<PAGE>
 
        THIS DIRECT LOAN AGREEMENT dated DECEMBER 29, 1996, by and between the 
NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY (the "Authority"), a public body 
corporate and politic constituting and instrumentality of the State of New
Jersey and RF POWER PRODUCTS, INC. a corporation organized and existing under
the laws of the State of New Jersey (the "Borrower").

                              IT IS AGREED THAT:

        Section 1. THE LOAN.  The Authority agrees on the terms and conditions 
                   --------
of this Direct Loan Agreement to make a loan (the "Loan") to the Borrower in the
principal amount of FIVE HUNDRED THOUSAND DOLLARS ($500,000) to finance the 
purchase of equipment for the expansion of an existing manufacturer of radio 
frequency power delivery system (the "Project") located at 1007 Laurel Oak 
Road, Voorhees, New Jersey (the "Project Facility").

        Section 2. THE NOTE.  The Loan shall be evidenced by a Promissory Note 
                   --------    
substantially in the form attached as Exhibit "A" (the "Note").  The Loan shall 
be repaid over a term of five (5) years in sixty (60) equal monthly installments
as provided in the Note and shall bear interest on the unpaid principal balance 
from the date of the Note until payment in full of the entire principal amount,
at a rate of five percent (5%) per annum.  The Borrower may prepay the Note in 
whole at any time or in part of any payment date without penalty.  Partial 
prepayments shall be applied to the last maturing payments due on the Note, 
shall be in one or more increments of the monthly amount due on principal, shall
not extend or postpone the due date of any subsequent monthly installment or 
change the amounts of such installments unless the holder of the Note shall 
otherwise expressly agree in writing.  There shall be due and owing by the 
Borrower a late charge of five percent (5%) of any monthly payment on any such 
payment which is seven (7) days or more past due.

        Section 3.  SECURITY.  As security for the Note, and for any other 
                    --------    
loans, advances, credits, indebtedness, obligations and liabilities of any kind 
of Borrower to the Authority, now or hereafter existing, whether absolute or 
contingent, due or to become due, direct or indirect, liquidated or unliquidated
and however incurred or arising, the Borrower hereby grants to the Authority a 
security interest in all machinery and equipment purchased with the proceeds of 
the Loan (hereinafter the "Collateral") including but not limited to the 
following:

        (a)     All machinery and equipment of every nature, kind and 
description wherever located purchased with the proceeds of the Loan whether 
affixed to realty or not including without limitation, any and all present and 
future accretions, additions, replacements, substitutions, improvements and 
accessories relating thereto or used in connection therewith and all proceeds 
thereof; and 
                  
<PAGE>
 
                                       2

     (b)  all interest, proceeds and products of all of the above including 
without limitation, any insurance proceeds thereof.

     This Direct Loan Agreement shall be deemed a security agreement creating a 
security interest on behalf of the Authority in said Collateral.

     Section 4.  DISBURSEMENT OF THE LOAN.  The Loan shall be disbursed by the 
                 ------------------------
Authority upon receipt of the following:

     (a)  requisition of the form attached as Exhibit "B" signed by an 
authorized representative of the Borrower stating the name of the person, firm 
or corporation to whom payment is to be made and the amount to be paid;

     (b)  all documents, searches, opinions, evidence of insurance and 
guarantees as required by the Authority commitment letter dated November 1, 1996
as amended attached as Exhibit "C."

     Notwithstanding anything herein to the contrary, Borrower understands and 
agrees the Authority shall be under no obligation to make any disbursement with 
respect to which a requisition has been submitted by Borrower if, at the time of
said submission, Borrower is in default under Section 17 of this Direct Loan 
Agreement.

     Section 5.  INSURANCE.  The Borrower agrees to insure the Project Facility 
                 ---------
and the Collateral with insurance companies licensed to do business in New 
Jersey in such a manner and against such loss, damage and liability to third 
parties as is customary with companies in the same or similar business. The 
Borrower shall at all times carry general liability insurance with companies 
licensed to do business in New Jersey in amounts approved by the Authority and 
naming the Authority as additional insured. With respect to the Collateral, the 
Borrower shall carry at all times with companies licensed to do business in New 
Jersey full extended coverage fire, theft and hazard insurance in an amount 
approved by the Authority. Such extended coverage shall name the Authority as 
loss payee, and shall contain a provision that such policy may not be canceled 
or materially altered except upon at least fifteen (15) days written notice to 
the Authority and shall not contain a provision for deductible amounts greater 
than $5,000. In the event of loss or damage to any portion of the Project 
Facility or the Collateral, the proceeds of any insurance shall be deposited 
with the Authority and applied as set forth in Section 6. At least ten (10) days
prior to the expiration of any such policy the Borrower shall furnish evidence 
satisfactory to the Authority that such policy has been renewed or replaced or 
is no longer required by this Direct Loan Agreement.
<PAGE>
 
                                       3

        At all times during the term of this Direct Loan Agreement, the Borrower
shall comply with the laws of New Jersey relating to Worker's Compensation 
Insurance.

        Section 6.  DAMAGE, DESTRUCTION AND CONDEMNATION.
                    ------------------------------------

        (a)  If the Project Facility or the Collateral shall be damaged or 
either partially or totally destroyed or if title to or the temporary use of the
whole or any part of the Project Facility shall be taken or condemned by a 
competent authority for any public use or purpose, there shall be no abatement 
or reduction in the amounts payable by the under this Direct Loan Agreement or 
under the Note.

        (b)  In the event of any damage, destruction, taking or condemnation, 
the proceeds from any insurance or condemnation award shall be deposited with 
the Authority and applied to the payment of any amounts due on the Loan unless 
the Borrower and the Authority shall agree to apply the proceeds to the repair, 
reconstruction, replacement or relocation of the Collateral.

        Section 7.  FINANCIAL STATEMENTS.  The Borrower agrees to furnish to the
                    --------------------
Authority:

        (a)  within 90 days of the end of each fiscal year, annual review 
financial statements for the Borrower prepared by an independent accountant 
acceptable to the Authority;

        (b)  within 45 days of the end of each quarter, quarterly company 
prepared financial statements for the Borrower; and

        (c)  deliver to he authority concurrently with the annual review 
financial statements, a certificate of the Borrower stating that:

        (i)  all taxes, assessments and charges which have become due have been
             paid or specifying which have not been paid and stating why they
             remain so; and

        (ii) the Borrower has not failed to comply with any obligations under
             this Direct Loan Agreement or specifying any such failure and the
             reasons for such failure.

        Section 8.  REPRESENTATIONS AND WARRANTIES BY THE BORROWER.  Borrower 
                    ----------------------------------------------    
hereby makes the following representations and warranties and acknowledges and 
agrees that each and every one of the following representations and warranties 
shall survive closing and shall continue for as long as the Loan remains 
outstanding:


                   
<PAGE>
 
                                       4

        (a)  The Borrower has been duly organized and validly exists as a 
corporation under the laws of the State of New Jersey, has power to enter into 
this Direct Loan Agreement and the Note evidencing the debt obligation of the 
Borrower to the Authority hereunder and has authorized the taking of all action 
necessary to carry out and give effect to the transactions contemplated by this 
Direct Loan Agreement.

