THIRD AMENDMENT TO LOAN AGREEMENT (REVOLVER) AND FIRST AMENDMENT TO
                           LOAN AGREEMENT (TERM LOAN)

These  AMENDMENTS,  dated the 26th day of July,  1996 between Zycon  Corporation
(herein  referred to as the  "Borrower")  and COMERICA  BANK-California  (herein
referred to as the "Bank").

                                  WlTNESSETH:

WHEREAS,  the Bank and the  Borrower  on March 31, 1994  entered a certain  Loan
Agreement as amended (herein referred to as the "Revolver Agreement"), a certain
Revolving Credit Master Note (the "Revolving Credit Note"), a certain Term Note,
a Security Agreement (Inventory and Accounts Receivable), and a certain Security
Agreement (Equipment); and

WHEREAS,  the Bank and the  Borrower on December 31, 1995 entered a certain Loan
Agreement as amended (herein  referred to as the "Term Loan  Agreement"),  and a
certain Term Note; and

WHEREAS, the modifications to the Revolver Agreement and the Term Loan Agreement
contemplated hereby are in the best interest of, and will mutually benefit,  the
parties hereto; and

NOW, THEREFORE,  in consideration of the premises and the mutual promises herein
contained,  the Borrower and the Bank agree to amend the Revolver  Agreement and
the Term Loan Agreement in the manner and to the extent hereinafter set forth:

1. In Section 1.1 of the Revolver Agreement titled "Defined Terms.", replace the
definition  of  "Commitment   Amount  (Revolving  Loans)"  with  the  following:
"'Commitment  Amount (Revolving  Loans)' shall mean for any applicable period of
determination, Twenty Eight Million Dollars ($28,000,000)."

2. In Section 1.1 of the Revolver Agreement titled "Defined Terms.", replace the
definition of "Termination Date" with the following:  "'Termination  Date' shall
mean July 1, 1998 (or such earlier date on which the Borrower shall  permanently
terminate the Bank's commitment under Section 2.8 of this Agreement),  provided,
however,  if the Bank notifies  Borrower fewer than 90 days before July 1, 1998,
that the period of financing  under the Agreement  will not be extended,  and no
Event of Default then exists under this  Agreement,  then the  Termination  Date
will for this  Agreement be deemed  postponed to the date 90 days after delivery
of such notice from Bank to Borrower."

3. In Section 1.1 of the Revolver Agreement titled "Defined Terms.", replace the
definition of "Borrowing Base" with the following:  "'Borrowing Base' shall mean
as of any applicable date of  determination,  eighty percent (80%) of the sum of
(a) the  aggregate  outstanding  principal  balance of the  Borrower's  Eligible
Accounts plus (b) the aggregate  outstanding  principal  balance of the Eligible
Accounts of Zycon Alternate Circuits, Inc."


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4. Replace the content of Section  6.1.4 of the Revolver  Agreement  and Section
6.1.3 of the Term Loan  Agreement  both titled  "Aging of Accounts Certificate."
with the  following:  "Furnish to the Bank monthly by the 10th of each month the
following:  (1) an aging  as of the end of the  preceding  month  of  Borrower's
Accounts Receivable and accounts payable in a form satisfactory to the Bank; and
(2) an aging of Accounts  Receivable  and  accounts  payable of Zycon  Alternate
Circuits,  Inc. as of the end of the preceding  month in a form  satisfactory to
the Bank."

5. Replace the content of Section 6.5 of the Revolver Agreement titled "Maintain
Tangible  Net  Worth."  with  the  following:  "At the  date  of each  Financial
Statement  provided to the Bank pursuant to Section 6.1 of the  Agreement,  on a
consolidated and non-consolidated basis, maintain a Tangible Net Worth for it of
not less than the amounts specified during the periods specified below:

      (a)   $42,000,000 from December 31, 1995 until September 30, 1996,

      (b)   the  sum  of  the  minimum   Tangible  Net  Worth  required  at  the
            commencement  of the  preceding  calendar quarter plus fifty percent
            (50%) of the Borrower's Net Income (but only if such Net Income is a
            positive  number greater than zero dollars ($0.00) for the preceding
            calendar quarter from October 1, 1996 until the Indebtedness is paid
            in full  and  the  Borrower  has  performed  all of its  obligations
            hereunder."

