Document:

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                                                                   EXHIBIT 10.15

                         AGREEMENT FOR PURCHASE AND SALE
                                       OF
                   NOVATEL WIRELESS INC. MOBILE TERMINAL UNITS

                                     BETWEEN

                              NOVATEL WIRELESS INC.

                                       AND

                        VOICESTREAM WIRELESS CORPORATION

* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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   TABLE OF CONTENTS

<TABLE>
<S>                                                                                        <C>
   1 DEFINITIONS.............................................................................1

   2 PURCHASES AND SCOPE OF SUPPLY...........................................................4

   2.3  PERSONS AUTHORIZED TO PURCHASE; SUPPLY OF DELIVERABLES AND PURCHASE ORDERS...........4
   2.5  TECHNICAL INTERFACE..................................................................4
   2.6  POINT-OF-SALE PACKAGING..............................................................5
   2.13 CO PRODUCTS..........................................................................7
   2.8  PRODUCT TEST INSTRUMENTATION.........................................................7
   2.9  ACCESSORIES..........................................................................7
   2.12 UPDATE TO CHANGED STANDARDS..........................................................8
   2.15 MINIMUM HANDSET PROCUREMENT..........................................................8
   2.14 ALLOCATION OF PRODUCTION.............................................................9
   2.18 EMBEDDED PERMITTED SYSTEM RESTRICTION; PRE-LOADED SIM................................9
   2.19 RESALE BY BUYER.....................................................................10
   2.20 SOFTWARE LICENSE....................................................................10
   2.21 DATABASE............................................................................10
   2.22 COUNTRY OF ORIGIN...................................................................10
   2.23 BATTERY RECYCLING...................................................................10
   2.24 ADVERTISING DISPLAY MATERIAL........................................................10

   3 CUSTOMER REPRESENTATIVE................................................................11

   3.1  PROGRAM MANAGER REQUIRED............................................................11
   3.3  REPORTING AND MEETINGS..............................................................11

   4 PRICES.................................................................................11

   5.1  PRICE LIST; CHANGES AS NEW PRODUCTS ARE INTRODUCED..................................12
   5.2  MOST FAVORED CUSTOMER...............................................................13
   5.7  TAXES AND OTHER CHARGES.............................................................14

   5 INVOICING AND TERMS OF PAYMENT.........................................................14

   6.2  INVOICE UPON SHIPMENT...............................................................14
   6.5  PAYMENT.............................................................................14
   6.6  PAST DUE PAYMENTS...................................................................14
   6.7  AMOUNTS IN DISPUTE..................................................................14

   6 SELLER ADVERTISING ACCOUNT.............................................................14

   7 TRADEMARKS AND LOGOS...................................................................15

   9.1  BUYER'S LOGO ON PRODUCTS; ADVANCE CONSENT OF BUYER FOR OTHER LOGOS..................15
   9.2  ARTWORK AND REPRODUCTION............................................................15
   10.8 INABILITY TO MEET REQUIRED DELIVERY DATE............................................18
   10.10  FAILURE TO MEET REQUIRED DELIVERY DATE............................................18
   10.10  RIGHT TO COVER....................................................................18
   10.12  DISCREPANCIES.....................................................................19
</TABLE>

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<TABLE>
<S>                                                                                        <C>
   10.15 MODIFICATIONS TO PURCHASE ORDER....................................................19
   4.1  ACCEPTANCE TEST PROCEDURE TO BE DEFINED.............................................20
   4.2  REGULATORY..........................................................................20
   4.7  ISO 9000 COMPLIANCE; AUDITS.........................................................20
   4.4  COMMERCIAL TEST PROCEDURES MARKET VERIFICATION TEST.................................21
   4.6  SAMPLE TESTING......................................................................21
   12.2 EXTENDED TERM FOR CERTAIN PROVISIONS................................................23

   11. TITLE AND RISK OF LOSS...............................................................23

   12 PRODUCT SUPPORT.......................................................................23

   14.1 TRAINING SUPPORT....................................................................23
   14.2 TECHNICAL SUPPORT...................................................................24
   14.3 DOCUMENTATION.......................................................................24
   14.4 SURVIVAL AND EXTENDED TERM..........................................................25

   13 WARRANTY AND SERVICE REPAIR...........................................................26

   4.3  INTER-OPERABILITY TESTING...........................................................26
   2.4  COMPLIANCE..........................................................................26
   11.1 RETURN OF DEFECTIVE PRODUCTS........................................................28
   16.3 SURVIVAL AND TERM...................................................................29

   14 TERMINATION; LIMITATION OF LIABILITY..................................................29

   17.1 DEFAULT.............................................................................29
   17.3 BANKRUPTCY..........................................................................29
   17.4 LIMITATION OF LIABILITY.............................................................30
   17.6 RIGHTS OF PARTIES UPON TERMINATION BY SELLER........................................31

   15 CONFIDENTIALITY.......................................................................31

   18.1 CONFIDENTIAL INFORMATION DEFINED....................................................31
   18.2 EXCEPTIONS..........................................................................32
   18.3 SURVIVAL............................................................................32

   16 FORCE MAJEURE.........................................................................32

   19.1 FORCE MAJEURE.......................................................................32
   19.3 BUYER'S RIGHT TO TERMINATE FOR FORCE MAJEURE........................................33
   19.4 SELLER'S RIGHT TO TERMINATE FOR FORCE MAJEURE.......................................33

   17 PRODUCT LIABILITY INDEMNIFICATION.....................................................33

   18 INTELLECTUAL PROPERTY INDEMNIFICATION.................................................33

   19 DISPUTE RESOLUTION....................................................................34

   22.1 INTERNAL ESCALATION.................................................................34
   22.2 MEDIATION...........................................................................35
   22.3 ARBITRATION OF DISPUTES.............................................................35
   22.4 CONTINUE TO PERFORM.................................................................36

   20 NON-EXCLUSIVE AGREEMENT...............................................................36

   21 INSURANCE.............................................................................36

   24.1 SELLER TO MAINTAIN..................................................................36
   24.3 LEVEL OF INSURANCE..................................................................37
</TABLE>

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<TABLE>
<S>                                                                                        <C>
   24.4 CERTIFICATES OF INSURANCE...........................................................37
   24.5 NO WAIVER...........................................................................37

   22 ASSIGNMENT............................................................................37

   25.1 CONSENT REQUIRED....................................................................37
   25.2 INVALID WITHOUT COMPLIANCE..........................................................37
   25.3 ASSIGNS.............................................................................38

   23 NOTICES...............................................................................38

   24 PUBLICITY.............................................................................38

   25 COMPLIANCE WITH LAWS; GOVERNING LAW...................................................39

   26 WAIVERS OF DEFAULT....................................................................39

   27 AMENDMENTS............................................................................39

   28 ORDER OF PRECEDENCE...................................................................39

   29 HEADINGS..............................................................................40

   30 SEVERABILITY..........................................................................40

   31 SURVIVAL..............................................................................40

   32 LICENSE...............................................................................40

   33 PARTY RELATIONSHIP....................................................................40

   35 COUNTERPARTS..........................................................................41

   39.1 INCORPORATION.......................................................................41

   37 ENTIRE AGREEMENT......................................................................41

   ATTACHMENT A-1 PRODUCT 1 -- GPRS  - PCS PC CARD..........................................44

   ATTACHMENT A-2 PRODUCT 2 -- GPRS  - PCS PC CARD 8-SLOT...................................46

   ATTACHMENT A-3 PRODUCT 3 -- GPRS  - GSM/PCS PC CARD 900/1900.............................48

   ATTACHMENT B DATES FOR COMPLETION OF ATTACHMENTS.........................................50

   ATTACHMENT C PRICES......................................................................51

   ATTACHMENT D SAMPLE TESTING PROTOCOL.....................................................53

   ATTACHMENT E  ACCEPTANCE TEST PROCEDURE..................................................56

   PENDING..................................................................................56

   ATTACHMENT F WARRANTY....................................................................57
</TABLE>

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<TABLE>
<S>                                                                                        <C>
   ATTACHMENT G DATABASE FORMAT.............................................................58

   ATTACHMENT H ADVERTISING DISPLAY MATERIAL................................................59

   ATTACHMENT I RETURN POLICY...............................................................60

   ATTACHMENT J  GPRS DEVELOPMENT SCHEDULE..................................................61

   LEVEL ONE TECHNICAL SUPPORT..............................................................63

   LEVEL TWO TECHNICAL SUPPORT..............................................................63

   TECHNICAL SUPPORT TRAINING...............................................................64
</TABLE>

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  LIST OF CONTRACT ATTACHMENTS

  ATTACHMENT               DESCRIPTION
  Attachment A-1           Description of Product 1 (specifications)
  Attachment A-2           Description of Product 2 (specifications)
  Attachment A-3           Description of Product 3 (specifications)

  Attachment B             Dates for Completion of Attachments
  Attachment C             Prices
  Attachment D             Sample Testing Protocol
  Attachment E             Acceptance Test Procedure

  Attachment F             End-user warranty
  Attachment G             Database Format
  Attachment H             Advertising Display Material
  Attachment I             Return Policy
  Attachment J             GPRS Development Schedule
  Attachment K             Technical Support

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<PAGE>   7

                         AGREEMENT FOR PURCHASE AND SALE

                                       OF

                NOVATEL WIRELESS INC. GPRS MOBILE TERMINAL UNITS

THIS AGREEMENT FOR PURCHASE AND SALE OF NOVATEL WIRELESS INC. MOBILE TERMINAL
UNITS (the "Agreement"), is made and effective as of the __ day of March, 2000,
by and between VoiceStream Wireless Corporation, a Delaware corporation with its
principal place of business in Bellevue, Washington ("Buyer"), and Novatel
Wireless Inc., a Delaware corporation, with its principal place of business in
San Diego, California ("Seller").

                                    RECITALS

A.       Buyer has received authority from the FCC (as defined herein below) to
         construct and operate PCS (as defined herein below) networks in certain
         areas within the jurisdiction of the United States and may receive
         authority to operate additional such systems.

B.      Seller has offered to sell to Buyer and Buyer wishes to buy the wireless
        communications subscriber devices and accessories described herein at
        the prices and discounts and on the terms and conditions specified
        herein .

                                    AGREEMENT

        NOW, THEREFORE, in consideration of the premises and mutual covenants
        set forth herein and for other good and valuable consideration, the
        sufficiency of which is hereby acknowledged, the parties, intending to
        be legally bound, agree as follows:

1       DEFINITIONS

        The capitalized terms used in this Agreement or in an Attachment to this
        Agreement have the meanings set forth below:

AFFILIATE means any partnership, corporation or other entity in which Buyer owns
        a fifteen percent (15%) or greater equity interest or any entity
        controlling, controlled by or under common control with Buyer, which
        operates or is authorized to operate a Cellular System or PCS system in
        North America including the Caribbean Islands.

ANNUAL FORECAST means that annual forecast of Buyer's purchase volume only,
        updated monthly, supplied by Buyer to Seller, as more specifically
        described in Section 8.1.

AUTHORIZED PURCHASER means Buyer's selected, dealers, and agents, GSM network
        operators, retail stores, distribution centers, third party warehouses,
        and those other third party

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        dealers with whom Buyer has a relationship at the time of such third
        party's contracting with Seller for the purchase of Handsets.

BTA means Basic Trading Area, a geographic area designated by the Federal
        Communications Commission for the purpose of granting authorizations to
        construct and operate PCS networks.

COMMERCIAL PRODUCTS means that Products have passed the testing process defined
        in Section 9, have received any necessary regulatory approvals, and is
        ready in all respects for public sale.

COMMERCIAL TEST PROCEDURES (CTP) means that test procedure, as provided in
        Section 9 and elsewhere, for Commercial Products.

CONFIDENTIAL INFORMATION means information that the parties are obligated to
        protect as more fully provided in Section 15.

END-USER means the owner or user of a Handset (i.e., the person who buys and
        uses a Product).

FCC OR FEDERAL COMMUNICATIONS COMMISSION means the agency of the United States
        Government charged with authorizing PCS networks, currently the Federal
        Communications Commission, or its successor agency.

HANDSET(s) means a mobile station in the PCS service intended to be used while
        in motion or during halts at unspecified points and conforming to the
        PCS 1900 specifications, as appropriate. Handsets include handheld
        portable units and units installed in vehicles. Handsets shall also
        include data-only or voice and data subscriber equipment products
        designed for use with computer devices, and includes the PCS cards
        described on Attachments A-1 through A-3 and such other attachments upon
        which the parties may subsequently agree in writing and attach to this
        Agreement.

INTELLECTUAL PROPERTY CLAIM (IP CLAIM) means a claim involving Buyer's or
        Seller's intellectual property rights, as more fully described in
        Section 19.

INVENTORY means all Products owned and held by Buyer or its Authorized
        Purchasers for resale or use.

MINIMUM PURCHASE TERM means that 12-month period of time (i) commencing on the
        date of delivery from Seller of the first Commercial Products purchased
        and accepted by Buyer.

MTA means Major Trading Area, a geographic area designated by the Federal
        Communications Commission for the purpose of granting authorizations to
        construct and operate PCS networks. References to MTAs shall include
        BTAs.

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PERSONAL COMMUNICATIONS SERVICE ("PCS") means a system authorized by the FCC to
        provide public correspondence using cellular radio techniques and
        operating in the frequency band 1850 MHz to 1910 MHz and 1930 MHz to
        1990 MHz.

PRODUCTS means the Handsets and accessories identified in Attachments A-1
        through A-3 hereto, including related documentation as the same may be
        modified, added or discontinued during the Term (where the addition,
        modification or discontinuance is in accordance with this Agreement) and
        available for purchase by Buyer or otherwise supplied to Buyer under
        this Agreement.

PROTOTYPE PRODUCT means an engineering version of a Product that is not a
        Commercial Product, capable of demonstrating size, weight, feel and some
        basic functionality (e.g., the ability to place/receive voice telephony
        calls, of the final Product). Prototype Products are not necessarily
        produced with production tooling nor do they necessarily have final
        production software. Prototype Products are built in limited volumes,
        primarily for engineering design validation purposes, and may include
        Alpha (first generation) and Beta versions..

PURCHASE ORDER means Buyer's order to Seller for specific Products, as more
        fully described in Section 8.

SECTION means, when used without any other reference, sections, including
        subsections, within this Agreement.

SOFTWARE means (a) all computer software furnished hereunder for use with
        Products including, but not limited to, computer programs contained on a
        magnetic or optical storage medium, in a semiconductor device, or in
        another memory device or system memory consisting of (i) hardwired logic
        instructions which manipulate data in central processors, control
        input-output operations, and error diagnostic and recovery routines,
        (ii) instruction sequences in machine-readable code that control call
        processing, peripheral equipment and administration and maintenance
        functions; and (b) documentation furnished hereunder for use and
        maintenance of the Software.

SPECIFIED SHIPPING DATE means the date, as shown in a Purchase Order or
        otherwise, upon which Buyer requests shipping of certain Products, as
        more fully described in Section 8.

SUBSCRIBER IDENTITY MODULE (SIM) means mean an electronic module, either in the
        form of an integrated circuit "smart card" or otherwise, that contains
        personalization information concerning a user and is intended to be
        inserted in and removed from a SIM reader in Handset Products.

TERM means, unless sooner terminated subject to section 14, the initial ***
        duration of this Agreement commencing on the date that it is completely
        executed by the parties, which initial term shall be extended for
        additional *** terms unless, ninety (90) days before the

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       3
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        expiration of the initial or any other term, one party gives written
        notice to the other of non-renewal.

2       PURCHASES AND SCOPE OF SUPPLY

          2.1  PERSONS AUTHORIZED TO PURCHASE .

               2.1.1  PERSONS PERMITTED TO BUY PRODUCTS. This Agreement
                      contemplates purchases by Buyer, its Affiliates, and its
                      Authorized Purchasers, all sometimes collectively referred
                      to as "Permitted Purchasers."

                      2.1.1.1  BUYER AND AFFILIATES. Buyer is permitted to
                               purchase under the terms and conditions
                               applicable to Buyer on its own account or for its
                               Affiliates and Authorized Purchasers.

                      2.1.1.2  AUTHORIZED PURCHASERS. To simplify administration
                               of purchases by Affiliates and Authorized
                               Purchasers, unless otherwise agreed by the
                               parties, each Affiliate or Authorized Purchaser
                               may enter into a separate contract with Seller
                               consistent with Seller's obligations to provide
                               to such Affiliate or Authorized Purchaser
                               identical pricing and substantially and
                               materially the same terms and conditions provided
                               to Buyer herein

               2.1.2  Nothwithstanding the foregoing, Buyer has no
                      responsibility for payments of obligations incurred by any
                      other purchaser. Seller shall not seek payment from Buyer
                      for any sums owed by any purchaser except Buyer.

               2.1.3  EXCLUSIVE PURCHASES. Nothing in this Agreement shall
                      require Buyer, or any other Permitted Purchasers, to
                      purchase exclusively from Seller.

               2.14   CREDITWORTHINESS. For any Permitted Purchaser other than
                      Buyer, Seller may establish commercially reasonable,
                      non-discriminatory credit (and other) qualifications as a
                      pre-condition to sales. Seller shall provide written
                      notice to Buyer of any proposed disqualification.

        2.2    TECHNICAL INTERFACE.

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               2.2.1  INFORMATION REQUIRED. Within forty five (45) days from the
                      effective date hereof, Seller shall provide Buyer with
                      detailed information concerning the diagnostic and
                      monitoring capabilities, operating software
                      specifications, and detailed product specifications of
                      Products, except information Seller reasonably considers
                      proprietary or confidential. The information to be
                      provided by Seller to Buyer shall also include the
                      electrical interface specifications and the data flow
                      specifications. All such information provided by Seller
                      shall be sufficient enough to permit Buyer to use and
                      maintain the Products as test equipment and to effectively
                      test the Products in Buyer's network. As new Products are
                      developed or as the electrical interface or data flow
                      specifications are changed, Seller shall timely supply
                      updated information to Buyer, except information Seller
                      reasonably considers to be proprietary or confidential.
                      The information supplied shall include instruction on how
                      to place Products into diagnostic or monitor mode and, if
                      hardware or Software components are necessary, Seller
                      shall supply Buyer, without charge, with a quantity of
                      such components sufficient for Buyer's reasonable
                      requirements. The diagnostic and monitoring information to
                      be provided by Seller shall include specific
                      diagnostic/monitoring testing features on PCS 1900
                      equipment. If unique or proprietary connecting cables are
                      necessary to communicate with the Product when in
                      diagnostic or monitor mode, Seller shall furnish Buyer
                      with a reasonable quantity of such cables, without charge.

               2.2.2  USE OF INFORMATION. Seller hereby grants to Buyer a
                      royalty-free license to use the information described in
                      2.2.1 for Buyer's purposes in constructing, testing,
                      maintaining, using, and operating the Products. Seller
                      shall develop sample software demonstrating interfaces and
                      communications with the Product in diagnostic or monitor
                      mode and Seller shall supply, without charge, copies of
                      same, including sample source code (i.e., sample AT
                      command script), to Buyer for Buyer's use. Buyer shall
                      have the right to incorporate Products in this
                      configuration into its test equipment for testing the
                      Products, including the right to transfer information
                      furnished under this Section 2.2.2 to third parties to
                      develop test equipment for Buyer or to develop such test
                      equipment directly. Seller shall not charge Buyer or any
                      such third party any royalty or other similar charge where
                      the test equipment so developed is used for Buyer's
                      purposes testing the Products.

        2.3    POINT-OF-SALE PACKAGING.

               Seller shall use EAN 328, "3 of 9", or Universal Product Code
               ("UPC") stock control numbering ("SKU") markings or other
               customer-specific bar code markings and human readable format on
               the outside of the point-of-sale package

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               for each of the packaging options described below. Seller shall
               provide information to Buyer concerning Seller's bar coding and
               serial number coding for Products, sufficient to permit Buyer to
               properly electronically read Seller's bar coding and to be able
               to monitor and track Products received. Invoices and shipping
               notices shall include electronic copies of serial numbers and
               other information reasonably needed by Buyer to track and control
               inventory.

               Buyer shall select, from time-to-time, its desired packaging
               format from among the options described below, subject to the
               limitations established therein. In the event that Buyer wishes
               to change its desired packaging format, Buyer and Seller shall
               agree upon the lead time necessary to effect such change, Buyer
               shall provide Seller with Notice of its desire to change
               packaging format as soon as possible (but no less than 90 days
               before the format change is desired), and Seller shall use
               reasonable efforts to afford the shortest lead time possible.

               2.3.1  SELLER-LABELED BOX. The Product is packaged and shipped in
                      Seller's standard size rectangular box labeled with
                      Seller's trade name.

               2.3.2  GENERIC BOX. The Product is packaged and shipped in
                      Seller's standard size rectangular box without any labels,
                      in a plain white cardboard format. In the event that any
                      labels, packaging or identifying marks are intended to be
                      attached to, or wrapped around such box, and Buyer uses
                      its transparent packaging, Seller shall design the Product
                      so that the "Novatel Inc." logo will be visible to the End
                      User.

               2.3.3  BULK-SHIP. The Product is shipped in a bulk package,
                      without individual packages for each unit of Product.
                      Buyer has the obligation to arrange for individual unit
                      packaging. In the event that any labels, packaging or
                      identifying marks are attached to, or wrapped around any
                      individual unit packaging, and Buyer uses its transparent
                      packaging, Seller shall design the Product so that the
                      "Novatel Inc." logo will be visible to the End User.

               2.3.4  CUSTOM PACKAGE. The Product is packaged and shipped in
                      Seller's standard size rectangular box with Buyer's
                      artwork and inserts (Commercial Product packaging). Buyer
                      shall provide the necessary artwork in such format and
                      upon such schedules as may be reasonably agreed by the
                      parties. The parties shall agree upon a
                      commercially-reasonable minimum order for such custom
                      packaging. In the event that the cost for producing and
                      shipping such a custom package exceeds Seller's cost to
                      produce and ship its Seller-labeled box, Buyer shall pay
                      that excess amount upon Seller's providing such
                      documentation as Buyer may reasonably require.

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               2.3.5  PACKAGE INSERTS. With respect to the packaging performed
                      in sections 2.3.1, 2.3.2, and 2.3.4, Seller shall, without
                      charge to Buyer, insert into each point-of-sale package up
                      to four (4) pieces of Buyer-provided materials such as,
                      but not limited to, promotional materials and Buyer's
                      service provider information. Buyer's promotional
                      materials and information may be different for different
                      models of Products and may differ geographically, which
                      would require different SKU's for each package
                      configuration, but they shall be designed to fit within
                      the point of sale packaging with the Product, without
                      significantly increasing the packaging costs. Seller shall
                      ensure that the proper materials and information are
                      inserted into the corresponding Commercial Product
                      packaging and are delivered to the corresponding
                      geographical regions.

        2.4    CO-BRANDED PRODUCTS.

               2.4.1  CO-BRANDED PRODUCTS. Buyer may wish to receive all or part
                      of its orders in the form of co-branded Products in such
                      form as Buyer shall direct in advance, whereby Buyer's
                      name appears on the Product in addition to Seller's name
                      (such Products being referred to as "Co-Branded
                      Products"). Such Co-Branded Products may be in slightly
                      different form, different color, etc. as may be mutually
                      agreed by Buyer and Seller. Co-Branded Products shall be
                      available to Permitted Purchasers to the extent determined
                      and permitted in writing by Buyer. Seller's logo shall
                      also appear on Co-Branded Products.

               2.4.2  PRICES FOR CO-BRANDED PRODUCTS.

                      2.4.2.1  ***

                      2.4.2.2  *** the *** charge for a Co-Branded Product shall
                               be based upon ***. Seller shall document its
                               incremental expenses and present the
                               documentation to Buyer. Notwithstanding anything
                               to the contrary contained in the preceding
                               sentences, the parties may mutually agree upon a
                               commercially reasonable charge for custom
                               manuals, documentation or other similar changes
                               from Seller's standard practices. ***" Seller's
                               charges for packaging of a Co-Branded Product are
                               to be determined consistent with this Section
                               2.4.

        2.5    PRODUCT TEST INSTRUMENTATION. ***, beginning when the first
               Commercial Products are delivered, Seller shall provide Buyer
               with current Software and shall continue to provide current
               updated Software subject to the terms of this Agreement.

        2.6    ACCESSORIES. Seller will include a standard set of accessories
               with each Handset as identified and set forth in Attachment A-1
               through Attachment A-3, including, at

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       7
<PAGE>   14

               a minimum, antenna, headpiece/earset, user guide and necessary
               device driver software supplied on computer readable media (i.e.
               CD-ROM). In addition, Seller will offer a set of optional
               accessories available *** as identified in Attachment C, which
               shall be updated from time to time as mutually agreed to by the
               parties.

        2.7    UPDATE TO CHANGED STANDARDS. The parties recognize that the PCS
               1900 technology is still undergoing development and that
               Commercial Products may require post-production modification to
               meet changes in the various standards governing such Commercial
               Products.

               2.7.1  Seller agrees to provide to Buyer, ***, all Software
                      necessary to update any Products provided under this
                      Agreement to meet standards changes relevant to the
                      Product, where such standards change becomes effective
                      within *** from the date of delivery of the Product to the
                      End-User and (i) where, without the update, use of the
                      Product would be significantly impaired; or (ii) where the
                      update is necessary to remove a safety risk to users of
                      the Product; or (iii) where the update is necessary in
                      order to continue the safe, efficient and economic
                      operation of Buyer's network; or (iv) where the change is
                      required by operation of federal, state, local, or
                      international law or regulation.

               2.7.2  Further, Seller agrees to provide to Buyer, ***, any
                      Software necessary to update any Products provided under
                      this Agreement to meet standards changes relevant to such
                      Products where such standards changes become effective
                      within *** from the date of delivery of the Products to
                      Buyer and where, without the update (i) there would be a
                      material degradation in the operation of significant
                      features of the Products available to End-Users prior to
                      such standards changes and such material degradation
                      occurred with respect to a material number of Products, or
                      (ii) there would be a material degradation in the
                      operation of the network.

               2.7.3  Notwithstanding anything to the contrary contained herein,
                      Seller shall comply with the final order of any court or
                      administrative body with respect to any required
                      modification of any Product.

         2.8   MINIMUM PRODUCT PROCUREMENT.  ***

               2.8.1  RECORDS AND REPORTS. Seller shall maintain records
                      sufficient to accurately determine the actual purchase
                      volume credited to Buyer. Not later than thirty (30) days
                      after the end of each preceding month, Seller shall
                      prepare and provide to Buyer a report of qualifying
                      purchases and credits toward purchases (if appropriate)
                      for the preceding month. The report shall be furnished in
                      both paper and electronic versions. Seller shall certify
                      the accuracy of the report by signature of an appropriate
                      officer of Seller. The report shall be categorized by
                      identity of purchaser

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       8
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                      (Buyer,Affiliates, Authorized Purchasers) and model of
                      Product purchased or credits toward purchases made, and
                      the report shall indicate the unit volume of purchases
                      qualifying for aggregation in each category.

               2.8.2  CONTINUE TO DEVELOP COMPETITIVE PRODUCTS. Buyer's guaranty
                      to purchase the Minimum Purchase Quantity is conditioned
                      upon Seller's ability to continue to supply
                      state-of-the-art Products that are readily accepted by the
                      marketplace.

