Document:

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                                                                    Exhibit 10.7

                          SECURITIES PURCHASE AGREEMENT

                                      AMONG

                             THE BUYERS NAMED HEREIN

                                       AND

                          CENTURION INTERNATIONAL, INC.

                                   DATED AS OF

                                SEPTEMBER 6, 2000
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                                TABLE OF CONTENTS

<TABLE>
<S>                                                                          <C>
SECTION 1.  PURCHASE AND SALE OF THE SERIES C PREFERRED.................       1
      1.1   Issuance, Sale and Delivery of the Series C Preferred.......       1

SECTION 2.  CLOSING TRANSACTIONS........................................       1
      2.1   Closing.....................................................       1
      2.2   Transfers...................................................       1

SECTION 3.  CONDITIONS TO CLOSING.......................................       2
      3.1   Conditions Precedent to Buyers' Obligations.................       2
      3.2   Conditions to the Company's Obligations.....................       3

SECTION 4.  COVENANTS...................................................       4
      4.1   Financial Statements and Other Information..................       4
      4.2   Inspection of Property......................................       5
      4.3   Affirmative Covenants of the Company........................       5
      4.4   Pre-Closing Covenants.......................................       6

SECTION 5.  REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY.......       7
      5.1.  Organization, Corporate Power and Licenses..................       7
      5.2.  Capital Stock and Related Matters; Subsidiaries.............       7
      5.3.  Authorization; No Breach....................................       8
      5.4.  Consents....................................................       9
      5.5   Financial Statements........................................       9
      5.6   Absence of Undisclosed Liabilities..........................       9
      5.7   Absence of Material Adverse Change..........................       9
      5.8   Absence of Certain Developments.............................       9
      5.9   Title to Properties.........................................      10
      5.10  Environmental and Safety Matters............................      11
      5.11  Tax Matters.................................................      12
      5.12  Intellectual Property Rights................................      13
      5.14  Brokerage...................................................      13
      5.15  Employees...................................................      13
      5.16  Employee Benefit Plans......................................      13
      5.17  Insurance...................................................      14
      5.18  Licenses, Compliance with Law, Other Agreements, Etc........      14
      5.19  Customers and Suppliers.....................................      14
      5.20  Disclosure..................................................      14

SECTION 6.  REPRESENTATIONS AND WARRANTIES OF BUYERS....................      15
      6.1   Organization and Power......................................      15
      6.2   Authorization...............................................      15
      6.3   Investment Representations..................................      15
</TABLE>
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<TABLE>
<S>                                                                          <C>
SECTION 7.  TERMINATION.................................................     15
      7.1   Termination.................................................     15
      7.2   Effect of Termination.......................................     16

SECTION 8.  ADDITIONAL AGREEMENTS.......................................     16
      8.1   Transfer Taxes..............................................     16
      8.2   Press Releases and Announcements............................     16
      8.3   Expenses....................................................     16
      8.4   Survival, Representations and Warranties. ..................     16
      8.5   Indemnification Obligation of the Company...................     17
      8.6   Indemnification Obligation of Buyers........................     17
      8.7   Indemnification Procedures..................................     18
      8.8   Payment.....................................................     19

SECTION 9.  DEFINITIONS.................................................     19

SECTION 10. MISCELLANEOUS...............................................     23
      10.1  Amendment and Waiver........................................     23
      10.2  Notices.....................................................     23
      10.3  Binding Agreement; Assignment...............................     24
      10.4  Severability................................................     24
      10.5  No Strict Construction......................................     24
      10.6  Headings....................................................     24
      10.7  Entire Agreement............................................     25
      10.8  Counterparts................................................     25
      10.9  Parties in Interest.........................................     25
      10.10 WAIVER OF JURY TRIAL........................................     25
      10.11 Governing Law; Consent to Jurisdiction......................     25
      10.12 Other Definitional Provisions...............................     25
</TABLE>

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                                LIST OF SCHEDULES

Schedule 5.2      -     Capitalization
Schedule 5.3      -     Authorizations
Schedule 5.4      -     Consents
Schedule 5.6      -     Undisclosed Liabilities
Schedule 5.8      -     Absence of Certain Developments
Schedule 5.9      -     Property
Schedule 5.10     -     Environmental
Schedule 5.11     -     Tax Matters
Schedule 5.12     -     Intellectual Property Rights
Schedule 5.13     -     Litigation
Schedule 5.16     -     Employee Benefit Plans

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                          SECURITIES PURCHASE AGREEMENT

            This SECURITIES PURCHASE AGREEMENT (the "Agreement") is made as of
September 6, 2000 by and among Cornerstone Equity Investors IV, L.P., a Delaware
limited partnership, the State of Wisconsin Investment Board, Prudential Private
Equity Investors III, L.P., a Delaware limited partnership, Randolph Street
Partners III, K&E Investment Partners, LLC- 2000DIF, Kuck Investment Partners,
L.P., a Delaware limited partnership, P. Jackson Bell, Behlman Family Revocable
Trust (collectively the "Buyers" and individually, a "Buyer") and Centurion
International, Inc., a Nebraska corporation (the "Company"). Certain capitalized
terms used herein are defined in Section 9.

            Subject to the terms and conditions set forth in this Agreement,
each of the Buyers desires to purchase that number of shares of the Company's
Series C Convertible Preferred Stock, par value $0.01 per share (the "Series C
Preferred") set forth on Annex 1 attached hereto and the Company desires to sell
all of such Series C Preferred to the Buyers.

            NOW, THEREFORE, the parties hereto agree as follows:

            SECTION 1.  PURCHASE AND SALE OF THE SERIES C PREFERRED.

            1.1 Issuance, Sale and Delivery of the Series C Preferred. Pursuant
to the terms and conditions set forth in this Agreement, on the Closing Date the
Company agrees to issue and sell to each of the Buyers, and each of the Buyers
hereby severally and not jointly agrees to purchase from the Company, that
number of shares of Series C Preferred set forth opposite such Buyer's name on
Annex 1 attached hereto at an aggregate purchase price set forth on Annex 1
attached hereto (the "Purchase Price").

            SECTION 2.  CLOSING TRANSACTIONS.

            2.1 Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") will take place at the offices of Kirkland & Ellis,
153 E. 53rd Street, New York, New York 10022 at 10:00 a.m. on September 6, 2000,
or on such other date or at such other location mutually agreed upon by the
Buyers and the Company. The date and time of the Closing are herein referred to
as the "Closing Date."

            2.2 Transfers. Subject to the conditions set forth in this
Agreement, the parties agree to consummate the following transactions (the
"Closing Transactions") on the Closing Date:

                  (a) the Company will deliver to each of the Buyers a stock
certificate representing that number of shares of Series C Preferred set forth
opposite such Buyer's name under the heading "Shares Purchased Hereunder" on
Annex 1 hereto;

                  (b) each of the Buyers will deliver to the Company the amount
set forth opposite such Buyer's name under the heading "Purchase Price" on Annex
1 hereto by wire transfer of immediately available funds to an account
designated in writing by the Company; and
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                  (c) the Buyers and the Company, as applicable, shall cause the
opinions, certificates, and other documents and instruments to be delivered
pursuant to Section 3.

            SECTION 3.  CONDITIONS TO CLOSING.

            3.1 Conditions Precedent to Buyers' Obligations. The obligations of
the Buyers to consummate the transactions contemplated hereby are subject to
satisfaction (or written waiver) at or prior to the Closing of the following
conditions:

                  (a) The representations and warranties of the Company
contained in Section 5 and in any writing delivered pursuant hereto shall be
true and correct in all material respects when made and at and as of the time of
the Closing;

                  (b) All governmental filings, authorizations and approvals
that are required to be made or obtained by the Company for the consummation of
the transactions contemplated hereby will have been duly made and obtained on
terms reasonably satisfactory to Buyers and no action, suit, investigation or
proceeding shall be pending or threatened before any court or Governmental
Agency to restrain, prohibit, collect damages as a result of or otherwise
challenge this Agreement or any Related Document or any transaction contemplated
hereby or thereby;

                  (c) All acts or covenants required hereunder to be performed
by the Company prior to the Closing shall have been performed by it in all
material respects;

                  (d) The Company shall have received all consents and waivers
by third parties that are required for the issuance of the Series C Preferred or
the consummation of the transactions contemplated hereby on terms reasonably
satisfactory to Buyers (including (i) waivers of all shareholders' contractual
or other preemptive and similar rights, and (ii) any consents required in order
that the transactions contemplated hereby do not constitute a breach of, a
default under, or a termination or modification of any material agreement to
which the Company is a party or to which any portion of the property of the
Company is subject);

                  (e) Since June 30, 2000, there will have been no change,
circumstance or event which has had or which could reasonably be expected to
have a Material Adverse Effect;

                  (f) The Company's Articles of Incorporation (the "Articles of
Incorporation") shall have been amended substantially in the form of Annex 2
attached hereto to reflect the terms of and to authorize the issuance of the
Series C Preferred (the "Amended Articles of Incorporation"), shall be in full
force and effect under the laws of Nebraska as of the Closing Date as so amended
and shall not have been further amended or modified;

                  (g) The Company and each other party thereto shall have
executed and delivered the Registration Rights Agreement and Stockholders
Agreement each in form and substance reasonably acceptable to Buyers;

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                  (h) Buyers shall have received the written opinion of Kirkland
& Ellis, special counsel to the Company, substantially in the form of Annex 3
hereto;

                  (i) Buyers shall have received the written opinion of Baird,
Holm, McEachen, Pedersen, Nebraska counsel to the Company, substantially in the
form of Annex 4 hereto;

                  (j) The Company shall have delivered to the Buyers:

                   (i) certificates of a duly authorized officer of the Company
            dated as of the Closing Date (A) stating that the conditions in
            Sections 3.1(a) through (e) have been satisfied and (B) setting
            forth the resolutions of the Board and the Company's shareholders,
            as required, authorizing the execution and delivery of this
            Agreement and the Related Documents and the consummation of the
            transactions contemplated hereby and thereby and certifying that
            such resolutions were duly adopted and have not been rescinded or
            amended;

                  (ii) copies of all third party and governmental consents,
            waivers, approvals and filings required in connection with the
            consummation of the transactions contemplated hereby; and

                 (iii) such other documents relating to the transactions
            contemplated hereby as the Buyers may reasonably request.

Any condition specified in this Section 3.1 may be waived by each Buyer with
respect to itself in its sole discretion; provided, that no such waiver will be
effective against any particular Buyer unless it is set forth in writing by such
Buyer.

            3.2 Conditions to the Company's Obligations. The obligation of the
Company to consummate the transactions contemplated by this Agreement is subject
to the satisfaction of the following conditions on or before the Closing Date:

            (a) the representations and warranties set forth in Section 6 will
be true and correct in all material respects when made and at and as of the
Closing Date;

            (b) Buyers will have performed and complied in all material respects
with all of the covenants and agreements required to be performed by them under
this Agreement prior to the Closing;

            (c) all governmental filings, authorizations and approvals that are
required to be made or obtained by Buyers for the consummation of the
transactions contemplated hereby, if any, will have been duly made and obtained
on terms reasonably satisfactory to the Company and no action, suit
investigation or proceeding shall be pending or threatened before any court or
Governmental Agency to restrain, prohibit, collect damages as a result of or
otherwise challenge this Agreement or any Related Document or any transaction
contemplated hereby or thereby;

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            (d) on or prior to the Closing Date, each Buyer will have delivered
to the Company a certificate from such Buyer, dated the Closing Date, stating
that the conditions specified in Sections 3.2(a) through 3.2(c) above have been
satisfied with respect to such Buyer; and

            (e) Buyers shall have delivered to the Company such other documents
relating to the transactions contemplated hereby as the Company may reasonably
request.

Any condition specified in this Section 3.2 may be waived by the Company in its
sole discretion with respect to each Buyer; provided, that no such waiver will
be effective unless it is set forth in writing by the Company.

            SECTION 4.  COVENANTS.

            4.1 Financial Statements and Other Information. So long as the
Company does not have any class or securities registered with the Securities and
Exchange Commission, the Company shall deliver to each Buyer holding 10% or more
of the Series C Preferred:

            (a) as soon as available to the Company, and in no event later than
ninety (90) days after the end of each fiscal year, consolidated and
consolidating audited statements of income and cash flows of the Company and its
Subsidiaries for such fiscal year, and consolidated and consolidating balance
sheets of the Company and its Subsidiaries as of the end of such fiscal year,
setting forth comparisons to the preceding fiscal year, all prepared in
accordance with GAAP, consistently applied and certified without qualification
by Ernst & Young, L.L.P. or any other "big-six" accounting firm selected by the
Company, accompanied by (i) a management discussion and analysis of such
financial statements and comparisons, and (ii) to the extent available, such
firm's annual management letter to the Company's Board of Directors; provided
that if statements of income and balance sheets are not consolidated, the
Company shall deliver such statements and balance sheets with respect to each of
the Company and its Subsidiaries (the "Annual Financial Statements");

            (b) as soon as available but in any event within forty-five (45)
days after the end of each fiscal quarter of the Company, consolidated and
consolidating unaudited statements of income and cash flows of the fiscal
quarter of the Company and its Subsidiaries for such quarterly period, and
consolidated and consolidating balance sheets of the Company and its
Subsidiaries as of the end of such quarterly period; provided that if such
statements of income and balance sheets are not consolidated, the Company shall
deliver such statements and balance sheets with respect to each of the Company
and its Subsidiaries (the "Quarterly Financial Statements");

            (c) within thirty (30) days after the beginning of each fiscal year,
a final annual budget (the "Annual Budget"), prepared on a monthly basis for the
Company and its Subsidiaries for such fiscal year (displaying anticipated
statements of income and cash flows and balance sheets).

            4.2 Inspection of Property. The Company shall permit, and cause its
Subsidiaries to permit, as applicable, any Buyer who holds 10% or more of the
Series C Preferred or any representatives designated by any such holder, upon
reasonable notice to the Company and during normal business hours, to (a) visit
and inspect any of the properties of the Company or any of its

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Subsidiaries, (b) examine the corporate and financial records of the Company or
any of its Subsidiaries and make copies thereof or extracts therefrom and (c)
discuss the affairs, finances and accounts of any such corporations with the
officers, key employees and independent accountants of the Company or its
Subsidiaries. The presentation of an executed copy of this Agreement to the
Company's independent accountants shall constitute the Company's permission to
its independent accountants to participate in discussions with such Persons.

            4.3 Affirmative Covenants of the Company. Unless Buyers holding at
least 66.67% of the Series C Preferred (the "Required Buyers") otherwise consent
in writing, the Company shall and shall cause each of its Subsidiaries to:

            (a) at all times cause to be done all things reasonably necessary to
maintain, preserve and renew such Person's corporate existence and all material
Licenses, authorizations and permits necessary to the conduct of their
respective businesses;

            (b) own all right, title and interest in and to, or have a valid and
enforceable license to use, all Intellectual Property Rights necessary to
conduct their respective businesses and maintain, protect and enforce all such
Intellectual Property Rights;

            (c) maintain and keep the properties necessary to conduct their
respective businesses in such state of repair, working order and condition as is
reasonably necessary to permit the Company and its Subsidiaries to conduct their
respective businesses;

            (d) pay and discharge when payable (i) all Taxes, assessments and
governmental charges imposed upon its properties or upon the income or profits
therefrom (in each case before the same becomes delinquent and before penalties
accrue thereon) and (ii) all claims for labor, materials or supplies which if
unpaid would by law become a Lien upon any of their respective properties, in
each case unless, and to the extent that, the same are being contested in good
faith and by appropriate proceedings;

            (e) comply with all other obligations which such Person incurs
pursuant to any material contract or agreement, as such obligations become due,
unless and to the extent that the same are being contested in good faith and by
appropriate proceedings;

            (f) comply in all material respects with all applicable laws, rules
and regulations of all governmental authorities;

            (g) maintain proper books of record and account which fairly present
such Person's financial condition and results of operations and make provisions
on its financial statements for all such proper reserves as in each case are
required in accordance with GAAP, consistently applied, except as otherwise
approved by the independent auditors of the Company or its Subsidiaries, as
applicable;

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            (h) maintain adequate insurance, including title insurance for all
Owned Property, covering risks of such types and in such amounts as are
customary for corporations of similar size engaged in similar lines of business
in similar geographic areas;

            (i) comply in all material respects with all Environmental and
Safety Requirements and all permits, licenses or other authorizations issued
thereunder; respond promptly to any release or threatened release of any
hazardous materials in a manner which complies with all Environmental and Safety
Requirements and reasonably mitigates any risk to human health or the
environment; and provide such documents or information, or conduct such studies
or assessments, relating to matters arising under Environmental and Safety
Requirements as Buyers may reasonably request; and

            (j) at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of issuance upon the
conversion of the Series C Preferred, such number of shares of Common Stock
issuable upon the conversion of all outstanding Series C Preferred. All shares
of Common Stock which are so issuable shall, when issued, be duly and validly
issued, fully paid and nonassessable and free from all taxes, Liens and charges.
The Company shall take all such actions as may be necessary to assure that all
such shares of Common Stock may be so issued without violation of any applicable
law or governmental regulation or any requirements of any domestic securities
exchange upon which shares of Common Stock may be listed (except for official
notice of issuance which shall be immediately transmitted by the Company upon
issuance).

            4.4   Pre-Closing Covenants.

            (a) Prior to the Closing, each of the parties hereto covenants and
agrees that it will, and will cause its Subsidiaries to, cooperate with the
other party and use all commercially reasonable efforts to cause the conditions
of such other party's obligation to close to be satisfied (including the
execution and delivery of all agreements contemplated hereunder to be so
executed and delivered);

            (b) Prior to Closing, the Company shall give prompt written notice
to Buyers of (i) the occurrence, or failure to occur, of any event which
occurrence or failure would cause any representation or warranty of the Company
contained in this Agreement to be untrue or inaccurate in any material respect
at any time from the date hereof to the Closing Date or that will result in the
failure to satisfy any of the conditions specified in Section 3.1 (provided that
such written notice (x) shall specify the representation or warranty so breached
and (y) will not be deemed to amend the Schedules attached hereto unless so
accepted as such by the Buyers in writing prior to the Closing Date, in which
event such written acceptance shall be deemed to cure the breach of any such
representation or warranty and amend and/or supplement the Schedule related to
such representation or warranty) or (ii) any failure in any material respect of
the Company to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement or the Related Documents.
The Company shall give prompt written notice to the Buyers of any development of
which it is aware which is reasonably likely to have a Material Adverse Effect.

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            SECTION 5.  REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY.

            As a material inducement to each Buyer to enter into this Agreement
and purchase the Series C Preferred, the Company hereby represents and warrants
to the Buyers that:

            5.1. Organization, Corporate Power and Licenses. Each of the Company
and its Subsidiaries is a corporation duly organized, validly existing and in
good standing under the Laws of its state of incorporation and is duly
authorized to conduct business in every jurisdiction where such qualification is
required and where the failure to be so qualified would have a Material Adverse
Effect. Each of the Company and its Subsidiaries possesses all requisite
corporate power and authority and all licenses, permits, and authorizations
necessary to own and operate its properties, to carry on its businesses as now
conducted and presently proposed to be conducted and to carry out the
transactions contemplated by this Agreement other than such failures as would
not be reasonably likely to have a Material Adverse Effect. The copies of the
charter documents and bylaws which have been furnished to the Buyers reflect all
amendments made thereto at any time prior to the date of this Agreement and are
correct and complete.

            5.2.  Capital Stock and Related Matters; Subsidiaries.

            (a) As of immediately prior to the Closing, the authorized capital
stock of the Company consists of 819,745 shares of Common Stock, 160,000 shares
of Series A Convertible Preferred Stock, par value $0.01 per share and 90,000
shares of Series B Redeemable Preferred Stock, par value $0.01 per share. The
Capitalization Schedule 5.2 attached hereto sets forth the capitalization of
each of the Company and its Subsidiaries, any securities convertible or
exchangeable for any equity securities of the Company or its Subsidiaries and
any options or other rights to purchase equity securities of the Company. Other
than as set forth on Schedule 5.2, none of the Company or any of its
Subsidiaries has outstanding (1) any stock or securities convertible or
exchangeable for any shares of its capital stock or containing any profit
participation features, nor any rights or options to subscribe for or to
purchase its capital stock or (2) any stock or securities convertible into or
exchangeable for its capital stock or any stock appreciation rights or phantom
stock or similar plans or rights.

            (b) The shares of Series C Preferred have been duly and validly
authorized and, when issued and delivered against payment of the Purchase Price,
will be duly and validly issued and fully paid and nonassessable. The Company
has duly authorized and reserved for issuance all shares of Common Stock
issuable upon conversion of any or all shares of Series C Preferred. Upon the
conversion of any shares of Series C Preferred, the Common Stock issuable in
connection with such conversion will be duly and validly issued and fully paid
and nonassessable. The certificates evidencing the shares of Series C Preferred
comply with all applicable requirements of Nebraska law. None of the shares of
Series C Preferred, and none of the shares of Common Stock issuable upon
conversion of the shares of Series C Preferred will be issued or sold in
violation of any preemptive rights of stockholders.

            (c) The Company has not violated any applicable federal or state
securities laws in connection with the offer, sale or issuance of the Series C
Preferred. Other than the Stockholders

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Agreement and the Registration Rights Agreement, there are no voting trusts,
proxies, or other agreements or understandings among the Company and its
shareholders with respect to the voting, transfer or registration of the
Company's capital stock.

            (d) Schedule 5.2 sets forth each Subsidiary of the Company and each
Subsidiary's jurisdiction of incorporation. Except as set forth on Schedule 5.2,
each of the Company and its Subsidiaries holds of record and owns beneficially
all of the outstanding shares of each Subsidiary of the Company, free and clear
of any restrictions on transfer (other than restrictions under the Securities
Act and state securities laws), Taxes, Security Interests, options, warrants,
purchase rights, contracts, commitments, equities, claims, and demands.

            5.3. Authorization; No Breach. The Company's execution, delivery and
performance of this Agreement, the Related Documents and all other agreements
and instruments contemplated hereby to which the Company is a party have been
duly authorized by the Company. This Agreement and the Related Documents
constitute valid and binding obligations of the Company, enforceable in
accordance with their terms, and all other agreements and instruments
contemplated hereby to which the Company or any Subsidiary of the Company is a
party, when executed and delivered by the Company in accordance with the terms
hereof, shall each constitute a valid and binding obligation of the Company or
such Subsidiary, enforceable in accordance with its terms, except, in each case,
as such enforceability may be limited by (x) applicable insolvency, bankruptcy,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and (y) applicable equitable principles (whether considered in a
proceeding at law or in equity). Except as set forth on the attached
Authorization Schedule 5.3, and except for instances which could not reasonably
be expected to have a Material Adverse Effect, the execution and delivery by the
Company of this Agreement, the Related Documents and all other agreements and
instruments contemplated hereby and thereby to which the Company is a party, and
the fulfillment of and compliance with the respective terms hereof and thereof
by the Company or such Subsidiary do not and shall not (i) conflict with or
result in a breach of the terms, conditions or provisions of, (ii) constitute a
default under (whether with or without the passage of time, the giving of notice
or both), (iii) result in the creation of any Lien upon the Company's or any of
its Subsidiaries' capital stock or assets pursuant to, (iv) give any third party
the right to modify, terminate or accelerate any obligation under, (v) result in
a violation of, or notice or declaration to, the Articles of Incorporation or
bylaws of the Company or any of its Subsidiaries, or any Law to which the
Company or any of its Subsidiaries is subject, or any order, judgment or decree
or any material agreement or instrument to which the Company or any of its
Subsidiaries is subject.

            5.4. Consents. No consent, approval or authorization of, or
designation, declaration or filing with, any Governmental Entity or other third
party is necessary for the execution, delivery or performance of this Agreement
or the consummation of the transactions contemplated hereby, except as set forth
on the attached Consents Schedule 5.4.

            5.5 Financial Statements. The Company has furnished the Buyers with
copies of each of the Company's and its Subsidiaries' (a) balance sheet as of
December 31, 1999 and the related statements of income and cash flow for the
twelve (12) months then ended (the "Audited Financial Statements"), and (b)
unaudited balance sheet as of June 30, 2000 and the related

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statements of income and cash flow for the six (6) months then ended (the
"Unaudited Financial Statements" and together with the Audited Financial
Statements, the "Financial Statements"). Each of the Financial Statements
presents fairly in all material respects the financial condition, results of
operations and cash flows of the Company and its Subsidiaries as of the times
and for the periods referred to therein and have been prepared in accordance
with GAAP, consistently applied, except that the Unaudited Financial Statements
do not reflect normal year-end adjustments or contain footnote disclosure.

            5.6 Absence of Undisclosed Liabilities. Except as disclosed on
Schedule 5.6 attached hereto, none of the Company or any of its Subsidiaries has
any liabilities (whether accrued, absolute, contingent, unliquidated or
otherwise, whether or not known, whether due or to become due and regardless of
when asserted) except (a) liabilities reflected on the Financial Statements or
not required to be disclosed thereon in accordance with GAAP, (b) liabilities
which have arisen after June 30, 2000 in the ordinary course of business
consistent with past custom and practice (none of which liabilities is a
liability that could reasonably be expected to have a Material Adverse Effect)
and (c) obligations and liabilities which individually and in the aggregate
could not be reasonably expected to have a Material Adverse Effect.

            5.7 Absence of Material Adverse Change. Since December 31, 1999,
there has been no change or event resulting in or which would have a Material
Adverse Effect.

            5.8 Absence of Certain Developments. Except as set forth in Schedule
5.8 attached hereto or as contemplated by this Agreement since June 30, 2000,
none of the Company or any of its Subsidiaries has:

            (a) redeemed or repurchased, directly or indirectly, any shares of
capital stock or declared, set aside or paid any dividends or made any other
distributions with respect to any shares of its capital stock;

            (b) issued or sold any equity securities, securities convertible,
exchangeable or exercisable into equity securities, or warrants, options or
other rights to acquire equity securities, of the Company or any of its
Subsidiaries;

            (c) incurred any Indebtedness in excess of $250,000 in the
aggregate;

            (d) mortgaged, pledged or subjected to any Lien other than Permitted
Liens, charge or any other encumbrance, all or any material portion of its
properties or assets;

            (e) sold, leased, assigned or transferred any portion of its
tangible or intangible assets with a value in excess of $250,000 in the
aggregate or canceled any debts or claims in excess of $250,000 in the aggregate
owing to or held by it in any such case without fair consideration;

            (f) suffered any theft, taking by power of eminent domain, damage,
destruction or casualty loss in excess of $250,000 to its tangible assets,
whether or not covered by insurance or suffered any substantial destruction of
its books and records;

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<PAGE>   14
            (g) made any capital expenditures or commitments therefor in excess
of $750,000 in the aggregate;

            (h) made any loans or advances to, or guarantees for the benefit of,
any Person other than to employees of the Company or any of its Subsidiaries in
the ordinary course of business consistent with past practice; or

            (i) agreed to do any of the foregoing.

            5.9 Title to Properties.

            (a) Schedule 5.9 contains a list of all of the real property owned
by each of the Company and its Subsidiaries (collectively, the "Owned
Property").

            (b) Schedule 5.9 attached hereto contains a list of all of the real
estate leased, used or occupied by each of the Company and its Subsidiaries
(collectively, the "Leased Property" and together with the Owned Property, the
"Real Property").

            (c) The Company has made available to the Buyers copies of each of
the leases or subleases listed on Schedule 5.9 (the "Leases") and none of the
Leases have been modified in any material respect, except to the extent that
such modifications are disclosed by the copies made available to Buyers. None of
the Company or any of its Subsidiaries is in material default, and to the
Knowledge of the Company no circumstances exist which could result in a material
default by the Company or any of its Subsidiaries or by any other party, under
any of the Leases.

            (d) To the Knowledge of the Company, the Leases are valid, binding,
enforceable and in full force and effect and the Company or its Subsidiaries
holds a valid and existing leasehold interest under each of the Leases for the
term set forth therein.

            (e) Except as disclosed on Schedule 5.9 attached hereto, all of the
buildings, improvements and fixtures leased under the Leases are in reasonably
good condition and repair (ordinary wear and tear excepted).

            (f) Except as set forth on Schedule 5.9, each of the Company and its
Subsidiaries owns marketable title, free and clear of all Liens, charges,
security interests and encumbrances to all of the material personal property and
material assets necessary for the conduct of their respective businesses.

            (g) The buildings, machinery, equipment, vehicles and other tangible
assets of each of the Company and its Subsidiaries necessary for the conduct of
its respective businesses are in reasonably good operating condition and repair
(ordinary wear and tear excepted).

                                       10
<PAGE>   15
            5.10  Environmental and Safety Matters.

            (a) Except as set forth on Schedule 5.10 attached hereto and except
for instances which could not reasonably be expected to have a Material Adverse
Effect:

                   (i) Each of the Company and its Subsidiaries has complied and
            is in compliance with all Environmental Requirements in all material
            respects.

                  (ii) None of the Company or any of its Subsidiaries has
            received any claim, complaint, citation, report or other written or
            oral notice regarding any liabilities or potential liabilities
            (whether accrued, absolute, contingent, unliquidated or otherwise),
            including any investigatory, remedial or corrective obligations,
            arising under Environmental Requirements.

                 (iii) No facts, events or conditions relating to the past or
            present facilities, properties or operations of the Company or any
            of its Subsidiaries will prevent, hinder or materially limit
            continued compliance with Environmental Requirements, give rise to
            any material investigatory, remedial or corrective obligations
            pursuant to Environmental Requirements, or give rise to any other
            material liabilities (whether accrued, absolute, contingent,
            unliquidated or otherwise) pursuant to Environmental Requirements.

                  (iv) None of the Company or any of its Subsidiaries has,
            either expressly or by operation of law, assumed or undertaken any
            liability or corrective or remedial obligation of any other Person
            relating to Environmental Requirements other than in connection with
            the acquisition of all or substantially all of the capital stock or
            assets of such person.

                   (v) No Environmental Lien has attached to any property owned,
            leased or operated by the Company or any of its Subsidiaries.

            5.11 Tax Matters. Except as set forth on Schedule 5.11 attached
hereto and except for instances which could not reasonably be expected to have a
Material Adverse Effect:

            (a) Each of the Company and its Subsidiaries has filed all material
Tax Returns that it was required to file. All such Tax Returns were correct and
complete in all material respects. All material Taxes which have become due and
payable by the Company or any of its Subsidiaries (whether or not shown on any
Tax Return) have been fully paid. None of the Company or any of its Subsidiaries
is currently the beneficiary of any extension of time within which to file any
Tax Return. No claim has been made by an authority in a jurisdiction where the
Company or its Subsidiaries does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction. There are no security interests on any
of the assets of the Company or the assets of any of its Subsidiaries that arose
in connection with any failure (or alleged failure) to pay any Tax. Schedule
5.11 lists the dates as of and for which the Tax Returns of the Company or any
of its Subsidiaries were audited and closed and lists the jurisdictions in which
the Company or any of its Subsidiaries

                                       11
<PAGE>   16
files or is required to file any such Tax Return. Except as listed on Schedule
5.11, there is no tax audit or examination now pending or, to the Knowledge of
the Company, threatened with respect to the Company.

            (b) Each of the Company and its Subsidiaries has withheld and paid
all Taxes required to have been withheld and paid in connection with amounts
paid or owing to any employee, creditor, independent contractor, or other third
party.

            (c) There is no dispute or claim concerning any Tax liability of the
Company or any of its Subsidiaries either (i) claimed or raised by any authority
in writing or (ii) as to which any of the officers or employees responsible for
Tax matters of the Company or such Subsidiary have knowledge based upon personal
contact with any agent of such authority.

            (d) None of the Company or any of its Subsidiaries has waived any
statute of limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency.

            (e) None of the Company or any of its Subsidiaries (i) has been a
member of an Affiliated Group (other than an Affiliated Group of which the
Company is or was the common parent) filing a consolidated federal income Tax
Return and (ii) has any Liability for the Taxes of any Person under Treas. Reg.
Section 1.1502-6 (or any similar provision of state, local, or foreign law), as
a transferee or successor, by contract, or otherwise.

            (f) The unpaid Taxes of each of the Company and its Subsidiaries (i)
did not, as of December 31, 1999, exceed the combined total amount of income
Taxes and deferred Taxes payable as set forth in the Financial Statements and
(ii) do not exceed that provision as adjusted for the passage of time through
the Closing Date in accordance with the past custom and practice of the Company
and its Subsidiaries in filing its Tax Returns.

            5.12  Intellectual Property Rights.

            (a) Each of the Company and its Subsidiaries owns all right, title
and interest to, or has the right to use pursuant to a valid license, all
Intellectual Property Rights necessary for the operation of the businesses of
the Company or such Subsidiary as presently conducted and as presently proposed
to be conducted, free and clear of all Liens other than Permitted Liens. Except
as set forth on Schedule 5.12, the loss or expiration of any Intellectual
Property Right or related group of Intellectual Property Rights owned or used by
the Company or any of its Subsidiaries could not reasonably be expected to have
a Material Adverse Effect on the Company or such Subsidiary, and, to the
Knowledge of the Company, no such loss or expiration is threatened or pending.

            5.13 Litigation; Proceedings. Set forth on Schedule 5.13 is a list
and description of all claims, suits, proceedings or investigations currently
pending or, to the Knowledge of the Company, threatened against or affecting the
Company or any of its Subsidiaries, any officer or director thereof or the
business of the Company or any of its Subsidiaries, in each case, that would
reasonably be expected to result in liability of the Company or any Subsidiary
exceeding $100,000.

                                       12
<PAGE>   17
Except as set forth on Schedule 5.13, no such claim, suit, proceeding or
investigation, would have a Material Adverse Effect or a material adverse effect
on the ability of any officer or director to participate in the affairs of the
Company or any of its Subsidiaries.

            5.14 Brokerage. There are no claims for brokerage commissions,
finders' fees or similar compensation in connection with the transactions
contemplated by this Agreement or the Related Documents based on any arrangement
or agreement made by or on behalf of the Company or any of its Subsidiaries.

            5.15 Employees. Except as listed on Schedule 5.15, since June 30,
2000, no key employee and no group of employees has terminated, or to the
Knowledge of the Company plans to terminate, employment with the Company or any
of its Subsidiaries. The Company is not a party to or bound by any collective
bargaining agreement, nor has it experienced any strike, material grievance,
material claim of unfair labor practice or other collective bargaining dispute.
To the Knowledge of the Company, there is no organizational effort being made or
threatened by or on behalf of any labor union with respect to its employees.
Neither the Company nor any of its Subsidiaries has committed any unfair labor
practice or materially violated any federal, state or local law or regulation
regulating employers or the terms and conditions of its employees' employment,
including laws regulating employee wages and hours, employment discrimination,
employee civil rights, equal employment opportunity and employment of foreign
nationals, in either case, which would reasonably be likely to result in any
material liability.

            5.16 Employee Benefit Plans. Schedule 5.16 attached hereto sets
forth a list of each "employee benefit plan" (as such term is defined in Section
3(3) of ERISA) and each other material employee benefit plan, program or
arrangement sponsored by each of the Company and its Subsidiaries. Each such
item listed on Schedule 5.16 is referred to herein as a "Plan" and collectively
as the "Plans." None of the Company or any of its Subsidiaries maintains,
contributes to, or has any liability under (or with respect to) any "defined
benefit plan" (as defined in Section 3(35) of ERISA), or any "multiemployer
plan" (as defined in Section 3(37) of ERISA). Each Plan that is intended to be
qualified under Section 401(a) of the Code has received a determination from the
Internal Revenue Service that such Plan is so qualified. Each of the Plans and
all related trusts, insurance contracts and funds have been maintained, funded
and administered in material compliance with their terms and with the applicable
provisions of ERISA, the Code, and any other applicable laws.

            5.17 Insurance. The Company currently has in place insurance
policies covering such types or risk and in such amounts as are customary for
corporations of similar size engaged in similar lines of business in similar
geographic areas as the Company. To the Knowledge of the Company, all such
policies are in full force and effect and enforceable in accordance with their
terms.

            5.18 Licenses, Compliance with Law, Other Agreements, Etc. Each of
the Company and its Subsidiaries has all material franchises, permits, licenses
and other rights to allow it to conduct its business and is not in violation in
any material respects of any order or decree of any court, or of any law, order
or regulation of any governmental authority, or of the provisions of any

                                       13
<PAGE>   18
material contract or agreement to which it is a party or by which it is bound,
and neither this Agreement nor the Related Documents nor the transactions
contemplated hereby or thereby will result in any such violation. The Company's
and the Company's Subsidiaries' respective businesses have been conducted in all
material respects in compliance with all federal, state and local laws,
ordinances, rules and regulations, except where such violations, defaults or
noncompliance would not have a Material Adverse Effect.

            5.19 Customers and Suppliers. Since June 30, 2000, no material
vendor of the Company or any of its Subsidiaries has indicated that it shall
stop, or materially decrease the rate of, supplying materials, products or
services to the Company or such Subsidiary, and no material customer of the
Company or any of its Subsidiaries has indicated that it shall stop, or
materially decrease the rate of, buying services from the Company or such
Subsidiary.

            5.20 Disclosure. This Agreement (including the Schedules attached
hereto) does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make each statement contained herein not
misleading in light of the circumstances prevailing at the time such statement
was made.

            5.21 No Conflict of Interest. To the Knowledge of the Company, no
officer or employee of the State of Wisconsin Investment Board ("SWIB") has or
will receive, directly or indirectly, a personal interest in the Company or its
property or anything of substantial economic value for his or her private
benefit from the Company, or anyone acting on its behalf, in connection with the
investment(s) made pursuant to this Agreement.

