<PAGE>
 
--------------------------------------------------------------------------------

  Loan Agreement                           [LOGO OF MELLON PSFS APPEARS HERE]

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


  ------------------------------------------------------------------------------
  
  RF POWER PRODUCTS, INC.
  ------------------------------------------------------------------------------

  (*Borrower") has requested

  Mellon Bank, N.A.
  ------------------------------------------------------------------------------
  ("Bank") to make loans(s), extend discretionary line(s) of credit, or
  otherwise extend credit accommodation(s) (the "Borrowings") to Borrower, and
  Bank has agreed to make or extend such loan(s), discretionary line(s) of
  credit or extension(s) of credit to Borrower upon the following terms and
  conditions. The Borrowings shall be  evidenced by such notes, instruments or
  other documents ("Notes") as may be requested from time by Bank, and Borrower
  agrees to comply with the terms contained herein and in any written supplement
  now or hereafter executed by Borrower in which reference to this Agreement is
  made.

  1. Representations and Warranties. In addition to the representations and
  warranties contained in the Notes, Borrower hereby makes the following
  representations and warranties which shall be true and correct on the date
  hereof and shall continue to be true and correct at the time of the creation
  of any of the Borrowings and until the Borrowings shall have been paid in
  full:

  (a) Organization-Corporation and Partnership. If Borrower is a corporation or
  a partnership, Borrower is duly organized, validly existing, and in good
  standing under the laws of the jurisdiction in which Borrower is incorporated
  or was formed; Borrower has the power and authority to own its properties and
  assets, to carry on its businesses as now being conducted and is qualified to
  do business in every jurisdiction in which it is required to qualify to do
  business;

  (b) Validity and Binding Nature. Borrower has the power to execute, deliver
  and perform this Agreement, the Notes, and to execute and deliver any other
  documents evidencing or relating to the Borrowings; and when executed and
  delivered, this Agreement, the Notes and such documents will be valid and
  binding obligations of Borrower, enforceable in accordance with their terms;
  provided, however, that this representation with respect to enforceability is
  limited by bankruptcy, insolvency, or other laws of general application
  relating to or affecting the enforcement of creditors' rights.

  (c) Due Authorization-Corporation and Partnership. The execution, delivery and
  performance of this Agreement, the Notes and any other documents evidencing or
  relating to the Borrowings, have been duly authorized by all corporate or
  partnership action required for the lawful creation and issuance of such
  documents and will not violate any provisions of law, any order or any court
  or governmental agency, the charter documents and by-laws of, or partnership
  agreement of Borrower.

  (d) Conflicting Instruments. The execution, delivery and performance of this
  Agreement, the Notes and any other documents evidencing or relating to the
  Borrowings will not violate any provisions of any indenture, agreement, or
  other instrument to which Borrower or any of Borrower's properties or assets
  are bound, and will not be in conflict with, result in a breach of, or
  constitute (with due notice and/or lapse of time) a default under any such
  indenture, agreement, or other instrument, or result in the creation or
  imposition of any lien, charge, or encumbrance of any nature whatsoever upon
  any of the properties or assets of Borrower.

  (e) Authorization and Consents. No authorization, consent, approval, license
  or exemption of, and no registration, qualification, designation, declaration
  or filing with any court or governmental department, commission, board,
  bureau, agency or instrumentality, domestic or foreign is necessary to the
  valid execution and delivery of this Agreement, the Notes or any other
  documents evidencing or relating to the Borrowings.

  (f) Financial Condition. The most recent financial statements of Borrower
  delivered to the Bank are true and correct and represent fairly its financial
  position as of the date thereof as required by GAAP; and the result of its
  operations for the period indicated; and show all liabilities, direct, or
  contingent, of Borrower as of the date thereof. Since the date of such
  financial statements, there has been no material adverse change in the
  condition, financial or otherwise, of Borrower or in the business and
  properties of Borrower and, since such date, Borrower has not incurred, other
  than in the ordinary course or business, any indebtedness, liabilities,
  obligations or commitments, contingent or otherwise.

  (g) Litigation. Except as previously disclosed in writing to Bank prior to the
  date of this Agreement, there is no action, suit or proceeding at law or in
  equity or by or before any governmental instrumentality or other agency now
  pending, or to knowledge of Borrower, threatened by or against or affecting
  Borrower or any of its properties or rights of Borrower which, if adversely
  determined, would impair the right of Borrower to carry on its business
  substantially as now conducted or would adversely affect the financial
  condition, business or operations of Borrower in amount in excess of $100,000.