        (b)  There is no action or proceeding pending or threatened against the 
Borrower before any court or administrative agency that might adversely affect 
the ability of the Borrower to perform its obligations under this Direct Loan 
Agreement and all authorizations, consents and approvals of governmental bodies
or agencies, required in connection with the performance of the Borrower's 
obligations hereunder have been obtained and will be obtained whenever required 
hereunder or by law.

        (c)  Neither the execution and delivery of this Direct Loan Agreement, 
the consummation of the transactions contemplated hereby, nor the fulfilment of 
or compliance with the terms and conditions of this Direct Loan Agreement is 
prevented, limited by, or conflicts with or results in a breach of, the terms, 
conditions, or provisions of any corporate restrictions or any evidence of 
indebtedness, agreement or instrument of whatever nature to which the Borrower 
is now a party or by which it is bound, or constitutes a default under any of 
the foregoing.

        (d)  All tax returns and reports of the Borrower required by law to be 
filed have been duly filed and all taxes, assessments, fees and other 
governmental charges upon the Borrower or upon any of its respective properties,
assets, income or franchises which are due and payable pursuant to such returns 
and reports, or pursuant to any assessment received by the Borrower have been 
paid other than those which may be presently payable without penalty or 
interest.

        (e)  The Borrower has, or will have, title to all the Collateral 
whenever acquired or arising free and clear of all liens and claims, 
encumbrances, set-offs, defenses and counterclaims, and has not made and will 
not make any assignment, pledge, mortgage, hypothecation or transfer (other than
sales or leases in the ordinary course of business) of any such Collateral or 
the proceeds thereof.

        (f)  There has been no material adverse change in the aggregate assets 
or aggregate liabilities or in the condition, financial or otherwise, of the 
Borrower from that set forth in the financial statements delivered to the 
Authority by the Borrower in connection with this Direct Loan Agreement.
<PAGE>
 
                                       5

                (g) All statements, representations and warranties made by the
Borrower in its application to the Authority, and any materials furnished in
support of the request for Authority financial assistance and this Direct Loan
Agreement are true. It is specifically understood by the Borrower that all such
statements, representations and warranties shall be deemed to have relied upon
the Authority as an inducement to make the Loan and that if any such statements,
representations or warranties were materially false at the time they were made
or are breached during the term hereof, the Authority may, in its sole
discreation, consider any such misrepresentation or breach an event of default
including without limitation, the Borrower's representation that it would not
have been able to proceed with the Project without financial assistance from
the Authority.
                (h)  The chief executive office of the Borrower is located at 
1007 Laurel Oak Road, Voorhees, New Jersey.  None of the Borrower's books or 
records are maintained at any other location.  The Borrower shall notify the 
Authority in writing of any change in the location of the Borrower's chief 
executive office.

                (i) Borrower represents to the Authority that it has at all
times pertinent to this Direct Loan Agreement been represented by advisors of
its own selection, including but not limited to attorneys-at-law and/or
certified public accountants; that it has not relied upon any statement,
representation, warranty, agreement or information provided by the Authority, 
its employees, agents or attorneys; that it acknowledges that it is informed by
its advisors of its respective rights, duties, and obligations with respect to
the Loan under all applicable laws, that is has no set-offs, defenses or
counterclaims against the Authority with respect to the Loan, and that it is
indebted to the Authority for the amounts stated in this Direct Loan Agreement.

                (j)  Borrower further acknowledges and agrees that the Authority
has made no statements, representations, warranties, agreements or provided 
information to it in order to induce the execution of this Direct Loan 
Agreement.  Borrower further acknowledges and agrees that all agreements of the 
parties are set forth in this Direct Loan Agreement or in the financing 
documents executed by Borrower prior to or on even date hereof.

                (k) If during any time the Loan remains outstanding, the
Borrower becomes aware of any facts, occurrences, information, statements, or
events that render any of the foregoing representations or warranties herein
made untrue or materially misleading or incomplete, Borrower shall immediately
notify the Authority in writing of such facts, occurrences, information,
statements or events.
<PAGE>
 
     Section 9.  OPERATION AS AN AUTHORIZED PROJECT.  The Borrower agrees to 
                 ----------------------------------
operate its business at the Project Facility as set forth in its application to 
the Authority and will operate the Project Facility as an authorized project 
under the New Jersey Economic Development Authority Act, P.L. 1974, c.80.

     Section 10.  TAXES AND OTHER GOVERNMENTAL CHARGES.  The Borrower shall pay 
                  ------------------------------------
during the term of this Direct Loan Agreement as the same become due, all taxes,
assessments and governmental charges which may be required by law or contract to
be paid by the Borrower. The Borrower may in good faith contest such taxes and 
governmental charges and such taxes and charges may remain unpaid during the 
period of such contest provided the Collateral will not be subject to loss or 
forfeiture as a result.

     Section 11.  MAINTENANCE OF ASSETS AND EMPLOYMENT.
                  ------------------------------------

     (a)  The Borrower shall during the term of this Direct Loan Agreement 
operate and maintain all assets of the Borrower in compliance with all 
governmental laws, ordinances, approvals, rules and regulations which are 
acceptable to and binding upon the Borrower.

     (b)  The Borrower will not relocate all or any substantial part of its 
business operation from the Project Facility without the express prior written 
consent of the Authority.

     Section 12.  PRESERVATION OF COLLATERAL.
                  --------------------------

     (a)  The Collateral will be kept and maintained at the Project Facility.
The Borrower will not remove the Collateral from that location, except in the
normal course of business without the express prior consent of the Authority.

     (b)  The Borrower will join the Authority in executing, filing and doing 
whatever may be necessary under applicable law, to perfect and continue the 
Authority's security interest in the Collateral at Borrower's expense.

     (c)  The Borrower agrees that it will at all times keep accurate and 
complete records with respect to the Collateral including, but not limited to, a
record of all proceeds received therefrom or as a result of the sale thereof.

     Section 13.  EMPLOYMENT RECORDS.  Within 30 days after the close of each 
                  ------------------
fiscal year, the Borrower shall furnish a written report to the Authority of the
number and classification of employees at the Project Facility as of the end of 
the fiscal year.
<PAGE>
 
                                       7

     Section 14. ASSIGNMENT OF AGREEMENT, SALE OR LEASE OF PROJECT FACILITY. The
                 ----------------------------------------------------------
Borrower may not assign or transfer the whole or any part of this Direct Loan 
Agreement. The Borrower may not sell, lease, convey, assign, transfer or 
otherwise dispose of any use or possessory interest in the Project Facility 
without the express prior written consent of the Authority except that the 
Borrower may grant utility, access and other easements and rights-of-way which 
will not impair the Borrower's use of the Project Facility. The Authority 
reserves the right to deny approval of any proposed lease, sublease, assignment 
or transfer if the lessee, sublessee or assignee does not, in the judgment of 
the Authority, satisfy guidelines for eligibility for Authority financial 
assistance. No permitted subleasing or assignment shall relieve the Borrower 
from primary liability hereunder.

