      in  exercising  its right to cure such  default if the Lender so  chooses,
      chooses,   including,   without   limitation,   assisting  the  Lender  in
      communicating with the seller.

            (n) In the event  that the  Borrower  or an  Acquisition  Subsidiary
      consummates  a  Specified  Acquisition  with  proceeds  of the Loans,  the
      Borrower  shall  promptly  provide  the Lender a copy of (i) the  relevant
      section(s) of the  acquisition  document  which include the Right of First
      Offer  (including  any other sections  referred to therein,  and any other
      sections  that  affect any of the rights  thereunder)  and (ii) the Seller
      Note, certified as true and complete copies of such executed section(s) or
      documents  by the  chief  executive  officer,  the  president,  the  chief
      operating officer or the chief financial officer of the Borrower.

            (o) No Obligor  will  permit any  Acquisition  Subsidiary  to incur,
      assume or be liable for any Debt other than Debt  incurred in the ordinary
      course of business, Seller Debt and Debt owing to the Borrower, so long as
      such Debt owing to the Borrower is evidenced by an intercompany  note that
      is  pledged  to the  Lender  as  security  for  the  Obligations.  For the
      avoidance of doubt, it is understood that Debt incurred for the purpose of
      consummating  an acquisition  of stock or assets will not constitute  Debt
      incurred in the ordinary course of business.

                                    ARTICLE 6
                                EVENTS OF DEFAULT

      If any of the following  events  ("EVENTS OF DEFAULT")  shall occur and be
continuing: (i) any Obligor shall fail to make payment when due of any principal
of or interest on the Loan and such non-payment  continues for a period of three
Business  Days; or (ii) any Obligor  shall fail to pay any other amount  payable
under  any Loan  Document  and such  non-payment  continues  for a period of ten
Business  Days  after  the due date  therefor;  or (iii) any  representation  or
warranty  made by any  Obligor in the Loan  Documents  shall  prove to have been
incorrect in any material  respect when made;  or (iv) any Obligor shall fail to
observe or perform any covenant applicable to such Obligor contained in the Loan
Documents;  or (v) any Obligor or any of its subsidiaries shall fail to make any
payment in respect of any Material Debt when due or within any applicable  grace
period,  or any event or condition shall occur which results in the acceleration
of the maturity of any Material  Debt of any Obligor or any of its  subsidiaries
or  enables  the  holder  of such  Material  Debt or any  person  acting on such
holder's behalf to accelerate the maturity  thereof;  or (vi) any Obligor or any
of its  subsidiaries  shall become  insolvent  (however such  insolvency  may be
evidenced) or proceedings are instituted by or against any Obligor or any of its
subsidiaries  under the United States  Bankruptcy  Code or under any bankruptcy,

                                      -17-
<PAGE>

reorganization  or  insolvency  law or other law for the relief of  debtors;  or
(vii) final judgments or orders for the payment of money in excess of $2,000,000
shall be rendered  against any Obligor and/or any of its  subsidiaries  and such
judgments or orders shall remain  unstayed and  undischarged  for a period of 10
days;  or (viii) any Lien  purported to be created  under any Security  Document
shall  cease to be, or shall be  asserted  by any Obligor not to be, a valid and
perfected  Lien  (having  the  priority  required  by  the  applicable  Security
Document) on any material property or assets purported to be covered thereby; or
(ix) the  obligations  of Sonus  Corp.  in  Article  8 shall at any time fail to
constitute a valid and binding  agreement of Sonus Corp.,  or Sonus Corp. or the
Borrower  shall so assert in writing;  or (x) any  "Change of Control"  (as such
term is defined in the Sales  Agreement)  occurs with  respect to a Customer (as
defined in the Sales Agreement)  without the prior written consent of GN Resound
North America Corporation (formerly known as GN ReSound Corporation);  or (xi) a
Customer (as defined in the Sales Agreement)  breaches any material provision of
the Sales  Agreement  (other than as described in clause (x) above) and fails to
cure such breach within fifteen days after receipt of written notice thereof; or
(xii) the Sales  Agreement is terminated by the Lender  pursuant to Section 4.02
thereof;

then, in any such event,  (a) the Lender may declare the Commitment  terminated,
and (b) the Lender may declare  the Loans,  all  interest  thereon and all other
amounts and Obligations payable under the Loan Documents to be forthwith due and
payable,  whereupon  the  Loans,  all such  interest  and all such  amounts  and
Obligations  payable under the Loan Documents  shall become and be forthwith due
and payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly  waived by each Obligor;  provided that in the
case of the Event of Default  specified in clause (vi) above with respect to the
Borrower,  without any notice to any Obligor or any other act of the Lender, the
Loans shall become  forthwith due and payable,  together with accrued  interest,
without demand, protest, presentment,  notice of dishonor or any other notice or
demand whatsoever, all of which are hereby waived by each Obligor.

                                    ARTICLE 7
                             [INTENTIONALLY OMITTED]

                                    ARTICLE 8
                                    GUARANTY

      SECTION 8.01. Guaranty.

      Sonus Corp.  hereby  unconditionally  and  irrevocably  guarantees  to the
Lender the due and punctual payment of all present and future amounts payable by
the Borrower under this Agreement or any other Loan Document, including, but not
limited to, the due and  punctual  payment by the  Borrower of  principal of and
interest (including,  without limitation,  interest accruing during the pendency
of any bankruptcy or insolvency  proceedings whether or not allowed or allowable
thereunder)  on the Note and the due and punctual  payment of all other sums now
or  hereafter  owed by the  Borrower  under  this  Agreement  and the other Loan
Documents  as and  when  the same  shall  become  due and  payable,  whether  at
maturity,  by  declaration  or  otherwise,  according  to the terms  hereof  and
thereof.  In  case of  failure  by the  Borrower  punctually  to pay any  amount
guaranteed  hereby,  Sonus  Corp.  hereby  unconditionally  agrees to cause such
payment to be made punctually as and when the same shall become due and payable,
whether at maturity or by declaration or otherwise,  and as if such payment were
made by the Borrower.

