Document:

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                                                                   Exhibit 10.46
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                               WARRANT AGREEMENT

     This WARRANT AGREEMENT dated as of the 8th day of December, 2000 (this
"Agreement"), is by and between RF Monolithics, Inc., a Delaware corporation
(the "Company"), and Wells Fargo Business Credit, Inc. (the "Initial Holder").

     WHEREAS, the Initial Holder is acting as underwriter of, and syndication
agent in respect to, a syndicated credit facility being made available to the
Company (the "Credit Facility").

     WHEREAS, in partial consideration of the agreement of the Initial Holder as
underwriter of, and syndication agent in respect to, the Credit Facility, the
Company proposes to issue and deliver to the Initial Holder its warrant
certificates (the "Warrant Certificates") evidencing Warrants (as defined below)
to purchase up to an aggregate of Thirty Thousand (30,000) shares  (the "Initial
Number").  Each such Warrant will entitle the registered owner thereof to
purchase one Stock Unit (as defined below), subject to adjustment as provided
herein.

     NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and for the purpose of defining the terms and provisions of the
Warrants and the respective rights and obligations thereunder of the Company and
the record holders of the Warrants, the Company and the Initial Holder hereby
agrees as follows:

1.   DEFINITIONS.

     As used in this Agreement, the following terms shall have the following
meanings:

     Additional Shares of Common Stock:  all shares of Common Stock issued by
the Company after the date of this Agreement other than Underlying Common Stock
issued upon exercise of Warrants.

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

     Agreement: the Agreement identified in the preamble to this Agreement as
amended.

     Business Day:  any day except Saturday, Sunday or any other day that is a
legal holiday in New York City, New York or Dallas, Texas or a day on which
banks in New York City, New York or Dallas, Texas are authorized or required by
law or executive order to close.

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     Common Stock:  the class of capital stock of the Company designated as the
Common Stock, par value $.001 per share, of the Company or shares of any class
or classes resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Company and which are not subject to redemption by the Company.

     Company:  the corporation identified in the preamble to this Agreement and
its successors and assigns.

     Constituent Person:  has the meaning set forth in Section 5.1.11

     Convertible Securities:  evidences of indebtedness, shares of stock or
other securities that are convertible into or exchangeable, with or without
payment of additional consideration in cash or property, for Additional Shares
of Common Stock, either immediately or upon the arrival of a specified date or
the happening of a specified event.

     Credit Facility:  the Credit Facility identified in the first Recital to
this Agreement.

     Current Market Price:  on any date:

          (i)  if the reference is to the per share price of Common Stock on any
     date herein specified and if on such date the Common Stock is listed or
     admitted to trading on any national securities exchange or quoted on Nasdaq
     or otherwise traded in the over-the-counter market in the United States:

               (A)  for the purpose of any computation under this Agreement
     (except under Section 5.1.4), the average of the Quoted Prices for the five
     consecutive Trading Days selected by the Company commencing not more than
     20 Trading Days before, and ending not later than, the earlier of (x) the
     date in question and (y) in the case of any computation under Section
     5.1.2, or 5.1.6, the day before the "ex" date for the issuance or
     distribution requiring such computation; or

               (B)  for the purpose of any computation under Section 5.1.4, the
     average of the Quoted Prices for the five consecutive Trading Days selected
     by the Company commencing on or after the latest of (x) the date 20 Trading
     Days before the date in question, (y) the date of commencement of the
     tender offer requiring such computation and (z) the date of the last
     amendment, if any, of such tender offer involving a change in the maximum
     number of shares for which tenders are sought or a change in the
     consideration offered, and ending not later than the Expiration Time of
     such tender offer; or

          (ii) if the reference is to the per share price of Common Stock on any
     date herein specified and if on such date the Common Stock is not listed or
     admitted to trading on any national securities exchange or quoted on Nasdaq
     or otherwise traded in the over-the-counter market in the United States,
     the amount which a willing buyer would

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     pay a willing seller in an arm's-length transaction on such date (neither
     being under any compulsion to buy or sell) for one share of Common Stock as
     determined as of such date, as set forth in a value report by an
     Independent Financial Expert using one or more valuation methods that such
     Independent Financial Expert, in its best professional judgment, determines
     to be most appropriate.

     Current Market Value:  on any date, with respect to any security,

          (i)    if on such date such security is listed or admitted to trading
     on any national securities exchange or quoted on Nasdaq or otherwise traded
     in the over-the-counter market in the United States, the average of the
     Quoted Prices for the five consecutive Trading Days selected by the Company
     commencing not more than 20 Trading Days before, and ending not later than,
     such date; or

          (iii)  if on such date such security is not listed or admitted to
     trading on any national securities exchange or quoted on Nasdaq or
     otherwise traded in the over-the-counter market in the United States, the
     amount that a willing buyer would pay a willing seller in an arm's-length
     transaction on such date (neither being under any compulsion to buy or
     sell) for such security as determined as of such date, as set forth in a
     value report by an Independent Financial Expert using one or more valuation
     methods that such Independent Financial Expert, in its best professional
     judgment, determines to be most appropriate.

     Effective Date:  December 8, 2000, the date of the Credit Facility.

     "ex" date: when used with respect to any issuance or distribution, the
first date on which the Common Stock trades regular way on the relevant exchange
or in the relevant market from which the Quoted Price was obtained without the
right to receive such issuance or distribution.

     Exchange Act:  the Securities Exchange Act of 1934, as amended.

     Exchange Date:  has the meaning set forth in Article 4.

     Exercise Price:  the exercise price per Stock Unit, which is $5.00,
provided the per share Exercise Price shall not be less than the then current
par value per share of each share of New Common Stock.

     Expiration Date:  December 31, 2010 (subject to any extension as provided
in Section 10.2).

     Expiration Time:  6:00 p.m. New York, New York time.

     Financial Expert:  any broker or dealer registered as such under the
Exchange Act that conducts an investment banking business of nationally-
recognized standing.

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     Governmental Authority:  the United States of America, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government
within any such jurisdiction.

     Holder:  as of the Effective Date, the Initial Holder and thereafter any
person in whose name at the time any Warrant Certificate is registered upon the
Warrant Register and, when used with respect to any Warrant Certificate, the
person in whose name such Warrant Certificate is registered in the Warrant
Register.

     Independent Financial Expert:  any Financial Expert selected by the Company
that either (i) is reasonably acceptable to the Holders of Warrant Certificates
evidencing a majority of the outstanding Warrants or (ii) is a firm (x) which
does not (and the directors, officers, employees, affiliates or stockholders of
which, to the knowledge of the Company, do not) have a material direct or
indirect interest in the Company or any of its subsidiaries or Affiliates, as
determined by the Board of Directors of the Company in its good faith judgment,
(y) which has not been within the last three years, and, at the time it is
called upon to give independent financial advice to the Company, is not (and
none of the directors, officers, employees, affiliates or stockholders of which,
to the knowledge of the Company, is) a director or officer of the Company or any
of its subsidiaries or Affiliates and (z) which does not provide any advice or
opinions to the Company except as an independent financial expert or as an
investment bank or in connection with this Agreement (in any case, for which it
may be compensated without compromising its independence).

     Initial Holder:  is the Person identified in the preamble to this
Agreement.

     Initial Number:  is the number identified in the third Recital to this
Agreement.

     NASD:  National Association of Securities Dealers, Inc.

     Nasdaq:  The Nasdaq Stock Market, Inc., including, without limitation, both
the Nasdaq National Market and the Nasdaq Small Cap Market, and its successors
and assigns.

     New Common Stock:  the shares purchasable upon exercise of Warrants which,
subject to the provisions of Section 5.1.11, shall include only shares of the
class of capital stock of the Company designated as the Common Stock on the
Effective Date or shares of any class or classes resulting from any
reclassification or reclassifications thereof and which have no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company and which are
not subject to redemption by the Company; provided, however, that if at any time
there shall be more than one such resulting class, the shares of each such class
then so issuable shall be substantially in the proportion which the total number
of shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.

     Non-electing share:  has the meaning set forth in Section 5.1.10.

     Non-Surviving Transaction:  has the meaning set forth in Section 5.1.10.

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     Per Share Exercise Price: the Exercise Price divided by the number of
shares of New Common Stock in a Stock Unit.

     Person: any individual, corporation, joint stock company, partnership,
joint venture, trust (including a business trust), estate, limited liability
company, unincorporated association, unincorporated organization, Governmental
Authority or any other entity.

     Purchased Shares: has the meaning set forth in Section 5.1.11.

     Quoted Price: on any Trading Day, with respect to any security, the last
reported sales price regular way or, in case no such reported sale takes place
on such Trading Day, the average of the reported closing bid and asked prices
regular way, in either case on the New York Stock Exchange or, if such security
is not listed or admitted to trading on such Exchange, on the principal national
securities exchange on which such security is listed or admitted to trading or,
if not listed or admitted to trading on any national securities exchange, on
Nasdaq or, if such security is not listed or admitted to trading on any national
securities exchange or quoted on Nasdaq, the average of the highest closing bid
and lowest closing offer prices (the inside market) in the over-the-counter
market in the United States as furnished by any NASD member firm that shall be
selected from time to time by the Company for that purpose.

     Rule 144A Information: has the meaning set forth in Section 9.3.

     SEC: the Securities and Exchange Commission.

     Securities Act: the Securities Act of 1933, as amended.

     Stockholder's Meeting: has the meaning set forth in Section 9.2.

     Stock Unit: the number of shares of New Common Stock issuable upon exercise
of one Warrant, which, on the Effective Date is one share of New Common Stock
and thereafter shall be such number of shares (including any fractional share)
of New Common Stock as shall result from the adjustments specified in Article 5
hereof.

     Substituted Property: has the meaning set forth in Section 5.1.11.

     Surviving Transaction: has the meaning set forth in Section 5.1.11.

     Trading Day: each Monday, Tuesday, Wednesday, Thursday and Friday, other
than any day on which securities are not traded on the applicable securities
exchange or in the applicable securities market.

     Underlying Common Stock: the shares of New Common Stock issuable upon the
exercise of the Warrants.

     Warrant Agent: as of the Effective Date, the Company and thereafter any
other Person who may be appointed as warrant agent in accordance with the terms
hereof or any successors of such warrant agent appointed in accordance with the
terms hereof.

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     Warrant Certificates: those certain warrant certificates evidencing the
Warrants, substantially in the form of Exhibit A attached hereto.
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     Warrant Register: a register to be maintained by the Warrant Agent for the
purpose of maintaining the names of the holders of the Warrant Certificates.

     Warrants: those certain Warrants initially issued to the Initial Holder to
purchase the Initial Number of shares of New Common Stock at the Exercise Price,
subject to adjustment pursuant to Article 5, issued hereunder.

2.   ORIGINAL ISSUE OF WARRANTS.

     2.1  Form of Warrant Certificates.  The Warrant Certificates evidencing the
          ----------------------------
Warrants may be in registered form and shall be substantially in the form
attached hereto as Exhibit A, shall be dated the date on which countersigned by
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the Warrant Agent and may have such legends and endorsements typed, stamped,
printed, lithographed or engraved thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation pursuant thereto.

     2.2  Execution and Delivery of Warrant Certificates.  Warrant Certificates
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evidencing Warrants that may be countersigned and delivered under this Agreement
are limited to Warrant Certificates evidencing the right to purchase initially
the Initial Number of shares of New Common Stock, except for Warrant
Certificates countersigned and delivered upon registration of transfer of, or in
exchange for, or in lieu of, one or more previously countersigned Warrant
Certificates pursuant to Sections 2.1, 3.4, or 10.4 or Article 6.

     At any time and from time to time after the execution of this Agreement,
Warrant Certificates evidencing the Warrants may be executed by the Company and
delivered to the Warrant Agent for countersignature, and the Warrant Agent shall
thereupon countersign and deliver such Warrant Certificates upon the written
order and at the direction of the Company for original issuance to the
respective Persons entitled thereto.  The Warrant Agent is hereby authorized to
countersign and deliver Warrant Certificates as required by this Section 2.2 or
by Sections 2.1, 3.4, or 10.4 or Article 6.  The Warrant Certificates shall be
executed in the corporate name and on behalf of the Company by its Chairman of
the Board, Chief Executive Officer, President or by any of its Vice Presidents,
under its corporate seal reproduced thereon and attested to by its Secretary or
one of its Assistant Secretaries.  The signature of any of these officers on the
Warrant Certificates may be manual or facsimile.  The Warrant Certificates shall
be manually countersigned by the Warrant Agent and shall not be valid for any
purpose unless so countersigned.  In case any officer of the Company whose
signature shall have been placed upon any of the Warrant Certificates shall
cease to be such officer of the Company before countersignature by the Warrant
Agent and issue and delivery thereof, such Warrant Certificates may,
nevertheless, be countersigned by the Warrant Agent and issued and delivered
with the same force and effect as though such person had not ceased to be such
officer of the Company.

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3.   EXERCISE PRICE; EXERCISE OF WARRANTS GENERALLY.

     3.1  Exercise Price. Each Warrant Certificate shall, when countersigned by
          --------------
the Warrant Agent, entitle the Holder thereof, subject to the provisions of this
Agreement, to receive one Stock Unit for each Warrant represented thereby at the
Exercise Price.

     3.2  Exercise of Warrants.  Subject to the terms and conditions set forth
          --------------------
herein, the Warrants may be exercised on any Business Day from and after the
date hereof.

     3.3  Expiration of Warrants. The Warrants shall terminate and become void
          ----------------------
as of the Expiration Time on the Expiration Date.

     The Company shall give notice not less than 60, and not more than 120, days
prior to the Expiration Date to the Holders of all then outstanding Warrants to
the effect that the Warrants will terminate and become void as of the Expiration
Time on the Expiration Date.

     3.4  Method of Exercise. In order to exercise a Warrant, the Holder thereof
          ------------------
must (i) deliver to the Warrant Agent (a) a written notice of the Holder's
election to exercise the Warrant, which notice shall be in the form of the form
on the reverse of, or attached to, the Warrant Certificate evidencing such
Warrant and (b) the Warrant Certificate evidencing such Warrant, and (ii) (A)
pay the Exercise Price for such Warrants, at the option of the Holder, by any
combination of cash, certified bank check, official bank check in New York
Clearing House funds or wire transfer in immediately available funds to an
account designated by the Warrant Agent or (B) in lieu of paying cash as
specified above, a Holder may from time to time convert a Warrant, into a number
of shares of Common Stock determined by dividing (I) the Common Market Value of
the shares of New Common Stock issuable upon exercise of the Warrant minus the
aggregate Exercise Price of such shares by (II) the Current Market Value of one
share of Common Stock. There shall be no other requirements or conditions to the
exercise of the Warrants.

     Upon exercise of a Warrant, the Warrant Agent shall (i) deliver or deposit
all funds received, if any, as instructed in writing by the Company, and (ii)
thereupon promptly notify the Company, and the Company shall, as promptly as
practicable, and in any event within three (3) Business Days thereafter, execute
or cause to be executed and deliver or cause to be delivered to the Holder a
certificate or certificates representing the aggregate number of full shares of
Underlying Common Stock issuable upon such exercise together with cash in lieu
of any fraction of a share, as hereinafter provided.  The stock certificate or
certificates so delivered shall be, to the extent possible, in such denomination
or denominations as such Holder shall request in the notice and shall be
registered or otherwise placed in the name of the Holder or, subject to Section
10.2, such other name as shall be designated by the Holder in the notice.  A
Warrant shall be deemed to have been exercised and such stock certificate or
certificates shall be deemed to have been issued, and the Holder or any other
Person so designated to be named therein shall be deemed to have become a holder
of record of such shares for all purposes, as of immediately prior to the close
of business on the date the notice or notices referred to above, together with
the Exercise Price, is received by the Warrant Agent and all taxes required to
be paid by the Holder, if any, pursuant to Section 10.2, prior to the issuance
of such shares have been paid.

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     If fewer than all the Warrants evidenced by a surrendered Warrant
Certificate are exercised, a new Warrant Certificate of the same tenor and for
the number of Warrants that were not exercised shall be executed by the Company.
The Warrant Agent shall countersign the new Warrant Certificate, register it in
such name or names, subject to Article 6, as may be directed in writing by the
Holder and deliver the new Warrant Certificate to the Person or Persons entitled
to receive the same.

4.   DISSOLUTION, LIQUIDATION OR WINDING UP.

     If, prior to the Expiration Date, the Company (or any other Person
controlling the Company) shall propose a voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, the Company shall give
written notice thereof to the Warrant Agent and all Holders of Warrant
Certificates in the manner provided in Section 9.2 prior to the date on which
such transaction is expected to become effective or, if earlier, the record date
for such transaction.  Such notice shall also specify the date (the "Exchange
Date") as of which the holders of the shares of record of the capital stock of
the Company shall be entitled to exchange their shares for securities, money or
other property deliverable upon such dissolution, liquidation or winding up, as
the case may be, on which date each Holder of a Warrant Certificate shall
receive the securities, money or other property which such Holder would have
been entitled to receive had the Warrant been exercised immediately prior to
such dissolution, liquidation or winding up (net of the then applicable Exercise
Price), and the rights to exercise the Warrants shall terminate.  In case of any
such voluntary or involuntary dissolution, liquidation or winding up of the
Company, the Company shall deposit with the Warrant Agent any funds or other
property which the Holders are entitled to receive under this Agreement with
respect to each Warrant.  After receipt of such deposit from the Company and
after receipt of surrendered Warrant Certificates evidencing the Warrants, the
Warrant Agent shall make payment in appropriate amount, with respect to each
Warrant, to such Person or Persons as it may be directed in writing by the
Holder surrendering such Warrant Certificate.