        2.9    ALLOCATION OF PRODUCTION. In the event that Seller is unable to
               meet its orders for Products as set forth in Purchase Orders that
               have been accepted by the Seller, and without derogation of
               Buyer's other remedies under this Agreement, Seller grants Buyer
               ***. Buyer shall retain this right of first refusal until Buyer
               has met its Minimum Purchase Quantity commitment, or the Minimum
               Purchase Term has expired, whichever is earlier. Buyer's right of
               first refusal shall apply to purchases by Affiliates and
               Authorized Purchasers.

        2.10   EMBEDDED PERMITTED SYSTEM RESTRICTION; PRE-LOADED SIM.

               2.10.1 EMBEDDED PERMITTED SYSTEM RESTRICTION. All Co-Branded
                      Handset Products sold to Permitted Purchasers shall be
                      configured with embedded software so as to function only
                      with a SIM supplied by Buyer or, as provided in Section
                      2.10.2, by Seller, unless otherwise specifically requested
                      by Buyer. Handsets shall be inoperable, except for
                      emergency calls, using a SIM for a network other than
                      Buyer's. Roaming operation with Buyer's network as the
                      subscriber's home system shall be unaffected by this
                      restriction. Such restriction shall be removable only
                      through an input key sequence unique to each individual
                      Handset (i.e., a common un-restriction code for all
                      Handsets of a particular model is not acceptable).
                      Following removal, the Handset shall operate with any SIM.
                      The removal key sequence shall be supplied to Buyer in an
                      electronic database, indexed by the serial number of the
                      Handset or other unique identifier agreed to by Buyer. The
                      removal key sequence shall not be supplied to any other
                      Permitted Purchaser or to the users of Handsets without
                      the written consent of Buyer on a case-by-case basis.

               2.10.2 PRE-LOADED SIM; PRE-PAID SIMS. Buyer intends that all
                      Handsets sold to Permitted Purchasers shall have a SIM
                      configured for Buyer's network pre-installed unless
                      otherwise directed by Buyer. The parties shall negotiate
                      the method of effecting Buyer's intention, recognizing the
                      need for security in the SIM configuration and the need to
                      accomplish installation in a cost-effective fashion. The
                      installation method may involve Buyer supplying configured
                      SIMs to Seller for installation. In those instances where
                      Seller is to install SIMs, the compensation to be

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

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                      paid to Seller shall be as set forth in Attachment C.
                      Where the parties agree that Seller is to assume
                      responsibility for installing SIMs, information concerning
                      the SIM and International Mobile Equipment Identity
                      ("IMEI"), etc., shall be provided to Buyer in a mutually
                      agreed electronic form. ***. Seller agrees that it will
                      implement reasonable and prudent safeguards to protect all
                      SIMs over which it has custody. In connection therewith,
                      no less frequently than once per calendar quarter, Seller
                      shall provide Buyer with a detail inventory report and
                      proper accounting of SIMs provided to Seller hereunder.

                      Seller agrees promptly to implement pre-paid SIM support
                      in its Handsets upon completion of pre-paid SIM standards.

        2.11   RESALE BY BUYER. Buyer shall have the right to resell Products
               upon the prices and terms and conditions to be determined by
               Buyer. Seller shall honor the warranty and other obligations
               imposed in this Agreement with respect to any Affiliate,
               Authorized Purchaser, or End User to the same extent required for
               a direct sale by Seller.

        2.12   SOFTWARE LICENSE. Subject to the limitations set forth elsewhere
               in this Agreement, at no charge to Buyer, Seller hereby grants to
               Buyer and its End Users a nonexclusive license to use Software
               associated with Products delivered to Buyer.

        2.13   DATABASE. Seller shall provide electronic format data concerning
               each Handset Product shipped, in the format and on the dates set
               forth in Attachment G. The form of data and its media may be
               changed from time-to-time by mutual agreement of the parties.

        2.14   COUNTRY OF ORIGIN. Upon request by Buyer, Seller shall provide
               Buyer with evidence of country of origin of Products, including
               the usual and customary certificates of country of origin, signed
               by an appropriate authorized official of Seller.

        2.15   BATTERY RECYCLING. If Seller's Products contain separate
               batteries or batteries replacable by End-Users, Seller shall
               establish a "used battery return program," whereby Buyer and
               End-Users of Seller's Products may obtain information on
               recycling used batteries through a nationwide toll-free "800"
               telephone number. Information concerning this program shall be
               included in the user information supplied with Products and
               replacement batteries.

        2.16   ADVERTISING DISPLAY MATERIAL. Seller shall create the normal and
               customary point-of-sale display material, product brochures,
               dummy Handsets, etc. and furnish reasonable quantities of the
               same to Permitted Purchasers at the prices set forth in
               Attachment C. Seller shall cooperate with Buyer in producing this

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

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               material and, upon request by Buyer, add reasonable Buyer-defined
               information to the point-of-sale material. Reasonable quantities
               of the sales material described in Attachment H will be provided
               by Seller to Buyer without charge. Such quantities shall be
               consistent with those quantities offered to other customers of
               Seller under similar circumstances.

3       CUSTOMER REPRESENTATIVE

        3.1    CUSTOMER REPRESENTATIVE. No more than 30 days subsequent to the
               effective date hereof, Seller shall identify a customer
               representative (the "Customer Representative") to whom it shall
               delegate such authority within Seller's organization as is
               necessary for proper discharge of the duties and obligations set
               forth in this Agreement. By illustration and not limitation, the
               Customer Representative shall provide timely information to Buyer
               concerning development, testing and manufacturing schedules, test
               procedures, test execution, shipping and delivery schedules,
               manufacturing of co-branded or other custom Products,
               specifications, features and functions, inter-operability, and
               other related matters. The Customer Representative shall be
               Buyer's primary point of contact for all issues arising from the
               implementation and execution of the terms and conditions of this
               Agreement.

        3.2    UPDATE MEETINGS. The parties shall meet not less than once every
               calendar quarter to review Buyer's needs for Products, and
               discuss new Products (such meeting being referred to as an
               "Update Meeting"). At least thirty (30) days prior to each Update
               Meeting, Buyer shall submit to Seller a written, proposed agenda,
               outlining the development issues Buyer would like addressed by
               Seller. Seller shall review such proposed agenda and will provide
               an update to Buyer on any such issue where Seller has provided,
               or is willing to provide, an update to any customer or other
               third party. Further, at each Update Meeting, Seller will provide
               to Buyer an update on the status of the development of any
               features Seller anticipates will be launched within the
               forthcoming two (2) years, provided that Seller has disclosed, or
               is willing to disclose, such information to any customer or other
               third party. Buyer agrees that certain of this information may be
               Confidential Information and shall be treated as such in accord
               with the terms of this Agreement.

4       PRICES

        4.1    ***

        4.2    ***. Subject to the terms and conditions set forth in Section 8,
               ***

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               4.2.1 In the event that Seller fails for any reason to develop
               and deliver any of the Commercial Products listed on Attachments
               A-1, A-2, or A-3 within the time periods previously agreed upon
               by the parties, then ***

        4.3    PRICE LIST; CHANGES AS NEW PRODUCTS ARE INTRODUCED. The prices
               for the Products as set forth in Attachment C are ***. If Seller
               implements changes in the Products, modifies the drawings and
               specifications relating thereto, or substitutes therefor products
               of more recent design through proposed amendments to Attachments
               A-1 through A-3 or the addition of a new Attachment, in addition
               to any other requirements provided in this Agreement, any
               changes, modifications or substitutions must comply with each of
               the following requirements with respect to changes to existing
               Products or new Products intended as replacements for existing
               Products:

               4.3.1  INTERCHANGEABILITY. Where the new or changed Product is
                      intended to be physically interchangeable with an existing
                      Product, such new or changed Product must not adversely
                      affect physical or functional interchangeability with
                      existing Products or performance, unless otherwise agreed
                      in writing by Buyer.

               4.3.2  PRICE. The price for an equivalent Product (i.e., with
                      similar form including size and weight, features,
                      functionality and accessories) must be ***.

               4.3.3  ADVANCE NOTICE.

                      4.3.3.1  Seller will provide Buyer with advance written
                               notice of any substantial change, modification
                               substitution, or discontinuance, including notice
                               of Seller's intention to change the Product's
                               price as set forth in section 4.3.2. Except where
                               unplanned and immediate market changes make such
                               notice impracticable, the notice shall be given
                               at least ninety (90) days in advance of the
                               effective date of the change, modification or
                               substitution, except that notice of Seller's
                               intention to change the Product's price shall be
                               given at least thirty (30) days in advance of the
                               effective date of the change. Should Seller not
                               have made its final pricing decisions at the date
                               of notice, Seller shall provide Buyer with
                               Seller's estimated prices *** and shall furnish
                               the final price information to Buyer not later
                               than thirty (30) days in advance of the effective
                               date. In the event that Seller has failed to
                               provide the required advance written notice, then
                               Buyer may, at its option, return all unsold
                               inventory of the Products to which the price
                               change applies and receive a credit from Seller
                               in the amount paid by Buyer for the

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

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                               returned products. The price for any Product that
                               has not been shipped as of the effective date of
                               the price change shall be deemed to be restated
                               at the new, lower amount.

               4.3.4  ACCESSORY COMPATIBILITY. Where a new Product is
                      introduced, Seller shall ensure that, to the greatest
                      extent reasonably feasible, the new Product is
                      plug-compatible with older Products for accessories. It is
                      not Buyer's intention to limit Seller's ability to
                      introduce smaller or lighter Products through this Section
                      4.3.4. However, Seller shall give due consideration to
                      ensuring compatibility of, among other things, battery
                      chargers, hands-free kits, etc., when introducing new
                      Products.

        4.4    ***.

               ***

               4.4.2  *** either by (i) delivering a check made payable to the
                      order of Buyer or delivering cash to Buyer; or (ii)
                      applying a credit or offset against any outstanding
                      undisputed invoices Buyer has with Seller and delivering a
                      check to Buyer for the remaining amount. In addition to
                      the foregoing, the parties may agree that Seller may apply
                      *** rebate either by (x) delivering to Buyer such quantity
                      of Products as has an aggregate value equal to the ***; or
                      (y) combining any of the first three methods set forth in
                      this Section 4.4.2.

               4.4.3  CERTIFICATION. Buyer may from time to time obtain from
                      Seller, ***, a certification signed by an authorized
                      officer, stating that the price review was performed and
                      whether Buyer or any other Permitted Purchaser is entitled
                      to a rebate or a lower price upon the conclusion of the
                      quarterly price analysis described above. At Buyer's
                      request, Seller shall provide the results and
                      documentation of the review to Buyer's outside independent
                      firm of certified public accountants for verification;
                      provided that the accountants shall not disclose any
                      information related to such review to Buyer, unless Buyer
                      is entitled to lower prices or more favorable terms of
                      sale under this provision and then only such information
                      as may be necessary to request such prices or terms. All
                      information delivered to Buyer shall also be delivered to
                      Seller. In the event that the outside audit determines
                      that a price reduction should have been made but was not
                      made by Seller, Seller shall bear all expenses of the
                      audit. In the event that the outside audit determines that
                      no price reduction should have been made, Buyer shall bear
                      all expenses of the audit.

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

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        4.5    RETURN POLICY. Buyer shall have the right to return Product,
               subject to re-stocking charges and other reasonable limitations
               set forth in Seller's "Standard Return Policy," as amended from
               time to time by mutual agreement, a copy of which is attached
               hereto as Attachment I. ***

        4.6    TAXES AND OTHER CHARGES. Seller shall bear the cost of all taxes,
               import and export duties, and other governmental fees of whatever
               nature except sales and use taxes. Seller shall not charge Buyer
               sales tax, provided that Buyer has provided Seller with a current
               tax-exempt certificate.

        4.7    SELLER TO HOLD BUYER HARMLESS. Seller agrees to pay, and to hold
               Buyer harmless from and against, any penalty, interest, tax or
               other charge that may be levied or assessed as a result of the
               delay or failure of Seller for any reason to pay any tax or file
               any return or information required by law, rule or regulation or
               by this Agreement to be paid or filed by Seller.

5       INVOICING AND TERMS OF PAYMENT

        5.1    INVOICE UPON SHIPMENT. Seller shall issue an invoice to Buyer in
               detail satisfactory to Buyer, including a mutually-agreed upon
               electronic format, for Products at the time of shipment.

        5.2    PAYMENT. Buyer guarantees to Seller to pay invoices within thirty
               (30) calendar days of the later of both (i) Buyer's receipt of an
               invoice and (ii) receipt by Buyer of Products corresponding to
               such Invoice.

        5.3    PAST DUE PAYMENTS. Any payment not made within thirty (30) days
               of receipt of invoice shall be subject to a late payment charge
               of *** per month applied against the unpaid portion of the
               charge. In the event that any payment becomes more than sixty
               (60) days past due, Seller may at its option (i) cease shipment
               of any Products ordered in accord with this Agreement and (ii)
               provide the thirty (30) notice of termination with Buyer's right
               to cure as set forth in section 14.1.

        5.4    AMOUNTS IN DISPUTE. Where Buyer disputes the amount due under an
               invoice, Buyer shall pay the sum not in dispute. Sums disputed in
               good faith shall not be considered late under Section 5.3.

6       SELLER ADVERTISING ACCOUNT

        Buyer may purchase advertising and promotion in the Buyer's MTA's and
        BTA's with a total value of *** purchased by Permitted Purchasers from
        Seller hereunder, and Seller shall credit *** against amounts otherwise
        due Seller (the "Advertising Allowance"). Buyer shall earn the
        Advertising Allowance monthly and may use it at any time over the

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        twelve (12) month period immediately following the month in which the
        Advertising Allowance was earned. The Advertising Allowance shall be
        applicable to the Minimum Purchase Quantity only once the Minimum
        Purchase Quantity has been delivered, but it may be spent at any time in
        the twelve (12) month period immediately following completion of
        delivery of the Minimum Purchase Quantity.

7       TRADEMARKS AND LOGOS

        7.1    LOGOS ON PRODUCTS; ADVANCE CONSENT FOR OTHER LOGOS. At either
               party's reasonable request, the Products shipped under this
               Agreement shall carry that party's designated logo and/or
               labeling as described in Section 2.

        7.2    LIMITED USE OF MARKS. To ensure protection of each party's
               trademarks, trade names, corporate slogans, corporate logo,
               goodwill and product designations, neither party, without the
               express written consent of the other, shall have the right to use
               any such marks, names, slogans or designations of the other, in
               the sales, lease or advertising of any Products or on any Product
               container, component part, business forms, sales, advertising and
               promotional materials or other business supplies or material,
               whether in writing, orally or otherwise.

        7.3    ARTWORK AND REPRODUCTION. To the extent requested by a party and
               in accordance with Sections 2 and 7.1, the other shall provide
               camera-ready artwork of the other's trademarked logo labels. The
               providing party hereby authorizes the receiving party to
               reproduce such trademarked labels to the providing party's
               satisfaction for the sole purpose of affixing such trademarked
               labels to the Products and point-of-sale packaging in accordance
               with the providing party's specifications. Each party represents
               and warrants to the other that it has the right, by way of
               ownership or otherwise, to use such logo and further agrees to
               indemnify and hold the other harmless for any losses, damages or
               other liabilities resulting from the use of the providing party's
               designated logo. The parties will agree upon reasonable
               provisions for samples and approval of trademarked labels added
               to Products.

        8.     FORECASTING AND PURCHASE ORDERS.

               8.1 FORECAST OF DEMAND. Buyer shall MONTHLY FURNISH SELLER WITH
twelve-month rolling forecasts, showing Buyer's projected purchases month by
month. Buyer shall use its reasonable efforts to make the rolling forecasts
accurate but the rolling forecast does not obligate Buyer to purchase any
specific Products or quantities of Products, subject to the Minimum Purchase
Quantity commitment. Seller shall notify Buyer promptly upon receipt of each
forecast whether Seller can provide Products sufficient to meet the forecast.
Buyer shall provide the first forecast within two business days after complete
execution of this Agreement.

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<PAGE>   22

               8.2 PURCHASE ORDERS; ACCEPTANCE; THE MINIMUM PURCHASE QUANTITY.
Buyer shall periodically submit to Seller orders for the purchase of the
Products (each a "Purchase Order") as set forth below. Purchase Orders shall be
governed by the terms and conditions of this Agreement. If a Purchase Order
specifies quantities that do not exceed the forecast, then Seller must accept
that Purchase Order. If a Purchase Order specifies quantities that exceed the
forecast, Seller may at its option accept all of the Purchase Order, but it must
accept that portion or quantity of the Purchase Order specified in the forecast.
If a Purchase Order is within the forecast and Seller can only deliver less, the
difference between the quantity within the forecast and the quantity delivered
shall be applied against Buyer's obligation to purchase the Minimum Purchase
Quantity. In the event that Seller refuses to provide Products in excess of the
quantities set forth in the forecast, then such amounts shall not be applied
against Buyer's obligation to purchase the Minimum Purchase Quantity.

               8.3 FORM OF PURCHASE ORDER. Each Purchase Order shall specify:

                          (a)    the models, unit extended, and total cost of
                                 Products to be delivered;

                          (b)    the quantity of Products to be delivered,
                                 provided, however, that each Purchase Order
                                 shall be for a minimum of four pallets, each
                                 sized 40" X 48" X 60", and containing no fewer
                                 than *** units of the Products;

                          (c)    Buyer's required date of delivery of the
                                 Products (the "Specified Delivery Date"),
                                 provided, however, that in no event shall the
                                 Specified Delivery Date be sooner than ninety
                                 (90) days after Seller receives the Purchase
                                 Order;

                          (d)    Where the Products are to be delivered, which
                                 may include any or all of Buyer's, Affiliates',
                                 or Authorized Purchasers' delivery points, or
                                 third party delivery points or warehouses [the
                                 "Delivery Location(s)"];

                          (e)    the preferred method of shipping;

                          (f)    the SKU and any other Products packaging or
                                 labeling requirements; and

                          (g)    Name, address and phone number of the person to
                                 receive the notice of receipt.

               8.4. RECEIPTS OF PURCHASE ORDERS. Seller shall provide Buyer with
electronic (to include facsimile) or written notice of receipt of Purchase
Orders. Subject to the terms and restrictions of section 8.2, within five (5)
business days of Buyer's placement of a

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

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Purchase Order, Seller shall notify Buyer in writing of its acceptance or
rejection of Buyer's Purchase Order including shipment dates. Seller shall also
provide to Buyer notices of actual shipments on each day of shipment. Such
notices shall include the serial numbers of Products being shipped and the
Purchase Order number being filled, SKU, description, quantity shipped and
quantities backordered, the name of the carrier and the carrier's tracking
number, delivery date, and Universal Product Codes ("UPC") related to the
shipment.

               8.5. SIM UNLOCK DATA. Seller shall provide Buyer with all handset
SIM unlock data via electronic or disks within five (5) days of any handset
deliveries. The data format shall follow the GSM NA reference document NAPT 14
(or successor thereto). Upon prior written approval by Buyer, Seller may
implement an alternate means of Seller's choice of providing the SIM unlock
data, provided, however, that if such alternate means requires additional costs
or equipment, this shall be provided to Buyer by Seller free of charge.

               8.6 CHANGES TO DELIVERY LOCATIONS. Changes to the Delivery
Location(s) originally specified on a purchase order must be submitted to Seller
in writing at least fifteen (15) business days prior to the Shipment Date.

               8.7 TEMPORARY HOLD ON DELIVERIES. Buyer shall have the right to
require Seller to hold delivery of up to twenty percent (20%) of any shipment
for a period not to exceed sixty (60) days, where the hold notice is given at
least thirty (30) days in advance of the scheduled shipping date; provided,
however, for all such shipments scheduled to be made during the last calendar
quarter of any year, Seller may, at its option, in lieu of postponing shipment
according to the terms of this Section 8.7, ship the Products as scheduled.
However, if Seller elects not to honor Buyer's hold notice and instead elects to
ship the entire quantity of Product ordered by Buyer, Buyer shall be afforded
sixty (60) days from the date of receipt of the invoice applicable to such
shipped order in which to pay Seller for such shipment. Notwithstanding anything
to the contrary contained in this Section 8.7, if Buyer shall invoke its
privilege to delay delivery of up to twenty percent (20%) and shipment is
delayed as provided herein, the liquidated damages provision of Section 8.10
shall not apply to the late delivery of the re-scheduled shipment(s) and Buyer
expressly acknowledges that Seller may sell to another of Seller's customers any
delayed Handset inventory on hold.

               8.8    CHANGE OF MODEL MIX. Buyer may change the model mix of any
                      shipment of any Purchase Order and Seller shall honor such
                      changes subject to the following:

                      8.8.1.   All such changes must be made in writing.

                      8.8.2.   For changes requested where Products are sought
                               to be substituted for other Products within that
                               same model family, requests for changes made at
                               least ninety (90) days prior to the Specified

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<PAGE>   24

                             Shipping Date shall be honored, without adjustment
                             to the Specified Shipping Date.

                      8.8.3    For changes requested where (a) Products are
                               sought to be substituted for other Products
                               within that same model family, but the request is
                               made less than ninety (90) prior to the Specified
                               Shipping Date or (b) Products are sought to be
                               substituted for other Products outside the model
                               family, Seller shall, within ten (10) days of
                               receipt of such request, notify Seller whether
                               the requested change is acceptable and/or whether
                               such changes will necessitate a change in the
                               Specified Shipping Date.

        8.9    INABILITY TO MEET A SPECIFIED SHIPPING DATE. Once a Purchase
               Order has been accepted, Seller is expected to deliver the
               Products in such quantities, in such manner and in such time as
               specified in the Purchase Order. As soon as Seller believes that
               it will be unable to meet the Specified Shipping Date, Seller
               shall without delay provide notice to Buyer.

        8.10.  FAILURE TO MEET SPECIFIED SHIPPING DATE. Regardless of whether
               Buyer has been notified of Seller's inability to meet a Specified
               Shipping Date, should Seller fail to ship Products within
               fourteen (14) days of the Specified Shipping Date, Buyer shall
               have the option, which shall not be unreasonably invoked, to
               exercise any one or more of the remedies defined below:

               8.10.1 Cancel the Purchase Order, in whole or in part, with no
                      obligation to pay for the Products specified in the
                      Purchase Order.

               8.10.2 Reschedule the delivery date for all or any part of the
                      late shipment.

               8.10.3 If delivery is not complete by the Specified Shipping
                      Date, then Seller shall be liable for the following late
                      delivery damages: ***

               8.10.4 If Seller fails to make a full delivery within 30 days of
                      the Specified Shipping Date, in addition to the foregoing
                      remedies, ***

        8.11   RIGHT TO COVER. Except as otherwise limited in the manner
               described in this Section 8.11, in addition to any other rights
               that Buyer might have elsewhere in this Agreement, including
               specifically section 8.10, should Seller fail to meet its
               Specified Shipping Date for any Product, at its sole option and
               after providing Seller with written notice no less than thirty
               (30) days prior to seeking alternative supplies, Buyer may seek
               alternative supplies from other manufacturers or distributors.
               However, if within such thirty (30) day period, Seller resolves
               the delivery problems that have caused Buyer to seek such
               alternative supplies, Buyer shall renew purchasing Products from
               Seller on the terms and conditions set forth in this Agreement.

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

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               Should Buyer exercise its option to seek alternative supplies
               after the thirty (30) day period described above, Buyer's Minimum
               Purchase Quantity shall be reduced by the number of units that
               Buyer obtains from its alternative source. The number of units
               that Buyer obtains from its alternative source shall also count
               toward Buyer's ***, as set forth in Section 4.2. For example, in
               the event that Seller fails to meet a Specified Delivery Date for
               *** units, and after 30 days, Buyer exercises its option to
               purchase those *** units from an alternative source, then those
               *** units shall count as purchased in determining when Buyer
               shall begin to recoup the Product Development Fee. If Buyer has
               already begun to ***, then those units shall be eligible for ***
               in accordance with Section 4.2.

               Should Buyer exercise its option to seek alternative supplies
               after the thirty (30) day period described above, Seller shall be
               liable to Buyer for Buyer's increased costs, including
               differences in unit prices, expedited shipping charges and
               related operating costs related acquiring comparable Products
               from an alternative source. Notwithstanding anything to the
               contrary in the immediately preceding sentence, Buyer agrees that
               it shall take reasonable steps to mitigate the level of such
               increased costs and the resultant impact on Buyer's operations.

        8.12   DISCREPANCIES. Buyer shall report to Seller any discrepancies
               concerning the quantity of Products shipped or drop-shipped
               within either five (5) days following delivery or three (3) days
               of discovery of the discrepancy, whichever comes later.

        8.13   MODIFICATIONS TO PURCHASE ORDER. Except to the extent restricted
               by this Agreement, Buyer retains the right to modify or cancel,
               in whole or in part, any Purchase Order prior to complete
               performance thereof by Seller. Any such modification or
               cancellation shall be subject to the provisions set forth below
               and to this Agreement.

               8.13.1 MODIFIED OR CANCELED PURCHASE ORDER. Notwithstanding the
                      foregoing, Buyer may modify or cancel any Purchase Order
                      through notice to Seller. In the event of modification or
                      cancellation of a Purchase Order by Buyer, Seller may be
                      entitled to claim compensation as provided in Section
                      8.13.2.

               8.13.2 CHANGE IN COSTS. If Seller has performed work that is not
                      reusable in fulfilling its obligations under other
                      Purchase Orders issued by Buyer, or that such non-reusable
                      work cannot reasonably be restocked or otherwise used by
                      Seller in fulfillment of its obligations to other
                      customers without increased cost to Seller, then the
                      purchase price to be charged by Seller shall be equitably
                      adjusted. Seller shall inform Buyer of its intention to
                      demand a price increase due to the variation within two
                      (2) weeks after the receipt by the Seller of the modified
                      or canceled Purchase Order. Buyer need not give notice to
                      Seller of Buyer's intention to claim a

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

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                      payment reduction due to any cancellation or reduction in
                      quantity of Products. In such instances, Seller shall
                      reduce appropriately and automatically the invoice amount
                      to reflect the reduced quantity of Product ordered. The
                      determination of any price adjustment shall in no event
                      delay any performance by Seller under this Agreement.

9       QUALITY ASSURANCE

        9.1    ACCEPTANCE TEST PROCEDURE TO BE DEFINED. Buyer and Seller will
               jointly establish the appropriate Acceptance Test Procedures that
               will be added to this Agreement subsequent to the date hereof as
               Attachment E not later than the dates set forth in Attachment B.
               Notwithstanding the preceding sentence, Seller is expected to
               plan other tests, generate test procedures, incorporate Buyer
               input, to the extent Seller believes such input is reasonably
               appropriate, execute tests, report results and rectify test
               failures, before testing a Product for Acceptance.

