<PAGE>
 
                         MULTI-CURRENCY LOAN BOND AND          31st October 1996
               GUARANTEE FACILITY SPECIFYING ACCELERATION EVENTS


To:   SpeedFam Limited ("the Borrower")
      Brindley Road
      Dodwells Bridge Industrial Estate
      Hinckley
      Leicestershire
      LE10 3BY


For the attention of: M.L. Allcoat, Esq.

Dear Sirs,

               Uncommitted (pounds)950,000 Multi-currency Loan,
      Bond and Guarantee Facility 

      We are pleased to offer you

      an uncommitted credit facility of up to a maximum at any one time
      outstanding of (pounds)950,000 (nine hundred and fifty thousand pounds
      sterling) (or its equivalent) to include the issue of bonds and guarantees
      of up to a maximum of (pounds)250,000 (two hundred and fifty thousand
      pounds sterling) (the "Facility"). Any amount outstanding hereunder from
      time to time is repayable on demand.

The terms are:

1     Interpretation

1.1   In this Letter, unless the context otherwise requires:

      "Advance" means each borrowing of a portion of the Facility
      by the Borrower;

      "Banking Day" means a day on which banks are open for business in London
      (other than a Saturday or a Sunday) and (if payment in Dollars and/or an
      Optional Currency is required to be made on such day) in New York City
      or the principal financial centre for the Optional Currency concerned;

                                       1
<PAGE>
 
"CONDITIONS PRECEDENT" means those conditions set out in paragraph 8.1 below;

"CURRENT ASSETS" means the aggregate at the date of computation of the 
stock-in-trade and work in progress, marketable securities, cash and bank 
balances of the Borrower and moneys owing to the Borrower (other than moneys due
or to become due from the Borrower) payable on demand or within one year from
the date of computation;

"CURRENT LIABILITIES" means the aggregate at the date of computation of the 
obligations including contingent obligations of the Borrower to pay money on 
demand or within one year from the date of computation (including the current 
portion of long-term debt);

"DEBENTURE" means the debenture referred to in paragraph 8.1(a) below
in a form acceptable to the Bank;

"OPTIONAL CURRENCY" means any currency other than sterling which is freely 
transferable and freely convertible into sterling and dealt in on the London 
Interbank Market;

"PROPERTY" means the property known as Brindley Road, Dodwells Bridge Industrial
Estate, Hinckley, Leicestershire, LE10 3BY, title number LT 163667;

"TANGIBLE NET WORTH" means the aggregate of the amounts paid-up or credited as 
paid-up on the Borrower's issued share capital and the amount of the capital and
revenue reserves of the Borrower (including any share premium account, capital 
redemption reserve fund revaluation reserve and any credit balance on the profit
and loss account of the Borrower) all as shown by the latest audited or 
management accounts as the case may be delivered under this Letter but after

(a)   deducting any debt balance on the profit and loss account;

(b)   deducting any amount shown in the balance sheet in respect of goodwill and
      other intangible assets;

(c)   deducting a sum equal to the aggregate of the amount by which the book 
      value of any fixed assets of the Borrower has been written up after the
      date of this Letter by way of a revaluation unless such revaluation is
      supported by a formal independent valuation addressed to the Bank.

                                       2
<PAGE>
 

     "Total Gross Liabilities" means the aggregate of all debts and liabilities
     present and future, actual or contingent of whatever nature owing by the
     Borrower from time to time including (without limitation) all tax
     liabilities and sums due to trade creditors and any borrowings from the
     Borrower from any source.

2    Multi-Currency Facility
     -----------------------

2.1  Advances under the Facility will only be made following written
     confirmation from the Bank's solicitors that the Conditions Precedent have
     been satisfied. The offer of the facility shall lapse if the Conditions
     Precedent have not been satisfied on or before 17th May 1996 unless the
     Bank shall agree otherwise in writing.

2.2  An advance in any currency other than sterling will only be made to the
     Borrower following receipt by the Bank from the Borrower of a request in
     writing for such Advance not later than 10am, on the second Banking Day
     before the date on which the Advance is to be made as set out in the
     Borrowers' request for such Advance.

2.3  The Borrower shall not request Advances at any time which would result in 
     the aggregate amount of all Advances at any time exceeding the amount of:

     (a)  the total Facility; or

     (b)  the aggregate value of 80% of the Borrower's acceptable accounts 
          receivable (acceptable accounts receivable being those that are less
          than 90 days past due date which have not been declared ineligible by
          the Bank in writing, such ineligibility shall not be applied
          unreasonably and shall be determined after consultation with the
          Borrower where practical) and 50% of its marketable stock-in-trade
          (taken at cost or market price whichever may be the lower according to
          the best estimate that can be formed without it being necessary to
          take stock for the purpose as determined by the Bank). For the
          purposes of this sub-paragraph there shall be disregarded:

          (i)    any stock-in-trade which takes the aggregate value of stock-
                 in-trade over (Pounds)250,000;

          (ii)   any stock-in-trade the property in which remains in the seller
                 notwithstanding that the Borrower may have agreed to purchase
                 the same and notwithstanding that the same may be in the
                 possession order or disposition of the Borrower; and

          (iii)  any accounts receivable deriving from any such stock-in-trade
                 as is referred to in paragraph (ii) of this sub-paragraph,

     whichever shall be the lower.

                                       3
           
<PAGE>
 
     2.4  Upon the Borrower's request in writing but subject to the Bank's
          agreement in each case the Bank shall issue bonds and guarantees on
          the Borrower's behalf in favour of third parties including guarantees
          for Value Added Tax payments to H.M. Customs and Excise (together the
          "Bonds" and each a "Bond"). Each Bond shall be in such form and
          substance as the Bank may agree and shall specify an expiry date which
          does not exceed 12 months. In any event, the aggregate amount of all
          such Bonds shall not exceed a maximum of (Pounds)250,000.

     3    CURRENCY
          --------

     3.1  Subject to the provisions of clause 3.2, if the Borrower so requests
          in writing an Advance may be drawn down in an Optional Currency but if
          no such request is received by the Bank such Advance will be drawn
          down in Sterling. The sterling equivalent of such currency shall be
          the sterling amount from time to time required to purchase the
          relevant amount of such currency at our spot buying rate of exchange
          in London.

     3.2  An Advance may not be drawn down in or remain outstanding in an
          Optional Currency if (a) in consequence thereof there would be
          Advances outstanding in more than 5 different currencies or (b) the
          Bank notifies the Borrower that deposits of such Optional Currency are
          not readily available to the Bank in an amount comparable with the
          relevant Advance or (c) the Bank determines that by reason of any
          change in currency availability, currency exchange rates or exchange
          controls it is or will be impracticable for such Advance to be drawn
          down in or remain outstanding in that Optional Currency. Accordingly,
          in any such event, the relevant Advance shall be drawn down in or be
          converted into Sterling (unless the Borrower immediately notifies the
          Bank otherwise).

     3.3  If due to fluctuations in currency exchange rates or otherwise the
          aggregate of Advances drawn on the Multi-Currency Facility exceeds
          (Pounds)950,000 (using the conversion basis set out in paragraph 3.1
          above) on any Banking Day whilst any such amount remains drawn then
          the Borrower shall immediately pay such amount to the Bank as shall be
          necessary to ensure that the aggregate of Advances does not exceed
          (Pounds)950,000.


                                       4
<PAGE>

     4    INDEMNITY
          ---------
    
     4.1  The Borrower shall indemnify the Bank against all losses costs damages
          expenses and demands which the Bank may suffer incur sustain or
          receive under or by reason of or in connection with the Bonds other
          than such losses, costs, damages, expenses and demands arising out of
          the gross negligence or wilful misconduct of the Bank. This indemnity
          shall be continuing indemnity and shall be in addition to any security
          or other right that the Bank may have against the Borrower and shall
          not be wholly or partly discharged by any variation of the Bonds or of
          this Letter or by anything done or omitted which would but for this
          provision operates to exonerate the Borrower.

     4.2  The Borrower irrevocably authorises the Bank to pay immediately any
          amounts from time to time demanded or which the Bank may become liable
          pursuant to any one or more of the Bonds which appear on their face to
          be payable in accordance with the terms of the relevant Bond or Bonds
          without reference to or further authority from the Borrower. The Bank
          shall not be under any duty to investigate or enquire whether any
          claim or demand on the Bank under a Bond shall have been properly made
          notwithstanding that the Borrower may dispute the validity of such
          claim or demand.

     4.3  The Borrower agrees that a certificate signed by an officer of the
          Bank to the effect that a sum has become due from the Bank in
          connection with any Bond shall (in the absence of manifest error) be
          conclusive as to the amount due and that a certificate signed by an
          officer of the Bank as to the maximum amount of its liability under
          any Bond shall (in the absence of manifest error) be conclusive.

     4.4  The Borrower will indemnify the Bank on request against all loss or
          expense that the Bank properly incurs under the Facility as a result
          of:

          (i)  the Borrower's failure to pay any sum on the due date; 




                                       5
<PAGE>
 

          (ii)   the Bank's accepting instructions by facsimile in relation to
                 any matter purported to be authorised on the Borrower's behalf
                 notwithstanding that the signature(s) of the person(s) signing
                 such instructions appear only as facsimile copies and
                 notwithstanding that any such instructions may be forged or
                 unauthorised providing that such signatures appear on their
                 face to be the signatures of the persons notified to the Bank
                 as authorised by the Borrower in accordance with this letter;
                 
          (iii)  the Bank's accepting instructions by telephone in relation to
                 any such matter from any person reasonably believed by the Bank
                 to be acting on the Borrower's behalf; or 
                  
          (iv)   the occurrence of any Event of Default.