5.   ADJUSTMENTS.

     5.1  Adjustments. The number of shares of New Common Stock constituting a
          -----------
Stock Unit therefor, shall be subject to adjustment from time to time as
follows:

          5.1.1  Stock Dividends, Subdivisions and Combinations. In case at any
     time or from time to time after the Effective Date the Company shall

          (i)    pay to the holders of its Common Stock a dividend payable in,
     or make any other distribution on any class of its capital stock in, shares
     of Common Stock (other than a dividend or distribution upon a merger or
     consolidation or sale to which Section 5.1.11 applies);

          (ii)   subdivide its outstanding shares of Common Stock into a larger
     number of shares of Common Stock (other than a subdivision upon a merger or
     consolidation or sale to which Section 5.1.11 applies); or

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     (iii)       combine its outstanding shares of Common Stock into a smaller
     number of shares of Common Stock (other than a combination upon a merger or
     consolidation or sale to which Section 5.1.11 applies);

     then, (I) in the case of any such dividend or distribution, effective
     immediately after the opening of business on the day after the date for the
     determination of the holders of shares of Common Stock entitled to receive
     such dividend or distribution, or (II) in the case of any subdivision or
     combination, effective immediately after the opening of business on the day
     after the day upon which such subdivision or combination becomes effective,
     the number of shares of New Common Stock constituting a Stock Unit shall be
     adjusted to that number of shares of Common Stock determined by (x) in the
     case of any such dividend or distribution, multiplying the number of shares
     of Common Stock constituting a Stock Unit at the opening of business on the
     day after the day for determination by a fraction (not to be less than
     one), (i) the numerator of which shall be equal to the sum of the number of
     shares of Common Stock outstanding at the close of business on such date
     for determination and the total number of shares constituting such dividend
     or distribution and (ii) the denominator of which shall be equal to the
     number of shares of Common Stock outstanding at the close of business on
     such date for determination or (y) in the case of any such combination, by
     proportionately reducing, or, in the case of any such subdivision, by
     proportionately increasing, the number of shares of New Common Stock
     constituting a Stock Unit at the opening of business on the day after the
     day upon which such subdivision or combination becomes effective.

          5.1.2  Certain Other Dividends and Distributions. In case at any time
                 -----------------------------------------
     or from time to time after the Effective Date the Company shall pay to all
     holders of its Common Stock any dividend or make any other distribution of
     any shares of its capital stock, evidences of its indebtedness, cash or
     other assets (including rights, warrants or other securities (of the
     Company or any other Person), but excluding any dividend or distribution
     (I) upon a merger or consolidation or sale to which Section 5.1.11 applies
     or (II) of any Common Stock referred to in Section 5.1 or of any rights or
     warrants referred to in Section 5.1.6, then, and in each such case,
     effective immediately prior to the opening of business on the day after the
     date for the determination of the holders of Common Stock entitled to
     receive such dividend or distribution, the number of shares of New Common
     Stock constituting a Stock Unit shall be adjusted to that number determined
     by multiplying the number of shares of New Common Stock constituting a
     Stock Unit immediately prior to the close of business on such date of
     determination by a fraction (x) the numerator of which shall be the Current
     Market Price per share of Common Stock on such date for determination and
     (y) the denominator of which shall be such Current Market Price per share
     of Common Stock (as adjusted) minus the portion applicable to one share of
     Common Stock of the fair value (as determined in good faith by the Board of
     Directors of the Company) of any and all such shares, evidences of its
     indebtedness, cash or other assets so distributed.

          5.1.3  Reclassifications. A reclassification of the Common Stock
                 -----------------
     (other than any such reclassification in connection with a merger or
     consolidation or sale to which

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     Section 5.1.11 applies) into shares of Common Stock and shares of any other
     class of stock shall be deemed a distribution by the Company to the holders
     of its Common Stock of such shares of such other class of stock within the
     meaning of Section 5.1.2 (and the effective date of such reclassification
     shall be deemed to be "the date for the determination of the holders of
     Common Stock entitled to receive such dividend or distribution" within the
     meaning of Section 5.1.2) and, if the outstanding shares of Common Stock
     shall be changed into a larger or smaller number of shares of Common Stock
     as a part of such reclassification, such change shall be deemed a
     subdivision or combination, as the case may be, of the outstanding shares
     of Common Stock within the meaning of Section 5.1.1 (and the effective date
     of such reclassification shall be deemed to be "the day after the day upon
     which such subdivision or combination becomes effective" within the meaning
     of Section 5.1.1).

          5.1.4  Self-Tender Offer. In case at any time or from time to time
                 -----------------
     after the Effective Date a tender offer made by the Company or any of its
     subsidiaries or Affiliates for all or any portion of the Common Stock shall
     expire, then, and in each such case, effective immediately prior to the
     opening of business on the date after the date of the last time (the
     "Expiration Time") tenders could have been made pursuant to such tender
     offer (as it may be amended), the number of shares of Common stock
     constituting a Stock Unit shall be adjusted to that number determined by
     multiplying the number of shares of New Common Stock constituting a Stock
     Unit immediately prior to the close of business on the date of the
     Expiration Time by a fraction (not to be less than one), (i) the numerator
     of which shall be equal to the product of (A) the Current Market Value per
     share of the Common Stock on the date of the Expiration Time and (B) the
     number of shares of Common Stock outstanding (including any tendered
     shares) on the Expiration Time less the number of all shares validly
     tendered and not withdrawn as of the Expiration Time (the shares deemed so
     accepted, up to any such maximum, being referred to as the "Purchased
     Shares") and (ii) the denominator of which shall be equal to (A) the
     product of (I) the Current Market Value per share of the Common Stock on
     the date of the Expiration Time and (II) the number of shares of Common
     Stock outstanding (including any tendered shares) on the Expiration Time
     less (B) the fair market value of the aggregate consideration payable to
     ----
     stockholders based on the acceptance (up to any maximum specified in the
     terms of the tender offer) of Purchased Shares.

          5.1.5  Issuance of Additional Shares of Common Stock. In case at any
                 ---------------------------------------------
     time or from time to time after the Effective Date the Company shall issue
     or sell any Additional Shares of Common Stock for a consideration per share
     less than the Current Market Price per share of Common Stock (other than
     with respect to (I) a dividend or distribution referred to in Section
     5.1.1, (II) the Warrants, (III) any currently outstanding options,
     warrants, rights or Convertible Securities, provided such Securities are
     not "repriced" to a lower exercise or conversion price or (IV) sales of
     shares of Common Stock in accordance with and pursuant to the terms of the
     Company's 1994 Employee Stock Purchase Plan), then, and in each such case,
     effective immediately after such issuance or sale, the number of shares of
     New Common Stock constituting a Stock Unit shall be adjusted to that number
     determined by multiplying the number of shares of New

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     Common Stock constituting a Stock Unit immediately prior to such adjustment
     by a fraction (not less than one) (i) the numerator of which shall be the
     number of shares of Common Stock outstanding immediately prior to the
     issuance or sale of such Additional Shares of Common Stock plus the number
     of such Additional Shares of Common Stock so issued or sold and (ii) the
     denominator of which shall be the number of shares of Common Stock
     outstanding immediately prior to the issuance or sale of such Additional
     Shares of Common Stock plus the number of shares of Common Stock that the
     aggregate consideration for the total number of such Additional Shares of
     Common Stock so issued or sold would purchase at the Current Market Price.
     No adjustment of the number of shares of New Common Stock constituting a
     Stock Unit shall be made under this Section 5.1.5 upon (x) any issuance or
     sale of Additional Shares of Common Stock for which an adjustment is
     provided under Section 5.1.1 or (y) any issuance or sale of any Additional
     Shares of Common Stock that are issued pursuant to the exercise of any
     warrants or other subscription or purchase rights or pursuant to the
     exercise of any conversion or exchange rights in any Convertible Securities
     if any such adjustment shall previously have been made upon the issuance or
     distribution of such warrants or other rights or upon the issuance or sale
     of such Convertible Securities (or upon the issuance of any warrant or
     other rights therefor) pursuant to Sections 5.1.2, 5.1.6, 5.1.7 or 5.1.8 or
     (z) any issuance upon a merger or consolidation or sale to which Section
     5.1.11 applies.

          5.1.6  Issuance of Warrants or Other Rights to Holders of Common
                 ---------------------------------------------------------
     Stock. In case at any time or from time to time after the Effective Date
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     the Company shall make a distribution to all holders of its Common Stock of
     any warrants or other rights to subscribe for or purchase any Additional
     Shares of Common Stock (other than a distribution of such warrants or
     rights upon a merger or consolidation or sale to which Section 5.1.11
     applies), whether or not the rights to subscribe or purchase thereunder are
     immediately exercisable, and the consideration per share for which
     Additional Shares of Common Stock may at any time thereafter be issuable
     pursuant to such warrants or other rights shall be less than the Current
     Market Price on the date fixed for determination of the holders of Common
     Stock entitled to receive such distribution, then, and in each such case,
     effective immediately after the opening of business on the day after such
     date for determination, the number of shares of New Common Stock
     constituting a Stock Unit shall be adjusted to that number determined by
     multiplying the number of shares of New Common Stock constituting a Stock
     Unit at the opening of business on the day after such date for
     determination by a fraction (not less than one) (i) the numerator of which
     shall be the number of shares of Common Stock outstanding at the close of
     business on such date for determination plus the maximum number of
     Additional Shares of Common Stock issuable pursuant to all such warrants or
     other rights, and (ii) the denominator of which shall be the number of
     shares of Common Stock outstanding at the close of business on such date
     for determination plus the number of shares of Common Stock that the
     minimum consideration received and receivable by the Company for the
     issuance of such maximum number of Additional Shares of Common Stock
     pursuant to the terms of such warrants or other rights would purchase at
     such Current Market Price.

                                      xi
<PAGE>

          5.1.7  Other Issuances of Warrants or Other Rights. In case (i) at any
                 -------------------------------------------
     time or from time to time after the Effective Date, the Company shall in
     any manner (whether directly or by assumption in a merger or similar
     combination in which the Company is the surviving corporation and in which
     the stockholders of the Company immediately prior to the merger continue to
     own at least 51% of the Common Stock outstanding immediately after the
     merger or otherwise) issue or sell any warrants or other rights to
     subscribe for or purchase any Additional Shares of Common Stock or any
     Convertible Securities, whether or not the rights to subscribe, purchase,
     exchange or convert thereunder are immediately exercisable, and (ii) the
     consideration per share for which Additional Shares of Common Stock may at
     any time thereafter be issuable pursuant to such warrants or other rights
     or pursuant to the terms of such Convertible Securities shall be less than
     the Current Market Price, then, and in each such case, effective
     immediately after such issuance or sale, the number of shares of New Common
     Stock constituting a Stock Unit shall be adjusted to that number determined
     by multiplying the number of shares of New Common Stock constituting a
     Stock Unit immediately prior to such adjustment by a fraction (not less
     than one) (i) the numerator of which shall be the number of shares of
     Common Stock outstanding immediately prior to the issuance or sale of such
     warrants or rights plus the maximum number of Additional Shares of Common
     Stock issuable pursuant to all such warrants or other rights or necessary
     to effect the conversion of all such Convertible Securities, and (ii) the
     denominator of which shall be the number of shares of Common Stock
     outstanding immediately prior to the issuance or sale of such warrants or
     rights plus the number of shares of Common Stock that the minimum
     consideration received and receivable by the Company for the issuance or
     sale of such warrants or rights and the maximum number of Additional Shares
     of Common Stock pursuant to the terms of such warrants or other rights or
     necessary to effect conversion of all such Convertible Securities would
     purchase at the Current Market Price. For purposes of this Section 5.1.7,
     the date as of which the Current Market Price shall be computed shall be
     the earlier of (x) the date on which the Company shall take a record of the
     holders of its Common Stock for the purpose of entitling them to receive
     any such warrants or other rights or such Convertible Securities, (y) the
     date on which the Company shall enter into a firm contract for the issuance
     or sale of such warrants or other rights or such Convertible Securities and
     (z) the date of actual issuance or sale of such warrants or other rights or
     such Convertible Securities. No adjustment of the number of shares of New
     Common Stock constituting a Stock Unit shall be made under this Section
     5.1.7 upon the issuance or sale of any warrants or rights (x) upon a
     distribution to which Section 5.1.2 or 5.1.6 applies, (y) upon a merger or
     consolidation or sale to which Section 5.1.11 applies, or (z) upon the
     issuance of Additional Shares of Common Stock by the Person with whom the
     Company merges or combines that would have been excluded pursuant to
     Section 5.1.5 had such Additional Shares of Common Stock been issued by the
     Company after such merger or combination.

          5.1.8  Issuance of Convertible Securities. In case (i) at any time or
                 ----------------------------------
     from time to time the Company shall in any manner (whether directly or by
     assumption in a merger in which the Company is the surviving corporation
     and in which the shareholders of the Company immediately prior to the
     merger continue to own at least 51% of the Common

                                      xii
<PAGE>

     Stock outstanding immediately after the merger or otherwise) issue or sell
     any Convertible Securities, whether or not the rights to exchange or
     convert thereunder are immediately exercisable, and (ii) the consideration
     per share for which the Additional Shares of Common Stock may at any time
     thereafter be issuable pursuant to the terms of such Convertible Securities
     shall be less than the Current Market Price, then, and in each such case,
     effective immediately after such issuance or sale, the number of shares of
     New Common Stock constituting a Stock Unit shall be adjusted to that number
     determined by multiplying the number of shares of New Common Stock
     constituting a Stock Unit immediately prior to such adjustment by a
     fraction (not less than one) (i) the numerator of which shall be the number
     of shares of Common Stock outstanding immediately prior to the issuance or
     sale of such Convertible Securities plus the maximum number of Additional
     Shares of Common Stock necessary to effect the conversion or exchange of
     all such Convertible Securities and (ii) the denominator of which shall be
     the number of shares of Common Stock outstanding immediately prior to such
     issuance or sale plus the number of shares of Common Stock that the minimum
     consideration received and receivable by the Company for the issuance or
     sale of such Convertible Securities and maximum number of Additional Shares
     of Common Stock pursuant to the terms of such Convertible Securities would
     purchase at the Current Market Price. For purposes of this Section 5.1.8,
     the date as of which the Current Market Price shall be computed shall be
     the earliest of (1) the date on which the Company shall enter into a firm
     contract for the issuance or sale of such Convertible Securities and (2)
     the date of actual issuance or sale of such Convertible Securities. No
     adjustment of the number of shares of New Common Stock constituting a Stock
     Unit shall be made under this Section 5.1.8 upon the issuance or sale of
     any Convertible Securities that are issued or sold (x) pursuant to the
     exercise of any warrants or other subscription or purchase rights therefor
     if any such adjustment shall previously have been made upon the issuance or
     sale of such warrants or other rights pursuant to Sections 5.1.6 or 5.1.7
     or (y) upon a merger, consolidation or sale to which Section 5.1.11 applies
     or (z) upon a distribution to which Section 5.1.2 applies.

          5.1.9  Superseding Adjustment of Stock Unit. In case at any time after
                 ------------------------------------
     any adjustment of the number of shares of New Common Stock constituting a
     Stock Unit shall have been made pursuant to Sections 5.1.6, 5.1.7 or 5.1.8
     on the basis of the issuance or sale of warrants or other rights or the
     issuance or sale of Convertible Securities or after any new adjustments of
     the number of shares of New Common Stock constituting a Stock Unit shall
     have been made pursuant to this Section 5.1.9,

          (i)    such warrants or rights, or the right of conversion or exchange
     in such other Convertible Securities shall expire, and all or a portion of
     such warrants or rights or the right of conversion or exchange for all or a
     portion of such Convertible Securities, as the case may be, shall not have
     been exercised, or

          (ii)   the consideration per share of Common Stock issuable pursuant
     to such warrants or rights, or the terms of such Convertible Securities,
     shall be increased solely by virtue of provisions therein contained for an
     automatic increase in such consideration per share upon the arrival of a
     specified date or the happening of a specified event,

                                     xiii
<PAGE>

     then, and in each such case, such previous adjustment shall be rescinded
     and annulled as to any then outstanding Warrants and the Additional Shares
     of Common Stock that were deemed for purposes of the computations set forth
     in Sections 5.1.6, 5.1.7 or 5.1.8 , as the case may be, to have been issued
     or sold by virtue of such adjustment shall no longer be deemed to have been
     issued or sold. Thereupon, a recomputation shall be made of the effect of
     the issuance or sale of such warrants or rights or Convertible Securities
     on the basis of,

          (iii)  treating the number of Additional Shares of Common Stock, if
     any, theretofore issued or issuable, sold or saleable pursuant to the
     previous exercise of such warrants or rights or right of conversion as
     having been issued or sold on the date or dates of such exercise and for
     the consideration actually received and receivable therefor, and

          (iv)   treating any such warrants or rights or any such Convertible
     Securities that then remain outstanding as having been issued or sold
     immediately after the time of such increase of the consideration per share
     for which shares of Common Stock are issuable under such warrants or rights
     or such Convertible Securities;

whereupon a new adjustment of the number of shares constituting a Stock Unit
shall be made for any then outstanding Warrants pursuant to Sections 5.1.6,
5.1.7 or 5.1.8, as the case may be, which such new adjustment shall supersede
the previous adjustment as to any then outstanding Warrants.

          5.1.10 Other Provisions Applicable to Adjustments Under this Section.
                 -------------------------------------------------------------
     The following provisions shall be applicable to the making of adjustments
     of the number of shares of New Common Stock constituting a Stock Unit under
     this Section:

          (i)    Treasury Stock. The sale or other disposition (other than upon
                 --------------
     exercise of any Warrants) of any issued shares of Common Stock owned or
     held by or for the account of the Company shall be deemed an issuance or
     sale of Additional Shares of Common Stock for purposes of this Article 5.
     The Company shall not issue, pay any dividend on or make any distribution
     on shares of Common Stock held in the treasury of the Company. For the
     purposes of this Section 5.1, the number of shares of Common Stock at any
     time outstanding shall not include shares held in the treasury of the
     Company but shall include shares issuable in respect of scrip certificates
     issued in lieu of fractions of shares of Common Stock.

