<PAGE>
 
                                                                     EXHIBIT 4.3

[LOGO OF FIRST INTERSTATE BANK]


                                PROMISSORY NOTE
================================================================================

Borrower:  GTI MANUFACTURING, INC.           Lender:  First Interstate Bank 
           1681 McGaw Avenue                            of California 
           Irvine, CA 92714                           Orange County Corporate 
                                                        Banking 
                                                      5000 Birch Suite 10000
                                                      Newport Beach, CA 92660
================================================================================
Principal Amount: $100,000.00  Interest Rate: 4.000%  Date of Note: January 11, 
                                                                      1996

PROMISE TO PAY.  GTI MANUFACTURING, INC. ("Borrower") promises to pay to First 
Interstate Bank of California ("Lender"), or order, in lawful money of the 
United States of America, the principal amount of One Hundred Thousand & 00/100 
Dollars ($100,000.00), together with interest at the rate of 4.000% per annum on
the unpaid principal balance from January 11, 1996, until paid in full.

PAYMENT.  Borrower will pay this loan in one principal payment of $100,000.00 
plus interest on April 9, 1996.  This payment due April 9, 1996, will be for all
principal and accrued interest not yet paid.  In addition, Borrower will pay 
regular monthly payments of all accrued unpaid interest due as of each payment 
date, beginning February 1, 1996, with all subsequent interest payments to be 
due on the same day of each month after that.  Interest on this Note is computed
on a 365/360 simple interest basis; that is, by applying the ratio of the annual
interest rate over a year of 360 days, multiplied by the outstanding principal 
balance, multiplied by the actual number of days the principal balance is 
outstanding.  Borrower will pay Lender at Lender's address shown above or at 
such other place as Lender may designate in writing.  Unless otherwise agreed or
required by applicable law, payments will be applied in any order at Lender's 
sole discretion.

PREPAYMENT.  Borrower may pay without penalty all or a portion of the amount 
owed earlier than it is due.  Early payments will not, unless agreed to by 
Lender in writing, relieve Borrower of Borrower's obligation to continue to make
payments under the payment schedule.

DEFAULT.  Borrower will be in default if any of the following happens: (a) 
Borrower fails to make any payment when due. (b) Borrower breaks any promise 
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower 
has with Lender. (c) Borrower defaults under any loan, extension or credit, 
security agreement, purchase or sales agreement, or any other agreement, in 
favor of any other creditor or person that may materially affect any of 
Borrower's property or Borrower's ability to repay this Note or perform 
Borrower's obligations under this Note or any of the Related Documents. (d) Any 
representation or statement made or furnished to Lender by Borrower or on 
Borrower's behalf is false or misleading in any material respect either now or 
at the time made or furnished. (e) Borrower becomes insolvent, a receiver is 
appointed for any part of Borrower's property, Borrower makes an assignment for 
the benefit of creditors, or any proceeding is commenced either by Borrower or 
against Borrower under any bankruptcy or insolvency laws. (f) Any creditor tries
to take any of Borrower's property on or in which Lender has a lien or security 
interest.  This includes a garnishment of any of Borrower's accounts with 
Lender. (g) Any of the events described in this default section occurs with 
respect to any guarantor of this Note. (h) A material adverse change occurs in 
Borrower's financial condition, or Lender believes the prospect of payment or 
performance of the indebtedness is impaired.

LENDER'S RIGHTS.  Upon default, Lender may declare the entire unpaid principal 
balance on this Note and all accrued unpaid interest immediately due, without 
notice, and then Borrower will pay that amount.  Upon Borrower's failure to pay 
all amounts declared due pursuant to this section, including failure to pay upon
final maturity, Lender, at its option, may also, if permitted under applicable 
law, increase the interest rate on this Note 3.000 percentage points.  Lender 
may hire or pay someone else to help collect this Note if Borrower does not pay.
Borrower also will pay Lender that amount.  This includes, subject to any limits
under applicable law, Lender's attorneys' fees and Lender's legal expenses 
whether or not there is a lawsuit, including attorneys' fees and legal expenses 
for bankruptcy proceedings (including efforts to modify or vacate any automatic 
stay or injunction), appeals, and any anticipated post-judgment collection 
services.  Borrower also will pay any court costs, in addition to all other sums
provided by law.  This Note has been delivered to Lender and accepted by Lender 
in the State of California.  If there is a lawsuit, Borrower agrees upon 
Lender's request to submit to the jurisdiction of the courts of Los Angeles 
County, the State of California.  Subject to the provisions on arbitration, this
Note shall be governed by and construed in accordance with the laws of the State
of California.

