EXHIBIT 10

                      BUSINESS FINANCING AGREEMENT


This Business Financing Agreement ("Agreement") is made as of August 21, 1996 
between Deutsche Financial Services Corporation ("DFS") and SMTEK, INC., a  
corporation ("Dealer"), having a principal place of business located at  2151 
ANCHOR COURT, NEWBURY PARK, CA 91320.

Definitions.  The following terms will have the following meanings in this 
Agreement, Agreement for Wholesale Financing and in the Other Agreements:

(a)  "Accounts":  all accounts, leases, contract rights, chattel paper, 
chooses in action and instruments, including any lien or other security 
interest that secures or may secure any of the foregoing, plus all books, 
invoices, documents and other records in any form evidencing or relating to 
any of the foregoing, now owned or hereafter acquired by Dealer.

(b)  "Accounts Receivable Facility":  a credit facility extended pursuant to 
this Agreement.

(c)  "Agreement for Wholesale Financing":  any Agreement for Wholesale 
Financing, as amended from time to time, which Dealer has executed in 
conjunction with inventory financing extended by DFS.

(d)  "Average Contract Balance::  the amount determined by dividing: (a) the 
sum of the Daily Contract Balances (as defined in Section 2.1.1) for a 
billing period; by, (b) the actual number of days in such billing period.

(e)  "Default":  the events or occurrences enumerated in Section 6.

(f)  "Entity":  any individual, association, firm, corporation, partnership, 
limited liability company, trust, governmental body, agency or 
instrumentality whatsoever.

(g)  "Guarantor":  a guarantor of any of the Obligations.

(h)  "Inventory":  all of Dealer's presently owned and hereafter acquired 
goods which are held for sale or lease.

(i)  "Obligations":  all liabilities and indebtedness now or hereafter 
arising, owing, due or payable from Dealer to DFS (and any of its 
subsidiaries and affiliates), including any third party claims against Dealer 
satisfied or acquired by DFS, whether primary or secondary, joint or several, 
direct, contingent, fixed or otherwise, and whether or not evidenced by 
instruments or evidences of indebtedness, and all covenants, agreements 
(including consent to binding arbitration), warranties, duties and 
representations, whether such Obligations arise under this Agreement, the 
Other Agreements or any other agreements previously, now or hereafter 
executed by Dealer and delivered to DFS or by operation of law.

(j)  "Other Agreements":  all security agreements (including the Agreement 
for Wholesale Financing), mortgages, leases, instruments, documents, 
guarantees, schedules, certificates, contracts and similar agreements 
heretofore, now or hereafter executed by Dealer and delivered to DFS or 
delivered by or on behalf of Dealer to a third party and assigned to DFS by 
operation of law or otherwise.

(k)  "Prime Rate":  the rate of interest which Chase Manhattan Bank publicly 
announces from time to time as its prime rate or reference rate; provided, 
however, that for purposes of this Agreement, the interest rate charged to 
Dealer will at no time be computed on a Prime Rate of less than SEVEN percent 
(7.0%) per annum.  The Prime Rate will change and take effect for purposes of 
this Agreement on the day that Chase Manhattan Bank announces any change in 
its Prime Rate or reference rate.

CREDIT FACILITY/INTEREST RATES/FEES

Accounts Receivable Facility.  Subject to the terms of this Agreement, DFS 
agrees to provide to Dealer an Accounts Receivable Facility of TWO MILLION 
FIVE HUNDRED THOUSAND DOLLARS ($2,500,000.00).  DFS' decision to advance 
funds will not be binding until the funds are actually advanced.

2.1.1  Interest. Dealer agrees to pay interest to DFS on the Daily Contract 
Balance at a rate equal to the Prime Rate plus ONE AND ONE QUARTER percent 
(1.25%) per annum.  Such interest will:  (i) be computed based on a 360 day 
year; (ii) be calculated each day by multiplying the Daily Rate (as defined 
below) by the Daily Contract Balance (as defined below); and (iii) accrue 
from the date that DFS makes an advance under the Accounts Receivable 
Facility until DFS receives the full and final payment of the principal debt 
which Dealer owes to DFS.  The "Daily Rate" is the quotient of the applicable 
annual rate provided herein divided by 360.  The "Daily Contract Balance" is 
the amount of the outstanding principal debt which Dealer owes to DFS on the 
Accounts Receivable Facility at the end of each day after DFS has credited 
the payments which it has received on the Accounts Receivable Facility, 
subject to the terms of Section 3.8 herein.

2.1.2  Fees.  Dealer agrees to pay to DFS an advance fee equal to ZERO 
percent (0.0%) on each advance to Dealer under the Accounts Receivable 
Facility.

2.1.3  Maximum Interest.  Dealer acknowledges that DFS intends to strictly 
conform to the applicable usury laws governing this Agreement.  Regardless of 
any provision contained herein or in any other document executed or delivered 
in connection herewith or therewith, DFS shall never be deemed to have 
contracted for, charged or be entitled to receive, collect or apply as 
interest on this Agreement (whether termed interest herein or deemed to be 
interest by judicial determination or operation of law), any amount in excess 
of the maximum amount allowed by applicable law, and, if DFS ever receives, 
collects or applies as interest any such excess, such amount, which would be 
excessive interest will be applied first to the reduction of the unpaid 
principal balances of advances under this Agreement, and, second, any 
remaining excess will be paid to Dealer.  In determining whether or not the 
interest paid or payable under any specific contingency exceeds the highest 
lawful rate, Dealer and DFS shall, to the maximum extent permitted under 
applicable law:  (a) characterize any non-principal payment (other than 
payments which are expressly designated as interest payments hereunder) as an 
expense or fee rather than as interest; (b) exclude voluntary pre-payments 
and the effect thereof; and (c) spread the total amount of interest 
throughout the entire term of this Agreement so that the interest rate is 
uniform throughout such term.