                                      -18-
<PAGE>


      SECTION 8.02. Guaranty Unconditional. The obligations of Sonus Corp. under
this Article 8 shall be  unconditional  and absolute and,  without  limiting the
generality  of the  foregoing,  shall not be released,  discharged  or otherwise
affected by:

            (a)  any  extension,  renewal,  settlement,  compromise,  waiver  or
      release  in  respect  of any  obligation  of the  Borrower  under any Loan
      Document by operation of law or otherwise;

            (b) any  modification  or  amendment  of or  supplement  to any Loan
      Document;

            (c)  any  modification,   amendment,  waiver,  release,  impairment,
      non-perfection or invalidity of any direct or indirect security, or of any
      guarantee or other liability of any third party, for any obligation of the
      Borrower under any Loan Document;

            (d) any change in the corporate existence, structure or ownership of
      the  Borrower  or any  insolvency,  bankruptcy,  reorganization  or  other
      similar proceeding affecting the Borrower,  or its assets or any resulting
      release or discharge of any  obligation  of the Borrower  contained in any
      Loan Document;

            (e) the existence of any claim,  set-off or other rights which Sonus
      Corp.  may have at any time against the Borrower,  the Lender or any other
      Person,  whether or not arising in connection  with this  Agreement or any
      other Loan Document or any unrelated  transactions,  provided that nothing
      herein shall  prevent the  assertion of any such claim by separate suit or
      compulsory counterclaim;

            (f) any  invalidity or  unenforceability  relating to or against the
      Borrower  for  any  reason  of any  Loan  Document,  or any  provision  of
      applicable  law or  regulation  purporting  to prohibit the payment by the
      Borrower of the  principal  of or interest on the Note or any other amount
      payable by it under this Agreement or any other Loan Document; or

            (g) any  other  act or  omission  to act or delay of any kind by the
      Borrower,  the  Lender  or any  other  Person  or any  other  circumstance
      whatsoever  that  might,   but  for  the  provisions  of  this  paragraph,
      constitute a legal or  equitable  discharge  of the  obligations  of Sonus
      Corp. under this Article 8.

      SECTION  8.03.  Discharge  Only upon  Payment  in Full;  Reinstatement  in
Certain Circumstances. The obligations of Sonus Corp. under this Article 8 shall
remain in full force and  effect  until the  Commitment  is  terminated  and the
principal  of and  interest  on the Note and all other  amounts  payable  by the
Borrower under this Agreement or any other Loan Document shall have been paid in
full.  If at any time any payment of the principal of or interest on the Note or
any other amount  payable by the Borrower under this Agreement or any other Loan
Document  is  rescinded  or must be  otherwise  restored  or  returned  upon the
insolvency,  bankruptcy or  reorganization  of the Borrower or otherwise,  Sonus
Corp.'s  obligations  under this Article 8 with respect to such payment shall be
reinstated  at such time as though such  payment had become due but had not been
made at such time.

      SECTION 8.04.  Waiver.  Sonus Corp.  irrevocably waives acceptance hereof,
presentment,  demand, protest and any notice not provided for herein, as well as
any  requirement  that at any time any action be taken by any Person against the
Borrower or any other Person or against any security.


                                      -19-
<PAGE>


      SECTION 8.05. Subrogation.  Sonus Corp. irrevocably waives all subrogation
rights, including,  without limitation, any right to be subrogated to the rights
of the payee  against the  Borrower  with respect to any payment with respect to
any obligation of the Borrower hereunder.

      SECTION  8.06.  Stay of  Acceleration.  If  acceleration  of the  time for
payment of any amount  payable by the Borrower  under this Agreement or the Note
is stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all
such amounts otherwise subject to acceleration under the terms of this Agreement
shall nonetheless be payable by Sonus Corp. hereunder forthwith on demand by the
Lender.

      SECTION 8.07.  Limit of Liability.  The  obligations of Sonus Corp.  under
this  Article 8 shall be limited to an  aggregate  amount  equal to the  largest
amount  that would not render its  obligations  hereunder  subject to  avoidance
under  Section  548 of the  United  States  Bankruptcy  Code  or any  comparable
provisions of any applicable state law.

                                    ARTICLE 9
                                  MISCELLANEOUS

      SECTION 9.01.  Notices,  Etc..  All notices,  demands,  requests and other
communications  provided for in this Agreement shall be given in writing,  or by
any telecommunication device capable of creating a written record, and addressed
to the party to be notified as follows:

         (a)      if to any Obligor:

                  c/o Sonus-USA, Inc.
                  111 SW Fifth Street
                  Suite 1620
                  Portland, Oregon   97204
                  Attention: Chief Financial Officer
                  Facsimile No.: (503) 225-9309

         (b)      if to the Lender:

                  GN Great Nordic A/S
                  Kongens Nytorv 26
                  Post Box 2167
                  DK - 1016 Copenghagen K, Denmark
                  Attention: Christian Tang-Jespersen
                  Facsimile No.: 011-45-72-111-889

         with a copy to:

                  GN Resound North America Corporation
                  220 Saginaw Drive
                  Seaport Centre
                  Redwood City, California 94063
                  Attention: Carsten Trads
                  Facsimile No.: 952-769-8011

                                      -20-
<PAGE>


or at such other  address as the party  delivering  notice  shall be notified in
writing by the party receiving notice. All such notices and communications shall
be effective  upon  personal  delivery  (if  delivered  by hand,  including  any
overnight  courier  service),  five days after  deposit in the mails (if sent by
mail), or when properly transmitted (if sent by a telecommunications device).

      SECTION 9.02. Waivers; Remedies; Amendments. (a) No failure on the part of
the Lender to exercise,  and no delay in exercising,  any right  hereunder shall
operate as a waiver  thereof;  nor shall any single or partial  exercise  of any
such right preclude any other or further exercise thereof or the exercise of any
other right.  The remedies  herein  provided are cumulative and not exclusive of
any remedies provided by law.

