[LOGO] Fleet                                    STIPULATED LOSS VALUE SCHEDULE
Capital Leasing

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

         This  Stipulated  Loss Value Schedule (this  "Schedule") is attached to
and made a part of that certain Lease Schedule No. 32089-00001, dated as of June
19, 1996 (the "Lease Schedule"), by and between the undersigned parties.
<TABLE>

         The following Stipulated Loss Values shall be used to calculate damages
or loss as provided in the Master Lease.  The Stipulated Loss Value with respect
to any item of Equipment on any Rental  Payment Date during the Lease Term shall
be an amount equal to the sum of: (a) all Rental Payments and other amounts then
due and owing to Lessor under the Lease,  together with all accrued interest and
late charges thereon, calculated through and including the date of payment; plus
(b) the product of the Acquisition Cost of the such Equipment  multiplied by the
percentage set forth below as of such Rental Payment Date.
<CAPTION>
  <S>                         <C>                      <C>                         <C>   

  Rental Payment Date for      Percentage of           Rental Payment Date for      Percentage of
   Rental Payment Number      Acquisition Cost          Rental Payment Number      Acquisition Cost
</TABLE>

              SEE EXHIBIT C ATTACHED HERETO AND MADE A PART HEREOF





         All capitalized terms used herein and not defined herein shall have the
meanings set forth or referred to in the Lease Schedule.  Except as specifically
set forth herein,  all of the terms and  conditions of the Lease shall remain in
full force and effect and are hereby ratified and affirmed.


Dated as of: June 19, 1996

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By: /s/ Michael  B. Sullivan
   -----------------------------                   -----------------------------
Name:   John J. Gould                           Name:   Michael  B. Sullivan
     ---------------------------                     ---------------------------
Title:  VP/Senior Lender                        Title:  President
      --------------------------                      --------------------------

<PAGE>

                                   EXHIBIT C
                                       TO
                         STIPULATED LOSS VALUE SCHEDULE
                         TO LEASE SCHEDULE NO. 32089-01

RENTAL PAYMENT      PERCENTAGE OF       RENTAL PAYMENT           PERCENTAGE OF
DATE FOR RENTAL     ACQUISITION COST    DATE FOR RENTAL         ACQUISITION COST
PAYMENT NUMBER                          PAYMENT NUMBER

                                               37                70.90880090
       1            103.35121715               38                69.75511355
       2            102.77715752               39                68.59002020
       3            102.19526265               40                67.41874422
       4            101.59552206               41                66.23597391
       5            100.98781724               42                65.04165152
       6            100.37210821               43                63.84099969
       7             99.73838360               44                62.62870597
       8             99.09652408               45                61.40471189
       9             98.44648879               46                60.16895869
      10             97.78823666               47                58.92972240
      11             97.11575495               48                57.67865042
      12             96.43494366
                                               49                56.42401842
      13             95.54711438               50                55.15747340
      14             94.34921445               51                53.87895553
      15             93.74119331               52                52.59673978
      16             92.81702863               53                51.30247247
      17             91.88261080               54                49.99609306
      18             90.93788832               55                48.68587582
      19             89.97683797               56                47.36346638
      20             89.00534921               57                46.02880349
      21             88.02336959               58                44.68182560
      22             87.03084644               59                43.33120369
      23             86.02873119               60                41.96818663
      24             85.01597126
                                               61                40.60144498
      25             83.99351758               62                39.22222721
      26             82.96031708               63                37.83047065
      27             81.91631576               64                36.43484516
      28             80.86246378               65                35.02659847
      29             79.79770726               66                33.60566720
      30             78.72199142               67                32.18072044
      31             77.63626563               68                30.74300521
      32             76.53947521               69                29.29245738
      33             75.43156457               70                27.82901249
      34             74.31247787               71                26.37095856
      35             73.18743961               72                24.89996987
      36             72.05113926
                                               72                25.00000000

<PAGE>


[LOGO] Fleet                                               PURCHASE OPTION RIDER
Capital Leasing

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

         This  Purchase  Option  Rider (this  "Rider") is attached to and made a
part of that certain Lease Schedule No.  32089-00001,  dated as of June 19, 1996
(the "Lease Schedule"), by and between the undersigned parties.

         If no Event of Default (or event or condition  which,  with the passage
of time or giving of notice,  or both,  would  become  such an Event of Default)
shall have occurred and be continuing, and the Lease shall not have been earlier
terminated,  Lessee shall have the option to purchase  (the  "Purchase  Option")
all, but not less than all, of the Equipment at the expiration of the Lease Term
for an amount,  payable in  immediately  available  funds on the last day of the
Lease Term,  equal to: (a) all Rental  Payments,  late charges and other amounts
due and owing under the Lease; plus (b) all taxes, assessments and other charges
due or payable in connection with the sale of the Equipment to Lessee;  plus (c)
an amount equal to 25.00000% of the  Acquisition  Cost of the  Equipment,  which
Lessor and Lessee  acknowledge  represents a reasonable  current estimate of the
fair market value of the Equipment at the end of the Lease Term.

         Provided that Lessor shall have received all amounts payable  hereunder
on the last day of the Lease Term,  and that no Event of Default then exists and
is continuing under the Lease,  Lessor shall convey all of its right,  title and
interest in and to the Equipment to Lessee on the last day of the Lease Term, on
an "AS-IS,"  "WHERE-IS"  BASIS WITHOUT  REPRESENTATION  OR WARRANTY,  EXPRESS OR
IMPLIED, and without recourse to Lessor, except that the Equipment shall be free
and clear of all liens  created by Lessor.  If Lessee  intends to  exercise  the
Purchase  Option,  Lessee shall give  irrevocable  written notice to Lessor (the
"Option  Notice") not more than 240 days,  nor less than 180 days,  prior to the
expiration  of the Lease Term.  If Lessee fails to give such  written  notice to
Lessor,  it shall be  conclusively  presumed  that  Lessee  has  elected  not to
exercise the Purchase Option.

         If, for any  reason,  Lessee does not  exercise  the  Purchase  Option,
Lessee shall, on the last day of the Lease Term,  return all of the Equipment to
Lessor  pursuant to and in the condition  required by the terms of the Lease and
pay to Lessor a return fee equal to 5.0 % of the Acquisition Cost
 of the Equipment.

         All capitalized terms used herein and not defined herein shall have the
meanings set forth or referred to in the Lease Schedule.  Except as specifically
set forth herein,  all of the terms and  conditions of the Lease shall remain in
full force and effect and are hereby  ratified and affirmed.  To the extent that
the  provisions  of this Rider  conflict  with any  provisions  contained in the
Lease, the provisions of this Rider shall control.

 Dated as of: June 19, 1996

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By: /s/ Michael  B. Sullivan
   -----------------------------                   -----------------------------
Name:   John J. Gould                           Name:   Michael  B. Sullivan
     ---------------------------                     ---------------------------
Title:  VP/Senior Lender                        Title:  President
      --------------------------                      --------------------------

<PAGE>

[LOGO] Fleet                                               WARRANTY BILL OF SALE
Capital Leasing
50 Kennedy Plaza
Providence, Rhode Island 02903

         FLEX  PRODUCTS,  INC.,  ("Seller")  of 1402 MARINER WAY SANTA ROSA,  CA
95407, in consideration of the sum of $7,879,000.00  Dollars, and other good and
valuable  consideration,   the  receipt  and  sufficiency  of  which  is  hereby
acknowledged, does hereby sell, transfer and assign to Fleet Capital Corporation
("FCC") a Rhode Island  corporation  having its  principal  office at 50 Kennedy
Plaza,  Providence,  Rhode Island  02903,  the equipment set forth in Schedule A
hereto (the "Equipment").

         Seller  hereby  covenants  with and  warrants to FCC that Seller is the
lawful owner of the Equipment and has the right to sell the Equipment,  and that
the Equipment is free and clear of all rights, claims, liens, charges,  security
interests or encumbrances  of any other person.  Seller will  forever indemnify,
defend and warrant all of the rights of FCC in and to the Equipment  transferred
hereunder against the claims and demands of all other persons.

IN WITNESS WHEREOF,  Seller has duly executed this Bill of Sale this 11th day of
July, 1996.

                                   FLEX PRODUCTS, INC.

                                   By: /s/ Michael B. Sullivan
                                      --------------------------------
                                   Name:   Michael B. Sullivan
                                        ------------------------------
                                   Title:  President
                                         -----------------------------


State of California
         --------------------------
County of Sonoma
         --------------------------


Subscribed and sworn before me this 11th day of July, 1996.

                                /s/ Aggie S. Navarro

                                  Notary Public
                     My Commission expires:________________

                                        ==============================
                                                AGIE S. NAVARRO       
                                        [SEAL]  COMM. #1009257        
                                           Notary Public--California  
                                                 SONOMA COUNTY        
                                         My Comm. Expires NOV 11, 1997
                                        ==============================

<PAGE>

FLEET CREDIT CORPORATION
                                                CONSENT AND WAIVER
                                   (OWNER, LANDLORD OR MORTGAGEE OF REAL ESTATE)

50 Kennedy Plaza
Providence, Rhode Island 02903

         The undersigned, Aid Association for Lutherans, 4321 North Ballard Road
Appleton,  Wisconsin  54919 is the owner,  landlord or mortgagee of the premises
located at 1402 Mariner  Way, Santa Rosa California 95407 (the "Premises") which
are occupied by Flex Products, Inc.

         The undersigned  acknowledges that Customer has leased or financed,  or
that Customer expects to lease or finance from Fleet Credit Corporation ("FCC"),
the  Equipment  set forth on  Schedule  A  hereto,  including  any  accessories,
additions,  substitutions or replacements therefor,  which may from time to time
be located  at the  Premises.  To induce FCC to enter into a lease or  financing
agreement with Customer, the undersigned agrees with FCC as follows:

         The  undersigned  waives  any  right,  title or  interest  in or to the
         Equipment  that  it  may  now  or  hereafter   have.  The   undersigned
         irrevocably  agrees and  consents  that it will refrain from taking any
         action  to  bar,  restrain  or  otherwise   prevent  FCC,  its  agents,
         successors  or assigns,  from  entering the Premises for the purpose of
         inspecting,  removing or taking  possession of the Equipment,  and will
         grant FCC, its agents,  successors or assigns the right of entry to the
         Premises to remove the Equipment at any  reasonable  time or times. FCC
         shall be responsible  for any damage to the Premises that FCC causes in
         connection  with its entry  thereon  and the  removal of the  Equipment
         therefrom.  The  Equipment  is  and  shall  remain  personal  property,
         notwithstanding  the manner in which it may be  installed or affixed to
         the Premises.

         This  Consent and Waiver  shall inure to the benefit of the  successors
and  assigns  of FCC and  shall  be  binding  upon the  heirs,  representatives,
successors  and  assigns of the  undersigned.  The  undersigned  will,  upon the
request and at the expense of FCC,  execute and deliver to FCC such  further and
additional documents as FCC may reasonably deem necessary or desirable to effect
waivers and consents  contemplated  hereby.  This Agreement shall be governed by
and construed in accordance with the laws of the state in which the premises are
located, without reference to principles of conflict of laws.

         IN WITNESS WHEREOF,  the undersigned has duly executed this Consent and
Waiver this ___ day of April, 1996.

                                   AID ASSOCIATION F0R LUTHERANS

/s/ Bonnie L. Hietpas              By: /s/ Wayne C. Streck
------------------------               -----------------------------------------
    (Witness)                              Wayne C. Streck
                                   Title: Vice President-Mortgages & Real Estate
                                         ---------------------------------------
/s/ Janice A. Schuette             By: /s/ Kenneth E. Podell
------------------------               -----------------------------------------
    (Witness)                              Kenneth E. Podell
                                           Assistant Secretary

<PAGE>

                      ACKNOWLEDGEMENT TO BE MADE BY OWNER,
                      LANDLORD OR MORTGAGEE OF REAL ESTATE

                    (Hereinafter referred to as "Undersigned")

                                  [INDIVIDUAL)
STATE OF ________________________
                               SS.
COUNTY OF _______________________

         I,  _______________________ a Notary Public within and for said County,
in the State aforesaid,  duly commissioned and acting, do hereby certify that on
this day ______ of  ____________________,  19__  personally  appeared  before me
__________________________, Undersigned, in the foregoing Consent and Waiver, to
me  personally  well known and known to the person who signed  said  Consent and
Waiver,  who,  being by me duly sworn and being informed of the contents of said
Consent and Waiver  stated and  acknowledged  on oath that he signed,  executed,
sealed and delivered  same as his free and voluntary act and deed, for the uses,
purposes and considerations therein mentioned and set forth. 

         WITNESS my hand and seal as such Notary Public the day and year in this
certificate above written.

My commission expires ______________________   _________________________________
                                                  (Notary Public)
                                                      (Seal)
                                 (PARTNERSHIP)

STATE OF ________________________
                               SS.
COUNTY OF _______________________

         I,  _______________________ a Notary Public within and for said County,
in the State aforesaid,  duly commissioned and acting, do hereby certify that on
this day ___________ of ____________________, 19__ personally appeared before me
___________________________ and  _________________________________  who executed
the foregoing  Consent and Waiver,  to me personally well known and known to the
person who signed said Consent and Waiver,  and known to be and who, being by me
duly sworn and being  informed of the contents of said Consent and Waiver stated
and acknowledged on oath that they were Partners of ____________________________
_______________________________________________________________________________,
the  Partnership  named in and which  executed the said Consent and Waiver,  and
that they signed, executed, sealed and delivered same individually and in behalf
of the said Partnership,  with authority as their and its free and voluntary act
and deed for the uses,  purposes and  considerations  therein  mentioned and set
forth.

         WITNESS my hand and seal as such Notary Public the day and year in this
certificate above written.

My commission expires ______________________   _________________________________
                                                  (Notary Public)
                                                      (Seal)
                                 (CORPORATION)
STATE OF       WISCONSIN
          -----------------
                        SS.
COUNTY OF      OUTAGAMIE
          -----------------

         I, David Crist,  a Notary  Public  within and for said  County,  in the
State aforesaid,  duly  commissioned and acting,  do hereby certify that on this
18th day of  April,  1996  personally  appeared  before me Wayne C.  Streck  and
Kenneth E. Podell (Name of Signer for Undersigned),  to me personally well known
and known to me to be the person who signed the  foregoing  Consent  and Waiver,
and known to me to be and who,  being by me duly sworn and being informed of the
contents of said Consent and Waiver  stated and  acknowledged  on oath that they
are Vice  President-Mortgages  and  Real  Estate &  Assistant  Secretary  of Aid
Association for Lutherans the  Corporation  named in and which executed the said
Consent and Waiver,  and that he knows the corporate  seal of said  Corporation,
and that the seal  affixed to said Consent and Waiver is the  corporate  seal of
said  Corporation,  that he was duly  authorized  to execute  said  Consent  and
Waiver, for, in the name of and on behalf of said Corporation, and that same was
signed,  sealed,  executed and  delivered by him in the name of and on behalf of
said  Corporation  by authority of its Board of Directors and that the execution
of said Consent and waiver was his free and  voluntary  act and deed in his said
capacity and acknowledged to me that said  Corporation  executed the same as its
voluntary act and deed and was by him  voluntarily  executed,  on behalf of said
Corporation for the uses, purposes and considerations  therein mentioned and set
forth.

         WITNESS my hand and seal as such Notary Public the day and year in this
certificate above written.

My commission expires is permanent.                  /s/ David Crist
                      -----------------           --------------------
                                                      (Notary Public)
                                                          (Seal)

<PAGE>


FLEET CREDIT CORPORATION                                    PAGE 3 OF 3
                                                            Schedule A Equipment

--------------------------------------------------------------------------------
Manufacturer, Description
--------------------------------------------------------------------------------

WPH overhead wire rope crane,  model 1 1/2 ton, serial  W6022015,  approximately
   X-Y, travel is 55' X 35' X 40'.
Kinney vacuum rotary pump, model  KT-505-LP,  serial 3011-2 with a dresser roots
   booster blower, 15 HP., model HV3000, serial H00224, 480 volts.
Kinney vacuum rotary pump,  model  KT-505-LP,  serial 3011-1 with a dresser root
   booster blower, 15 HP., model HV3000, serial H00219.
Dresser roots, 30 HP. booster pump.
(4) Emergency isolation switches. 
(3) 5.5 Bar pneumatic actuator valves. 
Solenoids.
Alfa  laval  heat  exchanger,   Mfg.  1995,  serial  30102-86367.  
(4)  Weksler temperature gauges, 0-150F deg.
Raven round Polypro storage tank,  approximately
  6' X 4' diameter,  serial  G333465.  
Approximately  60 feet of 4" 304  stainless steel seamless 
  piping with connectors.
(2) ITT Bell & Gossett pumps, series 1510, 20 HP., 200 GPM, model  21/2AB7000BF,
   serials 1955295 and 1955296.
(2) FSI filter columns,  stainless  steel,  Mfg. 1995, 10 micron filters, serial
   38121, 150 PSI.
Air storage tank 4'X 2' diameter with a 0-160 PSI gauge. 
Miscellaneous spare parts.

     And a11 standard and accessory Equipment.



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

<PAGE>

FLEET CREDIT CORPORATION                                   PAGE 2 OF 3
                                                           Schedule A Equipment

--------------------------------------------------------------------------------
Manufacturer, Description
--------------------------------------------------------------------------------

(2) Bell & Gosett  pumps,  models  114RC925,  series  1510, serials  1955297 and
   1955296. 
Raven polypro tank, approximately 5' X 2', diameter.
(2) Bell & Gosett pumps, model 4BC9375, serial 1957959 and 1957960, 625 GPM.
Alfa laval heat exchanger,  type M6-FG, serial 3010286368 with (4) 0-150 degree
   gauges.
Alfa 1ave1 heat  exchanger,  type M10-BFG,  serial  30102-86369  with (4) 0-150 
   degree gauges.
FSI water  filter,  model  FSP-4ON-4-304SS,  Mfg. 1995. 10 micron with 0-160 PSI
   gauge.
Dual water cooling condensing system, low pressure,  high pressure with  (2) KSB
   pumps,  model ETACHROMB,  valves,  solenoids.  
(2) Edwards two stage  vacuum   pumps, model 275.
Air storage  tank 4' X 2'  diameter  with  0-160 PSI  gauge.  
Water filter systems with (2) KSB ETACHROM-B-40160562,  pumps, 2200 gallon round
   stainless steel tank, model BT33541.
Approximately 60' X 4" stainless steel piping with fittings.
Approximately 100' of 2" stainless steel piping with fittings.

BETA FIVE:

General Vacuum Equipment Corp.  electron beam metalyzing system,  Mfg. 1995, 78"
   width  capacity, 1200 feet per minute,  480 volt, 3 phase,  218 amps.,  model
   95-005, overall size 9' X 10', serial W9827-95.

SERIAL NUMBER _________________-
             
CONSISTING OF BUT NOT LIMITED TO:

         (8) Electron beam guns.
         (8) Airco Temescal Simba 2 electron  beam power supplies,  serials 330,
             337, 340, 338, 339, 336, 333 and 335.
         (8) Programmable sweep generators.
         (8) High voltage controllers.
         (8) Electron beam gun controllers.
         (2) Polycolds, model PFC1100HC.
         (6) Varian 20" diffusion pumps, model  016513/HS-20.
         (8) Airco electron  beam gun interfaces.
         (4) Trige-Scott drive motors, model S90L01199100203050300011
             serials 104529421295, 104529211295, 104529311295 and 104529411295.
--------------------------------------------------------------------------------

<PAGE>

  FLEET CREDIT CORPORATION                                 PAGE 1 OF 3
                                                           Schedule A Equipment

Attached to and made part of the following documents: Consent and Waiver (Owner,
Landlord or  Mortgagee of Real Estate)  with Flex  Products,  Inc.  32089-01 and
32089-02.

--------------------------------------------------------------------------------
Manufacturer, Description
--------------------------------------------------------------------------------

The Equipment is Currently Located at:

                          1402 Mariner Way
                          Santa Rosa, California 95407

BETA THREE:                   

Weinert  Vacuum GMBH.  sputtering  roll coating  machine,  Mfg.  1995,  7' X 10'
chamber size, 480 volt, 3 phase, all stainless steel construction.

SERIAL NUMBER _______________


CONSISTING OF BUT NOT LIMITED TO:

(6) 20" diffusion pumps.
(4) 16" diffusion pumps.
3 Chamber system.
Liebert UPS battery back-up system, model AP331, serial P21174SF.
(3) Polycold cooling systems, model PFC-1100ST.
(3) Cathodes.
(2) Aluminum sputtering cathodes.
(6) Transformers, 72 kilowatt.
Edwards two stage vacuum pump, model 275.
(3) Edwards two stage vacuum pumps, model 80.
(6) ENI D.C Plasma generators model DCG-100.
Allen Bradley controls.
(2) Mapping monitors.
(2) Control monitors.
PLC'S.
Circulation pumps.
Hydraulic pumps.
Other various monitors.
Miscellaneous spare parts.
--------------------------------------------------------------------------------

FLEET CREDIT CORPORATION           AID ASSOCIATION FOR LUTHERANS

By: /s/ John J. Gould              By: /s/ Wayne C. Streck
------------------------               -----------------------------------------
Name:   John J. Gould              Name: Wayne C. Streck
------------------------               -----------------------------------------
Title: Vice President              Title: Vice President-Mortgages & Real Estate
                                         ---------------------------------------
                                   By: /s/ Kenneth E. Podell
                                       -----------------------------------------
                                           Kenneth E. Podell

<PAGE>


FLEET CREDIT CORPORATION
                                               CONSENT AND WAIVER
                                   (OWNER, LANDLORD OR MORTGAGEE OF REAL ESTATE)

50 Kennedy Plaza
Providence, Rhode Island 02903

         The  undersigned,  Aid  Association  for Lutherans , 4321 North Ballard
Road  Appleton,  Wisconsin  54919 is the owner,  landlord  or  mortgagee  of the
premises  located  at 1402  Mariner  Way ,  Santa  Rosa  California  95407  (the
"Premises") which are occupied by Flex Products, Inc.

         The undersigned  acknowledges that Customer has leased or financed,  or
that Customer expects to lease or finance from Fleet Credit Corporation ("FCC"),
the  Equipment  set forth on  Schedule  A  hereto,  including  any  accessories,
additions,  substitutions or replacements therefor,  which may from time to time
be located  at the  Premises.  To induce FCC to enter into a lease or  financing
agreement with Customer, the undersigned agrees with FCC as follows:

         The  undersigned  waives  any  right,  title or  interest  in or to the
         Equipment  that  it  may  now  or  hereafter   have.  The   undersigned
         irrevocably  agrees and  consents  that it will refrain from taking any
         action  to  bar,   restrain  or  otherwise  prevent  FCC,  its  agents,
         successors  or assigns,  from entering the  Premises for the purpose of
         inspecting,  removing or taking  possession of the Equipment,  and will
         grant FCC, its agents,  successors or assigns the right of entry to the
         Premises to remove the Equipment at any reasonable  time or times.  FCC
         shall be responsible for any damage to the Premises that FCC causes  in
         connection  with its entry  thereon  and the  removal of the  Equipment
         therefrom.  The  Equipment  is  and  shall  remain  personal  property,
         notwithstanding  the manner in which it may be  installed or affixed to
         the Premises.

         This  Consent and Waiver  shall inure to the benefit of the  successors
and  assigns  of FCC and  shall  be  binding  upon the  heirs,  representatives,
successors  and  assigns of the  undersigned.  The  undersigned  will,  upon the
request and at the expense of FCC,  execute and deliver to FCC such  further and
additional documents as FCC may reasonably deem necessary or desirable to effect
waivers and consents  contemplated  hereby.  This Agreement shall be governed by
and construed in accordance with the laws of the state in which the premises are
located, without reference to principles of conflict of laws.

         IN WITNESS WHEREOF,  the undersigned has duly executed this Consent and
Waiver this 18th day of April, 1996 .

                                   AID ASSOCIATION F0R LUTHERANS
/s/ Bonnie L. Hietpas              By: /s/ Wayne C. Streck
--------------------------             -----------------------------------------
    (Witness)                          Wayne C. Streck
                                   Title: Vice President-Mortgages & Real Estate
                                         ---------------------------------------
/s/ Janice A. Schuette             By: /s/ Kenneth E. Podell
--------------------------             -----------------------------------------
    (Witness)                          Kenneth E. Podell
                                       Assistant Secretary

<PAGE>

                      ACKNOWLEDGEMENT TO BE MADE BY OWNER,
                      LANDLORD OR MORTGAGEE OF REAL ESTATE

                   (Hereinafter referred to as "Undersigned")

                                  [INDIVIDUAL)
STATE OF ________________________
                               SS.
COUNTY OF _______________________

         I,  _______________________ a Notary Public within and for said County,
in the State aforesaid,  duly commissioned and acting, do hereby certify that on
this ___________ day of ____________________, 19__ personally appeared before me
___________________________, Undersigned in the foregoing Consent and Waiver, to
me  personally  well known and known to the person who signed  said  Consent and
Waiver,  who,  being by me duly sworn and being informed of the contents of said
Consent and Waiver  stated and  acknowledged  on oath that he signed,  executed,
sealed and delivered  same as his free and voluntary act and deed, for the uses,
purposes and considerations therein mentioned and set forth.

         WITNESS my hand and seal as such Notary Public the day and year in this
certificate above written.

My commission expires ______________________   _________________________________
                                                  (Notary Public)
                                                      (Seal)
                                 (PARTNERSHIP)

STATE OF ________________________
                               SS.
COUNTY OF _______________________

         I,  _______________________ a Notary Public within and for said County,
in the State aforesaid,  duly commissioned and acting, do hereby certify that on
this ___________ day of ____________________, 19__ personally appeared before me
___________________________ and  _________________________________  who executed
the foregoing  Consent and Waiver,  to me personally well known and known to the
person who signed said Consent and Waiver,  and known to be and who, being by me
duly sworn and being informed of the contents of said Consent and Waiver, stated
and acknowledged on oath that they were Partners of ____________________________
_______________________________________________________________________________,
the  Partnership  named in and which  executed the said Consent and Waiver,  and
that they signed, executed, sealed and delivered same individually and in behalf
of the said Partnership,  with authority as their and its free and voluntary act
and deed for the uses,  purposes and  considerations  therein  mentioned and set
forth.

         WITNESS my hand and seal as such Notary Public the day and year in this
certificate above written.

My commission expires ______________________   _________________________________
                                                  (Notary Public)
                                                      (Seal)
                                 (CORPORATION)
STATE OF       WISCONSIN
          -----------------
                        SS.
COUNTY OF      OUTAGAMIE
          -----------------

         I, David Crist,  a Notary  Public  within and for said  County,  in the
State aforesaid,  duly  commissioned and acting,  do hereby certify that on this
18th day of  April,  1996  personally  appeared  before me Wayne C.  Streck  and
Kenneth E. Podell (Name of Signer for Undersigned),  to me personally well known
and known to me to be the person who signed the  foregoing  Consent  and Waiver,
and known to me to be and who,  being by me duly sworn and being informed of the
contents of said Consent and Waiver  stated and  acknowledged  on oath that they
are Vice  President-Mortgages  and  Real  Estate &  Assistant  Secretary  of Aid
Association for Lutherans the  Corporation  named in and which executed the said
Consent and Waiver,  and that he knows the corporate  seal of said  Corporation,
and that the seal  affixed to said Consent and Waiver is the  corporate  seal of
said  Corporation,  that he was duly  authorized  to execute  said  Consent  and
Waiver, for, in the name of and on behalf of said Corporation, and that same was
signed,  sealed,  executed and  delivered by him in the name of and on behalf of
said  Corporation  by authority of its Board of Directors and that the execution
of said Consent and waiver was his free and  voluntary  act and deed in his said
capacity and acknowledged to me that said  Corporation  executed the same as its
voluntary act and deed and was by him  voluntarily  executed,  on behalf of said
Corporation for the uses, purposes and considerations  therein mentioned and set
forth.

         WITNESS my hand and seal as such Notary Public the day and year in this
certificate above written.

My commission expires is permanent.                  /s/ David Crist
                      -----------------           --------------------
                                                      (Notary Public)
                                                          (Seal)

<PAGE>

FLEET CREDIT CORPORATION                                    PAGE 3 OF 3
                                                            Schedule A Equipment

--------------------------------------------------------------------------------
Manufacturer, Description
--------------------------------------------------------------------------------

WPH overhead wire rope crane,  model 1 1/2 ton, serial  W6022015,  approximately
   X-Y, travel is 55' X 35' X 40' .
Kinney vacuum  rotary  pump,  model  KT-505-LP,  serial 3011-2 with a dresser
   roots booster blower, 15 HP., model HV3000, serial H00224, 480 volts.
Kinney vacuum rotary pump. model KT-505-LP,  serial 3011-1 with a dresser root
   booster blower, 15 HP., model HV3000, serial H00219.
Dresser roots, 30 HP. booster pump.
(4) Emergency isolation switches.
(3) 5.5 Bar pneumatic actuator valves.
Solenoids.
Alfa laval heat exchanger, Mfg. 1995, serial 30102-86367.
{4) Weksler temperature gauges, 0-150F deg.
Raven round Polypro storage tank, approximately 
   6' X 4' diameter, serial G333465.
Approximately 60 feet of 4" 304 stainless steel seamless piping with connectors.
(2)ITT Bell & Gossett pumps,  series 1510, 20 HP., 200 GPM, model 21/2AB7000BF,
   serials 1955295 and 1955296.
(2)FSI filter columns,  stainless  steel,  Mfg. 1995, 10 micron filters,  serial
   38121,  150 PSI.  
Air storage  tank 4' X 2' diameter  with a 0-160 PSi gauge.
Miscellaneous spare parts.

And all standard and accessory Equipment.

<PAGE>

FLEET CREDIT CORPORATION                                    PAGE 2 OF 3
                                                            Schedule A Equipment

--------------------------------------------------------------------------------
Manufacturer, Description
--------------------------------------------------------------------------------

(2) Bell & Gosett  pumps,  models  114RC925,  series 1510,  serials  1955297 and
   1955296. 
Raven polypro tank,  approximately 5' X 2' diameter. 
(2) Bell & Gosett pumps, model 4BC9375, serial 1957959 and 1957960, 625 GPM.
Alfa laval heat  exchanger,  type M6-FG,  serial  3010286368 with (4) 0-150 deg.
   gauges.
Alfa laval heat exchanger, type M10-BFG, serial 3.0102-86369 with (4) 0-150 deg.
   gauges.
FSI water  filter, model  FSP-4ON-4-304SS,  Mfg.  1995, 10 micron with 0-160 PSI
   gauge.
Dual water cooling condensing  system, low pressure,  high pressure with (2) KSB
   pumps,  model  ETACHROMB,  valves,  solenoids.
(2) Edwards two stage  vacuum pumps, model 275. 
Air storage tank 4' X 2' diameter with 0-160 PSI gauge. 
Water filter system with (2) KSB  ETACHROM-B-40160562,  pumps, 2200 gallon round
   stainless steel tank, model BT33541.  
Approximately  60' X 4" stainless steel piping with fittings.  
Approximately  100' of 2" stainless  steel piping with fittings.

BETA FIVE:

General Vacuum Equipment Corp.  electron beam metalyzing system,  Mfg. 1995, 78"
width capacity 1200 feet per minute, 480 volt, 3 phase, 218 amps., model 95-005,
overall size 9' X 10' , serial W9827-95.

SERIAL NUMBER:

CONSISTING OF BUT NOT LIMITED TO:

(8) Electron beam guns.
(8) Airco Temescal Simba 2 electron beam power supplies, serials 330, 337, 340,
    338, 339, 336, 333 and 335.
(8) High voltage controllers.
(8) Electron beam gun controllers.
(2) Polycolds, model PFC1100HC.
(6) Varian 20" diffusion pumps, model 016513/HS-20.
(8) Airco electron beam gun interfaces.
(4) Trigo-Scott drive motors, model 590L01199100203050300011
serials 104529421295, 104529211295, 104529311295 and 104529411295.

<PAGE>

  FLEET CREDIT CORPORATION                                  PAGE 1 OF 3
                                                            Schedule A Equipment

Attached to and made part of the following  documents Consent and Waiver (Owner,
Landlord or  Mortgagee  of Real Estate)  with Flex Products,  Inc.  32089-01 and
32089-02.

--------------------------------------------------------------------------------
Manufacturer, Description
--------------------------------------------------------------------------------

           The Equipment is Currently Located at:

                                1402 Mariner Way
                          Santa Rosa, California 95407

BETA THREE:

Weinert Vacuum GMBH. sputtering roll coating machine, 
Mfg. 1995, 7' X 10' chamber size, 480 volt, 3 phase, 
all stainless steel construction.

SERIAL NUMBER _________________________________


CONSISTING OF BUT NOT LIMITED TO:

(6) 20" diffusion pumps.
(4) 16" diffusion pumps.
3 Chamber system.
Liebert UPS battery back-up system, model AP331, serial P21174SF.
(3) Polycold cooling systems, model PFC-1100ST.
(3) Cathodes.
(2) Aluminum sputtering cathodes.
(6) Transformers, 72 kilowatt, Edwards two stage vacuum pump, model 275.
(3) Edwards two stage vacuum pumps, model 80.
(6) ENI D.C Plasma generators model DCG-100.
Allen Bradley controls.
(2) Mapping monitors.
(2) Control monitors.
PLC'S.
Circulation pumps.
Hydraulic pumps.
Other various monitors.
Miscellaneous spare parts.


FLEET CREDIT CORPORATION           AID ASSOCIATION FOR LUTHERANS

By: /s/ John J. Gould              By: /s/ Wayne C. Streck
    --------------------               -----------------------------------------
Name:   John J. Gould              Name: Wayne C. Streck
    --------------------               -----------------------------------------
Title: Vice President              Title Vice President-Mortgages & Real Estate
    --------------------               -----------------------------------------
                                   By: /s/ Kenneth E. Podell
                                       -----------------------------------------
                                           Kenneth E. Podell

<PAGE>

 [LOGO] Fleet                               LEASE SCHEDULE NO. 32089-00002
Capital Leasing                                (True Lease Schedule)

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

                                Lessee: FLEX PRODUCTS, INC.
                                Address: 1402 MARINER WAY

                                         SANTA ROSA, CA 95407

         1. This Lease  Schedule  No. 32089 - 00002 dated as of June 19, 1996 is
entered into pursuant to and  incorporates by this  reference,  all of the terms
and provisions of that certain Master  Equipment Lease Agreement No. 32089 dated
as of JUNE 19,  1996  (the  "Master  Lease"),  for the  lease of the   Equipment
described in Schedule A attached hereto.  This Lease Schedule shall constitute a
separate,  distinct and  independent  lease of the Equipment and the contractual
obligation  of Lessee.  References to the "the Lease" or "this Lease" shall mean
and  refer  to this  Lease  Schedule,  together  with the  Master  Lease and all
exhibits,  addenda, schedules,  certificates,  riders  and other  documents  and
instruments  executed and delivered in connection with this Lease Schedule,  all
as the same may be amended or modified from time to time. All capitalized  terms
used  herein  and not  defined  herein  shall have  the  meanings  set  forth or
referred to in the Master  Lease.  By its  execution  and delivery of this Lease
Schedule,  Lessee hereby  reaffirms all of the  representations,  warranties and
covenants  contained in the Master  Lease,  as of the date  hereof,  and further
represents  and  warrants to Lessor  that no Event of  Default,  and no event or
condition  which with notice or the passage of time or both would  constitute an
Event of Default, has occurred and is continuing as of the date hereof.

         2.  ACQUISITION  COST.  The  Acquisition  Cost  of  the  Equipment  is:
$4,500,000.00.

         3. (a) LEASE TERM. The Lease Term shall commence on the date hereof and
shall continue for a period of 72 months after the Lease Term  Commencement Date
set forth in the Acceptance Certificate to this Lease Schedule, plus any renewal
or extended term applicable in accordance with the terms of the Lease.

            (b)  RENTAL  PAYMENTS.  In addition to interim rent payable pursuant
to Section 2 of the Master Lease,  Lessee shall pay Lessor 72 consecutive Rental
Payments in the amounts set forth in the  schedule  below,  plus any  applicable
sales/use taxes,  commencing on the Rental Payment  Commencement  Date set forth
in the Acceptance  Certificate  and MONTHLY  thereafter for the remaining  Lease
Term.  Each Rental  Payment shall be payable on the same day of the month as the
Rental Payment Date in each succeeding  rental period during the remaining Lease
Term (each, a "Rental Payment Date"):

                                                  Amount of Each
              Number of Rental Payments           Rental Payment
              -------------------------           --------------
                        12                          65,109.74
                        60                          73,780.11

             (c) ADVANCE RENTAL  PAYMENT.  Lessee agrees to pay Lessor the first
01 and last O Rental Payments, due and payable on the Acceptance Date.

<PAGE>

[LOGO] Fleet
Capital Leasing

                                                             PAY PROCEEDS LETTER

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

    We hereby  authorize you to pay the following  Payee(s) from the proceeds of
your  financial  accommodations  to us in  respect  of that  certain  True Lease
Schedule  No.  32089-00002  dated as of June 19,  1996,  and make  disbursements
directly to said Payee(s) as follows:

                                                       Amount of
        PAYEE                                          Payment

Flex Products, Inc. *                                       $4,421,390.26
----------------------------------------------------   -------------------------
Fleet Capital Corporation (short fund to pay                    78,609.74
----------------------------------------------------   -------------------------
Customer Invoice now due)
----------------------------------------------------   -------------------------

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

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

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

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

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

                 TOTAL:                                     $4,500,000.00
                                                            --------------------


Dated as of: June 19 , 1996
            ------------------------

* BANK: Bank of America, NTSA                     FLEX PRODUCTS, INC.
        10 Santa Rosa Ave.
        Santa Rosa, CA                            By: /s/ Michael B. Sullivan
                                                     ---------------------------
  ABA #:  12100358                                Name:   Michael B. Sullivan
                                                       -------------------------
For Account of: FLEX PRODUCTS INC.                Title:  President
                                                       -------------------------
Account #:  14984-00242

<PAGE>

                           FLEET CAPITAL CORPORATION
                                50 Kennedy Plaza
                           Providence, RI 02903-2305
                                 1-800-238-3737

FLEX PRODUCTS, INC.
1402 MARINER WAY
SANTA ROSA CA 95407-0000

                                                       July 10, 1996

--------------------------------------------------------------------------------
          DESCRIPTION                                   AMOUNT
--------------------------------------------------------------------------------


          ADVANCE PAYMENT                            $65,109.74 +
          ORIGINATION FEE                            $30,000.00 +
          TRANSACTION EXPENSES                       $ 8,500.00 +
          SH FUND                                    $78,609.74 -
          SUB DEP                                    $25,000.00 -
                                          


                                 Total Due           $103,609.74
                                 Total Received      $103,609.74

                                 Balance                   $0.00

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

RETURN YOUR REMITTANCE TO THE ATTENTION OF: SANDRA BUONAIUTO

TO INSURE PROPER CREDIT TO YOUR ACCOUNT, PLEASE RETURN REMITTANCE COPY.

                      A Subsidiary of Fleet National Bank

32089 00 001 00002

<PAGE>
                                                          ACCEPTANCE CERTIFICATE
[LOGO] Fleet             
Capital Leasing
50 Kennedy Plaza
Providence, Rhode Island 02903-2305

         This Acceptance Certificate (this "Acceptance Certificate") is attached
to and made a part of that certain Lease Schedule No. 32089 - 00002, dated as of
June 19, 1996 (the "Lease  Schedule"),  by and between the undersigned  parties.
All capitalized terms used herein and not defined herein shall have the meanings
set forth or  referred  to in the Lease  Schedule.  To the  extent the terms set
forth in this  Acceptance  Certificate  differ or conflict with any of the terms
set forth in the Lease, the terms set forth in this Acceptance Certificate shall
control.

         1. Lessee acknowledges and agrees that each item of Equipment set forth
on Schedule A hereto (collectively,  the "Equipment") is hereby  unconditionally
accepted by Lessee for all purposes  under the Lease at the locations  specified
in  Schedule  A-1 hereto,  and hereby  agrees to  faithfully  perform all of its
obligations  under  the Lease as of the date  hereof  (the  "Acceptance  Date").
Lessee hereby  authorizes  and directs  Lessor to make payment to each vendor of
the Equipment pursuant to such vendor's invoice or any purchase order,  purchase
agreement or supply contract with such vendor, receipt and approval of which are
hereby reaffirmed by Lessee.

         2. By its execution and delivery of this Acceptance Certificate, Lessee
hereby reaffirms all of the representations,  warranties and covenants contained
in the Lease as of the date  hereof,  and  further  represents  and  warrants to
Lessor that no Event of Default,  and no event or condition which with notice or
the passage of time or both would  constitute an Event of Default,  has occurred
and is continuing as of the date hereof. Lessee further certifies to Lessor that
Lessee has  selected  the  Equipment  and has received and approved the purchase
order,  purchase  agreement or supply contract under which the Equipment will be
acquired for all purposes of the Lease.

     3. Lessee hereby  represents  and warrants that: (a) the Equipment has been
delivered  and is in an operating  condition  and  performing  the operation for
which it is intended to the satisfaction of the Lessee;  and (b) if requested by
Lessor,  the  Equipment  has been  marked or  labeled  evidencing  the  Lessor's
interest therein.

4. The LEASE TERM COMMENCEMENT DATE is the 10th day of July, 1996

5. The RENTAL PAYMENT COMMENCEMENT DATE is the 10th day of July, 1996

6. All terms and provisions of the Lease Schedule shall remain in full force and
effect, except as otherwise provided below:

          - ACQUISITION COST: $ 4,500,000.00.

          - LEASE TERM: (72) seventy-two months.

          - RENTAL PAYMENTS:  Number of Rental Payments    Rental Payment Amount

                                         12                     $______
                                         60                     $______

          - ADVANCE RENTAL PAYMENT(S): First 01 and last 00.

          - SECURITY DEPOSIT:    N/A  %.

Dated:            July 10, 1996

Agreed and Accepted:

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By:  /s/ Michael  B. Sullivan
    ----------------------------                     ---------------------------
Name:   John J. Gould                           Name:    Michael  B. Sullivan
      --------------------------                       -------------------------
Title:  VP/Senior Lender                        Title:   President
       --------------------------                      -------------------------

<PAGE>
<TABLE>
<CAPTION>
        This FINANCING  STATEMENT is presented for filing and will remain  effective with certain
exceptions  for a period of five years from the date of filing  pursuant  to section  9403 of the
California Uniform Commercial Code.
------------------------------------------------------------------------------------------------
<C>                                                    <C>                                     
1. DEBTOR  (LAST NAME FIRST--IF AN INDIVIDUAL)         1A.  SOCIAL SECURITY OR  FEDERAL TAX NO.

  Flex Products, Inc.
------------------------------------------------------------------------------------------------
1B. MAILING ADDRESS                          1C. CITY, STATE              1D. ZIP CODE

  2793 Northpoint Parkway                    Santa Rosa, California            95407
------------------------------------------------------------------------------------------------
 2. ADDITIONAL DEBTOR (IF ANY)                         2A. SOCIAL SECURITY OR FEDERAL TAX NO.
    (LAST NAME FIRST--IF AN INDIVIDUAL)                    

------------------------------------------------------------------------------------------------
2B. MAILING ADDRESS                          2C. CITY, STATE              2D. ZIP CODE

------------------------------------------------------------------------------------------------
3. DEBTOR'S TRADE NAMES OR STYLES (IF ANY)             3A. FEDERAL TAX NUMBER

================================================================================================
4. SECURED PARTY                                       4A.  SOCIAL SECURITY NO., FEDERAL TAX NO.
                                                            OR BANK TRANSIT AND A.B.A. N0.
     NAME      FLEET CREDIT CORPORATION
     MAILING ADDRESS   50 Kennedy Plaza, 5th Floor
     CITY  Providence     STATE   RI     ZIP CODE  02903
     
------------------------------------------------------------------------------------------------
5.  ASSIGNEE OF SECURED PARTY (IF ANY)                  5A. SOCIAL SECURITY NO., FEDERAL TAX NO.
                                                            OR BANK TRANSIT AND A.B.A. N0.
     NAME
     MAILING ADDRESS
     CITY                    STATE          ZIP CODE
------------------------------------------------------------------------------------------------
6.  This FINANCING STATEMENT covers the following types or items of property (include  description
    of real property on which located and owner of record when required by instruction 4).

   (1) General Vacuum  Equipment Corp. electron beam metalyzing system as further described on 
attached Schedule A(s) and all additions, accessories, modifications improvements, replacements 
substitutions, and accessories thereto and therefor, whether now owned or hereafter acquired, 
and proceeds, products and income of any of the foregoing, including insurance proceeds. Debtor 
has possession of the equipment under a true lease only. Secured Party has a security interest
in the equipment to the extent necessary to protect its title and interest therein.

Acct. No. 32089-02/lae (Fixture filing)

                                 Sonoma County                          Exhibit d
------------------------------------------------------------------------------------------------
7. CHECK   [X]      7A. [ ] PRODUCTS OF COLLATERAL      7B. DEBTOR(S) SIGNATURE NOT REQUIRED IN 
   IF APPLICABLE           ARE ALSO COVERED                 ACCORDANCE WITH INSTRUCTION 5(a) ITEM:
                                                            [ ](1)    [ ](2)    [ ](3)    [ ](4)
------------------------------------------------------------------------------------------------
8. CHECK   [X]          [ ]  DEBTOR IS A "TRANSMITTING UTILITY"
   IF APPLICABLE             IN ACCORDANCE WITH UCC SS. 9105 (1)(n)
------------------------------------------------------------------------------------------------
9.                                       DATE:      C   10. THIS SPACE FOR USE OF FILING OFFICER
                                                    O       (DATE, TIME, FILE NUMBER
  /s/ Michael B. Sullivan                 7/11/96   D       AND FILING OFFICER)
SIGNATURE(S) OF DEBTOR(S)                           E
-------------------------------------------------- ---
Flex Products, Inc.                                 1

TYPE OR PRINT NAME(S) OF DEBTOR(S)                  2
--------------------------------------------------
                                                    3          JUL 23, 1996
   /s/ Sandra Burnett
SIGNATURE(S) OF SECURED PARTY (IES)                 4
--------------------------------------------------               96-65549
FLEET CAPITAL C0RPORATION                           5

TYPE OR PRINT NAME(S) OF SECURED PARTY (IES)        6        CONF0RMED COPY
==================================================           NOT COMPARED
11. Return copy to:                                 7        WITH ORIGINAL
                                                             SONOMA COUNTY
NAME         PARASEARCH INC.                        8   
ADDRESS      222 Jefferson Blvd.
CITY         Warwick, RI 02688                      9
STATE
ZIP CODE                                            0
==================================================
Filing Officer is requested to note file number,
date and hour of filing on this copy and return to
the above party
                FORM UCC.1--
                Approved by the Secretary of State
==================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
        This FINANCING  STATEMENT is presented for filing and will remain  effective with certain
exceptions  for a period of five years from the date of filing  pursuant  to section  9403 of the
California Uniform Commercial Code.
------------------------------------------------------------------------------------------------
<C>                                                    <C>                                     
1. DEBTOR  (LAST NAME FIRST--IF AN INDIVIDUAL)         1A.  SOCIAL SECURITY OR  FEDERAL TAX NO.

 Flex Products, Inc.
------------------------------------------------------------------------------------------------
1B. MAILING ADDRESS                          1C. CITY, STATE              1D. ZIP CODE

 1402 Mariner Way                            Santa Rosa, California            95407
------------------------------------------------------------------------------------------------
 2. ADDITIONAL DEBTOR (IF ANY)                         2A. SOCIAL SECURITY OR FEDERAL TAX NO.
    (LAST NAME FIRST--IF AN INDIVIDUAL)                    

------------------------------------------------------------------------------------------------
2B. MAILING ADDRESS                          2C. CITY, STATE              2D. ZIP CODE

------------------------------------------------------------------------------------------------
3. DEBTOR'S TRADE NAMES OR STYLES (IF ANY)             3A. FEDERAL TAX NUMBER

================================================================================================
4. SECURED PARTY                                       4A.  SOCIAL SECURITY NO., FEDERAL TAX NO.
                                                            OR BANK TRANSIT AND A.B.A. N0.
     NAME      FLEET CREDIT CORPORATION
     MAILING ADDRESS   50 Kennedy Plaza, 5th Floor
     CITY  Providence     STATE   RI     ZIP CODE  02903
     
------------------------------------------------------------------------------------------------
5.  ASSIGNEE OF SECURED PARTY (IF ANY)                  5A. SOCIAL SECURITY NO., FEDERAL TAX NO.
                                                            OR BANK TRANSIT AND A.B.A. N0.
     NAME
     MAILING ADDRESS
     CITY      STATE          ZIP CODE
------------------------------------------------------------------------------------------------
6.  This FINANCING STATEMENT covers the following types or items of property (include  description
    of real property on which located and owner of record when required by instruction 4).