4.5  If any sum due from the Borrower under this Letter or any order or judgment
     given or made in relation hereto has to be converted from the currency (the
     "first currency") in which the same is payable under this Letter or under
     such order or judgment into another currency (the "second currency") for
     the purpose of (a) making or filing a claim or proof against the Borrower,
     (b) obtaining an order or judgment in any court or other tribunal or (c)
     enforcing any order or judgment given or made in relation to this Letter,
     the Borrower shall indemnify and hold harmless the Bank from and against
     any loss suffered as a result of any difference between (i) the rate of
     exchange used for such purpose to convert the sum in question from the
     first currency into the second currency and (ii) the rate or rates of
     exchange at which the Bank may in the ordinary course of business purchase
     the first currency with the second currency upon receipt of a sum paid to
     it in satisfaction, in whole or in part, of any such order, judgment, claim
     or proof. Any amount due from the Borrower under this paragraph 4.5 shall
     be due as a separate debt and shall not be affected by judgment being
     obtained for any other sums due under or in respect to this Letter and the
     term "rate of exchange" includes any premium and costs of exchange payable
     in connection with the purchase of the first currency with the second
     currency.

4.6  The Bank shall be entitled to rely on any instructions purported to be
     signed (providing that such signatures appear on their face to be the
     signatures of the persons notified to the Bank as authorised by the
     Borrower in accordance with this letter) by any of the Borrower's
     authorised representatives and the Borrower hereby waives all rights that
     the Borrower may have to renounce forged or unauthorised instructions and
     the Bank shall other than in the case of manifest error, have no liability
     to the Borrower for acting on such instructions.

5    INTEREST ON THE FACILITY
     ------------------------

5.1  Interest shall be payable by the Borrower on each Advance from the date of
     any Advance in the currency of the Advance at the rate per annum equivalent
     to 2% above the Bank's base rate for Sterling advances as varied from time
     to time. All payments of interest in respect of an Advance shall be made in
     the Optional Currency in which such Advance is outstanding at the relevant
     time. Any certificate or determination of the Bank as to any rate of
     interest rate of exchange or any other amount pursuant to and for the
     purposes of this Letter shall, in the absence of manifest error, be
     conclusive and binding on the Borrower. If for any reason the Bank is
     unable to apply its base rate
                                       6
<PAGE>
 

     in respect any particular currency then any relevant Advance shall be
     converted into its sterling equivalent using the formula set out in
     paragraph 3.1 in order to calculate the interest payable.

5.2  All interest shall accrue from day to day to the date of actual payment (as
     well after as before judgement) on the basis of the actual number of days
     elapsed and a 360 day year (or in the case of sterling a 365 year) and
     shall be calculated and payable monthly in arrears.
     
5.3  Interest shall be paid on any sum payable under this letter (including any
     amount payable pursuant to this paragraph 5.3) which is not paid on the due
     date at the rate of 3% per annum over the cost of funds to the Bank (as
     conclusively certified by the Bank).

6    PAYMENTS
     --------

6.1  The Borrower shall pay to the Bank forthwith on request all moneys
     whatsoever which may from time to time be outstanding under the Facility.

6.2  All sums from time to time payable by the Borrower in connection with this 
     Facility whether principal indemnity payment interest commission or
     otherwise shall be paid to the Bank for value on the due date in the
     currency in which it is due in freely transferable and immediately
     available funds free and clear of any present or future taxes duties
     charges fees or withholdings and without any set-off counterclaim or any
     deduction whatsoever. If the Borrower is compelled by law to deduct any of
     the foregoing the Borrower will pay the Bank such additional amount as
     makes the net amount received by the Bank equal to the amount payable by
     the Borrower had there been no deduction or withholding. Subject to the 
     Bank notifying the Borrower in writing after exercising its rights under 
     this paragraph, the Borrower irrevocably authorises the Bank to apply any
     credit balance in any currency in reduction of sums from time to time due 
     to the Bank and to purchase with the currency of any credit balance the 
     currency in which amounts are owing. 

                                       7
<PAGE>
 
 7    Representations and Warranties

      The Borrower hereby represents and warrants to the Bank that:
  
 7.1  the Borrower is duly incorporated and validly existing under the laws of
      England, has power and all necessary corporate authorisations to enter
      into and perform its obligations under this letter and the security to be
      granted to the Bank pursuant to this Letter and has complied with all
      material statutory and other legal requirements relative to its business;

 7.2  all necessary governmental and other official consents and approvals for
      the Borrower to accept the Facility and to make all payments in accordance
      with the terms of this Letter have been obtained and are in full force and
      effect;

 7.3  on acceptance this Letter will and the Debenture will constitute valid and
      binding obligations of the Borrower enforceable in accordance with their
      terms;

 7.4  no action, suit or proceeding is pending nor, to the Borrower's knowledge
      after due enquiry, threatened against the Borrower or any of its assets
      which could or might have a material adverse effect on its conditions,
      financial or otherwise or on its ability to perform its obligations under
      this Letter of the Debenture;

 7.5  the Borrower is not (nor would with the giving of notice or passing of
      time or both be) in default in respect of any indebtedness for borrowed
      money, (including obligations under guarantees and indemnities) and the
      borrowing and repayment of the sum advanced under this Letter and the
      providing of the security to be provided by the Borrower to the Bank will
      not contravene any existing applicable law or regulation or any
      contractual or other restriction or limitation binding on the Borrower.

 8    Conditions Precedent

 8.1  The Bank shall not be obliged to make any amount available under this 
      Letter unless it shall have received before drawdown the following:

      (a) a first debenture over all the undertaking and assets including a
          legal charge over the Property;

      (b) a report on title from the Bank's Solicitors in respect of the 
          Property in such form as is satisfactory to the Bank;

      (c) a valuation by Locke & England satisfactory to the Bank of the
          Property and such valuation being signed by R.A. Promfret;

      (d) a copy, certified as a true, complete and up-to-date copy by the
          Borrower's Company Secretary of the Memorandum and Articles of
          Association of the Borrower;

                                       8
<PAGE>
 
     (e)  a copy, certified as a true copy by the Company Secretary of the
          Borrower, of resolutions of the Board of Directors of the Borrower
          evidencing approval or ratification of this Letter and authorising its
          appropriate officers to execute and deliver this Letter or to ratify
          the execution and delivery of this Letter and to give all notices and
          take all other action required by the Borrower under this Letter;

     (f)  a comfort letter from Speedfam International, Inc in a form
          satisfactory to the Bank. 

8.2  The conditions specified in this paragraph 11 are inserted solely for the
     benefit of the Bank and may be waived by the Bank in whole or in part and
     with or without conditions without prejudicing the right of the Bank to
     require fulfilment of such conditions in whole or in part at a later time.

9    UNDERTAKINGS BY THE BORROWER
     ----------------------------

9.1  While any amount (whether actual or contingent) is outstanding hereunder 
     the Borrower will not, without the prior written consent of the Bank;

     (a)  create or allow to subsist any debenture mortgage security pledge or
          other encumbrance over any part of the Property or revenue therefrom
          or asset present or future (other than a lien arising by operation of
          law or in the ordinary course of trading as now conducted); or

     (b)  permit any of the Borrower's liabilities to have the benefit of any
          guarantee indemnity bond or comfort letter unless the party giving the
          same gives a like commitment in respect of this Facility.

9.2  The Borrower will supply the Bank with Annual Audited Accounts and
     Directors' Report of the Borrower within 180 days of the end of the
     relevant financial year and all other documents issued to the Borrower's
     shareholders and creditors (forthwith upon their issue) and with such other
     financial and other information as the Bank may from time to time
     reasonably request.

9.3  The Borrower will procure that the Bank is supplied with the Annual Audited
     Accounts of Speedfam International, Inc.

9.4  The Borrower will deliver to the Bank copies of each of the following
     documents, in each case (unless stated otherwise) at the time of
     distribution thereof or in the case of the certificate referred to in
     paragraph 9.4(b) below together with the financial statements to be
     supplied pursuant to paragraph 9.2 and 9.3 in respect of the financial
     period to which such certificate relates:

     (a)  every report, circular, notice or like document issued by the Borrower
          to its shareholders or creditors generally; and 

                                       9
<PAGE>
 
     (b)  a certificate addressed to the Bank from its auditors stating that the
          Borrower as at the date of its latest audited financial statements was
          in compliance with the covenants and undertakings in paragraph 12.8
          (or if it was not in compliance indicating the extent of the breach);

     (c)  management accounts for the Borrower within 60 days of the end of the
          quarter to which they relate in a standard format agreed with the
          Bank;

     (d)  aged debtor reports and inventory certificates for the Borrower within
          10 days of the end of the month to which they relate in a standard
          format agreed with the Bank;

9.5 (a)   the Borrower will insure the Property in the name of the Borrower with
          the interest of the Bank endorsed or noted on the policies in such
          manner as the Bank may require against loss or damage by fire and such
          other risks as the Bank shall from time to time consider necessary to
          not less than the full reinstatement value thereof (together with
          additional amounts estimated as sufficient to cover architects and
          surveyors fees and the costs of demolition site clearance and shoring
          up) with such insurance office or underwriters as may from time to
          time be approved by the Bank in writing.

     (b)  the Borrower will insure and keep insured all its properties (other
          than those referred to in sub-paragraph 9.5(a) and assets with
          underwriters or insurance companies of repute to such extent and
          against such risks as prudent companies engaged in businesses similar
          to those of the Borrower normally insure and produce to the Bank on
          request copies of all insurance policies from time to time effected by
          the Borrower and will procure that the Bank's interest is noted on the
          insurance policies in respect of such properties;

9.6  the Borrower will comply, with the terms and conditions of all laws,
     regulations, agreements, licenses and concessions material to the carrying
     on of its businesses,

9.7  the Borrower will not sell, transfer, lend or otherwise dispose of or cease
     to exercise direct control over any part of its present or future
     undertaking, assets, rights or revenues (otherwise than by transfers, sales
     or disposals at market value to any person) whether by one or a series of
     transactions related or not, without the prior written consent of the Bank
     (such consent not to be unreasonably withheld or delayed);

9.8  the Borrower will ensure that at all times:

     (a)  the ratio of Current Assets to Current Liabilities is not less than 
          1:1;

     (b)  the Tangible Net Worth is not less than (Pound)700,000;

     (c)  the ratio of Total Gross Liabilities to Tangible Net Worth does not 
          exceed 2.5:1.