2.2  Payments.  DFS will send Dealer a monthly billing statement(s) 
identifying all charges due on Dealer's account with DFS.  The interest and 
fee charges specified on each billing statement will be:  (a) due and payable 
in full immediately on receipt, and (b) an account stated, unless DFS 
receives Dealer's written objection thereto within fifteen (15) days after it 
is mailed to Dealer.  If DFS does not receive, by the 25th day of any given 
month, payment of all charges accrued to Dealer's account with DFS during the 
immediately preceding month, Dealer will (to the extent allowed by law) pay 
DFS a late fee ("Late Fee") equal to the greater of $5 or 5% of the amount of 
such finance charges (payment of the Late Fee does not waive the default 
caused by the late payment).  Dealer will also pay DFS $100 for each of 
Dealer's checks returned unpaid for insufficient funds (an "NSF check") (such 
$100 payment repays DFS' estimated administrative costs; it does not waive 
the default caused by the NSF check).  DFS may adjust the billing statement 
at any time to conform to applicable law and this Agreement.  Dealer waives 
the right to direct the application of any payments hereafter received by DFS 
on account of the Obligations.  DFS will have the continuing exclusive right 
to apply and reapply any and all such payments in such manner as DFS may deem 
advisable notwithstanding any entry by DFS upon its books and records.

2.3  One Loan.  DFS may combine all of DFS' advances to Dealer or on Dealer's 
behalf, whether under this Agreement or any Other Agreements, and whether 
provided by one or more of DFS' branch offices, together with all finance 
charges, fees and expenses related thereto, to make one debt owed by Dealer.

3.  ACCOUNTS RECEIVABLE FACILITY - ADDITIONAL PROVISIONS

3.1  Schedules.  Dealer will, no less than weekly or as otherwise agreed to, 
furnish DFS with a schedule of Accounts ("Schedule") which will:  (a) 
describe all Accounts created or acquired by Dealer since the last Schedule 
furnished DFS; (b) inform DFS of any rejection of goods by any obligor, 
delays in delivery of goods, non-performance of contracts and of any 
assertion of any claim, offset or counterclaim by any obligor; and (c) inform 
DFS of any adverse information relating to the financial condition of any 
obligor.

3.2  Available Credit.  On receipt of each Schedule, DFS will credit Dealer 
with such amount as DFS may deem advisable up to EIGHTY FIVE percent (85.0%) 
of the net amount of the eligible Accounts listed in such Schedule.  DFS will 
loan Dealer such amounts so credited or a part thereof as requested provided 
that at no time will such outstanding loans exceed Dealer's maximum Accounts 
Receivable Facility from time to time established by DFS.  No loans need be 
made by DFS if the Dealer is in Default.

3.3  Ineligible Accounts.  DFS will have the sole right to determine 
eligibility of Accounts and, without limiting DFS' discretion in that regard, 
the following Accounts will be deemed ineligible:  (a) Accounts created from 
the sale of goods and services on non-standard terms and/or that allow for 
payment to be made more than thirty (30) days from the date of sale; (b) 
Accounts unpaid more than ninety (90) days from date of invoice; (c) all 
Accounts of any obligor with fifty percent (50%) or more of the outstanding 
balance unpaid for more than ninety (90) days from the date of invoice; (d) 
Accounts for which the obligor is an officer, director, shareholder, partner, 
member, owner, employee, agent, parent, subsidiary, affiliate of, or is 
related to Dealer or has common shareholders, officers, directors, owners, 
partners or members; (e) consignment sales; (f) Accounts for which the 
payment is or may be conditional; (g) Accounts for which the obligor is not a 
commercial or institutional entity or is not a resident of the United States 
or Canada; (h) Accounts with respect to which any warranty or representation 
provided in Subsection 3.4 is not true and correct; (i) Accounts which 
represent goods or services purchased for a personal, family or household 
purpose; (j) Accounts which represent goods used for demonstration purposes 
or loaned by the Dealer to another party; (k) Accounts which are progress 
payment, barter, or contra accounts; and (l) any and all other Accounts which 
DFS deems to be ineligible.  If DFS determines that any Account is or becomes 
an ineligible Account, immediately upon notice thereof from DFS, Dealer will 
pay to DFS an amount equal to the monies loaned by DFS for such ineligible 
Account.

3.4  Warranties and Representations.  For each Account which Dealer lists on 
any Schedule, Dealer warrants and represents to DFS that at all times:  (a) 
such Account is genuine; (b) such Account is not evidenced by a judgment or 
promissory note or similar instrument or agreement; (c) it represents an 
undisputed bona fide transaction completed in accordance with the terms of 
the invoices and purchase orders relating thereto; (d) the goods sold or 
services rendered which resulted in the creation of such Account have been 
delivered or rendered to and accepted by the obligor; (e) the amounts shown 
on the Schedules, Dealer's books and records and all invoices and statements 
delivered to DFS with respect thereto are owing to Dealer and are not 
contingent; (f) no payments have been or will be made thereon except payments 
turned over to DFS; (g) there are no offsets, counterclaims or disputes 
existing or asserted with respect thereto and Dealer has not made any 
agreement with any obligor for any deduction or discount of the sum payable 
thereunder except regular discounts allowed by Dealer in the ordinary course 
of its business for prompt payment; (h) there are no facts or events which in 
any way impair the validity or enforceability thereof or reduce the amount 
payable thereunder from the amount shown on the Schedules, Dealer's books and 
records and the invoices and statements delivered to DFS with respect 
thereto; (i) all persons acting on behalf of obligors thereon have the 
authority to bind the obligor; (j) the goods sold or transferred giving rise 
thereto are not subject to any lien, claim, encumbrance or security interest 
which is superior to that of DFS; and (k) there are no proceedings or actions 
known to Dealer which are threatened or pending against any obligor thereon 
which might result in any material adverse change in such obligor's financial 
condition.

3.5  Notes.  Loans made pursuant to this Agreement need not be evidenced by 
promissory notes unless otherwise required by DFS in DFS' sole discretion.

3.6  Reimbursement for Charges.  Dealer will reimburse DFS for all charges 
made by banks for collection of checks and other items of payment and for 
transfer of funds to or from the Dealer.

3.7  Collections.  Dealer is authorized to collect Accounts as agent for DFS 
and trustee of an express trust for DFS' benefit.  Dealer will receive all 
payments on Accounts as agent and in trust for DFS and will, as DFS directs, 
either transmit to DFS or deposit into an account or accounts designated by 
DFS, on the day of receipt thereof, all original checks, drafts, acceptances, 
and other evidences of payment of Accounts, including all cash.  Until 
delivery to DFS, Dealer will keep such remittances separate and apart from 
Dealer's own funds so that they are capable of identification as the property 
of DFS and will be held in trust for DFS.  DFS may terminate such 
authorization upon Default and DFS may notify any obligor of the assignment 
of Accounts and collect the same.  All proceeds received or collected by DFS 
with respect to Accounts, and reserves and other property of Dealer in 
possession of DFS at any time or times hereafter, may be held by DFS without 
interest to Dealer until all Obligations are paid in full or applied by DFS 
on account of the Obligations.  DFS may release to Dealer such portions of 
such reserves and proceeds as DFS may determine.