            (b) Neither this Agreement  (including the Schedules hereto) nor any
      other Loan  Document  nor any  provision  hereof or thereof may be waived,
      amended or modified  except  pursuant to an agreement  in writing  entered
      into by the Borrower, Sonus Corp. and the Lender.

      SECTION 9.03.  Binding Effect.  This Agreement shall become effective when
it shall have been  executed by the  Borrower,  Sonus  Corp.  and the Lender and
thereafter shall be binding upon and inure to the benefit of the Borrower, Sonus
Corp.,  the Lender and their  respective  successors  and  permitted  assigns(as
described in this Section 9.03). Neither the Borrower nor Sonus Corp. shall have
the right to assign its rights  hereunder  or any  interest  herein  without the
prior written  consent of the Lender,  which  consent shall not be  unreasonably
withheld.  The Lender shall not have the right to assign its rights hereunder or
any interest  herein  without the prior written  consent of the Borrower,  which
consent shall not be  unreasonably  withheld,  except that the Lender may assign
its rights hereunder or any interest herein to any of its Affiliates without the
prior consent of the Borrower.

      SECTION 9.04. Governing Law. This Agreement and the rights and obligations
of the parties  hereto shall be governed by, and  construed and  interpreted  in
accordance with, the law of New York.

      SECTION 9.05. Submission to Jurisdiction; Waiver of Jury Trial; Service of
Process.   EACH  OBLIGOR  HEREBY   IRREVOCABLY   SUBMITS  TO  THE  NON-EXCLUSIVE
JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK,  COUNTY OF NEW YORK,
THE UNITED STATES  DISTRICT COURT FOR THE SOUTHERN  DISTRICT OF NEW YORK AND ANY
APPELLATE COURT OR BODY THERETO (COLLECTIVELY, THE "NEW YORK COURTS") AND TO THE
COURTS OF ITS OWN CORPORATE DOMICILE, WITH RESPECT TO ACTIONS BROUGHT AGAINST IT
AS A DEFENDANT,  OVER ANY SUIT, ACTION OR PROCEEDING  ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS  CONTEMPLATED  HEREBY.  IN ADDITION,  EACH
OBLIGOR HEREBY  IRREVOCABLY  SUBMITS TO THE  NON-EXCLUSIVE  JURISDICTION  OF THE
PROVINCIAL AND FEDERAL COURTS LOCATED IN THE  JURISDICTION IN WHICH SUCH OBLIGOR
HAS BEEN ORGANIZED IN CONNECTION  WITH ANY SUCH SUIT,  ACTION OR PROCEEDING THAT
MAY BE BROUGHT  AGAINST SUCH OBLIGOR AS A  DEFENDANT.  EACH OBLIGOR  IRREVOCABLY
WAIVES,  TO THE FULLEST EXTENT  PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW
OR  HEREAFTER  HAVE TO THE  LAYING  OF THE  VENUE OF ANY SUCH  SUIT,  ACTION  OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

                                      -21-
<PAGE>

EACH OF THE OBLIGORS AND THE LENDER HEREBY  IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL  PROCEEDING  ARISING  OUT OF OR  RELATING  TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS  CONTEMPLATED HEREBY OR
THEREBY.

      SECTION  9.06.  Service of  Process.  (a) Sonus Corp.  hereby  irrevocably
appoints  Corporation  Service Company,  having offices on the date hereof at 80
State  Street,  Albany,  New  York  12207-2543  (the  "PROCESS  AGENT"),  as its
authorized  agent to accept and acknowledge on its behalf service of any and all
process  which may be served in any suit,  action or  proceeding  of the  nature
referred to above in any New York Court.  Such designation and appointment shall
be irrevocable  until all  Obligations  of Sonus Corp.  hereunder and other sums
payable hereunder shall have been paid in full in accordance with the provisions
hereof  and the  Commitments  shall  have  been  reduced  to zero.  Sonus  Corp.
covenants and agrees that it shall take any and all reasonable action, including
the  execution  and filing of any and all  documents,  that may be  necessary to
continue the foregoing  designations  and  appointments in full force and effect
and to cause the  Process  Agent to  continue  to act in such  capacity.  If the
Process Agent shall desire to cease so to act, Sonus Corp.  covenants and agrees
that prior to the Process Agent ceasing so to act it shall irrevocably designate
and appoint without delay another such agent in such  jurisdiction  satisfactory
to the Lender and, if requested  by the Lender,  shall  promptly  deliver to the
Lender evidence in writing of such other agent's  acceptance of such appointment
in form and substance reasonably acceptable to the Lender.

            (b) Sonus Corp. consents to process being served in any suit, action
      or proceeding of the nature  referred to in Section 9.05 by serving a copy
      thereof upon the Process Agent.  Without  prejudice to the foregoing,  the
      Lender agrees that to the extent lawful and  possible,  written  notice of
      said service upon the Process  Agent shall also be mailed by registered or
      certified airmail,  postage prepaid,  return receipt  requested,  to Sonus
      Corp.  at its address  specified  on the  signature  page hereof or to any
      other address of which Sonus Corp.  shall have given written notice to the
      Lender.  If said service  upon the Process  Agent shall not be possible or
      shall  otherwise be  impractical  after  reasonable  efforts to effect the
      same, Sonus Corp.  consents to process being served in any suit, action or
      proceeding  of the nature  referred to in Section 9.05 by the mailing of a
      copy thereof by registered or certified airmail,  postage prepaid,  return
      receipt requested, to the address of Sonus Corp. specified in Section 9.01
      or to any other  address of which  Sonus  Corp.  shall have given  written
      notice to the Lender,  which service,  to the fullest extent  permitted by
      law,  shall be effective 14 days after deposit in the United States Postal
      Service.  Sonus Corp.  irrevocably waives, to the fullest extent permitted
      by law,  all claim of error by reason of any such  service and agrees that
      such  service (i) shall be deemed in every  respect  effective  service of
      process upon Sonus Corp. in any such suit,  action or proceeding  and (ii)
      shall to the  fullest  extent  permitted  by law,  be taken and held to be
      valid personal service upon and personal delivery to Sonus Corp.

