Document:

The securities represented by this Warrant were originally issued on
  January 7, 2000, and have not been registered under the Securities Act of
  1933, as amended, or any state securities laws.  These securities have been
  issued in a transaction exempt from the registration requirements of such Act
  and state securities laws and may not be sold except in a transaction which
  is exempt under such Act or pursuant to a registration statement under such
  Act or in a transaction which is otherwise in compliance with such Act, in
  each case only to the extent such Act is applicable.

       The transfer of the securities represented by this Warrant is restricted
  by and subject to the terms of an Investment Agreement dated January 7, 2000,
  a copy of which is on file with the Secretary of the Company, and will be
  furnished to any interested party upon written request.

                               TELULAR CORPORATION

                            STOCK PURCHASE WARRANT

  Date of Issuance:  January 7, 2000            Certificate No. W-1

       FOR VALUE RECEIVED, Telular Corporation, a Delaware corporation (the
  Company), hereby grants to Wells Fargo Business Credit, Inc., a Minnesota
  corporation (Wells Fargo) or its registered assigns (the Registered
  Holder) the right to purchase 50,000 shares of Common Stock (as defined in
  Section 4, below) of the Company at any time at an exercise price of
  $16.29375 per share (the Exercise Price).  The amount and kind of
  securities obtainable pursuant to the rights granted hereunder and the
  purchase price for such securities are subject to adjustment pursuant to the
  provisions contained in this Warrant.

       This Warrant was issued pursuant to that certain Credit and Security
  Agreement (the Credit Agreement) dated January  7, 2000 by and between the
  Company and Wells Fargo and is the Warrant referred to in the Credit
  Agreement.  This Warrant and any shares of Common Stock issued upon the
  exercise of this Warrant shall be subject in all respects to the terms and
  conditions of that certain Investment Agreement (the Investment Agreement)
  dated January 7, 2000 by and between the Company and Wells Fargo.  The
  Registered Holder is entitled to certain rights and privileges contained in
  the Investment Agreement pertaining to the Company's obligation to purchase
  and redeem this Warrant or the Common Stock issued upon the exercise hereof
  at the election of the Registered Holder and to provide certain registration
  rights, all of which rights are hereby incorporated herein by this reference.

       This Warrant is subject to the following provisions:

       Section 1.     Exercise of Warrant.

            1.1. Exercise.  The Registered Holder may exercise, in whole or in
  part (but not as to a fractional share of Common Stock), the purchase rights
  represented by this Warrant at any time and from time to time; provided,
  however, that any partial exercise of this Warrant shall be for at least
  10,000 shares of Common Stock and increments of 1,000 shares of Common Stock,
  subject to appropriate adjustment in the event the terms of this Warrant are
  adjusted pursuant to Section 2, below.
<PAGE>
            1.2. Exercise Procedure.

            (a)       This Warrant shall be deemed to have been exercised when
       the Company has received all of the following items:

                 (i)       a completed Exercise Form, substantially in the form
            attached hereto as Exhibit A, executed by the Person (as defined in
            Section 4, below) exercising all or part of the purchase rights
            represented by this Warrant (the Purchaser);

                 (ii)      this Warrant;

                 (iii)     if this Warrant is not registered in the name of the
            Purchaser, an Assignment or Assignments in the form set forth in
            Exhibit B hereto evidencing the assingment of this Warrant to the
            Purchaser, in which case the Registered Holder shall have complied
            with the provisions set forth in Section 5 hereof; and

                 (iv)      a  cashier's  or  certified  check  payable  to  the
            Company in an amount equal to the product of the Exercise Price
            multiplied by the number of shares of Common Stock being purchased
            upon such exercise.

            (b)       Certificates for shares of Common Stock purchased upon
       exercise of this Warrant shall be delivered by the Company to the
       Purchaser within five business days after the date of any exercise of
       this Warrant (the Exercise Date).  Unless this Warrant has expired or
       all of the purchase rights represented hereby have been exercised, the
       Company shall prepare a new Warrant, substantially identical hereto,
       representing the rights formerly represented by this Warrant which have
       not expired or been exercised and shall, within such five-day period,
       deliver such new Warrant to the Person designated for delivery in the
       Exercise Form.

            (c)       The Common Stock issuable upon the exercise of this
       Warrant shall be deemed to have been issued to the Purchaser on the
       Exercise Date, and the Purchaser shall be deemed for all purposes to
       have become the record holder of such Common Stock on the Exercise Date.

            (d)       The  Company  shall  not  close  its  books  against  the
       transfer of this Warrant or of any share of Common Stock issued or
       issuable  upon  the  exercise  of  this  Warrant  in  any  manner  which
       interferes with the timely exercise of this Warrant.  The Company shall
       from time to time take all such action as may be necessary to assure
       that the par value per share of the unissued Common Stock acquirable
       upon exercise of this Warrant is at all times equal to or less than the
       Exercise Price then in effect.

            (e)       The  Company  shall  assist  and  cooperate  with  any
       Registered Holder or Purchaser required to make any governmental filings
       or obtain any governmental approvals prior to or in connection with any
       exercise of this Warrant (including, without limitation, making any
       filings required to be made by the Company).

            (f)       The Company shall take all such actions as may be
       necessary to assure that all shares of Common Stock issuable upon the
       exercise of this Warrant 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 delivered by the Company upon each such issuance).
<PAGE>
            1.3. Fractional Shares.  If a fractional share of Common Stock
  would, but for the provisions of Section 1.1, be issuable upon exercise of
  the rights represented by this Warrant, the Company shall, within five
  business days after the Exercise Date, deliver to the Purchaser a check
  payable to the Purchaser in lieu of such fractional share in an amount equal
  to the difference between the Market Price (as defined in Section 4, below)
  of such fractional share and the Exercise Price of such fractional share.

       Section 2.     Adjustments.  In the event of any stock dividend, split-
  up, recapitalization, merger, consolidation, combination or exchange of
  shares, or the like, as a result of which shares of any class shall be issued
  in respect of the outstanding shares of Common Stock, or the shares of Common
  Stock shall be changed into the same or a different number of the same or
  another class of stock, or into securities of another Person, cash or other
  property, the total number of shares of Common Stock which the Registered
  Holder shall be entitled to purchase hereunder and the Exercise Price
  applicable to each such share of Common Stock shall be automatically (and
  without notice or further action) and appropriately adjusted.

       Section 3.     Covenants.  The Company covenants and agrees that so long
  as the Registered Holder holds this Warrant and/or any shares of Common Stock
  issued upon exercise of this Warrant:

            (a)      the shares of Common Stock issuable upon exercise of this
       Warrant will, upon such exercise and issuance in accordance herewith, be
       duly authorized, validly issued, fully paid and nonassessable and free
       from all taxes, liens and charges with respect to the issuance thereof;

            (b)       the Company will at all times have authorized, and
       reserved for the purpose of issuance upon total or partial exercise of
       this Warrant, a sufficient number of shares of Common Stock to provide
       for the exercise of this Warrant; and

            (c)       the Company will pay when due and payable or reimburse
       the Registered Holder or Purchaser promptly upon demand for any and all
       transfer, stamp and related taxes (except federal and state income
       taxes) or other cost which may be payable in connection with the
       issuance of this Warrant or the issuance of any shares of Common Stock
       upon the exercise of this Warrant except in any case where the shares of
       Common Stock are issued to a Registered Holder other than Wells Fargo.

