Document:

ASSIGNMENT OF PROMISSORY NOTE

                  THIS AGREEMENT is made as of the 29th day of July, 1999.

B E T W E E N

                           CHEROKEE MINING COMPANY, INC., a
                           corporation incorporated under the laws of the State
                           of Wyoming,

                           (hereinafter called the "Assignor")

                                                              OF THE FIRST PART,

                           -and

                           INFOCAST CORPORATION, a corporation
                           incorporated under the laws of the State of Nevada,

                           (hereinafter called the "Assignee")

                                                             OF THE SECOND PART.

                  WHEREAS the Assignor is the holder of a  promissory  note (the
"Promissory Note") issued by Silver Wing Co., Inc., (the "Maker") dated the 29th
day of July,  1999 for the principle  sum of US$250,000  plus interest at a rate
per  annum  equal  to the  Prime  Rate  (as  more  particularly  set  out in the
Promissory Note);

                  AND  WHEREAS  the  Assignor  has  agreed to assign  all of its
right, title and interest in the Promissory Note to the Assignee;

                  AND WHEREAS  capitalized  terms not defined  herein shall have
the meanings ascribed to them in the Promissory Note;

                  NOW THEREFORE THIS AGREEMENT  WITNESSETH THAT in consideration
of the sum of One  Dollar  in  lawful  money of the  United  States  of  America
(US$1.00) now paid by the Assignee to the Assignor (the receipt and  sufficiency
of which is hereby  acknowledged)  and in  consideration of the mutual terms and
covenants herein set forth, the parties hereto covenant and agree as follows:

1.                The Assignor does hereby agree to assign, set over,  transfer,
                  grant and convey to the Assignee  all of its right,  title and
                  interest in and to the Promissory Note.

<PAGE>

2.                The Assignor  represents  and warrants to the Assignee that it
                  has full power and authority to assign the Promissory  Note to
                  the Assignee.

3.                The parties hereto  further  covenant and agree that they will
                  each execute such further and other  documents and do all such
                  further and other  things as may be  necessary or requisite in
                  connection with this Agreement.

4.                This  Agreement  shall  enure  to the  benefit  of the  heirs,
                  executors,  administrators,  successors  and  assigns  of  the
                  Assignee and shall be binding upon the  successors and assigns
                  of the Assignor.

                  IN WITNESS  WHEREOF the parties have executed this  assignment
as of the day and year first written above.

                                        CHEROKEE MINING COMPANY, INC.

                                        Per:   /s/
                                               ---------------------------------

                                        INFOCAST CORPORATION

                                        Per:   /s/ A.T. Griffis
                                               ---------------------------------

                                       -2-______________________________________________

                 ______________________________________________

                          CREDIT AND SECURITY AGREEMENT

                                 BY AND BETWEEN

                               TELULAR CORPORATION

                                       AND

                        WELLS FARGO BUSINESS CREDIT, INC.

                           Dated as of January 7, 2000

                 ______________________________________________

                 ______________________________________________

<PAGE>
                                Table of Contents

  ARTICLE I  DEFINITIONS..........................................1
   Section 1.1 Definitions .......................................1
   Section 1.2 Cross References .................................11

  ARTICLE II  AMOUNT AND TERMS OF THE CREDIT FACILITY............11
    Section 2.1 Revolving Advances ..............................11
    Section 2.2 Letters of Credit ...............................12
    Section 2.3 Payment of Amounts Drawn Under Letters of Credit;
                Obligation of Reimbursement .....................12
    Section 2.4 Special Account .................................13
    Section 2.5 Obligations Absolute ............................13
    Section 2.6 Interest; Minimum Interest Charge; Default Interest;
                Participations; Usury ...........................14
    Section 2.7 Fees; Warrant ...................................15
    Section 2.8 Computation of Interest and Fees; When Interest
                Due and Payable .................................16
    Section 2.9 Capital Adequacy; Increased Costs and
                Reduced Return...................................16
    Section 2.10 Voluntary Prepayment; Termination of the Credit
                 Facility by the Borrower; Automatic Renewal ....17
    Section 2.11 Termination. ...................................17
    Section 2.12 Mandatory Prepayment ...........................18
    Section 2.13 Payment ........................................18
    Section 2.14 Payment on Non-Banking Days ....................18
    Section 2.15 Use of Proceeds ................................18
    Section 2.17 Liability Records ..............................18

  ARTICLE III  SECURITY INTEREST; OCCUPANCY; SETOFF..............19
    Section 3.1 Grant of Security Interest ......................19
    Section 3.2 Notification of Account Debtors and Other
                Obligors.........................................19
    Section 3.3 Assignment of Insurance .........................19
    Section 3.4 Occupancy .......................................19
    Section 3.5 License .........................................20
    Section 3.6 Financing Statement .............................20
    Section 3.7 Setoff ..........................................21

  ARTICLE IV  CONDITIONS OF LENDING..............................21
    Section 4.1 Conditions Precedent to the Initial Revolving
                Advances and the Initial Letter of Credit .......21
    Section 4.2 Conditions Precedent to All Advances and Letters
                of Credit........................................23

  ARTICLE V  REPRESENTATIONS AND WARRANTIES......................23
    Section 5.1 Corporate Existence and Power; Name; Chief
                Executive Office; Inventory and Equipment
                Locations; Tax Identification Number.............23
    Section 5.2 Authorization of Borrowing; No Conflict as to
                Law or Agreements ...............................24
    Section 5.3 Legal Agreements ................................24
    Section 5.4 Subsidiaries ....................................24
    Section 5.5 Financial Condition; No Adverse Change ..........24
    Section 5.6 Litigation ......................................25
    Section 5.7 Regulation U ....................................25
    Section 5.8 Taxes ...........................................25
    Section 5.9 Titles and Liens ................................25
    Section 5.10 Plans ..........................................25
    Section 5.11 Default ........................................26
    Section 5.12 Environmental Matters ..........................26
    Section 5.13 Submissions to Lender ..........................27
    Section 5.14 Financing Statements ...........................27
    Section 5.15 Rights to Payment ..............................27

<PAGE>
  ARTICLE VI  BORROWER'S AFFIRMATIVE COVENANTS...................28
    Section 6.1 Reporting Requirements ..........................28
    Section 6.2 Books and Records; Inspection and Examination ...30
    Section 6.3 Account Verification ............................31
    Section 6.4 Compliance with Laws ............................31
    Section 6.5 Payment of Taxes and Other Claims ...............31
    Section 6.6 Maintenance of Properties .......................31
    Section 6.7 Insurance .......................................32
    Section 6.8 Preservation of Existence .......................32
    Section 6.9 Delivery of Instruments, etc ....................32
    Section 6.10 Collateral Account .............................32
    Section 6.11 Performance by the Lender ......................33
    Section 6.12 Minimum Book Net Worth .........................34
    Section 6.13 Minimum Availability ...........................34

  ARTICLE VII  NEGATIVE COVENANTS................................34
    Section 7.1 Liens ...........................................34
    Section 7.2 Indebtedness ....................................35
    Section 7.3 Guaranties ......................................35
    Section 7.4 Investments and Subsidiaries ....................36
    Section 7.5 Dividends .......................................36
    Section 7.6 Sale or Transfer of Assets; Suspension of
    Business Operations..........................................36
    Section 7.7 Consolidation and Merger; Asset Acquisitions ....36
    Section 7.8 Sale and Leaseback ..............................37
    Section 7.9 Restrictions on Nature of Business ..............37
    Section 7.10 Capital Expenditures ...........................37
    Section 7.11 Accounting .....................................37
    Section 7.12 Discounts, etc .................................37
    Section 7.13 Defined Benefit Pension Plans ..................37
    Section 7.14 Other Defaults .................................37
    Section 7.15 Place of Business; Name ........................37
    Section 7.16 Organizational Documents .......................37

  ARTICLE VIII  EVENTS OF DEFAULT, RIGHTS AND REMEDIES...........38
    Section 8.1 Events of Default ...............................38
    Section 8.2 Rights and Remedies .............................40
    Section 8.3 Certain Notices .................................41

  ARTICLE IX  MISCELLANEOUS......................................41
    Section 9.1 No Waiver; Cumulative Remedies ..................41
    Section 9.2 Amendments, Etc .................................41
    Section 9.3 Addresses for Notices, Etc ......................42
    Section 9.4 Further Documents ...............................42
    Section 9.5 Collateral ......................................43
    Section 9.6 Costs and Expenses ..............................43
    Section 9.7 Indemnity .......................................43
    Section 9.8 Participants ....................................44
    Section 9.9 Execution in Counterparts .......................44

    Section 9.10 Binding Effect; Assignment; Complete Agreement;
                 Exchanging Information .........................44
    Section 9.11 Severability of Provisions .....................45
    Section 9.12 Headings .......................................45
    Section 9.13 Governing Law; Jurisdiction, Venue; Waiver of
                 Jury Trial......................................45
<PAGE>

                          CREDIT AND SECURITY AGREEMENT

                           Dated as of January 7, 2000

       TELULAR CORPORATION, a Delaware corporation (the Borrower), and WELLS
  FARGO BUSINESS CREDIT, INC., a Minnesota corporation (the Lender), hereby
  agree as follows:

                                    ARTICLE I

                                   Definitions

       Section1.1 Definitions.  For all purposes of this Agreement, except
  as otherwise expressly provided or unless the context otherwise requires:

          (a)  the terms defined in this Article have the meanings assigned
       to them in this Article, and include the plural as well as the
       singular; and

          (b)  all accounting terms not otherwise defined herein have the
       meanings assigned to them in accordance with GAAP.

          Accounts means all of the Borrower's accounts, as such term is
       defined in the UCC, including, without limitation, the aggregate unpaid
       obligations of customers and other account debtors to the Borrower
       arising out of the sale or lease of goods or rendition of services by
       the Borrower on an open account or deferred payment basis.

          Advance means a Revolving Advance.

          Affiliate or Affiliates means Telular International, Inc.,
       Telular-Adcor Security Products, Inc., Telular -WD Corporation, and any
       other Person controlled by, controlling or under common control with
       the Borrower, including, without limitation, any Subsidiary of the
       Borrower. For purposes of this definition, control, when used with
       respect to any specified 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.

          Agreement means this Credit and Security Agreement, as amended,
       supplemented or restated from time to time.

          American National means American National Bank & Trust Company of
       Chicago, a national banking association with an office located in Elk
       Grove Village, Illinois.

          Banking Day means a day other than a Saturday, Sunday or other
       day on which banks are generally not open for business in Milwaukee,
       Wisconsin.

          Book Net Worth means the aggregate of the common and preferred
       stockholders' equity in the Borrower, determined on a consolidated
       basis in accordance with GAAP.

          Borrowing Base means, at any time the lesser of:

                 (a)  the Maximum Line; or

                 (b)  the Collateral Availability.
<PAGE>
          Capital Expenditures for a period means any expenditure of money
       for the lease, purchase or other acquisition of any capitalized asset,
       or for the lease of any other asset whether payable currently or in
       the future, provided such lease is a capital lease, all in accordance
       with GAAP.

          Collateral means all of the Borrower's Equipment, General
       Intangibles, Inventory, Receivables, Investment Property, all sums
       on deposit in any Collateral Account, and any items in any Lockbox;
       together with (i) all substitutions and replacements for and products of
       any of the foregoing; (ii) proceeds of any and all of the foregoing;
       (iii) in the case of all tangible goods, all accessions; (iv) all
       accessories, attachments, parts, equipment and repairs now or hereafter
       attached or affixed to or used in connection with any tangible goods;
       (v) all warehouse receipts, bills of lading and other documents of title
       now or hereafter covering such goods; and (vi) all sums on deposit in
       the Special Account.

          Collateral Account at any time, has the meaning given in the
       Collateral Account Agreement then in effect.

          Collateral Account Agreement initially, means the Multi-Party
       Blocked Account Agreement of even date herewith by and among the
       Borrower, American National and the Lender and, no later than July 1,
       2000, means the Collateral Account Agreement of such date by and among
       the Borrower, Norwest Bank Wisconsin and the Lender.

       Collateral Availability means at any time the sum of:

                 (i)  85% of Eligible Accounts; plus

                 (ii) subject to satisfaction of the Foreign Line Conditions,
            the lesser of (A) 85% of Eligible Foreign Accounts or
            (B) $1,000,000; plus

                 (iii)     the lesser of (A) 35% of Eligible Inventory or
            (B) $1,500,000.

          Commitment means the Lender's commitment to make Advances and to
       cause the Issuer to issue Letters of Credit to or for the Borrower's
       account pursuant to Article II.

          Credit Facility means the credit facility being made available to
       the Borrower by the Lender pursuant to Article II.

          Default means an event that, with giving of notice and after the
       expiry of any applicable notice or remedy period, would constitute an
       Event of Default.

          Default Period means any period of time beginning on day an Event
       of Default has occurred (or in the case of an occurrence of a
       violation of Section 6.12 hereof, the fifth business day of the month
       immediately following the month in which such provision was violated)
       and ending on the date Event of Default has been cured or waived as
       set forth in the Lender's written notice of such cure or waiver.

          Default Rate means an annual rate equal to three percent (3%)
       over the Floating Rate, which rate shall change when and as the
       Floating Rate changes.