        9.2    REGULATORY. Seller shall be responsible at its sole cost for
               obtaining any and all approvals and certifications required by
               governing bodies, including, but not limited to, FCC approvals,
               Underwriter's Laboratory approval, etc. Seller is deemed to be an
               expert in obtaining any regulatory approvals and delays in
               obtaining regulatory approval shall not constitute an excusable
               delay, unless such delay is the result of system simulator
               failure or similar problems, or such delay results from an event
               deemed to be Force Majeure, unless Seller can clearly demonstrate
               such, where requests are timely filed. Seller represents and
               warrants that all Products delivered hereunder will have received
               all necessary regulatory approvals. By illustration and not
               limitation of the foregoing, Seller warrants that, upon delivery,
               Products will comply with all FCC rules or other regulations
               including, without limitation, compatibility with disabled or
               handicapped End-Users, including hearing impaired End-Users using
               hearing aids, blind End-Users, etc., applicable as of the date of
               such delivery. Seller also warrants that, to the extent
               applicable to Seller or Buyer, Seller's Products comply with the
               requirements of the Americans With Disabilities Act, 42 U.S.C.
               Section 12101. Seller shall add to its instruction manuals
               information concerning use of Products by disabled or handicapped
               persons. Buyer agrees to provide Seller at Seller's expense with
               reasonable assistance and backup support when so requested by
               Seller and where necessary in obtaining such approvals.

        9.3    ISO 9000 COMPLIANCE; AUDITS. Seller shall endeavor to produce
               Products in accordance with a quality system meeting the
               requirements established in ISO Standard 9001. Seller shall work
               to gain ISO 9001 certification and shall, upon request by Buyer,
               furnish Buyer a copy of Seller's ISO certification plans and
               timetable. Buyer may conduct quality audits of Seller's
               manufacturing facilities up to four times a year, with advance
               notice of five (5) working days.

                                       20
<PAGE>   27

        9.4    MARKET VERIFICATION TEST; COMMERCIAL TEST PROCEDURES. For each
               Prototype model of Product, within five (5) days of the first day
               on which Alpha units are available (as set forth in Attachment
               J), Seller will provide Buyer, at no charge, two (2) such
               Prototypes for testing. Buyer shall test the units according to
               any protocols submitted by Seller and may additionally test the
               units as Buyer deems appropriate. In addition, for each new model
               of Product, within five (5) days of the first (1st) day of Beta
               testing (generally, about thirty (30) days before launch), Seller
               will provide Buyer, at no charge, one hundred (100) units for
               Beta testing in accordance with Seller's protocols. Buyer shall
               conduct all such testing in good faith and shall submit the
               results to Seller within ten (10) days of completion of testing.
               In addition, if Seller so requests, all test units on loan to
               Buyer shall be (i) returned to Seller, or (ii) destroyed by
               Buyer, either at Seller's expense.

        9.5    FIELD TRIALS. Where Buyer and Seller agree to conduct field
               trials using Buyer's network and Prototype Products, should FCC
               type acceptance or other regulatory approval not have been
               granted for the Prototype or Pre-production Products, Seller, at
               its cost and with appropriate support from Buyer in Buyer's
               discretion, shall promptly seek and diligently prosecute, a
               request for expedited approval or an interim waiver to meet
               regulatory requirements. In connection with such field trials, at
               no charge to Seller, Buyer shall provide Seller with a
               commercially reasonable number of SIMs for the purpose of
               conducting such field trials. The SIMs to be provided to Seller
               shall be enabled for use in Buyer's home network and for roaming
               in other networks. The reasonable and customary expenses incurred
               by Seller in performing such tests shall be borne by Seller.

        9.6    SAMPLE TESTING. Seller may at its sole option, but is not
               obligated to, perform adequate testing to assure that shipped
               Products meet Buyer's sample testing criteria established in
               Attachment D. Notwithstanding the foregoing, prior to Seller
               initiating the volume manufacture of Products, Buyer shall have
               the right at its sole option, but is not obligated to, conduct
               sample testing of incoming Products and to reject lots that fail
               to meet the applicable product specifications and quality levels
               set forth in this Agreement and Attachments hereto (including the
               quality levels set forth in Attachment D), and/or US regulatory
               requirements and US law. Buyer shall have the right to conduct
               such testing either at Seller's manufacturing facility ("on-site
               testing") or Buyer's facility ("off-site testing"). Neither
               Buyer's waiver of its right to conduct sample testing nor Buyer's
               conducting sample testing in any way other than as set forth in
               Attachment D shall derogate from or otherwise affect in any way
               Buyer's other rights or remedies under this Agreement, including
               by illustration and not limitation its rights and remedies under
               sections 13, 14, or 17.

               9.6.1  ON-SITE TESTING. Buyer shall have the right to conduct at
                      Seller's site acceptance tests of manufactured Products in
                      such time frames as are

                                       21
<PAGE>   28

                      mutually agreed upon by the parties. Buyer's acceptance
                      tests shall not unreasonably interfere with Seller's
                      normal business operations, and Buyer may not require
                      Seller to provide test equipment for such tests beyond
                      that which Seller normally uses to perform such tests.
                      This testing in no way relieves Seller of any other
                      responsibilities under this Agreement. Seller shall make
                      available such test equipment to Buyer at Seller's
                      location to perform such tests. In the event Buyer
                      requests tests that are not normally performed by Seller,
                      Buyer and Seller shall work together to implement Buyer
                      specific end of process tests. Any increases in cost to
                      Seller to perform such Buyer tests will be negotiated in
                      good faith by both parties prior to Seller initiating such
                      tests.

               9.6.2  OFF-SITE TESTING. Seller acknowledges and agrees that, in
                      addition to the testing described in Section 9.6.1 or in
                      lieu thereof, Buyer shall have the right to conduct
                      off-site sample testing of incoming Products and to reject
                      lots that fail to meet the quality levels set forth in
                      Attachment D. In connection with such off-site testing,
                      Buyer shall bear the cost of any additional test equipment
                      required to perform such test(s); however, Seller shall
                      provide Buyer, without charge, all upgrade(s) to any
                      Seller owned software used in the test equipment so that
                      Buyer is able to test and confirm the quality of the
                      various releases of Products provided hereunder. Buyer
                      shall be solely responsible for any additional testing
                      required to qualify Products for sale in any market other
                      than the U.S. Seller shall perform adequate testing to
                      assure that shipped Products meet Buyer's sample testing
                      criteria set forth in Attachment D.

        9.7    INCOMING INSPECTION. In addition to the sample testing described
               in Section 9.6, Buyer shall have the right to conduct up to one
               hundred percent (100%) inspection of all incoming products
               ("Incoming Inspection"). Any Incoming Inspection shall be
               completed within thirty (30) days of receipt of the Product
               undergoing inspection. The Incoming Inspection shall determine
               completeness of shipment, physical and electrical condition of
               Products, and otherwise verify conformance of the Products with
               the specifications thereof. Buyer shall have the right to reject
               any such shipment as having failed Incoming Inspection. In such
               event, at the Seller's discretion either (i) Buyer may reject the
               shipment and return it to Seller at Seller's expense or (ii)
               Buyer may reject the shipment, and, as soon as commercially
               feasible but no later than seventy-two (72) hours after receiving
               Buyer's notice of rejection, Seller will fly one or more of its
               personnel to the location of such rejected shipment for the
               purpose of examining the same and rectifying the cause for
               Buyer's rejection. Buyer, however, shall not have the right to
               delay payment, where payment to Seller is otherwise due, by
               virtue of Buyer's failure to complete Incoming Inspection within
               thirty (30) days. Buyer's performance of Incoming Inspection,
               however, shall not prevent Buyer from making claims under other
               provisions of this Agreement for defective, misdelivered or
               otherwise incorrect Products.

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<PAGE>   29

        9.8    RETURN OF DEFECTIVE PRODUCTS OTHER THAN IN WHOLE SHIPMENTS. With
               respect to Products failing Buyer's acceptance tests, where such
               failures are random in nature and type and are not common
               failures (e.g., a software program bug that affects every unit
               shipped in the same or a similar manner), Seller shall compensate
               Buyer in liquidated damages for Buyer's efforts in identifying
               Defective Products and returning them to Seller for credit
               against Buyer's account. A Product Defect shall include, but not
               be limited to, a damaged, mislabeled or mis-packaged Product, an
               incorrect Product model or improperly operating Product, or a
               Product not in compliance with the specifications as set forth in
               Attachments A-1 through A-3 of this Agreement or such subsequent
               Attachment (a "Defect" or "Defective Product"). The liquidated
               damages shall be in the form of additional like Products shipped
               at Seller's expense, provided without additional charge to Buyer,
               and shall be in addition to any other remedies for Defective
               equipment as provided elsewhere in this Agreement. The liquidated
               damages shall be determined as follows:

               9.8.1  ***

               9.8.2  ***

10.     EXTENDED TERM FOR CERTAIN PROVISIONS. Except as may be more specifically
        set forth in an individual section, sections 1, 2, 7, 10, 12, 13, 14,
        15, 17, 18, 19, 25, and 32 shall survive the termination of other
        portions of this Agreement.

11.     TITLE AND RISK OF LOSS

               Title and risk of loss shall pass to Buyer upon delivery of the
               Products to the location specified in the Purchase Order. Seller
               shall pay for all freight charges from Seller's configuration
               center to Seller's warehouse in San Diego, California. Seller
               shall bill all additional freight charges to Buyer's Delivery
               Points at the amounts set forth in Attachment C. Delivery of the
               Products shall convey to Buyer all rights and title therein by
               appropriate documents with warranty of title, free and clear of
               all liens and encumbrances. Title to Seller's intellectual
               property, including software, patents, copyrights, trademarks and
               trade names, shall not be conveyed to Buyer at any time.

12      PRODUCT SUPPORT

        12.1   TRAINING SUPPORT. Seller shall provide, without charge, training
               support to Buyer as provided below:

               12.1.1 TECHNICAL TRAINING. Seller will train Buyer's personnel in
                      connection with the installation, re-programming, use, and
                      maintenance of the Products. Consistent with the
                      requirements of Section 12.3, Seller shall

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

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<PAGE>   30

                      give Buyer a reasonable number of copies of Product
                      documentation, including, but not limited to,
                      re-programming and installation instructions, standards
                      and specifications, maintenance procedures and usage
                      instructions, except as Seller reasonably considers to be
                      proprietary or confidential.

               12.1.2 SALES TRAINING. Seller shall train Buyer's sales personnel
                      on the Products, including training materials for on-site
                      sales personnel training, providing detailed feature and
                      benefits summaries, configuration drawings, accessory
                      descriptions, programming instructions and the like.

               12.1.3 CUSTOMER SERVICE TRAINING. Seller shall train Buyer's
                      customer operations personnel, including training
                      materials for on-site customer service training, providing
                      detailed feature, configuration drawings, trouble shooting
                      Q&A, and programming instructions.

               12.1.4 REPRODUCTION RIGHTS; UPDATED TRAINING MATERIAL. Buyer has
                      the right to video tape all training classes conducted by
                      Seller for Buyer's employees and to use the video tapes as
                      training tools for new hires. Seller will provide Buyer
                      with training documentation in both paper and electronic
                      formats and for on-line documentation to be shared by
                      multiple users. Seller will provide Buyer with updates to
                      training manuals and training equipment and software at no
                      charge to Buyer. Buyer will work with Seller to establish
                      the training guidelines and modules. Seller will conduct
                      training at Buyer's sites of choice with no more than five
                      (5) sites in each MTA or BTA for each category of training
                      defined in Sections 12.1.1 through 12.1.3. Seller will
                      provide Buyer with a training support line, during normal
                      business hours, at no charge to Buyer. Buyer will provide
                      Seller with a single point of contact for updates and
                      resolutions.

        12.2   TECHNICAL SUPPORT. Seller shall provide, without charge,
               technical support to Buyer and End Users as described on Exhibit
               K.

        12.3   DOCUMENTATION. Seller shall supply Buyer with the documentation
               described below in both printed format and on magnetic storage
               medium. Where documentation exists in draft or preliminary form,
               it shall be supplied to Buyer in such draft or preliminary form,
               and updated as described in Section 12.4. All documentation
               supplied shall be in accordance with the best standards for
               similar Products, whether from Seller or other suppliers.

               12.3.1 TECHNICAL DOCUMENTATION. Except as Seller reasonably
                      considers to be proprietary or confidential, technical
                      documents to be supplied include, but are not limited to:
                      block diagrams; service manual (including theory

                                       24
<PAGE>   31

                      of operation); installation and preventive maintenance
                      procedures; training manual; configuration guide;
                      installation and planning guide; commercial/sales training
                      instructions.

               12.3.2 FIRMWARE. Except as Seller reasonably considers to be
                      proprietary or confidential, Seller shall provide to Buyer
                      a firmware manual, including general description of
                      firmware architecture, to the extent appropriate for the
                      level of maintenance performed by Buyer.

               12.3.3 DELIVERY DATES AND REPRODUCTION. Complete sets of the
                      documents described in Sections 12.3.1 and 12.3.2,
                      inclusive, shall be delivered within a mutually agreed and
                      established time schedule and in correspondence with any
                      addition or modification to Products or the addition of
                      new Products to this Agreement. Buyer is authorized to
                      modify, reproduce and distribute such documents, whether
                      in whole or in part, as Buyer sees fit, for purposes
                      related to the operation, maintenance or business
                      activities of its PCS business.

               12.3.4 TECHNICAL BULLETINS AND NOTES. Except as Seller reasonably
                      considers to be proprietary or confidential, Seller shall
                      provide to Buyer, without charge, all technical bulletins
                      and notes related to Products, whether issued periodically
                      or aperiodically.

               12.3.5 TEST AND DIAGNOSTIC MODE INFORMATION. Except as Seller
                      reasonably considers to be proprietary or confidential,
                      Seller shall provide the information specified at Section
                      2.2 concerning the technical interface to Products,
                      including test and diagnostic mode information.

               12.3.6 CUSTOMER SERVICE. Seller shall provide customer service to
                      the extent and in the manner described in Attachment K.
                      Further, Seller shall make a good faith effort to
                      coordinate customer service efforts with Buyer's
                      contractor, Wireless Data Services.

        12.4   SURVIVAL AND EXTENDED TERM. Seller shall be responsible for
               revising and issuing its documentation and for providing Buyer
               with complete and up-to-date documentation as provided in Section
               12.3 and for providing Buyer with technical support as provided
               in Section 12.2. Seller's obligations under Sections 12.2 and
               12.3 and this Section 12.4 shall survive the term of this
               Agreement and shall end three (3) years after the delivery of the
               last unit of any Product under this Agreement.

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<PAGE>   32

13      WARRANTY AND SERVICE REPAIR

        13.1   PRODUCT WARRANTY. Without reducing the scope of warranties
               provided by Seller elsewhere in this Agreement or that may be
               imposed upon Seller at law or in equity, Seller hereby represents
               and warrants to Buyer as follows:

               13.1.1 INTER-OPERABILITY TESTING. Seller shall warrant and
                      certify that it has tested its PCS 1900 Products with PCS
                      1900 network infrastructure manufactured by Northern
                      Telecom, Ericsson, Siemens, Motorola, Nokia and Lucent, to
                      the extent these manufacturers have a functioning PCS 1900
                      test system and are willing to cooperate with Seller in
                      such compatibility testing, and that the results of such
                      tests demonstrate proper inter-operability as of the date
                      of testing. Seller shall periodically inform Buyer of the
                      status of its compatibility testing and shall provide such
                      information to Buyer when Seller introduces a new
                      configuration Product.

               13.1.2 REGULATORY APPROVALS. Seller warrants that all Products
                      have received all necessary regulatory approvals and
                      comply with all applicable federal and state laws, rules,
                      regulations, and codes in existence during the term hereof
                      (including without limitation FCC rules, regulations and
                      requirements),.

               13.1.3 COMPLIANCE. Seller warrants that all Products will work on
                      the full PCS spectrum, Bands A through F, inclusive,
                      except as may be specifically excluded on a
                      product-by-product basis in Buyer's sole discretion.
                      Seller further warrants that the Products comply with all
                      EIA/TIA, GSM, GSM NA, PTCRB, and ETSI standards and all
                      other mutually agreed industry specifications and
                      standards. Seller further warrants that the Products are
                      and will be fully Year 2000 compliant, meaning that the
                      advent of the Year 2000 shall not adversely affect the
                      performance, operation, or networking of any Products,
                      with respect to date or date-dependent data or functions.

               13.1.4 GOOD TITLE. Seller warrants that it has good title to the
                      Products and the right to sell them to Buyer free of any
                      proprietary rights of any other party, security interest,
                      lien or any other encumbrance whatsoever.

               13.1.5 OPERATIONS WARRANTY. Seller warrants that Products
                      furnished by Seller hereunder shall be free from defects
                      in manufacture, material, design, workmanship and title,
                      and shall conform to published specifications at the time
                      of original purchase. This warranty shall not apply to any
                      Product, or part thereof, which (i) has been modified or
                      otherwise altered other than pursuant to Seller's written
                      instructions or written approval, (ii) is in the normal
                      course consumed or depleted in operation or, (iii) is not
                      properly stored, installed, used, maintained or repaired
                      other than by

                                       26
<PAGE>   33

                      Seller-authorized repair, or, (iv) has been subjected to
                      any other type of misuse or detrimental exposure, or has
                      been involved in an accident.

               13.1.6 If a Product fails to meet the foregoing Warranties during
                      the warranty period, Seller shall promptly correct the
                      failure. Any repaired or replacement part furnished
                      hereunder shall be warranted for either the longer of (a)
                      the remainder of the warranty period of the Products in
                      which it is installed or (b) ninety (90) days after the
                      repair or replacement. In the event that Seller is unable
                      to correct the failure through either repair or
                      replacement, Buyer shall return the Product and Seller
                      shall refund the purchase price of the Product.

        13.2   LIMITATION. SUBJECT TO SECTIONS 4, 9, 11, AND 12, THE WARRANTIES
               SET FORTH IN THIS SECTION 13 ARE THE ONLY WARRANTIES, EITHER
               EXPRESS OR IMPLIED, THAT ARE MADE BY SELLER TO BUYER AS TO THE
               PRODUCTS, AND ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, STATUTORY
               OR COMMON LAW, ARE HEREBY EXPRESSLY DISCLAIMED, INCLUDING, BUT
               NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTIBILITY AND
               FITNESS FOR A PARTICULAR PURPOSE.

        13.3   END-USER WARRANTY. In addition, each Product shall come with such
               warranty to the End-User, as Seller shall establish as its
               standard End-User warranty for the Products from time to time,
               the current such standard warranty to the End-User being
               substantially in the form attached hereto as Attachment F. Under
               no circumstances shall the warranty period under the End-User
               warranty be for less than the longer of either (a) one year from
               the purchase of the Product or (b) ninety (90) days from the date
               of repair of the Product.

        13.4   SERVICE REPAIR AND REPLACEMENT. Seller shall maintain one or more
               authorized service centers as may be necessary to provide
               warranty service for the Products. The authorized service centers
               shall be equipped to repair or exchange, at no cost to the owner
               of the Product, defective Products that are within the warranty
               period, as described above. For products requiring repair or
               replacement after expiration of the applicable warranty period,
               Seller's authorized service center shall implement an exchange
               and repaid policy at reasonable rates.

        13.5   EXCHANGE PROGRAM. In order to minimize end-user time without
               Handsets in the event of warranty repairs, Seller shall support a
               Handset exchange program to be administered by PCS Partners or
               other servicer authorized by Seller and selected by Buyer (PCSP).
               Such support shall consist of (a) supplying an appropriate number
               of handsets and standard accessories to PCSP as seed stock
               sufficient to meet warranty replacement needs, and (b) the
               payment of fees to PCSP to cover repairs, refurbishing and one
               way standard ground freight for in-warranty

                                       27
<PAGE>   34

               defective Seller products received from end-users. PCSP shall use
               all in-warranty repaired and refurbished units as replacements
               under the exchange program.

        13.6   CONSISTENT FAILURES. Notwithstanding any disclaimer of warranties
               herein, where delivered Products repeatedly exhibit Defect
               failure rates during the warranty period with regard to any
               particular model of Product (i.e. any lot, batch, or other
               separately distinguishable group of Product sold or delivered to
               the End-user or remaining in inventory has more than ***of the
               same or similar Defect, or *** failure due to cumulative
               Defects), Seller and Buyer shall immediately initiate a joint
               program for appropriate countermeasures and, in addition to any
               other remedy ultimately available to Buyer under this Agreement
               or otherwise, Buyer shall have the option to exercise any of the
               following rights, individually or cumulatively:

               13.6.1 COVER. Buyer may purchase substitute products from another
                      supplier, in which case Seller shall be liable to Buyer
                      for Buyer's increased costs, including increased operating
                      costs, resulting from the substitute products

               13.6.2 TERMINATE FOR CAUSE. Buyer may terminate this Agreement
                      for cause; provided, however, Buyer shall deliver notice
                      to Seller of its intent to terminate this Agreement for
                      cause pursuant to this Section 13.6 and Seller shall be
                      given thirty (30) days in which to completely remedy to
                      Buyer's reasonable satisfaction the problem or problems
                      creating the unacceptable consistent defective failure
                      rate.

               13.6.3 RETURN OF DEFECTIVE PRODUCTS. Upon notice from Buyer of a
                      Product Defect, Seller shall issue a return authorization
                      to Buyer within 48 hours of receipt of notice. A Defective
                      Product may be returned directly by any Permitted
                      Purchaser or by Buyer's distributors or retailers at
                      Seller's expense. Seller shall accept returns even though
                      the Product is no longer in its original point-of-sale
                      packaging. Buyer agrees that each Defective Product is to
                      be returned to Seller without its associated SIM. Buyer's
                      distributors and retailers may return Defective Products
                      for a period starting upon receipt of such Product and
                      ending one (1) year after the last date the particular
                      model of Product has been purchased and received by an
                      End-User. Where Buyer elects to proceed under this Section
                      13.6.3, Seller shall issue an open credit memo to Buyer in
                      the amount of the full invoice purchase price for all
                      returned Products within thirty (30) days of return. Once
                      repaired or replaced, the Products will be delivered with
                      new invoices. This return policy shall continue to apply
                      notwithstanding that Seller has discontinued the model of
                      the Defective Products.

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

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               13.6.4 CANCELLATION OF PURCHASE ORDER. Cancel the Purchase Order,
                      in whole or in part, and return Defective and
                      non-Defective Products to Seller. Should Buyer exercise
                      its option under this section, Buyer's Minimum Purchase
                      Quantity shall be reduced by the number of units returned.
                      That number of units returned shall also count toward
                      Buyer's recoupment of the Product Development Fee, as set
                      forth in Section 4.2.

               13.6.5 RESHIPMENT. Require Seller to ship within 48 hours a
                      comparable non-Defective Product to the location requested
                      by Buyer, at Seller's expense; provided, however, such
                      right shall be exercised by Buyer only for returns of
                      twenty-five (25) or few units of Product.

               13.6.6 DURATION OF RIGHTS. Buyer shall be entitled to exercise
                      its rights under Section 13.6 until such time as Seller
                      establishes to Buyer's reasonable satisfaction that it has
                      cured the consistent failures. Provided, however, that
                      should Buyer have exercised its rights to terminate under
                      Section 13.6.2, Buyer shall be under no obligation to
                      reinstate this Agreement and provided that should Buyer
                      have exercised the remedies identified in Sections 13.6.1,
                      Seller shall be obligated to supply alternative Products
                      and cover Buyer's reasonable expenses, respectively, until
                      Seller has demonstrated, through delivery of Products to
                      Buyer, a period of three (3) consecutive months'
                      compliance with a failure rate of *** in each delivery
                      lot. Where Buyer elects to terminate this Agreement under
                      Section 13.6.2 during the Minimum Purchase Term, Seller
                      shall be liable to Buyer for Buyer's increased costs for
                      the remainder of the Minimum Purchase Term. Where Buyer
                      elects the right of cover under section 13.6.1, for a
                      period of forty-five (45) days following receipt by Seller
                      of notice of Buyer's remedy, Buyer shall provide Seller
                      the opportunity to negotiate the supply contract necessary
                      to effect such cover.

        13.7   SURVIVAL AND TERM. The rights and warranties granted in this
               Section 13 shall survive the term of this Agreement and shall
               remain valid for the periods during which the right or warranty
               is provided as described in this Section 13.

14      TERMINATION; LIMITATION OF LIABILITY

        14.1   DEFAULT. In the event of a material breach of this Agreement, the
               non-breaching party shall have the right to terminate this
               Agreement upon thirty (30) days prior written notice of
               termination to the other party, unless such breach and any
               intervening breaches have been cured.

        14.2   BANKRUPTCY. Either party may terminate this Agreement by written
               notice in the event that the other party (i) applies for or
               consents to the appointment of, or the

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

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               taking of possession by a receiver, custodian, trustee, or
               liquidator of itself or of all or a substantial part of its
               property, (ii) makes a general assignment for the benefit of its
               creditors, (iii) commences a voluntary proceeding under the
               Federal Bankruptcy code or under any other law relating to relief
               from creditors generally, or (iv) fails to contest in a timely or
               appropriate manner, or acquiesces in writing to, any petition
               filed against it in an involuntary proceeding under the Federal
               Bankruptcy Code or under any other law relating to relief from
               creditors generally, or any application for the appointment of a
               receiver, custodian, trustee, or liquidator of itself or of all
               or a substantial part of its property, or its liquidation,
               reorganization, dissolution, or winding-up.

        14.3   LIMITATION OF LIABILITY.

               14.3.1 EXCEPT FOR SELLER'S LIABILITY UNDER SECTIONS 9, 12, 13,
               15, 17, AND 18, AND EXCEPT FOR SELLER'S GROSSLY NEGLIGENT OR
               INTENTIONALLY WRONGFUL ACTS OR OMISSIONS, THE TOTAL LIABILITY OF
               SELLER, ON ANY AND ALL CLAIMS, WHETHER IN CONTRACT, WARRANTY,
               TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, ARISING OUT OF,
               CONNECTED WITH, OR RESULTING FROM THE PERFORMANCE OR
               NON-PERFORMANCE OF ANY AGREEMENT RESULTING HEREFROM OR FROM THE
               MANUFACTURE, SALE, DELIVERY, RESALE, REPAIR, REPLACEMENT OR USE
               OF THE PRODUCTS OR THE FURNISHING OF ANY SERVICE, SHALL NOT
               EXCEED THE PRICE ALLOCABLE TO THE PRODUCT OR SERVICE WHICH GIVES
               RISE TO THE CLAIM.

               14.3.2 Where a remedy, including a series of optional remedies or
               multiple remedies, is set forth in the Agreement, those remedies
               shall be the sole and exclusive remedies for the breach or event
               for which it is specified, unless such section states that the
               series of remedies are not exclusive of other remedies. Where no
               specific remedy is provided, the non-defaulting party shall have
               the right to recover from the defaulting party only its direct
               damages arising out of that breach or event. NOTWITHSTANDING
               ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, IN NO
               EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT, WARRANTY, TORT
               (INCLUDING BUT NOT LIMITED TO NEGLIGENCE OR INFRINGEMENT) SHALL
               SELLER OR BUYER BE LIABLE UNDER THIS AGREEMENT FOR ANY
               CONSEQUENTIAL OR INCIDENTAL DAMAGES OF ANY NATURE WHATSOEVER,
               INCLUDING LOST PROFITS, OF THE OTHER PARTY, REGARDLESS OF WHETHER
               SUCH DAMAGES ARE FORESEEABLE OR WHETHER A PARTY HAS BEEN ADVISED
               OF THE POSSIBILITY OF DAMAGES.