       Section 4.     Definitions.  The following terms have the meanings set
       forth below:

       Appraised Price means the fair market value of the Company's entire
  equity determined on a going concern basis, between a willing buyer and a
  willing seller, assuming the payment of the purchase price in cash in full on
  the closing of the transaction and the complete cooperation, support and
  continuity of management, and taking into account all relevant factors
  determinative of value (but not taking into account any discounts for lack of
  liquidity, minority position or other similar or related discounts), divided
  by the number of shares of Common Stock issued and outstanding on the
  Exercise Date.  The Appraised Price shall be determined by an independent
  investment banking firm of recognized national standing having a capital and
  surplus of not less than $50,000,000 mutually agreeable to the Company and
  the Registered Holder of this Warrant.  In the absence of agreement on such
  investment banking firm, the Company and the Registered Holder shall each
  select an investment banking firm and the two firms so selected shall select
  a third investment banking firm meeting the criteria set forth above which
  shall make a determination of the Appraised Price.  The cost of such
  determination shall be borne by the Company
<PAGE>
       Common Stock means the Common Stock of the Company, par value $.01 per
  share; provided that if there is a change such that the securities issuable
  upon exercise of this Warrant are issued by an entity other than the Company
  or there is a change in the class of securities so issuable, then the term
  Common Stock shall mean the security issuable upon exercise of this
  Warrant.

       Market Price means the closing sale price of Common Stock on the
  NASDAQ National Market System (or such other national securities exchange or
  over-the-counter market on which such shares are then traded) on the Exercise
  Date, or if shares of Common Stock are not publicly traded on the Exercise
  Date, the Appraised Price as of the end of the month immediately proceeding
  the Exercise Date.

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

       Section 5.     Warrant  Transferable.    This  Warrant  and  all  rights
  hereunder are transferable in whole or in part, without charge to the
  Registered Holder, upon surrender of this Warrant with a properly executed
  Assignment (in the form of Exhibit B hereto) at the principal office of the
  Company; provided that in the opinion of counsel for the Company, such
  transfer  is  exempt  from  registration  and  otherwise  lawful  under  all
  applicable state and federal securities laws.

       Section 6.     Warrant Exchangeable for Different Denominations.  This
  Warrant is exchangeable, upon the surrender hereof by the Registered Holder
  at the principal office of the Company, for new Warrants of like tenor
  representing in the aggregate the purchase rights hereunder, and each of such
  new Warrants shall represent such portion of such rights as is designated by
  the  Registered  Holder  at  the  time  of  such  surrender.    All  Warrants
  representing portions of the rights hereunder are referred to herein as this
  Warrant.

       Section 7.     Replacement.    Upon  receipt  of  evidence  reasonably
  satisfactory to the Company (an affidavit of the Registered Holder shall be
  satisfactory) of the ownership and the loss, theft, destruction or mutilation
  of any certificate evidencing this Warrant, and in the case of any such loss,
  theft or destruction, upon receipt of indemnity reasonably satisfactory to
  the Company (provided that if the holder is a financial institution or other
  institutional investor its own agreement shall be satisfactory), or, in the
  case of any such mutilation upon surrender of such certificate, the Company
  shall (at its expense) execute and deliver in lieu of such certificate a new
  certificate of like kind representing the same rights represented by such
  lost, stolen, destroyed or mutilated certificate and dated the date of such
  lost, stolen, destroyed or mutilated certificate.

       Section 8.     Notices.  Except as otherwise expressly provided herein,
  all notices referred to in this Warrant shall be in writing and shall be
  delivered personally, sent by reputable overnight courier service (charges
  prepaid) or sent by registered or certified mail, return receipt requested,
  postage prepaid and shall be deemed to have been given when so delivered,
  sent or deposited in the U.S. Mail (i) to the Company, at its principal
  executive offices and (ii) to the Registered Holder of this Warrant, at such
  holder's address as it appears in the records of the Company (unless
  otherwise indicated by any such holder).

       Section 9.     Amendment and Waiver.  Except as otherwise provided
  herein, the provisions of this Warrant may be amended, and the Company may
  take any action herein prohibited, or omit to perform any act herein required
  to be performed by it, only if the Company has obtained the written consent
  of the Registered Holders of this Warrant representing at least a majority of
  the shares of Common Stock obtainable upon exercise of this Warrant.
<PAGE>
       Section 10.    Descriptive Headings.  The descriptive headings of the
  several Sections and paragraphs of this Warrant are inserted for convenience
  only and do not constitute a part of this Warrant.

       Section 11.    Governing Law; Jurisdiction, Venue; Waiver of Jury Trial.
   This Warrant shall be governed by and construed in accordance with the
  substantive laws (other than conflict laws) of the State of Delaware.  The
  parties hereto hereby (i) consent to the personal jurisdiction of the state
  and federal courts located in the State of Wisconsin in connection with any
  controversy related to this Warrant; (ii) waive any argument that venue in
  any such forum is not convenient, (iii) agree that any litigation initiated
  by either party in connection with this Warrant shall be venued in either the
  Circuit Court of Milwaukee County, Wisconsin, or the United States District
  Court, Eastern District of Wisconsin; and (iv) agree that a final judgment in
  any such suit, action or proceeding shall be conclusive and may be enforced
  in other jurisdictions by suit on the judgment or in any other manner
  provided by law.

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

       IN WITNESS WHEREOF, the Company has caused this Warrant to be signed and
  attested by its duly authorized officers under its corporate seal and to be
  dated the date hereof.

                                  TELULAR CORPORATION

                                  By:
                                     Kenneth E. Millard, President

  [Corporate Seal]

  Attest:

  Assistant Secretary

                                    EXHIBIT A

                                  EXERCISE FORM

  To:   Telular Corporation                                   Dated:

       The undersigned, pursuant to the provisions set forth in the attached
  Warrant (Certificate No. W-___), hereby agrees to subscribe for the purchase
  of ______ shares of the Common Stock covered by such Warrant and makes
  payment herewith in full therefor at the price per share provided by such
  Warrant.

       The shares of Common Stock are to be issued in the following name:

  Name

  Address

  Taxpayer Identification Number

       The new Warrant for the unexercised portion of the rights under the
  Warrant is to be issued in the following name:

  Name

  Address

  Taxpayer Identification Number

                                  Signature

                                  Address

                                    EXHIBIT B

                                   ASSIGNMENT

       FOR VALUE RECEIVED, ___________________________ hereby sells, assigns
  and transfers all of the rights of the undersigned under the attached Warrant
  (Certificate No. W-______) with respect to the number of shares of the Common
  Stock covered thereby set forth below, unto:

  Name(s) of Assignee(s)             Address                  No. of Shares

  Dated:                          Signature

                                  WitnessEXHIBIT 10 (f)

  Bank of America, N.A.

                 EIGHTH AMENDED AND RESTATED LOAN AGREEMENT

       This  Loan  Agreement ("Agreement") dated as of December 12, 1999,
  by  and  between  Bank of America, N.A. (formerly known as NationsBank,
  N.A. and successor by merger of NationsBank of Texas, N.A.), a national
  banking  association  ("Bank")  and the Borrower described below.  This
  Agreement  amends  and restates in its entirety the Seventh Amended and
  Restated Loan Agreement dated as of December 12, 1998, between Bank and
  Borrower.