            5.22 No Bad Actor. Neither the Company nor, to the Knowledge of the
Company, any of its affiliates, directors or officers is or has (except as
described on Schedule 5.22) been the subject of, or a defendant in: (i) an
enforcement action or prosecution (or settlement in lieu thereof) brought by a
governmental authority relating to a violation of securities, tax, fiduciary or
criminal laws, or (ii) a civil action (or settlement in lieu thereof) brought by
investors in a common investment vehicle for violation of duties owed to the
investors. The Company covenants that it will notify SWIB within five days in
the event any such action or prosecution is initiated during the term of this
investment.

            SECTION 6.  REPRESENTATIONS AND WARRANTIES OF BUYERS.

            As a material inducement to the Company to enter into this Agreement
and sell the Series C Preferred, each of the Buyers hereby represents and
warrants, severally and not jointly, to the Company that:

            6.1 Organization and Power. Such Buyer is an entity duly organized
and validly existing under the laws of the State or jurisdiction of its
incorporation or organization, as applicable. Such Buyer has full power and
authority to enter into this Agreement and perform its obligations hereunder.

                                       14
<PAGE>   19
            6.2 Authorization. The execution, delivery and performance of this
Agreement by such Buyer and the consummation of the transactions contemplated
hereby by such Buyer has been duly and validly authorized by all requisite
action on the part of such Buyer, and no other proceedings on such Buyer's part
are necessary to authorize the execution, delivery or performance of this
Agreement. This Agreement constitutes a valid and binding obligation of such
Buyer, enforceable in accordance with its terms.

            6.3 Investment Representations. Such Buyer hereby represents that it
is acquiring the Series C Preferred purchased hereunder for its own account with
the present intention of holding such securities for purposes of investment, and
not with a view to, or intention of, distribution thereof in violation of the
federal securities laws or any applicable state securities laws, and that it
will not sell such securities in violation of the federal securities laws or any
applicable state securities laws; provided, that nothing contained herein shall
prevent the Buyers and subsequent holders of Series C Preferred from
transferring such securities in compliance with the provisions of the
Shareholders Agreement and applicable federal and state securities laws. Such
Buyer hereby acknowledges that the Series C Preferred have not been registered
under the Securities Act and therefore cannot be sold unless registered under
the Securities Act or sold pursuant to an exemption thereunder. Such Buyer
further represents that it is an "accredited investor" as defined by 17 CFR
Section 230.501(a) under the Securities Act, as in effect on the date hereof.

            SECTION 7.  TERMINATION.

            7.1 Termination. This Agreement may be terminated at any time prior
to the Closing:

            (a) by mutual written consent of the Required Buyers and the
Company;

            (b) by the Required Buyers or the Company if there has been a
material misrepresentation or breach on the part of the Buyers in the case of
the Company or the Company in the case of the Buyers in the representations and
warranties set forth in this Agreement, or if events have occurred which have
made it impossible to satisfy a condition precedent to the terminating party's
obligations to consummate the transactions contemplated hereby, unless such
terminating party's willful breach of this Agreement has caused the condition to
be unsatisfied; or

            (c) by the Required Buyers or the Company if the Closing has not
occurred on or prior to September 30, 2000; provided, that a party may not
terminate this Agreement pursuant to this Section 7.1(c) if such party's willful
breach of this Agreement has prevented the consummation of the transactions
contemplated hereby at or prior to such time.

            7.2 Effect of Termination. In the event of termination of this
Agreement by the Required Buyers or the Company as provided above, this
Agreement will forthwith become void and there will be no liability on the part
of any party hereto to any other party hereto or its shareholders or directors
or officers in respect thereof other than the obligations of the parties
pursuant to Sections 8.2, 8.4, 10.9, 10.11 and 10.12 except that nothing herein
will relieve any party from liability resulting from any breach of this
Agreement prior to such termination.

                                       15
<PAGE>   20
            SECTION 8.  ADDITIONAL AGREEMENTS.

            8.1 Transfer Taxes. The Company shall pay any transfer Taxes imposed
on the Company or any Buyer as a result of the purchase and sale of the stock of
the Company pursuant to this Agreement.

            8.2 Press Releases and Announcements. No press releases or public
announcement related to this Agreement or the transactions contemplated herein,
or other related announcements to the employees, customers or suppliers of the
Company will be issued without the mutual approval of the Company and the Buyers
except if required by applicable law or governmental regulation or by order of a
court of competent jurisdiction, in which case prior to making the release or
announcement the party required to make such release or announcement shall give
written notice to the other parties hereto describing in reasonable detail the
proposed content of such release or announcement and shall permit such other
parties to review and comment upon the form and substance of such release or
announcement.

            8.3 Expenses. The Company agrees to reimburse Buyers for their
reasonable fees and expenses (including legal fees and expenses) incurred in
connection with the negotiation and execution of this Agreement, the Related
Documents and the consummation of the transactions contemplated hereby and
thereby.

            8.4 Survival, Representations and Warranties. The respective
representations and warranties of the Company and Buyers contained herein or in
any certificates or other documents delivered at the Closing shall not be deemed
waived or otherwise affected by any investigation, inquiry or examination made
by or on behalf of any party hereto, or the knowledge of any party's officers,
directors, shareholders, employees or agents or the acceptance by any party of
any certificate or opinion hereunder. The representations and warranties
provided for in this Agreement shall survive for 15 months beyond the Closing
Date provided that the representations and warranties made fraudulently and the
representations and warranties contained in Section 5.2 hereof shall survive
indefinitely, provided, further, that the representations and warranties
pertaining to taxes shall survive for a period equal to the applicable statute
of limitations, provided, further, that any representation or warranty in
respect of which indemnity may be sought under this Agreement shall survive the
time at which it would otherwise terminate pursuant to this Section 8.5 if
notice of the inaccuracy or breach or potential inaccuracy or breach thereof
giving rise to such right or potential right of indemnity shall have been given
to the party against whom such indemnity may be sought prior to such time. The
indemnification provisions contained in Sections 8.5 through 8.9 of this
Agreement are the sole remedy available to the Buyers in the case of any breach
of representation or warranty or covenant herein to the exclusion of any
statutory, equitable, or common law remedy any party hereto may have for any
breach of any representation, warranty, or covenant.

            8.5   Indemnification Obligation of the Company.

            (a) The Company agrees to indemnify each of the Buyers and each of
their affiliates, stockholders, partners, managers, members, officers,
directors, employees, agents, representatives and successors and assigns
(collectively, the "Buyer Indemnitees") in respect of, and

                                       16
<PAGE>   21
save and hold each Buyer Indemnitee harmless against and pay on behalf of or
reimburse each Buyer Indemnitee as and when incurred, any Losses which any Buyer
Indemnitee suffers, sustains or becomes subject to as a result of or by virtue
of, without duplication:

                   (i) any facts or circumstances which constitute a
      misrepresentation or breach by the Company set forth in this Agreement
      (including any Schedule), or any certificate delivered by the Company
      pursuant to this Agreement (provided that the Company is given written
      notice of such Loss during the survival period specified in Section 8.5
      above); or

                  (ii) any nonfulfillment or breach of any covenant of the
      Company or set forth in this Agreement.

            (b) Notwithstanding the foregoing, the Company shall not be required
to indemnify the Buyer Indemnitees in respect of any Losses any Buyer Indemnitee
suffers, sustains or becomes subject to as a result of or by virtue of any of
the occurrences referred to in this Section 8.5 unless the aggregate of all such
Losses exceeds $100,000 (but, if such claims exceed $100,000 in the aggregate,
such Buyer Indemnitee shall be entitled to recover from the first dollar). In no
event shall the Company be obligated to indemnify the Buyer Indemnitees
hereunder in respect of any Losses the Buyer Indemnitees suffer, sustain, or
become subject to, as a result of or by virtue of any of the occurrences
referred to in this Section 8.5 in the aggregate in excess of the Purchase
Price.

            8.6 Indemnification Obligation of Buyers. Each of the Buyers will
severally but not jointly indemnify the Company and its respective affiliates,
stockholders, officers, managers, directors, employees, agents, representatives
and successors and assigns (collectively, the "Company Indemnitees") in respect
of, and save and hold each Company Indemnitee harmless against any Losses which
such Company Indemnitee suffers, sustains or becomes subject to as a result of
or by virtue of, without duplication:

            (a) any facts or circumstances which constitute a misrepresentation
of or breach by such Buyer set forth in this Agreement or any certificate
delivered by such Buyer pursuant to this Agreement (provided that such Buyer is
given written notice of such Loss during the applicable survival period
specified in Section 8.4 above); or

            (b) any nonfulfillment or breach of any covenant or agreement of
such Buyer set forth in this Agreement.

            (c) Notwithstanding the foregoing, the Buyers shall not be required
to indemnify the Company Indemnitees in respect of any Losses any Company
Indemnitee suffers, sustains or becomes subject to as a result of or by virtue
of any of the occurrences referred to in this Section 8.6 unless the aggregate
of all such Losses exceeds $100,000 (but, if such claims exceed $100,000 in the
aggregate, such Company Indemnitee shall be entitled to recover from the first
dollar). In no event shall the Buyers be obligated to indemnify the Company
Indemnitees hereunder in respect of any Losses the Company Indemnitees suffer,
sustain, or become subject to, as a result of or by virtue

                                       17
<PAGE>   22
of any of the occurrences referred to in this Section 8.6 in the aggregate in
excess of the Purchase Price.

            8.7 Indemnification Procedures.

            (a) Any Person making a claim for indemnification pursuant to
Section 8.5 or 8.6 above (each, an "Indemnified Party") must give the party from
whom indemnification is sought (an "Indemnifying Party") written notice of such
claim promptly after the Indemnified Party receives any written notice of any
action, lawsuit, proceeding, investigation or other claim (a "Proceeding")
against or involving the Indemnified Party by any Person or otherwise discovers
the liability, obligation or facts giving rise to such claim for
indemnification; provided, that the failure to notify or delay in notifying an
Indemnifying Party will not relieve the Indemnifying Party of its obligations
pursuant to Section 8.5 or 8.6 above, as applicable, except to the extent that
such failure actually harms the Indemnifying Party.

            (b) With respect to the defense of any Proceeding against or
involving an Indemnified Party for which indemnification is provided in Section
8.5 or 8.6 above, at its option an Indemnifying Party may appoint as lead
counsel of such defense any legal counsel selected by the Indemnifying Party.

            (c) Notwithstanding this Section 8.7: (i) the Indemnified Party will
be entitled to participate in the defense of such claim and to employ counsel of
its choice for such purpose at its own expense (provided that the Indemnifying
Party will bear the reasonable fees and expenses of such separate counsel
incurred prior to the date upon which the Indemnifying Party effectively assumes
control of such defense); provided that the Indemnifying Party will pay the fees
and expenses of counsel to the Indemnified Party if (i) the Indemnified Party
reasonably believes that there exists a conflict of interest which, under
applicable principles of legal ethics, would prohibit a single legal counsel
from representing both the Indemnified Party and the Indemnifying Party in such
Proceeding; or (ii) the Indemnifying Party has failed or is failing to prosecute
or defend vigorously such claim.

            (d) The Indemnifying Party may not enter into any settlement of any
claim or Proceeding other than for money damages and not for injunctive or
equitable relief unless it has first obtained the prior written consent of the
Indemnified Party (which the Indemnified Party will not unreasonably withhold).

            8.8 Payment. Upon the determination of the liability under Sections
8.5 through 8.7 of this Agreement or otherwise between the parties or by
judicial proceeding, the appropriate party shall pay to the other, as the case
may be, within 10 days after such determination, the amount of any claim for
indemnification made hereunder.

            8.9 Cumulative Voting. The Buyers shall not be entitled to cumulate
any shares of Common Stock held by such Buyers on the date hereof or hereafter
acquired for purposes of voting to elect Directors to the Board of Directors of
the Company, as provided in Neb. Rev. Stat. Section 21-2066 and Article XII,
Section 1 of the Nebraska Constitution.

                                       18
<PAGE>   23
            SECTION 9.  DEFINITIONS

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

            "Affiliated Group" means an affiliated group as defined in Section
1504 of the Code (or any analogous combined, consolidated or unitary group
defined under state, local or foreign Tax law) of which any of the Company or
the Subsidiaries is or has been a member.

            "Amended Articles of Incorporation" has the meaning set forth in
Section 3.1(f).

            "Annual Budget" has the meaning set forth in Section 4.1(c).

            "Articles of Incorporation" has the meaning set forth in Section
3.1(f).

            "Audit" means any audit, assessment of Taxes, or other examination
by any taxing authority, proceedings, or appeal of such proceedings relating to
Taxes.

            "Board" means the board of directors of the Company.

            "Buyers" and "Buyer" have the meaning set forth in the recitals
hereto.

            "Closing" has the meaning set forth in Section 2.1.

            "Closing Date" has the meaning set forth in Section 2.1.

            "Closing Transactions" has the meaning set forth in Section 2.2.

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

            "Common Stock" means the common stock, par value $0.01 per share, of
the Company.

            "Company" has the meaning set forth in the recitals hereto.

            "Environmental Lien" means a Lien, either recorded or unrecorded, in
favor of any governmental entity, relating to any liability of the Company and
its Subsidiaries arising under Environmental and Safety Requirements.

            "Environmental Requirements" means all federal, state, local and
foreign statutes, regulations, ordinances and similar provisions having the
force or effect of law, all judicial and

                                       19
<PAGE>   24
administrative orders and determinations, all contractual obligations and all
common law concerning public health or safety, workplace health or safety or
pollution or protection of the environment.

            "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, or any successor statute.

            "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

            "Financial Statements" has the meaning set forth in Section 5.5.

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

            "Governmental Entity" means the United States of America or any
nation, any state or other political subdivision thereof, or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of government.

            "Indebtedness" shall mean at a particular time, without duplication,
(i) indebtedness for borrowed money or for the deferred purchase price of
property or services in respect of which any Person is liable, contingently or
otherwise, as obligor or otherwise (other than trade payables and other current
liabilities incurred in the ordinary course of business consistent with past
custom and practice) or any commitment by which any Person assures a creditor
against loss, including contingent reimbursement obligations with respect to
letters of credit, (ii) all debts of other Persons guaranteed or otherwise
supported in any manner by the Company or any of its Subsidiaries, including
guarantees in the form of an agreement to repurchase or reimburse, (iii)
obligations under capitalized leases in respect of which obligations any Person
is liable, contingently or otherwise, as obligor, guarantor or otherwise, or in
respect of which obligations any Person assures a creditor against loss and (iv)
any unsatisfied obligation of any Person for "withdrawal liability" to a
"multiemployer plan" as such terms are defined under ERISA.

            "Intellectual Property Rights" means all (i) patents, patent
applications, patent disclosures and inventions, (ii) trademarks, service marks,
trade dress, trade names, domain names, logos and corporate names and
registrations and applications for registration thereof together with all of the
goodwill associated therewith, (iii) copyrights (registered or unregistered) and
copyrightable works and registrations and applications for registration thereof,
(iv) mask works and registrations and applications for registration thereof, (v)
computer software, data, data bases and documentation thereof, (vi) trade
secrets and other confidential information (including, without limitation,
ideas, formulas, compositions, inventions (whether patentable or unpatentable
and whether or not reduced to practice), know-how, manufacturing and production
processes and techniques, research and development information, drawings,
specifications, designs, plans, proposals, technical data, copyrightable works,
financial and marketing plans and customer and supplier lists and information),
(vii) other intellectual property rights and (viii) copies and tangible
embodiments thereof (in whatever form or medium).

                                       20
<PAGE>   25
            "Knowledge of the Company" means the actual knowledge of Gary Kuck,
Thomas Cochran, Edward Campbell and Monty Rhode.

            "Leased Property" has the meaning set forth in Section 5.9.

            "Leases" has the meaning set forth in Section 5.9.

            "Legal Requirement" means any requirement arising under any action,
law, treaty, rule or regulation, determination or direction of any arbitrator or
Governmental Entity.

            "Lien" means any lien, mortgage, pledge, security interest,
restriction, charge or other encumbrance.

            "Losses" means any claims, liabilities, losses, damages (including
consequential damages and damages for lost profits), deficiencies, assessments,
judgments, remediations and costs or expenses (including reasonable attorneys',
consultants', accountants' and experts' fees and expenses).

            "Material Adverse Effect" means a material adverse change in the
assets, earnings, financial condition, business or operating results of the
Company and its Subsidiaries taken as a whole.

            "Owned Property" has the meaning set forth in Section 5.9.

            "Permitted Liens" means (i) Liens for taxes not yet due and taxes
for which adequate provision is made in the Unaudited Financial Statements, (ii)
purchase money security interests in supplies and equipment, (iii) precautionary
Liens filed by lessors with respect to leased equipment, (iv) workman's and
materialman's Liens that, with respect to amounts owed to such persons, are not
yet due and payable or are being contested in good faith and for which
appropriate reserves have been established by the Company, and (v) encumbrances
which are not substantial in amount, do not materially detract from the value of
the property subject thereto and do not materially impair the use of the
property subject thereto and do not materially impair the use of the property
subject thereto or the operation of the Company's or its Subsidiaries'
businesses.

            "Person" means an individual, a partnership (including a limited
partnership), a corporation, an association, a limited liability company, a
joint stock company, a trust, a joint venture, an unincorporated organization
and a governmental entity or any department, agency or political subdivision
thereof.

            "Purchase Price" has the meaning set forth in Section 1.1.

            "Real Property" has the meaning set forth in Section 5.9(b).

                                       21
<PAGE>   26
            "Registration Rights Agreement" means the Amended and Restated
Registration Rights Agreement dated as of the date hereof by and among the
Company and certain stockholders of the Company.

            "Related Documents" means the Amended Articles of Incorporation and
the Joinders.

            "Required Buyers" has the meaning set forth in Section 4.3.

            "Safety Requirements" means all federal, state, local and foreign
statutes, regulations, ordinances and similar provisions having the force or
effect of law, all judicial and administrative orders, all contractual
obligations and all common law concerning public health and safety and worker
health and safety.

            "Securities Act" means the Securities Act of 1933, as amended.

            "Series C Preferred" has the meaning set forth in the recitals
hereto.

            "Stockholders Agreement" means the Amended and Restated Stockholders
Agreement dated as of the date hereof by and among the Company and certain
stockholders of the Company.

            "Subsidiary" means, with respect to any Person, any corporation,
partnership, association or other business entity of which (i) if a corporation,
a majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof, or (ii) if a partnership, association, limited
liability company or other business entity, a majority of the partnership or
other similar ownership interests thereof is at the time owned or controlled,
directly or indirectly, by any Person or one or more Subsidiaries of that Person
or a combination thereof. For purposes hereof, a Person or Persons shall be
deemed to have a majority ownership interest in a partnership, association,
limited liability company or other business entity if such Person or Persons (x)
shall be or control the managing director, managing member, general partner or
other managing Person of such partnership, association, limited liability
company or other business entity, or, if no Person possesses the control
described in clause (x), then (y) shall be allocated a majority of partnership,
association, limited liability company or other business entity gains or losses
(without regard to any preferred allocations).

            "Taxes" means any federal, state, local or foreign income,
estimated, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, windfall profits, environmental (including taxes
under Section 59A of the Code), customs duties, capital stock, franchise,
employees' income withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum or other tax, of any
kind whatsoever, including any interest, penalties or additions to tax or
additional amounts in respect of the foregoing.

                                       22
<PAGE>   27
            "Tax Returns" means returns, declarations, reports, claims for
refund and information returns or statements relating to Taxes, including any
schedules or attachments thereto and including any amendments to any of the
foregoing.

            SECTION 10. MISCELLANEOUS.

            10.1 Amendment and Waiver. Except as otherwise expressly provided
herein, no modification or amendment or waiver of any provision of this
Agreement will be effective unless such modification, amendment or waiver is
approved in writing by the Company and each of the Buyers. No other course of
dealing between the Company and the Buyers or any delay in exercising any rights
hereunder or under the Company's certificate of incorporation shall operate as a
waiver of any rights of any Buyer.

            10.2 Notices. All notices, demands and other communications given or
delivered under this Agreement will be in writing and will be deemed to have
been given when personally delivered, mailed by first class mail, return receipt
requested, or delivered by express courier service or telecopied with telephonic
confirmation to the receiving party. Notices, demands and communications to the
Company and the Buyers will, unless another address is specified in writing, be
sent to the address indicated below:

            To the Company:

                  Centurion International, Inc.
                  3425 North 44th Street
                  Lincoln, Nebraska 68501
                  Telecopy:  (402) 467-4528
                  Attention: Gary Kuck

                  with a copy (which will not constitute notice to the Company)
                  to:

                  Kirkland & Ellis
                  153 East 53rd Street
                  New York, New York 10022
                  Telecopy:(212) 446-4900
                  Attention Frederick Tanne, Esq.

            To any Buyer: to the address set forth opposite such Buyer's name on
      Annex 1 attached hereto or at such other address as any Buyer shall notify
      the Company of in accordance with the provisions of this Section 10.2.

            10.3  Binding Agreement; Assignment.

            (a) This Agreement and all of the provisions hereof will be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but

                                       23
<PAGE>   28
neither this Agreement nor any of the rights, interests or obligations hereunder
may be assigned by the Company without the prior written consent of each of the
Buyers.

            (b) The Buyers may assign their respective rights under this
Agreement to any of their respective Affiliates.

            10.4 Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provisions or the remaining provisions of this Agreement.

            10.5 No Strict Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction will be applied against any
person.

            10.6 Headings. The headings used in this Agreement are for
convenience of reference only and do not constitute a part of this Agreement and
will not be deemed to limit, characterize or in any way affect any provision of
this Agreement, and all provisions of this Agreement will be enforced and
construed as if no caption had been used in this Agreement.

            10.7 Entire Agreement. This Agreement and the documents referred to
herein contain the entire agreement between the parties and supersede any prior
understandings, agreements or representations by or between the parties, written
or oral, which may have related to the subject matter hereof in any way.

            10.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which taken
together will constitute one and the same instrument.

            10.9 Parties in Interest. Nothing in this Agreement, express or
implied, is intended to confer on any person, other than the parties, their
respective successors and assigns any rights or remedies under or by virtue of
this Agreement.

            10.10 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO WAIVES TO THE
FULLEST EXTENT PERMITTED BY LAW ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN
RESPECT OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION BASED ON, OR ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, VERBAL OR WRITTEN STATEMENT OR ACTION OF ANY PARTY HERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT,
EQUITY OR OTHERWISE. THE PARTIES TO THIS AGREEMENT HEREBY AGREE THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY AND THAT THE PARTIES TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART
OF A COPY OF THIS AGREEMENT WITH ANY

                                       24
<PAGE>   29
COURT AS EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.

            10.11 Governing Law; Consent to Jurisdiction. All questions
concerning the construction, validity and interpretation of this agreement and
the exhibits and schedules hereto shall be governed by the internal law of the
State of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of New York. All judicial proceedings brought against any party hereto
with respect to this Agreement may be brought in any state or federal court of
competent jurisdiction in the State of New York and by execution and delivery of
this Agreement each party hereto accepts for itself and in connection with its
properties, generally and unconditionally, the exclusive jurisdiction of the
aforesaid courts, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement subject, however, to rights of appeal.

            10.12 Other Definitional Provisions.

            (a) Accounting Principles. Except as otherwise expressly provided,
the classification, character and amount of all assets, liabilities, capital
accounts and reserves and of all items of income and expense to be determined,
and any consolidation or other accounting computation to be made, and the
interpretation of any definition containing any financial term, for purposes of
this Agreement will be determined and made in accordance with GAAP, consistently
applied.

            (b) "Hereof," etc. The terms "hereof," "herein," "hereby" and
"hereunder" and terms of similar import will refer to this Agreement as a whole
and not to any particular provision of this Agreement. Section, clause and
exhibit references contained in this Agreement are references to Sections,
clauses and exhibits in or annexed to this Agreement, unless otherwise
specified.

            (c) Number and Gender. Each defined term used in this Agreement has
a comparable meaning when used in its plural or singular form. Each
gender-specific term used in this Agreement has a comparable meaning whether
used in a masculine, feminine or gender-neutral form.

            (d) Including. Whenever the term "including" is used in this
Agreement (whether or not that term is followed by the phrase "but not limited
to" or "without limitation" or words of similar effect) in connection with a
listing of items within a particular classification, that listing will be
interpreted to be illustrative only and will not be interpreted as a limitation
on, or an exclusive listing of, the items within that classification.

                             *    *    *    *    *

                                       25
<PAGE>   30
            IN WITNESS WHEREOF, the parties hereto have executed this Securities
Purchase Agreement as of the date first written above.

                              CORNERSTONE EQUITY INVESTORS IV, L.P.

                              By:   Cornerstone IV, LLC
                              Its:  General Partner

                              By:   /s/ Robert H. Getz
                                    ------------------------------
                                    Name:  Robert H. Getz
                                    Title: Managing Director

                              THE STATE OF WISCONSIN INVESTMENT BOARD

                              By:  /s/ Jon Vanderpleeg
                                    ------------------------------
                                    Name:  Jon Vanderpleeg
                                    Title: Portfolio Manager

                              PRUDENTIAL PRIVATE EQUITY INVESTORS III,
                              L.P.

                              By:   Prudential Equity Investors, Inc.
                              Its:  General Partner

                              By:   Cornerstone Equity Investors, L.L.C.
                              Its:  Investment Advisor

                              By:   /s/ Robert H. Getz
                                    ------------------------------
                                    Name:  Robert H. Getz
                                    Title: Managing Director

                              RANDOLPH STREET PARTNERS III

                              By:   /s/ Frederick Tanne
                                    ------------------------------
                                    Name:  Frederick Tanne
                                    Title:
<PAGE>   31
                              K&E INVESTMENT PARTNERS, LLC-2000DIF

                              By:   /s/ Glen Hess
                                    ------------------------------
                                    Name: Glen Hess
                                    Title:

                              KUCK INVESTMENT PARTNERS, L.P.

                              By:   /s/ Gary L. Kuck
                                    -----------------------------
                                    Name: Gary L. Kuck
                                    Title: Managing Agent

                              /s/ P. Jackson Bell
                              -----------------------------------
                              P. JACKSON BELL

                              BEHLMAN FAMILY REVOCABLE TRUST

                              By:   /s/ Robert Behlman
                                    ----------------------------
                                    Name: Robert Behlman
                                    Title: Trustee

                              CENTURION INTERNATIONAL, INC.

                              By:   /s/ Gary L. Kuck
                                    ----------------------------
                                    Name: Gary L. Kuck
                                    Title: President/CEO/Chairman
<PAGE>   32
                                                       ANNEX 1 TO THE SECURITIES
                                                       PURCHASE AGREEMENT
                                                       -------------------------

<TABLE>
<CAPTION>
                                                                           SHARES
                                                                          PURCHASED
            BUYER                           ADDRESS                       HEREUNDER              PURCHASE PRICE
            -----                           -------                       ---------              --------------
<S>                            <C>                                        <C>                    <C>
Cornerstone Equity Investors   717 Fifth Avenue                            475,857                $6,590,625.00
IV, L.P.                       Suite 1100
                               New York, NY 10022
                               Telecopy: (212) 826-6798
                               Attention:  Mark Rossi;
                                     Robert Getz

                               with a copy (which will not
                               constitute notice to Cornerstone
                               Equity Investors IV, L.P.) to:

                               Kirkland & Ellis
                               153 East 53rd Street
                               New York, NY  10022
                               Telecopy:  (212) 446-4900
                               Attention: Frederick Tanne, Esq.
</TABLE>
<PAGE>   33
<TABLE>
<CAPTION>
                                                                           SHARES
                                                                          PURCHASED
            BUYER                           ADDRESS                       HEREUNDER              PURCHASE PRICE
            -----                           -------                       ---------              --------------
<S>                            <C>                                        <C>                    <C>
State of Wisconsin             State of Wisconsin Investment               667,870                 $ 9,250,000
Investment Board               Board
                               121 East Wilson Street
                               Madison, Wisconsin  53702
                               (if by U.S. mail: P.O. Box 7842,
                               Madison, Wisconsin 53707-7842)
                               Attn: Jon R. Vanderploeg,
                               Portfolio Manager
                               Fax: (608) 266-2436

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

                               Michael Best & Friedrich LLP
                               One South Pinckney Street,
                               Suite 700
                               Madison, Wisconsin  53703
                               (if by U.S. Mail: P.O. Box 1806,
                               Madison, Wisconsin 53701-1806)
                               Attn: Timothy S. Crisp
                               Fax: (608) 283-2275
</TABLE>
<PAGE>   34
<TABLE>
<CAPTION>
                                                                           SHARES
                                                                          PURCHASED
            BUYER                           ADDRESS                       HEREUNDER              PURCHASE PRICE
            -----                           -------                       ---------              --------------
<S>                            <C>                                        <C>                    <C>
Prudential Private Equity      c/o Cornerstone Equity Investors            192,013                 $ 2,659,375
Investors III, L.P.            IV, L.P.
                               717 Fifth Avenue
                               Suite 1100
                               New York, NY 10022
                               Telecopy: (212) 826-6798
                               Attention:  Mark Rossi;
                                     Robert Getz

                               with a copy (which will not
                               constitute notice to Cornerstone
                               Equity Investors IV, L.P.) to:

                               Kirkland & Ellis
                               153 East 53rd Street
                               New York, NY  10022
                               Telecopy:  (212) 446-4900
                               Attention: Frederick Tanne, Esq.

Randolph Street Partners III   Kirkland & Ellis                             7,220                  $   100,000
                               153 East 53rd Street
                               New York, NY  10022
                               Telecopy:  (212) 446-4900
                               Attn: Frederick Tanne, Esq.

K&E Investment Partners,       Kirkland & Ellis                            14,440                  $   200,000
LLC-2000DIF                    153 East 53rd Street
                               New York, NY  10022
                               Telecopy:  (212) 446-4900
                               Attn: Frederick Tanne, Esq.
Kuck Investment Partners,      c/o Gary Kuck                               72,202                  $ 1,000,000
L.P.                           Centurion International, Inc.
                               3425 North 44th Street
                               Lincoln, NE 68501
                               (402) 467-4491 (tel)
                               (402) 465-1435 (fax)
</TABLE>

<PAGE>   35

<TABLE>
<CAPTION>
                                                                           SHARES
                                                                          PURCHASED
            BUYER                           ADDRESS                       HEREUNDER              PURCHASE PRICE
            -----                           -------                       ---------              --------------
<S>                            <C>                                        <C>                    <C>
P. Jackson Bell                1145 San Mateo Drive                         7,220                  $   100,000
                               Menlo Park, CA 94025
                               (650) 329-0927 (tel)
                               (650) 322-0388 (fax)

Behlman Family Revocable       c/o Robert G. Behlman                        7,220                  $   100,000
Trust                          Celestica Inc.
                               2222 Qume Drive
                               San Jose, CA 95131
                               (408) 953-1020 (tel)
                               (408) 922-2727 (fax)
                                                                                                   ===========
                                                                                                   $20,000,000
</TABLE><PAGE>   1
                                                                    Exhibit 10.8

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

                           REVOLVING CREDIT, TERM LOAN

                                       AND

                               SECURITY AGREEMENT

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

                          PNC BANK NATIONAL ASSOCIATION
                            (AS LENDER AND AS AGENT)

                                       AND

                    THE SEVERAL OTHER LENDERS PARTIES HERETO

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

                                      WITH

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

                          CENTURION INTERNATIONAL, INC.
                                   (BORROWER)

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

                                DECEMBER 30, 1998
<PAGE>   2
                           REVOLVING CREDIT, TERM LOAN
                                       AND
                               SECURITY AGREEMENT

                  Revolving Credit, Term Loan and Security Agreement dated
December 30, 1998 among CENTURION INTERNATIONAL, INC., a corporation organized
under the laws of the State of Nebraska ("Centurion"), the undersigned financial
institutions and the various financial institutions which in accordance with the
terms and provisions of Section 15.3(c) become Purchasing Lenders (collectively,
the "Lenders" and individually a "Lender") and PNC BANK NATIONAL ASSOCIATION
"PNC"), as agent for Lenders (PNC, in such capacity, the "Agent").

                  IN CONSIDERATION of the mutual covenants and undertakings
herein contained, Borrower, Lenders and Agent hereby agree as follows:

                                 I. DEFINITIONS.

         1.1 Accounting Terms. As used in this Agreement, the Notes, or any
certificate, report or other document made or delivered pursuant to this
Agreement, accounting terms not defined in Section 1.2 or elsewhere in this
Agreement, and accounting terms partly defined in Section 1.2 to the extent not
defined, shall have the respective meanings given to them under GAAP.

         1.2 General Terms. For purposes of this Agreement the following terms
shall have the following meanings:

                  "Advances" shall mean and include the Revolving Advances, the
Term Loan and the Equipment Loans.

                  "Advance Rates" shall mean the respective percentages
applicable to Eligible Accounts Receivable, Eligible Inventory consisting of
antennas and Eligible Inventory consisting of batteries referred to in the
definition of Formula Amount, as the same may be adjusted from time to time in
accordance with Section 2.1(b).

                  "Affiliate" of any Person shall mean (a) any Person (other
than a Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with such Person, or (b) any Person
who is a director or officer (i) of such Person, (ii) of any Subsidiary of such
Person or (iii) of any Person described in clause (a) above. For purposes of
this definition, control of a Person shall mean the power, direct or indirect,
(x) to vote 5% or more of the interests having ordinary voting power for the
election of directors of such Person, or (y) to direct or cause the direction of
the management and policies of such Person whether by contract or otherwise.

                  "Agent" shall have the meaning set forth in the preamble to
this Agreement and any successor Agent appointed in accordance with Section
14.3.
<PAGE>   3
                  "Alternate Base Rate" shall mean, for any day, a rate per
annum equal to the higher of (i) the Base Rate in effect on such day and (ii)
the Federal Funds Rate in effect on such day plus 1/2 of 1%.

                  "Alternate Base Rate Loans " shall mean Loans the rate of
interest applicable to which is based upon the Alternate Base Rate.

                  "Authority" shall have the meaning set forth in Section
4.19(d).

                  "Base Rate" shall mean the base commercial lending rate of PNC
as publicly announced to be in effect from time to time, such rate to be
adjusted automatically, without notice, on the effective date of any change in
such rate. This rate of interest is determined from time to time by PNC as a
means of pricing certain loans to its customers and is neither tied to any
external rate of interest or index nor does it necessarily reflect the lowest
rate of interest actually charged by PNC to any particular class or category of
customers of PNC.

                  "Blocked Account" shall mean the commercial depository account
with Processor established by Borrower as provided in the Blocked Account
Agreement, or such other account maintained with the consent of Agent from time
to time by Borrower for the collection of Receivables and the cash proceeds of
the Collateral as required by Section 4.15(h).

                  "Blocked Account Agreement" shall mean the Blocked Account
Agreement, dated as of the Closing Date, among Agent, Borrower and Processor, in
substantially the form attached hereto as Exhibit 4.15(h), together with all
extensions, renewals, amendments, supplements, modifications, substitutions and
replacements thereto and thereof.

                  "Borrower" shall mean Centurion and all its permitted
successors and assigns.

                  "Borrowing Base Certificate" shall mean a certificate duly
executed by an officer of Borrower appropriately completed and in substantially
the form of Exhibit A hereto.

                  "Borrower's Account" shall have the meaning set forth in
Section 2.8.

                  "Business Day" shall mean (a) any day other than a day on
which commercial banks in New York are authorized or required by law to close
and (b) when used with respect to or in connection with Eurodollar Loans, which
is also a day on which dealings in Dollars are carried on between banks in the
London interbank Eurodollar market.

                  "Centurion China" shall mean Centurion Electronics Ltd.
(Shanjia), a company organized under the laws of China.

                  "Centurion Trading" shall mean Centurion International Trading
Co., Inc., a company organized under the laws of the U.S. Virgin Islands.

                                        2
<PAGE>   4
                  "CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. S Section 9601 et
seq.

                  "Change of Control" shall mean (a) the occurrence of any event
(whether in one or more transactions) which results in a transfer of control of
Borrower to a Person who is not the Majority Stockholder or (b) any merger or
consolidation of or with Borrower or sale of all or substantially all of the
property or assets of Borrower (other than a merger permitted by Section 15.17
hereof). For purposes of this definition, "control of Borrower" shall mean the
power, direct or indirect (x) to vote 50% or more of the interests having
ordinary voting power for the election of directors of Borrower or (y) to elect
a majority of the members of the board of directors of Borrower by contract or
otherwise.

                  "Charges" shall mean all taxes, charges, fees, imposts, levies
or other assessments, including, without limitation, all net income, gross
income, gross receipts, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, license, withholding, payroll,
employment, social security, unemployment, excise, severance, stamp, occupation
and property taxes, custom duties, fees, assessments, liens, claims and charges
of any kind whatsoever, together with any interest and any penalties, additions
to tax or additional amounts, imposed by any taxing or other authority, domestic
or foreign (including, without limitation, the Pension Benefit Guaranty
Corporation or any environmental agency or superfund), upon the Collateral,
Borrower or any of its Subsidiaries.

                  "Closing Date" shall mean December 31, 1998 or such other date
as may be agreed to by the parties hereto.

                  "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time and the regulations promulgated thereunder.

