institution identified as Lender on the signature page hereof ("Lender").



                                    RECITALS



         Borrower has requested  that Lender  establish a Loan Facility in favor

of Borrower for the  purposes of  providing  Borrower  with  pre-export  working

capital to finance the manufacture, production or purchase and subsequent export

sale of Items.



         It is a condition to the establishment of such Loan Facility that Ex-Im

Bank   guarantee  the  payment  of  ninety   percent  (90%)  of  certain  credit

accommodations  subject  to the  terms  and  conditions  of a  Master  Guarantee

Agreement, the Loan Authorization  Agreement, and to the extent applicable,  the

Delegated Authority Letter Agreement.



         Borrower  is  executing  this  Agreement  for the benefit of Lender and

Ex-Im Bank in consideration for and as a condition to Lender's  establishing the

Loan  Facility  and Ex-Im  Bank's  agreement  to  guarantee  such Loan  Facility

pursuant to the Master Guarantee Agreement.



         NOW, THEREFORE, Borrower hereby agrees as follows:



                                    ARTICLE I

                                   DEFINITIONS



1.01 Definition of Terms.  As used in this Agreement,  including the Recitals to

this Agreement and the Loan Authorization  Agreement,  the following terms shall

have the following meanings:



         "Accounts  Receivable"  shall  mean  all of  Borrower's  now  owned  or

hereafter  acquired (a) "accounts"  (as such term is defined in the UCC),  other

receivables,  book debts and other forms of obligations,  whether arising out of

goods sold or services rendered or from any other transaction; (b) rights in, to

and under all purchase  orders or receipts for goods or services;  (c) rights to

any goods  represented  or purported to be  represented  by any of the foregoing

(including  unpaid  sellers'  rights of rescission,  replevin,  reclamation  and

stoppage in transit and rights to returned, reclaimed or repossessed goods); (d)

moneys  due or to become  due to such  Borrower  under all  purchase  orders and

contracts for the sale of goods or the performance of services or





{PAGE}



both by  Borrower  (whether  or not yet  earned  by  performance  on the part of

Borrower),  including  the  proceeds of the  foregoing;  (e) any notes,  drafts,

letters  of credit,  insurance  proceeds  or other  instruments,  documents  and

writings evidencing or supporting the foregoing; and (f) all collateral security

and  guarantees of any kind given by any other Person with respect to any of the

foregoing.



         "Advance  Rate" shall mean the rate  specified  in Section  5(C) of the

Loan Authorization Agreement for each category of Collateral.



         "Business Day" shall mean any day on which the Federal  Reserve Bank of

New York is open for business.



         "Buyer"  shall mean a Person that has  entered  into one or more Export

Orders with Borrower.



         "Collateral"  shall mean all  property  and  interest in property in or

upon which Lender has been granted a Lien as security for the payment of all the

Loan Facility  Obligations  including the Collateral  identified in Section 6 of

the Loan  Authorization  Agreement  and all  products  and  proceeds  (cash  and

non-cash) thereof.



         "Commercial  Letters  of Credit"  shall  mean  those  letters of credit

subject  to the UCP  payable  in  Dollars  and  issued or caused to be issued by

Lender  on  behalf  of  Borrower  under a Loan  Facility  for the  benefit  of a

supplier(s)  of  Borrower in  connection  with  Borrower's  purchase of goods or

services from the supplier in support of the export of the Items.



         "Country  Limitation  Schedule" shall mean the schedule  published from

time to time by Ex-Im Bank and  provided to Borrower by Lender  which sets forth

on a country by country basis whether and under what conditions  Ex-Im Bank will

provide  coverage for the financing of export  transactions to countries  listed

therein.



         "Credit  Accommodation Amount" shall mean, the sum of (a) the aggregate

outstanding  amount of  Disbursements  and (b) the  aggregate  outstanding  face

amount of Letter of Credit Obligations.



         "Credit  Accommodations"  shall mean,  collectively,  Disbursements and

Letter of Credit Obligations.



         "Debarment   Regulations"   shall   mean,    collectively,    (a)   the

Governmentwide  Debarment and Suspension  (Nonprocurement)  regulations  (Common

Rule),  53  Fed.  Reg.  19204  (May  26,  1988),  (b)  Subpart  9.4  (Debarment,

Suspension, and Ineligibility) of the Federal Acquisition Regulations, 48 C.F.R.