       In  consideration  of  the  Loan  or  Loans  and Letters of Credit
  described  below  and  the  mutual  covenants  and agreements contained
  herein,  and  intending  to  be legally bound hereby, Bank and Borrower
  agree as follows:

  1.   DEFINITIONS  AND  REFERENCE TERMS.  In addition to any other terms
  defined  herein,  the  following terms shall have the meaning set forth
  with respect thereto:

       A.   Borrower: Peerless Mfg. Co., a Texas corporation

       B.   Borrower's Address:
            2819 Walnut Hill Lane
            Dallas, Texas  75229

       C.   Chase  Agreement.    Chase Agreement means the Loan Agreement
  dated  as  of  December  12,  1998,  between Borrower and Chase Bank of
  Texas, N.A.

       D.   Collateral  Account.    Collateral Account means each deposit
  account in which Bank has a perfected, first priority Lien, not subject
  to any claim of any other Person.

       E.   Collateral  Policy.    Collateral Policy means each effective
  insurance  policy  insuring the life of Don Sillars in which Bank has a
  perfected,  first  priority  Lien  in  the  cash  value  and  all death
  benefits,  together  with  such other assurances as Bank may require to
  evidence its interest in such policy.

       F.   Compliance   Certificate.    Compliance  Certificate  mean  a
  certificate substantially in the form of Exhibit B.

       G.   Current Assets.  Current Assets means the aggregate amount of
  all  the assets of the Borrower and its Subsidiaries, on a consolidated
  basis, assets which would, in accordance with GAAP, properly be defined
  as current assets.
<PAGE>
       H.   Current Liabilities.  Current Liabilities means the aggregate
  amount of all current liabilities of the Borrower and its Subsidiaries,
  on  a consolidated basis, as determined in accordance with GAAP, but in
  any  event shall include all liabilities except those having a maturity
  date  which  is  more  than  one  year  from  the date as of which such
  computation is being made, plus the amount equal to the difference (but
  not  less than zero) of (i) the aggregate undrawn amount of all Letters
  of  Credit,  minus  (ii)  the  sum  of (a) the aggregate amount in each
  Collateral   Account,  plus  (b)  the  aggregate  cash  value  of  each
  Collateral Policy.

       I.   Hazardous  Materials.    Hazardous   Materials   include  all
  materials  defined  as  hazardous  materials    or substances under any
  local,  state  or federal environmental laws, rules or regulations, and
  petroleum, petroleum products, oil and asbestos.

       J.   Investment.    Investment  means  any  acquisition  of all or
  substantially  all  assets  of  any  Person,  or any direct or indirect
  purchase  or other acquisition of, or a beneficial interest in, capital
  stock  or  other  securities  of  any  other  Person,  or any direct or
  indirect loan, advance (other than advances to employees for moving and
  travel  expenses,  drawing  accounts,  and  similar expenditures in the
  ordinary  course of business), or capital contribution to or investment
  in  any  other  Person,  including without limitation the incurrence or
  sufferance  of debt or accounts receivable of any other Person that are
  not  current  assets or do not arise from sales to that other Person in
  the ordinary course of business.

       K.   Lien.    Lien  means any mortgage, pledge, security interest,
  encumbrance,  lien, or charge of any kind, including without limitation
  any  agreement  to  give  or  not  to  give  any  of the foregoing, any
  conditional  sale  or other title retention agreement, any lease in the
  nature  thereof,  and  the filing of or agreement to give any financing
  statement  or other similar form of public notice under the laws of any
  jurisdiction.

       L.   Loan.    Any  loan  described  in  Section  2  hereof and any
  subsequent loan which states that  it is subject to this Agreement.

       M.   Loan  Documents.  Loan Documents means this Agreement and any
  and  all  promissory  notes executed by Borrower in favor of Bank, each
  application for issuance of a Letter of Credit and all other documents,
  instruments,  guarantees,  certificates  and agreements executed and/or
  delivered  by Borrower, any guarantor or third party in connection with
  any Loan or Letter of Credit.

       N.   Material  Adverse  Effect.  Material Adverse Effect means any
  circumstance  or  event  that  is or would reasonably be expected to be
  material  and  adverse to the financial condition, business operations,
  prospects  or  properties  of Borrower and its Subsidiaries, taken as a
  whole.

       O.   Net  Income.   Net Income means net profit after taxes of the
  Borrower  and  its Subsidiaries, on a consolidated basis, determined in
  accordance with GAAP.

       P.   Net  Loss.    Net  Loss  means  net  loss  after taxes of the
  Borrower  and  its Subsidiaries, on a consolidated basis, determined in
  accordance with GAAP.
<PAGE>
       Q.   Obligor.  Obligor means Borrower, any Subsidiary of Borrower,
  any indorser or guarantor of any obligation under any Loan Document and
  any  other  Person  liable  for  or  the  property of which secures any
  obligation under any Loan Document.

       R.   Person.    Person  means  an  individual,  partnership, joint
  venture, corporation, trust, tribunal, unincorporated organization, and
  government,   or  any  department,  agency,  or  political  subdivision
  thereof.

       S.   Subsidiary.    Subsidiary   means   as   to   any  Person,  a
  corporation,  partnership  or  other entity of which shares of stock or
  other ownership interests having ordinary voting power (other than such
  stock  or  such  other  ownership  interests  having such power only by
  reason  of  the  happening of a contingency) to elect a majority of the
  board  of directors or other managers of such corporation, partnership,
  or  other  entity  are at the time owned, or the management of which is
  otherwise  controlled,  directly  or  indirectly,  through  one or more
  intermediaries, or both by such Person.

       T.   Accounting  Terms.    All  accounting  terms not specifically
  defined  or  specified  herein  shall   have  the   meanings  generally
  attributed to such terms under generally accepted accounting principles
  ("GAAP"),  as  in  effect from time to time, consistently applied, with
  respect to the financial statements referenced in Section 3.I. hereof.

       2.   LOANS.

       A.   Loan.    Bank hereby agrees to make (or has made) one or more
  loans  to Borrower in the aggregate principal face amount of $3,500,000
  (as  such  amount  may be reduced, the "Line"), provided, the aggregate
  unpaid  principal  of  all  loans  shall  not  at  any  time exceed the
  difference  between  (i) the Line, minus (ii) the undrawn amount of all
  outstanding  Letters  of Credit, minus (iii) the amount of all drawings
  under any Letter of Credit for which Bank has not been reimbursed.  The
  obligation to repay the loans is evidenced by the promissory note dated
  December  12,  1999 (the promissory note or notes together with any and
  all  renewals,  extensions  or  rearrangements  thereof being hereafter
  collectively  referred  to  as  the  "Note")  having  a  maturity date,
  repayment  terms  and interest rate as set forth in the Note (a copy of
  which is attached as Exhibit A).

            i.   Revolving  Credit  Feature.    The  Note  provides for a
       revolving  line  of  credit  under which Borrower may from time to
       time, borrow, repay and re-borrow funds.