  (h) Misrepresentation. Neither this Agreement nor any other document,
  statement, financial statement, or certificate furnished to Bank by or on
  behalf of Borrower in connection herewith, contains an untrue statement of a
  material fact with respect to the financial condition or properties of
  Borrower or omits to state a material fact necessary to make the statements
  contained therein not misleading or, insofar as Borrower can now foresee, may
  in the future materially adversely affect the financial condition or
  properties of borrower which has not been set forth in this Agreement or in a
  document, statement, financial statement, or certificate furnished to Bank in
  connection herewith.

  2. General Covenants. In addition to the covenants contained in the Notes,
  Borrower hereby covenants and agrees that, so long as any of the Borrowings
  are outstanding, Borrower shall, except as Bank may otherwise agree in
  writing:

  (a) Financial Statements-Annual. Furnish to Bank, within _____________________
  days after the end of each fiscal year of Borrower, a financial statement of
  Borrower's profit and loss and surplus for such fiscal year and a balance
  sheet as of the end of such fiscal year, in each case setting forth in
  comparative form the corresponding figures for the preceding fiscal year, all
  in reasonable detail and

  See Supplement to Loan Agreement
  ------------------------------------------------------------------------------

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

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

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

 
                                                                     Page 1 of 3
<PAGE>
 
================================================================================

(b)  Financial Statements-Other.  Furnish to Bank each financial statement 
required to be delivered to Bank by any supplement, addendum or amendment 
hereto, and such other information concerning the financial business affairs of 
Borrower as may be requested by bank from time to time.

(c)  Property.  Maintain and keep all its property in good repair, working order
and condition and make or cause to be made all necessary or appropriate repairs,
renewals, replacements, substitutions, additions, betterments and improvements 
thereto so that the efficiency of all such properties shall at all times be 
properly preserved and maintained.

(d)  Taxes and Assessments.  Duly pay and discharge all taxes, assessments and 
governmental charges levied upon or assessed against it or against its
properties or income prior to the date on which penalties are attached thereto,
unless and except to the extent only that such taxes, assessments and charges
shall be contested in good faith and by appropriate proceedings diligently
conducted by Borrower (unless and until foreclosure, distraint, sale or other
similar proceedings shall have been commenced) and provided that such reserve or
their appropriate provisions, if any, as shall be required by generally accepted
accounting principles shall have been made therefor.

(e) Litigation.  Promptly give notice in writing to Bank of the occurrence of 
any material litigation, arbitration or governmental proceeding affecting 
Borrower, and of any governmental investigation or labor dispute pending or, 
to the knowledge of Borrower, threatened which could reasonably be expected to 
interfere substantially with normal operations of the business of Borrower or 
materially adversely affect the financial condition of Borrower.

(f)  Books and Records.  Maintain and keep proper records and books of account 
in conformance with generally accepted accounting principles applied on a 
consistent basis in which full, true and correct entries shall be made of all 
its dealings and business affairs.

(g) Access to Properties, Books and Records. Permit any of the officers,
employees or representatives of Bank to visit and inspect any of the
properties of Borrower and to examine its books and records and discuss the
affairs, finances and accounts of Borrower with representatives thereof, during
normal business hours, and as often as Bank may request.

(h) Financial Information-Guarantors. Cause any third party guarantor of the
Borrowings to submit annually or at any time there is a material change in their
financial position, personal or business financial statements containing such
financial information as may be requested by Bank from time to time.

(j)  Continuance of Business.  Not engage in any line of business other than 
those in which it is actively engaged in on the date hereof.

(k)  Sale of Assets.  Except for sales or other dispositions of inventory in the
ordinary course of business, not sell, lease, transfer, or otherwise dispose of 
in a single transaction, or a series of related transactions, all or a 
substantial part of the property and assets of Borrower, whether now owned or 
hereafter acquired, to any person, firm or corporation.

(l)  Acquisition of Assets. Not purchase or otherwise acquire all or
substantially all of the operating assets of any other person, firm or
corporation and, if Borrower is a corporation, not merge or consolidate with or
into any other person, firm or corporation, or permit any other person, firm or
corporation to merge with or into it, or acquire all or substantially all of the
property or assets of any other person, firm or corporation.