   (1) General Vacuum Equipment Corp. electron beam metalyzing system as further described on 
attached Schedule A(s), and all additions, accessions, modifications, improvements, replacements 
substitutions, and accessories thereto and therefor, whether now owned or hereafter acquired, 
and proceeds, products and income of any of the foregoing, including insurance proceeds. Debtor
has possession of the equipment under a true lease only. Secured Party has a security interest
in the equipment to the extent necessary to protect its title and interest therein.

Acct. No. 32089-02/lae
------------------------------------------------------------------------------------------------
7. CHECK   [X]      7A. [ ] PRODUCTS OF COLLATERAL      7B. DEBTOR(S) SIGNATURE NOT REQUIRED IN 
   IF APPLICABLE           ARE ALSO COVERED                 ACCORDANCE WITH INSTRUCTION 5(a) ITEM:
                                                            [ ](1)    [ ](2)    [ ](3)    [ ](4)
------------------------------------------------------------------------------------------------
8. CHECK   [X]          [ ]  DEBTOR IS A "TRANSMITTING UTILITY"
   IF APPLICABLE             IN ACCORDANCE WITH UCC SS. 9105 (1)(n)
------------------------------------------------------------------------------------------------
9.                                       DATE:      C   10. THIS SPACE FOR USE OF FILING OFFICER
                                                    O       (DATE. TIME FILE NUMBER
  /s/ Michael B. Sullivan               7/11/96     D       AND FILING OFFICER)
SIGNATURE(S) OF DEBTOR(S)                           E
-------------------------------------------------- ---
Flex Products, Inc.                                 1

TYPE OR PRINT NAME(S) OF DEBTOR(S)                  2
--------------------------------------------------
                                                    3           9620060637
   /s/ Sandra Burnett
SIGNATURE(S) OF SECURED PARTY (IES)                 4
--------------------------------------------------
FLEET CAPITAL C0RPORATION                           5

TYPE OR PRINT NAME(S) OF SECURED PARTY (IES)        6
==================================================
11. Return copy to:                                 7          FILED
                                                           SACRAMENTO, CA
NAME         PARASEARCH INC.                        8   JUL 16, 1996 AT 0800
ADDRESS      222 Jefferson Blvd.
CITY         Warwick, RI 02688                      9        BILL JONES
STATE                                                    SECRETARY OF STATE
ZIP CODE                                            0
==================================================
Filing Officer is requested to note file number,
date and hour of filing on this copy and return to
the above party
                FORM UCC.1--
                Approved by the Secretary of State
==================================================
</TABLE>

<PAGE>


FLEET CAPITAL CORPORATION                                  PAGE 1 OF 1
                                                           SCHEDULE A EQUIPMENT

Attached to and made part of the following  documents:  True Lease  Schedule No.
32089-02,  Acceptance Certificate, UCC Financing Statement(s), and Warranty Bill
of Sale with Flex Products, Inc.

The Depreciable Life of the Property is (07) seven years.

LOC# (01)

BETA FIVE
Unit Number: Beta V

(1) General Vacuum Equipment Corp.  electron beam metalyzing system,  Mfg. 1995,
78" width capacity,  1200 feet per minute,  480 volt, 3 phase,  218 amps,  model
95-005,  overall size 9' X 10'. serial number 95005 which machine includes,  but
is not limited to, the following:

(8) Electron beam guns
(8) Airco  Temescal  Simba 2 electron beam power  supplies,  serial numbers 330,
337, 340,  338, 339,  336, 333 and 335 
(8) Programmable  seep generators 
(8) High voltage  controllers  
(8) Electron  beam gun  controllers  
(2)  Polyolds,  model PEC1100HC 
(6) Varian 20" diffusion pumps, model 016513/HS-20 
(8) Airco electron beam gun interfaces     
(4) Trige-Scott  drive motors,  model  S90L01199100203050300011,  serial numbers
104529421295, 104529211295, 104529311295 and 104529411295

AND ALL STANDARD AND ACCESSORY EQUIPMENT.

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By: /s/ Michael  B. Sullivan
   -----------------------------                   -----------------------------
Name:   John J. Gould                           Name:   Michael  B. Sullivan
     ---------------------------                     ---------------------------
Title:  VP/Senior Lender                        Title:  President
      --------------------------                      --------------------------

<PAGE>

FLEET CAPITAL CORPORATION                                  Schedule A-1
                                                           Equipment Location

Attached to and made part of the  following  documents  True Lease  Schedule No.
32089-02,  Acceptance Certificate, UCC Financing Statement(s),  Warranty Bill of
Sale with Flex Products, Inc.

--------------------------------------------------------------------------------
Loc #     Equipment Currently Located at:
--------------------------------------------------------------------------------

   01     1402 Mariner Way, Santa Rosa, California 95407






FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By: /s/ Michael  B. Sullivan
   -----------------------------                   -----------------------------
Name:   John J. Gould                           Name:   Michael  B. Sullivan
     ---------------------------                     ---------------------------
Title:  VP/Senior Lender                        Title:  President
      --------------------------                      --------------------------

<PAGE>

[LOGO] Fleet                                     STIPULATED LOSS VALUE SCHEDULE
Capital Leasing

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

         This  Stipulated  Loss Value Schedule (this  "Schedule") is attached to
and made a part of that certain Lease Schedule No. 32089-00002, dated as of June
19,1996 (the "Lease Schedule"), by and between the undersigned parties.
<TABLE>

         The following Stipulated Loss Values shall be used to calculate damages
or loss as provided in the Master Lease.  The Stipulated Loss Value with respect
to any item of Equipment on any Rental  Payment Date during the Lease Term shall
be an amount equal to the sum of: (a) all Rental Payments and other amounts then
due and owing to Lessor under the Lease,  together with all accrued interest and
late charges thereon, calculated through and including the date of payment: plus
(b) the product of the Acquisition Cost of the such Equipment  multiplied by the
percentage set forth below as of such Rental Payment Date.

<CAPTION>
  <S>                           <C>                    <C>                           <C>

  Rental Payment Date for        Percentage of         Rental Payment Date for        Percentage of
   Rental Payment Number        Acquisition Cost        Rental Payment Number        Acquisition Cost
</TABLE>

              SEE EXHIBIT C ATTACHED HERETO AND MADE A PART HEREOF

         All capitalized terms used herein and not defined herein shall have the
meanings set forth or referred to in the Lease Schedule.  Except as specifically
set forth herein,  all of the terms and  conditions of the Lease shall remain in
full force and effect and are hereby ratified and affirmed.


Dated as of: June 19, 1996

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By: /s/ Michael  B. Sullivan
   -----------------------------                   -----------------------------
Name:   John J. Gould                           Name:   Michael  B. Sullivan
     ---------------------------                     ---------------------------
Title:  VP/Senior Lender                        Title:  President
      --------------------------                      --------------------------

<PAGE>

                                    EXHIBIT C
                                       TO
                         STIPULATED LOSS VALUE SCHEDULE
                         TO LEASE SCHEDULE NO. 32089-02

RENTAL PAYMENT       PERCENTAGE OF         RENTAL PAYMENT       PERCENTAGE OF
DATE FOR RENTAL     ACQUISITION COST      DATE FOR RENTAL      ACQUISITION COST
PAYMENT NUMBER                             PAYMENT NUMBER

1                      103.35121715              37              70.90880090
2                      102.77715752              38              69.75511355
3                      102.19526265              39              68.59002020
4                      101.59552206              40              67.41874422
5                      100.98781724              41              66.23597391
6                      100.37210821              42              65.04165152
7                       99.73838360              43              63.84099969
8                       99.09652408              44              62.62870597
9                       98.44648879              45              61.40471189
10                      97.78823666              46              60.16895869
11                      97.11575495              47              58.92972240
12                      96.43494366              48              57.67865042

13                      95.54711438              49              56.42401842
14                      94.34921445              50              55.15747340
15                      93.74119331              51              53.87895553
16                      92.81702863              52              52.59673978
17                      91.88261080              53              51.30247247
18                      90.93788832              54              49.99609306
19                      89.97683797              55              48.68587582
20                      89.00534921              56              47.36346638
21                      88.02336959              57              46.02880349
22                      87.03084644              58              44.68182560
23                      86.02873119              59              43.33120369
24                      85.01597126              60              41.96818663

25                      83.99351758              61              40.60144498
26                      82.96031708              62              39.22222721
27                      81.91631576              63              37.83047065
28                      80.86246378              64              36.43484516
29                      79.79770726              65              35.02659847
30                      78.72199142              66              33.60566720
31                      77.63626563              67              32.18072044
32                      76.53947521              68              30.74300521
33                      75.43156457              69              29.29245738
34                      74.31247787              70              27.82901249
35                      73.18743961              71              26.37095856
36                      72.05113926              72              24.89996987

                                                 72              25.00000000

<PAGE>


[LOGO] Fleet                                               PURCHASE OPTION RIDER
Capital Leasing

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

         This  Purchase  Option  Rider (this  "Rider") is attached to and made a
part of that certain Lease Schedule No.  32089-00002,  dated as of June 19, 1996
(the "Lease Schedule"), by and between the undersigned parties.

         If no Event of Default (or event or condition  which,  with the passage
of time or giving of notice,  or both,  would  become  such an Event of Default)
shall have occurred and be continuing, and the Lease shall not have been earlier
terminated,  Lessee shall have the option to purchase  (the  "Purchase  Option")
all, but not less than all, of the Equipment at the expiration of the Lease Term
for an amount,  payable in  immediately  available  funds on the last day of the
Lease Term,  equal to: (a) all Rental  Payments,  late charges and other amounts
due and owing under the Lease; plus (b) all taxes, assessments and other charges
due or payable in connection with the sale of the Equipment to Lessee;  plus (c)
an amount equal to 25.00000% of the  Acquisition  Cost of the  Equipment,  which
Lessor and Lessee  acknowledge  represents a reasonable  current estimate of the
fair market value of the Equipment at the end of the Lease Term.

         Provided that Lessor shall have received all amounts payable  hereunder
on the last day of the Lease Term,  and that no Event of Default then exists and
is continuing under the Lease,  Lessor shall convey all of its right,  title and
interest in and to the Equipment to Lessee on the last day of the Lease Term, on
an "AS-IS,"  "WHERE-IS"  BASIS WITHOUT  REPRESENTATION  OR WARRANTY,  EXPRESS OR
IMPLIED, and without recourse to Lessor, except that the Equipment shall be free
and clear of all liens  created by Lessor.  If Lessee  intends to  exercise  the
Purchase  Option,  Lessee shall give  irrevocable  written notice to Lessor (the
"Option  Notice") not more than 240 days,  nor less than 180 days,  prior to the
expiration  of the Lease Term.  If Lessee fails to give such  written  notice to
Lessor,  it shall be  conclusively  presumed  that  Lessee  has  elected  not to
exercise the Purchase Option.

         If, for any  reason,  Lessee does not  exercise  the  Purchase  Option,
Lessee shall, on the last day of the Lease Term,  return all of the Equipment to
Lessor  pursuant to and in the condition  required by the terms of the Lease and
pay to  Lessor  a  return  fee  equal  to  5.0% of the  Acquisition  Cost of the
Equipment.

         All capitalized terms used herein and not defined herein shall have the
meanings set forth or referred to in the Lease Schedule.  Except as specifically
set forth herein,  all of the terms and  conditions of the Lease shall remain in
full force and effect and are hereby  ratified and affirmed.  To the extent that
the  provisions  of this Rider  conflict  with any  provisions  contained in the
Lease, the provisions of this Rider shall control.

Dated as of: June 19 , 1996

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By: /s/ Michael  B. Sullivan
   -----------------------------                   -----------------------------
Name:   John J. Gould                           Name:   Michael  B. Sullivan
     ---------------------------                     ---------------------------
Title:  VP/Senior Lender                        Title:  President
      --------------------------                      --------------------------

<PAGE>

                                                           WARRANTY BILL OF SALE
[LOGO] F1eet
Capital Leasing
50 Kennedy Plaza
Providence, Rhode Island 02903

         FLEX  PRODUCTS,  INC.  ("Seller")  of 1402  MARINER WAY SANTA ROSA,  CA
95407, in consideration of the sum of $4,500,000.00  Dollars, and other good and
valuable  consideration,   the  receipt  and  sufficiency  of  which  is  hereby
acknowledged, does hereby sell, transfer and assign to Fleet Capital Corporation
("FCC"),  a Rhode Island  corporation  having its principal office at 50 Kennedy
Plaza,  Providence,  Rhode Island  02903,  the equipment set forth in Schedule A
hereto (the "Equipment").

         Seller  hereby  covenants  with and  warrants to FCC that Seller is the
lawful owner of the Equipment and has the right to sell the Equipment,  and that
the Equipment is free and clear of all rights, claims, liens, charges,  security
interests or encumbrances  of any other person.  Seller will for ever indemnify,
defend and warrant all of the rights of FCC in and to the Equipment  transferred
hereunder against the claims and demands of all other persons.

IN WITNESS WHEREOF,  Seller has duly executed this Bill of Sale this 11th day of
July, 1996.

                                   FLEX PRODUCTS, INC.

                                   By: /s/ Michael B. Sullivan
                                      --------------------------------
                                   Name: Michael B. Sullivan
                                        ------------------------------
                                   Title: President
                                         -----------------------------


State of California
         --------------------------
County of Sonoma
         --------------------------

Subscribed and sworn before me this 11th day of July, 1996.

                                /s/ Aggie S. Navarro
                                  Notary Public

                     My Commission expires:________________

                                        =============================== 
                                                AGIE S. NAVARRO         
                                        [SEAL]  COMM. #1009257          
                                           Notary Public--California    
                                                 SONOMA COUNTY          
                                         My Comm. Expires NOV 11, 1997  
                                        =============================== 

<PAGE>

FLEET CREDIT CORPORATION
                                                 CONSENT AND WAIVER
                                   (OWNER, LANDLORD OR MORTGAGEE OF REAL ESTATE)

50 Kennedy Plaza
Providence, Rhode island 02903


The  undersigned,  0ptical  Coating  Laboratory,  Inc., 2789 North Point Parkway
Santa Rosa, California 95407 is the owner, landlord or mortgagee of the premises
located at 1402 Mariner Way, Santa Rosa, California 95407 (the "Premises") which
are occupied by Flex Products, Inc.

     The undersigned  acknowledges that Customer has leased or financed, or that
Customer expects to lease or finance from Fleet Credit Corporation ("FCC"),  the
Equipment set forth on Schedule A hereto including any  accessories,  additions,
substitutions or replacements  therefor,  which may from time to time be located
at the Premises. To induce FCC to enter into a lease or financing agreement with
Customer, the undersigned agrees with FCC as follows:

     The  undersigned  waives any  right,  title or  interest  in or to the
     Equipment  that  it  may  now  or  hereafter   have.  The  undersigned
     irrevocably  agrees and consents  that it will refrain from taking any
     action  to  bar,  restrain  or  otherwise  prevent  FCC,  its  agents,
     successors  or assigns,  from entering the Premises for the purpose of
     inspecting,  removing or taking possession of the Equipment,  and will
     grant FCC, its agents, successors or assigns the right of entry to the
     Premises to remove the Equipment at any reasonable time or times.  FCC
     shall be responsible for any damage to the Premises that FCC causes in
     connection  with its entry  thereon and the  removal of the  Equipment
     therefrom.  The  Equipment  is and  shall  remain  personal  property,
     notwithstanding  the manner in which it may be installed or affixed to
     the Premises.

     This  Consent and Waiver shall inure to the benefit of the  successors  and
assigns of FCC and shall be binding upon the heirs, representatives,  successors
and assigns of the  undersigned.  The undersigned  will, upon the request and at
the  expense of FCC,  execute and  deliver to FCC such  further  and  additional
documents as FCC may  reasonably  deem  necessary or desirable to effect waivers
and consents  contemplated  hereby.  This  Agreement  shall be  governed  by and
construed  in  accordance  with the laws of the state in which the  premises are
located,  without  reference  to  principles  of  conflict  of laws.

     IN WITNESS  WHEREOF,  the  undersigned  has duly  executed this Consent and
Waiver this 11th day of July, 1996.

                                             Optical Coating Laboratory, Inc.

 /s/ Silvia C. Hogan                         By: /s/ John M. Markovich         
-------------------------                        ------------------------------
       (Witness)                             Title:  V.P. Finance & CFO
                                                    ---------------------------

<PAGE>
                      ACKNOWLEDGEMENT TO BE MADE BY OWNER,
                      LANDLORD OR MORTGAGEE OF REAL ESTATE

                   (Hereinafter referred to as "Undersigned")

                                  [INDIVIDUAL)
STATE OF ________________________
                               SS.
COUNTY OF _______________________

         I,  _______________________ a Notary Public within and for said County,
in the State aforesaid,  duly commissioned and acting, do hereby certify that on
this ___________ day of ____________________, 19__ personally appeared before me
___________________________, Undersigned in the foregoing Consent and Waiver, to
me  personally  well known and known to the person who signed  said  Consent and
Waiver,  who,  being by me duly sworn and being informed of the contents of said
Consent and Waiver  stated and  acknowledged  on oath that he signed,  executed,
sealed and delivered  same as his free and voluntary act and deed, for the uses,
purposes and considerations therein mentioned and set forth.

         WITNESS my hand and seal as such Notary Public the day and year in this
certificate above written.

My commission expires ______________________   _________________________________
                                                  (Notary Public)
                                                      (Seal)
                                 (PARTNERSHIP)
STATE OF ________________________
                               SS.
COUNTY OF _______________________

         I,  _______________________ a Notary Public within and for said County,
in the State aforesaid,  duly commissioned and acting, do hereby certify that on
this day ___________ of ____________________, 19__ personally appeared before me
___________________________  and  ___________________________,  who executed the
foregoing  Consent  and  Waiver,  to me  personally  well known and known to the
persons who signed said Consent and Waiver, and known to be and who, being by me
duly sworn and being informed of the contents of said Consent and Waiver, stated
and acknowledged on oath that they were Partners of ____________________________
__________________, the Partnership named in and which executed the said Consent
and  Waiver,  and  that  they  signed,  executed,   sealed  and  delivered  same
individually and in behalf of the said Partnership,  with authority as their and
its free and  voluntary act and deed for the uses,  purposes and  considerations
therein mentioned and set forth.

         WITNESS my hand and seal as such Notary Public the day and year in this
certificate above written.

My commission expires ______________________   _________________________________
                                                  (Notary Public)
                                                      (Seal)
                                 (CORPORATION)
                                             ===================================
STATE OF       California                                  SILVIA C. HOGAN
          -----------------                  [SEAL]         COMM. #1009258
                        SS.                          Notary Public - California
COUNTY OF     Sonoma                                        SONOMA COUNTY
          -----------------                        My Comm. Expires NOV 11, 1997
                                             ===================================
           I, Silvia C. Hogan,  a Notary Public  within and for said County,  in
the State aforesaid,  duly  commissioned  and acting,  do hereby certify that on
this 11th day of July,  1996  personally  appeared  before me John M.  Markovich
(Name of Signer for  Undersigned) to me personally well known and known to me to
be the person who signed the foregoing Consent and Waiver, and known to me to be
and who,  being by me duly  sworn and being  informed  of the  contents  of said
Consent  and  Waiver,  stated  and  acknowledged  to me an oath that he was Vice
President & CFO (Title) of Optical  Coating  Laboratory,  Inc., the  Corporation
named in and which  executed  said  Consent  and  Waiver,  and that he knows the
corporate  seal of said  Corporation,  and that the seal affixed to said Consent
and  Waiver  is the  corporate  seal  of  said  Corporation,  that  he was  duly
authorized to execute said Consent and Waiver, for, in the name of and on behalf
of said Corporation, and that same was signed, sealed, executed and delivered by
him in the name of and on behalf of said  Corporation  by authority of its Board
of Directors  and that the execution of said Consent and Waiver was his free and
voluntary  act and deed in his said  capacity and  acknowledged  to me that said
Corporation  executed  the  same as its  voluntary  act and  deed and was by him
voluntarily  executed,  on behalf of said Corporation for the uses, purposes and
considerations therein mentioned and set
forth.

         WITNESS my hand and seal as such Notary Public the day and year in this
certificate above written.

My commission expires November 11, 1997           /s/ Silvia C. Hogan
                      -----------------           --------------------
                                                      (Notary Public)
                                                          (Seal)

<PAGE>

CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
================================================================================

State of California
         --------------------------
County of Sonoma
          -------------------------

On July 11, 1996 before me,          Silvia C. Hogan, Notary Public
   -------------          ------------------------------------------------------
       Date               NAME, TITLE OF OFFICER-E.G., "JANE DOE, NOTARY PUBLIC"

personally appeared  John M. Markovich
                    ------------------------------------------------------------
                                        NAME(S) OF SIGNER(S)


[X] personally known to me - OR - [ ] proved to me on the basis of  satisfactory
                                     evidence  to be the  person  whose  name is
==================================   subscribed  to the  within  instrument  and
             SILVIA C. HOGAN         acknowledged  to me  that he  executed  the
[SEAL]        COMM. #1009258         same in his authorized capacity and that by
       Notary Public - California    his signature on the instrument the person,
              SONOMA COUNTY          or the  entity  upon  behalf  of which  the
     My Comm. Expires NOV 11, 1997   person acted, executed the instrument.     
==================================                                            
                                     WITNESS my hand and official seal.

                                     /s/ Silvia C. Hogan
                                     -------------------------------------------
                                                SIGNATURE OF NOTARY


====================================OPTIONAL====================================

Though the data below is not  required by law, it may prove  valuable to persons
relying on the document and could prevent fraudulent reattachment of this form.

      CAPACITY CLAIMED BY SIGNER                DESCRIPTION OF ATTACHED DOCUMENT

[ ] INDIVIDUAL
[X] CORPORATE OFFICER     
     Vice President & CFO                              Consent and Waiver
    ----------------------------------          --------------------------------
                     TITLE(S)                       TITLE OR TYPE OF DOCUMENT

[ ] PARTNER(S)             [ ] LIMITED                         2
                           [ ] GENERAL          --------------------------------
[ ] ATTORNEY-IN-FACT                                    NUMBER OF PAGES
[ ] TRUSTEE(S)
[ ] GUARDIAN/CONSERVATOR                                   7-11-96
[ ] OTHER:____________________________          --------------------------------
    __________________________________                 DATE OF DOCUMENT
    __________________________________

SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)

Optical Coating Laboratory, Inc.                            ----
--------------------------------------          --------------------------------
                                                SIGNER(S) OTHER THAN NAMED ABOVE
--------------------------------------

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

<PAGE>

FLEET CREDIT CORPORATION
                                                 CONSENT AND WAIVER
                                   (OWNER, LANDLORD OR MORTGAGEE OF REAL ESTATE)

50 Kennedy Plaza
Providence, Rhode island 02903


The  undersigned,  0ptical  Coating  Laboratory,  Inc., 2789 North Point Parkway
Santa Rosa, California 95407 is the owner, landlord or mortgagee of the premises
located at 1402 Mariner Way, Santa Rosa, California 95407 (the "Premises") which
are occupied by Flex Products, Inc.

     The undersigned  acknowledges that Customer has leased or financed, or that
Customer expects to lease or finance from Fleet Credit Corporation ("FCC"),  the
Equipment set forth on Schedule A hereto including any  accessories,  additions,
substitutions or replacements  therefor,  which may from time to time be located
at the Premises. To induce FCC to enter into a lease or financing agreement with
Customer, the undersigned agrees with FCC as follows:

     The  undersigned  waives any  right,  title or  interest  in or to the
     Equipment  that  it  may  now  or  hereafter   have.  The  undersigned
     irrevocably  agrees and consents  that it will refrain from taking any
     action  to  bar,  restrain  or  otherwise  prevent  FCC,  its  agents,
     successors  or assigns,  from entering the Premises for the purpose of
     inspecting,  removing or taking possession of the Equipment,  and will
     grant FCC, its agents, successors or assigns the right of entry to the
     Premises to remove the Equipment at any reasonable time or times.  FCC
     shall be responsible for any damage to the Premises that FCC causes in
     connection  with its entry  thereon and the  removal of the  Equipment
     therefrom.  The  Equipment  is and  shall  remain  personal  property,
     notwithstanding  the manner in which it may be installed or affixed to
     the Premises.

     This  Consent and Waiver shall inure to the benefit of the  successors  and
assigns of FCC and shall be binding upon the heirs, representatives,  successors
and assigns of the  undersigned.  The undersigned  will, upon the request and at
the  expense of FCC,  execute and  deliver to FCC such  further  and  additional
documents as FCC may  reasonably  deem  necessary or desirable to effect waivers
and consents  contemplated  hereby.  This  Agreement  shall be  governed  by and
construed  in  accordance  with the laws of the state in which the  premises are
located,  without  reference  to  principles  of  conflict  of laws.

     IN WITNESS  WHEREOF,  the  undersigned  has duly  executed this Consent and
Waiver this 11th day of July, 1996.

                                             Optical Coating Laboratory, Inc.

 /s/ Silvia C. Hogan                         By: /s/ John M. Markovich         
-------------------------                        ------------------------------
       (Witness)                             Title:  V.P. Finance & CFO
                                                    ---------------------------

<PAGE>
                      ACKNOWLEDGEMENT TO BE MADE BY OWNER,
                      LANDLORD OR MORTGAGEE OF REAL ESTATE

                   (Hereinafter referred to as "Undersigned")

                                  [INDIVIDUAL)
STATE OF ________________________
                               SS.
COUNTY OF _______________________

         I,  _______________________ a Notary Public within and for said County,
in the State aforesaid,  duly commissioned and acting, do hereby certify that on
this ___________ day of ____________________, 19__ personally appeared before me
___________________________, Undersigned in the foregoing Consent and Waiver, to
me  personally  well known and known to the person who signed  said  Consent and
Waiver,  who,  being by me duly sworn and being informed of the contents of said
Consent and Waiver  stated and  acknowledged  on oath that he signed,  executed,
sealed and delivered  same as his free and voluntary act and deed, for the uses,
purposes and considerations therein mentioned and set forth.

         WITNESS my hand and seal as such Notary Public the day and year in this
certificate above written.

My commission expires ______________________   _________________________________
                                                  (Notary Public)
                                                      (Seal)
                                 (PARTNERSHIP)
STATE OF ________________________
                               SS.
COUNTY OF _______________________

         I,  _______________________ a Notary Public within and for said County,
in the State aforesaid,  duly commissioned and acting, do hereby certify that on
this day ___________ of ____________________, 19__ personally appeared before me
___________________________  and  ___________________________,  who executed the
foregoing  Consent  and  Waiver,  to me  personally  well known and known to the
persons who signed said Consent and Waiver, and known to be and who, being by me
duly sworn and being informed of the contents of said Consent and Waiver, stated
and acknowledged on oath that they were Partners of ____________________________
__________________, the Partnership named in and which executed the said Consent
and  Waiver,  and  that  they  signed,  executed,   sealed  and  delivered  same
individually and in behalf of the said Partnership,  with authority as their and
its free and  voluntary act and deed for the uses,  purposes and  considerations
therein mentioned and set forth.

         WITNESS my hand and seal as such Notary Public the day and year in this
certificate above written.

My commission expires ______________________   _________________________________
                                                  (Notary Public)
                                                      (Seal)
                                 (CORPORATION)
                                             ===================================
STATE OF      California                                   SILVIA C. HOGAN
          -----------------                  [SEAL]         COMM. #1009258
                        SS.                          Notary Public - California
COUNTY OF     Sonoma                                        SONOMA COUNTY
          -----------------                        My Comm. Expires NOV 11, 1997
                                             ===================================
           I, Silvia C. Hogan,  a Notary Public  within and for said County,  in
the State aforesaid,  duly  commissioned  and acting,  do hereby certify that on
this 11th day of July,  1996  personally  appeared  before me John M.  Markovich
(Name of Signer for  Undersigned) to me personally well known and known to me to
be the person who signed the foregoing Consent and Waiver, and known to me to be
and who,  being by me duly  sworn and being  informed  of the  contents  of said
Consent  and  Waiver,  stated  and  acknowledged  to me an oath that he was Vice
President & CFO (Title) of Optical  Coating  Laboratory,  Inc., the  Corporation
named in and which  executed  said  Consent  and  Waiver,  and that he knows the
corporate  seal of said  Corporation,  and that the seal affixed to said Consent
and  Waiver  is the  corporate  seal  of  said  Corporation,  that  he was  duly
authorized to execute said Consent and Waiver, for, in the name of and on behalf
of said Corporation, and that same was signed, sealed, executed and delivered by
him in the name of and on behalf of said  Corporation  by authority of its Board
of Directors  and that the execution of said Consent and Waiver was his free and
voluntary  act and deed in his said  capacity and  acknowledged  to me that said
Corporation  executed  the  same as its  voluntary  act and  deed and was by him
voluntarily  executed,  on behalf of said Corporation for the uses, purposes and
considerations therein mentioned and set
forth.

         WITNESS my hand and seal as such Notary Public the day and year in this
certificate above written.

My commission expires November 11, 1997           /s/ Silvia C. Hogan
                      -----------------           --------------------
                                                      (Notary Public)
                                                          (Seal)

<PAGE>

CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
================================================================================

State of California
         --------------------------
County of Sonoma
          -------------------------

On July 11, 1996 before me,          Silvia C. Hogan, Notary Public
   -------------          ------------------------------------------------------
       Date               NAME, TITLE OF OFFICER-E.G., "JANE DOE, NOTARY PUBLIC"

personally appeared  John M. Markovich
                    ------------------------------------------------------------
                                        NAME(S) OF SIGNER(S)


[X] personally known to me - OR - [ ] proved to me on the basis of  satisfactory
                                     evidence  to be the  person  whose  name is
==================================   subscribed  to the  within  instrument  and
             SILVIA C. HOGAN         acknowledged  to me  that he  executed  the
[SEAL]        COMM. #1009258         same in his authorized capacity and that by
       Notary Public - California    his signature on the instrument the person,
              SONOMA COUNTY          or the  entity  upon  behalf  of which  the
     My Comm. Expires NOV 11, 1997   person acted, executed the instrument.     
==================================                                            
                                     WITNESS my hand and official seal.

                                     /s/ Silvia C. Hogan
                                     -------------------------------------------
                                                SIGNATURE OF NOTARY


====================================OPTIONAL====================================

Though the data below is not  required by law, it may prove  valuable to persons
relying on the document and could prevent fraudulent reattachment of this form.

      CAPACITY CLAIMED BY SIGNER                DESCRIPTION OF ATTACHED DOCUMENT

[ ] INDIVIDUAL
[X] CORPORATE OFFICER     
     Vice President & CFO                              Consent and Waiver
    ----------------------------------          --------------------------------
                     TITLE(S)                       TITLE OR TYPE OF DOCUMENT

[ ] PARTNER(S)             [ ] LIMITED                         2
                           [ ] GENERAL          --------------------------------
[ ] ATTORNEY-IN-FACT                                    NUMBER OF PAGES
[ ] TRUSTEE(S)
[ ] GUARDIAN/CONSERVATOR                                   7-11-96
[ ] OTHER:____________________________          --------------------------------
    __________________________________                 DATE OF DOCUMENT
    __________________________________

SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)

Optical Coating Laboratory, Inc.                            ----
--------------------------------------          --------------------------------
                                                SIGNER(S) OTHER THAN NAMED ABOVE
--------------------------------------

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

<PAGE>

FLEET CREDIT CORPORATION
                                                 CONSENT AND WAIVER
                                   (OWNER, LANDLORD OR MORTGAGEE OF REAL ESTATE)

50 Kennedy Plaza
Providence, Rhode island 02903


The  undersigned,  0ptical  Coating  Laboratory,  Inc., 2789 North Point Parkway
Santa Rosa, California 95407 is the owner, landlord or mortgagee of the premises
located at 1402 Mariner Way, Santa Rosa, California 95407 (the "Premises") which
are occupied by Flex Products, Inc.

     The undersigned  acknowledges that Customer has leased or financed, or that
Customer expects to lease or finance from Fleet Credit Corporation ("FCC"),  the
Equipment set forth on Schedule A hereto including any  accessories,  additions,
substitutions or replacements  therefor,  which may from time to time be located
at the Premises. To induce FCC to enter into a lease or financing agreement with
Customer, the undersigned agrees with FCC as follows:

     The  undersigned  waives any  right,  title or  interest  in or to the
     Equipment  that  it  may  now  or  hereafter   have.  The  undersigned
     irrevocably  agrees and consents  that it will refrain from taking any
     action  to  bar,  restrain  or  otherwise  prevent  FCC,  its  agents,
     successors  or assigns,  from entering the Premises for the purpose of
     inspecting,  removing or taking possession of the Equipment,  and will
     grant FCC, its agents, successors or assigns the right of entry to the
     Premises to remove the Equipment at any reasonable time or times.  FCC
     shall be responsible for any damage to the Premises that FCC causes in
     connection  with its entry  thereon and the  removal of the  Equipment
     therefrom.  The  Equipment  is and  shall  remain  personal  property,
     notwithstanding  the manner in which it may be installed or affixed to
     the Premises.

     This  Consent and Waiver shall inure to the benefit of the  successors  and
assigns of FCC and shall be binding upon the heirs, representatives,  successors
and assigns of the  undersigned.  The undersigned  will, upon the request and at
the  expense of FCC,  execute and  deliver to FCC such  further  and  additional
documents as FCC may  reasonably  deem  necessary or desirable to effect waivers
and consents  contemplated  hereby.  This  Agreement  shall be  governed  by and
construed  in  accordance  with the laws of the state in which the  premises are
located,  without  reference  to  principles  of  conflict  of laws.

     IN WITNESS  WHEREOF,  the  undersigned  has duly  executed this Consent and
Waiver this 11th day of July, 1996.

                                             Optical Coating Laboratory, Inc.

 /s/ Silvia C. Hogan                         By: /s/ John M. Markovich         
-------------------------                        ------------------------------
       (Witness)                             Title:  V.P. Finance & CFO
                                                    ---------------------------

<PAGE>
                      ACKNOWLEDGEMENT TO BE MADE BY OWNER,
                      LANDLORD OR MORTGAGEE OF REAL ESTATE

                   (Hereinafter referred to as "Undersigned")

                                  [INDIVIDUAL)
STATE OF ________________________
                               SS.
COUNTY OF _______________________

         I,  _______________________ a Notary Public within and for said County,
in the State aforesaid,  duly commissioned and acting, do hereby certify that on
this ___________ day of ____________________, 19__ personally appeared before me
___________________________, Undersigned in the foregoing Consent and Waiver, to
me  personally  well known and known to the person who signed  said  Consent and
Waiver,  who,  being by me duly sworn and being informed of the contents of said
Consent and Waiver  stated and  acknowledged  on oath that he signed,  executed,
sealed and delivered  same as his free and voluntary act and deed, for the uses,
purposes and considerations therein mentioned and set forth.

         WITNESS my hand and seal as such Notary Public the day and year in this
certificate above written.

My commission expires ______________________   _________________________________
                                                  (Notary Public)
                                                      (Seal)
                                 (PARTNERSHIP)
STATE OF ________________________
                               SS.
COUNTY OF _______________________

         I,  _______________________ a Notary Public within and for said County,
in the State aforesaid,  duly commissioned and acting, do hereby certify that on
this day ___________ of ____________________, 19__ personally appeared before me
___________________________  and  ___________________________,  who executed the
foregoing  Consent  and  Waiver,  to me  personally  well known and known to the
persons who signed said Consent and Waiver, and known to be and who, being by me
duly sworn and being informed of the contents of said Consent and Waiver, stated
and acknowledged on oath that they were Partners of ____________________________
__________________, the Partnership named in and which executed the said Consent
and  Waiver,  and  that  they  signed,  executed,   sealed  and  delivered  same
individually and in behalf of the said Partnership,  with authority as their and
its free and  voluntary act and deed for the uses,  purposes and  considerations
therein mentioned and set forth.

         WITNESS my hand and seal as such Notary Public the day and year in this
certificate above written.

My commission expires ______________________   _________________________________
                                                  (Notary Public)
                                                      (Seal)
                                 (CORPORATION)
                                             ===================================
STATE OF      California                                   SILVIA C. HOGAN
          -----------------                  [SEAL]         COMM. #1009258
                        SS.                          Notary Public - California
COUNTY OF     Sonoma                                        SONOMA COUNTY
          -----------------                        My Comm. Expires NOV 11, 1997
                                             ===================================
           I, Silvia C. Hogan,  a Notary Public  within and for said County,  in
the State aforesaid,  duly  commissioned  and acting,  do hereby certify that on
this 11th day of July,  1996  personally  appeared  before me John M.  Markovich
(Name of Signer for  Undersigned) to me personally well known and known to me to
be the person who signed the foregoing Consent and Waiver, and known to me to be
and who,  being by me duly  sworn and being  informed  of the  contents  of said
Consent  and  Waiver,  stated  and  acknowledged  to me an oath that he was Vice
President & CFO (Title) of Optical  Coating  Laboratory,  Inc., the  Corporation
named in and which  executed  said  Consent  and  Waiver,  and that he knows the
corporate  seal of said  Corporation,  and that the seal affixed to said Consent
and  Waiver  is the  corporate  seal  of  said  Corporation,  that  he was  duly
authorized to execute said Consent and Waiver, for, in the name of and on behalf
of said Corporation, and that same was signed, sealed, executed and delivered by
him in the name of and on behalf of said  Corporation  by authority of its Board
of Directors  and that the execution of said Consent and Waiver was his free and
voluntary  act and deed in his said  capacity and  acknowledged  to me that said
Corporation  executed  the  same as its  voluntary  act and  deed and was by him
voluntarily  executed,  on behalf of said Corporation for the uses, purposes and
considerations therein mentioned and set
forth.

         WITNESS my hand and seal as such Notary Public the day and year in this
certificate above written.

My commission expires November 11, 1997           /s/ Silvia C. Hogan
                      -----------------           --------------------
                                                      (Notary Public)
                                                          (Seal)

<PAGE>

CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
================================================================================

State of California
         --------------------------
County of Sonoma
          -------------------------

On July 11, 1996 before me,          Silvia C. Hogan, Notary Public
   -------------          ------------------------------------------------------
       Date               NAME, TITLE OF OFFICER-E.G., "JANE DOE, NOTARY PUBLIC"

personally appeared  John M. Markovich
                    ------------------------------------------------------------
                                        NAME(S) OF SIGNER(S)


[X] personally known to me - OR - [ ] proved to me on the basis of  satisfactory
                                     evidence  to be the  person  whose  name is
==================================   subscribed  to the  within  instrument  and
             SILVIA C. HOGAN         acknowledged  to me  that he  executed  the
[SEAL]        COMM. #1009258         same in his authorized capacity and that by
       Notary Public - California    his signature on the instrument the person,
              SONOMA COUNTY          or the  entity  upon  behalf  of which  the
     My Comm. Expires NOV 11, 1997   person acted, executed the instrument.     
==================================                                            
                                     WITNESS my hand and official seal.

                                     /s/ Silvia C. Hogan
                                     -------------------------------------------
                                                SIGNATURE OF NOTARY


====================================OPTIONAL====================================

Though the data below is not  required by law, it may prove  valuable to persons
relying on the document and could prevent fraudulent reattachment of this form.

      CAPACITY CLAIMED BY SIGNER                DESCRIPTION OF ATTACHED DOCUMENT

[ ] INDIVIDUAL
[X] CORPORATE OFFICER     
     Vice President & CFO                              Consent and Waiver
    ----------------------------------          --------------------------------
                     TITLE(S)                       TITLE OR TYPE OF DOCUMENT

[ ] PARTNER(S)             [ ] LIMITED                         2
                           [ ] GENERAL          --------------------------------
[ ] ATTORNEY-IN-FACT                                    NUMBER OF PAGES
[ ] TRUSTEE(S)
[ ] GUARDIAN/CONSERVATOR                                   7-11-96
[ ] OTHER:____________________________          --------------------------------
    __________________________________                 DATE OF DOCUMENT
    __________________________________

SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)

Optical Coating Laboratory, Inc.                            ----
--------------------------------------          --------------------------------
                                                SIGNER(S) OTHER THAN NAMED ABOVE
--------------------------------------

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

<PAGE>

                                                   30 BROAD STREET
[LOGO]  HUGH WOOD INC.                             NEW YORK, NEW YORK 10004-2333
                                                   TELEPHONE: (212) 509-3777
                                                   FAX: (212) 509-4906





Mr. Jeffrey M. Ryan                                         12th July 1996
Assistant Treasurer
Optical Coating Laboratory, Inc.
2789 Northpoint Parkway
Santa Rosa, CA 95407-7397

Fleet Capital Leasing

Dear Jeff:

The  original  copy of the  certificate  and  attachments  with  respect  to the
captioned is enclosed for your records and handling.

I will hopefully be able to forward the insurance schedule early next week.


                                             Sincerely, 


                                             /s/ Jack R. Fisher

                                             Jack R. Fisher, CPCU
                                             Vice President



JRF:jl enclosure

letter\fisher\RYAN


<PAGE>

<TABLE>
<CAPTION>
[LOGO]  CERTIFICATE OF INSURANCE                                 CSR DM                  ISSUE DATE (MM/DD/YY)
                                                                 FLE0001                       07/11/96
PRODUCER                                   ==================================================================================
                                             THIS  CERTIFICATE  IS ISSUED AS A MATTER OF  INFORMATION ONLY AND CONFERS
Hugh Wood Inc.                               NO RIGHTS UPON THE CERTIFICATE  HOLDER. THIS  CERTIFICATE  DOES NOT AMEND,
30 Broad Street                              EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
New York NY 10004                          =================================================================================
                                                                 COMPANIES AFFORDING COVERAGE
212-509-3777
                                             COMPANY
                                             LETTER    A         Royal Insurance Company

                                             COMPANY   B         See Reverse
                                             LETTER
INSURED
                                             COMPANY   C
                                             LETTER

                                             COMPANY
   Flex Products, Inc.                       LETTER    D
   1402 Mariner Way
   Santa Rosa CA 95407                       COMPANY
                                             LETTER    E
----------------------------------------------------------------------------------------------------------------------------
COVERAGES
   THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE  LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY
   PERIOD  INDICATED,  NOTWITHSTANDING  ANY REQUIREMENT,  TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO
   WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO
   ALL THE TERMS. EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.

CO      TYPE OF                       POLICY  POLICY EFFECTIVE  POLICY EXPIRATION
LTR    INSURANCE                      NUMBER    DATE(MM/DD/YY)    DATE(MM/DD/YY)      LIMITS
----------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>            <C>           <C>            <C>                             <C>        
     GENERAL LIABILITY                                                           GENERAL AGGREGATE               $ 2,000,000
A    X COMMERCIAL GENERAL LIABILITY  RIW 762691     03/31/96      03/31/97
                                                                                 PRODUCTS-COMP/OP AGG.           $ 1,000,000
         CLAIMS MADE X OCCUR.                                                    PERSONAL & ADV. INJURY          $ 1,000,000
       OWNER'S & CONTRACTOR'S PROT.                                              EACH OCCURRENCE                 $ 1,000,000
                                                                                 FIRE DAMAGE (Any one fire)      $ 1,0O0,000
                                                                                 MED. EXPENSE (Any one person)   $     5,000
----------------------------------------------------------------------------------------------------------------------------
     AUTOMOBILE LIABILITY
       ANY AUTO                                                                  COMBINED SINGLE
                                                                                 LIMIT                           $
       ALL OWNED AUTOS
                                                                                 BODILY INJURY
       SCHEDULED AUTOS                                                           (Per person)                    $

       HIRED AUTOS                                                               BODILY INJURY                     
                                                                                 (Per accident)                  $ 
       NON-OWNED AUTOS                                                                                             
                                                                                                                   
       GARAGE LIABILITY                                                          PROPERTY DAMAGE                 $ 
----------------------------------------------------------------------------------------------------------------------------
     EXCESS LIABILITY                                                            EACH OCCURRENCE                 $
       UMBRELLA FORM                                                             AGGREGATE                       $
       OTHER THAN UMBRELLA FORM
----------------------------------------------------------------------------------------------------------------------------
       WORKER'S COMPENSATION                                                          STATUTORY LIMITS
              AND                                                                EACH ACCIDENT                   $
       EMPLOYERS' LIABILITY                                                      DISEASE--POLICY LIMIT           $
                                                                                 DISEASE--EACH EMPLOYEE          $
----------------------------------------------------------------------------------------------------------------------------
   OTHER
A Blanket Property                   RIL762701      03/31/96      03/31/97       All Risk                        $40,138,000
B Earthquake                         See Reverse
----------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS
The Certificate Holder is included as Loss Payee with respect to equipment known
as Beta I, Beta II, Beta III, and Beta V, as listed on the  attached  schedules.
Property deductible - $10,000,  each and every loss, except Earthquake where the
deductible is 5% of the total location value.
----------------------------------------------------------------------------------------------------------------------------
  CERTIFICATE HOLDER                         CANCELLATION
                                                SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE
                                                EXPIRATION DATE THEREOF. THE ISSUING COMPANY WILLENDEAVOR TO
           Fleet Capital Leasing                MAIL 30 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE
           50 Kennedy Plaza                     LEFT. BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR
           Providence Rl 02903                  LIABILITY OF ANY KIND UPON THE COMPANY, ITS AGENTS OR REPRESENTATIVES.
                                             -------------------------------------------------------------------------------
                                             AUTHORIZED REPRESENTATIVE

                                                  /s/ Jack Fish
ACORD 25-S (7/90)                                                                                     ACORD CORPORATION 1990
</TABLE>

<PAGE>

                                   EARTHQUAKE

                         POLICY         POLICY
COMPANY                  NUMBER         PERIOD              LIMITS

Royal                    RIL762701      3-31-96/3-31-97     $3,000,000
Insurance
Company

Agriculture              CPP1802300     3-31-96/3-31-97     $2,500,000 Excess of
Insurance                                                   $3,000,000

Associated               IM316256       3-31-96/3-31-97     $3,333,333 Part of
International                                               $5,000,000 Excess of
                                                            $5,500,000

Frontier                 FIM316256      3-31-96/3-31-97     $1,666,667 Part of
Pacific                                                     $5,000,000 Excess of
                                                            $5,500,000




<PAGE>

FLEET CAPITAL CORPORATION                                      PAGE 1 OF 1
                                                         SCHEDULE A EQUIPMENT

Attached to and made part of the following document: Insurance Certification
with Flex Products, Inc. (32089-01)

The Depreciable Life of the Property is (07) seven years.

LOC# (01)

BETA THREE

(1) Weinert Vacuum GMBH,  sputtering roll coating  machine,  Mfg. 1995, 7' X 10'
chamber size, 480 volt, 3 phase, all stainless stee1 construction  Serial Number
_________

Unit Number: Beta III is included
but not limited to, the following:

   (6) 20" diffusion pumps
   (4) 16" diffusion pumps
   3 Chamber system
   Liebert UPS battery back-up system, model AP441, serial number P21174SE 
   (3) Polycoid cooling systems, model PFC-1100ST
   (3) Cathodes
   (2) Aluminum evaporation systems
   (6) Transformers, 72 kilowatt
   Edwards two stage vacuum pump, model 275
   (3) Edwards two stage vacuumm pumps, model 8O
   (3) ENI D.C. Plasma generators, model DCG-100 zokw/ea 
   Siemens PLC
   (1) Nemonic Display
   (2) Control Stations
   (1) PLC
   (2) Machine state actuators
   Circulation pumps
   Hydraulic pumps
   Miscellaneous spare parts

AND ALL STANDARD AND ACCESSORY EQUIPMENT

   FLEET CAPITAL CORPORATION                 Jack Fisher           Insurance Co.
                                             ----------------------
   BY:                                       BY:
      --------------------------------          --------------------------------
   NAME:                                     NAME:
        ------------------------------            ------------------------------
   TITLE:                                    TITLE:
         -----------------------------             -----------------------------

<PAGE>

FLEET CAPITAL CORPORATION                                        PAGE 1 OF 1
                                                            SCHEDULE A EQUIPMENT

Attached to and made part of the following  documents:  Insurance  Certification
with Flex Products, Inc. (32089-02)

The Depreciable Life of the Property is (07) seven years.

LOC# (01)


BETA FIVE

(1) Greneral Vacuum Equipment Corp.  electron beam metalyzing system, Mfg. 1995,
78" width capacity,  1200 feet per minute,  480 volt, 3 phase,  218 amps,  model
95-005, overall size 9' X 10', serial number W9827-95

Unit Number: Beta V
Including, but not limited to, the following:

   (8) Electron beam
   (8) Airco Temescal Simba 2 electron beam power supplies,  serial numbers 330,
   337, 340, 338, 339, 336, 333 and 335
   (8) Programmable seep generators 
   (8) High voltage controllers
   (8) Electron beam gun controllers
   (2) Polycolds, model PEC1100HC
   (6) Varian 20" diffusion  pumps,  model  016513/HS-20 
   (8) Airco electron beam gun interfaces
   (4) Trige-Scott drive motors, model  S90L01199100203050300011, serial numbers
   104529421295, 104529211295, 104529311295 and 104529411295

AND ALL STANDARD AND ACCESSORY EQUIPMENT.