          ERISA means the Employee Retirement Income Security Act of 1974,
       as amended.
<PAGE>
          Eligible Accounts means all unpaid Accounts, net of any credits,
       except the following shall not in any event be deemed Eligible
       Accounts:

                 (i)  That portion of Accounts unpaid more than sixty (60)
                 days after the due date; provided that in no event shall
                 any Account payable more than one hundred fifty (150) days
                 after the invoice date be deemed an Eligible Account;

                 (ii) That portion of Accounts that is disputed or subject to
                 a claim of offset or a contra account;

                 (iii) That portion of Accounts not yet earned by the final
                 delivery of goods or rendition of services, as applicable,
                 by the Borrower to the customer;

                 (iv) Accounts owed by any unit of government, whether
                 foreign or domestic (provided, however, that there shall be
                 included in Eligible Accounts that portion of Accounts owed
                 by such units of government for which the Borrower has
                 provided evidence reasonably satisfactory to the Lender that
                 (A) the Lender has a first priority perfected security
                 interest and (B) such Accounts may be enforced by the Lender
                 directly against such unit of government under all applicable
                 laws);

                 (v)  Accounts owed by an account debtor located outside the
                 United States of America which are not backed by a bank
                 letter of credit naming the Lender as beneficiary or assigned
                 to the Lender, confirmed, and in the Lender's possession and
                 acceptable to the Lender in all material respects;

                 (vi) Accounts owed by an account debtor that is insolvent, the
                 subject of bankruptcy proceedings or has gone out of business;

                 (vii) Accounts owed by a shareholder, Subsidiary, Affiliate,
                 officer or employee of the Borrower;

                 (viii) Accounts not subject to a duly perfected security
                 interest in the Lender's favor or which are subject to any
                 lien, security interest or claim in favor of any Person other
                 than the Lender including, without limitation, any payment or
                 performance bond;

                 (ix) That portion of Accounts that has been restructured,
                 extended, amended or modified;

                 (x)  That portion of Accounts that constitutes advertising,
                 finance charges, service charges or sales or excise taxes;

                 (xi) Accounts owed by an account debtor, regardless of
                 whether otherwise eligible, if twenty five percent (25%) or
                 more of the total amount due under Accounts from such debtor
                 is ineligible under clauses (i), (ii) or (ix), above; and

                 (xii)     With respect to any Accounts in an amount in
                 excess of $200,000 which are not backed by a bank letter of
                 credit, any such Accounts otherwise deemed ineligible by
                 the Lender in its reasonable business judgment.
<PAGE>
          Eligible Foreign Accounts means Accounts due and owing by an
       Account debtor located outside the United States; but excluding any
       Accounts having the following characteristics:

                 (i)  That portion of Accounts unpaid more than sixty (60)
                 daysafter the due date; provided that in no event shall any
                 Account payable more than one hundred fifty (150) days after
                 the invoice date be deemed an Eligible Account;

                 (ii) That portion of Accounts that is disputed or subject
                 to a claim of offset or a contra account;

                 (iii) That portion of Accounts not yet earned by the final
                 delivery of goods or rendition of services, as applicable,
                 by the Borrower to the customer;

                 (iv) Accounts owed by any unit of government;

                 (v)  Accounts owed by an account debtor that is insolvent,
                 the subject of bankruptcy proceedings or has gone out of
                 business;

                 (vi) Accounts owed by a shareholder, Subsidiary, Affiliate,
                 officer or employee of the Borrower;

                 (vii) Accounts not subject to a duly perfected security
                 interest in the Lender's favor or which are subject to any
                 lien, security interest or claim in favor of any Person
                 other than the Lender including without limitation any
                 payment or performance bond;

                 (viii) That portion of Accounts that has been restructured,
                 extended, amended or modified;

                 (ix) That portion of Accounts that constitutes advertising,
                 finance charges, service charges or sales or excise taxes;

                 (x)  That portion of Accounts owed by any one account debtor
                 that would permit Revolving Advances supported by such
                 account debtor's Accounts to exceed Two Hundred Thousand
                 Dollars ($200,000) at any one time;

                 (xi) Accounts denominated in any currency other than United
                 States dollars, Canadian dollars, French francs, Swiss
                 francs, German marks, Japanese yen, United Kingdom pounds
                 sterling;

                 (xii) Accounts with respect to which the Borrower has not
                 instructed the account debtor to pay the Account to the
                 Collateral Account;

                 (xiii) Accounts owed by account debtors located in countries
                 appearing on a list of unacceptable countries delivered by
                 the Lender to the Borrower from time to time; provided,
                 however, that to the extent such list is changed by the
                 Lender, any Accounts owed by account debtors in countries
                 which are subsequently unacceptable to the Lender shall
                 nevertheless not be deemed ineligible solely on account of
                 such change to the list of unacceptable countries;

                 (xiv) Accounts owed by an account debtor, regardless of
                 whether otherwise eligible, if twenty five percent (25%) or
                 more of the total amount due under Accounts from such debtor
                 is ineligible under clauses (i), (ii) or (viii) above; and

                 (xv) Foreign Accounts that constitute Eligible Accounts in
                 accordance with part (v) of the definition of Eligible
                 Accounts.
<PAGE>
          Eligible Inventory means all finished goods Inventory of the
          Borrower, at the lower of cost or market value as determined in
          accordance with GAAP; provided, however, that the following shall
          not in any event be deemed Eligible Inventory:

                 (i)  Inventory that is:  in-transit; located at any warehouse,
                 job site or other premises not approved by the Lender in
                 writing; located outside of the states, or localities, as
                 applicable, in which the Lender has filed financing statements
                 to perfect a first priority security interest in such
                 Inventory; covered by any negotiable or non-negotiable
                 warehouse receipt, bill of lading or other document of
                 title; on consignment from any Person; on consignment to
                 any Person or subject to any bailment unless such consignee
                 or bailee has executed an agreement with the Lender;

                 (ii) Supplies, packaging, parts or sample Inventory;

                 (iii) Raw materials and work-in-process Inventory;

                 (iv) Inventory that is damaged, obsolete, slow moving or not
                 currently saleable in the normal course of the Borrower's
                 operations;

                 (v)  Inventory that the Borrower has returned, has attempted
                 to return, is in the process of returning or  intends to
                 return to the vendor thereof;

                 (vi) Inventory manufactured by the Borrower pursuant to a
                 license unless the applicable licensor has agreed in writing
                 to permit the Lender to exercise its rights and remedies
                 against such Inventory or the Lender has agreed in writing
                 that the licensor's agreement is not required; and

                 (vii) Inventory that is subject to a security interest in
                 favor of any Person other than the Lender;

                 (viii) Inventory otherwise deemed ineligible by the Lender
                 in its reasonable business judgment.

          Environmental Laws has the meaning specified in Section 5.12.

          Equipment means all of the Borrower's equipment, as such term is
       defined in the UCC, whether now owned or hereafter acquired,
       including, but not limited to, all present and future machinery,
       vehicles, furniture, fixtures, manufacturing equipment, shop equipment,
       office and recordkeeping equipment, parts, tools, supplies, and
       including, specifically, without limitation, the goods described in
       any equipment schedule or list herewith or hereafter furnished to the
       Lender by the Borrower.

          Event of Default has the meaning specified in Section 8.1.

          Floating Rate means an annual rate equal to the Prime Rate, which
       annual rate shall change when and as the Prime Rate changes.

          Foreign Line Conditions means (i) the Lender has received from
       the Borrower a fee equal to one percent (1%) per annum of  One Million
       Dollars ($1,000,000), prorated for the number of months from the date
       the Borrower has requested Advances based of Foreign Accounts to the
       Foreign Line Expiry Date and (ii) the Foreign Line Expiry Date has not
       occurred.

          Foreign Line Expiry Date means September 30, 2000, or such later
       date as to which the Lender has agreed, which agreement to extend
       shall not be unreasonably withheld.
<PAGE>
          Funding Date has the meaning given in Section 2.1.

          GAAP means, at any time, accounting principles generally accepted
       in the United States, applied on a consistent basis.

          General Intangibles means all of the Borrower's general
       intangibles, as such term is defined in the UCC, whether now owned or
       hereafter acquired, including, without limitation, all present and
       future patents, patent applications, copyrights, trademarks, trade
       names, trade secrets, customer or supplier lists and contracts,
       manuals, operating instructions, permits, franchises, the right to
       use the Borrower's name, and the goodwill of the Borrower's business.

          Guarantors means Telular International, Inc., Telular-Adcor Security
       Products, Inc., and Telular-WD Corporation.

          Hazardous Substance has the meaning given in Section 5.12.

          Inventory means all of the Borrower's inventory, as such term is
       defined in the UCC, whether now owned or hereafter acquired, whether
       consisting of whole goods, spare parts or components, supplies or
       materials, whether acquired, held or furnished for sale, for lease or
       under service contracts or for manufacture or processing, and wherever
       located.

          Investment Agreement means that certain Investment Agreement of
       even date herewith between the Borrower and the Lender.

          Investment Property means all of the Borrower's investment
       property, as such term is defined in the UCC whether now owned or
       hereafter acquired, including, but not limited to, all securities,
       security entitlements, securities accounts, commodity contracts,
       commodity accounts, stocks, bonds, mutual fund shares, money market
       shares and United States of America Government Securities.

          Issuer means the issuer of any Letter of Credit.

          L/C Amount means the sum of (i) the aggregate face amount of any
       issued and outstanding Letters of Credit and (ii) the unpaid amount
       of the Obligation of Reimbursement.

          L/C Application means an application and agreement for letters of
       credit in a form acceptable to the Issuer and the Lender.

          Letter of Credit has the meaning specified in Section 2.2.

          Loan Documents means this Agreement, the Note and the Security
       Documents.

          Lockbox at any time, has the meaning given in the Lockbox
       Agreement then in effect.

          Lockbox Agreement initially, means such agreement as is required
       by American National as to lockbox services provided to the Borrower
       by American National and, not later than July 1, 2000, means the
       Agreement as to Lockbox Services of such date by and among the
       Borrower, Norwest Bank Wisconsin and the Lender.

          Maturity Date has the meaning set forth in Section 2.10.

          Maximum Line means Five Million Dollars ($5,000,000), unless said
       amount is reduced pursuant to Section 2.10, in which event it means
       the amount to which said amount is reduced.

          Minimum Interest Charge has the meaning given in Section 2.6(b).
<PAGE>
          Norwest Bank Wisconsin means Norwest Bank Wisconsin, National
       Association, a national banking association with an office in
       Milwaukee, Wisconsin.

          Note means the Revolving Note.

          Obligations means the Note and each and every other debt,
       liability and obligation of every type and description which the
       Borrower may now or at any time hereafter owe to the Lender, whether
       such debt, liability or obligation now exists or is hereafter created
       or incurred, whether it arises in a transaction involving the Lender
       alone or in a transaction involving other creditors of the Borrower,
       and whether it is direct or indirect, due or to become due, absolute or
       contingent, primary or secondary, liquidated or unliquidated, or sole,
       joint, several or joint and several, and including, specifically, but
       not limited to, the Obligation of Reimbursement and all indebtedness of
       the Borrower arising under this Agreement, the Note, any L/C
       Application completed by the Borrower, or any other loan or credit
       agreement or guaranty between the Borrower and the Lender, whether now
       in effect or hereafter entered into.

          Obligation of Reimbursement has the meaning given in Section 2.3(a).

          Patent and Trademark Security Agreement means the Patent and
          Trademark Security Agreement dated as of the date hereof to be
          executed by the Borrower in the Lender's favor.

          Permitted Lien has the meaning given in Section 7.1.

          Person means any individual, corporation, partnership, joint
       venture, limited liability company, association, joint-stock company,
       trust, unincorporated organization or government or any agency or
       political subdivision thereof.

          Plan means an employee benefit plan or other plan maintained for
       the Borrower's employees and covered by Title IV of ERISA.

          Premises means all premises where the Borrower conducts its
       business and has any rights of possession, including, without
       limitation, the premises legally described in Exhibit C attached hereto.

          Prime Rate means the rate of interest publicly announced from
       time to time by Wells Fargo Bank, N. A. as its prime rate or, if such
       bank ceases to announce a rate so designated, any similar successor
       rate reasonably designated by the Lender.

          Receivables means each and every right of the Borrower to the
       payment of money, whether such right to payment now exists or hereafter
       arises, whether such right to payment arises out of a sale, lease or
       other disposition of goods or other property, out of a rendering of
       services, out of a loan, out of the overpayment of taxes or other
       liabilities, or otherwise arises under any contract or agreement,
       whether such right to payment is created, generated or earned by the
       Borrower or by some other person who subsequently transfers such
       person's interest to the Borrower, whether such right to payment is or
       is not already earned by performance, and howsoever such right to
       payment may be evidenced, together with all other rights and interests
       (including all liens and security interests) which the Borrower may at
       any time have by law or agreement against any account debtor or other
       obligor obligated to make any such payment or against any property of
       such account debtor or other obligor; all including, but not limited to,
       all present and future accounts, contract rights, loans and obligations
       receivable, chattel papers, bonds, notes and other debt instruments, tax
       refunds and rights to payment in the nature of general intangibles.
<PAGE>
          Reportable Event shall have the meaning assigned to that term in
       Title IV of ERISA.

          Revolving Advance has the meaning given in Section 2.1.

          Revolving Note means the Borrower's revolving promissory note,
       payable to the order of the Lender in substantially the form of Exhibit
       A hereto and any note or notes issued in substitution therefor, as the
       same may hereafter be amended, supplemented or restated from time to
       time.

          Security Documents means this Agreement, the Patent and Trademark
       Security Agreement, the Collateral Account Agreement, the Lockbox
       Agreement, and any other document delivered to the Lender from time to
       time to secure the Obligations, as the same may hereafter be amended,
       supplemented or restated from time to time.

          Security Interest has the meaning given in Section 3.1.

          Special Account means a specified cash collateral account
       maintained by a financial institution acceptable to the Lender in
       connection with Letters of Credit, as contemplated by Section 2.4.

          Subsidiary means any corporation of which more than fifty percent
       (50%) of the outstanding shares of capital stock having general voting
       power under ordinary circumstances to elect a majority of the board of
       directors of such corporation, irrespective of whether or not at the
       time stock of any other class or classes shall have or might have
       voting power by reason of the happening of any contingency, is at
       the time directly or indirectly owned by the Borrower, by the
       Borrower and one or more other Subsidiaries, or by one or more other
       Subsidiaries.

          Termination Date means the earliest of (i) the Maturity Date,
       (ii) the date the Borrower terminates the Credit Facility, or (iii)
       the date the Lender demands payment of the Obligations after an Event
       of Default pursuant to Section 8.2.

          UCC means the Uniform Commercial Code as in effect from time to
       time in the state designated in Section 9.13 as the state whose laws
       shall govern this Agreement, or in any other state whose laws are held
       to govern this Agreement or any portion hereof.

          Warrant means the Stock Purchase Warrant issued on the date
       hereof by the Borrower to the Lender for the purchase of the
       Borrower's Common Stock, par value $.01 per share, substantially in
       the form of Exhibit D attached hereto.

       Section 1.2 Cross References  All references in this Agreement to
       Articles, Sections and subsections, shall be to Articles, Sections
       and subsections of this Agreement unless otherwise explicitly
       specified.
<PAGE>
                                    ARTICLEII

                      Amount and Terms of the Credit Facility

       Section 2.1  Revolving Advances.  The Lender agrees, on the terms and
       subject to the conditions herein set forth, to make advances to the
       Borrower from time to time from the date all of the conditions set
       forth in Section 4.1 are satisfied or waived in writing by the Lender
       (the Funding Date) to the Termination Date, on the terms and subject
       to the conditions herein set forth (the Revolving Advances).  The
       Lender shall have no obligation to make a Revolving Advance if, after
       giving effect to such requested Revolving Advance, the sum of the
       outstanding and unpaid Revolving Advances under this Section 2.1 or
       otherwise would exceed the Borrowing Base less the L/C Amount.  The
       Borrower's obligation to pay the Revolving Advances shall be evidenced
       by the Revolving Note and shall be secured by the Collateral as
       provided in Article III.  Within the limits set forth in this Section
       2.1, the Borrower may borrow, prepay pursuant to Section 2.12 and
       reborrow.  The Borrower agrees to comply with the following procedures
       in requesting Revolving Advances under this Section 2.1:

          (a)  The Borrower shall make each request for a Revolving Advance
       to the Lender before 12:00 p.m. (Milwaukee time) of the day of the
       requested Revolving Advance.  Requests may be made in writing or by
       telephone, specifying the date of the requested Revolving Advance and
       the amount thereof.  Each request shall be by (i) any officer of the
       Borrower; or (ii) any person designated as the Borrower's agent by any
       officer of the Borrower in a writing delivered to the Lender; or
       (iii) any person whom the Lender reasonably believes to be an officer
       of the Borrower or such a designated agent.