DEPOSIT ACCOUNTS.  Borrower grants to Lender a contractual possessory security 
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to 
Lender all Borrower's right, title and interest in and to, Borrower's accounts 
with Lender (whether checking, savings, or some other account), including 
without limitation all accounts held jointly with someone else and all accounts 
Borrower may open in the future, excluding however all IRA, Keogh, and trust 
accounts.

ARBITRATION.

     Binding Arbitration. Upon the demand of any party ("Party/Parties"), to a
     Document (as defined below), whether made before the institution of any
     judicial proceeding or not more than 60 days after service of a complaint,
     third party complaint, cross-claim or counterclaim or any answer thereto or
     any amendment to any of the above, any Dispute (as defined below) shall be
     resolved by binding arbitration in accordance with the terms of this
     arbitration program ("Arbitration Program"). A "Dispute" shall include any
     action, dispute, claim or controversy of any kind, whether founded in
     contract, tort, statutory or common law, equity, or otherwise, now existing
     or hereafter arising between any of the Parties arising out of, pertaining
     to or in connection with any agreement, document or instrument to which
     this Arbitration Program is attached or in which it appears or is
     referenced or any related agreements, documents, or instruments
     ("Documents"). Any Party who fails to submit to binding arbitration
     following a lawful demand by another Party shall bear all costs and
     expenses, including reasonable attorneys' fees (including those incurred in
     any trial, bankruptcy proceeding or on appeal), incurred by the other Party
     in obtaining a stay of any pending judicial proceeding and compelling
     arbitration of any Dispute. The Parties agree that any agreement, document
     or instrument which includes, attaches to or incorporates this Arbitration
     Program represents a transaction involving commerce as that term is used in
     the Federal Arbitration Act, Title 9 United States Code ("FAA"). THE
     PARTIES UNDERSTAND THAT BY THIS AGREEMENT THEY HAVE DECIDED THAT THEIR
     DISPUTES SHALL BE RESOLVED BY BINDING ARBITRATION RATHER THAN IN COURT, AND
     ONCE DECIDED BY ARBITRATION NO DISPUTE CAN LATER BE BROUGHT, FILED OR
     PURSUED IN COURT.

     Governing Rules. Arbitrations conducted pursuant to this Arbitration
     Program shall be administered by the American Arbitration Association
     ("AAA"), or other mutually agreeable administrator ("Administrator") in
     accordance with the terms of this Arbitration Program and the Commerical
     Arbitration Rules of the AAA. Proceedings hereunder shall be governed by
     the provisions of the FAA. The arbitrator(s) shall resolve all Disputes in
     accordance with the applicable substantive law designated in the Documents.
     Judgment upon any award rendered hereunder may be entered in any court
     having jurisdiction; provided, however, that nothing herein shall be
     construed to be a waiver by any Party that is a bank of the protections
     afforded pursuant to 12 U.S.C. 91 or any similar applicable state law.