(m) Selling Accounts Receivable. Not sell, assign or discount any of its
accounts receivable or any promissory note held by it, with or without recourse,
other than the discount of such receivables or notes in the ordinary course of
business for collection.

(n) Retirement of Outstanding Stock. Not purchase, redeem or retire or make any
distribution on account of, if Borrower is a corporation, any shares of the
capital stock of Borrower or if Borrower is a partnership, any capital account
of any partner of such partnership.

(o) Affiliated Entities.** Without providing prior written notice to Bank, Not
establish any partnership, subsidiary, corporation, joint venture or other form
of business combination.

(p)  Insurance.  Keep all insurable property, real and personal, now owned or 
hereafter acquired, insured at all times against loss or damage by fire and 
extended coverage risks and other hazards of the kinds customarily insured 
against and in amounts customarily carried by businesses engaged in comparable 
businesses and comparably situated; effect all such insurance under valid and 
enforceable policies issued by insurers of recognized responsibility not
unacceptable to Bank; and, promptly from time to time upon request of Bank, 
deliver to Bank a summary schedule indicating all insurance then in effect.

(q) Investments. Not purchase, own, invest in or otherwise acquire, directly or
indirectly, any stock or other securities, or make or permit to exist any
investment or capital contribution or acquire any interest whatsoever in any
other person, firm or corporation or permit to exist any loans or advances for
such purposes except for investments in direct obligations of the United States
of America or any agency thereof, obligations guaranteed by the United States of
America, certificates of deposit issued by a bank or trust company organized
under the laws of the United States, or any state thereof, or marketable
securities which are publicly traded on a nationally recognized market.

(r)  Patents. Preserve and protect its patents, franchises, licenses,
trademarks, trademark rights, tradenames, tradename rights, and copyrights used
or useful in the conduct of its business.

(s)  Guarantees and Contingencies. Not endorse, assume, guarantee, become surety
for, or otherwise become or remain liable in connection with the obligations of
any person, firm or corporation except Borrower may endorse negotiable or other
instruments for deposit or collection or similar transactions in the ordinary
course of its business.

(t) Transactions with Affiliates. Not enter into any transaction, including,
without limitation, the purchase, sale, leasing or exchange of property, real or
personal, or the rendering of any service, with any person, firm or corporation
affiliated with Borrower, except in the ordinary course of and pursuant to the
reasonable requirements of Borrower's business and upon fair and reasonable
terms no less favorable to Borrower than would be obtained in a comparable 
arm's-length transaction with any other person, firm or corporation not
affiliated with Borrower.



                                                                     Page 2 of 3
<PAGE>
 
================================================================================

(u) Modifications to Other Agreements. Not amend or modify any existing 
agreement with any person, firm or corporation in any manner materially adverse 
to Borrower.

(v) Notice of Event of Default. Promptly give notice in writing to Bank of the 
occurrence of any event of default and of any condition, event, act or omission 
which, with the giving of notice or the lapse of time or both, would constitute 
an event of default hereunder or under the Notes, or under any agreement or 
document securing, evidencing or relating to the Notes.

3. General Provisions.

(a) Waivers. The provisions of this Agreement may from time to time be waived in
writing by Bank in its sole discretion. Any such waiver of any kind on the part 
of Bank of any breach or default under this Agreement or any waiver of any 
provision or condition of this Agreement must be in writing and shall be 
effective only to the extent set forth in such writing. No delay by Bank in 
exercising any right or remedy hereunder shall operate as a waiver thereof.

(b) Financial Covenants. Compliance or non-compliance with all financial 
covenants of Borrower contained herein, or in any supplement, addendum or 
amendment hereto, shall be determined in accordance with generally accepted 
accounting principles applied on a consistent basis. All financial statements of
Borrower required to be delivered to Bank hereby, or by any written supplement
now or hereafter executed by Borrower in which reference to this Agreement is
made, shall be prepared on the basis of generally accepted accounting principles
applied on a consistent basis.