            (c) Nothing in this Section  shall affect any right of the Lender to
      serve  process  in any manner  permitted  by law or limit the right of the
      Lender to bring  proceedings  against  Sonus  Corp.  in the  courts of any
      jurisdiction  or  jurisdictions  or to bring  proceedings in more than one
      jurisdiction concurrently.

      SECTION  9.07.  Conversion  of  Currencies.  (a) If,  for the  purpose  of
obtaining  judgment in any court, it is necessary to convert a sum due hereunder
in U.S. Dollars into another currency,  the parties hereto agree, to the fullest
extent that they may legally  and  effectively  do so, that the rate of exchange
used shall be that at which in accordance  with normal  banking  procedures  the
Lender could  purchase U.S.  Dollars with such other  currency in New York,  New
York on the Business Day  immediately  preceding the day on which final judgment
is given,  or, in the event  that any such  final  judgment  is  registered  for
enforcement  in the courts of any  province

                                      -22-
<PAGE>

of Canada, then on the Business Day immediately  preceding the day on which such
final judgment is registered in the courts of such province.

            (b) The  obligation  of Sonus Corp. in respect of any sum due to any
      Person  in U.S.  Dollars  hereunder  shall,  to the  extent  permitted  by
      applicable law, notwithstanding any judgment in a currency other than U.S.
      Dollars,  be  discharged  only  to the  extent  that on the  Business  Day
      following  receipt  of any  sum  adjudged  to be so  due  in the  judgment
      currency  such Person may in  accordance  with normal  banking  procedures
      purchase U.S. Dollars in the amount originally due to such Person with the
      judgment currency. If the amount of U.S. Dollars so purchased is less than
      the sum originally due to such Person,  Sonus Corp.  agrees, as a separate
      obligation and notwithstanding any such judgment, to indemnify such Person
      against the resulting loss; and if the amount of U.S. Dollars so purchased
      is greater than the sum originally due to such Person,  such Person agrees
      to repay such excess.

      SECTION 9.08.  Waiver of Immunity.  To the extent that Sonus Corp.  has or
hereafter  may acquire any immunity from  jurisdiction  of any court or from any
legal process (whether through service or notice,  attachment prior to judgment,
attachment  in aid or  execution,  or  otherwise)  with respect to itself or its
property,  Sonus Corp. hereby irrevocably waives such immunity in respect of its
obligations hereunder and under the other Loan Documents to the extent permitted
by applicable law and, without limiting the generality of the foregoing,  agrees
that the  waivers  set forth in this  Section  shall have  effect to the fullest
extent  permitted  under the  Foreign  Sovereign  Immunities  Act of 1976 of the
United States of America and are intended to be irrevocable for purposes of such
Act.

      SECTION  9.09.  Section  Titles.  The  Section  titles  contained  in this
Agreement  are and shall be without  substantive  meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.

      SECTION 9.10. Execution in Counterparts. This Agreement may be executed in
any number of counterparts  and by different  parties in separate  counterparts,
each of which  when so  executed  shall be deemed to be an  original  and all of
which taken together  shall  constitute  one and the same  agreement.  Signature
pages may be detached  from  multiple  separate  counterparts  and attached to a
single  counterpart  so that  all  signature  pages  are  attached  to the  same
document.

      SECTION  9.11.  Entire  Agreement.  This  Agreement  embodies  the  entire
agreement of the parties and supersedes all prior agreements and  understandings
relating to the subject matter hereof. Delivery of an executed signature page of
this Agreement by facsimile  transmission shall be as effective as delivery of a
manually executed counterpart hereof.

      SECTION  9.12.  Confidential  Treatment.  (a) With respect to any of Sonus
Corp.'s filings with the Securities and Exchange  Commission (the "SEC"), at the
request of the Lender,  Sonus Corp. and its  Affiliates  agree to use their best
efforts  to  obtain  from  the SEC  confidential  treatment  of any  information
contained in this Agreement for which such treatment may reasonably be argued to
be available and for as long as is permitted  under  applicable law. Sonus


                                      -23-
<PAGE>

Corp.  and its Affiliates  agree to cooperate  fully with the Lender in applying
for such  confidential  treatment,  including,  but not limited to, allowing the
Lender and its counsel to review any  application  in advance of its  submission
and  incorporating  such of the  Lender's  and its  counsel's  comments  in such
application  as may  reasonably be requested.  Furthermore,  Sonus Corp. and its
Affiliates  agree not to  publicly  disclose  in any  manner,  oral or  written,
including, but not limited to, in any portion of its filings with the SEC, press
releases  or  other  communications,  any  information  with  respect  to  which
confidential  treatment  has been  requested,  unless  required  to so  disclose
pursuant to applicable  law. Any breach of any provision of this paragraph shall
be considered a material breach of this Agreement.

            (b) Any technical, health, environmental and safety,  manufacturing,
      market  or  customer  information,  or price or cost  related  information
      communicated  to one  party by the  other,  under  any  provision  of this
      Agreement,  whether in writing, verbally or visually observed (hereinafter
      "CONFIDENTIAL  INFORMATION") shall be considered  confidential at the time
      of communication  and shall not be disclosed to any person or entity other
      than the parties hereto,  their Affiliates and their respective  officers,
      directors,  employees and agents (each, a "THIRD PARTY"),  nor used by the
      recipient  party  other  than  as  contemplated  by  this  Agreement.  The
      recipient  party  shall  use  the  same  degree  of care  protecting  this
      Confidential   Information   as  it  applies   to  its  own   confidential
      information. This Section 9.12(b) shall not apply to:

                  (i) Confidential  Information already in the public domain, or
      released to the public through no fault of the recipient;

                  (ii) Confidential  Information  already known to the recipient
      except  through  prior  disclosure  by the other party  hereto or which is
      developed by the recipient  independently of its relationship to the other
      party hereunder;

                  (iii) Confidential  Information acquired by the recipient from
      a Third Party entitled to disclose it; and

                  (iv)   Confidential   Information  the  recipient  is  legally
      required to disclose;  provided that,  subject to applicable law, prior to
      any  disclosure  permitted by this clause (iv),  the  recipient  gives the
      other  party  hereto,  to the extent  reasonably  practicable,  reasonable
      notice and a reasonable  opportunity to seek a protective order protecting
      against the disclosure of such Confidential Information.