3.8  Collection Days.  All payments and all amounts received on any Account 
will be credited by DFS to Dealer's account (subject to final collection 
thereof) after allowing one (1) business days for collection of checks or 
other instruments.

3.9  Power of Attorney.  Dealer irrevocably appoints DFS (and any person 
designated by it) as Dealer's true and lawful Attorney with full power to at 
any time, in the discretion of DFS (whether or not Default has occurred) to:  
(a) endorse the name of Dealer upon any of the items of payment or proceeds 
and deposit the same in the account of DFS for application to the 
Obligations; (b) sign the name of Dealer to verify the accuracy of the 
Accounts; (c) sign the name of Dealer on any document or instrument that DFS 
shall deem necessary or appropriate to perfect and maintain perfected the 
security interests in the Collateral under this Agreement and the Other 
Agreements; and (d) initiate and settle any insurance claim and endorse 
Dealer's name on any check, instrument or other item of payment.  In the 
event of a Default, Dealer irrevocably appoints DFS (and any person 
designated by it) as Dealer's true and lawful Attorney with full power to at 
any time, in the discretion of DFS to: (i) demand payment, enforce payment 
and otherwise exercise all of Dealer's rights, and remedies with respect to 
the collection of any Accounts; (ii) settle, adjust, compromise, extend or 
renew any Accounts; (iii) settle, adjust or compromise any legal proceedings 
brought to collect any Accounts; (iv) sell or assign any Accounts upon such 
terms, for such amounts and at such time or times as DFS may deem advisable; 
(v) discharge and release any Accounts; (vi) prepare, file and sign Dealer's 
name on any Proof of Claim in Bankruptcy or similar document against any 
obligor; (vii) endorse the name of Dealer upon any chattel paper, document, 
instrument, invoice, freight bill, bill of lading or similar document or 
agreement relating to any Account or goods pertaining thereto; (viii) take 
control in any manner of any item of payments or proceeds and for such 
purpose to notify the Postal Authorities to change the address for delivery 
of mail addressed to Dealer to such address as DFS may designate.  The power 
of attorney is for value and coupled with an interest and is irrevocable so 
long as any Obligations remain outstanding and by DFS exercising such right, 
DFS shall not waive any right against Dealer until the Obligations are paid 
in full.

3.10  Continuing Requirements.  Dealer will:  (a) if from time to time 
required by DFS, immediately upon their creation, deliver to DFS copies of 
all invoices, delivery evidences and other such documents relating to each 
Account; (b) not permit or agree to any extension, compromise or settlement 
or make any change to any Account; (c) affix appropriate endorsements or 
assignments upon all such items of payment and proceeds so that the same may 
be properly deposited by DFS to DFS' account; (d) immediately notify DFS in 
writing which Accounts may be deemed ineligible as defined in Subsection 3.3; 
(e) mark all chattel paper and instruments now owned or hereafter acquired by 
it to show that the same are subject to DFS' security interest and 
immediately thereafter deliver such chattel paper and instruments to DFS with 
appropriate endorsements and assignments to DFS; (f) within ten (10) days 
after the end of each month, provide DFS with a detailed aging of its 
Accounts for each month, together with the names and addresses of all 
obligors.

3.11  Release.  Dealer releases DFS from all claims and causes of action 
which Dealer may now or hereafter have for any loss or damage to it claimed 
to be caused by or arising from:  (a) any failure of DFS to protect, enforce 
or collect, in whole or in part, any Account; (b) DFS' notification to any 
obligors thereon of DFS' security interest in any of the Accounts; (c) DFS' 
directing any obligor to pay any sum owing to Dealer directly to DFS; and (d) 
any other act or omission to act on the part of DFS, its officers, agents or 
employees, except for willful misconduct.  DFS will have no obligation to 
preserve rights to Accounts against prior parties.  Dealer waives all rights 
of offset and counterclaims Dealer may have against DFS.

3.12  Review.  Dealer grants DFS an irrevocable license to enter Dealer's 
business locations during normal business hours without notice to Dealer to: 
(a) account for and inspect all Collateral; (b) verify Dealer's compliance 
with this Agreement; and (c) review, examine, and make copies of Dealer's 
books, records, files and business procedures and practices.  Dealer further 
agrees to pay DFS a review fee of one thousand dollar ($1,000.00) per fiscal 
quarter for any such review, inspection or examination made by DFS.  DFS may, 
without notice to Dealer and at any time or times hereafter, verify the 
validity, amount or any other matter relating to any Account by mail, 
telephone, or other means, in the name of Dealer or DFS.

4.  SECURITY - COLLATERAL

4.1  Grant of Security Interest.  To secure payment of all of Dealer's 
current and future Obligations and to secure Dealer's performance of all of 
the provisions under this Agreement and the Other Agreements, Dealer grants 
DFS a security interest in all of Dealer's inventory, equipment, fixtures, 
accounts, contract rights, chattel paper, security agreements, instruments, 
deposit accounts, reserves, documents, and general intangibles; and all 
judgments, claims, insurance policies, and payments owed or made to Dealer 
thereon; all whether now owned or hereafter acquired, all attachments, 
accessories, accessions, returns, repossessions, exchanges, substitutions and 
replacements thereto, and all proceeds thereof.  All such assets are 
collectively referred to herein as the "Collateral."  All of such terms for 
which meanings are provided in the Uniform Commercial Code of the applicable 
state are used herein with such meanings.  Dealer covenants with DFS that DFS 
may realize upon all or part of any Collateral in any order it desires and 
any realization by any means upon any Collateral will not bar realization 
upon any other collateral.  Dealer's liability under this Agreement is direct 
and unconditional and will not be affected by the release or nonperfection of 
any security interest granted hereunder.  All Collateral financed by DFS, and 
all proceeds thereof, will be held in trust by Dealer for DFS, with such 
proceeds being payable in accordance with this Agreement.