                                       30
<PAGE>   37

        14.4   RIGHTS OF PARTIES UPON TERMINATION BY EITHER PARTY. In the event
               of a termination by Buyer or Seller pursuant to the terms hereof,
               the parties shall make an equitable accounting of any sums due
               Seller for partial deliveries, such accounting to be completed
               within sixty (60) days following the effective date of
               termination, with payment by Buyer to be completed within thirty
               (30) days following the completion of such accounting.

               Seller acknowledges and agrees that the Minimum Purchase Quantity
               commitment of Section 2.8 imposed upon Buyer shall be terminated
               in the event of any termination hereunder due to the Seller's
               breach of this Agreement.

         14.5  OTHER GROUNDS FOR TERMINATION. Notwithstanding anything to the
               contrary contained elsewhere in this Agreement, this Agreement
               may be terminated and the obligations of the parties hereunder
               shall be ended under the following circumstances:

                      (a) Buyer and Seller mutually agree in writing to
                      terminate this Agreement;

                      (b) Buyer determines that the development of Products is
                      more than 6 months behind the development schedule set
                      forth in Attachment J; or

                      (c) Buyer determines that key performance requirements
                      (e.g., dataspeeds, etc.) are beyond the deviation or
                      tolerance standards set forth in this Agreement or in any
                      Attachments hereto.

15      CONFIDENTIALITY

        15.1   CONFIDENTIAL INFORMATION DEFINED. During the term of this
               Agreement and thereafter it may be necessary for the parties to
               mutually exchange certain information, data and material of a
               proprietary nature whether relating to marketing, technical,
               financial and other matters. To be treated as confidential
               hereunder ("Confidential Information"), information disclosed in
               writing shall be marked as confidential or proprietary, and the
               disclosing party shall indicate the confidential nature of verbal
               information at the time of disclosure. All Confidential
               Information shall:

               15.1.1 BE HELD IN CONFIDENCE. Be received and retained in the
                      strictest confidence by the parties and will be deemed to
                      be proprietary information of the disclosing party and the
                      recipient(s) of such Confidential Information agree(s)
                      that it (or they) will not disclose it to third parties
                      and further, will treat such information, data or material
                      as proprietary using the same degree of care that it (or
                      they) would normally use in protecting its (or their) own
                      proprietary information.

                                       31
<PAGE>   38

               15.1.2 LIMITED USE. Be used by the parties hereto solely for the
                      purpose of implementing this Agreement.

        15.2   EXCEPTIONS. The provisions of Section 15.1 above shall not apply
               to any Confidential Information which:

                      (a) Is known by the receiving party prior to the date
                      hereof, and is not subject to or in violation of an
                      obligation of confidentiality;

                      (b) Is or becomes public knowledge other than by default
                      of the receiving party;

                      (c) Is obtained by the receiving party from a bona-fide
                      third party having free right of disposal of such
                      information;

                      (d) Is wholly and independently developed by receiving
                      party without reference to the Confidential Information;
                      or

                      (e) The receiving party is required to disclose pursuant
                      to a valid order of a court or other governmental body or
                      any political subdivision thereof, provided, however, that
                      the recipient of the information shall first have given
                      notice to the disclosing party and made a reasonable
                      effort to obtain a protective order requiring that the
                      information and/or documents so disclosed be used only for
                      the purposes for which the order was issued.

        15.3   SURVIVAL. This Section 15 shall survive any termination of this
               Agreement for a period of two (2) years.

16      FORCE MAJEURE

        16.1   FORCE MAJEURE. Neither of the parties hereto shall be liable for
               any damages or penalty for delay in performance of its
               obligations under this Agreement when such delay is due to acts
               of God, acts of civil or military authority, fires, floods,
               epidemics, war or riots, industry-wide strikes, lockouts or other
               labor disputes, , or any other causes beyond the reasonable
               control of such party. The party so affected shall, upon giving
               prompt written notice to the other party of the delay and the
               cause therefore, be excused from performance to the extent of the
               prevention, restriction or interference; provided, however, that
               the party so affected shall use reasonable efforts to avoid or
               remove such causes of nonperformance and shall continue
               performance hereunder with the utmost dispatch whenever such
               causes are removed. In the event of Force Majeure delays, the
               time for performance shall be extended by mutual agreement of the
               parties as

                                       32
<PAGE>   39

               provided above, but in no case shall the extension exceed a
               day-for-day extension based upon the duration of the act of Force
               Majeure.

        16.2   BUYER'S RIGHT TO TERMINATE FOR FORCE MAJEURE. Should Force
               Majeure prevent Seller from timely performing under this
               Agreement, where the Force Majeure delays Seller's performance by
               such time that, in Buyer's reasonable judgment, Buyer has lost
               the benefit of the bargain or where the delay is such that Buyer
               must reasonably look to substitute supplies to protect Buyer's
               position, Buyer has the right to terminate this Agreement,
               notwithstanding the provisions of Section 18.1.

        16.3   SELLER'S RIGHT TO TERMINATE FOR FORCE MAJEURE. Should Force
               Majeure prevent Buyer's performance under this Agreement for a
               period of more than six (6) months, Seller has the right to
               terminate this Agreement, notwithstanding the provisions of
               Section 16.1.

17      PRODUCT LIABILITY INDEMNIFICATION

        Notwithstanding anything to the contrary contained herein, Seller agrees
        to defend, hold harmless and indemnify Buyer, its subsidiaries and
        Affiliates, and its and their officers, agents and employees, from and
        against any damages, claims, demands, liabilities and expenses
        (including reasonable attorneys' fees) that arise out of, or result
        from, the death or bodily injury to, or damage to tangible property of
        any third party resulting (including Seller's employees) from the
        design, manufacture, or use of a Product, whether or not resulting from
        a Defect, produced by Seller or Seller's affiliate. Seller shall pay all
        costs, damages and reasonable attorneys' fees that a court awards as a
        result of such claim provided that: (i) Seller has sole control of the
        defense and related settlement negotiations; (ii) Buyer provides Seller
        with assistance, information and authority reasonably necessary for
        Seller to perform its obligations under this Section 17; and (iii) Buyer
        notifies Seller in writing within thirty (30) days of the discovery of
        the claim. Seller shall not be responsible for any settlement made
        without its consent. Buyer shall not be required to admit any liability
        either to obtain Seller's compliance with the indemnification provisions
        of this Section or for any other reason.

18      INTELLECTUAL PROPERTY INDEMNIFICATION

        18.1   Seller warrants that the Products furnished hereunder shall be
               delivered free of any rightful claim of any third party for
               infringement of any patent, copyright, trademark, trade secret,
               or other intellectual property right. If Buyer notifies Seller
               with thirty (30) days of the receipt of any claim that the
               Products infringes a patent, copyright, trademark, trade secret,
               or other intellectual property right, and gives Seller
               information assistance and exclusive authority to settle and
               defend such claim, Seller at its own expense shall indemnify,
               defend, and hold harmless

                                       33
<PAGE>   40

               Buyer, or may settle, any suit or proceeding against Buyer so far
               as based on a claimed infringement which breaches this warranty.
               If, in any such suit arising from such claim, the continued use
               of the Products for the purpose intended is enjoined by any court
               of competent jurisdiction, Seller shall, at its expense and
               option, either: (i) procure for Buyer the right to continue using
               the Products, or (ii) modify the Products so that they become
               non-infringing, or (iii) replace the Products or portions thereof
               so that they become non-infringing, or (iv) if none of (i), (ii),
               or (iii) can be accomplished within a reasonable period, accept
               the return of the Products and refund the purchase price. The
               foregoing states the entire liability of Seller for patent,
               copyright, trademark, trade secret or other intellectual property
               right infringement by the Products and is subject to any
               limitation of total liability set forth in this Contract. Buyer
               shall not be required to admit any liability either to obtain
               Seller's compliance with the indemnification provisions of this
               Section or for any other reason.

        18.2   The preceding subsection 18.1 shall not apply to: (i) any portion
               of the Products that is manufactured to Buyer's design, provided
               that the claim of infringement arose out of Buyer's design or
               (ii) the use of the Products for a purpose not intended or in
               conjunction with any other apparatus or material not supplied by
               Seller to the extent that such conjoined use causes the alleged
               infringement. As to any portion of the Products or use described
               in the preceding sentence, Seller assumes no liability whatsoever
               for patent, copyright, trademark, trade secrets, or intellectual
               property rights infringement.

        18.3   Seller will not be responsible for any compromise or settlement
               made without its written consent.

19      DISPUTE RESOLUTION

        19.1   INTERNAL ESCALATION. In the event that a dispute arises over the
               interpretation or application of any provision of this Agreement
               or the grounds for termination hereof, any party may request that
               the parties meet within ten (10) days of such request and seek to
               resolve the dispute by negotiation of the appropriate officers of
               each party, with the request for resolution being passed to each
               officer at the next higher level of authority, in turn. Such
               meetings shall be attended by individuals with decision-making
               authority, to attempt in good faith to negotiate a resolution of
               the dispute prior to pursuing other available remedies. If,
               within ten (10) days after the first such meeting, the parties
               have not succeeded in negotiating a resolution of the dispute, or
               if it has not been possible to schedule a meeting within ten (10)
               days following request thereof by a party, a party may request
               that such dispute be mediated in accordance with Subsection 19.2.
               Notwithstanding anything to the contrary contained in the
               foregoing, any disputes with respect to intellectual property
               rights shall be submitted to the courts and not

                                       34
<PAGE>   41

               subject to the provisions of Subsection 19.2, unless otherwise
               agreed by both Buyer and Seller.

        19.2   MEDIATION. If the attempts to resolve a dispute described in
               Subsection 19.1 fail, then such dispute will be mediated by a
               mutually acceptable mediator to be chosen by Seller and Buyer
               within twenty (20) days after written notice by either party
               demanding mediation. A party may not unreasonably withhold
               consent to the selection of a mediator, and Seller and Buyer
               shall share the costs of mediation equally. Each party shall pay
               its own attorneys' fees. By mutual agreement, however, Seller and
               Buyer may postpone mediation until each has completed some
               specified but limited discovery regarding the dispute. The
               parties may also agree to replace mediation with some other form
               of alternate dispute resolution, such as neutral fact-finding or
               mini-trial.

        19.3   ARBITRATION OF DISPUTES. Any controversy or claim arising out of
               or relating to this Agreement for the breach hereof which cannot
               be settled by the parties pursuant to Section 19.1 and 19.2,
               shall be settled by arbitration in accordance with the commercial
               arbitration rules of the American Arbitration Association as set
               forth herein.

               19.3.1 SELECTION OF ARBITRATORS. Each party may select one
                      arbitrator. Selection shall be completed within ten (10)
                      days of the receipt of a demand for arbitration. If either
                      party fails to select an arbitrator within such ten (10)
                      day period, the one selected shall act as sole arbitrator.
                      If two (2) arbitrators have been selected, the two
                      arbitrators selected shall select a third within fifteen
                      (15) days after their selection. If they fail to do so,
                      the third arbitrator shall be selected by the American
                      Arbitration Association. The arbitrators shall set a date
                      of hearing no later than sixty (60) days from the date all
                      arbitrators have been selected and shall enter a decision
                      within thirty (30) days at the end of the proceeding

               19.3.2 LANGUAGE. All proceedings shall be conducted in the
                      English language.

               19.3.3 LOCATION. The arbitration shall take place at a location
                      to be agreed upon by the parties. If the parties are
                      unable to agree, the arbitration shall be in Bellevue, or
                      Seattle, Washington, as designated by Buyer.

               19.3.4 FRCP TO APPLY. In any such arbitration proceeding the
                      arbitrators shall adopt and apply the provisions of the
                      Federal Rules of Civil Procedure relating to discovery so
                      that each party shall allow and may obtain discovery of
                      any matter not privileged which is relevant to the subject
                      matter involved in the arbitration to the same extent as
                      if such arbitration were a civil action pending in a
                      United States District Court; provided, however, that each
                      party shall be entitled to no more than four (4)

                                       35
<PAGE>   42

                      depositions upon oral examination of no more than one (1)
                      day in length each.

               19.3.5 FINAL AWARD. The award of any arbitration shall be final,
                      conclusive and binding on the parties hereto.

               19.3.6 REMEDY. The arbitrators may award any legal or equitable
                      remedy. The arbitration award shall include an award of
                      reasonable attorney's fees, in the amount of such fees, to
                      the prevailing party. Judgment upon any arbitration award
                      may be entered and enforced in any court of competent
                      jurisdiction.

               19.3.7 INJUNCTIVE RELIEF. Either party to an arbitration
                      hereunder may bring an action for injunctive relief
                      against the other party if such action is necessary to
                      preserve jurisdiction of the arbitrators or to maintain
                      status quo pending the arbitrators' decision. Any such
                      action called pursuant to this paragraph shall be
                      discontinued upon assumption of jurisdiction by the
                      arbitrators and their opportunity to consider the request
                      for equitable relief pending final decision in the
                      arbitration.

        19.4   CONTINUE TO PERFORM. The parties shall continue to perform all
               obligations under the Agreement pending the above-described
               dispute resolution proceedings, subject to full reservation of
               rights at law or under this Agreement.

        19.5   CHOICE OF LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
               ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
               WASHINGTON, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF
               LAW THEREOF.

20      NON-EXCLUSIVE AGREEMENT

        This Agreement is a nonexclusive agreement. Buyer expressly reserves the
        right to contract with others for any of the goods or services it may
        require, including those that may duplicate Products.

21      INSURANCE

        21.1   SELLER TO MAINTAIN. Seller shall maintain and keep in force all
               risk insurance, in form and substance and with insurers
               reasonably satisfactory to Buyer, covering all Products delivered
               to Buyer the risk of loss to which has not passed to Buyer, and
               shall furnish Buyer with proof that such insurance has been
               obtained and is in force.

                                       36
<PAGE>   43

        21.2   LEVEL OF INSURANCE. Seller shall at all times while performing
               services on Buyer's premises carry insurance with limits not less
               than the limits described as follows:

                      (a) Employer's General Liability: Limits ***.

                      (b) Comprehensive General Public Liability: *** single
                      limit bodily injury and property damage combined; such
                      coverage shall include a broad form liability rider,
                      completed operations coverage rider and contractual
                      liability rider.

                      (c) An umbrella policy: with *** single limit bodily
                      injury and property damage combined.

                      (d) Workmen's Compensation: maintained at least at the
                      level required by statute in the states in which Seller is
                      to perform work under this Agreement.

        21.3   CERTIFICATES OF INSURANCE. Seller shall provide Buyer with
               certificates of insurance (i) evidencing the insurance to be
               carried under this Article 21, naming the Buyer as an additional
               insured and (ii) including provisions that such insurance policy
               shall not be subject to cancellation, expiration or reduction
               without thirty (30) days written notice to Buyer.

        21.4   NO WAIVER. Notwithstanding the requirements as to insurance to be
               carried, the insolvency, bankruptcy or failure of any insurance
               company carrying insurance for either party, or failure of any
               such insurance company to pay claims accruing, shall not be held
               to waive any of the provisions of this Agreement or relieve
               either party from any obligations under this Agreement.

22      ASSIGNMENT

        22.1   CONSENT REQUIRED. Except as otherwise expressly provided in this
               Agreement, no party shall have the right to assign its rights or
               delegate its duties under this Agreement or any Purchase Order
               hereunder, without the prior written consent of the other party
               hereto, which consent shall not be unreasonably withheld.
               Notwithstanding the foregoing, Buyer may assign its rights and
               obligations hereunder to (1) any corporation resulting from any
               merger or other reorganization to which Buyer is a party, (2) any
               corporation, partnership, association, or other person or entity
               to which Buyer may transfer all or substantially all of its
               assets or business existing at such time, or (3) any entity which
               controls, is controlled by, or under common control with Buyer.

        22.2   INVALID WITHOUT COMPLIANCE. Any attempted assignment or
               delegation in contravention of this Section 22 shall be void and
               of no effect and shall be

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       37
<PAGE>   44

               grounds for immediate termination by the non-breaching party, for
               cause, as provided in Section 12 hereof.

        22.3   ASSIGNS. Subject to the provisions of Section 22.1 above, this
               Agreement shall inure to the benefit of and be binding upon the
               respective successors and assigns, if any, of the parties hereto.

23      NOTICES

        Except as otherwise provided in this Agreement, or applicable Purchase
        Order, all notices or other communications hereunder shall be deemed to
        have been duly given when made in writing and mailed by certified mail,
        return receipt request, facsimile transmission upon confirmation of
        receipt, overnight courier or hand delivery to the parties at the
        addresses set forth below or at such other addresses as may be
        designated by the parties in writing:

To:     Seller:

               NOVATEL INC.
               Attn: Greg Robins
               9360 Towne Center Drive, Suite 110
               San Diego, CA 92122
               Phone: 858-320-8813
               Fax: 858-784-0626

To:     Buyer:

               VoiceStream Wireless Corporation
               Attn:  David A. Miller
               Vice President of Legal Affairs
               3650 131st Ave. SE, Suite 200
               Bellevue WA  98006

               with a copy, which shall not constitute notice, to:

               Attn:  Stuart Funk
               Director of Contracts and Supplier Relations
               3650 131st Ave. SE, Suite 200
               Bellevue WA  98006

24      PUBLICITY

        Except with respect to Co-Op Advertising (for which Buyer is allowed to
        use Seller's name in accordance with Buyer's guidelines), Seller shall
        submit to Buyer and Buyer

                                       38
<PAGE>   45

        shall submit to Seller, as the case may be, all advertising, sales
        promotion, press releases and other publicity relating to the subject
        matter of this Agreement wherein Buyer's or Seller's name or names
        (including the names of Affiliates) are mentioned or language, signs,
        markings or symbols are used from which the connection of a Buyer's or
        Seller's name or names therewith may, in Buyer's or Seller's judgment,
        as applicable, be reasonably inferred or implied. Seller or Buyer, as
        applicable, shall not publish or use such advertising, sales promotion,
        press release or publicity matter without Buyer's Seller's, as
        applicable, prior written approval, which approval may be withheld or
        delayed for any or no reason.

25      COMPLIANCE WITH LAWS; GOVERNING LAW

        Each party shall comply with all applicable federal, state and local
        laws, regulations and codes, including the procurement of permits and
        licenses when needed, in the performance of this Agreement. Each party
        shall indemnify the other party against any loss or damage that may be
        sustained by reason of such party's failure to comply with such federal,
        state and local laws, regulations and codes. This Agreement shall be
        construed and enforced in accordance with the laws of the State of
        Washington, without regard to the conflict of laws of Washington or any
        other state.

26      WAIVERS OF DEFAULT

        Waiver by a party of any default by another party shall not be deemed a
        waiver by the non-defaulting party of any other default. Failure of a
        party to exercise a right or remedy shall not be deemed a waiver of that
        right or remedy.

27      AMENDMENTS

        No provisions of this Agreement or any Purchase Order shall be deemed
        waived, amended or modified by a party, unless such waiver, amendment or
        modification is in writing and signed by the authorized representative
        of the party against whom it is sought to enforce such waiver, amendment
        or modification.

28      ORDER OF PRECEDENCE

        During the Term, Buyer's purchase of Products from Seller shall be
        deemed to be purchased under the terms and conditions of this Agreement.
        The terms and conditions of Buyer's Purchase Order, Seller's
        acknowledgments, invoices or any other writings by either party which
        differ from the terms hereunder shall not be effective unless
        specifically accepted in writing by amendment to this Agreement made
        separate and apart from said terms and conditions and signed by all of
        the parties to this Agreement. In the event of any conflict or
        inconsistency among the provisions of this Agreement and the

                                       39
<PAGE>   46

        documents attached and incorporated herein, such conflict or
        inconsistency shall be resolved, by giving precedence to this Agreement
        and thereafter to the Attachments.

29      HEADINGS

        The section headings contained in this Agreement are for reference
        purposes only and shall not affect in any way the meaning or
        interpretation of this Agreement.

30      SEVERABILITY

        If any provision or any part of a provision of this Agreement shall be
        invalid or unenforceable, such invalidity or unenforceability shall not
        invalidate or render unenforceable the entire Agreement, but rather the
        entire provision or the Agreement shall be construed as if not
        containing the particular invalid or unenforceable provision or
        provisions, and the rights and obligations of the parties shall be
        construed and enforced accordingly, provided, that the deletion of such
        provision does not change the intent of the Agreement.

31      SURVIVAL

        The provisions contained in this Agreement that by their sense and
        context are intended to survive the cancellation or termination of this
        Agreement or any Purchase Order hereunder shall survive such
        Cancellation and termination.

32      LICENSE

        Except as specifically provided in Section 2 hereof, no licenses,
        express or implied, under any patents, copyrights, trademarks or trade
        secrets are granted by Buyer or Seller to the other hereunder.

33      PARTY RELATIONSHIP

        It is expressly understood that the parties intend by this Agreement to
        establish the relationship of independent contractors. No party shall
        have any authority to create or assume in the name of or on behalf of
        the other party any obligation, express or implied, nor to act or to
        purport to act as the agent or legally empowered representative of the
        other party hereto for any purpose whatsoever.

34      CONTRACT/TARGET DATES

                                       40
<PAGE>   47

        Performance of this Agreement will also be subject to Seller working
        towards completion of tasks subject to agreed target and contract
        completion dates, set out in Attachment J.

35      COUNTERPARTS

        This Agreement may be executed in two (2) separate counterparts, each of
        which shall be deemed an original and both of which taken together shall
        constitute one and the same instrument.

36      ATTACHMENTS AND INCORPORATION

        36.1   INCORPORATION. The following documents attached hereto are
               incorporated herein by reference and made a part of this
               Agreement with the same force and effect as though set forth in
               their entirety herein (such documents together with this
               Agreement are herein referred to as the "Agreement").

<TABLE>
<CAPTION>
               ATTACHMENT          DESCRIPTION
<S>                                <C>
               Attachment A-1      Description of Product 1 (specifications)
               Attachment A-2      Description of Product 2 (specifications)
               Attachment A-3      Description of Product 3 (specifications)
               Attachment B        Dates for Completion of Attachments
               Attachment C        Prices
               Attachment D        Sample Testing Protocol
               Attachment E        Acceptance Test Procedures
               Attachment F        End-user warranty
               Attachment G        Database Format
               Attachment H        Advertising Display Material
               Attachment I        Return Policy
               Attachment J        GPRS Development Schedule
               Attachment K        Technical Support
</TABLE>

37      ENTIRE AGREEMENT

        This Agreement constitutes the entire agreement between the parties with
        respect to the subject matter thereof. All prior agreements,
        representations, statements, negotiations, understandings and
        undertakings are superseded hereby.

                                       41
<PAGE>   48

IN WITNESS HEREOF, THE PARTIES HEREBY EXECUTE THIS AGREEMENT BELOW.

SELLER:                                      BUYER:

Novatel Wireless Inc.,                       VoiceStream Wireless Corporation
a Delaware Corporation                       a Delaware Corporation

/s/                                          /s/
-----------------------------------          -----------------------------------
By:                                          By:

                                                       Cole Brodman
-----------------------------------          -----------------------------------
Name: [Print]                                Name: [Print]

Title:                                       Title:
      -----------------------------                -----------------------------

                                       42
<PAGE>   49

   ATTACHMENTS

                                       43
<PAGE>   50

Attachment A-1
VoiceStream Wireless Corporation/Novatel Inc.

ATTACHMENT A-1 PRODUCT 1 - GPRS - PCS PC CARD

Overview:

***

Features:

***

Specifications:

***

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       44
<PAGE>   51
                                      ***

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       45
<PAGE>   52

Attachment A-2
VoiceStream Wireless Corporation/Novatel Inc.

ATTACHMENT A-2 PRODUCT 2 - GPRS - PCS PC CARD 8-SLOT

Overview:

                                      ***

Features:

                                      ***

Specifications:

                                      ***

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       46
<PAGE>   53
                                      ***

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       47
<PAGE>   54

Attachment A-3
VoiceStream Wireless Corporation/Novatel Inc.

ATTACHMENT A-3 PRODUCT 3 -- GPRS  - GSM/PCS PC CARD 900/1900

Overview:

         ***
Features:

         ***

Specifications:

         ***

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       48
<PAGE>   55

        ***

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       49
<PAGE>   56

Attachment B
VoiceStream Wireless Corporation/Novatel Inc.

ATTACHMENT B DATES FOR COMPLETION OF ATTACHMENTS

<TABLE>
<CAPTION>
ATTACHMENT            DESCRIPTION                                 Completion Date
----------            -----------                                 ---------------
<S>                   <C>                                         <C>
 Attachment A-1       Description of Product 1 (specifications)      ***
 Attachment A-2       Description of Product 2 (specifications)      ***
 Attachment A-3       Description of Product 3 (specifications)      ***
 Attachment B         Dates for Completion of Attachments            ***
 Attachment C         Prices                                         ***
 Attachment D         Sample Testing Protocol                        ***
 Attachment E         Acceptance Test Procedures                     ***
 Attachment F         End-user warranty                              ***
 Attachment G         Database Format                                ***
 Attachment H         Advertising Display Material                   ***
 Attachment I         Return Policy                                  ***
 Attachment J         GPRS Development Schedule                      ***
 Attachment K         Technical Support                              ***

</TABLE>

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       50
<PAGE>   57

Attachment C
VoiceStream Wireless Corporation/Novatel Inc.

ATTACHMENT C PRICES

Net Price* to Buyer shall be determined by adding the Base Price plus all
applicable adjustments as set forth below:

BASE PRICE

THE NOT-TO-EXCEED PRICE FOR PRODUCTS 1 THROUGH 3 AS DEFINED IN ATTACHMENTS A-1
THROUGH A-3 SHALL BE ***.

Prices charged in the future may be adjusted downward to the best prevailing
market price at the time of shipment in accordance with the *** section of this
agreement.

ADJUSTMENTS TO PRICE

<TABLE>
<CAPTION>
                                                UPCHARGE    UPCHARGE
                                                APPLIED     APPLIED TO
SECTION                                         TO ALL      AFFECTED
NUMBER              SUBJECT                     PRODUCTS    PRODUCTS
-------             -------                     --------    --------
<S>                 <C>                         <C>         <C>
2.6.4               ***                                     ***
2.7                 ***                         ***

2.11.1              ***                         ***
2.15.2              ***                                     ***
2.20                ***                         ***
4.3                 ***                         ***
5.5                 ***                         ***

9.6                 ***                                     ***
12.1.2              ***                         ***
12.1.3              ***                         ***
12.2.1              ***                         ***
12.3.1              ***                         ***
12.3.2              ***                         ***
12.3.4              ***                         ***
12.3.5              ***                         ***
</TABLE>

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       51
<PAGE>   58

<TABLE>
<S>                 <C>                         <C>         <C>
12.3.6              ***                         ***
Attachments A-1     ***                         ***
through A-3

****
</TABLE>

ACCESSORY PRICES

No accessories are currently contemplated.

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       52
<PAGE>   59

Attachment D
VoiceStream Wireless Corporation/Novatel Inc.