6. Replace the content of Section 6.7 of the Revolver Agreement titled "Maintain
Current Ratio." with the  following:  "At the date of each  Financial  Statement
provided to the Bank pursuant to Section 6.1 of the Agreement, on a consolidated
and non-consolidated  basis, maintain the ratio of its Current Assets to Current
Liabilities  at not less  than 1.1 to 1.0,  at all  times  from the date of this
Agreement until the  Indebtedness is paid in full and the Borrower has performed
all of its obligations hereunder."
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7. Replace the content of Section 6.8 of the Revolver Agreement titled "Maintain
Fixed  Charges  Ratio."  with  the  following:  "At the  date of each  Financial
Statement  provided to the Bank pursuant to Section 6.1 of the  Agreement,  on a
consolidated  and  non-consolidated  basis,  maintain  the ratio of (i) its Cash
Flow,  calculated on an annualized  basis, to (ii) its Fixed Charges at not less
than  1.35 to 1.0,  at all  times  from the  date of this  Agreement  until  the
Indebtedness  is  paid  in  full  and  the  Borrower  has  performed  all of its
obligations hereunder."

8.   Add the following Section to the Revolver Agreement:  
     "6.14 Zycon Corporation Sdn. Bhd. Profitability. Ensure that the Net Income
of Zycon  Corporation  Sdn. Bhd,  calculated in accordance  with GAAP shall be a
positive number greater than zero dollars ($0.00) for each fiscal year beginning
with the fiscal year ending December 31, 1998, until the Indebtedness is paid in
full and the Borrower has performed all of its obligations hereunder."

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9.   Add the following Section to the Revolver Agreement:
     "7.1  Transfers to  Subsidiary.  Make  loan  advances to, extend credit to,
guaranty the Debt of, purchase the stock of, or otherwise make Transfers (herein
defined as, every mode, direct or indirect,  absolute or conditional,  voluntary
or  involuntary,  of disposing  or parting with  property or with an interest in
property.) to or for the benefit of Zycon  Corporation Sdn. Bhd.,  which, in the
aggregate, at any time, exceed thirty-three million dollars ($33,000,000.00)."

10.  Replace  the  content of  Section  6.6 of the Term Loan  Agreement  and the
Revolver  Agreement both titled  "Maintain Debt Ratio." with the following:  "At
the date of each  Financial  Statement  provided to the Bank pursuant to Section
6.1 of the Agreement, on a consolidated and non-consolidated basis, maintain the
ratio of its Debt to  Tangible  Net Worth at not more  than 1.60 to 1.0,  at all
times from the date of this Agreement until the Indebtedness is paid in full and
the Borrower has performed all of its obligations hereunder."

11.  Replace the  content of Section  2.4(a) of the Term Loan  Agreement  titled
"Interest - Draw Period Note." with the following:  "During the Draw Period, the
Draw  Period  Note shall bear  interest  on the  principal  balance  outstanding
thereunder  at a rate equal to the Prime Rate plus  three-eights  of one percent
(.3750%)  per  annum,  but in no event to exceed  the Legal  Rate.  Such rate of
interest  shall  change  as and when the Prime  Rate  changes.  During  the Draw
Period, accrued interest on the Draw Period Note shall be payable monthly on the
twenty-first  day  of  each  consecutive  calendar  month,  beginning  with  the
twenty-first day of the first month following the first  Disbursement Date until
the Termination  Date (unless sooner  accelerated  pursuant to the terms of this
Agreement), and from and after such date, on demand."

12. Replace the content of Section  2.4(b)(i) of the Term Loan Agreement  titled
"Interest - Fixed Rate Note and Variable  Rate Note - Variable  Rate Note." with
the following:  "Commencing  with the  Termination  Date, the Variable Rate Note
shall bear interest on the principal balance outstanding thereunder at the Prime
Rate plus  three-eights  of one percent  (.3750%)  per annum until the  Maturity
Date, and thereafter at a rate equal to two percent (2%) per annum plus the rate
otherwise  prevailing  hereunder,  but in no event to exceed the Legal Rate (the
"Prime Rate  Option").  Such rate of interest shall change as and when the Prime
Rate  changes.  Interest  shall be  payable to the  extent  then  accrued on the
twenty-first  day of the first month  following the  Termination  Date until the
Maturity Date, and from and after the Maturity Date, on demand;"

IN WITNESS  WHEREOF,  the parties  hereto have caused  these  AMENDMENTS  to the
Revolver  Agreement and the Term Loan  Agreement to be executed and delivered by
their duly authorized officers on the day and year first written above.



Zycon Corporation                          COMERICA BANK-California

By: /s/ Ronald H. Donati                   By: /s/ Greg H. Atkinson
    ------------------------------            -----------------------------
     Ronald H. Donati                          Greg H. Atkinson
Its: President                            Its: Assistant Vice President

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