          (b)  Upon fulfillment of the applicable conditions set forth in
       Article IV, the Lender shall disburse the proceeds of the requested
       Revolving Advance by crediting the same to the Borrower's demand deposit
       account maintained with Norwest Bank Wisconsin unless the Lender and the
       Borrower shall agree in writing to another manner of disbursement.  Upon
       the Lender's request, the Borrower shall promptly confirm each
       telephonic request for an Advance by executing and delivering an
       appropriate confirmation certificate to the Lender.  The Borrower shall
       repay all Advances even if the Lender does not receive such confirmation
       and even if the person requesting an Advance was not in fact authorized
       to do so (so long as such person was named on the most current list of
       authorized officers delivered to the Lender under Section 2.1(a)).  Any
       request for an Advance, whether written or telephonic, shall be deemed
       to be a representation by the Borrower that the conditions set forth in
       Section 4.2 have been satisfied as of the time of the request.

       2.2.  Letters of Credit.

          (a)  The Lender agrees, on the terms and subject to the conditions
       herein set forth, to cause an Issuer to issue, from the Funding Date to
       the Termination Date, one or more irrevocable standby or documentary
       letters of credit (each, a Letter of Credit) for the Borrower's account.
       The Lender shall have no obligation to cause an Issuer to issue any
       Letter of Credit if the face amount of the Letter of Credit to be
       issued, would exceed the Borrowing Base less the sum of (A) all
       outstanding and unpaid Revolving Advances and (B) the L/C Amount.
       Each Letter of Credit, if any, shall be issued pursuant to a separate
       L/C Application entered into by the Borrower and the Lender for the
       benefit of the Issuer, completed in a manner reasonably satisfactory
       to the Lender and the Issuer.  The terms and conditions set forth in
       each such L/C Application shall supplement the terms and conditions
       hereof, but if the terms of any such L/C Application and the terms of
       this Agreement are inconsistent, the terms hereof shall control.
<PAGE>
            (b)  Letters of Credit may not be issued with an expiry date later
       than the Termination Date in effect as of the date of issuance.

            (c)  Any request to cause an Issuer to issue a Letter of Credit
       under this Section 2.2 shall be deemed to be a representation by the
       Borrower that the conditions set forth in Section 4.2 have been
       satisfied as of the date of the request.

       Section 2.3.  Payment of Amounts Drawn Under Letters of Credit;
       Obligation of Reimbursement.  The Borrower acknowledges that the
       Lender, as co-applicant, will be liable to the Issuer for reimbursement
       of any and all draws under Letters of Credit and for all other amounts
       required to be paid under the applicable L/C Application.  Accordingly,
       the Borrower agrees to pay to the Lender any and all amounts reasonably
       required to be paid by the Lender to the Issuer under the applicable
       L/C Application, when and as required to be paid thereby, and the
       amounts designated below, when and as designated:

          (a)  The Borrower hereby agrees to pay the Lender on the day a
       draft is honored under any Letter of Credit a sum equal to all amounts
       drawn under such Letter of Credit plus any and all reasonable charges
       and expenses that the Lender has paid or incurred relative to such
       draw and the applicable L/C Application, plus interest on all such
       amounts, charges and expenses as set forth below (the Borrower's
       obligation to pay all such amounts is herein referred to as the
       Obligation of Reimbursement).

            (b)  Whenever a draft is submitted under a Letter of Credit, the
            Lender shall make a Revolving Advance in the amount of the
            Obligation of Reimbursement and shall apply the proceeds of such
            Revolving Advance thereto.  Such Revolving Advance shall be
            repayable in accordance with and be treated in all other respects
            as a Revolving Advance hereunder.

            (c)  If a draft is submitted under a Letter of Credit when the
            Borrower is unable, because a Default Period then exists or for
            any other reason, to obtain a Revolving Advance to pay the
            Obligation of Reimbursement, the Borrower shall pay to the Lender
            on demand and in immediately available funds, the amount of the
            Obligation of Reimbursement together with interest, accrued from
            the date of the draft until payment in full at the Default Rate.
            Notwithstanding the Borrower's inability to obtain a Revolving
            Advance for any reason, the Lender is irrevocably authorized, in
            its sole discretion, to make a Revolving Advance in an amount
            sufficient to discharge the Obligation of Reimbursement and all
            accrued but unpaid interest thereon.

            (d)  The Borrower's obligation to pay any Revolving Advance made
            under this Section 2.3, shall be evidenced by the Revolving Note
            and shall bear interest as provided in Section 2.6.
<PAGE>
            Section 2.4.  Special Account.  If the Credit Facility is
            terminated for any reason whatsoever while any Letter of Credit
            is outstanding, the Borrower shall thereupon pay the Lender in
            immediately available funds for deposit in the Special Account an
            amount equal to the L/C Amount.  The Special Account shall be an
            interest bearing account maintained for the Lender by any financial
            institution acceptable to the Lender. Any interest earned on amounts
            deposited in the Special Account shall be credited to the Special
            Account.  Amounts on deposit in the Special Account shall be
            applied by the Lender as follows:  (a) first, to pay any unpaid
            Obligation of Reimbursement for any Letter of Credit which is drawn
            upon, (b) second, to the extent there are not any outstanding
            Obligations and a Letter of Credit expires undrawn, the amount on
            deposit with respect to such Letter of Credit shall not later than
            fifteen (15) days after such expiration be paid to the Borrower,
            and (c) after all Letters of Credit have expired or been
            terminated, any amount or deposit shall be applied to any
            outstanding Obligations or if there are none, then released to
            the Borrower.  The amount on deposit in the Special Account shall
            not be subject to withdrawal by the Borrower so long as the Lender
            maintains a security interest therein.  The Lender agrees to
            transfer any balance in the Special Account to the Borrower at
            such time as the Lender is required to release its security
            interest in the Special Account under applicable law.

            Section 2.5.  Obligations Absolute.  The Borrower's obligations
            arising under Section 2.3 shall be absolute, unconditional and
            irrevocable, and shall be paid strictly in accordance with the
            terms of Section 2.3, under all circumstances whatsoever,
            including, without limitation, the following circumstances:

          (a)  any lack of validity or enforceability of any Letter of Credit
       or any other agreement or instrument relating to any Letter of Credit
       (collectively the Related Documents);

          (b)  any amendment or waiver of or any consent to departure from
       all or any of the Related Documents;

          (c)  the existence of any claim, setoff, defense or other right
       which the Borrower may have at any time, against any beneficiary or any
       transferee of any Letter of Credit (or any persons or entities for whom
       any such beneficiary or any such transferee may be acting), or other
       person or entity, whether in connection with this Agreement, the
       transactions contemplated herein or in any unrelated transactions;

          (d)  any statement or any other document presented under any Letter
       of Credit proving to be forged, fraudulent, invalid or insufficient in
       any respect or any statement therein being untrue or inaccurate in any
       respect whatsoever; or

          (e)  any other circumstance or happening whatsoever, whether or not
       similar to any of the foregoing (other than the making of payment under
       a Letter of Credit not in conformity with the terms thereof).

       Section 2.6.  Interest; Minimum Interest Charge; Default Interest;
       Participations; Usury.  Interest accruing on the Note shall be due and
       payable in arrears on the first day of each month.

          (a)  Note.  Except as set forth in Sections 2.6(c) and 2.6(d), the
       outstanding principal balance of the Note shall bear interest at the
       Floating Rate.

          (b)  Minimum Interest Charge.  Notwithstanding the interest payable
       pursuant to Section 2.6(a), the Borrower shall pay to the Lender
       interest of not less than Fifteen Thousand Dollars ($15,000) per
       calendar month (or a prorata portion of such amount for any partial
       month) (the Minimum Interest Charge) during the term of this
       Agreement, and the Borrower shall pay any deficiency between the
       Minimum Interest Charge and the amount of interest otherwise
       calculated under Sections 2.6(a) and 2.6(d) on the date and in the
       manner provided in Section 2.8.
<PAGE>
          (c)  Default Interest Rate.  At any time during any Default Period,
       in the Lender's sole discretion and without waiving any of its other
       rights and remedies, the principal of the Advances outstanding from
       time to time shall bear interest at the Default Rate, effective for
       any periods designated by the Lender from time to time during that
       Default Period.

          (d)  Usury.  In any event no rate change shall be put into effect
       which would result in a rate greater than the highest rate permitted by
       law.  Notwithstanding anything to the contrary contained in any Loan
       Document, all agreements which either now are or which shall become
       agreements between the Borrower and the Lender are hereby limited so
       that in no contingency or event whatsoever shall the total liability for
       payments in the nature of interest, additional interest and other
       charges exceed the applicable limits imposed by any applicable usury
       laws.  If any payments in the nature of interest, additional interest
       and other charges made under any Loan Document are held to be in excess
       of the limits imposed by any applicable usury laws, it is agreed that
       any such amount held to be in excess shall be considered payment of
       principal hereunder, and the indebtedness evidenced hereby shall be
       reduced by such amount so that the total liability for payments in the
       nature of interest, additional interest and other charges shall not
       exceed the applicable limits imposed by any applicable usury laws, in
       compliance with the desires of the Borrower and the Lender.  This
       provision shall never be superseded or waived and shall control every
       other provision of the Loan Documents and all agreements between the
       Borrower and the Lender, or their successors and assigns.

       Section 2.7.  Fees; Warrant.

            (a)  Origination Fee.  The Borrower hereby agrees to pay the Lender
       a fully earned and non-refundable origination fee of Twenty Five
       Thousand Dollars ($25,000), due and payable upon the execution of this
       Agreement.

            (b)  Warrant.  The Borrower hereby agrees to issue the Warrant to
       the Lender upon execution of this Agreement.

            (c)  Facility Fee.   The Borrower agrees to pay to the Lender a
       facility fee at the rate of one half percent (.50%) per annum on the
       Maximum Line from the date of this Agreement to and including the
       Termination Date, due and payable monthly in arrears on the first day
       of each month commencing February 1, 2000, and on the Termination Date.

            (d)  Letter of Credit Fees.  The Borrower agrees to pay the Lender
       a fee with respect to each Letter of Credit, if any, accruing on a daily
       basis and computed at the annual rate of one percent (1.0%) of the
       aggregate amount that may then be drawn on all issued and outstanding
       Letters of Credit assuming compliance with all conditions for drawing
       thereunder (the Aggregate Face Amount), from and including the date of
       issuance of such Letter of Credit until such date as such Letter of
       Credit shall terminate by its terms or be returned to the Lender, due
       and payable monthly in arrears on the first day of each month and on the
       Termination Date; provided, however that during Default Periods, in the
       Lender's sole discretion and without waiving any of its other rights and
       remedies, such fee shall increase to three percent (3.0%) of the
       Aggregate Face Amount.  The foregoing fee shall be in addition to any
       and all processing fees, commissions and charges of any Issuer of a
       Letter of Credit with respect to or in connection with such Letter of
       Credit.

            (e)  Letter of Credit Administrative Fees.  The Borrower agrees to
       pay the Lender, on written demand, the administrative fees charged by
       the Issuer in connection with the honoring of drafts under any Letter of
       Credit, amendments thereto, transfers thereof and all other activity
       with respect to the Letters of Credit at the then-current rates
       published by the Issuer for such services rendered on behalf of
       customers of the Issuer generally.
<PAGE>
            (f)  Audit Fees.  The Borrower hereby agrees to pay the Lender
       audit fees of Two Thousand Five Hundred Dollars ($2,500) per quarter
       beginning April 1, 2000 in connection with any audit or inspection
       conducted by the Lender of any Collateral or the Borrower's operations
       or business, and, during Default Periods, all out-of-pocket costs and
       expenses incurred in conducting any such audit or inspection.

            (g)  Miscellaneous Fees.  The Borrower hereby agrees to (i)
       reimburse the Lender for all wire transfer charges  and automated
       clearinghouse charges and to (ii) pay overadvance charges of Two Hundred
       Dollars ($200) per day; provided, however, that from the first day of
       any month during which any Default Period commences or exists at any
       time, the daily overadvance charge (if an overadvance exists) shall be
       Four Hundred Dollars ($400).

       2.8.  Computation of Interest and Fees; When Interest Due and Payable.
       Interest accruing on the outstanding principal balance of the Advances
       and fees hereunder outstanding from time to time shall be computed on
       the basis of actual number of days elapsed in a year of three hundred
       sixty (360) days. Interest shall be payable in arrears on the first
       day of each month and on the Termination Date.

       Section 2.9. Capital Adequacy; Increased Costs and Reduced Return.If any
       Related Lender determines at any time that its Return has been reduced
       solely as a result of any Rule Change, such Related Lender may require
       the Borrower to pay it the amount necessary to restore its Return to
       what it would have been had there been no Rule Change, provided that
       the Lender and the Related Lender makes similar adjustments to all of
       their other credit facilities.  For purposes of this Section 2.9:

          (a)  Capital Adequacy Rule means any law, rule, regulation,
       guideline, directive, requirement or request regarding capital adequacy,
       or the interpretation or administration thereof by any governmental or
       regulatory authority, central bank or comparable agency, whether or not
       having the force of law, that applies to any Related Lender.  Such rules
       include rules requiring financial institutions to maintain total capital
       in amounts based upon percentages of outstanding loans, binding loan
       commitments and letters of credit.

          (b)  L/C Rule means any law, rule, regulation, guideline,
       directive, requirement or request regarding letters of credit, or the
       interpretation or administration thereof by any governmental or
       regulatory authority, central bank or comparable agency, whether or not
       having the force of law, that applies to any Related Lender.  Such rules
       include rules imposing taxes, duties or other similar charges, or
       mandating reserves, special deposits or similar requirements against
       assets of, deposits with or for the account of, or credit extended by
       any Related Lender, on letters of credit.

          (c)  Return, for any period, means the return as reasonably
       determined by such Related Lender on the Advances and Letters of Credit
       based upon its total capital requirements and a reasonable attribution
       formula that takes account of the Capital Adequacy Rules then in effect
       and costs of issuing or maintaining any Letter of Credit.  Return may be
       calculated for each calendar quarter and for the shorter period between
       the end of a calendar quarter and the date of termination in whole of
       this Agreement.

          (d)  Rule Change means any change in any Capital Adequacy Rule or
       L/C Rule occurring after the date of this Agreement, but the term does
       not include any changes in applicable requirements that at the Closing
       Date are scheduled to take place under the existing Capital Adequacy
       Rules or L/C Rules or any increases in the capital that any Related
       Lender is required to maintain to the extent that the increases are
       required due to a regulatory authority's assessment of the financial
       condition of such Related Lender.
<PAGE>
          (e)  Related Lender includes (but is not limited to) the Lender
       or any parent corporation of the Lender.