<PAGE>
 
 
01-11-1996                      PROMISSORY NOTE                           Page 2
                                  (Continued)
================================================================================
   Arbitrator Powers and Qualifications; Awards. The Parties agree to select a
   neutral qualified arbitrator or a panel of three qualified arbitrators to
   resolve any Dispute hereunder. "Qualified" means a retired judge or
   practicing attorney, with not less than 10 years practice in commercial law,
   licensed to practice in the state of the applicable substantive law
   designated in the Documents. A Dispute in which the claims or amounts in
   controversy do not exceed $1,000,000, shall be decided by a single
   arbitrator. A single arbitrator shall have authority to render an award up to
   but not to exceed $1,000,000.00 including all damages of any kind whatsoever,
   costs, fees, attorneys' fees and expenses. Submission to a single arbitrator
   shall be a waiver of all Parties' claims to recover more than $1,000,000.00.
   A Dispute involving claims or amounts in controversy exceeding $1,000,000.00
   shall be decided by a majority vote of a panel of three qualified
   arbitrators. All three arbitrators on the arbitration panel must actively
   participate in all hearings and deliberations. The arbitrator(s) shall be
   empowered to, at the written request of any Party in any Dispute, (a) to
   consolidate in a single proceeding any multiple party claims that are
   substantially identical or based upon the same underlying transaction; (b) to
   consolidate any claims and Disputes between other Parties which arise out of
   or relate to the subject matter hereof, including all claims by or against
   borrowers, guarantors, sureties and/or owners of collateral; and (c) to
   administer multiple arbitration claims as class actions in accordance with
   Rule 23 of the Federal Rules of Civil Procedure. In any consolidated
   proceeding the first arbitrator(s) selected in any proceeding shall conduct
   the consolidated proceeding unless disqualified due to conflict of interest.
   The arbitrator(s) shall be empowered to resolve any dispute regarding the
   terms of this arbitration clause, including questions about the arbitrability
   of any Dispute, but shall have no power to change or alter the terms of the
   Arbitration Program. The prevailing Party in any Dispute shall be entitled to
   recover its reasonable attorneys' fees in any arbitration, and the
   arbitrator(s) shall have the power to award such fees. The award of the
   arbitrator(s) shall be in writing and shall set forth the factual and legal
   basis for the award.

   Real Property Collateral. Notwithstanding the provisions of the preceding
   paragraphs concerning arbitration, no Dispute shall be submitted to
   arbitration without the consent of all Parties if, at the time of the
   proposed submission, such Dispute arises from or relates to an obligation
   which is secured directly or indirectly and in whole or in part by real
   property collateral. If all Parties do not consent to submission of such a
   Dispute to arbitration, the Dispute shall be determined as provided in the
   paragraph below entitled "Judicial Reference".

   Judicial Reference. At the request of any Party, a Dispute which is not
   submitted to arbitration as provided and limited in the preceding paragraphs
   concerning arbitration shall be determined by a reference in accordance with
   California Code of Civil Procedure Section 638 et seq. If such an election is
   made, the Parties shall designate to the court a referee or referees selected
   under the auspices of the AAA, unless otherwise agreed to in writing by all
   parties. With respect to a Dispute in which the amounts in controversy do not
   exceed $1,000,000, a single referee shall be chosen and shall resolve the
   Dispute. The referee shall have authority to render an award up to but not to
   exceed $1,000,000, including all damages of any kind whatsoever, including
   costs, fees and expenses. A Dispute involving amounts in controversy
   exceeding $1,000,000 shall be decided by a majority vote of a panel of three
   referees (a "Referee Panel"), provided, however, that all three referees on
   the Referee Panel must actively participate in all hearings and
   deliberations. Referees, including any Referee Panel, may grant any remedy of
   relief deemed just and equitable and within the scope of this Arbitration
   Program and may also grant such ancillary relief as is necessary to make
   effective any award. The presiding referee of the Referee Panel, or the
   referee if there is a single referee, shall be a retired judge. Judgment upon
   the award rendered by such referee(s) shall be entered in the court in which
   such proceeding was commenced in accordance with California Code of Civil
   Procedure Sections 644 and 645. Determinations and awards by a referee or
   Referee Panel shall be binding on all Parties and shall not be subject to
   further review or appeal except as allowed by applicable law.