                  "Collateral" shall mean and include:

                  (a) all Receivables;

                  (b) all Equipment;

                  (c) all General Intangibles;

                  (d) all Inventory;

                  (e) all Real Property;

                  (f) all of Borrower's right, title and interest in and to (i)
its goods and other property including, but not limited to all merchandise
returned or rejected by Customers, relating to or securing any of the
Receivables; (ii) all of Borrower's rights as a consignor, a consignee, an

                                        3
<PAGE>   5
unpaid vendor, mechanic, artisan, or other lien or, including stoppage in
transit, setoff, detinue, replevin, reclamation and repurchase; (iii) all
additional amounts due to Borrower from any Customer relating to the
Receivables; (iv) other property, including warranty claims, relating to any
goods securing this Agreement; (v) all of Borrower's contract rights, rights of
payment which have been earned under a contract right, instruments, documents,
chattel paper, warehouse receipts, deposit accounts, money, securities and
investment property; (vi) if and when obtained by Borrower, all real and
personal property of third patties in which Borrower has been granted a lien or
security interest as security for the payment or enforcement of Receivables; and
(vii) any other goods, personal property or real property now owned or hereafter
acquired in which Borrower has expressly granted a security interest or may in
the future grant a security interest to Agent hereunder, or in any amendment or
supplement hereto, or under any other agreement between Agent and Borrower;

                  (g) all of Borrower's ledger sheets, ledger cards, files,
correspondence, records, books of account, business papers, computers, computer
software (owned by Borrower or in which it has an interest), computer programs,
tapes, disks and documents relating to clauses (a), (b), (c), (d), (e) or (f) of
this Definition; and

                  (h) all proceeds and products of (a), (b), (c), (d), (e), (f)
and (g) of this Definition in whatever form, including, but not limited to:
cash, deposit accounts (whether or not comprised solely of proceeds),
certificates of deposit, insurance proceeds (including hazard, flood and credit
insurance), negotiable instruments and other instruments for the payment of
money, chattel paper, security agreements, documents, eminent domain proceeds,
condemnation proceeds and tort claim proceeds.

                  Collateral shall not include assets of any foreign
Subsidiaries, any equity securities of Centurion China and Centurion Trading,
and more than 65% of each class or type of equity securities of any other
foreign Subsidiary.

                  "Commitment Date" shall mean the date on which Agent has
received commitments from Lenders to fund an aggregate of $47,000,000 of
Advances.

                  "Commitment Percentage" of any Lender shall mean the
percentage set f below such Lender's name on the signature page hereof as same
may be adjusted upon any assignment by a Lender pursuant to Section 15.3(c).

                  "Commitment Transfer Supplement" shall mean a document in the
form of Exhibit 15.3, hereto, properly completed and otherwise in form and
substance satisfactory to Agent by which the Purchasing Lender purchases and
assumes a portion of the obligation of Lenders to make Advances under this
Agreement.

                  "Consents" shall mean all filings and all licenses, permits,
consents, approvals, authorizations, qualifications and orders of governmental
authorities and other third parties, domestic

                                       4
<PAGE>   6
or foreign, necessary to carry on Borrower's business, including, without
limitation, any Consents required under all applicable federal, state or other
applicable law.

                  "Contract Rate" shall have the meaning set forth in Section
3.1.

                  "Controlled Group" shall mean all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
under common control which, together with Borrower, are treated as a single
employer under Section 414 of the Code.

                  "Current Assets" at a particular date, shall mean all cash,
cash equivalents, accounts and inventory of Borrower and all other items which
would, in conformity with GAAP, be included under current assets on a balance
sheet of Borrower as at such date; provided, however, that such amounts shall
not include (a) any amounts for any Indebtedness owing by an Affiliate to
Borrower, unless such Indebtedness arose in connection with the sale of goods or
rendering of services in the ordinary course of business and would otherwise
constitute current assets in conformity with GAAP, (b) any shares of stock
issued by an Affiliate of Borrower, or (c) the cash surrender value of any life
insurance policy.

                  "Current Liabilities" at a particular date, shall mean all
amounts which would, in conformity with GAAP, be included under current
liabilities on a balance sheet of Borrower as at such date, but in any event
including, without limitation, the amounts of (a) all Indebtedness of Borrower
payable on demand, or, at the option of the Person to whom such Indebtedness is
owed, not more than twelve (12) months after such date, (b) any payments in
respect of any Indebtedness of Borrower (whether installment, serial maturity,
sinking fund payment or otherwise) required to be made not more than twelve (12)
months after such date, (c) all reserves in respect of liabilities or
Indebtedness payable on demand or, at the option of the Person to whom such
Indebtedness is owed, not more than twelve (12) months after such date, the
validity of which is not contested at such date, and (d) all accruals for
federal or other taxes measured by income payable within a twelve (12) month
period.

                  "Customer" shall mean and include the account debtor with
respect to any Receivable and/or the prospective purchaser of goods, services or
both with respect to any contract or contract right, and/or any party who enters
into or proposes to enter into any contract or other arrangement with Borrower,
pursuant to which Borrower is to deliver any personal property or perform any
services.

                  "Deed of Trust" shall mean the deed of trust on the Real
Property securing the Obligations, in substantially the form attached hereto as
Exhibit 8.1(p) together with all extensions, renewals, amendments, supplements,
modifications, substitutions and replacements thereto and thereof.

                  "Default" shall mean an event which, with the giving of notice
or passage of time or both, would constitute an Event of Default.

                                        5
<PAGE>   7
                  "Default Rate" shall have the meaning set forth in Section
3.1.

                  "Depository Accounts" shall have the meaning set forth in
Section 4.15(h).

                  "Documents" shall have the meaning set forth in Section
8.1(c).

                  "Dollar" and the sign "$" shall mean lawful money of the
United States of America.

                  "Earnings Before Interest and Taxes" shall mean for any period
the sum of (i) Borrower's and its consolidated Subsidiaries' net income for such
period, (ii) all cash interest expense of Borrower and its consolidated
Subsidiaries for such period (other than interest on the Holdback Notes), and
(iii) all charges against Borrower's and its consolidated Subsidiaries' income
for such period for federal, state and local taxes based on such income minus
(iv) extraordinary gains plus (v) extraordinary losses.

                  "EBITDA" shall mean for any period the sum of (i) Earnings
Before Interest and Taxes for such period, (ii) depreciation expenses of
Borrower and its consolidated Subsidiaries for such period and (iii)
amortization expenses of Borrower and its consolidated Subsidiaries for such
period.

                  "Eligible Inventory" shall mean and include Inventory
consisting of antennas or batteries, valued at the lower of cost or market
value, determined on a first-in-first-out basis, which is not, in Agent's
reasonable opinion, obsolete, slow moving or unmerchantable and which Agent, in
its reasonable discretion, shall not deem ineligible Inventory, based on such
considerations as Agent may from time to time deem appropriate including,
without limitation, whether the Inventory is subject to a perfected, first
priority security interest in favor of Agent and whether the Inventory conforms
to all standards imposed by any governmental agency, division or department
thereof which has regulatory authority over such goods or the use or sale
thereof. Eligible Inventory shall not include sub-assemblies.

                  "Eligible Receivables" shall mean each Receivable unless
Agent, in its reasonable credit judgment, shall deem such Receivable not to be
an Eligible Receivable, based on such considerations as Agent may in its
reasonable discretion from time to time deem appropriate. In addition, a
Receivable shall be deemed not to be an Eligible Receivable if:

                  (a) it arises out of a sale made by Borrower to an Affiliate
of Borrower or to a Person controlled by an Affiliate of Borrower,

                  (b) it is due or unpaid more than (i) ninety (90) days after
the original due date or (ii) one hundred twenty (120) days after the original
invoice date;

                  (c) fifty percent (50%) or more of the Receivables from such
Customer are not deemed Eligible Receivables hereunder,

                                        6
<PAGE>   8
                  (d) any covenant, representation or warranty contained in this
Agreement with respect to such Receivable has been breached in any material
respect;

                  (e) the Customer shall (i) apply for, suffer, or consent to
the appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a substantial part of its property
or call a meeting of its creditors, (ii) admit in writing its inability, or be
generally unable, to pay its debts as they become due or cease operations of its
present business, (iii) make a general assignment for the benefit of creditors,
(iv) commence a voluntary case under any state or federal bankruptcy laws (as
now or hereafter in effect), (v) be adjudicated a bankrupt or insolvent, (vi)
file a petition seeking to take advantage of any other law providing for the
relief of debtors, (vii) acquiesce to, or fail to have dismissed, any petition
which is filed against it in any involuntary case under such bankruptcy laws, or
(viii) take any action for the purpose of effecting any of the foregoing;

                  (f) the sale is to a Customer outside the continental United
States of America or Canada (other than Customers that are, or are direct or
indirect wholly-owned subsidiaries of, Motorola, Inc., Ericsson L.M. Telephone
Company (Sweden) or Nokia Corp (Finland)), unless the sale is on letter of
credit, guaranty or acceptance terms, in each case acceptable to Agent in its
reasonable discretion;

                  (g) it is not subject to a perfected, first priority, security
interest in favor of Agent;

                  (h) it is not evidenced by an invoice or other documentary
evidence satisfactory to Lenders;

                  (i) the sale to the Customer is on a bill-and-hold, guaranteed
sale, sale-and-return, sale on approval, consignment or any other repurchase or
return basis or is evidenced by chattel paper;

                  (j) the Customer is the United States of America, any state or
any department, agency or instrumentality of any of them, unless Borrower
assigns its right to payment of such Receivable to Agent pursuant to the
Assignment of Claims Act of 1940, as amended (31 U.S.C. SubSection 3727 et seq.
and 41 U.S.C. Sub-Section 15 et seq.) or has otherwise complied with other
applicable statutes or ordinances;

                  (k) the goods giving rise to such Receivable have not been
shipped and delivered to and accepted by the Customer or the services giving
rise to such Receivable have not been performed by Borrower and accepted by the
Customer or the Receivable otherwise does not represent a final sale;

                  (l) the Receivables of the Customer exceed a credit limit
determined by Agent, in its reasonable discretion, to the extent such Receivable
exceeds such limit;

                  (m) the Receivable is subject to any offset, deduction,
defense, dispute, or

                                        7
<PAGE>   9
counterclaim the Customer is also a creditor or supplier or the Receivable is
contingent in any respect or for any reason;

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

                  (o) shipment of the merchandise or the rendition of services
has not been completed;

                  (p) any return, rejection or repossession of the merchandise
has occurred;

                  (q) such Receivable is not payable to Borrower or any of its
consolidated Subsidiaries, provided, that Receivables which are payable to any
such consolidated Subsidiaries must comply with all other eligibility criteria
set forth in the definition "Eligible Receivables" provided further, that
Receivables payable to Centurion China need not comply with clause (g) so long
as the applicable Customer is, or is a direct or indirect wholly-owned
subsidiary of, Motorola, Inc., Ericsson L.M. Telephone Company (Sweden) or Nokia
Corp. (Finland); or

                  (r) such Receivable is not otherwise satisfactory to Agent as
determined in good faith by Agent in the exercise of its discretion in a
reasonable manner.

                  "Environmental Complaint" shall have the meaning set forth in
Section 4.19(d).

                  "Environmental Laws" shall mean all federal, state and local
environmental, land use, zoning, worker health and safety, chemical use laws,
statutes, ordinances and codes relating to the protection of the environment
and/or governing the use, storage, treatment, generation, transportation,
processing, handling, production or disposal of Hazardous Substances and the
rules, regulations, policies, guidelines, interpretations, decisions, orders and
directives of federal, state and local governmental agencies and authorities
with respect thereto, in each case as now in force or hereafter enacted or
adopted, including without limitation CERCLA, the Hazardous Materials
Transportation Act, as amended (49 U.S.C. Sections 1801, et seq.) and RCRA.

                  "Equipment" shall mean and include all of Borrower's goods
(other than Inventory) whether now owned or hereafter acquired and wherever
located including, without limitation, all equipment, machinery, apparatus,
motor vehicles, fittings, furniture, furnishings, fixtures, parts, accessories
and all replacements and substitutions therefor or accessions thereto.

                  "Equipment Cost Verification" shall mean the equipment cost
verifications delivered from time to time by Borrower to Agent reflecting the
net cost (excluding taxes, freight, delivery, installation, overhead and other
so called soft costs) of Equipment then to be purchased by Borrower with
Equipment Loan proceeds in accordance with the provisions of Section 2.4(b),
which

                                        8
<PAGE>   10
Equipment Cost Verification shall be prepared by an officer of Borrower and
shall be satisfactory in all respects to Agent.

                  "Equipment Loan" shall mean an Advance made pursuant to
Section 2.4(b).

                  "Equipment Notes" shall mean the promissory notes described in
Section 2.4(b).

                  "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time and the rules and regulations promulgated
thereunder.

                  "Eurodollar Loans" means Advances the rate of interest
applicable to which is based upon the Eurodollar Rate.

                  "Eurodollar Rate" shall mean for any Eurodollar Rate Loan for
the then current interest Period relating thereto the interest rate per annum
determined by PNC by dividing (the resulting quotient rounded upwards, if
necessary, to the nearest 1/100th of 1% per annum) (i) the rate of interest
determined by PNC in accordance with its usual procedures (which determination
shall be conclusive absent manifest error) to be the average of the London
interbank offered rates for U.S. Dollars quoted by the British Bankers'
Association as set forth on Dow Jones Markets Service (formerly known as
Telrate) (or appropriate successor or, if British Banker's Association or its
successor ceases to provide such quotes, a comparable replacement determined by
PNC display page 3750 (or such other display page on the Dow Jones Markets
Service system as may replace display page 3750) two (2) Business Days prior to
the first day of such Interest Period for an amount comparable to such
Eurodollar Rate Loan and having a borrowing date and a maturity comparable to
such Interest Period by (ii) a number equal to 1.00 minus the Reserve
Percentage. The Eurodollar Rate may also be expressed by the following formula:

<TABLE>
<CAPTION>
<S>               <C>  <C>
                       Average of London interbank offered rates quoted by BBA as shown on
Eurodollar Rate   =    Dow Jones Markets Service display page 3750 or appropriate successor
                                         1.00 - Reserve Percentage
</TABLE>

                  "Event of Default" shall mean the occurrence of any of the
events set forth in Article X hereof.

                  "Excess Cash Flow" shall mean, with respect to any fiscal
period, EBITDA for such period MM cash interest and scheduled cash principal
payments on all Indebtedness for borrowed money for such period, minus permitted
capital expenditures to the extent not financed for such period, minus income
taxes paid for such period, minus permitted cash dividends on Series A
Convertible Preferred Stock and Series B Redeemable Preferred Stock.

                  "Facility Fee Amount" shall have the meaning set forth in
Section 3.2.

                                        9
<PAGE>   11
                  "Federal Funds Rate" shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or if such rate is not so published for
any day which is a Business Day, the average of quotations for such day on such
transactions received by PNC from three Federal funds brokers of recognized
standing selected by PNC.

                  "Fee Letter" shall mean the letter agreement dated December
30, 1998 between Borrower and Agent regarding certain fees payable to Agent.

                  "Fixed Charge Coverage Ratio" shall mean, with respect to any
fiscal period, the ratio of (a) EBITDA for such period minus the sum of (i)
capital expenditures for such period which are not financed and (ii) income and
franchise taxes paid for such period to (b) Senior Debt and Fixed Charge
Payments for such period.

                  "Foreign Exchange Contract" shall have the meaning set forth
in Section 3.1C.

                  "Foreign Exchange Obligations" shall have the meaning set
forth in Section 3.1C.

                  "Foreign Exchange Reserves" shall have the meaning set forth
in Section 3.3C.

                  "Formula Amount" shall mean an amount equal to the sum of:

                  (i)      85% of Eligible Receivables, plus

                  (ii)     the lesser of (A) the sum of (x) 60% of the Eligible
                           Inventory consisting of antennas plus (y) 50% of
                           Eligible Inventory consisting of batteries and (B)
                           the lesser of (x) $10,000,000 prior to the Commitment
                           Date and $11,500,000 on and after the Commitment Date
                           and (y) an amount equal to 50% of Advances (other
                           than the Term Loan and Equipment Loan), minus

                  (iii)    such reserves as Agent may reasonably deem proper and
                           necessary from time to time.

                  "Funded Debt" at a particular date, shall mean all
Indebtedness of Borrower that matures more than one year from the date of its
creation or matures within one year from such date but is renewable or
extendable, at the option of Borrower, to a date more than one year from such
date or arises under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one year from
such date, including, without limitation, all current maturities and current
sinking fund payments in respect of such Indebtedness whether or not required to
be paid within one year from the date of its creation, including, without
limitation, Indebtedness in respect of the Advances.

                                       10
<PAGE>   12
                  "GAAP" shall mean generally accepted accounting principles in
the United States of America in effect from time to time.

                  "General Intangibles" shall mean and include all of Borrower's
general intangibles, whether now owned or hereafter acquired including, without
limitation, all choses in action, causes of action, corporate or other business
records, inventions, designs, patents, patent applications, equipment
formulations, manufacturing procedures, quality control procedures, trademarks,
trade secrets, goodwill, copyrights, registrations, licenses, franchises,
customer lists, tax refunds, tax refund claim computer programs, all claims
under guaranties, security interests or other security held by or granted to
Borrower to secure payment of any of the Receivables by a Customer all rights of
indemnification and all other intangible property of every kind and nature
(other than Receivables).

                  "Governmental Body" shall mean any nation or government, any
state or other political subdivision thereof or any entity authorized to
exercise the legislative, judicial, regulatory or administrative functions of or
pertaining to a government.

                  "Hazardous Discharge" shall have the meaning set forth in
Section 4.19(d).

                  "Hazardous Substance" shall mean, without limitation, any
flammable or explosive, radon, radioactive materials, asbestos, urea
formaldehyde foam insulation, polychlorinated byphenyls, petroleum and petroleum
products, methane, hazardous materials, Hazardous Wastes, hazardous or toxic
substances as defined in the Environmental Laws.

                  "Hazardous Wastes" shall mean all hazardous waste materials
subject to regulation under the Environmental Laws.

                  "Holdback Notes" shall mean the promissory notes in an
aggregate principal amount of $3,000,000 issued by Borrower on April 18, 1997 to
Kuck Investment Partners, L.P., Lance J. Kuck and Scott M. Kuck.

                  "Indebtedness" of a Person at a particular date shall mean all
obligations of such Person which in accordance with GAAP would be classified
upon a balance sheet as liabilities (except capital stock and surplus earned or
otherwise) and in any event, without limitation by reason of enumeration, shall
include all indebtedness, debt and other similar monetary obligations of such
Person whether direct or guaranteed, and all premiums, if any, due at the
required prepayment dates of such indebtedness, and all indebtedness secured by
a Lien on assets owned by such Person, whether or not such indebtedness actually
shall have been created, assumed or incurred by such Person. Any indebtedness of
such Person resulting from the acquisition by such Person of any assets subject
to any Lien shall be deemed, for the purposes hereof, to be the equivalent of
the creation, assumption and incurring of the indebtedness secured thereby,
whether or not actually so created, assumed or incurred.

                                       11
<PAGE>   13
                  "Ineligible Security" shall mean any security which may not be
underwritten or dealt in by member banks of the Federal Reserve System under
Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as
amended.

                  "Initial Public Offering" shall mean the initial sale by the
Borrower of its common stock in an offering registered under the Securities Act
of 1933, as amended, other than an offering pursuant to a registration statement
on Form S-8 or any similar form.

                  "Intellectual Property Security Agreement" shall mean the
Copyright Patent and Trademark Security Agreement securing the Obligations, in
substantially the form attached hereto as Exhibit 8.1 (n)-1 together with all
extensions, renewals, amendments, supplements, modifications, substitutions and
replacements thereto and thereof.

                  "Interest Expense" shall mean for any fiscal period of
Borrower and its consolidated Subsidiaries, the amount which, on a consolidated
basis in conformity with GAAP (but excluding the effect of any interest income
for such fiscal period), would be deducted as interest expense (other than
interest payable under the Holdback Notes) in any determination of net income of
Borrower and its consolidated Subsidiaries for such fiscal period (including,
without limitation, the interest component of payments made under capital
leases).

                  "Interest Payment Date" shall mean (a) as to any Alternate
Base Rate Loan on the first Business Day of each calendar month occurring while
such Alternate Base Rate Loan is outstanding, commencing on February 1, 1999 and
(b) as to any Eurodollar Loan, the last day of each Interest Period for such
Loan.

                  "Interest Period" shall mean, with respect to any Eurodollar
Loan:

                           (i) initially, the period commencing on the borrowing
                  or conversion date, as the case may be, with respect to such
                  Eurodollar Loan and ending one, two or three months
                  thereafter, as selected by Borrower in its notice of borrowing
                  or notice of conversion, as the case may be, given with
                  respect thereto; and

                           (ii) thereafter, each period commencing on the last
                  day of the next preceding Interest Period applicable to such
                  Eurodollar Loan and ending one, two or three months
                  thereafter, as selected by Borrower by irrevocable notice to
                  Agent not less than three Business Days prior to the last day
                  of the then current Interest Period with respect thereto;

                  provided that all of the foregoing provisions relating to
         Interest Periods are subject to the following:

                           (1) if any Interest Period pertaining to a Eurodollar
                  Loan would otherwise end on a day that is not a Business Day,
                  such Interest Period shall be

                                       12
<PAGE>   14
                  extended to the next succeeding Business Day unless the result
                  of such extension would be to carry such Interest Period into
                  another calendar month in which event such Interest Period
                  shall end on the immediately preceding Business Day;

                           (2) any Interest Period that would otherwise extend
                  beyond the Termination Date or beyond the date final payment
                  is due on the Term Loan and the Equipment Loans shall end on
                  the Termination Date or such date of final payment, as the
                  case may be;

                           (3) any Interest Period pertaining to a Eurodollar
                  Loan that begins on the last Business Day of a calendar month
                  (or on a day for which there is no numerically corresponding
                  day in the calendar month at the end of such Interest Period)
                  shall end on the last Business Day of a calendar month, and

                           (4) Borrower shall select Interest Periods so as not
                  to require a payment or prepayment of any Eurodollar Loan
                  during an Interest Period for such Loan.

                  "Inventory" shall mean all of Borrower's now owned or
hereafter acquired goods, merchandise and other personal property, wherever
located, to be furnished under any contract of service or held for sale or lea ,
all raw materials, work in process, finished goods and materials and supplies of
any kind, nature or description which are or might be used or consumed in
Borrower's business or used in selling or furnishing such goods, merchandise and
other personal property, and all documents of title or other documents
representing than.

                  "Issuing Lender" means, in the case of any Letter of Credit,
the Lender that shall have issued such Letter of Credit, in its capacity as the
issuer thereof under Article III.

                  "Lender" and "Lenders" shall have the meaning ascribed to such
term in the Preamble and shall include each Person which is a Purchasing Lender.

                  "Lending Office" shall mean, with respect to any Lender, the
branch or branches from which any such Lender's Eurodollar Loans or Alternate
Base Rate Loans, as the case may be, are made or maintained and for the account
of which all payments of principal of, or interest on, such Lender's Eurodollar
Loans or Alternate Base Rate Loans are made, provided to Agent from time to time
in accordance, as the case may be, with Section 15.6.

                  "Letter of Credit" means any letter of credit issued or to be
issued hereunder by Issuing Lender for the account of Borrower pursuant to
Article IIIA.

                  "Letter of Credit Cash Collateral" shall have the meaning
ascribed to such term in Section 3.6A.

                  "Letter of Credit Cash Collateral Account" has the meaning
specified in Section 3.6A.

                                       13
<PAGE>   15
                  "Letter of Credit Obligations" shall mean, as at any date of
determination, the slim of the following amounts (without duplication): (i) with
respect to any Letter of Credit issued for the purpose of purchasing Eligible
Inventory consisting of batteries, 50% of the cost of such Eligible Inventory,
(ii) with respect to any Letter of Credit issued for the purpose of purchasing
Eligible Inventory consisting of antennas, 400/6 of the cost of such Eligible
Inventory, (iii) the cost of freight, taxes, duty and other amounts which
Agent estimates must be paid in connection with the Inventory referred to in the
preceding clauses (i) and (ii) upon arrival and for delivery to one of
Borrower's locations for Eligible Inventory within the United States, (iv) with
respect to any Letter of Credit issued for any other purpose, an amount equal to
I W/O of the stated amount thereof and all other commitments and obligations
made or incurred by Issuing Lender with respect thereto and (v) the aggregate
amount of all Reimbursement Obligations.

                  "Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, security interest, Hen (whether statutory or
otherwise), charge, claim or encumbrance, or preference, priority or other
security agreement or preferential arrangement held or asserted in respect of
any asset of any kind or nature whatsoever including, without limitation, any
conditional sale or other title retention agreement, any lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement under the Uniform Commercial
Code or comparable law of any jurisdiction.

                  "Loan" shall mean either an Alternative Base Rate Loan or a
Eurodollar Loan.

                  "Loan Year" shall mean each period Of twelve (12) consecutive
months commencing on the Closing Date and on each anniversary thereof.

                  "Majority Stockholder" shall mean collectively Cornerstone
Equity Investors, IV, L.P. and Prudential Private Equity Investors, III, L.P.

                  "Material Adverse Effect" shall mean a material adverse effect
on (i) the business, assets, operations, prospects or financial condition of
Borrower or any of its Subsidiaries, (ii) Borrower's ability to pay the
Obligations in accordance with the terms thereof, (iii) the Collateral or
Agent's Liens on the Collateral or the priority of any such Lim or (iv) Agent's
and Lenders' rights and remedies under this Agreement and the Other Documents.

                  "Maturity Date" shall have the meaning set forth in Section
13.1.

                  "Maximum Equipment Loan Amount" shall mean (x) from the
Closing Date to the Commitment Date, $2,000,000 and (y) on the Commitment Date
and thereafter, $4,000,000.

                  "Maximum Foreign Exchange Facility Amount" shall mean
$2,000,000.

                  "Maximum Letter of Credit Stated Amount"shall mean $4,000,000.

                                       14
<PAGE>   16
                  "Maximum Loan Amount" shall mean (x) from the Closing Date to
the Commitment Date, $42,000,000 and (y) on the Commitment Date and thereafter,
$47,000,000, in each case less the aggregate amount of all repayments of the
Term Loan and the Equipment Loans.

                  "Maximum Revolving Advance Amount" shall mean (x) from the
Closing Date to the Commitment Date, $20,000,000 and (y) on the Commitment Date
and thereafter, $23,000,000.

                  "Notes" shall mean, collectively, the Term Notes, the
Equipment Notes and the Revolving Credit Notes.

                  "Obligations" shall mean and include Indebtedness, obligations
and liabilities of Borrower to Agent (in such capacity and as Issuing Lender)
and each Lender now existing or hereafter incurred, under or arising out of or
in connection with the Advances, the Letters of Credit, the Foreign Exchange
Contacts, this Agreement, or any of the Other Documents, whether for principal,
interest, fees, expenses, indemnities or otherwise.

                  "Other Documents" shall mean the Blocked Account Agreement,
the Deed of Trust, the Intellectual Property Security Agreement, the Notes, the
Questionnaire, any and all stock pledge, security and other documents granting
Agent additional Liens as security for the obligations as by Section 6.9 and
7.4, and any and all other agreements, instruments and documents, including,
without limitation, guaranties, security agreements, pledges, powers of
attorney, consents, and all other writings now or hereafter executed by Borrower
and/or delivered to Agent or any Lender in respect of the transactions
contemplated by this Agreement.

                  "Participant" shall mean each Person who shall be granted the
right by any Lender to participate in any of the Advances and who shall have
entered into a participation agreement in form and substance satisfactory to
such Lender.

                  "Payment Office" shall mean initially Two Tower Center
Boulevard, East Brunswick, New Jersey 08816; thereafter, such other office of
Agent, if any, which it may designate by notice to Borrower and to each Lender
to be the Payment Office.

                  "Permitted Encumbrances" shall mean (a) Liens in favor of
Agent for the benefit of Agent and Lenders; (b) Liens for taxes, assessments or
other governmental charges not delinquent, or, being contested in good faith and
by appropriate proceedings and with respect to which proper reserves have been
taken by Borrower; provided, that, the Lien shall have no effect on the priority
of the Liens in favor of Agent or the value of the assets in which Agent has
such a Lien and a stay of enforcement of any such Lien shall be in effect; (c)
deposits or pledges to secure obligations under worker's compensation, social
security or similar laws, or under unemployment insurance; (d) deposits or
pledges to secure bids, tenders, contracts (other than contracts for the payment
of money), leases, statutory obligations, surety and appeal bonds and other
obligations of like nature arising in the ordinary course of Borrower's
business; (e) judgment Liens that have been stayed or bonded and mechanics',
worker's, materialmen's or other like Liens arising in the ordinary course

                                       15
<PAGE>   17
of Borrower's business with respect to obligations which are not due or which
are being contested in good faith by Borrower, (f) Liens placed upon fixed
assets hereafter acquired to secure a portion of the purchase price thereof,
provided that (x) any such lien shall not encumber any other property of
Borrower and (y) the aggregate amount of Indebtedness secured by such Liens
incurred as a result of such purchases during any fiscal year shall not exceed
the amount provided for in Section 7.6; (g) Liens disclosed on Schedule 1.2 and
(h) Liens covering assets that are acquired by Borrower or any Subsidiary, to
the extent such acquisition is otherwise permitted hereunder.

                  "Person" shall mean an individual, a partnership, a
corporation, a business bust, a joint stock company, a bust, an unincorporated
association, a joint venture, a limited liability company, a limited liability
partnership, a governmental authority or any other entity of whatever nature.

                  "Plan" shall mean any employee benefit plan within the meaning
of Section 3(3) of ERISA, maintained for employees of Borrower or any member of
the Controlled Group or any such Plan to which Borrower or any member of the
Controlled Group is required to contribute on behalf of any of its employees.

                  "PNC Collateral Account" shall have the meaning ascribed to
such term in Section 4.15(j).

                  "Processor" shall mean Norwest Bank Nebraska, National
Association, at which Borrower has established the Special Account pursuant to
the Blocked Account Agreement, or such other bank reasonably satisfactory to
Agent at which the Blocked Account shall be maintained from time to time in
accordance with this Agreement.

                  "Pro Forma Balance Sheet" shall have the meaning set forth in
Section 5.5(a).

                  "Pro Forma Financial Statements" shall have the meaning set
forth in Section 5.5(b).

                  "Projections" shall have the meaning set forth in Section
5.5(b).

                  "Purchasing Lender" shall have the meaning set forth in
Section 15.3(c).

                  "Questionnaire" shall mean the Documentation Information
Questionnaire and the responses thereto provided by Borrower and delivered to
Agent.

                  "RCRA" shall mean the Resource Conservation and Recovery Act,
42 U.S.C. Section 6901 et seq., as same may be amended from time to time.

                  "Real Property" shall mean all of Borrower's right, title and
interest in and to the premises located at 3425 North 44th Street, Lincoln,
Nebraska.

                                       16
<PAGE>   18
                  "Receivables" shall mean and include all of Borrower's and its
consolidated Subsidiaries' accounts, contract rights, instruments (including
those evidencing indebtedness among Borrower and its Affiliates), documents,
chattel paper, general intangibles relating to accounts, drafts and acceptances,
and all other forms of obligations owing to Borrower arising in the ordinary
course of Borrower's business out of or in connection with the sale of Inventory
or the rendition of services, all guarantees and other security therefor,
whether secured or unsecured, now existing or hereafter created, and whether or
not specifically sold or assigned to Lenders hereunder.

                  "Reimbursement Obligation" shall have the meaning set forth in
Section 3.3A.

                  "Release" shall have the meaning set forth in Section
5.7(c)(i).

                  "Reportable Event" shall mean a reportable event described in
Section 4043(b) of ERISA or the regulations promulgated thereunder.

                  "Required Lenders" shall mean Lenders the Commitment
Percentages of which aggregate at least sixty six percent (66%).

                  "Reserve Percentage" shall mean the maximum effective
percentage in effect on any day as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining the reserve
requirements (including, without limitation, supplemental, and emergency reserve
requirements) with respect to eurocurrency funding.

                  "Revolving Advances" shall mean Advances made other than the
Term Loan or the Equipment Loans.

                  "Revolving Credit Notes" shall mean the promissory notes
referred to in Section 2.1(a).

                  "Revolving Interest Rate" shall mean an interest rate per
annum equal to (a) in the case of Revolving Advances and Equipment Loans made as
Alternate Base Rate Loans, the sum of the Alternate Base Rate plus one-half of
one percent (.50%) and (b) in the case of Revolving Advances and Equipment Loans
made as Eurodollar Loans, the sum of the Eurodollar Rate plus two and one half
percent (2.50%).

                  "Section 20 Subsidiary" shall mean the Subsidiary of the bank
holding company controlling PNC, which Subsidiary has been granted authority by
the Federal Reserve Board to underwrite and deal in certain Ineligible
Securities.

                  "Senior Debt and Fixed Charge Payments" shall mean and include
(without duplication) for any fiscal period the aggregate amount of cash
actually expended by Borrower to pay (a) Interest Expense, (b) scheduled
principal payments on the Term Loan and the Equipment Loans, (c) payments for
all fees, commissions and charges set forth herein, including without

                                       17
<PAGE>   19
limitation, with respect to all Advances, Letters of Credit and Foreign Exchange
Contracts, but excluding any such fees paid on the Closing Date, and (d) cash
dividend payments made by Borrower with respect to Borrower's preferred stock
during such period other than dividend payments permitted by Section 2.12, to
the extent permitted hereunder.

                  "Series A Convertible Preferred Stock" shall mean the Series A
Convertible Preferred Stock, par value $.01 per share, of Borrower, authorized
under the Restated Article of Incorporation of Borrower and in effect on the
date hereof, issued by Borrower with an aggregate liquidation preference
(excluding dividends) of $16,000,000.

                  "Series B Redeemable Preferred Stock" shall mean the Series B
Redeemable Preferred Stock, par value S.01 per share, of Borrower, authorized
under the Restated Articles of Incorporation of Borrower and in effect on the
date hereof, issued by Borrower with an aggregate liquidation preference
(excluding dividends) of $9,500,000.

                  "Settlement Date" shall mean the Closing Date and thereafter
Wednesday of each week unless such day is not a Business Day in which case it
shall be the next succeeding Business Day.

                  "Subordinated Notes" shall mean the 12% Subordinated Notes Due
April 18, 2004 issued by Borrower in the aggregate principal amount of
$18,000,000.

                  "Subsidiary" shall mean as to any Person a corporation or
other entity whose sham of stock or other ownership interests having ordinary
voting power (other than stock or other ownership interests having such power
only by reason of the happening of a contingency) to elect a majority of the
directors of such corporation, or other Persons performing similar functions for
such entity, are owned, directly or indirectly, by such Person.

                  "Taxes" shall have the meaning set forth in Section 3.9.

                  "Term" means the period beginning on the Closing Date and
ending on the first to occur of the Maturity Date or the Termination Date.

                  "Termination Date" shall have the meaning set forth in Section
13.1.

                  "Term Loan" shall mean the Advances made pursuant to Section
2.4(a).

                  "Term Loan Rate" shall mean an interest rate per annum equal
to the sum of (a) in the case of the Term Loan made as Alternate Base Rate
Loans, the Alternate Base Rate plus three-quarters of one percent (.75%) and (b)
in the case of the Term Loan made as Eurodollar Loans, the sum of the Eurodollar
Rate plus two and three-quarters percent (2.75%).

                  "Term Notes" shall mean the promissory notes described in
Section 2.4(a).

                                       18
<PAGE>   20
                  "Termination Event" shall mean (i) a Reportable Event with
respect to any Plan or Multiemployer Plan; (ii) the withdrawal of either
Borrower or any member of the Controlled Group from a Plan or Multiemployer Plan
during a plan year in which such entity was a "substantial employer" as defined
in Section 4001(a)(2) of ERISA; (iii) the providing of notice of intent to
terminate a Plan in a distress termination described in Section 4041(c) of
ERISA; (iv) the institution by the PBGC of proceedings to terminate a Plan or
Multiemployer Plan; (y) any event or condition (a) which might constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan or Multiemployer Plan, or (b) that may
result in termination of a Multiemployer Plan pursuant to Section 4041A of
ERISA; or (vi) the partial or complete withdrawal within the meaning of Sections
4203 and 4205 of ERISA, of either Borrower or any member of the Controlled Group
from a Multiemployer Plan.

                  "Tranche" shall mean Eurodollar Loans all of which have
Interest Periods that begin on the same date and end on the same later date
(whether or not such Loans shall originally have been made on the same day).

                  "Transferee" shall have the meaning set forth in Section
15.3(b).

                  "Transactions" shall have the meaning set forth in Section
5.5(a).

                  "Type" shall mean, as to any Loan, its nature as an
Alternative Base Rate Loan or a Eurodollar Loan.

                  "Undrawn Availability" shall mean, at any time, an amount
equal to the lesser of (a) the Formula Amount or (b) the Maximum Revolving
Advance Amount, in each case less the slim of the following amounts (without
duplication) at such time: (i) the aggregate outstanding principal amount of all
Revolving Advances, (ii) the aggregate amount of all Foreign Exchange Reserves
and Foreign Exchange Obligations (iii) all amounts due and owing to Borrower's
trade creditors which are outstanding more than sixty (60) days past the due
date thereof, and (iv) with respect to clause (a) above, the aggregate amount of
all Letter of Credit Obligations, and with respect to clause (b) above, the
aggregate stated amount of all outstanding Letters of Credit and the aggregate
amount of all outstanding Reimbursement Obligations.

                  "Week" shall mean the time period commencing with the opening
of business on a Wednesday and ending on the end of business the following
Tuesday.

                  "Working Capital" shall mean, at any date, (a) Current Assets
(excluding cash), less (b) Current Liabilities (other than the current portion
of long-term Indebtedness of Borrower at such time, determined in accordance
with GAAP).

         1.3 Uniform Commercial Code Terms. All terms used herein and defined in
the Uniform Commercial Code as adopted in the State of New York shall have the
meaning given therein unless otherwise defined herein.

                                       19
<PAGE>   21
         1.4 Certain Matters of Construction. The terms "herein", "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular section, paragraph or subdivision, and all references
herein to numbered Sections or Articles refer to Sections or Articles of this
Agreement Any pronoun used shall be deemed to cover all genders. Wherever
appropriate in the context, terms used herein in the singular also include the
plural and vice versa. All references to statutes and related regulations shall
include any amendments of same and any successor statutes and regulations. All
references to any instruments or agreements, including, without limitation,
references to any of the Other Documents shall include any and all modifications
or amendments thereto and any and all extensions or renewals thereof.