(c) Binding Nature. The rights and privileges of Bank contained in this 
Agreement shall inure to the benefit of its successors and assigns, and the 
duties of Borrower shall bind all heirs, personal representatives, successors, 
and assigns. "Borrower" refers individually and collectively to all signers of 
this Agreement, including, in the case of any partnership, all general partners 
of such partnership individually and collectively, whether or not such partners 
sign below. Each of the signers shall be jointly and severally bound by the 
terms hereof, and, with respect to any partnership executing this Agreement, 
each general partner shall be bound hereby both in such general partner's 
individual and partnership capacities.

(d) Governing Law. Time of performance hereunder is of the essence of this 
Agreement. This Agreement and any written supplement hereto executed by Borrower
in which reference to this Agreement is made shall in all respects be governed 
by the laws of the state where Notes are payable (except to the extent that 
federal law governs).

(e) Severability. If any provision hereof shall for any reason be held invalid
or unenforceable, no other provision shall be affected thereby, and this
Agreement shall be construed as if the invalid or unenforceable provision had
never been a part of it. The descriptive headings hereof are for convenience
only and shall not in any way affect the meaning or construction of any
provision hereof.

4. Special Covenants. In addition to the covenants contained herein or in the 
Notes, Borrower hereby agrees that, so long as any of the Borrowings are 
outstanding, Borrower shall, except as Bank may grant its prior written consent,
comply with the special provisions or covenants set forth in any written 
supplement, now or hereafter executed by Borrower, in which references to this 
Agreement is made.

--------------------------------------------------------------------------------
Signatures
--------------------------------------------------------------------------------

Witness the due execution hereof intending to be legally bound this 24th day of 
                                                                   ------
May, 1996
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Witness:                               Individual:

X                                      X                                (Seal)
------------------------------------   -----------------------------------------

                                       Address

------------------------------------   -----------------------------------------
Witness:                               Individual:

X                                      X                                (Seal)
------------------------------------   -----------------------------------------

                                       Address

                                       -----------------------------------------
                                       Corporation or Other Entity

                                       RF POWER PRODUCTS, INC.
------------------------------------   -----------------------------------------
Attest/Witness:                        By: (Signature and Title)
                                                      Domenic Golato, CFO

X    [SIGNATURE APPEARS HERE]          /s/ Domenic Golato, CFO VP & CFO (Seal)
------------------------------------   -----------------------------------------

                                       By: (Signature and Title)

                                       X                                (Seal)  
                                       -----------------------------------------

(Corporate Seal)                       Business Address

                                       502 Gibbsboro-Marlton Road
                                       -----------------------------------------
                                       Voorhees, NJ 08043

                                                                     Page 3 of 3
<PAGE>
 
                         SUPPLEMENT TO LOAN AGREEMENT
                         ----------------------------

     The following constitutes the special provisions and/or special covenants 
and/or modifications referred to in the Loan Agreement dated May 24th, 1996 (the
"Loan Agreement") covering the Borrowings (as that term is defined in the Loan
Agreement) of the undersigned (the "Borrower") from Mellon Bank, N.A. ("Bank").
The following shall supercede any special provision or covenant contained in any
prior Supplement to Loan Agreement and shall be applicable to all Borrowings in
existence on the date hereof or incurred hereafter.

     1. The provisions of this Supplement shall, as of the date hereof, be 
deemed to be fully incorporated by reference in, constitute a part of, and 
supplement the provisions of, the Loan Agreement, which, except as supplemented
hereby, shall continue in full force and effect in accordance with its terms and
conditions.

     2. The Borrower hereby covenants and decrees that, so long as any 
Borrowings are outstanding, the Borrower shall, except as Bank may grant its 
prior written consent:

        (a) Financial Statements-Annual. Furnish to Bank, within ninety (90) 
            ---------------------------
days after the end of each fiscal year of the Borrower, the annual consolidated
financial statements of the Borrower, audited and certified without material  
qualification by an independent certified public accountant acceptable to Bank.

        (b) Financial Statements-Quarterly. Furnish to Bank, within forty-five 
            ------------------------------
(45) days after the end of each quarter of each fiscal year of the Borrower, a 
statement of the Borrower's profit and loss, a statement of cash flow and a 
balance sheet as of the end of such period, in each case setting forth in 
comparative form the corresponding figures from the corresponding period of the 
preceding fiscal year and comparative year-to-date presentations, all in 
reasonable detail and in a form acceptable to Bank, and prepared on an unaudited
basis.