5.  WARRANTIES AND REPRESENTATIONS

5.1  Affirmative Warranties and Representations.  Except as otherwise 
specifically provided in the Other Agreements, Dealer warrants and represents 
to DFS that:  (a) Dealer has good title to all Collateral; (b) DFS' security 
interest in the Accounts will at all times constitute a perfected, first 
security interest in such Accounts and will not become subordinate to the 
security interest, lien, encumbrance or claim of any Entity; (c) Dealer will 
execute all documents DFS requests to perfect and maintain DFS' security 
interest in the Collateral and to fully consummate the transactions 
contemplated under this Agreement and the Other Agreements; (d) Dealer will 
at all times be duly organized, existing, in good standing, qualified and 
licensed to do business in each state, county, or parish, in which the nature 
of its business or property so requires; (e) Dealer has the right and is duly 
authorized to enter into this Agreement; (f) Dealer's execution of this 
Agreement does not constitute a breach of any agreement to which Dealer is 
now or hereafter becomes bound; (g) there are and will be no actions or 
proceedings pending or threatened against Dealer which might result in any 
material adverse change in Dealer's financial or business condition or which 
might in any way adversely affect any of Dealer's assets; (h) Dealer will 
maintain the Collateral in good condition and repair; (i) Dealer has duly 
filed and will duly file all tax returns required by law; (j) Dealer has paid 
and will pay when due all taxes, levies, assessments and governmental charges 
of any nature; (k) Dealer will maintain a system of accounting in accordance 
with generally accepted accounting principles and account records which 
contain such information in a format as may be requested by DFS; (l) Dealer 
will keep and maintain all of its books and records pertaining to the 
Accounts at its principal place of business designated in this Agreement; (m) 
Dealer will promptly supply DFS with such information concerning it or any 
Guarantor as DFS hereafter may reasonably request; (n) Dealer will give DFS 
thirty (30) days prior written notice of any change in Dealer's identity, 
name, form of business organization, ownership, management, principal place 
of business, Collateral locations or other business locations; and before 
moving any books and records to any other location; (o) Dealer will observe 
and perform all matters required by any lease, license, concession or 
franchise forming part of the Collateral in order to maintain all the rights 
of DFS thereunder; (p) Dealer will advise DFS of the commencement of material 
legal proceedings against Dealer or any Guarantor; (q) Dealer will comply 
with all applicable laws and will conduct its business in a manner which 
preserves and protects the Collateral and the earnings and incomes thereof; 
and (r) Dealer will keep the Collateral insured for its full insurable value 
under an "all risk" property insurance policy with a company acceptable to 
DFS, naming DFS as a lender loss-payee or mortgagee and containing standard 
lender's loss payable and termination provisions.  Dealer will provide DFS 
with written evidence of such property insurance coverage and lender's loss-
payee or mortgagee endorsement.

5.2  Negative Covenants.  Dealer will not at any time (without DFS' prior 
written consent):  (a) grant to or in favor of any Entity a security interest 
in or permit to exist a lien, claim or encumbrance in the Accounts which is 
superior to the interest of DFS; (b) other than in the ordinary course of its 
business, sell, lease or otherwise dispose of or transfer any of its assets; 
(c) merge or consolidate with another Entity; (d) acquire the assets or 
ownership interest of any other Entity; (e) enter into any transaction not in 
the ordinary course of business; (f) guarantee or indemnify or otherwise 
become in any way liable with respect to the obligations of any Entity, 
except by endorsement of instruments or items of payment for deposit to the 
general account of Dealer or which are transmitted or turned over to DFS on 
account of the Obligations; (g) redeem, retire, purchase or otherwise 
acquire, directly or indirectly, any of Dealer's capital stock; (h) make any 
change in Dealer's capital structure or in any of its business objectives or 
operations which might in any way adversely affect the ability of Dealer to 
repay the Obligations; (i) make any distribution of Dealer's assets not in 
the ordinary course of business; (j) incur any debts outside of the ordinary 
course of business except renewals or extensions of existing debts and 
interest thereon; and (k) make any loans, advances, contributions or payments 
of money or in goods to any affiliated entity or to any officer, director, 
stockholder, member or partner of Dealer or of any such entity (except for 
compensation for personal services actually rendered); provided, however, 
that the Dealer may make principal and interest payments on the loan due to 
Mr. Don Horton which totaled $34,739.00 as of August 19,1996, and the loan 
due to DDL Electronics, Inc. which totaled $1,569,862.00 as of August 19, 
1996, so long as both before and after giving effect of any such payment, 
Dealer is not in default of any of its Obligations, including without 
limitation, Dealer's financial covenants with DFS.

5.3  Financial Statements.  Dealer will deliver to DFS:  (a) within ninety 
(90) days after the end of each of Dealer's fiscal years, a reasonably 
detailed balance sheet as of the last day of such fiscal year and a 
reasonably detailed income statement covering Dealer's operations for such 
fiscal year, in a form satisfactory to DFS; (b) within forty-five (45) days 
after the end of each of Dealer's fiscal quarters, a reasonably detailed 
balance sheet as of the last day of such quarter and an income statement 
covering Dealer's operations for such quarter in a form satisfactory to DFS; 
(c) within ten (10) days after request therefor by DFS, any other report 
requested by DFS relating to the Collateral or the financial condition of 
Dealer.  Dealer warrants and represents to DFS that all financial statements 
and information relating to Dealer or any Guarantor which have been or may 
hereafter be delivered by Dealer or any Guarantor to DFS are true and correct 
and have been and will be prepared in accordance with generally accepted 
accounting principles consistently applied and, with respect to such 
previously delivered statements or information, there has been no material 
adverse change in the financial or business condition of Dealer or any 
Guarantor since the submission to DFS, either as of the date of delivery, or, 
if different, the date specified therein, and Dealer acknowledges DFS' 
reliance thereon.

6.  DEFAULT

6.1  Definition.  Dealer will be in default under this Agreement if:  (a) 
Dealer breaches any terms, warranties or representations contained herein or 
in any Other Agreements; (b) any Guarantor of Dealer's debts to DFS breaches 
any terms, warranties or representations contained in any guaranty or Other 
Agreements; (c) any representation, statement, report, or certificate made or 
delivered by Dealer or any Guarantor to DFS is not accurate when made; (d) 
Dealer fails to pay any of the Obligations when due and payable; (e) Dealer 
abandons any Collateral; (f) Dealer or any Guarantor is or becomes in default 
in the payment of any debt owed to any third party; (g) a money judgment 
issues against Dealer or any Guarantor; (h) an attachment, sale or seizure 
issues or is executed against any assets of Dealer or of any Guarantor; (i) 
the undersigned dies while Dealer's business is operated as a sole 
proprietorship, any general partner dies while Dealer's business is operated 
as a general or limited partnership, or any member dies while Dealer's 
business is operated as a limited liability company, as applicable; (j) any 
Guarantor dies; (k) Dealer or any Guarantor shall cease existence as a 
corporation, partnership, limited liability company or trust, as applicable; 
(l) Dealer or any Guarantor ceases or suspends business; (m) Dealer, any 
Guarantor or any member while Dealer's business is operated as a limited 
liability company, as applicable, makes a general assignment for the benefit 
of creditors; (n) Dealer, any Guarantor or any member while Dealer's business 
is operated as a limited liability company, as applicable, becomes insolvent 
or voluntarily or involuntarily becomes subject to the Federal Bankruptcy 
Code, any state insolvency law or any similar law; (o) any receiver is 
appointed for any assets of Dealer, any Guarantor or any member while 
Dealer's business is operated as a limited liability company, as applicable; 
(p) any guaranty of Dealer's debt to DFS is terminated; (q) Dealer loses any 
franchise, permission, license or right to sell or deal in any Collateral 
which DFS finances; (r) Dealer or any Guarantor misrepresents Dealer's or 
such Guarantor's financial condition or organizational structure; or (s) DFS 
determines in good faith that it is insecure with respect to any of the 
Collateral or the payment of any part of Dealer's Obligations.