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

                          SONUS-USA, INC., as Borrower


                           By: /s/ Brandon M. Dawson
                              ------------------------
                           Title: Chairman


                           SONUS CORP., as Guarantor


                           By: /s/ Brandon M. Dawson
                              -------------------------
                           Title: Chairman

                                      -24-
<PAGE>

                         GN GREAT NORDIC A/S, as Lender

                          By: /s/ Jirn Kildegaard
                              --------------------------
                         Title: Chief Executive Officer



                                      -25-
<PAGE>


SCHEDULE 1.02



                         REQUIRED ACQUISITION PARAMETERS


1.       ***

2.       Each  Specified  Acquisition  shall be a  purchase  of the  stock of an
         Acquisition  Subsidiary  by the Initial  Acquisition  Subsidiary  or an
         Acquisition Subsidiary that is a wholly owned subsidiary of the Initial
         Acquisition  Subsidiary (which acquired  Acquisition  Subsidiary may be
         merged into the acquiring Acquisition  Subsidiary only if the surviving
         entity of such merger is the  acquiring  Acquisition  Subsidiary)  or a
         purchase  of  assets by an the  Initial  Acquisition  Subsidiary  or an
         Acquisition Subsidiary that is a wholly owned subsidiary of the Initial
         Acquisition Subsidiary , and the Borrower (or the acquiring Acquisition
         Subsidiary, as applicable) shall, pursuant to arrangements satisfactory
         to the Lender,  immediately,  where such  actions have not already been
         performed,   (a)  pledge  and  deposit  with  the  Lender  certificates
         representing  all shares of such  Acquisition  Subsidiary as additional
         security for the Obligations and (b) cause such Acquisition  Subsidiary
         to (i) guarantee  the  Obligations  by executing a Subsidiary  Guaranty
         substantially  in the form of Exhibit D hereto and (ii) grant a Lien on
         all of the  assets  of such  Acquisition  Subsidiary  to the  Lender to
         secure such  guaranty by  executing a  Subsidiary  Security  and Pledge
         Agreement substantially in the form of Exhibit E hereto.

3.       With respect to each Specified Acquisition for which the Purchase Price
         includes Seller Debt, the  acquisition  agreement shall contain a right
         of first offer substantially the same as the following:

                  Seller  agrees  that  [Sonus-USA,   Inc.][specify  Acquisition
                  Subsidiary] (together with its assigns1, "BUYER") shall have a
                  right of first offer (the "RIGHT OF FIRST  OFFER") to purchase
                  any indebtedness  issued by Buyer to Seller in connection with
                  the  acquisition of [target] (such  indebtedness,  the "SELLER
                  DEBT").
                  If, at any time, Seller desires to transfer the Seller Debt to
                  any third party,  Seller shall give notice (an "OFFER NOTICE")
                  to Buyer  that  Seller  desires  to make  such a  transfer  (a
                  "SALE")  and that sets  forth the  amount of the  Seller  Debt
                  proposed  to be  transferred  by Seller  (which  amount  shall
                  constitute  the full amount of the Seller  Debt  outstanding),
                  the cash price that Seller  proposes to be paid for the Seller
                  Debt (the "OFFER  PRICE") and any other  material terms sought
                  by Seller.

                  The giving of an Offer  Notice to Buyer  shall  constitute  an
                  offer (the  "OFFER") by Seller to transfer  the Seller Debt to
                  Buyer for cash at the Offer  Price and on the other  terms set
                  forth in the Offer  Notice.  Buyer shall have a 30-day  period
                  (the "OFFER PERIOD") in which to accept such Offer by giving a
                  notice of acceptance to Seller prior to the expiration of such
                  Offer  Period.  If Buyer fails to notify  Seller

--------
     1 It is imperative that there are no restrictions on Sonus' assignees, or
if there are restrictions, GN Great Nordic A/S must be a permitted assignee.

***Confidential   portions  omitted  pursuant  to  a  request  for  confidential
treatment
                                      -26-



<PAGE>
                  prior  to the  expiration  of the  Offer  Period,  it shall be
                  deemed to have declined the Offer.

                  If Buyer  elects to  purchase  the Seller  Debt,  Buyer  shall
                  purchase and pay, by wire  transfer,  bank or certified  check
                  (in immediately  available funds),  for the Seller Debt within
                  20 business  days after the date on which Buyer  accepted  the
                  Offer. Upon receipt of such payment,  Seller shall release all
                  security  interests  in all assets and  property of  [target],
                  including  the delivery of any UCC-3  termination  statements,
                  mortgage   satisfactions   and  other  release   documentation
                  reasonably requested by Buyer.

                  Upon the  earlier  to occur of (i)  rejection  of the Offer by
                  Buyer  and (ii) the  expiration  of the Offer  Period  without
                  Buyer electing to purchase the Seller Debt,  Seller shall have
                  a 120-day  period  during  which to effect a  transfer  of the
                  Seller Debt on substantially the same or more favorable (as to
                  the  Seller)  terms  and  conditions  as were set forth in the
                  Offer Notice at a price in cash not less than the Offer Price.
                  If Seller does not  consummate the transfer of the Seller Debt
                  in accordance  with the foregoing time  limitations,  then the
                  right of Seller to effect  the  transfer  of the  Seller  Debt
                  pursuant to this  paragraph  shall  terminate and Seller shall
                  again comply with the  procedures  set forth in this Agreement
                  with respect to any proposed  transfer of the Seller Debt to a
                  third party.