            ii.  Usage  Fee.  Borrower will pay hereafter on the last day
       of  each  calendar  quarter  for the period from and including the
       date  the  Line was established to and including the maturity date
       of  the  Line,  a  usage  fee  at  a rate per annum of .25% of the
       average  daily unused portion of the Line during such period.  The
       Borrower  may  at  any  time  upon  written  notice  to  the  Bank
       permanently  reduce  the  amount  of  the  Line  at which time the

       obligation  of  the  Borrower  to  pay a usage fee shall thereupon
       correspondingly be reduced.
<PAGE>
            iii. Letter  of Credit Subfeature.  As a subfeature under the
       Line,  Bank may from time to time up to and including December 12,
       2000, issue letters of credit for the account of Borrower (each, a
       "Letter   of  Credit"  and  collectively,  "Letters  of  Credit");
       provided,  however,  that the form and substance of each Letter of
       Credit   shall  be  subject  to  approval  by  Bank  in  its  sole
       discretion; and provided further that the aggregate undrawn amount
       of  all outstanding Letters of Credit shall not at any time exceed
       the  difference  between  (a)  the  Line,  minus (b) the aggregate
       unpaid  principal amount of all Loans, minus (c) the amount of all
       drawings  under  any  Letter of Credit for which Bank has not been
       reimbursed.    No Letter of Credit shall have an expiry subsequent
       to  December 10, 2001 or 364 or more days after the issuance date;
       provided  Borrower  may  request that Bank issue Letters of Credit
       having  an expiry after December 10, 2001 or an expiry 364 or more
       days  after  the  issuance  date  ("Extended  Expiry  LC"), if the
       undrawn  amount  of  such  Extended  Expiry  LC plus the aggregate
       undrawn amount of all other Extended Expiry LCs does not exceed an
       amount  equal  to  the  sum  of  (a) the amount of each Collateral
       Account  plus (b) 95% of the cash value of each Collateral Policy.
       Each  draft  paid by Bank under a Letter of Credit shall be deemed
       an  advance  under the Line and shall be repaid in accordance with
       the  terms  of the Line; provided however, that if the Line is not
       available for any reason whatsoever, at the time any draft is paid
       by  Bank,  or if advances are not available under the Line in such
       amount  due  to any limitation of borrowing set forth herein, then
       the  full  amount  of  such  drafts  shall  be immediately due and
       payable, together with interest thereon, from the date such amount
       is  paid  by  Bank  to  the  date  such  amount is fully repaid by
       Borrower,  at  that  rate of interest applicable to advances under
       the  Line.    In  such event, Borrower agrees that Bank, at Bank's
       sole  discretion  may  debit  any Collateral Account or Borrower's
       deposit  accounts with Bank or obtain all or any of the cash value
       of  any Collateral Policy for the amount of such draft.  If at any
       time  prior  to  December  12,  1999  the sum of (a) the aggregate
       unpaid  principal  of  the  Loans,  plus (b) the aggregate undrawn
       amount  of  all  outstanding  Letters  of Credit exceeds the Line,
       Borrower  shall immediately pay to Bank the amount of such excess,
       together  with  accrued,  unpaid  interest  on  the amount of such
       excess.    If  at  any  time after December 12, 1999 the aggregate
       undrawn  amount  of all Extended Expiry LCs exceeds the sum of (a)
       the  amount  of  each Collateral Account, plus (b) 95% of the cash
       value  of  each  Collateral  Policy,  Borrower  shall  immediately
       deliver  to Bank, for deposit into a Collateral Account, an amount
       in  cash  equal to such excess.  Letters of Credit shall be priced
       at  a  rate  of 1.5% per annum of the face amount of the Letter of
       Credit, which fee is due and payable on issuance of the Letters of
       Credit.   Bank shall send to Borrower notice of Bank's election to
       pursue any remedy with respect to the Collateral Policy three days
       prior to enforcing such remedy.
<PAGE>
       3.   REPRESENTATIONS  AND  WARRANTIES.  Borrower hereby represents
  and warrants to Bank as follows:

       A.   Good  Standing.    Borrower is a corporation, duly organized,
  validly  existing  and in good standing under the laws of Texas and has
  the power and authority to own its property and is qualified to conduct
  its  business  in  each  jurisdiction  in which Borrower does business,
  except  to  the  extent the failure to obtain such qualifications or to
  remain  in good standing would not result in a Material Adverse Effect.
  Each  Subsidiary  of Borrower is a corporation, duly organized, validly
  existing  and  in  good  standing under the laws of the jurisdiction in
  which  it  is  organized (as indicated on Schedule 1) and has the power
  and  authority  to  own  its  property  and is qualified to conduct its
  business  in each jurisdiction in which it does business, except to the
  extent  the  failure to obtain such qualifications or to remain in good
  standing would not result in a Material Adverse Effect.

       B.   Authority  and  Compliance.    Borrower  has  full  power and
  authority  to  execute  and deliver the Loan Documents and to incur and
  perform  the  obligations  provided for therein, all of which have been
  duly  authorized  by  all  proper  and  necessary  corporate  action of
  Borrower.    No  consent  or  approval of any public authority or other
  third  party  is  required  as  a condition to the validity of any Loan
  Document, and Borrower and each Subsidiary of Borrower is in compliance
  with  all  laws  and  regulatory  requirements  to which it is subject,
  except to the extent the failure to comply with such laws or regulatory
  requirements would not result in a Material Adverse Effect.

       C.   Binding  Agreement.    This  Agreement  and  the  other  Loan
  Documents  executed  by  Borrower  constitute valid and legally binding
  obligations of Borrower, enforceable in accordance with their terms.

       D.   Litigation.  There is no proceeding involving Borrower or any
  Subsidiary  of  Borrower  pending  or,  to  the  knowledge of Borrower,
  threatened  before  any  court  or  governmental  authority,  agency or
  arbitration  authority,  except as (i) disclosed to Bank in writing and
  acknowledged by Bank prior to the date of this Agreement, or (ii) would
  not result in a Material Adverse Effect if adversely determined.

       E.   No Conflicting Agreements.  There is no charter, bylaw, stock
  provision,  partnership  agreement  or other document pertaining to the
  organization,  power  or  authority  of  Borrower  or any Subsidiary of
  Borrower   and  no  provision  of  any  existing  agreement,  mortgage,
  indenture or contract binding on Borrower or any Subsidiary of Borrower
  or  affecting  its respective property, which would conflict with or in
  any way prevent the execution, delivery or carrying out of the terms of
  this Agreement and the other Loan Documents.

       F.   Ownership  of  Assets.    Borrower  and  each  Subsidiary  of
  Borrower  has  good  title to its respective assets, and its respective
  assets are free and clear of Liens, except those granted to Bank and as
  disclosed to Bank in writing prior to the date of this Agreement.

       G.   Investments.  Neither Borrower nor any Subsidiary of Borrower
  has any Investments except as described on Schedule 1.  Schedule 1 is a
  complete  and  correct  description  of  the  name  and jurisdiction of
  organization of each Subsidiary of Borrower.
<PAGE>
       H.   Taxes.  All taxes and assessments due and payable by Borrower
  and  each  Subsidiary of Borrower have been paid or are being contested
  in  good  faith  by  appropriate  proceedings  and  Borrower  and  each
  Subsidiary  of Borrower have filed all tax returns which it is required
  to file.

       I.   Financial  Statements.   The financial statements of Borrower
  heretofore delivered to Bank have been prepared in accordance with GAAP
  applied on a consistent basis throughout the period involved and fairly
  present Borrower's financial condition as of the date or dates thereof,
  and  there  has been no material adverse change in Borrower's financial
  condition  or  operations since June 30, 1999.  All factual information
  furnished by Borrower to Bank in connection with this Agreement and the
  other  Loan  Documents,  when taken as a whole, is and will be accurate
  and  complete  on the date as of which such information is delivered to
  Bank  and  is  not  and  will  not be incomplete by the omission of any
  material  fact  necessary  to  make  such  information, in light of the
  circumstances under which they were made, not misleading.