   FLEET CAPITAL CORPORATION                 Jack Fisher           Insurance Co.
                                             ----------------------
   BY:                                       BY:
      --------------------------------          --------------------------------
   NAME:                                     NAME:
        ------------------------------            ------------------------------
   TITLE:                                    TITLE:
         -----------------------------             -----------------------------

<PAGE>


FLEET CAPITAL CORPORATION                                PAGE 1 OF 3
                                                  ADDITIONAL COLLATERAL SCHEDULE

Attached  to and  made  part of the  following  documents:  Additional  Security
Agreement  dated  as of:  June 19, 1996 and UCC Financing Statement(s) with Flex
Products, Inc.

The Equipment is currently located at:       2793 Northpoint Parkway
                                             Santa Rosa, California 95407

BETA ONE

(1) Leybold Hereaus  electron beam roll coater,  model Al600B30,  Mfg. 1979, 52"
width capacity, 3 meters per second, 480 volt, 3 phase, 122 Amps., Serial Number
_________________.



Unit Number: Beta I

Including, but not limited to, the following:

   (12) 30KW electron beam guns with power  supplies,  model D2D4
   (3) Polycolds, model PFC1PFC00ST
   (6) Diffusion pumps, 20" Water cooled
   (12) Electron gun controllers
   Winding Cabinet
   (12) Hewlett Packard 6253A dual DC power supplies, 0-200 volt, 3 amps
   (5) Leybold Hereaus vacuum motors, model PENNINGVAC PM 41152
   (4) Leybold Hereaus vacuum motors, model THERMOVPC TM 22052
   Viewing port holes
   Residual gas analyzers electron monitoring system, model QUADREX 200
   Meters
   Control Cabinets
   Catwalk and platform around machine
   Hi-resolution RAD monitoring system
   Winding shafts and chucks
   Sputtering power supply
   63 X 15 Target
   Web drives
   Plate lifter
   (6) Leybold Hereaus turbo pumps, model 1000C
   (4) Stokes vacuum pumps, model 412-11
   (2) Leybold Hereaus blowers, model RA7001S
   (4) Genvin portable oil filters
   Glow power supply
   (6) Filter amplifier chassis
   (2) Water cooled shield sets
   Sputtering targets
   Desktop computer
   Monitors with exception of proprietary plasma emission and optical monitor
   Pressure controllers
   Heco-Pacific crane

<PAGE>


                                                         PAGE 2 OF 3
                                                  ADDITIONAL COLLATERAL SCHEDULE

BETA TWO

(l) Leybold  Hereaus  sputtering  roll coater,  Mfg. 1987,  54" width  capacity,
overall size  approximately  16' X 12' X 12', 480 volt, 3 phase,  Serial  Number
_______

Unit Number: Beta II

Including, but not limited to, the following:

   (2) polycolds, model PFC65011ST
   (8) 8 X 54 sputtering targets with (8) SSV sputtering power supplies, serial
   numbers are MCC3K1-2, MCC3K3-4, MCC3I1-2, MCC3I3-4, MCC3G1-2, MCC3G3-4, 
   MCC3F1-2, MCC3F3-4
   (2) Cryo-pumps
   Neslab chiller, model RTE-110
   (8) 90 Kilowatt breaker boxes
   (8) Systron Donner 0-60 VDC, 0-100 amp. power supplies
   (21) Leybold Hereaus turbo pumps, model 1000G
   (2) Leybold Hereaus blower station, model WAV2000
   (3)  Leybold Hereaus pumps, model S250-C
    Leybold Hereaus blower, model RUVAC, type WPV 251
   (2) Balston filters, model R1680
   Leybold  Hereaus  blower,  model RUVAC,  type 70001S 
   Cooling Tower 
   (4) Anode power supplies 
   (4) Glow discharge power supplies
   Allen Bradley controls, PLC-30
   Herbert Schuller chilling system with tower
   (4) Optical monitoring devices
   Transformers
   Motor controls
   Sheet resistance monitor
   Safety platform with stairs
   (2) Target backing plates
   (2) Analog controllers
   (2) 50/50 tooling
   Turbo lifting fixture
   (43) sets of shields
   Gas handling system
   Cathode system
   Overhead trolley with crane
   (7) Spare Titanium targets
   (5) Zircon targets
   (6) Long shields

<PAGE>

                                                         PAGE 3 OF 3
                                                  ADDITIONAL COLLATERAL SCHEDULE

The Equipment is Currenty Located at:   1402 Mariner Way
                                        Santa Rosa, California 95407

BETA THREE

   (2) Bell & Gossett pumps,  models 11RC925 series 1510, serial numbers 1955297
   and 1955296 Raven polypro tank, approximately 5' X 2' diameter
   Raven polypro tank, approximately 5' X 2' diameter
   (2) Bell & Gossett pumps, models 4BC9375, serial numbers 1957959 and 1957960,
   625 GPM
   Alfa laval heat  exchanger,  type M6-FG,  serial number  3010286368  with (4)
   0-150 degree gauges
   Alfa laval heat exchanger,  type MIO-BFG,  serial number  3010286389 with (4)
   0-150 degree gauges
   FSI water filter,  model  FSP-40N-30455,  Mfg. 1995, 10 micron with 0-160 PSI
   gauge
   Dual water cooling condensing  system,  low pressure,  high pressure with (2)
   KSB pumps, model ETACHROMB, valves, so1enoids
   (2) Edwards two stage vacuum pumps, model 275
   Air storage tank 4' X 2' diameter with 0-160 PSI guage
   Water  filter  system with (2) KSB  ETACHROM-B-40160562,  pumps,  2200 gallon
   round stainless steel tank, model BT33541
   Approximately 60' X 4" stainless steel piping with fittings
   Approximately 100' X 2" stainless steel piping with fittings

BETA FIVE

   WPH  overhead  wire rope  crane,  model 1 l/2 ton,  serial  number  W6022015,
   approximately X-Y, travel is 55' X 35' X 40'
   Kinney  vacuum  rotary pump,  model  KT-505-LP,  serial  number 3011-2 with a
   dresser roots booster blower, 15HP,  model HV3000,  serial number H00224, 480
   volts
   Kinney  vacuum  rotary pump,  model  KT-505-LP,  serial  number 3011-1 with a
   dresser roots booster  blower, 15HP, model HV3000,  serial number H00219
   Dresser roots, 30MP booster pump
   (4) Emergency isolation switches
   (3) 5.5 Bar pneumatic actuator valves
   Solenoids
   Alfa laval heat exchanger, Mfg. 1995, serial number 3010286367
   (4) Weksler temperature gauges, 0-150 degrees Fahrenheit
   Raven round polypro  storage  tank,  approximately  6' X 4' diameter,  serial
   number G333465
   Approximately  60  feet  of 4"  304  stainless  steel  seamless  piping  with
   connectors
   (2)  ITT  Bell  &  Gossett  pumps,   series  1510,  20  HP,  200  GPM,  model
   21/2AB7000BF, serial numbers 1955295 and 1955296
   (2) FSI filter columns, stainless steel, Mfg. 1995, 10 micron filters, serial
   numbers 38121, 150 PSI
   Air storage tank 4' X 2' diameter with a 0-160 PSI gauge
   Miscellaneous spare parts

                                             Jack Fisher           Insurance Co.
                                             ----------------------

   FLEET CAPITAL CORPORATION                 FLEX PRODUCTS, INC.

   BY:                                       BY:
      --------------------------------          --------------------------------
   NAME:                                     NAME:
        ------------------------------            ------------------------------
   TITLE:                                    TITLE:
         -----------------------------             -----------------------------

<PAGE>

[LOGO] Fleet                                             SECRETARY'S CERTIFICATE
Capital Leasing
50 Kennedy Plaza
Providence, Rhode Island 02903-2305

The  undersigned,  Joseph C. Zils, the duly elected  Secretary of FLEX PRODUCTS,
INC. (the  "Corporation"),  in order to induce Fleet Capital Corporation ("FCC")
to  enter  into  one  or  more  loans,  leases  or  otherwise  extend  financial
accommodations to or for the benefit of the Corporation, hereby certifies to FCC
that:

(i) the  Corporation is duly  organized,  validly  existing and in good standing
under the laws of the State or Commonwealth of DELAWARE;

(ii) the Corporation has full corporate power and authority to enter into one or
more transactions,  at any time and in any amount or form, with FCC: (a) to sell
to and/or lease or purchase from FCC any personal  property or fixtures;  (b) to
borrow and otherwise  effect loans and advances or extensions of credit;  (c) to
guaranty or otherwise  provide financial  accommodations or additional  security
for the payment and performance of any obligations or indebtedness  owing to FCC
by the  Corporation  or any  other  party;  and (d) to sell,  assign,  transfer,
mortgage, pledge, hypothecate,  grant security interests in, endorse and deliver
to FCC, any and all real or personal  property of the  Corporation,  tangible or
intangible,  of every name and  description,  as  security  for the  payment and
performance of any obligations or  indebtedness  owing to FCC by the Corporation
or any other party,  or otherwise in connection  with any of the foregoing  (the
"Authorized Transactions");

(iii) each of the officers designated below (an "Authorized Officer"), is a duly
elected (or appointed), qualified and acting officer of the Corporation, and the
signature  appearing  opposite  his  or her  name  below  is his or her  genuine
signature:

     Name                      Office                             Signature
     ----                      ------                             ---------
Michael B. Sullivan           President
-------------------------   ------------------------   -------------------------

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

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

(iv) each Authorized Officer has full power and authority to act alone on behalf
of the  Corporation  with respect to the Authorized  Transactions  and to do and
perform all acts and things,  and to execute  and  deliver all  instruments  and
documents  of every  kind and  nature  he or she may deem  necessary,  proper or
incidental  to,  or which  is  otherwise  required  by FCC in  connection  with,
completion of the Authorized  Transactions,  including but not limited to one or
more leases, loan agreements,  promissory notes, security agreements, schedules,
riders, certificates,  guaranties, pledge agreements,  subordination agreements,
purchase orders or agreements,  disbursement authorizations,  invoices, bills of
sale,  intercreditor  agreements,  consents,  disclaimers  of  interests,  legal
opinions  and  UCC  financing  statements  and  any  future  modification(s)  or
amendments  thereof  ("Authorized  Documentation"),   with  such  execution  and
delivery to be conclusive  evidence that such Authorized  Transactions have been
duly and  specifically  authorized and approved by the Board of Directors of the
Corporation  as being for the benefit of the  Corporation  in  consideration  of
reasonably  equivalent  value  to the  Corporation,  and  that  such  Authorized
Documentation  is intended by the Board of Directors to constitute the valid and
legally binding obligations of the Corporation, enforceable by FCC in accordance
with their terms;

(v) all  corporate  votes,  meetings,  consents or other  actions  necessary  or
appropriate  to duly and properly  authorize the  Corporation  to enter into the
Authorized  Transactions and for the Authorized  Officers to execute and deliver
the Authorized  Documentation  has been taken, and such corporate actions are in
full  force  and  effect as of the date  hereof  and have not been  modified  or
rescinded in any respect;

(vi) all previous acts of, and all documents and papers heretofore  executed and
delivered  by,  any  Authorized   Officer  in  connection  with  the  Authorized
Transactions  or  any  Authorized  Documentation  are  ratified,  confirmed  and
approved as the act or acts of the Corporation; and

(vii) the  Corporation  shall furnish  written notice to FCC of any  revocation,
modification or amendment of any corporate action affecting any of the foregoing
certifications,  and FCC shall be entitled to rely on these certifications until
such notice is received by FCC.

IN WITNESS  WHEREOF,  I have  hereunto  set my hand and  affixed the seal of the
Corporation, this 11th day of July, 1996

                               /s/ Joseph C. Zils
                         ------------------------------
                                    Secretary

<PAGE>


July 11, 1996

FLEET CAPITAL CORPORATION
50 Kennedy Plaza
Providence, Rhode Island 02903-2305

Re:  Master  Lease   Agreement  (the  "Master   Lease")  between  Fleet  Capital
     Corporation  ("Fleet") and Flex Products,  Inc.  ("Lessee")  dated June 19,
     1996

Gentlemen:

        I serve as Vice  President,  General  Counsel and  Secretary  of Optical
Coating Laboratory, Inc. and as Secretary of Lessee. I have also been authorized
by the  Chairman of the Board of  Directors  of Lessee to oversee and manage the
legal affairs for Lessee.  In this capacity,  I have acted as counsel for Lessee
in connection with the proposed  transaction between Lessee and you as set forth
in the  Master  Lease and with  respect to certain  equipment  described  in the
Master Lease (the  "Equipment")  along with John V.  Erickson of the law firm of
Collette & Erickson.

        In connection with the Master Lease I have been furnished with originals
or copies certified to my satisfaction of such corporate or other records of the
Lessee,  with such certificates of officers and  representatives  of the Lessee,
and with such  other  documents,  and I have made such  other  examinations  and
investigations, as I have deemed necessary as a basis for the opinions expressed
below.

        All capitalized  terms used and not expressly  defined  below shall have
the meaning given to them in the Master Lease.

        In conducting my examination I have assumed, without investigation,  the
genuineness  of  all  signatures,  the  correctness  of  all  certificates,  the
authenticity of all certificates and documents submitted to me as originals, the
conformity to original  documents of all documents  submitted to me as certified
or photostatic  copies and the authenticity of the originals of such copies, and
the accuracy and  completeness of all records made available to me by the Lessee
or any of its  affiliates.  I have  also  assumed,  without  investigation,  the
accuracy of the representations and warranties as to factual matters made by any
party in the Master  Lease and all  related  documents  and the  accuracy of the
representations  and statements made to me by officers,  affiliates or employees
of the Lessee, its officers and by public officials, except to the extent I have
actual  knowledge to the  contrary.  In making my  examination  of documents and
instruments  executed  by any  person or entity  other than the  Lessee,  I have
assumed,  without  investigation,  that each such other person or entity has (i)
the power, capacity,  right and legal authority to enter into and perform all of
its obligations  under such documents and instruments,  (ii) duly authorized all
requisite action with respect to such documents and instruments,  and (iii) duly
executed and delivered such documents and instruments.

        Whenever a statement  below is qualified by the phrase  "known to me" or
"to my knowledge" it is intended to indicate that no information that would give
me actual knowledge of,

<PAGE>


Fleet Capital Corporation
July 11, 1996                                                   Optical Coating
Page 2                                                          Laboratory, Inc.

or a reasonable belief concerning,  the inaccuracy of such statement has come to
my attention. Except as otherwise expressly indicated, I have not undertaken any
independent  investigation to determine the accuracy of such statement,  and any
limited  inquiry  undertaken by me during the preparation of this opinion letter
should not be regarded as such an investigation.

        In rendering the opinions  hereinafter  expressed,  I have also assumed,
without investigation, that the following facts are true:

        Fleet will enforce its rights  under the Master  Lease in  circumstances
and in a manner in which it is commercially reasonable to do so.

        Fleet is not subject to any  statute,  role,  or  regulation,  or to any
impediment  to which  contracting  parties  are  generally  not  subject,  which
requires the Lessee or any other person or party to obtain the consent of, or to
make a declaration or filing with, any governmental authority or other person or
entity.

        The   opinions   expressed   below   are   subject   to  the   following
qualifications:

        My  opinions  below are  subject  to the  following:  (a) the  effect of
bankruptcy,  insolvency,  fraudulent  conveyance,  reorganization,  arrangement,
moratorium,  and other  similar laws now or  hereafter in effect  relating to or
affecting  the rights of creditors  generally;  (b) the  limitations  imposed by
California law,  federal law, or equitable or public policy  principles upon the
performance  or  enforceability  of any of the  remedies,  covenants,  or  other
provisions of the Master Lease and upon the availability of injunctive relief or
other  equitable  remedies,   including,   without  limitation,  the  effect  of
California and federal court decisions invoking statutes or principles of equity
or of public  policy,  which have held that certain  covenants and provisions of
agreements  are  unenforceable  where:  (i)  the  breach  of such  covenants  or
provisions   imposes   restrictions  or  burdens  upon  the  debtor,   including
acceleration, termination or the imposition of late payment charges or increased
interest rates upon delinquency in the payment of sums or indebtedness  due, and
it cannot be demonstrated  that the enforcement of such  restrictions or burdens
is  reasonably  necessary  for the  protection  of the  creditor,  or  (ii)  the
creditor's  enforcement of such covenants or provisions under the  circumstances
would violate the  creditor's  implied  covenant of good faith and fair dealing;
and (c) the limitations upon the ability of the Lessee or any other party to the
Master Lease to waive any rights,  claims or defenses available to such party at
law or in equity pursuant to statute or otherwise.

        In  expressing my opinions  below,  I note that Fleet's right to enforce
remedies  set forth in or  permitted  under the  Master  Lease may be subject to
various procedural limitations imposed by California law.

        My opinions  below are limited to the effect of the laws of the State of
California  and of the federal laws of the United  States.  In addition,  to the
extent  that my opinions  reach the  validity  or  enforceability  of the Master
Lease, I have assumed that such validity and  enforceability  is governed by the
law of the  State of  California  applicable  to  agreements  made and  entirely
performed in California by California residents.  I express no opinion regarding
the  enforceability  of the  choice of law and  other  provisions  contained  in
paragraph 20 of the Master Lease.

        My opinions  with  respect to the  validity  and  enforceability  of the
Master  Lease do not reach the  question  of whether  the Master  Lease might be
re-characterized  (for  taxation or other  purposes) as  something  other than a
lease  (for  example,  a debt  instrument).  I express  no opinion on the proper
characterization of the Master Lease (for taxation or any other purpose),  and I
have assumed

<PAGE>

 Fleet Capital Corporation
 July 11, 1996
 Page 3                                                          Optical Coating
                                                                Laboratory, Inc.

for   purposes of my opinions  that a court will  construe the Master Lease as a
lease document.

        I have not made or undertaken to make any  investigation of the state of
title to any real property or personal property, or of the filing or recordation
of any document or instrument. I express no opinion with respect to the title of
such real or personal  property or to the priority of any lien or claim  created
with respect thereto.

        My  opinions  below are limited to matters  expressly  set forth in this
opinion  letter,  and no opinion is to be implied or may be inferred  beyond the
matters expressly so stated.

        Based upon and subject to the foregoing, I am of the opinion that:

        1. Lessee is a corporation duly organized,  validly existing and in good
standing under the laws of the state of Delaware and is qualified to do business
in each  jurisdiction  in which such  qualification  is  necessary  in order for
Lessee to carry out its business and to perform its obligations under the Master
Lease (including each state or other  jurisdiction in which any of the Equipment
will be located), and is in good standing under the laws of each jurisdiction in
which it is so qualified.

        2. Lessee has the  requisite  power and authority to execute and perform
the Master Lease and the transactions contemplated therein.

        3. The transaction  contemplated by the Master Lease,  the execution and
delivery  of the  Master  Lease and other  related  instruments,  documents  and
agreements,  and the  compliance by the Lessee with the terms  thereof,  and the
payment and performance by Lessee of all of its obligations  thereunder (a) have
been duly and legally  authorized by appropriate  action taken by Lessee (b) are
not in contravention of, and will not result in a violation or breach of, any of
the terms of any Certificate of Incorporation (or equivalent document), By-Laws,
provisions  relating to shares of the capital stocks,  any provision of law, any
order of any court or other agency of government, or any indenture,  partnership
agreement  or  certificate  agreement or other  instrument  of which Lessee is a
party,  or by or under which Lessee or any of Lessee's  property is bound, or be
in conflict  with,  result in breach of, or  constitute  (with due notice and/or
lapse of time) a default under any such indenture,  agreement or any instrument,
or  result  in the  creation  or  imposition  of any lien  upon any of  Lessee's
property or assets. In this regard,  however,  you have been informed that there
exists an agreement  between the two current  stockholders of Lessee pursuant to
which   ownership  and  control  of  Lessee  may  change  from  Optical  Coating
Laboratory, Inc. without any action on the part of Lessee.

        4. The Master Lease has been executed by the duly authorized  officer or
officers of Lessee and constitutes,  the legal, valid and binding obligations of
Lessee,  enforceable  in  accordance  with its  terms.  The laws of the state of
California  will  not  be  applied  in  such  a  fashion  that  the  transaction
contemplated by the Master Lease will be found to be usurious.

        5.  Neither  the  execution  and  delivery of the Master  Lease,  or the
payment and performance by Lessee of all of its obligations thereunder, required
the consent or approval of, the giving of notice to, or the registration, filing
or recording with, or the taking of any other action in respect of, any federal,
state or foreign  government  or  governmental  authority or agency or any other
person.

        6. No  mortgage, deed of trust or other lien which now covers or affects
or which may  hereafter  cover or affect any  property  or  interest  therein of
Lessee now attaches or hereafter will

<PAGE>
Fleet Capital Corporation
July 11, 1996                                                   Optical Coating
Page 4                                                          Laboratory, lnc.

attach to the Equipment or in any manner  affects or will affect  adversely your
right, title and interest therein.

        7. There is no  litigation  or other  proceeding  now pending or, to the
best of my knowledge threatened,  against the Lessee, in any court or before any
regulatory commission,  board or other administrative  governmental agency which
would  directly  or  indirectly  adversely  affect or impair  your  title to the
equipment,  or which, if decided adversely to Lessee, would materially adversely
affect the business operations or final condition of Lessee.

        This  opinion  letter is rendered  solely for the benefit of Fleet,  its
successors and assigns.  Without my prior written  consent,  this opinion letter
may not be relied upon by any other persons or entities.

                                    Regards,

                                    /s/ Joseph Zils

                                    Joseph Zils
<PAGE>

                               SUPPORT AGREEMENT
                       BETWEEN FLEET CAPITAL CORPORATION,
                        OPTICAL COATING LABORATORY, INC.
                            AND FLEX PRODUCTS, INC.

        This  Support  Agreement,  made and  entered  into as of July 11,  1996,
between FLEET CAPITAL CORPORATION  ("Fleet"),  OPTICAL COATING LABORATORY,  INC.
("Parent"), and FLEX PRODUCTS, INC. ("Subsidiary").

Recitals:

        A. Parent owns sixty  percent (60%) of the  outstanding  common stock of
Subsidiary; and

        B.  Subsidiary  has entered into that  certain  Master  Equipment  Lease
Agreement  No.  32089  dated as of June 19, 1996 (the  "Agreement")  under which
Subsidiary  now has and/or shall incur certain  liabilities  and  obligations to
Fleet; and

        C. Parent and Subsidiary  desire to take certain actions and enhance and
maintain the financial condition of Subsidiary as hereinafter set forth in order
that Subsidiary might meet its Obligations (as hereinafter defined) to Fleet.

        NOW,   THEREFORE,   in  consideration  of  the  mutual  promises  herein
contained, the parties hereto agree as follows:

        1. Stock Ownership.  During the term of this Support  Agreement,  Parent
will  maintain  a majority  of the voting  capital  stock of  Subsidiary  now or
hereafter issued and outstanding.

        2.  Financial  Covenants.  During  such  period  of  time  as any of the
Obligations of the Lessee to Fleet are outstanding,  Parent agrees that it shall
not accept any payment, whether by dividend, salary, bonus, commission,  loan or
other compensation other than in the ordianry course of business, which would be
a  contributing  cause to Lessee's  violation  of, the terms and  conditions  of
Lessee's obligations to Fleet, including, but not limited to, Lessee's financial
covenants under the Agreement.

        3. Performance Provision. Upon and during the pendancy of any default by
the Lessee  which is caused in whole or in part by any  payment to Parent  other
than in the ordinary course of business,  or by failure of Parent to pay amounts
owing to Subsidiary when due, or by transfer of  Subsidiary's  assets to Parent,
Parent agrees hereby  to cause  Subsidiary to fully and promptly  perform all of
the obligations  which  Subsidiary  presently has or hereafter may have to Fleet
whether under the Agreement or otherwise (collectively, the "Obligations"),  and
agrees to indemnify Fleet against any loss which it may sustain,  and expense it
may incur, in connection with such default.

                                                                          1 of 3
<PAGE>

        4. Rights of Fleet.  In the event that  Subsidiary  fails,  is unable or
refuses to perform any  of its Obligations in a timely manner,  and such failure
to perform has been  caused in whole or in part by a breach of  Paragraph 2 or 3
of this Support  Agreement by Parent,  Fleet may proceed directly against Parent
to collect  any of said  Obligations  and may  exercise  against  Parent  and/or
Subsidiary  any rights and remedies  that it may have under the Agreement or any
other  agreement  with respect to the  Obligations.  The  obligations  of Parent
hereunder  shall  not  be  affected  by  any  waiver,  modification,  extension,
amendment or other change in any of the underlying Obligations between Fleet and
Subsidiary.

        5.  Termination;  Amendment.  This Support  Agreement  may be amended or
terminated  at any time by written amendment or agreement signed by all parties.

        6. Notices. Any notice,  instruction,  request, consent, demand or other
communication  required  or  contemplated  by this  Support  Agreement  to be in
writing shal1 be given or made or communicated by first class mail, addressed as
follows:

      If to Parent:           Optical Coating Laboratory, Inc.
                              2789 Northpoint Parkway
                              Santa Rosa, CA 95047-7397
                              Attn: General Counsil

      If to Subsidiary:       Flex Products, Inc.
                              1402 Marina Way
                              Santa Rosa, CA 95407-7370
                              Attn: President

      If to FLEET:            Fleet Capital Corporation
                              50 Kennedy Plaza, 5th floor
                              Providence, RI 02903
                              Attn: Customer Service

        7.   Succcessors.   The  covenants,   representations,   warranties  and
agreements  herein set forth  shall be  mutually  binding  upon and inure to the
mutual  benefit of Parent and its  successors  and Subsidiary and its successors
and Fleet and its successors and assigns.

        8. Governing Law; Counterparts. This Support Agreement shall be governed
by the laws of the State of Rhode  Island.  This  instrument  may be executed in
counterparts  and  the  executed  counterparts  shal1  together  constitute  one
instrument.

                                                                          2 of 3
<PAGE>

        IN WITNESS WHEREOF,  the parties hereto have set their hands and affixed
their corporate seals as of the day and year first above written.

OPTICAL COATING LABORATORY, INC.   
                                   
By: /s/ John M. Markovich          
    ------------------------------ 
Name:   John M. Markovich          
      ---------------------------- 
Title:  VP Finance & CFO           
       --------------------------- 

FLEX PRODUCTS, INC.

By: /s/ Michael R. Sullivan
    ------------------------------ 
Name:   Michael R. Sullivan
      ---------------------------- 
Title:  President 
       --------------------------- 

FLEET CAPITAL CORPORATION

By: /s/ John J. Gould
    ------------------------------ 
Name:   John J. Gould
      ---------------------------- 
Title:  Vice President 
       --------------------------- 

                                                                          3 of 3

<PAGE>

[LOGO] Fleet                                             SECRETARY'S CERTIFICATE
Capital Leasing

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

The undersigned,  Joseph C. Zils, the duly elected  Secretary of OPTICAL COATING
LABORATORY,  INC.  (the  "Corporation"),   in  order  to  induce  Fleet  Capital
Corporation  ("FCC") to enter into one or more loans, leases or otherwise extend
financial  accommodations  to or for  the  benefit  of the  Corporation,  hereby
certifies to FCC that:

(i) the  Corporation is duly  organized,  validly  existing and in good standing
under the laws of the State or Commonwealth of DELAWARE;

(ii) the Corporation has full corporate power and authority to enter into one or
more transactions,  at any time and in any amount or form, with FCC: (a) to sell
to and/or lease or purchase from FCC any personal  property or fixtures;  (b) to
borrow and otherwise  effect loans and advances or extensions of credit;  (c) to
guaranty or otherwise  provide financial  accommodations or additional  security
for the payment and performance of any obligations or indebtedness  owing to FCC
by the  Corporation  or any  other  party;  and (d) to sell,  assign,  transfer,
mortgage, pledge, hypothecate,  grant security interests in, endorse and deliver
to FCC, any and all real or personal  property of the  Corporation,  tangible or
intangible,  of every name and  description,  as  security  for the  payment and
performance of any obligations or  indebtedness  owing to FCC by the Corporation
or any other party,  or otherwise in connection  with any of the foregoing  (the
"Authorized Transactions");

(iii) each of the officers designated below (an "Authorized Officer"), is a duly
elected (or appointed), qualified and acting officer of the Corporation, and the
signature  appearing  opposite  his  or her  name  below  is his or her  genuine
signature:

     Name                      Office                             Signature
     ----                      ------                             ---------
John M. Markovich           Vice President, CFO        /s/ John M. Markovich
-------------------------   ------------------------   -------------------------

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

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

(iv) each Authorized Officer has full power and authority to act alone on behalf
of the  Corporation  with respect to the Authorized  Transactions  and to do and
perform all acts and things,  and to execute  and  deliver all  instruments  and
documents  of every  kind and  nature  he or she may deem  necessary,  proper or
incidental  to,  or which  is  otherwise  required  by FCC in  connection  with,
completion of the Authorized  Transactions,  including but not limited to one or
more leases, loan agreements,  promissory notes, security agreements, schedules,
riders, certificates,  guaranties, pledge agreements,  subordination agreements,
purchase orders or agreements,  disbursement authorizations,  invoices, bills of
sale,  intercreditor  agreements,  consents,  disclaimers  of  interests,  legal
opinions  and  UCC  financing  statements  and  any  future  modification(s)  or
amendments  thereof  ("Authorized  Documentation"),   with  such  execution  and
delivery to be conclusive  evidence that such Authorized  Transactions have been
duly and  specifically  authorized and approved by the Board of Directors of the
Corporation  as being for the benefit of the  Corporation  in  consideration  of
reasonably  equivalent  value  to the  Corporation,  and  that  such  Authorized
Documentation  is intended by the Board of Directors to constitute the valid and
legally binding obligations of the Corporation, enforceable by FCC in accordance
with their terms;

(v) all  corporate  votes,  meetings,  consents or other  actions  necessary  or
appropriate  to duly and properly  authorize the  Corporation  to enter into the
Authorized  Transactions and for the Authorized  Officers to execute and deliver
the Authorized  Documentation  has been taken, and such corporate actions are in
full  force  and  effect as of the date  hereof  and have not been  modified  or
rescinded in any respect;

(vi) all previous acts of, and all documents and papers heretofore  executed and
delivered  by,  any  Authorized   Officer  in  connection  with  the  Authorized
Transactions  or  any  Authorized  Documentation  are  ratified,  confirmed  and
approved as the act or acts of the Corporation; and

(vii) the  Corporation  shall furnish  written notice to FCC of any  revocation,
modification or amendment of any corporate action affecting any of the foregoing
certifications,  and FCC shall be entitled to rely on these certifications until
such notice is received by FCC.

IN WITNESS  WHEREOF,  I have  hereunto  set my hand and  affixed the seal of the
Corporation, this 11th day of July, 1996

                               /s/ Joseph C. Zils
                         ------------------------------
                                    Secretary
<PAGE>
                                 MASTER EQUIPMENT LEASE AGREEMENT No. 32089

 LESSOR: FLEET CAPITAL CORPORATION            LESSEE: FLEX PRODUCTS, INC.
         a Rhode Island corporation                   a Delaware corporation

Address: 50 Kennedy Plaza                     Address: 1402 Mariner Way
         Providence, Rhode Island 02903-2305        Santa Rosa, California 95047

1. LEASE OF EQUIPMENT
   Subject to the terms and conditions set forth herein (the "Master Lease") and
in any Lease  Schedule  incorporating  the terms of this Master Lease  (each,  a
"Lease Schedule").  Lessor agrees to lease to Lessee, and Lessee agrees to lease
from  Lessor,  the items and units of personal  property  described in each such
Lease Schedule,  together with all replacements,  parts, additions,  accessories
and substitutions therefor (collectively,  the "Equipment"). Each Lease Schedule
shall  constitute a separate,  distinct and  independent  lease of Equipment and
contractual  obligation of Lessee.  References  to "the Lease",  "this Lease" or
"any Lease" shall mean and refer to any Lease  Schedule which  incorporates  the
terms of this Master  Lease,  together with all  exhibits,  addenda,  schedules,
certificates,  riders and other documents and instruments executed and delivered
in connection with such Lease Schedule or this Master Lease, all as the same may
be amended or modified  from time to time.  The Equipment is to be delivered and
installed  at the  location  specified  or referred to in the  applicable  Lease
Schedule.  The Equipment shall be deemed to have been accepted by Lessee for all
purposes  under this Lease upon Lessor's  receipt of an  Acceptance  Certificate
with respect to such  Equipment,  executed by Lessee after  receipt of all other
documentation  required by Lessor with respect to such  Equipment.  Lessor shall
not be liable or  responsible  for any  failure or delay in the  delivery of the
Equipment  to Lessee for whatever  reason.  As used in the Lease with respect to
any item of Equipment, the terms "Acceptance Date",  "Acquisition Cost", "Rental
Payment(s)",  "Rental Payment Dates", "Rental Payment Numbers",  "Rental Payment
Commencement  Date",  "Lease Term" and "Lease Term Commencement Date" shall have
the  meanings  and  values  assigned  to  them  in the  Lease  Schedule  and the
Acceptance Certificate applicable to such Equipment.

2. TERM AND RENT
   The  Lease  Term for each  item of  Equipment  shall be as  specified  in the
applicable Lease Schedule.  Rental Payments shall be in the amounts and shall be
due and payable as set forth in the applicable  Lease  Schedule.  If any rent or
other amount payable hereunder shall not be paid within 10 days of the date when
due, Lessee shall pay as an administrative and late charge an amount equal to 5%
of the amount of any such overdue payment. In addition, Lessee shall pay overdue
interest  on any  delinquent  payment or other  amounts  due under the Lease (by
reason of  acceleration or otherwise) from 30 days after the due date until paid
at the rate of 1 1/2% per month or the maximum  amount  permitted by  applicable
law,  whichever  is lower.  All  payments to be made to Lessor  shall be made to
Lessor in  immediately  available  funds at the address shown above,  or at such
other  place as Lessor  shall  specify  in  writing.  THIS IS A  NON-CANCELABLE,
NON-TERMINABLE  LEASE OF EQUIPMENT  FOR THE ENTIRE  LEASE TERM  PROVIDED IN EACH
LEASE SCHEDULE HERETO.

3. POSSESSION; PERSONAL PROPERTY
   No right,  title or interest in the Equipment shall pass to Lessee other than
the right to maintain  possession  and use of the  Equipment  for the Lease Term
(provided no Event of Default has occurred) free from interference by any person
claiming by,  through,  or under  Lessor.  The  Equipment  shall  always  remain
personal  property even though the Equipment  may hereafter  become  attached or
affixed to real  property.  Lessee agrees to give and record such notices and to
take such other  action at its own  expense as may be  necessary  to prevent any
third party  (other than an assignee  of Lessor)  from  acquiring  or having the
right under any  circumstances  to acquire any interest in the Equipment or this
Lease.

4. DISCLAIMER OF WARRANTIES
   LESSOR IS NOT THE  MANUFACTURER  OR SUPPLIER OF THE EQUIPMENT,  NOR THE AGENT
THEREOF, AND MAKES NO EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES AS TO ANY
MATTER  WHATSOEVER,  INCLUDING WITHOUT  LIMITATION,  THE  MERCHANTABILITY OF THE
EQUIPMENT,  ITS FITNESS FOR A PARTICULAR PURPOSE,  ITS DESIGN OR CONDITION,  ITS
CAPACITY OR  DURABILITY,  THE  QUALITY OF THE  MATERIAL  OR  WORKMANSHIP  IN THE
MANUFACTURE OR ASSEMBLY OF THE EQUIPMENT,  OR THE CONFORMITY OF THE EQUIPMENT TO
THE PROVISIONS AND  SPECIFICATIONS  OF ANY PURCHASE ORDER RELATING  THERETO,  OR
PATENT INFRINGEMENTS,  AND LESSOR HEREBY DISCLAIMS ANY SUCH WARRANTY.  LESSOR IS
NOT RESPONSIBLE FOR ANY REPAIRS OR SERVICE TO THE EQUIPMENT,  DEFECTS THEREIN OR
FAILURES IN THE OPERATION THEREOF. Lessee has made the selection of each item of
Equipment and the manufacturer and/or supplier thereof based on its own judgment
and expressly disclaims any reliance upon any statements or representations made
by Lessor. For so long as no Event of Default (or event or condition which, with
the passage of time would  become such an Event of Default)  has occurred and is
continuing,  Lessee shall be the  beneficiary  of, and shall be entitled to, all
rights under any applicable  manufacturer's or vendor's  warranties with respect
to the Equipment, to the extent permitted by law.

   If the  Equipment  is not  delivered,  is not  properly  installed,  does not
operate as warranted,  becomes  obsolete,  or is  unsatisfactory  for any reason
whatsoever,  Lessee shall make all claims on account  thereof solely against the
manufacturer or supplier and not against Lessor,  and Lessee shall  nevertheless
pay all rentals  and other sums  payable  hereunder.  Lessee  acknowledges  that
neither  the   manufacturer  or  supplier  of  the  Equipment,   nor  any  sales
representative  or agent  thereof,  is an agent of Lessor,  and no  agreement or
representation  as to the  Equipment  or any  other  matter  by any  such  sales
representative  or agent of the manufacturer or supplier shall in any way affect
Lessee's obligations hereunder.

5. REPRESENTATIONS, WARRANTIES AND COVENANTS
   Lessee represents and warrants to and covenants with Lessor that:

   (a) Lessee has the form of business organization  indicated above and is duly
organized  and existing in good  standing  under the laws of the state listed in
the caption of this Master Lease and is duly  qualified to do business  wherever
necessary  to  carry  on its  present  business  and  operations  and to own its
property; (b) this Lease has been duly authorized by all necessary action on the
part of Lessee  consistent with its form of  organization,  does not require any
further  shareholder or partner  approval,  does not require the approval of, or
the  giving  notice  to,  any  federal,  state,  local or  foreign  governmental
authority and does not  contravene  any law binding on Lessee or contravene  any
certificate or articles of incorporation  or by-laws or partnership  certificate
or agreement,  or any agreement,  indenture, or other instrument to which Lessee
is a party or by which it may be bound;  (c) this  Lease has been duly  executed
and  delivered by  authorized  officers or partners of Lessee and  constitutes a
legal, valid and binding obligation of Lessee enforceable in accordance with its
terms; (d) Lessee has not and will not, directly or indirectly, create, incur or
permit to exist any lien, encumbrance,  mortgage, pledge, attachment or security
interest on or with  respect to the  Equipment  or this Lease  (except  those of
persons  claiming by, through or under  Lessor);  (e) the Equipment will be used
solely in the conduct of Lessee's business and will remain in the location shown
on the applicable  Lease Schedule unless Lessor  otherwise agrees in writing and
Lessee has completed all notifications, filings, recordings and other actions in
such new location as Lessor may reasonably  request to protect Lessor's interest
in the Equipment;  (f) there are no pending or threatened actions or proceedings
before any court or  administrative  agency which  materially  adversely  affect
Lessee's financial condition or operations,  and all credit, financial and other
information  provided  by  Lessee  or at  Lessee's  direction  is,  and all such
information  hereafter  furnished  will be,  true,  correct and  complete in all
material  respects;  (g) Lessor has not selected,  manufactured  or supplied the
Equipment to Lessee and has  acquired any  Equipment  subject  hereto  solely in
connection with this Lease and Lessee has received and approved the terms of any
purchase  order or  agreement  with respect to the  Equipment;  (h) Lessee shall
maintain,  as of the end of each of Lessee's  fiscal  quarters,  a Fixed  Charge
Coverage Ratio of not less than 1.75:1 for each  cumulative  four quarter period
(if Lessee issues stock  through an initial  public stock  offering  ("IPO") (x)
during its fiscal  quarter ending April 30, 1997, and the net proceeds to Lessee
from such IPO are no less than $15,0OO,000, and at the conclusion of such fiscal
quarter  Lessee's  TangibLe Net Worth is no less than the Base Net Worth, or (y)
after April 30, 1997,  and Lessee's  Tangible Net Worth,  immediately  following
such  IPO,  is no less than the Base Net Worth  plus 50% of  Lessee's  total Net
Income for each fiscal quarter from and after the fiscal quarter ending July 31,
1997, to the date of the

                                                                     Page 1 of 5
<PAGE>

IPO, Lessee shall  thereafter  maintain a Fixed Charge Coverage Ratio of no less
than 1.2:1);  (i) Lessee shall maintain a ratio of total liabilities  (including
the  present  value of  non-cancelable  equipment  operating  lease  rentals) to
Tangible Net Worth of not more than 2.75:1  through until July 31, 1997,  and of
not more than 2.0:1  thereafter;  (j) Lessee shall maintain a Tangible Net Worth
of not less than $7,728,000 (the "Minimum Tangible Net Worth") through April 30,
1996,  which Minimum  Tangible Net Worth shall increase as of the end of each of
Lessee's fiscal quarters thereafter by the sum of (x) 50% of Lessee's Net Income
during  such  quarter  and (y) 80% of the net  proceeds  of any stock  issued by
Lessee  during  such  quarter;  (k)  Lessee  shall  not  make  any  payments  to
shareholders,  whether by dividend, commission, repayment of debt, loan or other
payments, if such payments would cause Lessee's cumulative four quarter Adjusted
Fixed Charge  Coverage Ratio to be less than 1.0:1 or Lessee's  Current Ratio to
be less than 1.2:1 or result in Lessee's  breach of any other  covenant  herein;
and (1) more than 50% of Lessee's voting capital stock, or effective  control of
Lessee's voting capital stock,  issued and outstanding  from time to time, shall
be retained by Optical Holding Laboratory,  Inc., ("OCLI").  Notwithstanding the
provisions  set forth in Section 5 (1) above,  in the event that SICPA  Holding,
S.A.  ("SICPA")  acquires more than 50% of Lessee's  voting  capital  stock,  or
effective control of Lessee's voting capital stock,  issued and outstanding from
time to time, Lessor agrees that, upon delivery of such financial information on
SICPA as Lessor deems  necessary,  Lessor shall  consider a request by Lessee to
substitute  SICPA for OCLI for  purposes of the  covenant set forth in Section 5
(1). The sale of the Equipment by Lessee to Lessor and Lessee's  undertaking  of
the obligations  contained  herein shall not cause Lessee to be insolvent within
the meaning of applicable  state and/or  federal laws.  The payment by Lessor to
Lessee of the Acquisition Cost of the Equipment,  as set forth from time to time
on the Acquisition Certificate, is fair consideration for each item of Equipment
within the meaning of applicable state and federal laws.

   Without limiting the generality of any of the foregoing  representations  and
warranties,  the sale by Lessee to Lessor of the Equipment  does not require any
stockholder approval or consent of any trustee or holders of any indebtedness or
obligations of Lessee and will not, to Lessee's knowledge,  contravene any laws,
statutes, regulations, judgments or decrees applicable to Lessee, including, but
not limited to, laws or statutes regarding fraudulent  conveyances,  bankruptcy,
creditors'  rights or bulk  transfers,  or the certificate of  incorporation  or
by-laws of Lessee,  or  contravene  the  provisions  of, or constitute a default
under, or violate any  restrictive  covenants or other agreement to which Lessee
is a party or by which  Lessee or its assets may be bound or  affected,  and any
authorization,  approval,  license,  filing  or  registration  with any court or
governmental  agency or  instrumentality  which is necessary in connection  with
such sale has, to Lessee's  knowledge,  been effected and a written copy thereof
has been delivered to Lessor.  Lessee has full power,  authority and legal right
to sell the  Equipment to Lessor.  The sale of the  Equipment to Lessor has been
duly authorized by all necessary corporate action and constitutes a legal, valid
and binding obligation of Lessee.  Lessor's decision to accept such substitution
shall be made in Lessor's sole discretion and will require,  among other things,
the execution of a Support Agreement from SICPA substantially in the form of the
Support Agreement executed by OCLI.

   For the purposes of this section the following definitions shall apply:

     "Adjusted  Fixed Charge  Coverage Ratio" shall be defined as the sum of Net
     Income, depreciation,  amortization, interest expense, taxes on income, and
     operating lease payments  divided by the sum of interest  expense,  current
     maturities of long term debt,  operating lease  payments,  net repayment of
     shareholder debt on an intra-quarterly basis, and dividend payments.

     "Base Net Worth" shall be defined as the sum of the net  proceeds  received
     by Lessee from the issuance of stock through an IPO and $15,000,000.

     "Current  Ratio" shall be defined as all cash, cash  equivalents,  accounts
     receivable,  inventory,  prepaid  expenses,  and  other  current  rights to
     receive payments as of the date of determination thereof in accordance with
     generally   accepted   accounting   principles   ("GAAP")  divided  by  all
     liabilities which should, in accordance with GAAP consistently  applied, be
     classified  as  current  liabilities,   and  in  any  event  including  all
     indebtedness  payable  on  demand  or  within  one  year  from  the date of
     determination  without  any option on the part of Lessee to extend or renew
     beyond  such year,  and  including  the  current  portion of long term debt
     required to be paid within one year.

     "Fixed  Charge  Coverage  Ratio" shall be defined as the sum of net income,
     depreciation,  amortization, interest expense, and operating lease payments
     divided by the sum of interest  expense,  current  maturities  of long term
     debt, and operating lease payments.

     "Tangible  Net  Worth"  shall  be  defined  as the  excess  of all  assets,
     excluding  any  value  for  goodwill,   trademarks,   patents,  copyrights,
     organization expense,  other similar intangible items, and receivables from
     stockholders  that do not arise from the sale of  product to  stockholders,
     employees and affiliated companies, over total liabilities.

   All other  financial  terms used  herein  and not  defined  herein,  shall be
defined in accordance with GAAP, consistently applied.

6. INDEMNITY
   Lessee  assumes the risk of liability for, and hereby agrees to indemnify and
hold safe and harmless, and covenants to defend, Lessor, its employees, servants
and agents  from and  against:  (a) any and all  liabilities,  losses,  damages,
claims and expenses  (including legal expenses of every kind and nature) arising
out of the  manufacture,  purchase,  shipment and  delivery of the  Equipment to
Lessee,  acceptance or rejection,  ownership,  titling,  registration,  leasing,
possession,  operation,  use,  return  or other  disposition  of the  Equipment,
including,  without  limitation,  any liabilities  that may arise from patent or
latent defects in the Equipment  (whether or not  discoverable  by Lessee),  any
claims  based on absolute  tort  liability  or warranty  and any claims based on
patent,  trademark or copyright infringement;  (b) any and all loss or damage of
or to the Equipment;  and (c) any obligation or liability to the manufacturer or
any supplier of the  Equipment  arising  under any purchase  orders issued by or
assigned to Lessor.

7. TAXES AND OTHER CHARGES
   Lessee agrees to comply with all laws,  regulations and  governmental  orders
related to this Lease and to the Equipment and its use or possession, and to pay
when due, and to defend and indemnify  Lessor against  liability for all license
fees, assessments,  and sales, use, property,  excise, privilege and other taxes
(including  any related  interest or  penalties) or other charges or fees now or
hereafter imposed by any governmental body or agency upon any Equipment, or with
respect to the manufacturing, ordering, shipment, purchase, ownership, delivery,
installation,  leasing, operation, possession, use, return, or other disposition
thereof or the rentals  hereunder (other than taxes on or measured solely by the
net income of Lessor).  Any fees,  taxes or other lawful  charges paid by Lessor
upon failure of Lessee to make such  payments  shall at Lessor's  option  become
immediately due from Lessee to Lessor.

   Lessor and Lessee agree that Lessor is the owner of the Equipment for Federal
income tax purposes. Lessee covenants that it shall not take any action which is
inconsistent with Lessor's ownership of the Equipment.

   For  purposes  of this  Section  7, the term Tax  Benefits  shall  mean  cost
recovery  deductions  under Section 168 of the Internal Revenue Code of 1986, as
amended,  using a 200% declining balance method of depreciation switching to the
straight line method for the first taxable year for which such method will yield
larger  depreciation  deductions,  and assuming a half-year  convention and zero
salvage  value,  for the  applicable  recovery  period for such Equipment as set
forth in the Lease Schedule with respect to such Equipment.