4.                With  respect  to each  Specified  Acquisition  for  which the
                  Purchase  Price  includes  Seller  Debt,  the  note  or  other
                  instrument  (the  "SELLER  NOTE")  evidencing  the Seller Debt
                  shall  contain  a right to cure  defaults  under  Seller  Debt
                  substantially  the same as the  following:  Seller  agrees  to
                  provide  the  Buyer  with  written  notice of any  default  or
                  claimed  default by the Buyer under the Seller Note (a "SELLER
                  NOTE DEFAULT NOTICE"), and shall provide a lender of the Buyer
                  designated by the Buyer with a period of 15 days following the
                  Buyer's  receipt of such Seller Note  Default  Notice,  during
                  which period such lender may cure such default  before  Seller
                  shall be permitted  to exercise any remedies  under the Seller
                  Note.

5.                No  Specified   Acquisition  shall  be  made  in  an  Excluded
                  Jurisdiction.




                                      -27-
<PAGE>

                                                                SCHEDULE 4.01(J)



                              EXISTING INVESTMENTS

--------------------- ----------------------- ----------------------
       Payee                 Description         Amount Outstanding
--------------------- ----------------------- ----------------------

--------------------- ----------------------- ----------------------
US Bank               Revolving Credit Line
--------------------- ----------------------- ----------------------
Phonak Inc.           Working Capital Loan
--------------------- ----------------------- ----------------------


                                      -28-
<PAGE>

<TABLE>
<CAPTION>
                                                                                                                  SCHEDULE 4.01(K)
                                                       EXISTING INDEBTEDNESS
                                               FOR THE PERIOD ENDED FEBRUARY 28, 2001

                                       Interest                           Payment     Balance
Payee                                    Rate     Maturity    Payment      Terms     at 2/28/01   Secured  Secured Balance
                                         ----     --------   ---------  -  ------    ----------   -------  ---------------
---------------------------------------
<S>                                        <C>        <C>       <C>        <C>        <C>            <C>        <C>
MONTHLY DEBT
---------------------------------------
***                                        6.00%      7/1/01     833.33     Monthly     4,166.77    No               $0.00
                                           6.00%     6/23/03   4,167.00     Monthly   116,660.00    Yes        $116,660.00
                                          10.00%     6/23/01   3,369.84     Monthly    13,479.66    Yes         $13,479.66
                                          11.00%     12/3/01   2,163.67     Monthly    20,787.44    Yes         $20,787.44
                                          18.00%     4/15/02     351.08     Monthly     4,640.91    Yes          $4,640.91
                                           9.00%     3/10/01  41,666.67     Monthly    41,634.01    Yes         $41,634.01
                                           8.00%     6/10/01   3,133.64     Monthly    21,433.82    No               $0.00
                                           0.00%      4/2/01  30,000.00    one-time    30,000.00    Yes         $30,000.00
                                          10.00%      7/1/03     486.00     Monthly    14,335.54    No               $0.00

QUARTERLY DEBT
---------------------------------------
***                                        6.00%     6/30/01  43,333.33   Quarterly    86,666.70    Yes         $86,666.70
                                           7.75%      5/1/03  14,788.41   Quarterly   103,125.05    Yes        $103,125.05
                                           8.00%     10/1/01   8,500.00   Quarterly    25,500.00    No               $0.00
                                           8.00%     10/1/01   4,833.33   Quarterly    14,500.03    No               $0.00
                                           5.00%     5/31/05   3,000.00   Quarterly    33,540.00    No               $0.00
                                           7.50%      9/6/04 3666.67+int. Quarterly    55,000.00    Yes         $55,000.00

ANNUAL DEBT
---------------------------------------
***                                        6.00%     3/31/01   4,333.34    Annually     3,455.83    No               $0.00
                                           6.00%     2/27/03 112,000.00    Annually   224,000.00    Yes        $224,000.00
                                           6.00%     4/13/01  16,667.00    Annually    16,666.00    No               $0.00
                                           6.00%     7/16/01  30,000.00    Annually    30,000.00    Yes         $30,000.00
                                           6.00%     7/10/01  85,000.00    Annually    85,000.00    No               $0.00
                                           6.00%     9/24/01 116,667.00    Annually   116,666.00    No               $0.00
                                           6.00%    12/19/04  16,666.67    Annually    66,666.66    No               $0.00
                                           6.00%      6/1/02  30,000.00    Annually    60,000.00    No               $0.00
                                           6.00%      7/6/02  50,000.00    Annually   100,000.00    Yes        $100,000.00
                                           7.00%     3/31/01  78,445.33    Annually    69,614.18    No               $0.00
                                           6.00%     12/1/02  50,000.00    Annually   100,000.00    Yes        $100,000.00
                                           6.00%     2/28/03  10,833.33    Annually    21,666.67    No               $0.00
                                           7.50%      4/7/03  11,666.67    Annually    35,000.00    Yes         $35,000.00
                                           9.00%     4/21/03  25,000.00    Annually    75,000.00    No               $0.00
                                           6.00%    10/23/03   8,333.00    Annually    25,000.00    No               $0.00
                                           6.00%    10/23/03   8,333.00    Annually    25,000.00    No               $0.00
                                           7.50%     12/1/03  51668+int    Annually    51,668.00    Yes         $51,668.00
                                           6.00%     5/14/03  27,000.00    Annually    81,000.00    No               $0.00
                                           6.00%     7/22/02  50,000.00    Annually   100,000.00    No               $0.00
                                           6.00%    12/31/02  43,000.00    Annually    57,000.00    Yes         $57,000.00

NON-COMPETE DEBT
---------------------------------------
***                                        0.00%     6/30/01   2,500.00   Quarterly     5,000.00    No               $0.00
                                           0.00%     3/31/01  14,167.00   Quarterly    28,330.00    Yes         $28,330.00
                                           0.00%     7/10/01   2,500.00     Monthly    12,500.00    No               $0.00
                                           0.00%      9/1/01   6,303.00     Monthly    23,821.00    No               $0.00
                                           0.00%      9/1/01   4,091.00     Monthly     6,637.00    No               $0.00
                                           0.00%      9/1/01   4,455.00     Monthly     8,585.00    No               $0.00
                                           0.00%     9/24/01  16,666.67    Annually    16,666.66    No               $0.00
                                           0.00%     3/31/02   2,500.00   Quarterly    20,000.00    Yes         $20,000.00
                                           0.00%     3/31/03   4,167.00   Quarterly    37,499.00    No               $0.00