                                      10
<PAGE>
 
9.9   the Borrower will procure that no transfer of the shares in the Borrower
      held by Speedfam International, Inc will be registered without the Bank's
      prior written consent;

9.10  it will not make any change to its main objects clause in its Memorandum
      of Association or to its borrowing powers or power to issue security
      without the Bank's written consent (such consent not to be unreasonably
      witheld or delayed);

9.11  the Borrower shall notify the Bank of any Event of Default (as hereinafter
      defined) immediately upon becoming aware of its occurrence.

10    EVENTS OF DEFAULT
      -----------------

      The Bank may, without prejudice to its other rights hereunder, terminate
      its obligation to make the Facility contemplated hereunder available and
      declare that all outstanding amounts shall become immediately due and
      payable and the Borrower shall place cash cover with the Bank in an amount
      equal to the maximum amount of the Bank's liability under all Bonds then
      outstanding on the Bank's so notifying the Borrower at any time after any
      of the following events ("EVENTS OF DEFAULT") shall occur:

      (a)  if the Borrower fails to perform and observe any of its obligations
           under this Letter or any agreement between the Borrower and the Bank,
           and, in respect only of a failure which is capable of remedy, does
           not remedy such failure within 5 Banking Days;

      (b)  if it becomes unlawful (or impossible) for the Bank to maintain fund
           or provide the facilities as contemplated hereby;

      (c)  if any borrowed moneys of the Borrower exceeding in aggregate
           (pounds)10,000 are not paid when due or become capable of being
           declared due prior to their stated maturity or the security for any
           such borrowed money becomes enforceable;

      (d)  if a petition is presented or an order made or a resolution passed
           for the administration or winding-up of the Borrower or if any
           execution or distress is levied or enforced against the Borrower;

      (e)  if the Borrower ceases to be wholly owned by Speedfam International,
           Inc;

      (f)  any representation or warranty the Borrower has made or is deemed to
           have made pursuant to this Letter proves to be incorrect in a
           material respect unless previously disclosed to the Bank in writing
           and such disclosure was accepted by the Bank;

      (g)  any governmental consent or approval at any time necessary to enable
           the Borrower to comply with its obligations hereunder is revoked or
           withheld or materially modified or is otherwise not granted or fails
           to remain in full force and effect;


                                      11
<PAGE>
 
      (h)    an encumbrancer takes possession of or a receiver or similar
             officer is appointed of the whole or any part of the undertaking,
             property, assets or revenues of the Borrower; or

      (i)    the Borrower is unable to, or admits its inability to, pay its
             debts as they fall due, or enters into any composition or
             arrangement with its creditors or proceedings are commenced in
             relation to the Borrower under any law, regulation or procedure
             relating to reconstruction or re-adjustment of debts;

      (j)    the Borrower ceases or threatens to cease to carry on business or a
             substantial part of the undertaking, property or assets of the
             Borrower is seized or appropriated;

      (k)    there occurs, in the opinion of the Bank, a material adverse change
             in the financial condition of the Borrower by reference to the
             financial statements referred to in paragraph 9.2, or any event,
             which material adverse change or event in the reasonable opinion of
             the Bank affects the ability of the Borrower to perform its
             obligations under this Letter;

      (l)    the Borrower defaults under any loan agreement debenture or other
             document or obligation relating to money borrowed from the Bank or
             any third party;

      (m)    the Borrower defaults under any loan agreement debenture or other
             document or obligation relating to money borrowed from any third
             party but where such default is in respect of a monetary payment
             only, it will only be an Event of Default if the sum not paid
             exceeds (pounds)1,000.

      11   ARRANGEMENT COMMISSION AND OTHER FEES AND EXPENSES IN RESPECT OF THE 
           --------------------------------------------------------------------
           FACILITIES
           ----------

      11.1 The Borrower will pay commission on each Bond at a rate of 2% (two
           per cent) for advance payment and performance guarantees and 1% (one
           per cent) per annum for VAT guarantees for the maximum amount of the
           Bank's liability under each Bond calculated on a daily basis from the
           date of issue until the expiry date of such Bond payable in full in
           advance. Commission will be calculated on the basis of the actual
           number of days elapsed and a 365 day year.

      11.2 The Borrower shall pay to the Bank an arrangement fee of
           (pounds)2,500.

      11.3 The Borrower shall pay to the Bank upon demand all costs, charges and
           expenses (including legal expenses, stamp, registration or other
           duties and any VAT) incurred by the Bank in connection with the
           preparation and execution of this Letter and documents ancillary
           thereto and all costs, charges and expenses (including legal and
           valuation expenses on a full indemnity basis and any V.A.T.) of the
           Bank in connection with the enforcement of, or preservation of any
           rights under this Letter or otherwise in connection with this
           Facility or security to be granted by the Borrower.

      11.4 The Borrower hereby authorises the Bank to deduct any fees or
           expenses payable to it under the terms of this Letter and notified by
           the Bank to the Borrower in

                                      12
<PAGE>
 
      accordance with its usual practice from such of its accounts maintained by
      the Bank from time to time as the Bank shall choose. 

12    ASSIGNMENT
      ----------

12.1  The Borrower agrees that the Bank may:

      (a)  assign all or any part of its rights or obligation under this letter
           to any one or more members of the same group (as defined in Section
           53(1) of the Companies Act 1989); or

      (b)  (with the Borrower's prior written consent, such consent not to be
           unreasonably withheld or delayed) assign all or any part of its
           rights or obligations under this Letter to any one or more other
           banks or financial institutions

      Providing such an assignment does not give rise to any withholding tax
      liability on the part of the Borrower and after any such assignment the
      expression the "BANK" shall be deemed to include such assignees to the
      extent of their respective participation and provided also that the
      assignment of all or part of the Bank's obligations may only be effected
      if the assignee shall undertake to become bound by the terms of this
      Letter and thereafter the assignee alone shall be obliged to perform that
      portion of the Bank's obligations which corresponds to its participation.

12.2  The Bank may disclose to a prospective assignee, substitute or transferee
      or to any other person who may propose entering into contractual relations
      with the Bank in relation to this Letter such information about the
      Borrower as the Bank shall consider appropriate subject to it obtaining an
      appropriate confidentiality undertaking in a form approved by the Borrower
      from such potential assignee, substitute or transferee.

13    LAW
      ---

13.1  This Letter shall be governed by English law and the Borrower hereby
      irrevocably submits to the non-exclusive jurisdiction of the High Court of
      Justice in England.

                               Yours faithfully


                               /s/ W. Stevenson
                           ........................
                             for and on behalf of
                      The First National Bank of Chicago


ACCEPTED AND AGREED      )      
for and on behalf of     )
SpeedFam Limited         )
by                       )       /s/ R. R. Smith
on 31st October 1996     )   ...................... 


                                      13
<PAGE>
 
 
Private & Confidential                                         



                            DATED 31st October 1996
                            -----------------------



                               SPEEDFAM LIMITED                (1)

                                      and

                      THE FIRST NATIONAL BANK OF CHICAGO       (2)




                          ---------------------------

                                   DEBENTURE

                          ---------------------------




                                  Wragge & Co
                                  Birmingham
<PAGE>
 
                                   CONTENTS
                                   --------


Clause                              Heading                              Page


1    Interpretation.......................................................   1

2    Covenant to Pay......................................................   3

3    Charges..............................................................   4

4    Set-off..............................................................   6

5    Undertakings.........................................................   7

6    Further Assurance....................................................  11

7    Certain powers of the Bank: Enforcement..............................  12

8    Appointment and Powers of Receiver...................................  13

9    Application of Proceeds; Purchasers.................................   16

10   Indemnities; Costs and Expenses......................................  16

11   Power of Attorney....................................................  17

12   Continuing Security and Other Matters................................  18

13   Representations and Warranties.......................................  18

14   Miscellaneous........................................................  20

15   Notices..............................................................  21

16   Law..................................................................  21

The Schedule
Part A - Properties.......................................................  22
Part B - Fixed Plant and Machinery........................................  23
Part C - Intellectual Property Rights.....................................  24 
<PAGE>

THIS DEBENTURE dated                   ,19

BETWEEN:

(1)  SPEEDFAM LIMITED (No. 1175211) whose registered office is at Brindley Road,
     Dodwells Industrial Estate, Hinckley, Leicestershire LE10 3BY (the
     "Company"); and

(2)  THE FIRST NATIONAL BANK OF CHICAGO whose office is at First Chicago House,
     90 Long Acre, London, WC2E 9RB (the "Bank")
     

WITNESSES as follows:


1    INTERPRETATION

1.1  DEFINITIONS: In this Deed, unless the context otherwise requires:        

     "CHARGED ASSETS" means all the undertaking, goodwill, property, assets and
     rights of the Company described in clauses 3.1 and 3.2;

     "COLLATERAL INSTRUMENTS" means negotiable and non-negotiable instruments,
     guarantees, indemnities and other assurances against financial loss and any
     other documents or instruments which contain or evidence an obligation
     (with or without security) to pay, discharge or be responsible directly or
     indirectly for, any liabilities of any person and includes any document or
     instrument creating or evidencing an Encumbrance;

     "DEBTS" means the assets of the Company described in clause 3.1(d);

     "DISPOSAL" includes any sale, lease, sub-lease, assignment or transfer, the
     grant of an option or similar right, the grant of any easement, right or
     privilege, the creation of a trust or other equitable interest in favour of
     a third party, a sharing or parting with

                                       1
<PAGE>
 
possession or occupation whether by way of licence or otherwise and the granting
of access to any other person over any intellectual property, and "dispose" and
"disposition" shall be construed accordingly;

"ENCUMBRANCE"  means any mortgage, charge (whether fixed or floating), pledge, 
lien, hypothecation, standard security, assignment by way of security or other 
security interest of any kind;

"ENFORCEMENT DATE"  means the date on which the Bank demands the payment or 
discharge of all or any part of the Secured Obligations or if earlier, the date 
on which a petition for an administration order is presented in relation to the 
Company;

"EVENT OF DEFAULT"  means any of the events or circumstances described in
paragraph 13 of the Facility Agreement;

"FACILITY AGREEMENT"  means the facility agreement dated 31st October 1996 made
between Speedfam Limited and the Bank.
 