   If, as a result of any act,  failure  to act or any  omission  on the part of
Lessee,  or breach of any  representation,  warranty or covenant  made by Lessee
hereunder,  there shall be a loss, disallowance,  recapture or delay in claiming
all or any portion of the Tax Benefits with respect to the  Equipment,  or there
shall be included in Lessor's  gross income for  Federal,  state or local income
tax purposes any amount on account of any addition,  modification or improvement
to or in respect of any of the  Equipment  made or paid for by Lessee (any loss,
disallowance,  recapture,  delay, inclusion or change being herein called a "Tax
Loss"),  then thirty (30) days after  written  notice to Lessee by Lessor that a
Tax Loss has occurred,  Lessee shall pay Lessor a lump sum amount  which,  after
deduction of all taxes required to be paid by Lessor with respect to the receipt
of such  amount,  will  provide  Lessor  with an amount  necessary  to  maintain
Lessor's  after-tax economic yield and overall net after-tax cash flows at least
at the same  level  that  would  have  been  available  if such Tax Loss had not
occurred, plus any interest,  penalties or additions to tax which may be imposed
in connection with such Tax Loss. In lieu of paying such Tax Loss in a lump sum,
Lessor may  require,  or upon  Lessee's  request,  may agree,  in Lessor's  sole
discretion, that such Tax Loss shall be paid in equal periodic payments over the
applicable  remaining Lease Term with respect to such Equipment with each Rental
Payment due and payable with respect to such Equipment.  Notwithstanding, and in
addition to, the

                                                                     Page 2 of 5
<PAGE>

portion of the Tax Benefits  with respect to the  Equipment and such loss of Tax
Benefits is the result of any act, failure to act or any omission on the part of
Lessee or a breach of any  representation,  warranty or covenant  made by Lessee
hereunder,  and either (a) a deficiency shall have been proposed by the Internal
Revenue  Service  or other  taxing  authority  having  jurisdiction,  or (b) tax
counsel  for Lessor has  rendered an opinion to Lessor that such Tax Loss has so
occurred. The foregoing indemnities and covenants set forth in Section 7 of this
Master  Lease  shall  continue  in full force and effect and shall  survive  the
expiration or earlier termination of the Lease.

8. DEFAULT
   Lessee  shall be in default of this Lease upon the  occurrence  of any one or
more of the following events (each an "Event of Default"):

   (a) Lessee shall fail to make any payment,  of rent or  otherwise,  under any
Lease within 10 days of the date when due; or (b) Lessee shall fail to obtain or
maintain any of the insurance required under any Lease; or (c) Lessee shall fail
to perform or observe any covenant,  condition or agreement under any Lease, and
such failure  continued  for 10 days after notice  thereof to Lessee,  provided,
however, that no such failure to perform or observe shall constitute an Event of
Default hereunder,  where Lessee has commenced curing such failure to perform or
observe within such ten (10) day period and continues to diligently  pursue such
cure in the  opinion of Lessor;  or (d) Lessee  shall  default in the payment or
performance  of any  indebtedness  or  obligation  to Lessor  or any  affiliated
person, firm or entity  controlling,  controlled by or under common control with
Lessor,  under  any loan,  note,  security  agreement,  lease,  guaranty,  title
retention or conditional  sales  agreement or any other  instrument or agreement
evidencing such indebtedness with Lessor or such other affiliated  person,  firm
or entity affiliated with Lessor; or (e) any  representation or warranty made by
Lessee herein or in any certificate,  agreement, statement or document hereto or
hereafter  furnished  to  Lessor  in  connection  herewith,   including  without
limitation,  any  financial  information, disclosed  to Lessor shall prove to be
false or incorrect in any material respect; or (f) death or judicial declaration
of incompetence of Lessee, it an individual; the commencement of any bankruptcy,
insolvency,  arrangement,  reorganization,  receivership,  liquidation  or other
similar  proceeding by or against Lessee or any of its properties or businesses,
or the appointment of a trustee, receiver, liquidator or custodian for Lessee or
any of its  properties of business,  or if Lessee  suffers the entry of an order
for relief under Title 11 of the United States Code; or the making by Lessee era
general assignment or deed of trust for the benefit of creditors,  or (g) Lessee
shall  default in any payment on any  obligation  to any third  party,  which is
greater than  $1,000,000,  and any applicable grace or cure period with respect:
thereto has expired;  or (h) Lessee  shall  terminate  its  existence by merger,
consolidation,  sale of  substantially  all of its assets or  otherwise;  or (i)
Lessee  shall be in breach of Section 5 (1) hereof as such  Section 5 (1) may be
revised  from time to time  pursuant to the terms of Section 5; or (j) if Lessee
is a publicly  held  corporation,  there shall be a change in the  ownership  of
Lessee's  stock  such  that  Lessee  is  no  longer  subject  to  the  reporting
requirements of the Securities Exchange Act of 1934, or no longer has a class of
equity securities  registered under Section 12 of the Securities Act of 1933; or
(k) Lessor shall determine, in its sole discretion and in good faith, that there
has been a material  adverse  change in the  financial  condition  of the Lessee
since the date of this  Lease,  or that  Lessee's  ability  to make any  payment
hereunder  promptly when due or otherwise comply with the terms of this Lease or
any other agreement  between Lessor and Lessee is impaired;  or (l) any event or
condition set forth in subsections (e), (f) or (h) of this Section 8 shall occur
with respect to any guarantor or other person responsible,  in whole or in part,
for payment or  performance  of this Lease;  or (m) any event or  condition  set
forth in  subsections  (d) through  (j) shall occur with  respect to any person,
firm or entity controlled by Lessee.  Lessee shall promptly notify Lessor of the
occurrence  of any Event of Default or the  occurrence or existence of any event
or condition  which,  upon the giving of notice of lapse of time,  or both,  may
become an Event of Default.

9. REMEDIES
   Upon the  occurrence of any Event of Default,  Lessor may, at its sole option
and discretion,  exercise one or more of the following  remedies with respect to
any or all of the Equipment:  (a) cause Lessee to promptly  return,  at Lessee's
expense,  any or all  Equipment  to such  location  as Lessor may  designate  in
accordance with the terms of Section 18 of this Master Lease, or Lessor,  at its
option,  may enter upon the  premises  where the  Equipment  is located and take
immediate possession of and remove the same by summary proceedings or otherwise,
all without  liability  to Lessor for or by reason of damage to property or such
entry or taking  possession  except for  Lessor's  gross  negligence  or willful
misconduct; (b) sell any or all Equipment at public or private sale or otherwise
dispose of, hold, use, operate, lease to others or keep idle the Equipment,  all
as Lessor in its sole  discretion  may  determine  and all free and clear of any
rights  of  Lessee;  (c)  remedy  such  default,  including  making  repairs  or
modifications  to the  Equipment,  for the account  and  expense of Lessee,  and
Lessee agrees to reimburse Lessor for all of Lessor's costs and expenses; (d) by
written  notice to Lessee,  terminate the Lease with respect to any or all Lease
Schedules and the Equipment subject thereto, as such notice shall specify,  and,
with  respect  to  such  terminated  Lease  Schedules  and  Equipment,   declare
immediately due and payable and recover from Lessee,  as liquidated  damages for
loss of Lessor's bargain and not as a penalty, an amount equal to the Stipulated
Loss Value,  calculated as of the next following  Rental Payment Date: (e) apply
any  deposit or other cash  collateral  or sale or  remarketing  proceeds of the
Equipment at any time to reduce any amounts due to Lessor,  and (f) exercise any
other right or remedy which may be available to Lessor under applicable  law, or
proceed by  appropriate  court  action to enforce the terms hereof or to recover
damages for the breach hereof,  including  reasonable  attorneys' fees and court
costs.  No remedy  referred to in this  Section 9 shall be  exclusive,  but each
shall be  cumulative  and in addition to any other  remedy  referred to above or
otherwise available to Lessor at law or in equity.

   The exercise or pursuit by Lessor of any one or more of such  remedies  shall
not preclude the  simultaneous  or later exercise or pursuit by Lessor of any or
all such other remedies, and all remedies hereunder shall survive termination of
this Lease. At any sale of the Equipment  pursuant to this Section 9, Lessor may
bid for the Equipment. Notice required, if any, of any sale or other disposition
hereunder  by Lessor  shall be satisfied by the mailing of such notice to Lessee
at least  seven (7) days prior to such sale or other  disposition.  In the event
Lessor takes possession and disposes of the Equipment,  the proceeds of any such
disposition  shall be applied in the  following  order:  (1) to all of  Lessor's
costs, charges and expenses incurred in taking, removing, holding, repairing and
selling or leasing  the  Equipment;  (2) to the  extent not  previously  paid by
Lessee,  to pay Lessor for any damages then remaining unpaid  hereunder;  (3) to
reimburse  Lessee for any sums previously  paid by Lessee as damages  hereunder;
and (4) the balance,  if any, shall be retained by Lessor.  A termination  shall
occur only upon written notice by Lessor and only with respect to such Equipment
as Lessor shall specify in such notice.  Termination  under this Section 9 shall
not affect Lessee's duty to perform Lessee's obligations  hereunder to Lessor in
full.  Lessee  agrees to  reimburse  Lessor on demand  for any and all costs and
expenses  incurred  by Lessor in  enforcing  its rights and  remedies  hereunder
following the occurrence of an Event of Default, including,  without limitation,
reasonable  attorney's fees, and the costs of repossession,  storage,  insuring,
reletting, selling and disposing of any and all Equipment.

   The term  "Stipulated Loss Value" with respect to any item of Equipment shall
mean the Stipulated  Loss Value as set forth in any Schedule of Stipulated  Loss
Values attached to and made a part of the applicable Lease Schedule. If there is
no such Schedule of Stipulated Loss Values,  then the Stipulated Loss Value with
respect to any item of  Equipment  on any Rental  Payment  Date during the Lease
Term shall be an amount  equal to the sum of: (a) all Rental  Payments and other
amounts then due and owing to Lessor under the Lease,  together with all accrued
interest and late charges thereon  calculated  through and including the date of
payment;  plus (b) the net  present  value  of:  (i) all  Rental  Payments  then
remaining  unpaid  for the  Lease  Term,  plus (ii) the  amount of any  purchase
obligation  with respect to the  Equipment  or, if there is no such  obligation,
then  the  fair  market  value  of the  Equipment  at the end of such  term,  as
estimated by Lessor in its sole discretion,  all discounted to net present value
at a discount  rate  equal to the  1-year  Treasury  Constant  Maturity  rate as
published  in  the  Selected   Interest  Rates  table  of  the  Federal  Reserve
statistical  release  H.15(519)  for the week  ending  immediately  prior to the
original Acceptance Date for such Equipment.

10. ADDITIONAL SECURITY
   For so long as any obligations of Lessee shall remain  outstanding  under any
Lease,  Lessee  hereby  grants to Lessor a security  interest in all of Lessee's
rights in and to  Equipment  subject to such Lease from time to time,  to secure
the  prompt  payment  and  performance  when due (by reason of  acceleration  or
otherwise) of each and every indebtedness, obligation or liability of Lessee, or
any affiliated  person,  firm, or entity controlled by Lessee,  owing to Lessor,
whether now existing or hereafter  arising,  including but not limited to all of
such  obligations  under or in respect of any Lease.  The extent to which Lessor
shall have a purchase money security  interest in any item of Equipment  under a
Lease which is deemed to create a security  interest under Section  1-201(37) of
the Uniform  Commercial Code shall be determined by reference to the Acquisition
Cost of such item  financed by Lessor.  In order more fully to secure its rental
payments and all other obligations to Lessor hereunder,  Lessee hereby grants to
Lessor a security interest in any deposit of Lessee to Lessor under Section 3(d)
of any Lease Schedule hereto. Such security deposit shall not bear interest, may
be commingled  with other funds of Lessor and shall be  immediately  restored by
Lessee if applied under Section 9. Upon expiration of the term of this Lease and
satisfaction  of all of Lessee's  obligations,  the  security  deposit  shall be
returned to Lessee.  The term  "Lessor" as used in this Section 10 shall include
any affiliated person, firm or entity controlling, controlled by or under common
control with Lessor.

                                                                     Page 3 of 5
<PAGE>

11. NOTICES
   Any  notices or demands  required or  permitted  to be given under this Lease
shall be  given  in  writing  and  either  (i) by  regular  mail,  by hand or by
overnight courier, which notice shall become effective when received, or (ii) by
facsimile or other form of  electronic  transmission,  which notice shall become
effective upon transmission thereof, such notice shall be addressed to Lessor to
the  attention  of  Customer  Accounts,  and to Lessee at the  address set forth
above,  or to such  other  address  as the  party to  receive  notice  hereafter
designates by such written notice.

12. USE; MAINTENANCE; INSPECTION; LOSS AND DAMAGE
   During the Lease Term for each item of Equipment, Lessee shall, unless Lessor
shall otherwise consent in writing: (a) permit each item of Equipment to be used
only within the  continental  United  States by qualified  personnel  solely for
business  purposes and the purpose for which it was  designed and shall,  at its
sole expense,  service,  repair, overhaul and maintain each item of Equipment in
the same  condition as when received,  ordinary wear and tear excepted,  in good
operating  order,  consistent with prudent  industry  practice (but, in no event
less than the same extent to which Lessee  maintains other similar  equipment in
the prudent  management of its assets and properties) and in compliance with all
applicable  laws,  ordinances,  regulations,  and  conditions  of all  insurance
policies  required to be  maintained  by Lessee under the Lease and all manuals,
orders,  recommendations,  instructions and other written requirements as to the
repair  and  maintenance  of such  item of  Equipment  issued at any time by the
vendor and/or manufacturer  thereof; (b) maintain  conspicuously on each item of
Equipment such labels, plates, decals or other markings as Lessor may reasonably
require,  stating that Lessor is owner of such item of Equipment; (c) furnish to
Lessor such information concerning the condition, location, use and operation of
the Equipment as Lessor may request; (d) upon reasonable advance notice,  permit
any person  designated by Lessor to visit and inspect,  during  normal  business
hours,  any  item  of  Equipment  and  any  records  maintained   in  connection
therewith,  provided,  however,  that the  failure  of  Lessor  to  inspect  the
Equipment or to inform Lessee of any  noncompliance  shall not relieve Lessee of
any of its obligations  hereunder;  (e) if any item of Equipment does not comply
with the  requirements  of this Lease,  Lessee shall,  within 30 days of written
notice  from  Lessor,  bring such  Equipment  into  compliance;  (f) not use any
Equipment,  nor  allow the same to be used,  for any  unlawful  purpose,  nor in
connection  with any property or material  that would  subject the Lessor to any
liability  under any state or federal  statute or  regulation  pertaining to the
production,  transport,  storage,  disposal or  discharge  of hazardous or toxic
waste or materials;  and (g) make no additions,  alterations,  modifications  or
improvements  (collectively,  "Improvements")  to any item of Equipment that are
not readily  removable without causing material damage to such item of Equipment
or which will cause the value,  utility or useful life of such item of Equipment
to materially  decline.  If any such  Improvement  is made and cannot be removed
without causing  material damage or decline in value,  utility or useful life (a
"Non-Severable  Improvement"),  then  Lessee  warrants  that such  Non-Severable
Improvement shall immediately  become Lessor's property upon being installed and
shall be free and clear of all liens and encumbrances and shall become Equipment
subject to all of the terms conditions of the Lease. All such  Improvements that
are not  Non-Severable  Improvements  shall be  removed  by Lessee  prior to the
return of the item of Equipment hereunder or such Improvements shall also become
the sole and absolute  property of Lessor without any further  payment by Lessor
to Lessee and shall be free and clear of all liens and encumbrances  whatsoever.
Lessee shall repair all damage to any item of Equipment caused by the removal of
any  Improvement  so as to restore such item of Equipment to the same  condition
which existed prior to its installation and as required by this Lease.

   Lessee hereby assumes all risk of loss,  damage or  destruction  for whatever
reason to the Equipment  from and after the earlier of the date (i) on which the
Equipment  is ordered or (ii) Lessor pays the purchase  price of the  Equipment,
and continuing until the Equipment has been returned to, and accepted by, Lessor
in the condition  required by Section 18 hereof upon the expiration of the Lease
Term. If during the Lease Term any item of Equipment shall become lost,  stolen,
destroyed,  damaged beyond repair or rendered  permanently unfit for use for any
reason, or in the event of any condemnation,  confiscation,  theft or seizure or
requisition  of title to or use of such item,  Lessee shall  immediately  pay to
Lessor an amount equal to the Stipulated Loss Value of such item, as of the next
following Rental Payment Date.

13. INSURANCE
   Lessee  shall  procure and  maintain  insurance in such amounts and upon such
terms and with such  companies  as Lessor may  approve,  during the entire Lease
Term and until the  Equipment  has been  returned to, and accepted by, Lessor in
the condition required by Section 18 hereof, at Lessee's expense,  provided that
in no event  shall  such  insurance  be less than the  following  coverages  and
amounts: (a) Worker's  Compensation and Employer's  Liability Insurance,  in the
full statutory  amounts  provided by law; (b)  Comprehensive  General  Liability
Insurance  including  product/completed  operations  and  contractual  liability
coverage, with minimum limits of $1,000,000 each occurrence. and Combined Single
Limit Body Injury  and Property Damage, $1,000,000 aggregate,  where applicable;
and (c) All Risk Physical Damage Insurance,  including  earthquake and flood, on
each item of Equipment, in an amount not less than the greater of the Stipulated
Loss Value of the Equipment or (if available) its full replacement value. Lessor
will be included as an  additional  insured and loss payee as its  interest  may
appear. Such policies shall be endorsed to provide that the coverage afforded to
Lessor shall not be rescinded,  impaired or invalidated by any act or neglect of
Lessee. Lessee agrees to waive Lessee's right and its insurance carrier's rights
of subrogation against Lessor for any and all loss or damage.

   Notwithstanding  the  foregoing,  Lessee  shall not be  required  to maintain
earthquake  insurance in an amount in excess of the then current Stipulated Loss
Value with a 15% deductible.

   In addition to the foregoing minimum insurance coverage, Lessee shall procure
and maintain such other insurance coverage as lessor may reasonably require from
time to time during the Lease Term.  All policies shall be endorsed to contain a
clause  requiring  the  insurer to furnish  Lessor  with at least 30 days' prior
written notice of any material change,  cancellation or non-renewal of coverage.
Upon execution of this Lease,  Lessee shall furnish Lessor with a certificate of
insurance or other evidence  satisfactory to Lessor that such insurance coverage
is in effect,  provided,  however,  that Lessor shall be under no duty either to
ascertain  the existence of or to examine such  insurance  coverage or to advise
Lessee  in the  event  such  insurance  coverage  should  not  comply  with  the
requirements  hereof.  In case of  failure  of Lessee  to  procure  or  maintain
insurance,  Lessor may at its option  obtain such  insurance,  the cost of which
will be paid by the Lessee as  additional  rentals.  Lessee  hereby  irrevocably
appoints  Lessor as Lessee's  attorney-in-fact  to file,  settle or adjust,  and
receive  payment  of  claims  under any such  insurance  policy  and to  endorse
Lessee's  name on any  checks,  drafts or other  instruments  on payment of such
claims.  Lessee  further agrees to give Lessor prompt notice of any damage to or
loss of, the Equipment, or any part thereof.

14. LIMITATION OF LIABILITY
   Lessor  shall have no  liability  in  connection  with or arising  out of the
ownership,  leasing,  furnishing,  performance  or use of the  Equipment  or any
special,  indirect,  incidental  or  consequential  damages  of  any  character,
including,   without  limitation,  loss  of  use  of  production  facilities  or
equipment, loss of profits, property damage or lost production, whether suffered
by Lessee or any third party.

15. FURTHER ASSURANCES
   Lessee shall  promptly  execute and deliver to Lessor such further  documents
and take such further action as Lessor may reasonably  require in good faith, in
order to more effectively carry out the intent and purpose of this Lease. Lessee
shall  provide  to Lessor,  within 120 days after the close of each of  Lessee's
fiscal years,  and, within 45 days of the end of each quarter of Lessee's fiscal
year, a copy of its financial  statements  prepared in accordance with generally
accepted accounting  principles and, in the case of annual financial statements,
audited  by  independent  certified  public  accountants,  and  in the  case  of
quarterly  financial  statements  certified by Lessee's chief financial officer,
each such financial  statement to be  accompanied  by a Compliance  Certificate,
substantially  in the form of Exhibit A attached  hereto,  certified by Lessee's
chief financial officer,  as to Lessee's compliance with subsections (h) through
(k) of Section 5 above. Lessee shall execute and deliver to Lessor upon Lessor's
request  such  instruments  and  assurances  as Lessor deems  necessary  for the
confirmation,  preservation  or  perfection  of this Lease and  Lessor's  rights
hereunder,   including,  without  limitation,  such  corporate  resolutions  and
opinions of counsel as Lessor may request from time to time,  and all schedules,
forms and other  reports as may be  required to satisfy  obligations  imposed by
taxing authorities. In furtherance thereof, Lessor may file or record this Lease
or a memorandum or a photocopy  hereof  (which for the purposes  hereof shall be
effective as a financing  statement) so as to give notice to third parties;  and
Lessee hereby appoints Lessor as its attorney-in-fact to execute, sign, file and
record UCC  financing  statements  and other  lien  recordation  documents  with
respect to the Equipment  where Lessee fails or refuses to do so after  Lessor's
written  request,  and Lessee agrees to pay or reimburse  Lessor for any filing,
recording or stamp fees or taxes arising from any such filings.

16. ASSIGNMENT
   This Lease and all rights of Lessor  hereunder  shall be assignable by Lessor
absolutely or as  security,  without notice to Lessee,  subject to the rights of
Lessee  hereunder for the use and  possession of the Equipment for so long as no
Event of Default has occurred and is continuing  hereunder.  Any such assignment
shall  not  relieve  Lessor of its  obligations  hereunder  unless  specifically
assumed by the assignee, and Lessee

                                                                     Page 4 of 5
<PAGE>

agrees it shall not  assert  any  defense,  rights of  set-off  or  counterclaim
against  any  assignee  to which  Lessor  shall  have  assigned  its  rights and
interests hereunder, nor hold or attempt to hold such assignee liable for any of
Lessor's  obligations  hereunder.  No such assignment  shall materially increase
Lessee's obligations hereunder. Lessee agrees, upon Lessor's written request, to
provide to any such assignee an acknowledgment of such assignment confirming the
terms, conditions,  representations,  warranties and covenants contained in this
Lease.

   LESSEE SHALL NOT ASSIGN OR DISPOSE OF ANY OF ITS RIGHTS OR OBLIGATIONS  UNDER
THIS  LEASE OR ENTER INTO ANY  SUBLEASE  WITH  RESPECT  TO ANY OF THE  EQUIPMENT
WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT OF LESSOR.

17. LESSEE'S OBLIGATION UNCONDITIONAL
   This  Lease is a net  lease and  Lessee  hereby  agrees  that it shall not be
entitled to any abatement of rents or of any other amounts payable  hereunder by
Lessee,  and that its  obligation  to pay all rent and any other  amounts  owing
hereunder  shall  be  absolute  and  unconditional   under  all   circumstances,
including,  without limitation,  the following  circumstances:  (i) any claim by
Lessee to any right of set-off, counterclaim, recoupment, defense or other right
which  Lessee  may have  against  Lessor,  any  seller  or  manufacturer  of any
Equipment or anyone else for any reason  whatsoever;  (ii) the  existence of any
liens,  encumbrances  or  rights  of  others  whatsoever  with  respect  to  any
Equipment,  whether or not resulting  from claims  against Lessor not related to
the  ownership  of such  Equipment;  or (iii) any other  event or  circumstances
whatsoever.  Each Rent Payment or other amount paid by Lessee hereunder shall be
final and Lessee will not seek to recover all or any part of such  payment  from
Lessor for any reason whatsoever.

18. RETURN OF EQUIPMENT
   Upon the expiration or earlier  termination of the Lease Term with respect to
any item of Equipment,  and provided  that Lessee has not validly  exercised any
purchase option with respect thereto,  Lessee shall: (a) return the Equipment to
a location and in  the  manner  designated by the Lessor within the  continental
United  States,   including,   as  reasonably   required  by  Lessor,   securing
arrangements  for the  disassembly  and  packing for  shipment by an  authorized
representative of the manufacturer of the Equipment, shipment with all parts and
pieces on a carrier  designated  or  approved  by  Lessor,  and then  reassembly
(including,  if necessary,  repair and overhaul) by such  representative  at the
return  location in the  condition the Equipment is required to be maintained by
the Lease and in such  condition  as will make the  Equipment  (in its  original
configuration  or as upgraded)  immediately  able to satisfy the acceptance test
protocol used to accept the Equipment from the original equipment manufacturer),
and immediately  qualified for the manufacturer's (or other authorized servicing
representatives) then-available service contract or warranty (Lessee may replace
any proprietary  optical monitoring systems with commercially  available optical
monitoring  systems,  at Lessee's  sole  expense);  (b) cause the  Equipment  to
qualify for all applicable  licenses or permits  necessary for its operation for
its intended purpose and to comply with all  specifications  and requirements of
applicable federal, state and local laws,  regulations and ordinances;  (c) upon
Lessor's  request,  provide  suitable  storage,  acceptable  to Lessor,  for the
Equipment  for a period  not to  exceed  180 days from the date of  return;  (d)
cooperate with Lessor in attempting to remarket the Equipment, including display
and  demonstration  of the Equipment to prospective  purchasers or lessees,  and
allowing  Lessor to  conduct  any  private  or  public  sale or  auction  of the
Equipment  on  Lessee's  premises.  All costs  (except for any costs that may be
incurred in preparing  the utilities or  infrastructure  necessary for operating
the Equipment at the return  location) shall be the sole  responsibility  of the
Lessee.  During any period of time from the expiration or earlier termination of
the Lease until the  Equipment  is returned in  accordance  with the  provisions
hereof or until Lessor has been paid the applicable purchase option price if any
applicable  purchase  option  is  exercised,  Lessee  agrees  to pay  to  Lessor
additional per diem rent  ("Holdover  Rent"),  payable  promptly on demand in an
amount equal to 125% of the highest  monthly Rental  Payment  payable during the
Lease Term divided by 30, provided,  however,  that nothing contained herein and
no payment of Holdover Rent hereunder  shall relieve Lessee of its obligation to
return the Equipment upon the expiration or earlier termination of the Lease.

19. MISCELLANEOUS
   THE LEASE REPRESENTS THE FINAL AGREEMENT  BETWEEN THE PARTIES  CONCERNING THE
LEASE  OF THE  EQUIPMENT  AND MAY NOT BE  CONTRADICTED  BY  EVIDENCE  OF  PRIOR,
CONTEMPORANEOUS  OR  SUBSEQUENT  ORAL  AGREEMENTS  BETWEEN THE  PARTIES.  LESSEE
ACKNOWLEDGES AND CERTIFIES THAT NO SUCH ORAL AGREEMENTS EXIST. The Lease may not
be  amended,  nor may any  rights  under  the  Lease  be  waived,  except  by an
instrument in writing signed by the party charged with such amendment or waiver.
The term  "Lessee"  as used in the  Lease  shall  mean and  include  any and all
Lessees who sign below, each of whom shall be jointly and severally liable under
the Lease.  This Master Lease will not be binding on Lessor  until  accepted and
executed by Lessor,  notice of which is hereby  waived by Lessee.  Any waiver of
the terms hereof shall be  effective  only in the specific  instance and for the
specific purpose given. Time is of the essence in the payment and performance of
all of Lessee's  obligations under the Lease. The captions in this Lease are for
convenience only and shall not define or limit any of the terms hereof.

20. ENFORCEABILITY AND GOVERNING LAW
   Any  provisions  of this Lease which are  unenforceable  in any  jurisdiction
shall,  as  to such   jurisdiction,   be  ineffective  to  the  extent  of  such
unenforceability  without  invalidating the remaining provisions hereof, and any
such  unenforceability  in any jurisdiction shall not render  unenforceable such
provisions in any other jurisdiction. To the extent permitted by applicable law,
Lessee  hereby  waives;  (a) any  provisions  of law which render any  provision
hereof  unenforceable  in any respect;  (b) all rights and remedies  under Rhode
Island General Laws Sections 6A-2.1-508 through 522 or corresponding  provisions
of the  Uniform  Commercial  Code  article or  division  pertaining  to personal
property  leasing  in any  jurisdiction  in which  enforcement  of this Lease is
sought.

   THIS  LEASE  AND THE  LEGAL  RELATIONS  OF THE  PARTIES  HERETO  SHALL IN ALL
RESPECTS BE GOVERNED BY AND CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE STATE
OF RHODE  ISLAND,  WITHOUT  REGARD TO  PRINCIPLES  REGARDING  THE CHOICE OF LAW.
LESSEE  HEREBY  CONSENTS  AND SUBMITS TO THE  JURISDICTION  OF THE COURTS OF THE
STATE OF RHODE  ISLAND AND  CALIFORNIA  AND THE FEDERAL  DISTRICT  COURT FOR THE
DISTRICT  OF RHODE  ISLAND  AND THE  NORTHERN  DISTRICT  OF  CALIFORNIA  FOR THE
PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING  ARISING OUT OF ITS OBLIGATIONS
HEREUNDER,  AND EXPRESSLY WAIVES ANY OBJECTIONS THAT IT MAY HAVE TO THE VENUE OF
SUCH COURTS.  LESSEE HEREBY  EXPRESSLY  WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY
ACTION  BROUGHT ON OR WITH RESPECT TO THIS LEASE.  Any action by Lessee  against
Lessor for any cause of action  relating to this Lease  shall be brought  within
one year after any such cause of action first arises.

Executed and delivered by duly authorized  representatives of the parties hereto
as of the date set forth below.

DATED AS OF: June 19, 1996

FLEET CAPITAL CORPORATION                   FLEX PRODUCTS, INC.

By: /s/ John J. Gould                       By: /s/ Michael B. Sullivan

Name: John J. Gould                         Name: Michael B. Sullivan

Title: Vice President                       Title: President

                                                                     Page 5 of 5
<PAGE>


                                                   ADDITIONAL SECURITY AGREEMENT

SECURED PARTY: FLEET CAPITAL CORPORATION         DEBTOR: FLEX PRODUCTS, INC.
               50 Kennedy Plaza                          1402 Mariner Way
               Providence, Rhode Island 02903-2305       Santa Rosa, CA 95407

             1. Grant of Security Interest. The undersigned Debtor hereby grants
to Secured Party and its successors and assigns, a continuing  security interest
in the Collateral  (hereinafter  defined) to secure the due and punctual payment
and performance of all of the Obligations (hereinafter defined) to an amount not
to exceed  $5,000,000.  As used herein,  the term  "Obligations"  shall mean and
include the following: (a) all of Debtor's obligations under that certain Master
Equipment  Lease Agreement No. 32089 dated as of June 19, 1996, to Secured Party
(the "Agreement"); and (b) all obligations contained herein and. As used herein,
the term  "Collateral"  shall mean and include  the  property  described  on the
Additional  Collateral Schedule attached hereto,  whether now owned or hereafter
acquired  and  wherever  the same may be  located,  and all  present  and future
additions, attachments, or accessories thereto and replacements thereof, and the
proceeds  therefrom  or  thereof,  including  proceeds  in the  form  of  goods,
accounts,  chattel  paper,  documents,   instruments  and  general  intangibles,
insurance  proceeds  payable in respect of loss or damage to any such  property.
All capitalized terms used herein and not defined herein shall have the meanings
set forth or referred to in the Agreement.  To the extent not otherwise  defined
in this  Additional  Security  Agreement,  all  other  terms  contained  in this
Additional  Security  Agreement  shall have the meanings assigned or referred to
them in the Uniform  Commercial  Code in force in the State of Rhode Island (the
"UCC").

             2. Additional Documents and Aqreements. Debtor will, at the request
of Secured Party, execute,  deliver, and permit Secured Party to file and record
any  financing  statement,  specific  assignment  or  other  paper  that  may be
reasonably requested  by Secured Party in order to create, preserve,  perfect or
validate any security interest  hereunder or to enable Secured Party to exercise
and enforce its rights  hereunder with respect to any of the Collateral,  Debtor
hereby appoints Secured Party as Debtor's  attorney-in-fact to execute, sign and
file such additional  financing statements as Secured Party may determine in its
sole discretion to be necessary or desirable to protect Secured Party's interest
in the Collateral. Debtor hereby authorizes Secured Party to file and record any
carbon, photographic or other reproduction of this Additional Security Agreement
or any  financing  statement  executed  and  delivered in  connection  with this
Additional  Security  Agreement,  which  shall for all  purposes be deemed to be
sufficient as a financing  statement  hereunder.  The security  interest granted
hereby shall continue  effective  irrespective of any retaking and redelivery of
Collateral  to Debtor  until all  Obligations  secured  hereby are fully paid or
performed.  The Collateral is and shall remain personal property even though all
or any portion of the  Collateral  may hereafter  become  attached or affixed to
real  property,  and Debtor shall  provide  Secured Party with  disclaimers  and
waivers from landlords,  mortgagees or any other persons holding any interest in
the real  property  where  any  Collateral  may be  located,  acceptable  in all
respects to Secured Party, which  may be  necessary  or  advisable  in the  sole
discretion of Secured Party to confirm that the security  interest and rights of
Secured  Party in the  Collateral  are and will remain  valid  against all other
Parties.

             3. Representations;  Warranties;  Covenants and Aqreements.  For so
long as any  Obligations  shall remain  outstanding,  Debtor hereby  represents,
warrants,  covenants and agrees that: (a) this Additional Security Agreement and
all related documentation has been and shall be duly authorized by all necessary
action on the part of Debtor  consistent with its form of  organization,  do not
and shall not require any further  shareholder or partner  approval,  or require
the  approval  of, or the  giving of notice  to, any  federal,  state,  local or
foreign  governmental  authority  and shall not  contravene  any law  binding on
Debtor or contravene any certificate or articles of  incorporation or by-laws or
partnership  certificate  or agreement,  or any agreement,  indenture,  or other
instrument  to which  Debtor is a party or by which it may be bound;  (b) Debtor
shall  lawfully  possess  and own the  Collateral;  (c) except for the  security
interest granted hereby,  the Collateral is free from and will be kept free from
all liens, claims, security interests, attachments and encumbrances, and that no
financing  statement covering the Collateral or any proceeds thereof shall be on
file in favor of anyone  other than Secured  Party;  (d) Debtor will not misuse,
fail to keep in good repair,  sell,  assign,  rent,  lend,  encumber,  transfer,
secrete or otherwise  dispose of any of the Collateral or any interest  therein,
nor permit or  contract  to do any such act,  except  that Debtor may dispose of
inventory in the ordinary course of business as heretofore  conducted by Debtor;
(e) if any  Collateral  becomes the subject of any  instrument,  chattel  paper,
negotiable document of title, including any warehouse receipt or bill of lading,
Debtor shall deliver such  instrument,  paper or document to Secured Party;  (f)
Debtor  shall  defend  at  Debtor's  own cost any  action,  proceeding  or claim
affecting the Collateral;  (g) Debtor shall pay promptly all taxes, assessments,
license fees and other public or private charges when levied or assessed against
the Collateral;  (h) Debtor shall permit Secured Party at any time during normal
business  hours to examine and inspect  the  Collateral  and to inspect and make
abstracts  from records of Debtor  concerning the  Collateral;  (i) Debtor shall
furnish  Secured  Party such  information  and  reports  regarding  the  status,
condition and location of the Collateral  and the financial  condition of Debtor
as Secured Party may from time to time reasonably request;  (j) if a certificate
of title be required or permitted by law with respect to any Collateral,  Debtor
shall obtain such  certificate  and all related lien  registration  and notation
documentation with respect to the Collateral indicating the security interest of
Secured Party thereon,  and in any event do everything necessary or expedient to
preserve or perfect the security  interest of Secured Party in such  Collateral;
(k)  Debtor  shall  promptly  notify  Secured  Party  of  any  event  causing  a
substantial loss or diminution in the value or functional  utility of all or any
material part of the Collateral, or affecting Secured Party's rights or remedies
hereunder  with respect to the  disposition  of all or any material  part of the
Collateral;  (1) Debtor shall promptly and  diligently  collect all accounts and
rights to receive  payment for goods sold or leased,  or for  services  rendered
(whether or not evidenced by an instrument  or chattel  paper) which  constitute
all or any part of the Collateral  ("Accounts") and maintain  accurate books and
records of such Accounts and all collections  thereof; and (m) Debtor shall keep
its records  concerning the Accounts at Debtor's chief executive  offices at the
address shown above,  or at such other address as Secured Party shall approve in
writing. For so long as any Obligations shall remain outstanding,  Debtor shall:
(i) segregate all  collections,  Accounts and proceeds of the Collateral so that
they are capable of identification  and deliver such  collections,  Accounts and
proceeds to Secured Party immediately upon demand therefor;  (ii) obtain Secured
Party's prior written consent to any sale, contract of sale or other disposition
of the Collateral;  (iii) upon Secured Party's request therefor,  notify account
debtors,  purchasers  of the  Collateral  or any other  persons of the  security
interest created hereby; and (iv) upon Secured Party's request therefor,  demand
and collect any Accounts and any proceeds of the  Collateral  from persons owing
same.  Debtor hereby  irrevocably  authorizes  Secured Party to endorse Debtor's
name on all collections,  receipts, instruments or other documents, and appoints
Secured Party as Debtor's  attorney-in-fact  to exercise to the extent permitted
by law all powers,  rights and  remedies  necessary to enable  Secured  Party to
exercise its rights hereunder.

             4.  Insurance.  All risk of loss of, damage to, or destruction  of,
the Collateral shall at all times be with Debtor.  Debtor will procure forthwith
and maintain fire, theft and property damage insurance with extended or combined
additional  coverage on any Collateral which is tangible  personal  property for
the  full  replacement  value  thereof  for so  long as any  Obligations  remain
outstanding,  together with such other insurance as Secured Party may reasonably
specify,  and promptly deliver certificates and copies evidencing each policy to
Secured Party with a standard mortgagee's long form endorsement attached showing
loss  payable to  Secured  Party and Debtor as their  respective  interests  may
appear, which endorsement shall provide at least thirty (30) days' prior written
notice to Secured Party of any material  change,  cancellation or non-renewal of
coverage.  Secured  Party's  acceptance  of policies in lesser  amounts or risks
shall not be a waiver of Debtor's foregoing obligations.

            5. Defaults.  Time is of the essence in the payment and  performance
of all Obligations,  including  without  limitation all Obligations  under or in
respect of this Additional Security Agreement. It shall be an "Event of Default"
hereunder  if (i) an Event of Default  under the  Agreement  shall  occur,  (ii)
Debtor breaches any representation,  warranty, covenant or provision hereof, and
such breach continues for ten (1O) days after notice thereof to Debtor,

                                                                     Page 1 of 2

<PAGE>

provided,  however,  that no such breach shall  constitute  an Event of Default
hereunder where Debtor has commenced curing such breach within such ten (1O) day
period and  continues to  diligently  pursue such cure in the opinion of Secured
Party; or (iii) any Collateral is lost or destroyed.

             6. Remedies.  Upon the occurrence of an Event of Default hereunder.
all  Obligations,  at Secured  Party's option and without  notice,  shall become
immediately  due and  payable,  and  Secured  Party  shall  have all  rights and
remedies of a secured party under the UCC and any other  applicable  law, and in
addition, and without limiting the foregoing, Secured Party may: (a) sell all or
any part of the Collateral at public or private sale at such price(s) as Secured
Party may deem  satisfactory;  (b) require Debtor to assemble all or any part of
the Collateral and any records  pertaining  thereto and make it available to the
Secured Party at a place to be designated  by the Secured  Party;  (c) enter the
premises  of  Debtor  and take  possession  of the  Collateral  and any  records
pertaining thereto and/or  disable or render any such Collateral  unusable;  (d)
grant  extensions,  compromise claims and settle Accounts in any amount for less
than face value or book value or otherwise  without prior notice to Debtor.  All
rights and remedies in this Additional Security Agreement are cumulative and not
alternative and are not exclusive of any other remedies provided by law.  Debtor
will upon  demand  pay to  Secured  Party the  expenses  of  retaking,  holding,
preparing  for  sale,  selling  and  the  like,  including  without  limitation,
reasonable  attorney's fees and other legal expenses,  incurred by Secured Party
in  connection  with the  Collateral  or the  exercise of its rights or remedies
hereunder,  all of which shall constitute additional  Obligations secured by the
Collateral hereunder. In the event Secured Party seeks to take possession of any
or all of the Collateral by court process,  Debtor hereby irrevocably waives any
bonds and any surety or security relating thereto required by any statute, court
rule or otherwise as an incident to such  possession,  and waives any demand for
possession  prior to the  commencement  of any suit or  action to  recover  with
respect  thereto.  Any notice required to be given by Secured Party of a sale or
other  disposition or other intended action by Secured Party with respect to any
of the  Collateral or otherwise  which is made in  accordance  with the terms of
this Additional Security Agreement at least five (5) days prior to such proposed
action,  shall  constitute  fair and  reasonable  notice  to  Debtor of any such
action. Secured Party shall be liable to Debtor only for its gross negligence or
willful  misconduct in failing to comply with any applicable law imposing duties
upon Secured  Party;  Secured  Party's  liability  for any such failure shall be
limited to the actual  loss  suffered  by Debtor  directly  resulting  from such
failure.  Secured  Party  shall  have  no  liability  to  Debtor  in tort or for
incidental or consequential damages.

             7. Assignment. The provisions of this Additional Security Agreement
shall  be  binding   upon  and  shall   inure  to  the  benefit  of  the  heirs,
administrators,  successors  and assigns of Secured Party and Debtor,  provided,
however,  that  Debtor may not assign any of its rights or  delegate  any of its
Obligations  hereunder  without  the prior  written  consent of  Secured  Party.
Secured Party may, from time to time,  without notice to Debtor,  sell,  assign,
transfer,  participate,  pledge or  otherwise  dispose of all or any part of the
Obligations  and/or  the  Collateral  therefor.  In such  event,  each and every
immediate and successive purchaser, assignee, transferee,  participant, pledgee,
or holder of all or any part of the Obligations  and/or the Collateral  (each, a
"Holder") shall have the right to enforce this Additional Security Agreement, by
legal action or  otherwise,  for its own benefit as fully as if such Holder were
herein by name specifically given such rights hereunder.  Debtor agrees that the
rights of any such Holder  hereunder or with respect to the related  Obligations
shall not be subject to any  defense,  set-off or  counterclaim  that Debtor may
assess or claim against  Secured Party,  and that any such Holder shall have all
of the  Secured  Party's  rights  hereunder  but  none  of the  Secured  Party's
obligations.  Secured  Party  shall have an  unimpaired  right to  enforce  this
Additional  Security  Agreement  for its benefit with respect to that portion of
the  Obligations  which  Secured  Party  has not  sold,  assigned,  transferred,
participated, pledged or otherwise disposed of.

             8.  Miscellaneous.  No  failure  on the  part of  Secured  Party to
exercise and no delay in exercising any right,  power or remedy  hereunder shall
operate as a waiver thereof. Any provisions hereof contrary to, prohibited by or
invalid under  applicable laws or regulations  shall be inapplicable  and deemed
omitted here from,  and shall not invalidate  the remaining  provisions  hereof.
Debtor  acknowledges  receipt of a true copy and waives acceptance hereof.  THIS
ADDITIONAL  SECURITY  AGREEMENT  TOGETHER  WITH THE  AGREEMENT AND THE DOCUMENTS
EXECUTED IN CONNECTION THEREWITH  CONSTITUTES THE ENTIRE AGREEMENT OF DEBTOR AND
SECURED PARTY RELATIVE TO THE SUBJECT  MATTER HEREOF,  AND THERE ARE NO PRIOR OR
CONTEMPORANEOUS  UNDERSTANDINGS  OR  AGREEMENTS,  WHETHER  ORAL  OR IN  WRITING,
BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT  MATTER  HEREOF.  NEITHER
THIS  ADDITIONAL  SECURITY  AGREEMENT NOR ANY  PROVISION  HEREOF MAY BE CHANGED,
WAIVED,  DISCHARGED OR TERMINATED  EXCEPT BY AGREEMENT IN WRITING  SIGNED BY THE
PARTY AGAINST WHICH ENFORCEMENT OF SUCH CHANGE, WAIVER, DISCHARGE OR TERMINATION
IS SOUGHT.  Any notices and demands  shall be in writing and sent to the parties
by regular mail at the  addresses  herein set forth or to such other  address as
the parties may hereafter  specify by written notice.  THIS ADDITIONAL  SECURITY
AGREEMENT AND THE LEGAL RELATIONS OF THE PARTIES HERETO SHALL IN ALL RESPECTS BE
GOVERNED  BY AND  CONSTRUED  IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF RHODE
ISLAND,  WITHOUT REGARD TO PRINCIPLES REGARDING THE CHOICE OF LAW. DEBTOR HEREBY
CONSENTS  TO THE  JURISDICTION  OF THE  COURTS OF THE STATE OF RHODE  ISLAND AND
CALIFORNIA,  AND THE FEDERAL DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND AND
THE NORTHERN  DISTRICT OF  CALIFORNIA  FOR THE  PURPOSES OF ANY SUIT,  ACTION OR
OTHER PROCEEDING  ARISING OUT OF ITS OBLIGATIONS  HEREUNDER AND EXPRESSLY WAIVES
ANY OBJECTIONS TO THE VENUE OF SUCH COURTS. DEBTOR HEREBY EXPRESSLY WAIVES TRIAL
BY JURY IN ANY ACT1ON  BROUGHT ON OR WITH  RESPECT TO THIS  ADDITIONAL  SECURITY
AGREEMENT.  Any action by Debtor  against  Secured Party for any cause of action
relating to this Additional  Security  Agreement shall be instituted  within one
year after any such cause of action first arise.

Dated as of: June 19, 1996


FLEET CAPITAL CORPORATION                   FLEX PRODUCTS, INC.

By: /s/ John J. Gould                       By: /s/ Michael B. Sullivan

Name: John J. Gould                         Name: Michael B. Sullivan

Title: Vice President                       Title: President


                                                                     Page 2 of 2
<PAGE>

FLEET CAPITAL CORPORATION                                PAGE 1 OF 3
                                                  ADDITIONAL COLLATERAL SCHEDULE

Attached  to and  made  part of the  following  documents:  Additional  Security
Agreement  dated  as of:  June 19, 1996 and UCC Financing Statement(s) with Flex
Products, Inc.

The Equipment is currently located at:       2793 Northpoint Parkway
                                             Santa Rosa, California 95407

BETA ONE
Unit Number: Beta I

(1) Leybold Hereaus  electron beam roll coater,  model Al600B30,  Mfg. 1979, 52"
width capacity, 3 meters per second, 480 volt, 3 phase, 122 Amps., Serial Number
31419342, which machine includes, but is not limited to, the following:

   (12) 30KW electron beam guns with power  supplies,  model D2D4
   (3) Polycolds, model PFC1PFC00ST
   (6) Diffusion pumps, 20" water cooled
   (12) Electron gun controllers
   Winding Cabinet
   (12) Hewlett Packard 6253A dual DC power supplies, 0-200 volt, 3 amps
   (5) Leybold Hereaus vacuum motors, model PENNINGVAC PM 41152
   (4) Leybold Hereaus vacuum motors, model THERMOVPC TM 22052
   Viewing port holes
   Residual gas analyzers electron monitoring system, model QUADREX 200
   Meters
   Control Cabinets
   Catwalk and platform around machine
   Hi-resolution RAD monitoring system
   Winding shafts and chucks
   Sputtering power supply
   63 X 15 Target
   Web drives
   Plate lifter
   (6) Leybold Hereaus turbo pumps, model 1000C
   (4) Stokes vacuum pumps, model 412-11
   (2) Leybold Hereaus blowers, model RA7001S
   (4) Genvin portable oil filters
   Glow power supply
   (6) Filter amplifier chassis
   (2) Water cooled shield sets
   Sputtering targets
   Desktop computer
   Monitors with exception of proprietary plasma emission and optical monitor
   Pressure controllers
   Heco-Pacific crane

<PAGE>

                                                         PAGE 2 OF 3
                                                  ADDITIONAL COLLATERAL SCHEDULE

BETA TWO
Unit Number: Beta II

(l) Leybold  Hereaus  sputtering  roll coater,  Mfg. 1987,  54" width  capacity,
overall size  approximately  16' X 12' X 12', 480 volt, 3 phase,  Serial  Number
58073044, which machine includes, but is not limited to, the following:

   (2) polycolds, model PFC65011ST
   (8) 8 X 54 sputtering targets with (8) SSV sputtering power supplies, serial
   numbers are MCC3K1-2, MCC3K3-4, MCC3I1-2, MCC3I3-4, MCC3G1-2, MCC3G3-4, 
   MCC3F1-2, MCC3F3-4
   (2) Cryo-pumps
   Neslab chiller, model RTE-110
   (8) 90 Kilowatt breaker boxes
   (8) Systron Donner 0-60 VDC, 0-100 amp. power supplies
   (21) Leybold Hereaus turbo pumps, model 1000G
   (2) Leybold Hereaus blower station, model WAV2000
   (3) Leybold Hereaus pumps, model S250-C
   Leybold Hereaus blower, model RUVAC, type WPV 251
   (2) Balston filters, model R1680
   Leybold  Hereaus  blower,  model RUVAC,  type 70001S 
   Cooling Tower 
   (4) Anode power supplies 
   (4) Glow discharge power supplies
   Allen Bradley controls, PLC-30
   Herbert Schuller chilling system with tower
   (4) Optical monitoring devices
   Transformers
   Motor controls
   Sheet resistance monitor
   Safety platform with stairs
   (2) Target backing plates
   (2) Analog controllers
   (2) 50/50 tooling
   Turbo lifting fixture
   (43) sets of shields
   Gas handling system
   Cathode system
   Overhead trolley with crane
   (7) Spare Titanium targets
   (5) Zircon targets
   (6) Long shields

<PAGE>

                                                         PAGE 3 OF 3
                                                  ADDITIONAL COLLATERAL SCHEDULE

The Equipment is Currenty Located at:   1402 Mariner Way
                                        Santa Rosa, California 95407

BETA THREE

   (2) Bell & Gossett pumps,  models 11RC925 series 1510, serial numbers 1955297
   and 1955296 Raven polypro tank, approximately 5' X 2' diameter
   Raven polypro tank, approximately 5' X 2' diameter
   (2) Bell & Gossett pumps, models 4BC9375, serial numbers 1957959 and 1957960,
   625 GPM
   Alfa laval heat  exchanger,  type M6-FG,  serial number  3010286368  with (4)
   0-150 degree gauges
   Alfa laval heat exchanger,  type MIO-BFG,  serial number  3010286389 with (4)
   0-150 degree gauges
   FSI water filter,  model  FSP-40N-30455,  Mfg. 1995, 10 micron with 0-160 PSI
   gauge
   Dual water cooling condensing  system,  low pressure,  high pressure with (2)
   KSB pumps, model ETACHROMB, valves, so1enoids
   (2) Edwards two stage vacuum pumps, model 275
   Air storage tank 4' X 2' diameter with 0-160 PSI guage
   Water  filter  system with (2) KSB  ETACHROM-B-40160562,  pumps,  2200 gallon
   round stainless steel tank, model BT33541
   Approximately 60' X 4" stainless steel piping with fittings
   Approximately 100' X 2" stainless steel piping with fittings

BETA FIVE

   WPH  overhead  wire rope  crane,  model 1 l/2 ton,  serial  number  W6022015,
   approximately X-Y, travel is 55' X 35' X 40'
   Kinney  vacuum  rotary pump,  model  KT-505-LP,  serial  number 3011-2 with a
   dresser roots booster  blower, 15HP, model HV3000,  serial number H00224, 480
   volts
   Kinney  vacuum  rotary pump,  model  KT-505-LP,  serial  number 3011-1 with a
   dresser roots booster  blower, 15HP, model HV3000,  serial number H00219
   Dresser roots, 30MP booster pump
   (4) Emergency isolation switches
   (3) 5.5 Bar pneumatic actuator valves
   Solenoids
   Alfa laval heat exchanger, Mfg. 1995, serial number 3010286367
   (4) Weksler temperature gauges, 0-150 degrees Fahrenheit
   Raven round polypro  storage  tank,  approximately  6' X 4' diameter,  serial
   number G333465
   Approximately  60  feet  of 4"  304  stainless  steel  seamless  piping  with
   connectors
   (2)  ITT  Bell  &  Gossett  pumps,   series  1510,  20  HP,  200  GPM,  model
   21/2AB7000BF, serial numbers 1955295 and 1955296
   (2) FSI filter columns, stainless steel, Mfg. 1995, 10 micron filters, serial
   numbers 38121, 150 PSI
   Air storage tank 4' X 2' diameter with a 0-160 PSI gauge
   Miscellaneous spare parts

 
   FLEET CAPITAL CORPORATION                 FLEX PRODUCTS, INC.