                             II. ADVANCES, PAYMENTS.

         2.1 Revolving Advances. (a) Subject to the terms and conditions set
forth in this Agreement, each Lender, severally and not jointly, will make
Revolving Advances to Borrower in aggregate amounts outstanding at any time
equal to such Lender's Commitment Percentage of up to the lesser of (x) the
Maximum Revolving Advance Amount and (y) the Formula Amount; provided, however,
the Lenders shall not be required to make any Revolving Advance at any time to
the extent that after giving effect to such Advance, Undrawn Availability would
be less than zero. The Revolving Advances of each Lender shall be evidenced by
secured promissory notes (each, a "Revolving Credit Note") substantially in the
form attached hereto as Exhibit 2. 1(a) and shall be secured by the Collateral.

                  (b) Discretionary Rights as to Advance Rates: Reserves. The
Advance Rates may be increased (subject to Section 15.2(b)(ii)) or decreased,
and the reserves referred to in clause (iii) of the definition of Formula Amount
may be increased or decreased, by Agent at any time and from time to time in the
exercise of its reasonable discretion. Borrower consents to any such increases
or decreases and acknowledges that decreasing the Advance Rates or imposing or
increasing such reserves may limit or restrict Advances requested by Borrower.
Agent shall give Borrower prior written notice of its intention to decrease any
of the Advance Rates or impose, increase or decrease any such reserves.

                  (c) Types of Revolving Advances. The Revolving Advances made
pursuant to this Section 2.1 may from time to time be (i) Eurodollar Loans, (ii)
Alternate Base Rate Loans or (iii) a combination thereof, as determined by
Borrower and notified to Agent in accordance with Sections 2.2(a) and 2.14.

         2.2 (a) Procedure for Borrowings. Borrower shall give Agent irrevocable
notice (which notice must be received by Agent prior to 10:00 AM on a Business
Day, New York City time, three Business Days prior to the requested borrowing
date, if all or any part of the Revolving Advances, Term Loan or Equipment Loans
to which such notice relates are to be Eurodollar Loans, or prior to 12:00 noon,
New York City time, on a Business Day that is the date of the requested
borrowing, if all of the Revolving Advances, Term Loan or Equipment Loans to
which such notice

                                       20
<PAGE>   22
relates are to be Alternate Base Rate Loans; provided that, with respect to the
Term Loan to be made on the Closing Date, the borrowing request therefor may, at
the discretion of Agent, be delivered later than the times specified above),
specifying (i) whether the borrowing to which such notice relates is to be a
Revolving Advance, a Term Loan or an Equipment Loan, (ii) the amount to be
borrowed, (iii) the requested borrowing date, (iv) whether the requested
borrowing is to be of Eurodollar Loans, Alternate Base Rate Loans or a
combination thereof and (v) if the borrowing is to be entirely or partly of
Eurodollar Loans, the amount of such Loan and the initial Interest Period
therefor. Each borrowing made as a Revolving Advance shall be in an amount equal
to at least $100,000 (or, if the Undrawn Availability is less than $100,000,
such lesser amount). Each borrowing made as an Equipment Loan shall be in an
amount equal to at least $50,000.

                  (b) Deemed Requests for Revolving Advances. Should any amount
required to be paid as interest hereunder, or as fees or other charges under
this Agreement or any other agreement with Agent or Lenders, or with respect to
any other obligation, including, without limitation, any Reimbursement
Obligation or Foreign Exchange Obligations as contemplated by Section 3.3A and
Section 3.1C, or amount remain unpaid within two (2) Business Days after the
same amount became due, same shall be deemed a request for a Revolving Advance
as of the date two (2) Business days after such payment became due, in the
amount required to pay in full such interest, fee, charge or Obligation under
this Agreement or any other agreement with Agent or Lenders, and such request
shall be irrevocable.

         2.3 Disbursement of Advance Proceeds. All Advances shall be disbursed
from whichever office or other place Agent may designate from time to time and,
together with any and all other Obligations of Borrower to Agent or Lenders,
shall be charged to Borrower's Account on Agent's books. During the Term,
Borrower may use the Revolving Advances by borrowing, prepaying and reborrowing,
all in accordance with the terms and conditions hereof. The proceeds of each
Revolving Advance requested by Borrower or deemed to have been requested by
Borrower under Section 2.2 shall, with respect to requested Revolving Advances
to the extent Lenders make such Revolving Advances, be made available to
Borrower on the day so requested by way of credit to Borrower's operating
account at PNC, or such other bank as Borrower may designate following
notification to Agent, in immediately available federal funds or other
immediately available funds or, with respect to Revolving Advances deemed to
have been requested, be disbursed to Agent to be applied to the outstanding
obligations giving rise to such deemed request.

         2.4 (a) Term Loan. Subject to the terms and conditions of this
Agreement, each Lender, severally and not jointly, will make a Term Loan to
Borrower in the sum equal to such Lender's Commitment Percentage of $20,000,000.
The Term Loan shall be advanced on the Closing Date and shall be, with respect
to principal, payable in consecutive monthly installments of $238,095 commencing
on February 1, 1999 and on the first day of each month thereafter, with a final
installment in an amount equal to the entire remaining outstanding balance
thereof, payable on the last day of the Term, subject to acceleration upon the
occurrence of an Event of Default under this Agreement or termination of this
Agreement and to mandatory prepayments pursuant to Section

                                       21
<PAGE>   23
2.11. The Term Loan shall be evidenced by secured promissory notes (each, a
"Term Note") in substantially the form attached hereto as Exhibit 2.4(a) and
shall be secured by the Collateral.

                  (b) Equipment Loans. (i) Subject to the terms and conditions
of this Agreement (including, without limitation, the terms and conditions of
Section 8.2(e)), each Lender, severally and not jointly, shall, from time to
time during the period commencing on the Closing Date and ending on the third
anniversary of the Closing Date make Advances to Borrower ("Equipment Loans") to
finance Borrower's purchase of Equipment for use in Borrower's business based
upon such Lender's Commitment Percentage of the requested Equipment Loan. All
such Equipment Loans shall be in such amounts as are requested by Borrower, but
in no event shall the amount of any Equipment Loan exceed eighty percent (80%)
of the net cost (excluding taxes, freight, delivery, installation, overhead and
other so called soft costs) of the Equipment then to be purchased by Borrower,
nor shall the total amount of all Equipment Loans made hereunder exceed, in the
aggregate, the Maximum Equipment Loan Amount. Once repaid, Equipment Loans may
not be reborrowed.

                           (ii) Advances constituting Equipment Loans shall be
accumulated during each Loan Year. At the end of each Loan Year, the sum of all
Equipment Loans made during such Loan Year shall amortize on the basis of an
eighty-four (84) month schedule (each such monthly amount as determined with
respect to any Loan Year, the "Amortization Amount"). Monthly principal payments
will be determined for the Equipment Loans made during the first Loan Year and
the amount of such monthly principal payments shall be increased upon completion
of the subsequent Loan Year by the applicable Amortization Amount for each month
with respect to the subsequent Loan Year. The Equipment Loans shall, with
respect to principal, be payable in consecutive monthly installments based upon
the amortization schedule set forth above, commencing January 1, 2000 and on the
first day of each month thereafter, with a final installment in an amount equal
to the entire remaining outstanding balance of all. Equipment Loans, payable on
the Maturity Date, subject to (x) acceleration upon the occurrence of an Event
of Default under this Agreement or termination of this Agreement, and (y)
mandatory prepayments pursuant to Section 2.11. The Equipment Loans shall be
evidenced by secured promissory notes (each, an "Equipment Note") in
substantially the form attached hereto as Exhibit 2.4(b) and shall be secured by
the Collateral.

                  (c) Types of Term Loan and & Equipment Loans. The Term Loan
and the Equipment Loans may from time to time be (i) Eurodollar Loans, (ii)
Alternate Base Rate Loans or (iii) a combination thereof, as determined by
Borrower and notified to Agent in accordance with Sections 2.2(a) and 2.14.

         2.5 Maximum Advances. The aggregate unpaid principal balance of
Advances plus the stated amount of all Letters of Credit, all Reimbursement
Obligations, the face amount of all Foreign Exchange Contracts and all Foreign
Exchange Obligations outstanding at any time shall not exceed the Maximum Loan
Amount Subject to the provisions of Section 2.1 (a) further limiting the
availability of Revolving Advances, the aggregate unpaid principal balance of
Revolving Advances plus the stated amount of all Letters of Credit, all
Reimbursement Obligations, the face amount of

                                       22
<PAGE>   24
all Foreign Exchange Contracts and all Foreign Exchange Obligations outstanding
at any time shall not exceed the Maximum Revolving Advance Amount.

         2.6 Repayment of Advance.

                  (a) The Advances shall be due and payable in full on the
Maturity Date subject to earlier prepayment as herein provided. The Term Loan
shall be due and payable as provided in Section 2.4(a) and in the Term Note. The
Equipment Loans shall be due and payable as provided in Section 2.4(b) and in
the Equipment Note.

                  (b) Borrower recognizes that the amounts evidenced by checks,
notes, drafts or any other items of payment relating to and/or proceeds of
Collateral may not be collectible by Agent on the date received. In
consideration of Agent's agreement to conditionally credit Borrower's Account as
of the Business Day on which Agent receives those items of payment, Borrower
agrees that, in computing the charges under this Agreement, all items of payment
shall be deemed applied by Agent on account of the Obligations one (1) Business
Day after receipt by Agent by wire transfer or electronic depository check of
such payments. Agent is not, however, required to credit Borrower's Account for
the amount of any item of payment which is unsatisfactory to Agent and Agent may
charge Borrower's Account for the amount of any item of payment which is
returned to Agent unpaid.

                  (c) All payments of principal, interest, fees and other
amounts payable hereunder (including prepayments), or under any of the Other
Documents shall be made without setoff or counterclaim and shall be made to
Agent on behalf of Lenders, as appropriate, at the Payment Office not later than
1:00 PM (New York Time) on the due date therefor in Dollars in federal funds or
other funds immediately available to Agent. Agent shall have the right to
effectuate payment on any and all Obligations due and owing hereunder by
charging Borrower's Account or by making Advances as provided in Section 2.2(b).
Payments on account of the Advances are also subject to the provisions of
Section 4.15(h) and the Blocked Account Agreement.

                  (d) Borrower shall pay principal, interest, and all other
amounts payable hereunder, or under any related agreement, without any deduction
whatsoever, including, but not limited to, any deduction for any setoff or
counterclaim.

         2.7 Repayment of Excess Advances. The aggregate balance of Advances
outstanding at any time in excess of the maximum amount of Advances permitted
hereunder shall be immediately due and payable without the necessity of any
demand, at the Payment Office, whether or not a Default or Event of Default has
occurred.

         2.8 Statement of Account. Agent shall maintain, in accordance with its
customary procedures, a loan account ("Borrower's Account") in the name of
Borrower in which shall be recorded the date and amount of each Advance made by
Lenders and the date and amount of each payment in respect thereof; provided,
however, the failure by Agent to record the date and amount

                                       23
<PAGE>   25
of any Advance shall not adversely affect Agent or any Lender. Each month, Agent
shall send to Borrower a statement showing the accounting for the Advances made,
payments made or credited in respect thereof, and other transactions between
Lenders and Borrower, during such month. The monthly statements shall be deemed
correct and binding upon Borrower in the absence of manifest error and shall
constitute an account stated between Lenders and Borrower unless Agent receives
a written statement of Borrower's specific exceptions thereto within thirty (30)
days after such statement is received by Borrower. The records of Agent with
respect to the loan account shall be conclusive evidence absent manifest error
of the amounts of Advances and other charges thereto and of payments applicable
thereto.

         2.9 Additional Payments. Any sums expended by Agent or any Lender due
to Borrower's failure to perform or comply with its obligations under this
Agreement or any Other Document including, without limitation, Borrower's
obligations under Sections 4.2, 4.4, 4.12, 4.13, 4.14 and 6. 1, may be charged
to Borrower's Account as a Revolving Advance and added to the Obligations.

         2.10 Manner of Borrowing and Payment.

                  (a) Each borrowing of Revolving Advances shall be advanced
according to the Commitment Percentages of Lenders. The Term Loan and Equipment
Loan shall each be advanced according to the Commitment Percentages of Lenders.

                  (b) Each payment (including each prepayment) by Borrower on
account of the principal of and interest on a type of Advance shall be applied
to the applicable type of Advance pro rata according to the Commitment
Percentages of Lenders. Except as expressly provided herein, all payments
(including prepayments) to be made by Borrower on account of principal, interest
and fees shall be made without set-off or counterclaim and shall be made to
Agent on behalf of Lenders to the Payment Office, in each case on or prior to
1:00 PK New York time, in Dollars and in immediately available funds. Payments
on account of the Revolving Advances are also subject to the provisions of
Section 4.15(h).

                  (c) (i) Notwithstanding anything to the contrary contained in
Sections 2.10(a) and (b), commencing with the first Business Day following the
Closing Date, each borrowing of Revolving Advances shall be advanced by Agent
and each payment by Borrower on account of Revolving Advances shall be applied
first to those Revolving Advances made by Agent. On or before 1:00 PM, New York
time, on each Settlement Date commencing with the first Settlement Date
following the Closing Date, Agent and Lenders shall make certain payments as
follows: (1) if the aggregate amount of new Revolving Advances made by Agent
during the preceding Week exceeds the aggregate amount of repayments applied to
outstanding Revolving Advances during such preceding Week, then each Lender
shall provide Agent with funds in an amount equal to its Commitment Percentage
of the difference between (w) such Revolving Advances and (x) such repayments
and (11) if the aggregate amount of repayments applied to outstanding Revolving
Advances during such Week exceeds the aggregate amount of new Revolving Advances
made

                                       24
<PAGE>   26
during such Week, then Agent shall provide each Lender with its Commitment
Percentage of the difference between (y) such repayments and (z) such Revolving
Advances.

                           (ii) Each Lender shall be entitled to earn interest
at the Contract Rate on outstanding Advances which it has funded.

                           (iii) Promptly following each Settlement Date, Agent
shall submit to each Lender a certificate with respect to payments received and
Advances made during the week immediately preceding such Settlement Date. Such
certificate of Agent shall be conclusive in the absence of manifest error.

                  (d) If any Lender or Participant (a "benefitted Lender") shall
at any time receive any payment of all or part of its Advances, or interest
thereon, or receive any Collateral in respect thereof (whether voluntarily or
involuntarily or by setoff) in a greater proportion than any such payment to and
Collateral received by any other Lender, if any, in respect of such other
Lender's Advances, or interest thereon, and such greater proportionate payment
or receipt of Collateral is not expressly permitted hereunder, such benefitted
Lender shall purchase for cash from the other Lenders such portion of each such
other Lender's Advances, or shall provide such other Lender with the benefits of
any such Collateral, or the proceeds thereof, as shall be necessary to cause
such benefitted Lender to share the excess payment or benefits of such
Collateral or proceeds ratably with each other Lender provided, however, that if
all or any portion of such excess payment or benefits is thereafter recovered
from such benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest. Each Lender so purchasing a portion of another Lender's Advances may
exercise all rights of payment (including, without limitation, rights of
set-off) with respect to such portion as fully as if such Lender were the direct
holder of such portion.

                  (e) Unless Agent shall have been notified by telephone,
confirmed in writing, by any Lender that such Lender will not make the amount
which would constitute its Commitment Percentage of the Advances available to
Agent, Agent may (but shall not be obligated to) assume that such Lender shall
make such amount available to Agent and, in reliance upon such assumption, make
available to Borrower a corresponding amount. Agent will promptly notify
Borrower of its receipt of any such notice from a Lender. If such amount is made
available to Agent on a date after a Settlement Date, such Lender shall pay to
Agent on an amount equal to the product of (i) the daily average Federal Funds
Rate (computed on the basis of a year of 360 days) during such period as quoted
by Agent, times (ii) such amount, times (iii) the number of days from and
including such Settlement Date to the date on which such amount becomes
immediately available to Agent. A certificate of Agent submitted to any Lender
with respect to any amounts owing under this paragraph (e) shall be conclusive,
in the absence of manifest error. If such amount is not in fact made available
to Agent by such Lender within three (3) Business Days after such Settlement
Date, Agent shall be entitled to recover such an amount, with interest thereon
at the rate per annum. then applicable to Revolving Advances hereunder, on
demand from Borrower; provided, however, that Agent's right

                                       25
<PAGE>   27
to such recovery shall not prejudice or otherwise adversely affect Borrower's
rights (if any) against such Lender.

                  (f) Each Lender may, at its option, make or maintain any
Eurodollar Loan by causing a Lending Office of such Lender to make or maintain
such Loan; provided, however, that any exercise of such option shall not affect
the obligation of Borrower to repay such Loan in accordance with the terms of
this Agreement.

                  (g) In the event, and on each occasion, that on the date two
Business Days prior to the commencement of any Interest Period for any
Eurodollar Loan to be made or maintained by a Lender, such Lender shall have
determined (which determination shall be conclusive and binding upon Borrower)
that dollar deposits in the unpaid principal amount of such Eurodollar Loan are
not generally available in the London interbank market, or that the rate at
which such dollar deposits are being offered will not adequately and fairly
reflect the cost to such Lender of making or maintaining the principal amount of
such Eurodollar Loan during such Interest Period, such Lender shall promptly
give Borrower and Agent notice of such determination. For one Business Day after
receipt of such notice, Borrower shall have the right to withdraw any request
for a Eurodollar Loan pursuant to Section 2.2(a) by notice to Agent. If notice
is not received from Borrower, such request shall be deemed to be a request for
an Alternate Base Rate Loan and Agent shall notify the Lenders accordingly.
After any notice of such a determination shall have been given by a Lender and
until the circumstances giving rise to such notice no longer exist, each request
to make, convert or maintain a Eurodollar Loan pursuant to Section 2.2(a) or
2.14 shall be deemed to be a request to make or convert into an Alternate Base
Rate Loan. Each determination by a Lender hereunder shall be conclusive absent
manifest error. Any Lender giving notice as described above shall notify
Borrower and Agent at such time as the circumstances giving rise to such notice
cease to exist.

         2.11 Mandatory and Optional Prepayments.

                  (a) Except as otherwise expressly provided in Section 4.3,
when Borrower sells or otherwise disposes of any Collateral other than Inventory
sold in the ordinary course of business, Borrower shall repay the Advances in an
amount equal to the net proceeds of such sale or other disposition (i.e., gross
proceeds less the reasonable costs of such sale or other disposition), such
repayments to be made promptly but in no event more than one (1) Business Day
following receipt of such net proceeds~ and until the date of payment such
proceeds shall be held in trust for Agent. The foregoing shall not be deemed to
be implied consent to any such sale otherwise prohibited by the term and
conditions hereof.

                  (b) Repayments under the foregoing paragraph (a) shall be
applied first, to the outstanding principal installments on the Term Loan in the
inverse order of the maturities thereof, second, to the outstanding aggregate
principal installments of the Equipment Loans in the inverse order of the
maturities thereof, and third, to the remaining Advances in such order as Agent
may determine, subject to Borrower's ability to reborrow Revolving Advances in
accordance with the terms hereof.

                                       26
<PAGE>   28
                  (c) Borrower shall prepay the outstanding amount of the Term
Loan in an amount equal to 50% of Excess Cash Flow for each fiscal year
commencing on or after January 1, 1999, payable no later than thirty (30) days
following delivery of the financial statements to Agent referred to in and
required by Section 9.7 for such fiscal year but in any event not later than one
hundred and twenty (120) days after the end of each such fiscal year, which
amount shall be applied to the outstanding principal installments of the Term
Loan in the inverse order of the maturities thereof. In the event that the
financial statements are not so delivered, then a calculation based upon
estimated amounts shall be made by Agent upon which calculation Borrower shall
make the prepayment required by this Section 2.11(c), subject to adjustment
when the financial statements are delivered to Agent as required hereby. The
calculation made by Agent shall not be deemed a waiver of any rights Agent or
Lenders may have as a result of the failure by Borrowers to deliver such
financial statements.

                  (d) At its option, Borrower may at any time and from time to
time prepay in whole or in part the outstanding amount of the Advances without
premium or penalty; provided, however, Borrower cannot terminate this Agreement
except as provided in Article XIII hereof.

         2.12 Use of Proceeds. Borrower shall apply the proceeds of Advances to
(i) pay in full all outstanding obligations under Borrower's existing senior
Indebtedness as of immediately prior to the Closing Date and the Indebtedness
evidenced by the Subordinated Notes and the Holdback Notes (ii) pay fees and
expenses related to consummating the transactions contemplated by this Agreement
(including a transaction fee payable to Cornerstone Equity Investors, LLC in an
amount not exceeding $ 1,000,000 in the aggregate, (iii) provide for permitted
capital expenditure requirements and investments (including investments
permitted by Section 7.4) (iv) provide for its working capital needs and (y) the
payment of dividends on Borrower's preferred stock in an amount not exceeding
$1,726,456 in the aggregate (such dividends to be payable only to the extent
that, after giving effect to such payment, Borrower shall have Undrawn
Availability of not less than $5,000,000).

         2.13 Defaulting Lender

                  (a) Notwithstanding anything to the contrary contained herein,
in the event any Lender (x) has refused (which refusal constitutes a breach by
such Lender of its obligations under this Agreement) to make available its
portion of any Advance or (y) notifies either Agent or Borrower that it does not
intend to make available its portion of any Advance (if the actual refusal would
constitute a breach by such Lender of its obligations under this Agreement)
(each, a "Lender Default"), all rights and obligations hereunder of such Lender
(a "Defaulting Lender") as to which a Lender Default is in effect and of the
other parties hereto shall be modified to the extent of the express provisions
of this Section 2.13 while such Lender Default remains in effect.

                  (b) Advances shall be incurred pro rata from Lenders (the
"Non-Defaulting Lenders") which are not Defaulting Lenders based on their
respective Commitment Percentages, and no Commitment Percentage of any Lender or
any pro rata share of any Advances required to be

                                       27
<PAGE>   29
advanced by any Lender shall be increased as a result of such Lender Default.
Amounts received in respect of principal of any type of Advances shall be
applied to reduce the applicable Advances of each Lender pro rata based on the
aggregate of the outstanding Advances of that type of all Lenders at the time of
such application; provided that, such amount shall not be applied to any
Advances of a Defaulting Lender at any time when, and to the extent that, the
aggregate amount of Advances of any Non-Defaulting Lender exceeds such
Non-Defaulting Lender's Commitment Percentage of all Advances then outstanding.

                  (c) A Defaulting Lender shall not be entitled to give
instructions to Agent or to approve, disapprove, consent to or vote on any
matters relating to this Agreement and the Other Documents. All amendments,
waivers and other modifications of this Agreement and the Other Documents may be
made without regard to a Defaulting Lender and, solely for purposes of the
definition of "Required Lenders", a Defaulting Lender shall be deemed not to be
a Lender and not to have Advances outstanding.

                  (d) Other than as expressly set forth in this Section 2.13,
the rights and obligations of a Defaulting Lender (including the obligation to
indemnify Agent) and the other parties hereto shall remain unchanged. Nothing in
this Section 2.13 shall be deemed to release any Defaulting Lender from its
obligations under this Agreement and the Other Documents, shall alter such
obligations, shall operate as a waiver of any default by such Defaulting Lender
hereunder, or shall prejudice any rights which Borrower, Agent or any Lender may
have against any Defaulting Lender as a result of any default by such Defaulting
Lender hereunder.

                  (e) In the event a Defaulting Lender retroactively cures to
the satisfaction of Agent the breach which caused a Lender to become a
Defaulting Lender, such Defaulting Lender shall no longer be a Defaulting Lender
and shall be treated as a Lender under this Agreement.

         2.14 Conversion and Continuation of Loans. (a) Subject to the
limitations set forth in Section 2.14(b), Borrower may (i) continue any
Eurodollar Loan or portion thereof into a subsequent Interest Period as a
Eurodollar Loan, (ii) convert an Alternate Base Rate Loan or portion thereof
into a Eurodollar Loan, or (iii) convert a Eurodollar Loan or portion thereof
into an Alternate Base Rate Loan, in any such case, by giving irrevocable notice
to Agent not later than 10:00 AM New York City time, three Business Days prior
to the proposed date of continuation of or conversion into a Eurodollar Dollar
Loan, or one Business Day prior to the proposed date of conversion into an
Alternate Base Rate Loan. Such notice shall specify (A) whether a continuation
or conversion is requested, (B) the Loan being continued or converted and (C)
the Interest Period, if applicable. In the event that the Borrower shall not
give notice to continue any Eurodollar Loan, such Loan (except to the extent
repaid) shall automatically be converted into an Alternate Base Rate Loan at the
expiration of the Interest Period in effect for such Loan.

                  (b) Borrower's right to continue or convert any Loan in
accordance with Section 2.14(a) is subject to the following:

                                       28
<PAGE>   30
                           (i) with respect to the conversion to or continuation
         of Eurodollar Loans, no Default or Event of Default shall have occurred
         and be continuing at the time of such continuation or conversion;

                           (ii) each conversion shall be effected by the Lenders
         applying the proceeds of the new Loan to the Loan (or portion thereof)
         being converted;

                           (iii) if the new Loan made in respect of the
         conversion shall be a Eurodollar Loan, the first Interest Period with
         respect thereto shall commence on the date of conversion;

                           (iv) a Eurodollar Loan may be converted only on the
         last day of the Interest Period applicable to such Loan, except
         conversion of a Eurodollar Loan to an Alternate Base Rate Loan to the
         extent required to be converted pursuant to Section 3.8;

                           (v) each request for a Eurodollar Loan or for a
         continuation thereof which shall fail to state the applicable Interest
         Period shall be deemed to be a request for an Interest Period of one
         month's duration;

                           (vi) no Term Loan or Equipment Loans may be converted
         into or continued as a Eurodollar Loan if after giving effect to such
         action the Interest Period applicable thereto shall extend beyond the
         date of payment of any installment of principal of the Term Loan or the
         Equipment Loans, as the case may be, unless there is a sufficient
         principal amount of Term Loan or Equipment Loans, as the case may be,
         maintained as Base Rate Loans or Eurodollar Loans having Interest
         Periods ending prior to such date to permit such repayment or
         prepayment to be applied solely to an Alternate Base Rate Loans;

                           (vii) any portion of a Eurodollar Loan which cannot
         be converted into or continued as a Eurodollar Loan by reason of clause
         (i) or (vi) above shall be automatically converted into an Alternate
         Base Rate Loan at the expiration of the Interest Period in effect for
         such Loan;

                           (viii) no Loans may be converted into or continued as
         a Eurodollar Loan if after giving effect to such action the number of
         Tranches in existence shall exceed 8; and

                           (ix) each request hereunder for conversion of Base
         Rate Loans to Eurodollar Loans or of Eurodollar Loans to an Alternate
         Base Rate Loans shall be in an aggregate principal amount of at least $
         100,000.

         2.15 Limitation on Maximum Loan Amount. Anything in this Agreement to
the contrary notwithstanding, Agent shall advise Borrower two (2) Business Days
prior to the date on which PNC will sell a portion of its commitment pursuant to
Section 15.3(c) to a third Lender (in a transaction which would, but for this
Section 2.15, increase the Maximum Loan Amount from $42,000,000 to

                                       29
<PAGE>   31
$47,000,000) and Borrower shall have the right to notify Agent one (1) Business
Day prior to such sale (or prior thereto if Borrower so chooses) that Borrower
does not seek to increase the Maximum Loan Amount. In such event, the Commitment
Date shall be deemed not to have occurred notwithstanding such sale by PNC.

                                  ARTICLE III.A

                                LETTERS OF CREDIT

         SECTION 3.1A Letters of Credit. Agent agrees that it will from time to
time prior to the Maturity Date, on the terms and conditions of this Agreement
and such other conditions to the opening of Letters of Credit as Agent in its
capacity as Issuing Lender requires of its customers generally, acting for and
on behalf of each Lender, open for the account of Borrower one or more standby
or documentary sight Letters of Credit denominated and payable in Dollars ($).
Letters of Credit will be available hereunder upon the request of Borrower in an
aggregate stated amount of all outstanding Letters of Credit not at any time to
exceed the Maximum Letter of Credit Amount; provided however that Borrower may
not request Issuing Lender to open a Letter of Credit to the extent that after
giving effect thereto Undrawn Availability would be less than zero.

         SECTION 3.2A Issuance of Letters of Credit. The issuance of each Letter
of Credit hereunder shall be made on at least two (2) Business Days' written
notice from Borrower to Issuing Lender, which written notice shall be an
application for a Letter of Credit on Issuing Lender's customary form completed
to the satisfaction of Issuing Lender, together with such other certificates,
documents and other papers and information as Issuing Lender may reasonably
request. Such notice shall specify the date a Letter of Credit is to be issued,
set forth the amount and expiry date of such Letter of Credit, identify the
beneficiary and describe the nature of the transactions proposed to be supported
thereby. Issuing Lender shall not at any time be obligated to issue any Letter
of Credit if such issuance would conflict with, or cause Issuing Lender or any
Lender to exceed any limits imposed by, any applicable requirements of law. The
expiration date of any Letter of Credit shall not be later than 360 days from
the date of issuance thereof, and, in any event, no Letter of Credit shall have
an expiration date later than thirty days prior to the Maturity Date.

         SECTION 3.3A Reimbursement Obligations. Upon the issuance of a Letter
of Credit, Borrower shall be irrevocably and unconditionally obligated forthwith
without presentment, demand, protest or other formalities of any kind, to pay to
Issuing Lender as a reimbursement for the account of Issuing Lender any amounts
paid by Issuing Lender with respect to such Letter of Credit. Borrower hereby
authorizes and directs Agent to debit Borrower's Account (by increasing the
principal balance of the Revolving Advances (to the extent only of the then
Undrawn Availability)) in the amount of any payment made by Issuing Lender with
respect to any Letter of Credit All amounts paid by Issuing Lender with respect
to any Letter of Credit that are not immediately paid by Borrower with the
proceeds of a Revolving Advance, or otherwise (such unpaid amounts being called
"Reimbursement Obligations"), shall bear interest at the Default Rate applicable
to Revolving Advances that are Alternative Base Rate Advances.

                                       30
<PAGE>   32
         SECTION 3.4.A Participation. To the extent that any Reimbursement
Obligation shall arise hereunder and remain outstanding, Issuing Lender shall
promptly notify each Lender of the amount thereof, together with accrued
interest thereon, and each Lender agrees to purchase, and shall be deemed to
have purchased (as of the date of issuance of such Letter of Credit), a
participation (which participation shall be nonrecourse to Issuing Lender) in
such Letter of Credit in an amount equal to its Commitment Percentage of such
Reimbursement Obligation, together with accrued interest thereon. Upon one (1)
Business Day's notice from Issuing Lender, each Lender shall deliver to Agent
(for the account of Issuing Lender) an amount equal to its respective
participation in same day funds, at the place, on the date and by the time
notified by Agent. Each Lender hereby absolutely and unconditionally assumes, as
primary obligor and not as a surety, and agrees to pay and discharge, and to
indemnify and hold Issuing Lender harmless from liability in respect of, such
Lender's Commitment Percentage of the amount of any Reimbursement Obligation
under any Letter of Credit. Each Lender acknowledges and agrees that its
obligation to acquire participations in each Letter of Credit issued by Issuing
Lender and its obligation to make the payments specified herein, and the right
of Issuing Lender to receive the same, in the manner specified herein, are
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including, without limitation, the occurrence and continuance of a
Default or an Event of Default hereunder, and that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever.

         SECTION 3.5.A Reimbursement Obligations Absolute, Etc. The obligations
of Borrower under Section 3.3A to reimburse the Lenders and Issuing Lender for
all drawings under any Letter of Credit shall be absolute, unconditional and
immovable and shall (absent the gross negligence or willful misconduct of
Issuing Lender or any Lender) be satisfied strictly in accordance with their
terms, irrespective of:

                  (a) any lack of validity or enforceability of such Letter of
Credit;

                  (b) the existence of any claim, setoff, defense or other right
which Borrower or any other person may at any time have against the beneficiary
under such Letter of Credit, Issuing Leader or any Lender or any other person in
connection with this Agreement or any other transaction;

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

                  (d) payment by Issuing Lender or any Lender under such Letter
of Credit against presentation of a draft or other document which does not
comply with the terms of such Letter of Credit;

                  (e) any other circumstance or event whatsoever, whether or not
similar to any of the foregoing; and

                                       31
<PAGE>   33
                  (f) the fact that a Default or an Event of Default shall have
occurred and be continuing.

                  It is understood that in making any payment under any Letter
of Credit (x) Issuing Lender's and any Lender's exclusive reliance on the
documents presented to it under any Letter of Credit as to any and all matters
set forth therein, including, without limitation, reliance on the amount of any
draft presented under such Letter of Credit, whether or not the amount due to
the beneficiary equals the amount of such draft and whether or not any document
presented pursuant to any Letter of Credit proves to be insufficient in any
respect, if such document on its face appears to be in order, and whether or not
any other statement or any other document presented pursuant to such Letter of
Credit proves to be forged or invalid or any statement therein proves to be
inaccurate or untrue in any respect whatsoever and (y) any noncompliance in any
immaterial respect of the documents presented under any Letter of Credit with
the terms thereof shall, in each case, not be deemed willful misconduct or gross
negligence of Issuing Lender or any Lender.

         SECTION 3.6A Cash Collateral. Notwithstanding anything to the contrary
expressed or implied in this Agreement, upon the occurrence and during the
continuation of any Event of Default hereunder, Issuing Lender may, by notice to
Borrower, require that Borrower provide to Agent cash collateral with respect to
all outstanding Letters of Credit, and upon receipt of such notice, Borrower
shall, within five Business Days of such notice, deliver cash to Issuing Lender
in an amount equal to the sum of (x) the maximum aggregate amount that is or at
any time thereafter may become available to be drawn under such Letters of
Credit and (y) the aggregate amount of all outstanding Reimbursement
Obligations. The Agent is hereby authorized and directed in the event of such
Event of Default and requirement of cash Collateral to create a segregated
non-interest bearing cash collateral account (a "Letter of Credit Cash
Collateral Account"), and to deposit in such account any amounts received from
Borrower pursuant to the foregoing provisions of this Section 3.6A. Funds on
deposit from time to time in any Letter of Credit Cash Collateral Account (the
"Letter of Credit Cash Collateral") shall be held by Issuing Lender for the
ratable benefit of Issuing Lender and the Lenders (in the case of the Lenders,
in respect of their participations in such Letters of Credit and as Lenders
hereunder) and otherwise as security for the payment and performance of all
Obligations in accordance with this Agreement and Other Documents, including
Borrower's obligations under this Article IIIA. Notwithstanding any provision of
this Agreement or in any Other Document, after payment of any costs of
collection and reasonable expenses of Issuing Lender in connection with the
establishment of The Letter of Credit Cash Collateral Account Letter of Credit
Cash Collateral shall be applied by Agent as follows: first, to payment of all
Reimbursement Obligations by payment to Issuing Lander and any Lenders
participating in such, such payments to be made from time to time until no
Letter of Credit is any longer outstanding; second, after all Reimbursement
Obligations (or participations in such) of Issuing Lender and any Lender have
been fully repaid and all fees payable under this Article IHA have been paid, to
the payment, in accordance with this Agreement and the Other Documents, of any
of the remaining Obligations then due and payable; and finally, after its
application in accordance with the foregoing, returned to Borrower.

                                       32
<PAGE>   34
         SECTION 3.7A Payment of, and Issuing Lender's Actions with respect to,
Letters of Credit. Issuing Lender shall review, on behalf of the Lenders, each
draft and any accompanying documents presented under any Letter of Credit and
shall notify each Lender of any such presentment.

         Any Letter of Credit may, in the discretion of Issuing Lender or its
correspondents, be interpreted by them (to the extent not inconsistent with such
Letter of Credit) in accordance with the Uniform Customs and Practice for
Documentary Credits of the International Chamber of Commerce, as adopted or
amended from time to time, or any other rules, regulations and customs
prevailing at the place where any Letter of Credit is available or the drafts
are drawn or negotiated. Issuing Lender and its correspondents may accept and
act upon the name, signature, or act of any party purported to be the executor,
administrator, receiver, trustee in bankruptcy, or other legal representative of
any party designated in any Letter of Credit in the place of the name,
signature, or act of such party.

         SECTION 3.8A Compensation. (a) In addition to interest on Reimbursement
Obligations as provided in Section 3.3A, Borrower agrees to pay the following
amounts:

                           (i) With respect to the opening, any amendment or
                  transfer of any Letter of Credit and each drawing made
                  thereunder, documentary and processing charges in accordance
                  with Issuing Lender's standard schedule (a copy of which as
                  currently in effect being attached hereto as Exhibit 3.8A) for
                  such charges in effect at the time of such amendment, transfer
                  or drawing, as the case may be;

                           (ii) In respect of each Letter of Credit outstanding
                  a commission equal to .75% per annum of the maximum amount
                  available from time to time to be drawn under such outstanding
                  Letter of Credit, payable in arrears on and through the last
                  Business Day of each June, September, December and March
                  commencing March, 1999 and calculated on the basis of a
                  360-day year and the actual number of days elapsed.

                           (iii) On the date of issuance of each Letter of
                  Credit an amount equal to .125% of the maximum amount
                  available to be drawn thereunder.

                  (b) Interest payable under Section 3.3A and amounts payable
under clause (ii) of Section 3.8A(a) shall be paid to Issuing Lender for the
benefit of each of the Lenders in an amount equal to such Lender's Commitment
Percentage thereof. Issuing Lender shall promptly distribute to each Lender such
amounts. Amounts payable under clauses (i) and (iii) of Section 3.8A(a) shall be
paid directly to Issuing Lender.