       Section 2.10.  Voluntary Prepayment; Termination of the Credit Facility
       by the Borrower; Automatic Renewal.  Except as otherwise provided
       herein, the Borrower may prepay the Revolving Advances in whole at any
       time or from time to time in part.  The Borrower may terminate the
       Credit Facility at any time if it (i) gives the Lender at least thirty
       (30) days prior written notice and (ii) pays the Lender the termination
       fees in accordance with Section 2.11.  Upon termination of the Credit
       Facility and payment and performance of all Obligations, the Lender
       shall release or terminate the Security Interest and the Security
       Documents to which the Borrower is entitled by law.  Unless terminated
       by either the Lender or the Borrower upon ninety (90) days prior
       written notice, the Credit Facility shall remain in effect until
       December 31, 2002, and thereafter shall automatically renew for
       successive one year periods (December 31, 2002 and each anniversary
       date thereof which is at the end of any year in which the Credit
       Facility has been automatically renewed, is herein referred to as the
       (Maturity Date)

       Section 2.11.  Termination Fees.  If the Credit Facility is terminated
       for any reason as of a date other than the Maturity Date (other than
       following the imposition of a charge under Section 2.9) the Borrower
       shall pay the Lender a fee in an amount equal to a percentage of the
       Maximum Line, in the case of a termination, as follows: (i) two percent
       (2.0%) if the termination or reduction occurs on or before the first
       anniversary of the Funding Date; and (ii) one percent (1.0%) if the
       termination or reduction occurs after the first anniversary of the
       Funding Date.

       Section 2.12.  Mandatory Prepayment. Without notice or demand, if the
       sum of the outstanding principal balance of the Revolving Advances plus
       the L/C Amount shall at any time exceed the Borrowing Base, the Borrower
       shall (i) first, immediately prepay the Revolving Advances to the
       extent necessary to eliminate such excess; and (ii) if prepayment in
       full of the Revolving Advances is insufficient to eliminate such
       excess, pay to the Lender in immediately available funds for deposit
       in the Special Account an amount equal to the remaining excess.  Any
       payment received by the Lender under this Section 2.12 or under
       Section 2.10 may be applied to the Obligations, in such order and in
       such amounts as the Lender, in its reasonable discretion, may from
       time to time determine.

       Section 2.13.  Payment.  All payments to the Lender shall be made in
       immediately available funds and shall be applied to the Obligations
       one (1) Banking Day after receipt by the Lender.  The Lender may hold
       all payments not constituting immediately available funds for two (2)
       Banking Days before applying them to the Obligations.  Notwithstanding
       anything in Section 2.1, the Borrower hereby authorizes the Lender,
       in its reasonable discretion at any time or from time to time without
       the Borrower's request and even if the conditions set forth in
       Section 4.2 would not be satisfied, to make a Revolving Advance in an
       amount equal to the portion of the Obligations from time to time due
       and payable.

       Section 2.14.  Payment on Non-Banking Days.  Whenever any payment to be
       made hereunder shall be stated to be due on a day which is not a Banking
       Day, such payment may be made on the next succeeding Banking Day, and
       such extension of time shall in such case be included in the computation
       of interest on the Advances or the fees hereunder, as the case may be.

       Section 2.15.  Use of Proceeds.  The Borrower shall use the proceeds of
       Advances, and each Letter of Credit, if any, for ordinary working
       capital purposes.
<PAGE>
       Section 2.18.  Liability Records.  The Lender may maintain from time to
       time, at its discretion, liability records as to the Obligations.  Upon
       the Lender's request, the Borrower will review, admit and certify in
       writing the exact principal balance of the Obligations that the Borrower
       then asserts to be outstanding.  Any billing statement or accounting
       rendered by the Lender and delivered to the Borrower shall be conclusive
       and fully binding on the Borrower unless the Borrower gives the Lender
       specific written notice of exception within thirty (30) days after
       receipt by the Borrower.

                                   ARTICLE III

                       Security Interest; Occupancy; Setoff

       Section 3.1.  Grant of Security Interest.  The Borrower hereby pledges,
       assigns and grants to the Lender a security interest (collectively
       referred to as the Security Interest) in the Collateral, as security
       for the payment and performance of the Obligations.

       Section 3.2.  Notification of Account Debtors and Other Obligors.  At any
       time after the occurrence and during the continuance of an Event of
       Default, the Lender may notify any account debtor or other person
       obligated to pay the amount due that such right to payment has been
       assigned or transferred to the Lender for security and shall be paid
       directly to the Lender.  The Borrower will join in giving such notice
       if the Lender so requests.  At any time after the Borrower or the
       Lender gives such notice to an account debtor or other obligor, the
       Lender may, but need not, in the Lender's name or in the Borrower's
       name, (a) demand, sue for, collect or receive any money or property at
       any time payable or receivable on account of, or securing, any such
       right to payment, or grant any extension to, make any compromise or
       settlement with or otherwise agree to waive, modify, amend or change
       the obligations (including collateral obligations) of any such account
       debtor or other obligor; and (b) as the Borrower's agent and
       attorney-in-fact, notify the United States Postal Service to change
       the address for delivery of the Borrower's mail to any address
       designated by the Lender, otherwise intercept the Borrower's mail,
       and receive, open and dispose of the Borrower's mail, applying all
       Collateral as permitted under this Agreement and holding all other
       mail for the Borrower's account or forwarding such mail to the
       Borrower's last known address.

       Section 3.3.  Assignment of Insurance.  As additional security for the
       payment and performance of the Obligations, the Borrower hereby
       assigns to the Lender any and all monies (including, without
       limitation, proceeds of insurance and refunds of unearned premiums)
       due or to become due under, and all other rights of the Borrower with
       respect to, any and all policies of insurance now or at any time
       hereafter covering the Collateral or any evidence thereof or any
       business records or valuable papers pertaining thereto, and the
       Borrower hereby directs the issuer of any such policy to pay all such
       monies directly to the Lender.  At any time, whether or not a Default
       Period then exists, the Lender may (but need not), in the Lender's name
       or in the Borrower's name, execute and deliver proof of claim, receive
       all such monies, endorse checks and other instruments representing
       payment of such monies, and adjust, litigate, compromise or release
       any claim against the issuer of any such policy.
<PAGE>
       Section 3.4.  Occupancy.

          (a)  The Borrower hereby irrevocably grants to the Lender the right
       to take possession of the Premises at any time during a Default Period.

          (b)  The Lender may use the Premises only to hold, process,
       manufacture, sell, use, store, liquidate, realize upon or otherwise
       dispose of goods that are Collateral and for other purposes that the
       Lender may in good faith deem to be related or incidental purposes.

          (c)  The Lender's right to hold the Premises shall cease and
       terminate upon the earlier of (i) payment in full and discharge of all
       Obligations and termination of the Commitment, (ii) the termination of
       the relevant Default Period, and (iii) final sale or disposition of all
       goods constituting Collateral and delivery of all such goods to
       purchasers.

          (d)  The Lender shall not be obligated to pay or account for any
       rent or other compensation for the possession, occupancy or use of any
       of the Premises; provided, however, that if the Lender does pay or
       account for any rent or other compensation for the possession,
       occupancy or use of any of the Premises, the Borrower shall reimburse
       the Lender promptly for the full amount thereof.  In addition, the
       Borrower will pay, or reimburse the Lender for, all taxes, fees,
       duties, imposts, charges and expenses at any time incurred by or
       imposed upon the Lender by reason of the execution, delivery,
       existence, recordation, performance or enforcement of this Agreement
       or the provisions of this Section 3.4.

       Section 3.5.  License.  The Borrower hereby grants to the Lender a
       non-exclusive, worldwide and royalty-free license to use or otherwise
       exploit all trademarks, franchises, trade names, copyrights and patents
       of the Borrower for the purpose of selling, leasing or otherwise
       disposing of any or all Collateral during any Default Period.

       Section 3.6.  Financing Statement.  A carbon, photographic or other
       reproduction of this Agreement or of any financing statements signed
       by the Borrower is sufficient as a financing statement and may be
       filed as a financing statement in any state to perfect the security
       interests granted hereby.  For this purpose, the following information
       is set forth:

            Name and address of Debtor:

            Telular Corporation
            647 North Lakeview Parkway
            Vernon Hills, Illinois  60061
            Federal Tax Identification No. 36-3885440

            Name and address of Secured Party:

            Wells Fargo Business Credit, Inc.
            100 East Wisconsin Avenue, Suite 1400
            MAC N9811-143
            Milwaukee, Wisconsin  53202
            Federal Tax Identification No. 41-1237652

       Section 3.7.  Setoff.  The Borrower agrees that the Lender may at any
       time during a Default Period, at its sole discretion and without demand
       and without notice to anyone, setoff any liability owed to the Borrower
       by the Lender, whether or not due, against any Obligation, whether or not
       due.  In addition, each other Person holding a participating interest
       in any Obligations shall have the right to appropriate or setoff any
       deposit or other liability then owed by such Person to the Borrower,
       whether or not due, and apply the same to the payment of said
       participating interest, as fully as if such Person had lent directly
       to the Borrower the amount of such participating interest.
<PAGE>
                                    ARTICLE IV

                              Conditions of Lending

       Section 4.1.  Conditions Precedent to the Initial Revolving Advance and
       the Initial Letter of Credit.  The Lender's obligation to make the
       initial Revolving Advance or to cause to be issued the initial Letter
       of Credit hereunder shall be subject to the condition precedent that
       the Lender shall have received all of the following, each in form and
       substance satisfactory to the Lender:

          (a)  This Agreement, properly executed by the Borrower.

          (b)  The Note, properly executed by the Borrower.

          (c)  The Patent and Trademark Security Agreement, properly
       executed by the Borrower in the Lender's favor.

          (d)  A true and correct copy of any and all leases pursuant to
       which the Borrower is leasing the Premises, together with a landlord's
       disclaimer and consent with respect to each such lease.

          (e)  The initial Collateral Account Agreement, properly executed
       by the Borrower and American National.

          (f)  Current searches of appropriate filing offices showing that
       (i) no state or federal tax liens have been filed and remain in effect
       against the Borrower, (ii) no financing statements or assignments of
       patents, trademarks or copyrights have been filed and remain in effect
       against the Borrower except those financing statements and assignments
       of patents, trademarks or copyrights relating to Permitted Liens or to
       liens held by Persons who have agreed in writing that upon receipt of
       proceeds of the Advances, they will deliver UCC releases and/or
       terminations and releases of such assignments of patents, trademarks or
       copyrights  satisfactory to the Lender, and (iii) the Lender has duly
       filed all financing statements necessary to perfect the Security
       Interest, to the extent the Security Interest is capable of being
       perfected by filing.

          (g)  A certificate of the Borrower's Secretary or Assistant
       Secretary certifying as to (i) the resolutions of the Borrower's
       directors and, if required, shareholders, authorizing the execution,
       delivery and performance of the Loan Documents, (ii) the Borrower's
       articles of incorporation and bylaws, and (iii) the signatures of the
       Borower's officers or agents authorized to execute and deliver the
       Loan Documents and other instruments, agreements and certificates,
       including Advance requests, on the Borrower's behalf.

          (h)  A letter from an officer of the Borrower identifying those
       individuals who are authorized to initiate and confirm payment orders
       and to sign collateral reports.

          (i)  A current certificate issued by the Secretary of State of
       Delaware, certifying that the Borrower is validly existing and in good
       standing in the State of Delaware.

          (j)  Evidence that the Borrower is duly licensed or qualified to
       transact business in all jurisdictions where the character of the
       property owned or leased or the nature of the business transacted by it
       makes such licensing or qualification necessary.

          (k)  A certificate of an officer of the Borrower confirming the
       representations and warranties set forth in Article V.
<PAGE>
          (l)  Certificates of the insurance required hereunder, with all
       hazard insurance containing a lender's loss payable endorsement in the
       Lender's favor and with all liability insurance naming the Lender as an
       additional insured.

          (m)  A Guaranty by Corporation properly executed by each of  the
       Guarantors in the Lender's favor.

          (n)  With respect to each Guarantor, a certificate of such
       Guarantor's Secretary or Assistant Secretary certifying as to (i) the
       resolutions of the Guarantor's directors and, if required, shareholders,
       authorizing the execution, delivery and performance of the Guaranty,
       (ii) such Guarantor's articles of incorporation and bylaws, and
       (iii) the signatures of such Guarantor's officers or agents authorized
       to execute and deliver the Guaranty and other instruments, agreements
       and certificates. including Advance requests, on the Borrower's behalf.

          (o)  The Warrant, executed by the Borrower.

          (p)  Payment of the fees and commissions due through the date of
       the initial Advance or Letter of Credit under Section 2.7 and expenses
       incurred by the Lender through such date and required to be paid by the
       Borrower under Section 9.6, including legal expenses incurred through
       the date of this Agreement.

          (q)  Written authorization from the Borrower to pay proceeds of
       the Advances to third parties.

          (r)  An opinion of counsel to the Borrower and the Guarantors,
       addressed to the Lender.

          (s)  The Investment Agreement, duly executed by the Borrower.

          (t)  Such other documents as the Lender in its sole discretion may
       require.

       Section 4.2 Conditions Precedent to All Advances and Letters of Credit.
       The Lender's obligation to make each Advance or to cause the Issuer to
       issue any Letter of Credit shall be subject to the further conditions
       precedent that on such date:

          (a)  the representations and warranties contained in Article V are
       correct in all material respects on and as of the date of such Advance
       or issuance of Letter of Credit as though made on and as of such date,
       except to the extent that such representations and warranties relate
       solely to an earlier date; and

          (b)  no event has occurred and is continuing, or would result from
          such Advance or the issuance of such Letter of Credit, as the case
          may be, which constitutes an Event of Default.

                                    ARTICLE V

                         Representations and Warranties

       The Borrower represents and warrants to the Lender as follows:
<PAGE>
       Section 5.1.  Corporate Existence and Power; Name; Chief Executive
       Office; Inventory and Equipment Locations; Tax Identification Number.
       The Borrower is a corporation, duly organized, validly existing and in
       good standing under the laws of the State of Delaware and is duly
       licensed or qualified to transact business in all jurisdictions where
       the character of the property owned or leased or the nature of the
       business transacted by it makes such licensing or qualification
       necessary. The Borrower has all requisite power and authority,
       corporate or otherwise, to conduct its business, to own its
       properties and to execute and deliver, and to perform all of its
       obligations under, the Loan Documents.  During its existence, the
       Borrower has done business solely under the names set forth in
       Schedule 5.1 hereto.  The Borrower's chief executive office and
       principal place of business is located at the address set forth in
       Schedule 5.1 hereto, and all of the Borrower's records relating to
       its business or the Collateral are kept at that location.  All
       Inventory and Equipment is located at that location or at one of the
       other locations set forth in Schedule 5.1 hereto. The Borrower's tax
       identification number is correctly set forth in Section 3.6 hereto.