   BY:  /s/ John J. Gould                    BY: /s/ Michael B. Sullivan
      --------------------------------          --------------------------------
   NAME:    John J. Gould                    NAME:   Michael B. Sullivan
        ------------------------------            ------------------------------
   TITLE:   Vice President                   TITLE:  President
         -----------------------------             -----------------------------

<PAGE>

 [LOGO] Fleet                               LEASE SCHEDULE NO. 32089-00001
Capital Leasing                                (True Lease Schedule)

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

                                Lessee:  FLEX PRODUCTS, INC.
                                Address: 1402 MARINER WAY

                                         SANTA ROSA, CA 95407

         1. This Lease  Schedule  No. 32089 - 00001 dated as of June 19, 1996 is
entered into pursuant to and  incorporates by this  reference,  all of the terms
and provisions of that certain Master  Equipment Lease Agreement No. 32089 dated
as of JUNE 19,  1996  (the  "Master  Lease"),  for the  lease of the   Equipment
described in Schedule A attached hereto.  This Lease Schedule shall constitute a
separate,  distinct and  independent  lease of the Equipment and the contractual
obligation  of Lessee.  References to the "the Lease" or "this Lease" shall mean
and  refer  to this  Lease  Schedule,  together  with the  Master  Lease and all
exhibits,  addenda, schedules,  certificates,  riders  and other  documents  and
instruments  executed and delivered in connection with this Lease Schedule,  all
as the same may be amended or modified from time to time. All capitalized  terms
used  herein  and not  defined  herein  shall have  the  meanings  set  forth or
referred to in the Master  Lease.  By its  execution  and delivery of this Lease
Schedule,  Lessee hereby  reaffirms all of the  representations,  warranties and
covenants  contained in the Master  Lease,  as of the date  hereof,  and further
represents  and  warrants to Lessor  that no Event of  Default,  and no event or
condition  which with notice or the passage of time or both would  constitute an
Event of Default, has occurred and is continuing as of the date hereof.

         2.  ACQUISITION  COST.  The  Acquisition  Cost  of  the  Equipment  is:
$7,879,000.00.

         3. (a) LEASE TERM. The Lease Term shall commence on the date hereof and
shall continue for a period of 72 months after the Lease Term  Commencement Date
set forth in the Acceptance Certificate to this Lease Schedule, plus any renewal
or extended term applicable in accordance with the terms of the Lease.

            (b)  RENTAL  PAYMENTS.  In addition to interim rent payable pursuant
to Section 2 of the Master Lease,  Lessee shall pay Lessor 72 consecutive Rental
Payments in the amounts set forth in the  schedule  below,  plus any  applicable
sales/use taxes,  commencing on the Rental Payment  Commencement  Date set forth
in the Acceptance  Certificate  and MONTHLY  thereafter for the remaining  Lease
Term.  Each Rental  Payment shall be payable on the same day of the month as the
Rental Payment Date in each succeeding  rental period during the remaining Lease
Term (each, a "Rental Payment Date"):

                                                  Amount of Each
              Number of Rental Payments           Rental Payment
              -------------------------           --------------
                        12                         113,999.91
                        60                         129,180.78

             (c) ADVANCE RENTAL  PAYMENT.  Lessee agrees to pay Lessor the first
01 and last O Rental Payments, due and payable on the Acceptance Date.

<PAGE>
                                                          ACCEPTANCE CERTIFICATE
[LOGO] Fleet             
Capital Leasing
50 Kennedy Plaza
Providence, Rhode Island 02903-2305

         This Acceptance Certificate (this "Acceptance Certificate") is attached
to and made a part of that certain Lease Schedule No. 32089 - 00001, dated as of
June 19, 1996 (the "Lease  Schedule"),  by and between the undersigned  parties.
All capitalized terms used herein and not defined herein shall have the meanings
set forth or  referred  to in the Lease  Schedule.  To the  extent the terms set
forth in this  Acceptance  Certificate  differ or conflict with any of the terms
set forth in the Lease, the terms set forth in this Acceptance Certificate shall
control.

         1. Lessee acknowledges and agrees that each item of Equipment set forth
on Schedule A hereto (collectively,  the "Equipment") is hereby  unconditionally
accepted by Lessee for all purposes  under the Lease at the locations  specified
in  Schedule  A-1 hereto,  and hereby  agrees to  faithfully  perform all of its
obligations  under  the Lease as of the date  hereof  (the  "Acceptance  Date").
Lessee hereby  authorizes  and directs  Lessor to make payment to each vendor of
the Equipment pursuant to such vendor's invoice or any purchase order,  purchase
agreement or supply contract with such vendor, receipt and approval of which are
hereby reaffirmed by Lessee.

         2. By its execution and delivery of this Acceptance Certificate, Lessee
hereby reaffirms all of the representations,  warranties and covenants contained
in the Lease as of the date  hereof,  and  further  represents  and  warrants to
Lessor that no Event of Default,  and no event or condition which with notice or
the passage of time or both would  constitute an Event of Default,  has occurred
and is continuing as of the date hereof. Lessee further certifies to Lessor that
Lessee has  selected  the  Equipment  and has received and approved the purchase
order,  purchase  agreement or supply contract under which the Equipment will be
acquired for all purposes of the Lease.

     3. Lessee hereby  represents  and warrants that: (a) the Equipment has been
delivered  and is in an operating  condition  and  performing  the operation for
which it is intended to the satisfaction of the Lessee;  and (b) if requested by
Lessor,  the  Equipment  has been  marked or  labeled  evidencing  the  Lessor's
interest therein.

4. The LEASE TERM COMMENCEMENT DATE is the 10th day of July, 1996

5. The RENTAL PAYMENT COMMENCEMENT DATE is the 10th day of July, 1996

6. All terms and provisions of the Lease Schedule shall remain in full force and
effect, except as otherwise provided below:

          - ACQUISITION COST: $7,879,000.00.

          - LEASE TERM: (72) seventy-two months.

          - RENTAL PAYMENTS:  Number of Rental Payments    Rental Payment Amount

                                         12                     $_________
                                         60                     $_________

          - ADVANCE RENTAL PAYMENT(S): First 01 and last 00.

          - SECURITY DEPOSIT:    N/A  %.

Dated:            July 10, 1996

Agreed and Accepted:

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By:  /s/ Michael  B. Sullivan
    ----------------------------                     ---------------------------
Name:   John J. Gould                           Name:    Michael  B. Sullivan
      --------------------------                       -------------------------
Title:  VP/Senior Lender                        Title:   President
       --------------------------                      -------------------------

<PAGE>

[LOGO] Fleet                                                 PAY PROCEEDS LETTER
 Credit Corporation

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

     We hereby authorize you to pay the following  Payee(s) from the proceeds of
your  financial accommodations  to us in  respect  of that  certain  True  Lease
Schedule  No.  32089-00001  dated as of June 19,  1995,  and make  disbursements
directly to said Payee(s) as follows:



                                                            Amount of
              PAYEE                                          Payment

Flex Products, Inc.                                      $ 7,765,000.09
----------------------------------------------------   -------------------------
Fleet Capital Corporation (short fund to pay                 113,999.91
----------------------------------------------------   -------------------------
Customer Invoice now due)
----------------------------------------------------   -------------------------

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

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

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

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

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

                                              TOTAL:     $ 7,879,000.00
                                                       -------------------------


Dated as of: June 19, 1996
            -----------------
                                                  FLEX PRODUCTS, INC.           
                                                                         
                                                  By:  /s/ Michael  B. Sullivan 
                                                     ---------------------------
                                                  Name:    Michael  B. Sullivan 
                                                       -------------------------
                                                  Title:   President & CEO      
                                                       -------------------------
<PAGE>

FLEET CAPITAL CORPORATION                                      PAGE 1 OF 1
                                                         SCHEDULE A EQUIPMENT

Attached to and made part of the  following  documents: True Lease  Schedule No.
32089-01, Acceptance Certificate, UCC Financing Statement(s),  and Warranty Bill
of Sale with Flex Products, Inc.

The Depreciable Life of the Property is (07) seven years.

LOC# (01)

BETA THREE
Unit Number: Beta III

(1) Weinert Vacuum GMBH,  sputtering roll coating  machine,  Mfg. 1995, 7' X 10'
chamber size, 480 volt, 3 phase, all stainless stee1 construction  Serial Number
FBR  1400  SP-SC-001,  which  machine  includes,  but is  not  limited  to,  the
following:

   (6) 20" diffusion pumps
   (4) 16" diffusion pumps
   3 Chamber system
   Liebert UPS battery back-up system, model AP441, serial number P21174SE 
   (3) Polycoid cooling systems, model PFC-1100ST
   (3) Cathodes
   (2) Aluminum evaporation systems
   (6) Transformers, 72 kilowatt
   Edwards two stage vacuum pump, model 275
   (3) Edwards two stage vacuumm pumps, model 8O
   (3) ENI D.C. Plasma generators, model DCG-100 zokw/ea 
   Siemens PLC
   (1) Nemonic Display
   (2) Control Stations
   (1) PLC
   (2) Machine state actuators
   Circulation pumps
   Hydraulic pumps

AND ALL STANDARD AND ACCESSORY EQUIPMENT

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

BY: /s/ John J. Gould                           BY:  /s/ Michael  B. Sullivan
    ----------------------------                     ---------------------------
NAME:   John J. Gould                           NAME:    Michael  B. Sullivan
      --------------------------                       -------------------------
TITLE:  VP/Senior Lender                        TITLE:   President
       --------------------------                      -------------------------


<PAGE>

FLEET CAPITAL CORPORATION                                  Schedule A-1
                                                           Equipment Location

Attached to and made part of the  following  documents  True Lease  Schedule No.
32089-01,  Acceptance Certificate, UCC Financing Statement(s),  Warranty Bill of
Sale with Flex Products, Inc.

--------------------------------------------------------------------------------
Loc #     Equipment Currently Located at:
--------------------------------------------------------------------------------

01        1402 Mariner Way, Santa Rosa, California 95407






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

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By: /s/ Michael  B. Sullivan
   -----------------------------                   -----------------------------
Name:   John J. Gould                           Name:   Michael  B. Sullivan
     ---------------------------                     ---------------------------
Title:  VP/Senior Lender                        Title:  President
      --------------------------                      --------------------------

<PAGE>

  [LOGO] Fleet                                    STIPULATED LOSS VALUE SCHEDULE
Capital Leasing

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

         This  Stipulated  Loss Value Schedule (this  "Schedule") is attached to
and made a part of that certain Lease Schedule No. 32089-00001, dated as of June
19, 1996 (the "Lease Schedule"), by and between the undersigned parties.
<TABLE>

         The following Stipulated Loss Values shall be used to calculate damages
or loss as provided in the Master Lease.  The Stipulated Loss Value with respect
to any item of Equipment on any Rental  Payment Date during the Lease Term shall
be an amount equal to the sum of: (a) all Rental Payments and other amounts then
due and owing to Lessor under the Lease,  together with all accrued interest and
late charges thereon, calculated through and including the date of payment; plus
(b) the product of the Acquisition Cost of the such Equipment  multiplied by the
percentage set forth below as of such Rental Payment Date.
<CAPTION>
<S>                        <C>                <C>                       <C>   
Rental Payment Date for   Percentage of       Rental Payment Date for   Percentage of
 Rental Payment Number    Acquisition Cost    Rental Payment Number     Acquisition Cost
</TABLE>

              SEE EXHIBIT C ATTACHED HERETO AND MADE A PART HEREOF








         All capitalized terms used herein and not defined herein shall have the
meanings set forth or referred to in the Lease Schedule.  Except as specifically
set forth herein,  all of the terms and  conditions of the Lease shall remain in
full force and effect and are hereby ratified and affirmed.


Dated as of: June 19, 1996

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By: /s/ Michael  B. Sullivan
   -----------------------------                   -----------------------------
Name:   John J. Gould                           Name:   Michael  B. Sullivan
     ---------------------------                     ---------------------------
Title:  VP/Senior Lender                        Title:  President
      --------------------------                      --------------------------

<PAGE>

                                   EXHIBIT C
                                       TO
                         STIPULATED LOSS VALUE SCHEDULE
                         TO LEASE SCHEDULE NO. 32089-01

RENTAL PAYMENT      PERCENTAGE OF       RENTAL PAYMENT           PERCENTAGE OF
DATE FOR RENTAL     ACQUISITION COST    DATE FOR RENTAL         ACQUISITION COST
PAYMENT NUMBER                          PAYMENT NUMBER

                                               37                70.90880090
       1            103.35121715               38                69.75511355
       2            102.77715752               39                68.59002020
       3            102.19526265               40                67.41874422
       4            101.59552206               41                66.23597391
       5            100.98781724               42                65.04165152
       6            100.37210821               43                63.84099969
       7             99.73838360               44                62.62870597
       8             99.09652408               45                61.40471189
       9             98.44648879               46                60.16895869
      10             97.78823666               47                58.92972240
      11             97.11575495               48                57.67865042
      12             96.43494366
                                               49                56.42401842
      13             95.54711438               50                55.15747340
      14             94.34921445               51                53.87895553
      15             93.74119331               52                52.59673978
      16             92.81702863               53                51.30247247
      17             91.88261080               54                49.99609306
      18             90.93788832               55                48.68587582
      19             89.97683797               56                47.36346638
      20             89.00534921               57                46.02880349
      21             88.02336959               58                44.68182560
      22             87.03084644               59                43.33120369
      23             86.02873119               60                41.96818663
      24             85.01597126
                                               61                40.60144498
      25             83.99351758               62                39.22222721
      26             82.96031708               63                37.83047065
      27             81.91631576               64                36.43484516
      28             80.86246378               65                35.02659847
      29             79.79770726               66                33.60566720
      30             78.72199142               67                32.18072044
      31             77.63626563               68                30.74300521
      32             76.53947521               69                29.29245738
      33             75.43156457               70                27.82901249
      34             74.31247787               71                26.37095856
      35             73.18743961               72                24.89996987
      36             72.05113926
                                               72                25.00000000

<PAGE>


[LOGO] Fleet                                               PURCHASE OPTION RIDER
Capital Leasing

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

         This  Purchase  Option  Rider (this  "Rider") is attached to and made a
part of that certain Lease Schedule No.  32089-00001,  dated as of June 19, 1996
(the "Lease Schedule"), by and between the undersigned parties.

         If no Event of Default (or event or condition  which,  with the passage
of time or giving of notice,  or both,  would  become  such an Event of Default)
shall have occurred and be continuing, and the Lease shall not have been earlier
terminated,  Lessee shall have the option to purchase  (the  "Purchase  Option")
all, but not less than all, of the Equipment at the expiration of the Lease Term
for an amount,  payable in  immediately  available  funds on the last day of the
Lease Term,  equal to: (a) all Rental  Payments,  late charges and other amounts
due and owing under the Lease; plus (b) all taxes, assessments and other charges
due or payable in connection with the sale of the Equipment to Lessee;  plus (c)
an amount equal to 25.00000% of the  Acquisition  Cost of the  Equipment,  which
Lessor and Lessee  acknowledge  represents a reasonable  current estimate of the
fair market value of the Equipment at the end of the Lease Term.

         Provided that Lessor shall have received all amounts payable  hereunder
on the last day of the Lease Term,  and that no Event of Default then exists and
is continuing under the Lease,  Lessor shall convey all of its right,  title and
interest in and to the Equipment to Lessee on the last day of the Lease Term, on
an "AS-IS,"  "WHERE-IS"  BASIS WITHOUT  REPRESENTATION  OR WARRANTY,  EXPRESS OR
IMPLIED, and without recourse to Lessor, except that the Equipment shall be free
and clear of all liens  created by Lessor.  If Lessee  intends to  exercise  the
Purchase  Option,  Lessee shall give  irrevocable  written notice to Lessor (the
"Option  Notice") not more than 240 days,  nor less than 180 days,  prior to the
expiration  of the Lease Term.  If Lessee fails to give such  written  notice to
Lessor,  it shall be  conclusively  presumed  that  Lessee  has  elected  not to
exercise the Purchase Option.

         If, for any  reason,  Lessee does not  exercise  the  Purchase  Option,
Lessee shall, on the last day of the Lease Term,  return all of the Equipment to
Lessor  pursuant to and in the condition  required by the terms of the Lease and
pay to  Lessor  a  return  fee  equal  to 5.0 % of the  Acquisition  Cost of the
Equipment.

         All capitalized terms used herein and not defined herein shall have the
meanings set forth or referred to in the Lease Schedule.  Except as specifically
set forth herein,  all of the terms and  conditions of the Lease shall remain in
full force and effect and are hereby  ratified and affirmed.  To the extent that
the  provisions  of this Rider  conflict  with any  provisions  contained in the
Lease, the provisions of this Rider shall control.

Dated as of: June 19, 1996

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By: /s/ Michael  B. Sullivan
   -----------------------------                   -----------------------------
Name:   John J. Gould                           Name:   Michael  B. Sullivan
     ---------------------------                     ---------------------------
Title:  VP/Senior Lender                        Title:  President
      --------------------------                      --------------------------

<PAGE>

[LOGO] Fleet                                               WARRANTY BILL OF SALE
Capital Leasing
50 Kennedy Plaza
Providence, Rhode Island 02903

         FLEX  PRODUCTS,  INC.,  ("Seller")  of 1402 MARINER WAY SANTA ROSA,  CA
95407, in consideration of the sum of $7,879,000.00  Dollars, and other good and
valuable  consideration,   the  receipt  and  sufficiency  of  which  is  hereby
acknowledged, does hereby sell, transfer and assign to Fleet Capital Corporation
("FCC") a Rhode Island  corporation  having its  principal  office at 50 Kennedy
Plaza,  Providence,  Rhode Island  02903,  the equipment set forth in Schedule A
hereto (the "Equipment").

         Seller  hereby  covenants  with and  warrants to FCC that Seller is the
lawful owner of the Equipment and has the right to sell the Equipment,  and that
the Equipment is free and clear of all rights, claims, liens, charges,  security
interests or encumbrances  of any other person.  Seller will  forever indemnify,
defend and warrant all of the rights of FCC in and to the Equipment  transferred
hereunder against the claims and demands of all other persons.

IN WITNESS WHEREOF,  Seller has duly executed this Bill of Sale this 11th day of
July, 1996.

                                   FLEX PRODUCTS, INC.

                                   By: /s/ Michael B. Sullivan
                                      --------------------------------
                                   Name:   Michael B. Sullivan
                                        ------------------------------
                                   Title:  President
                                         -----------------------------


State of California
         --------------------------
County of Sonoma
         --------------------------


Subscribed and sworn before me this 11th day of July, 1996.

                                /s/ Aggie S. Navarro

                                  Notary Public

                   My Commission expires:____________________

                                        ==============================
                                                AGIE S. NAVARRO       
                                        [SEAL]  COMM. #1009257        
                                           Notary Public--California  
                                                 SONOMA COUNTY        
                                         My Comm. Expires NOV 11, 1997
                                        ==============================

<PAGE>

<TABLE>
<CAPTION>
        This FINANCING STATEMENT is presented for filing and will remain  effective with certain
exceptions  for a period of five years from the date of filing  pursuant to section  9403 of the
California Uniform Commercial Code.
------------------------------------------------------------------------------------------------
<C>                                                    <C>                                     
1. DEBTOR  (LAST NAME FIRST--IF AN INDIVIDUAL)         1A.  SOCIAL SECURITY OR FEDERAL TAX NO.

  Flex Products, Inc.
------------------------------------------------------------------------------------------------
1B. MAILING ADDRESS                          1C. CITY, STATE              1D. ZIP CODE

  2793 Northpoint Parkway                    Santa Rosa, California            95407
------------------------------------------------------------------------------------------------
2.  ADDITIONAL DEBTOR (IF ANY)                         2A.  SOCIAL SECURITY OR FEDERAL TAX NO.
    (LAST NAME FIRST--IF AN INDIVIDUAL)                    

------------------------------------------------------------------------------------------------
2B. MAILING ADDRESS                          2C. CITY, STATE              2D. ZIP CODE

------------------------------------------------------------------------------------------------
3.  DEBTOR'S TRADE NAMES OR STYLES (IF ANY)            3A.  FEDERAL TAX NUMBER

================================================================================================
4. SECURED PARTY                                       4A.  SOCIAL SECURITY NO., FEDERAL TAX NO.
                                                            OR BANK TRANSIT AND A.B.A. NO.
     NAME      Fleet Capital Corporation
     MAILING ADDRESS   50 Kennedy Plaza, 5th Floor
     CITY  Providence     STATE   RI     ZIP CODE  02903
------------------------------------------------------------------------------------------------
5.  ASSIGNEE OF SECURED PARTY (IF ANY)                  5A. SOCIAL SECURITY NO., FEDERAL TAX NO.
                                                            OR BANK TRANSIT AND A.B.A. NO.
     NAME
     MAILING ADDRESS
     CITY
------------------------------------------------------------------------------------------------
6.  This FINANCING STATEMENT covers the following types or items of property (include description
    of real property on which located and owner of record when required by instruction 4).

   (1) Leybold Hereaus electron beam roll coater, and (1) Leybold Hereaus sputtering roll coater
   as further described on the Additional Collateral Schedule attached hereto and made a part
   hereof.


   
   32089-01/lae (additional collateral)

------------------------------------------------------------------------------------------------
7. CHECK   [X]      7A. [ ] PRODUCTS OF COLLATERAL     7B. DEBTOR(S) SIGNATURE NOT REQUIRED IN 
   IF APPLICABLE            ARE ALSO COVERED               ACCORDANCE WITH INSTRUCTION 5(a) ITEM:
                                                           [ ](1)    [ ](2)    [ ](3)    [ ](4)
------------------------------------------------------------------------------------------------
8. CHECK   [X]          [ ]  DEBTOR IS A "TRANSMITTING UTILITY"
   IF APPLICABLE             IN ACCORDANCE WITH UCC SS. 9105 (1)(n)
------------------------------------------------------------------------------------------------
9.                                       DATE:      C   10. THIS SPACE FOR USE OF FILING OFFICER
                                                    O       (DATE, TIME, FILE NUMBER
  /s/ Michael B. Sullivan                7/11/96    D       AND FILING OFFICER)
SIGNATURE(S) OF DEBTOR(S)                           E
-------------------------------------------------- ---
Flex Products, Inc.                                 1

TYPE OR PRINT NAME(S) OF DEBTOR(S)                  2
--------------------------------------------------
                                                    3
   /s/ John J. Gould
SIGNATURE(S) OF SECURED PARTY(IES)                  4
--------------------------------------------------
Fleet Capital Corporation                           5

TYPE OR PRINT NAME(S) OF SECURED PARTY(IES)         6
==================================================
11. Return copy to:                                 7

NAME                                                8
ADDRESS
CITY                                                9
STATE
ZIP CODE                                            0
==================================================
                FORM UCC.1--
                Approved by the Secretary of State
==================================================
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
        This FINANCING STATEMENT is presented for filing and will remain  effective with certain
exceptions  for a period of five years from the date of filing  pursuant to section  9403 of the
California Uniform Commercial Code.
------------------------------------------------------------------------------------------------
<C>                                                    <C>                                     
1. DEBTOR  (LAST NAME FIRST--IF AN INDIVIDUAL)         1A.  SOCIAL SECURITY OR FEDERAL TAX NO.

  Flex Products, Inc.
------------------------------------------------------------------------------------------------
1B. MAILING ADDRESS                          1C. CITY, STATE              1D. ZIP CODE

  2793 Northpoint Parkway                    Santa Rosa, California            95407
------------------------------------------------------------------------------------------------
2.  ADDITIONAL DEBTOR (IF ANY)                         2A.  SOCIAL SECURITY OR FEDERAL TAX NO.
    (LAST NAME FIRST--IF AN INDIVIDUAL)                    

------------------------------------------------------------------------------------------------
2B. MAILING ADDRESS                          2C. CITY, STATE              2D. ZIP CODE

------------------------------------------------------------------------------------------------
3.  DEBTOR'S TRADE NAMES OR STYLES (IF ANY)            3A.  FEDERAL TAX NUMBER

================================================================================================
4. SECURED PARTY                                       4A.  SOCIAL SECURITY NO., FEDERAL TAX NO.
                                                            OR BANK TRANSIT AND A.B.A. NO.
     NAME      Fleet Capital Corporation
     MAILING ADDRESS   50 Kennedy Plaza, 5th Floor
     CITY  Providence     STATE   RI     ZIP CODE  02903
------------------------------------------------------------------------------------------------
5.  ASSIGNEE OF SECURED PARTY (IF ANY)                  5A. SOCIAL SECURITY NO., FEDERAL TAX NO.
                                                            OR BANK TRANSIT AND A.B.A. NO.
     NAME
     MAILING ADDRESS
     CITY
------------------------------------------------------------------------------------------------
6.  This FINANCING STATEMENT covers the following types or items of property (include description
    of real property on which located and owner of record when required by instruction 4).

   (1) Weinert Vacuum GMBH, sputtering roll coating machine as further described on attached
   Schedule A(s), and all additions, accessions, modifications, improvements, replacements,
   substitutions, and accessories thereto and therefor, whether now owned or hereafter acquired,
   and proceeds, products and income of any of the foregoing, including insurance proceeds.
   Debtor has possession of the equipment under a true lease only. Secured Party has a security
   interest in the equipment to the extent necessary to protect its title and interest therein.


   Acct. No. 32089-01/lae
------------------------------------------------------------------------------------------------
7. CHECK   [X]      7A. [ ] PRODUCTS OF COLLATERAL     7B. DEBTOR(S) SIGNATURE NOT REQUIRED IN 
   IF APPLICABLE            ARE ALSO COVERED               ACCORDANCE WITH INSTRUCTION 5(a) ITEM:
                                                           [ ](1)    [ ](2)    [ ](3)    [ ](4)
------------------------------------------------------------------------------------------------
8. CHECK   [X]          [ ]  DEBTOR IS A "TRANSMITTING UTILITY"
   IF APPLICABLE             IN ACCORDANCE WITH UCC SS. 9105 (1)(n)
------------------------------------------------------------------------------------------------
9.                                       DATE:      C   10. THIS SPACE FOR USE OF FILING OFFICER
                                                    O       (DATE, TIME, FILE NUMBER
  /s/ Michael B. Sullivan                7/11/96    D       AND FILING OFFICER)
SIGNATURE(S) OF DEBTOR(S)                           E
-------------------------------------------------- ---
Flex Products, Inc.                                 1

TYPE OR PRINT NAME(S) OF DEBTOR(S)                  2
--------------------------------------------------
                                                    3
   /s/ John J. Gould
SIGNATURE(S) OF SECURED PARTY(IES)                  4
--------------------------------------------------
Fleet Capital Corporation                           5

TYPE OR PRINT NAME(S) OF SECURED PARTY(IES)         6
==================================================
11. Return copy to:                                 7

NAME                                                8
ADDRESS
CITY                                                9
STATE
ZIP CODE                                            0
==================================================
                FORM UCC.1--
                Approved by the Secretary of State
==================================================
</TABLE>

<PAGE>

 [LOGO] Fleet                               LEASE SCHEDULE NO. 32089-00002
Capital Leasing                                (True Lease Schedule)

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

                                Lessee: FLEX PRODUCTS, INC.
                                Address: 1402 MARINER WAY

                                         SANTA ROSA, CA 95407

         1. This Lease  Schedule  No. 32089 - 00002 dated as of June 19, 1996 is
entered into pursuant to and  incorporates by this  reference,  all of the terms
and provisions of that certain Master  Equipment Lease Agreement No. 32089 dated
as of JUNE 19,  1996  (the  "Master  Lease"),  for the  lease of the   Equipment
described in Schedule A attached hereto.  This Lease Schedule shall constitute a
separate,  distinct and  independent  lease of the Equipment and the contractual
obligation  of Lessee.  References to the "the Lease" or "this Lease" shall mean
and  refer  to this  Lease  Schedule,  together  with the  Master  Lease and all
exhibits,  addenda, schedules,  certificates,  riders  and other  documents  and
instruments  executed and delivered in connection with this Lease Schedule,  all
as the same may be amended or modified from time to time. All capitalized  terms
used  herein  and not  defined  herein  shall have  the  meanings  set  forth or
referred to in the Master  Lease.  By its  execution  and delivery of this Lease
Schedule,  Lessee hereby  reaffirms all of the  representations,  warranties and
covenants  contained in the Master  Lease,  as of the date  hereof,  and further
represents  and  warrants to Lessor  that no Event of  Default,  and no event or
condition  which with notice or the passage of time or both would  constitute an
Event of Default, has occurred and is continuing as of the date hereof.

         2.  ACQUISITION  COST.  The  Acquisition  Cost  of  the  Equipment  is:
$4,500,000.00.

         3. (a) LEASE TERM. The Lease Term shall commence on the date hereof and
shall continue for a period of 72 months after the Lease Term  Commencement Date
set forth in the Acceptance Certificate to this Lease Schedule, plus any renewal
or extended term applicable in accordance with the terms of the Lease.

            (b)  RENTAL  PAYMENTS.  In addition to interim rent payable pursuant
to Section 2 of the Master Lease,  Lessee shall pay Lessor 72 consecutive Rental
Payments in the amounts set forth in the  schedule  below,  plus any  applicable
sales/use taxes,  commencing on the Rental Payment  Commencement  Date set forth
in the Acceptance  Certificate  and MONTHLY  thereafter for the remaining  Lease
Term.  Each Rental  Payment shall be payable on the same day of the month as the
Rental Payment Date in each succeeding  rental period during the remaining Lease
Term (each, a "Rental Payment Date"):

                                                  Amount of Each
              Number of Rental Payments           Rental Payment
              -------------------------           --------------
                        12                          65,109.74
                        60                          73,780.11

             (c) ADVANCE RENTAL  PAYMENT.  Lessee agrees to pay Lessor the first
01 and last O Rental Payments, due and payable on the Acceptance Date.

<PAGE>

             (d) SECURITY DEPOSIT.  Lessee agrees to make a payment in an amount
equal to 0% of the  Acquisition  Cost of the  Equipment,  due and payable on the
Acceptance  Date,  to be held by Lessor as a  non-interest  bearing  deposit  to
secure Lessee's performance under the Lease.

          4.  EQUIPMENT  LOCATION(S).  The  Equipment  will  be  located  at the
location(s) specified in Schedule A-1 hereto.

          5.  Lessor  will  invoice  Lessee for all sales,  use and/or  personal
property taxes as and when due and payable in accordance  with  applicable  law,
unless Lessee delivers to Lessor a valid exemption  certificate  with respect to
such   taxes.   Delivery  of  such   certificate   shall   constitute   Lessee's
representation and warranty that no such taxes shall become due and payable with
respect to the  Equipment and Lessee shall  indemnify  and hold harmless  Lessor
from and against any and all  liability or damages,  including  late charges and
interest which Lessor may incur by reason of the assessment of such taxes.

           6. The  Rental  Payments  may  change for  Equipment  accepted  after
July 12, 1996.

           7. Lessee  represents  that the  applicable  recovery  period for the
Equipment,  for purposes of Section 168 of the Internal Revenue Code of 1986, is
as set forth in Schedule A hereto.



Dated as of: June 19, 1996



FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By: /s/ Michael  B. Sullivan
   -----------------------------                   -----------------------------
Name:   John J. Gould                           Name:   Michael  B. Sullivan
     ---------------------------                     ---------------------------
Title:  VP/Senior Lender                        Title:  President
      --------------------------                      --------------------------




<PAGE>
                                                          ACCEPTANCE CERTIFICATE
[LOGO] Fleet             
Capital Leasing
50 Kennedy Plaza
Providence, Rhode Island 02903-2305

         This Acceptance Certificate (this "Acceptance Certificate") is attached
to and made a part of that certain Lease Schedule No. 32089 - 00002, dated as of
June 19, 1996 (the "Lease  Schedule"),  by and between the undersigned  parties.
All capitalized terms used herein and not defined herein shall have the meanings
set forth or  referred  to in the Lease  Schedule.  To the  extent the terms set
forth in this  Acceptance  Certificate  differ or conflict with any of the terms
set forth in the Lease, the terms set forth in this Acceptance Certificate shall
control.

         1. Lessee acknowledges and agrees that each item of Equipment set forth
on Schedule A hereto (collectively,  the "Equipment") is hereby  unconditionally
accepted by Lessee for all purposes  under the Lease at the locations  specified
in  Schedule  A-1 hereto,  and hereby  agrees to  faithfully  perform all of its
obligations  under  the Lease as of the date  hereof  (the  "Acceptance  Date").
Lessee hereby  authorizes  and directs  Lessor to make payment to each vendor of
the Equipment pursuant to such vendor's invoice or any purchase order,  purchase
agreement or supply contract with such vendor, receipt and approval of which are
hereby reaffirmed by Lessee.

         2. By its execution and delivery of this Acceptance Certificate, Lessee
hereby reaffirms all of the representations,  warranties and covenants contained
in the Lease as of the date  hereof,  and  further  represents  and  warrants to
Lessor that no Event of Default,  and no event or condition which with notice or
the passage of time or both would  constitute an Event of Default,  has occurred
and is continuing as of the date hereof. Lessee further certifies to Lessor that
Lessee has  selected  the  Equipment  and has received and approved the purchase
order,  purchase  agreement or supply contract under which the Equipment will be
acquired for all purposes of the Lease.

     3. Lessee hereby  represents  and warrants that: (a) the Equipment has been
delivered  and is in an operating  condition  and  performing  the operation for
which it is intended to the satisfaction of the Lessee;  and (b) if requested by
Lessor,  the  Equipment  has been  marked or  labeled  evidencing  the  Lessor's
interest therein.

4. The LEASE TERM COMMENCEMENT DATE is the 10th day of July, 1996

5. The RENTAL PAYMENT COMMENCEMENT DATE is the 10th day of July, 1996

6. All terms and provisions of the Lease Schedule shall remain in full force and
effect, except as otherwise provided below:

          - ACQUISITION COST: $ 4,500,000.00.

          - LEASE TERM: (72) seventy-two months.

          - RENTAL PAYMENTS:  Number of Rental Payments    Rental Payment Amount

                                         12                     $______
                                         60                     $______

          - ADVANCE RENTAL PAYMENT(S): First 01 and last 00.

          - SECURITY DEPOSIT:    N/A  %.

Dated:            July 10, 1996

Agreed and Accepted:

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By:  /s/ Michael  B. Sullivan
    ----------------------------                     ---------------------------
Name:   John J. Gould                           Name:    Michael  B. Sullivan
      --------------------------                       -------------------------
Title:  VP/Senior Lender                        Title:   President
       --------------------------                      -------------------------

<PAGE>

FLEET CAPITAL CORPORATION                                      PAGE 1 OF 1
                                                         SCHEDULE A EQUIPMENT

Attached to and made part of the  following  documents: True Lease  Schedule No.
32089-02, Acceptance Certificate, UCC Financing Statement(s),  and Warranty Bill
of Sale with Flex Products, Inc.

The Depreciable Life of the Property is (07) seven years.

LOC# (01)

BETA FIVE:
Unit Number: Beta V

(1) General Vacuum Equipment Corp.  electron beam metalyzing system,  Mfg. 1995,
78" width capacity,  1200 feet per minute,  480 volt, 3 phase,  218 amps,  model
95-005 overall size 9' X 10', serial number 95005 which machine includes, but is
not limited to, the following:

       (8) Electron beam guns
       (8) Airco Temescal Simba 2 electron  beam power supplies,  serial numbers
           330, 337, 340, 338, 339, 336, 333 and 335
       (8) Programmable seep generators
       (8) High voltage controllers
       (8) Electron beam gun controllers
       (2) Polycolds, model PFC1100HC
       (6) Varian 20" diffusion pumps, model  016513/HS-20
       (8) Airco electron  beam gun interfaces
       (4) Trige-Scott drive motors, model S90L01199100203050300011, serial
           numbers 104529421295, 104529211295, 104529311295 and 104529411295

AND ALL STANDARD AND ACCESSORY EQUIPMENT.


   FLEET CAPITAL CORPORATION                 FLEX PRODUCTS, INC.

   BY:  /s/ John J. Gould                    BY: /s/ Michael B. Sullivan
      --------------------------------          --------------------------------
   NAME:    John J. Gould                    NAME:   Michael B. Sullivan
        ------------------------------            ------------------------------
   TITLE:   Vice President                   TITLE:  President
         -----------------------------             -----------------------------

<PAGE>

FLEET CAPITAL CORPORATION                                  Schedule A-1
                                                           Equipment Location

Attached to and made part of the  following  documents  True Lease  Schedule No.
32089-02,  Acceptance Certificate, UCC Financing Statement(s),  Warranty Bill of
Sale with Flex Products, Inc.

--------------------------------------------------------------------------------
Loc #     Equipment Currently Located at:
--------------------------------------------------------------------------------

01        1402 Mariner Way, Santa Rosa, California 95407






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

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By: /s/ Michael  B. Sullivan
   -----------------------------                   -----------------------------
Name:   John J. Gould                           Name:   Michael  B. Sullivan
     ---------------------------                     ---------------------------
Title:  VP/Senior Lender                        Title:  President
      --------------------------                      --------------------------

<PAGE>

[LOGO] Fleet                                               PURCHASE OPTION RIDER
Capital Leasing

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

         This  Purchase  Option  Rider (this  "Rider") is attached to and made a
part of that certain Lease Schedule No.  32089-00002,  dated as of June 19, 1996
(the "Lease Schedule"), by and between the undersigned parties.

         If no Event of Default (or event or condition  which,  with the passage
of time or giving of notice,  or both,  would  become  such an Event of Default)
shall have occurred and be continuing, and the Lease shall not have been earlier
terminated,  Lessee shall have the option to purchase  (the  "Purchase  Option")
all, but not less than all, of the Equipment at the expiration of the Lease Term
for an amount,  payable in  immediately  available  funds on the last day of the
Lease Term,  equal to: (a) all Rental  Payments,  late charges and other amounts
due and owing under the Lease; plus (b) all taxes, assessments and other charges
due or payable in connection with the sale of the Equipment to Lessee;  plus (c)
an amount equal to 25.00000% of the  Acquisition  Cost of the  Equipment,  which
Lessor and Lessee  acknowledge  represents a reasonable  current estimate of the
fair market value of the Equipment at the end of the Lease Term.

         Provided that Lessor shall have received all amounts payable  hereunder
on the last day of the Lease Term,  and that no Event of Default then exists and
is continuing under the Lease,  Lessor shall convey all of its right,  title and
interest in and to the Equipment to Lessee on the last day of the Lease Term, on
an "AS-IS,"  "WHERE-IS"  BASIS WITHOUT  REPRESENTATION  OR WARRANTY,  EXPRESS OR
IMPLIED, and without recourse to Lessor, except that the Equipment shall be free
and clear of all liens  created by Lessor.  If Lessee  intends to  exercise  the
Purchase  Option,  Lessee shall give  irrevocable  written notice to Lessor (the
"Option  Notice") not more than 240 days,  nor less than 180 days,  prior to the
expiration  of the Lease Term.  If Lessee fails to give such  written  notice to
Lessor,  it shall be  conclusively  presumed  that  Lessee  has  elected  not to
exercise the Purchase Option.

         If, for any  reason,  Lessee does not  exercise  the  Purchase  Option,
Lessee shall, on the last day of the Lease Term,  return all of the Equipment to
Lessor  pursuant to and in the condition  required by the terms of the Lease and
pay to  Lessor  a  return  fee  equal  to  5.0% of the  Acquisition  Cost of the
Equipment.

         All capitalized terms used herein and not defined herein shall have the
meanings set forth or referred to in the Lease Schedule.  Except as specifically
set forth herein,  all of the terms and  conditions of the Lease shall remain in
full force and effect and are hereby  ratified and affirmed.  To the extent that
the  provisions  of this Rider  conflict  with any  provisions  contained in the
Lease, the provisions of this Rider shall control.

Dated as of: June 19, 1996

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By: /s/ Michael  B. Sullivan
   -----------------------------                   -----------------------------
Name:   John J. Gould                           Name:   Michael  B. Sullivan
     ---------------------------                     ---------------------------
Title:  VP/Senior Lender                        Title:  President
      --------------------------                      --------------------------

<PAGE>

  [LOGO] Fleet                                    STIPULATED LOSS VALUE SCHEDULE
Capital Leasing

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

         This  Stipulated  Loss Value Schedule (this  "Schedule") is attached to
and made a part of that certain Lease Schedule No. 32089-00002, dated as of June
19, 1996 (the "Lease Schedule"), by and between the undersigned parties.
<TABLE>

         The following Stipulated Loss Values shall be used to calculate damages
or loss as provided in the Master Lease.  The Stipulated Loss Value with respect
to any item of Equipment on any Rental  Payment Date during the Lease Term shall
be an amount equal to the sum of: (a) all Rental Payments and other amounts then
due and owing to Lessor under the Lease,  together with all accrued interest and
late charges thereon, calculated through and including the date of payment; plus
(b) the product of the Acquisition Cost of the such Equipment  multiplied by the
percentage set forth below as of such Rental Payment Date.
<CAPTION>
<S>                        <C>                <C>                       <C>   
Rental Payment Date for   Percentage of       Rental Payment Date for   Percentage of
 Rental Payment Number    Acquisition Cost    Rental Payment Number     Acquisition Cost
</TABLE>

              SEE EXHIBIT C ATTACHED HERETO AND MADE A PART HEREOF








         All capitalized terms used herein and not defined herein shall have the
meanings set forth or referred to in the Lease Schedule.  Except as specifically
set forth herein,  all of the terms and  conditions of the Lease shall remain in
full force and effect and are hereby ratified and affirmed.


Dated as of: June 19, 1996

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By: /s/ Michael  B. Sullivan
   -----------------------------                   -----------------------------
Name:   John J. Gould                           Name:   Michael  B. Sullivan
     ---------------------------                     ---------------------------
Title:  VP/Senior Lender                        Title:  President
      --------------------------                      --------------------------

<PAGE>

                                    EXHIBIT C
                                       TO
                         STIPULATED LOSS VALUE SCHEDULE
                         TO LEASE SCHEDULE NO. 32089-02

RENTAL PAYMENT       PERCENTAGE OF         RENTAL PAYMENT       PERCENTAGE OF
DATE FOR RENTAL     ACQUISITION COST      DATE FOR RENTAL      ACQUISITION COST
PAYMENT NUMBER                             PAYMENT NUMBER

      1                103.35121715              37              70.90880090
      2                102.77715752              38              69.75511355
      3                102.19526265              39              68.59002020
      4                101.59552206              40              67.41874422
      5                100.98781724              41              66.23597391
      6                100.37210821              42              65.04165152
      7                 99.73838360              43              63.84099969
      8                 99.09652408              44              62.62870597
      9                 98.44648879              45              61.40471189
     10                 97.78823666              46              60.16895869
     11                 97.11575495              47              58.92972240
     12                 96.43494366              48              57.67865042
     
     13                 95.54711438              49              56.42401842
     14                 94.34921445              50              55.15747340
     15                 93.74119331              51              53.87895553
     16                 92.81702863              52              52.59673978
     17                 91.88261080              53              51.30247247
     18                 90.93788832              54              49.99609306
     19                 89.97683797              55              48.68587582
     20                 89.00534921              56              47.36346638
     21                 88.02336959              57              46.02880349
     22                 87.03084644              58              44.68182560
     23                 86.02873119              59              43.33120369
     24                 85.01597126              60              41.96818663
     
     25                 83.99351758              61              40.60144498
     26                 82.96031708              62              39.22222721
     27                 81.91631576              63              37.83047065
     28                 80.86246378              64              36.43484516
     29                 79.79770726              65              35.02659847
     30                 78.72199142              66              33.60566720
     31                 77.63626563              67              32.18072044
     32                 76.53947521              68              30.74300521
     33                 75.43156457              69              29.29245738
     34                 74.31247787              70              27.82901249
     35                 73.18743961              71              26.37095856
     36                 72.05113926              72              24.89996987

                                                 72              25.00000000

<PAGE>

[LOGO] Fleet
Capital Leasing

                                                             PAY PROCEEDS LETTER

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

    We hereby  authorize you to pay the following  Payee(s) from the proceeds of
your  financial  accommodations  to us in  respect  of that  certain  True Lease
Schedule  No.  32089-00002  dated as of June 19,  1996,  and make  disbursements
directly to said Payee(s) as follows:

                                                       Amount of
        PAYEE                                          Payment

Flex Products, Inc. *                                       $4,421,390.26
----------------------------------------------------   -------------------------
Fleet Capital Corporation (short fund to pay                    78,609.74
----------------------------------------------------   -------------------------
Customer Invoice now due)
----------------------------------------------------   -------------------------

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

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

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

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

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

                 TOTAL:                                     $4,500,000.00
                                                            --------------------


Dated as of: June 19 , 1996
            ------------------------

* BANK: Bank of America, NTSA                     FLEX PRODUCTS, INC.
        10 Santa Rosa Ave.
        Santa Rosa, CA                            By: /s/ Michael B. Sullivan
                                                     ---------------------------
  ABA #:  12100358                                Name:   Michael B. Sullivan
                                                       -------------------------
For Account of: FLEX PRODUCTS INC.                Title:  President
                                                       -------------------------
Account #:  14984-00242

<PAGE>

<TABLE>
<CAPTION>
        This FINANCING STATEMENT is presented for filing and will remain  effective with certain
exceptions  for a period of five years from the date of filing  pursuant to section  9403 of the
California Uniform Commercial Code.
------------------------------------------------------------------------------------------------
<C>                                                    <C>                                     
1. DEBTOR  (LAST NAME FIRST--IF AN INDIVIDUAL)         1A.  SOCIAL SECURITY OR FEDERAL TAX NO.