   Preservation of Remedies. No provision of, nor the excise of any rights
   under, this Arbitration Program shall limit the right of any Party to: (a)
   foreclose against and/or sale of any real or personal property collateral or
   other security, or obtain a personal or deficiency award; (b) exercise self-
   help remedies (including repossession and setoff rights); or (c) obtain
   provisional or ancillary remedies such as injunctive relief, sequestration,
   attachment, replevin, garnishment, or the appointment of a receiver from a
   court having jurisdiction. Such rights can be exercised at any time except to
   the extent such action is contrary to a final award or decision in any
   arbitration proceeding. The institution and maintenance of an action as
   described above shall not constitute a waiver of the right of any Party to
   submit the Dispute to arbitration, nor render inapplicable the compulsory
   exercise of any self-help, auxiliary or other rights under this paragraph
   shall be a Dispute hereunder.

   Miscellaneous. All statutes of limitation applicable to any Dispute shall
   apply to any proceeding in accordance with this Arbitration Program. The
   Parties agree, to the maximum extent practicable, to take any action
   necessary to conclude an arbitration hereunder within 180 days of the filing
   of a Dispute with the Administrator. The arbitrator(s) shall be empowered
   to impose sanctions for any Party's failure to proceed within the times
   established herein. Arbitrations shall be conducted in the state of the
   applicable substantive law designated in the Documents. The provisions of
   this Arbitration Program shall survive a termination, amendment, or
   expiration hereof or of the Documents unless the Parties otherwise expressly
   agree in writing. Each Party agrees to keep all Disputes and arbitration
   proceedings strictly confidential, except for disclosures of information
   required in the ordinary course of business of the Parties or as required by
   applicable law or regulation. If any provision of this Arbitration Program is
   declared invalid by any court, the remaining provisions shall not be affected
   thereby and shall remain fully enforceable.

GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive
any applicable statute of limitations, presentment, demand for payment, protest
and notice of dishonor. Upon any change in the terms of this Note, and unless
otherwise expressly stated in writing, no party who signs this Note, whether as
maker, guarantor, accommodation maker or endorser, shall be released from
liability. All such parties agree that Lender may renew or extend (repeatedly
and for any length of time) this loan, or release any party or guarantor or
collateral; or impair, fail to realize upon or perfect Lender's security
interest in the collateral; and take any other action deemed necessary by Lender
without the consent of or notice to anyone. All such parties also agree that
Lender may modify this loan without the consent of or notice to anyone other
that the party with whom the modification is made.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF
A COMPLETED COPY OF THE NOTE.


BORROWER:

GTI MANUFACTURING, INC.


By:/s/ Samuel G. Lindsay
   ----------------------------
   Samuel G. Lindsay, President

================================================================================

<PAGE>
 
[LOGO OF FIRST INTERSTATE BANK]

                           CHANGE IN TERMS AGREEMENT

================================================================================

Borrower:  GTI MANUFACTURING, INC.
           1681 McGaw Avenue
           Irvine, CA 92714

Lender: First Interstate Bank of California    
        Orange County Corporate Banking
        5000 Birch Suite 10000
        Newport Beach, CA 92660

================================================================================

Principal Amount:  $180,000.00

Date of Agreement: May 20, 1996

DESCRIPTION OF EXISTING INDEBTEDNESS. That certain promissory note executed by
Borrower on January 11, 1996 in the original amount of $100,000.00, as it may
have been amended or renewed from time to time (the "Note").

DESCRIPTION OF CHANGE IN TERMS. The maturity date of the existing indebtedness
described above is hereby extended to July 8, 1996, when the entire unpaid
principal balance, all accrued and unpaid interest, and all other amounts
payable thereunder shall be due and payable. Effective May 20, 1996, the face
amount of the existing indebtedness described above is hereby increased to
$180,000.00.

ARBITRATION. 