          (ii)   Computation of Consideration. To the extent that any Additional
                 ----------------------------
     Shares of Common Stock or any Convertible Securities or any warrants or
     other rights to subscribe for or purchase any Additional Shares of Common
     Stock or any Convertible Securities shall be issued or sold for a cash
     consideration, the consideration received by the Company therefor shall be
     deemed to be the amount of the cash received by the Company therefor; if
     such Additional Shares of Common Stock or Convertible Securities are
     offered by the Company for subscription, the consideration shall be deemed
     to be the subscription price; or, if such Additional Shares of Common Stock
     or Convertible Securities are issued or sold to underwriters or dealers for
     public offering without a

                                      xiv
<PAGE>

     subscription offering, the consideration shall be deemed to be the initial
     public offering price, in any such case excluding any amounts paid or
     receivable for accrued interest or accrued dividends and reflecting
     deduction of any compensation, discounts or expenses paid or incurred by
     the Company for and in the underwriting of, or otherwise in connection
     with, the issuance or sale thereof. To the extent that such issuance or
     sale shall be for a consideration other than cash and except as herein
     otherwise expressly provided, the amount of such consideration shall be
     deemed to be the fair value of such consideration at the time of such
     issuance or sale as determined in good faith by the Board of Directors of
     the Company. If any Additional Shares of Common Stock or any Convertible
     Securities or any warrants or other rights to subscribe for or purchase
     Additional Shares of Common Stock or Convertible Securities shall be issued
     in connection with any merger in which the Company as the surviving
     corporation issues any securities, the consideration therefor shall be
     deemed to be the fair value of the portion of the assets and business of
     the nonsurviving corporation attributable to such Additional Shares of
     Common Stock, Convertible Securities, warrants or other rights, as
     determined in good faith by the Board of Directors of the Company. The
     consideration for any Additional Shares of Common Stock issuable pursuant
     to any warrants or other rights to subscribe for or purchase the same shall
     be the consideration received by the Company for issuing or selling such
     warrants or other rights, plus the additional consideration payable to the
     Company upon the exercise of such warrants or other rights. The
     consideration for any Additional Shares of Common Stock issuable pursuant
     to the terms of any Convertible Securities shall be the consideration
     received by the Company for issuing or selling any warrants or other rights
     to subscribe for or purchase such Convertible Securities, plus the
     consideration paid or payable to the Company in respect of the subscription
     for or purchase of such Convertible Securities, plus the additional
     consideration, if any, payable to the Company upon the exercise of the
     right of conversion of such Convertible Securities. In the case of the
     issuance at any time of any Additional Shares of Common Stock or
     Convertible Securities in payment or satisfaction of any dividends upon any
     class of stock of the Company other than Common Stock, the Company shall be
     deemed to have received for such Additional Shares of Common Stock or
     Convertible Securities a consideration equal to the amount of such dividend
     so paid or satisfied.

          (iii)  When Adjustments are to be Made. The adjustments required by
                 -------------------------------
     Sections 5.1 shall be made whenever and as often as any specified event
     requiring an adjustment shall occur, except that no adjustment of the
     number of shares of New Common Stock constituting a Stock Unit that would
     otherwise be required shall be made (except in the case of a subdivision of
     shares of the Common Stock as provided for in Section 5.1.1) unless and
     until such adjustment either by itself or with other adjustments not
     previously made increases or decreases the number of shares of New Common
     Stock constituting a Stock Unit immediately prior to the making of such
     adjustment by at least 1%. Any adjustment representing a change of less
     than such minimum amount (except as aforesaid) shall be carried forward and
     made as soon as such adjustment, together with other adjustments required
     by Sections 5.1 and not previously made, would result in such minimum
     adjustment.

                                      xv
<PAGE>

          (iv)    Fractional Interests. In computing adjustments under this
                  --------------------
     Article 5, fractional interests in Common Stock shall be taken into account
     to the nearest one-thousandth of a share.

          (v)     Deferral Of Issuance Upon Exercise. In any case in which this
                  ----------------------------------
     Article 5 shall require that an adjustment to the number of shares of New
     Common Stock constituting a Stock Unit be made effective prior to the
     occurrence of a specified event, the Company may elect to defer until the
     occurrence of such specified event the issuing to the Holder of any Warrant
     Certificate evidencing any Warrant exercised after the time on which the
     adjustment became effective pursuant to Section 5.1.1(i), 5.1.2 or 5.1.6 of
     the New Common Stock over and above the New Common Stock issuable upon such
     exercise on the basis of the number of shares of New Common Stock
     constituting a Stock Unit in effect prior to such adjustment.

          5.1.11  Changes in Common Stock. In case at any time or from time to
                  -----------------------
     time the Company shall be a party to or shall otherwise engage in any
     transaction or series of related transactions constituting (x) a merger of
     the Company into, a consolidation of the Company with, or a sale of all or
     substantially all of the Company's assets to, any other Person (a "Non-
     Surviving Transaction") or (y) any merger of another person into the
     Company in which the previously outstanding shares of Common Stock shall be
     canceled, reclassified, converted or changed into or exchanged for
     securities of the Company or other property (including cash) or any
     combination of the foregoing (a "Surviving Transaction", and along with a
     Non-Surviving Transaction, a "Transaction"), then, as a condition to the
     consummation of such Transaction, the Company shall, or, in the case of a
     Non-Surviving Transaction, the Company shall cause such other Person to
     execute and deliver to each Holder a written instrument providing that (a)
     during the period any Warrant is exercisable, on such terms and subject to
     such conditions as shall be as nearly equivalent as may be practicable to
     the provisions set forth in this Agreement, the Holder of the Warrant
     Certificate evidencing such Warrant, upon the exercise thereof at any time
     on or after the consummation of such Transaction, shall be entitled to
     receive, and such Warrant Certificate shall thereafter represent the right
     to receive, in lieu of the New Common Stock issuable upon such exercise
     prior to such consummation, only the securities or other property
     ("Substituted Property") that would have been receivable upon such
     Transaction by a holder of the number of shares of New Common Stock that
     would have been issued upon exercise of such Warrant if such Holder had
     exercised such Warrant in full immediately prior to such Transaction,
     assuming such holder of New Common Stock (i) is not a Person with which the
     Company consolidated or into which the Company merged or which merged into
     the Company or to which such sale or transfer was made, as the case may be
     ("Constituent Person"), or an Affiliate of a Constituent Person and (ii)
     failed to exercise his rights of election, if any, as to the kind or amount
     of securities, cash and other property receivable upon such Transaction
     (provided that if the kind or amount of securities, cash and other property
     receivable upon such Transaction is not the same for each share of Common
     Stock held immediately prior to such Transaction by other than a
     Constituent Person or an Affiliate thereof and in respect of which such
     rights of election shall not have been

                                      xvi
<PAGE>

     exercised ("non-electing share"), then, for the purposes of this Section
     5.1.11, the kind and amount of securities, cash and other property
     receivable upon such Transaction by each non-electing share shall be deemed
     to be the kind and amount so receivable per share by a plurality of the
     non-electing shares), and (b) the rights and obligations of the Company and
     the holders in respect of Substituted Property shall be as nearly
     equivalent as may be practicable to the rights and obligations of the
     Company and Holders in respect of Underlying Common Stock hereunder as set
     forth in Section 3.1 hereof and elsewhere herein. Such written instrument
     shall provide for adjustments which, for events subsequent to the effective
     date of such written instrument, shall be as nearly equivalent as may be
     practicable to the adjustments provided for in this Article 5.

The above provisions of the Section 5.1.11, shall similarly apply to successive
Transactions.  Notwithstanding the foregoing, in the event of a Non-Surviving
Transaction in which none of the Stockholders of the Company are to receive
equity securities of the surviving entity and not all of the Warrants have been
exercised prior to the consummation of the Non-Surviving Transaction, then the
surviving entity may pay the Holders the Substituted Property allocable to such
Warrants reduced by the Exercise Price thereof and cancel the Warrants.

          5.1.12  Other Events. If any event occurs as to which the foregoing
                  ------------
     provisions of this Article 5 are not strictly applicable or, if strictly
     applicable, would not, in the good faith judgement of the Board of
     Directors of the Company fairly and adequately protect the purchase rights
     of the Warrants in accordance with the essential intent and principles of
     such provisions, then such Board of Directors of the Company shall make
     such adjustments in the application of such provisions, in accordance with
     such essential intent and principles, as shall be reasonably necessary, in
     the good faith opinion of such Board of Directors of the Company to protect
     such purchase rights as aforesaid, but in no event shall any such
     adjustment have the effect of increasing the Exercise Price or Per Share
     Exercise Price or decreasing the number of shares of New Common Stock
     subject to purchase upon exercise of any Warrant.

          5.1.13  Certain Adjustment Events. The Company agrees that before
                  -------------------------
     taking any action that would cause an adjustment of the Per Share Exercise
     Price to an amount that is less than the then par value (if any) per share
     of the New Common Stock, the Company will take any corporate action which
     may be necessary in order that the Company may validly and legally issue
     fully paid and nonassessable shares of New Common Stock at the Per Share
     Exercise Price as so adjusted.

          5.1.14  Optional Tax Adjustment. The Company may at its option, at any
                  -----------------------
     time during the term of the Warrants, increase the number of shares of New
     Common Stock which constitute a Stock Unit, in addition to those changes
     required by this Sections 5.1, as deemed advisable by the Board of
     Directors of the Company, in order that any event treated for Federal
     income tax purposes as a dividend of stock or stock rights shall not be
     taxable to the recipients.

     5.2  Notice of Adjustment.  Whenever the number of shares of New Common
          --------------------
Stock issuable upon the exercise of each Warrant is to be adjusted, or the
Exercise Price is to be

                                     xvii
<PAGE>

adjusted, or the Company shall compute the adjustment in accordance with Section
5.1 shall forthwith mail or cause the Warrant Agent to mail by first class mail,
postage prepaid, to each Holder promptly after such adjustment becomes effective
a notice of such adjustment or adjustments and shall deliver to each Holder and
any Warrant Agent a certificate of a firm of independent public accountants
selected by the Board of Directors of the Company (who may be the regular
accountants employed by the Company) setting forth the number of shares of New
Common Stock issuable upon the exercise of each Warrant after such adjustment
and setting forth a brief statement of the facts requiring such adjustment and
the computation by which such adjustment was made. As provided in Section 8.1,
the Warrant Agent (if a Person other than the Company) shall be entitled to rely
on such certificate and shall be under no duty or responsibility with respect to
any such certificate, except to exhibit the same from time to time to any Holder
desiring an inspection thereof during reasonable business hours. The Warrant
Agent (if a Person other than the Company) shall not at any time be under any
duty or responsibility to any Holders to determine whether any facts exist that
may require any adjustment of the number of shares of New Common Stock issuable
on exercise of the Warrants, or of the Exercise Price, or with respect to the
nature or extent of any such adjustment when made, or with respect to the method
employed in making such adjustment or the validity or value (or the kind or
amount) of any shares of New Common Stock which may be issuable on exercise of
the Warrants. The Warrant Agent (if a Person other than the Company) shall not
be responsible for any failure of the Company to make any cash payment or to
issue, transfer or deliver any shares of New Common Stock or stock certificates
or other common stock or properties upon the exercise of any Warrant.

     5.3  Statement on Warrants. Irrespective of any adjustment in the number or
          ---------------------
kind of shares issuable upon the exercise of the Warrants, Warrant Certificates
theretofore or thereafter issued may continue to express the same price and
number and kind of shares initially issuable pursuant to this Agreement.

     5.4  Fractional Interest. The Company may, but shall not be required to
          -------------------
issue fractional shares of New Common Stock on the exercise of Warrants. If more
than one Warrant shall be presented for exercise in full at the same time by the
same Holder, the number of full shares of New Common Stock which shall be
issuable upon such exercise thereof shall be computed on the basis of the
aggregate number of shares of New Common Stock purchasable on exercise of the
Warrants so presented. If any fraction of a share of New Common Stock would,
except for the provisions of this Section 5.4 be issuable on the exercise of any
Warrant (or specified portion thereof), the Company may, at its option, but
shall not be obligated to, pay an amount in cash calculated by it to be equal to
the then Current Market Price per share of New Common Stock multiplied by such
fraction computed to the nearest whole cent.

     5.5  Transactions Relating to Common Stock.  If the Company in any manner
          -------------------------------------
subdivides (by stock split, stock dividend or otherwise) or combines (by reverse
stock split or otherwise) the outstanding shares of Common Stock, the Company
shall subdivide or combine, as the case may be, the outstanding shares of New
Common Stock to the same extent, share and share alike.  The Company shall pay
any dividend or distribution on its Common Stock on shares of New Common Stock
and Common Stock, share and share alike; provided, however, that in the case of
dividends payable in shares of New Common Stock or Common Stock of the Company,

                                     xviii
<PAGE>

or options, warrants or rights to acquire shares of New Common Stock or Common
Stock, or securities convertible into or exchangeable for shares of New Common
Stock or Common Stock, the shares, options, warrants, rights or securities so
payable shall be payable in shares of, or options, warrants or rights to acquire
or securities convertible into or exchangeable for, Common Stock of the Company
of the same class upon which the dividend or distribution is being paid.  If the
Company elects to make a tender offer for its Common Stock, the Company shall,
and shall cause any of its subsidiaries to, make such tender offer for its
Common Stock for shares of New Common Stock and Common Stock, share and share
alike.

6.   WARRANT TRANSFER BOOKS.

     The Warrant Certificates evidencing the Warrants shall be issued in
registered form only.  The Company shall cause to be kept at the office of the
Warrant Agent the Warrant Register in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Warrant Certificates and of transfers or exchanges of Warrant Certificates as
herein provided.

     At the option of the Holder, Warrant Certificates may be exchanged at the
office of the Warrant Agent upon payment of the charges hereinafter provided.
Whenever any Warrant Certificates are so surrendered for exchange, the Company
shall execute, and the Warrant Agent shall countersign and deliver, the Warrant
Certificates of the same tenor and evidencing the same number of Warrants that
the Holder making the exchange is entitled to receive.

     All Warrant Certificates issued upon any registration of transfer or
exchange of Warrant Certificates shall be the valid obligations of the Company,
evidencing the same obligations, and entitled to the same benefits under this
Agreement, as the Warrant Certificates surrendered for such registration of
transfer or exchange.

     Every Warrant Certificate surrendered for registration of transfer or
exchange shall (if so required by the Company or the Warrant Agent) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Warrant Agent, duly executed by the Holder
thereof or his attorney duly authorized in writing.

     No service charge shall be made for any registration of transfer or
exchange of Warrant Certificates; provided, however, the Company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Warrant Certificates.

     Any Warrant Certificate when duly endorsed in blank shall be deemed
negotiable and when a Warrant Certificate shall have been so endorsed, the
Holder thereof may be treated by the Company, the Warrant Agent and all other
Persons dealing therewith as the absolute owner thereof for any purpose and as
the Person entitled to exercise the rights represented thereby, or to the
transfer thereof on the register of the Company maintained by the Warrant Agent,
any notice to the contrary notwithstanding; but until such transfer on such
register, the Company and the Warrant Agent may treat the registered Holder
thereof as the owner for all purposes.

                                      xix
<PAGE>

7.   WARRANT HOLDERS.

     7.1  No Stockholder Rights. Prior to the exercise of the Warrants, no
          ---------------------
Warrant Certificate or Warrant evidenced thereby shall entitle the Holder
thereof to any of the rights of a holder of Common Stock, including, without
limitation, the right to vote at, or to receive notice of, any meeting of
stockholders of the Company; the consent of any such Holder shall not be
required with respect to any action or proceeding of the Company; no such
Holder, by reason of the ownership or possession of a Warrant or the Warrant
Certificate representing the same, shall have any right to receive any cash
dividends, stock dividends, allotments or rights or other distributions (except
as specifically provided herein), paid, allotted or distributed or distributable
to the stockholders of the Company prior to the date of the exercise of such
Warrant; and no such Holder shall have any right not expressly conferred by the
Warrant or Warrant Certificate held by such Holder.

     7.2  Rights of Action.  All rights of action in respect of this Agreement
          ----------------
are vested in the Holders of the Warrant Certificates, and any Holder of any
Warrant Certificate, without the consent of the Warrant Agent or the Holder of
any other Warrant Certificate, may, in such Holder's own behalf and for such
Holder's own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company suitable to enforce, or otherwise in respect
of, such Holder's right to exercise such Holder's Warrants in the manner
provided in this Agreement.

     7.3  Treatment of Holders of Warrant Certificates. Every Holder of a
          --------------------------------------------
Warrant Certificate, by accepting the same, consents and agrees with the
Company, the Warrant Agent and with every subsequent holder of such Warrant
Certificate that, prior to due presentment of such Warrant Certificate for
registration of transfer, the Company and the Warrant Agent may treat the Person
in whose name the Warrant Certificate is registered as the owner thereof for all
purposes and as the Person entitled to exercise the rights granted under the
Warrants, and neither the Company, the Warrant Agent nor any agent thereof shall
be affected by any notice to the contrary.

8.   WARRANT AGENT.

     8.1  Nature of Duties and Responsibilities Assumed. The Company may, after
          ---------------------------------------------
the Effective Date, appoint a Person to act as the Warrant Agent on its behalf,
as set forth in this Agreement. The Company, as the initial Warrant Agent hereby
accepts, and any subsequent Warrant Agent shall accept, the appointment as agent
of the Company and the Company and any subsequent Warrant Agent agrees to
perform that agency upon the terms and conditions set forth in this Agreement,
in the Warrant Certificates or as the Company may hereafter prescribe, by all of
which the Company and the Holders of Warrant Certificates, by their acceptance
thereof, shall be bound; provided, however, that the terms and conditions
contained in the Warrant Certificates are subject to and governed by this
Agreement or any other terms and conditions hereafter prescribed by the Company.
The Warrant Agent shall not by countersigning Warrant Certificates or by any
other act hereunder be deemed to make any representations as to validity or
authorization of (i) the Warrants or the Warrant Certificates (except as to its
countersignature thereon), (ii) any securities or other property delivered upon
exercise of any Warrant, (iii) the

                                      xx
<PAGE>

computation of the number or kind or amount of stock or other securities or
other property deliverable upon exercise of any Warrant, or (iv) the
independence of any firm of public accountants or the correctness of the
representations of the Company made in such certificates that the Warrant Agent
receives. The Warrant Agent (if a Person other than the Company) shall not at
any time be under any duty or responsibility to any Holder to determine whether
any facts exist that may require an adjustment pursuant to Article 5 hereof, or
with respect to the nature or extent of any adjustment when made, or with
respect to the method employed herein in making the same. The Warrant Agent
shall not be accountable with respect to the validity or value (or the kind or
amount) of any shares of Common Stock or of any securities or property which may
at any time be issued or delivered upon the exercise of any Warrant or upon any
adjustment pursuant to Article 5 hereof, and it makes no representation with
respect thereto. The Warrant Agent shall not be responsible for any failure of
the Company to make any cash payment or to issue, transfer or deliver any shares
of Common Stock or stock certificates or other securities or property upon the
surrender of any Warrant Certificate for the purpose of exercise or upon any
adjustment pursuant to Article 5 hereof, or to comply with any of the covenants
of the Company contained in Article 5 hereof.

     The Warrant Agent (if a Person other than the Company) shall not (i) be
liable for any recital or statement of fact contained herein or in the Warrant
Certificates or for any action taken, suffered or omitted by it in good faith on
the belief that any Warrant Certificate or any other documents or any signatures
are genuine or properly authorized, (ii) be responsible for any failure on the
part of the Company to comply with any of its covenants and obligations
contained in this Agreement or in the Warrant Certificates, or (iii) be liable
for any act or omission in connection with this Agreement or the Warrant
Certificates except for its own negligence or willful misconduct.