       Section 5.2. Authorization of Borrowing; No Conflict as to Law or
       Agreements.  The execution, delivery and performance by the Borrower
       of the Loan Documents and the borrowings from time to time hereunder
       have been duly authorized by all necessary corporate action and do not
       and will not (i) require any consent or approval of the Borrower's
       stockholders; (ii) require any authorization, consent or approval by,
       or registration, declaration or filing with, or notice to, any
       governmental department, commission, board, bureau, agency or
       instrumentality, domestic or foreign, or any third party, except such
       authorization, consent, approval, registration, declaration, filing or
       notice as has been obtained, accomplished or given prior to the date
       hereof; provided, that with respect to any applicable federal or state
       securities laws, the foregoing representation and warranty is made
       subject to and in reliance on the investment letter of the Lender
       delivered to the Borrower on the date hereof; (iii) violate any
       provision of any law, rule or regulation (including, without
       limitation, Regulation X of the Board of Governors of theFederal
       Reserve System) or of any order, writ, injunction or decree presently
       in effect having applicability to the Borrower or of the Borrower's
       articles of incorporation or bylaws; (iv) result in a breach of or
       constitute a default under any indenture or loan or credit agreement
       or any other material agreement, lease or instrument to which the
       Borrower is a party or by which it or its properties may be bound or
       affected; or (v) result in, or require, the creation or imposition of
       any mortgage, deed of trust, pledge, lien, security interest or other
       charge or encumbrance of any nature (other than the Security Interest)
       upon or with respect to any of the properties now owned or hereafter
       acquired by the Borrower.

       Section 5.3.  Legal Agreements.  This Agreement constitutes and, upon
       due execution by the Borrower, the other Loan Documents will constitute
       the legal, valid and binding obligations of the Borrower, enforceable
       against the Borrower in accordance with their respective terms.

       Section 5.4.  Subsidiaries.  The Borrower has no Subsidiaries, other
       than Telular International, Inc., Telular-Adcor Security Products,
       Inc., and Telular-WD Corporation.

       Section 5.5.  Financial Condition; No Adverse Change.  The Borrower has
       heretofore furnished to the Lender its audited financial statements
       for its fiscal year ended September 30, 1999 and unaudited financial
       statements for the fiscal year-to-date period ended November 30, 1999
       and those statements fairly present the Borrower's financial condition
       on the dates thereof and the results of its operations and cash flows
       for the periods then ended and were prepared in accordance with generally
       accepted accounting principles.  Since the date of the most recent
       financial statements, there has been no material adverse change in the
       Borrower's business, properties or condition (financial or otherwise).
<PAGE>
        Section 5.6.  Litigation.  There are no actions, suits or proceedings
        pending or, to the Borrower's knowledge, threatened against or
        affecting the Borrower or any of its Affiliates or the properties of
        the Borrower or any of its Affiliates before any court or governmental
        department, commission, board, bureau, agency or instrumentality,
        domestic or foreign, which would reasonably be expected to have a
        material adverse effect on the financial condition, properties or
        operations of the Borrower.

        Section 5.7.  Regulation U.  The Borrower is not engaged in the
        business of extending credit for the purpose of purchasing or carrying
        margin stock (within the meaning of Regulation U of the Board of
        Governors of the Federal Reserve System), and no part of the proceeds
        of any Advance will be used to purchase or carry any margin stock or
        to extend credit to others for the purpose of purchasing or carrying
        any margin stock.

        5.8.  Taxes.  The Borrower and its Affiliates have paid or caused to
        be paid to the proper authorities when due all federal, state and
        local taxes required to be withheld by each of them unless the same
        are being contested in good faith by appropriate proceedings and
        proper reserves therefore have been made by the Borrower.  The
        Borrower and its Affiliates have filed all federal, state and local
        tax returns which to the knowledge of the officers of the Borrower
        or any Affiliate, as the case may be, are required to be filed, and
        the Borrower and its Affiliates have paid or caused to be paid to
        the respective taxing authorities all taxes as shown on said returns
        or on any assessment received by any of them to the extent such
        taxes have become due.

       Section 5.9.  Titles and Liens.  Except as set forth on Schedule 5.9,
       the Borrower has good and absolute title to all Collateral described
       in the collateral reports provided to the Lender and all other
       Collateral, properties and assets reflected in the latest financial
       statements provided under Section 6.1 and all proceeds thereof, free
       and clear of all mortgages, security interests, liens and encumbrances,
       except for Permitted Liens.  No financing statement naming the Seller
       or the Borrower as debtor is on file in any office except to perfect
       only Permitted Liens.

       Section 5.10.  Plans.  Except as disclosed to the Lender in writing
       prior to the date hereof, neither the Borrower nor any of its
       Affiliates maintains or has maintained any Plan.  Neither the Borrower
       nor any Affiliate has received any notice or has any knowledge to the
       effect that it is not in full compliance with any of the requirements
       of ERISA.  No Reportable Event or other fact or circumstance which
       may have an adverse effect on the Plan's tax qualified status exists
       in connection with any Plan. Neither the Borrower nor any of its
       Affiliates has:

          (a)  Any accumulated funding deficiency within the meaning of
       ERISA; or

          (b)  Any liability or knows of any fact or circumstances which
       could result in any liability to the Pension Benefit Guaranty
       Corporation, the Internal Revenue Service, the Department of Labor
       or any participant in connection with any Plan (other than accrued
       benefits which or which may become payable to participants or
       beneficiaries of any such Plan).

       Section 5.11.  Default.  The Borrower is in compliance with all
       provisions of all agreements, instruments, decrees and orders to which
       it is a party or by which it or its property is bound or affected, the
       breach or default of which would reasonably be expected to have a
       material adverse effect on the Borrower's financial condition,
       properties or operations.
<PAGE>
       Section 5.12.  Environmental Matters.

          (a)  Definitions.  As used in this Agreement, the following terms
       shall have the following meanings:

                 (i)  Environmental Law means any federal, state, local or
            other governmental statute, regulation, law or ordinance dealing
            with the protection of human health and the environment.

                 (ii) Hazardous Substances means pollutants, contaminants,
            hazardous substances, hazardous wastes, petroleum and fractions
            thereof, and all other chemicals, wastes, substances and materials
            listed in, regulated by or identified in any Environmental Law.

          (b)  To the Borrower's best knowledge, there are not present in, on
       or under the Premises any Hazardous Substances in such form or quantity
       as to create any liability or obligation for either the Borrower or the
       Lender under common law of any jurisdiction or under any Environmental
       Law, and no Hazardous Substances have ever been stored, buried, spilled,
       leaked, discharged, emitted or released in, on or under the Premises in
       such a way as to create any such liability.

          (c)  To the Borrower's best knowledge, the Borrower has not
       disposed of Hazardous Substances in such a manner as to create any
       liability under any Environmental Law.

          (d)  To the Borrower's best knowledge, there are not and there
       never have been any requests, claims, notices, investigations, demands,
       administrative proceedings, hearings or litigation, relating in any way
       to the Premises or the Borrower, alleging liability under, violation of,
       or noncompliance with any Environmental Law or any license, permit or
       other authorization issued pursuant thereto.  To the Borrower's best
       knowledge, no such matter is threatened or impending.

          (e)  To the Borrower's best knowledge, the Borrower's businesses
       are and have in the past always been conducted in accordance with all
       Environmental Laws and all licenses, permits and other authorizations
       required pursuant to any Environmental Law and necessary for the lawful
       and efficient operation of such businesses are in the Borrower's
       possession and are in full force and effect.  No permit required under
       any Environmental Law is scheduled to expire within twelve (12) months
       and there is no threat that any such permit will be withdrawn,
       terminated, limited or materially changed.

          (f)  To the Borrower's best knowledge, the Premises are not and
       never have been listed on the National Priorities List, the
       Comprehensive Environmental Response, Compensation and Liability
       Information System or any similar federal, state or local list,
       schedule, log, inventory or database.

          (g)  The Borrower has delivered to Lender all environmental
       assessments, audits, reports, permits, licenses and other documents
       describing or relating in any way to the Premises or Borrower's
       businesses.

       Section 5.13.  Submissions to Lender.  All financial and other
       information provided to the Lender by or on behalf of the Borrower
       in connection with the Borrower's request for the credit facilities
       contemplated hereby is true and correct in all material respects and,
       as to projections, valuations or proforma financial statements,
       present a good faith opinion as to such projections, valuations and
       proforma condition and results.
<PAGE>
       Section 5.14.  Financing Statements.  The Borrower has provided to the
       Lender signed financing statements sufficient when filed to perfect the
       Security Interest and the other security interests created by the
       Security Documents.  When such financing statements are filed in the
       offices noted therein, the Lender will have a valid and perfected
       security interest in all Collateral and all other collateral described
       in the Security Documents which is capable of being perfected by filing
       financing statements.  None of the Collateral or other collateral
       covered by the Security Documents is or will become a fixture on real
       estate, unless a sufficient fixture filing is in effect with respect
       thereto.

       Section 5.15.  Rights to Payment.  Each right to payment and each
       instrument, document, chattel paper and other agreement constituting or
       evidencing Collateral or other collateral covered by the Security
       Documents is (or, in the case of all future Collateral or such other
       collateral, will be when arising or issued) the valid, genuine and
       legally enforceable obligation, subject to no defense, setoff or
       counterclaim, of the account debtor or other obligor named therein or
       in the Borrower's records pertaining thereto as being obligated to pay
       such obligation.
<PAGE>
                                    ARTICLE VI

                        Borrower's Affirmative Covenants

       So long as the Obligations shall remain unpaid, or the Credit Facility
       shall remain outstanding, the Borrower will comply with the following
       requirements, unless the Lender shall otherwise consent in writing:

       Section 6.1.  Reporting Requirements. The Borrower will deliver, or
       cause to be delivered, to the Lender each of the following, which shall
       be in form and detail reasonably acceptable to the Lender:

          (a)  as soon as available, and in any event within ninety (90) days
       after the end of each fiscal year of the Borrower, the Borrower's
       audited financial statements with the unqualified opinion of independent
       certified public accountants selected by the Borrower and acceptable
       to the Lender in its reasonable discretion, which annual financial
       statements shall include the Borrower's balance sheet as at the end of
       such fiscal year and the related statements of the Borrower's income,
       retained earnings and cash flows for the fiscal year then ended,
       prepared, if the Lender so requests, on a consolidating and
       consolidated basis to include any Affiliates, all in reasonable detail
       and prepared in accordance with GAAP, together with (i) copies of all
       management letters prepared by such accountants; and (ii) a
       certificate of the Borrower's chief financial officer, substantially
       in the form of Exhibit B hereto, stating (A) that such financial
       statements have been prepared in accordance with GAAP and (B) whether
       or not such officer has knowledge of the occurrence of any Default or
       Event of Default hereunder and, if so, stating in reasonable detail the
       facts with respect thereto;

          (b)  as soon as available and in any event within twenty (20) days
       after the end of each month, an unaudited/internal balance sheet and
       statements of income and retained earnings of the Borrower as at the
       end of and for such month and for the year to date period then ended,
       prepared, if the Lender so reasonably requests, on a consolidating and
       consolidated basis to include any Affiliates, in reasonable detail and
       stating in comparative form the figures for the corresponding date and
       periods in the previous year, all prepared in accordance with GAAP,
       subject to year-end audit adjustments and except for the absence of
       footnotes; and accompanied by a certificate of the Borrower's chief
       financial officer, substantially in the form of Exhibit B hereto
       stating (i) that such financial statements have been prepared in
       accordance with GAAP, subject to year-end audit adjustments and except
       for the absence of footnotes, (ii) whether or not such officer has
       knowledge of the occurrence of any Default or Event of Default
       hereunder not theretofore reported and remedied and, if so, stating
       in reasonable detail the facts with respect thereto, and (iii) all
       relevant facts in reasonable detail to evidence, and the computations
       as to, whether or not the Borrower is in compliance with the
       requirements set forth in Sections 6.12  and 7.10;

          (c)  within fifteen (15) days after the end of each month or more
       frequently if the Lender so reasonably requires, agings of the
       Borrower's accounts receivable and its accounts payable, an inventory
       certification report, and a calculation of the Borrower's Accounts,
       Eligible Accounts, Inventory and Eligible Inventory as at the end of
       such month or shorter time period;

          (d)  at least thirty (30) days before the beginning of each fiscal
       year of the Borrower, the projected balance sheets and income
       statements for each month of such year, each in reasonable detail,
       representing the Borrower's good faith projections and certified by
       the Borrower's chief financial officer as being the most accurate
       projections available and identical to the projections used by the
       Borrower for internal planning purposes, together with such supporting
       schedules and information as the Lender may in its reasonable
       discretion require;
<PAGE>
          (e)  as promptly as practicable, after an officer of the Borrower
       obtains knowledge thereof, notice in writing of all litigation and of
       all proceedings before any governmental or regulatory agency affecting
       the Borrower of the type described in Section 5.12 or which seek a
       monetary recovery against the Borrower in excess of Twenty Five Thousand
       Dollars ($25,000);

          (f)  as promptly as practicable, and in any event not later than
       five (5) Banking Days after an officer of the Borrower obtains knowledge
       of the occurrence of any breach, default or event of default under any
       Security Document or any event which constitutes a Default or Event of
       Default hereunder, notice of such occurrence, together with a detailed
       statement by a responsible officer of the Borrower of the steps being
       taken by the Borrower to cure the effect of such breach, default or
       event;

          (g)  as promptly as practicable, and in any event within thirty
       (30) days after the Borrower knows or has reason to know that any
       Reportable Event with respect to any Plan has occurred, the statement of
       the Borrower's chief financial officer setting forth details as to such
       Reportable Event and the action which the Borrower proposes to take with
       respect thereto, together with a copy of the notice of such Reportable
       Event to the Pension Benefit Guaranty Corporation;

          (h)  as promptly as practicable, and in any event within ten (10)
       days after the Borrower fails to make any quarterly contribution
       required with respect to any Plan under Section 412(m) of the Internal
       Revenue Code of 1986, as amended, the statement of the Borrower's chief
       financial officer setting forth details as to such failure and the
       action which the Borrower proposes to take with respect thereto,
       together with a copy of any notice of such failure required to be
       provided to the Pension Benefit Guaranty Corporation;

          (i)  promptly upon knowledge thereof, notice of (i) any disputes or
       claims by the Borrower's customers exceeding One Hundred Thousand
       Dollars ($100,000) individually; (ii) credit memos exceeding One Hundred
       Thousand Dollars ($100,000) individually; (iii) any goods returned to or
       recovered by the Borrower exceeding One Hundred Thousand Dollars
       ($100,000) individually; and (iv) any change in the persons constituting
       the Borrower's officers and directors;

          (j)  promptly upon knowledge thereof, notice of any loss of or
       material damage to any material portion of the Collateral or other
       collateral covered by the Security Documents or of any substantial
       adverse change in any Collateral or such other collateral or the
       prospect of payment thereof;

          (k)  promptly after the sending or filing thereof, copies of all
       regular and periodic reports which the Borrower shall file with the
       Securities and Exchange Commission or any national securities exchange;

          (l)  promptly upon knowledge thereof, notice of the Borrower's
       violation of any law, rule or regulation, the non-compliance with which
       would reasonably be expected to materially and adversely affect the
       Borrower's business or its financial condition; and

          (m)  from time to time, with reasonable promptness, any and all
       receivables schedules, collection reports, deposit records, equipment
       schedules, copies of invoices to account debtors, shipment documents and
       delivery receipts for goods sold, and such other material, reports,
       records or information as the Lender may reasonably request.
<PAGE>
       Section 6.2.  Books and Records; Inspection and Examination.  The
       Borrower will keep accurate books of record and account for itself
       pertaining to the Collateral and pertaining to the Borrower's
       business and financial condition and such other matters as the Lender
       may from time to time reasonably request in which true and complete
       entries will be made in accordance with GAAP and, upon the Lender's
       request, will permit any officer, employee, attorney or accountant
       for the Lender to audit, review, make extracts from or copy any and
       all corporate and financial books and records of the Borrower at all
       times during ordinary business hours, to send and discuss with account
       debtors and other obligors requests for verification of amounts owed
       to the Borrower, and to discuss the Borrower's affairs with any of its
       directors, officers or financial personnel, as well as any other
       employees or agents to the extent the same may have specific knowledge
       of a matter as to which the Lender requires further information.  The
       Borrower will permit the Lender, or its employees, accountants,
       attorneys or agents, to examine and inspect any Collateral, other
       collateral covered by the Security Documents or any other property of
       the Borrower at any time during ordinary business hours and except
       during a Default Period, on reasonable notice to the Borrower.  The
       Lender will, and will cause its agents and representatives to, at all
       times take reasonable steps to preserve the confidentiality of all
       nonpublic information furnished by the Borrower.