  Flex Products, Inc.
------------------------------------------------------------------------------------------------
1B. MAILING ADDRESS                          1C. CITY, STATE              1D. ZIP CODE

  2793 Northpoint Parkway                    Santa Rosa, California            95407
------------------------------------------------------------------------------------------------
2.  ADDITIONAL DEBTOR (IF ANY)                         2A.  SOCIAL SECURITY OR FEDERAL TAX NO.
    (LAST NAME FIRST--IF AN INDIVIDUAL)                    

------------------------------------------------------------------------------------------------
2B. MAILING ADDRESS                          2C. CITY, STATE              2D. ZIP CODE

------------------------------------------------------------------------------------------------
3.  DEBTOR'S TRADE NAMES OR STYLES (IF ANY)            3A.  FEDERAL TAX NUMBER

================================================================================================
4. SECURED PARTY                                       4A.  SOCIAL SECURITY NO., FEDERAL TAX NO.
                                                            OR BANK TRANSIT AND A.B.A. NO.
     NAME      Fleet Capital Corporation
     MAILING ADDRESS   50 Kennedy Plaza, 5th Floor
     CITY  Providence     STATE   RI     ZIP CODE  02903
------------------------------------------------------------------------------------------------
5.  ASSIGNEE OF SECURED PARTY (IF ANY)                  5A. SOCIAL SECURITY NO., FEDERAL TAX NO.
                                                            OR BANK TRANSIT AND A.B.A. NO.
     NAME
     MAILING ADDRESS
     CITY
------------------------------------------------------------------------------------------------
6.  This FINANCING STATEMENT covers the following types or items of property (include description
    of real property on which located and owner of record when required by instruction 4).

    (1) General Vacuum Equipment Corp. electron beam metalyzing system as further described on
    attached Schedule A(s) and all additions, accessions, modifications, improvements,
    replacements, substitutions, and accessories thereto and therefor, whether now owned or
    hereafter acquired, and proceeds, products and income of any of the foregoing, including
    insurance proceeds. Debtor has possession of the equipment under a true lease only. Secured
    Party has a security interest in the equipment to the extent necessary to protect its title
    and interest therein.

   Acct. No. 32089-02/lae (Fixture filing)
------------------------------------------------------------------------------------------------
7. CHECK   [X]      7A. [ ] PRODUCTS OF COLLATERAL     7B. DEBTOR(S) SIGNATURE NOT REQUIRED IN 
   IF APPLICABLE            ARE ALSO COVERED               ACCORDANCE WITH INSTRUCTION 5(a) ITEM:
                                                           [ ](1)    [ ](2)    [ ](3)    [ ](4)
------------------------------------------------------------------------------------------------
8. CHECK   [X]          [ ]  DEBTOR IS A "TRANSMITTING UTILITY"
   IF APPLICABLE             IN ACCORDANCE WITH UCC SS. 9105 (1)(n)
------------------------------------------------------------------------------------------------
9.                                       DATE:      C   10. THIS SPACE FOR USE OF FILING OFFICER
                                                    O       (DATE, TIME, FILE NUMBER
  /s/ Michael B. Sullivan                7/11/96    D       AND FILING OFFICER)
SIGNATURE(S) OF DEBTOR(S)                           E
-------------------------------------------------- ---
Flex Products, Inc.                                 1

TYPE OR PRINT NAME(S) OF DEBTOR(S)                  2
--------------------------------------------------
                                                    3
   /s/ John J. Gould
SIGNATURE(S) OF SECURED PARTY(IES)                  4
--------------------------------------------------
Fleet Capital Corporation                           5

TYPE OR PRINT NAME(S) OF SECURED PARTY(IES)         6
==================================================
11. Return copy to:                                 7

NAME                                                8
ADDRESS
CITY                                                9
STATE
ZIP CODE                                            0
==================================================
                FORM UCC.1--
                Approved by the Secretary of State
==================================================
</TABLE>


<PAGE>

Memorandum

DATE:     July 23, 1996

TO:       Jeff Ryan

FROM:     David Kitayama

RE:       Fleet Credit Lease Documents

     Comparing  the signed  lease  documents  I got on Monday  and the  previous
documents  given to Flex as the final lease,  it appears that the signed package
is not complete. Please secure file copies for Flex of the following documents:

     1) All UCC filings

     2) (Assistant) Secretary's Certificate

          a) from OCLI

          b) from Flex

     3) Lease schedule p2 on both items leased

     4) Support agreement between Fleet Capital Corp and OCLI and Flex Products.

     5) Any and  all  side  letters that constitute documentation supporting the
lease transactions.


     We discussed items 4 and 5 this morning and you indicated that you would be
getting them from Fleet. Please add the other items to the list and let me  know
when they are available.

<PAGE>

[LOGO] Fleet 
Capital Leasing




July 18, 1996



Mr. Jeff Ryan
Flex Products, Inc.
1402 Mariner Way
Santa Rosa, California 95407

RE: ACCOUNT NO. 32089-01 and 02

Dear Jeff:

I would  like to take this  opportunity  to thank  you for  working  with  Fleet
Capital Corporation on your recent financing requirements.

Enclosed for your files are copies of the  executed  documents  referencing  the
above  account  number.  Invoices  will be mailed to the address on this letter.
Please  verify it; if  invoices  should be mailed to another  address or another
individual  within  your  organization,  please  contact  our  customer  service
department at (800) 238-3737.

I have also included a revised Pay Proceeds letter for Lease Schedule 01, please
have this executed and return to my attention.

Again,  thank  you for your  business.  Please  feel free to call us if you have
questions regarding your account or if we can be of any further service to you.

Very truly yours,

/s/ Sandy

Sandra Buonaiuto
Sr. Contract Administrator I

Enclosures

<PAGE>

[LOGO]                                                       PAY PROCEEDS LETTER
Fleet Credit Corporation

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

     We hereby authorize you to pay the following  Payee(s) from the proceeds of
your  financial accommodations  to us in  respect  of that  certain  True  Lease
Schedule  No.  32089-00001  dated as of June 19,  1995,  and make  disbursements
directly to said Payee(s) as follows:


                                                            Amount of
              PAYEE                                          Payment

Flex Products, Inc.                                      $ 7,765,000.09
----------------------------------------------------   -------------------------
Fleet Capital Corporation (short fund to pay                 113,999.91
----------------------------------------------------   -------------------------
Customer Invoice now due)
----------------------------------------------------   -------------------------

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

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

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

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

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

                                              TOTAL:     $ 7,879,000.00
                                                       -------------------------


Dated as of: June 19, 1996
            -----------------
                                                  FLEX PRODUCTS, INC.           
                                                                         
                                                  By:  
                                                     ---------------------------
                                                  Name: 
                                                       -------------------------
                                                  Title: 
                                                       -------------------------

<PAGE>
                                      MASTER EQUIPMENT LEASE AGREEMENT No. 32089

 LESSOR: FLEET CAPITAL CORPORATION            LESSEE: FLEX PRODUCTS, INC.
         a Rhode Island corporation                   a Delaware corporation

Address: 50 Kennedy Plaza                     Address: 1402 Mariner Way
         Providence, Rhode Island 02903-2305        Santa Rosa, California 95047

1. LEASE OF EQUIPMENT
   Subject to the terms and conditions set forth herein (the "Master Lease") and
in any Lease  Schedule  incorporating  the terms of this Master Lease  (each,  a
"Lease Schedule").  Lessor agrees to lease to Lessee, and Lessee agrees to lease
from  Lessor,  the items and units of personal  property  described in each such
Lease Schedule,  together with all replacements,  parts, additions,  accessories
and substitutions therefor (collectively,  the "Equipment"). Each Lease Schedule
shall  constitute a separate,  distinct and  independent  lease of Equipment and
contractual  obligation of Lessee.  References  to "the Lease",  "this Lease" or
"any Lease" shall mean and refer to any Lease  Schedule which  incorporates  the
terms of this Master  Lease,  together with all  exhibits,  addenda,  schedules,
certificates,  riders and other documents and instruments executed and delivered
in connection with such Lease Schedule or this Master Lease, all as the same may
be amended or modified  from time to time.  The Equipment is to be delivered and
installed  at the  location  specified  or referred to in the  applicable  Lease
Schedule.  The Equipment shall be deemed to have been accepted by Lessee for all
purposes  under this Lease upon Lessor's  receipt of an  Acceptance  Certificate
with respect to such  Equipment,  executed by Lessee after  receipt of all other
documentation  required by Lessor with respect to such  Equipment.  Lessor shall
not be liable or  responsible  for any  failure or delay in the  delivery of the
Equipment  to Lessee for whatever  reason.  As used in the Lease with respect to
any item of Equipment, the terms "Acceptance Date",  "Acquisition Cost", "Rental
Payment(s)",  "Rental Payment Dates", "Rental Payment Numbers",  "Rental Payment
Commencement  Date",  "Lease Term" and "Lease Term Commencement Date" shall have
the  meanings  and  values  assigned  to  them  in the  Lease  Schedule  and the
Acceptance Certificate applicable to such Equipment.

2. TERM AND RENT
   The  Lease  Term for each  item of  Equipment  shall be as  specified  in the
applicable Lease Schedule.  Rental Payments shall be in the amounts and shall be
due and payable as set forth in the applicable  Lease  Schedule.  If any rent or
other amount payable hereunder shall not be paid within 10 days of the date when
due, Lessee shall pay as an administrative and late charge an amount equal to 5%
of the amount of any such overdue payment. In addition, Lessee shall pay overdue
interest  on any  delinquent  payment or other  amounts  due under the Lease (by
reason of  acceleration or otherwise) from 30 days after the due date until paid
at the rate of 1 1/2% per month or the maximum  amount  permitted by  applicable
law,  whichever  is lower.  All  payments to be made to Lessor  shall be made to
Lessor in  immediately  available  funds at the address shown above,  or at such
other  place as Lessor  shall  specify  in  writing.  THIS IS A  NON-CANCELABLE,
NON-TERMINABLE  LEASE OF EQUIPMENT  FOR THE ENTIRE  LEASE TERM  PROVIDED IN EACH
LEASE SCHEDULE HERETO.

3. POSSESSION; PERSONAL PROPERTY
   No right,  title or interest in the Equipment shall pass to Lessee other than
the right to maintain  possession  and use of the  Equipment  for the Lease Term
(provided no Event of Default has occurred) free from interference by any person
claiming by,  through,  or under  Lessor.  The  Equipment  shall  always  remain
personal  property even though the Equipment  may hereafter  become  attached or
affixed to real  property.  Lessee agrees to give and record such notices and to
take such other  action at its own  expense as may be  necessary  to prevent any
third party  (other than an assignee  of Lessor)  from  acquiring  or having the
right under any  circumstances  to acquire any interest in the Equipment or this
Lease.

4. DISCLAIMER OF WARRANTIES
   LESSOR IS NOT THE  MANUFACTURER  OR SUPPLIER OF THE EQUIPMENT,  NOR THE AGENT
THEREOF, AND MAKES NO EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES AS TO ANY
MATTER  WHATSOEVER,  INCLUDING WITHOUT  LIMITATION,  THE  MERCHANTABILITY OF THE
EQUIPMENT,  ITS FITNESS FOR A PARTICULAR PURPOSE,  ITS DESIGN OR CONDITION,  ITS
CAPACITY OR  DURABILITY,  THE  QUALITY OF THE  MATERIAL  OR  WORKMANSHIP  IN THE
MANUFACTURE OR ASSEMBLY OF THE EQUIPMENT,  OR THE CONFORMITY OF THE EQUIPMENT TO
THE PROVISIONS AND  SPECIFICATIONS  OF ANY PURCHASE ORDER RELATING  THERETO,  OR
PATENT INFRINGEMENTS,  AND LESSOR HEREBY DISCLAIMS ANY SUCH WARRANTY.  LESSOR IS
NOT RESPONSIBLE FOR ANY REPAIRS OR SERVICE TO THE EQUIPMENT,  DEFECTS THEREIN OR
FAILURES IN THE OPERATION THEREOF. Lessee has made the selection of each item of
Equipment and the manufacturer and/or supplier thereof based on its own judgment
and expressly disclaims any reliance upon any statements or representations made
by Lessor. For so long as no Event of Default (or event or condition which, with
the passage of time would  become such an Event of Default)  has occurred and is
continuing,  Lessee shall be the  beneficiary  of, and shall be entitled to, all
rights under any applicable  manufacturer's or vendor's  warranties with respect
to the Equipment, to the extent permitted by law.

   If the  Equipment  is not  delivered,  is not  properly  installed,  does not
operate as warranted,  becomes  obsolete,  or is  unsatisfactory  for any reason
whatsoever,  Lessee shall make all claims on account  thereof solely against the
manufacturer or supplier and not against Lessor,  and Lessee shall  nevertheless
pay all rentals  and other sums  payable  hereunder.  Lessee  acknowledges  that
neither  the   manufacturer  or  supplier  of  the  Equipment,   nor  any  sales
representative  or agent  thereof,  is an agent of Lessor,  and no  agreement or
representation  as to the  Equipment  or any  other  matter  by any  such  sales
representative  or agent of the manufacturer or supplier shall in any way affect
Lessee's obligations hereunder.

5. REPRESENTATIONS, WARRANTIES AND COVENANTS
   Lessee represents and warrants to and covenants with Lessor that:

   (a) Lessee has the form of business organization  indicated above and is duly
organized  and existing in good  standing  under the laws of the state listed in
the caption of this Master Lease and is duly  qualified to do business  wherever
necessary  to  carry  on its  present  business  and  operations  and to own its
property; (b) this Lease has been duly authorized by all necessary action on the
part of Lessee  consistent with its form of  organization,  does not require any
further  shareholder or partner  approval,  does not require the approval of, or
the  giving  notice  to,  any  federal,  state,  local or  foreign  governmental
authority and does not  contravene  any law binding on Lessee or contravene  any
certificate or articles of incorporation  or by-laws or partnership  certificate
or agreement,  or any agreement,  indenture, or other instrument to which Lessee
is a party or by which it may be bound;  (c) this  Lease has been duly  executed
and  delivered by  authorized  officers or partners of Lessee and  constitutes a
legal, valid and binding obligation of Lessee enforceable in accordance with its
terms; (d) Lessee has not and will not, directly or indirectly, create, incur or
permit to exist any lien, encumbrance,  mortgage, pledge, attachment or security
interest on or with  respect to the  Equipment  or this Lease  (except  those of
persons  claiming by, through or under  Lessor);  (e) the Equipment will be used
solely in the conduct of Lessee's business and will remain in the location shown
on the applicable  Lease Schedule unless Lessor  otherwise agrees in writing and
Lessee has completed all notifications, filings, recordings and other actions in
such new location as Lessor may reasonably  request to protect Lessor's interest
in the Equipment;  (f) there are no pending or threatened actions or proceedings
before any court or  administrative  agency which  materially  adversely  affect
Lessee's financial condition or operations,  and all credit, financial and other
information  provided  by  Lessee  or at  Lessee's  direction  is,  and all such
information  hereafter  furnished  will be,  true,  correct and  complete in all
material  respects;  (g) Lessor has not selected,  manufactured  or supplied the
Equipment to Lessee and has  acquired any  Equipment  subject  hereto  solely in
connection with this Lease and Lessee has received and approved the terms of any
purchase  order or  agreement  with respect to the  Equipment;  (h) Lessee shall
maintain,  as of the end of each of Lessee's  fiscal  quarters,  a Fixed  Charge
Coverage Ratio of not less than 1.75:1 for each  cumulative  four quarter period
(if Lessee issues stock  through an initial  public stock  offering  ("IPO") (x)
during its fiscal  quarter ending April 30, 1997, and the net proceeds to Lessee
from such IPO are no less than $15,0OO,000, and at the conclusion of such fiscal
quarter  Lessee's  TangibLe Net Worth is no less than the Base Net Worth, or (y)
after April 30, 1997,  and Lessee's  Tangible Net Worth,  immediately  following
such  IPO,  is no less than the Base Net Worth  plus 50% of  Lessee's  total Net
Income for each fiscal quarter from and after the fiscal quarter ending July 31,
1997, to the date of the

                                                                     Page 1 of 5
<PAGE>

IPO, Lessee shall  thereafter  maintain a Fixed Charge Coverage Ratio of no less
than 1.2:1);  (i) Lessee shall maintain a ratio of total liabilities  (including
the  present  value of  non-cancelable  equipment  operating  lease  rentals) to
Tangible Net Worth of not more than 2.75:1  through until July 31, 1997,  and of
not more than 2.0:1  thereafter;  (j) Lessee shall maintain a Tangible Net Worth
of not less than $7,728,000 (the "Minimum Tangible Net Worth") through April 30,
1996,  which Minimum  Tangible Net Worth shall increase as of the end of each of
Lessee's fiscal quarters thereafter by the sum of (x) 50% of Lessee's Net Income
during  such  quarter  and (y) 80% of the net  proceeds  of any stock  issued by
Lessee  during  such  quarter;  (k)  Lessee  shall  not  make  any  payments  to
shareholders,  whether by dividend, commission, repayment of debt, loan or other
payments, if such payments would cause Lessee's cumulative four quarter Adjusted
Fixed Charge  Coverage Ratio to be less than 1.0:1 or Lessee's  Current Ratio to
be less than 1.2:1 or result in Lessee's  breach of any other  covenant  herein;
and (1) more than 50% of Lessee's voting capital stock, or effective  control of
Lessee's voting capital stock,  issued and outstanding  from time to time, shall
be retained by Optical Holding Laboratory,  Inc., ("OCLI").  Notwithstanding the
provisions  set forth in Section 5 (1) above,  in the event that SICPA  Holding,
S.A.  ("SICPA")  acquires more than 50% of Lessee's  voting  capital  stock,  or
effective control of Lessee's voting capital stock,  issued and outstanding from
time to time, Lessor agrees that, upon delivery of such financial information on
SICPA as Lessor deems  necessary,  Lessor shall  consider a request by Lessee to
substitute  SICPA for OCLI for  purposes of the  covenant set forth in Section 5
(1). The sale of the Equipment by Lessee to Lessor and Lessee's  undertaking  of
the obligations  contained  herein shall not cause Lessee to be insolvent within
the meaning of applicable  state and/or  federal laws.  The payment by Lessor to
Lessee of the Acquisition Cost of the Equipment,  as set forth from time to time
on the Acquisition Certificate, is fair consideration for each item of Equipment
within the meaning of applicable state and federal laws.

   Without limiting the generality of any of the foregoing  representations  and
warranties,  the sale by Lessee to Lessor of the Equipment  does not require any
stockholder approval or consent of any trustee or holders of any indebtedness or
obligations of Lessee and will not, to Lessee's knowledge,  contravene any laws,
statutes, regulations, judgments or decrees applicable to Lessee, including, but
not limited to, laws or statutes regarding fraudulent  conveyances,  bankruptcy,
creditors'  rights or bulk  transfers,  or the certificate of  incorporation  or
by-laws of Lessee,  or  contravene  the  provisions  of, or constitute a default
under, or violate any  restrictive  covenants or other agreement to which Lessee
is a party or by which  Lessee or its assets may be bound or  affected,  and any
authorization,  approval,  license,  filing  or  registration  with any court or
governmental  agency or  instrumentality  which is necessary in connection  with
such sale has, to Lessee's  knowledge,  been effected and a written copy thereof
has been delivered to Lessor.  Lessee has full power,  authority and legal right
to sell the  Equipment to Lessor.  The sale of the  Equipment to Lessor has been
duly authorized by all necessary corporate action and constitutes a legal, valid
and binding obligation of Lessee.  Lessor's decision to accept such substitution
shall be made in Lessor's sole discretion and will require,  among other things,
the execution of a Support Agreement from SICPA substantially in the form of the
Support Agreement executed by OCLI.

   For the purposes of this section the following definitions shall apply:

     "Adjusted  Fixed Charge  Coverage Ratio" shall be defined as the sum of Net
     Income, depreciation,  amortization, interest expense, taxes on income, and
     operating lease payments  divided by the sum of interest  expense,  current
     maturities of long term debt,  operating lease  payments,  net repayment of
     shareholder debt on an intra-quarterly basis, and dividend payments.

     "Base Net Worth" shall be defined as the sum of the net  proceeds  received
     by Lessee from the issuance of stock through an IPO and $15,000,000.

     "Current  Ratio" shall be defined as all cash, cash  equivalents,  accounts
     receivable,  inventory,  prepaid  expenses,  and  other  current  rights to
     receive payments as of the date of determination thereof in accordance with
     generally   accepted   accounting   principles   ("GAAP")  divided  by  all
     liabilities which should, in accordance with GAAP consistently  applied, be
     classified  as  current  liabilities,   and  in  any  event  including  all
     indebtedness  payable  on  demand  or  within  one  year  from  the date of
     determination  without  any option on the part of Lessee to extend or renew
     beyond  such year,  and  including  the  current  portion of long term debt
     required to be paid within one year.

     "Fixed  Charge  Coverage  Ratio" shall be defined as the sum of net income,
     depreciation,  amortization, interest expense, and operating lease payments
     divided by the sum of interest  expense,  current  maturities  of long term
     debt, and operating lease payments.

     "Tangible  Net  Worth"  shall  be  defined  as the  excess  of all  assets,
     excluding  any  value  for  goodwill,   trademarks,   patents,  copyrights,
     organization expense,  other similar intangible items, and receivables from
     stockholders  that do not arise from the sale of  product to  stockholders,
     employees and affiliated companies, over total liabilities.

   All other  financial  terms used  herein  and not  defined  herein,  shall be
defined in accordance with GAAP, consistently applied.

6. INDEMNITY
   Lessee  assumes the risk of liability for, and hereby agrees to indemnify and
hold safe and harmless, and covenants to defend, Lessor, its employees, servants
and agents  from and  against:  (a) any and all  liabilities,  losses,  damages,
claims and expenses  (including legal expenses of every kind and nature) arising
out of the  manufacture,  purchase,  shipment and  delivery of the  Equipment to
Lessee,  acceptance or rejection,  ownership,  titling,  registration,  leasing,
possession,  operation,  use,  return  or other  disposition  of the  Equipment,
including,  without  limitation,  any liabilities  that may arise from patent or
latent defects in the Equipment  (whether or not  discoverable  by Lessee),  any
claims  based on absolute  tort  liability  or warranty  and any claims based on
patent,  trademark or copyright infringement;  (b) any and all loss or damage of
or to the Equipment;  and (c) any obligation or liability to the manufacturer or
any supplier of the  Equipment  arising  under any purchase  orders issued by or
assigned to Lessor.

7. TAXES AND OTHER CHARGES
   Lessee agrees to comply with all laws,  regulations and  governmental  orders
related to this Lease and to the Equipment and its use or possession, and to pay
when due, and to defend and indemnify  Lessor against  liability for all license
fees, assessments,  and sales, use, property,  excise, privilege and other taxes
(including  any related  interest or  penalties) or other charges or fees now or
hereafter imposed by any governmental body or agency upon any Equipment, or with
respect to the manufacturing, ordering, shipment, purchase, ownership, delivery,
installation,  leasing, operation, possession, use, return, or other disposition
thereof or the rentals  hereunder (other than taxes on or measured solely by the
net income of Lessor).  Any fees,  taxes or other lawful  charges paid by Lessor
upon failure of Lessee to make such  payments  shall at Lessor's  option  become
immediately due from Lessee to Lessor.

   Lessor and Lessee agree that Lessor is the owner of the Equipment for Federal
income tax purposes. Lessee covenants that it shall not take any action which is
inconsistent with Lessor's ownership of the Equipment.

   For  purposes  of this  Section  7, the term Tax  Benefits  shall  mean  cost
recovery  deductions  under Section 168 of the Internal Revenue Code of 1986, as
amended,  using a 200% declining balance method of depreciation switching to the
straight line method for the first taxable year for which such method will yield
larger  depreciation  deductions,  and assuming a half-year  convention and zero
salvage  value,  for the  applicable  recovery  period for such Equipment as set
forth in the Lease Schedule with respect to such Equipment.

   If, as a result of any act,  failure  to act or any  omission  on the part of
Lessee,  or breach of any  representation,  warranty or covenant  made by Lessee
hereunder,  there shall be a loss, disallowance,  recapture or delay in claiming
all or any portion of the Tax Benefits with respect to the  Equipment,  or there
shall be included in Lessor's  gross income for  Federal,  state or local income
tax purposes any amount on account of any addition,  modification or improvement
to or in respect of any of the  Equipment  made or paid for by Lessee (any loss,
disallowance,  recapture,  delay, inclusion or change being herein called a "Tax
Loss"),  then thirty (30) days after  written  notice to Lessee by Lessor that a
Tax Loss has occurred,  Lessee shall pay Lessor a lump sum amount  which,  after
deduction of all taxes required to be paid by Lessor with respect to the receipt
of such  amount,  will  provide  Lessor  with an amount  necessary  to  maintain
Lessor's  after-tax economic yield and overall net after-tax cash flows at least
at the same  level  that  would  have  been  available  if such Tax Loss had not
occurred, plus any interest,  penalties or additions to tax which may be imposed
in connection with such Tax Loss. In lieu of paying such Tax Loss in a lump sum,
Lessor may  require,  or upon  Lessee's  request,  may agree,  in Lessor's  sole
discretion, that such Tax Loss shall be paid in equal periodic payments over the
applicable  remaining Lease Term with respect to such Equipment with each Rental
Payment due and payable with respect to such Equipment.  Notwithstanding, and in
addition to, the

                                                                     Page 2 of 5
<PAGE>

portion of the Tax Benefits  with respect to the  Equipment and such loss of Tax
Benefits is the result of any act, failure to act or any omission on the part of
Lessee or a breach of any  representation,  warranty or covenant  made by Lessee
hereunder,  and either (a) a deficiency shall have been proposed by the Internal
Revenue  Service  or other  taxing  authority  having  jurisdiction,  or (b) tax
counsel  for Lessor has  rendered an opinion to Lessor that such Tax Loss has so
occurred. The foregoing indemnities and covenants set forth in Section 7 of this
Master  Lease  shall  continue  in full force and effect and shall  survive  the
expiration or earlier termination of the Lease.

8. DEFAULT
   Lessee  shall be in default of this Lease upon the  occurrence  of any one or
more of the following events (each an "Event of Default"):

   (a) Lessee shall fail to make any payment,  of rent or  otherwise,  under any
Lease within 10 days of the date when due; or (b) Lessee shall fail to obtain or
maintain any of the insurance required under any Lease; or (c) Lessee shall fail
to perform or observe any covenant,  condition or agreement under any Lease, and
such failure  continued  for 10 days after notice  thereof to Lessee,  provided,
however, that no such failure to perform or observe shall constitute an Event of
Default hereunder,  where Lessee has commenced curing such failure to perform or
observe within such ten (10) day period and continues to diligently  pursue such
cure in the  opinion of Lessor;  or (d) Lessee  shall  default in the payment or
performance  of any  indebtedness  or  obligation  to Lessor  or any  affiliated
person, firm or entity  controlling,  controlled by or under common control with
Lessor,  under  any loan,  note,  security  agreement,  lease,  guaranty,  title
retention or conditional  sales  agreement or any other  instrument or agreement
evidencing such indebtedness with Lessor or such other affiliated  person,  firm
or entity affiliated with Lessor; or (e) any  representation or warranty made by
Lessee herein or in any certificate,  agreement, statement or document hereto or
hereafter  furnished  to  Lessor  in  connection  herewith,   including  without
limitation,  any  financial  information, disclosed  to Lessor shall prove to be
false or incorrect in any material respect; or (f) death or judicial declaration
of incompetence of Lessee, it an individual; the commencement of any bankruptcy,
insolvency,  arrangement,  reorganization,  receivership,  liquidation  or other
similar  proceeding by or against Lessee or any of its properties or businesses,
or the appointment of a trustee, receiver, liquidator or custodian for Lessee or
any of its  properties of business,  or if Lessee  suffers the entry of an order
for relief under Title 11 of the United States Code; or the making by Lessee era
general assignment or deed of trust for the benefit of creditors,  or (g) Lessee
shall  default in any payment on any  obligation  to any third  party,  which is
greater than  $1,000,000,  and any applicable grace or cure period with respect:
thereto has expired;  or (h) Lessee  shall  terminate  its  existence by merger,
consolidation,  sale of  substantially  all of its assets or  otherwise;  or (i)
Lessee  shall be in breach of Section 5 (1) hereof as such  Section 5 (1) may be
revised  from time to time  pursuant to the terms of Section 5; or (j) if Lessee
is a publicly  held  corporation,  there shall be a change in the  ownership  of
Lessee's  stock  such  that  Lessee  is  no  longer  subject  to  the  reporting
requirements of the Securities Exchange Act of 1934, or no longer has a class of
equity securities  registered under Section 12 of the Securities Act of 1933; or
(k) Lessor shall determine, in its sole discretion and in good faith, that there
has been a material  adverse  change in the  financial  condition  of the Lessee
since the date of this  Lease,  or that  Lessee's  ability  to make any  payment
hereunder  promptly when due or otherwise comply with the terms of this Lease or
any other agreement  between Lessor and Lessee is impaired;  or (l) any event or
condition set forth in subsections (e), (f) or (h) of this Section 8 shall occur
with respect to any guarantor or other person responsible,  in whole or in part,
for payment or  performance  of this Lease;  or (m) any event or  condition  set
forth in  subsections  (d) through  (j) shall occur with  respect to any person,
firm or entity controlled by Lessee.  Lessee shall promptly notify Lessor of the
occurrence  of any Event of Default or the  occurrence or existence of any event
or condition  which,  upon the giving of notice of lapse of time,  or both,  may
become an Event of Default.

9. REMEDIES
   Upon the  occurrence of any Event of Default,  Lessor may, at its sole option
and discretion,  exercise one or more of the following  remedies with respect to
any or all of the Equipment:  (a) cause Lessee to promptly  return,  at Lessee's
expense,  any or all  Equipment  to such  location  as Lessor may  designate  in
accordance with the terms of Section 18 of this Master Lease, or Lessor,  at its
option,  may enter upon the  premises  where the  Equipment  is located and take
immediate possession of and remove the same by summary proceedings or otherwise,
all without  liability  to Lessor for or by reason of damage to property or such
entry or taking  possession  except for  Lessor's  gross  negligence  or willful
misconduct; (b) sell any or all Equipment at public or private sale or otherwise
dispose of, hold, use, operate, lease to others or keep idle the Equipment,  all
as Lessor in its sole  discretion  may  determine  and all free and clear of any
rights  of  Lessee;  (c)  remedy  such  default,  including  making  repairs  or
modifications  to the  Equipment,  for the account  and  expense of Lessee,  and
Lessee agrees to reimburse Lessor for all of Lessor's costs and expenses; (d) by
written  notice to Lessee,  terminate the Lease with respect to any or all Lease
Schedules and the Equipment subject thereto, as such notice shall specify,  and,
with  respect  to  such  terminated  Lease  Schedules  and  Equipment,   declare
immediately due and payable and recover from Lessee,  as liquidated  damages for
loss of Lessor's bargain and not as a penalty, an amount equal to the Stipulated
Loss Value,  calculated as of the next following  Rental Payment Date: (e) apply
any  deposit or other cash  collateral  or sale or  remarketing  proceeds of the
Equipment at any time to reduce any amounts due to Lessor,  and (f) exercise any
other right or remedy which may be available to Lessor under applicable  law, or
proceed by  appropriate  court  action to enforce the terms hereof or to recover
damages for the breach hereof,  including  reasonable  attorneys' fees and court
costs.  No remedy  referred to in this  Section 9 shall be  exclusive,  but each
shall be  cumulative  and in addition to any other  remedy  referred to above or
otherwise available to Lessor at law or in equity.

   The exercise or pursuit by Lessor of any one or more of such  remedies  shall
not preclude the  simultaneous  or later exercise or pursuit by Lessor of any or
all such other remedies, and all remedies hereunder shall survive termination of
this Lease. At any sale of the Equipment  pursuant to this Section 9, Lessor may
bid for the Equipment. Notice required, if any, of any sale or other disposition
hereunder  by Lessor  shall be satisfied by the mailing of such notice to Lessee
at least  seven (7) days prior to such sale or other  disposition.  In the event
Lessor takes possession and disposes of the Equipment,  the proceeds of any such
disposition  shall be applied in the  following  order:  (1) to all of  Lessor's
costs, charges and expenses incurred in taking, removing, holding, repairing and
selling or leasing  the  Equipment;  (2) to the  extent not  previously  paid by
Lessee,  to pay Lessor for any damages then remaining unpaid  hereunder;  (3) to
reimburse  Lessee for any sums previously  paid by Lessee as damages  hereunder;
and (4) the balance,  if any, shall be retained by Lessor.  A termination  shall
occur only upon written notice by Lessor and only with respect to such Equipment
as Lessor shall specify in such notice.  Termination  under this Section 9 shall
not affect Lessee's duty to perform Lessee's obligations  hereunder to Lessor in
full.  Lessee  agrees to  reimburse  Lessor on demand  for any and all costs and
expenses  incurred  by Lessor in  enforcing  its rights and  remedies  hereunder
following the occurrence of an Event of Default, including,  without limitation,
reasonable  attorney's fees, and the costs of repossession,  storage,  insuring,
reletting, selling and disposing of any and all Equipment.

   The term  "Stipulated Loss Value" with respect to any item of Equipment shall
mean the Stipulated  Loss Value as set forth in any Schedule of Stipulated  Loss
Values attached to and made a part of the applicable Lease Schedule. If there is
no such Schedule of Stipulated Loss Values,  then the Stipulated Loss Value with
respect to any item of  Equipment  on any Rental  Payment  Date during the Lease
Term shall be an amount  equal to the sum of: (a) all Rental  Payments and other
amounts then due and owing to Lessor under the Lease,  together with all accrued
interest and late charges thereon  calculated  through and including the date of
payment;  plus (b) the net  present  value  of:  (i) all  Rental  Payments  then
remaining  unpaid  for the  Lease  Term,  plus (ii) the  amount of any  purchase
obligation  with respect to the  Equipment  or, if there is no such  obligation,
then  the  fair  market  value  of the  Equipment  at the end of such  term,  as
estimated by Lessor in its sole discretion,  all discounted to net present value
at a discount  rate  equal to the  1-year  Treasury  Constant  Maturity  rate as
published  in  the  Selected   Interest  Rates  table  of  the  Federal  Reserve
statistical  release  H.15(519)  for the week  ending  immediately  prior to the
original Acceptance Date for such Equipment.

10. ADDITIONAL SECURITY
   For so long as any obligations of Lessee shall remain  outstanding  under any
Lease,  Lessee  hereby  grants to Lessor a security  interest in all of Lessee's
rights in and to  Equipment  subject to such Lease from time to time,  to secure
the  prompt  payment  and  performance  when due (by reason of  acceleration  or
otherwise) of each and every indebtedness, obligation or liability of Lessee, or
any affiliated  person,  firm, or entity controlled by Lessee,  owing to Lessor,
whether now existing or hereafter arising,  including  but not limited to all of
such  obligations  under or in respect of any Lease.  The extent to which Lessor
shall have a purchase money security  interest in any item of Equipment  under a
Lease which is deemed  to create a security  interest under Section 1-201(37) of
the Uniform  Commercial Code shall be determined by reference to the Acquisition
Cost of such item  financed by Lessor.  In order more fully to secure its rental
payments and all other obligations to Lessor hereunder,  Lessee hereby grants to
Lessor a security interest in any deposit of Lessee to Lessor under Section 3(d}
of any Lease Schedule hereto. Such security deposit shall not bear interest, may
be commingled  with other funds of Lessor and shall be  immediately  restored by
Lessee if applied under Section 9. Upon expiration of the term of this Lease and
satisfaction  of all of Lessee's  obligations,  the  security  deposit  shall be
returned to Lessee.  The term  "Lessor" as used in this Section 10 shall include
any affiliated person, firm or entity controlling, controlled by or under common
control with Lessor.

                                                                     Page 3 of 5
<PAGE>

11. NOTICES
   Any  notices or demands  required or  permitted  to be given under this Lease
shall be  given  in  writing  and  either  (i) by  regular  mail,  by hand or by
overnight courier, which notice shall become effective when received, or (ii) by
facsimile or other form of  electronic  transmission,  which notice shall become
effective upon transmission thereof, such notice shall be addressed to Lessor to
the  attention  of  Customer  Accounts,  and to Lessee at the  address set forth
above,  or to such  other  address  as the  party to  receive  notice  hereafter
designates by such written notice.

12. USE; MAINTENANCE; INSPECTION; LOSS AND DAMAGE
   During the Lease Term for each item of Equipment, Lessee shall, unless Lessor
shall otherwise consent in writing: (a) permit each item of Equipment to be used
only within the  continental  United  States by qualified  personnel  solely for
business  purposes and the purpose for which it was  designed and shall,  at its
sole expense,  service,  repair, overhaul and maintain each item of Equipment in
the same  condition as when received,  ordinary wear and tear excepted,  in good
operating  order,  consistent with prudent  industry  practice (but, in no event
less than the same extent to which Lessee  maintains other similar  equipment in
the prudent  management of its assets and properties) and in compliance with all
applicable  laws,  ordinances,  regulations,  and  conditions  of all  insurance
policies  required to be  maintained  by Lessee under the Lease and all manuals,
orders,  recommendations,  instructions and other written requirements as to the
repair  and  maintenance  of such  item of  Equipment  issued at any time by the
vendor and/or manufacturer  thereof; (b) maintain  conspicuously on each item of
Equipment such labels, plates, decals or other markings as Lessor may reasonably
require,  stating that Lessor is owner of such item of Equipment; (c) furnish to
Lessor such information concerning the condition, location, use and operation of
the Equipment as Lessor may request; (d) upon reasonable advance notice,  permit
any person  designated by Lessor to visit and inspect,  during  normal  business
hours,  any  item  of  Equipment  and  any  records  maintained   in  connection
therewith,  provided,  however,  that the  failure  of  Lessor  to  inspect  the
Equipment or to inform Lessee of any  noncompliance  shall not relieve Lessee of
any of its obligations  hereunder;  (e) if any item of Equipment does not comply
with the  requirements  of this Lease,  Lessee shall,  within 30 days of written
notice  from  Lessor,  bring such  Equipment  into  compliance;  (f) not use any
Equipment,  nor  allow the same to be used,  for any  unlawful  purpose,  nor in
connection  with any property or material  that would  subject the Lessor to any
liability  under any state or federal  statute or  regulation  pertaining to the
production,  transport,  storage,  disposal or  discharge  of hazardous or toxic
waste or materials;  and (g) make no additions,  alterations,  modifications  or
improvements  (collectively,  "Improvements")  to any item of Equipment that are
not readily  removable without causing material damage to such item of Equipment
or which will cause the value,  utility or useful life of such item of Equipment
to materially  decline.  If any such  Improvement  is made and cannot be removed
without causing  material damage or decline in value,  utility or useful life (a
"Non-Severable  Improvement"),  then  Lessee  warrants  that such  Non-Severable
Improvement shall immediately  become Lessor's property upon being installed and
shall be free and clear of all liens and encumbrances and shall become Equipment
subject to all of the terms conditions of the Lease. All such  Improvements that
are not  Non-Severable  Improvements  shall be  removed  by Lessee  prior to the
return of the item of Equipment hereunder or such Improvements shall also become
the sole and absolute  property of Lessor without any further  payment by Lessor
to Lessee and shall be free and clear of all liens and encumbrances  whatsoever.
Lessee shall repair all damage to any item of Equipment caused by the removal of
any  Improvement  so as to restore such item of Equipment to the same  condition
which existed prior to its installation and as required by this Lease.

   Lessee hereby assumes all risk of loss,  damage or  destruction  for whatever
reason to the Equipment  from and after the earlier of the date (i) on which the
Equipment  is ordered or (ii) Lessor pays the purchase  price of the  Equipment,
and continuing until the Equipment has been returned to, and accepted by, Lessor
in the condition  required by Section 18 hereof upon the expiration of the Lease
Term. If during the Lease Term any item of Equipment shall become lost,  stolen,
destroyed,  damaged beyond repair or rendered  permanently unfit for use for any
reason, or in the event of any condemnation,  confiscation,  theft or seizure or
requisition  of title to or use of such item,  Lessee shall  immediately  pay to
Lessor an amount equal to the Stipulated Loss Value of such item, as of the next
following Rental Payment Date.

13. INSURANCE
   Lessee  shall  procure and  maintain  insurance in such amounts and upon such
terms and with such  companies  as Lessor may  approve,  during the entire Lease
Term and until the  Equipment  has been  returned to, and accepted by, Lessor in
the condition required by Section 18 hereof, at Lessee's expense,  provided that
in no event  shall  such  insurance  be less than the  following  coverages  and
amounts: (a) Worker's  Compensation and Employer's  Liability Insurance,  in the
full statutory  amounts  provided by law; (b)  Comprehensive  General  Liability
Insurance  including  product/completed  operations  and  contractual  liability
coverage, with minimum limits of $1,000,000 each occurrence. and Combined Single
Limit Body Injury  and Property Damage, $1,000,000 aggregate,  where applicable;
and (c) All Risk Physical Damage Insurance,  including  earthquake and flood, on
each item of Equipment, in an amount not less than the greater of the Stipulated
Loss Value of the Equipment or (if available) its full replacement value. Lessor
will be included as an  additional  insured and loss payee as its  interest  may
appear. Such policies shall be endorsed to provide that the coverage afforded to
Lessor shall not be rescinded,  impaired or invalidated by any act or neglect of
Lessee. Lessee agrees to waive Lessee's right and its insurance carrier's rights
of subrogation against Lessor for any and all loss or damage.

   Notwithstanding  the  foregoing,  Lessee  shall not be  required  to maintain
earthquake  insurance in an amount in excess of the then current Stipulated Loss
Value with a 15% deductible.

   In addition to the foregoing minimum insurance coverage, Lessee shall procure
and maintain such other insurance coverage as lessor may reasonably require from
time to time during the Lease Term.  All policies shall be endorsed to contain a
clause  requiring  the  insurer to furnish  Lessor  with at least 30 days' prior
written notice of any material change,  cancellation or non-renewal of coverage.
Upon execution of this Lease,  Lessee shall furnish Lessor with a certificate of
insurance or other evidence  satisfactory to Lessor that such insurance coverage
is in effect,  provided,  however,  that Lessor shall be under no duty either to
ascertain  the existence of or to examine such  insurance  coverage or to advise
Lessee  in the  event  such  insurance  coverage  should  not  comply  with  the
requirements  hereof.  In case of  failure  of Lessee  to  procure  or  maintain
insurance,  Lessor may at its option  obtain such  insurance,  the cost of which
will be paid by the Lessee as  additional  rentals.  Lessee  hereby  irrevocably
appoints  Lessor as Lessee's  attorney-in-fact  to file,  settle or adjust,  and
receive  payment  of  claims  under any such  insurance  policy  and to  endorse
Lessee's  name on any  checks,  drafts or other  instruments  on payment of such
claims.  Lessee  further agrees to give Lessor prompt notice of any damage to or
loss of, the Equipment, or any part thereof.

14. LIMITATION OF LIABILITY
   Lessor  shall have no  liability  in  connection  with or arising  out of the
ownership,  leasing,  furnishing,  performance  or use of the  Equipment  or any
special,  indirect,  incidental  or  consequential  damages  of  any  character,
including,   without  limitation,  loss  of  use  of  production  facilities  or
equipment, loss of profits, property damage or lost production, whether suffered
by Lessee or any third party.

15. FURTHER ASSURANCES
   Lessee shall  promptly  execute and deliver to Lessor such further  documents
and take such further action as Lessor may reasonably  require in good faith, in
order to more effectively carry out the intent and purpose of this Lease. Lessee
shall  provide  to Lessor,  within 120 days after the close of each of  Lessee's
fiscal years,  and, within 45 days of the end of each quarter of Lessee's fiscal
year, a copy of its financial  statements  prepared in accordance with generally
accepted accounting  principles and, in the case of annual financial statements,
audited  by  independent  certified  public  accountants,  and  in the  case  of
quarterly  financial  statements  certified by Lessee's chief financial officer,
each such financial  statement to be  accompanied  by a Compliance  Certificate,
substantially  in the form of Exhibit A attached  hereto,  certified by Lessee's
chief financial officer,  as to Lessee's compliance with subsections (h) through
(k) of Section 5 above. Lessee shall execute and deliver to Lessor upon Lessor's
request  such  instruments  and  assurances  as Lessor deems  necessary  for the
confirmation,  preservation  or  perfection  of this Lease and  Lessor's  rights
hereunder,   including,  without  limitation,  such  corporate  resolutions  and
opinions of counsel as Lessor may request from time to time,  and all schedules,
forms and other  reports as may be  required to satisfy  obligations  imposed by
taxing authorities. In furtherance thereof, Lessor may file or record this Lease
or a memorandum or a photocopy  hereof  (which for the purposes  hereof shall be
effective as a financing  statement) so as to give notice to third parties,  and
Lessee hereby appoints Lessor as its attorney-in-fact to execute, sign, file and
record UCC  financing  statements  and other  lien  recordation  documents  with
respect to the Equipment  where Lessee fails or refuses to do so after  Lessor's
written  request,  and Lessee agrees to pay or reimburse  Lessor for any filing,
recording or stamp fees or taxes arising from any such filings.

16. ASSIGNMENT
   This Lease and all rights of Lessor  hereunder  shall be assignable by Lessor
absolutely or as  security,  without notice to Lessee,  subject to the rights of
Lessee  hereunder for the use and  possession of the Equipment for so long as no
Event of Default has occurred and is continuing  hereunder.  Any such assignment
shall  not  relieve  Lessor of its  obligations  hereunder  unless  specifically
assumed by the assignee, and Lessee

                                                                     Page 4 of 5
<PAGE>

agrees it shall not  assert  any  defense,  rights of  set-off  or  counterclaim
against  any  assignee  to which  Lessor  shall  have  assigned  its  rights and
interests hereunder, nor hold or attempt to hold such assignee liable for any of
Lessor's  obligations  hereunder.  No such assignment  shall materially increase
Lessee's obligations hereunder. Lessee agrees, upon Lessor's written request, to
provide to any such assignee an acknowledgment of such assignment confirming the
terms, conditions,  representations,  warranties and covenants contained in this
Lease.

   LESSEE SHALL NOT ASSIGN OR DISPOSE OF ANY OF ITS RIGHTS OR OBLIGATIONS  UNDER
THIS  LEASE OR ENTER INTO ANY  SUBLEASE  WITH  RESPECT  TO ANY OF THE  EQUIPMENT
WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT OF LESSOR.

17. LESSEE'S OBLIGATION UNCONDITIONAL
   This  Lease is a net  lease and  Lessee  hereby  agrees  that it shall not be
entitled to any abatement of rents or of any other amounts payable  hereunder by
Lessee,  and that its  obligation  to pay all rent and any other  amounts  owing
hereunder  shall  be  absolute  and  unconditional   under  all   circumstances,
including,  without limitation,  the following  circumstances:  (i) any claim by
Lessee to any right of set-off, counterclaim, recoupment, defense or other right
which  Lessee  may have  against  Lessor,  any  seller  or  manufacturer  of any
Equipment or anyone else for any reason  whatsoever;  (ii) the  existence of any
liens,  encumbrances  or  rights  of  others  whatsoever  with  respect  to  any
Equipment,  whether or not resulting  from claims  against Lessor not related to
the  ownership  of such  Equipment;  or (iii) any other  event or  circumstances
whatsoever.  Each Rent Payment or other amount paid by Lessee hereunder shall be
final and Lessee will not seek to recover all or any part of such  payment  from
Lessor for any reason whatsoever.

18. RETURN OF EQUIPMENT
   Upon the expiration or earlier  termination of the Lease Term with respect to
any item of Equipment,  and provided  that Lessee has not validly  exercised any
purchase option with respect thereto,  Lessee shall: (a) return the Equipment to
a location and in  the  manner  designated by the Lessor within the  continental
United  States,   including,   as  reasonably   required  by  Lessor,   securing
arrangements  for the  disassembly  and  packing for  shipment by an  authorized
representative of the manufacturer of the Equipment, shipment with all parts and
pieces on a carrier  designated  or  approved  by  Lessor,  and then  reassembly
(including,  if necessary,  repair and overhaul) by such  representative  at the
return  location in the  condition the Equipment is required to be maintained by
the Lease and in such  condition  as will make the  Equipment  (in its  original
configuration  or as upgraded)  immediately  able to satisfy the acceptance test
protocol used to accept the Equipment from the original equipment manufacturer),
and immediately  qualified for the manufacturer's (or other authorized servicing
representatives) then-available service contract or warranty (Lessee may replace
any proprietary  optical monitoring systems with commercially  available optical
monitoring  systems,  at Lessee's  sole  expense);  (b) cause the  Equipment  to
qualify for all applicable  licenses or permits  necessary for its operation for
its intended purpose and to comply with all  specifications  and requirements of
applicable federal, state and local laws,  regulations and ordinances;  (c) upon
Lessor's  request,  provide  suitable  storage,  acceptable  to Lessor,  for the
Equipment  for a period  not to  exceed  180 days from the date of  return;  (d)
cooperate with Lessor in attempting to remarket the Equipment, including display
and  demonstration  of the Equipment to prospective  purchasers or lessees,  and
allowing  Lessor to  conduct  any  private  or  public  sale or  auction  of the
Equipment  on  Lessee's  premises.  All costs  (except for any costs that may be
incurred in preparing  the utilities or  infrastructure  necessary for operating
the Equipment at the return  location) shall be the sole  responsibility  of the
Lessee.  During any period of time from the expiration or earlier termination of
the Lease until the  Equipment  is returned in  accordance  with the  provisions
hereof or until Lessor has been paid the applicable purchase option price if any
applicable  purchase  option  is  exercised,  Lessee  agrees  to pay  to  Lessor
additional per diem rent  ("Holdover  Rent"),  payable  promptly on demand in an
amount equal to 125% of the highest  monthly Rental  Payment  payable during the
Lease Term divided by 30, provided,  however,  that nothing contained herein and
no payment of Holdover Rent hereunder  shall relieve Lessee of its obligation to
return the Equipment upon the expiration or earlier termination of the Lease.