"FLOATING CHARGE ASSETS"  means the assets of the Company from time to time
expressed to be charged by this Debenture by way of floating charge;

"INSURANCES"  means all present and future contracts or policies of insurance
(including life policies) in which the Company from time to time has an
interest;

"INTELLECTUAL PROPERTY RIGHTS"  means the assets of the Company described in
clause 3.1 (g);

 

                                       2



<PAGE>
 
     "PERMITTED ENCUMBRANCE" means any Encumbrance arising by the way of
     retention of title of goods by the supplier of such goods where such goods
     are supplied on credit and are acquired in the ordinary course of trading
     of the Company;

     "PROPERTIES" means the assets of the Company described in clause 3.1(a) and
     all present and future heritable and leasehold property of the Company
     situate in Scotland (including without limitation the properties specified
     in Part B of the schedule) and all liens, charges, options, agreements,
     rights and interests in or over land or the proceeds of sale of land
     situate in Scotland and all buildings, fixtures (including trade fixtures)
     and fixed plant and machinery from time to time on such property or land
     together with all rights, easements, servitudes and privileges appurtenant
     to, or benefitting, the same, in all cases both present and future;

     "RECEIVER" means any one or more receivers and/or managers or
     administrative receivers appointed by the Bank pursuant to this Deed in
     respect of the Company or over all or any of the Charged Assets;

     "SECURED OBLIGATIONS" means all moneys, obligations and liabilities
     covenanted to be paid or discharged by the Company under or pursuant to
     clause 2;

     "SECURITIES" means the assets of the Company described in clause 3.1(c).

1.2  Successors and assigns: the expressions "Bank" and "Company" include, where
     the context admits, their respective successors, and, in the case of the
     Bank, its transferees and assignees, whether immediate or derivative.

1.3  Headings: Clause headings and the contents page are inserted for
     convenience of reference only and shall be ignored in the interpretation of
     this Deed.

1.4  Construction of certain terms: In this Deed, unless the context otherwise
     requires:

                                       3
<PAGE>
 
     (a)  references to clauses and the schedule are to be construed as
          references to the clauses of, and the schedule to, this Deed and
          references to the Deed include its schedule;

     (b)  reference to (or to any specified provision of) this Deed or any other
          document shall be construed as references to this Deed, that provision
          or that document as in force for the time being and as amended in
          accordance with the terms thereof or, as the case may be, with the
          agreement of the relevant parties and (where such consent is, by the
          terms of this Deed or the relevant document, required to be obtained
          as a condition to such amendment being permitted) the prior written
          consent of the Bank;

     (c)  words importing the plural shall include the singular and vice versa;

     (d)  references to a person shall be construed as including references to
          an individual, firm, company, corporation, unincorporated body of
          persons or any State or any agency thereof;

     (e)  references to statutory provisions shall be construed as references to
          those provisions as replaced, amended or re-enacted from time to time.

1.5  Effect as a deed: This deed is intended to take effect as a deed
     notwithstanding that the Bank may have executed it under hand only.

1.6  Facility Agreement definitions: Unless the context otherwise requires or
     unless otherwise defined in this Deed, words and expressions defined in the
     Facility Agreement shall have the same meaning when used in this Deed.

                                       4
<PAGE>
 
2    COVENANT TO PAY

2.1  Secured obligations: The Company hereby convenants that it will on demand
     pay to the Bank all moneys and discharge all obligations and liabilities
     now or hereafter due, owing or incurred to the Bank when the same become
     due for payment or discharge whether by acceleration or otherwise, and
     whether such moneys, obligations or liabilities are express or implied;
     present, future or contingent; joint or several; incurred as principal or
     surety; originally owing to the Bank or purchased or otherwise acquired by
     it; denominated in sterling or in any other currency; or incurred on any
     banking account or in any other manner whatsoever.

2.2  Certain liabilities: The liabilities referred to in clause 2.1 shall, 
     without limitation, include:

     (a)  all liabilities under or in connection with foreign exchange
          transactions, interest rate swaps and other arrangements entered into
          for the purpose of limiting exposure to fluctuations in interest or
          exchange rates,

     (b)  all liabilities arising from the issue, acceptance, endorsement,
          confirmation or discount of any negotiable or non-negotiable
          instruments, documentary or other credits, bonds, guarantees,
          indemnities or other instruments of any kind; and

     (c)  interest (both before and after judgment) to date of payment at such
          rates and upon such terms as may from time to time be agreed,
          commission, fees and other charges and all legal and other costs,
          charges and expenses on a full and unqualified indemnity basis which
          may be incurred by the Bank in relation to any such moneys,
          obligations or liabilities or generally in respect of the Company.

                                       5
<PAGE>
 
3    CHARGES
     -------

3.1  Fixed Charge: The Company with full title guarantee hereby charges to the
     Bank by way of first fixed charge (and as regards all those parts of the
     freehold and leasehold property in England and Wales now vested in the
     Company by way of first legal mortgage) as a continuing security for the
     payment and discharge of the Secured Obligations the following assets, both
     present and future, from time to time owned by the Company or in which the
     Company may from time to time have an interest:

     (a)  Properties: all freehold and leasehold property of the Company situate
          in England and Wales (including without limitation the property
          specified in Part A of the schedule) and all liens, charges, options,
          agreements, rights and interests in or over land or the proceeds of
          sale of land situate in England and Wales and all buildings, fixtures
          (including trade fixtures) and fixed plant and machinery from time to
          time on such property or land together with all rights, easements and
          privileges appurtenant to, or benefitting, the same;

     (b)  Plant and Machinery: all plant, machinery, vehicles, computers and
          office and other equipment including, without limitation, those listed
          in Part B of the schedule and the benefit of all contracts and
          warranties relating to the same;

     (c)  Securities: all stocks, shares, bonds and securities of any kind
          whatsoever whether marketable or otherwise and all other interests
          (including but not limited to loan capital) in any person, including
          all allotments, rights, benefits and advantages whatsoever at any time
          accruing, offered or arising in respect of or incidental to the same
          and all money or property accruing or offered at any time by way of
          conversion, redemption, bonus, preference, option, dividend,
          distribution, interest or otherwise in respect thereof;

     (d)  Debts: all book and other debts, revenues and claims, whether actual
          or contingent, whether arising under contracts or in any other manner
          whatsoever

                                       6
<PAGE>
 
          and whether originally owing to the Company or purchased or otherwise
          acquired by it including, without limitation, any amount from time to
          time standing to the credit of any bank or other account with the Bank
          or with any other person and all things in action which may give rise
          to any debt, revenue or claim, together with the full benefit of any
          Encumbrances, Collateral Instruments and any other rights relating
          thereto including, without limitation, reservations of proprietary
          rights, rights of tracing and unpaid vendor's liens and associated
          rights;

     (e)  Insurances: all moneys from time to time payable to the Company under
          or pursuant to the Insurances including without limitation the refund
          of any premiums;

     (f)  Goodwill and uncalled capital: all goodwill and uncalled capital;

     (g)  Intellectual Property Rights: all patents, patent applications, trade
          marks and service marks (whether registered or not) trade mark
          applications, service mark applications, trade names, registered
          designs, design rights, copyrights, computer programmes, know how and
          trade secrets and all other industrial or intangible property or
          rights and all licences, agreements and ancillary and connected rights
          relating to, intellectual and intangible property including, without
          limitation, those listed in Part C of the schedule.

3.2  Floating Charge: The Company with full title guarantee hereby charges to
     the Bank by way of first floating charge as a continuing security for the
     payment and discharge of the Secured Obligations its undertaking and all
     its property, assets and rights whatsoever and wheresoever both present and
     future, other than any property or assets from time to time effectively
     charged by way of legal mortgage or fixed charge or assignment pursuant to
     clause 3.1 or otherwise pursuant to this Deed but including (without
     limitation and whether or not so effectively charged) any of its property
     and assets situated in Scotland and such assets or any part or parts
     thereof as may be

                                       7
<PAGE>
 
     released from such fixed charges either in writing by the Lender or 
     pursuant to the provisions of clause 5.1(a)(i).

3.3  Restrictions on dealing with Charged Assets: The Company hereby covenants 
     that it will not without the prior consent in writing of the Bank:

     (a)  dispose of, or create or attempt to create or permit to subsist or
          arise any Encumbrance on or over, the Debts or any part thereof or
          release, set off or compound or deal with the same otherwise than in
          accordance with clause 5.1(a);

     (b)  create or attempt to create or permit to subsist in favour of any
          person other than the Bank any Encumbrance (except a Permitted
          Encumbrance) and a lien arising by operation of law in the ordinary
          course of trading over property other than land) on or affecting the
          Charged Assets or any part thereof; or

     (c)  dispose of the Charged Assets or any part thereof or attempt or agree 
          so to do except in the case of:

          (i)   stock-in-trade, which may, subject to the other provisions of 
                this Deed, be sold at full market value in the usual course of
                trading as now conducted and for the purpose of carrying on the
                Company's business; and

          (ii)  other Floating Charge Assets which may, subject to the other
                provisions of this Deed, be disposed of in the ordinary course
                of business); and

          (iii) plant and equipment for full value in cash if the proceeds of
                such sale are reinvested in the Company's business.