       J.   Place  of  Business.    Borrower's  chief executive office is
  located at:

            2819 Walnut Hill Lane
            Dallas, Texas  75229

       K.   Environmental.      The  conduct  of  Borrower's  and each of
  Borrower's  Subsidiary's  business  operations  and  the  condition  of
  Borrower's  and  each  of Borrower's Subsidiary's property does not and
  will   not   violate  any   federal  laws,   rules  or  ordinances  for
  environmental  protection,  regulations of the Environmental Protection
  Agency,  any applicable local or state law, rule, regulation or rule of
  common law or any judicial interpretation thereof relating primarily to
  the environment or Hazardous Materials.

       L.   Chase  Agreement.   Borrower has delivered to Bank a complete
  and correct copy of the Chase Agreement and all related documents.

       M.   Continuation  of   Representations   and   Warranties.    All
  representations  and  warranties  made  under  this  Agreement shall be
  deemed  to  be  made  at and as of the date hereof and at and as of the
  date  of  any  advance under any Loan and the issuance of any Letter of
  Credit.

       N.   Year 2000.

            i.   Borrower  has  (a)  begun  analyzing  the  operations of
       Borrower  and  its  subsidiaries  and  affiliates  that  could  be
       adversely  affected by failure to become Year 2000 compliant (that
       is,  that  computer  applications,  imbedded  microchips and other
       systems  will be able to perform date-sensitive functions prior to
       and after December 31, 1999) and (b) developed a plan for becoming
       Year  2000  compliant  in  a  timely manner, the implementation of
       which   is  on  schedule  in  all  material  respects.    Borrower
       reasonably  believes  that  it will become Year 2000 compliant for
       its  operations  and those of its subsidiaries and affiliates on a
       timely  basis  except  to the extent that a failure to do so could
       not  reasonably be expected to have a material adverse effect upon
       the financial condition of Borrower.
<PAGE>
            ii.  Borrower  reasonably  believes any suppliers and vendors
       that  are  material  to  the  operations   of  Borrower   or   its
       subsidiaries  and affiliates will be Year 2000 compliant for their
       own  computer  applications except to the extent that such failure
       could not reasonably be expected to have a material adverse effect
       on the financial condition of Borrower.

            iii. Borrower will promptly notify Bank in the event Borrower
       determines  that any computer application which is material to the
       operations  of  Borrower,  its subsidiaries or any of its material
       vendors  or  suppliers  will not be fully Year 2000 compliant on a
       timely  basis,  except  to  the extent that such failure could not
       reasonably  be expected to have a material adverse effect upon the
       financial condition of the Borrower.

       4.   AFFIRMATIVE  COVENANTS.    Until  full  and final payment and
  performance  of  all  obligations of Borrower under the Loan Documents,
  Borrower  will,  unless Bank consents otherwise in writing (and without
  limiting any requirement of any other Loan Document):

       A.   Financial  Statements  and  Other  Information.    Maintain a
  system  of accounting reasonably satisfactory to Bank and in accordance
  with GAAP applied on a consistent basis throughout the period involved,
  permit  Bank's  officers  or  authorized  representatives  to visit and
  inspect   Borrower's  books  of  account  and  other  records  at  such
  reasonable  times  and  as  often  as  Bank  may  desire,  and  pay the
  reasonable fees and disbursements of any accountants or other agents of
  Bank  selected  by  Bank  for  the  foregoing purposes.  Unless written
  notice  of  another  location  is  given  to Bank, Borrower's books and
  records  will be located at Borrower's chief executive office set forth
  above.  All financial statements called for below shall be prepared  in
  form  and  content  reasonably  acceptable  to  Bank and by independent
  certified  public  accountants  acceptable  to Bank.  Bank acknowledges
  that   Grant  Thornton,  L.P.,  independent  certified  accountants  of
  Borrower  on  the  date  hereof,  is  acceptable to Bank as of the date
  hereof.

  In addition, Borrower will:

       i.   Furnish  to  Bank  consolidated  and  consolidating financial
  statements  of  Borrower  for  each fiscal year of Borrower, within 120
  days after the close of each such fiscal year.

       ii.  Furnish  to  Bank  consolidated  and  consolidating financial
  statements (including a balance sheet and profit and loss statement) of
  Borrower  for  each  quarter of each fiscal year of Borrower, within 60
  days after the close of each such period.

       iii. Furnish to Bank a Compliance Certificate for (and executed by
  an  authorized representative of) Borrower  concurrently with and dated
  as  of  the  date  of  delivery  of each of the financial statements as
  required  in  paragraphs i and ii above, containing (a) a certification
  that  the  financial  statements  of  even  date therewith are true and
  correct and that the Borrower is not in default under the terms of this
  Agreement, and (b) computations and conclusions, in such detail as Bank
  may reasonably request, with respect to compliance with this Agreement,
  and    the  other  Loan  Documents,  including  computations   of   all
  quantitative covenants.
<PAGE>
       iv.  Furnish to Bank promptly such additional information, reports
  and   statements  respecting  the  business  operations  and  financial
  condition  of Borrower and its Subsidiaries, from time to time, as Bank
  may reasonably request.

       B.   Insurance.    Maintain, and cause each Subsidiary of Borrower
  to  maintain, insurance with responsible insurance companies on such of
  its   properties,  in  such  amounts  and  against  such  risks  as  is
  customarily  maintained  by  similar  businesses  operating in the same
  vicinity,  specifically to include fire and extended coverage insurance
  covering  all  assets,  and  liability  insurance,  all to be with such
  companies  and  in  such  amounts  as  are  satisfactory  to  Bank  and
  providing for at least 15 days prior notice to Bank of any cancellation
  thereof.    Satisfactory evidence of such insurance will be supplied to
  Bank prior to funding under the Loan(s) or issuance of the first Letter
  of Credit and 15 days prior to each policy renewal.

       C.   Existence   and   Compliance.    Maintain,  and  cause   each
  Subsidiary  of  Borrower  to maintain, its existence, good standing and
  qualification  to do business, where required and comply with all laws,
  regulations    and   governmental   requirements   including,   without
  limitation,  environmental  laws  applicable  to  it  or  to any of its
  property,  business  operations  and transactions, except in each case,
  where the failure of such Subsidiary to comply with the requirements of
  this section would not result in a Material Adverse Effect.

       D.   Adverse  Conditions  or  Events.    Promptly  advise  Bank in
  writing of (i) any condition, event or act which comes to its attention
  that  would  or  might materially adversely affect Borrower's or any of
  Borrower's  Subsidiary's  financial  condition  or operations or Bank's
  rights  under  the  Loan  Documents,  (ii)  any  litigation filed by or
  against  Borrower  or  any Subsidiary of Borrower, (iii) any event that
  has  occurred  that would constitute an event of default under any Loan
  Documents, (iv) any uninsured or partially uninsured loss through fire,
  theft,  liability  or  property damage, and (v) any actual or potential
  contingent  liability  which  singly or in the aggregate with all other
  actual  or  potential  contingent  liabilities  could  equal  or exceed
  $500,000.