       Section 6.3.  Account Verification.  The Lender may at any time and from
       time to time send or require the Borrower to send requests for
       verification of accounts or notices of assignment to account debtors and
       other obligors.  The Lender may also at any time and from time to time
       telephone account debtors and other obligors to verify accounts.

       Section 6.4.  Compliance with Laws.

          (a)  The Borrower will (i) comply with the requirements of
       applicable laws and regulations, the non-compliance with which would
       materially and adversely affect its business or its financial condition
       and (ii) use and keep the Collateral, and require that others use and
       keep the Collateral, only for lawful purposes, without violation of any
       federal, state or local law, statute or ordinance, the non-compliance
       with which would materially and adversely affect its business or its
       financial condition.

          (b)  Without limiting the foregoing undertakings, the Borrower
       specifically agrees that it will comply in all material respects with
       all applicable Environmental Laws and obtain and comply with all
       permits, licenses and similar approvals required by any Environmental
       Laws, and will not generate, use, transport, treat, store or dispose of
       any Hazardous Substances in such a manner as to create any material
       liability or obligation under the common law of any jurisdiction or any
       Environmental Law.

       Section 6.5.  Payment of Taxes and Other Claims.  The Borrower will pay
       or discharge, when due, (a) all taxes, assessments and governmental
       charges levied or imposed upon it or upon its income or profits, upon
       any properties belonging to it (including, without limitation, the
       Collateral) or upon or against the creation, perfection or continuance
       of the Security Interest, prior to the date on which penalties attach
       thereto, (b) all federal, state and local taxes required to be withheld
       by it, and (c) all lawful claims for labor, materials and supplies
       which, if unpaid, might by law become a lien or charge upon any
       properties of the Borrower; provided, that the Borrower shall not be
       required to pay any such tax, assessment, charge or claim whose amount,
       applicability or validity is being contested in good faith by
       appropriate proceedings and for which proper reserves have been made.
<PAGE>
       Section 6.6.  Maintenance of Properties.

          (a)  The Borrower will keep and maintain the Collateral, the other
       collateral covered by the Security Documents and all of its other
       properties necessary or useful in its business in good condition,
       repair and working order (normal wear and tear excepted) and will from
       time to time replace or repair any worn, defective or broken parts;
       provided, however, that nothing in this Section 6.6 shall prevent the
       Borrower from discontinuing the operation and maintenance of any of its
       properties if such discontinuance is, in the Borrower's good faith
       judgment, desirable in the conduct of the Borrower's business, and in
       the Lender's good faith judgment, not disadvantageous in any material
       respect to the Lender.

          (b)  The Borrower will defend the Collateral against all claims or
       demands of all persons (other than the Lender) claiming the Collateral
       or any interest therein.

          (c)  The Borrower will keep all Collateral and other collateral
       covered by the Security Documents free and clear of all security
       interests, liens and encumbrances except Permitted Liens.

       Insurance.  The Borrower will obtain and at all times maintain
       insurance with insurers believed by the Borrower to be responsible
       and reputable, in the same relative  amounts (relative to the value of
       the Borrowers tangible assets) and against such risks as the Borrower
       has in effect as of the date hereof, but in all events in such amounts
       and against such risks as is usually carried by companies engaged in
       similar business and owning similar properties in the same general
       areas in which the Borrower operates.  Without limiting the generality
       of the foregoing, the Borrower will at all times maintain business
       interruption insurance including coverage for force majeure and keep
       all tangible Collateral insured against risks of fire (including
       so-called extended coverage), theft, and collision (for Collateral
       consisting of motor vehicles), with any loss payable to the Lender to
       the extent of its interest, and all policies of such insurance shall
       contain a lender's loss payable endorsement for the Lender's benefit
       acceptable to the Lender.  All policies of liability insurance required
       hereunder shall name the Lender as an additional insured.

       Section 6.8.  Preservation of Existence.  The Borrower will preserve and
       maintain its existence and all of its rights, privileges and franchises
       necessary or desirable in the normal conduct of its business and shall
       conduct its business in an orderly, efficient and regular manner.

       Section 6.9.  Delivery of Instruments, etc. Upon request by the Lender,
       the Borrower will promptly deliver to the Lender in pledge all
       instruments, documents and chattel papers constituting Collateral,
       duly endorsed or assigned by the Borrower.

       Section 6.10.  Collateral Account.

          (a)  If, notwithstanding the instructions to debtors to make
       payments to the Lockbox, the Borrower receives any payments on
       Receivables or other proceeds of Collateral, the Borrower shall
       promptly deposit such payments and proceeds into the Collateral
       Account.  Until so deposited, the Borrower shall hold all such
       payments and proceeds in trust for and as the property of the
       Lender and shall not commingle such payments with any of its other
       funds or property.

          (b)  Amounts deposited in the Collateral Account shall not bear
       interest and shall not be subject to withdrawal by the Borrower, except
       after full payment and discharge of all Obligations.
<PAGE>
          (c)  All deposits in the Collateral Account shall constitute
       proceeds of Collateral and shall not constitute payment of the
       Obligations.  The Lender from time to time at its discretion may, after
       allowing two (2) Banking Days, apply deposited funds in the Collateral
       Account to the payment of the Obligations, in any order or manner of
       application satisfactory to the Lender, by transferring such funds to
       the Lender's general account.

          (d)  All items deposited in the Collateral Account shall be subject
       to final payment.  If any such item for which the Borrower has received
       credit in the Collateral Account is returned uncollected, the Borrower
       will immediately pay the Lender, or, for items deposited in the
       Collateral Account, the bank maintaining such account, the amount of
       that item, or such bank at its discretion may charge any uncollected
       item to the Borrower's commercial account or other account.  The
       Borrower shall be liable as an endorser on all items deposited in the
       Collateral Account, whether or not in fact endorsed by the Borrower.

       Section 6.11.  Performance by the Lender.  If the Borrower at any time
       fails to perform or observe any of the foregoing covenants contained in
       this Article VI or elsewhere herein, and if such failure shall continue
       for a period of ten (10) calendar days (or in the case of the agreements
       contained in Sections 6.5, 6.7 and 6.10, immediately upon the occurrence
       of such failure, without lapse of time), the Lender may, but need not,
       perform or observe such covenant on behalf and in the name, place and
       stead of the Borrower (or, at the Lender's option, in the Lender's name)
       and may, but need not, take any and all other actions which the Lender
       may reasonably deem necessary to cure or correct such failure
       (including, without limitation, the payment of taxes, the satisfaction
       of security interests, liens or encumbrances, the performance of
       obligations owed to account debtors or other obligors, the procurement
       and maintenance of insurance, the execution of assignments, security
       agreements and financing statements, and the endorsement of
       instruments); and the Borrower shall thereupon pay to the Lender on
       demand the amount of all monies expended and all costs and expenses
       (including reasonable attorneys' fees and legal expenses) incurred by
       the Lender in connection with or as a result of the performance or
       observance of such agreements or the taking of such action by the
       Lender, together with interest thereon from the date expended or
       incurred at the Floating Rate.  To facilitate the Lender's performance
       or observance of such covenants of the Borrower, the Borrower hereby
       irrevocably appoints the Lender, or the Lender's delegate, acting
       alone, as the Borrower's attorney in fact (which appointment is coupled
       with an interest) with the right (but not the duty) from time to time
       to create, prepare, complete, execute, deliver, endorse or file in the
       name and on behalf of the Borrower any and all instruments, documents,
       assignments, security agreements, financing statements, applications
       for insurance and other agreements and writings required to be
       obtained, executed, delivered or endorsed by the Borrower under this
       Section 6.11.

       Section 6.12.  Minimum Book Net Worth.  While any part of the
       Obligations remains unpaid, the Borrower will continuously maintain:

          (a)    as of the Funding Date, a minimum Book Net Worth of not
       less than Twenty Five Million Dollars ($25,000,000);

          (b)    thereafter, through September 30, 2000, a minimum Book Net
       Worth of not less than Twenty One Million Five Hundred Thousand Dollars
       ($21,500,000);

          (c)    thereafter, during each period from October 1 through
       September 29, a minimum Book Net Worth of not less than the prior fiscal
       year end required minimum Book Net Worth minus One Million Dollars
       ($1,000,000); and
<PAGE>
          (d)    as of September 30, 2001 and each September 30 thereafter,
       a minimum Book Net Worth of not less than the prior fiscal year end's
       required minimum Book Net Worth plus One Million Dollars ($1,000,000).

       Section 6.13.  Minimum Availability.   While any part of the Obligations
       remains unpaid, the Borrower will continuously maintain excess
       availability of not less than One Million Dollars ($1,000,000).  For
       purposes hereof, excess availability means the difference of (i) the
       Collateral Availability minus (ii) the total of outstanding Revolving
       Advances plus the aggregate face amount of any issued and outstanding
       Letters of Credit.

                                   ARTICLE VII

                               Negative Covenants

          So long as the Obligations shall remain unpaid, or the Credit
       Facility shall remain outstanding, the Borrower agrees that, without
       the Lender's prior written consent:

       Section 7.1.  Liens.  The Borrower will not create, incur or suffer to
       exist any mortgage, deed of trust, pledge, lien, security interest,
       assignment or transfer upon or of any of its assets, now owned or
       hereafter acquired, to secure any indebtedness; excluding, however,
       from the operation of the foregoing, the following (collectively,
       Permitted Liens):

          (a)  in the case of any of the Borrower's property which is not
       Collateral or other collateral described in the Security Documents,
       covenants, restrictions, rights, easements and minor irregularities in
       title which do not materially interfere with the Borrower's business or
       operations as presently conducted;

          (b)  mortgages, deeds of trust, pledges, liens, security interests
       and assignments in existence on the date hereof and listed in Schedule
       7.1 hereto, securing indebtedness for borrowed money permitted under
       Section 7.2;

          (c)  the Security Interest and liens and security interests created
       by the Security Documents;

          (d)  purchase money security interests relating to the acquisition
       of machinery and equipment of the Borrower not exceeding the lesser of
       cost or fair market value thereof and so long as no Default Period is
       then in existence and none would exist immediately after such
       acquisition; and

          (e)  erroneous UCC filings or other evidences of liens filed
       without the knowledge or authority of the Borrower, so long as such
       evidences of liens are released or terminated within thirty (30) days
       of the Lender's notice to the Borrower of the same.

       Section 7.2.  Indebtedness.  The Borrower will not incur, create, assume
       or permit to exist any indebtedness or liability on account of deposits
       or advances or any indebtedness for borrowed money or letters of
       credit issued on the Borrower's behalf, or any other indebtedness or
       liability evidenced by notes, bonds, debentures or similar obligations,
       except:

          (a)  indebtedness arising hereunder;

          (b)  indebtedness of the Borrower in existence on the date hereof
       and listed in Schedule 7.2 hereto;
<PAGE>
          (c)  indebtedness relating to liens permitted in accordance with
       Section 7.1; and

          (d)  indebtedness relating to performance and surety bonds and
       appeal bonds for litigation and other obligations of a like nature
       incurred in the ordinary course of business.

       Section 7.3.  Guaranties.  The Borrower will not assume, guarantee,
       endorse or otherwise become directly or contingently liable in
       connection with any obligations of any other Person, except:

          (a)  the endorsement of negotiable instruments by the Borrower for
       deposit or collection or similar transactions in the ordinary course of
       business; and

          (b)  guaranties, endorsements and other direct or contingent
       liabilities in connection with the obligations of other Persons, in
       existence on the date hereof and listed in Schedule 7.2 hereto.

       Section 7.4.  Investments and Subsidiaries.

          (a)  The Borrower will not purchase or hold beneficially any stock
       or other securities or evidences of indebtedness of, make or permit to
       exist any loans or advances to, or make any investment or acquire any
       interest whatsoever in, any other Person, including, specifically, but
       without limitation, any partnership or joint venture, except:

                 (i)  investments in direct obligations of the United States of
            America or any agency or instrumentality thereof whose obligations
            constitute full faith and credit obligations of the United States
            of America having a maturity of one year or less, commercial paper
            issued by United States of America corporations rated A-1 or A-2
            by Standard & Poor's Corporation or P-1 or P-2 by Moody's
            Investors Service or certificates of deposit or bankers'
            acceptances having a maturity of one year or less issued by
            members of the Federal Reserve System having deposits in excess of
            One Hundred Million Dollars ($100,000,000) (which certificates of
            deposit or bankers' acceptances are fully insured by the Federal
            Deposit Insurance Corporation); and

                 (ii) travel advances or loans to the Borrower's officers and
            employees not exceeding at any one time an aggregate of Ten
            Thousand Dollars ($10,000).

            (b)  The Borrower will not create or permit to exist any
       Subsidiary, other than as provided in Section 5.4.

       Sections 7.5.  Dividends.  The Borrower will not declare or pay any
       dividends (other than dividends payable solely in stock of the Borrower)
       on any class of its stock or make any payment on account of the purchase,
       redemption or other retirement of any shares of such stock or make
       any distribution in respect thereof, either directly or indirectly.