                                       8

<PAGE>
 
3.4  Automatic conversion of floating charge: Notwithstanding anything expressed
     or implied in this Deed, if the Company creates or attempts to create any
     Encumbrance over all or any of the Floating Charge Assets without the prior
     consent in writing of the Bank or if any person levies or attempts to levy
     any distress, execution, sequestration or other process or does or attempts
     to do any diligence in execution against any of the Floating Charge Assets,
     the floating charge created by clause 3.2 over the property or asset
     concerned shall thereupon automatically without notice be converted into a
     fixed charge.

3.5  Conversion of floating charge by notice: Notwithstanding anything expressed
     or implied in this Deed but without prejudice to clause 3.4, the Bank shall
     be entitled at any time by giving notice in writing to that effect to the
     Company to convert the floating charge over all or any part of the Floating
     Charge Assets into a fixed charge as regards the assets specified in such
     notice.

3.6  H.M. Land Registry: The Company hereby applies to the Chief Land Registrar
     for the registration of the following restriction against each of the
     registered titles specified in Part A of the schedule (and against any
     title to any unregistered property specified in Part A of the schedule
     which is or ought to be the subject of a first registration of title at
     H.M. Land Registry at the date of this Deed):

          "Except under an Order of the Registrar no disposition or charge or
          other security interest is to be registered or noted without the
          consent of the proprietor for the time being of Charge No.  ".

4    SET-OFF
     -------

4.1  Set-off: The Company hereby agrees that the Bank may at any time without
     notice, notwithstanding any settlement of account or other matter
     whatsoever, combine or consolidate all or any of its then existing accounts
     wheresoever situate (including accounts in the name of the Bank or of the
     Company jointly with others), whether

                                       9
<PAGE>
 
     such accounts are current, deposit, loan or of any other nature whatsoever,
     whether they are subject to notice or not and whether they are denominated
     in sterling or in any other currency, and set-off or transfer any sum
     standing to the credit of any one or more of such accounts in or towards
     satisfaction of the Secured Obligations which, to the extent not then
     payable, shall automatically become payable to the extent necessary to
     effect such set-off.

4.2  Purchase of currencies: For the purpose of clause 4.1, the Company
     authorises the Bank to purchase with the moneys standing to the credit of
     such accounts such other currencies as may be necessary to effect such
     applications.

5    UNDERTAKINGS
     ------------

5.1  The Company hereby undertakes with the Bank that during the continuance of 
     this security the Company will:
     
     (a)  Debts:

          (i)  deal with the Debts in accordance with such directions as may be
               given by the Bank in writing from time to time (subject only to
               such rights if any as Lloyds Bank Plc or such other clearing bank
               as the Company and the Bank shall agree in writing from time to
               time ("the Clearing Bank") may have in respect thereof) and
               subject to such directions as may be given from time to time
               shall enforce payment and realise the Debts in the ordinary
               course of its business (which shall not without the prior written
               consent of the Bank extend to the selling or assigning or in any
               other way factoring or discounting the same) and pay the proceeds
               of the enforcement and realisation of the Debts:

               (A)  into the Company's current account with the Clearing Bank; 
                    or
 
                                      10
<PAGE>
 
               (B)  into such other separate account with the Clearing Bank as
                    the Bank may in writing from time to time specify;

               and in either case pay or otherwise deal with such proceeds
               standing in such account (subject to such rights if any as the
               Clearing Bank may have in respect thereof) in accordance with any
               directions given in writing from time to time by the Bank; or

               (C)  if so requested by the Bank to the Bank itself;

               PROVIDED THAT where no directions have been given by the Bank in
               respect of the proceeds of the enforcement and realisation of any
               Debts such proceeds shall on payment into such accounts as are
               specified in clauses 5.1(a)(i)(A) and 5.1(a)(i)(B) stand released
               from the fixed charge hereby created but shall nonetheless remain
               subject to the floating charge hereby created PROVIDED FURTHER
               that such release shall be limited to the proceeds of such assets
               in respect of which no directions have been given by the Bank and
               shall not derogate from the fixed charge in respect of all the
               other Debts;
         
          (ii) if so requested by the Bank pay to the Bank all monies which the
               Company may receive in respect of the Securities.

     (b)  Deposit of deeds: deposit with the Bank (to be held at the risk of the
          Company):

          (i)  all deeds and documents of title relating to the Properties and
               to any subordinate interest in any of them and the insurance
               policies relating thereto;


                                      11
<PAGE>
 
     (ii)  all certificates and documents of title relating to the Securities
           and such deeds of transfer in blank and other documents as the Bank
           may from time to time require for perfecting the title of the Bank to
           the Securities (duly executed by or signed on behalf of the
           registered holder) or for vesting or enabling it to vest the same in
           itself or its nominees or in any purchaser; and

     (iii) all such other documents relating to the Charged Assets as the Bank
           may from time to time reasonably require;

(c)  Calls etc:  duly and promptly pay all calls, instalments or other moneys 
     which may from time to time become due in respect of any of its Securities,
     it being acknowledged by the Company that the Bank shall not in any
     circumstances incur any liability whatsoever in respect of any such calls,
     instalments or other moneys;

(d)  Provision of information:  provide the Bank with such financial and other 
     information relating to the Company, and its business as the Bank may from
     time to time reasonably require;

(e)  Conduct of business:  conduct and carry on its business, and procure that 
     each of its Subsidiaries conducts and carries on its business, in a proper
     and efficient manner and keep or cause or procure to be kept proper books
     of account relating to such business and not make any material alteration
     in the nature or mode of conduct of any such business;

(f)  Compliance with covenants etc:  observe and perform all covenants, burdens,
     stipulations, requirements and obligations from time to time affecting the
     Charged Assets and/or the use, ownership, occupation, possession,
     operation, repair, maintenance or other enjoyment or exploitation of the
     Charged Assets whether imposed by statute, contract, lease, license, grant
     or otherwise, carry

                                      12
<PAGE>
 
          out all registrations or renewals and generally do all other acts and
          things (including the taking of legal proceedings) necessary or
          desirable to maintain, defend or preserve its right, title and
          interest to and in the Charged Assets without infringement by any
          third party and not without the prior consent in writing of the Bank
          (such consent not to be unreasonably withheld or delayed) enter into
          any onerous or restrictive obligations affecting any of the same or
          agree any rent review relating to any interest in any of the
          Properties;

     (g)  Alteration or development of Properties: not make without the prior
          written consent of the Bank, whose consent shall not be unreasonably
          withheld, any structural or material alteration to or to the user of
          any of its Properties or do or permit to be done anything which is a
          "development" within the meaning of the Town and Country Planning Acts
          from time to time or any orders or regulations under such Acts or do
          or permit or omit to be done any act, matter or thing as a consequence
          of which any provision of any statute, bye-law, order or regulation or
          any condition of any consent, licence, permission or approval (whether
          of a public or private nature) from time to time in force affecting
          any of the Properties is or may be infringed;

     (h)  Maintenance of buildings, machinery and plant: keep all its buildings,
          machinery, plant, fixtures, vehicles, computers and office and other
          equipment in good and substantial repair and in good working order and
          condition and on receipt of reasonable notice permit the Bank and its
          agents or representatives to enter and view their state and condition;

     (i)  Insurance:

          (i)  insure the Property listed in Part A of the Schedule in the name
               of the Company with the interest of the Bank endorsed or noted on
               the policies in such manner as the Bank may require against loss
               or damage by fire and such other risks as the Bank shall from
               time to

                                      13
<PAGE>
 
               time consider necessary to not less than the full reinstatement
               value thereof (together with additional amounts estimated as
               sufficient to cover architects and surveyors fees and the costs
               of demolition, site clearance and shoring up) with such insurance
               office or underwriters as may from time to time be approved by
               the Bank in writing;

          (ii) insure and keep insured all its properties (other than referred
               to above) and assets with underwriters or insurance companies of
               repute to such extent and against such risks is prudent companies
               engaged in businesses similar to those of the Company normally
               insure and produce to the Bank on request copies of all insurance
               policies from time to time effected by the Company and will
               procure that the Bank's interest is noted on the insurance
               policies in respect of such properties.