     Section 15. THE BORROWER TO MAINTAIN ITS EXISTENCE. During the term of this
                 --------------------------------------
Direct Loan Agreement the Borrower shall maintain its existence, shall continue 
as a corporation either organized under the laws of or duly qualified to do 
business as a corporation in the State of New Jersey, and without prior written 
consent of the Authority shall not dispose of all or substantially all of its 
assets and without prior written notice to the Authority shall not consolidate 
with or merge into another entity or permit one or more other entities to 
consolidate with or merge into it.

     Section 16. ADDITIONAL COVENANTS.
                 --------------------
     (a) The Borrower shall not, without written notice to the Authority:

     (i) issue any additional stock (except as issued pursuant to stock 
         options);
    (ii) declare cash or stock dividends (except for Sub-Chapter S 
         corporations);
   (iii) purchase its own stock for value; or
    (iv) transfer any excess funds of the Borrower, its affiliates or
         subsidiaries for investment in any other business venture. The term
         "business venture" does not include bank accounts or certificates of
         deposit.

     (b) The Borrower shall make no material or substantial changes in the 
present management or operating control of the Borrower without the express 
prior written consent of the Authority.

     (c) The Borrower shall not borrow any additional funds or grant any 
additional liens on the Collateral without the express prior written consent of 
the Authority.

     (d) The Borrower shall permit representatives of the Authority to examine 
all books and records of the Borrower and to inspect the Project Facility at 
reasonable times.
<PAGE>
 
                                       8

     (e)  The Borrower agrees that the Authority shall have the right to have a 
representative present at all special and regular meetings of the Board of 
Directors.  The Borrower shall notify the Authority of all such meetings in 
advance.

     (f)  The Borrower represents and warrants that it would not have been able
to proceed with the Project without financial assistance from the Authority.

     Section 17.  EVENT OF DEFAULT.  Any one or more of the following events 
                  ----------------
shall constitute an event of default of the Borrower hereunder (an "Event of 
Default"):

     (a) if any representation or warranty made herein or in any report,
certificate, financial statement or other instrument furnished in connection
with this Direct Loan Agreement shall prove to be false or misleading in any
material respect;

     (b)  default in the payment of any installment of the principal or interest
on the Note and such default shall continue unremedied for fifteen (15) days;

     (c)  failure of the Borrower to observe and perform any other covenant, 
condition or agreement hereunder on its part to be performed (except obligation 
referred to in (a) above) and (i) continuance of such failure for a period of 
thirty (30) days after receipt by the Borrower of written notice by the 
Authority, specifying the nature of such failure and requesting that it be 
remedied; or (ii) if by reason of the nature of such failure the same cannot be 
remedied within the said 30 days, the Borrower fails to proceed with reasonable 
diligence after receipt of said notice to cure same;

     (d) the Borrower shall have applied for or consented to the appointment of
a receiver, trustee or liquidator of all or a substantial part of its assets;
admitted in writing the inability to pay its debts as they mature; made a
general assignment for the benefit of creditors; been adjudged a bankrupt, or
filed a petition or an answer seeking an arrangement with creditors or taken
advantage of any insolvency law, or an answer admitting the material allegations
of a petition in bankruptcy or insolvency proceeding; or an order, judgment or
decree shall have been entered, without the application, approval or consent of
the Borrower by any court of competent jurisdiction approving a receiver,
trustee or liquidator of the Borrower or a substantial part of any of its assets
and such order, judgment or decree shall continue unstayed and in effect for any
period of forty-five (45) consecutive days; or file a voluntary petition in
bankruptcy or fail to remove an involuntary petition in bankruptcy filed against
it within 45 days of the filing thereof;
<PAGE>
 
                                       9

                (e)     the default in the due observance or performance of any 
        covenant, condition or agreement on the part of the borrower to be
        performed pursuant to the terms of the Mortgage, other than payment of
        principal and interest which shall be governed by (b) above, and such
        default shall continue unremedied for thirty (30) days after notice
        given by the Authority;

                (f)     failure to observe any of the terms or conditions of the
        commitment letter of the Authority dated November 1, 1996 as amended
        which is incorporated herein.

                Section 18. REMEDIES OF THE AUTHORITY.
                            -------------------------

                (a)     Whenever any Event of Default referred to in Section 17
        hereof shall have occurred and be continuing, the Authority may take one
        or more of the following remedial steps:

                (i)     declare the entire principal amount of the Note to be
                        due and payable forthwith, whereupon the note shall
                        become forthwith, due and payable, both as to principal
                        and interest, without presentment, demand, protest or
                        other notice of any kind, all of which are hereby
                        expressly waived, anything contained herein or in the
                        Note to the contrary notwithstanding;

                (ii)    take any action at law or in equity to collect the
                        payments then due and thereafter to become due under the
                        Note or to enforce performance and observance of any
                        obligation, agreement or covenant of the Borrower under
                        this Direct Loan Agreement;

                (iii)   take possession of the Borrower's interest in the
                        Collateral without terminating this Direct Loan
                        Agreement, and pursue remedies of a creditor under the
                        Uniform Commercial Code and assign, sell or lease, or
                        otherwise dispose of the Borrower's interest in the
                        collateral for the account of the Borrower, and the
                        Borrower shall then be liable for the difference between
                        the loan payments and other amounts due under this
                        Direct Loan Agreement and the Note and amounts received
                        pursuant to such assignment or contract of sale or lease
                        or other disposition of the borrower's interest in the
                        Collateral and the amount of such difference shall then
                        be immediately due and payable. The Borrower hereby
                        agrees that in the event the Authority does take
                        possession of the Collateral as provided herein, the
                        obligation of the Borrower to pay such loan payments due
                        or to become due under this Direct Loan Agreement and
                        Note shall survive such repossession;



<PAGE>
 
                                      10

     (iv)  without further notice or demand or legal process, enter upon any
           premises of the Borrower and take possession of the Collateral, all
           records and items relating to the Collateral and, at the Authority's
           request, the Borrower will assemble the Collateral and such records
           and deliver them to the Authority;

      (v)  sell the Collatral but the Authority shall give the Borrower
           reasonable notice of the time and place of any public sale of such
           Collateral or of the time after which any private sale or other
           intended disposition thereof is to be made. The requirement of
           reasonable notice shall be met if notice of the sale or other
           intended disposition is (1) mailed (by certified mail, postage paid)
           to the Borrower at least ten (10) days prior to the time of such sale
           or disposition or (2) delivered to the Borrower at least five (5)
           days prior to the time of such sale or disposition. At such sale the
           Authority may sell the Collateral for cash or upon credit or
           otherwise, at such prices and upon such terms as it deems advisable
           and the Authority may bid or become purchaser at such sale, free of
           the right of redemption, which is hereby waived. The Authority may
           adjourn such sales at the time and place fixed therefor without
           further notice or advertisement and may sell such Collateral as an
           entirety or in separate lots as it deems advisable, but the Authority
           shall not be obligated to sell all or any part of such Collateral at
           the time and place fixed for such sale if it determines not to do so.
           Upon the institution of any such action hereunder by the Authority,
           the Authority shall be entitled to the appointment of a receiver for
           the Collateral without proof of the depreciation of the value of
           same.