         SECTION 3.9A Additional Payments. If by reason of (a) any change after
the Closing Date in applicable law, regulation, rule, decree or regulatory
requirement or any change in the interpretation or application by any judicial
or regulatory authority of any law, regulation, rule, decree or regulatory
requirement or (b) compliance by Issuing Lender or any Lender with any
direction, request or requirement (whether or not having the force of law) of
any Governmental Body

                                       33
<PAGE>   35
or monetary authority including, without limitation, Regulation D of the Board
of Governors of the Federal Reserve System, any reserve, deposit or similar
requirement is or shall be applicable, imposed or modified in respect of any
Letter of Credit issued by Issuing Lender or participations therein purchased by
any Lender and the result of the foregoing is to increase the cost to Issuing
Lender or any Lender of issuing, making or maintaining any Letter of Credit or
of purchasing or maintaining any participation therein, or to reduce the amount
receivable in respect thereof by Issuing Lender or any Lender, then and in any
such case Issuing Lender or such Lender shall, after the additional cost is
incurred or the amount received is reduced, notify Borrower and Borrower shall
pay within 10 Business Days after demand such amounts as Issuing Lender or such
Lender may specify to be necessary to compensate Issuing Lender or such Lender
for such additional cost or reduced receipt, together with interest on such
amount from the date demanded until payment in full thereof at a rate per annum
equal at all times to the Alternative Base Rate applicable to Revolving Advances
then in effect.

         SECTION 3.10A Indemnification; Nature of Issuing Lender's Duties. (a)
In addition to amounts payable as elsewhere provided in this Article IIIA,
without duplication, Borrower hereby agrees to protect, indemnify, pay and save
Issuing Lender harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees and allocated costs of internal counsel) which Issuing Lender
may incur or be subject to as a consequence, direct or indirect, of (i) the
issuance of any Letter of Credit or (ii) the failure of Issuing Lender to honor
a drawing under any Letter of Credit, in each case as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto Governmental Body.

                  (b) As between Borrower and Issuing Lender, Borrower assumes
all risks of the acts and omissions of, or misuse of any Letter of Credit issued
by Issuing Lender by any beneficiary of any Letter of Credit In furtherance and
not in limitation of the foregoing, Issuing Lender shall not be responsible: (i)
for the form, validity, sufficiency, accuracy, genuineness or legal effects of
any document submitted by any party in connection with the application for and
of any Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of
any Letter of Credit to comply fully with conditions required in order to draw
upon any Letter of Credit; (iv) for errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they are in cipher; (v) for errors in the translation
or on of technical terms; (vi) for any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any Letter
of Credit or of the proceeds thereof; (vii) for the misapplication by the
beneficiary of any Letter of Credit of the proceeds of any drawing under such
Letter of Credit; (viii) for any consequences arising from causes beyond the
control of Issuing Lender or its correspondents, including, without limitation,
any act or omission of any Governmental Body; and (ix) for any error, neglect,
default, suspension or insolvency of Issuing Lender or its correspondents or any
consequence thereof, gm in each case, that

                                       34
<PAGE>   36
Issuing Lender acts in good faith. None of the above shall affect, impair, or
prevent the vesting of any of Issuing Lender's rights or powers hereunder.

                  (c) Issuing Lender shall have the right to transmit the terms
of any Letter of Credit without translating them. If any Letter of Credit
provides that payment is to be made by Issuing Lender's correspondent, neither
Issuing Lender nor such correspondent shall be responsible for the failure of
any document specified in any Letter of Credit to come into Issuing Lender's
hands or for any delay in connection therewith, and Borrower's obligation to
reimburse Issuing Lender for payments made or obligations incurred shall not be
affected by such failure or delay in the receipt by such correspondent of any or
all of such documents whether sent to such Lender in one or multiple mailings.
Issuing Lender shall not be liable for any failure by such correspondent or
anyone else to pay or accept any draft or other demands for payment or
acceptance under any Letter of Credit resulting from any censorship, law,
control or restriction rightfully or wrongfully exercised by any de facto or de
jure Governmental Body or from any other cause beyond such correspondent's
control or the control of such correspondent's agents or sub-agents or for any
loss or damage to Borrower or anyone else resulting from any such failure to pay
or accept, all such risks being expressly assumed by Borrower.

                  (d) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by
Issuing Lender in connection with any Letter of Credit issued by it or the
related certificates, if taken or omitted in good faith, shall not result in
Issuing Lender incurring any liability to Borrower. Without limiting the
generality of the foregoing, Issuing Lender and its correspondents may, without
incurring any responsibility or liability, (i) act in reliance upon any oral,
telephonic, telegraphic, telex, telecopier, electronic or written request,
application (including an application for issuance of a Letter of Credit) or
notice believed in good faith to have been authorized by Borrower, whether or
not given or signed by an authorized person, and (ii) receive, accept and pay
any drafts or other documents and instruments (otherwise in order) signed by, or
issued to, the receiver, executor, administrator, liquidator, guardian or
conservator of anyone named in any Letter of Credit as the person by whom drafts
and other documents and instruments are to be made or issued.

                  (e) Notwithstanding anything to the contrary contained in this
Section 3.10A, Borrower shall have no obligation to indemnify Issuing Lender or
any Lender in respect of any liability incurred by Issuing Lender or such Lender
arising solely out of the gross negligence or willful misconduct of Issuing
Lender or such Lender.

         SECTION 3.11A Computation of Interest. Interest and commissions payable
pursuant to this Article MA shall be computed on the basis of a 360-day year and
the actual number of days elapsed.

                      ARTICLE III.B [INTENTIONALLY OMITTED]

                                       35
<PAGE>   37
                                  ARTICLE III.C

                            FOREIGN EXCHANGE FACILITY

         SECTI0N 3.1C Requests Under the Foreign Exchange Facility. Subject to
the terms and conditions hereof, Borrower may, from time to time, request and
Agent may, in its sole discretion, purchase or arrange for the purchase of
foreign currency for delivery immediately ("Foreign Exchange Contacts") in the
outstanding face amount of Foreign Exchange Contracts up to the Maximum Foreign
Exchange Facility Amount; provided, however, that the Agent shall not be
required to purchase or arrange for the purchase of any Foreign Exchange
Contract at any time to the extent that after giving effect thereto, Undrawn
Availability would be less than zero; and provided, further, however, that the
aggregate settlement amounts of all Foreign Exchange Contracts so requested
shall not exceed $1,000,000 on any one day. All Foreign Exchange Contracts
entered into by Agent upon Borrower's request shall be for Borrower's exclusive
account and Borrower will reimburse Agent on demand for all costs, expenses,
services, service charges, fees and commissions incurred in connection therewith
(including the cost of purchasing the foreign currency). All amounts paid by
Agent with respect to any Foreign Exchange Contracts that are not immediately
paid by Borrower with the proceeds of a Revolving Advance, or otherwise
("Foreign Exchange Obligations") shall bear interest at the Default Rate
applicable to Revolving Advances that are Alternative Base Rate Advances. The
obligations of Borrower under this Section 3.1 C to reimburse Agent for all
Foreign Exchange Obligations shall be absolute, unconditional and irrevocable
and shall be satisfied strictly in accordance with their terms, irrespective of
(a) any lack of validity or enforceability of such Foreign Exchange Obligations
or (b) the fact that a Default or an Event of Default shall have occurred and be
continuing.

         SECTION 3.2C Sale of Foreign Currency Purchased. If, as of a date on
which foreign currency is to be delivered, Borrower has not instructed Agent as
to where such currency is to be transferred or if on such date a Default or
Event of Default shall have occurred and be continuing, Agent may, in its sole
discretion, sell or arrange for the sale of the foreign currency to any third
party and charge Borrower's account for the difference between the cost quoted
to Borrower for purchasing the foreign currency and the price Agent (or its
nominee) obtains in selling the foreign currency. Agent (or its nominee) shall
not hold the foreign currency beyond the designated delivery date. Borrower
acknowledges and agrees that the cost of purchasing foreign currency from Agent
may be greater than Agent's cost. Borrower shall indemnify and hold Agent
harmless from all losses, liabilities and expenses (including attorneys' fees)
incurred by Agent as a result of or arising from any foreign currency
transaction that Agent institutes at Borrower's request. Borrower shall be bound
by the regulations and rules of Agent and of any bank or other financial
institution through which Agent purchases Foreign Exchange Contracts and agrees
dud neither Agent nor any bank or correspondent of any bank that purchases
Foreign Exchange Contracts shall be liable for any error, negligence and/or
mistake, whether of omission or commission, in purchasing or failing to purchase
Foreign Exchange Contracts.

                                       36
<PAGE>   38
         SECTION 3.3C Foreign Exchange Reserves. Agent shall from time to time
establish such reserves (the "Foreign Exchange Reserve") in connection with the
purchase of Foreign Exchange Contracts as Agent in its reasonable discretion
deems appropriate. Initially, the Foreign Exchange Reserve shall be an amount
equal to (i) 100%of the aggregate outstanding face amount of all spot Foreign
Exchange Contracts and (ii) 20% of the outstanding face amount of all forward
Foreign Exchange Contracts, which amount may, in each case, in the exercise by
Agent of its reasonable discretion, at any time be decreased or increased, in
which case the increase will be in an amount equal to the difference between the
aggregate exchange exposure of Agent under all outstanding Foreign Exchange
Contracts and the amount of the Foreign Exchange Reserve in existence at such
time.

         SECTION 3.4C Participations. To the extent that Borrower shall fail to
reimburse Agent for any amount due in respect of a Foreign Exchange Contract as
provided in Section 3. 1C, Agent shall promptly notify each Lender of the
unreimbursed amount of such payment together with accrued interest thereon and
each Lender agrees to purchase, and shall be deemed to have purchased (as of the
date of purchase of such Foreign Exchange Contract), a participation (which
participation shall be nonrecourse to Agent) in such Foreign Exchange Contract
in an amount equal to its Commitment Percentage of the unpaid portion of such
among together with accrued interest thereon. Upon one (1) Business Day's notice
from Agent, each Lender shall deliver to Agent an amount equal to its respective
participation in same day funds, at the place, on the date and by the time
notified by Agent Each Lender hereby absolutely and unconditionally assumes, as
primary obligor and not as a surety, and agrees to pay and discharge, and to
indemnify and hold Agent harmless from liability in respect of, such Lender's
Commitment Percentage of the amount of any payment obligation in respect of any
Foreign Exchange Contract. Each Lender acknowledges and agrees that its
obligation to acquire participations in each Foreign Exchange Contract purchased
by Agent and its obligation to make the payments specified herein, and the right
of Agent to receive the same, in the manner specified herein, are absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including, without limitation, the occurrence and continuance of a Default or an
Event of Default hereunder, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever.

         SECTION 3.5C Indemnification; Nature of Agent's Duties. In addition to
amounts payable as elsewhere provided in this Article IIIC, without duplication,
Borrower hereby agrees to protect, indemnify, pay and save Agent harmless from
and against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable attorneys' fees and allocated costs
of internal counsel) which Agent may incur or be subject to as a consequence,
direct or indirect, of (i) the purchase of any Foreign Exchange Contract or (ii)
the failure of Agent to honor its obligations in respect of any Foreign Exchange
Contact, in each case as a result of any act or omission, whether rightfully or
wrongfully, of any present or future de jure or de facto Governmental Body.

                                       37
<PAGE>   39
                             III. INTEREST AND FEES.

         3.1 Interest. Interest on Advances shall be payable in arrears on each
Interest Payment Date. Interest charges shall be computed on the actual
principal amount of Advances outstanding during the month at a rate per annum
equal to (i) with respect to Revolving Advances and Equipment Loans, the
Revolving Interest Rate and (ii) with respect to the Term Loan, the Term Loan
Rate (as applicable, the "Contract Rate"). Whenever, subsequent to the date of
this Agreement, the Alternate Base Rate or Eurodollar Rate is increased or
decreased, the applicable Contract Rate shall be similarly changed without
notice or demand of any kind by an amount equal to the amount of such change in
the Alternate Base Rate or Eurodollar Rate, as the case may be, during the time
such change or changes remain in effect. The Eurodollar Rate shall be adjusted
with respect to Eurodollar Rate Loans without notice or demand of any kind on
the effective date of any change in the Reserve Percentage as of such effective
date. Agent shall determine the applicable Eurodollar Rate for each Interest
Period as soon as practicable after 10:00 AM, New York City time, two Business
Days prior to the commencement of such Interest Period and shall notify Borrower
and the Lenders of such Eurodollar Rate so determined. Such determination shall
be conclusive absent manifest error. Upon the occurrence of an Event of Default,
and during the continuation thereof, the Obligations shall bear interest at the
applicable Contract Rate plus two percent (2%) per annum and the Letter of
Credit Fees shall be increased by two percent (2%) per annum (as applicable, the
"Default Rate").

         3.2 Facility Fee. If, for any quarter during the Term, the average
daily unpaid balance of the Advances for each day of such quarter is less than
the Maximum Loan Amount (such difference being hereunder referred to as the
"Facility Fee Amount"), then Borrower shall pay to Agent for the ratable benefit
of Lenders a fee at a rate equal to three-eighths of one percent (.375%) per
annum of the Facility Fee Amount. Such fee shall be payable to Agent in arrears
on the first day of each quarter.

         3.3 Fee Letter. Borrower shall pay PNC the fees set forth in the Fee
Letter.

         3.4 Computation of Interest and Fees. Interest and fees hereunder shall
be computed on the basis of a year of 360 days and for the actual number of days
elapsed. If any payment to be made hereunder becomes due and payable on a day
other than a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and interest thereon shall be payable at the applicable
Contract Rate during such extension.

         3.5 Maximum Charges. In no event whatsoever shall interest and other
charges charged hereunder exceed the highest rate permissible under law In the
event interest and other charges as computed hereunder would otherwise exceed
the highest rate permitted under law, such excess amount shall be first applied
to any unpaid principal balance owed by Borrower, and if the then remaining
excess amount is greater dun the previously unpaid principal balance, Lenders
shall promptly refund such excess amount to Borrower and the provisions hereof
shall be deemed amended to provide for such permissible rate.

                                       38
<PAGE>   40
         3.6 Increased Costs; Compensation. (a) In the event that any applicable
law, treaty or governmental regulation, or any change therein or in the
interpretation or application thereof, or compliance by any Lender (for purposes
of this Section 3.6, the term "Lender" shall include Agent or any Lender and any
corporation or bank controlling Agent or any Lender) with any request or
directive (whether or not having the force of law) from any central bank or
other financial, monetary or other authority, shall:

                           (i) subject Agent or any Lender to any tax of any
         kind whatsoever with respect to this Agreement or change the basis of
         taxation of payments to Agent or any Lender of principal, fees,
         interest or any other amount payable hereunder or under any Other
         Documents (except for changes in the rate of tax on the overall net
         income of Agent or any Lender by the jurisdiction in which it maintains
         its principal office);

                           (ii) impose, modify or hold applicable any reserve,
         special deposit, assessment or similar requirement against assets held
         by, or deposits in or for the account of, advances or loans by, or
         other credit extended by, any office of Agent or any Lender that is not
         otherwise included in the determination of the Eurodollar Rate
         hereunder (including, without limitation, pursuant to Regulation D of
         the Board of Governors of the Federal Reserve System); or

                           (iii) impose on Agent or any Lender any other
         condition with respect to this Agreement, any Other Documents; and the
         result of any of the foregoing is to increase the cost to Agent or any
         Lender of making, renewing or maintaining its Advances hereunder or
         making, converting into, continuing or maintaining Eurodollar Loans, in
         any such case, by an amount that Agent or such Lender deems to be
         material or to reduce the amount of any payment (whether of principal,
         interest or otherwise) in respect of any of the Advances by an amount
         that Agent or such Lender deems to be material, then, in any case
         Borrower shall promptly pay Agent or such Lender, upon its demand, such
         additional amount as will compensate Agent or such Lender for such
         additional cost or such reduction, as the case may be. Agent or such
         Lender shall use reasonable efforts to minimize any such additional
         cost or reduction of amount. Agent or such Lender shall certify the
         amount of such additional cost or reduced amount to Borrower, and such
         certification shall be conclusive absent manifest error.

                  (b) Compensation. Borrower shall compensate each Lender, upon
its written request (which request shall set forth in reasonable detail the
basis for requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Lender to fund its Eurodollar Loans) which such Lender may
sustain: (i) if for any reason (other than a default by such Lender or Agent) a
Borrowing of Eurodollar Loans does not occur on a date specified therefor by
Borrower; (ii) if any repayment or conversion of any of its Eurodollar Loans
occurs on a date which is not the last day of an Interest Period applicable
thereto; (iii) if any prepayment of any of its Eurodollar Loans is not made on
any date specified in a notice

                                       39
<PAGE>   41
of prepayment given by Borrower, or (iv) as a consequence of any other default
by the terms of this Agreement. Calculation of all amounts payable to a Lender
under this Section 3.6(b) in respect of Eurodollar Loans shall be made as though
that Lender had actually funded its relevant Eurodollar Loan through the
Purchase of a Eurodollar deposit bearing interest at the Eurodollar Rate in an
amount equal to the amount of that Loan, having a maturity comparable to the
relevant Interest Period provided, however, that each Lender may fund each of
its Eurodollar Loans in any manner it sees fit and the foregoing assumption
shall be utilized only for the calculation of amounts payable under this Section
3.6(b).

         3.7 Capital Adequacy. (a) In the event that Agent or any Lender shall
have determined that any applicable law, rule, regulation or guideline regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by Agent or any Lender (for purposes of this Section 3.7, the term "Lender"
shall include Agent or any Lender and any corporation or bank controlling Agent
or any Lender) with any request or directive regarding capital adequacy (whether
or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on Agent or any Lender's capital as a consequence of its obligations hereunder
to a level below that which Agent or such Lender could have achieved but for
such adoption, change or compliance (taking into consideration Agent's and each
Lender's policies with respect to capital adequacy) by an amount deemed by Agent
or any Lender to be material, then, from time to time, Borrower shall pay upon
demand to Agent or such Lender such additional amount or amounts as will
compensate Agent or such Lender for such reduction. In determining such amount
or amounts, Agent or such Lender may use any reasonable averaging or attribution
methods. The protection of this Section 3.7 shall be available to Agent and each
Lender regardless of any possible contention of invalidity or inapplicability
with respect to the applicable law, regulation or condition.

                  (b) A certificate of Agent or such Lender setting forth such
amount or amounts as shall be necessary to compensate Agent or such Lender with
respect to Section 3.7(a) when delivered to Borrower shall be conclusive absent
manifest error.

         3.8 Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any requirement of law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement (a) for so long as such
changed requirement of law shall continue to have such effect, the commitment of
such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as
such and convert Alternate Base Rate Loans to Eurodollar Loans shall forthwith
be suspended and (b) such Lender's Loans then outstanding as Eurodollar Loans,
if any, shall be converted automatically to Alternate Base Rate Loans on the
respective last days of the then current Interest Periods with respect to such
Loans or within such earlier period as is required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, Borrower shall pay to such
Lender such amounts, if any, as may be required pursuant to Section 3.10.

                                       40
<PAGE>   42
         3.9 Taxes. (a) Subject to Section 3.9(b), all payments made by Borrower
under this Agreement and the Notes shall be made free and clear of, and without
deduction or withholding for or on account to any present or future income,
stamp or other taxes, levies, imposts, dudes, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Body, excluding, in the case of Agent and each Lender, net
income taxes and franchise taxes (or other similar taxes imposed as a result of
doing business in a particular jurisdiction) imposed on Agent or any Lender, as
the case may be, as a result of a present or former connection between the
jurisdiction of the government or taxing authority imposing such tax and Agent
or such Lender (excluding a connection arising solely from Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or the Notes) or any political subdivision or
taxing authority thereof or therein (all such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions and withholdings being hereinafter
called "Taxes"). If any Taxes are required to be withheld from any amounts
payable to Agent or any Lender hereunder or under the Notes, and subject to
Agent's or such Lender's compliance with this Section 3.9, the amounts so
payable to Agent or such Lender shall be increased to the extent necessary to
yield to Agent or such Lender (after payment of all Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts specified in this
Agreement and the Notes. Whenever any Taxes are payable by Borrower, as promptly
as possible thereafter, Borrower shall send to Agent for its own account or for
the account of such Lender, as the case may be, a certified copy of an original
official receipt received by Borrower showing payment thereof. If any Lender
shall become entitled to any tax credit or receive a refund from any
Governmental Body, in either case, directly attributable to the payment by
Borrower of any Taxes, such Lender shall return to Agent for the benefit of
Borrower an amount equal to the lesser of (x) the amount of such credit or
refund, as the case may be, and (y) the aggregate amount of the Taxes so paid by
Borrower that gave rise to such credit or refund. Any payment to be made by a
Lender to Borrower pursuant to the preceding sentence shall be made at the time,
and solely to the extent, that (i) in the case of a refund, such refund is
actually received by the Lender from the applicable Governmental Body, and (ii)
in the case of a credit, a payment of Taxes actually made by the Lender to a
Governmental Body is reduced as a direct result of such credit. If Borrower
fails to pay any Taxes when due to the appropriate taxing authority or fails to
remit to Agent the required receipts or other required documentary evidence,
Borrower shall indemnify Agent and the Lenders for any incremental taxes,
interest or penalties that may become payable by Agent or any Lender as a result
of any such failure. The agreements in this Section 3.9 shall survive the
payment of the Notes and all other amounts payable hereunder.

                  (b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof agrees that it will deliver to
Borrower and Agent (i) two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224 or successor applicable form, establishing
that payments of interest hereunder are either not subject to or totally exempt
from United States Federal withholding tax and (ii) a duly completed Internal
Revenue Service Form W-8 or W-9 or successor applicable form. Each such Lender
also agrees to deliver to Borrower and Agent two further copies of the said Form
1001 or 4224 and Form W-8 or W-9, or successor applicable forms or other manner
of certification, as the case may be, on or before the date that any such form

                                       41
<PAGE>   43
expires or becomes obsolete (provided that a request has been made by Borrower)
or after the occurrence of any event requiring a change in the most recent form
previously delivered by it to Borrower, and such extensions or renewals thereof
as may reasonably be requested by Borrower or Agent, unless in any such case an
event (including, without limitation, any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery would otherwise be
required which renders any such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect to it and
such Lender so advises each of Borrower and Agent. Each such Lender shall
certify (i) in the case of a Form 1001, that it is entitled to receive payments
under this Agreement without deduction or withholding of any United States
federal income taxes, (ii) in the case of a Form 4224, that the interest paid
hereunder is effectively connected with the conduct of such Lender's trade or
business in the United States, and (iii) in the case of a Form W-8 or W-9, that
it is entitled to an exemption from United States backup withholding tax.
Borrower's obligation under paragraph (a) of this Section 3.9 to make payments
free and clear of United States federal income taxes shall be in effect with
respect to a Lender only during the period(s) in which such Lender establishes
that it is exempt from withholding of all United States federal income taxes
with respect to such payments in accordance with the foregoing procedures or
such other procedures as may be promulgated by the United States Treasury
Department or Internal Revenue Service.

                  (c) The Agent or any Lender (as the case may be) claiming any
additional amounts payable pursuant to this Section 3.9 shall use reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions) to (i) change the jurisdiction of its Lending Office or (H) assign
or otherwise transfer its interest, rights and obligations under this Agreement,
the Notes and Other Documents to an affiliate, if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
which may thereafter accrue and would not, in the reasonable judgment of the
Agent or such Lender (as the case may be), be otherwise disadvantageous to the
Agent or such Lender (as the case may be).

         3.10 Indemnity. Borrower agrees to indemnify each Lender and to hold
each Lender harmless from any loss or expense which such Lender may sustain or
incur as a consequence of (a) the failure of a borrowing of, conversion into or
continuation of Eurodollar Loans to occur for any reason (other than as a
consequence of the failure of any Lender to fulfill its obligations hereunder)
after Borrower shall have given a notice requesting the same in accordance with
the provisions of this Agreement, (b) default by Borrower in making any
prepayment after Borrower shall have given a notice thereof in accordance with
the provisions of this Agreement or (c) the making of a payment or prepayment of
Eurodollar Loans on a day which is not the last day of an Interest Period with
respect thereto, including, without limitation, in each case, any such loss
(including, without limitation, loss of margin) or expense arising from the
redeployment of funds obtained by it or from fees payable to terminate the
deposits from which such funds were obtained. This covenant shall survive the
payment of the Notes and all other amounts payable hereunder.

                                       42
<PAGE>   44
                         IV. COLLATERAL: GENERAL TERMS.

         4.1 Security Interest in the Collateral. To secure the prompt payment
and performance to Agent and each Lender of the Obligations, Borrower hereby
pledges and grants to Agent for its benefit and for the ratable benefit of each
Lender a continuing security interest in and to all of the Collateral, whether
now owned or existing or hereafter acquired or arising and wheresoever located.
Borrower shall mark its books and records as may be necessary or appropriate to
evidence, protect and perfect Agent's security interest and shall cause its
financial statements to reflect such security interest.

         4.2 Perfection of Security Interest. Borrower shall take all action
that may be necessary or desirable and that Agent may request, so as at all
times to maintain the validity, perfection, enforceability and priority of
Agent's security interest in the Collateral and to enable Agent to protect,
exercise or enforce its rights hereunder and in the Collateral, including, but
not limited to (i) immediately discharging all Liens other than Permitted
Encumbrances, (ii) obtaining landlords' or mortgagees' lien waivers, (iii)
delivering to Agent, endorsed or accompanied by such instruments of assignment
as Agent may specify, and stamping or marking, in such manner as Agent may
specify, any and all chattel paper, instruments, letters of credits and advices
thereof and documents evidencing or forming a part of the Collateral, (iv)
entering into warehousing, lockbox and other custodial arrangements satisfactory
to Agent, and (v) executing and delivering financing statements, instruments of
pledge, mortgages, notices and assignments, in each case in form and substance
satisfactory to Agent, relating to the creation, validity, perfection,
maintenance or continuation of Agent's security interest under the Uniform
Commercial Code or other applicable law. Agent is hereby authorized to file
financing statements signed by Agent instead of Borrower in accordance with
Section 9-402(2) of Uniform Commercial Code as adopted in the State of New York.
All charges, expenses and fees Agent may incur in doing any of the foregoing,
and any local taxes relating thereto, shall be charged to Borrower's Account as
a Revolving Advance and added to the Obligations, or, at Agent's option, shall
be paid to Agent immediately upon demand.

         4.3 Disposition of Collateral. Borrower will safeguard and protect all
Collateral for Agent's general account and make no disposition thereof whether
by sale, lease or otherwise except (a) the sale of Inventory in the ordinary
course of business and (b) the disposition or transfer of Equipment during any
fiscal year having an aggregate fair market value of not more than $500,000 in
any fiscal year of Borrower, but only to the extent, in each case, that the
proceeds of any such disposition are (i) used within 180 days of such sale to
acquire replacement Equipment which is subject to Agent's first, perfected,
priority security interest (in which case, the provisions of Section 2.11 (a)
shall not apply to such disposition or transfer) or (ii) remitted to Agent as a
prepayment on the Advances in accordance with Section 2.11 (a).

         4.4 Preservation of Collateral. During the occurrence of an Event of
Default, in addition to the rights and remedies set forth in Section 11. 1,
Agent: (a) may at any time take such steps a Agent deems necessary to protect
Agent's interest in and to preserve the Collateral, including the hiring of such
security guards or the placing of other security protection measures as Agent
may

                                       43
<PAGE>   45
deem appropriate; (b) may employ and maintain at any of Borrower's premises a
custodian who shall have full authority to do all acts necessary to protect
Agent's interests in the Collateral; (c) may lease warehouse facilities to which
Agent may move all or part of the Collateral; (d) may use any of Borrower's
owned or leased lifts, hoists, trucks and other facilities or equipment for
handling or removing the Collateral; and (e) shall have, and is hereby granted,
a right of ingress and egress to the places where the Collateral is located, and
may proceed over and through any of Borrower's owned or leased property.
Borrower shall cooperate fully with all of Agent's efforts to preserve the
Collateral and will take such actions to preserve the Collateral as Agent may
direct. All of Agent's expenses of preserving the Collateral, including any
expenses relating to the bonding of a custodian, shall be charged to Borrower's
Account as a Revolving Advance and added to the Obligations.

         4.5 Ownership of Collateral. With respect to the Collateral, at the
time the Collateral becomes subject to Agent's security interest: (a) Borrower
shall be the sole owner of and fully authorized and able to sell, transfer,
pledge and/or grant a first security interest in each and every item of the
Collateral to Agent; and, except for Permitted Encumbrances, the Collateral
shall be free and clear of all Liens and encumbrances whatsoever; (b) each
document and agreement executed by Borrower or delivered to Agent or any Lender
in connection with this Agreement shall be true and correct in all material
respects; (c) all signatures and endorsements of Borrower that appear on such
documents and agreements shall be genuine and Borrower shall have full capacity
to execute same; and (d) Borrower's Equipment and Inventory shall be located as
set forth on Schedule 4.5 (and shall not be removed from such locations) without
the prior written consent of Agent except with respect to the sale of Inventory
in the ordinary course of business and Equipment to the extent permitted in
Section 4.3.

         4.6 Defense of Agent's and Lenders' Interests. Until (a) payment and
performance in full of all of the Obligations and (b) termination of this
Agreement, Agent's interests in the Collateral shall continue in full force and
effect. During such period Borrower shall not, without Agent's prior written
consent, pledge, sell (except Inventory in the ordinary course of business and
Equipment to the extent permitted in Section 4.3), assign, transfer, create or
suffer to exist a Lien upon or encumber or allow or suffer to be encumbered in
any way, except for Permitted Encumbrances, any part of the Collateral. Borrower
shall defend Agent's interests in the Collateral against any and all Persons
whatsoever. At any time following the occurrence and during the continuance of
an Event of Default, Agent shall have the right to take possession of all
indicia of the Collateral and the Collateral in whatever physical form
contained, including without limitation: labels, stationery, documents,
instruments and advertising materials. If Agent exercises this right to take
possession of the Collateral, Borrower shall, upon demand, assemble it in the
best manner possible and make it avoidable to Agent at a place reasonably
convenient to Agent. In addition, with respect to all Collateral, Agent and
Lenders shall be entitled to all of the rights and remedies set forth herein and
further provided by the Uniform Commercial Code or other applicable law.
Borrower shall, upon the reasonable request of Agent, and Agent may, at its
option, instruct all suppliers, carriers, forwarders, warehouses or others
receiving or holding cash, checks, Inventory, documents or instruments in which
Agent holds a security interest to deliver same to Agent and/or subject to
Agent's order and if they shall come into Borrower's possession, they, and each
of them, shall be held

                                       44
<PAGE>   46
by Borrower in trust as Agent's trustee, and Borrower will immediately deliver
them to Agent in their original form together with any necessary endorsement.

         4.7 Books and Records. Borrower (a) shall keep proper books of record
and account in which full, true and correct entries will be made of all dealings
or transactions of or in relation to its business and affairs; (b) set up on its
books accruals with respect to all taxes, assessments, charges, levies and
claims; and (c) on a reasonably current basis set up on its books, from its
earnings, allowances against doubtful Receivables, advances and investments and
all other proper accruals (including without limitation by reason of
enumeration, accruals for premiums, if any, due on required payments and
accruals for depreciation, obsolescence, or amortization of properties, which
should be set aside from such earnings in connection with its business. All
determinations pursuant to this subsection shall be made in accordance with, or
as required by, GAAP consistently applied in the opinion of such independent
certified public accountant as shall then be regularly engaged by Borrower.

         4.8 Financial Disclosure. Borrower hereby irrevocably authorizes and
directs all accountants and auditors employed by Borrower at any time during the
Term, if requested by Agent, to exhibit and deliver to Agent and each Lender
copies of any of Borrower's financial statements, trial balances or other
accounting records of any sort in the accountant's or auditor's possession, and
to disclose to Agent and each Lender any information such accountants or
auditors may have concerning Borrower's financial status and business
operations. Borrower hereby authorizes all federal, state and municipal
authorities to furnish to Agent and each Lender copies of all reports or
examinations relating to Borrower, whether made by Borrower or otherwise;
however, Agent and each Lender will attempt to obtain such information or
materials directly from Borrower prior to obtaining such information or
materials from such accountants or such authorities.

         4.9 Compliance with Laws. Borrower shall comply with all acts, rules,
regulations and orders of any legislative, administrative or judicial body or
official applicable to the Collateral or any part thereof or to the operation of
Borrower's business the non-compliance with which could reasonably be expected
to have a Material Adverse Effect.

         4.10 Inspection of Premises. At all reasonable times Agent and each
Lender shall have full access to and the right to audit, check, inspect and make
abstracts and copies from Borrower's books, records, audits, correspondence and
all other papers relating to the Collateral and the operation of Borrower's
business. Agent, any Lender and their agents may enter upon any of Borrower's
premises at any time during business hours and at any other reasonable time, and
from time to time, for the purpose of inspecting the Collateral and any and all
records pertaining thereto and the operation of Borrower's business.

         4.11 Insurance. Borrower shall bear the full risk of any loss of any
nature whatsoever with respect to the Collateral. At Borrower's own cost and
expense, and in amounts and with carriers acceptable to Agent, Borrower shall
(a) keep all its insurable properties and properties in which Borrower has an
interest insured against the hazards of fire, flood, sprinkler leakage, those
hazards

                                       45
<PAGE>   47
covered by extended coverage insurance and such other hazards, and for such
amounts, as is customary in the case of companies engaged in businesses similar
to Borrower's including, without limitation, business interruption insurance;
(b) maintain a bond in such amounts as is customary in the case of companies
engaged in businesses similar to Borrower's insuring against larceny,
embezzlement or other criminal misappropriation of insured's officers and
employees who may either singly or jointly with others at any time have access
to the assets or funds of Borrower either directly or through authority to draw
upon such funds or to direct generally the disposition of such assets; (c)
maintain public and product liability finance against claim for personal injury,
death or property damage suffered by others; (d) maintain all such worker's
compensation or similar insurance as may be required under the laws of any state
or jurisdiction in which Borrower is engaged in business; and (c) at Agent's
request furnish Agent with (i) copies of all policies and evidence of the
maintenance of such policies by the renewal thereof at least thirty (30) days
before any expiration date, and (ii) appropriate loss payable endorsements in
form and substance satisfactory to Agent, naming Agent as a co-insured and loss
payee as its interests may appear with respect to all insurance coverage
referred to in clauses (a) and (b) above, and providing (A) that all proceeds
thereunder shall be payable to Agent, (B) no such insurance shall be affected by
any act or neglect of the insured or owner of the property described in such
policy, and (C) that such policy and loss payable clauses my not be canceled,
amended or terminated unless at least thirty (30) days prior written notice is
given to Agent. In the event of any loss thereunder, the carriers named therein
hereby are directed by Agent and Borrower to make payment for such loss to Agent
and not to Borrower and Agent jointly. If any insurance losses are paid by
check, draft or other instrument payable to Borrower and Agent jointly, Agent
may endorse Borrower's name thereon and do such other things as Agent may deem
advisable to reduce the same to cash. Agent is hereby authorized following the
occurrence and during the continuation of an Event of Default to adjust and
compromise claims under insurance coverage referred to in clauses (a), (b) and
(e) above. All loss recoveries received by Agent upon any such insurance may be
applied to the Obligations, in such order as Agent in its sole discretion shall
determine. Any surplus shall be paid by Agent to Borrower or applied as may be
otherwise required by law. Borrower shall remain liable for all unpaid
Obligations after application of all loss recoveries to the Obligations.

         4.12 Failure to Pay Insurance. If Borrower fails to obtain insurance as
hereinabove provided, or to keep the same in force, Agent, if Agent so elects,
may obtain such insurance and pay the premium therefor for Borrower's Account,
and charge Borrower's Account therefor and such expenses so paid shall be part
of the Obligations.

         4.13 Payment of Taxes. Borrower will pay, when due, all taxes,
assessments and other Charges lawfully levied or assessed upon Borrower or any
of the Collateral including, without limitation, real and personal property
taxes, assessments and charges and all franchise, income, employment. social
security benefits, withholding, and sales taxes except when the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and Borrower shall have provided for such reserves as Agent may
reasonably deem proper and necessary. If any tax by any Governmental Body is or
may be imposed on or as a result of any transaction between Borrower and Agent
or any Lender which Agent or any Lender may be required to withhold or pay

                                       46
<PAGE>   48
or if any taxes, assessments, or other Charges remain unpaid after the date
fixed for their payment, or if any claim shall be made which, in Agent's or any
Lender's opinion, may possibly create a valid Lien on the Collateral, Agent may
without notice to Borrower pay the tam, assessments or other Charges and
Borrower hereby indemnities and holds Agent and each Lender harmless in respect
thereof. The amount of any payment by Agent under this Section 4.13 shall be
charged to Borrower's Account as a Revolving Advance and added to the
Obligations and, until Borrower shall furnish Agent with an indemnity therefor
(or supply Agent with evidence satisfactory to Agent that due provision for the
payment thereof has been made), Agent may hold without interest on any balance
standing to Borrower's credit and Agent shall retain its security interest in
any and all Collateral held by Agent.

         4.14 Payment of Leasehold Obligations. Borrower shall at all times pay,
when and as due, its rental obligations under all leases under which it is a
tenant, and shall otherwise comply, in all material respects, with all other
terms of such leases and keep them in full force and effect and, at Ages request
will provide evidence of having done so. In the event Borrower is contesting the
validity and a material amount of such rental obligations, it shall notify the
Agent of the existence of such contest and the amount involved, and, if
requested by Agent, shall remit the disputed amount to Agent to be held as cash
collateral for the Obligations.