       Section 7.6.  Sale or Transfer of Assets; Suspension of Business
       Operations.  The Borrower will not sell, lease, assign, transfer or
       otherwise dispose of (i) the stock of any Subsidiary, (ii) all or
       substantially all of its assets, or (iii) any Collateral or any
       interest therein (whether in one transaction or in a series of
       transactions) to any other Person other than (a) the sale or other
       disposition of Inventory in the ordinary course of business and (b)
       with the Lender's prior consent, the sale or disposition of obsolete
       equipment or other assets or unsaleable, obsolete or slow-moving
       inventory.  The Borrower and will not liquidate, dissolve or suspend
       business operations.  The Borrower will not in any manner transfer any
       property without prior or present receipt of full and adequate
       consideration.
<PAGE>
       Section 7.7.  Consolidation and Merger; Asset Acquisitions.  The
       Borrower will not consolidate with or merge into any Person, or permit
       any other Person to merge into it, or acquire (in a transaction
       analogous in purpose or effect to a consolidation or merger) all or
       substantially all the assets of any other Person.

       Section 7.8.  Sale and Leaseback.  The Borrower will not enter into any
       arrangement, directly or indirectly, with any other Person whereby the
       Borrower shall sell or transfer any real or personal property, whether
       now owned or hereafter acquired, and then or thereafter rent or lease
       as lessee such property or any part thereof or any other property which
       theBorrower intends to use for substantially the same purpose or
       purposes as the property being sold or transferred.

       Section 7.9.  Restrictions on Nature of Business.  The Borrower will
       not engage in any line of business materially different from that
       presently engaged in by the Borrower and will not purchase, lease or
       otherwise acquire assets not related to its business.

       Section 7.10.  Capital Expenditures.  The Borrower will not incur or
       contract to incur Capital Expenditures of more than One Million Dollars
       ($1,000,000) in the aggregate during any fiscal year.

       Section 7.11.  Accounting.  The Borrower will not adopt any material
       change in accounting principles other than as required by GAAP.  The
       Borrower will not adopt, permit or consent to any change in its fiscal
       year.

       Section 7.12.  Discounts, etc.  The Borrower will not, after notice
       from the Lender, grant any discount, credit or allowance on any then
       outstanding Receivable or accept any return of goods sold without
       notifying the Lender of such return, or at any time (whether before or
       after notice from the Lender) modify, amend, subordinate, cancel or
       terminate the obligation of any account debtor or other obligor of the
       Borrower.

       Section 7.13.  Defined Benefit Pension Plans.  The Borrower will not
       adopt, create, assume or become a party to any defined benefit pension
       plan, unless disclosed to the Lender pursuant to Section 5.10.

       Section 7.14.  Other Defaults.  The Borrower will not permit any breach,
       default or event of default to occur under any note, loan agreement,
       indenture, lease, mortgage, contract for deed, security agreement or
       other contractual obligation binding upon the Borrower or any Affiliate
       that would reasonably be expected to have a material adverse effect on
       the Borrower.

       Section 7.15.  Place of Business; Name.  The Borrower will not transfer
       its chief executive office or principal place of business, or move,
       relocate, close or sell any business location.  The Borrower will not
       permit any tangible Collateral or any records pertaining to the
       Collateral to be located in any state or area in which, in the event of
       such location, a financing statement covering such Collateral would be
       required to be, but has not in fact been, filed in order to perfect the
       Security Interest.  The Borrower will not change its name.

       Section 7.16. Organizational Documents.  The Borrower will not amend its
       certificate of incorporation, articles of incorporation or bylaws.

<PAGE>
                                  ARTICLE VIII

                     Events of Default, Rights and Remedies

       Section 8.1.  Events of Default.  Event of Default, wherever used
       herein, means any one of the following events:

          (a)  Default in the payment of the Obligations when they become
       due and payable;

          (b)  Failure to pay when due any amount specified in Section 2.3
       relating to the Borrower's Obligation of Reimbursement, or failure to
       pay immediately when due or upon termination of the Credit Facility
       any amounts required to be paid for deposit in the Special Account
       under Section 2.4 or;

          (c)  Default in the payment of any fees, commissions, costs or
       expenses required to be paid by the Borrower under this Agreement;

          (d)  Default in the performance, or breach, of any covenant or
       agreement of the Borrower contained in this Agreement; provided,
       however, that any such Default occurring under any of Sections 6.1
       through 6.3, 6.5, 6.6, or 6.8 through 6.11 of this Agreement shall not
       be deemed to be an Event of Default unless such Default continues
       unremedied for fifteen (15) days after written notice thereof is given
       by the Lender to the Borrower; provided, further, however, that any
       Default occurring under Section 6.4 of this Agreement shall not be
       deemed to be an Event of Default if the applicable governmental agency
       or authority has provided the Borrower some time period to remedy its
       noncompliance and such noncompliance continues unremedied beyond that
       designated time period;

          (e)  The Borrower or any Guarantor shall be or become insolvent,
       or admit in writing its or his inability to pay its debts as they
       mature, or make an assignment for the benefit of creditors; or the
       Borrower or any Guarantor shall apply for or consent to the appointment
       of any receiver, trustee, or similar officer for it or for all or any
       substantial part of its property; or such receiver, trustee or similar
       officer shall be appointed without the application or consent of the
       Borrower or any Guarantor, as the case may be and the authority of such
       receiver or trustee over the Borrower's assets has not been discharged
       or dismissed within ten (10) business days (provided, however, that
       during such ten (10) day period the Lender shall be under no obligation
       to make any Advances hereunder); or the Borrower or any Guarantor shall
       institute (by petition, application, answer, consent or otherwise) any
       bankruptcy, insolvency, reorganization, arrangement, readjustment of
       debt, dissolution, liquidation or similar proceeding relating to it
       under the laws of any jurisdiction; or any such proceeding shall be
       instituted (by petition, application or otherwise) against the Borrower
       or any Guarantor and such proceeding has not been discharged or
       dismissed within ten (10) business days (provided, however, that during
       such ten (10) day period the Lender shall be under no obligation to make
       any Advances hereunder); or any judgment, writ, warrant of attachment or
       execution or similar process shall be issued or levied against a
       substantial part of the property of the Borrower or any Guarantor;

          (f)  A petition shall be filed by or against the Borrower or any
       Guarantor under the United States Bankruptcy Code naming the Borrower or
       any Guarantor as debtor;

          (g)  Any representation or warranty made by the Borrower in this
       Agreement, by any Guarantor in any guaranty delivered to the Lender, or
       by the Borrower (or any of its officers) or any Guarantor in any
       agreement, certificate, instrument or financial statement or other
       statement contemplated by or made or delivered pursuant to or in
       connection with this Agreement or any such guaranty shall prove to have
       been incorrect in any material respect when deemed to be effective;

          (h)  The rendering against the Borrower of a final and non-
       appealable judgment, decree or order for the payment of money in excess
       of One Hundred Thousand Dollars ($100,000) and the continuance of such
       judgment, decree or order unsatisfied and in effect for any period of
       thirty (30) consecutive days without a stay of execution;
<PAGE>
            (i)  A default under any bond, debenture, note or other evidence
       of indebtedness of the Borrower owed to any Person other than the Lender
       in excess of One Hundred Thousand Dollars ($100,000), or under any
       indenture or other instrument under which any such evidence of
       indebtedness has been issued or by which it is governed, or under any
       lease of any of the Premises, and the expiration of the applicable
       period of grace, if any, specified in such evidence of indebtedness,
       indenture, other instrument or lease;

          (j)  Any Reportable Event, which the Lender determines in good
       faith might constitute grounds for the termination of any Plan or for
       the appointment by the appropriate United States District Court of a
       trustee to administer any Plan, shall have occurred and be continuing
       thirty (30) days after written notice to such effect shall have been
       given to the Borrower by the Lender; or a trustee shall have been
       appointed by an appropriate United States District Court to administer
       any Plan; or the Pension Benefit Guaranty Corporation shall have
       instituted proceedings to terminate any Plan or to appoint a trustee to
       administer any Plan; or the Borrower shall have filed for a distress
       termination of any Plan under Title IV of ERISA; or the Borrower shall
       have failed to make any quarterly contribution required with respect to
       any Plan under Section 412(m) of the Internal Revenue Code of 1986, as
       amended, which results in the imposition of a lien on the Borrower's
       assets in favor of the Plan;

          (k)  An event of default (after giving of all required notices and
       the expiration of all cure periods, if any) shall occur under any
       Security Document or under any other security agreement, mortgage, deed
       of trust, assignment or other instrument or agreement securing any
       obligations of the Borrower hereunder or under any note;

          (l)  The Borrower shall liquidate, dissolve, terminate or suspend
       its business operations or otherwise fail to operate its business in the
       ordinary course, or sell all or substantially all of its assets, without
       the Lender's prior written consent;

          (m)  The Borrower shall fail to pay, withhold, collect or remit
       any tax or tax deficiency when assessed or due (other than any tax
       deficiency which is being contested in good faith and by proper
       proceedings and for which it shall have set aside on its books adequate
       reserves therefor) or notice of any federal tax liens or any state tax
       liens (other than any state tax lien with respect to a tax deficiency
       which is being contested in good faith and by proper proceedings and for
       which the Borrower shall have set aside on its books adequate reserves
       therefor) shall be filed or issued;

          (n)  Default in the payment of any amount owed by the Borrower to
       the Lender other than any indebtedness arising hereunder;

          (o)  Any Guarantor shall repudiate, purport to revoke or fail to
       perform its obligations under the Guaranty in favor of the Lender; or

          (p)  Any breach, default or event of default by or attributable to
       any Affiliate under any agreement between such Affiliate and the Lender.

       Section 8.2.  Rights and Remedies.  During any Default Period, the
       Lender may exercise any or all of the following rights and remedies:

          (a)  the Lender may, by notice to the Borrower, declare the
       Commitment to be terminated, whereupon the same shall forthwith
       terminate;

          (b)  the Lender may, by notice to the Borrower, declare the
       Obligations to be forthwith due and payable, whereupon all Obligations
       shall become and be forthwith due and payable, without presentment,
       notice of dishonor, protest or further notice of any kind, all of which
       the Borrower hereby expressly waives;
<PAGE>
          (c)  the Lender may, without notice to the Borrower and without
       further action, apply any and all money owing by the Lender to the
       Borrower to the payment of the Obligations;

          (d)  the Lender may make demand upon the Borrower and, forthwith
       upon such demand, the Borrower will pay to the Lender in immediately
       available funds for deposit in the Special Account pursuant to Section
       2.4 an amount equal to the aggregate maximum amount available to be
       drawn under all Letters of Credit then outstanding, assuming compliance
       with all conditions for drawing thereunder;

          (e)    the Lender may exercise and enforce any and all rights and
       remedies available upon default to a secured party under the UCC,
       including, without limitation, the right to take possession of
       Collateral, or any evidence thereof, proceeding without judicial process
       or by judicial process (without a prior hearing or notice thereof, which
       the Borrower hereby expressly waives) and the right to sell, lease or
       otherwise dispose of any or all of the Collateral, and, in connection
       therewith, the Borrower will on demand assemble the Collateral and make
       it available to the Lender at a place to be designated by the Lender
       which is reasonably convenient to both parties;

          (f)  the Lender may exercise and enforce its rights and remedies
       under the Loan Documents; and

          (g)  the Lender may exercise any other rights and remedies
       available to it by law or agreement.

       Notwithstanding the foregoing, upon the occurrence of an Event of
       Default described in subsections (e) or (f) of Section 8.1, the
       Obligations shall be immediately due and payable automatically without
       presentment, demand, protest or notice of any kind.

       Section 8.3.  Certain Notices.  If notice to the Borrower of any
       intended disposition of Collateral or any other intended action is
       required by law in a particular instance, such notice shall be deemed
       commercially reasonable if given (in the manner specified in Section
       9.3) at least ten calendar days before the date of intended disposition
       or other action.

                                   ARTICLE IX

                                  Miscellaneous

       Section 9.1.  No Waiver; Cumulative Remedies.  No failure or delay by
       the Lender in exercising any right, power or remedy under the Loan
       Documents shall operate as a waiver thereof; nor shall any single or
       partial exercise of any such right, power or remedy preclude any other
       or further exercise thereof or the exercise of any other right, power
       or remedy under the Loan Documents.  The remedies provided in the Loan
       Documents are cumulative and not exclusive of any remedies provided by
       law.

       Section 9.2.  Amendments, Etc.  No amendment, modification,
       termination or waiver of any provision of any Loan Document or consent
       to any departure by the Borrower therefrom or any release of a Security
       Interest shall be effective unless the same shall be in writing and
       signed by the Lender, and then such waiver or consent shall be
       effective only in the specific instance and for the specific purpose
       for which given.  No notice to or demand on the Borrower in any case
       shall entitle the Borrower to any other or further notice or demand in
       similar or other circumstances.
<PAGE>
       Section 9.3.  Addresses for Notices, Etc. Except as otherwise expressly
       provided herein, all notices, requests, demands and other
       communications provided for under the Loan Documents shall be in
       writing and shall be (a) personally delivered, (b) sent by first class
       United States mail, (c) sent by overnight courier of national
       reputation, or (d) transmitted by facsimile, in each case addressed or
       facsimiled to the party to whom notice is being given at its address or
       facsimile number as set forth below:

            If to the Borrower:

            Telular Corporation
            647 North Lakeview Parkway
            Vernon Hills, Illinois  60061
            Facsimile:  847/573-2011
            Attention:

            If to the Lender:

            Wells Fargo Business Credit, Inc.
            100 East Wisconsin Avenue, Suite 1400
            MAC N9811-143
            Milwaukee, Wisconsin  53202
            Facsimile:  414/224-7439
            Attention:  Mark J. Stoeberl

       or, as to each party, at such other address or facsimile number as may
       hereafter be designated by such party in a written notice to the other
       party complying as to delivery with the terms of this Section.  All
       such notices, requests, demands and other communications shall be
       deemed to have been given on (a) the date received if personally
       delivered, (b) three (3) business days after deposit in the mail,
       postage prepaid, if delivered by mail, (c) the first business day
       after the date sent if sent by overnight courier, or (d) the date of
       transmission if delivered by facsimile, except that notices or requests
       to the Lender pursuant to any of the provisions of Article II shall not
       be effective until received by the Lender.

       Section 9.4.  Further Documents.  The Borrower will from time to time
       execute and deliver or endorse any and all instruments, documents,
       conveyances, assignments, security agreements, financing statements and
       other agreements and writings that the Lender may reasonably request in
       order to secure, protect, perfect or enforce the Security Interest or
       the Lender's rights under the Loan Documents (but any failure to
       request or assure that the Borrower executes, delivers or endorses any
       such item shall not affect or impair the validity, sufficiency or
       enforceability of the Loan Documents and the Security Interest,
       regardless of whether any such item was or was not executed, delivered
       or endorsed in a similar context or on a prior occasion).