6.2  Rights of DFS.  In the event of a Default:

(a)  DFS may at any time at DFS' election, without notice or demand to 
Dealer, do any one or more of the following:  declare all or any of the 
Obligations immediately due and payable, together with all costs and expenses 
of DFS' collection activity, including, without limitation, all reasonable 
attorneys' fees; exercise any or all rights under applicable law (including, 
without limitation, the right to possess, transfer and dispose of the 
Collateral); and/or cease extending any additional credit to Dealer (DFS' 
right to cease extending credit shall not be construed to limit the 
discretionary nature of this credit facility).

(b)  Dealer will segregate and keep the Collateral in trust for DFS, and in 
good order and repair, and will not sell, rent, lease, consign, otherwise 
dispose of or use any Collateral, nor further encumber any Collateral.

(c)  Upon DFS' oral or written demand, Dealer will immediately deliver the 
Collateral to DFS, in good order and repair, at a place specified by DFS, 
together with all related documents; or DFS may, in DFS' sole discretion and 
without notice or demand to Dealer, take immediate possession of the 
Collateral together with all related documents.

(d)  DFS may, without notice, apply a default finance charge to Dealer's 
outstanding principal indebtedness equal to the default rate specified in 
Dealer's financing program with DFS, if any, or if there is none so 
specified, at the lesser of 3% per annum above the rate in effect immediately 
prior to the Default, or the highest lawful contract rate of interest 
permitted under applicable law.

(e)  DFS may, without notice to Dealer and at any time or times enforce 
payment and collect, by legal proceedings or otherwise, Accounts in the name 
of Dealer or DFS; and take control of any cash or non-cash items of payment 
or proceeds of Accounts and of any rejected, returned, repossessed or stopped 
in transit goods relating to Accounts.  DFS may at its sole election and 
without demand enter, with or without process of law, any premises where 
Collateral might be and, without charge or liability to DFS therefor do one 
or more of the following:  (i) take possession of the Collateral and use or 
store it in said premises or remove it to such other place or places as DFS 
may deem convenient; (ii) take possession of all or part of such premises and 
the Collateral and place a custodian in the exclusive control thereof until 
completion of enforcement of DFS' security interest in the Collateral or 
until DFS' removal of the Collateral and, (iii) remain on such premises and 
use the same, together with Dealer's materials, supplies, books and records, 
for the purpose of performing all acts necessary and incidental to the 
collection or liquidation of such Collateral. All of DFS' rights and remedies 
are cumulative.  DFS' failure to exercise any of DFS' rights or remedies 
hereunder will not waive any of DFS' rights or remedies as to any past, 
current or future Default.

6.3  Sale of Collateral.  Dealer agrees that if DFS conducts a private sale 
of any Collateral by requesting bids from 10 or more dealers or distributors 
in that type of Collateral, any sale by DFS of such Collateral in bulk or in 
parcels within 120 days of:  (a) DFS' taking possession and control of such 
Collateral; or (b) when DFS is otherwise authorized to sell such Collateral; 
whichever occurs last, to the bidder submitting the highest cash bid 
therefor, is a commercially reasonable sale of such Collateral under the 
Uniform Commercial Code.  Dealer agrees that the purchase of any Collateral 
by a vendor, as provided in any agreement between DFS and the vendor, is a 
commercially reasonable disposition and private sale of such Collateral under 
the Uniform Commercial Code, and no request for bids shall be required.  
Dealer  further agrees that 7 or more days prior written notice will be 
commercially reasonable notice of any public or private sale (including any 
sale to a vendor).  Dealer irrevocably waives any requirement that DFS retain 
possession and not dispose of any Collateral until after an arbitration 
hearing, arbitration award, confirmation, trial or final judgment.  If DFS 
disposes of any such Collateral other than as herein contemplated, the 
commercial reasonableness of such disposition will be determined in 
accordance with the laws of the state governing this Agreement.

7.  MISCELLANEOUS

7.1  Termination.  This Agreement will continue in full force and effect and 
be noncanceble by Dealer (except that it may be terminated by DFS upon thirty 
(30) days written notice to Dealer or in the exercise of its rights and 
remedies upon Default by Dealer) for a period of two (2) years from the first 
day of the first month following the date hereof and for successive one (1) 
year periods thereafter, subject to termination as to future transactions at 
the end of any such period on at least ninety (90) days prior written notice 
by Dealer to DFS.  If such notice of termination is given by Dealer to DFS, 
such notice will be ineffective unless Dealer pays to DFS all Obligations on 
or before the termination date.  Any termination of this Agreement by Dealer 
or DFS will have the effect of accelerating the maturity of all Obligations 
not then otherwise due.

7.1.1  Termination Privilege.  Despite anything to the contrary in Section 
7.1 of this Agreement, this Agreement may be terminated by Dealer at any time 
upon ninety (90) days prior written notice and payment to DFS of the 
following sum (in addition to payment of all Obligations, whether or not by 
their terms then due) which sum represents liquidated damages for the loss of 
the bargain and not as a penalty, and the same is hereby acknowledged by 
Dealer: (1) Twenty-Five Thousand Dollars ($25,000.00) if termination occurs 
during the first twelve months following the date of this agreement,(2) 
Fifteen Thousand Dollars ($15,000.00) if termination occurs during the second 
twelve months following the date of this agreement.  This sum will also be 
paid by Dealer if the Agreement is terminated on account of Dealer's Default.