       E.   Taxes  and Other Obligations.  Pay, and cause each Subsidiary
  of  Borrower  to  pay, all of its taxes, assessments and other material
  obligations,  including,  but  not  limited  to  taxes,  costs or other
  expenses  arising  out  of this transaction, as the same become due and
  payable,  except  to  the  extent  the same are being contested in good
  faith by appropriate proceedings in a diligent manner.

       F.   Maintenance.  Maintain, and cause each Subsidiary of Borrower
  to  maintain, all of its tangible property in good condition and repair
  and  make all necessary replacements thereof, and preserve and maintain
  all licenses, trademarks, privileges, permits, franchises, certificates
  and the like necessary for the operation of its business.
<PAGE>
       G.   Environmental.    Immediately  advise  Bank  in  writing   of
  (i)  all material enforcement, cleanup,  remedial,  removal,  or  other
  governmental  or regulatory actions instituted, completed or threatened
  pursuant to any applicable federal, state, or local laws, ordinances or
  regulations relating to any Hazardous Materials affecting Borrower's or
  any of Borrower's Subsidiary's business operations; and (ii) all claims
  made  or  threatened  by  any  third  party  against  Borrower  or  any
  Subsidiary  of  Borrower  relating  to  damages,  contribution,  cost
  recovery,  compensation,  loss  or  injury resulting from any Hazardous
  Materials.    Borrower  shall  immediately  notify Bank of any remedial
  action  taken by Borrower or any  Subsidiary  of  Borrower with respect
  to  Borrower's  or any of  Borrower's  Subsidiary's  material  business
  operations.    Borrower  will  not  use  or permit, and will cause each
  Subsidiary of Borrower to not use or permit, any other party to use any
  Hazardous   Materials  at  any  of  Borrower's  or  any  of  Borrower's
  Subsidiary's  places  of  business  or  at  any other property owned by
  Borrower  or  any  Subsidiary  of Borrower except such materials as are
  incidental  to  Borrower's  or  any  of  Borrower's Subsidiary's normal
  course  of  business,  maintenance and repairs and which are handled in
  material  compliance  with  all applicable environmental laws. Borrower
  agrees  to  permit Bank, its agents, contractors and employees to enter
  and  inspect any of Borrower's or any of Borrower's Subsidiary's places
  of  business  or  any other property of Borrower and each Subsidiary of
  Borrower  at  any reasonable times upon three (3) days prior notice for
  the  purposes  of  conducting  an environmental investigation and audit
  (including  taking  physical  samples) to insure that Borrower and each
  Subsidiary  of  Borrower  are complying with this covenant and Borrower
  shall  reimburse  Bank  on  demand for the reasonable costs of any such
  environmental  investigation  and  audit.   Borrower shall provide, and
  shall  cause  each Subsidiary of Borrower to provide, Bank, its agents,
  contractors, employees and representatives with access to and copies of
  any  and  all  data  and  documents  relating  to  or  dealing with any
  Hazardous  Materials  used, generated, manufactured, stored or disposed
  of  by Borrower's and each Subsidiary's of Borrower business operations
  within five (5) days of the request written therefore.

       5.   NEGATIVE  COVENANTS.    Until  full  and  final  payment  and
  performance  of  all  obligations of Borrower under the Loan Documents,
  Borrower  will  not, and will not permit any Subsidiary of Borrower to,
  without  the  prior  written  consent of Bank (and without limiting any
  requirement of any other Loan Documents):

       A.   Financial Condition.

            i.   Borrower  shall  not  permit  the  ratio  of (a) Current
       Assets  divided  by (b) Current Liabilities to be less than 1.0 to
       1.0 as at the last day of each calendar quarter.

            ii.  Borrower  shall  not  permit  Net Income to be less than
       $750,000  for  the  twelve  months  ending  on the last day of any
       fiscal quarter of Borrower.

       B.   Investments.    Make  an  Investment  in  or  to  any Person;
  provided, Borrower may make Investments in the existing Subsidiaries of
  Borrower  identified  on Schedule 1 if the aggregate of all Investments
  in such Subsidiaries does not exceed at any time $2,500,000.
<PAGE>
       C.   Extensions  of  Credit.    Make  any  loan  or advance to any
  Person;  provided  Borrower  may  (i)  make  loans  and/or  advances to
  Subsidiaries  under  the  terms  specified  in Section "B. Investments"
  above,  and  (ii)  advances (not to exceed $50,000 in the aggregate) to
  employees for moving and travel expenses, drawing accounts, and similar
  expenditures  in  the ordinary course of Borrower's or its Subsidiary's
  business.

       D.   Transfer  of  Assets  or  Control.    Sell,  lease, assign or
  otherwise  dispose  of  or  transfer  any  assets, except in the normal
  course  of  its  business,  or  enter into any merger or consolidation;
  provided,  however, any Subsidiary of Borrower may dissolve or merge or
  consolidate with or into Borrower or any other Subsidiary of Borrower.

       E.   Liens.    Grant,   suffer   or   permit  any  contractual  or
  noncontractual  Lien  on  any  of  its assets (other than liens granted
  under  the  Chase Agreement or related agreements to assure performance
  of  obligations  related to letters of credit issued for the account of
  Borrower  or any of its Subsidiaries), or fail to promptly pay when due
  all  lawful claims, whether for labor, materials or otherwise; or agree
  with  any Person to not grant any Lien on any of its assets, except (i)
  with  respect  to any failure to pay a claim, to the extent the failure
  to  pay  such claims would not result in a Material Adverse Effect, and
  (ii) as provided in the Chase Agreement.

       F.   Borrowings.    Create,  incur, assume or become liable in any
  manner  for  any indebtedness (for borrowed money, deferred payment for
  the  purchase of assets, lease payments, as surety or guarantor for the
  debt  for  another, or otherwise) other than to Bank, except for normal
  trade  debts  incurred in the ordinary course  of  Borrower's  and each
  of  Borrower's Subsidiary's  business,  and  except  for  (i)  existing
  indebtedness  disclosed  to  Bank  in  writing and acknowledged by Bank
  prior  to  the  date  of  this Agreement and (ii) indebtedness under or
  evidenced by the Chase Agreement and any related promissory notes.

       G.   Chase   Agreement.    Amend,  modify  or  restate  the  Chase
  Agreement,  or  any  related  agreement,  as they exist on December 12,
  1998.

       H.   Character  of  Business.    Change  the  general character of
  business  as  conducted  at  the  date hereof, or engage in any type of
  business not reasonably related to its business as presently conducted.