     (b)  If the Authority shall have proceeded to enforce its rights under this
Direct Loan Agreement and such proceedings shall have been discontinued or
abandoned for any reason or shall have been determined adversely to the
Authority, then the Borrower and the Authority shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Borrower and the Authority shall continue as though no such
proceedings had taken place.

     (c)  Without limiting the generality of the foregoing, upon the happening 
of an Event of Default by the Borrower hereunder, all of the Borrower's right, 
title and interest in the Project Facility hereunder or in equity and the 
Borrower's rights to possession thereof may be terminated by an action for 
foreclosure or repossession in accordance with the statutes of the State of New 
Jersey.


<PAGE>
 
                                      11

     (d)  Upon the institution of any such action by the Authority, the 
Authority shall be entitled to the appointment of a receiver for the Project 
Facility.

     (e)  No remedy herein conferred or reserved to the Authority is intended to
be exclusive of any other available remedy or remedies, but each and every such 
remedy shall be cumulative and shall be in addition to every other remedy given 
under this Direct Loan Agreement or now or hereafter existing at law or in 
equity or by statute.  No delay or omission to exercise any right or power 
accruing upon any default shall impair any such right or power or shall be 
construed to be a waiver thereof, but any such right and power may be exercised 
from time to time and as often as may be deemed expedient.  In order to entitle 
the Authority to exercise any remedy reserved to it in this Section, it shall 
not be necessary to give notice other than such notice as may be required in 
this Section.

     (f)  In addition to the above remedies, if the Borrower commits a breach, 
or threatens to commit a breach of this Direct Loan Agreement, the Authority 
shall have the right and remedy, without posting bond or other security, to have
the provisions of this Direct Loan Agreement specifically enforced by any court 
having equity jurisdiction, it being acknowledged and agreed that any such 
breach or threatened breach will cause irreparable injury to the Authority and 
that money damages will not provide an adequate remedy therefor.

     (g)  In the event the Borrower should default under any of the provisions 
of this Direct Loan Agreement and the Authority shall require and employ 
attorneys or incur other expenses for the collection of payments due or to 
become due for the enforcement or performance or observance of any obligation or
agreement on the part of the Borrower herein contained, the Borrower shall on 
demand therefor pay to the Authority, the reasonable fees of such attorneys and 
other expenses so incurred by the Authority.

     (h)  The Authority shall not be required to do any act whatsoever or 
exercise any diligence whatsoever to mitigate the damages to the Borrower if an 
Event of Default shall occur hereunder.

     Section 19.  FURTHER ASSURANCES AND CORRECTIVE INSTRUMENTS.  The Borrower
                  ---------------------------------------------
shall execute, acknowledge and deliver such supplements and further instruments 
and perform such acts as the Authority may reasonably require for carrying out 
the intention of or facilitating the performance of this Direct Loan Agreement 
or the Note.
<PAGE>
 
                                      12

     Section 20.  RELEASE AND INDEMNIFICATION.  The Borrower covenants and 
                  ---------------------------
agrees that neither the Authority, its members, agents, servants, officers or 
employees shall be liable for:  (1) any loss, damage or injury to, or death of, 
any person occurring at or about or resulting from any defect in the Project 
Facility or the Collateral; (2) any damage or injury to the persons or property 
of the Borrower, or its officers, agents, servants or employees, or any other 
person who may be about the Project Facility, caused by any act of negligence of
any person (other than the Authority or its members, officers, agents, servants
or employees); or (3) any costs, expenses or damages incurred as a result of any
lawsuit commenced because of action taken in good faith by the Authority in 
connection with the Project Facility or the Collateral.  The Borrower shall 
indemnify, protect, defend and hold the Authority, that State of New Jersey 
their respective members, agents, servants, officers and employees (each an 
"Indemnified Party"), harmless from and against any and all such losses,
damages, injuries, costs or expenses and (except for claims, demands, suits,
actions or other proceedings brought against an Indemnified Party resulting from
willful or wanton misconduct of such Indemnified Party) from and against any and
all claims, demands, suits, actions or other proceedings whatsoever, brought by
any person or entity whatsoever, (except the Borrower) and arising or
purportedly arising from this Direct Loan Agreement, the Note or any transaction
contemplated in any such documents, or from the construction, ownership and
operation of the Project Facility or the Collateral.

     Section 21.  NOTICES.  Any notices required to be sent under this Direct 
                  -------
Loan Agreement shall be sent to:

     (1)  The Authority at:  CN 990, Trenton, New Jersey 08625-0990, Attn:
          Managing Director - Finance

     (2)  The Borrower at:  1007 Laurel Oak Road, Voorhees, New Jersey 08043,
          Attn:  President

     Section 22.  MISCELLANEOUS.
                  -------------

     (a)  This Direct Loan Agreement constitutes the entire agreement, and 
supersedes all prior agreements and understandings, both written and oral among 
the parties with respect to the subject matter hereof and may be executed 
simultaneously in several counterparts, each of which shall be deemed an 
original, and all of which together shall constitute one and the same
instrument.

     (b)  Modifications or waivers of any provisions of this Direct Loan 
Agreement or the Note must be in writing.

     (c)  In the event any provision of this Direct Loan Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, such holding 
shall not invalidate or render unenforceable any other provision thereof.


<PAGE>
 
                                      13

     (d)  This Direct Loan Agreement shall become effective upon its execution 
and delivery by the parties hereto, shall remain in full force from the date 
thereof, and subject to the provisions hereof, shall expire on such date as the 
Note and the interest thereon and all other expenses or sums to which the 
Authority is entitled, have been fully paid and retired.

     (e)  In the event that any provision of this Direct Loan Agreement should 
be breached by any party and thereafter waived by any party, such waiver shall 
be limited to the particular breach so waived by any party and shall not be 
deemed to waive any other breach.

     (f)  This Direct Loan Agreement shall inure to the benefit of and be 
binding upon the successors and assigns of the Authority and the Borrower.

     (g)  This Direct Loan Agreement shall be construed and enforced under the 
laws of the State of New Jersey.

     (h)  The rights and remedies of the Borrower under this Agreement shall be 
subject to the New Jersey Contractual Liability Act, N.J.S.A. 59:13-1 et seq., 
                                                     --------
the provisions of which are hereby incorporated herein by reference in their 
entirety.

     IN WITNESS WHEREOF, the Authority and the Borrower have caused this Direct 
Loan Agreement to be executed in their respective names and by their duly 
authorized officers, as of the date first above written.


ATTEST:                                         NEW JERSEY ECONOMIC DEVELOPMENT
                                                AUTHORITY



By: /s/ Teri Dunlop                             By: /s/ Adam Mukerji
   ---------------------------------               -----------------------------
     Teri Dunlop                                     Adam Mukerji
     Director-Lending Services                       Director-Commercial Lending


ATTEST:                                         RF POWER PRODUCTS, INC.        