9.400-9.409  and  (c)  the  revised  Governmentwide   Debarment  and  Suspension

(Nonprocurement) regulations (Common Rule), 60 Fed. Reg. 33037 (June 26, 1995).



         "Delegated   Authority  Letter  Agreement"  shall  mean  the  Delegated

Authority Letter Agreement, if any, between Ex-Im Bank and Lender.



         "Disbursement"  shall mean,  collectively,  (a) an advance of a working

capital loan from Lender to Borrower under the Loan Facility, and (b) an advance

to fund a drawing under a Letter



                                       2



{PAGE}



of Credit  issued or caused to be issued by Lender for the  account of  Borrower

under the Loan Facility.



         "Dollars" or "$" shall mean the lawful currency of the United States.



         "Effective  Date"  shall mean the date on which (a) the Loan  Documents

are executed by Lender and Borrower or the date, if later,  on which  agreements

are  executed  by Lender and  Borrower  adding the Loan  Facility to an existing

working capital loan arrangement  between Lender and Borrower and (b) all of the

conditions  to the making of the initial  Credit  Accommodations  under the Loan

Documents or any amendments thereto have been satisfied.



         "Eligible   Export-Related   Accounts   Receivable"   shall   mean   an

Export-Related  Account  Receivable  which is  acceptable to Lender and which is

deemed to be  eligible  pursuant  to the Loan  Documents,  but in no event shall

Eligible Export-Related Accounts Receivable include any Account Receivable:



         (a) that does not arise from the sale of Items in the  ordinary  course

of Borrower's business;



         (b) that is not subject to a valid,  perfected  first  priority Lien in

favor of Lender;



         (c) as to which any covenant,  representation or warranty  contained in

the Loan Documents with respect to such Account Receivable has been breached;



         (d) that is not owned by Borrower or is subject to any right,  claim or

interest of another Person other than the Lien in favor of Lender;



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



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



         (g) that is due and  payable  from a Buyer  located  in a country  with

which Ex-Im Bank is prohibited  from doing business as designated in the Country

Limitation Schedule;



         (h)  that  does  not  comply  with  the  requirements  of  the  Country

Limitation Schedule;



         (i) that is due and  payable  more than one hundred  eighty  (180) days

from the date of the invoice;



         (j) that is not paid within sixty (60)  calendar days from its original

due date,  unless it is insured  through Ex-Im Bank export credit  insurance for

comprehensive  commercial  and  political  risk,  or through Ex-Im Bank approved

private  insurers for comparable  coverage,  in which case it is not paid within

ninety (90) calendar days from its due date;



         (k) that arises from a sale of goods to or  performance of services for

an employee of Borrower,  a stockholder of Borrower, a subsidiary of Borrower, a

Person with a  controlling  interest in Borrower or a Person which shares common

controlling ownership with Borrower;



                                       3

{PAGE}



         (l) that is backed by a letter of credit  unless  the Items  covered by

the subject letter of credit have been shipped;



         (m) that  Lender  or Ex-Im  Bank,  in its  reasonable  judgment,  deems

uncollectible for any reason;



         (n) that is due and payable in a currency other than Dollars, except as

may be approved in writing by Ex-Im Bank;



         (o) that is due and  payable  from a military  Buyer,  except as may be

approved in writing by Ex-Im Bank;



         (p) that does not comply  with the terms of sale set forth in Section 7

of the Loan Authorization Agreement;



         (q) that is due and payable from a Buyer who (i) applies for,  suffers,

or consents to the  appointment  of, or the taking of possession by, a receiver,

custodian,  trustee or liquidator  of itself or of all or a substantial  part of

its  property  or calls a meeting of its  creditors,  (ii) admits in writing its

inability, or is generally unable, to pay its debts as they become due or ceases

operations of its present  business,  (iii) makes a general  assignment  for the

benefit of creditors, (iv) commences a voluntary case under any state or federal

bankruptcy laws (as now or hereafter in effect),  (v) is adjudicated as bankrupt

or insolvent,  (vi) files a petition  seeking to take advantage of any other law

providing  for the  relief of  debtors,  (vii)  acquiesces  to, or fails to have

dismissed,  any petition which is filed against it in any involuntary case under

such  bankruptcy  laws,  or (viii) takes any action for the purpose of effecting

any of the foregoing;

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