         4.15 Receivables.

                  (a) Nature of Receivables. Each of the Receivables shall be a
bona fide and valid account representing a bona fide indebtedness incurred by
the Customer therein named, for a fixed sum as set forth in the invoice relating
thereto (provided immaterial or unintentional invoice errors shall not be deemed
to be a breach hereof) with respect to an absolute sale or lease and delivery of
goods upon stated term of Borrower, or work, labor or services theretofore
rendered by Borrower as of the date each Receivable is created. Same shall be
due and owing in accordance with Borrower's standard terms of sale without
dispute, setoff or counterclaim except as may be stated on the accounts
receivable schedules delivered by Borrower to Agent.

                  (b) Solvency of Customers. Each Customer, to the best of
Borrower's knowledge, as of the date each Receivable is created, is and will be
solvent and able to pay all Receivables on which the Customer is obligated in
full when due or, with respect to such Customers of Borrower who are not
solvent, Borrower has set up on its books and in its financial records bad debt
reserves adequate to cover such Receivables.

                  (c) Locations of Borrower. Borrower's chief executive office
is located at 3425 North 44th Street, Lincoln, Nebraska 69504. Until written
notice is given to Agent by Borrower of any other office at which it keeps its
records pertaining to Receivables, all such records shall be kept at such
executive office.

                  (d) Collection of Receivables. Until Borrower's authority to
do so is terminated by Agent (which notice Agent may give at any time during the
continuance of an Event of Default),

                                       47
<PAGE>   49
Borrower will, at Borrower's sole cost and expense, but on Agent's behalf and
for Agent's account, collect as Agent's property and in tug for Agent all
amounts received on Receivables, and shall not commingle such collections with
Borrower's funds or use the same except to pay Obligations. Borrower shall, upon
request, deliver to Agent or the Blocked Account in original form and on the
date of receipt thereof, all checks, drafts, notes, money orders, acceptances,
cash and other evidences of Indebtedness.

                  (e) Notification of Assignment of Receivables. At any time
during the continuance of an Event of Default, Agent shall have the right to
send notice of the assignment of, and Agent's security interest in, the
Receivables to any and all Customers or any third party holding or otherwise
concerned with any of the Collateral. Thereafter, Agent shall have the sole
right to collect the Receivables, take possession of the Collateral, or both.
Agent's actual collection expenses, including, but not limited to, stationery
and postage, telephone and telegraph, secretarial and clerical expenses and the
salaries of any collection personnel used for collection, may be charged to
Borrower's Account and added to the Obligations.

                  (f) Power of Agent to Act on Borrower's Behalf. Agent shall
have the right to receive, endorse, assign and/or deliver in the name of Agent
or Borrower any and all checks, drafts and other instruments for the payment of
money relating to the Receivables, and Borrower hereby waives notice of
presentment, protest and non-payment of any instrument so endorsed. Effective
only during the continuance of an Event of Default, Borrower hereby constitutes
Agent or Agent's designee as Borrower's attorney with power (i) to endorse
Borrower's name upon any notes, acceptances, checks, drafts, money orders or
other evidences of payment or Collateral; (ii) to sign Borrower's name on any
invoice or bill of lading relating to any of the Receivables, drafts against
Customers, assignments and verifications of Receivables; (iii) to send
verifications of Receivables to any Customer; (iv) to sign Borrower's name on
all financing statements or any other documents or instruments deemed necessary
or appropriate by Agent to preserve, protect, or perfect Agent's interest in the
Collateral and to file same; (v) to demand payment of the Receivables; (vi) to
enforce payment of the Receivables by legal proceedings or otherwise; (vii) to
exercise all of Borrower's rights and remedies with respect to the collection of
the Receivables and any other Collateral; (viii) to settle, adjust, compromise,
extend or renew the Receivables; (ix) to settle, adjust or compromise any legal
proceedings brought to collect Receivables; (x) to prepare, file and sign
Borrower's name on a proof of claim in bankruptcy or similar document against
any Customer; (xi) to prepare, file and sign Borrower's name on any notice of
Lien, assignment or satisfaction of Lien or similar document in connection with
the Receivables; and (xii) to do all other acts and things necessary to carry
out this Agreement. All acts of said attorney or designee are hereby ratified
and approved, and said attorney or designee shall not be liable for any acts of
omission or commission nor for any error of judgment or mistake of fact or of
law, unless done maliciously or with gross (not mere) negligence; this power
being coupled with an interest is irrevocable while any of the Obligations
remain unpaid. Agent shall have the right at any time during the continuance of
an Event of Default, to change the address for delivery of mail addressed to
Borrower to such address as Agent may designate and to receive, open and dispose
of all mail addressed to Borrower.

                                       48
<PAGE>   50
                  (g) No Liability. Neither Agent nor any Lender shall, under
any circumstances or in any event whatsoever, have any liability for any error
or omission or delay of any kind occurring in the settlement, collection or
payment of any of the Receivables or any instrument received in payment thereof,
or for any damage resulting therefrom. During the continuance of an Event of
Default Agent may, without notice or consent from Borrower, sue upon or
otherwise collect, extend the time of payment of, compromise or settle for cash,
credit or upon any terms any of the Receivables or any other securities,
instruments or insurance applicable thereto and/or release any obligor thereof.
Agent is authorized and empowered to accept during the continuance of an Event
of Default the return of the goods represented by any of the Receivables,
without notice to or consent by Borrower, all without discharging or in any way
affecting Borrower's liability hereunder.

                  (h) Establishment of Blocked Account. All proceeds of
Collateral shall, at the direction of Agent, be deposited by Borrower into a
blocked account as Agent may require pursuant to an arrangement with such bank
as may be selected by Borrower and be acceptable to Agent Borrower shall issue
to any such bank, irrevocable instructions directing said bank to transfer such
funds so deposited to Agent, either to any account maintained by Agent at said
bank or by wire transfer to appropriate account(s) of Agent. All funds deposited
in such blocked account shall immediately become the property of Agent and
Borrower shall obtain the agreement by such bank to waive any offer rights
against the funds so deposited. Agent assumes no responsibility for such blocked
account arrangement, including without limitation, any claim of accord and
satisfaction or release with respect to deposits accepted by any bank
thereunder. Alternatively, Agent may establish depository accounts ("Depository
Accounts") in the name of Agent at a bank or banks for the deposit of such funds
and Borrower shall deposit all proceeds of Collateral or cause same to be
deposited, in kind, in such Depository Accounts of Agent in lieu of depositing
same to the blocked accounts. In either case, funds in blocked accounts and
Depository Accounts, if any, shall be made available to Borrower on
substantially the same basis as set forth in the following provisions of this
Section 4.15(h) with respect to the Blocked Account:

                           (i) Blocked Account Agreement. Without limiting the
         generality of the foregoing, Borrower agrees with Agent and the
         Lenders, at all times during the Term, and thereafter so long as any
         Obligations remain unpaid, (A) to execute, deliver and comply with all
         obligations on its part to be performed under, and to give full force
         and effect to procedures and arrangements contemplated by, the Blocked
         Account Agreement and (B) in the event that at any time during such
         period the Blocked Account Agreement shall not be in full force and
         effect for any reason, that all of the representations, warranties, and
         covenants of Borrower contained in the form of Blocked Account
         Agreement attached hereto as Exhibit 4.15(h) shall be binding upon
         Borrower and deemed incorporated herein by reference, except to the
         extent that any such representation, warranty or covenant can have no
         relevance due to circumstances beyond the control of Borrower.

                                       49
<PAGE>   51
                           (ii) PNC Collateral Account.

                  (A) Borrower has established with Processor the Blocked
         Account into which Borrower has agreed to deposit all collections of
         Receivables and other cash proceeds of the Collateral, and Agent has
         established a cash collateral account (the "PNC Collateral Account")
         into which Processor has agreed to transmit funds on deposit with
         Processor in the Blocked Account in accordance with the Blocked Account
         Agreement.

                  (B) Notwithstanding anything to the contrary contained herein
         (but subject in all events to Section 2.11 hereof) or in the Blocked
         Account Agreement, from and after the date that funds shall be
         deposited in the PNC Collateral Account as aforesaid, Borrower agrees
         that at all times during the Term and thereafter so long as any
         Obligations remain unpaid, Agent shall have the continuing exclusive
         right to apply and reapply any and all such funds on deposit in the PNC
         Collateral Account representing proceeds of Inventory or General
         Intangibles in satisfaction of the Obligations in the following manner.
         (1) so long as no Default or Event of Default shall have occurred and
         be continuing, such funds may be applied first to repay outstanding
         Revolving Advances and thereafter to such other Obligations (other than
         the Term Loan and the Equipment Loans) as Agent in its sole discretion
         shall determine; and (2) following the occurrence and during the
         continuance of an Event of Default, such funds may be applied to the
         Obligations in such order of priority as Agent in its sole discretion
         shall determine. Agent shall give Borrower notice of each such
         application; provided, however that failure by Agent to give such
         notice shall not affect Agent's right to make or continue to make
         applications of funds on deposit in the PNC Collateral Account in
         accordance with this Section 4.15. So long as no Default or Event of
         Default shall have occurred and be continuing, to the extent that there
         are funds on deposit in the PNC Collateral Account at a time when no
         Revolving Advances we outstanding and no other Obligations (other than
         the Term Loan and Equipment Loans) are then due and payable (without
         regard to any grace periods provided hereunder for the payment thereof
         after the date when such Obligations are due), Agent shall promptly
         make such funds available to Borrower by way of credit to Borrower's
         operating account at Processor, or such other bank as Borrower may
         designate following notification to Agent, in immediately available
         federal funds or other immediately available funds.

                  (C) Notwithstanding anything to the contrary herein, (1) for
         purposes of computing interest on the Advances under this Agreement in
         all cases where Agent exercises its right to apply funds on deposit in
         the PNC Collateral Account in satisfaction of the Obligations, funds
         shall be deemed applied by Agent the day after the funds become
         available and (2) solely for purposes of determining the occurrence of
         an Event of Default and determining the Undrawn Availability at any
         date, funds shall be deemed on deposit in the PNC Collateral Account as
         provided in the preceding paragraph 4.15(h)(ii)B subject, in all cases,
         to the condition that funds transferred by Processor to the PNC
         Collateral Account on any date are not subsequently dishonored for any
         reason whatsoever, and that no such trader shall constitute payment to
         Agent unless such item is actually collected by Processor

                                       50
<PAGE>   52
         or such other bank as may act as the Agent's depository bank as to such
         items of payment and such collection is actually transferred to the PNC
         Collateral Account.

                           (iii) Special Receipts. Notwithstanding anything to
         the contrary in this Agreement or the Blocked Account Agreement, if the
         Blocked Account Agreement shall be terminated during the Term or its
         provisions cannot be implemented in accordance with the terms thereof,
         any monies, advance customer deposits, checks, notes, drafts, or other
         similar items of payment relating to or constituting the Collateral or
         proceeds thereof received by Borrower shall be held by Borrower in
         trust for Agent and as the property of Agent and the other Lenders,
         separate from the funds of Borrower, and, until Borrower is notified in
         writing by Agent to do otherwise, Borrower shall forthwith on the date
         of receipt of all such monies and items of collection, deposit the same
         in the PNC Collateral Account for application on account of the
         Obligations as provided in this Section 4.15.

                  (i) Adjustments. Borrower will not, without Agent's consent,
compromise or adjust any Receivables (or extend the time for payment thereof) or
accept any returns of merchandise or grant any additional discounts, allowances
or credits thereon except for those compromises, adjustments, returns,
discounts, credits and allowances as have been heretofore customary in the
business of Borrower.

         4.16 Inventory. All Inventory held for sale has been, and will be,
produced by Borrower in accordance with the Federal Fair Labor Standards Act of
1938, as amended and all rules, regulations and orders thereunder.

         4.17 Maintenance of Equipment. The Equipment shall be maintained in
good operating condition and repair (reasonable wear and tear excepted) and all
necessary replacements of and repairs thereto shall be made so that the value
and operating efficiency of the Equipment shall be maintained and preserved.
Borrower shall not use or operate the Equipment in violation of any law,
statute, ordinance, code, rule or regulation except to the extent such violation
could not reasonably be expected to have a Material Adverse Effect Borrower
shall have the right to sell Equipment to the extent set forth in Section 4.3.

         4.18 Exculpation of Liability. Nothing herein contained shall be
construed to constitute Agent or any Lender as Borrower's agent for any purpose
whatsoever, nor shall Agent or any Lender be responsible or liable for any
shortage, discrepancy, damage, loss or destruction of any part of the Collateral
wherever the same may be located and regardless of the cause thereof. Neither
Agent nor any Lender, whether by anything herein or in any assignment or
otherwise, assume any of Borrower's obligations under any contract or agreement
assigned to Agent or such Lender, and neither Agent nor any Lender shall be
responsible in any way for the performance by Borrower of any of the terms and
conditions thereof.

                                       51
<PAGE>   53
         4.19 Environmental Matters. (a) Borrower will ensure that the Real
Property complies with all Environmental Laws and it will not place or permit to
be placed any Hazardous Substances on any Real Property except as not prohibited
by Environmental Laws.

                  (b) Borrower will establish and maintain a system, including
without limitation an asbestos management plan, to assure and monitor continued
compliance with all applicable Environmental Laws which system shall include
periodic reviews of such compliance.

                  (c) Borrower will dispose of any and all Hazardous Waste
generated at the Real Property in compliance with Environmental Laws.

                  (d) In the event Borrower obtains, gives or receives notice of
any Release or threat of Release of a reportable quantity of or the capacity to
emit any Hazardous Substances at the Real Property (any such event being
hereinafter referred to as a "Hazardous Discharge") or receives any notice of
violation, request for information or notification that it is potentially
responsible for investigation or cleanup of environmental conditions at the Real
Property, demand letter or complaint, order, citation, or other written notice
with regard to any Hazardous Discharge or violation of Environmental Laws
affecting the Real Property or Borrower's interest therein (any of the foregoing
is referred to herein as an "Environmental Complaint") from any Person or
entity, including any local or state agency responsible in whole or in part for
environmental matters in the state in which the Real Property is located or the
United States Environmental Protection Agency (any such person or entity
hereinafter the "Authority"), then Borrower shall, within five (5) Business
Days, give written notice of same to Agent detailing facts and circumstances of
which Borrower is aware giving rise to the Hazardous Discharge or Environmental
Complaint. Such information is to be provided to allow Agent to protect its
security interest in the Real Property and is not intended to create nor shall
it create any obligation upon Agent or any Lender with respect thereto.

                  (e) Borrower shall promptly forward to Agent copies of any
request for information, notification of potential liability, demand letter
relating to potential responsibility with respect to the investigation or
cleanup of Hazardous Substances at any site owned, operated or used by Borrower
to dispose of Hazardous Substances and shall continue to forward copies of
correspondence between Borrower and the Authority regarding such claim to Agent
until the claim is settled. Borrower shall promptly forward to Agent copies of
all documents and reports concerning a Hazardous Discharge at the Real Property
that Borrower is required to file under any Environmental Laws. Such information
is to be provided solely to allow Agent to protect Agent's security interest in
the Real Property and the Collateral.

                  (f) Borrower shall respond promptly to any Hazardous Discharge
or Environmental Complaint and take all necessary action in order to safeguard
the health of any Person and to avoid subjecting the Collateral or Real Property
to any Lien. If Borrower shall fail to respond promptly to any Hazardous
Discharge or Environmental Complaint or Borrower shall fail to comply with any
of the requirements of any Environmental Laws, Agent on behalf of Lenders may,
but without the obligation to do so, for the sole purpose of protecting Agent's
interest in Collateral, with

                                       52
<PAGE>   54
five (5) days written notice to Borrower: (A) give such notices or (B) enter
onto the Real Property (or authorize third parties to enter onto the Real
Property) and take such actions as Agent (or such third parties as directed by
Agent) deem reasonably necessary or advisable, to comply with Environmental
Laws. All reasonable costs and expenses incurred by Agent and Lenders (or such
third parties) in the exercise of any such rights, including any reasonable sums
paid in connection with any judicial or administrative investigation or
proceeding fines and penalties, together with interest thereon from the date
expended at the Default Raft for Revolving Advances shall be paid upon demand by
Borrower, and until paid shall be added to and become a part of the obligations
secured by the Liens created by the terms of this Agreement or any other
agreement between Agent, any Lender and Borrower.

                  (g) made at a time when Agent reasonably believes that a
Hazardous Discharge exists at the Real Property, Borrower shall provide Agent,
at Borrower's expense, with an environmental site assessment or environmental
audit report prepared by an environmental engineering shall acceptable in the
reasonable opinion of Agent, to assess with a reasonable degree of certainty the
existence of a Hazardous Discharge and the potential costs in connection with
abatement, cleanup, removal or remediation of any Hazardous Discharge or
Hazardous Substances found on, under, at or within the Real Property. Any report
or investigation of such Hazardous Discharge proposed and acceptable to an
appropriate Authority that is charged to oversee the clean-up of such Hazardous
Discharge shall be acceptable to Agent. If such estimates, individually or in
the aggregate, exceed $500,000, Agent shall have the right to require Borrower
to post a bond, letter of credit or other security reasonably satisfactory to
Agent to secure payment of these costs and expenses.

                  (h) Borrower shall defend and indemnify Agent and Lenders and
hold Agent, Lenders and their respective employees, agents, directors and
officers harmless from and against all loss, liability, damage and expense,
claims, costs, fines and penalties, including attorney's fees, suffered or
incurred by Agent or Lenders under or on account of any Environmental Laws,
including, without limitation, the assertion of any lien thereunder, with
respect to any Hazardous Discharge, the presence of any Hazardous Substances
affecting the Real Property, whether or not the some originates or emerges from
the Real Property or any contiguous real estate, including any loss of value of
the Real Property as a result of the foregoing except to the extent such loss,
liability, damage and expenses is attributable to any Hazardous Discharge
resulting from actions on the part of Agent or any Lender. Borrowers obligations
under this Section 4.19 shall arise upon the discovery of the presence of any
Hazardous Substances at the Real Property, whether or not any federal, state, or
local environmental agency has taken or threatened any action in connection with
the presence of any Hazardous Substances. Borrowers's obligation and the
indemnifications hereunder shall survive the termination of this Agreement

                  (i) For purposes of Section 4.19 and 5.7, all references to
Real Property shall be deemed to include all of Borrower's right, title and
interest in and to its owned and leased premises.

                                       53
<PAGE>   55
         4.20 Financing Statements. Except as respects the financing statements
filed by Agent and the financing statements described on Schedule 1.2, as of the
date hereof, no financing statement covering any of the Collateral or any
proceeds thereof is on file in any public office.

                       V. REPRESENTATIONS AND WARRANTIES.

         Borrower represents and warrants as follows:

         5.1 Authority. Borrower has full corporate power, authority and legal
right to enter into this Agreement and the Other Documents and perform all
Obligations hereunder and thereunder. The execution, delivery and performance
hereof and of the Other Documents (a) are within Borrower's corporate powers,
have been duly authorized, are not in contravention of any law, judgment,
injunction, order or decree of any, arbitrator, court or other Governmental
Body, or the terms of Borrower's Restated Articles of Incorporation or by-laws
or to the conduct of Borrower's business or of any material agreement or
undertaking to which Borrower is a party or by which Borrower is bound, and (b)
will not conflict with nor result in any breach in any of the provisions of or
constitute a default under or result in the creation of any Lien except
Permitted Encumbrances upon any asset of Borrower under the provisions of any
agreement, organization document, indenture or other instrument to which
Borrower or its property is a party or by which it may be bound, except for any
conflict which could not reasonably be expected to have a Material Adverse
Effect.

         5.2 Formation and Qualification. (a) Borrower is duly organized and in
good standing under the laws of the State of Nebraska and is qualified to do
business and is in good standing in the states listed on Schedule 5.2(a) which
constitute all states in which qualification and good standing we necessary for
Borrower to conduct its business and own its property except whom the failure to
so qualify could not reasonably be expected to have a Material Adverse Effect
Borrower has delivered to Agent true and complete copies of its Restated
Articles of Incorporation and by-laws and will promptly notify Agent of any
amendment or changes thereto.

                  (b) Except as listed on Schedule 5.2(b) Borrower has no
Subsidiaries.

         5.3 Survival of Representations and Warranties. All representations and
warranties of Borrower contained in this Agreement and the Other Documents shall
be true at the time of Borrowers's execution of this Agreement and the Official
Documents, and shall survive the execution, delivery and acceptance thereof by
the parties thereto and the closing of the transactions described therein or
related thereto.

         5.4 Tax Returns. Borrower's federal tax identification number is
47-0635953. Borrower has filed all federal, state and local tax returns and
other reports it is required by law to file and has paid all taxes, assessments,
fees and other governmental charges that are due and payable. The provision for
taxes on the books of Borrower are adequate for all years not closed by
applicable

                                       54
<PAGE>   56
statutes, and for its current fiscal year, and Borrower has no knowledge of any
deficiency or additional assessment in connection therewith not provided for on
its books.

         5.5 Financial Statements.

                  (a) The pro forma balance sheet of Borrower (the "Pro Forma
Balance Sheet") furnished to Agent on the Closing Date reflects the consummation
of the transactions contemplated by this Agreement (the "Transactions") and is
accurate, complete and correct and fairly reflects the financial condition of
Borrower as of the Closing Date after giving effect to the Transactions, and has
been prepared in accordance with GAAP, consistently applied. All financial
statements referred to in this subsection 5.5(a), including the related
schedules and notes thereto, have been prepared, in accordance with GAAP, except
as may be disclosed in such financial statements.

                  (b) The cash flow projections of Borrower and its projected
balance sheets as of the Closing Date, copies of which are annexed hereto as
Exhibit 5.5(b) (the "Projections") are based on underlying assumptions which
provide a reasonable basis for the projections contained therein and reflect
Borrower's judgment based on present circumstances of the most likely set of
conditions and course of action for the projected period. The cash flow
Projections together with the Pro Forma Balance Sheet, are referred to as the
"Pro Forma Financial Statements".

                  (c) The consolidated balance sheet of Borrower and its
Subsidiaries as of December 31, 1997, and the related statements of income,
changes in stockholder's equity, and changes in cash flow for the fiscal year
ended on such date, all accompanied by reports thereon containing opinions
without qualification by an independent certified public accounting firm, copies
of which have been delivered to Agent, have been prepared in all material
respects in accordance with GAAP, consistently applied (except for changes in
application in which such accounting firm concur) and present fairly, in all
material respects, the financial position of Borrower and its Subsidiaries at
such date and the results of their operations for such period. Since October 31,
1999 there has been no change in the condition, financial or otherwise, of
Borrower or its Subsidiaries as shown on the consolidated balance sheet as of
such date and no change in the aggregate value of machinery, equipment and Real
Property owned by Borrower and its Subsidiaries except changes in the ordinary
course of business, none of which individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect.

         5.6 Name. Borrower has not been known by any other name in the past
five years and does not sell Inventory under any name other than names disclosed
in the Questionnaire, nor has Borrower been the surviving entity of a merger or
consolidation or acquired all or substantially all of the assets of any Person
during the preceding five (5) years.

         5.7 O.S.H.A. and Environmental Compliance. Except as set forth on
Schedule 5.7:

                  (a) Borrower has duly complied with, and its facilities,
business, assets, property, leaseholds and Equipment are in compliance in all
material respects with, the provisions of the

                                       55

<PAGE>   57
Federal Occupational Safety and Health Act, the Environmental Protection Act,
RCRA and all other Environmental Laws; there have been no outstanding citations,
notices or orders of non-compliance issued to Borrower or relating to its
business, assets, property, leaseholds or equipment under any such laws, rules
or regulations.

                  (b) Borrower has applied for or been issued all required
federal, state and local licenses, certificates or permits required under all
applicable Environmental Laws.

                  (c) (i) There are no visible signs of releases, spills,
discharges, leaks or disposal (collectively referred to as "Releases") of
Hazardous Substances at, upon, under or within any Real Property or any premises
leased by Borrower; there are no underground storage tanks or polychlorinated
biphenyls on the Real Property or any premises leased by Borrower; neither the
Real Property nor any premises leased by Borrower has ever been used as a
treatment, storage or disposal facility of Hazardous Waste; and no Hazardous
Substances are present on the Real Property or any premises leased by Borrower,
excepting such quantities a are handled in accordance with all applicable
manufacturer's instructions and in proper storage containers and as are
necessary for the operation of the commercial business of Borrower cc of its
tenants and with all Environmental Laws.

         5.8 Solvency; No Litigation, Violation, Indebtedness or Default.

                  (a) After giving effect to the Transactions, Borrower will be
solvent, able to pay its debts as they mature, have capital sufficient to carry
on its business and all businesses in which it is about to engage, and as of the
Closing Date, the fair present saleable value of its assets, calculated on a
going concern basis, is in excess of the amount of its liabilities and
subsequent to the Closing Date, the fair saleable value of its assets
(calculated on a going concern basis) will be in excess of the amount of its
liabilities.

                  (b) Except as set forth on Schedule 5.8(b), Borrower has (i)
no pending or threatened litigation, arbitration, actions or proceedings which
could reasonably be expected to have a Material Adverse Effect, and (ii) there
are no liabilities of Borrower, fixed or contingent which are material but are
not reflected in the most recent financial statements (or in the notes thereto)
of Borrower required to be delivered to Agent hereunder, other than liabilities
arising in the ordinary course of business since the date of such financial
statements.

                  (c) Except as set forth on Schedule 5.8(c) Borrower is not in
violation of any applicable statute, regulation or ordinance in any respect
which could reasonably be expected to have a Material Adverse Effect, nor is
Borrower in violation of any order of any court, governmental authority or
arbitration board or tribunal.

                  (d) Neither Borrower nor any member of the Controlled Group
maintains or contributes to any Plan other than those fisted on Schedule 5.9(d)
hereto. (i) No Plan has incurred any "accumulated finding deficiency," as
defined in Section 302(a)(2) of ERISA and Section 412(a)

                                       56
<PAGE>   58
of the Code, whether or not waived, and Borrower and each member of the
Controlled Group has met all applicable minimum funding requirements under
Section 302 of ERISA in respect of each Plan, (ii) each Plan which is intended
to be a qualified plan under Section 401 (a) of the Code as currently in effect
has been determined by the Internal Revenue Service to be qualified under
Section 401 (a) of the Code and the trust related thereto is exempt from federal
income tax under Section 501 (a) of the Code, (iii) neither Borrower nor any
member of the Controlled Group has incurred any liability to the PBGC other than
for the payment of premiums, and there are no premium payments which have become
due which are unpaid, (iv) no Plan has been terminated by the plan administrator
thereof or by the PBGC, and there is no occurrence which would cause the PBGC to
institute proceedings under Title IV of ERISA to terminate any Plan, (y) at this
time, the present value of the accrued benefits and other liabilities of each
Plan exceed the current value of the assets of such Plan and neither Borrower
nor any member of the Controlled Group knows of any facts or circumstances which
would materially change the value of such assets and accrued benefits and other
liabilities, (vi) neither Borrower nor any member of the Controlled Group has
breached any of the responsibilities, obligations or duties imposed on it by
ERISA with respect to any Plan, (vii) neither Borrower nor any member of a
Controlled Group has incurred any liability for any excise tax arising under
Section 4972 or 4990B of the Code, and no fact exists which could give rise to
any such liability, (viii) neither Borrower nor any member of the Controlled
Group nor any fiduciary of, nor any trustee to, any Plan, has engaged in a
"prohibited transactions" described in Section 406 of the ERISA or Section 4975
of the Code nor taken any action which would constitute or result in a
Termination Event with respect to any such Plan which is subject to ERISA, (ix)
Borrower and each member of the Controlled Group has made all contributions due
and payable with respect to each Plan, (x) there exists no event described in
Section 4043(b) of ERISA, for which the thirty (30) day notice period contained
in 29 CFR Section 2615.3 has not been waived, (xi) neither Borrower nor any
member of the Controlled Group has any fiduciary responsibility for investments
with respect to any plan existing for the benefit of persons other than
employees or former employees of Borrower and any member of the Controlled
Group, and (xii) neither Borrower nor any member of the Controlled Group has
withdrawn, completely or partially, from any Multiemployer Plan so as to incur
liability under the Multiemployer Pension Plan Amendments Act of 1980.

         5.9 Patents, Trademarks, Copyrights and Licenses. All patents, patent
applications, trademarks, tidemark applications, service marks, service mark
applications, copyrights (other than any such copyrights that have not been
registered and are not necessary for the operation of Borrower's business),
copyright applications, tradenames, assumed names and licenses owned or utilized
by Borrower are set forth on Schedule 5.9, are valid and, except as set forth on
said Schedule, have been duly registered or filed with all appropriate
governmental authorities and together with design rights and trade secrets, the
Borrower owns all of the intellectual property rights which we necessary for the
operation of its business; there is no objection to or pending challenge to the
validity of any such material patent, trademark, copyright, design right,
tradename, trade secret or license and Borrower is not aware of any grounds for
any challenge. Each material patent, patent application, patent license,
trademark, trademark application, trademark license, service mark, service mark
application, service mark license, copyright, copyright application and
copyright license owned or held by Borrower and each design right and trade
secret used by Borrower consists

                                       57
<PAGE>   59
of original material or property developed by Borrower or was lawfully acquired
by Borrower from the proper and lawful owner thereof Each of such items has been
maintained so as to preserve the value thereof from the date of creation or
acquisition thereof. With respect to each piece of software used by Borrower,
Borrower is either the licensee under a valid license covering the use of such
software by Borrower or in possession of the source and object codes related to
such software or is the beneficiary of a source code escrow agreement, each such
source code escrow agreement being listed on Schedule 5.9 hereto.

         5.10 Licenses and Permits. Borrower (a) is in compliance with and (b)
has procured and is now in possession of, all material licenses or permits
required by any applicable federal, state or local law or regulation for the
operation of its business in each jurisdiction wherein it is now conducting or
proposes to conduct business except where the failure to so comply or to procure
such licenses or permits could not reasonably be expected to have a Material
Adverse Effect.

         5.11 Default of Indebtedness. Borrower is not in default in the payment
of the principal of or interest on any Indebtedness or under any instrument or
agreement under or subject to which any Indebtedness has been issued and no
event has occurred under the provisions of any such instrument or agreement
which with or without the lapse of time or the giving of notice, or both,
constitutes or would constitute an event of default thereunder.

         5.12 No Default. Borrower is not in material default in the payment or
performance of any of its continuing obligations and no Default has occurred.

         5.13 No Burdensome Restrictions. Borrower is not party to any contract
or agreement the performance of which could reasonably be expected to have a
Material Adverse Effect. Borrower has not agreed or consented to cause or permit
in the future (upon the happening of a contingency or otherwise) any of its
property, whether now owned or hereafter acquired, to be subject to a Lien which
is not a Permitted Encumbrance.

         5.14 No Labor Disputes. Borrower is not involved in any labor dispute;
there are no strikes or walkouts or union organization of any of Borrower's
employees threatened or in existence and no labor contract is scheduled to
expire during the Term.

         5.15 Margin Regulations. Borrower is not engaged, nor will it engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" within
the respective meanings of each of the quoted terms under Regulation U of the
Board of Governors of the Federal Reserve System as now and from time to time
hereafter in effect. No part of the proceeds of any Advance will be used for
"purchasing" or "carrying" "margin stock" as defined in Regulation U of such
Board of Governors.

         5.16 Investment Company Act. Borrower is not an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended, nor is it controlled by such a company.

                                       58
<PAGE>   60
         5.17 Disclosure. No representation or warranty made by Borrower in this
Agreement, or in any financial statement, report, certificate or any other
document finished in connection herewith or them-with contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements herein or therein not misleading. There is no fact known to
Borrower or which reasonably should be known to Borrower which Borrower has not
disclosed to Agent in writing with respect to the Transactions which could
reasonably be expected to have a Material Adverse Effect

         5.18 Intentionally Omitted.

         5.19 Swaps. Borrower is not a party to, nor will it be a party to, any
swap agreement whereby Borrower has agreed or will agree to swap interest rates
or currencies unless same provides that damages upon termination following an
event of default thereunder are payable on an unlimited "two-way basis" without
regard to fault on the part of either party.

         5.20 Conflicting Agreements. No provision of any mortgage, indenture,
contract, agreement, judgment, decree or order binding on Borrower or affecting
the Collateral conflicts with, or requires any Consent which has not already
been obtained to, or would in any way prevent the execution, delivery or
performance of, the terms of this Agreement or the Other Documents.

         5.21 Application of Certain Laws and Regulations. Neither Borrower nor
any Subsidiary of Borrower is subject to any statute, rule or regulation which
regulates the incurrence of any Indebtedness, including, without limitation,
statutes or regulations relative to common or interstate carriers or to the sale
of electricity, gas, steam, water, telephone, telegraph or other public utility
services.

         5.22 Business and Property of Borrower. Upon and after the Closing
Date, Borrower does not propose to engage in any business other than the
manufacture and distribution of design, manufacture, assembly, testing and
marketing of antennas and battery products and other related products and
components for use in the communications industry and activities necessary to
conduct such business. On the Closing Date, Borrower will own all the property
and possess all of the rights and Consents necessary for the conduct of the
business of Borrower.

         5.23 Intentionally Omitted.

         5.24 Year 2000. Borrower and its Subsidiaries have reviewed the areas
within their business and operations which could be adversely affected by, and
have developed or are developing a program to address on a timely basis, the
risk that certain computer applications used by Borrower or its Subsidiaries (or
any of their respective material suppliers, customers or vendors) may be unable
to recognize and perform properly date-sensitive functions involving dates prior
to and after December 31, 1999 (the "Year 2000 Problem"). The Year 2000 Problem
will not have a Material Adverse Effect on Borrower.

                                       59
<PAGE>   61
         5.25 Section 20 Subsidiaries. Borrower does not intend to use and shall
not use any portion of the proceeds of the Advances, directly or indirectly, to
purchase during the underwriting period, or for 30 days thereafter, Ineligible
Securities being underwritten by a Section 20 Subsidiary.

                           VI. AFFIRMATIVE COVENANTS.

         Borrower shall, until payment in full of the Obligations and
termination of this Agreement:

         6.1 Payment of Fees. Pay to Agent on demand all usual and customary
fees and expenses which Agent incurs in connection with (a) the forwarding of
Advance proceeds and (b) the establishment and maintenance of any Blocked
Accounts or Depository Accounts as provided for in Section 4.15(h). Agent may,
without making demand, charge the account of Borrower for all such fees and
expenses.

         6.2 Conduct of Business and Maintenance of Existence and Assets. (a)
Conduct continuously and operate actively its business according to good
business practices common to the industry in which Borrower is engaged and
maintain all of its properties useful or necessary in its business in good
working order and condition (reasonable wear and tear excepted and except as may
be disposed of in accordance with the terms of this Agreement), including,
without limitation, all licenses, patents, copyrights, design rights,
tradenames, trade secrets and trademarks and take all actions necessary to
enforce and protect the validity of any material intellectual property right or
other material right included in the Collateral; (b) keep in full force and
effect its existence and comply in all material respects with the laws and
regulations governing the conduct of its business where the failure to do so
could reasonably be expected to have a Material Adverse Effect, and (c) make all
such reports and pay all such franchise and other taxes and license fees and do
all such other acts and things as may be lawfully required to maintain its
rights, licenses, leases, powers and franchises under the laws of the United
States or any political subdivision thereof where the failure to do so could
reasonably be expected to have a Material Adverse Effect.

         6.3 Violations. Promptly notify Agent in writing of any violation of
any law, statute, regulation or ordinance of any governmental entity, or of any
agency thereof, applicable to Borrower and known to Borrower which could
reasonably be expected to have a Material Adverse Effect.

         6.4 Government Receivables. At Agent's request, take all steps
necessary to protect Agent's interest in the Collateral under the Federal
Assignment of Claim Act or other applicable state or local statutes or
ordinances and deliver to Agent appropriately endorsed, any instrument or
chattel paper connected with any Receivable arising out of contracts between
Borrower and the United States, any state or any department, agency or
instrumentality of any of them.

         6.5 Fixed Charged Coverage. Cause for any twelve month fiscal Period (a
"Test Period") ending on any March 3 1, June 30, September 30 or December 31
during the Term commencing with the Test Period ending March 31, 1999 the Fixed
Charge Coverage Ratio for such Test Period to be equal to or greater than 1.10
to 1.00:

                                       60

<PAGE>   62
         6.6 Funded Debt to EBITDA. Cause as at the end of any Test Period the
ratio of Funded Debt to EBITDA to be equal to or less than 3.80 to 1.00.

         6.7 Notices of Defaults, Events of Default, Etc. Promptly after the
occurrence thereof, deliver to Agent a written notice setting forth the details
of each Default, Event of Default or condition or state of facts known to
Borrower that has, or could reasonably be expected to have a Material Adverse
Effect.

         6.8 Execution of Supplemental Instruments. Execute and deliver to Agent
from time to time, upon demand, such agreements, statements, assignments and
transfers, or instructions or documents relating to the Collateral, and such
other instruments (including without limitation, legal opinions) as Agent may
request, in order that the full intent of this Agreement and the Other Documents
may be carried into effect.

         6.9 Payment of Indebtedness. Pay, discharge or otherwise satisfy at or
before maturity (subject, where applicable, to specified grace periods and, in
the case of the trade payables, to normal payment practices) all its obligations
and liabilities of whatever nature, except when the failure to do so could not
reasonably be expected to have a Material Adverse Effect or when the amount or
validity thereof is currently been contested in good faith by appropriate
proceedings and Borrower shall have provided for such reserves as Agent may
reasonably deem proper and necessary, subject at all times to any applicable
subordination arrangement in favor of Lenders.