     (j)  Property outgoings: punctually pay, or cause to be paid, and indemnify
          the Bank and any Receiver (on a several basis) against, all present
          and future rent, rates, taxes, duties, charges, assessments,
          impositions and outgoings whatsoever (whether imposed by agreement,
          statute or otherwise) now or at any time during the continuance of
          this security payable in respect of the Properties or any part thereof
          or by the owner or occupier thereof;

     (k)  Possession of Properties: without prejudice to the generality of
          clause 3.3(c), not without the prior consent in writing of the Bank
          grant any lease, part with possession or share occupation of the whole
          or any part of any of the Properties or confer any licence, right or
          interest to occupy or grant any licence or permission to assign,
          underlet or part with possession of the same or any part thereof or
          permit any person:

                                      14
<PAGE>
 
          (i)  to be registered (jointly with the Company or otherwise) as
               proprietor under the Land Registration Acts of any of the
               Properties nor create or permit to arise any overriding interest
               affecting the same within the definition in those Acts or within
               the meaning of the Land Registration (Scotland) Act 1979; or

          (ii) to become entitled to any right, easement, covenant, interest or
               other title encumbrance which might adversely affect the value or
               marketability of any of the Properties;

     (l)  Variation of leasehold interests: not without the prior consent in
          writing of the Bank vary, surrender, cancel or dispose of, or permit
          to be forfeit, any leasehold interest in any of the Properties or any
          credit sale, hire purchase, leasing, rental, licence or like agreement
          for any equipment used in its business;

     (m)  Acquisition of property: immediately inform the Bank before
          contracting to purchase any estate or interest in freehold, leasehold
          or heritable property and supply the Bank with such details of the
          purchase as the Bank may from time to time request;

     (n)  Access: procure that representatives designated by the Bank and its
          representatives will be allowed access at reasonable times and on
          reasonable notice to inspect the Properties;

     (o)  Intellectual Property Rights:  without prejudice to the generality of 
          clause 5.1(f):

          (i)  take all necessary action to safeguard and maintain its rights,
               present and future, in or relating to all Intellectual Property
               Rights including, without limitation, observing all covenants and
               stipulations relating

                                      15
<PAGE>
 
                thereto, paying all renewal fees and taking all other steps
                necessary to maintain all registered design, patent, trade mark
                and service mark registrations held by it;
     
          (ii)  use all reasonable efforts to effect registration of
                applications for registration of any registered design, patent,
                trade mark and service mark and keep the Bank informed of events
                relevant to any such application and not without the prior
                consent in writing of the Bank permit any Intellectual Property
                Rights to be abandoned or cancelled, to lapse or to be liable to
                any claim of abandonment for non-use or otherwise;
                
          (iii) notify the Bank forthwith of any infringement or material
                suspected infringement or any challenge to the validity of any
                of its present or future Intellectual Property Rights which may
                come to its notice, supply the Bank with all information in its
                possession relating thereto and take all steps necessary to
                prevent or bring to an end any such infringement and to defend
                any challenge to the validity of any such rights;

     (p)  Purchase of Shares: not (without the prior consent in writing of the
          Bank) redeem or purchase any of its own shares or pay any dividend;

     (q)  Disposals to connected persons: without prejudice to the generality of
          clause 3.3(c), not (without the prior consent in writing of the Bank)
          dispose of any Charged Assets to any person who is connected (within
          the meaning of section 249 Insolvency Act 1986) with the Company save
          on terms previously approved in writing by the Bank;

     (r)  Report on title: forthwith on request by the Bank, provide the Bank
          with a report from solicitors approved by the Bank in such form as the
          Bank may

                                      16
<PAGE>
 
          require as to the title of the Company to such of the Properties as 
          the Bank shall specify;

     (s)  Jeopardy:  not do or cause or permit to be done anything which may in 
          any way depreciate, jeopardise or otherwise prejudice the value to the
          Bank of any of the Charged Assets; and

     (t)  No Subsidiaries to be formed or acquired:  not (without the prior 
          consent in writing of the Bank) form or acquire any Subsidiary.

5.2  Power to remedy:  If the Company at any time defaults in complying with any
     of its obligations contained in this Deed, the Bank shall, without
     prejudice to any other rights arising as a consequence of such default, be
     entitled (but not bound) to make good such default and the Company hereby
     irrevocably authorises the Bank and its employees and agents by way of
     security to do all such things (including, without limitation, entering the
     Company's property) necessary or desirable in connection therewith.  Any
     moneys so expended by the Bank shall be repayable by the Company to the
     Bank on demand together with interest at the Default Rate from the date of
     payment by the Bank until such repayment, both before and after judgment.
     No exercise by the Bank of its powers under this clause 5.2 shall make it
     liable to account as a mortgagee in possession.

6    FURTHER ASSURANCE
     -----------------

6.1  Further assurance:  The Company shall if and when at any time required by 
     the Bank execute such further Encumbrances and assurances in favour of the
     Bank and do all such acts and things as the Bank shall from time to time
     reasonably require over or in relation to all or any of the Charged Assets
     to secure the Secured Obligations or to perfect or protect the security
     intended to be created by this Deed over the Charged Assets or any part
     thereof or to facilitate the realisation of the same. Such further

                                      17
<PAGE>
 
     Encumbrances and assurances shall be prepared by or on behalf of the
     Bank at the expense of the Company and shall be in a form reasonably
     acceptable to the Bank.

6.2  Specific security documents required:  Without prejudice to the 
     generality of the provision of clause 6.1 the Company shall execute as
     and when so required by the Bank;

     (a)  a mortgage, charge, standard security or hypothecation (as specified
          by the Bank) over any heritable property in Scotland owned, or any
          recorded lease of heritable property in Scotland held, by it at the
          date of this Deed, any leasehold or freehold property in Northern
          Ireland or the Republic of Ireland owned by it at the date of this
          Deed, and any and all heritable fixtures and fittings and fixed plant
          and machinery at any time situate thereon including (without prejudice
          to the generality of the foregoing) tenants fixtures and fittings in
          and upon any such leased property; and/or

     (b)  a legal mortgage, legal charge, standard security or hypothecation (as
          specified by the Bank) over any freehold, leasehold and heritable
          properties acquired by it after the date of this Deed (including all
          or any of the Properties as and when the same are conveyed,
          transferred, or let to it) and over any and all fixtures, trade
          fixtures and fixed plant and machinery at any time and from time to
          time situate thereon.


7    CERTAIN POWERS OF THE BANK; ENFORCEMENT
     ---------------------------------------

7.1  The Securities:  The Company will if so requested by the Bank transfer all 
     or any of the Securities to such nominees or agents as the Bank may select.

7.2  Powers on enforcement:  At any time on or after the Enforcement Date or if
     requested by the Company, the Bank may, without further notice, without the
     restrictions contained in section 103 Law of Property Act 1925 (or in the
     case of

                                      18
<PAGE>
 
     property in Northern Ireland section 20 of the Conveyancing and Law of
     Property Act 1881) and whether or not a Receiver shall have been appointed,
     exercise all the powers conferred upon mortgages by the Law of Property Act
     1925 (or in the case of property in Northern Ireland the Conveyancing and
     Law of Property Act 1881) as varied or extended by this Deed and all the
     powers and discretions conferred by this Deed on a Receiver either
     expressly or by reference.

7.3  Subsequent Encumbrances:  If the Bank receives notice of any subsequent
     Encumbrance affecting the Charged Assets or any part thereof, the Bank may
     open a new account for the Company. If it does not do so then, unless the
     Bank gives express written notice to the contrary to the Company, it shall
     nevertheless be treated as if it had opened a new account at the time when
     it received such notice and as from that time all payments made by or on
     behalf of the Company to the Bank shall be credited or be treated as having
     been credited to the new account and shall not operate to reduce the amount
     due from the Company to the Bank at the time when it received such notice.

7.4  Statutory power of leasing:  The Bank shall have the power to lease and
     make agreements for leases at a premium or otherwise, to accept surrenders
     of leases and to grant options on such terms as the Bank shall consider
     expedient and without the need to observe any of the provisions of sections
     99 and 100 Law of Property Act 1925 (or in the case of property in Northern
     Ireland section 18 of the Conveyancing and Law of Property Act 1881).

7.5  Contingencies:  If the Bank enforces the security constituted by this Deed
     at a time when no amount in respect of the Secured Obligations is due and
     payable, the Bank (or the Receiver) may pay the proceeds of any recoveries
     effected by it into an interest-bearing suspense account. The Bank may
     (subject to the payment of any claims having priority to this security)
     withdraw amounts standing to the credit of such suspense account for
     application as follows:


                                      19
<PAGE>
 
     (a)  paying all costs, charges and expenses incurred and payments made by
          the Bank (or the Receiver) in the course of such enforcement;

     (b)  paying remuneration to the Receiver as and when the same becomes due 
          and payable; and

     (c)  paying amounts due and payable in respect of the Secured Obligations 
          as and when the same become due and payable.


8    APPOINTMENT AND POWERS OF RECEIVER
     ----------------------------------

8.1  Appointment:  At any time on or after the Enforcement Date or if requested
     by the Company, the Bank may by instrument in writing executed as a deed or
     under the hand of any director or other duly authorised officer appoint any
     qualified person to be a Receiver of the Charged Assets or any part
     thereof. Where more than one Receiver is appointed, each joint Receiver
     shall have power to act severally, independently of any other joint
     Receivers, except to the extent that the Bank may specify to the contrary
     in the appointment. The Bank may (subject, where relevant, to section 45
     Insolvency Act 1986) remove any Receiver so appointed and appoint another
     in his place. In this clause 8 a "qualified person" is a person who, under
     the Insolvency Act 1986, is qualified to act as a receiver of the property
     of any company with respect to which he is appointed or, as the case may
     be, an administrative receiver of any such company.

8.2  Receiver as agent:  A Receiver shall be the agent of the Company and the
     Company shall be solely responsible for his acts or defaults and for his
     remuneration.