        (c) Financial Statements-Monthly. Furnish to Bank, within fifteen (15) 
            ----------------------------
days after the end of each month of the Borrower, an accounts receivable aging 
in reasonable detail and in a form acceptable to Bank.

        (d) Compliance Certificate. Together with the quarterly and annual
            ----------------------
financial statements, furnish to Bank an Officer's Compliance Certificate,
signed by the Chief Financial Officer of the Borrower, certifying that no
default or Event of Default has occurred as of the date of such certificate and
setting forth in reasonable detail the calculations required to establish
whether the Borrower was in compliance with the applicable requirements of the
financial covenants hereof, on the date of such financial statement.

<PAGE>
 
         (e)  Certain Other Reports and Information. Promptly upon their 
              -------------------------------------
becoming available to the Borrower, the Borrower shall deliver to Bank a copy of
(i) all regular or special reports, registration statements and amendments to 
the foregoing which the Borrower shall file with the Securities and Exchange 
Commission (or any successor thereto) or any securities exchange, (ii) all
reports, proxy statements, financial statements and other information
distributed by the Borrower to its stockholders, bondholders or the financial
community generally, and (iii) all accountants' management letters pertaining
to, all other reports submitted by accountants in connection with any audit of,
and all other material reports from outside accountants with respect to, the
Borrower.

         (f)  Negative Pledge. Not incur, create, assume or permit to exist, any
              ---------------
mortgage, pledge, lien, charge or other encumbrance of any nature whatsoever on 
any of the assets of the Borrower, whether now or hereafter owned, other than 
(i) security interests granted in favor of Bank, (ii) pledges or deposits under 
workers' compensation, unemployment insurance and social security laws, or to 
secure the performance of bids, tenders, contracts (other than for the repayment
of borrowed money) or leases or to secure statutory obligations or surety or 
other similar bonds used in the ordinary course of business, (iii) tax liens 
which are being contested in good faith and by appropriate proceedings 
diligently conducted (unless and until foreclosure, sale or other similar 
proceedings have been commenced) and provided that such reserve or other 
appropriate provisions, if any, as shall be required by GAAP shall have been 
made therefor, and (iv) any unfiled materialmen's, mechanic's, workmen's and 
repairmen's liens (provided, that if such a lien shall be perfected, it shall be
discharged of record immediately by payment, bond or otherwise). 

         (g)  Additional Indebtedness. Not create or incur any additional 
              -----------------------
indebtedness except loans from Bank and any term loans from the New Jersey 
Economic Development Authority which in aggregate do not exceed $500,000.

         (h)  Financial Covenants. Comply with the following financial covenants
              -------------------
which shall be tested on the Borrower on a quarterly basis and in accordance 
with GAAP:

              (i)   Leverage Ratio. The Borrower's ratio of (a) total 
                    -------------- 
liabilities, determined in accordance with GAAP, divided by (b) Tangible Net 
                                                 ----------
Worth, shall not exceed 1.25 to 1.00.

              (ii)  Cash Flow Ratio. The Borrower's ratio of (a) Cash Flow to 
                    ---------------
(b) current maturities on long term debt (including capitalized leases and as 
determined in accordance with GAAP) which were reported on the balance sheet of 
the Borrower for the period ending one year prior to the calculation date, plus
                                                                           ---- 
capital expenditures, as measured on a rolling four-quarter basis and as   
determined in accordance with GAAP, shall not be less than 1.25 to 1.00 as 
measured as of the fiscal quarters ending May 31, 1996,

                                      -2-

          
<PAGE>
 
August 31, 1996 and November 30, 1996, and shall not be less than 1.50 to 1.00 
at any fiscal quarter end thereafter.

          (i)  Management.  The Borrower shall retain capable executive 
               ----------  
management personnel at all times satisfactory to Bank, it being understood
that the management personnel of the Borrower as of the date hereof is
satisfactory to Bank.

     3.  Conditions to Initial Loans.  The obligation of Bank to make loans on 
         ---------------------------
the date hereof is subject to the satisfaction, immediately prior to or 
concurrently with the making of any Borrower, of the following conditions:

          (a)  All documentation, instruments, and proceedings shall be 
satisfactory to Bank;

          (b)  No Material adverse change shall have occurred in the business, 
products or prospects of the Borrower;

          (c)  The Borrower shall provide Bank with evidence that the Borrower 
has purchased and currently maintains policies of insurance, satisfactory to 
Bank and designating Bank as the loss payee, to protect the personal property 
pledged as collateral to Bank;

          (d)  No material adverse change shall have occurred in the financial 
condition of the Borrower, as such financial condition was depicted in the 
Borrower's financial statements dated November 30, 1995 and February 29, 1996.