     The Warrant Agent is hereby authorized to accept instructions with respect
to the performance of its duties hereunder from the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Financial Officer, any Vice
President or the Secretary of the Company and to apply to any such officer for
instructions (which instructions will be promptly given in writing when
requested) and the Warrant Agent shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with the instructions of
any such officer, but the Warrant Agent may accept further or additional
evidence as it may deem reasonable.

     The Warrant Agent may execute and exercise any of the rights and powers
hereby vested in it or perform any duty hereunder either by itself or by or
through its attorneys, agents or employees, provided reasonable care has been
exercised in the selection and in the continued employment of any such attorney,
agent or employee.  The Warrant Agent shall not be under any obligation or duty
to institute, appear in or defend any action, suit or legal proceeding in
respect hereof, unless first indemnified to its satisfaction; provided, however,
that this provision shall not affect the power of the Warrant Agent to take such
action as the Warrant Agent may consider proper, whether with or without such
indemnity.  The Warrant Agent (if a Person other than the Company) shall
promptly notify the Company in writing of any claim made or action, suit or
proceeding instituted against it arising out of or in connection with this
Agreement.

                                      xxi
<PAGE>

     The Warrant Agent shall act solely as agent of the Company hereunder and
does not assume any obligation or relationship of agency or trust for or with
any of the Holders or any beneficial owners of Warrants.  The Warrant Agent (if
a Person other than the Company) shall not be liable except for the failure to
perform such duties as are specifically set forth herein or as specifically set
forth in the Warrant Certificates, and no implied covenants or obligations shall
be read into this Agreement against the Warrant Agent (if a Person other than
the Company) whose duties and obligations shall be determined solely by the
express provisions hereof or the express provisions of the Warrant Certificates.

     8.2  Right to Consult Counsel.  The Warrant Agent may at any time consult
          ------------------------
with legal counsel satisfactory to it (who may be legal counsel for the
Company), and the Warrant Agent shall incur no liability or responsibility to
the Company or to any Holder for any action taken, suffered or omitted by it in
good faith in accordance with the opinion or advice of such counsel.

     8.3  Compensation and Reimbursement. If the Warrant Agent is a Person other
          ------------------------------
than the Company, the Company agrees to pay to such Warrant Agent from time to
time compensation for all services rendered by it hereunder as the Company and
the Warrant Agent may agree from time to time, and to reimburse the Warrant
Agent for reasonable expenses and disbursements incurred in connection with the
execution and administration of this Agreement (including the reasonable
compensation and the expenses of its counsel), and further agrees to indemnify
the Warrant Agent for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder.

     8.4  Warrant Agent May Hold Company Securities.  The Warrant Agent and any
          -----------------------------------------
stockholder, director, officer  or employee of the Warrant Agent may buy, sell
or deal in  any of the Warrants or other securities of the Company or its
Affiliates or become pecuniarily interested in transactions in which the Company
or its Affiliates may be interested, or contract with or lend money to the
Company or its Affiliates or otherwise act as fully and freely as though it were
not the Warrant Agent under this Agreement.  Nothing herein shall preclude the
Warrant Agent from acting in any other capacity for the Company or for any other
legal entity.

     8.5  Resignation and Removal; Appointment of Successor.
          -------------------------------------------------

          8.5.1  The Warrant Agent may resign its duties and be discharged from
     all further duties and liability hereunder (except liability arising as a
     result of the Warrant Agent's own negligence or willful misconduct) after
     giving one month's prior written notice to the Company. The Company may
     remove the Warrant Agent upon one month's written notice, and the Warrant
     Agent shall thereupon in like manner be discharged from all further duties
     and liabilities hereunder, except as aforesaid. The Warrant Agent shall, at
     the Company's expense, cause to be mailed (by first-class mail, postage
     prepaid) to each Holder of a Warrant Certificate at his last address as
     shown on the Warrant Register a copy of said notice of resignation or
     notice of removal, as the case may be. Upon such resignation or removal,
     the Company shall appoint in writing a new Warrant Agent. If

                                     xxii
<PAGE>

     the Company shall fail to make such appointment within a period of 30 days
     after it has been notified in writing of such resignation by the resigning
     Warrant Agent or after such removal, then the Holder of any Warrant
     Certificate may apply to any court of competent jurisdiction for the
     appointment of a new Warrant Agent. Any new Warrant Agent (other than the
     Company), whether appointed by the Company or by such a court, shall be a
     corporation doing business under the laws of the United States or any state
     thereof, in good standing and having a combined capital and surplus of not
     less than $50,000,000. The combined capital and surplus of any such new
     Warrant Agent shall be deemed to be the combined capital and surplus as set
     forth in the most recent annual report of its condition published by such
     Warrant Agent prior to its appointment, provided that such reports are
     published at least annually pursuant to law or to the requirements of a
     Federal or state supervising or examining authority. After acceptance in
     writing of such appointment by the new Warrant Agent, it shall be vested
     with the same powers, rights, duties and responsibilities as if it had been
     originally named herein as the Warrant Agent, without any further
     assurance, conveyance, act or deed; but if for any reason it shall be
     reasonably necessary or expedient to execute and deliver any further
     assurance, conveyance, act or deed, the same shall be done at the
     reasonable expense of the Company and shall be legally and validly executed
     and delivered by the resigning or removed Warrant Agent. Not later than the
     effective date of any such appointment, the Company shall file notice
     thereof with the resigning or removed Warrant Agent. Failure to give any
     notice provided for in this Section 8.5, however, or any defect therein,
     shall not affect the legality or validity of the resignation of the Warrant
     Agent or the appointment of a new Warrant Agent, as the case may be.

          8.5.2  Any corporation into which the Warrant Agent or any new Warrant
     Agent may be merged or any corporation resulting from any consolidation to
     which the Warrant Agent or any new Warrant Agent shall be a party, shall be
     a successor Warrant Agent under this Agreement without any further act,
     provided that such corporation would be eligible for appointment as
     successor to the Warrant Agent under the provisions of Section 8.5.1. Any
     such successor Warrant Agent shall promptly cause notice of its succession
     as Warrant Agent to be mailed (by first-class mail, postage prepaid) to
     each Holder of a Warrant Certificate at such Holder's last address as shown
     on the Warrant Register.

     8.6  Application of Funds Upon Exercise of Warrants. Any funds delivered to
          ----------------------------------------------
the Warrant Agent upon exercise of any Warrants shall be held by the Warrant
Agent in trust for the Company. The Warrant Agent shall promptly deliver and pay
to or upon the order of the Company all funds received by it upon the exercise
of any Warrants by bank wire transfer to an account designated by the Company or
as it otherwise may be directed in writing by the Company.

9.  COVENANTS OF THE COMPANY.

     9.1  Reservation of Common Stock for Issuance on Exercise of Warrants.  The
          ----------------------------------------------------------------
Company covenants that it will at all times reserve and keep available, free
from pre-emptive rights, out of its authorized but unissued Common Stock, solely
for the purpose of issuance upon

                                     xxiii
<PAGE>

exercise of Warrants as herein provided, such number of shares of Common Stock
as shall then be issuable upon the exercise of all outstanding Warrants. The
Company covenants that all shares of Common Stock which shall be so issuable
shall, upon such issuance, be duly and validly issued and fully paid and
nonassessable.

     The Company hereby authorizes and directs its current and future transfer
agents for the Common Stock at all times to reserve stock certificates for such
number of authorized shares as shall be requisite for such purpose.  The Warrant
Agent is hereby authorized to requisition from time to time from any such
transfer agents stock certificates required to honor outstanding Warrants upon
exercise thereof in accordance with the terms of this Agreement, and the Company
hereby authorizes and directs such transfer agents to comply with all such
requests of the Warrant Agent.  The Company will supply such transfer agents
with duly executed stock certificates for such purposes.  Promptly after the
date of expiration of all of the Warrants, the Warrant Agent shall certify to
the Company the aggregate number of Warrants then outstanding, and thereafter no
shares shall be reserved in respect of such Warrants.

     9.2  Notices to Holders.  In case the Company shall propose (i) to pay any
          ------------------
dividend payable in stock of any class to the holders of its Common Stock or to
make any other distribution to the holders of its Common Stock for which an
adjustment is required to be made pursuant to Article 5; (ii) to offer to the
holders of its Common Stock rights to subscribe for or to purchase any
Convertible Securities or Additional Shares of Common Stock or shares of stock
of any class or any other securities, rights or options; (iii) to effect any
reclassification of its Common Stock; (iv) to effect any capital reorganization;
(v) to effect any self-tender offer, consolidation, merger or sale, transfer or
other disposition of all or substantially all its property, assets or business;
(vi) to effect the liquidation, dissolution or winding up of the Company; (vii)
to hold an annual, regular or special meeting of the holders of its Common Stock
(a "Stockholders' Meeting"), then, and in each such case, the Company shall give
to each Holder of a Warrant Certificate, in accordance with Section 10.5, a
notice of such proposed action.  Such notice shall specify the date on which a
record is to be taken for the purposes of such dividend, distribution or rights
or the date on which such reclassification, reorganization, self-tender offer,
consolidation, merger, sale, transfer, disposition, liquidation, dissolution or
winding up is to become effective and the date of participation therein by the
holders of Common Stock, if any such date is to be fixed.  Such notice shall be
given in the case of any action covered by clause (i) or (ii) above, at least 20
days prior to the record date for determining holders of the Common Stock for
purposes of such action and, in the case of any action covered by clauses (iii)
through (vii), at least 20 days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of Common Stock,
whichever shall be the earlier.  The Company will allow each Holder of Warrant
Certificates to attend any Stockholders' Meeting held prior to the Expiration
Date. If the Company fails to give such notices at such times, the Expiration
Date shall be extended for such time as may be necessary or appropriate to allow
any Holder to make any desired transfers of the Warrants and/or to exercise the
Warrants.

                                     xxiv
<PAGE>

     9.3  Reports to Holders.
           -----------------

          (a)  So long as the Warrants are outstanding, the Company will supply
without cost to each Holder and file with the Warrant Agent, within 15 days
after the Company is required to file the same with the SEC, copies of the
annual reports, quarterly reports and other documents which the Company may be
required to file with the SEC pursuant to Section 12(a), 13(c) or 15(d) of the
Exchange Act.

          (b)  If the Company is not required to file with the SEC such reports
and other information and documents referred to in Section 9.3(a), the Company
shall provide in writing, upon the written request of a Holder, all information
required by Rule 144A(d)(4)(i) of the General Regulations promulgated by the
Commission under the Securities Act ("Rule 144A Information"). The Company's
obligations under this Section 9.3(b) shall at all times be contingent upon the
Purchasers obtaining from the prospective transferee of the Warrant or shares of
Underlying Common Stock. A written agreement to take all reasonable precautions
to safeguard the Rule 144A Information from disclosure to anyone other than a
person who will assist such transferee in evaluating the Warrant.

          (c)  The provisions of this Section 9.3 will terminate on the
Expiration Date.

10.  MISCELLANEOUS.

     10.1  Money and Other Property Deposited with the Warrant Agent.  Any
           ---------------------------------------------------------
moneys, securities or other property which at any time shall be deposited by the
Company or on its behalf with the Warrant Agent pursuant to this Agreement shall
be and are hereby assigned, transferred and set over to the Warrant Agent in
trust for the purpose for which such moneys, securities or other property shall
have been deposited; provided, however, that such moneys, securities or other
property need not be segregated from other funds, securities or other property
except to the extent required by law. The Warrant Agent shall distribute any
money deposited with it for payment and distribution to the Holders by mailing
by first-class mail a check in such amount as is appropriate, to each such
Holder at the address shown on the Warrant Register, or as it may be otherwise
directed in writing by such Holder, upon surrender of such Holder's Warrant
Certificates or shares of Underlying Common Stock, as the case may be. Any money
deposited with the Warrant Agent for payment and distribution to the Holders
that remains unclaimed for two years after the date the money was deposited with
the Warrant Agent shall be paid to the Company upon its request therefor.

     10.2  Payment of Taxes. The Company shall pay all taxes and other
           ----------------
governmental charges that may be imposed on the Company or on the Warrants or on
any securities deliverable upon exercise of the Warrants with respect thereto.
The Company shall not be required, however, to pay any tax or other charge
imposed in connection with any transfer involved in the issue of any certificate
for shares of Common Stock or other securities underlying the Warrants or
payment of cash to any Person other than the Holder of a Warrant Certificate
surrendered upon the exercise of a Warrant, and in case of such transfer, the
Warrant Agent and the Company shall not be required to issue any stock
certificate or pay any cash until such tax or charge has

                                      xxv
<PAGE>

been paid or it has been established to the Warrant Agent's and the Company's
satisfaction that no such tax or other charge is due.

     10.3  Surrender of Certificates.  Any Warrant Certificate surrendered for
           -------------------------
exercise shall, if surrendered to the Company, be delivered to the Warrant
Agent, and all Warrant Certificates surrendered or so delivered to the Warrant
Agent shall be promptly canceled by such Warrant Agent and shall not be reissued
by the Company.  The Warrant Agent shall destroy such canceled Warrant
Certificates and deliver its certificate of destruction to the Company unless
the Company shall otherwise direct.

     10.4  Mutilated, Destroyed, Lost and Stolen Warrant Certificates. If (a)
           ----------------------------------------------------------
any mutilated Warrant Certificate is surrendered to the Warrant Agent or (b) the
Company and the Warrant Agent receive evidence to their satisfaction of the
destruction, loss or theft of any Warrant Certificate, and there is delivered to
the Company and the Warrant Agent (if a Person other than the Company) such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Company or the Warrant Agent that such
Warrant Certificate has been acquired by a bona fide purchaser, the Company
shall execute and upon its written request the Warrant Agent shall countersign
and deliver, in exchange for any such mutilated Warrant Certificate or in lieu
of any such destroyed, lost or stolen Warrant Certificate, a new Warrant
Certificate of like tenor and evidencing a like aggregate number of Warrants.

     Upon the issuance of any new Warrant Certificate under this Section 10.4,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and other
expenses (including the reasonable fees and expenses of the Warrant Agent and of
counsel to the Company) in connection therewith.

     Every new Warrant Certificate executed and delivered pursuant to this
Section 10.4 in lieu of any destroyed, lost or stolen Warrant Certificate shall
constitute an original contractual obligation of the Company, whether or not the
destroyed, lost or stolen Warrant Certificate shall be at any time enforceable
by anyone, and shall be entitled to the benefits of this Agreement equally and
proportionately with any and all other Warrant Certificates duly executed and
delivered hereunder.

     The provisions of this Section 10.4 are exclusive and shall preclude (to
the extent lawful) all other rights or remedies with respect to the replacement
of mutilated, destroyed, lost, or stolen Warrant Certificates.

     10.5  Notices. Any notice, demand or delivery authorized or required by
           -------
this Agreement shall be given or made by telex, telecopy, courier or U.S. Mail
or in writing and telexed, telecopied, mailed or delivered at such Holder's
(other than the Initial Holder) address shown on the Warrant Register and to the
Company or the Initial Holder as follows:

     If to the Company:

     RF Monolithics, Inc.
     4347 Sigma Road

                                     xxvi
<PAGE>

     Dallas, Texas  75244
     Attn: President
     Telephone No.: (972) 233-2903
     Telecopy No.:  (972) 404-9476

     with a copy to (which shall not constitute notice):

     Worsham Forsythe Wooldridge LLP
     1601 Bryan Street, 30/th/ Floor
     Attn:  Steve Morton
     Telephone No.: (214) 979-3068
     Telecopy No.:  (214) 880-0011

     If to the Initial Holder:

     Wells Fargo Business Credit, Inc.
     4975 Preston Park Blvd., Suite 280
     Plano, Texas 75093
     Attn:  Terrance O. McKinney
     Telephone No.:  (972) 599-5306
     Telecopy No.:   (972) 867-7838

     with a copy to (which shall not constitute notice):

     Winstead Sechrest & Minick P.C.
     5400 Renaissance Tower
     1201 Elm Street
     Dallas, Texas  75270
     Attn:  Michael W. Hilliard, Esq.
     Telephone:  (214) 745-5843
     Telecopy:   (214) 745-5390

or such other address as shall have been furnished to the party giving or making
such notice, demand or delivery.

     10.6  APPLICABLE LAW.  THIS AGREEMENT, THE WARRANT CERTIFICATES AND EACH
           --------------
WARRANT EVIDENCED THEREBY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS.

     10.7  Persons Benefiting.  This Agreement shall be binding upon and inure
           ------------------
to the benefit of the Company and any Warrant Agent appointed in accordance with
the terms hereof, and their respective successors, assigns, beneficiaries,
executors and administrators, and the Holders from time to time of the Warrant
Certificates. Nothing in this Agreement is intended or shall be construed to
confer upon any Person, other than the Company, the Warrant Agent, the

                                     xxvii
<PAGE>

Holders of the Warrant Certificates, any right, remedy or claim under or by
reason of this Agreement or any part hereof.

     10.8  Counterparts.  This Agreement may be executed in any number of
           ------------
counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.

     10.9  Amendments.  This Agreement may be amended by the parties hereto only
           ----------
with the consent of the Company and Holders of Warrant Certificates evidencing a
majority of the then outstanding Warrants.

     The Warrant Agent shall join with the Company in any amendment unless such
amendment affects the Warrant Agent's own rights, duties or immunities
hereunder, in which case the Warrant Agent may, but shall not be required to,
join in such amendment.  Upon execution of any amendment pursuant to this
Section 10.9, such amendment shall be considered a part of this Agreement for
all purposes and every Holder of a Warrant Certificate theretofore or thereafter
countersigned and delivered hereunder shall be bound thereby.

     10.10  Waivers.  The Company may take any action herein prohibited, or omit
            -------
to perform any act herein required to be performed by it, only if (i) the
Company has obtained the written consent of a majority of Holders, and (ii) any
consent required pursuant to Section 10.9 has been obtained.

     10.11  Headings.  The descriptive headings of the several Sections of this
            --------
Agreement are inserted for convenience and shall not control or affect the
meaning or construction of any of the provisions hereof.

     10.12  Inspection.  The Warrant Agent shall cause a copy of this Agreement
            ----------
to be available at all reasonable times at the office of the Warrant Agent for
inspection by the Holder of any Warrant Certificate. The Warrant Agent may
require such Holder to submit his Warrant Certificate for inspection by it.