8.3  Powers of Receiver:  A Receiver shall have all the powers conferred from
     time to time on receivers and administrative receivers by statute (in the
     case of powers conferred by the Law of Property Act 1925, without the
     restrictions contained in section 103 of that Act) and power on behalf and
     at the expense of the Company

                                      20
<PAGE>
 
(notwithstanding liquidation of the Company) to do or omit to do anything which
the Company could do or omit to do in relation to the Charged Assets or any part
thereof. In particular (but without limitation) a Receiver shall have power to
do all or any of the following acts and things:

(a)  Take possession:  take possession of, collect and get in all or any of the
     Charged Assets and exercise in respect of the Securities all voting or
     other powers or rights available to a registered holder thereof in such
     manner as he may think fit;

(b)  Carry on business:  carry on, manage, develop, reconstruct, amalgamate or
     diversify the business of the Company or any part thereof or concur in so
     doing; lease or otherwise acquire and develop or improve properties or
     other assets without being responsible for loss or damage;

(c)  Borrow money:  raise or borrow any money from or incur any other liability
     to the Bank or others on such terms with or without security as he may
     think fit and so that any such security may be or include a charge on the
     whole or any part of the Charged Assets ranking in priority to this
     security or otherwise;

(d)  Dispose of assets:  without the restrictions imposed by section 103 Law of
     Property Act 1925 (or in the case of property in Northern Ireland section
     20 of the Conveyancing and Law of Property Act 1881) or the need to observe
     any of the provisions of sections 99 and 100 of such Act (or section 18 of
     the Conveyancing and Law of Property Act 1881 in the case of Northern
     Ireland), sell by public auction or private contract, let, surrender or
     accept surrenders, grant licences or otherwise dispose of or deal with all
     or any of the Charged Assets or concur in so doing in such manner for such
     consideration and generally on such terms and conditions as he may think
     fit with full power to convey, let, surrender, accept surrenders or
     otherwise transfer or deal with

                                      21
<PAGE>
 
     such Charged Assets in the name and on behalf of the Company or otherwise
     and so that covenants and contractual obligations may be granted and
     assumed in the name of and so as to bind the Company (or other the estate
     owner) if he shall consider it necessary or expedient so to do; any such
     sale, lease or disposition may be for cash, debentures or other
     obligations, shares, stock, securities or other valuable consideration and
     be payable immediately or by instalments spread over such period as he
     shall think fit and so that any consideration received or receivable shall
     ipso facto forthwith be and become charged with the payment of all the
     Secured Obligations; plant, machinery and other fixtures may be severed and
     sold separately from the premises containing them and the Receiver may
     apportion any rent and the performance of any obligations affecting the
     premises sold without the consent of the Company;

(e)  Form subsidiaries: promote the formation of companies with a view to the
     same becoming a subsidiary of the Company and purchasing, leasing,
     licensing or otherwise acquiring interests in all or any of the Charged
     Assets or otherwise, arrange for such companies to trade or cease to trade
     and to purchase, lease, license or otherwise acquire all or any of the
     Charged Assets on such terms and conditions whether or not including
     payment by instalments secured or unsecured as he may think fit;

(f)  Compromise contracts:  make any arrangements or compromise or enter into or
     cancel any contracts which he shall think expedient;

(g)  Repair and maintain assets:  make and effect such repairs, renewals and
     improvements to the Charged Assets or any part thereof as he may think fit
     and maintain, renew, take out or increase insurances;

(h)  Appoint employees:  appoint managers, agents, officers and employees for
     any of the purposes referred to in this clause 8.3 or to guard or protect
     the

                                      22
<PAGE>
 
          Charged Assets at such salaries and commissions and for such periods
          and on such terms as he may determine and may dismiss the same;

     (i)  Make calls:  make calls conditionally or unconditionally on the
          members of the Company in respect of uncalled capital;

     (j)  Exercise statutory leasehold powers: without any further consent by or
          notice to the Company exercise for and on behalf of the Company all
          the powers and provisions conferred on a landlord or a tenant by the
          Landlord and Tenant Acts, the Rent Acts, the Housing Acts or the
          Agricultural Holdings Act or any other legislation from time to time
          in force in any relevant jurisdiction relating to rents or agriculture
          in respect of any part of the Properties but without any obligation to
          exercise any of such powers and without any liability in respect of
          powers so exercised or omitted to be exercised;

     (k)  Legal proceedings:  institute, continue, enforce, defend, settle or
          discontinue any actions, suits or proceedings in relation to the
          Charged Assets or any part thereof or submit to arbitration as he may
          think fit;

     (l)  Execute documents:  sign any document, execute any deed and do all
          such other acts and things as may be considered by him to be
          incidental or conducive to any of the matters or powers aforesaid or
          to the realisation of the security created by or pursuant to this Deed
          and to use the name of the Company for all the purposes aforesaid; and

     (m)  Insolvency Act powers:  do all the acts and things described in
          Schedule 1 to the Insolvency Act 1986 as if the words "he" and "him"
          referred to the Receiver and "company" referred to the Company.

8.4  Remuneration:  The Bank may from time to time determine the remuneration of
     any Receiver and section 109(6) Law of Property Act 1925 (or in the case of
     property in

                                      23
<PAGE>
 
     Northern Ireland section 24(6) of the Conveyancing and Law of Property Act
     1881) shall be varied accordingly. A Receiver shall be entitled to
     remuneration appropriate to the work and responsibilities involved upon the
     basis of charging from time to time adopted by the Receiver in accordance
     with the current practice of his firm.

9    APPLICATION OF PROCEEDS; PURCHASERS

9.1  Application of proceeds:  All moneys received by the Bank or by any 
     Receiver shall be applied, after the discharge of the remuneration and
     expenses of the Receiver and all liabilities having priority to the Secured
     Obligations, in or towards satisfaction of such of the Secured Obligations
     and in such order as the Bank in its absolute discretion may from time to
     time conclusively determine, except that the Bank may credit the same to a
     suspense account for so long and in such manner as the Bank may from time
     to time determine and the Receiver may retain the same for such period as
     he and the Bank consider expedient.

9.2  Insurance proceeds:  all moneys receivable by virtue of any of the
     Insurances shall be paid to the Bank (or if not paid by the insurers
     directly to the Bank shall be held on trust for the Bank) and shall at the
     option of the Bank be applied in replacing, restoring or reinstating the
     property or assets destroyed, damaged or lost (any deficiency being made
     good by the Company).

9.3  Protection of purchasers:  No purchaser or other person shall be bound or 
     concerned to see or enquire whether the right of the Bank or any Receiver
     to exercise any of the powers conferred by this Deed has arisen or be
     concerned with notice to the contrary or with the propriety of the exercise
     or purported exercise of such powers.

10   INDEMNITIES; COSTS AND EXPENSES

10.1 Enforcement costs:  The Company hereby undertakes with the Bank to pay on 
     demand all costs, charges and expenses incurred by the Bank or by any
     Receiver in

                                      24
<PAGE>

      or about the enforcement, preservation or attempted preservation of any 
      of the security created by or pursuant to this Deed or any of the Charged
      Assets on a full indemnity basis, together with interest at the Default
      Rate from the date on which such costs, charges or expenses are so
      incurred until the date of payment by the Company (both before and after
      judgment).
      
10.2  No liability as mortgagee in possession: Neither the Bank nor any Receiver
      shall be liable to account as mortgagee or heritable creditor in
      possession in respect of all or any of the Charged Assets or be liable for
      any loss upon realisation or for any neglect or default of any nature
      whatsoever for which a mortgagee or heritable creditor in possession may
      be liable as such.

10.3  Indemnity from Charged Assets: The Bank and any Receiver, attorney, agent
      or other person appointed by the Bank under this Deed and the Bank's
      officers and employees (each an "INDEMNIFIED PARTY") shall be entitled to
      be indemnified out of the Charged Assets in respect of all costs, losses,
      actions, claims, expenses, demands or liabilities whether in contract,
      tort, delict or otherwise and whether arising at common law, in equity or
      by statute which may be incurred by, or made against, any of them (or by
      or against any manager, agent, officer or employee for whose liability,
      act or omission any of them may be answerable) at any time relating to or
      arising directly or indirectly out of or as a consequence of:

      (a)  anything done or omitted in the exercise or purported exercise of
           the powers contained in this Deed; or

      (b)  any breach by the Company of any of its obligations under this Deed; 
           or

      (c)  an Environmental Claim made or asserted against an Indemnified Party
           which would not have arisen if this Deed had not been executed and
           which was not caused by the (negligence or) wilful default of the
           relevant Indemnified Party.

                                      25
<PAGE>

11    POWER OF ATTORNEY

11.1  Power of attorney: The Company by way of security hereby irrevocably
      appoints each of the Bank and any Receiver severally to be its attorney
      in its name and on its behalf:

      (a)  to execute and complete any documents or instruments which the
           Bank or such Receiver may require for perfecting the title of the 
           Bank to the Charged Assets or for vesting the same in the Bank,
           its nominees or any purchaser;

      (b)  to sign, execute, seal and deliver and otherwise perfect any further
           security document referred to in clause 6; and

      (c)  otherwise generally to sign, seal, execute and deliver all deeds,
           assurances, agreements and documents and to do all acts and things 
           which may be required for the full exercise of all or any of the 
           powers conferred on the Bank or a Receiver under this Deed or which
           may be deemed expedient by the Bank or a Receiver in connection with
           any disposition, realisation or getting in by the Bank or such    
           Receiver of the Charged Assets or any part thereof or in connection
           with any other exercise of any power under this Deed.

11.2  Recovery of Debts: The Bank and any manager or officer of the Bank or of
      any branch is hereby irrevocably empowered to receive all Debts and on
      payment to give an effectual discharge therefor and on non-payment to take
      (if the Bank in its sole discretion so decides) all steps and proceedings
      either in the name of the Company or in the name of the Bank for the
      recovery thereof and also to agree accounts and to make allowances and to
      give time to any surety. The Bank shall have no liability or
      responsibility of any kind to the Company arising out of the exercise or
      non exercise of such rights and shall not be obliged to make any enquiry
      as to the sufficiency of any sums received by it in respect of any Debts
      or to make any claims or take any other action to collect or enforce the
      same.

                                      26
<PAGE>
 
11.3  Ratification: The Company ratifies and confirms and agrees to ratify
      and confirm all acts and things which any attorney as is mentioned in
      clause 11.1 shall do or purport to do in the exercise of his powers
      under such clause.