19. MISCELLANEOUS
   THE LEASE REPRESENTS THE FINAL AGREEMENT  BETWEEN THE PARTIES  CONCERNING THE
LEASE  OF THE  EQUIPMENT  AND MAY NOT BE  CONTRADICTED  BY  EVIDENCE  OF  PRIOR,
CONTEMPORANEOUS  OR  SUBSEQUENT  ORAL  AGREEMENTS  BETWEEN THE  PARTIES.  LESSEE
ACKNOWLEDGES AND CERTIFIES THAT NO SUCH ORAL AGREEMENTS EXIST. The Lease may not
be  amended,  nor may any  rights  under  the  Lease  be  waived,  except  by an
instrument in writing signed by the party charged with such amendment or waiver.
The term  "Lessee"  as used in the  Lease  shall  mean and  include  any and all
Lessees who sign below, each of whom shall be jointly and severally liable under
the Lease.  This Master Lease will not be binding on Lessor  until  accepted and
executed by Lessor,  notice of which is hereby  waived by Lessee.  Any waiver of
the terms hereof shall be  effective  only in the specific  instance and for the
specific purpose given. Time is of the essence in the payment and performance of
all of Lessee's  obligations under the Lease. The captions in this Lease are for
convenience only and shall not define or limit any of the terms hereof.

20. ENFORCEABILITY AND GOVERNING LAW
   Any  provisions  of this Lease which are  unenforceable  in any  jurisdiction
shall,  as  to such   jurisdiction,   be  ineffective  to  the  extent  of  such
unenforceability  without  invalidating the remaining provisions hereof, and any
such  unenforceability  in any jurisdiction shall not render  unenforceable such
provisions in any other jurisdiction. To the extent permitted by applicable law,
Lessee  hereby  waives;  (a) any  provisions  of law which render any  provision
hereof  unenforceable  in any respect;  (b) all rights and remedies  under Rhode
Island General Laws Sections 6A-2.1-508 through 522 or corresponding  provisions
of the  Uniform  Commercial  Code  article or  division  pertaining  to personal
property  leasing  in any  jurisdiction  in which  enforcement  of this Lease is
sought.

   THIS  LEASE  AND THE  LEGAL  RELATIONS  OF THE  PARTIES  HERETO  SHALL IN ALL
RESPECTS BE GOVERNED BY AND CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE STATE
OF RHODE  ISLAND,  WITHOUT  REGARD TO  PRINCIPLES  REGARDING  THE CHOICE OF LAW.
LESSEE  HEREBY  CONSENTS  AND SUBMITS TO THE  JURISDICTION  OF THE COURTS OF THE
STATE OF RHODE  ISLAND AND  CALIFORNIA  AND THE FEDERAL  DISTRICT  COURT FOR THE
DISTRICT  OF RHODE  ISLAND  AND THE  NORTHERN  DISTRICT  OF  CALIFORNIA  FOR THE
PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING  ARISING OUT OF ITS OBLIGATIONS
HEREUNDER,  AND EXPRESSLY WAIVES ANY OBJECTIONS THAT IT MAY HAVE TO THE VENUE OF
SUCH COURTS.  LESSEE HEREBY  EXPRESSLY  WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY
ACTION  BROUGHT ON OR WITH RESPECT TO THIS LEASE.  Any action by Lessee  against
Lessor for any cause of action  relating to this Lease  shall be brought  within
one year after any such cause of action first arises.

Executed and delivered by duly authorized  representatives of the parties hereto
as of the date set forth below.

DATED AS OF: June 19, 1996

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By:  /s/ Michael  B. Sullivan
    ----------------------------                     ---------------------------
Name:                                           Name:    Michael  B. Sullivan
      --------------------------                       -------------------------
Title:                                          Title:   President
       --------------------------                      -------------------------

                                                                     Page 5 of 5

<PAGE>


                                                   ADDITIONAL SECURITY AGREEMENT

SECURED PARTY: FLEET CAPITAL CORPORATION         DEBTOR: FLEX PRODUCTS, INC.
               50 Kennedy Plaza                          1402 Mariner Way
               Providence, Rhode Island 02903-2305       Santa Rosa, CA 95407

             1. Grant of Security Interest. The undersigned Debtor hereby grants
to Secured Party and its successors and assigns, a continuing  security interest
in the Collateral  (hereinafter  defined) to secure the due and punctual payment
and performance of all of the Obligations (hereinafter defined) to an amount not
to exceed  $5,000,000.  As used herein,  the term  "Obligations"  shall mean and
include the following: (a) all of Debtor's obligations under that certain Master
Equipment  Lease Agreement No. 32089 dated as of June 19, 1996, to Secured Party
(the "Agreement"); and (b) all obligations contained herein and. As used herein,
the term  "Collateral"  shall mean and include  the  property  described  on the
Additional  Collateral Schedule attached hereto,  whether now owned or hereafter
acquired  and  wherever  the same may be  located,  and all  present  and future
additions, attachments, or accessories thereto and replacements thereof, and the
proceeds  therefrom  or  thereof,  including  proceeds  in the  form  of  goods,
accounts,  chattel  paper,  documents,   instruments  and  general  intangibles,
insurance  proceeds  payable in respect of loss or damage to any such  property.
All capitalized terms used herein and not defined herein shall have the meanings
set forth or referred to in the Agreement.  To the extent not otherwise  defined
in this  Additional  Security  Agreement,  all  other  terms  contained  in this
Additional  Security  Agreement  shall have the meanings assigned or referred to
them in the Uniform  Commercial  Code in force in the State of Rhode Island (the
"UCC").

             2. Additional Documents and Aqreements. Debtor will, at the request
of Secured Party, execute,  deliver, and permit Secured Party to file and record
any  financing  statement,  specific  assignment  or  other  paper  that  may be
reasonably requested  by Secured Party in order to create, preserve,  perfect or
validate any security interest  hereunder or to enable Secured Party to exercise
and enforce its rights  hereunder with respect to any of the Collateral,  Debtor
hereby appoints Secured Party as Debtor's  attorney-in-fact to execute, sign and
file such additional  financing statements as Secured Party may determine in its
sole discretion to be necessary or desirable to protect Secured Party's interest
in the Collateral. Debtor hereby authorizes Secured Party to file and record any
carbon, photographic or other reproduction of this Additional Security Agreement
or any  financing  statement  executed  and  delivered in  connection  with this
Additional  Security  Agreement,  which  shall for all  purposes be deemed to be
sufficient as a financing  statement  hereunder.  The security  interest granted
hereby shall continue  effective  irrespective of any retaking and redelivery of
Collateral  to Debtor  until all  Obligations  secured  hereby are fully paid or
performed.  The Collateral is and shall remain personal property even though all
or any portion of the  Collateral  may hereafter  become  attached or affixed to
real  property,  and Debtor shall  provide  Secured Party with  disclaimers  and
waivers from landlords,  mortgagees or any other persons holding any interest in
the real  property  where  any  Collateral  may be  located,  acceptable  in all
respects to  Secured  Party, which  may be  necessary or advisable  in the  sole
discretion of Secured Party to confirm that the security  interest and rights of
Secured  Party in the  Collateral  are and will remain  valid  against all other
Parties.

             3. Representations;  Warranties;  Covenants and Aqreements.  For so
long as any  Obligations  shall remain  outstanding,  Debtor hereby  represents,
warrants,  covenants and agrees that: (a) this Additional Security Agreement and
all related documentation has been and shall be duly authorized by all necessary
action on the part of Debtor  consistent with its form of  organization,  do not
and shall not require any further  shareholder or partner  approval,  or require
the  approval  of, or the  giving of notice  to, any  federal,  state,  local or
foreign  governmental  authority  and shall not  contravene  any law  binding on
Debtor or contravene any certificate or articles of  incorporation or by-laws or
partnership  certificate  or agreement,  or any agreement,  indenture,  or other
instrument  to which  Debtor is a party or by which it may be bound;  (b) Debtor
shall  lawfully  possess  and own the  Collateral;  (c) except for the  security
interest granted hereby,  the Collateral is free from and will be kept free from
all liens, claims, security interests, attachments and encumbrances, and that no
financing  statement covering the Collateral or any proceeds thereof shall be on
file in favor of anyone  other than Secured  Party;  (d) Debtor will not misuse,
fail to keep in good repair,  sell,  assign,  rent,  lend,  encumber,  transfer,
secrete or otherwise  dispose of any of the Collateral or any interest  therein,
nor permit or  contract  to do any such act,  except  that Debtor may dispose of
inventory in the ordinary course of business as heretofore  conducted by Debtor;
(e) if any  Collateral  becomes the subject of any  instrument,  chattel  paper,
negotiable document of title, including any warehouse receipt or bill of lading,
Debtor shall deliver such  instrument,  paper or document to Secured Party;  (f)
Debtor  shall  defend  at  Debtor's  own cost any  action,  proceeding  or claim
affecting the Collateral;  (g) Debtor shall pay promptly all taxes, assessments,
license fees and other public or private charges when levied or assessed against
the Collateral;  (h) Debtor shall permit Secured Party at any time during normal
business  hours to examine and inspect  the  Collateral  and to inspect and make
abstracts  from records of Debtor  concerning the  Collateral;  (i) Debtor shall
furnish  Secured  Party such  information  and  reports  regarding  the  status,
condition and location of the Collateral  and the financial  condition of Debtor
as Secured Party may from time to time reasonably request;  (j) if a certificate
of title be required or permitted by law with respect to any Collateral,  Debtor
shall obtain such  certificate  and all related lien  registration  and notation
documentation with respect to the Collateral indicating the security interest of
Secured Party thereon,  and in any event do everything necessary or expedient to
preserve or perfect the security  interest of Secured Party in such  Collateral;
(k)  Debtor  shall  promptly  notify  Secured  Party  of  any  event  causing  a
substantial loss or diminution in the value or functional  utility of all or any
material part of the Collateral, or affecting Secured Party's rights or remedies
hereunder  with respect to the  disposition  of all or any material  part of the
Collateral;  (1) Debtor shall promptly and  diligently  collect all accounts and
rights to receive  payment for goods sold or leased,  or for  services  rendered
(whether or not evidenced by an instrument  or chattel  paper) which  constitute
all or any part of the Collateral  ("Accounts") and maintain  accurate books and
records of such Accounts and all collections  thereof; and (m) Debtor shall keep
its records  concerning the Accounts at Debtor's chief executive  offices at the
address shown above,  or at such other address as Secured Party shall approve in
writing. For so long as any Obligations shall remain outstanding,  Debtor shall:
(i) segregate all  collections,  Accounts and proceeds of the Collateral so that
they are capable of identification  and deliver such  collections,  Accounts and
proceeds to Secured Party immediately upon demand therefor;  (ii) obtain Secured
Party's prior written consent to any sale, contract of sale or other disposition
of the Collateral;  (iii) upon Secured Party's request therefor,  notify account
debtors,  purchasers  of the  Collateral  or any other  persons of the  security
interest created hereby; and (iv) upon Secured Party's request therefor,  demand
and collect any Accounts and any proceeds of the  Collateral  from persons owing
same.  Debtor hereby  irrevocably  authorizes  Secured Party to endorse Debtor's
name on all collections,  receipts, instruments or other documents, and appoints
Secured Party as Debtor's  attorney-in-fact  to exercise to the extent permitted
by law all powers,  rights and  remedies  necessary to enable  Secured  Party to
exercise its rights hereunder.

             4.  Insurance.  All risk of loss of, damage to, or destruction  of,
the Collateral shall at all times be with Debtor.  Debtor will procure forthwith
and maintain fire, theft and property damage insurance with extended or combined
additional  coverage on any Collateral which is tangible  personal  property for
the  full  replacement  value  thereof  for so  long as any  Obligations  remain
outstanding,  together with such other insurance as Secured Party may reasonably
specify,  and promptly deliver certificates and copies evidencing each policy to
Secured Party with a standard mortgagee's long form endorsement attached showing
loss  payable to  Secured  Party and Debtor as their  respective  interests  may
appear, which endorsement shall provide at least thirty (30) days' prior written
notice to Secured Party of any material  change,  cancellation or non-renewal of
coverage.  Secured  Party's  acceptance  of policies in lesser  amounts or risks
shall not be a waiver of Debtor's foregoing obligations.

            5. Defaults.  Time is of the essence in the payment and  performance
of all Obligations,  including  without  limitation all Obligations  under or in
respect of this Additional Security Agreement. It shall be an "Event of Default"
hereunder  if (i) an Event of Default  under the  Agreement  shall  occur,  (ii)
Debtor breaches any representation,  warranty, covenant or provision hereof, and
such breach continues for ten (1O) days after notice thereof to Debtor,

                                                                     Page 1 of 2

<PAGE>

provided,  however,  that no such breach shall  constitute  an Event of Default
hereunder where Debtor has commenced curing such breach within such ten (1O) day
period and  continues to  diligently  pursue such cure in the opinion of Secured
Party; or (iii) any Collateral is lost or destroyed.

             6. Remedies.  Upon the occurrence of an Event of Default hereunder,
all  Obligations,  at Secured  Party's option and without  notice,  shall become
immediately  due and  payable,  and  Secured  Party  shall  have all  rights and
remedies of a secured party under the UCC and any other  applicable  law, and in
addition, and without limiting the foregoing, Secured Party may: (a) sell all or
any part of the Collateral at public or private sale at such price(s) as Secured
Party may deem  satisfactory;  (b) require Debtor to assemble all or any part of
the Collateral and any records  pertaining  thereto and make it available to the
Secured Party at a place to be designated  by the Secured  Party;  (c) enter the
premises  of  Debtor  and take  possession  of the  Collateral  and any  records
pertaining thereto and/or  disable or render any such Collateral  unusable;  (d)
grant  extensions,  compromise claims and settle Accounts in any amount for less
than face value or book value or otherwise  without prior notice to Debtor.  All
rights and remedies in this Additional Security Agreement are cumulative and not
alternative and are not exclusive of any other remedies provided by law.  Debtor
will upon  demand  pay to  Secured  Party the  expenses  of  retaking,  holding,
preparing  for  sale,  selling  and  the  like,  including  without  limitation,
reasonable  attorney's fees and other legal expenses,  incurred by Secured Party
in  connection  with the  Collateral  or the  exercise of its rights or remedies
hereunder,  all of which shall constitute additional  Obligations secured by the
Collateral hereunder. In the event Secured Party seeks to take possession of any
or all of the Collateral by court process,  Debtor hereby irrevocably waives any
bonds and any surety or security relating thereto required by any statute, court
rule or otherwise as an incident to such  possession,  and waives any demand for
possession  prior to the  commencement  of any suit or  action to  recover  with
respect  thereto.  Any notice required to be given by Secured Party of a sale or
other  disposition or other intended action by Secured Party with respect to any
of the  Collateral or otherwise  which is made in  accordance  with the terms of
this Additional Security Agreement at least five (5) days prior to such proposed
action,  shall  constitute  fair and  reasonable  notice  to  Debtor of any such
action. Secured Party shall be liable to Debtor only for its gross negligence or
willful  misconduct in failing to comply with any applicable law imposing duties
upon Secured  Party;  Secured  Party's  liability  for any such failure shall be
limited to the actual  loss  suffered  by Debtor  directly  resulting  from such
failure.  Secured  Party  shall  have  no  liability  to  Debtor  in tort or for
incidental or consequential damages.

             7. Assignment. The provisions of this Additional Security Agreement
shall  be  binding   upon  and  shall   inure  to  the  benefit  of  the  heirs,
administrators,  successors  and assigns of Secured Party and Debtor,  provided,
however,  that  Debtor may not assign any of its rights or  delegate  any of its
Obligations  hereunder  without  the prior  written  consent of  Secured  Party.
Secured Party may, from time to time,  without notice to Debtor,  sell,  assign,
transfer,  participate,  pledge or  otherwise  dispose of all or any part of the
Obligations  and/or  the  Collateral  therefor.  In such  event,  each and every
immediate and successive purchaser, assignee, transferee,  participant, pledgee,
or holder of all or any part of the Obligations  and/or the Collateral  (each, a
"Holder") shall have the right to enforce this Additional Security Agreement, by
legal action or  otherwise,  for its own benefit as fully as if such Holder were
herein by name specifically given such rights hereunder.  Debtor agrees that the
rights of any such Holder  hereunder or with respect to the related  Obligations
shall not be subject to any  defense,  set-off or  counterclaim  that Debtor may
assess or claim against  Secured Party,  and that any such Holder shall have all
of the  Secured  Party's  rights  hereunder  but  none  of the  Secured  Party's
obligations.  Secured  Party  shall have an  unimpaired  right to  enforce  this
Additional  Security  Agreement  for its benefit with respect to that portion of
the  Obligations  which  Secured  Party  has not  sold,  assigned,  transferred,
participated, pledged or otherwise disposed of.

             8.  Miscellaneous.  No  failure  on the  part of  Secured  Party to
exercise and no delay in exercising any right,  power or remedy  hereunder shall
operate as a waiver thereof. Any provisions hereof contrary to, prohibited by or
invalid under  applicable laws or regulations  shall be inapplicable  and deemed
omitted here from,  and shall not invalidate  the remaining  provisions  hereof.
Debtor  acknowledges  receipt of a true copy and waives acceptance hereof.  THIS
ADDITIONAL  SECURITY  AGREEMENT  TOGETHER  WITH THE  AGREEMENT AND THE DOCUMENTS
EXECUTED IN CONNECTION THEREWITH  CONSTITUTES THE ENTIRE AGREEMENT OF DEBTOR AND
SECURED PARTY RELATIVE TO THE SUBJECT  MATTER HEREOF,  AND THERE ARE NO PRIOR OR
CONTEMPORANEOUS  UNDERSTANDINGS  OR  AGREEMENTS,  WHETHER  ORAL  OR IN  WRITING,
BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT  MATTER  HEREOF.  NEITHER
THIS  ADDITIONAL  SECURITY  AGREEMENT NOR ANY  PROVISION  HEREOF MAY BE CHANGED,
WAIVED,  DISCHARGED OR TERMINATED  EXCEPT BY AGREEMENT IN WRITING  SIGNED BY THE
PARTY AGAINST WHICH ENFORCEMENT OF SUCH CHANGE, WAIVER, DISCHARGE OR TERMINATION
IS SOUGHT.  Any notices and demands  shall be in writing and sent to the parties
by regular mail at the  addresses  herein set forth or to such other  address as
the parties may hereafter  specify by written notice.  THIS ADDITIONAL  SECURITY
AGREEMENT AND THE LEGAL RELATIONS OF THE PARTIES HERETO SHALL IN ALL RESPECTS BE
GOVERNED  BY AND  CONSTRUED  IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF RHODE
ISLAND,  WITHOUT REGARD TO PRINCIPLES REGARDING THE CHOICE OF LAW. DEBTOR HEREBY
CONSENTS  TO THE  JURISDICTION  OF THE  COURTS OF THE STATE OF RHODE  ISLAND AND
CALIFORNIA,  AND THE FEDERAL DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND AND
THE NORTHERN  DISTRICT OF  CALIFORNIA  FOR THE  PURPOSES OF ANY SUIT,  ACTION OR
OTHER PROCEEDING  ARISING OUT OF ITS OBLIGATIONS  HEREUNDER AND EXPRESSLY WAIVES
ANY OBJECTIONS TO THE VENUE OF SUCH COURTS. DEBTOR HEREBY EXPRESSLY WAIVES TRIAL
BY JURY IN ANY ACT1ON  BROUGHT ON OR WITH  RESPECT TO THIS  ADDITIONAL  SECURITY
AGREEMENT.  Any action by Debtor  against  Secured Party for any cause of action
relating to this Additional  Security  Agreement shall be instituted  within one
year after any such cause of action first arise.

Dated as of: June 19, 1996


FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By:  /s/ Michael  B. Sullivan
    ----------------------------                     ---------------------------
Name:                                           Name:    Michael  B. Sullivan
      --------------------------                       -------------------------
Title:                                          Title:   President
       --------------------------                      -------------------------


                                                                     Page 2 of 2

<PAGE>

FLEET CAPITAL CORPORATION                                PAGE 1 OF 3
                                                  ADDITIONAL COLLATERAL SCHEDULE

Attached  to and  made  part of the  following  documents:  Additional  Security
Agreement  dated  as of:  June 19, 1996 and UCC Financing Statement(s) with Flex
Products, Inc.

The Equipment is currently located at:       2793 Northpoint Parkway
                                             Santa Rosa, California 95407

BETA ONE
Unit Number: Beta I

(1) Leybold Hereaus  electron beam roll coater,  model Al600B30,  Mfg. 1979, 52"
width capacity, 3 meters per second, 480 volt, 3 phase, 122 Amps., Serial Number
31419342, which machine includes, but is not limited to, the following:

   (12) 30KW electron beam guns with power  supplies,  model D2D4
   (3) Polycolds, model PFC1PFC00ST
   (6) Diffusion pumps, 20" water cooled
   (12) Electron gun controllers
   Winding Cabinet
   (12) Hewlett Packard 6253A dual DC power supplies, 0-200 volt, 3 amps
   (5) Leybold Hereaus vacuum motors, model PENNINGVAC PM 41152
   (4) Leybold Hereaus vacuum motors, model THERMOVPC TM 22052
   Viewing port holes
   Residual gas analyzers electron monitoring system, model QUADREX 200
   Meters
   Control Cabinets
   Catwalk and platform around machine
   Hi-resolution RAD monitoring system
   Winding shafts and chucks
   Sputtering power supply
   63 X 15 Target
   Web drives
   Plate lifter
   (6) Leybold Hereaus turbo pumps, model 1000C
   (4) Stokes vacuum pumps, model 412-11
   (2) Leybold Hereaus blowers, model RA7001S
   (4) Genvin portable oil filters
   Glow power supply
   (6) Filter amplifier chassis
   (2) Water cooled shield sets
   Sputtering targets
   Desktop computer
   Monitors with exception of proprietary plasma emission and optical monitor
   Pressure controllers
   Heco-Pacific crane

<PAGE>

                                                         PAGE 2 OF 3
                                                  ADDITIONAL COLLATERAL SCHEDULE

BETA TWO
Unit Number: Beta II

(l) Leybold  Hereaus  sputtering  roll coater,  Mfg. 1987,  54" width  capacity,
overall size  approximately  16' X 12' X 12', 480 volt, 3 phase,  Serial  Number
58073044, which machine includes, but is not limited to, the following:

   (2) polycolds, model PFC65011ST
   (8) 8 X 54 sputtering targets with (8) SSV sputtering power supplies, serial
   numbers are MCC3K1-2, MCC3K3-4, MCC3I1-2, MCC3I3-4, MCC3G1-2, MCC3G3-4, 
   MCC3F1-2, MCC3F3-4
   (2) Cryo-pumps
   Neslab chiller, model RTE-110
   (8) 90 Kilowatt breaker boxes
   (8) Systron Donner 0-60 VDC, 0-100 amp. power supplies
   (21) Leybold Hereaus turbo pumps, model 1000G
   (2) Leybold Hereaus blower station, model WAV2000
   (3) Leybold Hereaus pumps, model S250-C
   Leybold Hereaus blower, model RUVAC, type WPV 251
   (2) Balston filters, model R1680
   Leybold  Hereaus  blower,  model RUVAC,  type 70001S 
   Cooling Tower 
   (4) Anode power supplies 
   (4) Glow discharge power supplies
   Allen Bradley controls, PLC-30
   Herbert Schuller chilling system with tower
   (4) Optical monitoring devices
   Transformers
   Motor controls
   Sheet resistance monitor
   Safety platform with stairs
   (2) Target backing plates
   (2) Analog controllers
   (2) 50/50 tooling
   Turbo lifting fixture
   (43) sets of shields
   Gas handling system
   Cathode system
   Overhead trolley with crane
   (7) Spare Titanium targets
   (5) Zircon targets
   (6) Long shields

<PAGE>

                                                         PAGE 3 OF 3
                                                  ADDITIONAL COLLATERAL SCHEDULE

The Equipment is Currenty Located at:   1402 Mariner Way
                                        Santa Rosa, California 95407

BETA THREE

   (2) Bell & Gossett pumps,  models 11RC925 series 1510, serial numbers 1955297
   and 1955296 Raven polypro tank, approximately 5' X 2' diameter
   Raven polypro tank, approximately 5' X 2' diameter
   (2) Bell & Gossett pumps, models 4BC9375, serial numbers 1957959 and 1957960,
   625 GPM
   Alfa laval heat  exchanger,  type M6-FG,  serial number  3010286368  with (4)
   0-150 degree gauges
   Alfa laval heat exchanger,  type MIO-BFG,  serial number  3010286389 with (4)
   0-150 degree gauges
   FSI water filter,  model  FSP-40N-30455,  Mfg. 1995, 10 micron with 0-160 PSI
   gauge
   Dual water cooling condensing  system,  low pressure,  high pressure with (2)
   KSB pumps, model ETACHROMB, valves, so1enoids
   (2) Edwards two stage vacuum pumps, model 275
   Air storage tank 4' X 2' diameter with 0-160 PSI guage
   Water  filter  system with (2) KSB  ETACHROM-B-40160562,  pumps,  2200 gallon
   round stainless steel tank, model BT33541
   Approximately 60' X 4" stainless steel piping with fittings
   Approximately 100' X 2" stainless steel piping with fittings

BETA FIVE

   WPH  overhead  wire rope  crane,  model 1 l/2 ton,  serial  number  W6022015,
   approximately X-Y, travel is 55' X 35' X 40'
   Kinney  vacuum  rotary pump,  model  KT-505-LP,  serial  number 3011-2 with a
   dresser roots booster blower, 15HP,  model HV3000,  serial number H00224, 480
   volts
   Kinney  vacuum  rotary pump,  model  KT-505-LP,  serial  number 3011-1 with a
   dresser roots booster blower, 15HP, model HV3000,  serial number H00219
   Dresser roots, 30MP booster pump
   (4) Emergency isolation switches
   (3) 5.5 Bar pneumatic actuator valves
   Solenoids
   Alfa laval heat exchanger, Mfg. 1995, serial number 3010286367
   (4) Weksler temperature gauges, 0-150 degrees Fahrenheit
   Raven round polypro  storage  tank,  approximately  6' X 4' diameter,  serial
   number G333465
   Approximately  60  feet  of 4"  304  stainless  steel  seamless  piping  with
   connectors
   (2)  ITT  Bell  &  Gossett  pumps,   series  1510,  20  HP,  200  GPM,  model
   21/2AB7000BF, serial numbers 1955295 and 1955296
   (2) FSI filter columns, stainless steel, Mfg. 1995, 10 micron filters, serial
   numbers 38121, 150 PSI
   Air storage tank 4' X 2' diameter with a 0-160 PSI gauge
   Miscellaneous spare parts

 
   FLEET CAPITAL CORPORATION                 FLEX PRODUCTS, INC.

   BY:                                       BY: /s/ Michael B. Sullivan
      --------------------------------          --------------------------------
   NAME:                                     NAME:   Michael B. Sullivan
        ------------------------------            ------------------------------
   TITLE:                                    TITLE:  President
         -----------------------------             -----------------------------

<PAGE>

 [LOGO] Fleet                               LEASE SCHEDULE NO. 32089-00001
Capital Leasing                                (True Lease Schedule)

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

                                Lessee:  FLEX PRODUCTS, INC.
                                Address: 1402 MARINER WAY

                                         SANTA ROSA, CA 95407

         1. This Lease  Schedule  No. 32089 - 00001 dated as of June 19, 1996 is
entered into pursuant to and  incorporates by this  reference,  all of the terms
and provisions of that certain Master  Equipment Lease Agreement No. 32089 dated
as of JUNE 19,  1996  (the  "Master  Lease"),  for the  lease of the   Equipment
described in Schedule A attached hereto.  This Lease Schedule shall constitute a
separate,  distinct and  independent  lease of the Equipment and the contractual
obligation  of Lessee.  References to the "the Lease" or "this Lease" shall mean
and  refer  to this  Lease  Schedule,  together  with the  Master  Lease and all
exhibits,  addenda, schedules,  certificates,  riders  and other  documents  and
instruments  executed and delivered in connection with this Lease Schedule,  all
as the same may be amended or modified from time to time. All capitalized  terms
used  herein  and not  defined  herein  shall have  the  meanings  set  forth or
referred to in the Master  Lease.  By its  execution  and delivery of this Lease
Schedule,  Lessee hereby  reaffirms all of the  representations,  warranties and
covenants  contained in the Master  Lease,  as of the date  hereof,  and further
represents  and  warrants to Lessor  that no Event of  Default,  and no event or
condition  which with notice or the passage of time or both would  constitute an
Event of Default, has occurred and is continuing as of the date hereof.

         2.  ACQUISITION  COST.  The  Acquisition  Cost  of  the  Equipment  is:
$7,879,000.00.

         3. (a) LEASE TERM. The Lease Term shall commence on the date hereof and
shall continue for a period of 72 months after the Lease Term  Commencement Date
set forth in the Acceptance Certificate to this Lease Schedule, plus any renewal
or extended term applicable in accordance with the terms of the Lease.

            (b)  RENTAL  PAYMENTS.  In addition to interim rent payable pursuant
to Section 2 of the Master Lease,  Lessee shall pay Lessor 72 consecutive Rental
Payments in the amounts set forth in the  schedule  below,  plus any  applicable
sales/use taxes,  commencing on the Rental Payment  Commencement  Date set forth
in the Acceptance  Certificate  and MONTHLY  thereafter for the remaining  Lease
Term.  Each Rental  Payment shall be payable on the same day of the month as the
Rental Payment Date in each succeeding  rental period during the remaining Lease
Term (each, a "Rental Payment Date"):

                                                  Amount of Each
              Number of Rental Payments           Rental Payment
              -------------------------           --------------
                        12                         113,999.91
                        60                         129,180.78

             (c) ADVANCE RENTAL  PAYMENT.  Lessee agrees to pay Lessor the first
01 and last O Rental Payments, due and payable on the Acceptance Date.

<PAGE>

             (d) SECURITY DEPOSIT.  Lessee agrees to make a payment in an amount
equal to 0% of the  Acquisition  Cost of the  Equipment,  due and payable on the
Acceptance  Date,  to be held by Lessor as a  non-interest  bearing  deposit  to
secure Lessee's performance under the Lease.

          4.  EQUIPMENT  LOCATION(S).  The  Equipment  will  be  located  at the
location(s) specified in Schedule A-1 hereto.

          5.  Lessor  will  invoice  Lessee for all sales,  use and/or  personal
property taxes as and when due and payable in accordance  with  applicable  law,
unless Lessee delivers to Lessor a valid exemption  certificate  with respect to
such   taxes.   Delivery  of  such   certificate   shall   constitute   Lessee's
representation and warranty that no such taxes shall become due and payable with
respect to the  Equipment and Lessee shall  indemnify  and hold harmless  Lessor
from and against any and all  liability or damages,  including  late charges and
interest which Lessor may incur by reason of the assessment of such taxes.

           6. The  Rental  Payments  may  change for  Equipment  accepted  after
June 19, 1996.

           7. Lessee  represents  that the  applicable  recovery  period for the
Equipment,  for purposes of Section 168 of the Internal Revenue Code of 1986, is
as set forth in Schedule A hereto.

Dated as of: June 19, 1996

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By: /s/ Michael  B. Sullivan
   -----------------------------                   -----------------------------
Name:   John J. Gould                           Name:   Michael  B. Sullivan
     ---------------------------                     ---------------------------
Title:  VP/Senior Lender                        Title:  President
      --------------------------                      --------------------------


<PAGE>
                                                          ACCEPTANCE CERTIFICATE
[LOGO] Fleet             
Capital Leasing
50 Kennedy Plaza
Providence, Rhode Island 02903-2305

         This Acceptance Certificate (this "Acceptance Certificate") is attached
to and made a part of that certain Lease Schedule No. 32089 - 00001, dated as of
June 19, 1996 (the "Lease  Schedule"),  by and between the undersigned  parties.
All capitalized terms used herein and not defined herein shall have the meanings
set forth or  referred  to in the Lease  Schedule.  To the  extent the terms set
forth in this  Acceptance  Certificate  differ or conflict with any of the terms
set forth in the Lease, the terms set forth in this Acceptance Certificate shall
control.

         1. Lessee acknowledges and agrees that each item of Equipment set forth
on Schedule A hereto (collectively,  the "Equipment") is hereby  unconditionally
accepted by Lessee for all purposes  under the Lease at the locations  specified
in  Schedule  A-1 hereto,  and hereby  agrees to  faithfully  perform all of its
obligations  under  the Lease as of the date  hereof  (the  "Acceptance  Date").
Lessee hereby  authorizes  and directs  Lessor to make payment to each vendor of
the Equipment pursuant to such vendor's invoice or any purchase order,  purchase
agreement or supply contract with such vendor, receipt and approval of which are
hereby reaffirmed by Lessee.

         2. By its execution and delivery of this Acceptance Certificate, Lessee
hereby reaffirms all of the representations,  warranties and covenants contained
in the Lease as of the date  hereof,  and  further  represents  and  warrants to
Lessor that no Event of Default,  and no event or condition which with notice or
the passage of time or both would  constitute an Event of Default,  has occurred
and is continuing as of the date hereof. Lessee further certifies to Lessor that
Lessee has  selected  the  Equipment  and has received and approved the purchase
order,  purchase  agreement or supply contract under which the Equipment will be
acquired for all purposes of the Lease.

     3. Lessee hereby  represents  and warrants that: (a) the Equipment has been
delivered  and is in an operating  condition  and  performing  the operation for
which it is intended to the satisfaction of the Lessee;  and (b) if requested by
Lessor,  the  Equipment  has been  marked or  labeled  evidencing  the  Lessor's
interest therein.

4. The LEASE TERM COMMENCEMENT DATE is the 10th day of July, 1996

5. The RENTAL PAYMENT COMMENCEMENT DATE is the 10th day of July, 1996

6. All terms and provisions of the Lease Schedule shall remain in full force and
effect, except as otherwise provided below:

          - ACQUISITION COST: $7,879,000.00.

          - LEASE TERM: (72) seventy-two months.

          - RENTAL PAYMENTS:  Number of Rental Payments    Rental Payment Amount

                                         12                     $_________
                                         60                     $_________

          - ADVANCE RENTAL PAYMENT(S): First 01 and last 00.

          - SECURITY DEPOSIT:    N/A  %.

Dated:            July 10, 1996

Agreed and Accepted:

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By:  /s/ Michael  B. Sullivan
    ----------------------------                     ---------------------------
Name:   John J. Gould                           Name:    Michael  B. Sullivan
      --------------------------                       -------------------------
Title:  VP/Senior Lender                        Title:   President
       --------------------------                      -------------------------

<PAGE>

FLEET CAPITAL CORPORATION                                      PAGE 1 OF 1
                                                         SCHEDULE A EQUIPMENT

Attached to and made part of the  following  documents: True Lease  Schedule No.
32089-01, Acceptance Certificate, UCC Financing Statement(s),  and Warranty Bill
of Sale with Flex Products, Inc.

The Depreciable Life of the Property is (07) seven years.

LOC# (01)

BETA THREE
Unit Number: Beta III

(1) Weinert Vacuum GMBH,  sputtering roll coating  machine,  Mfg. 1995, 7' X 10'
chamber size, 480 volt, 3 phase, all stainless stee1 construction  Serial Number
FBR  1400  SP-SC-001,  which  machine  includes,  but is  not  limited  to,  the
following:

   (6) 20" diffusion pumps
   (4) 16" diffusion pumps
   3 Chamber system
   Liebert UPS battery back-up system, model AP441, serial number P21174SE 
   (3) Polycoid cooling systems, model PFC-1100ST
   (3) Cathodes
   (2) Aluminum evaporation systems
   (6) Transformers, 72 kilowatt
   Edwards two stage vacuum pump, model 275
   (3) Edwards two stage vacuumm pumps, model 8O
   (3) ENI D.C. Plasma generators, model DCG-100 zokw/ea 
   Siemens PLC
   (1) Nemonic Display
   (2) Control Stations
   (1) PLC
   (2) Machine state actuators
   Circulation pumps
   Hydraulic pumps

AND ALL STANDARD AND ACCESSORY EQUIPMENT

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

BY: /s/ John J. Gould                           BY:  /s/ Michael  B. Sullivan
    ----------------------------                     ---------------------------
NAME:   John J. Gould                           NAME:    Michael  B. Sullivan
      --------------------------                       -------------------------
TITLE:  VP/Senior Lender                        TITLE:   President
       --------------------------                      -------------------------


<PAGE>

FLEET CAPITAL CORPORATION                                  Schedule A-1
                                                           Equipment Location

Attached to and made part of the  following  documents  True Lease  Schedule No.
32089-01,  Acceptance Certificate, UCC Financing Statement(s),  Warranty Bill of
Sale with Flex Products, Inc.

--------------------------------------------------------------------------------
Loc #     Equipment Currently Located at:
--------------------------------------------------------------------------------

01        1402 Mariner Way, Santa Rosa, California 95407






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

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By: /s/ Michael  B. Sullivan
   -----------------------------                   -----------------------------
Name:   John J. Gould                           Name:   Michael  B. Sullivan
     ---------------------------                     ---------------------------
Title:  VP/Senior Lender                        Title:  President
      --------------------------                      --------------------------

<PAGE>

  [LOGO] Fleet                                    STIPULATED LOSS VALUE SCHEDULE
Capital Leasing

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

         This  Stipulated  Loss Value Schedule (this  "Schedule") is attached to
and made a part of that certain Lease Schedule No. 32089-00001, dated as of June
19, 1996 (the "Lease Schedule"), by and between the undersigned parties.
<TABLE>

         The following Stipulated Loss Values shall be used to calculate damages
or loss as provided in the Master Lease.  The Stipulated Loss Value with respect
to any item of Equipment on any Rental  Payment Date during the Lease Term shall
be an amount equal to the sum of: (a) all Rental Payments and other amounts then
due and owing to Lessor under the Lease,  together with all accrued interest and
late charges thereon, calculated through and including the date of payment; plus
(b) the product of the Acquisition Cost of the such Equipment  multiplied by the
percentage set forth below as of such Rental Payment Date.
<CAPTION>
<S>                        <C>                <C>                       <C>   
Rental Payment Date for   Percentage of       Rental Payment Date for   Percentage of
 Rental Payment Number    Acquisition Cost    Rental Payment Number     Acquisition Cost
</TABLE>

              SEE EXHIBIT C ATTACHED HERETO AND MADE A PART HEREOF








         All capitalized terms used herein and not defined herein shall have the
meanings set forth or referred to in the Lease Schedule.  Except as specifically
set forth herein,  all of the terms and  conditions of the Lease shall remain in
full force and effect and are hereby ratified and affirmed.


Dated as of: June 19, 1996

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By: /s/ Michael  B. Sullivan
   -----------------------------                   -----------------------------
Name:   John J. Gould                           Name:   Michael  B. Sullivan
     ---------------------------                     ---------------------------
Title:  VP/Senior Lender                        Title:  President
      --------------------------                      --------------------------

<PAGE>

                                   EXHIBIT C
                                       TO
                         STIPULATED LOSS VALUE SCHEDULE
                         TO LEASE SCHEDULE NO. 32089-01

RENTAL PAYMENT      PERCENTAGE OF       RENTAL PAYMENT           PERCENTAGE OF
DATE FOR RENTAL     ACQUISITION COST    DATE FOR RENTAL         ACQUISITION COST
PAYMENT NUMBER                          PAYMENT NUMBER

                                               37                70.90880090
       1            103.35121715               38                69.75511355
       2            102.77715752               39                68.59002020
       3            102.19526265               40                67.41874422
       4            101.59552206               41                66.23597391
       5            100.98781724               42                65.04165152
       6            100.37210821               43                63.84099969
       7             99.73838360               44                62.62870597
       8             99.09652408               45                61.40471189
       9             98.44648879               46                60.16895869
      10             97.78823666               47                58.92972240
      11             97.11575495               48                57.67865042
      12             96.43494366
                                               49                56.42401842
      13             95.54711438               50                55.15747340
      14             94.34921445               51                53.87895553
      15             93.74119331               52                52.59673978
      16             92.81702863               53                51.30247247
      17             91.88261080               54                49.99609306
      18             90.93788832               55                48.68587582
      19             89.97683797               56                47.36346638
      20             89.00534921               57                46.02880349
      21             88.02336959               58                44.68182560
      22             87.03084644               59                43.33120369
      23             86.02873119               60                41.96818663
      24             85.01597126
                                               61                40.60144498
      25             83.99351758               62                39.22222721
      26             82.96031708               63                37.83047065
      27             81.91631576               64                36.43484516
      28             80.86246378               65                35.02659847
      29             79.79770726               66                33.60566720
      30             78.72199142               67                32.18072044
      31             77.63626563               68                30.74300521
      32             76.53947521               69                29.29245738
      33             75.43156457               70                27.82901249
      34             74.31247787               71                26.37095856
      35             73.18743961               72                24.89996987
      36             72.05113926
                                               72                25.00000000

<PAGE>


[LOGO] Fleet                                               PURCHASE OPTION RIDER
Capital Leasing

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

         This  Purchase  Option  Rider (this  "Rider") is attached to and made a
part of that certain Lease Schedule No.  32089-00001,  dated as of June 19, 1996
(the "Lease Schedule"), by and between the undersigned parties.

         If no Event of Default (or event or condition  which,  with the passage
of time or giving of notice,  or both,  would  become  such an Event of Default)
shall have occurred and be continuing, and the Lease shall not have been earlier
terminated,  Lessee shall have the option to purchase  (the  "Purchase  Option")
all, but not less than all, of the Equipment at the expiration of the Lease Term
for an amount,  payable in  immediately  available  funds on the last day of the
Lease Term,  equal to: (a) all Rental  Payments,  late charges and other amounts
due and owing under the Lease; plus (b) all taxes, assessments and other charges
due or payable in connection with the sale of the Equipment to Lessee;  plus (c)
an amount equal to 25.00000% of the  Acquisition  Cost of the  Equipment,  which
Lessor and Lessee  acknowledge  represents a reasonable  current estimate of the
fair market value of the Equipment at the end of the Lease Term.

         Provided that Lessor shall have received all amounts payable  hereunder
on the last day of the Lease Term,  and that no Event of Default then exists and
is continuing under the Lease,  Lessor shall convey all of its right,  title and
interest in and to the Equipment to Lessee on the last day of the Lease Term, on
an "AS-IS,"  "WHERE-IS"  BASIS WITHOUT  REPRESENTATION  OR WARRANTY,  EXPRESS OR
IMPLIED, and without recourse to Lessor, except that the Equipment shall be free
and clear of all liens  created by Lessor.  If Lessee  intends to  exercise  the
Purchase  Option,  Lessee shall give  irrevocable  written notice to Lessor (the
"Option  Notice") not more than 240 days,  nor less than 180 days,  prior to the
expiration  of the Lease Term.  If Lessee fails to give such  written  notice to
Lessor,  it shall be  conclusively  presumed  that  Lessee  has  elected  not to
exercise the Purchase Option.

         If, for any  reason,  Lessee does not  exercise  the  Purchase  Option,
Lessee shall, on the last day of the Lease Term,  return all of the Equipment to
Lessor  pursuant to and in the condition  required by the terms of the Lease and
pay to  Lessor  a  return  fee  equal  to 5.0%  of the  Acquisition  Cost of the
Equipment.

         All capitalized terms used herein and not defined herein shall have the
meanings set forth or referred to in the Lease Schedule.  Except as specifically
set forth herein,  all of the terms and  conditions of the Lease shall remain in
full force and effect and are hereby  ratified and affirmed.  To the extent that
the  provisions  of this Rider  conflict  with any  provisions  contained in the
Lease, the provisions of this Rider shall control.

Dated as of: June 19, 1996

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By: /s/ Michael  B. Sullivan
   -----------------------------                   -----------------------------
Name:   John J. Gould                           Name:   Michael  B. Sullivan
     ---------------------------                     ---------------------------
Title:  VP/Senior Lender                        Title:  President
      --------------------------                      --------------------------

<PAGE>

[LOGO] Fleet                                               WARRANTY BILL OF SALE
Capital Leasing
50 Kennedy Plaza
Providence, Rhode Island 02903

         FLEX  PRODUCTS,  INC.,  ("Seller")  of 1402 MARINER WAY SANTA ROSA,  CA
95407, in consideration of the sum of $7,879,000.00  Dollars, and other good and
valuable  consideration,   the  receipt  and  sufficiency  of  which  is  hereby
acknowledged, does hereby sell, transfer and assign to Fleet Capital Corporation
("FCC") a Rhode Island  corporation  having its  principal  office at 50 Kennedy
Plaza,  Providence,  Rhode Island  02903,  the equipment set forth in Schedule A
hereto (the "Equipment").

         Seller  hereby  covenants  with and  warrants to FCC that Seller is the
lawful owner of the Equipment and has the right to sell the Equipment,  and that
the Equipment is free and clear of all rights, claims, liens, charges,  security
interests or encumbrances  of any other person.  Seller will  forever indemnify,
defend and warrant all of the rights of FCC in and to the Equipment  transferred
hereunder against the claims and demands of all other persons.

IN WITNESS WHEREOF,  Seller has duly executed this Bill of Sale this 11th day of
July, 1996.

                                   FLEX PRODUCTS, INC.

                                   By: /s/ Michael B. Sullivan
                                      --------------------------------
                                   Name:   Michael B. Sullivan
                                        ------------------------------
                                   Title:  President
                                         -----------------------------


State of California
         --------------------------
County of Sonoma
         --------------------------


Subscribed and sworn before me this 11th day of July, 1996.

                                /s/ Aggie S. Navarro

                                  Notary Public

                   My Commission expires:____________________

                                        ==============================
                                                AGIE S. NAVARRO       
                                        [SEAL]  COMM. #1009257        
                                           Notary Public--California  
                                                 SONOMA COUNTY        
                                         My Comm. Expires NOV 11, 1997
                                        ==============================

<PAGE>

[LOGO] Fleet                                                 PAY PROCEEDS LETTER
Credit Corporation

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

     We hereby authorize you to pay the following  Payee(s) from the proceeds of
your  financial accommodations  to us in  respect  of that  certain  True  Lease
Schedule  No.  32089-00001  dated as of June 19,  1995,  and make  disbursements
directly to said Payee(s) as follows:

                                                            Amount of
              PAYEE                                          Payment

Flex Products, Inc.                                      $ 7,765,000.09
----------------------------------------------------   -------------------------
Fleet Capital Corporation (short fund to pay                 113,999.91
----------------------------------------------------   -------------------------
Customer Invoice now due)
----------------------------------------------------   -------------------------

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

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

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

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

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

                                              TOTAL:     $ 7,879,000.00
                                                       -------------------------

Dated as of: June 19 , 1996
            ------------------------

* BANK: Bank of America, NTSA                     FLEX PRODUCTS, INC.
        10 Santa Rosa Ave.
        Santa Rosa, CA                            By: /s/ Michael B. Sullivan
                                                     ---------------------------
  ABA #:  12100358                                Name:   Michael B. Sullivan
                                                       -------------------------
For Account of: FLEX PRODUCTS INC.                Title:  President
                                                       -------------------------
Account #:  14984-00242

<PAGE>

                           FLEET CAPITAL CORPORATION
                                50 Kennedy Plaza
                           Providence, RI 02903-2305
                                 1-800-238-3737

FLEX PRODUCTS, INC.
1402 MARINER WAY
SANTA ROSA CA 95407-0000

                                                       July 11, 1996

--------------------------------------------------------------------------------
          DESCRIPTION                                       AMOUNT
--------------------------------------------------------------------------------


          ADVANCE PAYMENT                              $113,999.91 +
          SH FUND                                      $113,999.91 -


                                          


                                 Total Due             $113,999.91
                                 Total Received        $113,999.91

                                 Balance                     $0.00

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

RETURN YOUR REMITTANCE TO THE ATTENTION OF: SANDRA BUONAIUTO

TO INSURE PROPER CREDIT TO YOUR ACCOUNT, PLEASE RETURN REMITTANCE COPY.