   BINDING ARBITRATION. Upon the demand of any party ("Party/Parties"), to a 
Document (as defined below), whether made before the institution of any judicial
proceeding or not more than 60 days after service of a complaint, third party 
complaint, cross-claim or counterclaim or any answer thereto or any amendment to
any of the above, any Dispute (as defined below) shall be resolved by binding 
arbitration in accordance with the terms of this arbitration program 
("Arbitration Program"). A "Dispute" shall include any action, dispute, claim or
controversy of any kind, whether founded in contract, tort, statutory or common 
law, equity, or otherwise, now existing or hereafter arising between any of the 
Parties arising out of, pertaining to or in connection with any agreement, 
document or instrument to which this Arbitration Program is attached or in which
it appears or is referenced or any related agreements, documents, or instruments
("Documents"). Any Party who fails to submit to binding arbitration following a 
lawful demand by another Party shall bear all costs and expenses, including 
reasonable attorneys' fees (including those incurred in any trial, bankruptcy 
proceeding or on appeal), incurred by the other Party in obtaining a stay of any
pending judicial proceeding and compelling arbitration of any Dispute. The 
Parties agree that any agreement, document or instrument which includes, 
attaches to or incorporates this Arbitration Program represents a transaction 
involving commerce as that term is used in the Federal Arbitration Act, Title 9 
United States Code ("FAA"). THE PARTIES UNDERSTAND THAT BY THIS AGREEMENT THEY 
HAVE DECIDED THAT THEIR DISPUTES SHALL BE RESOLVED BY BINDING ARBITRATION RATHER
THAN IN COURT, AND ONCE DECIDED BY ARBITRATION NO DISPUTE CAN LATER BE BROUGHT, 
FILED OR PURSUED IN COURT.

  GOVERNING RULES. Arbitrations conducted pursuant to this Arbitration Program 
shall be administered by the American Arbitration Association ("AAA"), or other 
mutually agreeable administrator ("Administrator") in accordance with the terms 
of this Arbitration Program and the Commercial Arbitration Rules of the AAA. 
Proceedings hereunder shall be governed by the provisions of the FAA. The 
arbitrator(s) shall resolve all Disputes in accordance with the applicable 
substantive law designated in the Documents. Judgment upon any award rendered 
hereunder may be entered in any court having jurisdiction; provided, however, 
that nothing herein shall be construed to be a waiver by any Party that is a 
bank of the protections afforded pursuant to 12 U.S.C. 91 or any similar 
applicable state law.

ARBITRATOR POWERS AND QUALIFICATIONS; AWARDS. The Parties agree to select a
neutral qualified arbitrator or a panel of three qualified arbitrators to
resolve any Dispute hereunder. "Qualified" means a retired judge or practicing
attorney, with not less than 10 years practice in commercial law, licensed to
practice in the state of the applicable substantive law designated in the
Documents. A Dispute in which the claims or amounts in controversy do not exceed
$1,000,000.00, shall be decided by a single arbitrator. A single arbitrator
shall have authority to render an award up to but not to exceed $1,000,000.00
including all damages of any kind whatsoever, costs, fees, attorneys' fees and
expenses. Submission to a single arbitrator shall be a waiver of all Parties'
claims to recover more than $1,000,000.00. A Dispute involving claims or amounts
in controversy exceeding $1,000,000.00 shall be decided by a majority vote of a
panel of three qualified arbitrators. All three arbitrators on the arbitration
panel must actively participate in all hearings and deliberations. The
arbitrator(s) shall be empowered to, at the written request of any Party in any
Dispute, (a) to consolidate in a single proceeding any multiple party claims
that are substantially identical or based upon the same underlying transaction;
(b) to consolidate any claims and Disputes between other Parties which arise out
of or relate to the subject matter hereof, including all claims by or against
borrowers, guarantors, sureties and/or owners of collateral; and (c) to
administer multiple arbitration claims as class actions in accordance with Rule
23 of the Federal Rules of Civil Procedure. In any consolidated proceeding the
first arbitrator(s) selected in any proceeding shall conduct the consolidated
proceeding unless disqualified due to conflict of interest. The arbitrator(s)
shall be empowered to resolve any dispute regarding the terms of this
arbitration clause, including questions about the arbitrability of any Dispute,
but shall have no power to change or alter the terms of the Arbitration Program.
The prevailing Party in any Dispute shall be entitled to recover its reasonable
attorneys' fees in any arbitration, and the arbitrator(s) shall have the power
to award such fees. The award of the arbitrator(s) shall be in writing and shall
set forth the factual and legal basis for the award.