     10.13  Successor to the Company.  So long as Warrants remain outstanding,
            ------------------------
the Company will not enter into any Non-Surviving Transaction unless the
acquirer shall expressly assume by a supplemental agreement, executed and
delivered to the Warrant Agent, in form reasonably satisfactory to the Warrant
Agent, the due and punctual performance of every covenant of this Agreement on
the part of the Company to be performed and observed and shall have provided for
exercise rights in accordance with Section 5.1.11; upon the consummation of such
Non-Surviving Transaction, the acquirer shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this Agreement
with the same effect as if such acquirer had been named as the Company herein.

     10.14  Entire Agreement. This Agreement and the Registration Rights
            ----------------
Agreement sets forth the entire agreement of the parties hereto and the Holders
as to the subject matter hereof and supersedes all previous agreements among all
or some of the parties hereto and the Holders, whether written, oral or
otherwise.

                                    xxviii
<PAGE>

     IN WITNESS WHEREOF, the parties have caused this Warrant Agreement to be
duly authorized, executed and delivered as of the day and year first above
written.

                              RF MONOLITHICS, INC., as the Company

                              By:   /s/ David M. Kirk
                                 ------------------------------------
                                    Name: David M. Kirk
                                         ----------------------------
                                    Title: President
                                           --------------------------

                              WELLS FARGO BUSINESS CREDIT, INC.,
                              as the Initial Holder

                              By:   /s/ Terrance O. McKinney
                                 ------------------------------------
                                    Name: Terrance O. McKinney
                                          ---------------------------
                                    Title: Assistant Vice President
                                           --------------------------

                                     xxix<PAGE>

                                                                   Exhibit 10.47
                                                                   -------------

                         CREDIT AND SECURITY AGREEMENT

                               Table of Contents
                               -----------------

<TABLE>
<S>                                                                                                      <C>
ARTICLE I - Definitions.................................................................................  1
            -----------
         Section 1.1       Definitions..................................................................  1
         Section 1.2       Cross References............................................................. 13

ARTICLE II - Amount and Terms of the Credit Facility.................................................... 13
             ---------------------------------------
         Section 2.1       Revolving Advances........................................................... 13
         Section 2.2       Interest; Minimum Charge; Default Interest; Participations; Usury............ 14
         Section 2.3       Fees......................................................................... 15
         Section 2.4       Computation of Interest and Fees; When Interest Due and Payable.............. 15
         Section 2.5       Capital Adequacy............................................................. 15
         Section 2.6       Voluntary Prepayment; Reduction of the Maximum Line;
                           Termination of the Credit Facility by the Borrower........................... 16
         Section 2.7       Termination and Line Reduction Fees; Waiver of Termination Fees.............. 16
         Section 2.8       Mandatory Prepayment......................................................... 17
         Section 2.9       Payment...................................................................... 17
         Section 2.10      Payment on Non-Banking Days.................................................. 17
         Section 2.11      Use of Proceeds.............................................................. 17
         Section 2.12      Liability Records............................................................ 17
         Section 2.13      Automatic Renewal............................................................ 17
         Section 2.14      Facility Subject to Eximbank Rules........................................... 18

ARTICLE III - Security Interest; Occupancy; Setoff...................................................... 18
              ------------------------------------
         Section 3.1       Grant of Security Interest................................................... 18
         Section 3.2       Notification of Account Debtors and Other Obligors........................... 18
         Section 3.3       Assignment of Insurance...................................................... 19
         Section 3.4       Occupancy.................................................................... 19
         Section 3.5       License...................................................................... 19
         Section 3.6       Financing Statement.......................................................... 19
         Section 3.7       Setoff....................................................................... 20

ARTICLE IV - Conditions of Lending...................................................................... 20
             ---------------------
         Section 4.1       Conditions Precedent to the Initial Revolving Advance........................ 20
         Section 4.2       Conditions Precedent to All Revolving Advances............................... 22

ARTICLE V - Representations and Warranties.............................................................. 23
            ------------------------------
</TABLE>

                                      -i-
<PAGE>

<TABLE>
         <S>                                                                                               <C>
         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................ 23
         Section 5.3       Legal Agreements............................................................... 23
         Section 5.4       Subsidiaries................................................................... 23
         Section 5.5       Financial Condition; No Adverse Change......................................... 23
         Section 5.6       Litigation..................................................................... 24
         Section 5.7       Regulation U................................................................... 24
         Section 5.8       Taxes.......................................................................... 24
         Section 5.9       Titles and Liens............................................................... 24
         Section 5.10      Plans.......................................................................... 24
         Section 5.11      Default........................................................................ 25
         Section 5.12      Environmental Matters.......................................................... 25
         Section 5.13      Submissions to Lender.......................................................... 26
         Section 5.14      Financing Statements........................................................... 26
         Section 5.15      Rights to Payment.............................................................. 26
         Section 5.16      Financial Solvency............................................................. 27
         Section 5.17      Suspension and Debarment, etc.................................................. 27
         Section 5.18      Ownership of Borrower.......................................................... 28

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...................................................... 32
         Section 6.7       Insurance...................................................................... 32
         Section 6.8       Preservation of Existence...................................................... 32
         Section 6.9       Delivery of Instruments, etc................................................... 32
         Section 6.10      Chattel Paper.................................................................. 32
         Section 6.11      Lockbox; Collateral Account.................................................... 33
         Section 6.12      Performance by the Lender...................................................... 33
         Section 6.13      Control Agreements............................................................. 34
         Section 6.14      Minimum Tangible Net Worth..................................................... 34
         Section 6.15      Minimum Book Net Worth......................................................... 34
         Section 6.16      Quarterly Minimum Net Income................................................... 35
         Section 6.17      Monthly Minimum Net Income..................................................... 35
         Section 6.18      New Covenants.................................................................. 35
         Section 6.19      Quarterly Inspection and Review................................................ 35
         Section 6.20      Assembly of Export Order Summaries............................................. 35
         Section 6.21      Perfection of Intellectual Property Security Interest.......................... 35
         Section 6.22      Location of Collateral;  Acknowledgment from Bailees........................... 36

ARTICLE VII - Negative Covenants.......................................................................... 36
              ------------------
         Section 7.1       Liens.......................................................................... 36
</TABLE>

                                     -ii-
<PAGE>

<TABLE>
         <S>                                                                                           <C>
         Section 7.2       Indebtedness............................................................... 37
         Section 7.3       Guaranties................................................................. 37
         Section 7.4       Investments and Subsidiaries............................................... 37
         Section 7.5       Dividends.................................................................. 38
         Section 7.6       Sale or Transfer of Assets; Suspension of Business Operations.............. 38
         Section 7.7       Consolidation and Merger; Asset Acquisitions............................... 39
         Section 7.8       Sale and Leaseback......................................................... 39
         Section 7.9       Restrictions on Nature of Business......................................... 39
         Section 7.10      Capital Expenditures....................................................... 39
         Section 7.11      Accounting................................................................. 39
         Section 7.12      Discounts, etc............................................................. 39
         Section 7.13      Defined Benefit Pension Plans.............................................. 39
         Section 7.14      Other Defaults............................................................. 39
         Section 7.15      Place of Business; Name.................................................... 39
         Section 7.16      Organizational Documents................................................... 40
         Section 7.17      Salaries................................................................... 40

ARTICLE VIII - Events of Default, Rights and Remedies................................................. 40
               --------------------------------------
         Section 8.1       Events of Default.......................................................... 40
         Section 8.2       Rights and Remedies........................................................ 42
         Section 8.3       Certain Notices............................................................ 43

ARTICLE IX - Miscellaneous............................................................................ 43
             -------------
         Section 9.1       No Waiver; Cumulative Remedies............................................. 43
         Section 9.2       Amendments, Etc............................................................ 43
         Section 9.3       Addresses for Notices, Etc................................................. 43
         Section 9.4       Further Documents.......................................................... 44
         Section 9.5       Collateral................................................................. 44
         Section 9.6       Costs and Expenses......................................................... 44
         Section 9.7       Indemnity.................................................................. 44
         Section 9.8       Participants............................................................... 46
         Section 9.9       Execution in Counterparts.................................................. 46
         Section 9.10      Binding Effect; Assignment; Complete Agreement; Exchanging Information..... 46
         Section 9.11      Severability of Provisions................................................. 46
         Section 9.12      Entire Agreement........................................................... 46
         Section 9.13      Headings................................................................... 46
         Section 9.14      Governing Law; Jurisdiction, Venue; Waiver of Jury Trial................... 47
         Section 9.15      Confidentiality............................................................ 47
</TABLE>

                                     -iii-
<PAGE>

                         CREDIT AND SECURITY AGREEMENT
                   (Eximbank Guaranteed Loan No. __________)

                         Dated as of December 8, 2000

     RF MONOLITHICS, INC., a Delaware corporation (the "Borrower"), and
WELLS FARGO BANK MINNESOTA, N.A. a national banking association (the "Lender"),
hereby agree as follows:

                                   ARTICLE I

                                  Definitions
                                  -----------

     Section 1.1    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 may be
defined from time to time in the UCC, whether now owned or hereafter arising,
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.

     "Affiliate" or "Affiliates" means any 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.

     "Availability" means, the lesser of:

               (a)  the Borrowing Base; or

               (b)  the difference between (i) $13,500,000 and (ii) the
     outstanding principal balance of the WFBCI Revolving Advances.

     "Banking Day" means a day other than a Saturday, Sunday or other day on
which banks are generally not open for business in Dallas, Texas.
<PAGE>

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

     "Borrower Agreement" means the Borrower Agreement of even date herewith by
and between the Borrower and the Lender in the form attached hereto as Exhibit
B.

     "Borrowing Base" means, at any time the lesser of:

          (a)  the Maximum Line; or

          (b)  subject to change from time to time in the Lender's sole
     discretion, the sum of:

               (i)  85% of Eligible Export-Related Accounts, plus

               (ii) the lesser of (A) 50% of Eligible Export Inventory or (B)
                    $4,000,000;

provided, however, (A) at no time shall the outstanding principal balance of the
--------  -------
Revolving Advances supported by Eligible Export Inventory exceed 60% of the
aggregate amount of all outstanding Revolving Advances and (B) the overall
amount of the Items shall be determined by reference to the percentage which
sales of the Items bears to the Borrower's total Inventory sales during the
twelve (12) month period preceding the date of determination plus the projected
sales in the next ninety (90) days.

     "Borrowing Base Certificate" means a certificate, substantially in the form
attached hereto as Exhibit D, executed by the Borrower and accepted by the
Lender.

     "Capital Expenditures" for a period means any expenditure of money for the
lease, purchase or other acquisition of any capital asset, or the lease of any
other asset whether payable currently or in the future.

     "Charges" means all fees, charges, and/or other items of value, if any,
contracted for, charged, taken, received or reserved by Lender in connection
with the transactions contemplated hereunder, which are treated as interest
under applicable law.

     "Chattel Paper" means all of the Borrower's Chattel Paper, as such term may
be defined from time to time in the UCC, whether now owned or hereafter
acquired.

     "Collateral" means all of the Borrower's assets, including all Chattel
Paper, deposit accounts, Equipment, General Intangibles, Instruments, Inventory,
Receivables, Investment Property, Letter of Credit Rights, Intellectual
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; and (v) all warehouse
receipts, bills of lading and other documents of title now or hereafter covering
such goods; provided, however that

                                       2
<PAGE>

Collateral shall not include any cash, cash equivalents or marketable securities
which are not Proceeds of Collateral.

     "Collateral Account" means the Lender Account, as such term is defined in
the Lockbox Agreement.

     "Commitments" means the Lender's commitments to make Revolving Advances to
or for the Borrower's account pursuant to Article II.

     "Compliance Certificate" means a certificate substantially in the form of
Exhibit B attached hereto.

     "Country Limitation Schedule" means the most recent schedule published by
Eximbank and provided to the Borrower by the Lender which sets forth on a
country-by-country basis whether and under what conditions Eximbank will provide
coverage for the financing of export transactions to countries listed therein.

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

     "Debt" of any Person means all items of indebtedness or liability which in
accordance with GAAP would be included in determining total liabilities as shown
on the liabilities side of a balance sheet of that Person as at the date as of
which Debt is to be determined. For purposes of determining a Person's aggregate
Debt at any time, "Debt" shall also include the aggregate payments required to
be made by such Person at any time under any lease that is considered a
capitalized lease under GAAP.

     "Default" means an event that, with giving of notice or passage of time or
both, would constitute an Event of Default.

     "Default Period" means any period of time beginning on the first day of any
month during which a Default or Event of Default has occurred and ending on the
date the Lender notifies the Borrower in writing that such Default or Event of
Default has been cured or waived.

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

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

     "Eligible Export-Related Accounts" means all unpaid Export Related Accounts
owed by account debtors located outside the United States for the sale or
provision of Items, net of any credits, but in no event shall Eligible Export-
Related Accounts include any Export Related Account:

               (i)       that does not arise from the sale of Items in the
          ordinary course of Borrower's business;

                                       3
<PAGE>

               (ii)      that is not subject to a valid, perfected first
          priority Lien in favor of Lender;

               (iii)     as to which any covenant, representation or warranty
          contained in the Loan Documents with respect to such Account has been
          breached;

               (iv)      that is not owned by Borrower or is subject to any
          right, claim or interest of another Person other than the Lien in
          favor of Lender and the junior Lien in favor of WFBCI;

               (v)       with respect to which an invoice has not been sent;

               (vi)      that arises from the sale of defense articles or
          defense services;

               (vii)     that is due and payable from an account debtor located
          in a Prohibited Country;

               (viii)    that does not comply with the requirements of the
          Country Limitation Schedule;

               (ix)      that is due and payable more than 90 days from the
          earlier of the shipment date or the date of the invoice;

               (x)       that is not paid within 60 calendar days from its
          original due date, unless it is insured through Eximbank export credit
          insurance for comprehensive commercial and political risk, or through
          Eximbank approved private insurers for comparable coverage, in which
          case it is not paid within 90 calendar days from its due date;

               (xi)      that arises from a sale of goods to or performance of
          services for an employee of Borrower, a stockholder of Borrower, a
          Subsidiary of Borrower, a Person with a controlling interest in
          Borrower or a Person which shares common controlling ownership with
          Borrower;

               (xii)     that is backed by a letter of credit unless the Items
          covered by the subject letter of credit have been shipped;

               (xiii)    that Lender or Eximbank, in its reasonable judgment,
          deems uncollectible for any reason;

               (xiv)     that is due and payable in a currency other than U.S.
          dollars, (a) except as may be approved in writing by Eximbank and (b)
          except for up to an aggregate of $500,000 in accounts receivable
          payable by customers of the Borrower existing on the Funding Date in
          British Pounds Sterling;

                                       4
<PAGE>

               (xv)      that is due and payable from a military account debtor,
          except as may be approved in writing by Eximbank;

               (xvi)     that does not comply with the terms of sale set forth
          in Section 7 of the Loan Authorization Notice;

               (xvii)    that is due and payable from an account debtor who (a)
          applies for, suffers, or consents to the appointment of, or the taking
          of possession by, a receiver, custodian, trustee or liquidator of
          itself or of all or a substantial part of its property or calls a
          meeting of its creditors, (b) admits in writing its inability, or is
          generally unable, to pay its debts as they become due or ceases
          operations of its present business, (c) makes a general assignment for
          the benefit of creditors, (d) commences a voluntary case under any
          state or federal bankruptcy laws (as now or hereafter in effect), (e)
          is adjudicated as bankrupt or insolvent, (f) files a petition seeking
          to take advantage of any other law providing for the relief of
          debtors, (g) acquiesces to, or fails to have dismissed, any petition
          which is filed against it in any involuntary case under such
          bankruptcy laws, or (h) takes any action for the purpose of effecting
          any of the foregoing;

               (xviii)   that arises from a bill-and-hold, guaranteed sale,
          sale-and-return, sale on approval, consignment or any other
          repurchase or return basis or is evidenced by Chattel Paper;

               (xix)     for which the Items giving rise to such Account have
          not been shipped and delivered to and accepted by the account debtor
          or the services giving rise to such Account have not been performed by
          Borrower and accepted by the account debtor or the Account otherwise
          does not represent a final sale;

               (xx)      that is subject to any offset, deduction, defense,
          dispute, or counterclaim or the account debtor is also a creditor or
          supplier of Borrower or the Account is contingent in any respect or
          for any reason;

               (xxi)     for which Borrower has made any agreement with the
          account debtor for any deduction therefrom, except for discounts or
          allowances made in the ordinary course of business for prompt payment,
          all of which discounts or allowances are reflected in the calculation
          of the face value of each respective invoice related thereto;

               (xxii)    for which any of the Items giving rise to such Account
          have been returned, rejected or repossessed;

               (xxiii)   to the extent it includes any finance charges, service
          charges, taxes, discounts, credits, allowances and Retainages;

               (xxiv)    that arise from the sale of Items containing less than
          50% US Content;

                                       5
<PAGE>

               (xxv)     that arise from the sale of Items containing any
          Foreign Content not incorporated into such Items in the United States;

               (xxvi)    that arise from the sale of any Items to be used in the
          construction, alteration, operation or maintenance of nuclear power,
          enrichment, reprocessing, research or heavy water production
          facilities; or

               (xxvii)   that are otherwise deemed ineligible for any reason by
          the Lender or Eximbank in its discretion.