By: /s/ Christopher A. Ben                      By: /s/ Domenic N. Golato
   ---------------------------------               -----------------------------
     Christopher A. Ben                              Domenic N. Golato
     Secretary                                       Chief Financial Officer    
<PAGE>
 
                                                                     EXHIBIT "A"

                            RF POWER PRODUCTS, INC.

                          DIRECT LOAN PROMISSORY NOTE

$500,000                                                               $500,000

     RF POWER PRODUCTS, INC. (the "Borrower") a corporation organized and 
existing under the laws of the State of New Jersey acknowledges itself indebted 
and for value received hereby promises to pay to the order of the NEW JERSEY 
ECONOMIC DEVELOPMENT AUTHORITY (the "Authority") and its successors and assigns,
the principal sum of FIVE HUNDRED THOUSAND DOLLARS ($500,000), together with 
interest on the unpaid principal balance thereof from the date hereof until the 
Borrower's obligations with respect to the payment of such sum shall be 
discharged at the rate of five percent (5%) per annum. Interest charges shall be
computed hereunder on the basis of a 360 day year, counting the actual number of
days elapsed.

     This Note is issued to evidence the obligation of the Borrower under and 
pursuant to, and shall be governed by and construed in accordance with the terms
and conditions of the Direct Loan Agreement (the "Agreement") between the 
Authority and the Borrower dated as of December 20, 1996 for the repayment of 
the loan made by the Authority to the Borrower thereunder and payment of 
interest thereon. Terms referred to herein have the same meaning as defined in 
the Agreement. This Note is secured by specific machinery and equipment of the 
Borrower.

     This Note is payable in sixty (60) equal monthly installments of principal 
and interest in the sum of $9,450.95 commencing on February 1, 1997 and on the 
first day of each succeeding month and terminating if not sooner paid, as herein
provided on January 1, 2002. Such installments shall be applied first to payment
of interest then due on the unpaid principal amount and the remaining balance of
each such installment to be applied to the payment and reduction of the unpaid 
principal amount of this Note. There shall additionally be due and payable on 
February 1, 1997 a sum equal to the interest at the rate hereinabove stated then
due on the total principal amount of this Note. The amount payable as the final 
installment may be such greater or lesser amount as shall be equal to the actual
principal amount of this Note remaining unpaid together with interest thereon 
then due and unpaid.

     Payments hereon are to be made in lawful money of the United States of 
America to the New Jersey Economic Development Authority (P9173), Title IX 
Grant, P.O. Box 8500 S-41210, Philadelphia, PA 19178, or such other place as the
Authority may designate, on each due date provided above, in an amount which 
will equal the amount payable as interest and principal on this Note.

<PAGE>
 
                                       2

     The Borrower agrees to make the payments on this Note on the dates and in 
the amounts specified herein and in the Agreement and in addition agrees to make
such other payments as are required pursuant to the Agreement. A late charge of 
five percent (5%) of the monthly payment shall be due and payable on any monthly
payment past due seven (7) days or more. In the event of default in the 
Agreement, the principal of and interest on this Note may be declared 
immediately due and payable as provided in the Agreement. This Note may be 
canceled, amended or supplemented as provided in the Agreement.

     The Borrower may prepay this Note in whole at any time or in part on any 
payment date without penalty. Partial prepayments shall be applied to the last 
maturing payments due on this Note, shall be in one or more increments of the 
monthly amount due, shall not extend or postpone the due date of any subsequent 
monthly installment or change the amounts of such installments. In any such 
case, the final payment on this Note shall be a sum sufficient, together with 
other funds deposited with the Authority and available for such purpose, to 
redeem all of this Note then outstanding at the principal amount thereof plus 
accrued interest to the date of payment and to pay all reasonable and necessary 
fees and expenses of the Authority accrued and to accrue through final payment 
for this Note. At the acceleration, termination or expiration of the term of 
this Note and following full payment of this Note and all other fees and charges
in accordance with the provisions of the Agreement, the Authority shall deliver 
to the Borrower any documents and take such actions as may be necessary to 
effectuate the cancellation of this Note and evidence the termination of the 
Agreement.

     Premium upon sale of machinery and equipment purchased with the proceeds of
the Loan: a percentage of the net profit from the sale of the Borrower's 
machinery and equipment purchased with the proceeds of the Loan shall be paid to
the Authority at the time of closing of said sale in the event same occurs 
during the term of this Note. Such sale is subject to the prior written consent 
of the Authority and is subject to the following conditions. The percentage of 
the net profit of the sale paid to the Authority shall:

     (i)  equal 35% if the sale occurs within one year from the date of this 
          Note; and

    (ii)  decrease by 5% each year for the subsequent 5 years of this Note.

Net Profit is defined as the total sales price minus debt, depreciated value and
taxes payable upon the sale.
<PAGE>
 
                                       3

     IN WITNESS WHEREOF, RF POWER PRODUCTS, INC. has caused this Note to be 
executed in its name and on its behalf by its authorized officers by their 
manual signatures as of this 20TH day of DECEMBER, 1996.

ATTEST:                                RF POWER PRODUCTS, INC.


By:                                    By:
   ----------------------------------     ---------------------------------
     Christopher A. Ben                     Domenic N. Golato
     Secretary                              Chief Financial Officer
<PAGE>
 
********** Amortization Schedule **********

Schedule for New Loan
Loan Type A: Straight Term, Rate: 5.00

Terms 60 Months            Closing Date: 12/18/96, Amortized over: 60 mos

Outstanding Principal:   500,000.00     1st Payment Interest Adjustment:  972.22
Standard Payment:          9,450.95