       6.   DEFAULT.    Borrower shall be in default under this Agreement
  and  under  each  of the other Loan Documents if any one or more of the
  following  shall  occur for any reason whatsoever, whether voluntary or
  involuntary, by operation of law, or otherwise:

       A.   Borrower  shall  fail to pay any principal, interest, fees or
  other amounts payable under any Loan Document on the date due;

       B.   Any  representation  or  warranty  made or deemed made by any
  Obligor  (or  any  of  its  officers  or  representatives)  under or in
  connection with any Loan Document shall prove to have been incorrect or
  misleading in any material respect when made or deemed made;

       C.   Borrower  or  any  other  Obligor  shall  fail  to perform or
  observe any term or covenant contained in any Loan Document;
<PAGE>
       D.   Any Loan Document or provision thereof shall, for any reason,
  not  be  valid  and  binding on any Obligor or not be in full force and
  effect,  or  shall  be  declared  to  be null and void; the validity or
  enforceability  of any Loan Document shall be contested by any Obligor;
  or  any  Obligor  shall  deny  that  it has any or further liability or
  obligation under any Loan Document;

       E.   Any Obligor shall fail to pay any debt (other than debt under
  the  Loan  Documents) or obligations in respect of capital leases in an
  aggregate amount of $50,000 or more when due; or any Obligor shall fail
  to  perform  or observe any term or covenant contained in any agreement
  or  instrument relating to any such debt, when required to be performed
  or observed;

       F.   Any  Obligor  shall  have  any  final judgment(s) outstanding
  against  it  for  the  payment of $50,000 or more, and such judgment(s)
  shall  remain  unstayed,  in  effect, and unpaid for the period of time
  after which the judgment holder may and may cause the creation of Liens
  against or seizure of any of its property;

       G.   Any  Obligor  shall  be  required under any environmental law
  (i) to implement any remedial, neutralization, or stabilization process
  or  program,  the  cost  of  which  exceeds $50,000, or (ii) to pay any
  penalty, fine, or damages in an aggregate amount of $50,000 or more;

       H.   Other  than  with  respect  to any Loan Document, any Obligor
  shall  fail  to  timely  and  properly  observe,  keep  or  perform any
  term, covenant, agreement or condition in  any  other  loan  agreement,
  promissory  note,  security  agreement,  deed  of trust, deed to secure
  debt,  mortgage,  assignment  or  other contract securing or evidencing
  payment  of any indebtedness of any Obligor to Bank or any affiliate or
  subsidiary of Bank of America Corporation.

       I.   The   withdrawal  of  any  material  owner  of  Borrower,  as
  determined by Bank in its sole discretion;

       J.   The  commencement  of  a  proceeding  against any Obligor for
  dissolution or liquidation, the voluntary or involuntary termination or
  dissolution  of  any  Obligor  or  the  merger  or consolidation of any
  Obligor  with  or  into  another entity (except as permitted by Section
  5.D.);

       K.   The  insolvency  of, the business failure of, the appointment
  of  a  custodian, trustee, liquidator or receiver for or for any of the
  property  of,  the  assignment  for the benefit of creditors by, or the
  filing  of  a  petition under bankruptcy, insolvency or debtor's relief
  law  or  the  filing  of a petition for any adjustment of indebtedness,
  composition or extension by or against any Obligor;

       L.   The  failure  of any Obligor to timely deliver such financial
  statements,  including  tax  returns,  other statements of condition or
  other information, as Bank shall request from time to time;

       M.   The  entry of a judgment against any Obligor which Bank deems
  to be of a material nature, in Bank's sole discretion;

       N.   The  seizure or forfeiture of, or the issuance of any writ of
  possession,  garnishment  or  attachment, or any turnover order for any
  material property of any Obligor; or
<PAGE>
       O.   The  determination by Bank that a material adverse change has
  occurred in the financial condition of any Obligor.

       7.   REMEDIES  UPON  DEFAULT.  If an event of default shall occur,
  Bank shall have all rights, powers and remedies available under each of
  the  Loan  Documents  (including  Section 11) as well as all rights and
  remedies available at law or in equity.

       8.   NOTICES.  All notices, requests or demands which any party is
  required  or  may desire to give to any other party under any provision
  of  this  Agreement  must be in writing delivered to the other party at
  the following address:

            Borrower:

            Peerless Mfg. Co.
            2819 Walnut Hill Lane
            Dallas, Texas  75229
            Attn: Paul Willey

            Bank:

            Bank of America, N.A.
            901 Main Street, 7th Floor
            P.O. Box 831000
            Dallas, Texas  75283-1000
            Attn:  Barry Bruce Conrad, II, Vice President

  or  to  such other address as any party may designate by written notice
  to  the  other  party.    Each such notice, request and demand shall be
  deemed given or made as follows:

       A.   If  sent  by mail, upon the earlier of the date of receipt or
  five  (5)  days  after  deposit  in  the U.S. Mail, first class postage
  prepaid;

       B.   If sent by  any other means , upon delivery.

       9.   COSTS,  EXPENSES  AND ATTORNEYS' FEES.  Borrower shall pay to
  Bank  not  later  than 5 days after demand the full amount of all costs
  and  expenses, including reasonable attorneys' fees (to include outside
  counsel  fees  and  all  allocated  costs of Bank's in-house counsel if
  permitted  by  applicable law), incurred by Bank in connection with (a)
  negotiation  and  preparation  of  this  Agreement and each of the Loan
  Documents, and (b) all other costs and attorneys' fees incurred by Bank
  for  which  Borrower  is obligated to reimburse Bank in accordance with
  the terms of the Loan Documents.

       10.  MISCELLANEOUS.   Borrower and Bank further covenant and agree
  as  follows,  without  limiting  any  requirement  of  any  other  Loan
  Document:
<PAGE>
       A.   Cumulative  Rights  and  No  Waiver.    Each  and every right
  granted to Bank under any Loan Document, or allowed it by law or equity
  shall  be  cumulative of each other and may be exercised in addition to
  any  and all other rights of Bank, and no delay in exercising any right
  shall  operate  as  a  waiver  thereof, nor shall any single or partial
  exercise  by  Bank  of  any right preclude any other or future exercise
  thereof  or the exercise of any other right.  Borrower expressly waives
  any presentment, demand, protest or other notice of any kind, including
  but  not  limited  to  notice  of  intent  to  accelerate and notice of
  acceleration.  No notice to or demand on Borrower in any case shall, of
  itself,  entitle  Borrower  to  any other or future notice or demand in
  similar or other circumstances.

       B.   Applicable  Law.    This   Agreement   and  the  rights   and
  obligations   of  the  parties  hereunder  shall  be  governed  by  and
  interpreted  in accordance with the laws of Texas and applicable United
  States federal law.

       C.   Amendment.   No modification, consent, amendment or waiver of
  any  provision  of  this  Agreement,  nor  consent  to any departure by
  Borrower  therefrom,  shall  be  effective  unless the same shall be in
  writing  and  signed by an officer of Bank, and then shall be effective
  only  in  the  specified  instance and for the purpose for which given.
  This  Agreement  is  binding upon Borrower, its successors and assigns,
  and inures to the benefit of Bank, its successors and assigns; however,
  no  assignment  or  other  transfer of Borrower's rights or obligations
  hereunder  shall  be  made or be effective without Bank's prior written
  consent,  nor  shall  it relieve Borrower of any obligations hereunder.
  There is no third party beneficiary of this Agreement.

       D.   Documents.    All  documents,  certificates  and  other items
  required  under  this Agreement to be executed and/or delivered to Bank
  shall be in form and content satisfactory to Bank and its counsel.

       E.   Partial  Invalidity.    The unenforceability or invalidity of
  any  provision  of this  Agreement  shall not affect the enforceability
  or validity of  any  other  provision  herein  and  the  invalidity  or
  unenforceability  of   any provision of any Loan Document to any person
  or circumstance shall not affect the enforceability or validity of such
  provision as it may apply to other persons or circumstances.