12    CONTINUING SECURITY AND OTHER MATTERS

12.1  Continuing security: This Deed and the obligations of the Company
      under this Deed shall:

      (a)  secure the ultimate balance from time to time owing to the Bank
           by the Company and shall be a continuing security notwithstanding
           any settlement of account or other matter whatsoever;

      (b)  be in addition to, and not prejudice or affect, any present or
           future Collateral instrument, Encumbrance, right or remedy held
           by or available to the Bank; and

      (c)  not merge with or be in any way prejudiced or affected by the
           existence of any such Collateral Instruments, Encumbrance, rights
           or remedies or by the same being or becoming wholly or in part
           void, voidable or unenforceable on any ground whatsoever or by
           the Bank dealing with, exchanging, releasing, varying or failing
           to perfect or enforce any of the same, or giving time for payment
           or indulgence or compounding with any other person liable.

12.2  Collateral Instruments: The Bank shall not be obliged to resort to any
      Collateral Instrument or other means of payment now or hereafter held
      by or available to it before enforcing this Deed and no action taken
      or omitted by the Bank in connection with any such Collateral
      Instrument or other means of payment shall discharge, reduce,
      prejudice or affect the liability of the Company nor shall the Bank be
      obliged to account for any money or other property received or
      recovered in consequence of


                                      27
<PAGE>
 
          any enforcement or realisation of any such Collateral Instrument or 
          other means of payment.


12.3      Settlements Conditional: Any release, discharge or settlement between
          the Company and the Bank shall be conditional upon no security,
          disposition or payment to the Bank by the Company or any other person
          being void, set aside or ordered to be refunded pursuant to any
          enactment or law relating to liquidation, administration or insolvency
          or for any other reason whatsoever and if such condition shall not be
          fulfilled the Bank shall be entitled to enforce this Deed subsequently
          as if such release, discharge or settlement had not occurred and any
          such payment had not been made.

13        REPRESENTATIONS AND WARRANTIES

13.1      Representations: The Company represents and warrants to the Bank that:

          (a)  Due incorporation: it is duly incorporated and validly existing
               under the laws of England and Wales and has power to carry on its
               business as it is now being conducted and to own its property and
               other assets;

          (b)  Corporate Power: it has power to execute, deliver and perform its
               obligations under this Deed; all necessary corporate, shareholder
               and other action has been taken to authorise the execution,
               delivery and performance of the same and no limitation on the
               powers of the Company will be exceeded as a result of the
               execution and delivery of this Deed or the performance of its
               obligations under this Deed;

          (c)  Binding obligations: this Deed constitutes valid and legally
               binding obligations of the Company enforceable in accordance with
               its terms;



                                      28
<PAGE>
 
          (d)  No conflict with other obligations: the execution and delivery
               of, the performance of its obligations under, and compliance with
               the provisions of, this Deed by the Company will not (i)
               contravene any existing applicable law, statute, rule or
               regulation or any judgment or permit to which it is subject, (ii)
               conflict with, or result in any breach of any of the terms of, or
               constitute a default under, any agreement or other instrument to
               which it or any of its Subsidiaries is a party or is subject or
               by which it or any of its property is bound, (iii) contravene or
               conflict with any provision of its Memorandum and Articles of
               Association, or (iv) result in the creation of or oblige the
               Company or any of its Subsidiaries to create an Encumbrance in
               favour of any person other than the Bank;

          (e)  No Litigation: no litigation, arbitration or administrative
               proceeding is taking place, pending or, to the knowledge of the
               officers of the Company, threatened against it which could have a
               material adverse effect on the business, assets or financial
               condition of the Company;

          (f)  No default in relation to other indebtedness: the Company is not
               (nor would with the giving of notice or lapse of time or both be)
               in breach of or in default under any agreement relating to
               indebtedness for borrowed money in excess in aggregate of
               (Pounds)10,000 to which it is a party or by which it may be bound
               other than where the indebtedness is being disputed in good
               faith;

          (g)  Title to Charged Assets: it has good and marketable title to its
               Charged Assets and has full power and authority to grant to the
               Bank the security interest in its Charged Assets created pursuant
               to this Deed and to execute, deliver and perform its obligations
               in accordance with the terms of this Deed without the consent or
               approval of any other person other than any consent or approval
               which has been obtained;

       


                                      29
<PAGE>
 
          (h)  Ownership of Charged Assets: the Charged Assets are beneficially
               owned by it free and clear of any Encumbrance other than
               Encumbrances created by this Deed;

          (i)  Accuracy of the schedule: each part of the schedule which
               describes Charged Assets beneficially owned by it is a true,
               accurate and complete list of such assets so owned by it at the
               date of this Deed;

          (j)  No other properties owned: except for the Properties specified in
               Part A of the schedule and any other properties acquired
               hereafter with the consent of the Bank, the Company does not own
               any freehold, leasehold or heritable property; the Company is the
               beneficial owner of the Properties save as disclosed in
               certificates as to title prepared by solicitors to the Company
               from time to time delivered to the Bank, so far as the Company is
               aware, the title to each of the Properties is good and
               marketable.

13.2      Repetition: The representations and warranties in clause 13.1 shall be
          deemed to be repeated by the Company on each day until all the Secured
          Obligations have been paid or discharged in full as if made with
          reference to the facts and circumstances existing on each such day.

14        MISCELLANEOUS

14.1      Remedies Cumulative: No failure or delay on the part of the Bank to
          exercise any power, right or remedy shall operate as a waiver thereof
          nor shall any single or any partial exercise or waiver of any power,
          right or remedy preclude its further exercise or the exercise of any
          other power, right or remedy.

14.2      Statutory power of leasing: During the continuance of this security
          the statutory and any other powers of leasing, letting, entering into
          agreements for leases or lettings





                                      30
<PAGE>
 
          and accepting or agreeing to accept surrenders of leases or tenancies
          shall not be exercisable by the Company in relation to the Charged
          Assets or any part thereof.

14.3      Successors and assigns: Any appointment or removal of a Receiver under
          clause 8 and any consents under this Deed may be made or given in
          writing signed or sealed by any successors or assigns of the Bank and
          accordingly the Company hereby irrevocably appoints each successor and
          assign of the Bank to be its attorney in the terms and for the
          purposes set out in clause 11.

14.4      Consolidation: Section 93 Law of Property Act 1925 shall not apply to
          the security created by this Deed or to any security given to the Bank
          pursuant to this Deed.

14.5      Reorganisation of the Bank: This Deed shall remain binding on the
          Company notwithstanding any change in the constitution of the Bank or
          its absorption in, or amalgamation with, or the acquisition of all or
          part of its undertaking by, any other person, or any reconstruction or
          reorganisation of any kind. The security granted by this Deed shall
          remain valid and effective in all respects in favour of any assignee,
          transferee or other successor in title of the Bank in the same manner
          as if such assignee, transferee or other successor in title had been
          named in this Deed as party instead of, or in addition to, the Bank.

14.6      Unfettered discretion: Any liability or power which may be exercised
          or any determination which may be made under this Deed by the Bank may
          be exercised or made in its absolute and unfettered discretion and it
          shall not be obliged to give reasons therefore.

14.7      Provisions severable: Each of the provisions of this Deed is severable
          and distinct from the others and if any time one or more of such
          provisions is or becomes invalid, illegal or unenforceable the
          validity, legality and enforceability of the remaining provisions of
          this Deed shall not in any way be affected or impaired thereby.





                                      31
<PAGE>
 
14.8  Law of Property (Miscellaneous Provisions) Act 1989: For the purposes
      of the Law of Property (Miscellaneous Provisions) Act 1989 any
      provisions of the Facility Agreement and any other relevant loan
      agreements relating to any disposition of any interest in land shall
      be deemed to be incorporated in this Deed.

15    NOTICES
      -------   

15.1  Mode of service: Any notice or demand for payment by the Bank under this
      Deed shall, without prejudice to any other effective mode of making the
      same, be deemed to have been properly served on the Company if served on
      any one of its Directors or on its Secretary or delivered or sent by
      letter, telex or telefax to the Company at its registered office or any of
      its principal places of business for the time being.

15.2  Time of service: Any such notice or demand shall be deemed to have been
      served (in the case of a letter) when delivered, (in the case of a telex)
      at the time of despatch with the correct answerback appearing at the
      beginning and end of the transmission and (in the case of a telefax) when
      received in complete and legible form.

15.3  Notices conclusive: Any such notice or demand or any certificate as to the
      amount at any time secured by the Deed shall, save for manifest error be
      conclusive and binding upon the Company if signed by an officer of the
      Bank.

16    LAW
      ---

16.1  This Deed shall be governed by and shall be construed in accordance with 
      English law.

IN WITNESS whereof this Deed has been executed and delivered by or on behalf of 
the parties on the date stated at the beginning of this Deed.

                                      32
<PAGE>
 
                                 The Schedule
                                 -------------

                              Part A  Properties
                              ------------------

================================================================================
  Address             County/District/London Borough   Title Number or Root of
  -------             ------------------------------   -----------------------
                                                       Title
                                                       -----
-------------------------------------------------------------------------------
  Brindley Road       Leicestershire                   LT163667

  Dodwells Bridge

  Industrial Estate
  
  Hinckley LE10

  3BY
===============================================================================

                                      33
<PAGE>
 
                      Part B - Fixed Plant and Machinery
                      ----------------------------------

                           None specifically listed.






                                      34
<PAGE>
 
                     Part C - Intellectual Property Rights
                     -------------------------------------


                           None specifically listed





                                      35
<PAGE>
 
EXECUTED and DELIVERED as a DEED     )
by SPEEDFAM LIMITED                  )

                                     Director  /s/ James N. Farley

                                     
                                     Secretary /s/ R. R. Smith



SIGNED for and on behalf             )
of FIRST NATIONAL BANK OF CHICAGO    )/s/ Wragge & Co.





                                      36