          (e)  The Borrower will provide Bank with an opinion of counsel for the
Borrower regarding the execution, delivery, validity and enforceability of the 
loan documents and the liens granted thereto.

     4.  Adoption of Certain Terms or Covenants.  The Borrower shall give notice
         --------------------------------------
in writing to Bank of the occurrence of any default under any debt instruments
or under any material contractual obligations or agreements with governmental
authorities, and of the incurrence of new or additional debt obligations and the
terms thereof, and of any change, whether by addition or modification in the
terms or covenants of any debt obligation. In the event that the terms or
covenants of any debt obligation of the Borrower existing on the date hereof or
incurred by the Borrower subsequent to the date hereof are more restrictive than
the terms and covenants of the Loan Agreement, such terms and covenants shall be
deemed to be incorporated into the Loan Agreement for the benefit of Bank and
shall be binding upon the Borrower and enforceable by Bank hereunder, at its
discretion, as if such more restrictive terms and conditions were herein fully
set forth.

     5.  Definitions.  In addition to other words and terms defined elsewhere in
         -----------
the Loan Agreement, as used herein, the following words and terms shall have the
following meanings:


                                      -3-

      

<PAGE>
 
           (a)   "Cash Flow" means net income minus dividends or withdrawals 
                  ---------                   -----
plus depreciation and amortization, as measured on a rolling four-quarter basis 
----
and as determined in accordance with GAAP.

           (b)   "GAAP" means generally accepted accounting principals of the 
                  ----
United States of America.

           (c)   "Tangible Net Worth" shall mean shareholders' equity less 
                  ------------------                                  ----
intangible assets, each determined in accordance with GAAP.

     Witness the due execution hereof intending to be legally bound this 24th 
day of May, 1996.                                                        ----

ATTEST:                                RF POWER PRODUCTS, INC.


/s/ Paul S. Zaun                       By: /s/ Domenic N. Golato
------------------------------            --------------------------------
By:    Paul S. Zaun                       Domenic N. Golato
Title: [TITLE APPEARS HERE]               Chief Financial Officer



                                       MELLON BANK, N.A.

                                       Accepted by


                                       /s/ Anthony W. LaMarca
                                       -----------------------------------
                                       Anthony W. LaMarca
                                       Vice President

                                      -4-
<PAGE>
 
                       FIRST AMENDMENT TO LOAN AGREEMENT
                       ---------------------------------

         THIS FIRST AMENDMENT TO LOAN AGREEMENT (this "Agreement") made as of 
this 17th day of January, 1997 between RF POWER PRODUCTS, INC. a New Jersey 
corporation (the "Borrower"), and MELLON BANK, N.A., a national banking 
association (the "Bank").


                             W I T N E S S E T H:

         WHEREAS, the Borrower and the Bank are parties to a Loan Agreement 
dated May 24th, 1996 (the "Loan Agreement"), pursuant to which the Bank agreed 
to extend to the Borrower a One Million Four Hundred Thousand Dollar 
($1,400,000) term loan (capitalized terms used herein but not defined in this 
Agreement shall have the meaning ascribed to them in the Loan Agreement);

         WHEREAS, the Borrower has requested that the Bank amend certain 
provisions of the Loan Agreement in order to, among other things, gain 
permission to obtain equipment financing in the amount of $500,000; and

         WHEREAS, the Bank is willing to grant such request, subject to the 
terms and conditions of this Agreement.