REAL PROPERTY COLLATERAL. Notwithstanding the provisions of the preceding 
paragraphs concerning arbitration, no Dispute shall be submitted to arbitration 
without the consent of all Parties if, at the time of the proposed submission, 
such Dispute arises from or relates to an obligation which is secured directly 
or indirectly and in whole or in part by real property collateral. If all 
Parties do not consent to submission of such a Dispute to arbitration, the 
Dispute shall be determined as provided in the paragraph below entitled 
"Judicial Reference".

JUDICIAL REFERENCE. At the request of any Party, a Dispute which is not 
submitted to arbitration as provided and limited in the preceding paragraphs 
concerning arbitration shall be determined by a reference in accordance with 
California Code of Civil Procedure Section 638 et seq. If such an election is 
made, the Parties shall designate to the court a referee or referees selected 
under the auspices of the AAA, unless otherwise agreed to in writing by all 
parties. With respect to a Dispute in which the amounts in controversy do not 
exceed $1,000,000, a single referee shall be chosen and shall resolve the 
Dispute. The referee shall have authority to render an award up to but not to 
exceed $1,000,000, including all damages of any kind whatsoever, including 
costs, fees and expenses. A Dispute involving amounts in controversy exceeding 
$1,000,000 shall be decided by a majority vote of a panel of three referees (a 
"Referee Panel"), PROVIDED, HOWEVER, that all three referees on the Referee 
Panel must actively participate in all hearings and deliberations. Referees, 
including any Referee Panel, may grant any remedy of relief deemed just and 
equitable and within the scope of this Arbitration Program and may also grant 
such ancillary relief as is necessary to make effective any award. The presiding
referee of the Referee Panel, or the referee if there is a single referee, shall
be a retired judge. Judgment upon the award rendered by such referee(s) shall be
entered in the court in which such proceeding was commenced in accordance with 
California Code of Civil Procedure Sections 644 and 645. Determinations and 
awards by a referee or Referee Panel shall be binding on all Parties and shall 
not be subject to further 

<PAGE>
 
05-20-1996                    CHANGE IN TERMS AGREEMENT                 PAGE 2
                                  (CONTINUED)

================================================================================
     review or appeal except as allowed by applicable law.


     PRESERVATION OF REMEDIES. No provision of, nor the excise of any rights
     under, this Arbitration Program shall limit the right of any Party to: (a)
     foreclose against and/or sale of any real or personal property collateral
     or other security, or obtain a personal or deficiency award; (b) exercise
     self-help remedies (including repossession and setoff rights); or (c)
     obtain provisional or ancillary remedies such as injunctive relief,
     sequestration, attachment, replevin, garnishment, or the appointment of a
     receiver from a court having jurisdiction. Such rights can be exercised at
     any time except to the extent such action is contrary to a final award or
     decision in any arbitration proceeding. The institution and maintenance of
     an action as described above shall not constitute a waiver of the right of
     any Party to submit the Dispute to arbitration, nor render inapplicable the
     compulsory exercise of any self-help, auxiliary or other rights under this
     paragraph shall be a Dispute hereunder.


     MISCELLANEOUS. All statutes of limitation applicable to any Dispute shall
     apply to any proceeding in accordance with this Arbitration Program. The
     Parties agree, to the maximum extent practicable, to take any action
     necessary to conclude an arbitration hereunder within 180 days of the
     filing of a Dispute with the Administrator. The arbitrator(s) shall be
     empowered to impose sanctions for any Party's failure to proceed within the
     times established herein. Arbitrations shall be conducted in the state of
     the applicable substantive law designated in the Documents. The provisions
     of this Arbitration Program shall survive a termination, amendment, or
     expiration hereof or of the Documents unless the Parties otherwise
     expressly agree in writing. Each Party agrees to keep all Disputes and
     arbitration proceedings strictly confidential, except for disclosures of
     information required in the ordinary course of business of the Parties or
     as required by applicable law or regulation. If any provision of this
     Arbitration Program is declared invalid by any court, the remaining
     provisions shall not be affected thereby and shall remain fully
     enforceable.