ATTACHMENT D SAMPLE TESTING PROTOCOL

                                      ***

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       53
<PAGE>   60

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------

                                 ACCEPTANCE SAMPLE TESTING

------------------------------------------------------------------------------------------
                                                        NUMBER OF PRODUCTS FOUND
                                                 IN SAMPLE QUANTITY WITH A MAJOR DEFECT
------------------------------------------------------------------------------------------
                                                  ACCEPT IF THIS        REJECT IF THIS
                                               NUMBER OR FEWER ARE    NUMBER OR MORE ARE
LOT SIZE                   SAMPLE QUANTITY            FOUND                 FOUND
------------------------------------------------------------------------------------------
<S>                      <C>                   <C>                    <C>
***                              ***                   ***                   ***
------------------------------------------------------------------------------------------
***                              ***                   ***                   ***
------------------------------------------------------------------------------------------
***                              ***                   ***                   ***
------------------------------------------------------------------------------------------
***                              ***                   ***                   ***
------------------------------------------------------------------------------------------
***                              ***                   ***                   ***
------------------------------------------------------------------------------------------
***                              ***                   ***                   ***
------------------------------------------------------------------------------------------
***                              ***                   ***                   ***
------------------------------------------------------------------------------------------
***                              ***                   ***                   ***
------------------------------------------------------------------------------------------
***                              ***                   ***                   ***
------------------------------------------------------------------------------------------
***                              ***                   ***                   ***
------------------------------------------------------------------------------------------
***                              ***                   ***                   ***
------------------------------------------------------------------------------------------
***                              ***                   ***                   ***
------------------------------------------------------------------------------------------
***                              ***                   ***                   ***
------------------------------------------------------------------------------------------
***                              ***                   ***                   ***
------------------------------------------------------------------------------------------
***                              ***                   ***                   ***
------------------------------------------------------------------------------------------
</TABLE>

Notwithstanding anything to the contrary set forth herein below, three Minor
Defects (as defined in the Defect Categorization for AQL Testing table set forth
herein below) of Handset Products shall also be deemed to constitute a Major
Defect and contribute to the acceptance or rejection of a lot as provided in the
table, rounded downward (i.e., five (5) Minor Defects should be counted as one
(1) Major Defect, while six (6) Minor Defects shall be counted as two (2) Major
Defects).

Major and Minor Defects are determined on a per-Product basis (i.e., a single
unit of Product with two (2) Major Defects is counted only as a single Major
Defect for the purpose of acceptance or rejection of a lot).

Should Buyer reject a lot based upon sample testing in accordance with this
Attachment E, Seller shall have the option to perform 100% testing of the lot,
at Seller's sole expense, at Buyer's premises or elsewhere with Buyer having the
right of observation of the tests and may re-submit the lot (less any defective
units) to Buyer. Seller agrees that Buyer may then re-sample test the
re-submitted lot, and Buyer may accept or reject such lot based on the testing
criteria set forth above.

Seller shall provide Buyer with Product specifications, including pass/fail
limits on parameters.

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       54
<PAGE>   61

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------

                      DEFECT CATEGORIZATION FOR AQL TESTING

------------------------------------------------------------------------------------------
                   DEFECT TYPE                        MAJOR DEFECT        MINOR DEFECT
------------------------------------------------------------------------------------------
<S>                                                   <C>                 <C>
ESN does not match declared ESN                             X
------------------------------------------------------------------------------------------
Shipping container seriously damaged                                           X
------------------------------------------------------------------------------------------
Shipping list inconsistent with Purchase Order                                 X
------------------------------------------------------------------------------------------
Visual assembly defect, not repaired, per
Seller's workmanship standards                                                 X
------------------------------------------------------------------------------------------
Mechanical part missing, damaged or broken, but
not restricting product integration                                            X
------------------------------------------------------------------------------------------
Connectors damaged or not functional                        X
------------------------------------------------------------------------------------------
Failure to pass Seller's Product test program               X
------------------------------------------------------------------------------------------
Foreign material on the Product                             X
------------------------------------------------------------------------------------------
Display damaged or inoperable                               X
------------------------------------------------------------------------------------------
Failure to conform with the PCS 1900
specifications or Seller's Product tolerances               X
------------------------------------------------------------------------------------------
</TABLE>

                                       55
<PAGE>   62

Attachment E
VoiceStream Wireless Corporation/Novatel Inc.

ATTACHMENT E  ACCEPTANCE TEST PROCEDURE

Pending
                    (To be jointly developed by the Parties)

                                       56
<PAGE>   63

Attachment F
VoiceStream Wireless Corporation/Novatel Inc.

ATTACHMENT F WARRANTY

Novatel warrants for a period either of the longer of 1 year from delivery at
the customer's location or ninety days after repair or replacement that its
Products are free from defects in material and workmanship, conform to Novatel
specifications and that the software shall be free from errors which materially
affect performance. THESE WARRANTIES ARE EXPRESSLY IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ALL IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. NOVATEL
WIRELESS SHALL IN NO EVENT BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES, OF ANY KIND OR NATURE DUE TO ANY CAUSE.

Novatel's obligations are limited to correction of such failure, repair or
replacement and are conditioned upon the Product having been maintained in
accordance with Novatel specifications and the Product not having been modified
by any party other than Novatel except as expressly permitted in writing.

The foregoing warranties do not extend to (i) nonconformities, defects or errors
in the Product due to accident, abuse, misuse or negligent use of the Product or
use in other than a normal and customary manner, environmental conditions not
conforming to Novatel's specifications, or failure to follow prescribed
operating maintenance procedures, (ii) defects, errors or nonconformities in the
Product due to modifications, alterations, additions or Product changes not made
or authorized to be made by Novatel, (iii) normal wear and tear, or (iv) damage
caused by force of nature or act of any third party.

                                       57
<PAGE>   64

Attachment G
VoiceStream Wireless Corporation/Novatel Inc.

ATTACHMENT G DATABASE FORMAT

                           (To be supplied by Novatel)

                                       58
<PAGE>   65

Attachment H
VoiceStream Wireless Corporation/Novatel Inc.

ATTACHMENT H ADVERTISING DISPLAY MATERIAL

                           (To be supplied by Novatel)

                                       59
<PAGE>   66

Attachment I
VoiceStream Wireless Corporation/Novatel Inc.

ATTACHMENT I RETURN POLICY

Recognizing that product sold to our customers is done so in good faith, the
return of stock is considered contrary to the original purchase terms. However,
at your request, Seller will consider the return of customer's inventory under
certain market conditions. Seller will only consider credit returns if our
customer has demonstrated active promotion and proper positioning of our
product.

This agreement is necessitated by the cost prohibitive nature of stock returns
and covers the blanket guidelines for processing a return. As a partner with
Seller interested in growing our relationship and respective businesses,
customers are asked to share the cost of this burden.

Note that each request for return must be specifically agreed to by the Seller
customer representative and Seller management. To obtain approval for a specific
restock return for credit, a customer signed agreement in accordance with the
following return guidelines is required:

        The product must be in current production and directly purchased by
        Buyer within the last 90 days. If product is determined to been
        purchased from other suppliers, product will be returned to customer.

        The product must be in new, immediate resoluble condition including
        original packaging and master cartons.

        ***

        A return authorization will be provided by your sales representative. It
        will be valid for 30 days from issuance.

        Stock is to be returned to the Seller San Diego, California, facility.

        No custom products are returnable under this policy.

        Buyer shall pay freight on returns.

Credit will be provided to customer's account within thirty (30) days.

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       60
<PAGE>   67

Attachment J
VoiceStream Wireless Corporation/Novatel Inc.

ATTACHMENT J  GPRS DEVELOPMENT SCHEDULE

THE FOLLOWING SCHEDULE IS CONTINGENT UPON THE OPERABILITY AND COMMERCIAL
AVAILABILITY OF A NORTH AMERICAN GSM 1900 NETWORK.

GPRS DEVELOPMENT SCHEDULE:

<TABLE>
<CAPTION>
  -------------------------------------------------------------------------------------
                        14.4KBPS                43.3KBPS                56KBPS
  -------------------------------------------------------------------------------------
    PROTOTYPE
    QUANTITY               10                      20                     100
  -------------------------------------------------------------------------------------
<S>                     <C>                     <C>                    <C>
       ***                ***                     ***                     ***
  -------------------------------------------------------------------------------------
       ***                ***                     ***                     ***
  -------------------------------------------------------------------------------------
       ***                ***                     ***                     ***
  -------------------------------------------------------------------------------------
       ***                ***                     ***                     ***
  -------------------------------------------------------------------------------------
       ***                ***                     ***                     ***
  -------------------------------------------------------------------------------------
       ***                ***                     ***                     ***
  -------------------------------------------------------------------------------------
       ***                ***                     ***                     ***
  -------------------------------------------------------------------------------------
       ***                ***                     ***                     ***
  -------------------------------------------------------------------------------------
</TABLE>

GPRS PC CARD PRODUCT DEVELOPMENT MILESTONES:

FIRST 1 SLOT ENGINEERING SAMPLES:  ***
INDUSTRIAL DESIGN COMPLETE:  ***
ALPHA TEST BEGINS IN PC CARD FORM FACTOR:  ***
FCC CERTIFICATION BEGINS:  ***
PILOT RUN:  ***
BETA TEST BEGINS :  ***
CARRIER CERTIFICATION BEGINS:  ***
RELEASE TO MANUFACTURING:  ***
FIRST PRODUCTION UNITS:  ***

TARGET DEVELOPMENT SCHEDULE FOR 115KBPS GPRS*:

                ----------------------------------------------
                                          115KBPS
                ----------------------------------------------
                 SCHEDULE         PROTOTYPE-12 MONTHS ARO
                ----------------------------------------------
                                    VOLUME-14 MONTHS ARO
                ----------------------------------------------
                                  CONTINGENT ON SOURCE OF
                ----------------------------------------------
                                          SILICON
                ----------------------------------------------

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

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       61
<PAGE>   68

               ----------------------------------------------
               CONFIGURATION      8 RECEIVE, 2 TRANSMIT
               ----------------------------------------------

               ----------------------------------------------
                  SPEED              115KBPS DOWNLOAD
               ----------------------------------------------
                                     28.8KBPS UPLOAD
               ----------------------------------------------

* Project totally dependent on delivery of silicon capable of this
configuration.

                                       62
<PAGE>   69

Attachment K
VoiceStream Wireless Corporation/Novatel

ATTACHMENT K  TECHNICAL SUPPORT

                                TECHNICAL SUPPORT

Technical Support for the Novatel GSM/GPRS 900/1900 Mhz PC Card delivered to
Voicestream or a Voicestream Designated Channel Partner will be managed via a
three-tier Technical Support infrastructure and process as follows:

LEVEL ONE TECHNICAL SUPPORT

        Level one Technical Support will be provided by Voicestream or
        Voicestream Designated Channel Partner to their direct and indirect
        customers. Level one support is defined as calls* originating from
        Voicestream or Voicestream Designated Channel Partner customers,
        resellers or distributors regarding Voicestream or Voicestream
        Designated Channel Partner Service, Wireless Service Providers, Novatel
        GPRS PC Card products including but not limited to pre and post sale
        inquiries concerning the basic operation of the hardware and software,
        functionality, interoperability and capabilities of those products and
        services.

        For calls regarding the Novatel GPRS PC Card products, Voicestream or
        Voicestream Designated Channel Partner will make every attempt to answer
        customer questions and resolve issues using available tools,
        documentation, test equipment and other materials used to support the
        Novatel GPRS PC Card products (see training section below). If the
        customer question/issue regarding the Novatel GPRS PC Card product
        cannot be resolved by Voicestream or Voicestream Designated Channel
        Partner support personnel to the customers' satisfaction, the issue will
        be forwarded to Novatel level two Technical Support for further
        investigation and resolution.

        *Calls include phone calls, e-mail, web-based inquiries, faxes and
        letters.

LEVEL TWO TECHNICAL SUPPORT

    Level two Technical Support will be provided by Novatel Wireless support
    staff directly to Voicestream or Voicestream Designated Channel Partner
    level one support personnel to assist in the resolution of open customer
    issues that have not been resolved to Voicestream or Voicestream Designated
    Channel Partner customers satisfaction during a level one support call.
    Voicestream or Voicestream Designated Channel Partner will have direct
    access to designated support staff within the Novatel Wireless support
    organization for this purpose. A direct line of communication between the
    two organizations will be established and Novatel

                                       63
<PAGE>   70

    Wireless support technicians will be available during normal Voicestream or
    Voicestream Designated Channel Partner Technical Support operation hours to
    assist in resolution of customer problems. Novatel Wireless support
    engineering will work directly with Voicestream or Voicestream Designated
    Channel Partner support staff to resolve issues and answer questions, this
    may require Voicestream or Voicestream Designated Channel Partner support
    staff to gather additional information and provide system information or
    test results back to Novatel support staff to aid in the definition and
    resolution of the problem. It will be Voicestream or Voicestream Designated
    Channel Partner support staff's responsibility to communicate directly with
    the end-user customer. Problems that are not resolved *** or problems that
    are flagged as sensitive/mission critical will be escalated to level three
    Technical Support for final resolution.

LEVEL THREE TECHNICAL SUPPORT (ESCALATION)

        Level three Technical Support will be provided by Novatel support and
        system engineering staff to resolve issues that cannot be satisfactorily
        resolved by level one and level two support personnel. Level three
        support will handle all Voicestream or Voicestream Designated Channel
        Partner product escalations issues including unresolved support calls
        and will work directly with Novatel engineering staff to resolve those
        issues.

TECHNICAL SUPPORT TRAINING

        Technical Support training and documentation for the Novatel GPRS PC
        Card Product will be provided to Voicestream or Voicestream Designated
        Channel Partner level one support staff by Novatel Wireless. Voicestream
        or Voicestream Designated Channel Partner support staff will receive
        training on the general use, functionality, operation and compatibility
        of the Novatel GPRS PC Card products. In addition all support related
        documentation, training materials, notes, FAQ's, and web based support
        materials will be made available to Voicestream or Voicestream
        Designated Channel Partner for their use in supporting these products.

*Certain information on this page has been omitted and filed separately with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                       64<PAGE>   1
                                                                    EXHIBIT 10.1

                                CREDIT AGREEMENT

         THIS CREDIT AGREEMENT is executed as of the 15th day of May, 2000 (the
"CLOSING DATE"), between INDIAN-MARTIN AG, a corporation organized and existing
under the laws of Switzerland (the "COMPANY"), and BANK ONE, INDIANA, NATIONAL
ASSOCIATION, a national banking association with its principal office in
Indianapolis, Indiana, United States of America (the "BANK").

                                   ARTICLE I

                              DEFINITION OF TERMS

         Section 1.01. Accounting Terms/Financial Statements. All accounting and
financial terms used in this Agreement are used with the meanings such terms
would be given in accordance with GAAP, except as may be otherwise specifically
provided in this Agreement.

         Section 1.02. Definitions. The following terms have the meanings
indicated when used in this Agreement with the initial letter capitalized:

         "ACCOUNT" means Account No. 628553794 maintained by the Company with
         the Bank.

         "ADVANCE" means the disbursement of proceeds under the Loan.

         "AFFILIATE" means, with respect to any Person, any officer, shareholder
         or director of such Person and any Person or group acting in concert in
         respect of the Person in question that, directly or indirectly,
         controls or is controlled by or is under common control with such
         Person.

         "AGREEMENT" means this Credit Agreement, as amended, modified,
         supplemented and/or restated from time to time and at any time.

         "APPLICABLE SPREAD" means that number of percentage points or Basis
         Points to be taken into account in determining the rate per annum at
         which interest will accrue on the Loan, which shall be as follows:

              If determining a                   If determining a
              LIBOR-based Rate                   Prime-based Rate
              ----------------                   ----------------

                 137.5 B.P.                      (125) B.P.

<PAGE>   2

         "APPLICATION FOR ADVANCE" or "APPLICATION" means the written
         application of the Company for a disbursement of proceeds of the Loan,
         which application will be in form and substance substantially the same
         as EXHIBIT "A" attached to this Agreement.

         "AUTHORIZED OFFICER" means the Chairman, President or Chief Financial
         Officer of the Company.

         "BANK" has the meaning ascribed to such term in the preamble to this
         Agreement.

         "BANK DEBT" has the meaning ascribed to such term in Section 8.11 of
         this Agreement.

         "BANKING DAY" means a day on which the principal offices of the Bank in
         the City of Indianapolis, Indiana, are open for the purpose of
         conducting substantially all of the Bank's business activities.

         "BASIS POINT" and "B.P." each mean one hundredth of one percent
         (0.01%).

         "BOC" means BANK ONE CORPORATION and all of its Subsidiaries (including
         the Bank), Affiliates and divisions.

         "BOARD" means the Board of Governors of the Federal Reserve System.

         "BORROWING BASE" means, at any date a determination thereof is made, an
         amount equal to the sum of: ninety-two and one half of one percent
         (92.5%) of the book value of the Eligible Accounts plus one hundred
         percent (100%) of the Pledged Cash, less the amount of excess, if any,
         by which the aggregate Eligible Accounts outstanding at any time from
         any account debtor and its Affiliates exceeds seven and one half
         percent (7 1/2%) of aggregate Eligible Accounts on such date of
         determination; provided however, that: (i) such concentration
         limitation in the case of each of United Stationers Supply Co. and The
         Sports Authority shall be increased to twelve and one half percent (12
         1/2%) of aggregate Eligible Accounts on such date of determination, and
         (ii) such concentration limitation shall not apply to Eligible Accounts
         owed by Sears Roebuck, Inc. so long as such account debtor is rated at
         least BBB/Baa2, or better, on the senior unsecured debt ratings
         established from time to time by S&P and Moody's, respectively.
         Further, to the extent that an Eligible Account is subject to any
         claimed set-off, offset, credit or other reduction right held by the
         account receivable debtor, then for purposes of determining the
         Borrowing Base the amount of such Eligible Account shall be reduced by
         the sum of all such claimed offsets, credits and reductions to the
         extent not covered by the Escalade Domestic Subsidiary, or
         Subsidiaries, that sold the Eligible Accounts to the Company.

         "BORROWING BASE CERTIFICATE" means a certificate (in form and substance
         substantially the same as EXHIBIT "B" attached to this Agreement) which
         is required to be delivered to the Bank in accordance with Section
         5.01(c)(7) of this Agreement.

         "CAPITAL LEASE" means, at any time, any lease of property (whether
         real, personal or mixed) with respect to which the lessee is required
         concurrently to recognize the acquisition of an asset and the
         incurrence of a liability in accordance with GAAP.

                                      -2-
<PAGE>   3

         "CHANGE IN CIRCUMSTANCES" has the meaning ascribed to such term in
         Section 5.01(l)(2) of this Agreement.

         "CHANGE OF CONTROL OF THE COMPANY" means Escalade shall cease to own
         one hundred percent (100%) of stock of the Company.

         "CLOSING DATE" has the meaning ascribed to such term in the Preamble to
         this Agreement.

         "CODE" means the Internal Revenue Code of 1986, as amended.

         "COLLATERAL" has the meaning ascribed to such term in Section 4.01 of
         this Agreement.

         "COMPANY" has the meaning ascribed to such term in the Preamble to this
         Agreement.

         "COMPANY'S AUDITORS" means Olive LLP, or such other independent
         certified public accounting firm in the United States of America as is
         acceptable to the Bank.

         "COMPANY SECURITY AGREEMENT" means the Collateral Assignment and
         Security Agreement, dated as of the Closing Date, executed by the
         Company in favor of the Bank (in form and substance substantially the
         same as EXHIBIT "C" attached to this Agreement), as the same hereafter
         may be amended, modified, supplemented and/or restated from time to
         time and at any time.

         "DEBT" means, with reference to any Person, as of any date, without
         duplication: (a) all indebtedness, liabilities and obligations of such
         Person for borrowed money and its redemption obligations in respect of
         mandatorily redeemable preferred stock; (b) obligations of such Person
         to pay the deferred purchase or acquisition price of property (tangible
         or intangible, real or personal) or services; (c) all obligations of
         such Person appearing as a liability on its balance sheet in accordance
         with GAAP in respect of Capital Leases; (d) all obligations,
         indebtedness and liabilities which are secured by any Lien on any asset
         of such Person, whether or not the obligation, indebtedness or
         liability secured thereby shall have been assumed by such Person (e)
         all obligations for any swap or interest rate agreements of such
         Person; and (f) all obligations, indebtedness and liabilities of others
         similar in character to those described in clauses (a) through (e) of
         this definition for which such Person is liable, contingently or
         otherwise, as obligor, guarantor or in any other capacity, or in
         respect of which obligations, indebtedness or liabilities such Person
         assures a creditor against loss or agrees to take any action to prevent
         any such loss (other than endorsements of negotiable instruments for
         collection in the ordinary course of business), including without
         limitation all reimbursement obligations of such Person in respect of
         letters of credit, surety bonds or similar obligations and all
         obligations of such Person to advance funds to, or to purchase assets,
         property or services from, any other Person in order to maintain the
         financial condition of such other Person. Debt of any Person shall
         include all obligations of such Person of the character described in
         clauses (a) through (f) above to the extent such Person remains legally
         liable in respect

                                      -3-
<PAGE>   4

         thereof notwithstanding that any such obligation is deemed to be
         extinguished under GAAP.

         "DEFAULT RATE" means the Prime Rate plus three percent (3%) per annum.

         "DISTRIBUTION" means any dividend, distribution, redemption or other
         acquisition for value of capital interests in the Company now or
         hereafter outstanding, return of capital or any distribution of assets
         to any shareholder of the Company.

         "DOLLARS" or "$" means dollars of the USA.

         "ELIGIBLE ACCOUNTS" means, at any date a determination thereof is to be
         made, those Purchased Accounts Receivable of the Company for which the
         Company shall have furnished to the Bank information adequate for
         purposes of identification at all times and in form and substance as
         may be requested by the Bank; provided however, that a Purchased
         Account Receivable shall not constitute an Eligible Account if it: (a)
         remains unpaid sixty-one (61) or more days after the original due date
         for its payment stated on the applicable invoice; (b) is an account
         receivable with respect to which the account receivable debtor is the
         subject of a bankruptcy or similar insolvency proceeding or has made an
         assignment for the benefit of creditors or whose assets have been
         conveyed to a receiver or trustee or who is no longer conducting its
         customary business, except and to the extent the Bank otherwise agrees
         in writing; (c) is an account receivable which is not invoiced (and
         dated as of the date of such invoice) and sent to the account
         receivable debtor in the ordinary course of the business of the Company
         and in accordance with customary billing practices after delivery of
         the underlying goods to, or performance of the underlying services for,
         the accounts receivable debtor; (d) is an account receivable arising
         with respect to goods which have not been shipped or arising with
         respect to services which have not been fully performed; (e) is an
         account receivable with respect to which the account receivable
         debtor's obligation to pay the account receivable is conditioned upon
         the account receivable debtor's approval or is otherwise subject to any
         repurchase obligation or return right, as with sales made on a
         bill-and-hold, guaranteed sale, sale-and-return, sale on approval or
         consignment basis; (f) is an account receivable in which the Bank does
         not have a security interest; (g) is an account receivable due from any
         Affiliate of the Company or which is due solely from an accounts
         receivable debtor which is a USA federal governmental entity or agency,
         except and to the extent the Bank otherwise agrees in writing; (h) is
         an account receivable evidenced by an instrument (as defined in Article
         9 of the UCC) not in the possession of the Bank; or (i) is an account
         receivable which has been charged-off by the Company, whether pursuant
         to Section 5.01(i) of this Agreement, or otherwise. At any time more
         than ten percent (10%) of the aggregate amount of accounts receivable
         due from an accounts receivable debtor remain unpaid sixty-one (61) or
         more days after the date(s) due, as stated on the original invoice(s)
         evidencing such accounts receivable, then no account receivable due the
         Company from that accounts receivable debtor shall constitute an
         Eligible Account.

                                      -4-
<PAGE>   5

         "ESCALADE" means Escalade, Incorporated, a corporation organized and
         existing under the laws of the State of Indiana, USA.

         "ESCALADE DOMESTIC SUBSIDIARIES" means the following first and second
         tier subsidiaries of Escalade: Indian Industries Inc., a corporation
         organized under the laws of the State of Indiana, USA ("Indian
         Industries"), and its subsidiary, Harvard Sports, Inc., a corporation
         organized under the laws of the State of California, USA ("Harvard
         Sports"), and Martin Yale Industries, Inc., a corporation organized
         under the laws of the State of Indiana, USA ("Martin Yale"), and its
         subsidiary, Master Products Manufacturing Company, Inc., a corporation
         organized under the laws of the State of Delaware, USA ("Master
         Products").

         "ESCALADE NOTE" means that certain unsecured, demand promissory note
         made by Escalade and payable to the order of the Company, dated as of
         the Closing Date in an original principal amount which is the greater
         of (i) the initial Advance against the Loan, or (ii) $7,500,000.00.

         "ESCALADE NOTE PLEDGE AGREEMENT" means the Pledge Agreement, dated as
         of the Closing Date, executed by the Company in favor of the Bank (in
         form and substance substantially the same as EXHIBIT "D" attached to
         this Agreement), as the same hereafter may be amended, modified,
         supplemented and/or restated from time to time and at any time, whereby
         the Company pledges the Escalade Note to the Bank as a part of the
         Collateral securing the Obligations.

         "ESCALADE SUBORDINATION AGREEMENT" is used as defined in Section
         6.01(b)(4).

         "EURODOLLAR RATE" means, with respect to a LIBOR Advance for the
         relevant Interest Period, the sum of (i) the quotient of (a) LIBOR
         applicable to such Interest Period, divided by (b) one minus the
         Reserve Requirement (expressed as a decimal) applicable to such
         Interest Period, plus (ii) the Applicable Spread.

         "EVENT OF DEFAULT" means any of the events described in Section 7.01 of
         this Agreement.

         "FINANCIAL STATEMENTS" includes, but is not limited to, balance sheets,
         profit and loss statements, reconciliations of net worth and cash flow
         statements, prepared in accordance with GAAP.

         "GAAP" means generally accepted accounting principles in the United
         States of America as in effect from time to time, which shall include
         the official interpretations thereof by the Financial Accounting
         Standards Board, consistently applied (from and after the date hereof)
         and for the period as to which such accounting principles are to apply.
         Except as otherwise provided in this Agreement, to the extent
         applicable, all computations and determinations as to accounting or
         financial matters and all Financial Statements to be delivered pursuant
         to this Agreement shall be made and prepared in accordance with

                                      -5-
<PAGE>   6

         GAAP (including principles of consolidation where appropriate), and, to
         the extent applicable, all accounting or financial terms shall have the
         meanings ascribed to such terms by GAAP.

         "HARVARD SPORTS" is used as defined in the definition of Escalade
         Domestic Subsidiaries.

         "HIGHEST LAWFUL RATE" means the maximum rate of interest which may be
         charged the Company by the Bank under applicable state or federal usury
         law or regulation or any other law or regulation, however
         characterized, limiting the rate of interest which may be charged to
         corporations.

         "INCREASED COST NOTICE" is used as defined in Section 2.01(g)(vii).

         "INCREASED COSTS" is used as defined in Section 2.01(g)(vii).

         "INDIAN INDUSTRIES" is used as defined in the definition of Escalade
         Domestic Subsidiaries.

         "INFORMAL REQUEST" is used as defined in Section 2.01(b) of this
         Agreement.