US Bank Revolving Credit Line              9.50%                                      600,000.00    Yes        $600,000.00
US Bank letter of Credit                                                               31,657.00    Yes         $31,657.00

CONTINGENT PAYMENT
---------------------------------------
***                                                  3/31/02   6,250.00   Quarterly    31,250.00    No               $0.00
                                                     6/30/02   7,917.00   Quarterly    47,498.00    No               $0.00
                                                     3/31/01  12,500.00   Quarterly    62,500.00    Yes         $62,500.00
                                                     3/31/02   9,583.00   Quarterly    47,919.00    Yes         $47,919.00
                                                     3/31/02  21,667.00   Quarterly   108,333.00    No               $0.00
                                                      9/4/01   6,250.00   Quarterly    75,000.00    Yes         $75,000.00
                                                     3/31/04   8,333.00   Quarterly    83,330.00    No               $0.00
                                                    12/31/03  20,833.00   Quarterly   250,000.00    Yes        $250,000.00
                                                     5/31/02  25,000.00               100,000.00    No               $0.00
                                                      8/1/01  25,000.00      Annual    25,000.00    No               $0.00
                                                    10/31/01  25,050.00   Quarterly    75,150.00    No               $0.00

CAPITAL LEASE PAYMENT
---------------------------------------
Siemens # 1 Revised                        8.25%      3/1/01   9,227.48     Monthly     9,164.48    Yes          $9,164.48
Siemens #2                                 8.25%      6/1/01   2,243.08     Monthly     8,820.25    Yes          $8,820.25

                                      -29-

***Confidential portions omitted pursuant
to a request for confidential treatment
<PAGE>
Lexington Capital Lease                   17.50%      8/2/02   4,866.88     Monthly    67,253.20    Yes         $67,253.20
Lexington Capital Lease                   17.50%      8/2/02   3,154.81     Monthly    44,690.52    Yes         $44,690.52
NA Commercial Leasing Co                              8/1/01     700.00     Monthly     7,300.00    Yes          $7,300.00
NA Commercial Leasing Co                              3/1/01     800.00     Monthly     4,800.00    Yes          $4,800.00
IBM Credit Corp.                          11.89%      7/1/02   1,300.00     Monthly    21,335.08    Yes         $21,335.08
IBM Credit Corp.                          12.15%     10/1/01     151.00     Monthly     2,843.27    Yes          $2,843.27

                                                                         TOTAL      3,791,755.73              2,351,274.57
</TABLE>

                                      -30-
<PAGE>


                                                                      EXHIBIT A


                                      NOTE

New York, New York
May 31, 2001


      For value received,  Sonus-USA, Inc., a corporation organized and existing
under the laws of Washington (the  "BORROWER"),  promises to pay to the order of
GN Great Nordic A/S, a  corporation  organized  and  existing  under the laws of
Denmark (the  "LENDER"),  the unpaid  principal  amount of each Loan made by the
Lender to the Borrower pursuant to the Credit Agreement referred to below on the
maturity date provided for in the Credit Agreement. The Borrower promises to pay
interest  on the unpaid  principal  amount of each such Loan on the dates and at
the rate or rates  provided for in the Credit  Agreement.  All such  payments of
principal  and interest  shall be made in lawful  money of the United  States in
Federal or other  immediately  available  funds at Merita Bank Plc,  437 Madison
Avenue, New York, NY 10022, routing no. 026010786, account no. 50024029275001.

      All Loans made by the Lender and all  repayments of the principal  thereof
shall be recorded by the Lender and, if the Lender so elects in connection  with
any  transfer or  enforcement  hereof,  appropriate  notations  to evidence  the
foregoing  information  with respect to each such Loan then  outstanding  may be
endorsed by the Lender on the schedule  attached hereto, or on a continuation of
such schedule  attached to and made a part hereof;  provided that the failure of
the Lender to make (or any error in making) any such  recordation or endorsement
shall not  affect  the  Borrower's  obligations  hereunder  or under the  Credit
Agreement.

      This note is the Note referred to in the Credit  Agreement dated as of May
31, 2001 among Sonus-USA, Inc., Sonus Corp. and GN Great Nordic A/S (as the same
may be amended from time to time, the "CREDIT Agreement").  Terms defined in the
Credit Agreement are used herein with the same meanings.

      Reference  is  made  to  the  Credit  Agreement  for  provisions  for  the
prepayment hereof and the acceleration of the maturity hereof.

                                            SONUS-USA, INC.


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


                                      -31-
<PAGE>


                         LOANS AND PAYMENTS OF PRINCIPAL


---------- ----------------- --------- ----------------- ----------------------
   DATE     AMOUNT OF LOAN                AMOUNT OF          NOTATION MADE BY
                                       PRINCIPAL REPAID
---------- ----------------- --------- ----------------- ----------------------

---------- ----------------- --------- ----------------- ----------------------

---------- ----------------- --------- ----------------- ----------------------

---------- ----------------- --------- ----------------- ----------------------

---------- ----------------- --------- ----------------- ----------------------

---------- ----------------- --------- ----------------- ----------------------

---------- ----------------- --------- ----------------- ----------------------

---------- ----------------- --------- ----------------- ----------------------

---------- ----------------- --------- ----------------- ----------------------

---------- ----------------- --------- ----------------- ----------------------

---------- ----------------- --------- ----------------- ----------------------

---------- ----------------- --------- ----------------- ----------------------

---------- ----------------- --------- ----------------- ----------------------

-------------- ----------------- --------- ----------------- ------------------

                                      -32-
<PAGE>


                                                                       EXHIBIT B

                          BORROWING REQUEST CERTIFICATE

                             --------------------, 200-


         The undersigned,                          [SPECIFY OFFICER'S TITLE] of
                         -------------------------
Sonus-USA, Inc. (the "BORROWER") refers to the Credit Agreement dated as of May
---, 2001 (the "CREDIT AGREEMENT") among the Borrower, Sonus Corp. and GN Great
Nordic A/S, as Lender. Terms defined in the Credit Agreement are used herein as
therein defined.