       F.   Indemnification.    Notwithstanding  anything to the contrary
  contained  in  Section 10(G), Borrower shall indemnify, defend and hold
  Bank  and  its successors and assigns harmless from and against any and
  all  claims,  demands,  suits,  losses,  damages,  assessments,  fines,
  penalties,  costs  or  other  expenses (including reasonable attorneys'
  fees  and court costs) arising from or in any way related to any of the
  transactions  contemplated  hereby, including but not limited to actual
  or threatened damage to the environment, agency costs of investigation,
  personal  injury  or  death,  or  property  damage, due to a release or
  alleged  release of Hazardous Materials, arising from Borrower's or any
  of  Borrower's  Subsidiary's  business  operations,  any other property
  owned  by  Borrower  or any Subsidiary of Borrower or in the surface or
  ground  water arising from Borrower's or any of Borrower's Subsidiary's
  business  operations,  or  gaseous emissions arising from Borrower's or
  any  of  Borrower's  Subsidiary's  business  operations  or  any  other
  condition  existing  or  arising  from  Borrower's or any of Borrower's
  Subsidiary's business operations resulting from the use or existence of
<PAGE>
  Hazardous  Materials,  whether  such  claim proves to be true or false.
  Borrower  further  agrees that its indemnity obligations shall include,
  but  are  not  limited  to,  liability  for  damages resulting from the
  personal  injury  or death of an employee of Borrower or any Subsidiary
  of  Borrower,  regardless  of  whether  Borrower  of such Subsidiary of
  Borrower  has  paid the employee under the workmen' s compensation laws
  of  any  state    or other similar federal or state legislation for the
  protection  of  employees.   The term "property damage" as used in this
  paragraph  includes,  but  is  not  limited  to,  damage to any real or
  personal  property of Borrower or any Subsidiary of Borrower, Bank, and
  of  any  third  parties.    Borrower's obligations under this paragraph
  shall  survive  the  repayment of the obligations of Borrower under the
  Loan  Documents  and  any deed in lieu of foreclosure or foreclosure of
  any  Deed to Secure Debt, Deed of Trust, Security Agreement or Mortgage
  securing the obligations of Borrower under the Loan Documents.

       G.   Survivability.    All  covenants, agreements, representations
  and warranties made herein or in the other Loan Documents shall survive
  the  making  of  the Loan and the issuance of each Letter of Credit and
  shall  continue  in  full  force  and effect so long as the Loan or any
  Letter  of  Credit is outstanding or the obligation of Bank to make any
  advances  under  the  Line  or  issue any Letter of Credit or honor any
  draft under any Letter of Credit shall not have expired.

       11.  ARBITRATION.    ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE
  PARTIES  HERETO  INCLUDING  BUT  NOT LIMITED TO THOSE ARISING OUT OF OR
  RELATING  TO  THIS,  INSTRUMENT,  AGREEMENT  OR DOCUMENT OR ANY RELATED
  INSTRUMENTS,   AGREEMENTS OR DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR
  A R ISING  FROM  AN  ALLEGED  TORT,  SHALL  BE  DETERMINED  BY  BINDING
  ARBITRATION  IN  ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT
  APPLICABLE,   THE  APPLICABLE  STATE  LAW),   THE  RULES  OF   PRACTICE
  AND PROCEDURE  FOR  THE   ARBITRATION   OF   COMMERCIAL   DISPUTES   OF
  J.A.M.S./ENDISPUTE  OR  ANY  SUCCESSOR  THEREOF  ("J.A.M.S."),  AND THE
  "SPECIAL  RULES"  SET  FORTH BELOW.  IN THE EVENT OF ANY INCONSISTENCY,
  THE  SPECIAL  RULES SHALL CONTROL.  JUDGMENT UPON ANY ARBITRATION AWARD
  MAY  BE  ENTERED  IN  ANY COURT HAVING JURISDICTION.  ANY PARTY TO THIS
  AGREEMENT  MAY  BRING  AN  ACTION,  INCLUDING  A  SUMMARY  OR EXPEDITED
  PROCEEDING,  TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH
  THIS  AGREEMENT  APPLIES  IN  ANY  COURT  HAVING JURISDICTION OVER SUCH
  ACTION.

       A.   SPECIAL  RULES.    THE  ARBITRATION SHALL BE CONDUCTED IN THE
  CITY  OF  THE  BORROWER'S  DOMICILE  AT  TIME  OF THE EXECUTION OF THIS
  INSTRUMENT, AGREEMENT OR DOCUMENT AND ADMINISTERED BY J.A.M.S. WHO WILL
  APPOINT  AN  ARBITRATOR;  IF  J.A.M.S. IS  UNABLE  OR LEGALLY PRECLUDED
  FROM  ADMINISTERING THE  ARBITRATION,  THEN  THE  AMERICAN  ARBITRATION
  ASSOCIATION  WILL  SERVE.    ALL ARBITRATION HEARINGS WILL BE COMMENCED
  WITHIN  90  DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR
  SHALL  ONLY,  UPON  A  SHOWING  OF  CAUSE,  BE  PERMITTED TO EXTEND THE
  COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60 DAYS.
<PAGE>
       B.   RESERVATION OF RIGHTS.  NOTHING IN THIS ARBITRATION PROVISION
  SHALL  BE  DEEMED  TO  (I)  LIMIT  THE  APPLICABILITY  OF ANY OTHERWISE
  APPLICABLE  STATUTES  OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED
  IN  THIS  ARBITRATION PROVISION; OR (II) BE A WAIVER BY THE BANK OF THE
  PROTECTION  AFFORDED  TO  IT  BY 12 U.S.C. SEC. 91 OR ANY SUBSTANTIALLY
  EQUIVALENT  STATE  LAW; OR (III) LIMIT THE RIGHT OF THE BANK HERETO (A)
  TO  EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF, OR
  (B)  TO  FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR
  (C)  TO  OBTAIN  FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH AS
  (BUT  NOT  LIMITED  TO)  INJUNCTIVE  RELIEF,  WRIT OF POSSESSION OR THE
  APPOINTMENT  OF  A  RECEIVER.    THE  BANK  MAY EXERCISE SUCH SELF HELP
  RIGHTS,  FORECLOSE  UPON  SUCH  PROPERTY, OR OBTAIN SUCH PROVISIONAL OR
  ANCILLARY  REMEDIES  BEFORE,  DURING  OR  AFTER  THE  PENDENCY  OF  ANY
  ARBITRATION  PROCEEDING  BROUGHT PURSUANT TO THIS INSTRUMENT, AGREEMENT
  OR  DOCUMENT.    NEITHER  THIS  EXERCISE  OF SELF HELP REMEDIES NOR THE
  INSTITUTION  OR MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL
  OR  ANCILLARY  REMEDIES  SHALL  CONSTITUTE A WAIVER OF THE RIGHT OF ANY
  PARTY,  INCLUDING  THE  CLAIMANT  IN  ANY SUCH ACTION, TO ARBITRATE THE
  MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.

       12.  NO ORAL AGREEMENT.  THIS WRITTEN LOAN AGREEMENT AND THE OTHER
  LOAN  DOCUMENTS  REPRESENT  THE FINAL AGREEMENT BETWEEN THE PARTIES AND
  MAY  NOT  BE  CONTRADICTED  BY  EVIDENCE  OF  PRIOR, CONTEMPORANEOUS OR
  SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL
  AGREEMENTS BETWEEN THE PARTIES.

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

  BORROWER:                               BANK:

  PEERLESS MFG. CO.                            BANK OF AMERICA, N.A.
                                               (formerly known as
                                               NationsBank, N.A. and
                                               successor by merger to
                                               NationsBank of Texas,
                                               N.A.)

  By:                                     By:
  Name:     Paul Willey                        Name:
  Title:    Chief Financial Officer            Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}]]