<TABLE> 
<CAPTION> 
                      Starting                      Interest    Principal    Ending
Payment   Payment     Principal      Monthly        Payment     Payment      Principal
Number    Date        Balance        Payment        Due         Due          Balance
<S>       <C>        <C>            <C>             <C>         <C>         <C> 
      1.  02/01/97   500,000.00     10,423.17       3,125.00     7,298.17   492,701.83
      2.  03/01/97   492,701.83      9,450.95       1,916.06     7,534.89   485,166.94
      3.  04/01/97   485,166.94      9,450.95       2,088.91     7,362.04   477,804.90
      4.  05/01/97   477,804.90      9,450.95       1,990.85     7,460.10   470,344.80
      5.  06/01/97   470,344.80      9,450.95       2,025.10     7,425.85   462,918.95
      6.  07/01/97   462,918.95      9,450.95       1,928.83     7,522.12   455,396.83
      7.  08/01/97   455,396.83      9,450.95       1,960.74     7,490.21   447,906.62
      8.  09/01/97   447,906.62      9,450.95       1,928.49     7,522.46   440,384.16
      9.  10/01/97   440,384.16      9,450.95       1,834.93     7,616.02   432,768.14
     10.  11/01/97   432,768.14      9,450.95       1,863.31     7,587.64   425,180.50
     11.  12/01/97   425,180.50      9,450.95       1,771.59     7,679.36   417,501.14
     12.  01/01/98   417,501.14      9,450.95       1,797.57     7,653.38   409,847.76
     13.  02/01/98   409,847.76      9,450.95       1,764.62     7,686.33   402,161.43
     14.  03/01/98   402,161.43      9,450.95       1,563.96     7,886.99   394,274.44
     15.  04/01/98   394,274.44      9,450.95       1,697.57     7,753.38   386,521.06
     16.  05/01/98   386,521.06      9,450.95       1,610.50     7,840.45   378,680.61
     17.  06/01/98   378,680.61      9,450.95       1,630.43     7,820.52   370,860.09
     18.  07/01/98   370,860.09      9,450.95       1,545.25     7,905.70   362,954.39
     19.  08/01/98   362,954.39      9,450.95       1,562.72     7,888.23   355,066.16
     20.  09/01/98   355,066.16      9,450.95       1,528.76     7,922.19   347,143.97
     21.  10/01/98   347,143.97      9,450.95       1,446.43     8,004.52   339,139.45
     22.  11/01/98   339,139.45      9,450.95       1,460.18     7,990.77   331,148.68
     23.  12/01/98   331,148.68      9,450.95       1,379.79     8,071.16   323,077.52
     24.  01/01/99   323,077.52      9,450.95       1,391.03     8,059.92   315,017.60
     25.  02/01/99   315,017.60      9,450.95       1,356.33     8,094.62   306,922.98
     26.  03/01/99   306,922.98      9,450.95       1,193.59     8,257.36   298,665.62
     27.  04/01/99   298,665.62      9,450.95       1,285.92     8,165.03   290,500.59
     28.  05/01/99   290,500.59      9,450.95       1,210.42     8,240.53   282,260.06
     29.  06/01/99   282,260.06      9,450.95       1,215.29     8,235.66   274,024.40
     30.  07/01/99   274,024.40      9,450.95       1,141.77     8,309.18   265,715.22
     31.  08/01/99   265,715.22      9,450.95       1,144.05     8,306.90   257,408.32
     32.  09/01/99   257,408.32      9,450.95       1,108.29     8,342.66   249,065.66
     33.  10/01/99   249,065.66      9,450.95       1,037.77     8,413.18   240,652.48
     34.  11/01/99   240,652.48      9,450.95       1,036.14     8,414.81   232,237.67
     35.  12/01/99   232,237.67      9,450.95         967.66     8,483.29   223,754.38
     36.  01/01/00   223,754.38      9,450.95         963.39     8,487.56   215,266.82
     37.  02/01/00   215,266.82      9,450.95         926.84     8,524.11   206,742.71
     38.  03/01/00   206,742.71      9,450.95         832.71     8,618.24   198,124.47
     39.  04/01/00   198,124.47      9,450.95         853.04     8,597.91   189,526.56
     40.  05/01/00   189,526.56      9,450.95         789.69     8,661.26   180,865.30
     41.  06/01/00   180,865.30      9,450.95         778.73     8,672.22   172,193.08
     42.  07/01/00   172,193.08      9,450.95         717.47     8,733.48   163,459.60
     43.  08/01/00   163,459.60      9,450.95         703.78     8,747.17   154,712.43
     44.  09/01/00   154,712.43      9,450.95         666.12     8,784.83   145,927.60
     45.  10/01/00   145,927.60      9,450.95         608.03     8,842.92   137,084.68
     46.  11/01/00   137,084.68      9,450.95         590.23     8,860.72   128,223.96
     47.  12/01/00   128,223.96      9,450.95         534.27     8,916.68   119,307.28
     48.  01/01/01   119,307.28      9,450.95         513.68     8,937.27   110,370.01
     49.  02/01/01   110,370.01      9,450.95         475.20     8,975.75   101,394.26
     50.  03/01/01   101,394.26      9,450.95         394.31     9,056.64    92,337.62
     51.  04/01/01    92,337.62      9,450.95         397.56     9,053.39    83,284.23
     52.  05/01/01    83,284.23      9,450.95         347.02     9,103.93    74,180.30
     53.  06/01/01    74,180.30      9,450.95         319.39     9,131.56    65,048.74
     54.  07/01/01    65,048.74      9,450.95         271.04     9,179.91    55,868.83
     55.  08/01/01    55,868.83      9,450.95         240.55     9,210.40    46,658.43
     56.  09/01/01    46,658.43      9,450.95         200.89     9,250.06    37,408.37
     57.  10/01/01    37,408.37      9,450.95         155.87     9,295.08    28,113.29
     58.  11/01/01    28,113.29      9,450.95         121.04     9,329.91    18,783.38 
</TABLE> 
<PAGE>
 
<TABLE> 
<S> <C>         <C>          <C>        <C>             <C>          <C> 
59. 12/01/01    18,783.38     9,450.95       78.26      9,372.69     9,410.69
60. 01/01/02     9,410.69     9,451.21       40.52      9,410.69         0.00

     Totals:                 68,029.48  500,000.00
</TABLE> 

Adjustment made to Final Principal Payment:  +0.26
<PAGE>
 
                                                                     EXHIBIT "B"


                                  REQUISITION
                                  -----------

     The Undersigned, on behalf of RF POWER PRODUCTS, INC., hereby requisitions 
the following from the NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY:

     1. Check number ____________ dated December _____________, 1996 made 
        payable to RF Power Products, Inc. and Laurel Oak Road, LLC in the
        amount of $250,000.00.

     2. Check number ____________ dated December _____________, 1996 made 
        payable to RF Power Products, Inc. and Atlantic Electric in the amount 
        of $33,050.70.





                                       RF POWER PRODUCTS, INC.




                                       By:
                                          -----------------------------------
                                            Domenic N. Golato
                                            Chief Financial Officer



DATED: DECEMBER 20, 1996
<PAGE>
 
                                                                     EXHIBIT "C"

                           [LETTERHEAD APPEARS HERE]




                                                November 1, 1996



VIA FEDERAL EXPRESS
-------------------
Joseph Stack, Chairman
R.F. Power Products, Inc.
502 Gibbsboro Marlton Road
Voorhees, New Jersey 08053



                                                RE:  R.F. Power Products, Inc.
                                                     P9173
                                                     --------------------------


Dear Mr. Stack:

I am pleased to inform you that at a meeting on October 8, 1996, the members of 
the Authority approved the application of R.F. Power Products, Inc. for a 
$500,000 Authority direct loan for the purchase of equipment for the expansion 
of an existing manufacturer of radio frequency power delivery systems (the 
"Project") as stated in your application dated August 7, 1996.

The Authority, unless stated otherwise in this commitment letter, has approved 
the direct loan upon the terms and conditions set forth in this commitment 
letter and the General Terms and Conditions of Lending attached and incorporated
herein.  No act or omission by or on behalf of the Authority shall be deemed as 
a waiver to any of the terms and conditions contained in this letter.  Such a 
waiver may be made only by an instrument in writing duly executed by an 
authorized representative of the Authority.