         "INTEREST PERIOD" means, with respect to any LIBOR Advance, the one (1)
         month, two (2) month, three (3) month or six (6) month period selected
         by the Company as provided in this Agreement and commencing on that day
         designated by the Company in its written notice to the Bank making such
         selection (so long as such day is not less than two (2) Banking Days
         after the date of such notice). Each Interest Period for a LIBOR
         Advance that begins on the last day of a calendar month (or on a day
         for which there is no numerically corresponding day in the appropriate
         subsequent calendar month) shall end on the last Banking Day of the
         appropriate subsequent calendar month. Each Interest Period for a LIBOR
         Advance which would otherwise end on a day which is not a Banking Day
         shall end on the next succeeding Banking Day (unless such next
         succeeding Banking Day is in another calendar month, in which case such
         Interest Period shall end on the immediately preceding Banking Day).

         "INTANGIBLE ASSETS" means amortizable loan costs, business acquisition
         costs, license agreements, trademarks, trade names, patents,
         capitalized research and development, proprietary products (the results
         of past research and development treated as long term assets and
         excluded from inventory), goodwill and all other assets which would be
         classified as intangible assets, all determined in accordance with
         GAAP.

         "INTEREST" means, for any fiscal period and for any Person, the amount
         equal to the sum of (a) the gross interest expense of such Person for
         that period plus, (b) capitalized interest on any Debt of such Person,
         in each case determined in accordance with GAAP.

                                      -6-
<PAGE>   7

         "INVESTMENT" means any investment, in cash or by delivery of property,
         made directly or indirectly in any other Person, whether by acquisition
         of shares of capital stock, Debt or other obligations or securities or
         by loan, advance, capital contribution or otherwise.

         "LIBOR" means, with respect to any LIBOR Advance, for the relevant
         Interest Period, the applicable British Bankers' Association Interest
         Settlement Rate for deposits in Dollars appearing on Reuters Screen
         FRDB as of 11:00 a.m. (London time) two (2) Banking Days prior to the
         first day of such Interest Period, and having a maturity equal to such
         Interest Period; provided however, that (i) if Reuters Screen FRDB is
         not available to the Bank for any reason, the applicable LIBOR for the
         relevant Interest Period shall instead be applicable British Bankers'
         Association Interest Settlement Rate for deposits in Dollars as
         reported by any other generally recognized financial information
         service as of 11:00 a.m. (London time) two (2) Banking Days prior to
         the first day of such Interest Period, and having a maturity equal to
         such Interest Period, and (ii) if no such British Bankers' Association
         Interest Settlement Rate is available to the Bank, the applicable LIBOR
         for the relevant Interest Period shall instead be the rate determined
         by the Bank in its sole discretion to be the rate at which the Bank, or
         any of its Affiliate banks, offers to place deposits in Dollars with
         first-class banks in the London interbank market at approximately 11:00
         a.m. (London time) two (2) Banking Days prior to the first day of such
         Interest Period in the approximate amount of the Bank's relevant LIBOR
         Advance and having a maturity equal to such Interest Period, all as
         determined by the Bank. Each determination of a LIBOR made by the Bank
         in accordance with the foregoing shall be conclusive except in the case
         of demonstrative or manifest error.

         "LIBOR ADVANCE" means any Advance (or, if the case, the entire
         outstanding principal balance of the Loan) as to which a LIBOR-based
         Rate is elected by the Company pursuant to this Agreement.

         "LIBOR-BASED RATE" means a per annum rate at which interest may accrue
         on all or a portion of the Loan under the terms of this Agreement,
         which rate is determined by reference to LIBOR.

         "LIEN" means any mortgage, security interest, pledge, hypothecation,
         assignment, deposit arrangement, encumbrance, lien (statutory or
         otherwise) or other security interest or preferential arrangement of
         any kind or nature whatsoever (including, without limitation, any
         conditional sale or other title retention agreement, any financing or
         similar statement or notice filed under the UCC as in effect in any
         jurisdiction, or any other similar recording or notice statute, and any
         lease having substantially the same effect as the foregoing, but
         excluding any equipment operating leases and any precautionary filings
         related thereto).

         "LOAN" has the meaning ascribed to such term in Section 2.01 of this
         Agreement.

                                      -7-
<PAGE>   8

         "LOAN DOCUMENTS" means, collectively, this Agreement, the Note, the
         Company Security Agreement, the Lockbox Agreements, the Escalade Note
         Pledge Agreement, the Escalade Subordination Agreement, the Standby and
         Subordination Agreements and all other instruments, agreements,
         certificates, financing statements and documents executed and delivered
         or to be delivered by the Company and others pursuant to or by virtue
         of this Agreement including, but not limited to all the documents,
         instruments and agreements enumerated in Article VI of this Agreement,
         as each of the foregoing may be amended, modified, extended, renewed,
         supplemented and/or restated from time to time and at any time, and
         when used in the singular form, means any of the Loan Documents, as the
         context requires.

         "LOCKBOX AGREEMENTS" means the existing Lockbox Operating Agreements
         previously entered into by the Bank and each of Indian Industries (No.
         663637), Martin Yale (No. 663646) and Master Products (No. 664073),
         including all amendments, modifications, extensions and/or replacements
         thereof.

         "LOCKBOXES" has the meaning ascribed to such term in Section 2.01(f)(1)
         of this Agreement.

         "LOSS" has the meaning ascribed to such term in Section 8.12 of this
         Agreement.

         "MARTIN YALE" is used as defined in the definition of Escalade Domestic
         Subsidiaries.

         "MASTER PRODUCTS" is used as defined in the definition of Escalade
         Domestic Subsidiaries.

         "MATERIALLY ADVERSE EFFECT" means any event, circumstance or condition
         that could reasonably be expected to have a materially adverse effect
         on (a) the business, operations, financial condition, properties or
         prospects of the Company, Escalade or the Escalade Domestic
         Subsidiaries, (b) the ability of the Company to pay or perform the
         Obligations, (c) the validity or enforceability of any of the Loan
         Documents, or any material provision thereof, or any transaction
         contemplated thereby, or (d) the rights and remedies of the Bank under
         any of the Loan Documents.

         "MATURITY DATE" means the earlier of (i) the Scheduled Maturity Date,
         and (ii) that date upon which the Bank accelerates payment of the Loan
         in accordance with Section 7.02 of this Agreement.

         "MAXIMUM AVAILABILITY" means, as of the date any determination thereof
         is to be made, the lesser of: $30,000,000.00, and (ii) the Borrowing
         Base as of such date.

         "MOODY'S" means Moody's Investors Service, Inc.

                                      -8-
<PAGE>   9

         "NET INCOME" means, for any period, the net income of the Company,
         determined for such period in accordance with GAAP.

         "NET WORTH" means, as of the date any determination thereof is to be
         made, the net worth of the Company as of such date, determined in
         accordance with GAAP.

         "NOTE" has the meaning ascribed to it in Section 2.01(b) of this
         Agreement.

         "NOTICE" has the meaning ascribed to such term in Section 5.01(l)(2) of
         this Agreement.

         "OBLIGATIONS" means all present and future indebtedness, obligations
         and liabilities, and all renewals, modifications and extensions
         thereof, now or hereafter owed to the Bank by the Company, whether
         arising under, by virtue of or pursuant to any of this Agreement, the
         Note, any other Loan Documents, or otherwise (including without
         limiting the generality of the foregoing, all indebtedness, obligations
         and liabilities hereafter arising by virtue of or in connection with
         any extensions of credit by the Bank to the Company unrelated to and
         not made under this Agreement), together with all costs, expenses and
         reasonable attorneys' fees incurred by the Bank in the enforcement or
         collection thereof, whether such indebtedness, obligations and
         liabilities are direct, indirect, fixed, contingent, liquidated,
         unliquidated, joint, several, joint and several, now exist or hereafter
         arise, or were prior to acquisition thereof by the Bank owed to some
         other Person.

         "OFFICER'S CERTIFICATE" means a certificate (in form and substance
         substantially the same as EXHIBIT "F" attached to this Agreement) which
         is in all regards satisfactory to the Bank and signed by an Authorized
         Officer confirming that all of the representations and warranties
         contained in Section 3.01 of this Agreement are true and correct as of
         the date of such certificate except as specified therein and with the
         further exceptions that: (i) the representation contained in Section
         3.01(d) of this Agreement shall be construed so as to refer to the
         latest Financial Statements which have been furnished to the Bank as of
         the date of any such certificate, and (ii) all other representations
         will be construed to have been amended to conform with any changes of
         which the Company shall have previously given the Bank notice in
         writing. The Officer's Certificate shall further confirm that no Event
         of Default or Unmatured Event of Default shall have occurred and be
         continuing as of the date of the Officer's Certificate or shall
         describe any such event which shall have occurred and be then
         continuing and the steps being taken by the Company to correct it. In
         addition, the Officer's Certificate shall demonstrate compliance with
         the financial covenants stated in Section 5.01(h), as applicable, and
         shall otherwise be in such form and provide such detail as may be
         reasonably satisfactory to the Bank.

         "PERSON" means an individual, a corporation, a limited or general
         partnership, a limited liability company, a joint venture, a trust or
         unincorporated organization, a joint stock company or other similar
         organization, a government or any political subdivision thereof, a

                                      -9-
<PAGE>   10

         court, or any other legal entity, whether acting in an individual,
         fiduciary or other capacity.

         "PLEDGED CASH" means the Company's cash and cash-equivalent
         Investments, which have been pledged to the Bank, and in which the Bank
         holds a perfected security interest, constituting part of the
         Collateral securing the Obligations.

         "PREPAYMENT PREMIUM" means the excess, if any, as determined by the
         Bank of: (i) the present value at the time of prepayment of the
         interest payments which would have been payable on account of an amount
         prepaid from the date of prepayment until the end of the period during
         which interest would have accrued at the LIBOR-based Rate applicable to
         the amount so prepaid but for such prepayment over (ii) the present
         value at the time of prepayment of interest payments calculated at the
         rate (the "REINVESTMENT RATE") which the Bank then estimates it would
         receive upon reinvesting the principal amount of the prepayment in an
         obligation which presents a credit risk substantially similar (as
         determined in accordance with the commercial credit rating system then
         used by the Bank) to that which is then presented by the Loan for the
         same period. The discount rate used by the Bank in determining such
         present values shall be the Reinvestment Rate.

         "PRIME ADVANCE" means any Advance (or, if the case, the entire
         outstanding principal balance of the Loan) as to which a Prime-based
         Rate is elected by the Company pursuant to this Agreement.

         "PRIME RATE" means a rate per annum equal to the prime rate of interest
         announced from time to time by the Bank or its parent as its prime rate
         (which is not necessarily the lowest or best rate charged to any
         customer), changing when and as said prime rate changes.

         "PRIME-BASED RATE" means the variable rate per annum at which interest
         may accrue on all or a portion of the Loan under the terms of this
         Agreement, which rate is determined by reference to the Prime Rate.

         "PURCHASED ACCOUNTS RECEIVABLE" means those accounts receivable less
         than sixty-one (61) days delinquent at the time of purchase, which are
         purchased on a non-recourse basis by the Company from the Escalade
         Domestic Subsidiaries pursuant to the Receivables Purchase Agreements
         for an amount which is not in excess of ninety-five percent (95%) of
         the original face amount of such purchased accounts receivable.

         "RECEIVABLES PURCHASE AGREEMENTS" means the four Receivable Purchase
         Agreements dated as of the Closing Date, by and between the Company and
         each of the Escalade Domestic Subsidiaries, respectively, pursuant to
         which the Company shall purchase from the Escalade Domestic
         Subsidiaries on a non-recourse basis certain of the accounts receivable
         of the Escalade Domestic Subsidiaries existing as of the Closing Date
         having in the aggregate an estimated face value of approximately
         $12,000,000.00, with

                                      -10-
<PAGE>   11

         additional accounts receivable being thereafter purchased by the
         Company from the Escalade Domestic Subsidiaries in an aggregate amount
         at any one time outstanding not in excess of the Maximum Availability
         (each of which Receivables Purchase Agreements shall be in form and
         substance substantially the same as EXHIBIT "G" attached to this
         Agreement).

         "REGULATION D" means Regulation D of the Board as in effect from time
         to time and any successor thereto or other regulation or official
         interpretation of the Board relating to reserve requirements applicable
         to member banks of the Federal Reserve System.

         "REGULATION U" means Regulation U of the Board as in effect from time
         to time and any successor or other regulation or official
         interpretation of the Board relating to the extension of credit by
         banks for the purpose of purchasing or carrying margin stocks
         applicable to member banks of the Federal Reserve System.

         "REINVESTMENT RATE" is used as defined in the definition of Prepayment
         Premium.

         "RESERVE REQUIREMENT" means, with respect to an Interest Period, the
         maximum aggregate reserve requirement (including all basic,
         supplemental, marginal and other reserves) which is imposed under
         Regulation D on Eurocurrency liabilities.

         "S&P" means Standard and Poor's Rating Services, a division of The
         McGraw Hill Companies, Inc.

         "SCHEDULED MATURITY DATE" means May 14, 2001, or such later date as may
         be established pursuant to Section 2.01(d) of this Agreement.

         "SERVICERS" means Indian Industries and Martin Yale, and in the
         singular means either one of them, as the context requires.

         "SERVICES AGREEMENTS" means the four Services Agreements dated as of
         the Closing Date, by and between the Company and a Servicer pursuant to
         which the Servicer with respect to those Purchased Accounts Receivable
         sold by it and its Subsidiary to the Company, will service and collect
         such Purchased Accounts Receivable (each of which Services Agreements
         shall be in form and substance substantially the same as EXHIBIT "H"
         attached to this Agreement).

         "SOLVENT" means, when used with respect to any Person, that: (i) the
         fair salable value of its assets is in excess of the total amount of
         its liabilities (including for purposes of this definition all
         liabilities, whether or not reflected on a balance sheet prepared in
         accordance with GAAP, and whether direct or indirect, fixed or
         contingent, disputed or undisputed; (ii) it is able to pay its debts or
         obligations in the ordinary course as they mature; and (iii) that
         Person has capital sufficient to carry on its business and all business
         in which it is about to engage.

                                      -11-
<PAGE>   12

         "STANDBY AND SUBORDINATION AGREEMENTS" is used as defined in Section
         6.01(b)(5).

         "SUBORDINATED DEBT" means with respect to the Company, as of any date
         of determination, all Debt of the Company owed to Persons other than
         the Bank which is made expressly subordinate in a manner acceptable to
         Bank to the payment of all or any of the Obligations.

         "SUBSIDIARY" means, with respect to any Person, any corporation,
         partnership, joint venture or other business entity (whether now
         existing or hereafter organized or acquired) over which the Person
         exercises control, provided that it shall be conclusively presumed that
         the Person exercises control over any such entity (a) if more than 50%
         of the equity interest in such entity is owned by the Person, directly
         or indirectly; or (b) if at least a majority of the securities of each
         class having ordinary voting power for the election of directors (other
         than securities which have such power only by reason of the happening
         of a contingency) at the time as of which the determination is being
         made, is owned, beneficially and of record, by such Person or by one or
         more of the other Subsidiaries of such Person or by any combination
         thereof.

         "SYSTEMS" has the meaning ascribed to such term in Section 3.01(k)(1)
         of this Agreement.

         "TANGIBLE CAPITAL BASE" means, as of the date any determination thereof
         is to be made, the Net Worth of the Company as of such date, less the
         amount of all Intangible Assets of the Company as of such date,
         determined in accordance with GAAP (except that, notwithstanding GAAP,
         such Intangible Assets shall include all notes and loans receivable
         from any of the Company's Affiliates as of such date), plus the sum of
         all Subordinated Debt.

         "TOTAL DEBT" means, with respect to the Company, as of the date any
         determination thereof is to be made, all Debt of the Company computed
         and determined in accordance with GAAP.

         "UCC" means the Indiana Uniform Commercial Code (i.e., IC 26-1-1-1, et
         seq.), as amended from time to time.

         "USA" means the United States of America.

         "UNAVAILABLE LIBOR-BASED RATE" is used as defined in Section
         2.01(g)(vi) of this Agreement.

                                      -12-
<PAGE>   13

         "UNAVAILABILITY DATE" is used as defined in Section 2.01 (g)(vi) of
this Agreement.

         "UNMATURED EVENT OF DEFAULT" means any event specified in Section 7.01
         of this Agreement, which is not initially an Event of Default, but
         which would, if uncured, become an Event of Default with the giving of
         notice or the passage of time or both.

         "YEAR 2000 COMPLIANT" has the meaning ascribed to such term in Section
3.01(k)(1) of this Agreement.

                                   ARTICLE II

                                 BORROWING TERMS

         Section 2.01. Loan. Provided that all of the conditions of lending
stated in Section 6.01(a) and (b) of this Agreement have been fulfilled on the
Closing Date, and subject to and in accordance with the terms of this Agreement,
and in reliance upon the representations, warranties, covenants, and agreements
of the Company made in this Agreement and the other Loan Documents, the Bank
will make a revolving loan available to the Company on the Closing Date, and
thereafter, on the following terms and subject to the following conditions:

         (a) The Loan Commitment / Use of Proceeds. From the Closing Date and
until the Maturity Date, the Bank agrees to make Advances (collectively, the
"LOAN") under a revolving line of credit from time to time to the Company up to
a principal amount which at any time shall not be in excess of the Maximum
Availability. All monies loaned and all Obligations repayable under this
Agreement shall be in Dollars. The Bank's agreement to make Advances is subject
to the requirement that all of the conditions of lending stated in Article VI of
this Agreement as being applicable to the Loan have been fulfilled at the time
of each Advance. The initial Advance of the Loan shall be used to fund a
one-time, unsecured loan by the Company to Escalade in an amount not less than
$7,500,000.00 in exchange for which Escalade shall issue to the Company the
Escalade Note. Thereafter, the proceeds of the Loan shall be used in their
entirety to fund the Company's acquisition of Purchased Accounts Receivable, in
accordance with the Receivables Purchase Agreements; provided however, that
certain operating expenses, service charges and legal and accounting fees of the
Company may be paid from the proceeds of the Loan if first disclosed to the
Bank.

         (b) Method of Borrowing. The Obligation of the Company to repay the
Loan shall be evidenced by a promissory note (the "NOTE") of the Company (in
form and substance substantially the same as EXHIBIT "I" attached to this
Agreement). So long as no Event of Default or Unmatured Event of Default shall
have occurred and be continuing and until the Maturity Date, Company may borrow,
repay and reborrow under the Note on any Banking Day, provided that no Advance
shall cause the total principal balance outstanding on the Loan to then exceed
the Maximum Availability or result in an Event of Default or an Unmatured Event
of Default. Each Advance under the Loan shall be conditioned upon receipt by the
Bank from the

                                      -13-
<PAGE>   14

Company of an Application for Advance and an Officer's Certificate, provided
that the Bank may, at its discretion, make a disbursement upon the oral request
of the Company made by an Authorized Officer, or upon a request transmitted to
the Bank by telephone facsimile machine, or by any other form of written
electronic communication (each such request for an Advance being hereafter
referred to as "INFORMAL REQUEST"). In so doing, the Bank may rely upon any
Informal Request which shall have been received by it in good faith from a
Person reasonably believed by it to be an Authorized Officer. Each Informal
Request shall be promptly confirmed by a duly executed Application and Officer's
Certificate, if the Bank so requires, which shall constitute the representation
of the Company that no Event of Default or Unmatured Event of Default has
occurred and is continuing or would result from the making of the requested
Advance and that the making of the requested Advance shall not cause the total
outstanding principal balance of the Revolving Loan to exceed the Maximum
Availability. All borrowings, repayments and reborrowings shall be in amounts of
not less than Ten Thousand Dollars ($10,000.00), except for repayment of the
entire principal balance of the Loan. Upon receipt of an Application, or at the
Bank's discretion upon receipt of an Informal Request for an Advance and upon
compliance with any other conditions of lending stated in Article VI of this
Agreement applicable to the Loan, the Bank shall disburse the amount of the
requested Advance to the Company. All Advances by the Bank and payments by the
Company shall be recorded by the Bank on its books and records, and the
principal amount outstanding on the Loan from time to time, plus interest
payable thereon, shall be determined by reference to the books and records of
the Bank, which books and records shall be presumed prima facie to be correct as
to such matters, absent demonstrative or manifest error.

         (c) Interest on the Loan. The principal amount of the Loan outstanding
from time to time shall bear interest until maturity of the Note at a rate per
annum equal to the Prime Rate, plus the Applicable Spread, except that at the
option of the Company, exercised from time to time as provided in Section
2.01(g) of this Agreement, interest may accrue prior to maturity on any Advance
or on the entire outstanding principal balance of the Loan as to which no
LIBOR-based Rate previously elected remains in effect, at the Eurodollar Rate,
for a period of one month, two months, three months or six months, provided that
an election of a LIBOR-based Rate for a period extending beyond the Scheduled
Maturity Date shall be permitted only at the discretion of the Bank. After
maturity, whether on the Scheduled Maturity Date or on account of acceleration
upon the occurrence of an Event of Default, and until paid in full, the Loan
shall bear interest at a per annum rate equal to the Default Rate. Accrued
interest on the outstanding principal balance of the Loan bearing a Prime-based
Rate shall be due and payable monthly on the first Banking Day of each month
prior to maturity. Accrued interest on the outstanding principal balance of the
Loan bearing one or more LIBOR-based Rates shall be due and payable on the last
day of the related Interest Period unless the related Interest Period covers a
period of six months in which event accrued interest thereon shall be due and
payable on the date which is three months after the first day of such Interest
Period and on the last day of such Interest Period. After maturity, all interest
shall be payable as accrued and without demand.

         (d) Extensions of Scheduled Maturity Date. The Bank may, upon the
request of Company, but at the Bank's sole discretion, extend the Scheduled
Maturity Date from time to

                                      -14-
<PAGE>   15

time to such date or dates as the Bank may elect by notice in writing to the
Company, and upon any such extension and upon execution and delivery by the
Company of a Note reflecting the extended maturity date, the date to which the
Note is then extended will become the "Scheduled Maturity Date" for purposes of
this Agreement.

         (e) Special Repayments of Principal. At any time the total outstanding
principal balance of the Loan exceeds the then existing Maximum Availability, as
determined by the Bank, the Company shall, immediately and without notice or
demand of any kind, repay that portion of the principal balance of the Loan
which is in excess of the Maximum Availability.

         (f) Manner of Payment. The Company shall pay the Obligations by and
through application of the proceeds of the Purchased Accounts Receivable as set
forth below:

                  (1) All checks, notes, drafts, items, money orders or other
         documents or instruments in satisfaction of or related to payments on
         the Purchased Accounts Receivable (collectively, the "ITEMS") shall be
         directed by the Company to be paid into one of three (3) lockboxes (the
         "Lockboxes") which shall be owned and controlled by the Bank, all as
         set forth more fully in the Company Security Agreement and Lockbox
         Agreements. The Bank shall process for collection all Items and
         remittances received into the Lockboxes at the close of every Banking
         Day and shall endorse and deposit all collected remittances into the
         "ACCOUNT", as such term is defined in the Lockbox Agreements. The
         Company shall cause any payments and remittances received by any of the
         Escalade Domestic Subsidiaries on account of the Purchased Accounts
         Receivable by means of an ACH credit, wire transfer or any other
         electronic means to be promptly transmitted by such Escalade Domestic
         Subsidiary to the Account.

                  (2) Provided that such funds are then "good and available" (as
         such term is understood in usual and customary banking parlance), the
         receipts deposited into the Account prior to an Event of Default or
         Unmatured Event of Default shall automatically be posted as payments
         and applied to the Obligations in accordance with the provisions of
         Section 2.02 (b) of this Agreement, or alternatively, upon written
         notice to the Bank from an Authorized Officer, funds in the Account may
         be used by the Company to acquire additional Purchased Accounts
         Receivable, pay interest on the Loan and other Obligations arising
         under this Agreement, pay normal and customary operating expenses of
         the Company previously approved by the Bank and/or pay accrued
         servicing fees due under the Services Agreements. After an Event of
         Default or Unmatured Event of Default all proceeds on deposit in the
         Account shall be applied solely to the Obligations. The Bank and the
         Company recognize as a matter of procedure that (i) payments on
         accounts receivable owing to one or more of the Escalade Domestic
         Subsidiaries may be deposited into the Account and applied by the Bank
         to the Obligations; and (ii) each of the Escalade Domestic Subsidiaries
         may owe the Company monies on account of returns, discounts, allowances
         or otherwise with

                                      -15-
<PAGE>   16

         respect to the Purchased Accounts Receivable. Accordingly, in
         accordance with the Services Agreements, the Escalade Domestic
         Subsidiaries and the Company shall make a determination within five (5)
         business days of the end of every four week accounting period of the
         Escalade Domestic Subsidiaries whether (i) the Bank has applied against
         the Obligations proceeds of accounts receivable, not Purchased Accounts
         Receivable, or (ii) any of the Escalade Domestic Subsidiaries owe the
         Company any monies for returns, discounts, allowances or otherwise.
         Such amounts shall be netted against each other as of the same date,
         and (i) any net monies to be reimbursed by the Bank to the Escalade
         Domestic Subsidiaries shall be paid out of receipts thereafter
         collected and deposited into the Account; provided however, that such
         payment does not cause any erosion of the Borrowing Base which would
         result in the outstanding principal balance of the Loan being in excess
         of the Maximum Availability, and (ii) any net monies owing by the
         Escalade Domestic Subsidiaries to the Company shall be paid immediately
         by their deposit of such amounts into the Account.

         (g) Procedures for Electing LIBOR-based Rates -- Certain Effects of
Election. LIBOR-based Rates may be elected only in accordance with the following
procedures, shall be subject to the following conditions, and the election of a
LIBOR-based Rate shall have the following consequences in addition to other
consequences stated in this Agreement:

                  (i)      A LIBOR-based Rate may be elected only for the Loan,
                           or portions thereof, in a minimum amount of
                           $500,000.00. No more than three (3) LIBOR-based Rate
                           elections may be in effect under the Loan, or
                           portions thereof, at any one time.

                  (ii)     No LIBOR-based Rate may be elected at any time that
                           an Event of Default or Unmatured Event of Default has
                           occurred and is continuing.

                  (iii)    Voluntary prepayment prior to scheduled expiration of
                           the relevant Interest Period pertaining to all or any
                           portion of the Loan on which interest is accruing at
                           a LIBOR-based Rate shall be subject to
                           contemporaneous payment of the Prepayment Premium if,
                           at the time of prepayment, the Reinvestment Rate is
                           less than the LIBOR-based Rate at which interest
                           accrues on such portion of the Loan. A Prepayment
                           Premium shall also be due and payable on prepayment
                           of all or any portion of any or all of such Loan
                           prior to scheduled expiration of the relevant
                           Interest Period because of acceleration of maturity
                           on account of an Event of Default if, at the time of
                           acceleration of maturity, the Reinvestment Rate is
                           less than the LIBOR-based Rate at which interest is
                           accruing on such portion of the Loan. If at the time
                           of any voluntary or mandatory prepayment of any
                           portion of the principal of the Loan, interest
                           accrues at both a LIBOR-based Rate or Rates and at a
                           Prime-based Rate on portions of such Loan, then any
                           prepayment of principal will be applied

                                      -16-
<PAGE>   17

                           first to the portion of such Loan on which interest
                           accrues at the Prime-based Rate and next to the
                           portion or portions at which interest accrues at a
                           LIBOR-based Rate or Rates, and if interest accrues on
                           such Loan at more than one LIBOR-based Rate, first to
                           that portion or those portions on which interest
                           accrues at a Rate or Rates which results in no
                           Prepayment Premium or the lowest Prepayment Premium
                           or Premiums.