       Section 9.5.  Collateral.  This Agreement does not contemplate a sale
       of accounts, contract rights or chattel paper, and, as provided by law,
       the Borrower is entitled to any surplus and shall remain liable for
       any deficiency.  The Lender's duty of care with respect to Collateral
       in its possession (as imposed by law) shall be deemed fulfilled if it
       exercises reasonable care in physically keeping such Collateral, or in
       the case of Collateral in the custody or possession of a bailee or
       other third person, exercises reasonable care in the selection of the
       bailee or other third person, and the Lender need not otherwise
       preserve, protect, insure or care for any Collateral.  The Lender shall
       not be obligated to preserve any rights the Borrower may have against
       prior parties, to realize on the Collateral at all or in any particular
       manner or order or to apply any cash proceeds of the Collateral in any
       particular order of application.
<PAGE>
       Section 9.6.  Costs and Expenses.  The Borrower agrees to pay on
       demand all costs and expenses, including, without limitation,
       reasonable attorneys' fees, periodic UCC, tax and judgment lien searches
       and title insurance premiums incurred by the Lender in connection with
       the Obligations, this Agreement, the Loan Documents, any Letters of
       Credit, and any other document or agreement related hereto or thereto,
       and the transactions contemplated hereby, including, without
       limitation, all such costs, expenses and fees incurred in connection
       with the negotiation, preparation, execution, amendment,
       administration, performance, collection and enforcement of the
       Obligations and all such documents and agreements and the creation,
       perfection, protection, satisfaction, foreclosure or enforcement of the
       Security Interest.  Notwithstanding the foregoing, legal fees and
       expenses payable by the Borrower hereunder with respect to the
       transactions consummated on the date hereof shall not exceed Twenty Five
       Thousand Dollars ($25,000).

       Section 9.7.  Indemnity.  In addition to the payment of expenses
       pursuant to Section 9.6, the Borrower agrees to indemnify, defend and
       hold harmless the Lender, and any of its participants, parent
       corporations, subsidiary corporations, affiliated corporations,
       successor corporations, and all present and future officers, directors,
       employees, attorneys and agents of the foregoing (the Indemnitees) from
       and against any of the following (collectively, Indemnified Liabilities):

            (i)  any and all transfer taxes, documentary taxes, assessments or
       charges made by any governmental authority by reason of the execution
       and delivery of the Loan Documents or the making of the Advances;

            (ii) any claims, loss or damage to which any Indemnitee may be
       subjected if any representation or warranty contained in Section 5.12
       proves to be incorrect in any respect or as a result of any violation of
       the covenant contained in Section 6.4(b); and

            (iii)     any and all other liabilities, losses, damages,
       penalties, judgments, suits, claims, costs and expenses of any kind or
       nature whatsoever (including, without limitation, the reasonable fees
       and disbursements of counsel) in connection with the foregoing and any
       other investigative, administrative or judicial proceedings, whether or
       not such Indemnitee shall be designated a party thereto, which may be
       imposed on, incurred by or asserted against any such Indemnitee, in any
       manner related to or arising out of or in connection with the making of
       the Advances and the Loan Documents or the use or intended use of the
       proceeds of the Advances.

       If any investigative, judicial or administrative proceeding arising from
       any of the foregoing is brought against any Indemnitee, upon such
       Indemnitee's request, the Borrower, or counsel designated by the
       Borrower and reasonably satisfactory to the Indemnitee, will resist
       and defend such action, suit or proceeding at the Borrower's sole costs
       and expense.  Each Indemnitee will use its best efforts to cooperate
       in the defense of any such action, suit or proceeding.  If the
       foregoing undertaking to indemnify, defend and hold harmless may be
       held to be unenforceable because it violates any law or public policy,
       the Borrower shall nevertheless make the maximum contribution to the
       payment and satisfaction of each of the Indemnified Liabilities which
       is permissible under applicable law.  The Borrower's obligation under
       this Section 9.7 shall survive the termination of this Agreement and
       the discharge of the Borrower's other obligations hereunder.

       Section 9.8.  Participants.  The Lender and its participants, if any,
       are not partners or joint venturers, and the Lender shall not have
       any liability or responsibility for any obligation, act or omission
       of any of its participants.  All rights and powers specifically
       conferred upon the Lender may be transferred or delegated to any of
       the Lender's participants, successors or assigns, provided that any
       transfer of warrants or shares acquired on exercise or any rights
       therein must be made under an exemption under and in compliance with all
       applicable securities laws.
<PAGE>
       Section 9.9.  Execution in Counterparts.  This Agreement and other
       Loan Documents may be executed in any number of counterparts, each of
       which when so executed and delivered shall be deemed to be an original
       and all of which counterparts, taken together, shall constitute but
       one and the same instrument.

       Section 9.10.  Binding Effect; Assignment; Complete Agreement;
       Exchanging Information.  The Loan Documents shall be binding upon and
       inure to the benefit of the Borrower and the Lender and their
       respective successors and assigns, except that the Borrower shall not
       have the right to assign its rights thereunder or any interest
       therein without the Lender's prior written consent.  Any transfer of
       warrants or shares acquired on exercise or any rights therein must be
       made under an exemption under and in compliance with all applicable
       securities laws.  This Agreement, together with the Loan Documents,
       comprises the complete and integrated agreement of the parties on the
       subject matter hereof and supersedes all prior agreements, written or
       oral, on the subject matter hereof.  Without limiting the Lender's
       right to share information regarding the Borrower and its Affiliates
       with the Lender's participants, accountants, lawyers and other
       advisors, the Lender, Wells Fargo & Company, and all direct and
       indirect subsidiaries of Wells Fargo & Company, may exchange any and
       all information they may have in their possession regarding the
       Borrower and its Affiliates, and the Borrower waives any right of
       confidentiality it may have with respect to such exchange of such
       information.

       Section 9.11.  Severability of Provisions.  Any provision of this
       Agreement which is prohibited or unenforceable shall be ineffective
       to the extent of such prohibition or unenforceability without
       invalidating the remaining provisions hereof.

       Section 9.12.  Headings.  Article and Section headings in this
       Agreement are included herein for convenience of reference only and
       shall not constitute a part of this Agreement for any other purpose.

       Section 9.13.  Governing Law; Jurisdiction, Venue; Waiver of Jury
       Trial.  The Loan Documents shall be governed by and construed in
       accordance with the substantive laws (other than conflict laws) of the
       State of Wisconsin.  This Agreement shall be governed by and construed
       in accordance with the substantive laws (other than conflict laws) of
       the State of Wisconsin.  The parties hereto hereby (i) consents to the
       personal jurisdiction of the state and federal courts located in the
       State of Wisconsin in connection with any controversy related to this
       Agreement; (ii) waives any argument that venue in any such forum is
       not convenient, (iii) agrees that any litigation initiated by the
       Lender or the Borrower in connection with this Agreement or the other
       Loan Documents shall be venued in either the Circuit Court of Milwaukee
       County, Wisconsin, or the United States District Court, Eastern
       District of Wisconsin; and (iv) agrees that a final judgment in any
       such suit, action or proceeding shall be conclusive and may be enforced
       in other jurisdictions by suit on the judgment or in any other manner
       provided by law.

       THE PARTIES WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
       BASED ON OR PERTAINING TO THIS AGREEMENT.

       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.

       WELLS FARGO BUSINESS CREDIT, INC.  TELULAR CORPORATION

  By:________________________________        By:_____________________________
     Mark J. Stoeberl, Vice President           Kenneth E. Millard, President
<PAGE>

                        Table of Exhibits and Schedules

            Exhibit A             Form of Revolving Note

            Exhibit B             Compliance Certificate

            Exhibit C             Premises

            ___________________

            Schedule 5.1          Trade Names, Chief Executive Office,
                                   Principal Place of Business, and Locations
                                   of Collateral

            Schedule 7.1          Permitted Liens

            Schedule 7.2          Permitted Indebtedness and Guaranties

<PAGE>
                                   Exhibit A
                        to Credit and Security Agreement

                                REVOLVING NOTE

                                            $5,000,000.00
                                                         December _____, 1999

       For value received, the undersigned, TELULAR CORPORATION, a Delaware
  corporation (the Borrower), hereby promises to pay on the Termination
  Date under the Credit Agreement (defined below), to the order of WELLS
  FARGO BUSINESS CREDIT, INC., a Minnesota corporation (the Lender), at
  its office in Milwaukee, Wisconsin, or at any other place designated at
  any time by the holder hereof, in lawful money of the United States of
  America and in immediately available funds, the principal sum of Five
  Million  Dollars  ($5,000,000.00)  or,  if  less,  the  aggregate  unpaid
  principal amount of all Revolving Advances made by the Lender to the
  Borrower under the Credit Agreement (defined below) together with interest
  on the principal amount hereunder remaining unpaid from time to time,
  computed on the basis of the actual number of days elapsed and a three
  hundred sixty (360) day year, from the date hereof until this Note is
  fully paid at the rate from time to time in effect under the Credit and
  Security Agreement of even date herewith (as the same may hereafter be
  amended,  supplemented  or  restated  from  time  to  time,  the  Credit
  Agreement) by and between the Lender and the Borrower.  The principal
  hereof and interest accruing thereon shall be due and payable as provided
  in the Credit Agreement.  This Note may be prepaid only in accordance with
  the Credit Agreement.

       This  Note  is  issued  pursuant,  and  is  subject,  to  the  Credit
  Agreement, which provides, among other things, for acceleration hereof.
  This Note is the Revolving Note referred to in the Credit Agreement.  This
  Note is secured, among other things, pursuant to the Credit Agreement and
  the Security Documents as therein defined, and may now or hereafter be
  secured by one or more other security agreements, mortgages, deeds of
  trust, assignments or other instruments or agreements.

       The Borrower hereby agrees to pay all costs of collection, including
  reasonable attorneys' fees and legal expenses in the event this Note is
  not paid when due, whether or not legal proceedings are commenced.

       Presentment or other demand for payment, notice of dishonor and
  protest are expressly waived.
                                TELULAR CORPORATION

                                By:
                                Its: President
<PAGE>

                                   Exhibit B
                        to Credit and Security Agreement

                            Compliance Certificate

  To:       Mark J. Stoeberl
            WELLS FARGO BUSINESS CREDIT, INC.

  Date:          _________________________, ________

  Subject:  Telular Corporation
            Financial Statements

       In accordance with our Credit and Security Agreement dated as of
  December _____, 1999, (the Credit Agreement), attached are the financial
  statements of Telular Corporation (the Borrower) as of and for
  _________________________, ________ (the Reporting Date) and the year-
  to-date period then ended (the Current Financials).  All terms used in
  this certificate have the meanings given in the Credit Agreement.

       The Borrower certifies  that the Current Financials have been
  prepared in accordance with GAAP, subject to year-end audit adjustments,
  and fairly present the Borrower's financial condition and the results of
  its operations as of the date thereof.

       Events of Default.  (Check one):

       o    The undersigned does not have knowledge of the occurrence of a
            Default or Event of Default under the Credit Agreement.

       o    The undersigned has knowledge of the occurrence of a Default or
            Event of Default under the Credit Agreement and attached hereto
            is a statement of the facts with respect to thereto.

       The Borrower  hereby  certifies to the Lender as follows:

       o    The Reporting Date marks the end of one of the Borrower's fiscal
            months.

       o    The Reporting Date marks the end of the Borrower's fiscal year.

       Financial Covenants.  The Borrower  further hereby  certifies as
  follows:

            1.   Minimum Book Net Worth.  Pursuant to Section 6.12 of the
       Credit Agreement, as of the Reporting Date, the Borrower's Book Net
       Worth was $_______________ which @ satisfies @ does not satisfy the
       requirement that such amount be not less than the following amounts
       on the Reporting Date as set forth in table below:

                              [To be completed.]

            2.   Capital Expenditures.  Pursuant to Section 7.10 of the
       Credit Agreement, for the year-to-date period ending on the Reporting
       Date, the Borrower has expended or contracted to expend during the
       fiscal year ended _________________________, ________, for Capital
       Expenditures, $_______________ in the aggregate  [see comment on

       credit agreement], which @ satisfies @ does not satisfy the
       requirement that such expenditures not exceed
       __________________________________ Dollars ($_______________) in the
       aggregate and __________________________________ Dollars
       ($_______________) for expenditures  [see comments on credit
       agreement] during such year.

       Attached hereto are all relevant facts in reasonable detail to
  evidence, and the computations of the financial covenants referred to
  above.  These computations were made in accordance with GAAP.

                                TELULAR CORPORATION

                                By:
                                Its:        Chief Financial Officer
<PAGE>

                                   Exhibit C
                        to Credit and Security Agreement

                                   Premises

       The Premises referred to in the Credit and Security Agreement are
  legally described as follows:

  Location: Corporate Office and Plant (Vernon Hills, Illinois)

  Legal Description: Approximately 72,125 sf in the building known as 645-7
  North Lakeview Parkway, Vernon Hills, IL 60061

  Location: Telular Technology Center (Hauppauge, New York)

  Legal Description: 20,000 sf in the building 580 Old Willets Path,
  Hauppauge, New York 11788

  Location: Telguard Sales Office (Lithia Springs, Georgia)

  Legal Description: Suite 109 (7,715sf) in the building located at 420
  Thorton Road, Lithia Springs, Georgia 30057

  Location: Oxford Fixed Wireless Field Sales Office (Oxford, United
  Kingdom)

  Legal Description: Unit 185 - IJ in Milton Park Office Building, Abington,
  Oxon, OX14 4SR, UK

  Location: Singapore Fixed Wireless Field Sales Office (Singapore)

  Legal Description: Unit #05-232 (1,500 sf) on the 5th floor of the
  building known as Faber House, No. 230 Orchard Road, Singapore

  Location: Weston Fixed Wireless Field Sales Office (Weston, Florida)

  Legal Description: Approximately 1,225 sf in the building located at 1920-
  1 N. Commerce Parkway, Weston, Florida 33326

<PAGE>
                                 Schedule 5.1
                        to Credit and Security Agreement

     Trade Names, Chief Executive Office, Principal Place of Business, and
                            Locations of Collateral

                                  Trade Names

    Telular (block), TELULAR plus design, CELJACK, PSCone, TELCEL, Hexagon
                  logo, PHONECELL, CELSERV, TELGUARD, and CPX

              Chief Executive Office/Principal Place of Business

                            647 N. Lakeview Parkway
                         Vernon Hills, Illinois 60061

                    Other Inventory and Equipment Locations

  Inventory - None

  Equipment:
  - All Premises listed on Exhibit C
  - SCI, Raleigh, North Carolina
  - ACT (formerly CMC), Corinth Mississippi
  - Mold-Tech Electronics, Soddy-Dasiy, Tennesee
  - Barlovento Electronics, Cuernavaca, Mexico
<PAGE>

                                 Schedule 7.1
                        to Credit and Security Agreement

                                Permitted Liens

   Creditor          Collateral   Jurisdiction   Filing   Filing
                                                   Date      No.

   Fulton County, GA   All Personal Property   Fulton Co., GA
   November 1, 1999  n/a

<PAGE>
                                 Schedule 7.2
                        to Credit and Security Agreement

                     Permitted Indebtedness and Guaranties

                                 Indebtedness

                             See Operating Leases

                                  Guaranties

                                     None.

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