            Mailing Address: CN 990, Trenton, New Jersey 08625-0990
    Delivery Address: 200 South Warren Street, 6th Floor, Trenton, NJ 08625
                            Telephone (609)292-1800
<PAGE>
 
NAME OF BORROWER:                      R. F. Power Products, Inc.

PROJECT LOCATION:                      1007 Laurel Oak Road
                                       Voorhees, New Jersey

LOAN:                                  $500,000 from NJEDA for a term of five
                                       (5) years at a rate of interest of 5% per
                                       annum or the Federal Discount Rate at the
                                       date of closing, whichever is greater.

AMORTIZATION:                          Principal payments in an amount to fully
                                       amortize $500,000 over 5 years plus
                                       interest payable monthly for sixty (60)
                                       months.

PREPAYMENT PENALTY:                    None

PREMIUM UPON SALE:                     A percentage of the net profit from the
                                       sale of the Borrower's machinery and
                                       equipment purchased with the proceeds of
                                       the Loan shall be paid to the Authority
                                       at the time of closing of said sale in
                                       the event such sale occurs during the
                                       term of this Loan. Such sale is subject
                                       to the prior written consent of the
                                       Authority and is subject to the following
                                       condition. The percentage of the net
                                       profit of the sale paid to the Authority
                                       shall:
                                       (i)  equal 35% if the sale occurs within 
                                       one year form the date of closing;
                                       (ii) decrease by 5% each year for the 
                                       subsequent 5 years of the Loan.
                                       Net Profit is defined as the total sales
                                       price minus debt, depreciated value and
                                       taxes payable upon the sale.

SECURITY:                              A first lien on all machinery and
                                       equipment purchased with the proceeds of
                                       this financing; all interest, proceeds
                                       and products of all of the above
                                       including without limitation, any
                                       insurance proceeds thereof.

FINANCIAL STATEMENTS:                  Annual review financial statements
                                       submitted to the Authority within 90 days
                                       of the end of each fiscal year for R. F.
                                       Power Products, Inc.

                                                                               2

<PAGE>
 
                                            Quarterly company prepared financial
                                            statements submitted to the
                                            Authority within 45 days of the end
                                            of each quarter for R.F. Power
                                            Products, Inc.

DISBURSEMENTS:                              The Loan proceeds will be disbursed
                                            in accordance with the following
                                            requirements: (1) receipt of a
                                            statement or invoice together with a
                                            requisition signed by the Borrower
                                            stating (a) the name and address of
                                            the person or firm to be paid; and
                                            (b) the amount to be paid; or if the
                                            Borrower has already paid the
                                            invoice, proof of payment; and (2)
                                            compliance with the terms of this
                                            commitment letter.

CONDITIONS:
----------

1.   The Authority shall receive evidence prior to closing that the Borrower has
     contributed not less than $510,000 to the Project as equity.

2.   The Authority shall receive at least 10 days prior to closing current
     financial statements for the Borrower not more than ninety (90) days old at
     the time of closing.

3.   The Borrower shall obtain a landlord's waiver from the owner of the Laurel
     Oak Road property recognizing the Authority's lien on all machinery and
     equipment by the Borrower. A copy of the executed lease is required.


The interests of the Borrower and the Authority are or may be different and may 
conflict. The Authority's attorney represents only the Authority and does not 
represent the Borrower in the Loan transaction. The Borrower, therefore, is 
advised to employ an attorney licensed to practice in the State of New Jersey, 
of the Borrower's own choice, to represent the Borrower's interest in the Loan 
transaction.

                                                                               3




<PAGE>
 
The credit of the Borrower and all other features of the transaction shall be as
represented to the Authority without material adverse change. The Borrower shall
not be involved in any bankruptcy, reorganization or insolvency proceeding.

The Authority will require evidence satisfactory to it and its counsel that 
assets pledged to it as security for this financing are free and clear of any 
and all security interest, except as set forth herein. The Authority reserves 
the right to pre-file financing statements prior to closing.

Counsel to the Authority must be satisfied with respect to the legality, 
validity, binding effect, and enforceability of all instruments, agreements, and
documents used to effect and consummate the transactions contemplated herein.

By your acceptance of this commitment letter, you acknowledge this letter is 
issued at a time when the Authority has not undertaken a full business, credit, 
and legal analysis of the Borrower and/or the transaction(s) contemplated by 
this commitment. As a result of further investigation and analysis by the 
Authority and its counsel, information of which we are not presently aware may 
be revealed and/or certain other impediments to closing may come to our 
attention. Our mutual efforts will be directed toward the closing of this 
financing. The Authority may require the financing to be restructured or 
otherwise modified. As lender, the Authority is the sole judge of what is an 
impediment and whether the impediment is so serious as to preclude closing.

Each unsatisfied covenant, term and condition of this commitment which is not 
expressly waived in writing by the Authority shall survive any closing 
hereunder. In case of any conflict between any unwaived and unsatisfied 
covenant, term or condition of this commitment and the provisions of the loan 
documents delivered at or pursuant to any closing regarding this financing, the 
unwaived and/or unsatisfied covenant, term or condition of this commitment shall
control.

This commitment is subject to acceptance by the Borrower of the terms and 
conditions contained herein and in the General Terms and Conditions of Lending. 
This commitment letter must be signed and returned to the undersigned together 
with a check in the amount of $2,500 made payable to the NJEDA for the 
non-refundable direct loan commitment fee. In addition, $2,500 is payable to the
NJEDA at closing for direct loan closing costs.

This commitment shall terminate and the Authority shall have no further 
obligation or liability hereunder if this letter is not signed and returned 
together with the applicable fees on or before December 31, 1996 ("Acceptance 
Date"). An extension fee of $750 is required to extend the Acceptance Date an 
additional 15 days.

In the event this financing is not closed on or before March 31, 1997 ("Closing 
Date"), the Authority's obligation to provide financing hereunder shall 
terminate and the Borrower will be required to submit a new application.

Please contact Steven K. Szmutko at (609) 292-0181 if you have any questions 
regarding this matter.

                                                                               4
<PAGE>
 
P9173        -$2,500                                       RECEIVED
                                                          NOV 19 1996
                                                      COMMERCIAL LENDING
We are pleased to be of service to your financing needs.

                                                Sincerely,


                                                /s/ Adam Mulkerji
                                                ------------------
                                                Adam Mulkerji
                                                Director-Commercial Lending
                                                
td/mw

ACCEPTED AND AGREED THIS 18th DAY
                         ----
OF November         , 1996 BY:
  ------------------

BORROWER:

R.F. POWER PRODUCTS, INC.