     "Eligible Export Inventory" means the Items including raw materials,
components and work-in-process that has been purchased, manufactured or
otherwise acquired by the Borrower for resale pursuant to Export Orders and for
which the Lender has received a Borrowing Base Certificate certifying that such
Inventory will be used for export purposes only, at the lower of cost or market
value as determined in accordance with GAAP with market value as of the date of
any Inventory appraisal completed pursuant to the provisions of Section 6.15
being established pursuant to such appraisal; provided, however, that in no
event shall Eligible Export Inventory include any Inventory:

               (i)       that is not subject to a valid, perfected first
          priority Lien in favor of Lender and subject to no other Liens except
          those Liens in favor of WFBCI to secure repayment of WFBCI Credit
          Agreement;

               (ii)      that is located at an address that has not been
          disclosed to Lender in writing;

               (iii)     that is placed by Borrower on consignment or held by
          Borrower on consignment from another Person;

               (iv)      that is in-transit; covered by any negotiable or non-
          negotiable warehouse receipt, bill of lading or other document of
          title; that is in the possession of a processor or bailee, or located
          on premises leased or subleased to Borrower, or on premises subject to
          a mortgage in favor of a Person other than Lender, unless such
          processor or bailee or mortgagee or the lessor or sublessor of such
          premises, as the case may be, has executed and delivered all
          documentation which Lender shall require to evidence the subordination
          or other limitation or extinguishment of such Person's rights with
          respect to such Inventory and Lender's right to gain access thereto;

               (v)       that is produced in violation of the Fair Labor
          Standards Act or subject to the "hot goods" provisions contained in 29
          U.S.C.ss.215 or any successor statute or section;

               (vi)      as to which any covenant, representation or warranty
          with respect to such Inventory contained in the Loan Documents has
          been breached;

               (vii)     that is not located in the United States;

                                       6
<PAGE>

               (viii)    that is sample or demonstration Inventory;

               (ix)      that consists of proprietary software (i.e. software
          designed solely for Borrower's internal use and not intended for
          resale);

               (x)       that is damaged, slow moving, obsolete, returned,
          defective, recalled or unfit for further processing or not currently
          saleable in the normal course of the Borrower's operations;

               (xi)      that has been previously exported from the United
          States;

               (xii)     that constitutes defense articles or defense services;

               (xiii)    that is to be incorporated into Items destined for
          shipment to a Prohibited Country, unless and only to the extent that
          such Items are to be sold to such Prohibited Country on terms of a
          letter of credit confirmed by a bank acceptable to Eximbank; or

               (xiv)     that is to be incorporated into Items whose sale would
          result in an Account which would not be an Eligible Export-Related
          Account;

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

               (xvi)     the Foreign Content portion of the Inventory containing
          less than 50% US Content;

               (xvii)    for Inventory containing at least 50% US Content, any
          Foreign Content not incorporated into such Inventory in the United
          States; and

               (xviii)   Inventory otherwise deemed ineligible by the Lender in
          its sole discretion.

          "Environmental Laws" has the meaning specified in Section 5.12.

          "Equipment" means all of the Borrower's equipment, as such term may be
defined from time to time 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.

                                       7
<PAGE>

          "Exceptions Approval Letter" means a letter from Eximbank approving
any and all applicable exceptions from the rules and regulations of Eximbank
governing the Working Capital Guaranty Program.

          "Export Collateral" means that portion of Collateral consisting of
Export Related Accounts and the Items.

          "Export Related Accounts" means all Accounts of the Borrower owed by
account debtors located outside the United States.

          "Export Order" means a written export order or contract for the
purchase from the Borrower of Items from a customer outside the United States.

          "Foreign Content" means that portion of the cost of Inventory arising
from materials which are not of United States origin or from labor and services
not performed in the United States.

          "Funding Date" has the meaning given in Section 2.1.

          "FYE" means the last day of the Borrower's fiscal year, which is
August 31.

          "GAAP" means generally accepted accounting principles, applied on a
basis consistent with the accounting practices applied in the audited financial
statements described in Section 6.1(a), except for any change in accounting
practices to the extent that, due to a promulgation of the Financial Accounting
Standards Board changing or implementing any new accounting standard, the
Borrower either (i) is required to implement such change, or (ii) for future
periods will be required to and for the current period may in accordance with
generally accepted accounting principles implement such change, for its
financial statements to be in conformity with generally accepted accounting
principles (any such change is herein referred to as a "Required GAAP Change"),
provided that (x) the Borrower shall fully disclose in such financial statements
any such Required GAAP Change and the effects of the Required GAAP Change on the
Borrower's income, retained earnings or other accounts, as applicable, and (y)
the Borrower's financial covenants set forth in Section 6.14 and 7.10 shall be
adjusted as necessary to reflect the effects of such Required GAAP Change.

          "General Intangibles" means all of the Borrower's general intangibles,
as such term may be defined from time to time 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.

          "Guarantor" means RFM Export, Inc., a company incorporated under the
laws of Barbados.

          "Guaranty" means that certain Guaranty of even date herewith executed
by the Guarantor in favor of the Lender.

          "Hazardous Substance" has the meaning given in Section 5.12.

                                       8
<PAGE>

          "Instruments" means all of the Borrower's instruments, as such term
may be defined from time to time in the UCC, whether now owned or hereafter
acquired.

          "Intellectual Property" means all rights, priorities and privileges
relating to intellectual property, whether arising under United States,
multinational or foreign laws or otherwise, including, without limitation, any
now owned or hereafter arising copyrights, copyright licenses, patents, patent
licenses, trademarks and trademark licenses and all rights to sue at law or in
equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.

          "Interest Payment Date" has the meaning given in Section 2.2.

          "Inventory" means all of the Borrower's inventory, as such term may be
defined from time to time 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 Property" means all of the Borrower's investment property,
as such term may be defined from time to time 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 U.S. Government
securities.

          "Items" means all Inventory of the Borrower to be sold by the Borrower
to customers outside the United States.

          "Letter of Credit Rights" means a right to payment or performance
under a letter of credit, whether or not the Borrower has demanded or is at the
time entitled to demand payment or performance but does not include the right to
demand payment or performance.

          "Lien" means any mortgage, security deed or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, security title, easement or encumbrance, or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including any lease or title retention agreement, any financing
lease having substantially the same effect as any of the foregoing, and the
filing of, or agreement to give, any financing statement perfecting a security
interest under the UCC or comparable law of any jurisdiction) by which property
is encumbered or otherwise charged.

          "Loan Authorization Notice" means that certain Loan Authorization
Notice submitted to the Eximbank by Lender in connection with this Agreement.

          "Loan Documents" means this Agreement, the Revolving Note, the
Borrower Agreement and the Security Documents.

          "Lockbox" has the meaning given in the Lockbox Agreement.

                                       9
<PAGE>

          "Lockbox Agreement" means the Lockbox and Collection Account Agreement
by and among the Borrower, Regulus West LLC, Wells Fargo Bank Texas, N.A. and,
the Lender, of even date herewith.

          "Master Guaranty" means that certain Master Guarantee Agreement No.
MN-MGA-99-001 dated July 20, 1999, by and between the Lender and Eximbank, as
supplemented by a Delegated Authority Letter Agreement No. MN-DA-99-001 dated
September 30, 1999.
                                                     .
          "Maturity Date" has the meaning given in Section 2.13.

          "Maximum Line" means $8,500,000, unless said amount is reduced
pursuant to Section 2.6, in which event it means the amount to which said amount
is reduced.

          "Maximum Rate" means the maximum lawful rate of interest which may be
contracted for, charged, taken, received or reserved by Lender in accordance
with the applicable laws of the State of Texas (or applicable United States
federal law to the extent that such law permits Lender to contract for, charge,
take, receive or reserve a greater amount of interest than under Texas law),
taking into account all Charges made in connection with the transaction
evidenced by the Loan Documents. To the extent, if any, that Chapter 303 of the
Texas Finance Code, as amended, establishes the Maximum Rate, the Maximum Rate
shall be the "weekly ceiling" as defined therein.

          "Minimum Charge" has the meaning given in Section 2.2(c).

          "Net Income" means fiscal year-to-date after-tax consolidated net
income of a Person, decreased by the sum of any extraordinary, non-operating or
                    ---------
non-cash income recorded by such Person as determined in accordance with GAAP.

          "Obligations" means the Revolving 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, all indebtedness of the Borrower arising under
this Agreement, the Revolving Note, or any other loan or credit agreement or
guaranty between the Borrower and the Lender, whether now in effect or hereafter
entered into.

          "Original Maturity Date"  means December 31, 2003.

          "Patent Security Agreement" means the Patent Security Agreement by the
Borrower in favor of the Lender of even date herewith, as the same may be
amended, supplemented or restated from time to time.

          "Permitted Lien" has the meaning given in Section 7.1.

                                      10
<PAGE>

          "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 the Texas premises legally described in Exhibit D
attached hereto.

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

          "Prohibited Country" means any country in which Eximbank coverage is
not available for commercial reasons or in which Eximbank is legally prohibited
from doing business, as designated in the Country Limitation Schedule.

          "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, tax refunds and rights to
payment not constituting General Intangibles.

          "Reportable Event" shall have the meaning assigned to that term in
Title IV of ERISA.

          "Retainage" means that portion of an Account that an account debtor is
not obligated to pay until the end of a specified period of time following
satisfactory performance by the Borrower.

          "Revolving Advance" has the meaning given in Section 2.1.

          "Revolving Floating Rate" means an annual rate equal to the sum of the
Prime Rate plus two percent (2.00%), which annual rate shall change when and as
the Prime Rate changes.

          "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.

                                      11
<PAGE>

          "Security Documents" means this Agreement, the Lockbox Agreement, the
Patent Security Agreement, the Guaranty 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.

          "Subsidiary" means any corporation of which more than 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.

          "Tangible Net Worth" means the difference between (i) the tangible
assets of the Borrower, which, in accordance with GAAP are tangible assets,
after deducting adequate reserves in each case where, in accordance with GAAP, a
reserve is proper and (ii) all Debt of the Borrower; provided, however, that
                                                     --------  -------
notwithstanding the foregoing in no event shall there be included as such
tangible assets patents, trademarks, trade names, copyrights, licenses,
goodwill, receivables from Affiliates, directors, officers or employees, prepaid
expenses, deposits, deferred charges or treasury stock or any securities or Debt
of the Borrower or any other securities unless the same are readily marketable
in the United States of America or entitled to be used as a credit against
federal income tax liabilities, and any other assets designated from time to
time by the Lender, in its sole discretion, in each case computed on a
consolidated basis.

          "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 of Texas.

          "US Content" means that portion of the cost of an Item arising from
materials which are of United States origin or from labor and services performed
in the United States.

          "WFBCI" means Wells Fargo Business Credit, Inc., a Minnesota
corporation.

          "WFBCI Credit Agreement" means that certain Credit and Security
Agreement of even date herewith by and between the Borrower and WFBCI, as the
same may hereafter be amended, supplemented or restated from time to time.

          "WFBCI Revolving Advances" means the Revolving Advances as defined in
WFBCI Credit Agreement.

          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.

                                      12
<PAGE>

                                  ARTICLE II

                    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 (the "Funding Date") to the Termination Date, on the terms and
subject to the conditions herein set forth (the "Revolving Advances"). In no
event shall the provisions of Chapter 346 of the Texas Finance Code (which
regulates certain revolving credit loan accounts) apply to this Agreement or the
Revolving Note or other Loan Documents. 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 would exceed
Availability. In addition, at no time shall the outstanding Revolving Advances
supported by Eligible Export Inventory exceed 60% of all Revolving Advances. 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 2.6 and reborrow. On the Termination Date, the entire
unpaid principal balance of the Revolving Note, and all unpaid interest accrued
thereon, shall be due and payable. 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 11:00 a.m. (Central 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 Wells Fargo Bank Texas, N.A. 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 a Revolving Advance by executing and delivering an appropriate
     confirmation certificate to the Lender. The Borrower shall repay all
     Revolving Advances even if the Lender does not receive such confirmation
     and even if the person requesting a Revolving Advance was not in fact
     authorized to do so. Any request for a Revolving 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.

     Section 2.2  Interest; Minimum Charge; Default Interest; Participations;
                  -----------------------------------------------------------
Usury. Interest accruing on the Revolving Note shall be due and payable in
-----
arrears on the first day of each month (each an "Interest Payment Date").

                                      13
<PAGE>

          (a)     Revolving Note. Except as set forth in Sections 2.2(c) and
     2.2(e), the outstanding principal balance of the Revolving Note shall bear
     interest at the Revolving Floating Rate.

          (b)     Minimum Charge. In addition to the provisions of Section
     2.2(a), the Borrower shall pay to the Lender on each Interest Payment Date
     an additional commitment fee equal to the difference, if any, between (i)
     $20,000.00 per calendar month during the term of this Agreement, and (ii)
     the amount of interest calculated under Sections 2.2(a) and 2.2(e).

          (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 Revolving 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)     Participations. The Lender may sell participations to one or
     more Persons in all or a portion of its rights and obligations under this
     Agreement. If any Person shall acquire a participation in the Revolving
     Advances under this Agreement, the Borrower shall be obligated to the
     Lender to pay the full amount of all interest calculated under, along with
     all other fees, charges and other amounts due under this Agreement,
     regardless if such Person elects to accept interest with respect to its
     participation at a lower rate than the Revolving Floating Rate, or
     otherwise elects to accept less than its prorata share of such fees,
     charges and other amounts due under this Agreement.

          (e)     Usury. In any event no rate change shall be put into effect
     which would result in a rate greater than the Maximum Rate. It is not the
     intention of the parties to this Agreement to make an agreement in
     violation of the laws of any applicable jurisdiction relating to usury.
     Regardless of any provision in any Loan Documents, the Lender shall never
     be entitled to charge, receive, collect or apply, as interest on the
     Obligations, any amount in excess of Maximum Rate. If the Lender receives,
     collects or applies, as interest, any such excess, such amount which would
     be excessive interest shall be deemed a partial repayment of principal and
     treated hereunder as such; and if principal is paid in full, any remaining
     excess shall be paid to the Borrower. All sums constituting interest under
     applicable law shall be, to the extent permitted by applicable law,
     amortized or spread, using the actuarial method, throughout the stated term
     of the Revolving Note.

     Section 2.3  Fees.
                  ----

          (a)     Facility Fee. The Borrower hereby agrees to pay the Lender a
     fully earned and non-refundable facility fee of 1.5% of the Maximum Line,
     due and payable upon the execution of this Agreement and on each
     anniversary hereof.

          (b)     Unused Line Fee. For the purposes of this Section 2.3(b),
     "Unused Amount" means the Maximum Line reduced by outstanding Revolving
     Advances. The Borrower agrees to pay to the Lender an unused line fee at
     the rate of one-half percent (.5%) per annum

                                      14
<PAGE>

     on the average daily Unused Amount from the date of this Agreement to and
     including the Termination Date, due and payable monthly in arrears on each
     Interest Payment Date and on the Termination Date.

          (c)     Audit Fees. The Borrower hereby agrees to pay the Lender, on
     demand, audit fees in connection with any audits or inspections conducted
     by the Lender of any Collateral or the Borrower's operations or business at
     the rates established from time to time by the Lender as its audit fees
     (which fees are currently $750 per day per auditor), together with all
     actual out-of-pocket costs and expenses incurred in conducting any such
     audit or inspection.

     Section 2.4  Computation of Interest and Fees; When Interest Due and
                  -------------------------------------------------------
Payable. Interest accruing on the outstanding principal balance of the Revolving
-------
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 360 days.

     Section 2.5  Capital Adequacy. If any Related Lender determines at any time
                  ----------------
that its Return has been reduced 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. For purposes of
this Section 2.5:

          (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)     "Return", for any period, means the return as determined by
     such Related Lender on the Revolving Advances based upon its total capital
     requirements and a reasonable attribution formula that takes account of the
     Capital Adequacy Rules then in effect. 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.

          (c)     "Rule Change" means any change in any Capital Adequacy 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 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.

          (d)     "Related Lender" includes (but is not limited to) the Lender,
     WFBCI, any parent corporation of the Lender and any assignee of any
     interest of the Lender hereunder and any participant in the loans made
     hereunder.

Certificates of any Related Lender sent to the Borrower from time to time
claiming compensation under this Section 2.5, stating the reason therefor and
setting forth in reasonable detail the calculation

                                      15
<PAGE>

of the additional amount or amounts to be paid to the Related Lender hereunder
to restore its Return shall be conclusive absent manifest error. In determining
such amounts, the Related Lender may use any reasonable averaging and
attribution methods.

         Section 2.6   Voluntary Prepayment; Reduction of the Maximum Line;
                       ----------------------------------------------------
Termination of the Credit Facility by the Borrower. 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 or
reduce the Maximum Line at any time if it (i) gives the Lender at least 30 days'
prior written notice and (ii) pays the Lender the termination or line reduction
fees in accordance with Section 2.7. Any reduction in the Maximum Line must be
in an amount not less than $100,000 or an integral multiple thereof. If the
Borrower reduces the Maximum Line to zero, all Obligations shall be immediately
due and payable. 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.

         Section 2.7   Termination and Line Reduction Fees; Waiver of
                       ----------------------------------------------
Termination Fees.
----------------

               (a)     Termination and Line Reduction Fees. If the Credit
         Facility is terminated for any reason as of a date other than the
         Maturity Date, or the Borrower reduces the Maximum Line, the Borrower
         shall pay to the Lender a fee in an amount equal to a percentage of the
         Maximum Line (or the reduction, as the case may be) as follows: (i)
         three percent (3%) if the termination or reduction occurs on or before
         December 31, 2001; (ii) two percent (2%) if the termination or
         reduction occurs after December 31, 2001 but on or before December 31,
         2002; and (iii) one percent (1%) if the termination or reduction occurs
         after December 31, 2002.

               (b)     Waiver of Termination Fees. The Borrower will not be
         required to pay the termination and line reduction fees otherwise due
         under this Section 2.7 if such termination or line reduction is made
         because of increased cash flow generated from the Borrower's operations
         or refinancing by an Affiliate of the Lender occurring after the first
         anniversary of the Funding Date.

         Section 2.8   Mandatory Prepayment. Without notice or demand, if the
                       --------------------
outstanding principal balance of the Revolving Advances shall at any time exceed
the Borrowing Base, the Borrower shall immediately prepay the Revolving Advances
to the extent necessary to eliminate such excess. Any payment received by the
Lender under this Section 2.8 or under Section 2.7 may be applied to the
Obligations, in such order and in such amounts as the Lender, in its discretion,
may from time to time determine.

         Section 2.9   Payment. All payments to the Lender shall be made in
                       -------
immediately available funds and shall be applied to the Obligations two (2)
Banking Days after receipt by the Lender. The Lender may hold all payments not
constituting immediately available funds for three (3) additional Banking Days
before applying them to the Obligations. Notwithstanding anything in Section
2.1, the Borrower hereby authorizes the Lender, in its 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

                                      16
<PAGE>

make a Revolving Advance in an amount equal to the portion of the Obligations
from time to time due and payable.

         Section 2.10  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
Revolving Advances or the fees hereunder, as the case may be.

         Section 2.11  Use of Proceeds. The Borrower shall use the proceeds of
                       ---------------
Revolving Advances only as a source of working capital to fulfill Export Orders
and to finance the manufacture, production or purchase and subsequent export
sale of Items. Without limiting the generality of the foregoing, the Borrower
shall not use any proceeds of Revolving Advances for any purpose prohibited by
the Borrower Agreement or (i) to service or repay any of Borrower's pre-existing
or future indebtedness unrelated to the Credit Facility, (ii) to acquire fixed
assets or capital goods for use in the Borrower's business, (iii) to acquire,
equip or rent commercial space outside the United States, (iv) to employ
non-United States citizens or non-U.S. permanent residents located outside of
the United States, or (v) to serve as a retainage or warranty bond.