         6.10 Standards of Financial Statements. Cause all financial statements
referred to in Sections 9.7, 9.9 and 9.11 as to which GAAP is applicable to be
complete and correct in all material respects (subject, in the case of interim
financial statements, to normal year-end audit adjustments) and to be prepared
in reasonable detail, in accordance with GAAP and (except as concurred in by
Borrower's independent certified public accountants in the case of audited
financial statements or by Borrower's chief financial officer, in the case of
unaudited financial statements and in any case as disclosed therein) applied
consistently throughout the periods reflected therein

         6.11 Intentionally Omitted.

         6.12 Trademark Documentation. Upon registration by Borrower of any
trademark, promptly deliver to Agent such collateral assignments as Agent shall
reasonably request.

         6.13 Environmental Licences. Maintain in full force and effect, and
comply with, all licenses and permits relating to Environmental Laws where the
failure to maintain and comply with such licenses could reasonably be expected
to have a Material Adverse Effect.

                                       61

<PAGE>   63
                             VII. NEGATIVE COVENANTS

         Borrower shall not, until satisfaction in full of the Obligations and
termination of this Agreement:

         7.1 Merger, Consolidation and Sale of Assets.

                  (a) Except as permitted by Section 15.17 hereof, enter into
any merger, consolidation or other reorganization with or into any other Person,
or permit any other Person to consolidate with or merge with it; or

                  (b) Sell, lease, transfer or otherwise dispose of any of its
properties or assets, except in the ordinary course of its business or as
permitted by Section 4-3.

         7.2 Creation of Liens. Create or suffer to exist any Lien upon or
against any of its property or assets now owned or hereafter acquired, except
Permitted Encumbrances.

         7.3 Guarantees. Become liable upon the obligations of any Person by
assumption, endorsement or guaranty thereof or otherwise (other than to Lenders)
except the endorsement of checks in the ordinary course of business.

         7.4 Investments. Except as otherwise provided in Section 7.12, purchase
or acquire, or permit any Subsidiary to purchase or acquire, obligations or
stock of, or any other investment in, or any assets constituting a business unit
of, or make any other investment in, any Person, except: obligations issued or
guaranteed by the United States of America or any agency thereof, commercial
paper with maturities of not more than 180 days and a published rating of not
less than A-I or P-1 (or the equivalent rating), certificate of time deposit and
bankers' acceptances having maturities of not more than 190 days and repurchase
agreements backed by United States government securities of a commercial bank if
(x) such bank has a combined capital and surplus of at least $500,000,000, or
(y) its debt obligations, or those of a holding company of which it is a
Subsidiary, are rated not less than A (or the equivalent rating) by a nationally
recognized investment rating agency, U.S. money market funds that invest solely
in obligations issued or guaranteed by the United States of America or an agency
thereof, any domestic Subsidiary that the aggregate amount of investments
pursuant to this clause (v) and clause (B) below during any fiscal year of
Borrower does not exceed $5,000,000, and redemptions permitted by Section 7.7;
provided, however, that if no Event of Default shall have occurred and be
continuing at the time of such investment, or occur as a result thereof Borrower
or any Subsidiary may:

                  (A) Acquire obligations or additional capital stock of or
         contribute additional capital to Centurion China in an aggregate amount
         during each fiscal year of Borrower not to exceed $1,750,000;

                                       62

<PAGE>   64
                  (B) Invest in direct or indirect foreign Subsidiaries of the
         Borrower so long as Borrower has pledged 65% of each class of equity
         securities to Agent and the aggregate amount of such investments during
         any fiscal year of Borrower (together with investments pursuant to
         clause (v) hereinabove) do not exceed $5,000,000;

                  (C) Acquire assets constituting capital expenditures permitted
         by Section 7.6; and

                  (D) Acquire assets constituting a business unit or
         substantially all of the stock or other equity interests of any Person
         engaged in a line of business substantially similar to the line of
         business currently engaged in by Borrower as described in Section 5.22,
         provided that no more than $5,000,000 of the consideration for any such
         acquisition made during the Term shall be funded with the proceeds of
         Advances, no more than $10,000,000 of the consideration for all such
         acquisitions made during the Term shall be funded with the proceeds of
         Advances, any portion of any consideration for any such acquisition
         consisting of Indebtedness of Borrower to the seller or sellers of such
         assets, stock or other investments shall be subordinated in right of
         payment to the prior payment in full of the Obligations on terms and
         conditions satisfactory to Agent and Agent shall have completed its due
         diligence with respect to the assets being acquired before such assets
         are included in the Formula Amount and (4) after giving effect to each
         such acquisition Borrower shall have Undrawn Availability of
         $5,000,000.

         7.5 Loans. Make advances, loans or extensions of credit to any Person,
including without limitation, any Affiliate except for loans in the ordinary
course of business not to exceed $750,000 in the aggregate at any time
outstanding.

         7.6 Capital Expenditures. Contract for, purchase or make any
expenditure or commitments for fixed or capital assets (including capitalized
leases) in any fiscal year in an amount in excess of the amounts set forth below
(exclusive of capital expenditures financed under Section 2.4(b) or with the
proceeds of permitted sales of Equipment), minus an amount equal to the amount
of any cash investment or other capital contribution made by Borrower in
Centurion China in such fiscal year:

<TABLE>
<CAPTION>
                        FISCAL YEAR             CAPITAL EXPENDITURES
                   --------------------------   --------------------
<S>                                             <C>
                   1999                               $4,500,000
                   2000                                5,000,000
                   2001                                5,500,000
                   2002 and each fiscal year           6,000,000
                   thereafter
</TABLE>

         7.7 Dividends, Distributions, Etc. Declare or pay any dividend on, or
make any other distribution in respect of, or apply any of its funds, property
or assets to the purchase, redemption

                                       63
<PAGE>   65
or other retirement of any shares of any class of capital stock of Borrower, or
of any options to purchase or acquire any shares, except that so long as no
Event of Default or Default shall have occurred and be continuing, Borrower
shall be permitted to (i) declare and pay dividends on Series A Convertible
Preferred Stock provided that the aggregate amount of such dividends will not
exceed The amount payable in accordance with the terms of the Restated Articles
of Incorporation of Borrower, as in effect on the Closing Date in any fiscal
year, prorated for any portion of a fiscal year (ii) redeem the Series B
Redeemable Preferred Stock in accordance with such terms of the Restated
Articles of Incorporation of Borrower with the proceeds of the Initial Public
Offering, provided that the Term Loan shall have been paid in full (iii) issue
its Common Stock upon the conversion of or exercise of any securities of
Borrower that are convertible into or exercisable for its Common Stock, (iv)
declare and pay the dividends described in Section 2.12 and (y) purchase or
redeem of Borrower's equity securities (including options) from employees or
former employees of Borrower or any of its Subsidiaries in an amount not to
exceed $500,000 in any one fiscal year.

         7.8 Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness for borrowed money (including, without limitation, Indebtedness to
the seller or sellers of assets, stock or other investments of the kind
contemplated by paragraph C of Section 7.4) of Borrower except in respect of (i)
Indebtedness to Lenders, (ii) Indebtedness incurred for capital expenditures
permitted under Section 7.6, (iii) unsecured Indebtedness for borrowed money
which does not exceed $1,000,000 at any given time, (iv) Indebtedness
subordinated to the Obligations which is incurred in connection with any
investment permitted by paragraph C of Section 7.4 and otherwise complying with
the conditions thereof, and (v) indebtedness in connection with the Holdback
Notes until January 31, 1999 (by which time such Holdback Notes shall be repaid
in full).

         7.9 Nature of Business. Substantially change the nature of the business
in which it is presently engaged, nor except as specifically permitted hereby,
purchase or invest, directly or indirectly, in any assets or property other than
in the ordinary course of business for assets or property which are useful in,
necessary for and are to be used in its business as presently conducted.

         7.10 Transactions with Affiliates. Except as set forth on Schedule
7.10. directly or indirectly, purchase, acquire or lease any property from, or
sell, transfer or lease any property to, or otherwise deal with, any Affiliate,
except (a) transactions disclosed in the ordinary course of business, on an
arm's-length basis on tam no less favorable than terms which would have been
obtainable from a Person other than an Affiliate, (b) arrangements with Gary
Kuck in connection with his employment by Borrower, (c) to the extent permitted
by Section 7.7, (i) payments of dividends to the holders of the Series A
Convertible Preferred Stock, (ii) redemption of the Series B Redeemable
Preferred Stock, (iii) issuance of Common Stock and other transactions referred
to in Section 7.7, and (d) payments permitted by Section 2.12 to the extent not
otherwise permitted in this Section 7. 10.

         7.11 Leases. Enter as lessee into any lease arrangement for real or
personal property (unless capitalized and permitted under Section 7.6) if after
giving effect thereto, aggregate annual rental payments for all leased property
would exceed $1,200,000 in any one fiscal year.

                                       64
<PAGE>   66
         7.12 Subsidiaries.

                  (a) Own any Subsidiary whether by formation or acquisition
other than the Subsidiaries listed on Schedule 5.2(b) and Subsidiaries
wholly-owned by Borrower incorporated in the United States, Mexico or Europe
formed or acquired after the Closing Date, provided that, in the case of an
acquisition, such acquisition is otherwise permitted under Section 7. 1 (b) and
that with respect to any such Subsidiary Borrower shall have: (i) provided Agent
with ten (10) Business Days prior written notice of such formation or
acquisition, (ii) if requested by Agent, granted Agent, for the benefit of the
Lenders, a first priority perfected Lien in the capital stock in such Subsidiary
pursuant to a stock pledge agreement (provided that if such Subsidiary is a
foreign Subsidiary then such pledge shall be for only 65% of each class of
equity securities of such foreign Subsidiary), (iii) unless such Subsidiary is a
foreign Subsidiary, if requested by Agent, taken all actions reasonably
requested by Agent so that, if requested by Agent, Agent may be granted a first
priority perfected Lien in all of the assets of such Subsidiary, (iv) unless
such Subsidiary is a foreign Subsidiary, caused such Subsidiary to issue to
Agent and the Lenders a guaranty of the Obligations, in form and substance
satisfactory to Agent.

                  (b) Enter into any partnership, joint venture or similar
arrangement.

         7.13 Fiscal Year and Accounting Changes. Change its fiscal year from
December 31 or make any change (i) in accounting treatment and reporting
practices except as required by GAAP or (ii) in tax reporting treatment except
as required by law.

         7.14 Pledge of Credit. Now or hereafter pledge Agent's or any Lender's
credit on any purchases or for any purpose whatsoever or use any portion of any
Advance in or for any business other than Borrower's business as conducted on
the date of this Agreement

         7.15 Changes, Amendments or Modifications. Amend, modify or waive any
term or material provision of (i) the Restated Articles of Incorporation of
Borrower or (ii) its by-laws without the prior written consent of Agent and the
Required Lenders; provided, however, that no such consent shall be required if
giving effect thereto shall not result in a Default or Event of Default, or
increase directly or indirectly, the present or fixture monetary obligations of
Borrower, or be reasonably expected to have a Material Adverse Effect. Whether
or not such consent is required hereunder, Borrower shall deliver to Agent a
copy of any such change, modification or waiver that is in writing promptly upon
its execution and delivery.

         7.16 Compliance with ERISA. In all material respects, (i) (x) maintain,
or permit any member of the Controlled Group to maintain, or (y) become
obligated to contribute, or permit any member of the Controlled Group to become
obligated to contribute, to any Plan, other than those Plans disclosed on
Schedule 5.8(d) (ii) engage, or permit any member of the Controlled Group to
engage, in any non-exempt "prohibited transaction", as that term is defined in
section 406 of ERISA and Section 4975 of the Code, (iii) incur, or permit any
member of the Controlled Group to incur, any "accumulated finding deficiency",
as that term is defined in Section 302 of ERISA or Section

                                       65
<PAGE>   67
412 of the Code, (iv) terminate, or permit any member of the Controlled Group to
terminate, any Plan when such event could result in any liability of Borrower or
any member of the Controlled Group or the imposition of a lien on the property
of Borrower or any member of The Controlled Group pursuant to Section 4068 of
ERISA, (y) assume, or permit any member of The Controlled Group to assume, any
obligation to contribute to any Multiemployer Plan not disclosed on Schedule
5.8(d) (vi) incur, or permit any member of the Controlled Group to incur, any
withdrawal liability to any Multiemployer Plan; (vii) fail promptly to notify
Agent of the occurrence of any Termination Event, (viii) fail to comply, or
permit a member of the Controlled Group to fail to comply, with the requirements
of ERISA or the Code or other applicable laws in respect of any Plan, (ix) fail
to meet, or permit any member of the Controlled Group to fail to meet, all
minimum funding requirements under ERISA or the Code or postpone or delay or
allow any member of the Controlled Group to postpone or delay any funding
requirement with respect of any Plan.

         7.17 Prepayment of Indebtedness. Except as permitted by Section 2.12,
at any time, directly or indirectly, prepay any Indebtedness for borrowed money
(including, without limitation, Indebtedness to the seller or sellers of assets,
stock or other investments of the kind contemplated by paragraph C of Section
7.4) (other than to Lenders), or repurchase, redeem, retire or otherwise acquire
such Indebtedness.

                           VIII. CONDITIONS PRECEDENT

         8.1 Conditions to Initial Advances. The agreement of Lenders to make
the initial Advances requested to be made on the Closing Date is subject to the
satisfaction, or waiver by Lenders, immediately prior to or concurrently with
the making of such Advances, of the following conditions precedent:

                  (a) Notes. Agent shall have received the Notes duly executed
and delivered by an authorized officer of Borrower,

                  (b) Filings, Registrations and Recordings. Each document
(including, without limitation, any Uniform Commercial Code financing statement)
required by this Agreement, any related agreement or under law or reasonably
requested by Agent to be filed, registered or recorded in order to create, in
favor of Agent, a perfected security interest in or lien upon the Collateral
shall have been properly filed, registered or recorded in each jurisdiction in
the United States in which the filing, registration or recordation thereof is so
required or requested, and Agent shall have received an acknowledgment copy, or
other evidence satisfactory to it, of each such filing, registration or
recordation and satisfactory evidence of the payment of any necessary fee, tax
or expense relating thereto;

                  (c) Proceedings of Borrower. Agent shall have received a copy
of the resolutions in form and substance reasonably satisfactory to Agent, of
the Board of Directors of Borrower authorizing (i) the execution, delivery and
performance of this Agreement, the Notes, the Mortgage, the Other Documents and
any related agreements (collectively the "Documents") and (ii) the

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granting by Borrower of the security interests in and liens upon the Collateral,
in each case certified by the Secretary or an Assistant Secretary of Borrower as
of the Closing Date; and, such certificate shall state that the resolutions
thereby certified have not been amended, modified, revoked or rescinded as of
the date of such certificate;

                  (d) Incumbency Certificates of Borrower. Agent shall have
received a certificate of the Secretary or an Assistant Secretary of Borrower,
dated the Closing Date, as to the incumbency and signature of the officers of
Borrower executing this Agreement, any certificate or other documents to be
delivered by it pursuant hereto, together with evidence of the incumbency of
such Secretary or Assistant Secretary;

                  (e) Restated Articles of Incorporation and By-Laws. Agent
shall have received a copy of the Restated Articles of Incorporation of
Borrower, and all amendments thereto, certified by the Secretary of State or
other appropriate official of its jurisdiction of incorporation together with a
copy of the by-laws of Borrower, and all amendments thereto, in each case
certified as accurate and complete by the Secretary of Borrower,

                  (f) Good Standing Certificates. Agent shall have received good
standing certificates for Borrower dated not more than fifteen (15) days prior
to the Closing, issued by the Secretary of State or other appropriate official
of Borrower's jurisdiction of incorporation and each jurisdiction listed on
Schedule 5.2 hereto;

                  (g) Legal Opinion. Agent shall have received executed legal
opinions in form and substance satisfactory to Agent which shall cover such
matters incident to the transactions contemplated by this Agreement, the Notes,
and the Other Documents as Agent may reasonably require and Borrower hereby
authorities and directs such counsel to deliver such opinions to Agent and
Lenders;

                  (h) No Litigation. (i) No litigation, investigation or
proceeding before or by any arbitrator or governmental authority shall be
continuing or threatened against Borrower or against the officers or directors
of Borrower (A) in connection with the Documents or any of the transactions
contemplated thereby and which, in the reasonable opinion of Agent, is deemed
material or (B) which could, in the reasonable opinion of Agent, have a Material
Adverse Effect; and (ii) no injunction, writ, restraining order or other order
of any nature materially adverse to Borrower or the conduct of its business or
inconsistent with the due consummation of the Transactions shall have been
issued by any Governmental Body;

                  (i) Financial Condition Certificate. Agent shall have received
an executed financial condition certificate in the form of Exhibit 8. 1 (i)
hereto;

                  (j) Collateral Examination. Agent shall have completed
Collateral examinations and received appraisals, the results of which shall be
satisfactory in form and substance to Lenders, of the Receivables, Inventory,
General Intangibles, Real Property and Equipment of Borrower and all books and
records in connection therewith;

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                  (k) Fees. Agent shall have received all fees payable to Agent
and Lenders on or prior to the Closing Date pursuant to Article III hereof;

                  (l) Pro Forma Financial Statements. Agent shall have received
a copy of the Pro Forma Financial Statements which shall be satisfactory in all
respects to Agent;

                  (m) Other Documents. Agent shall have received all Other
Documents, duly executed and delivered, each in form and substance satisfactory
to Agent;

                  (n) Insurance. Agent shall have received in form and substance
satisfactory to Agent, certified copies of Borrower's casualty insurance
policies, together with loss payable endorsements on Agent's standard form of
loss payee endorsement naming Lenders as loss payee, and certified copies of
Borrower's liability insurance policies, together with endorsements g Agent and
Lenders as a co-insured;

                  (o) Deed of Trust. Agent shall have received in form and
substance satisfactory to Agent and Lenders (i) an executed Deed of Trust, (ii)
surveys and (iii) such other documents and agreements as may be required by
Agent in connection therewith;

                  (p) Title Insurance. Agent shall have received fully paid
mortgagee title insurance policies (or binding commitments to issue title
insurance policies, marked to Agent's satisfaction to evidence the form of such
policies to be delivered with respect to the Mortgage), in standard ALTA form,
issued by a title insurance company satisfactory to Agent, each in an amount
equal to not less than $1,200,000, insuring the Deed of Trust to create a valid
Lien on the Real Property with no exceptions which Agent shall not have approved
in writing and no survey exceptions;

                  (q) Payment Instructions. Agent shall have received written
instructions from Borrower directing the application of proceeds of the initial
Advances made pursuant to this Agreement;

                  (r) Blocked Account. Agent shall have received a duly executed
agreement establishing the Blocked Account with the Processor for the collection
or servicing of the Receivables and the other proceeds of the Collateral;

                  (s) Consents. Agent shall have received any and all Consents
necessary to permit the effectuation of the transactions contemplated by this
Agreement and the Other Documents; and, Agent shall have received such Consents
and waivers of such third parties as might assert claims with respect to the
Collateral, as Agent and its counsel shall deem necessary;

                  (t) Leasehold Agreements, Etc. Agent shall have received
landlord, mortgagee or warehouseman agreements satisfactory to Agent with
respect to all premises leased or otherwise used by Borrower at which Inventory
is located;

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                  (u) Contract Review. Agent shall have reviewed all material
contracts of Borrower including, without limitation, leases, union contracts,
labor contracts, vendor supply contracts, license agreements and distributorship
agreements and such contracts and agreements shall be satisfactory in all
respects to Agent;

                  (v) Closing Certificate. Agent shall have received a closing
certificate signed by the President of Borrower dated as of the date hereof
stating that (i) all representations and warranties set forth in this Agreement
and the Other Documents are true and correct on and as of such date, (ii)
Borrower is on such date, in compliance with all the terms and provisions set
forth in this Agreement and the Other Documents and (iii) on such date no
Default or Event of Default has occurred or is continuing;

                  (w) Borrowing Base. Agent shall have received evidence from
Borrower that the aggregate amount of Eligible Receivables and Eligible
Inventory is sufficient in value and amount to support Revolving Advances in the
amount requested by Borrower on the Closing Date;

                  (x) Undrawn Availability. After giving effect to the initial
Revolving Advances hereunder including, without limitation, for payment of
transaction fees and expenses, Borrower shall have Undrawn Availability of at
least $5,000,000;

                  (y) Environmental Matters. Agent and Lenders shall be
satisfied that Borrower is in compliance with all pertinent federal, state and
local regulations including, but not limited to, those with respect to EPA, the
Nebraska Department of Environmental Quality, the Lincoln/Lancaster County
Department of Health, OSHA and ERISA; and

                  (z) Appraisal. Agent shall have received appraisals of
Borrower's Equipment and Real Property which shall be satisfactory in form and
substance to Agent and, based upon 80% of orderly liquidation value of Equipment
and 70% of fair market value of Real Estate, justify an advance of $5,925,000

                  (aa) Other. All other proceedings, and all documents,
instruments and other legal matters in connection with the Transactions shall be
satisfactory in form and substance to Agent and its counsel.

         8.2 Conditions to Each Advance. The agreement of Lenders to make any
Advance requested to be made on any date (including, without limitation, its
initial Advance), is subject to the satisfaction of the following conditions
precedent as of the date such Advance is made:

                  (a) Representations and Warranties. Each of the
representations and warranties made by Borrower and contained in this Agreement
and in each of the Other Documents, and each of the representations and
warranties contained in any certificate, document or financial or other
statement furnished at any time under or in connection with this Agreement or
any of the Other Documents shall be true and correct in all material respects on
and as of such date as if made on and as of such date, subject to prior
delivery, if appropriate, of amended Schedules 5.2(a), 5.2(b), 5.8(b),

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51(c), 5.8(d) and 5.9 and the Questionnaire which shall be permitted to the
extent that any condition, state of facts or event requiring the amendment of
such schedule as contemplated by this Section 8.2(a) shall not otherwise be
prohibited hereunder or constitute a breach of any other provision of this
Agreement;

                  (b) No Default. No Event of Default or Default shall have
occurred and be continuing on such date, or would exist after giving effect to
the Advances requested to be made, on such data and, in the case of the initial
Advance, after giving effect to the consummation of the Transactions; provided,
however, that Agent in its sole discretion, may continue to make Advances
notwithstanding the existence of an Event of Default or Default and that any
Advances so made shall not be deemed a waiver of any such Event of Default or
Default;

                  (c) No Adverse Material Change. (i) Since December 31, 1997,
there shall not have occurred any event, condition or state of facts which has
or could reasonably be expected to have a Material Adverse Effect;

                  (d) Maximum Advances. In the case of any Revolving Advances
requested to be made, after giving effect thereto, the aggregate Revolving
Advances shall not exceed the maximum amount of Revolving Advances permitted
under this Agreement; and

                  (e) Equipment Loans. As respects each Advance constituting an
Equipment Loan in addition to satisfaction of each and every one of the
foregoing conditions precedent, Agent shall have received no later than seven
(7) Business Days prior to Borrower's request for each such Advance an Equipment
Cost Verification covering the Equipment Borrower desires to purchase with the
proceeds of such Equipment Loan.

Each request and deemed request for an Advance by Borrower hereunder shall
constitute a representation and warranty by Borrower as of the date of such
Advance that the conditions contained in this subsection shall have been
satisfied.

                         IX. INFORMATION AS TO BORROWER

         Borrower shall, until satisfaction in full of the Obligations and the
termination of this Agreement:

         9.1 Disclosure of Material Matters. Immediately upon learning thereof,
report to Agent all matters materially affecting the value, enforceability or
collectibility of any portion of the Collateral including, without limitation,
Borrower's reclamation or repossession of, or the return to Borrower of, a
material amount of goods or claims or disputes asserted by any Customer or other
obligor.

         9.2 Schedules. Deliver to Agent on or before the fifteenth (15th) day
of each month as and for the prior month (a) accounts receivable ageings, (b)
accounts payable schedules, (c) Inventory reports and (d) a Borrowing Base
Certificate (which shall be calculated as of the last day

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of the prior month and which shall not be binding upon Agent or restrictive of
Agent's rights under this Agreement). In addition, Borrower will deliver to
Agent at such intervals as Agent may require: (i) confirmatory assignment
schedules, (ii) copies of Customer's invoices, (iii) evidence of shipment or
delivery, and (iv) such further schedules, documents and/or information
regarding the Collateral as Agent may require including, without limitation,
trial balances and test verifications. Agent shall have the right to confirm and
verify all Receivables by any manner and through any medium it considers
advisable and do, whatever it may deem reasonably necessary to protect its
interests hereunder. The items to be provided under this Section are to be in
form satisfactory to Agent and executed by Borrower and delivered to Agent from
time to time solely for Agent's convenience in maintaining records of the
Collateral, and Borrower's Mum to deliver any of such items to Agent shall not
affect, terminate, modify or otherwise limit Agent's Lien with respect to the
Collateral.

         9.3 Environmental Reports. Furnish Agent, concurrently with the
delivery of the financial statements referred to in Section 9.7, with a
certificate of Borrower signed by the President of Borrower stating, to the best
of his knowledge, that Borrower is in compliance in all material respects with
all federal, state and local laws relating to environmental protection and
control and occupational safety and health. To the extent that Borrower knows
that it is not in compliance with the foregoing laws, the certificate shall set
forth with specificity all areas of non-compliance and the proposed action
Borrower will implement in order to achieve compliance.

         9.4 Litigation. Promptly notify Agent in writing of any litigation,
suit or administrative proceeding affecting Borrower, whether or not the claim
is covered by insurance, and of any suit or administrative proceeding, which in
any such case could reasonably be expected to have a Material Adverse Effect.

         9.5 Material Occurrences. Promptly notify Agent in writing upon the
occurrence of (a) any Event of Default or Default; (b) any event, development or
circumstance whereby any financial statements or other reports furnished to
Agent fail in any material respect to present fairly, in accordance with GAAP
consistently applied, the financial condition or operating results of Borrower
as of the date of such statements; (c) any accumulated retirement plan funding
deficiency which, if such deficiency continued for two plan years and was not
corrected as provided in Section 4971 of the Internal Revenue Code, could
subject Borrower to a tax imposed by Section 4971 of the Internal Revenue Code;
(d) each and every default by Borrower which might result in the acceleration of
the maturity of any Indebtedness in excess of $500,000, including the names and
addresses of the holders of such Indebtedness with respect to which them is a
default existing or with respect to which the maturity has been or could be
accelerated, and the amount of such Indebtedness; and (e) any other development
in the business or affairs of Borrower which could reasonably be expected to
have a Material Adverse Effect; in each case describing the nature thereof and
the action Borrower proposes to take with respect thereto.

         9.6 Government Receivables. Notify Agent immediately if any of its
Receivables in excess of $ 100,000 arise out of contracts between Borrower and
the United States, any state, or any department, agency or instrumentality of
any of them.

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         9.7 Annual Financial Statements. Furnish Agent within ninety (90) days
after the end of each fiscal year of Borrower commencing with the fiscal year
ending December 31, 1998, financial statements of Borrower including, bin not
limited to, statements of income and stockholders equity and cash flow from the
beginning of such fiscal year to the end of such fiscal year and the balance
sheet as at the end of such fiscal year, all prepared in accordance with GAAP
applied on a basis consistent with prior practices, and in reasonable detail and
reported upon without qualification by an independent certified public
accounting firm selected by Borrower and satisfactory to Agent (provided that
any of the Big Five accounting firms are hereby deemed satisfactory to Agent)
(the "Accountants"). The report of the Accountants for each fiscal year of
Borrower commencing with the fiscal year ending December 31, 1999 shall be
accompanied by a statement of the Accountants certifying that (i) they have
caused Article X and Sections 6.5, 6.6, 7.6 and 7.11 of this Agreement to be
reviewed, (ii) in making the examination upon which such report was based either
no information came to their attention which to their knowledge constituted an
Event of Default or a Default under this Agreement or any related agreement or,
if such information came to their attention, specifying any such Default or
Event of Default, its nature, when it occurred and whether it is continuing, and
such report shall contain or have appended thereto calculations which set forth
Borrower's compliance with the requirements or restrictions for the fiscal year
reported thereon imposed by Sections 6.5, 6.6, 7.6 and 7.11. In addition, the
reports shall be accompanied by a certificate of Borrower's Chief Financial
Officer which shall state that, based on an examination sufficient to permit him
to make an informed statement, no Default or Event of Default exists, or, if
such is not the case, specifying such Default or Event of Default, its nature,
when it occurred, whether it is continuing and the steps being taken by Borrower
with respect to such event and, such certificate shall have appended thereto
calculations which set forth Borrower's compliance with the requirements or
restrictions imposed by Sections 6.5, 6.6, 7.6 and 7.11.

         9.8 Monthly Financial Statements. Furnish Agent within thirty (30) days
after the end of each month, an unaudited balance sheet of Borrower and
unaudited statements of income and stockholders' equity and cash flow of
Borrower reflecting results of operations from the beginning of the fiscal year
to the end of such month and for such month, prepared on a basis consistent with
prior practices and complete and correct in all material respects, subject to
normal year end adjustments. The reports shall be accompanied by a certificate
of Borrower's Chief Financial Officer which shall state that, based on an
examination sufficient to permit him to make an informed statement, no Default
or Event of Default exists, or, if such is not the case, specifying such Default
or Event of Default, its nature, when it occurred, whether it is continuing and
the steps being taken by Borrower with respect to such event and, such
certificate shall have appended thereto calculations which set forth Borrower's
compliance with the requirements or restrictions imposed by Sections 6.5, 6.6,
7.6 and 7.11.

         9.9 Other Reports. Furnish Agent as soon as available, but in any event
within ten (10) days after the issuance thereof, with copies of such financial
statements, reports and returns as Borrower shall send to its stockholders.

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         9.10 Additional Information. Furnish Agent with additional information
as Agent shall reasonably request in order to enable Agent and Lenders to
determine whether the terms, covenants, provisions and conditions of this
Agreement and the Notes have been complied with by Borrower including, without
limitation and without the necessity of any request by Agent, (a) copies of all
environmental audits and reviews, (b) at least thirty (30) days prior thereto,
notice of Borrower's opening of any new office or place of business or
Borrower's closing of any existing office or place of business, and (c) promptly
upon Borrowers learning thereof, of any labor dispute to which Borrower may
become a party, any strikes or walkouts relating to any of its plants or other
facilities, and the expiration of any labor contract to which Borrower is a
party or by which Borrower is bound.

         9.11 Projected Operating Budget. Furnish Agent, no less than thirty
(30) days after the beginning of each of Borrower's fiscal years commencing with
fiscal year 2000, a month by month projected operating budget and cash flow of
Borrower for such fiscal year (including an me statement for each month and a
balance sheet as at the end of the last month in each fiscal quarter), such
projections to be accompanied by a certificate signed by Borrowers President or
Chief Financial Officer to the effect that such projections have been prepared
on the basis of sound financial planning practice consistent with past budgets
and financial statements and that such officer has no reason to question the
reasonableness of any material assumptions on which such projections were
prepared.

         9.12 Variances From Operating Budget. Furnish Agent, concurrently with
the delivery of the financial statements referred to in Section 9.7 and each
monthly report, a written report summarizing all material variances from,
budgets submitted by Borrower pursuant to Section 9.11 and in the case of each
report delivered for the end of each fiscal quarter of Borrower a discussion and
analysis by management with respect to such variances.

         9.13 Notice of Suits, Adverse Events. Furnish Agent with prompt notice
of (i) any lapse or other termination of any Consent issued to Borrower by any
Governmental Body or any other Person that is material to the operation of
Borrower's business, (ii) any refusal by any Governmental Body or any other
Person to renew or extend any such Consent; and (iii) copies of any periodic or
special reports filed by Borrower with any Governmental Body or Person, if such
reports indicate any material change in the business, operations, affairs or
condition of Borrower, or if copies thereof are requested by Agent, and (iv)
copies of any material notices and other communications from any Governmental
Body or Person which specifically relate to Borrower.

         9.14 ERISA Notices and Requests. Furnish Agent with immediate written
notice in the event that (i) Borrower or any member of the Controlled Group
knows or has reason to know that a Termination Event has occurred, together with
a written statement describing such Termination Event and the action, if any,
which Borrower or member of the Controlled Group has taken, a taking, or
proposes to take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, Department of Labor or PBGC with
respect thereto, (ii) Borrower or any member of the Controlled Group knows or
has reason to know that a prohibited transaction (as defined in Sections 406 of
ERISA and 4975 of the Internal Revenue Code) has occurred together

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with a written statement describing such transaction and the action which
Borrower or any member of the Controlled Group has taken, is taking or proposes
to take with respect thereto, (iii) a funding waiver request has been filed with
respect to any Plan together with all communications received by either Borrower
or any member of the Controlled Group with respect to such request, (iv) any
increase in the benefits of any existing Plan or the establishment of any new
Plan or the commencement of contributions to any Plan to which either Borrower
or any member of the Controlled Group was not previously contributing shall
occur, (v) Borrower or any member of the Controlled Group shall receive from the
PBGC a notice of intention to terminate a Plan or to have a trustee appointed to
administer a Plan, together with copies of each such notice, (vi) Borrower or
any member of the Controlled Group shall receive any favorable or unfavorable
determination letter from the Internal Revenue Service regarding the
qualification of a Plan under Section 401 (a) of the Internal Revenue Code,
together with copies of each such letter, (vii) Borrower or any member of the
Controlled Group shall receive a notice regarding the imposition of withdrawal
liability, together with copies of each such notice; (viii) Borrower or any
member of the Controlled Group shall fail to make a required installment or any
other required payment under Section 412 of the Internal Revenue Code on or
before the due date for such installment or payment; (ix) Borrower or any member
of the Controlled Group knows that (a) a Multiemployer Plan has been terminated,
(b) the administrator or plan sponsor of a Multiemployer Plan intends to
terminate a Multiemployer Plan, or (c) the PBGC has instituted or will institute
proceedings under Section 4042 of ERISA to terminate a Multiemployer Plan.

         9.15 Additional Documents. Execute and deliver to Agent, upon request,
such documents and agreements as Agent may, from time to time, reasonably
request to carry out the purposes, terms or conditions of this Agreement

                              X. EVENTS OF DEFAULT

         The occurrence of any one or more of the following events shall
constitute an "Event of Default":

         10.1 failure by Borrower to pay any principal on the Obligations when
due or to pay any interest on the Obligations within two (2) Business Days of
the date when due, whether at maturity or by reason of acceleration pursuant to
the terms of this Agreement or by notice of intention to prepay, or by required
prepayment, or failure to pay any other Obligations within two (2) Business Days
of the date when due;

         10.2 any representation or warranty made or deemed made by Borrower in
this Agreement or any Other Documents or in any certificate, document or
financial or other statement required to be furnished at any time in connection
herewith or therewith shall prove to have been misleading in any material
respect on the date when made or deemed to have been made;

         10.3 issuance of a notice of Lien, levy, assessment, injunction or
attachment against a material portion of Borrower's property which is not
stayed, bonded or lifted within thirty (30) days;

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         10.4 failure or neglect of Borrower to observe or perform any agreement
contained in Article IV, (other than Sections 4.7, 4.9 and 4.19), Article VI
(other than Section 6.4) or Article VU of this Agreement; or

         10.5 failure or neglect of Borrower to observe or perform any other
agreement contained in this Agreement or any Other Document (other than as
provided in Section 10. 1 through Section 10.4), and such default shall continue
unremedied for a period of 30 days; or

         10.6 failure by Borrower or any of its Subsidiaries to pay any
principal on any Indebtedness (other then the Notes) or in the payment of any
guarantee obligation of any Indebtedness, in either case, the aggregate
principal amount of which exceeds $500,000 beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness or
guarantee obligation was created; or (ii) failure by Borrower or any of its
Subsidiaries to observe or perform my other agreement or condition relating to
any such Indebtedness or guarantee obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or the occurrence of any
other event or the existence of any other condition, the effect of which failure
or other event or condition is to cause, or to permit the holder or holders of
such Indebtedness or beneficiary or beneficiaries of such guarantee obligation
(or a trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, such Indebtedness to become due prior to its stated
maturity or such guarantee obligation to become payable; or

         10.7 any judgment is rendered or judgment liens filed against Borrower
for an amount in excess of $250,000 which within forty (40) days of such
rendering or filing is not either satisfied, stayed or discharged of record;

         10.8 Borrower or any Subsidiary of Borrower shall (i) apply for,
consent to or suffer the appointment of, or the taking of possession by, a
receiver, custodian, trustee, liquidator or similar fiduciary of itself or of
all or a substantial part of its property, (ii) make a general assignment for
the benefit of creditors, (iii) file any petition or commence any proceeding
under any bankruptcy, reorganization, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction (as now or
hereafter in effect), (iv) acquiesce to, or fail to have dismissed, within sixty
(60) days, any petition filed or any proceeding commenced against it under any
such law or statute, (v) be adjudicated a bankrupt or insolvent, (vi) file a
petition seeking to take advantage of any other law providing for the relief of
debtors, or (vii) take any action for the purpose of effecting any of the
foregoing;

         10.9 Borrower shall admit in writing its inability, or be generally
unable, to pay its debts as they become due or cease operations of its present
business;

         10.10 any Lien created hereunder or provided for hereby or under any
Other Document for any reason ceases to be or is not a valid and perfected Lien
having a first priority interest except for those Liens which cease to be
perfected solely as a result of Agent's failure to file continuation statements
for previously filed Uniform Commercial Code financing statements;

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<PAGE>   77
         10.11 any Change of Control;

         10.12 any material provision of this Agreement shall, for any reason,
cease to be valid and binding on Borrower, or Borrower shall so claim in writing
to Agent;

         10.13 (i) any Governmental Body shall (A) revoke, terminate, suspend or
materially adversely modify any license, permit, patent, trademark or tradename
of Borrower which is necessary for the continuation of Borrower's business, or
(B) commence proceedings to suspend, revoke, terminate or adversely modify any
such license, permit, trademark, tradename or patent and such proceedings shall
not be dismissed or discharged within sixty (60) days, or (C) schedule or
conduct a hewing on the renewal of any such license, permit, trademark,
tradename or patent and the staff of such Governmental Body issues a report the
termination, revocation, suspension or material, adverse modification of such
license, permit, trademark, tradename or patent; or (ii) any agreement which is
necessary or material to the operation of Borrower's business shall be revoked
or terminated and not replaced by a substitute acceptable to Agreement within
thirty (30) days after the date of such revocation or termination, and such
revocation or termination and non-replacement would reasonably be expected to
have a Material Adverse Effect;

         10.14 any portion of the Collateral shall be seized or taken by a
Governmental Body;

         10.15 the operations of Borrower's manufacturing facility are
interrupted at any time other than for the purpose of maintenance for a period
not to exceed two (2) weeks, unless Borrower shall (i) be entitled to receive
for such period of interruption, proceeds of business interruption insurance
sufficient to assure that its per them cash needs during such period is at least
equal to its average per them cash needs for the consecutive three (3) month
period immediately preceding the initial date of interruption and (ii) receive
such proceeds in the amount described in clause (i) preceding not later than
forty-five (45) days following the initial date of any such interruption; or

         10.16 an event or condition specified in Sections 7.16 or 9.14 shall
occur or exist with respect to any Plan and, as a result of such event or
condition, together with all other such events or conditions, Borrower or any
member of the Controlled Group shall incur, or in the reasonable opinion of
Agent be reasonably likely to incur, a liability to a Plan or the PBGC (or both)
which, in the reasonable judgment of Lenders, would have a Material Adverse
Effect.