                      A Subsidiary of Fleet National Bank

32089 00 001 00001

<PAGE>

FLEET CREDIT CORPORATION
                                                CONSENT AND WAIVER
                                   (OWNER, LANDLORD OR MORTGAGEE OF REAL ESTATE)

50 Kennedy Plaza
Providence, Rhode Island 02903

         The undersigned, Aid Association for Lutherans, 4321 North Ballard Road
Appleton,  Wisconsin  54919 is the owner,  landlord or mortgagee of the premises
located at 1402 Mariner Way, Santa Rosa  California 95407 (the "Premises") which
are occupied by Flex Products, Inc.

         The undersigned  acknowledges that Customer has leased or financed,  or
that Customer expects to lease or finance from Fleet Credit Corporation ("FCC"),
the  Equipment  set forth on  Schedule  A  hereto,  including  any  accessories,
additions,  substitutions or replacements therefor,  which may from time to time
be located  at the  Premises.  To induce FCC to enter into a lease or  financing
agreement with Customer, the undersigned agrees with FCC as follows:

         The  undersigned  waives  any  right,  title or  interest  in or to the
         Equipment  that  it  may  now  or  hereafter   have.  The   undersigned
         irrevocably  agrees and  consents  that it will refrain from taking any
         action  to  bar,  restrain  or  otherwise   prevent  FCC,  its  agents,
         successors  or assigns,  from  entering the Premises for the purpose of
         inspecting,  removing or taking  possession of the Equipment,  and will
         grant FCC, its agents,  successors or assigns the right of entry to the
         Premises to remove the Equipment at any  reasonable  time or times. FCC
         shall be responsible  for any damage to the Premises that FCC causes in
         connection  with its entry  thereon  and the  removal of the  Equipment
         therefrom.  The  Equipment  is  and  shall  remain  personal  property,
         notwithstanding  the manner in which it may be  installed or affixed to
         the Premises.

         This  Consent and Waiver  shall inure to the benefit of the  successors
and  assigns  of FCC and  shall  be  binding  upon the  heirs,  representatives,
successors  and  assigns of the  undersigned.  The  undersigned  will,  upon the
request and at the expense of FCC,  execute and deliver to FCC such  further and
additional documents as FCC may reasonably deem necessary or desirable to effect
waivers and consents  contemplated  hereby.  This Agreement shall be governed by
and construed in accordance with the laws of the state in which the premises are
located, without reference to principles of conflict of laws.

         IN WITNESS WHEREOF,  the undersigned has duly executed this Consent and
Waiver this 18th day of April, 1996.

                                   AID ASSOCIATION F0R LUTHERANS

/s/ Bonnie L. Hietpas              By: /s/ Wayne C. Streck
------------------------               -----------------------------------------
    (Witness)                              Wayne C. Streck
                                   Title: Vice President-Mortgages & Real Estate
                                         ---------------------------------------
/s/ Janice A. Schuette             By: /s/ Kenneth E. Podell
------------------------               -----------------------------------------
    (Witness)                              Kenneth E. Podell
                                           Assistant Secretary

<PAGE>

                      ACKNOWLEDGEMENT TO BE MADE BY OWNER,
                      LANDLORD OR MORTGAGEE OF REAL ESTATE

                    (Hereinafter referred to as "Undersigned")

                                  [INDIVIDUAL)
STATE OF ________________________
                               SS.
COUNTY OF _______________________

         I,  _______________________ a Notary Public within and for said County,
in the State aforesaid,  duly commissioned and acting, do hereby certify that on
this day ______ of  ____________________,  19__  personally  appeared  before me
__________________________, Undersigned, in the foregoing Consent and Waiver, to
me  personally  well known and known to the person who signed  said  Consent and
Waiver,  who,  being by me duly sworn and being informed of the contents of said
Consent and Waiver  stated and  acknowledged  on oath that he signed,  executed,
sealed and delivered  same as his free and voluntary act and deed, for the uses,
purposes and considerations therein mentioned and set forth. 

         WITNESS my hand and seal as such Notary Public the day and year in this
certificate above written.

My commission expires ______________________   _________________________________
                                                  (Notary Public)
                                                      (Seal)
                                 (PARTNERSHIP)

STATE OF ________________________
                               SS.
COUNTY OF _______________________

         I,  _______________________ a Notary Public within and for said County,
in the State aforesaid,  duly commissioned and acting, do hereby certify that on
this day ___________ of ____________________, 19__ personally appeared before me
___________________________ and  _________________________________  who executed
the foregoing  Consent and Waiver,  to me personally well known and known to the
persons who signed said Consent and Waiver, and known to be and who, being by me
duly sworn and being  informed of the contents of said Consent and Waiver stated
and acknowledged on oath that they were Partners of ____________________________
_______________________________________________________________________________,
the  Partnership  named in and which  executed the said Consent and Waiver,  and
that they signed, executed, sealed and delivered same individually and in behalf
of the said Partnership,  with authority as their and its free and voluntary act
and deed for the uses,  purposes and  considerations  therein  mentioned and set
forth.

         WITNESS my hand and seal as such Notary Public the day and year in this
certificate above written.

My commission expires ______________________   _________________________________
                                                  (Notary Public)
                                                      (Seal)
                                 (CORPORATION)
STATE OF       WISCONSIN
          -----------------
                        SS.
COUNTY OF      OUTAGAMIE
          -----------------

         I, David Crist,  a Notary  Public  within and for said  County,  in the
State aforesaid,  duly  commissioned and acting,  do hereby certify that on this
18th day of  April,  1996  personally  appeared  before me Wayne C.  Streck  and
Kenneth E. Podell (Name of Signer for Undersigned),  to me personally well known
and known to me to be the person who signed the  foregoing  Consent  and Waiver,
and known to me to be and who,  being by me duly sworn and being informed of the
contents of said Consent and Waiver  stated and  acknowledged  on oath that they
are Vice  President-Mortgages  and  Real  Estate and Assistant Secretary  of Aid
Association for Lutherans the  Corporation  named in and which executed the said
Consent and Waiver,  and that he knows the corporate  seal of said  Corporation,
and that the seal  affixed to said Consent and Waiver is the  corporate  seal of
said  Corporation,  that he was duly  authorized  to execute  said  Consent  and
Waiver, for, in the name of and on behalf of said Corporation, and that same was
signed,  sealed,  executed and  delivered by him in the name of and on behalf of
said  Corporation  by authority of its Board of Directors and that the execution
of said Consent and waiver was his free and  voluntary  act and deed in his said
capacity and acknowledged to me that said  Corporation  executed the same as its
voluntary act and deed and was by him  voluntarily  executed,  on behalf of said
Corporation for the uses, purposes and considerations  therein mentioned and set
forth.

         WITNESS my hand and seal as such Notary Public the day and year in this
certificate above written.

My commission expires is permanent.                  /s/ David Crist
                      -----------------           --------------------
                                                      (Notary Public)
                                                          (Seal)

<PAGE>

  FLEET CREDIT CORPORATION                                 PAGE 1 OF 3
                                                           Schedule A Equipment

Attached to and made part of the following documents  Consent and Waiver (Owner,
Landlord or  Mortgagee of Real Estate)  with Flex  Products,  Inc.  32089-01 and
32089-02.

--------------------------------------------------------------------------------
Manufacturer, Description
--------------------------------------------------------------------------------

The Equipment is Currently Located at:
                          1402 Mariner Way
                          Santa Rosa, California 95407

BETA THREE:                   

Weinert  Vacuum GMBH.  sputtering  roll coating  machine,  Mfg.  1995,  7' X 10'
chamber size, 480 volt, 3 phase, all stainless steel construction.

SERIAL NUMBER _____________________


CONSISTING OF BUT NOT LIMITED TO:

(6) 20" diffusion pumps.
(4) 16" diffusion pumps.
3 Chamber system.
Liebert UPS battery back-up system, model AP331, serial P21174SF.
(3) Polycold cooling systems, model PFC-1100ST.
(3) Cathodes.
(2) Aluminum sputtering cathodes.
(6) Transformers, 72 kilowatt.
Edwards two stage vacuum pump, model 275.
(3) Edwards two stage vacuum pumps, model 80.
(6) ENI D.C Plasma generators model DCG-100.
Allen Bradley controls.
(2) Mapping monitors.
(2) Control monitors.
PLC'S.
Circulation pumps.
Hydraulic pumps.
Other various monitors.
Miscellaneous spare parts.

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

FLEET CREDIT CORPORATION          AID ASSOCIATION FOR LUTHERANS

By:                               By: /s/ Wayne C. Streck
   --------------------------         -----------------------------------------
Name:                             Name:   Wayne C. Streck
     ------------------------         -----------------------------------------
Title:                            Title:  Vice President-Mortgages & Real Estate
      -----------------------           ---------------------------------------
                                  By: /s/ Kenneth E. Podell
                                       -----------------------------------------
                                          Kenneth E. Podell

<PAGE>

FLEET CREDIT CORPORATION                                   PAGE 2 OF 3
                                                           Schedule A Equipment

--------------------------------------------------------------------------------
Manufacturer, Description
--------------------------------------------------------------------------------

(2) Bell & Gosett  pumps,  models  114RC925,  series  1510, serials  1955297 and
   1955296. 
Raven polypro tank, approximately 5' X 2', diameter.
(2) Bell & Gosett pumps, model 4BC9375, serial 1957959 and 1957960, 625 GPM.
Alfa laval heat exchanger,  type M6-FG, serial 3010286368 with (4) 0-150 degree
   gauges.
Alfa 1ave1 heat  exchanger,  type M10-BFG,  serial  30102-86369  with (4) 0-150 
   degree gauges.
FSI water  filter,  model  FSP-4ON-4-304SS,  Mfg. 1995. 10 micron with 0-160 PSI
   gauge.
Dual water cooling condensing system, low pressure,  high pressure with  (2) KSB
   pumps,  model ETACHROMB,  valves,  solenoids.  
(2) Edwards two stage  vacuum   pumps, model 275.
Air storage  tank 4' X 2'  diameter  with  0-160 PSI  gauge.  
Water filter systems with (2) KSB ETACHROM-B-40160562,  pumps, 2200 gallon round
   stainless steel tank, model BT33541.
Approximately 60' X 4" stainless steel piping with fittings.
Approximately 100' of 2" stainless steel piping with fittings.

BETA FIVE:

General Vacuum Equipment Corp.  electron beam metalyzing system,  Mfg. 1995, 78"
   width  capacity, 1200 feet per minute,  480 volt, 3 phase,  218 amps.,  model
   95-005, overall size 9' X 10', serial W9827-95.

SERIAL NUMBER: _________________
             
CONSISTING OF BUT NOT LIMITED TO:

(8) Electron beam guns.
(8) Airco Temescal Simba 2 electron  beam power supplies,  serials 330,
    337, 340, 338, 339, 336, 333 and 335.
(8) Programmable seep generators.
(8) High voltage controllers.
(8) Electron beam gun controllers.
(2) Polycolds, model PFC1100HC.
(6) Varian 20" diffusion pumps, model  016513/HS-20.
(8) Airco electron  beam gun interfaces.
(4) Trige-Scott drive motors, model S90L01199100203050300011
    serials 104529421295, 104529211295, 104529311295 and 104529411295.
--------------------------------------------------------------------------------

<PAGE>


FLEET CREDIT CORPORATION                                    PAGE 3 OF 3
                                                            Schedule A Equipment

--------------------------------------------------------------------------------
Manufacturer, Description
--------------------------------------------------------------------------------

WPH overhead wire rope crane,  model 1 1/2 ton, serial  W6022015,  approximately
   X-Y, travel is 55' X 35' X 40'.
Kinney vacuum rotary pump, model  KT-505-LP,  serial 3011-2 with a dresser roots
   booster blower, 15 HP., model HV3000, serial H00224, 480 volts.
Kinney vacuum rotary pump,  model  KT-505-LP,  serial 3011-1 with a dresser root
   booster blower, 15 HP., model HV3000, serial H00219.
Dresser roots, 30 HP. booster pump.
(4) Emergency isolation switches. 
(3) 5.5 Bar pneumatic actuator valves. 
Solenoids.
Alfa  laval  heat  exchanger,   Mfg.  1995,  serial  30102-86367.  
(4)  Weksler temperature gauges, 0-150F deg.
Raven round Polypro storage tank, approximately 6' X 4' diameter, serial 
   G333465.
Approximately  60 feet of 4" 304  stainless steel seamless piping with 
   connectors.
(2) ITT Bell & Gossett pumps,  series 1510, 20 HP., 200 GPM, model 21/2AB7000BF,
   serials 1955295 and 1955296.
(2) FSI filter columns,  stainless  steel,  Mfg. 1995, 10 micron filters, serial
   38121, 150 PSI.
Air storage tank 4'X 2' diameter with a 0-160 PSI gauge. 
Miscellaneous spare parts.

     And a11 standard and accessory Equipment.



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

<PAGE>

                                     [LOGO]
                         AID ASSOCIATION FOR LUTHERANS
                ------------------------------------------------
                4321 North Ballard Road, Appleton, WI 54919-0001
                                 (414) 734-5721


                                 Facsimile Copy

                                                            Date: April 18, 1996

Please deliver this message to: Lisa Evora
                               ------------------------------------------------
From: Jan Schuette
------------------------------------------------
      Aid Association for Lutherans
      4321 North Ballard Road
      Appleton, WI 54919

This message consists of 6 pages including this cover page.

Message:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
If there are any problems or if you do not receive all pages, please contact:

     Name:  Jan Schuette
            (414/734-5721), Ext. 3613

     ( )  Original will not follow
     ( )  Original will follow by:

          ( )  Regular Mail
          ( )  Express Mail

This  message  is  intended  for  the  use of the  addressee,  and  may  contain
privileged or confidential  information.  If you are not the intended recipient,
or the employee or agent  responsible for delivering the message to its intended
recipient,  you are hereby  notified  that any  dissemination,  distribution  or
copying of this communication is strictly prohibited.  If you have received this
communication in error, please notify us immediately by telephone and return the
original message to us at the above address via the U.S. Postal Service.

        --------------------------------------------------------------
          A fraternal benefit society of Lutherans joined together for
        insurance, investment, educational and volunteer opportunities.


<PAGE>

 [LOGO] Fleet                               LEASE SCHEDULE NO. 32089-00002
Capital Leasing                                (True Lease Schedule)

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

                                Lessee: FLEX PRODUCTS, INC.
                                Address: 1402 MARINER WAY

                                         SANTA ROSA, CA 95407

         1. This Lease  Schedule  No. 32089 - 00002 dated as of June 19, 1996 is
entered into pursuant to and  incorporates by this  reference,  all of the terms
and provisions of that certain Master  Equipment Lease Agreement No. 32089 dated
as of JUNE 19,  1996  (the  "Master  Lease"),  for the  lease of the   Equipment
described in Schedule A attached hereto.  This Lease Schedule shall constitute a
separate,  distinct and  independent  lease of the Equipment and the contractual
obligation  of Lessee.  References to the "the Lease" or "this Lease" shall mean
and  refer  to this  Lease  Schedule,  together  with the  Master  Lease and all
exhibits,  addenda, schedules,  certificates,  riders  and other  documents  and
instruments  executed and delivered in connection with this Lease Schedule,  all
as the same may be amended or modified from time to time. All capitalized  terms
used  herein  and not  defined  herein  shall have  the  meanings  set  forth or
referred to in the Master  Lease.  By its  execution  and delivery of this Lease
Schedule,  Lessee hereby  reaffirms all of the  representations,  warranties and
covenants  contained in the Master  Lease,  as of the date  hereof,  and further
represents  and  warrants to Lessor  that no Event of  Default,  and no event or
condition  which with notice or the passage of time or both would  constitute an
Event of Default, has occurred and is continuing as of the date hereof.

         2.  ACQUISITION  COST.  The  Acquisition  Cost  of  the  Equipment  is:
$4,500,000.00.

         3. (a) LEASE TERM. The Lease Term shall commence on the date hereof and
shall continue for a period of 72 months after the Lease Term  Commencement Date
set forth in the Acceptance Certificate to this Lease Schedule, plus any renewal
or extended term applicable in accordance with the terms of the Lease.

            (b)  RENTAL  PAYMENTS.  In addition to interim rent payable pursuant
to Section 2 of the Master Lease,  Lessee shall pay Lessor 72 consecutive Rental
Payments in the amounts set forth in the  schedule  below,  plus any  applicable
sales/use taxes,  commencing on the Rental Payment  Commencement  Date set forth
in the Acceptance  Certificate  and MONTHLY  thereafter for the remaining  Lease
Term.  Each Rental  Payment shall be payable on the same day of the month as the
Rental Payment Date in each succeeding  rental period during the remaining Lease
Term (each, a "Rental Payment Date"):

                                                  Amount of Each
              Number of Rental Payments           Rental Payment
              -------------------------           --------------
                        12                          65,109.74
                        60                          73,780.11

             (c) ADVANCE RENTAL  PAYMENT.  Lessee agrees to pay Lessor the first
01 and last O Rental Payments, due and payable on the Acceptance Date.

<PAGE>

             (d) SECURITY DEPOSIT.  Lessee agrees to make a payment in an amount
equal to 0% of the  Acquisition  Cost of the  Equipment,  due and payable on the
Acceptance  Date,  to be held by Lessor as a  non-interest  bearing  deposit  to
secure Lessee's performance under the Lease.

          4.  EQUIPMENT  LOCATION(S).  The  Equipment  will  be  located  at the
location(s) specified in Schedule A-1 hereto.

          5.  Lessor  will  invoice  Lessee for all sales,  use and/or  personal
property taxes as and when due and payable in accordance  with  applicable  law,
unless Lessee delivers to Lessor a valid exemption  certificate  with respect to
such   taxes.   Delivery  of  such   certificate   shall   constitute   Lessee's
representation and warranty that no such taxes shall become due and payable with
respect to the  Equipment and Lessee shall  indemnify  and hold harmless  Lessor
from and against any and all  liability or damages,  including  late charges and
interest which Lessor may incur by reason of the assessment of such taxes.

           6. The  Rental  Payments  may  change for  Equipment  accepted  after
July 12, 1996.

           7. Lessee  represents  that the  applicable  recovery  period for the
Equipment,  for purposes of Section 168 of the Internal Revenue Code of 1986, is
as set forth in Schedule A hereto.



Dated as of: June 19, 1996



FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By: /s/ Michael  B. Sullivan
   -----------------------------                   -----------------------------
Name:   John J. Gould                           Name:   Michael  B. Sullivan
     ---------------------------                     ---------------------------
Title:  VP/Senior Lender                        Title:  President
      --------------------------                      --------------------------

<PAGE>
                                                          ACCEPTANCE CERTIFICATE
[LOGO] Fleet             
Capital Leasing
50 Kennedy Plaza
Providence, Rhode Island 02903-2305

         This Acceptance Certificate (this "Acceptance Certificate") is attached
to and made a part of that certain Lease Schedule No. 32089 - 00002, dated as of
June 19, 1996 (the "Lease  Schedule"),  by and between the undersigned  parties.
All capitalized terms used herein and not defined herein shall have the meanings
set forth or  referred  to in the Lease  Schedule.  To the  extent the terms set
forth in this  Acceptance  Certificate  differ or conflict with any of the terms
set forth in the Lease, the terms set forth in this Acceptance Certificate shall
control.

         1. Lessee acknowledges and agrees that each item of Equipment set forth
on Schedule A hereto (collectively,  the "Equipment") is hereby  unconditionally
accepted by Lessee for all purposes  under the Lease at the locations  specified
in  Schedule  A-1 hereto,  and hereby  agrees to  faithfully  perform all of its
obligations  under  the Lease as of the date  hereof  (the  "Acceptance  Date").
Lessee hereby  authorizes  and directs  Lessor to make payment to each vendor of
the Equipment pursuant to such vendor's invoice or any purchase order,  purchase
agreement or supply contract with such vendor, receipt and approval of which are
hereby reaffirmed by Lessee.

         2. By its execution and delivery of this Acceptance Certificate, Lessee
hereby reaffirms all of the representations,  warranties and covenants contained
in the Lease as of the date  hereof,  and  further  represents  and  warrants to
Lessor that no Event of Default,  and no event or condition which with notice or
the passage of time or both would  constitute an Event of Default,  has occurred
and is continuing as of the date hereof. Lessee further certifies to Lessor that
Lessee has  selected  the  Equipment  and has received and approved the purchase
order,  purchase  agreement or supply contract under which the Equipment will be
acquired for all purposes of the Lease.

     3. Lessee hereby  represents  and warrants that: (a) the Equipment has been
delivered  and is in an operating  condition  and  performing  the operation for
which it is intended to the satisfaction of the Lessee;  and (b) if requested by
Lessor,  the  Equipment  has been  marked or  labeled  evidencing  the  Lessor's
interest therein.

4. The LEASE TERM COMMENCEMENT DATE is the 10th day of July, 1996

5. The RENTAL PAYMENT COMMENCEMENT DATE is the 10th day of July, 1996

6. All terms and provisions of the Lease Schedule shall remain in full force and
effect, except as otherwise provided below:

          - ACQUISITION COST: $ 4,500,000.00.

          - LEASE TERM: (72) seventy-two months.

          - RENTAL PAYMENTS:  Number of Rental Payments    Rental Payment Amount

                                         12                     $______
                                         60                     $______

          - ADVANCE RENTAL PAYMENT(S): First 01 and last 00.

          - SECURITY DEPOSIT:    N/A  %.

Dated:            July 10, 1996

Agreed and Accepted:

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By:  /s/ Michael  B. Sullivan
    ----------------------------                     ---------------------------
Name:   John J. Gould                           Name:    Michael  B. Sullivan
      --------------------------                       -------------------------
Title:  VP/Senior Lender                        Title:   President
       --------------------------                      -------------------------

<PAGE>

FLEET CAPITAL CORPORATION                                        PAGE 1 OF 1
                                                            SCHEDULE A EQUIPMENT

Attached to and made part of the following  documents:  Insurance  Certification
with Flex Products, Inc. (32089-02)

The Depreciable Life of the Property is (07) seven years.

LOC# (01)


BETA FIVE
Unit Number: Beta V

(1) General  Vacuum Equipment Corp.  electron beam metalyzing system, Mfg. 1995,
78" width capacity,  1200 feet per minute,  480 volt, 3 phase,  218 amps,  model
95-005, overall size 9' X 10', serial number 95005, which  machine includes, but
not limited to, the following:

   (8) Electron beam
   (8) Airco Temescal Simba 2 electron beam power supplies,  serial numbers 330,
   337, 340, 338, 339, 336, 333 and 335
   (8) Programmable seep generators 
   (8) High voltage controllers
   (8) Electron beam gun controllers
   (2) Polycolds, model PEC1100HC
   (6) Varian 20" diffusion  pumps,  model  016513/HS-20 
   (8) Airco electron beam gun interfaces
   (4) Trige-Scott drive motors, model  S90L01199100203050300011, serial numbers
   104529421295, 104529211295, 104529311295 and 104529411295

AND ALL STANDARD AND ACCESSORY EQUIPMENT.



FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

BY: /s/ John J. Gould                           BY:  /s/ Michael  B. Sullivan
    ----------------------------                     ---------------------------
NAME:   John J. Gould                           NAME:    Michael  B. Sullivan
      --------------------------                       -------------------------
TITLE:  VP/Senior Lender                        TITLE:   President
       --------------------------                      -------------------------

<PAGE>

FLEET CAPITAL CORPORATION                                  Schedule A-1
                                                           Equipment Location

Attached to and made part of the  following  documents  True Lease  Schedule No.
32089-02,  Acceptance Certificate, UCC Financing Statement(s),  Warranty Bill of
Sale with Flex Products, Inc.

--------------------------------------------------------------------------------
Loc #     Equipment Currently Located at:
--------------------------------------------------------------------------------

01        1402 Mariner Way, Santa Rosa, California 95407






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

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By: /s/ Michael  B. Sullivan
   -----------------------------                   -----------------------------
Name:   John J. Gould                           Name:   Michael  B. Sullivan
     ---------------------------                     ---------------------------
Title:  VP/Senior Lender                        Title:  President
      --------------------------                      --------------------------

<PAGE>

[LOGO] Fleet                                               PURCHASE OPTION RIDER
Capital Leasing

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

         This  Purchase  Option  Rider (this  "Rider") is attached to and made a
part of that certain Lease Schedule No.  32089-00002,  dated as of June 19, 1996
(the "Lease Schedule"), by and between the undersigned parties.

         If no Event of Default (or event or condition  which,  with the passage
of time or giving of notice,  or both,  would  become  such an Event of Default)
shall have occurred and be continuing, and the Lease shall not have been earlier
terminated,  Lessee shall have the option to purchase  (the  "Purchase  Option")
all, but not less than all, of the Equipment at the expiration of the Lease Term
for an amount,  payable in  immediately  available  funds on the last day of the
Lease Term,  equal to: (a) all Rental  Payments,  late charges and other amounts
due and owing under the Lease; plus (b) all taxes, assessments and other charges
due or payable in connection with the sale of the Equipment to Lessee;  plus (c)
an amount equal to 25.00000% of the  Acquisition  Cost of the  Equipment,  which
Lessor and Lessee  acknowledge  represents a reasonable  current estimate of the
fair market value of the Equipment at the end of the Lease Term.

         Provided that Lessor shall have received all amounts payable  hereunder
on the last day of the Lease Term,  and that no Event of Default then exists and
is continuing under the Lease,  Lessor shall convey all of its right,  title and
interest in and to the Equipment to Lessee on the last day of the Lease Term, on
an "AS-IS,"  "WHERE-IS"  BASIS WITHOUT  REPRESENTATION  OR WARRANTY,  EXPRESS OR
IMPLIED, and without recourse to Lessor, except that the Equipment shall be free
and clear of all liens  created by Lessor.  If Lessee  intends to  exercise  the
Purchase  Option,  Lessee shall give  irrevocable  written notice to Lessor (the
"Option  Notice") not more than 240 days,  nor less than 180 days,  prior to the
expiration  of the Lease Term.  If Lessee fails to give such  written  notice to
Lessor,  it shall be  conclusively  presumed  that  Lessee  has  elected  not to
exercise the Purchase Option.

         If, for any  reason,  Lessee does not  exercise  the  Purchase  Option,
Lessee shall, on the last day of the Lease Term,  return all of the Equipment to
Lessor  pursuant to and in the condition  required by the terms of the Lease and
pay to  Lessor  a  return  fee  equal  to  5.0% of the  Acquisition  Cost of the
Equipment.

         All capitalized terms used herein and not defined herein shall have the
meanings set forth or referred to in the Lease Schedule.  Except as specifically
set forth herein,  all of the terms and  conditions of the Lease shall remain in
full force and effect and are hereby  ratified and affirmed.  To the extent that
the  provisions  of this Rider  conflict  with any  provisions  contained in the
Lease, the provisions of this Rider shall control.

Dated as of: June 19, 1996

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By: /s/ Michael  B. Sullivan
   -----------------------------                   -----------------------------
Name:   John J. Gould                           Name:   Michael  B. Sullivan
     ---------------------------                     ---------------------------
Title:  VP/Senior Lender                        Title:  President
      --------------------------                      --------------------------

<PAGE>

  [LOGO] Fleet                                    STIPULATED LOSS VALUE SCHEDULE
Capital Leasing

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

         This  Stipulated  Loss Value Schedule (this  "Schedule") is attached to
and made a part of that certain Lease Schedule No. 32089-00002, dated as of June
19, 1996 (the "Lease Schedule"), by and between the undersigned parties.
<TABLE>

         The following Stipulated Loss Values shall be used to calculate damages
or loss as provided in the Master Lease.  The Stipulated Loss Value with respect
to any item of Equipment on any Rental  Payment Date during the Lease Term shall
be an amount equal to the sum of: (a) all Rental Payments and other amounts then
due and owing to Lessor under the Lease,  together with all accrued interest and
late charges thereon, calculated through and including the date of payment; plus
(b) the product of the Acquisition Cost of the such Equipment  multiplied by the
percentage set forth below as of such Rental Payment Date.
<CAPTION>
<S>                        <C>                <C>                       <C>   
Rental Payment Date for   Percentage of       Rental Payment Date for   Percentage of
 Rental Payment Number    Acquisition Cost    Rental Payment Number     Acquisition Cost
</TABLE>

              SEE EXHIBIT C ATTACHED HERETO AND MADE A PART HEREOF








         All capitalized terms used herein and not defined herein shall have the
meanings set forth or referred to in the Lease Schedule.  Except as specifically
set forth herein,  all of the terms and  conditions of the Lease shall remain in
full force and effect and are hereby ratified and affirmed.


Dated as of: June 19, 1996

FLEET CAPITAL CORPORATION                       FLEX PRODUCTS, INC.

By: /s/ John J. Gould                           By: /s/ Michael  B. Sullivan
   -----------------------------                   -----------------------------
Name:   John J. Gould                           Name:   Michael  B. Sullivan
     ---------------------------                     ---------------------------
Title:  VP/Senior Lender                        Title:  President
      --------------------------                      --------------------------

<PAGE>

                                    EXHIBIT C
                                       TO
                         STIPULATED LOSS VALUE SCHEDULE
                         TO LEASE SCHEDULE NO. 32089-02

RENTAL PAYMENT       PERCENTAGE OF         RENTAL PAYMENT       PERCENTAGE OF
DATE FOR RENTAL     ACQUISITION COST      DATE FOR RENTAL      ACQUISITION COST
PAYMENT NUMBER                             PAYMENT NUMBER

     1                 103.35121715              37              70.90880090
     2                 102.77715752              38              69.75511355
     3                 102.19526265              39              68.59002020
     4                 101.59552206              40              67.41874422
     5                 100.98781724              41              66.23597391
     6                 100.37210821              42              65.04165152
     7                  99.73838360              43              63.84099969
     8                  99.09652408              44              62.62870597
     9                  98.44648879              45              61.40471189
    10                  97.78823666              46              60.16895869
    11                  97.11575495              47              58.92972240
    12                  96.43494366              48              57.67865042
    
    13                  95.54711438              49              56.42401842
    14                  94.34921445              50              55.15747340
    15                  93.74119331              51              53.87895553
    16                  92.81702863              52              52.59673978
    17                  91.88261080              53              51.30247247
    18                  90.93788832              54              49.99609306
    19                  89.97683797              55              48.68587582
    20                  89.00534921              56              47.36346638
    21                  88.02336959              57              46.02880349
    22                  87.03084644              58              44.68182560
    23                  86.02873119              59              43.33120369
    24                  85.01597126              60              41.96818663
    
    25                  83.99351758              61              40.60144498
    26                  82.96031708              62              39.22222721
    27                  81.91631576              63              37.83047065
    28                  80.86246378              64              36.43484516
    29                  79.79770726              65              35.02659847
    30                  78.72199142              66              33.60566720
    31                  77.63626563              67              32.18072044
    32                  76.53947521              68              30.74300521
    33                  75.43156457              69              29.29245738
    34                  74.31247787              70              27.82901249
    35                  73.18743961              71              26.37095856
    36                  72.05113926              72              24.89996987

                                                 72              25.00000000

<PAGE>

[LOGO] Fleet
Capital Leasing

                                                             PAY PROCEEDS LETTER

50 Kennedy Plaza
Providence, Rhode Island 02903-2305

    We hereby  authorize you to pay the following  Payee(s) from the proceeds of
your  financial  accommodations  to us in  respect  of that  certain  True Lease
Schedule  No.  32089-00002  dated as of June 19,  1996,  and make  disbursements
directly to said Payee(s) as follows:

                                                       Amount of
        PAYEE                                          Payment

Flex Products, Inc. *                                       $4,421,390.26
----------------------------------------------------   -------------------------
Fleet Capital Corporation (short fund to pay                    78,609.74
----------------------------------------------------   -------------------------
Customer Invoice now due)
----------------------------------------------------   -------------------------

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

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

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

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

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

                 TOTAL:                                     $4,500,000.00
                                                            --------------------


Dated as of: June 19 , 1996
            ------------------------

* BANK: Bank of America, NTSA                     FLEX PRODUCTS, INC.
        10 Santa Rosa Ave.
        Santa Rosa, CA                            By: /s/ Michael B. Sullivan
                                                     ---------------------------
  ABA #:  12100358                                Name:   Michael B. Sullivan
                                                       -------------------------
For Account of: FLEX PRODUCTS INC.                Title:  President
                                                       -------------------------
Account #:  14984-00242

<PAGE>

                           FLEET CAPITAL CORPORATION
                                50 Kennedy Plaza
                           Providence, RI 02903-2305
                                 1-800-238-3737

FLEX PRODUCTS, INC.
1402 MARINER WAY
SANTA ROSA CA 95407-0000

                                                       July 10, 1996

--------------------------------------------------------------------------------
          DESCRIPTION                                       AMOUNT
--------------------------------------------------------------------------------


          ADVANCE PAYMENT                             $65,109.74 +
          ORIGINATION FEE                             $30,000.00 +
          TRANSACTION EXPENSES                        $ 8,500.00 +
          SH FUND                                     $78,609.74 -
          SUB DEP                                     $25,000.00 -
                                          


                                 Total Due           $103,609.74
                                 Total Received      $103,609.74

                                 Balance                   $0.00

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

RETURN YOUR REMITTANCE TO THE ATTENTION OF: SANDRA BUONAIUTO

TO INSURE PROPER CREDIT TO YOUR ACCOUNT, PLEASE RETURN REMITTANCE COPY.

                      A Subsidiary of Fleet National Bank

32089 00 001 00002

<PAGE>

                                                           WARRANTY BILL OF SALE
[LOGO] F1eet
Capital Leasing
50 Kennedy Plaza
Providence, Rhode Island 02903

         FLEX  PRODUCTS,  INC.  ("Seller")  of 1402  MARINER WAY SANTA ROSA,  CA
95407, in consideration of the sum of $4,500,000.00  Dollars, and other good and
valuable  consideration,   the  receipt  and  sufficiency  of  which  is  hereby
acknowledged, does hereby sell, transfer and assign to Fleet Capital Corporation
("FCC"),  a Rhode Island  corporation  having its principal office at 50 Kennedy
Plaza,  Providence,  Rhode Island  02903,  the equipment set forth in Schedule A
hereto (the "Equipment").

         Seller  hereby  covenants  with and  warrants to FCC that Seller is the
lawful owner of the Equipment and has the right to sell the Equipment,  and that
the Equipment is free and clear of all rights, claims, liens, charges,  security
interests or encumbrances  of any other person.  Seller will  forever indemnify,
defend and warrant all of the rights of FCC in and to the Equipment  transferred
hereunder against the claims and demands of all other persons.

IN WITNESS WHEREOF,  Seller has duly executed this Bill of Sale this 11th day of
July, 1996.

                                   FLEX PRODUCTS, INC.

                                   By: /s/ Michael B. Sullivan
                                      --------------------------------
                                   Name:   Michael B. Sullivan
                                        ------------------------------
                                   Title:  President
                                         -----------------------------


State of California
         --------------------------
County of Sonoma
         --------------------------

Subscribed and sworn before me this 11th day of July, 1996.

                                /s/ Aggie S. Navarro
                                  Notary Public

                     My Commission expires:________________

                                        =============================== 
                                                AGIE S. NAVARRO         
                                        [SEAL]  COMM. #1009257          
                                           Notary Public--California    
                                                 SONOMA COUNTY          
                                         My Comm. Expires NOV 11, 1997  
                                        =============================== 


<PAGE>

FLEET CREDIT CORPORATION
                                                 CONSENT AND WAIVER
                                   (OWNER, LANDLORD OR MORTGAGEE OF REAL ESTATE)

50 Kennedy Plaza
Providence, Rhode island 02903


The  undersigned,  0ptical  Coating  Laboratory,  Inc., 2789 North Point Parkway
Santa Rosa, California 95407 is the owner, landlord or mortgagee of the premises
located at 1402 Mariner Way, Santa Rosa, California 95407 (the "Premises") which
are occupied by Flex Products, Inc.

     The undersigned  acknowledges that Customer has leased or financed, or that
Customer expects to lease or finance from Fleet Credit Corporation ("FCC"),  the
Equipment set forth on Schedule A hereto including any  accessories,  additions,
substitutions or replacements  therefor,  which may from time to time be located
at the Premises. To induce FCC to enter into a lease or financing agreement with
Customer, the undersigned agrees with FCC as follows:

     The  undersigned  waives any  right,  title or  interest  in or to the
     Equipment  that  it  may  now  or  hereafter   have.  The  undersigned
     irrevocably  agrees and consents  that it will refrain from taking any
     action  to  bar,  restrain  or  otherwise  prevent  FCC,  its  agents,
     successors  or assigns,  from entering the Premises for the purpose of
     inspecting,  removing or taking possession of the Equipment,  and will
     grant FCC, its agents, successors or assigns the right of entry to the
     Premises to remove the Equipment at any reasonable time or times.  FCC
     shall be responsible for any damage to the Premises that FCC causes in
     connection  with its entry  thereon and the  removal of the  Equipment
     therefrom.  The  Equipment  is and  shall  remain  personal  property,
     notwithstanding  the manner in which it may be installed or affixed to
     the Premises.

     This  Consent and Waiver shall inure to the benefit of the  successors  and
assigns of FCC and shall be binding upon the heirs, representatives,  successors
and assigns of the  undersigned.  The undersigned  will, upon the request and at
the  expense of FCC,  execute and  deliver to FCC such  further  and  additional
documents as FCC may  reasonably  deem  necessary or desirable to effect waivers
and consents  contemplated  hereby.  This  Agreement  shall be  governed  by and
construed  in  accordance  with the laws of the state in which the  premises are
located,  without  reference  to  principles  of  conflict  of laws.

     IN WITNESS  WHEREOF,  the  undersigned  has duly  executed this Consent and
Waiver this 11th day of July, 1996.

                                             Optical Coating Laboratory, Inc.

 /s/ Silvia C. Hogan                         By: /s/ John M. Markovich         
-------------------------                        ------------------------------
       (Witness)                             Title:  V.P. Finance & CFO
                                                    ---------------------------

<PAGE>
                      ACKNOWLEDGEMENT TO BE MADE BY OWNER,
                      LANDLORD OR MORTGAGEE OF REAL ESTATE

                   (Hereinafter referred to as "Undersigned")

                                  [INDIVIDUAL)
STATE OF ________________________
                               SS.
COUNTY OF _______________________

         I,  _______________________ a Notary Public within and for said County,
in the State aforesaid,  duly commissioned and acting, do hereby certify that on
this ___________ day of ____________________, 19__ personally appeared before me
___________________________, Undersigned in the foregoing Consent and Waiver, to
me  personally  well known and known to the person who signed  said  Consent and
Waiver,  who,  being by me duly sworn and being informed of the contents of said
Consent and Waiver  stated and  acknowledged  on oath that he signed,  executed,
sealed and delivered  same as his free and voluntary act and deed, for the uses,
purposes and considerations therein mentioned and set forth.

         WITNESS my hand and seal as such Notary Public the day and year in this
certificate above written.

My commission expires ______________________   _________________________________
                                                  (Notary Public)
                                                      (Seal)
                                 (PARTNERSHIP)
STATE OF ________________________
                               SS.
COUNTY OF _______________________

         I,  _______________________ a Notary Public within and for said County,
in the State aforesaid,  duly commissioned and acting, do hereby certify that on
this day ___________ of ____________________, 19__ personally appeared before me
___________________________  and  ___________________________,  who executed the
foregoing  Consent  and  Waiver,  to me  personally  well known and known to the
persons who signed said Consent and Waiver, and known to be and who, being by me
duly sworn and being informed of the contents of said Consent and Waiver, stated
and acknowledged on oath that they were Partners of ____________________________
__________________, the Partnership named in and which executed the said Consent
and  Waiver,  and  that  they  signed,  executed,   sealed  and  delivered  same
individually and in behalf of the said Partnership,  with authority as their and
its free and  voluntary act and deed for the uses,  purposes and  considerations
therein mentioned and set forth.

         WITNESS my hand and seal as such Notary Public the day and year in this
certificate above written.

My commission expires ______________________   _________________________________
                                                  (Notary Public)
                                                      (Seal)
                                 (CORPORATION)
                                             ===================================
STATE OF      California                                   SILVIA C. HOGAN
          -----------------                  [SEAL]         COMM. #1009258
                        SS.                          Notary Public - California
COUNTY OF     Sonoma                                        SONOMA COUNTY
          -----------------                        My Comm. Expires NOV 11, 1997
                                             ===================================
          I, Silvia C. Hogan, a Notary Public within and for said County, in the
State aforesaid,  duly  commissioned and acting,  do hereby certify that on this
11th day of July, 1996 personally  appeared before me John M. Markovich (Name of
Signer for  Undersigned),  to me personally well known and known to me to be the
person who signed the  foregoing  Consent and Waiver,  and known to me to be and
who,  being by me duly sworn and being  informed of the contents of said Consent
and Waiver,  stated and  acknowledged to me an oath that he was Vice President &
CFO (Title) of Optical Coating  Laboratory,  Inc., the Corporation  named in and
which executed said Consent and Waiver,  and that he knows the corporate seal of
said  Corporation,  and that the seal  affixed to said Consent and Waiver is the
corporate seal of said Corporation,  that he was duly authorized to execute said
Consent and Waiver,  for, in the name of and on behalf of said Corporation,  and
that same was signed,  sealed,  executed and delivered by him in the name of and
on behalf of said  Corporation  by authority of its Board of Directors  and that
the execution of said Consent and Waiver was his free and voluntary act and deed
in his said capacity and acknowledged to me that said  Corporation  executed the
same as its  voluntary  act and deed  and was by him  voluntarily  executed,  on
behalf of said  Corporation for the uses,  purposes and  considerations  therein
mentioned and set forth.

         WITNESS my hand and seal as such Notary Public the day and year in this
certificate above written.

My commission expires November 11, 1997           /s/ Silvia C. Hogan
                      -----------------           --------------------
                                                      (Notary Public)
                                                          (Seal)

<PAGE>

CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
================================================================================

State of California
         --------------------------
County of Sonoma
          -------------------------

On July 11, 1996 before me,          Silvia C. Hogan, Notary Public
   -------------          ------------------------------------------------------
       Date               NAME, TITLE OF OFFICER-E.G., "JANE DOE, NOTARY PUBLIC"

personally appeared  John M. Markovich
                    ------------------------------------------------------------
                                        NAME(S) OF SIGNER(S)


[X] personally known to me - OR - [ ] proved to me on the basis of  satisfactory
                                      evidence to be the  person  whose  name is
==================================    subscribed to the  within  instrument  and
             SILVIA C. HOGAN          acknowledged to me  that he  executed  the
[SEAL]        COMM. #1009258          same  in  his authorized capacity and that
       Notary Public - California     by his  signature  on the  instrument  the
              SONOMA COUNTY           person, or the entity upo  behalf of which
     My Comm. Expires NOV 11, 1997    the person acted, executed the instrument.
==================================                                            
                                      WITNESS my hand and official seal.

                                      /s/ Silvia C. Hogan
                                      ------------------------------------------
                                                SIGNATURE OF NOTARY


====================================OPTIONAL====================================

Though the data below is not  required by law, it may prove  valuable to persons
relying on the document and could prevent fraudulent reattachment of this form.

      CAPACITY CLAIMED BY SIGNER                DESCRIPTION OF ATTACHED DOCUMENT

[ ] INDIVIDUAL
[X] CORPORATE OFFICER     
     Vice President & CFO                              Consent and Waiver
    ----------------------------------          --------------------------------
                     TITLE(S)                       TITLE OR TYPE OF DOCUMENT

[ ] PARTNER(S)             [ ] LIMITED                         2
                           [ ] GENERAL          --------------------------------
[ ] ATTORNEY-IN-FACT                                    NUMBER OF PAGES
[ ] TRUSTEE(S)
[ ] GUARDIAN/CONSERVATOR                                   7-11-96
[ ] OTHER:____________________________          --------------------------------
    __________________________________                 DATE OF DOCUMENT
    __________________________________

SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)

Optical Coating Laboratory, Inc.                            ----
--------------------------------------          --------------------------------
                                                SIGNER(S) OTHER THAN NAMED ABOVE
--------------------------------------

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

<PAGE>

                               SUPPORT AGREEMENT
                       BETWEEN FLEET CAPITAL CORPORATION,
                        OPTICAL COATING LABORATORY, INC.
                            AND FLEX PRODUCTS, INC.

        This  Support  Agreement,  made and  entered  into as of July 11,  1996,
between FLEET CAPITAL CORPORATION  ("Fleet"),  OPTICAL COATING LABORATORY,  INC.
("Parent"), and FLEX PRODUCTS, INC. ("Subsidiary").

Recitals:

        A. Parent owns sixty  percent (60%) of the  outstanding  common stock of
Subsidiary; and

        B.  Subsidiary  has entered into that  certain  Master  Equipment  Lease
Agreement  No.  32089  dated as of June 19, 1996 (the  "Agreement")  under which
Subsidiary  now has and/or shall incur certain  liabilities  and  obligations to
Fleet; and

        C. Parent and Subsidiary  desire to take certain actions and enhance and
maintain the financial condition of Subsidiary as hereinafter set forth in order
that Subsidiary might meet its Obligations (as hereinafter defined) to Fleet.

        NOW,   THEREFORE,   in  consideration  of  the  mutual  promises  herein
contained, the parties hereto agree as follows:

        1. Stock Ownership.  During the term of this Support  Agreement,  Parent
will  maintain  a majority  of the voting  capital  stock of  Subsidiary  now or
hereafter issued and outstanding.

        2.  Financial  Covenants.  During  such  period  of  time  as any of the
Obligations of the Lessee to Fleet are outstanding,  Parent agrees that it shall
not accept any payment, whether by dividend, salary, bonus, commission,  loan or
other compensation other than in the ordianry course of business, which would be
a  contributing  cause to Lessee's  violation  of, the terms and  conditions  of
Lessee's obligations to Fleet, including, but not limited to, Lessee's financial
covenants under the Agreement.

        3. Performance Provision. Upon and during the pendancy of any default by
the Lessee  which is caused in whole or in part by any  payment to Parent  other
than in the ordinary course of business,  or by failure of Parent to pay amounts
owing to Subsidiary when due, or by transfer of  Subsidiary's  assets to Parent,
Parent agrees hereby  to cause  Subsidiary to fully and promptly  perform all of
the obligations  which  Subsidiary  presently has or hereafter may have to Fleet
whether under the Agreement or otherwise (collectively, the "Obligations"),  and
agrees to indemnify Fleet against any loss which it may sustain,  and expense it
may incur, in connection with such default.

                                                                          1 of 3
<PAGE>

        4. Rights of Fleet.  In the event that  Subsidiary  fails,  is unable or
refuses to perform any  of its Obligations in a timely manner,  and such failure
to perform has been  caused in whole or in part by a breach of  Paragraph 2 or 3
of this Support  Agreement by Parent,  Fleet may proceed directly against Parent
to collect  any of said  Obligations  and may  exercise  against  Parent  and/or
Subsidiary  any rights and remedies  that it may have under the Agreement or any
other  agreement  with respect to the  Obligations.  The  obligations  of Parent
hereunder  shall  not  be  affected  by  any  waiver,  modification,  extension,
amendment or other change in any of the underlying Obligations between Fleet and
Subsidiary.

        5.  Termination;  Amendment.  This Support  Agreement  may be amended or
terminated  at any time by written amendment or agreement signed by all parties.

        6. Notices. Any notice,  instruction,  request, consent, demand or other
communication  required  or  contemplated  by this  Support  Agreement  to be in
writing shal1 be given or made or communicated by first class mail, addressed as
follows:

      If to Parent:           Optical Coating Laboratory, Inc.
                              2789 Northpoint Parkway
                              Santa Rosa, CA 95047-7397
                              Attn: General Counsel

      If to Subsidiary:       Flex Products, Inc.
                              1402 Marina Way
                              Santa Rosa, CA 95407-7370
                              Attn: President

      If to FLEET:            Fleet Capital Corporation
                              50 Kennedy Plaza, 5th floor
                              Providence, RI 02903
                              Attn: Customer Service

        7.   Succcessors.   The  covenants,   representations,   warranties  and
agreements  herein set forth  shall be  mutually  binding  upon and inure to the
mutual  benefit of Parent and its  successors  and Subsidiary and its successors
and Fleet and its successors and assigns.

        8. Governing Law; Counterparts. This Support Agreement shall be governed
by the laws of the State of Rhode  Island.  This  instrument  may be executed in
counterparts  and  the  executed  counterparts  shal1  together  constitute  one
instrument.

                                                                          2 of 3
<PAGE>

        IN WITNESS WHEREOF,  the parties hereto have set their hands and affixed
their corporate seals as of the day and year first above written.

OPTICAL COATING LABORATORY, INC.   
                                   
By: /s/ John M. Markovich          
    ------------------------------ 
Name:   John M. Markovich          
      ---------------------------- 
Title:  VP Finance & CFO           
       --------------------------- 

FLEX PRODUCTS, INC.

By: /s/ Michael R. Sullivan
    ------------------------------ 
Name:   Michael R. Sullivan
      ---------------------------- 
Title:  President 
       --------------------------- 

FLEET CAPITAL CORPORATION

By: /s/ John J. Gould
    ------------------------------ 
Name:   John J. Gould
      ---------------------------- 
Title:  Vice President 
       --------------------------- 
                                                                     3 of 3