         Section 2.12  Liability Records. The Lender may maintain from time to
                       -----------------
time, at its discretion, liability records as to the Obligations. All entries
made on any such record shall be presumed correct absent manifest error or
unless the Borrower establishes the contrary. Upon the Lender's demand, the
Borrower will 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 shall be conclusive and fully
binding on the Borrower unless the Borrower gives the Lender specific written
notice of exception within 30 days after receipt absent manifest error.

         Section 2.13  Automatic Renewal. Unless terminated (a) by the Lender
                       -----------------
(i) by giving written notice to the Borrower no less than ninety (90) days prior
to the Maturity Date or (ii) in accordance with Section 8.2, or (b) by the
Borrower (i) by giving written notice to the Lender no less than ninety (90)
days prior to the Maturity Date or (ii) in accordance with Section 2.6, the
Credit Facility shall remain in effect until the Original Maturity Date, and,
thereafter, shall automatically renew for successive one-year periods; provided,
however that the Credit Facility shall not renew unless all applicable
conditions set forth in the rules and regulations of Eximbank governing the
Working Capital Guaranty Program for such renewal are satisfied and the Eximbank
guaranty with respect to the Credit Facility pursuant to the Master Guaranty
shall remain in full force and effect for the renewal term. "Maturity Date"
shall initially mean the Original Maturity Date; provided, however, that if at
any time the Credit Facility has been automatically renewed, "Maturity Date"
shall mean the one-year anniversary of the date that was formerly the Maturity
Date.

         Section 2.14  Facility Subject to Eximbank Rules. The Borrower
                       ----------------------------------
acknowledges that the Lender is willing to make the Credit Facility available to
the Borrower because the Eximbank is willing to guaranty payment of a
significant portion of the Obligations pursuant to the Master Guaranty.
Accordingly, in the event of any inconsistency among the Loan Documents and the
Master Guaranty or related documents and the rules and regulations of the
Eximbank governing the Working Capital Guaranty Program, the provision that is
the more stringent on the Borrower shall

                                      17
<PAGE>

control. Compliance with any such applicable rule or regulation shall constitute
an additional covenant of the Borrower incorporated herein by reference.

                                  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. The
                       --------------------------------------------------
Lender may at any time during a Default Period 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.

         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.

                                      18
<PAGE>

               (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 Commitments, and (ii) 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:
               RF Monolithics, Inc.
               4347 Sigma Road
               Farmers Branch, TX 75244
               Federal Tax Identification No.: 75-1638027

               Name and address of Secured Party:
               Wells Fargo Bank Minnesota, N.A.
               Wells Fargo Center
               Sixth and Marquette Avenue
               Minneapolis, Minnesota 55479

The Borrower hereby (i) authorizes the Secured Party to file one or more UCC
financing statements describing the Collateral, which financing statements may
contain broader collateral descriptions than the descriptions set forth herein
and (ii) agrees to execute UCC financing statements covering the Collateral when
and as requested by the Lender from time to time.

                                      19
<PAGE>

     Section 3.7   Setoff. The Borrower agrees that the Lender may at any time
                   ------
or from time to time, 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.

                                  ARTICLE IV

                             Conditions of Lending
                             ---------------------

     Section 4.1   Conditions Precedent to the Initial Revolving Advance. The
                   -----------------------------------------------------
Lender's obligation to make the initial Revolving Advances hereunder shall be
subject to the condition precedent that the Borrower shall have satisfied and/or
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 Revolving Note, properly executed by the Borrower.

          (c)      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.

          (d)      The Patent Security Agreement, properly executed by the
     Borrower.

          (e)      The Guaranty, properly executed by the Guarantor.

          (f)      A properly completed and executed Borrowing Base Certificate
     as of a date not more than 5 Banking Days before the date of this
     Agreement.

          (g)      The Borrower has simultaneously entered into the WFBCI Credit
     Agreement and all conditions precedent to the initial Advance set forth
     therein have been satisfied or waived by WFBCI.

          (h)      An Exceptions Approval Letter, properly signed by Eximbank.

          (i)      The Lockbox Agreement, properly executed by the Borrower,
     Regulus West LLC and Wells Fargo Bank Texas, N.A.

          (j)      The Borrower Agreement, properly executed by the Borrower.

          (k)      The SBA/Eximbank Joint Application, properly completed and
     executed by the Borrower.

                                      20
<PAGE>

                  (l)  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 have been
         filed and remain in effect against the Borrower except those financing
         statements relating to Permitted Liens or to liens held by Persons who
         have agreed in writing that upon receipt of proceeds of the Revolving
         Advances, they will deliver UCC releases and/or terminations
         satisfactory to the Lender, and (iii) the Lender has duly filed all
         financing statements necessary to perfect the Security Interest as
         first in priority to all other perfected security interests, to the
         extent the Security Interest is capable of being perfected by filing.
         Within 90 days of the Funding Date the Borrower shall provide searches
         of appropriate filing offices showing that no assignments of patents,
         trademarks or copyrights have been filed and remain in effect against
         the Borrower.

                  (m)  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
         Borrower's officers or agents authorized to execute and deliver the
         Loan Documents and other instruments, agreements and certificates,
         including Revolving Advance requests, on the Borrower's behalf.

                  (n)  A current certificate issued by the Secretary of State of
         Delaware, certifying that the Borrower is in compliance with all
         applicable organizational requirements of the State of Delaware and is
         in existence in good standing.

                  (o)  A current certificate issued by the Secretary of State of
         Texas, certifying that the Borrower is duly licensed and qualified to
         transact business in the State of Texas.

                  (p)  An opinion of counsel to the Borrower, addressed to the
         Lender, and in form and substance reasonably acceptable to the Lender.

                  (q)  Evidence that the net proceeds from the Borrower's
         issuance of equity securities pursuant to a Unit Subscription Agreement
         between the Borrower and certain investors in the amount of at least
         $1,550,000 have been deposited into the Borrower's demand deposit
         account with Wells Fargo Bank Texas, N.A.

                  (r)  Certificates of the insurance required hereunder, with
         all hazard insurance and the foreign credit 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.

                  (s)  Payment of the fees and commissions due through the date
         of the initial Revolving Advance under Section 2.3 and expenses
         incurred by the Lender through such date and required to be paid by the
         Borrower under Section 9.6, including all legal expenses incurred
         through the date of this Agreement.

                  (t)  Evidence that all indebtedness and lease obligations of
         the Borrower to Bank One, Texas, NA and its affiliates have been paid
         in full or will be paid out of the proceeds of the initial Advances.

                                      21
<PAGE>

                  (u)  Such other documents as the Lender may reasonably
         require.

         Section 4.2   Conditions Precedent to All Revolving Advances. The
                       ----------------------------------------------
Lender's obligation to make each Revolving Advance shall be subject to the
further conditions precedent that on such date:

                  (a)  the Lender has received a Borrowing Base Certificate
         submitted no less than one month before the requested day of the
         Revolving Advance and copies of the Export Orders (or a written summary
         thereof) against which the Borrower is requesting such Revolving
         Advance.

                  (b)  the representations and warranties contained in Article V
         are correct on and as of the date of such Revolving Advance 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

                  (c)  no event has occurred and is continuing, or would result
         from such Revolving Advance, which constitutes a Default or an Event of
         Default.

                                   ARTICLE V

                        Representations and Warranties
                        ------------------------------

         The Borrower represents and warrants to the Lender as follows:

         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 the other locations set forth in Schedule 5.1 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
Eximbank; (iii) violate any provision of any law, rule or regulation (including,
without limitation, Regulation T, U or X of the Board of Governors of the
Federal Reserve System) or of any order, writ, injunction or decree presently in
effect having applicability

                                      22
<PAGE>

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 except as
                      ------------
disclosed on Schedule 5.4 attached hereto. The Guarantor's net assets are less
than $5,000.

         Section 5.5  Financial Condition; No Adverse Change. The Borrower has
                      --------------------------------------
heretofore furnished to the Lender its unaudited financial statements for its
fiscal year ended August 31, 2000 and its unaudited financial statements for the
months ended September 30, 2000 and October 31, 2000 and those statements fairly
present in all material respects 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).

         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, if determined
adversely to the Borrower or any of its Affiliates, would have a material
adverse effect on the financial condition, properties or operations of the
Borrower or any of its Affiliates.

         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 Revolving 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.

         Section 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. 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
other than any tax the amount of which, applicability, or validity is being
contested in good faith by appropriate proceedings and (x) for which proper
reserves have been made, (y) there is no risk of forfeiture of Collateral during
the pendency of such action, and (z)

                                      23
<PAGE>

any lien arising as a result of such tax is at all times junior in priority to
the Lender's security interest in the Collateral.

         Section 5.9   Titles and Liens. The Borrower has good and indefeasible
                       ----------------
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 referred to in Section 5.5 and all proceeds thereof, free
and clear of all mortgages, security interests, liens and encumbrances, except
for Permitted Liens. No financing statement naming the Borrower as debtor is on
file in any office except to perfect only Permitted Liens. Upon the proper
filing of a UCC financing statements in Texas and Delaware describing the
Collateral, the Lender's Security Interest in the Collateral will constitute a
valid, perfected security interest in the Collateral capable of being perfected
by filing, prior to all other security interests of any other Person except for
the security interest of WFBCI in Collateral not constituting Export Collateral.

         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 compliance with any
of the material 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 could have a material adverse effect on the Borrower's financial
condition, properties or operations.

         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

                                      24
<PAGE>

                  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, except for liabilities in the
         aggregate amount of less than $25,000 and with respect to which no
         liens have attached to any of the Collateral.

                  (d)  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 compliance
         in all material respects 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 12 months for which renewal is not expected to be
         obtained 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.

                                      25
<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.

         Section 5.16  Financial Solvency. Both before and after giving effect
                       ------------------
to the transactions contemplated in the Loan Documents, none of the Borrower or
its Affiliates:

               (a)     was or will be insolvent, as that term is used and
         defined in Section 101(32) of the United States Bankruptcy Code and
         Section 2 of the Uniform Fraudulent Transfer Act;

               (b)     has unreasonably small capital or is engaged or about to
         engage in a business or a transaction for which any remaining assets of
         the Borrower or such Affiliate are unreasonably small;

               (c)     by executing, delivering or performing its obligations
         under the Loan Documents or other documents to which it is a party or
         by taking any action with respect thereto, intends to, nor believes
         that it will, incur debts beyond its ability to pay them as they
         mature;

               (d)     by executing, delivering or performing its obligations
         under the Loan Documents or other documents to which it is a party or
         by taking any action with respect thereto, intends to hinder, delay or
         defraud either its present or future creditors; and

               (e)     at this time contemplates filing a petition in bankruptcy
         or for an arrangement or reorganization or similar proceeding under any
         law any jurisdiction, nor, to the best knowledge of the Borrower, is
         the subject of any actual, pending or threatened bankruptcy, insolvency
         or similar proceedings under any law of any jurisdiction.

         Section 5.17  Suspension and Debarment, etc. Neither the Borrower nor
                       ------------------------------
any of its Principals (as defined below) are (A) debarred, suspended, proposed
for debarment with a final determination still pending, declared ineligible or
voluntarily excluded (as such terms are defined under any of the Debarment
Regulations referred to below) from participating in procurement or
nonprocurement transactions with any US federal government department or agency
pursuant to any of the Debarment Regulations (as defined below) or (B) indicted,
convicted or had a civil judgment

                                      26
<PAGE>

rendered against the Borrower or any of its Principals for any of the offenses
listed in any of the Debarment Regulations. Unless authorized by Eximbank, the
Borrower will not knowingly enter into any transactions in connection with the
Items with any person who is debarred, suspended, declared ineligible or
voluntarily excluded from participation in procurement or nonprocurement
transactions with any US federal government department or agency pursuant to any
of the Debarment Regulations. The Borrower will provide immediate written notice
to the Lender if at any time it learns that the certification set forth in this
Section 5.17 was erroneous when made or has become erroneous by reason of
changed circumstances. For the purposes hereof, (1) "Principals" shall mean any
officer, director, owner, partner, key employee, or other person with primary
management or supervisory responsibilities with respect to the Borrower; or any
other person (whether or not an employee) who has critical influence on or
substantive control over the transaction covered by this Agreement and (2) the
Debarment Regulations shall mean (x) the Government wide Debarment and
Suspension (Nonprocurement) regulations (Common Rule), 53 Fed. Reg. 19204 (May
26, 1988), (y) Subpart 9.4 (Debarment, Suspension and Ineligibility) of the
Federal Acquisition Regulations, 48 C.F.R. 9.400-9.409 and (z) the revised
Government wide Debarment and Suspension (Nonprocurement) regulations (Common
Rule), 60 Fed. Reg. 33037 (June 26, 1995). The Borrower acknowledges that any
statement, certification or representation made by it in connection with the
Credit Facility is subject to the penalties provided in Article 18 U.S.C.
Section 1001.

         Section 5.18  Ownership of Borrower. No Person or affiliated Persons
                       ---------------------
owns or controls the right to vote more than 20% of the outstanding capital
stock of the Borrower.

                                  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 acceptable to the Lender:

               (a)     except with respect to the FYE August 31, 2000, which
         shall be delivered no later than December 15, 2000, as soon as
         available, and in any event on the earlier of (x) the date the Borrower
         files its Annual Report on SEC form 10-K and (y) 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,
         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, on a consolidating and consolidated basis to
         include the Guarantor and any other Affiliates, all in reasonable
         detail and prepared in accordance with GAAP, together with (i) copies
         of all management letters prepared and delivered by such accountants;
         (ii) a report signed by such accountants stating that in making the
         investigations necessary for said opinion they obtained

                                      27
<PAGE>

         no knowledge, except as specifically stated, of any Default or Event of
         Default hereunder and 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 6.14 and 7.10;
         and (iii) a certificate of the Borrower's chief financial officer
         stating that such financial statements have been prepared in accordance
         with GAAP and 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 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, on a consolidating and consolidated basis to include the
         Guarantor and any other 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 accompanied by a Compliance Certificate
         signed by the Borrower's chief financial officer stating (i) that such
         financial statements have been prepared in accordance with GAAP,
         subject to normal year-end audit adjustments, (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 6.14 and 7.10;

                  (c)  within 15 days after the end of each month or more
         frequently if the Lender so requires, agings of the Borrower's accounts
         receivable, Eligible Export-Related Accounts, inventory, Eligible
         Export Inventory and its accounts payable, an inventory certification
         report, an accounts receivable certification as of the end of such
         month or shorter time period and such information as the Lender shall
         require to establish the sales percentage of the Items to total
         Inventory sales for such periods as the Lender may request;

                  (d)  as soon as available and in any event within 15 days
         after the end of each month, a properly completed Borrowing Base
         Certificate as of the end of such month, signed by the Borrower's chief
         financial officer.

                  (e)  at least 10 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 having been prepared in good faith and no more
         positive as to the Borrower's operating results or financial condition
         than 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;

                  (f)  within 5 Banking Days after the commencement 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 $10,000;

                                      28
<PAGE>

                  (g)  as promptly as practicable (but in any event not later
         than five business 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;

                  (h)  as soon as possible and in any event within 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;

                  (i)  as soon as possible, and in any event within 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;

                  (j)  promptly upon knowledge thereof, notice of (i) any
         disputes or claims by the Borrower's customers exceeding $10,000
         individually or $25,000 in the aggregate during any fiscal year; (ii)
         credit memos; (iii) any goods returned to or recovered by the Borrower;
         and (iv) any change in the persons constituting the Borrower's officers
         and directors; provided, however, that events described in clauses (ii)
         and (iii) may be reported using the daily collateral report provided to
         the Lender.

                  (k)  promptly upon knowledge thereof, notice of any loss of or
         material damage to any 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;

                  (l)  promptly upon their distribution, copies of all financial
         statements, reports and proxy statements which the Borrower shall have
         sent to its stockholders;

                  (m)  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;

                  (n)  as soon as possible, and in any event by not later than
         five Banking Days after the earlier of the due date or filing date
         thereof each year, copies of the franchise and federal and state income
         tax returns of the Borrower and all schedules thereto and any and all
         other state tax returns of the Borrower no later than five Banking Days
         of the Lender's request for the same;

                                      29
<PAGE>

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

                  (p)  within 5 days after knowledge thereof, notice of a change
         in ownership of the Premises or any parcel thereof; and

                  (q)  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.

         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 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, employees or agents. 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.

         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.

               (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 in all material
         respects 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 liability or obligation under the common law of any
         jurisdiction or any Environmental Law.

                                      30
<PAGE>

     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.

     Section 6.6    Maintenance of Properties. The Borrower will: (a) 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 Lender's judgment, desirable in the conduct of
the Borrower's business and not disadvantageous in any material respect to the
Lender; (b) defend the Collateral against all claims or demands of all persons
(other than the Lender) claiming the Collateral or any interest therein; and (c)
keep all Collateral and other collateral covered by the Security Documents free
and clear of all security interests, liens and encumbrances except Permitted
Liens.

     Section 6.7    Insurance. The Borrower will obtain and at all times
                    ---------
maintain insurance with insurers believed by the Borrower to be responsible and
reputable, in such amounts and against such risks as may from time to time be
required by the Lender, 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,
keep all tangible Collateral insured against risks of fire (including so- called
extended coverage), theft, collision (for Collateral consisting of motor
vehicles), insure its foreign receivables with foreign credit insurance, and
insurance for such other risks and in such amounts as the Lender may reasonably
request, 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. The Borrower will promptly
                    ----------------------------
deliver to the Lender in pledge all Instruments payable to it or any Subsidiary.
In addition, the Borrower will deliver to the Lender all Chattel Paper
evidencing a right to payment in excess of $5,000.

                                      31
<PAGE>

          Section 6.10   Chattel Paper. The Borrower will shall place the
                         -------------
following legend in conspicuous type on all Chattel Paper (including electronic
Chattel Paper) it creates:

                  "This Chattel Paper has been assigned to Wells Fargo Bank
                  Minnesota, N.A. (the "Secured Party") Further assignment of
                  this Chattel Paper violates the rights of the Secured Party."