CONTINUING VALIDITY. Except as expressly changed by this Agreement, the terms of
the original obligation or obligations, including all agreements evidenced or
securing the obligation(s), remain unchanged and in full force and effect.
Consent by Lender to this Agreement does not waive Lender's right to strict
performance of the obligation(s) as changed, nor obligate Lender to make any
future change in terms. Nothing in this Agreement will constitute a satisfaction
of the obligation(s). It is the intention of Lender to retain as liable parties
all makers and endorsers of the original obligation(s), including accommodation
parties, unless a party is expressly released by Lender in writing. Any maker or
endorser, including accommodation makers, will not be released by virtue of this
Agreement. If any person who signed the original obligation does not sign this
Agreement below, then all persons signing below acknowledge that this Agreement
is given conditionally, based on the representation to Lender that the non-
signing party consents to the changes and provisions of this Agreement or
otherwise will not be released by it. This waiver applies not only to any
initial extension, modification or release, but also to all such subsequent
actions.

PRIOR TO SIGNING THIS AGREEMENT, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF THIS AGREEMENT. BORROWER AGREES TO THE TERMS OF THE AGREEMENT AND
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE AGREEMENT.


BORROWER:

GTI MANUFACTURING, INC.


BY: /s/ Samuel G. Lindsay
   ---------------------------- 
   Samuel G. Lindsay, President

================================================================================
    
<PAGE>
 
                       [LETTERHEAD OF WELLS FARGO BANK]

                                 July 17, 1996


GTI Manufacturing, Inc.
1681 McGaw Ave.
Irvine, CA 92714

Dear Sir:

     This letter is to confirm that Wells Fargo Bank, National Association
("Bank") has agreed to extend the maturity date of that certain credit
accommodation granted by Bank to GTI Manufacturing, Inc. ("Borrower") in the
original principal amount of One Hundred Thousand Dollars ($100,000.00), as
evidenced by that certain promissory note dated as of January 11, 1996, executed
by Borrower and payable to the order of Bank (the "Note"), a copy of which is
attached hereto as Exhibit A, and as modified to increase the maximum principal
amount available to One Hundred Eighty Thousand Dollars (S180,000.00), as
evidenced by that certain change in terms agreement dated May 20, 1996, ("Change
in Terms Agreement") a copy of which is attached as Exhibit B.

     The maturity date of said credit accommodation is hereby extended until
December 31, 1996. The Note shall be deemed modified as of the date this letter
is acknowledged by Borrower to reflect said new maturity date. All other terms
and conditions of the Note remain in full force and effect, without waiver or
modification.

     Borrower acknowledges that Bank has not committed to make any renewal or
further extension of the maturity date of the above-described credit
accommodation beyond the new maturity date specified herein, and that any such
renewal or further extension remains in the sole discretion of Bank. This letter
constitutes the entire agreement between Bank and Borrower with respect to the
maturity date extension for the above-described credit accommodation, and
supersedes all prior negotiations, discussions and correspondence concerning
said extension.
<PAGE>
 
GTI Manufacturing, Inc.
July 17, 1996
Page 2

     Please acknowledge your acceptance of the terms and conditions contained
herein by dating and signing one copy below and returning it to my attention at
the above address on or before August 2, 1996.

                                  Very truly yours,

                                  WELLS FARGO BANK,
                                    NATIONAL ASSOCIATION



                                  By: /s/ Elliot Ichinose
                                      ------------------------------------
                                        Elliot Ichinose     
                                        Vice President


Acknowledged and accepted as of 7/29/96:
                                -------

GTI MANUFACTURING, INC.

By: /s/ Samuel G. Lindsay
    --------------------------
     Samuel G. Lindsay
     President