         NOW, THEREFORE, in consideration of the mutual promises contained 
herein and intending to be legally bound, the Borrower and the Bank hereby 
covenant and agree as follows:

         1.  Amendments.  Upon the execution and delivery by the Borrower and 
             ----------
the Bank of this Agreement, the Loan Agreement shall be amended as follows:

         (a)  The Supplement to Loan Agreement (the "Supplement") shall be 
amended by deleting Section 2(f) in its entirety and replacing it with the 
following:

              (f)  Negative Pledge.  Not incur, create, assume or permit to
                   ---------------
         exist, any mortgage, pledge, lien, charge or other encumbrance of any
         nature whatsoever on any of the assets of the Borrower, whether now or
         hereafter owned, other than (i) security interests granted in favor of
         Bank, (ii) security interests granted in favor of the New Jersey
         Economic Development Corporation to secure equipment purchases in an
         amount not to exceed $500,000, (iii) pledges or deposits under workers'
         compensation, unemployment insurance and social security laws, or to
         secure the performance of bids, tenders, contracts (other than for the
         repayment of borrowed money) or leases or to secure statutory
         obligations or surety or other similar bonds used in the ordinary
         course of business, (iv) tax liens which are being contested in good
         faith and by appropriate proceedings diligently conducted (unless and
         until foreclosure, sale or other similar
<PAGE>
 
    proceedings have been commenced) and provided that such reserve or other
    appropriate provisions, if any, as shall be required by GAAP shall have been
    made therefor, and (v) any unfiled materialmen's, mechanic's, workmen's and
    repairmen's liens (provided, that if such a lien shall be perfected, it
    shall be discharged of record immediately by payment, bond or otherwise).

        (b) Section 2(h) of the Supplement, Financial Covenants, shall also be
                                            --------- ---------
further amended by adding the following additional provision as Subsection 
2(h)(iii):

            (iii) Minimum Tangible Net Worth.  The Tangible Net Worth of the 
                  --------------------------
Borrower shall be greater than or equal to the following amounts as of the 
following dates:

Fiscal Quarters Ending                          Tangible Net Worth
----------------------                          ------------------

  February 28, 1997 and                         $7,800,000
     May 31, 1997

  August 31, 1997                               $8,000,000

  November 30, 1997                             $8,500,000

  All times thereafter                          No requirement

        2.  One-Time Covenant Waiver.  The Bank hereby agrees that it shall not 
            ------------------------
measure the Cash Flow Ratio covenant set forth in Section 2(h)(ii) of the 
Supplement for the fiscal quarters ending February 28, 1997, May 31, 1997, 
August 31, 1997 or November 30, 1997.  However, the Borrower specifically 
acknowledges that the waiver of such covenant compliance represents a one-time 
only, limited waiver and that the covenant shall be measured again beginning 
with the fiscal quarter ending February 28, 1998, and shall not be less than 
1.50 to 1.00 as of such date and as of each fiscal quarter thereafter.

        3.  Representations and Warranties.  The Borrower hereby represents and 
            ------------------------------
warrants to the Bank that the Borrower is not in default under the Loan 
Agreement or any other document executed in connection therewith, including, 
without limitation, the Note and Security Agreement (the "Note").

        4.  Other Terms Confirmed.  All other terms and conditions of the Loan 
            ---------------------
Agreement, including, without limitation, the Supplement attached thereto, are 
hereby confirmed and shall remain in full force and effect without modification.
From and after the effectiveness of the amendments set forth in Section 1 
hereof, all references in any document or instrument to the Loan Agreement shall
mean the Loan Agreement as amended by this Agreement.

        5.  No New Indebtedness.  The Borrower specifically acknowledges and 
            -------------------
agrees that this Agreement shall not represent in

                                                                         path-2-
<PAGE>
 
any way the extension of any new credit by the Bank to the Borrower, or the 
satisfaction of any indebtedness evidenced by the Loan Agreement as amended 
hereby or the Note.

        6.  Counterparts.  This Agreement may be executed in any number of 
            ------------
counterparts, each of which shall be deemed an original, but all such 
counterparts together shall constitute but one and the same instrument.

        7.  Headings.  The descriptive headings which are used in this Agreement
            --------
are for convenience only and shall not affect the meaning of any provision of 
this Agreement.

        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be 
executed by their duly authorized officers as of the day and year first written 
above.

Attest:                                         RF POWER PRODUCTS, INC.


[SIGNATURE APPEARS HERE]                        /s/ Domenic N. Golato
-----------------------------                   ------------------------------
Name:                                           By:  Domenic N. Golato
Title:                                               Chief Financial Officer

[Corporate Seal]                                MELLON BANK, N.A.



                                                By: /s/ Anthony W. LaMarca
                                                   ---------------------------
                                                   Anthony W. LaMarca
                                                   Vice President



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