         The  undersigned  hereby  gives you  irrevocable  notice,  pursuant  to
Section 2.02(a) of the Credit Agreement,  that the undersigned hereby requests a
Borrowing  under the Credit  Agreement,  and in that  connection  sets forth and
certifies below the information  relating thereto required by Section 2.02(a) of
the Credit Agreement:

                  (i) The aggregate amount of the requested  Borrowing is $ ---
                  (the "REQUESTED BORROWING AMOUNT").2

                  (ii) The date of the Borrowing  shall be        , which is a
                                                          --------
                  Business Day.

                  (iii) As of the date  hereof,  and as of the Funding  Date for
                  the Borrowing requested hereby (before and after giving effect
                  to such Borrowing),  all of the representations and warranties
                  of each Obligor  contained in the Loan Documents shall be true
                  and  correct,  except to the extent  that any  failure of such
                  representations  and  warranties,  or  any  event,  change  or
                  development   which  has  caused  such   representations   and
                  warranties to be untrue or incorrect,  could not reasonably be
                  expected to have a material  adverse  effect on the  condition
                  (financial or otherwise),  business,  results of operations or
                  prospects of any Obligor or any of its subsidiaries.

                  (iv) As of the date hereof, and as of the Funding Date for the
                  Borrowing  requested hereby (before and after giving effect to
                  such  Borrowing),  no Default  or Event of Default  shall have
                  occurred and be continuing.

                  (v) The  making  of the  Loans  on the  Funding  Date  for the
                  Borrowing requested hereby does not violate any Requirement of
                  Law on the date of or  immediately  following such Loan and is
                  not enjoined, temporarily, preliminarily or permanently.


----------------------------------
   2  For the intial Borrowing on the Effective Date, specify $5,000,000.

                                      -33-
<PAGE>

                  (vi)  The  Requested  Borrowing  Amount  will not  exceed  the
                  Account Shortfall Amount on the Funding Date for the Borrowing
                  requested  hereby. On such Funding Date, the Specified Account
                  Balance (before giving effect to such requested  Borrowing) is
                  less than $2,300,000.]3

                  (vii) The proceeds of the Borrowing  requested  hereby will be
                  applied  promptly  (and within 5 Business  Days after  receipt
                  thereof)   toward  the  payment  of  the  Purchase   Price  in
                  connection with the acquisition of
                                                     ------------------------
                  [IDENTIFY ACQUISITION TO BE FINANCED WITH THE LOAN PROCEEDS]
                  (the "FINANCED ACQUISITION").

                  (viii)  The  Requested  Borrowing  Amount  does not exceed the
                  excess  of (x) the  total  Purchase  Price  for  the  Financed
                  Acquisition over (y) the Account Surplus Amount on the Funding
                  Date for the Borrowing requested hereby.

                  (ix) The Financed Acquisition is a Specified Acquisition.

                  (x) The  Financed  Acquisition  satisfies  all of the Required
                  Acquisition   Parameters   (compliance   with   the   Required
                  Acquisition  Parameters in paragraph 1 in Schedule 1.02 of the
                  Credit Agreement is set forth in reasonable detail below), and
                  ***

                  (xi) The proceeds of the Borrowing requested hereby will be
                  applied promptly toward the payment of the Related Acquisition
                  Costs in connection with the acquisition of
                                                             ------------------
                  [IDENTIFY  ACQUISITION  TO BE FINANCED WITH THE LOAN PROCEEDS]
                  (the "FINANCED ACQUISITION").

                  (xii) The Related  Acquisition  Costs to be financed  with the
                  proceeds of the  Borrowing  requested  hereby are set forth in
                  reasonable   detail  below:   [INCLUDE   REASONABLY   DETAILED
                  DESCRIPTION OF RELATED ACQUISITION COSTS]

                  (xiii)  The  Requested  Borrowing  Amount  does not exceed the
                  excess  of (x) the  Maximum  Costs  Amount in  respect  of the
                  Financed  Acquisition  over (y) the Account  Surplus Amount on
                  the  Funding  Date for the  Borrowing  requested  hereby.  The
                  Maximum Costs Amount is respect of the Financed Acquisition is
                  set forth in

-------------------------

   3  Include clause (vi) only for Borrowings to increase the Specified  Account
      Balance (in amounts not to exceed the Account Shortfall Amount and only at
      times when the Specified  Account Balance is less than $2.3 million) after
      the Effective Date.

***Confidential   portions  omitted  pursuant  to  a  request  for  confidential
treatment

                                      -34-
<PAGE>

                  reasonable  detail  below:  [INCLUDE  CALCULATIONS  OF MAXIMUM
                  COSTS AMOUNT FOR THE FINANCED ACQUISITION]

                  (xiv) The Financed Acquisition is a Specified Acquisition.

                  (xv) The Financed  Acquisition  satisfies  all of the Required
                  Acquisition   Parameters   (compliance   with   the   Required
                  Acquisition  Parameters in paragraph 1 in Schedule 1.02 of the
                  Credit Agreement is set forth in reasonable detail below), and
                  ***

***Confidential   portions  omitted  pursuant  to  a  request  for  confidential
treatment

                                      -35-
<PAGE>



         IN WITNESS WHEREOF, the undersigned has set his hand as the
                         [PROVIDE OFFICER'S TITLE] of Sonus-USA, Inc. as of
         ----------------  this      day of            , 200 .
                                ----        ----------
                                                      ------------------------
                                                      Name:
                                                      Title:
                                      -36-