                 XI. LENDER'S RIGHTS AND REMEDIES AFTER DEFAULT

         11.1 Rights and Remedies. (a) Upon the occurrence of (i) an Event of
Default pursuant to Section 10.8 all Obligations shall be immediately due and
payable and this Agreement and the obligation of Lenders to make Advances shall
be deemed terminated; and, (ii) any of the other Events of Default and at any
time thereafter (such default not having previously been cured or waived), at
the option of Required Lenders all Obligations shall be immediately due and
payable and Lenders shall have the right to terminate this Agreement and to
terminate the obligation of Lenders

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<PAGE>   78
to make Advances. Upon the occurrence of any Event of Default (such default not
having previously been cured or waived): (A) Agent shall have the right to
exercise any and all other rights and remedies provided for herein, under the
Uniform Commercial Code and at law or equity generally, including, without
limitation, the right to foreclose the security interests granted herein and to
realize upon any Collateral by any available judicial procedure and/or to take
possession of and sell any or all of the Collateral with or without judicial
process; (B) Agent may enter any of Borrower's premises or other premises
without legal process and without incurring liability to Borrower therefor, and
Agent may thereupon, or at any time thereafter, in its discretion without notice
or demand, take the Collateral sod remove the same to such place as Agent may
deem advisable and Agent may require Borrower to make the Collateral available
to Agent at a convenient place; (C) with or without having the Collateral at the
time or place of sale, Agent may sell the Collateral, or any part thereof at
public or private sale, at any time or place, in one or more sales, at such
price or prices, and upon such terms, either for cash, credit or future
delivery, as Agent may elect, provided that except as to that part of the
Collateral which is perishable or threatens to decline speedily in value or is
of a type customarily sold on a recognized market Agent shall give Borrower
reasonable notification of such sale or sales, it being agreed that in all
events written notice mailed to Borrower at least ten (10) days prior to such
sale or sales is reasonable notification; (D) at any public sale Agent or any
Lender may bid for and become the purchaser, and Agent, any Lender or any other
purchaser at any such sale thereafter shall hold the Collateral sold absolutely
free from any claim or right of whatsoever kind, including any equity of
redemption and such right and equity are hereby expressly waived and released by
Borrower; and (E) in connection with the exercise of the foregoing remedies,
Agent is granted permission to use (x) all of Borrower's trademarks, trade
styles, trade names, patents, patent applications, licenses, franchises and
other proprietary rights which are used in connection with Inventory for the
purpose of disposing of such Inventory and (y) Equipment for the purpose of
completing the manufacture of unfinished goods.

                  (b) The proceeds realized from the sale of any Collateral
shall be applied as follows: first, to the reasonable costs, expenses and
attorneys' fees and expenses incurred by Agent for collection and for
acquisition, completion, protection, removal, storage, sale and delivery of the
Collateral; second, to interest due upon any of the Obligations; and, third, to
the principal of the Obligations. If any deficiency shall arise, Borrower shall
remain liable to Agent and Lenders therefor.

         11.2 Agent's Discretion. Agent shall have the right in its sole
discretion to determine which rights, Liens, security interests or remedies
granted hereunder or under any Other Document Agent may at any time pursue,
relinquish, subordinate, or modify or to take any other action with respect
thereto and such determination will not in any way modify or affect any of
Agent' s or Lenders', rights hereunder.

         11.3 In addition to any other rights which Agent or any Lender may have
under applicable law, upon the occurrence of an Event of Default (such default
not having previously been cured or waived), Agent and such Lender shall have a
right to apply any of Borrower's property held by Agent and such Lender to
reduce the Obligations.

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<PAGE>   79
         11.4 Rights and Remedies not Exclusive. The enumeration of the
foregoing rights and remedies is not intended to be exhaustive and the exercise
of any right or remedy shall not preclude the exercise of any other right or
remedies provided for herein or otherwise provided by law, all of which shall be
cumulative and not alternative.

                      XII. WAIVERS AND JUDICIAL PROCEEDINGS

         12.1 Waiver of Notice. Borrower hereby waives notice of non-payment of
any of the Receivables, demand, presentment, protest and notice thereof with
respect to any and all instruments, notice of acceptance hereof notice of loans
or advances made, credit extended, Collateral received or delivered, or any
other action taken in reliance hereon, and all other demands and notices of my
description, except such as are expressly provided for herein.

         12.2 Delay. No delay or omission on Agent's or any Lender's part in
exercising any right, remedy or option shall operate as a waiver of such or any
other right, remedy or option or of any default.

         12.3 Jury Waiver. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES
ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A)
ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO
OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE AND EACH PARTY HEREBY CONSENTS THAT
ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO TIES AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENTS OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

                      XIII. EFFECTIVE DATE AND TERMINATION

         13.1 Term. This Agreement, which shall inure to the benefit of and
shall be binding upon the respective successors and permitted assigns of each of
Borrower, Agent and each Lender, shall become effective on the date hereof and
shall continue in full force and effect until December 30, 2003 (the "Maturity
Date") unless sooner terminated as herein provided. Borrower may terminate this
Agreement at any time upon ninety (90) days, prior written notice (such actual
termination date, the "Termination Date") upon payment in full of the
Obligations; provided, however, Borrower shall pay to Agent, for the ratable
benefit of Lenders, an early termination fee in an amount equal to (x) $420,000
($470,000 if the Commitment Date has occurred) if the Termination Date occurs at
any

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<PAGE>   80
time prior to the first anniversary of the Closing Date and (y) $210,000
($235,000 if the Commitment Date has occurred) if the Termination Date occurs on
or after the first anniversary of the Closing Date but prior to the date
immediately preceding the second anniversary of the Closing Date.

         13.2 Termination. The termination of this Agreement shall not affect
any of Borrower's, Agent's or any Lender's rights, or any of the obligations
having their inception prior to the effective date of such termination, and the
provisions hereof shall continue to be fully operative until all transactions
entered into, rights or interests created or Obligations have been fully
disposed of, concluded or liquidated. The security interests, Liens and rights
granted to Agent and Lenders hereunder and the financing statements filed
hereunder shall continue in full force and effect, and Borrower waives any
rights which it may have under Section 9-404(l) of the Uniform Commercial Code
to demand the filing of termination statements with respect to the Collateral,
and Agent shall not be required to send such termination statements to Borrower,
in each case, notwithstanding the termination of this Agreement or the fact that
Borrower's Account may from time to time be temporarily in a zero or credit
position, until all of the Obligations of Borrower have been paid or performed
in full and all commitments to lend hereunder shall be terminated, or Borrower
has furnished Agent and Lenders with an indemnification satisfactory to Agent
and Lenders with respect thereto. All representations, warranties, covenants,
waivers and agreements contained herein shall survive termination hereof until
all Obligations are paid or performed in full.

                             XIV. REGARDING AGENT

         14.1 Appointment. Each Lender hereby designates PNC to act as Agent for
such Lender under this Agreement and the Other Documents. Each Lender hereby
irrevocably authorizes Agent to take such action on its behalf under the
provisions of this Agreement and the Other Documents and to exercise such powers
and to perform such duties hereunder and thereunder as are specifically
delegated to or required of Agent by the terms hereof and thereof and such other
powers as are reasonably incidental thereto and Agent shall hold all Collateral,
payments of principal and interest, fees (except the fees set forth in the Fee
Letter and Section 3.3) charges and collections (without giving effect to any
collection days) received pursuant to this Agreement, for the ratable benefit of
Lenders. Agent may perform any of its duties hereunder by or through its agents
or employees. As to any matters not expressly provided for by this Agreement
(including without limitation, collection of the Notes) Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding; provided however that Agent shall not be required
to take any action which exposes Agent to liability or which is contrary to this
Agreement or the Other Documents or applicable law unless Agent is furnished
with an indemnification reasonably satisfactory to Agent with respect thereto.

         14.2 Nature of Duties. Agent shall have no duties or responsibilities
except those expressly set forth in this Agreement and the Other Documents.
Neither Agent nor any of its officers, directors, employees or agents shall be
(i) liable for any action taken or omitted by them as such hereunder or

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<PAGE>   81
in connection herewith, unless caused by their gross negligence (but not mere
negligence) or willful misconduct, or (ii) responsible in any manner for any
recitals, statements, representations or warranties made by Borrower or any
officer thereof contained in this Agreement, or in any of the Other Documents or
in any certificate, report, statement or other document referred to or provided
for in, or received by Agent under or in connection with, this Agreement or any
of the Other Documents or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, or any of the Other Documents
or for any failure of Borrower to perform its obligations hereunder. Agent shall
not be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any of the Other Documents, or to inspect the properties,
books or records of Borrower. The duties of Agent as respects the Advances to
Borrower shall be mechanical and administrative in nature; Agent shall not have
by reason of this Agreement a fiduciary relationship in respect of any Lender;
and nothing in this Agreement, expressed or implied, is intended to or shall be
so construed as to impose upon Agent any obligations in respect of this
Agreement except as expressly set forth herein.

         14.3 Lack of Reliance on Agent and Resignation. Independently and
without reliance upon Agent or any other Lender, each Lender has made and shall
continue to make (i) its own independent investigation of the financial
condition and affairs of Borrower in connection with the making and the
continuance of the Advances hereunder and the taking or not taking of any action
in connection herewith, and (ii) its own appraisal of the creditworthiness of
Borrower. Agent shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or other information
with respect thereto, whether coming into its possession before making of the
Advances or at any time or times thereafter except as shall be provided by
Borrower pursuant to the terms hereof Agent shall not be responsible to any
Lender for any recitals, statements, information, representations or wan-antics
herein or in any agreement, document, certificate or a statement delivered in
connection with or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any Other
Document, or of the financial condition of Borrower, or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement, the Note, the Other Documents or the
financial condition of Borrower, or the existence of any Event of Default or any
Default.

         Agent may resign on sixty (60) days' written notice to each of Lenders
and Borrower and upon such resignation, the Required Lenders will promptly
designate a successor Agent reasonably satisfactory to Borrower.

         Any such successor Agent shall succeed to the rights, powers and duties
of Agent, and the term "Agent" shall mean such successor agent effective upon
its appointment, and the former Agent's rights, powers and duties as Agent shall
be terminated, without any other or further act or dead on the port of such
former Agent. After any Agent's resignation as Agent, the provisions of this
Article XIV shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.

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<PAGE>   82
         14.4 Certain Rights of Agent. If Agent shall request instructions from
Lenders with respect to any act or action (including failure to act) in
connection with this Agreement or any Other Document, Agent shall be entitled to
refrain from such act or taking such action unless and until Agent shall have
received instructions from the Required Lenders; and Agent shall not incur
liability to any Person by reason of so refraining. Without limiting the
foregoing, Lenders shall not have any right of action whatsoever against Agent
as a result of its acting or refraining from acting hereunder in accordance with
the instructions of the Required Lenders.

         14.5 Reliance. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, order or other
document or telephone message believed by it to be genuine and correct and to
have been signed, sent or made by the proper person or entity, and, with respect
to all legal matters pertaining to this Agreement and the Other Documents and
its duties hereunder, upon advice of counsel selected by it Agent may employ
agents and attorneys-in-fact and shall not be liable for the default or
misconduct of any such agents or attorneys-in-fact selected by Agent with
reasonable care.

         14.6 Notice of Default. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder or under
the Other Documents, unless Agent has received notice from a Lender or Borrower
referring to this Agreement or the Other Documents, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that Agent receives such a notice, Agent shall give notice thereof to
Lenders. Agent shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Lenders; provided that,
unless and until Agent shall have received such directions, Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of Lenders.

         14.7 Indemnification. To the extent Agent is not reimbursed and
indemnified by Borrower, each Lender will reimburse and indemnify Agent in
proportion to its respective portion of the Advances (or, if no Advances are
outstanding, according to its Commitment Percentage from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against Agent in performing its duties
hereunder, or in any way relating to or arising out of this Agreement or any
Other Loan Document; provided that, Lenders shall not be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from Agent's gross
negligence (but not mere negligence) or willful misconduct.

         14.8 Agent in its Individual Capacity. With respect to the obligation
of Agent to lend under this Agreement, the Advances made by it shall have the
same rights and powers hereunder as any other Lender and as if it were not
performing the duties as Agent specified herein; and the term "Lender" or any
similar term shall, unless the context clearly otherwise indicates, include
Agent in

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its individual capacity as a Lender. Agent may engage in business with Borrower
as if it were not performing the duties specified herein, and may accept fees
and other consideration from Borrower for services in connection with this
Agreement or otherwise without having to account for the same to Lenders.

         14.9 Delivery of Documents. To the extent Agent receives documents and
information from Borrower pursuant to the terms of this Agreement, Agent will
promptly finish such documents and information to Lenders.

         14.10 Borrower's Undertaking to Agent. Without prejudice to their
respective obligations to Lenders under the other provisions of this Agreement,
Borrower hereby undertakes with Agent to pay to Agent from time to time on
demand all amounts from time to time due and payable by it for the account of
Agent or Lenders or any of them pursuant to this Agreement to the extent not
already paid. Any payment made pursuant to any such demand shall pro tanto
satisfy Borrower's obligations to make payments for the account of Lenders or
the relevant one or more of them pursuant to this Agreement.

                                XV. MISCELLANEOUS

         15.1 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York applied to contracts to be
performed wholly within the State of New York. Any judicial proceeding brought
by or against Borrower with respect to any of the Obligations, this Agreement or
any related agreement may be brought in any court of competent jurisdiction in
the State of New York, United States of America, and, by execution and delivery
of this Agreement, Borrower accepts for itself and in connection with its
properties, generally and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement. Nothing herein shall affect the right
to serve process in any manner permitted by law or shall limit the right of
Lenders to bring proceedings against Borrower in the courts of any other
jurisdiction. Borrower waives any objection to jurisdiction and venue of any
action instituted hereunder and shall not assert any defense based on lack of
jurisdiction or venue or based upon forum non conveniens. Any judicial
proceeding by Borrower against Lenders involving, directly or indirectly, any
matter or claim in any way arising out of, related to or connected with this
Agreement or any related agreement, shall be brought only in a federal or state
court located in the City of New York, State of New York.

         15.2 Entire Understanding. (a)This Agreement and the documents executed
concurrently herewith contain the entire understanding between Borrower, Agent
and each Lender and supersedes all prior agreements and understandings, if any,
relating to the subject matter hereof. Any promises, representations, warranties
or guarantees not herein contained and hereinafter made shall have no force and
effect unless in writing, and executed by the party or parties making such
representations, warranties or guaranties. Neither this Agreement nor any
portion or provisions hereof may be changed, modified, amended, waived,
supplemented, discharged, canceled or terminated orally or

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by any course of dealing, or in any manner other than by an agreement in
writing, signed by the party to be charged. Borrower acknowledges that it has
been advised by counsel in connection with the execution of this Agreement and
Other Documents and is not relying upon oral representations or statements
inconsistent with the terms and provisions of this Agreement

                  (b) The Required Lenders, Agent with the consent in writing
of the Required Lenders, and Borrower may, subject to the provisions of this
Section 15.2 (b), from time to time enter into written supplemental agreements
to this Agreement, the Notes or the Other Documents executed by Borrower, for
the purpose of adding or deleting any provisions or otherwise changing, varying
or waiving in any manner the rights of Lenders, Agent or Borrower thereunder or
the conditions, provisions or terms thereof of waiving any Event of Default
thereunder, but only to the extent specified in such written agreements;
provided, however, that no such supplemental agreement shall, without the
consent of all Lenders:

                           (i)      increase the Maximum Loan Amount or increase
                                    the Commitment Percentage of any Lender,

                           (ii)     increase the Receivables Advance Rate in
                                    excess of 95%, increase the Antenna
                                    Inventory Advance Rate in excess of 60% or
                                    increase the Battery Advance Rate in excess
                                    of 50% (this provision shall apply to
                                    actions taken by Agent in accordance with
                                    Section 2. 1 (b));

                           (iii)    extend the maturity of any Note or the due
                                    date for any amount payable hereunder, or
                                    decrease the rate of interest or reduce any
                                    fee or principal payment payable by Borrower
                                    to Lenders pursuant to this Agreement;

                           (iv)     alter the definition of the term Required
                                    Lenders or alter, amend or modify Section
                                    2.5, Section 15.3(a) or this Section
                                    15.2(b);

                           (v)      release any Collateral during any calendar
                                    year having an aggregate value in excess of
                                    $500,000;

                           (vi)     change the rights and duties of Agent; or

                           (vii)    voluntarily make any Revolving Advance if
                                    after giving effect thereto the total of
                                    Revolving Advances outstanding hereunder
                                    would exceed the Formula Amount for more
                                    than sixty (60) consecutive Business Days or
                                    exceed one hundred and twenty percent (120%)
                                    of the Formula Amount. The foregoing
                                    limitation shall not apply to involuntary
                                    overadvances that may result from the
                                    limitations set forth in this Agreement that
                                    were unintentionally exceeded for reasons
                                    including, without limitation, Collateral
                                    believed to be eligible in fact being or
                                    becoming ineligible or the return of

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<PAGE>   85
                                    uncollected checks or other items applied to
                                    the reduction of the Advances or
                                    overadvances made to protect or preserve
                                    Collateral. The foregoing shall not be
                                    deemed to permit the making of any Revolving
                                    Advance if after giving effect thereto there
                                    would be a violation of Section 2.5.

         Any such supplemental agreement shall apply equally to each of Lenders
and shall be binding upon Borrower, Lenders and Agent and all future holders of
the Obligations. In the case of my waiver, Borrower, Agent and Lenders shall be
restored to their former positions and rights, and any Event of Default waived
shall be deemed to be cured and not continuing, but no waiver of a specific
Event of Default shall extend to any subsequent Event of Default (whether or not
the subsequent Event of Default is the same as the Event of Default which was
waived), or impair any right consequent thereon.

         Notwithstanding the foregoing, Agent may voluntarily permit the
Revolving Advances at any time to exceed the Formula Amount by not more than the
lesser of (x) $ 1,000,000 or (y) 10% of the Formula Amount but Agent will not
voluntarily permit the Revolving Advances to exceed such amount during any
period consisting of more than thirty (30) consecutive days. For the purposes of
the preceding sentence, the discretion granted to Agent hereunder shall not
preclude involuntary overadvances that may result from time to time from the
fact that the Formula Amount was * y exceeded (whether at the time of any
Revolving Advance or at the time of the issuance of a Letter of Credit resulting
in a Revolving Advance) for any reasons including, but not limited to,
Collateral believed to be eligible in fact being or becoming ineligible or the
return of uncollected checks or other items applied to the reduction of the
Revolving Advances or overadvances made to protect or preserve Collateral. In
the event that Agent involuntarily permits the Revolving Advances to exceed the
Formula Amount by more than 10%, Agent shall decrease such excess in as
expeditious a manner as is practicable under the circumstances and not
inconsistent with the reasons for such excess. Revolving Advances made after
Agent has determined the existence of involuntary overadvances shall be deemed
to be involuntary overadvances: and shall be decreased in accordance with the
preceding sentence. The foregoing shall not be deemed to permit the making of
any Revolving Advance if after giving effect thereto there would be a violation
of Section 2.5.

         In the event that Agent requests the consent of a Lender pursuant to
this Section 15.2 and such Lender shall not respond or reply to Agent in writing
within fifteen (15) Business Days of delivery of such request, such Lender shall
be deemed to have consented to the matter that was the subject of the request.
In the event that Agent requests the consent of a Lender pursuant to this
Section 15.2 in accordance with Section 15.6 and such consent is denied, then
Agent may, at its option, require such Lender to assign its interest in the
Advances to Agent or to another Lender or to any other Person designated by the
Agent (the "Designated Lender"), for a price equal to the then outstanding
principal amount thereof plus accrued and unpaid interest and fees due such
Lender together with any breakage costs for Eurodollar Loans, which interest and
fees shall be paid when collected from Borrower In the event Agent elects to
require any Lender to assign its interest to PNC or to the Designated Lender,
Agent will so notify such Lender in writing within forty five (45) days

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following such Lender's denial, and such Lender will assign its interest to PNC
or the Designated Lender no later than five (5) days following receipt of such
notice pursuant to a Commitment Transfer Supplement executed by such Lender, PNC
or the Designated Lender, as appropriate, and Agent.

         15.3 Successors and Assigns; Participations; New Lenders.

                  (a) This Agreement shall be binding upon and inure to the
benefit of Borrower, Agent, each Lender, all future holders of the Note and
their respective successors and except the Borrower may not assign or transfer
any of its rights or obligations under this Agreement without the prior written
consent of Agent and each Lender.

                  (b) Borrower acknowledges that in the regular course of
commercial banking business one or more Lenders may at any time and from time to
time sell participating interests in the Advances to other financial
institutions (each such transferee or purchaser of a participating interest, a
"Transferee"). Each Transferee may exercise all rights of payment (including
without limitation rights of set-off) with respect to the portion of such
Advances held by it or other Obligations payable hereunder as fully as if such
Transferee were the direct holder thereof provided that Borrower shall not be
required to pay to any Transferee more than the amount which it would have been
required to pay to Lender which granted an interest in its Advances or other
Obligations payable hereunder to such Transferee had such Lender retained such
interest in the Advances hereunder or other Obligations payable hereunder and in
no event shall Borrower be required to pay any such amount arising from the same
circumstances and with respect to the same Advances or other Obligations payable
hem-under to both such Lender and such Transferee. Borrower hereby grants to any
Transferee a continuing security interest in any deposits, moneys or other
property actually or constructively held by such Transferee as security for the
Transferee's interest in the Advances.

                  (c) Any Lender may sell, assign or transfer all or any part of
its rights under tins Agreement and the Other Documents to one or more
additional banks or financial institutions and one or more additional banks or
financial institutions may commit to make Advances hereunder (each a "Purchasing
Lender"); provided no bank or financial institution may become a Purchasing
Lender unless it has assets in excess of $1,000,000,000. Any such assignment or
transfer must be made in minimum amounts of not less than $5,000,000, pursuant
to a Commitment Transfer Supplement, executed by a Purchasing Lender, the
transferor Lender, and Agent and delivered to Agent for recording, provided,
however, that so long as PNC shall act as Agent hereunder, Agent shall not
transfer or assign any part of its rights hereunder to the extent that its
Commitment Percentage would be less than the Commitment Percentage of any other
Lender after giving effect to such assignment or transfer. Upon such execution,
delivery, acceptance and recording, from and after the transfer effective date
determined pursuant to such Commitment Transfer Supplement, (i) Purchasing
Lender thereunder shall be a party hereto and, to the extent provided in such
Commitment Transfer Supplement, have the rights and obligations of a Lender
thereunder with a Commitment Percentage as set forth therein, and (ii) the
transferor Lender thereunder shall, to the

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extent provided in such Commitment Transfer Supplement, be released from its
obligations under this Agreement, the Commitment Transfer Supplement creating a
novation for that purpose. Such Commitment Transfer Supplement shall be deemed
to amend this Agreement to the extent, and only to the extent, necessary to
reflect the addition of such Purchasing Lender and the resulting adjustment of
the Commitment Percentages arising from the purchase by such Purchasing Lender
of all or a portion of the rights and obligations of such transferor Lender
under this Agreement and the Other Documents. Borrower hereby consents to the
addition of such Purchasing Lender and the resulting adjustment of the
Commitment Percentages arising from the purchase by such Purchasing Lender of
all or a portion of the rights and obligations of such transferor Lender under
this Agreement and the Other Documents. Upon the Commitment Date, the Purchasing
Lender which is becoming a Leader under this Agreement shall receive an
assignment from PNC of a portion of PNC's Commitment Amount which, together with
the $5,000,000 increase in the Maximum Loan Amount, shall equal the Commitment
Amount of such Purchasing Lender. The Commitment Percentage of the Purchasing
Lender shall be a percentage of the Maximum Loan Amount as of the Commitment
Date subject to Section 2.15 hereof. Agent shall send a notice to Borrower and
each Lender setting forth the revised Commitment Percentage of each Lender after
giving effect to the increase in the Maximum Loan Amount.

                  (d) Agent, acting solely for this purpose as agent of
Borrower, shall maintain at its address a copy of each Commitment Transfer
Supplement delivered to it and a register (the "Register") for the recordation
of the names and addresses of the Advances owing to each Lender from, time to
time. The entries in the Register shall be conclusive, in the absence of
manifest error, and Borrower, Agent and Lenders may treat each Person whose name
is recorded in the Register as the owner of the Advance recorded therein for the
purposes of this Agreement The Register shall be available for inspection by
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice. Agent shall receive a fee in the amount of $3500
payable by the applicable Purchasing Lender upon the effective date of each
transfer or assignment to such Purchasing Lender.

                  (e) Borrower authorizes each Lender to disclose to any
Transferee or Purchasing Lender and any prospective Transferee or Purchasing
Lender any and all financial information in such Lender's possession concerning
Borrower which has been delivered to such Lender by or on behalf of Borrower
pursuant to this Agreement or in connection with such Lender's credit evaluation
of Borrower.

         15.4 Application of Payments. Agent shall have the continuing and
exclusive right to apply or reverse and re-apply any payment and any and all
proceeds of Collateral to any portion of the Obligations. To the extent that
Borrower makes a payment or Agent or any Lender receives any payment or proceeds
of the Collateral for Borrower's benefit, which are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, debtor in possession, receiver, custodian or any other party under
any bankruptcy law, common law or equitable cause, then, to such extent, the
Obligations or part thereof intended to be satisfied shall be revived and
continue as if such payment or proceeds had not been received by Agent or such
Lender.

                                       86
<PAGE>   88
         15.5 Indemnity. Borrower shall indemnify Agent (in such capacity and as
Issuing Lender) and each Lender and each of their respective officers,
directors, employees, and agents from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements of any kind or nature whatsoever (including, without
limitation, fees and disbursements of counsel) which may be imposed on, incurred
by, or asserted against Agent or any Lender in any litigation, proceeding or
investigation instituted or conducted by any governmental agency or
instrumentality or any other Person with respect to any aspect of, or any
transaction contemplated by, or referred to in, or any matter related to, this
Agreement, whether or not Agent or any Lender is a party thereto, except to the
extent that any of the foregoing arises out of the willful misconduct or gross
negligence of the party being indemnified.

         15.6 Notice. Any notice or request hereunder may be given to Borrower
or to Agent or any Lender at their respective addresses set forth below or at
such other address as may hereafter be specified in a notice designated as a
notice of change of address under this Section. Any notice or request hereunder
shall be given by (a) hand delivery, (b) overnight courier, (c) certified mail,
return receipt requested, (d) telex or telegram, subsequently confirmed by
registered or certified mail, or (e) telecopy to the number set out below (or
such other number as may hereafter be specified in a notice designated as a
notice of change of address) with telephone - on to a duly authorized officer of
the recipient confirming its receipt as subsequently confirmed by registered or
certified mail. Any notice or other communication required or permitted pursuant
to this Agreement shall be deemed given (a) when personally delivered to any
officer of the party to whom it is addressed, (b) on the earlier of actual
receipt thereof or three (3) days following posting thereof by certified or
registered mail, postage prepaid, or (c) upon actual receipt thereof when sent
by a recognized overnight delivery service or (d) upon actual receipt thereof
when sent by telecopier to the number set forth below with telephone
communication confirming receipt and subsequently confirmed by registered,
certified or overnight mail to the address set forth below, in each case
addressed to each party at its address set forth below or at such other address
as has been finished in writing by a party to the other by like notice:

         (A)      If to Agent or PNC at:   PNC Bank National Association
                                           201 East Fifth Street
                                           Cincinnati, Ohio 45201
                                           Attention: Michael Shover
                                           Telephone: (513) 651-7572
                                           Telecopier: (513) 651-7505

                  with a copy to:          Hahn & Hessen LLP
                                           350 Fifth Avenue
                                           New York, New York 10118
                                           Attention: Steven J. Seif, Esq.

                                       87
<PAGE>   89
                                           Telephone: (212) 946-0294
                                           Telecopier: (212) 594-7167

         (B) If to a Lender other than Agent, as specified on the signature
pages hereof,

         (C)      If to Borrower, at:      Centurion International, Inc.
                                           3425 North 44th Street
                                           Lincoln, Nebraska 68504
                                           Attention: Gary Kuck
                                           Telephone: (402) 4674491
                                           Telecopier: (402) 4674528

                   with a copy to:         Cornerstone Equity Investors, L.L.C.
                                           717 Fifth Avenue
                                           Suite 1100
                                           New York, New York 10022
                                           Attention: Mark Rossi
                                                      Robert Getz
                                           Telephone: (212) 753-0901
                                           Telecopier: (212) 926-6798

                   and a copy to:          Kirkland & Ellis
                                           Citicorp Center
                                           153 East 53rd Street
                                           New York, New York 10022
                                           Attention: Frederick A. Tanne, Esq.
                                           Telephone: (212) 4464931
                                           Telecopier: (212) 4464900

         15.7 Severability. If any part of this Agreement is contrary to,
prohibited by, or deemed invalid under applicable laws or regulations, such
provision shall be inapplicable and deemed omitted to the extent so contrary,
prohibited or invalid, but the remainder hereof shall not be invalidated thereby
and shall be given effect so far as possible.

         15.8 Expenses. All costs and expenses including, without limitation,
reasonable attorneys' fees and disbursements incurred by Agent, Agent on behalf
of Lenders and Lenders (a) in all efforts made to enforce payment of any
Obligation or effect collection of any Collateral, or (b) in connection with the
entering into, modification, amendment, administration and enforcement of this
Agreement or any consents or waivers hereunder and all related agreements,
documents and instruments, or (c) in instituting, maintaining, preserving,
enforcing and foreclosing on Agent's security interest in or Lien on any of the
Collateral, whether through judicial proceedings or otherwise, or (d) in
defending

                                       88
<PAGE>   90
or prosecuting any actions or proceedings arising out of or relating to Agent's
or any Lender's transactions with Borrower, or (e) in connection with any advice
given to Agent or any Lender with respect to its rights and obligations under
this Agreement and all related agreements, may be charged to Borrower's Account
and shall be part of the Obligations.

         15.9 Injunctive Relief. Borrower recognizes that, in the event Borrower
fails to perform, observe or discharge any of its obligations or liabilities
under this Agreement, any remedy at law may prove to be inadequate relief to
Lenders; therefore, Agent, if Agent so requests, shall be entitled to temporary
and permanent injunctive relief in any such case without the necessity of
proving that actual damages are not an adequate remedy.

         15.10 Consequential Damages. Neither Agent nor any agent or attorney
for any of them shall be liable to Borrower for consequential damages arising
from any breach of contract, tort or other wrong relating to this Agreement and
the transactions contemplated hereby.

         15.11 Captions. The captions at various places in this Agreement are
intended for convenience only and do not constitute and shall not be interpreted
as part of this Agreement.

         15.12 Counterparts. This Agreement may be executed in one or more
counterparts, each of which taken together shall constitute one and the same
agreement. Any signature delivered by a party by facsimile transmission shall be
deemed to be an original signature hereto.

         15.13 Construction. The parties acknowledge that each party and its
counsel have reviewed this Agreement and that the normal rule of construction to
the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement or any amendments,
schedules or exhibits thereto.

         15.14 Confidentiality: Shared Information. (a) Agent, each Lender and
each Transferee shall hold all confidential information that is non-public when
obtained by Agent, such Lender or such Transferee pursuant to the requirements
of this Agreement in accordance with Agent's, such Lender's and such
Transferee's customary procedures for handling confidential information of this
nature; Agent, each Lender and each Transferee may disclose such confidential
information (a) to its examiners, affiliates, outside auditors, counsel and
other professional advisors, (b) to Agent, any Lender or to any prospective
Transferees and Purchasing Lenders, and (e) as required or requested by any
Governmental Body or representative thereof or pursuant to legal process; that
(i) unless specifically prohibited by applicable law or court order, Agent, each
Lender and each Transferee shall use its best efforts prior to disclosure
thereof, to notify Borrower of the applicable request for disclosure of such
non-public information (A) by a Governmental Body or representative thereof
(other than any such request in connection with an examination of the financial
condition of a Lender or a Transferee by such Governmental Body) or (B) pursuant
to legal process and (H) in no event shall Agent, any Lender or any Transferee
be obligated to return any materials furnished by any Borrower other than those
documents and instruments in possession of Agent or any Lender in order to
perfect its Lien on the Collateral once the Obligations have been paid in full
and this Agreement has been terminated.

                                       89
<PAGE>   91
                   (b) Borrower acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
Borrower or one or more of its Affiliates (in connection with this Agreement or
otherwise) by any Lender or by one or more Subsidiaries or Affiliates of such
Lender and Borrower hereby authorizes each Lender to share any information
delivered to such Lender by Borrower and its Subsidiaries pursuant to this
Agreement, or in connection with the decision of such Lender to enter into this
Agreement, to any such Subsidiary or Affiliate of such Lender, it being
understood that any such Subsidiary or Affiliate of any Lender receiving such
information shall be bound by the provision of Section 15.14 as if it were a
Lender hereunder. Such authorization shall survive the repayment of the other
Obligations and the termination of the Loan Agreement.

         15.15 Publicity. Borrower hereby authorizes Agent to make appropriate
announcements for the financial arrangement entered into among Borrower, Agent
and Lenders including, without limitation, announcements which are commonly
known as tombstones, in such publications and to such selected parties as Agent
shall in its discretion deem appropriate.

         15.16 Survival. The obligations of Borrower under Sections 3.6, 3.7,
3.9, 3.10, 4.19(h), 14.7 and 15.5 shall survive termination of this Agreement
and the Other Documents and payment in full of the Obligations.

         15.17 Migratory Merger. Notwithstanding anything contained herein to
the contrary, Agent and each Lender hereby acknowledge and agree that Borrower
may at any time, upon notice to Agent, consummate a migratory merger with a
shell corporation pursuant to which Borrower would become a Delaware
corporation.

                                       90
<PAGE>   92
                  Each of the parties has signed this Agreement as of the day
and year first above written.

                                       CENTURION INTERNATIONAL, INC.,

                                       as Borrower

                                       By:  /s/ Gary L. Kuck
                                          Name:   Gary L. Kuck
                                          Title:  President

                                       PNC BANK NATIONAL ASSOCIATION,

                                       as Lender and as Agent
                                       By:/s/ Craig Stillwagon
                                          Name: Craig Stillwagon
                                          Title: Vice President

                                       201 E. Fifth Street
                                       P. 0. Box 1198
                                       Cincinnati, Ohio  45201

                                       Commitment Percentage: 64.2857%
                                       Commitment Amount: $27,000,000

                                       IBJ SCHRODER BUSINESS CREDIT
                                       CORPORATION, as Lender

                                       By: /s/ Peter Donahue
                                           Name: Peter Donahue
                                           Title: Vice President

                                       One State Street
                                       New York, New York  10004

                                       Commitment Percentage: 35.7143%
                                       Commitment Amount: $15,000,000

                                       91
<PAGE>   93
STATE OF Nebraska              )
                               ) ss.
COUNTY OF Lancaster            )

     On this 31st day of December, 1998, before me personally came Gary Kuck to
me known, who, being by me duly sworn, did depose and say that he is the
President of Centurion International, the corporation described in and which
executed the foregoing instrument and that he was duly authorized to sign his
name thereto.

                                       /s/ Dennis J. Hellbusch
                                       Notary Public

STATE OF New York          )
                           ) ss.
COUNTY OF New York         )

     On this 31st day of December, 1998, before me personally came Peter Donahue
to me known, who, being by me duly sworn, did depose and say that he is the Vice
President of IBJ Schroder Business Credit Corporation, the corporation described
in and which executed the foregoing instrument and that he was duly authorized
to sign his name thereto.

                                       /s/ Daphne E. Schmitt
                                       Notary Public

STATE OF New York          )
                           ) ss.
COUNTY OF New York         )

     On this 31st day of December, 1998, before me personally came Craig
Stillwagon to me known, who, being by me duly sworn, did depose and say that he
is the Vice President of PNC Bank National Association, the bank described in
and which executed the foregoing instrument and that he was duly authorized to
sign his name thereto.

                                       /s/ Daphne E. Schmitt
                                       Notary Public

                                       94

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