By:  /s/ Joseph Stack
   ----------------------
      Joseph Stack
      Chairman


                                                                               5
<PAGE>
 
                                  DIRECT LOAN

                    GENERAL TERMS AND CONDITIONS OF LENDING
                    ---------------------------------------

        1.  Any liens on real property required by this commitment letter shall 
be liens on the fee simple absolute title to the land and all improvements, free
of any prior mechanic's or materialmen's liens or special assessments.  Any 
title exceptions are subject to approval by the Authority.
        2.  Title insurance, when required, shall be evidenced by a paid policy 
with an insurance company or companies acceptable to the Authority and qualified
to do business in New Jersey.
        3.  Appraisals, when required, shall be made by an independent appraiser
acceptable to the Authority.  The appraisal fee shall be payable by the 
Borrower.
        4.  Fire and hazard insurance, including theft, vandalism and malicious 
mischief, shall equal 100% of the insurable value of all real estate, machinery,
equipment, furniture, fixtures and inventory securing the loan and shall be 
secured from such companies approved by the Authority.  Insurance covering real 
property shall include a standard mortgagee endorsement in favor of the "New 
Jersey Economic Development Authority."  Insurance for contents shall include 
the "New Jersey Economic Development Authority" as loss payee in a standard 
lender's loss payable clause.  General liability insurance shall be in amounts 
of $500,000 per individual, $1,000,000 per occurrence.  All insurance policies 
required shall be secured from companies qualified to do business in New Jersey.
Flood insurance covering both building and contents or proof that the real 
estate is not in a flood hazard area is required.
        5.  Financial statements shall be prepared by an independent certified 
public accountant acceptable to the Authority.  Unaudited financial statements 
shall be duly certified by the chief financial officer of the company.  Annual 
financial statements shall be submitted to the Authority within 90 days of the 
end of the Borrower's fiscal year. Quarterly statements shall be submitted
within 45 days of the end of each quarter. Semi-annual statements shall be
submitted within 45 days of the end of each semi-annual period. Financial
statements of the Guarantors shall be submitted within 90 days of the end of
each fiscal year or as provided in the commitment letter.
        6.  During the term of the Loan the Borrower and any Guarantor:
            a.  Shall make no material changes in their present management or 
            operating control without the consent of the Authority.
            b.  Shall not merge or consolidate with or acquire any other 
            business, corporation or partnership without written notice to the 
            Authority.
            c.  Shall not engage in any additional financing or grant any liens 
            or security interest to any other lender regarding the collateral
            securing this Loan.
            d.  Shall not sell, assign, lease, sublease, transfer or encumber 
            its interest in any machinery or equipment financed with the 
            proceeds of the Loan.
            e.  Shall permit representatives of the Authority to examine all 
            books and records of the Borrower and to inspect the Borrower's
            facilities.
            f.  If Borrower or Guarantor is a corporation, the Borrower or the 
            Guarantor shall agree that the Authority shall have the right to
            have a representative present at all special and regular meetings of
            its Board of Directors. The Borrower or the Guarantor shall notify
            the Executive Director of the Authority of such meetings in advance.
            In addition, each shall obtain the necessary authority of their
            respective boards of directors and shareholders to enter into the
            agreements evidenced or specified herein, and will each obtain such
            further authorization of their respective boards of directors and
            shareholders as may be necessary or appropriate to the financing
            arrangements set forth herein.
            g. Shall not transfer excess cash flow; declare cash or stock
            dividends (except Sub-Chapter S Corporations); issue any additional
            stock (except as issued pursuant to stock options); or purchase its
            own stock for value without written notice to the Authority.

<PAGE>
 
General Terms and Conditions of Lending
Page 2

           h.   Shall pay all taxes, assessments and governmental charges
           lawfully assessed or levied against its properties and assets. The
           Borrower or Guarantor shall also pay all utility, water, sewer or
           other charges incurred in the occupancy, use or operation regarding
           its business operation.
     7.    The Borrower shall submit such searches, title reports, and 
certificates evidencing Borrower's title to its real and personal property 
serving as collateral for the loan in a form satisfactory to counsel for the 
Authority.
     8.    The Borrower shall duly execute and deliver to such instruments, 
documents, certificates, opinions, assurances, and do such other acts and things
as the Authority may reasonably require to effect the purpose of the transaction
described herein. All proceedings, agreements, instruments, documents, and other
matters relating to the application for the loan and all other transactions 
contemplated herein shall be satisfactory to counsel for the Authority.
     9.    The Authority requires a current legal opinion by Borrower's legal 
counsel to the effect that all documents are valid and binding on the Borrower
or Guarantor, that the Borrower or Guarantor have valid title to all machinery
and equipment purchased with the proceeds of the Loan and that to the best of
the attorney's knowledge there is no litigation pending which would adversely
affect the Borrower's or Guarantor's financial condition.
     10.   Any consent of the Authority required to be given hereunder must be 
expressly stated in writing by an authorized officer of the Authority.
     11.   The Borrower shall operate the Project as an authorized project for 
purposes of the New Jersey Economic Development Authority Act and substantially 
as set forth in its application to the Authority. The Borrower will not 
relocate all or any substantial part of its business operation from its present 
location without the consent of the Authority.
     12.    Within 30 days after the end of each fiscal year, the Borrower shall
furnish to the Authority a report showing the number and classification of 
employees employed at the Project Facility as of the end of the fiscal year. The
Borrower shall agree to maintain or increase the number of employees employed by
the Borrower as set forth in its application to the Authority.
     13.   The Borrower shall agree to indemnify and save harmless, the 
Authority, their officers, members, employees, agents and servants from any 
losses, damages, claims or liability arising from the making of the loan or the 
acquisition, operation or ownership of the Project Facility or the Project.


<PAGE>
 
                                ACKNOWLEDGEMENT


STATE OF NEW JERSEY  :

                     :

COUNTY OF MERCER     :


        BE IT REMEMBERED, that on the 18th day of December, 1996, before me, the
                                     -----
subscriber, a Notary Public of the State of New Jersey, personally appeared ADAM
MUKERJI, who, being by me duly sworn on his oath, deposes and makes proof to my 
satisfaction, that he is the DIRECTOR - COMMERCIAL LENDING of the NEW JERSEY 
ECONOMIC DEVELOPMENT AUTHORITY, the Authority named in the within Instrument; 
that the execution, as well as the making of this Instrument, has been duly 
authorized by a proper resolution of the Members of said Authority; and said 
Instrument was signed and delivered by said Director as and for the voluntary 
act and deed of said Authority.



                                        /s/ Yvonne J. Sprouls
                                        ----------------------------
                                        YVONNE J. SPROULS
                                        Notary Public of New Jersey
                                        My Commission Expires July 27, 1999
<PAGE>
 
                                ACKNOWLEDGMENT




STATE OF NEW JERSEY :
                    :
COUNTY OF           :



     BE IT REMEMBERED, that on this 20th day of December, 1996, before me, a 
Notary Public of the State of New Jersey, personally appeared, DOMENIC N. 
GOLATO, to me known, who, being by me duly sworn, did depose and say that he is 
the CHIEF FINANCIAL OFFICER of RF POWER PRODUCTS, INC., the corporation named in
the within Instrument; that the execution, as well as the making of this 
Instrument, has been duly authorized by a proper resolution of the Board of 
Directors of said corporation; and said Instrument was signed and delivered by 
said Chief Financial Officer as and for the voluntary act and deed of said 
corporation.




                                           /s/ Teri Dunlop
                                         ---------------------------


                                                 Teri Dunlop
                                         Notary Public of New Jersey
                                   My Commission Expires November 4, 2001