7.1.2  Effect of Termination.  Dealer will not be relieved from any 
Obligations to DFS arising out of DFS' advances or commitments made before 
the effective termination date of this Agreement.  DFS will retain all of its 
rights, interests and remedies hereunder until Dealer has paid all of 
Dealer's Obligations to DFS.  All waivers set forth within this Agreement 
will survive any termination of this Agreement.

7.2  Collection.  Checks and other instruments delivered to DFS on account of 
the Obligations will constitute conditional payment until such items are 
actually paid to DFS.

7.3  Demand, Etc.  Dealer irrevocably waives notice of:  DFS' acceptance of 
this Agreement, presentment, demand, protest, nonpayment, nonperformance, and 
dishonor.  Dealer and DFS irrevocably waive all rights to claim any punitive 
and/or exemplary damages.  Dealer waives all notices of default and non-
payment at maturity of any or all of the Accounts.

7.4  Reimbursement.  Dealer will assume and reimburse DFS upon demand for all 
expenses incurred by DFS in connection with the preparation of this Agreement 
and the Other Agreements (including fees and costs of outside counsel) and 
all filing and recording fees and taxes payable in connection with the filing 
or recording of all documents under this Agreement and the Other Agreements; 
provided, however, that such reimbursement by Dealer hereunder will not 
exceed the sum of ONE THOUSAND DOLLARS ($1,000.00).

7.5  Additional Obligations.  DFS, without waiving or releasing any 
Obligation or Default, may perform any Obligations that Dealer fails or 
refuses to perform.  All sums paid by DFS on account of the foregoing and any 
expenses, including reasonable attorneys' fees, will be a part of the 
Obligations, payable on demand and secured by the Collateral.

7.6  NO ORAL AGREEMENTS.  ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, 
EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING 
PROMISES TO EXTEND OR RENEW SUCH DEBTS ARE NOT ENFORCEABLE.  TO PROTECT 
DEALER AND DFS FROM MISUNDERSTANDING OR DISAPPOINTMENT, ALL AGREEMENTS 
COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING AND THE OTHER AGREEMENTS, 
WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN THE 
PARTIES, EXCEPT AS SPECIFICALLY PROVIDED HEREIN OR AS THE PARTIES MAY LATER 
AGREE IN WRITING TO MODIFY IT.  THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE 
PARTIES.  Time is of the essence regarding Dealer's performance of its 
obligations to DFS notwithstanding any course of dealing or custom on DFS' 
part to grant extensions of time.  DFS will have the right to refrain from or 
postpone enforcement of this Agreement or any Other Agreements between DFS 
and Dealer without prejudice and the failure to strictly enforce these 
agreements will not be construed as having created a course of dealing 
between DFS and Dealer contrary to the specific terms of the agreements or as 
having modified, released or waived the same.  The express terms of this 
Agreement will not be modified by any course of dealing, usage of trade, or 
custom of trade which may deviate from the terms hereof.

7.7  Severability.  If any provision of this Agreement or the Other 
Agreements or the application thereof is held invalid or unenforceable, the 
remainder of this Agreement and the Other Agreements will not be impaired or 
affected and will remain binding and enforceable.

7.8  Supplement.  If Dealer and DFS have heretofore executed Other Agreements 
in connection with all or any part of the Collateral, this Agreement shall 
supplement each and every Other Agreement previously executed by and between 
Dealer and DFS, and in that event this Agreement shall neither be deemed a 
novation nor a termination of any such previously executed Other Agreement 
nor shall execution of this Agreement be deemed a satisfaction of any 
obligation secured by such previously executed Other Agreement.  In the event 
of any conflict between the terms of this Agreement and any previously 
executed Business Financing Agreement between DFS and Dealer, the terms of 
this Agreement shall control.

7.9  Section Titles.  The Section titles used in this Agreement are for 
convenience only and do not define or limit the contents of any Section.

7.10  Binding Effect.  Dealer cannot assign its interest in this Agreement or 
any Other Agreements without DFS' prior written consent, although DFS may 
assign or participate DFS' interest, in whole or in part, without Dealer's 
consent.  This Agreement and the Other Agreements will protect and bind DFS' 
and Dealer's respective heirs, representatives, successors and assigns.

7.11  Notices.  Except as otherwise stated herein, all notices, arbitration 
claims, responses, requests and documents will be sufficiently given or 
served if mailed or delivered:  (a) to Dealer at Dealer's principal place of 
business specified above; and (b) to DFS at 655 Maryville Centre Drive, St. 
Louis, Missouri 63141-5832, Attention:  General Counsel, or such other 
address as the parties may hereafter specify in writing.

7.12  Receipt of Agreement.  Dealer acknowledges that it has received a true 
and complete copy of this Agreement.  Dealer acknowledges that it has read 
and understood this Agreement.  Notwithstanding anything herein to the 
contrary:  (a) DFS may rely on any facsimile copy, electronic data 
transmission or electronic data storage of any Schedule, statement, financial 
statements or other reports, and (b) such facsimile copy, electronic data 
transmission or electronic data storage will be deemed an original, and the 
best evidence thereof for all purposes, including, without limitation, under 
this Agreement or any Other Agreements, and for all evidentiary purposes 
before any arbitrator, court or other adjudicatory authority.

8.  BINDING ARBITRATION

8.1  Arbitrable Claims.  Except as otherwise specified below, all actions, 
disputes, claims and controversies under common law, statutory law or in 
equity of any type or nature whatsoever (including, without limitation, all 
torts, whether regarding negligence, breach of fiduciary duty, restraint of 
trade, fraud, conversion, duress, interference, wrongful replevin, wrongful 
sequestration, fraud in the inducement, usury or any other tort, all contract 
actions, whether regarding express or implied terms, such as implied 
covenants of good faith, fair dealing, and the commercial reasonableness of 
any Collateral disposition, or any other contract claim, all claims of 
deceptive trade practices or lender liability, and all claims questioning the 
reasonableness or lawfulness of any act), whether arising before or after the 
date of this Agreement, and whether directly or indirectly relating to:  (a) 
this Agreement or any Other Agreements and/or any amendments and addenda 
hereto or thereto, or the breach, invalidity or termination hereof or 
thereof; (b) any previous or subsequent agreement between DFS and Dealer; (c) 
any act committed by DFS or by any parent company, subsidiary or affiliated 
company of DFS (the "DFS Companies"), or by any employee, agent, officer or 
director of an DFS Company whether or not arising within the scope and course 
of employment or other contractual representation of the DFS Companies 
provided that such act arises under a relationship, transaction or dealing 
between DFS and Dealer; and/or (d) any other relationship, transaction or 
dealing between DFS and Dealer (collectively the "Disputes"), will be subject 
to and resolved by binding arbitration.