                  (iv)     On any Banking Day, the Company may request a
                           quotation of the LIBOR-based Rates then in effect
                           from the Bank. As soon as possible, and in any event
                           before the close of business on the next following
                           Banking Day, the Bank shall quote such LIBOR-based
                           Rates. The Company shall then have until the end of
                           the Banking Day on which such quotation is given or
                           within such shorter time as the Bank may specify, to
                           exercise its option to elect any LIBOR-based Rate
                           quoted, subject to all other conditions and
                           limitations stated in this Agreement. The period for
                           which any LIBOR-based Rate is effective shall begin
                           on the second Banking Day following the day on which
                           the quotation is given.

                  (v)      An election of a LIBOR-based Rate may be communicated
                           to the Bank on behalf of the Company only by an
                           Authorized Officer. Such election may be communicated
                           by telephone or by telecopy or any other form of
                           written electronic communication, or by a writing
                           delivered to the Bank. At the request of the Bank,
                           the Company shall confirm any oral election in
                           writing, and such written confirmation shall be
                           signed by an Authorized Officer. The Bank shall be
                           entitled to rely on any oral or written electronic
                           communication of an election of a LIBOR-based Rate
                           which is received by an appropriate Bank employee
                           from anyone reasonably believed in good faith by such
                           employee to be an Authorized Officer.

                  (vi)     The Bank may elect not to quote a LIBOR-based Rate
                           (the "UNAVAILABLE LIBOR-BASED RATE") to any of its
                           customers otherwise eligible for the Unavailable
                           LIBOR-based Rate, including the Company, on any day
                           (the "UNAVAILABILITY DATE") on which the Bank has
                           determined that it is not practical to quote the
                           Unavailable LIBOR-based Rate because of the
                           unavailability of sufficient funds to the Bank for
                           appropriate terms at rates approximating the then
                           relevant LIBOR, or because of legal or regulatory
                           changes which make it impractical or burdensome for
                           the Bank to lend money at the Unavailable LIBOR-based
                           Rate.

                  (vii)    If, as a result of any regulatory change, the basis
                           of taxation of payments to the Bank of the principal
                           of or any interest on any portion or all of the Loan
                           bearing interest at a LIBOR-based Rate or any other
                           amounts payable hereunder in respect thereof, other
                           than taxes imposed on the overall net income of the
                           Bank, is changed, or any reserve, special deposit,

                                      -17-
<PAGE>   18

                           or similar requirement relating to any extensions of
                           credit or other assets of or any deposits with or
                           other liabilities of the Bank are imposed, modified,
                           or deemed applicable, and the Bank reasonably
                           determines that, by reason thereof, the cost to it of
                           making, issuing, or maintaining the Loan or any part
                           thereof at a LIBOR-based Rate is increased by an
                           amount deemed by it to be material, then the Company
                           shall pay promptly upon demand to the Bank such
                           additional amounts as the Bank reasonably determines
                           will compensate for such increased costs ("INCREASED
                           COSTS"); provided however, that (i) the Bank shall
                           give the Company ninety (90) days' prior written
                           notice of the Bank's intention to collect Increased
                           Costs from the Company ("INCREASED COST NOTICE"), and
                           the Bank shall not be entitled to pass-through to or
                           collect from the Company Increased Costs incurred by
                           the Bank prior to that date which is the ninetieth
                           (90th) day after the delivery of the Increased Cost
                           Notice to the Company by the Bank, and (ii) the
                           Company shall not be the only borrower of the Bank
                           that is singled out from a group of similarly
                           situated borrowers of the Bank subject to this type
                           of provision that is requested to remit Increased
                           Costs. Any determination by the Bank of Increased
                           Costs made pursuant to the provisions of this section
                           shall be final, absent manifest error.

         Section 2.02. Provisions Applicable to All Obligations. The following
provisions shall be applicable to all of the Obligations:

         (a) Calculation of Interest. Interest on all Obligations shall be
calculated on the basis of actual days elapsed and that an entire year's
interest is earned in three hundred sixty (360) days.

         (b) Other Manner of Payment -- Application. All payments of principal
and interest on the Loan made in addition to the payments provided for in
Section 2.02(f) shall be payable at the principal office of the Bank in
Indianapolis, Indiana, in funds available for the Bank's immediate use in that
city and for the Bank's account addressed as follows:

                          Bank One, Indiana, National Association
                          ABA #074000010
                          Attn: Commercial Loan Note Servicing
                          Re: Indian-Martin AG
                          Account No.  628553794

No payment will be considered to have been made until received in such funds.
Unless otherwise agreed to, in writing, or otherwise required by applicable law,
payments will be applied first to accrued, unpaid interest, then to principal,
and any remaining amount to any unpaid collection costs, late charges and other
charges; provided however, upon delinquency or other default, the Bank reserves
the right to apply payments among principal, interest, late charges, collection
costs and other charges as may be determined in the sole discretion of the Bank.
All prepayments shall

                                      -18-
<PAGE>   19

be applied to the Obligations owing hereunder in such order and manner as the
Bank may from time to time determine in its sole discretion.

         (c) Automatic Debit . The Bank may without further authority debit when
due all payments of principal and interest, or any other Obligations due and
payable by the Company under the terms of this Agreement or any other Loan
Document, to any deposit account maintained with the Bank by the Company.

         (d) Unconditional Obligations and No Deductions. The Company's
Obligations to make all payments provided for in this Agreement and the Note
shall be absolute and unconditional. Each such payment shall be made without
relief from valuation and appraisement laws and without deduction for any claim,
defense or offset of any type, including without limitation any withholdings and
other deductions on account of income or other taxes and regardless of whether
any claims, defenses or offsets of any type exist.

         (e) Payment on Non-Banking Days. Whenever any payment to be made under
this Agreement and the Note shall be stated to be due on a day other than 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
payment of fees, if any, and interest under this Agreement and the Note.

         (f) Reduction of Maximum Availability. If an Event of Default or an
Unmatured Event of Default has occurred and is continuing, and the Event of
Default is one described in Section 7.01(d) of this Agreement or the Bank shall
have notified the Company of the election of the Bank to take any action
specified in Section 7.02 of this Agreement, the Maximum Availability shall be
automatically reduced to zero Dollars ($0) without any action on the part of or
the giving of any additional notice to the Company by the Bank.

         (g) Additional Amounts Payable. If any change or the enactment,
adoption or judicial or administrative interpretation of any law, regulation,
treaty, guideline or directive (including, without limitation, Regulation D of
the Board) either (a) subjects the Bank to any additional tax, duty, charge,
deduction or withholding with respect to the Loan (other than a tax measured by
the net or gross income of the Bank), or (b) imposes or increases any reserve,
special deposit or similar requirement on account of the Loan not otherwise
provided in this Agreement or (c) imposes increased minimum capital requirements
on the Bank on account of its issuing or maintaining the Loan; and if any of the
foregoing (i) results in any increase to the Bank in the cost of issuing or
maintaining the Loan, or making any payment on account of the Loan, (ii) reduces
the amount of any payment receivable by the Bank under this Agreement with
respect to the Loan, (iii) requires the Bank to make any payment calculated by
reference to the gross amount of any sum received or paid by the Bank pursuant
to the Loan, or (iv) reduces the rate of return on the Bank's capital to a level
below that which the Bank could otherwise have achieved (taking into
consideration the Bank's policies with respect to capital adequacy), then the
Company shall pay to the Bank, as additional compensation for the Loan, such
amounts as will compensate the Bank for such increased costs, payments or
reductions. Within twenty (20) days

                                      -19-
<PAGE>   20

after (A) the initial demand therefor and (B) presentation by the Bank of a
certificate to the Company containing a statement of the cause of such increased
costs, payments or reductions and a calculation of the amounts thereof (which
statement and calculation shall be presumed prima facie to be correct, absent
demonstrative or manifest error), the Company shall pay the additional amounts
payable, measured from the date such change, enactment, adoption or
interpretation first affects the Bank.

                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         Section 3.01. Representations and Warranties. To induce the Bank to
make the Loan, the Company represents and warrants to the Bank that:

         (a) Existence and Authority. The Company is a corporation duly
organized and validly existing under the laws of Switzerland. The Company is
qualified to do business in every jurisdiction in which: (i) the nature of the
business conducted by it or the character or location of properties owned or
leased by it, or the residences or activities of its shareholder, directors,
officers or employees, make such qualification necessary; and (ii) failure so to
qualify might have a Materially Adverse Effect. No jurisdiction in which the
Company is not qualified to do business has asserted that the Company is
required to be qualified therein. The principal office of the Company is located
at Aegeristrasse 66, 6300, Zug, Switzerland. The Company has no Subsidiaries.
The Company does not conduct any material operations or keep any material
amounts of property at any location other than the locations specified in the
Company Security Agreement. The Company has not done business under any name
other than its present corporate name at any time during the six years preceding
the date of this Agreement.

         (b) Authorization/No Conflict. The execution and delivery of this
Agreement, the borrowings hereunder, the execution and delivery of all of the
other Loan Documents and the performance by the Company of its obligations under
this Agreement and all of the other Loan Documents are within the powers of the
Company, have been duly authorized by all necessary action, have received any
required governmental or regulatory agency approvals and do not and will not
contravene or conflict with any provision of law or of the Articles of
Incorporation or By-Laws of the Company or of any agreement binding upon the
Company or its properties.

         (c) Validity and Binding Nature. This Agreement and all of the other
Loan Documents to which the Company is a party are the legal, valid and binding
obligations of the Company, enforceable against the Company under the laws of
the United States of America and Switzerland, in accordance with their
respective terms, except to the extent that enforcement thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium and other laws enacted for
the relief of debtors generally and other similar laws affecting the enforcement
of creditors' rights generally or by equitable principles which may affect the
availability of specific performance and other equitable remedies.

                                      -20-
<PAGE>   21

         (d) Financial Statements. The Company came into existence as of
December 20, 1999. The Company has delivered to the Bank its balance sheet
prepared by management of the Company as of December 25, 1999, which balance
sheet has been prepared in accordance with GAAP. Such balance sheet presents
fairly the financial position of the Company as of the date thereof. There has
been no materially adverse change in the financial position of the Company as of
the Closing Date, and the Company is Solvent as of the Closing Date.

         (e) Litigation and Contingent Liabilities. No litigation, arbitration
proceedings or governmental proceedings are pending or to the best of the
Company's knowledge threatened against the Company which would, if adversely
determined, have a Materially Adverse Effect. The Company does not have any
material, contingent liabilities not provided for or disclosed in the Financial
Statements referred to in Section 3.01(d), above.

         (f) Liens. None of the assets of the Company are subject to any Lien
(including without limitation any seller or vendor's lien or right of
reclamation), except for Liens described in Sections 5.02(b) of this Agreement.

         (g) Payment of Taxes. The Company has filed all tax returns (federal,
state, local or otherwise) and tax related reports as may be required under the
laws of the USA and Switzerland which it is required to file by any statute or
regulation and all taxes and any tax related interest payments and penalties
that are due and payable have been paid, except for such as are being diligently
contested in good faith and by appropriate proceedings and as to which
appropriate reserves have been established. Adequate provision has been made for
the payment when due of all tax liabilities which have been incurred, but are
not as yet due and payable.

         (h) Investment Company Act. The Company is not an "investment company"
or a company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.

         (i) Regulation U. The Company is not engaged principally, or as one of
its important activities, in the business of extending credit for the purpose of
purchasing or carrying margin stock within the meaning of Regulation U of the
Board. Not more than twenty-five percent (25%) of the assets of the Company
consists of margin stock, within the contemplation of Regulation U, as amended.

         (j) Subsidiaries/Parent/Business Activities. The Company has no
Subsidiaries. Escalade is the sole owner of the issued and outstanding capital
stock of the Company. Except for such activities that the Bank may approve
pursuant to Section 5.02(m), the sole business of the Company is to buy and own
accounts receivable generated by and originally owed to the Escalade Domestic
Subsidiaries, respectively, and to engage in activities that are directly and
necessarily related thereto. The Company has only two employees, and all
servicing and collections of the Purchased Accounts Receivable are performed by
the Escalade Domestic Subsidiaries under the respective Services Agreements.

                                      -21-
<PAGE>   22

         (k) Year 2000 Compliant. The Company represents:

                  (1) All devices, systems, machinery, information technology,
         computer software and hardware, and other date sensitive technology
         (jointly and severally the "SYSTEMS") necessary for the Company to
         carry on its business as presently conducted and as contemplated to be
         conducted in the future are Year 2000 Compliant, or will be Year 2000
         Compliant, within a period of time calculated to result in no material
         disruption of any of its business operations. For purposes of these
         provisions, "YEAR 2000 COMPLIANT" means that such Systems are designed
         to be used prior to, during and after the Gregorian calendar year 2000
         A.D. and will operate during each time period without error relating to
         date data, specifically including any error relating to, or the product
         of, date data which represents or references different centuries or
         more than one century.

                  (2) The Company has: (i) undertaken a detailed inventory,
         review and assessment of all areas within the business and operations
         of the Company that could be adversely affected by the failure of the
         Company to be Year 2000 Compliant on a timely basis; (ii) developed a
         detailed plan and time line for becoming Year 2000 Compliant on a
         timely basis, and (iii) to date, implemented that plan in accordance
         with that timetable in all material respects.

                                   ARTICLE IV

                            SECURITY FOR OBLIGATIONS

         Section 4.01. Collateral for the Obligations. Until finally paid and
satisfied in full and this Agreement is no longer of any force or effect, the
Obligations are and shall remain secured by a valid and enforceable first
priority pledge, assignment of and/or grant of security interest and Lien in and
to all personal property of the Company, tangible and intangible, now owned and
existing or hereafter acquired or arising, including, without limitation, all
accounts receivable, all Purchased Accounts Receivable, cash, Pledged Cash,
Investment securities, all promissory notes (including, but not limited to, the
Escalade Note) made and issued by Escalade and/or any of the Escalade Domestic
Subsidiaries in favor of, and owned and held by, the Company, general
intangibles and all proceeds and products thereof (collectively, the
"COLLATERAL"), which assignments, security interests and pledges shall be
granted to the Bank by the Company Security Agreement and the Escalade Note
Pledge Agreement, respectively, subject only to Liens and security interests
described in the exceptions enumerated in Section 5.02(b) of this Agreement. In
the event the Company owns or acquires tangible or intangible personal property
that the Bank deems is or may not be covered as Collateral by the Company
Security Agreement and the Escalade Note Pledge Agreement, respectively, or in
which the Bank deems its security interest is or may not be perfected, the
Company covenants and agrees promptly, upon the request of the Bank, to execute
such other security instruments and documents and take such other actions as

                                      -22-
<PAGE>   23

the Bank may require to grant to the Bank a perfected security interest therein,
all of which security instruments and documents shall be in form and substance
satisfactory to the Bank and its counsel in all respects.

                                    ARTICLE V

                                 AFFIRMATIVE AND
                          NEGATIVE COVENANTS OF COMPANY

         Section 5.01. Affirmative Covenants of the Company. Unless otherwise
agreed or consented to by the Bank in a prior written document, until all
Obligations of the Company are paid and satisfied in full, and this Agreement
and the Bank's obligation to make Advances hereunder have been terminated, the
Company shall strictly observe each of the following covenants:

         (a) Existence. The Company shall preserve and maintain its corporate
existence and the right to do business in its place of incorporation and in such
other jurisdictions and states wherein non-qualification would have a Materially
Adverse Effect. Except for such activities that the Bank may approve pursuant to
Section 5.02(m), the sole business of the Company shall be to buy and own
accounts receivables generated by and originally owed to the Escalade Domestic
Subsidiaries, respectively, and to engage in activities that are directly and
necessarily related thereto. The Company shall not at any time have more than
two (2) employees, and all servicing and collections of the Purchased Accounts
Receivable shall be performed by the Escalade Domestic Subsidiaries under the
respective Services Agreements.

         (b) Use of the Proceeds of the Purchased Accounts Receivables. The
Company shall apply all proceeds of the Purchased Accounts Receivable against
its Obligations to the Bank to the extent necessary or required to all times to
prevent the outstanding principal balance owed on the Obligations from exceeding
the Maximum Availability and shall not invest or otherwise utilize the proceeds
for any purpose whatsoever; provided however, that the Company shall be
permitted from time to time to acquire additional Purchased Accounts Receivable
from the Escalade Domestic Subsidiaries so long as the Company as a result of
such transaction(s) does not at any time owe the Bank a principal balance on the
Loan in excess of the Maximum Availability and has not then otherwise committed
an Event of Default or Unmatured Event of Default.

         (c) Reports, Certificates and Other Information. The Company shall
furnish to the Bank the following Financial Statements, certificates and other
information, in form satisfactory in all regards to the Bank:

                  (1) Annual Audited Statements. As soon as available and in any
         event within ninety (90) days after the end of each fiscal year ending
         after the Closing Date, annual audited Financial Statements, audited by
         the Company's Auditors, showing the financial

                                      -23-
<PAGE>   24

         condition and results of operations of the Company as at the close of
         such fiscal year and for such fiscal year, all prepared in accordance
         with GAAP, accompanied by an opinion of the Company's Auditors, which
         opinion shall be without qualification and shall state that such
         audited Financial Statements present fairly the financial position of
         the Company as of the date of such Financial Statements and the results
         of its operations and changes in its financial position for the period
         covered thereby, and that their examination in connection with such
         Financial Statements has been made in accordance with GAAP. This
         reporting requirement may be satisfied by the Company providing to the
         Bank a copy of Escalade's annual audited Financial Statements which are
         inclusive of and show all consolidating data and information related to
         the Company.

                  (2) Interim Quarterly Statements. As soon as available and in
         any event within forty-five (45) days after the end of each fiscal
         quarter ending after the Closing Date, unaudited Financial Statements
         for the Company prepared in accordance with GAAP showing its financial
         condition and results of operations as at, and for such fiscal period
         and year-to-date, all in reasonable detail, and certified to the Bank
         by an Authorized Officer. This reporting requirement may be satisfied
         by the Company providing to the Bank a copy of Escalade's fiscal
         quarter Financial Statements which are inclusive of and show all
         consolidating data and information related to the Company.

                  (3) Annual and Quarterly Officer's Certificates.
         Contemporaneously with the furnishing of each set of Financial
         Statements provided for in Sections 5.01(c)(1) and (2), an Officer's
         Certificate.

                  (4) Orders. Prompt notice of any orders in any material
         proceedings to which the Company is a party, issued by any court or
         regulatory agency, federal or state, and if the Bank should so request,
         a copy of any such order.

                  (5) Notice of Default or Litigation. Immediately upon learning
         of the occurrence of an Event of Default or Unmatured Event of Default,
         or the institution of or any adverse determination in any litigation,
         arbitration proceeding or governmental proceeding which is material to
         the Company or the occurrence of any event which could have a
         Materially Adverse Effect, written notice thereof describing the same
         and the steps being taken with respect thereto.

                  (6) Borrowing Base Certificate. A Borrowing Base Certificate
         evidencing the Borrowing Base as of the close of the last prior Banking
         Day, on the date of the initial Advance and each subsequent Advance.
         For each month during which no Advance is made, the Company shall also
         provide a Borrowing Base Certificate as of the last Banking Day of such
         month by the fifth (5th) Banking Day of the next successive month.

                  (7) Other Information. From time to time all such other
         information, data and documents concerning the Company as the Bank may
         reasonably request.

                                      -24-
<PAGE>   25

         (d) Books, Records and Inspections. The Company shall maintain complete
and accurate books and records, and permit access thereto by the Bank for
purposes of inspection, copying and audit, and the Company shall permit the Bank
to inspect its properties and operations at all reasonable times and upon
reasonable notice. To the extent that the Company has rights pursuant to the
Receivables Purchase Agreements to access, inspect, copy and audit the books and
records and the properties and operations of the Escalade Domestic Subsidiaries,
the Company hereby irrevocably designates and authorizes the Bank to undertake
such access, inspection, copying and auditing functions for or on its behalf as
the Bank may determine, subject however, to the notice and other reasonable
limitations provided in the Receivables Purchase Agreements.

         (e) Insurance. In addition to any insurance required by any other Loan
Documents to which it is a party, the Company shall maintain in full force and
effect such insurance as may be required by law and such other insurance, to
such extent and against such hazards and liabilities, as is customarily
maintained by companies similarly situated.

         (f) Taxes and Liabilities. The Company shall pay when due all taxes,
license fees, assessments and other liabilities except such as are being
contested in good faith and by appropriate proceedings and for which appropriate
reserves have been established.

         (g) Compliance with Legal and Regulatory Requirements. The Company
shall maintain material compliance with the applicable provisions of all
federal, state and local statutes, ordinances and regulations of the USA and all
statutes, ordinances and regulations (or their equivalents) of Switzerland and
any court orders or orders of regulatory authorities issued thereunder.

         (h) Financial Covenants. The Company shall observe each of the
following financial covenants:

                  (1) Minimum Tangible Capital Base. The Company shall at all
         times maintain a Tangible Capital Base of not less than the lesser of
         Two Million Swiss francs (CHF 2,000,000) or One Million Two Hundred
         Fifty Thousand and 00/100 Dollars ($1,250,000.00) as of the Closing
         Date through and including the payment and satisfaction in full of all
         Obligations and termination of this Agreement.

                  (2) Total Debt. The Total Debt of the Company as of the
         Closing Date and at all times through and including the payment and
         satisfaction in full of all Obligations and termination of this
         Agreement shall be limited solely to the Obligations and the Debt
         specifically identified on the attached Schedule 5.01(h)(2) to this
         Agreement.

                  (3) Delinquency Ratio. The Company shall at all times maintain
         a delinquency ratio with respect to aggregate outstanding Eligible
         Accounts whereby the percentage of Eligible Accounts by Dollar amount
         which remains unpaid more than sixty-

                                      -25-
<PAGE>   26

         one (61) or more days after the original due dates for payment stated
         on the underlying invoices does not exceed ten percent (10%) of total
         Eligible Accounts then outstanding.

         (i) Charge-off Requirements. All Purchased Accounts Receivable owned by
the Company which become more than ninety (90) days delinquent shall be
charged-off immediately and automatically by the Company. If thirty percent
(30%) or more by Dollar amount of the Purchased Accounts Receivable owed to the
Company by a single account debtor become more than ninety (90) days delinquent,
all accounts owed to the Company by that account debtor shall be charged-off
immediately and automatically by the Company. All accounts charged-off pursuant
to this Section 5.01(i) shall not thereafter be deemed to be Eligible Accounts
for any purpose.

         (j) Primary Banking Relationship. The Company shall maintain the Cash
Collateral Account and its primary deposit accounts with the Bank.

         (k) Ownership/Solvency. The Company shall remain a wholly-owned
subsidiary of Escalade and be Solvent at all times.

         (l) Year 2000 Compliance. The Company shall:

                  (1) Furnish such additional information, statements and other
         reports with respect to its activities and progress towards the Company
         becoming Year 2000 Compliant as the Bank may reasonably request from
         time to time.

                  (2) In the event of any change in circumstances that causes or
         will likely cause any of its representations and warranties with
         respect to the Company being or becoming Year 2000 Compliant to no
         longer be true (hereinafter, referred to as a "CHANGE IN
         CIRCUMSTANCES") then it promptly, and in any event within ten (10) days
         of receipt of information regarding a Change in Circumstances, provide
         the Bank with written notice (the "NOTICE") that describes in
         reasonable detail the Change in Circumstances and how such Change in
         Circumstances caused or will likely cause the Company's representations
         and warranties with respect to the Company being or becoming Year 2000
         Compliant to no longer be true. The Company shall, within ten (10) days
         of a request, also provide the Bank with any additional information the
         Bank requests of the Company in connection with the Notice and/or a
         Change in Circumstances.

                  (3) Give any representative of the Bank access during all
         business hours to, and permit such representative to examine, copy or
         make excerpts from, any and all books, records and documents in the
         possession of the Company and relating to its affairs, and to inspect
         any of the properties and Systems of the Company and to project test
         such Systems to determine if they are Year 2000 Compliant in an
         integrated environment, all at the sole cost and expense of the Bank.

                                      -26-
<PAGE>   27

         Section 5.02. Negative Covenants of the Company. Unless otherwise
agreed or consented to by the Bank in a prior written document, until all
Obligations of the Company are paid and satisfied in full, and this Agreement
and the Bank's obligation to make Advances hereunder have been terminated, the
Company shall strictly observe each of the following covenants:

         (a) Restricted Payments. The Company shall not purchase or redeem any
shares of the capital stock of the Company, or declare or pay any Distributions
thereon. The Company shall not make any other Distributions to shareholders as
shareholders in any manner, or set aside any funds for any such purpose, or
prepay, purchase or redeem any Subordinated Debt of the Company; provided
however, that prior to the occurrence of an Event of Default or Unmatured Event
of Default, the Company shall be entitled to pay regularly scheduled payments of
interest owed by the Company on its Subordinated Debt which is payable to the
Escalade Domestic Subsidiaries and owned and held by Escalade.

         (b) Liens. The Company shall not create or permit to exist any Lien
with respect to any property or assets now owned or hereafter acquired by it,
including, without limitation any of its rights, title and interests in and to
any real estate, whether leased or owned, except:

                  (1) Liens in favor of the Bank created pursuant to the
         requirements of this Agreement, or otherwise;

                  (2) any Lien or deposit with any governmental agency required
         or permitted to qualify the Company to conduct business;

                  (3) Liens for taxes and governmental charges which are not yet
         due or which are being contested in good faith and by appropriate
         proceedings and for which appropriate reserves have been established;

                  (4) Liens created by or resulting from any litigation or legal
         proceeding which is being contested in good faith and by appropriate
         proceedings and for which appropriate reserves have been established;
         and

                  (5) those specific Liens now existing, if any, described on
         Schedule 5.02(b)(5) attached to this Agreement.

         (c) Guaranties. The Company shall not be a guarantor or surety of, or
otherwise be responsible in any manner with respect to any undertaking of any
other Person, whether by guaranty agreement or by agreement to purchase any
obligations, stock, assets, goods or services, or to supply or advance any
funds, assets, goods or services, or otherwise, except for:

                  (1) guaranties in favor of the Bank;

                                      -27-
<PAGE>   28

                  (2) guaranties by endorsement of instruments for deposit made
         in the ordinary course of business; and

                  (3) those specific existing guaranties, if any, listed on
         Schedule 5.02(c)(3) attached to this Agreement.

         (d) Loans or Advances. The Company shall not make or permit to exist
any loans, advances or extensions of credit by it to any other Person, except
for the specific items, if any, listed in Schedule 5.02(d).

         (e) Mergers, Consolidations, Sales, Acquisition or Formation of
Subsidiaries. The Company shall not (i) be a party to any consolidation or to
any merger or purchase the capital stock of or otherwise acquire any equity
interest in any other Person, (ii) acquire any assets of any other Person other
than Purchased Accounts Receivable acquired from the Escalade Domestic
Subsidiaries, or (iii) sell, transfer, convey or lease all or any of its assets.
The Company shall not cause to be created or otherwise acquire any Subsidiary
without the prior written consent of the Bank.

         (f) Other Agreements. The Company shall not enter into any agreement
containing any provision which would be violated or breached in any material
respect by the performance of its Obligations under this Agreement or under any
other Loan Document.