          Section 6.11   Lockbox; Collateral Account.
                         ---------------------------

                  (a)    For so long as the Credit Facility is in existence or
          any Obligations are outstanding, the Borrower shall irrevocably direct
          all present and future account debtors of Export Related Accounts and
          other Persons obligated to make payments constituting Export
          Collateral to make such payments directly to the Lockbox. All of the
          Borrower's invoices, account statements and other written or oral
          communications directing, instructing, demanding or requesting payment
          of any Account or any other amount constituting Export Collateral
          shall conspicuously direct that all payments be made to the Lockbox
          and shall include the Lockbox address. All payments received in the
          Lockbox shall be processed to the Collateral Account.

                  (b)    The Borrower agrees to deposit in the Collateral
          Account or, at the Lender's option, to deliver to the Lender all
          collections on Accounts, contract rights, chattel paper and other
          rights to payment constituting Export Collateral, and all other cash
          proceeds of Export Collateral, which the Borrower may receive directly
          notwithstanding its direction to account debtors and other obligors to
          make payments to the Lockbox, immediately upon receipt thereof, in the
          form received, except for the Borrower's endorsement when deemed
          necessary. Until delivered to the Lender or deposited in a Collateral
          Account, all proceeds or collections of Export Collateral shall be
          held in trust by the Borrower for and as the property of the Lender
          and shall not be commingled with any funds or property of the
          Borrower.

                  (c)    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.

                  (d)    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 one (1) Banking Day, 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.

                  (e)    All items deposited in the Collateral Account shall be
          subject to final payment. If any such item 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

                                      32
<PAGE>

          endorser on all items deposited in the Collateral Account, whether or
          not in fact endorsed by the Borrower.

          Section 6.12   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 calendar days after the Lender gives the Borrower written notice thereof
(or in the case of the agreements contained in Sections 6.5, 6.7 and 6.11,
immediately upon the occurrence of such failure, without notice or 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 during any Default Period 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 6.12.

          Section 6.13   Control Agreements. Upon request by the Lender, the
                         ------------------
Borrower hereby agrees to cooperate with the Lender in obtaining a control
agreement in form and substance reasonably satisfactory to the Lender with
respect to Collateral consisting of deposit accounts, letter of credit rights
and Investment Property sufficient to perfect the Lender's Security Interest in
such Collateral.

          Section 6.14   Minimum Tangible Net Worth. The Borrower will maintain
                         --------------------------
its Tangible Net Worth as of the end of each month at an amount not less than
$1.00.

          Section 6.15   Minimum Book Net Worth. The Borrower will maintain,
                         ----------------------
during each period described below, its Book Net Worth of an amount not less
than the amount set forth below:

                  (a)    From September 1, 2000 through November 30, 2000, a
          minimum Book Net Worth of not less than $28,886,000;

                  (b)    From December 1, 2000 through the Funding Date, a
          minimum Book Net Worth of not less than $28,386,000;

                  (c)    From the Funding Date through February 28, 2001, a
          minimum Book Net Worth of not less than $30,295,995;

                                      33
<PAGE>

                  (d)    From March 1, 2001 through May 31, 2001, a minimum Book
          Net Worth of not less than $29,795,995;

                  (e)    From June 1, 2001 through August 31, 2001, a minimum
          Book Net Worth of not less than $30,295,995; and

                  (f)    From September 1, 2001 through November 30, 2001, a
          minimum Book Net Worth of not less than the Book Net Worth as of FYE
          August 31, 2001 minus $1,500,000.

          Section 6.16   Quarterly Minimum Net Income. The Borrower will
                         ----------------------------
achieve: (a) during the three month fiscal period ending on November 30, 2000, a
minimum Net Income of greater than ($1,500,000); (b) during the six month fiscal
period ending on February 28, 2001, a minimum Net Income of greater than
($2,000,000); (c) during the nine month fiscal period ending on May 31, 2001, a
minimum Net Income of greater than ($2,500,000); (d) during the fiscal year
ending on August 31, 2001, a minimum Net Income of greater than ($2,000,000);
and (e) during the three month fiscal period from August 31, 2001, to November
30, 2001, a minimum Net Income of greater than ($1,500,000).

          Section 6.17   Monthly Minimum Net Income. The Borrower will achieve,
                         --------------------------
as of the end of each month during the fiscal year ended August 31, 2001, other
than the months of September and October, minimum Net Income of greater than
($500,000).

          Section 6.18   New Covenants. On or before December 1, 2001, the
                         -------------
Borrower and the Lender shall agree on new covenant levels for Sections 6.15,
6.16, 6.17 and 7.10 for periods after such date. The new covenant levels will be
based on Borrower's projections for such periods and shall be no less stringent
than the present levels. In addition, the Lender may readjust the covenant
levels (x) set forth in Section 6.15 to new levels determined in its sole
discretion in the event the Borrower issues additional equity securities after
the Funding Date or (y) set forth in Sections 6.15, 6.16 and 6.17 in the event
the Borrower assumes any new term indebtedness or capital lease obligations.

          Section 6.19   Quarterly Inspection and Review. The Borrower shall
                         -------------------------------
cooperate with and assist the Lender and its agents in conducting a field
examination, audit and appraisal of the Collateral once every quarter while any
Obligations remain outstanding for the purpose of determining the value of the
Collateral, verification of the Borrowing Base and Borrower's compliance with
the Loan Documents. The field examination shall include an inspection and
valuation of the Inventory, a book audit of Borrower's Accounts and a review of
the accounts receivable aging report. During any Default Period, the Lender may
require more frequent exams. The costs of such field exams shall be paid by the
Borrower.

          Section 6.20   Assembly of Export Order Summaries. In the event the
                         ----------------------------------
Borrower has furnished summaries of Export Orders to the Lender pursuant to
Section 4.2(a), the Borrower shall at least once each calendar quarter make a
sampling of such Export Orders selected by the Lender representing at least 10%
of the aggregate U.S. dollar volume of all Export Orders and 10% of the number
of Export Orders supporting Revolving Advances made during the preceding
calendar quarter available for the Lender's review and inspection.

                                      34
<PAGE>

          Section 6.21   Perfection of Intellectual Property Security Interest.
                         -----------------------------------------------------
No later than 90 days after the Funding Date, the Borrower shall execute and
file in all appropriate filing offices such instruments as may be required to
properly perfect the security interests granted pursuant to the Patent Security
Agreement. The Borrower shall provide the Lender with updates on its progress in
obtaining the perfection of such security interests in all foreign jurisdictions
every thirty days after the Funding Date until all such security interests are
properly perfected as first priority security interests.

          Section 6.22   Location of Collateral; Acknowledgment from Bailees.
                         ---------------------------------------------------
The Debtor will not permit the Collateral to be kept at any location not set
forth on Schedule 5.1 hereto. In the event Collateral is in the possession of a
third party, upon request of the Lender, Debtor will join with Secured Party in
notifying the third party of Secured Party's security interest and obtaining an
acknowledgment from the third party that it is holding the Collateral for the
benefit of the Secured Party.

                                  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 created by the Security
          Documents;

                  (d)    the Liens in favor of WFBCI provided such Liens are
          subordinate to the Security Interest in Export Collateral;

                  (e)    purchase money security interests (including capital
          leases) relating to permitted Capital Expenditures under Section 7.10
          not exceeding the lesser of cost or fair market value thereof so long
          as no Default Period is then in existence and none would exist
          immediately after such acquisition;

                                      35
<PAGE>

                  (f)    liens for taxes not then delinquent or the amount,
          applicability or validity of which is being contested in good faith by
          appropriate proceedings for which proper reserves have been made and
          (x) which do not materially interfere with the Borrower's business or
          operations as presently conducted, (y) there is no risk of forfeiture
          of Collateral during the pendency of such action, and (z) any lien
          arising as a result of such tax is at all times junior in priority to
          the Lender's security interest in the Collateral;

                  (g)    any landlord's lien on fixtures or personal property
          arising by operation of law to the extent such lien is subordinate to
          the security interest of the Lender in the Collateral and the rent
          secured thereby is not in default; and

                  (h)    any judgment lien which is subordinate to the security
          interest of the Lender in the Collateral in an amount not exceeding
          $25,000 so long as (x) the finality of such judgment is being
          contested in good faith by appropriate proceedings, (y) for which
          proper reserves have been made and (z) such proceedings or such lien
          does not materially interfere with the Borrower's business or
          operations as presently conducted.

          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 including any renewals or
          extensions thereof; and

                  (c)    indebtedness relating to liens permitted in accordance
          with Section 7.1.

          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:

                                      36
<PAGE>

                         (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 U.S. corporations rated
                  "A-1" or "A-2" by Standard & Poors 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 $100,000,000 (which certificates of
                  deposit or bankers' acceptances are fully insured by the
                  Federal Deposit Insurance Corporation);

                         (ii)   travel advances or loans to the Borrower's
                  officers and employees not exceeding at any one time an
                  aggregate of $50,000; and

                         (iii)  advances in the form of progress payments for
                  the purchase of capital assets permitted pursuant to Section
                  7.10, prepaid rent not exceeding one month and security
                  deposits maintained in the ordinary course of business.

                  (b)    The Borrower will not create or permit to exist any
          Subsidiary except the Guarantor and any successor company that obtains
          similar tax benefits provided that such company executes a guaranty on
          substantially the same terms as the Guaranty immediately upon its
          formation. The Borrower will not permit the Guarantor's net assets and
          the net assets of any successor company permitted to be formed under
          the preceding sentence at any one time to exceed $5,000 in the
          aggregate other than commissions realized in the ordinary course of
          business to the extent that same are transferred to the Borrower
          within 5 Banking Days after payment thereof.

                  (c)    Within 90 days after the Funding Date, the Borrower
          shall cause the Guarantor to execute and deliver (x) a security
          agreement (or other appropriate document) granting the Lender a
          blanket lien in all of its assets as additional security for the
          Guaranty, and take any other actions as may be necessary to cause the
          security interests granted thereby to be perfected under applicable
          law as first priority security interests and (y) a legal opinion in
          form and substance reasonably acceptable to the Lender relating to the
          due authorization, execution and delivery of the security agreement
          and the enforceability thereof under applicable law.

          Section 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 a substantial part 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 the
sale of Inventory in the ordinary course of business and will not liquidate,
dissolve or suspend business operations. The Borrower will not in any manner
transfer any property other than obsolete or worn-out Equipment

                                      37
<PAGE>

in the aggregate value of $25,000 or less during any fiscal year without prior
or present receipt of full and adequate consideration.

          Section 7.7    Consolidation and Merger; Asset Acquisitions. The
                         --------------------------------------------
Borrower will not dissolve, 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 the Borrower 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 $3,500,000 in the aggregate
during fiscal year 2001 of which not more than $1,500,000 shall be unfinanced.

          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 to any customer of the
Borrower or accept any return of goods sold, 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.

          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 or place of incorporation.

                                      38
<PAGE>

          Section 7.16   Organizational Documents. The Borrower will not amend
                         ------------------------
its certificate of incorporation or bylaws except to permit the issuance of
additional equity securities provided such amendment does not adversely affect
the Lender's rights or remedies.

          Section 7.17   Salaries. The Borrower will not pay excessive or
                         --------
unreasonable salaries, bonuses, commissions, consultant fees or other
compensation; or, without the prior approval of the independent members of the
Borrower's Board of Directors, increase the salary, bonus, commissions,
consultant fees or other compensation of any director, officer or consultant, or
any member of their families, by more than 10% in any one year, either
individually or for all such persons in the aggregate, or pay any such increase
from any source other than profits earned in the year of payment or improvements
in operating results compared to the preceding period or periods.

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

                  (c)    Default in the performance, or breach, of any covenant
          or agreement of the Borrower contained in this Agreement;

                  (d)    The Borrower shall be or become insolvent (as such term
          is defined in Section 5.16(a) hereof), or admit in writing its or his
          inability to pay its or his debts as they mature, or make an
          assignment for the benefit of creditors; or the Borrower shall apply
          for or consent to the appointment of any receiver, trustee, or similar
          officer for it or him or for all or any substantial part of its or his
          property; or such receiver, trustee or similar officer shall be
          appointed without the application or consent of the Borrower, as the
          case may be; or the Borrower 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 or him under the laws
          of any jurisdiction; or any such proceeding shall be instituted (by
          petition, application or otherwise) against the Borrower; 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 for an amount in excess of $25,000 at any one time in
          the aggregate;

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

                                      39
<PAGE>

                  (f)    Any representation or warranty made by the Borrower in
          this Agreement, or by the Borrower (or any of its officers) 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 shall prove to have been incorrect in
          any material respect when deemed to be effective;

                  (g)    The rendering against the Borrower of a final judgment,
          decree or order for the payment of money in excess of $25,000 and the
          continuance of such judgment, decree or order unsatisfied and in
          effect for any period of 30 consecutive days without a stay of
          execution;

                  (h)    A default under any bond, debenture, note or other
          evidence of indebtedness of the Borrower owed to any Person other than
          the Lender, including without limitation Next Millennium, 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;

                  (i)    Any Reportable Event, which the Lender determines in
          good faith constitutes 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
          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 the Lender determines in good faith may by itself,
          or in combination with any such failures that the Lender may determine
          are likely to occur in the future, result in the imposition of a lien
          on the Borrower's assets in favor of the Plan;

                  (j)    An event of default 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;

                  (k)    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;

                  (l)    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 state or federal tax
          liens shall be filed or issued;

                                      40
<PAGE>

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

                  (n)    An Event of Default shall occur under the Borrower
          Agreement;

                  (o)    Any of David M. Kirk, James P. Farley, Darrell Ash or
          Jon Prokop cease to be actively involved in the day-to-day management
          of the Borrower;

                  (p)    The Borrower fails to deliver a new landlord's waiver
          acceptable to the Lender within 30 days following a change in
          ownership of the Premises;

                  (q)    An Event of Default shall occur under the WFBCI Credit
          Agreement; or

                  (r)    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
          Commitments 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;

                  (c)    the Lender may, without notice to the Borrower and
          without further action, apply any and all money owing by the Lender or
          any affiliate of the Lender to the Borrower to the payment of the
          Obligations;

                  (d)    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;

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

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

                                      41
<PAGE>

Notwithstanding the foregoing, upon the occurrence of an Event of Default
described in subsections (d) or (e) 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.

          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
telecopy, in each case addressed or telecopied to the party to whom notice is
being given at its address or telecopier number as set forth below:

                  If to the Borrower:
                  RF Monolithics, Inc.
                  4347 Sigma Road
                  Farmers Branch, Texas 75244
                  Telecopier: (972) 404-9476
                  Mr. James P. Farley

                  If to the Lender:
                  Wells Fargo Bank Minnesota, N.A.
                  333 South Grand Avenue, Suite 800
                  Los Angeles, CA 90071
                  Attention: Brett Marschall

                                      42
<PAGE>

or, as to each party, at such other address or telecopier 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) when deposited in the mail if
delivered by mail, (c) the date sent if sent by overnight courier, or (d) the
date of transmission if delivered by telecopy, 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.

          Section 9.6    Costs and Expenses. The Borrower agrees to pay on
                         ------------------
demand all costs and expenses, including (without limitation) reasonable
attorneys' fees, incurred by the Lender in connection with the Obligations, this
Agreement, the Loan Documents, 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.

          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"):

                                      43
<PAGE>

                           (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 (INCLUDING ANY OF THE FOREGOING ARISING FROM THE
                  NEGLIGENCE OF THE INDEMNITEE), EXCEPT TO THE EXTENT SUCH
                  LIABILITY, LOSS, DAMAGE, PENALTY, JUDGMENT, SUIT, CLAIM, COST
                  OR EXPENSE IS FOUND IN A FINAL, NON-APPEALABLE JUDGMENT BY A
                  COURT OF COMPETENT JURISDICTION TO HAVE RESULTED FROM THE
                  INDEMNITEE'S GROSS NEGLIGENCE OR WILFUL MISCONDUCT.

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 SATISFACTORY TO THE
INDEMNITEE, WILL RESIST AND DEFEND SUCH ACTION, SUIT OR PROCEEDING TO THE EXTENT
AND IN THE MANNER DIRECTED BY THE INDEMNITEE, 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

                                      44
<PAGE>

BORROWER'S OTHER OBLIGATIONS HEREUNDER. THE BORROWER AGREES NOT TO ASSERT ANY
CLAIM AGAINST THE LENDER OR ANY OF ITS AFFILIATES OR ITS OR THEIR DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS AND ADVISORS, ON ANY THEORY OF LIABILITY,
FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES ARISING OUT OF OR
OTHERWISE RELATING TO THE LOAN DOCUMENTS.

          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.

          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.

          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   Entire Agreement. THIS AGREEMENT, TOGETHER WITH THE
                         ----------------
OTHER LOAN DOCUMENTS, REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
REGARDING THE SUBJECT MATTER HEREIN AND THEREIN AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES
HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

          Section 9.13   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 9.14 Governing Law; Jurisdiction, Venue; Waiver of Jury Trial.
                       --------------------------------------------------------
This Agreement and the Loan Documents shall be governed by and construed in
accordance with the substantive laws (other than conflict laws) of the State of
Texas. The parties hereto hereby (i) consents to the personal jurisdiction of
the state and federal courts located in the State of Texas 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 District Court of Collin County,
Texas, or the United States District Court for the Northern District of Texas;
and (iv) agrees that a final judgment in any such suit, action or proceeding
shall be conclusive and may be enforced

                                      45
<PAGE>

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.

          Section 9.15   Confidentiality. Lender shall use its best efforts to
                         ---------------
hold in confidence all information, memoranda, or extracts furnished to Lender
by Borrower hereunder or in connection with the negotiation hereof, including
without limitation, the information provided to Lender by Borrower pursuant to
Section 6.1 hereof; provided that the Lender may disclose such information (i)
to its Affiliates, accountants or counsel, (ii) to any regulatory agency having
the authority to examine the Lender, (iii) as required by any legal or
governmental process or otherwise by law (iv) to any Person to which the Lender
sells or proposes to sell an assignment or participation hereunder in accordance
herewith, and (v) to the extent that such information shall be publicly
available or shall have been known to the Lender independently of any disclosure
by the Borrower hereunder or in connection herewith.

                 [Remainder of page intentionally left blank.]

                                      46
<PAGE>

          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 BANK MINNESOTA, N.A.

                                By: /s/ Brett Beugen
                                    --------------------------------------------
                                        Brett Beugen, Assistant Vice President
<PAGE>

                                        RF MONOLITHICS, INC.

                                        By:/s/ David M. Kirk
                                           -------------------------------------
                                               David M. Kirk, President

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