8.2  Administrative Body.  All arbitration hereunder will be conducted in 
accordance with the Commercial Arbitration Rules of The American Arbitration 
Association ("AAA").  If the AAA is dissolved, disbanded or becomes subject 
to any state or federal bankruptcy or insolvency proceeding, the parties will 
remain subject to binding arbitration which will be conducted by a mutually 
agreeable arbitrable forum.  The parties agree that all arbitrator(s) 
selected will be attorneys with at least five (5) years secured transactions 
experience.  The arbitrator(s) will decide if any inconsistency exists 
between the rules of any applicable arbitrable forum and the arbitration 
provisions contained herein. If such inconsistency exists, the arbitration 
provisions contained herein will control and supersede such rules.  The site 
of all arbitration proceedings will be in the Division of the Federal 
Judicial District in which AAA maintains a regional office that is closest to 
Dealer.

8.3  Discovery.  Discovery permitted in any arbitration proceeding commenced 
hereunder is limited as follows.  No later than thirty (30) days after the 
filing of a claim for arbitration, the parties will exchange detailed 
statements setting forth the facts supporting the claim(s) and all defenses 
to be raised during the arbitration, and a list of all exhibits and 
witnesses.  No later than twenty-one (21) days prior to the arbitration 
hearing, the parties will exchange a final list of all exhibits and all 
witnesses, including any designation of any expert witness(es) together with 
a summary of their testimony; a copy of all documents and a detailed 
description of any property to be introduced at the hearing.  Under no 
circumstances will the use of interrogatories, requests for admission, 
requests for the production of documents or the taking of depositions be 
permitted.  However, in the event of the designation of any expert 
witness(es), the following will occur:  (a) all information and documents 
relied upon by the expert witness(es) will be delivered to the opposing 
party, (b) the opposing party will be permitted to depose the expert 
witness(es), (c) the opposing party will be permitted to designate rebuttal 
expert witness(es), and (d) the arbitration hearing will be continued to the 
earliest possible date that enables the foregoing limited discovery to be 
accomplished.

8.4  Exemplary or Punitive Damages.  The Arbitrator(s) will not have the 
authority to award exemplary or punitive damages.

8.5  Confidentiality of Awards.  All arbitration proceedings, including 
testimony or evidence at hearings, will be kept confidential, although any 
award or order rendered by the arbitrator(s) pursuant to the terms of this 
Agreement may be entered as a judgment or order in any state or federal court 
and may be confirmed within the federal judicial district which includes the 
residence of the party against whom such award or order was entered.  This 
Agreement concerns transactions involving commerce among the several states.  
The Federal Arbitration Act, Title 9 U.S.C. Sections 1 et seq., as amended 
("FAA") will govern all arbitration(s) and confirmation proceedings 
hereunder.

8.6  Prejudgment and Provisional Remedies.  Nothing herein will be construed 
to prevent DFS' or Dealer's use of bankruptcy, receivership, injunction, 
repossession, replevin, claim and delivery, sequestration, seizure, 
attachment, foreclosure, dation and/or any other prejudgment or provisional 
action or remedy relating to any Collateral for any current or future debt 
owed by either party to the other.  Any such action or remedy will not waive 
DFS' or Dealer's right to compel arbitration of any Dispute.

8.7  Attorneys' Fees.  If either Dealer or DFS brings any other action for 
judicial relief with respect to any Dispute (other than those set forth in 
Section 8.6), the party bringing such action will be liable for and 
immediately pay all of the other party's costs and expenses (including 
attorneys' fees) incurred to stay or dismiss such action and remove or refer 
such Dispute to arbitration.  If either Dealer or DFS brings or appeals an 
action to vacate or modify an arbitration award and such party does not 
prevail, such party will pay all costs and expenses, including attorneys' 
fees, incurred by the other party in defending such action.  Additionally, if 
Dealer sues DFS or institutes any arbitration claim or counterclaim against 
DFS in which DFS is the prevailing party, Dealer will pay all costs and 
expenses (including attorneys' fees) incurred by DFS in the course of 
defending such action or proce
eding.

8.8  Limitations.  Any arbitration proceeding must be instituted:  (a) with 
respect to any Dispute for the collection of any debt owed by either party to 
the other, within two (2) years after the date the last payment was received 
by the instituting party; and (b) with respect to any other Dispute, within 
two (2) years after the date the incident giving rise thereto occurred, 
whether or not any damage was sustained or capable of ascertainment or either 
party knew of such incident.  Failure to institute an arbitration proceeding 
within such period will constitute an absolute bar and waiver to the 
institution of any proceeding, whether arbitration or a court proceeding, 
with respect to such Dispute.

8.9  Survival After Termination.  The agreement to arbitrate will survive 
the termination of this Agreement.

9.  INVALIDITY/UNENFORCEABILITY OF BINDING ARBITRATION.  IF THIS AGREEMENT IS 
FOUND TO BE NOT SUBJECT TO ARBITRATION, ANY LEGAL PROCEEDING WITH RESPECT TO 
ANY DISPUTE WILL BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE 
WITHOUT A JURY.  DEALER AND DFS WAIVE ANY RIGHT TO A JURY TRIAL IN ANY SUCH 
PROCEEDING.

10.  Governing Law.  Dealer acknowledges and agrees that this and all Other 
Agreements between Dealer and DFS have been substantially negotiated, and 
will be substantially performed, in the state of CALIFORNIA.  Accordingly, 
Dealer agrees that all Disputes will be governed by, and construed in 
accordance with, the laws of such state, except to the extent inconsistent 
with the provisions of the FAA which shall control and govern all arbitration 
proceedings hereunder.

IN WITNESS WHEREOF, Dealer and DFS have executed this Agreement as of the 
date first set forth hereinabove.

THIS CONTRACT CONTAINS BINDING ARBITRATION, JURY WAIVER AND PUNITIVE DAMAGE 
WAIVER PROVISIONS.