         (g) Judgments. The Company shall not permit any uninsured judgment or
monetary penalty rendered against it in any judicial or administrative
proceeding to remain unsatisfied for a period in excess of thirty (30) days
unless such judgment or penalty is being contested diligently and in good faith
by appropriate proceedings and execution upon such judgment has been stayed, and
unless an appropriate reserve has been established with respect thereto.

         (h) Change Name/Location of Principal Office. The Company shall not
change its legal name or the location of its principal office unless it gives
not less than sixty (60) days' prior written notice of such change to the Bank.

         (i) Negative Pledge Limitation. The Company shall not enter into any
agreement with any Person, other than the Bank, which prohibits or limits its
ability to create, incur, assume, or suffer to exist in favor of the Bank any
Lien upon any of its assets, rights, revenues, or property, real, personal, or
mixed, tangible or intangible, whether now owned or hereafter acquired.

         (j) Accounting Policies/Change of Business. The Company shall not: (1)
change its fiscal year or any of its significant accounting policies except to
the extent necessary to comply with GAAP; and (2) make any material change in or
expansion of the nature of its business as carried on as of the Closing Date.

                                      -28-
<PAGE>   29

         (k) Service Fees. With the sole exception of the Company's agreements
with respect to the Services Agreements and this Agreement, the Company shall
not pay, nor enter into any contract or other commitment which obligates it to
pay any management fees, consulting fees, administrative service fees or any
other similar fee or charge to any Person or any Affiliate of the Company.

         (l) Limitation on Compensation. The Company shall not pay or become
obligated to pay any compensation, including salaries, bonuses or fees of any
kind, to: (i) any Person as compensation for employment services or consulting
or administrative services except as provided in the Services Agreements, and
(ii) except as specified in Schedule 5.02(l).

         (m) Limitation on Business Activities. The Company shall not engage in
any business activity other than is directly and necessarily related to the
purchase and ownership by the Company of Purchased Accounts Receivable, unless
the details of such additional business activity have been previously and fully
disclosed to the Bank and the Bank shall have consented in writing to such
expanded business activity.

         (n) Prohibited Use of Loans. No portion of any Loan made hereunder
shall be used directly or indirectly to purchase any ineligible securities, as
defined by applicable regulations of the Board, which are underwritten by BOC
during the underwriting period and for the thirty (30) days thereafter.

         (o) Change in Receivables Purchase Agreements and Services Agreements.
The Company shall not permit, consent to or acquiesce in any material change to
any of the Receivables Purchase Agreements and Services Agreements.

                                      -29-
<PAGE>   30

                                   ARTICLE VI

                               LENDING CONDITIONS

         Section 6.01. Conditions of Lending. The obligation of the Bank to
advance the proceeds of the Loan shall be subject to fulfillment of each of the
following conditions precedent:

         (a) No Default. No Event of Default or Unmatured Event of Default shall
have occurred and be continuing, and the representations and warranties of the
Company contained in Section 3.01 of this Agreement shall be true and correct as
of the date of this Agreement and as of the date of any Advance, except that
after the date of this Agreement: (i) the representations contained in Section
3.01(d) of this Agreement will be construed so as to refer to the latest
Financial Statements furnished to the Bank by the Company pursuant to the
requirements of this Agreement, and (ii) all other representations will be
construed to have been amended to conform with any changes of which the Bank
shall previously have been given notice in writing by the Company.

         (b) Documents and other Items to be Furnished at Closing. The Bank
shall have received contemporaneously with the execution of this Agreement, the
following, each duly executed by the parties or intended signatories thereto,
currently dated (as applicable) and in form and substance in all regards
satisfactory to the Bank and its counsel:

                  (1) The Note, the Company Security Agreement, the Escalade
         Note Pledge Agreement and the Escalade Note.

                  (2) A copy of the Written Consent Resolutions of the Board of
         Directors of the Company authorizing the execution and delivery, on
         behalf of the Company, of this Agreement and the other Loan Documents
         provided for in this Agreement to which the Company is a party, which
         Written Consent Resolutions shall be printed in the English language.

                  (3) A certificate of the Secretary, or any Assistant
         Secretary, of the Company certifying the names and signatures of the
         officer or officers authorized to sign this Agreement and the other
         Loan Documents provided for in this Agreement to which the Company is a
         party, for and on behalf of the Company, together with a Certificate of
         Existence (or its equivalent) for the Company issued by the appropriate
         Switzerland government office, which certificates shall be printed in
         the English language.

                  (4) Escalade Subordination Agreement executed by Escalade in
         favor of the Bank, and consented to by each of the Escalade Domestic
         Subsidiaries, which Escalade Subordination Agreement shall be in form
         and substance substantially the same as EXHIBIT "J" attached to this
         Agreement (the "Escalade Subordination Agreement").

                                      -30-
<PAGE>   31

                  (5) Four (4) Standby and Subordination Agreements to be
         executed by and between the Company and each of the Escalade Domestic
         Subsidiaries, subordinating the Company's Debt to the Escalade Domestic
         Subsidiaries to the Obligations, which shall be in form and substance
         substantially the same as EXHIBIT "K" attached to this Agreement (the
         "Standby and Subordination Agreements").

                  (6) A copy of the Written Consent Resolutions of the Board of
         Directors of Escalade authorizing the execution and delivery, on behalf
         of Escalade, of the Escalade Note and all other documents provided for
         in this Agreement to which Escalade is to be a party.

                  (7) A certificate of the Secretary of Escalade certifying the
         names and signatures of the officer authorized to sign the documents
         referenced in (6) above to be executed by Escalade, for and on behalf
         of Escalade.

                  (8) Payment to the Bank of reimbursement for all costs and
         expenses incurred by the Bank in the preparation and closing of the
         Loan Documents and in the making of the Loan, including, but not
         limited to, all of its reasonable attorneys' fees.

                  (9) Opinions of counsel for the Company, Escalade and the
         Escalade Domestic Subsidiaries, addressed to the Bank in such form and
         substance as shall be acceptable in all regards to the Bank and its
         counsel on the matters identified on Schedule 6.01 (b)(9).

                  (10) UCC-1 Financing Statements in such form as the Bank may
         request from the Company and UCC-3 Statements of Assignment in such
         form as the Bank may request from the Company pertaining to any and all
         security interests which the Company may have or hereafter been granted
         by Escalade and/or the Escalade Domestic Subsidiaries, or otherwise.

                  (11) Copies of the Articles of Association of the Company
         certified by the appropriate Swiss governmental authority, and copies
         of the current Regulations for the Company, certified by its Secretary,
         which Articles of Association and Regulations shall be printed in the
         English language.

                  (12) Payment to the Bank of commitment fees for the Loan in an
         aggregate amount of $25,000, which fees shall be fully earned when paid
         and shall be non-refundable.

                  (13) An initial Borrowing Base Certificate and an initial
         Officer's Certificate.

                  (14) Four (4) Receivables Purchase Agreements to be executed
         by and between the Company and each of the Escalade Domestic
         Subsidiaries in form and substance

                                      -31-
<PAGE>   32

         substantially the same as EXHIBIT "G" attached to this Agreement,
         together with copies of all the documentation and information described
         in Section 4.1 thereof, respectively.

                  (15) Four (4) Services Agreements by and between the Company
         and each of the Escalade Domestic Subsidiaries in form and substance
         substantially the same as EXHIBIT "H" attached to this Agreement.

                  (16) Such other documents, certificates, agreements and/or
         information as the Bank may reasonably require.

                                   ARTICLE VII

                         EVENTS OF DEFAULT--ACCELERATION

         Section 7.01. Events of Default. Each of the following shall constitute
an Event of Default under this Agreement:

         (a) Nonpayment of the Loan. Default in the payment when due of any
amount payable under the terms of the Note, or otherwise payable to the Bank or
any other holder of any of the Note under the terms of this Agreement.

         (b) Nonpayment of Other Debt. (i) Default by the Company in the payment
when due, whether by acceleration or otherwise, of any other Debt owed to a
Person other than the Bank, or default in the performance or observance of any
obligation or condition with respect to any such other Debt if the effect of
such default is to accelerate the maturity of such other Debt or to permit the
holder or holders thereof, or any trustee or agent for such holders, to cause
such Debt to become due and payable prior to its scheduled maturity, unless the
Company is diligently contesting the existence of such default in good faith and
by appropriate proceedings; and (ii) Default by any other Credit Party to pay
any Debt owed to the Bank when due.

         (c) Other Material Obligations. Subject to the expiration of any
applicable grace period, default by the Company in the payment when due, or in
the performance or observance of any material obligation of, or condition agreed
to by the Company with respect to any agreement respecting any material
purchase, sale or lease of goods, securities or services except only to the
extent that the existence of any such default is diligently being contested in
good faith and by appropriate proceedings and that appropriate reserves have
been established with respect thereto.

         (d) Bankruptcy, Insolvency, etc. The Company or any Servicer admitting
in writing its inability to pay its debts as they mature or an administrative or
judicial order of dissolution or determination of insolvency being entered
against the Company or any Servicer; or the Company or any Servicer applying
for, consenting to, or acquiescing in the appointment of a trustee or receiver
for the Company or any Servicer or any property thereof, or the Company or any
Servicer making a general assignment for the benefit of creditors; or, in the
absence of such

                                      -32-
<PAGE>   33

application, consent or acquiescence, a trustee or receiver being appointed for
the Company or any Servicer or for a substantial part of the property of the
Company or any Servicer and not being discharged within sixty (60) days; or any
bankruptcy, reorganization, debt arrangement, or other proceeding under any
bankruptcy or insolvency law, or any dissolution or liquidation proceeding being
instituted by or against the Company or any Servicer, and, if involuntary, being
consented to or acquiesced in by the Company or any Servicer, as applicable, or
remaining for sixty (60) days undismissed.

         (e) Warranties and Representations. Any warranty or representation made
by the Company in this Agreement, or any of the other Loan Documents, proving to
have been false or misleading in any material respect when made, or any
schedule, certificate, financial statement, report, notice, or other writing
furnished by the Company to the Bank proving to have been false or misleading in
any material respect when made or delivered.

         (f) Violations of Negative and Financial Covenants. Failure by the
Company to comply with or perform any covenant stated in Section 5.01(h) or
Section 5.02 of this Agreement.

         (g) Change of Control. There shall be a Change of Control of the
Company without the prior written consent of the Bank.

         (h) Noncompliance With Other Provisions of this Agreement. Failure of
the Company to comply with or perform any covenant or other provision of this
Agreement or to perform any other Obligation (which failure does not constitute
an Event of Default under any of the preceding provisions of this Section 7.01)
and continuance of such failure for five (5) days after actual receipt of notice
thereof by the Company from the Bank.

         (i) Noncompliance With Other Loan Documents. The occurrence of any
"Event of Default" or "Default" (as such terms are defined in any of the Loan
Documents other than this Agreement).

         (j) Escalade Note/Policies. If at any time the principal balance of the
Escalade Note is paid or reduced to an amount of less than $7,500,000.00, or if
any change in the credit practices or policies of the Company, the Escalade
Domestic Subsidiaries or Escalade occurs with respect to the Purchased Accounts
Receivable which the Bank reasonably deems likely to have a Materially Adverse
Effect.

         (k) Termination/Modification of the Lockbox Agreements, Receivables
Purchase Agreements or Services Agreements. The termination or purported
termination of any one or more of the Lockbox Agreements, the Receivables
Purchase Agreements or Services Agreements, or in the case of the Services
Agreements, or any of them, if any Person other than the Servicers is named as
the servicing agent thereunder.

                                      -33-
<PAGE>   34

         Section 7.02. Effect of Event of Default. If any Event of Default
described in Section 7.01(d) of this Agreement shall occur: (i) the maturity of
the Loan shall immediately be accelerated, and the Note and the Loan evidenced
thereby and all other indebtedness and any other payment Obligations of the
Company to the Bank shall become immediately due and payable; (ii) the Escalade
Domestic Subsidiaries shall waive any sums that may be owing to them under
Section 2.01 (f)(2); and (iii) the Maximum Availability shall be immediately
reduced to zero Dollars ($0). When any other Event of Default has occurred and
is continuing, the Bank or any other holder of the Note may accelerate payment
of the Loan and declare the Note and all other payment Obligations due and
payable, whereupon maturity of the Loan shall be accelerated, the Note and the
Loan evidenced thereby, and all other payment Obligations shall become
immediately due and payable and the Maximum Availability shall be immediately
reduced to zero Dollars ($0), all without notice of any kind. The Bank or such
other holder shall promptly advise the Company of any such declaration, but
failure to do so shall not abrogate the occurrence or impair the effect of such
declaration. The remedies of the Bank specified in this Agreement or in any
other Loan Document shall not be exclusive, and the Bank may avail itself of any
other remedies provided by law, as well as any equitable remedies available to
the Bank.

                                  ARTICLE VIII

                                  MISCELLANEOUS

         Section 8.01. Waiver -- Amendments. No delay on the part of the Bank,
or any holder of the Note in the exercise of any right, power or remedy shall
operate as a waiver thereof, nor shall any single or partial exercise by any of
them of any right, power or remedy preclude any other or further exercise
thereof, or the exercise of any other right, power or remedy. No amendment,
modification or waiver of, or consent with respect to any of the provisions of
this Agreement or the other Loan Documents or otherwise of the Obligations shall
be effective unless such amendment, modification, waiver or consent is in
writing and signed by the Bank.

         Section 8.02. Notices. Any notice given under or with respect to this
Agreement to the Company or the Bank shall be in writing and, if delivered by
hand or sent by overnight courier service, shall be deemed to have been given
when delivered and, if mailed, shall be deemed to have been given five (5) days
after the date when sent by registered or certified mail, postage prepaid, and
addressed to the Company or the Bank (or other holder of the Note) at its
address shown below, or at such other address as any such party may, by written
notice to the other party to this Agreement, have designated as its address for
such purpose. The addresses referred to are as follows:

                  The Company:              Indian-Martin AG
                                            Aegeristrasse 66
                                            6300, Zug
                                            Switzerland
                                            Attn:  President
                                            Telecopy: +1 41 1 254 3180

                                      -34-
<PAGE>   35

                  (with a copy to:) Bar & Karrer
                                    Baarerstrasse 8
                                    CH - 6301, Zug
                                    Switzerland
                                    Attn: Michael Trippel
                                    Telecopy: +41 41 710 5604

                                      -35-
<PAGE>   36

                  The Bank:         Bank One, Indiana, National Association
                                    Bank One Tower, Mail Code IN 1-0046
                                    111 Monument Circle
                                    Indianapolis, IN 46277
                                    Attn:  Manager-- Corporate Banking
                                    Telecopy: (317) 321-6762

                  (with a copy to:) BAKER & DANIELS
                                    300 North Meridian Street
                                    Suite 2700
                                    Indianapolis, IN 46204
                                    Attn: David R. Hamer, Esq.
                                    Telecopy: (317) 237-1000

         Section 8.03. Costs, Expenses and Taxes. The Company agrees to pay
(without duplication), all of the following fees, costs and expenses incurred by
the Bank: (i) all reasonable costs and expenses in connection with the
negotiation, preparation, printing, typing, reproduction, execution and delivery
of the Loan Documents and any and all other documents furnished pursuant hereto
or in connection herewith, including without limitation the reasonable fees and
out-of-pocket expenses of Messrs. Baker & Daniels, special counsel to the Bank,
as well as the fees and out-of-pocket expenses of such counsel in connection
with the foregoing and the administration of this Agreement, (ii) all reasonable
costs and expenses in connection with the negotiation, preparation, printing,
typing, reproduction, execution and delivery of any amendments or modifications
of (or supplements to) any of the foregoing and any and all other documents
furnished pursuant thereto or in connection therewith, including without
limitation the reasonable fees and out-of-pocket expenses of counsel retained by
the Bank relative thereto (or, but not as well as, the reasonable allocated
costs of staff counsel), (iii) all UCC and Lien search fees and costs and all
fees and taxes payable in connection with the filing or recording of any Loan
Documents or financing statements; (iv) all costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses of the Bank), if
any, incurred in connection with the administration and enforcement of this
Agreement and/or any other Loan Documents or other agreement furnished pursuant
hereto or thereto or in connection herewith or therewith; and (v) all costs and
expenses incurred by the Bank in conducting an independent audit or review by
the Bank's internal staff of the books and records of the Company and the
Collateral provided under the Loan Documents. In addition, the Company shall pay
any and all stamp, transfer and other similar taxes payable or determined to be
payable in connection with the execution and delivery of this Agreement, or any
of the other Loan Documents, or the issuance of the Notes, or the making of the
Loans, and agrees to save and hold the Bank harmless from and against any and
all liabilities with respect to or resulting from any delay in paying, or
omission to pay, such taxes. Any portion of the foregoing fees, costs and
expenses which remains unpaid following the Bank's statement and request for
payment thereof shall bear interest from the date of such statement and request
to the date of payment at a per annum rate equal to the Default Rate, that the
Bank shall be entitled to rely thereon.

                                      -36-
<PAGE>   37

         Section 8.04. Severability/Counterparts. If any provision of this
Agreement or any other Loan Document is determined to be illegal or
unenforceable, such provision shall be deemed to be severable from the balance
of the provisions of this Agreement or such Loan Document and the remaining
provisions shall be enforceable in accordance with their terms. This Agreement,
and any other of the Loan Documents, may be executed in any number of
counterparts, which taken together (as to this Agreement or any other of the
Loan Documents, as applicable) shall be considered as one instrument, and each
of the parties agree that the facsimile signature of an Authorized Officer
hereon or thereon shall be deemed for all purposes to have the same force and
effect as an original, manual signature and any Loan Document bearing such a
facsimile signature may be enforced by the Bank accordingly.

         Section 8.05. Captions/Time of Essence/Miscellaneous. Section captions
used in this Agreement are for convenience only and shall not affect the
construction of this Agreement. Time is of the essence under the Loan Documents.
This Agreement may be executed by original or facsimile signatures (which shall
be binding and enforceable for all purposes the same as if original), in two or
more counterparts, each of which shall constitute an original, but all of which
when taken together shall constitute but one agreement.

         Section 8.06. Further Assurances. The Company shall, at its expense,
upon request of Bank, duly execute and deliver, or cause to be executed and
delivered, such further documents, agreements and instruments and perform or
cause to be performed such further acts as may be necessary or proper in the
reasonable opinion of Bank to from time to time carry out the intents,
provisions and purposes of this Agreement.

         Section 8.07. Governing Law. Except as may otherwise be expressly
provided in any other Loan Document, this Agreement and all other Loan Documents
are made under and will be governed in all cases by the substantive laws of the
State of Indiana, USA, without reference to the choice or conflicts of laws
rules or principles of any foreign or domestic jurisdiction. THE COMPANY AGREES
THAT ALL SERVICE OF PROCESS MAY BE MADE BY MESSENGER, BY CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, OR BY REGISTERED MAIL DIRECTED TO THE COMPANY AT THE ADDRESS
STATED IN SECTION 8.02 OF THIS AGREEMENT. NOTHING CONTAINED IN THIS SECTION
SHALL AFFECT THE RIGHT OF THE BANK TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW.

         Section 8.08. Prior Agreements, Etc. This Agreement supersedes all
previous agreements and commitments made by the Bank and the Company with
respect to the Loan and all other subjects of this Agreement, including, without
limitation, any oral or written proposals or commitments made or issued by the
Bank. The Company agrees to indemnify and hold harmless the Bank from and
against all liabilities, obligations, losses, damages, penalties, action,
judgments, suits, costs (including attorneys' fees), expenses or disbursements
of any kind whatever which may be imposed upon or asserted against the Bank in
any way relating to the business operations of the Company, execution of this
Agreement or any other of the Loan Documents or the performance of its
obligations thereunder. It is expressly agreed that the Bank

                                      -37-
<PAGE>   38

shall not be deemed to control the business activities of the Company as a
result of this Agreement, the other Loan Documents or the performance thereof.

         Section 8.09. Successors and Assigns. This Agreement and the other Loan
Documents shall be binding upon and shall inure to the benefit of the Company
and the Bank and their respective legal representatives, successors and assigns,
provided that the Company's rights under this Agreement shall not be assignable
without the prior written consent of the Bank.

         Section 8.10. Waiver of Jury Trial/Jurisdiction. THE COMPANY AND THE
BANK EACH HEREBY VOLUNTARILY, KNOWINGLY, ABSOLUTELY, IRREVOCABLY AND
UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY TRIAL OR HAVE A JURY PARTICIPATE
IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE)
BETWEEN THE BANK AND THE COMPANY ARISING OUT OF OR IN ANY WAY RELATED TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY RELATIONSHIP BETWEEN THE COMPANY AND
THE BANK. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE BANK TO PROVIDE THE
FINANCING DESCRIBED IN THIS AGREEMENT AND IN THE OTHER LOAN DOCUMENTS.

                  NEITHER THE COMPANY NOR THE BANK WILL SEEK TO CONSOLIDATE ANY
SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH
A JURY TRIAL HAS NOT BEEN OR CANNOT BE WAIVED.

                  THE COMPANY AGREES THAT THE COURTS OF THE STATE OF INDIANA,
USA, LOCATED IN INDIANAPOLIS, INDIANA, AND THE FEDERAL COURTS LOCATED IN THE
SOUTHERN DISTRICT OF INDIANA, INDIANAPOLIS DIVISION, HAVE EXCLUSIVE JURISDICTION
OVER ANY AND ALL ACTIONS AND PROCEEDINGS INVOLVING THIS AGREEMENT OR ANY OTHER
AGREEMENT MADE IN CONNECTION HEREWITH, AND THE COMPANY HEREBY IRREVOCABLY AND
UNCONDITIONALLY AGREES TO SUBMIT TO THE JURISDICTION OF SUCH COURTS FOR PURPOSES
OF ANY SUCH ACTION OR PROCEEDING. THE COMPANY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY OBJECTION THAT THE COMPANY MAY NOW HAVE OR HEREAFTER
CLAIM TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING, INCLUDING ANY CLAIM THAT
SUCH COURT IS AN INCONVENIENT FORUM, AND HEREBY CONSENTS TO SERVICE OF PROCESS,
PROVIDED THE SAME IS IN ACCORDANCE WITH THE TERMS HEREOF. FINAL JUDGMENT IN ANY
SUCH PROCEEDING AFTER ALL APPEALS HAVE BEEN EXHAUSTED OR WAIVED SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS, INCLUDING, BUT NOT
LIMITED TO, THE CONFEDERATION OF SWITZERLAND, BY SUIT ON THE JUDGMENT.

         Section 8.11. Highest Lawful Rate. Notwithstanding any provision to the
contrary contained in this Agreement or in any of the other Loan Documents, it
is expressly provided that

                                      -38-
<PAGE>   39

in no case or event shall the aggregate of (a) all interest on the unpaid
balance of the Note, accrued or paid from the date hereof, and (b) the aggregate
of any other amounts accrued or paid pursuant to the Note, or any of the other
Loan Documents, which under applicable laws are or may be deemed to constitute
interest upon such Debt from the date hereof, ever exceed the maximum rate of
interest which could lawfully be contracted for, charged or received on the
unpaid principal balance of such Debt. In this connection, it is expressly
stipulated and agreed that it is the intent of the Company and the Bank to
contract in strict compliance with Indiana usury laws and with any other
applicable state usury laws and with federal usury laws (whichever permit the
higher rate of interest) from time to time in effect. In furtherance thereof,
none of the terms of this Agreement, the Note or any of the other Loan Documents
shall ever be construed to create a contract to pay, as consideration for the
use, forbearance or detention of money, interest at a rate in excess of the
Highest Lawful Rate. Neither the Company nor any other Person now or hereafter
becoming liable for payment of indebtedness pursuant to the Loan Documents (the
"BANK DEBT") shall ever be liable for interest in excess of the Highest Lawful
Rate. If under any circumstances the aggregate amounts paid on the Bank Debt
include amounts which by law are deemed interest which would exceed the Highest
Lawful Rate, the Company stipulates that such amounts will be deemed to have
been paid as a result of an error on the part of the Company and the Bank, and
the Person receiving such excess payment shall promptly, upon discovery of such
error or upon notice thereof from the Person making such payment, in its
discretion credit the amount of such excess as a reduction of the principal
balance outstanding or refund the amount of such excess. The parties further
stipulate that such credit or refund shall be a sufficient and sole remedy for
such error and that no party shall be entitled to any damages or penalties,
whether statutory or otherwise, as a result of such error. In addition, all sums
paid or agreed to be paid to the holder or holders of the Bank Debt for the use,
forbearance or detention of the Bank Debt shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full
term of the Bank Debt. The provisions of this Section 8.11 shall control all
agreements, whether now or hereafter existing and whether written or oral,
between the Company and the Bank.

         Section 8.12. Indemnification. The Company agrees to indemnify the
Bank, and its successors and assigns (including any purchaser of a participation
in any of the Loan) and its directors, officers, employees, agents and attorneys
against all losses, claims, costs, damages, liabilities and expenses, including,
without limitation, all expenses of litigation or preparation therefor (a
"LOSS"), which they, or any of them, may pay or incur in connection with or
arising out of the direct or indirect application of the proceeds of the Loan,
except for any Loss incurred as the result of the willful misconduct of the
Bank, its successors or assigns, or its directors, officers, employees, agents
and attorneys. The indemnity set forth herein shall be in addition to the other
Obligations of the Company to the Bank under the Loan Documents or at common law
or otherwise, and shall survive termination of this Agreement and the payment of
all other Obligations.

                                      -39-
<PAGE>   40

         IN WITNESS WHEREOF, the Bank and the Company have by their respective
duly authorized officers executed and delivered this Agreement as of the Closing
Date.

                                  INDIAN-MARTIN AG, a corporation organized
                                  and existing under the laws of Switzerland

                                  By:      /s/ Lars Haussmann
                                       ---------------------------------------
                                           Lars Haussmann, Director
                                       ---------------------------------------
                                           (Printed Name and Title)

                                                                   ("Company")

                                  BANK ONE, INDIANA, NATIONAL
                                  ASSOCIATION

                                  By:       /s/ Steven J. Krakoski
                                       ---------------------------------------
                                           Steven J. Krakoski, Vice President
                                       ---------------------------------------
                                           (Printed Name and Title)

                                                                      ("Bank")

                                      -40-
<PAGE>   41

                         LIST OF EXHIBITS AND SCHEDULES

           EXHIBIT                           DESCRIPTION
           -------                           -----------

           "A"                      Application for Advance
           "B"                      Borrowing Base Certificate
           "C"                      Collateral Assignment and Security Agreement
           "D"                      Escalade Note Pledge Agreement
           "E"                      [Intentionally Omitted]
           "F"                      Officer's Certificate
           "G"                      Receivables Purchase Agreement (Specimen)
           "H"                      Services Agreement (Specimen)
           "I"                      Promissory Note
           "J"                      Subordination Agreement
           "K"                      Standby and Subordination (Specimen)

           SCHEDULE
           --------

           5.01 (h)(2)              Other Permitted Debt
           5.02 (b)(5)              Other Liens
           5.02 (c)(3)              Guaranties
           5.02 (d)                 Loans or Advances
           5.02 (l)                 Permitted Compensation
           6.01 (b)(9)              Opinions Required

                                      -41-

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