DEUTSCHE FINANCIAL SERVICES CORPORATION          SMTEK, INC. 
                                           ------------------------
                                                Dealer's Name

By:     /s/ Edward Stepanow            By:         /s/ Gregory L. Horton
       ----------------------                    -------------------------
Print Name: Edward Stepanow            Print Name: Gregory L. Horton
Title:   Marketing Manager             Title:      President and Secretary


                                       By:         /s/ Richard K. Vitelle
                                                  ------------------------
                                       Print Name:  Richard K. Vitelle
                                       Title:       CFO and Treasurer


                                       ATTEST:      /s/ Barbara Casablanca
                                                  -------------------------
                                                    (Assistant) Secretary

                                       Print Name:   Barbara Casablanca





<PAGE>
                                                                  EXHIBIT 10
                                                                  (continued)

                  ADDENDUM TO BUSINESS FINANCING AGREEMENT



This Addendum is made to that certain Business Financing Agreement executed 
on the 21st day of August, 1996, between SMTEK, Inc. ("Dealer") and Deutsche 
Financial Services Corporation ("DFS"), as amended ("Agreement").

FOR VALUE RECEIVED, DFS and Dealer agree as follows:

1.  Section 3.8 of the Agreement is hereby amended in its entirety to read as 
follows:  

"3.8  Collection Days.  All Dealer payments and all amounts received in 
settlement, adjustment, or liquidation of any Account will be credited by DFS 
to Dealer's account (subject to final collection thereof) after allowing one 
(1) business day for collection of checks or other instruments."

2.  Section 7.1 of the Agreement is hereby amended in its entirety to read as 
follows:  

"7.1  Termination.  This Agreement will continue in full force and effect and 
be noncancellable (except that it may be terminated by DFS upon the exercise 
of its rights and remedies upon Default by Dealer) for a period of two (2) 
years from the first day of the first month following the date hereof and for 
successive one (1) year periods thereafter, subject to termination as to 
future transactions at the end of any such period on at least ninety (90) 
days prior written notice by either party to the other.  If such notice of 
termination is given by either party, Dealer will pay to DFS all Obligations 
on or before the termination date.  Any termination of this Agreement by 
Dealer or DFS will have the effect of accelerating the maturity of all 
Obligations not then otherwise due."

3.  New Paragraph 8 is incorporated into the BFA to read in its entirety as 
follows:  

"8.  Facility Fee.  Dealer agrees to pay DFS a one-time facility fee in 
connection with the Accounts Receivable Facility in the amount of Twelve 
Thousand Five Hundred Dollars ($12,500.00), payable in advance, upon the 
execution of this Agreement. Once received by DFS, the facility fee shall not 
be refundable by DFS for any reason."

4.  The following paragraph is incorporated into the Agreement as if fully 
and originally set forth therein:

"Dealer will (I) as of the end of each of its fiscal years maintain: 
(a) a Tangible Net Worth and Subordinated Debt in the combined amount of not 
less than One Million Five Hundred Thousand Dollars ($1,500,000.00); and (b) 
a ratio of Debt to Tangible Net Worth and Subordinated Debt of not more than 
three to one (3.0:1); and (II) for each of its fiscal years, achieve a Net 
Income of not less than One Hundred Thousand Dollars ($100,000.00).  For 
purposes of this paragraph:  (i) 'Tangible Net Worth' means the book value of 
Dealer's assets less liabilities, excluding from such assets all Intangibles; 
(ii) 'Intangibles' means and includes general intangibles (as that term is 
defined in the Uniform Commercial Code); accounts receivable and advances due 
from officers, directors, employees, stockholders and affiliates; leasehold 
improvements net of depreciation; licenses; good will; prepaid expenses; 
escrow deposits; covenants not to compete; the excess of cost over book value 
of acquired assets; franchise fees; organizational costs; finance reserves 
held for recourse obligations; capitalized research and development costs; 
and such other similar items as DFS may from time to time determine in DFS' 
sole discretion; (iii) 'Debt' means all of Dealer's liabilities and 
indebtedness for borrowed money of any kind and nature whatsoever, whether 
direct or indirect, absolute or contingent, and including obligations under 
capitalized leases, guaranties, or with respect to which Dealer has pledged 
assets to secure performance, whether or not direct recourse liability has 
been assumed by Dealer; (iv) 'Subordinated Debt' means all of Dealer's Debt 
which is subordinated to the payment of Dealer's liabilities to DFS by an 
agreement in form and substance satisfactory to DFS; and (v) 'Net Income' 
means the net income of Dealer before provision for taxes and extraordinary 
items.  The foregoing terms will be determined in accordance with generally 
accepted accounting principles consistently applied, and, if applicable, on a 
consolidated basis."

5.  The following paragraphs are hereby incorporated into the Agreement as if 
fully set forth therein (all capitalized terms shall have the same meaning 
used in the Agreement unless otherwise defined herein):

"Dealer hereby agrees to cause an institution acceptable to DFS to issue in 
favor of DFS one or more Irrevocable Letters of Credit, in a total amount, 
form, substance and with expiration dates satisfactory to DFS. 

Dealer hereby agrees that if at least sixty (60) days prior to the expiration 
of the above referenced Irrevocable Letter(s) of Credit or any subsequent 
Letter(s) of Credit issued for the account of Dealer in favor of DFS, such 
Irrevocable Letter of Credit is not extended for a term of twelve (12) months 
or longer, or a new Irrevocable Letter of Credit in an amount, form and from 
an institution acceptable to DFS and for a term of twelve (12) months or 
longer is not provided to DFS, an event of default shall have occurred under 
this Agreement, and DFS may declare all sums owed by Dealer under this 
Agreement to be immediately due and payable.  Upon such default, DFS may:  
(i) exercise any and all of its rights under this Agreement including, but 
not limited to, the right to repossess the Collateral from Dealer; and (ii) 
exercise any and all of its rights to draw upon any Irrevocable Letter of 
Credit issued for the account of Dealer in favor of DFS."

6.  After giving effect to the initial advance made to Dealer under the 
Agreement, Dealer will have unused availability under the Accounts Receivable 
Facility of not less than One Hundred Thousand Dollars ($100,000.00).

Dealer waives notice of DFS' acceptance of this Addendum.

All other terms and provisions of the Agreement, to the extent not 
inconsistent with the foregoing, are ratified and remain unchanged and in 
full force and effect.

IN WITNESS WHEREOF, Dealer and DFS have executed this Addendum on this 21st 
day of August, 1996.


                                     SMTEK, INC.
ATTEST:
                                     By:  /s/ Richard K. Vitelle
 /s/ Barbara Casablanca                  ------------------------
------------------------             Title: Chief Financial Officer
(Assistant) Secretary


                                     DEUTSCHE FINANCIAL SERVICES CORPORATION

                                     By:  /s/ Edward Stepanow
                                         -------------------------
                                     Title:  Marketing Manager