DATE : lST APRIL, 1998

                                   MEMORANDUM



SUBJECT:  $10 MILLION LOAN  OBLIGATION  OF LANXIDE  CORPORATION  ("LANXIDE")  TO
KANEMATSU  CORPORATION  ("KANEMATSU")  UNDER THE LOAN AGREEMENT  DATED 29 APRIL,
1994 ("$10 MI1LION LOAN")


KEY POINTS ARE AGREED AS FOLLOWS:

THE  FOLLOWING  TERMS AND  CONDITIONS  SHALL BE SUBJECT  TO EACH  PARTY' S BOARD
APPROVALS.


     1)  [VALUATION  OF LANXIDE  K.K.  STOCK] 
         LANXIDE'S 65% STOCK INTEREST IN LANXIDE K. K., CURRENTLY  COLLATERAL OF
         $10 MILLION LOAN,  SHALL BE TRANSFERRED TO KANEMATSU  IMMEDIATELY.  THE
         VALUE OF SUCH  STOCK  SHALL  BE  CALCULATED  IN  ACCORDANCE  WITH  THIS
         MEMORANDUM.   THE  NET  WORKING   CAPITAL  OF  LANXIDE  K.K.  SHALL  BE
         DISTRIBUTED TO KG AND 65% OF ITS VALUE SHALL BE CREDITED AS A REDUCTION
         TO THE $10 MILLION  LOAN  OBLIGATION  OF LANXIDE.  VALUATION OF LANXIDE
         K..'S STOCK SHALL BE ACCOMPLISHED NOT LATER THAN 30 JUNE, 1998.


     2)  [INSTALLMENT  SALE OF THE  EQUIPMENT]
         BY 10 APRIL 1998,  LANXIDE  WILL  FURNISH A LIST OF  EQUIPMENT  THAT IS
         PRESENTLY  COLLATERAL  TO THE  $10  MILLION  LOAN  WHICH  LANXIDE  WILL
         PURCHASE ON A MONTHLY  INSTALLMENT  BASIS OVER AN 8 YEAR  PERIOD,  WITH
         PAYMENTS COMMENCING 10 MAY 1998 ("EQUIPMENT".

         TITLE OF THE  EQUIPMENT TO BE PURCHASED BY LANXIDE WILL BE  TRANSFERRED
         TO KANEMATSU ON 10 APRIL 1998 AND SHALL REMAIN IN KANEMATSU. SUCH TITLE
         SHALL BE TRANSFERRED BACK TO LANXIDE FOLLOWING THE FINAL PAYMENT IN THE
         EIGHTH YEAR.

     3)  [SALE OF THE REMAINING EQUIPMENT]
         LANXIDE WILL ATTEMPT TO SELL ANY OF THE EQUIPMENT EXCEPT THAT PURCHASED
         BY LANXIDE IN ACCORDANCE WITH ABOVE NO. 2 RETWEEN NOW AND 30 JUNE 1998,
         REMITTING  PROCEEDS  FROM  SUCH  SALES  NET OF  ANY  REMOVAL  COSTS  TO
         KANEMATSU  IN  REDUCTION  OF THE $10  MILLION  LOAN  BA1ANCE.  ANY SUCH
         EQUIPMENT THAT IS NOT 501D BY 30 JUNE 1998 WILL BE TRANSFERRED IN TITLE
         TO  KANEMATSU  AT  THAT  TIME  AND  ADDED  TO THE  INSTALLMENT  SALE OF
         EQUIPMENT BEING  PURCHASED BY LANXIDE,  WITH MONTH1Y  PAYMENTS  REVISED
         ACCORDINGLY.

     4)  [INTEREST OF INSTALLMENT  SALE AND TRANSFER OF TITLE]
         INTEREST RATE GOVERNING THE EQUIPMENT  PURCHASED ON INSTALLMENT SALE BY
         LANXIDE  UNDER  ABOVE NO. 2 AND NO. 3 SHALL BE LIBOR PLUS 2% PER ANNUM,
         AND THE VA1UE OF SUCH PURCHASES SHAL1 BE BOOK VALUE ON LANXIDE'S
         BOOKS AS OF THE DATE OF TRANSFER TO  KANEMATSU.  F01LOWING  THE FINAL
         INSTALLMENT  PAYMENT IN THE  EIGHTH  YEAR ALL OF THE  OWNERSHIP  OF THE
         EQUIPMENT  SHAL1 BE  TRANSFERRED  BACK FROM KANEMATSU TO LANXIDE FOR NO
         FURTHER CONSIDERATION.
<PAGE>
     5)  [DISTRIBUTION RIGHT OF LANXIDE K.K.]
         ANY PROCEEDS PAID TO LANXIDE K.K. BY LANXIDE ELECTRONIC COMPONENTS INC.
         ("LEC") OR DHB CAPITAL GROUP INC. ("DHB") OR ANY JAPANESE SUBSIDIARY OF
         LEC OR DHB, FOR THE MARKETING  RIGHTS OF LEC PRODUCTS IN JAPAN SHALL BE
         REMITTED TO LANXIDE K.K. SUCH PROCEEDS SHALL BE DEEMED AS NET ASSETS OF
         LANXIDE K.K. AND 65% OF SUCH PROCEEDS SHALL BE CREDITED AGAINST THE $10
         MILLION LOAN  OBLIGATION OF LANXIDE TO KANEMATSU IN ACCORDANCE WITH NO.
         1. ABOVE. KANEMATSU AND LANXIDE AGREE THAT THEY ARE WILLING FOR LANXIDE
         K.K.  TO SELL THE LEC  PRODUCTS  DISTRIBUTION  RIGHTS  IN JAPAN  BY, IN
         EFFECT, TERMINATING THE DISTRIBUTION AGREEMENT BETWEEN LANXIDE K.K. AND
         LEC, IN RETURN FOR $0.5  MILLION  PLUS AN  ADDITIONAL  CONTINGENT  $0.5
         MILLION  PAID TO LANXIDE K. K ., AND WILL CAUSE  LANXIDE  K.K. TO ENTER
         INTO  SUCH A  TRANSACTION  IF A BUYER  CAN BE FOUND  FOR  SUCH  RIGHTS.
         LANXIDE  IS TO LEAD A  DISCUSSION  WITH  LEC  AND/OR  DHB  TOWARD  SUCH
         OBJECTIVE.  SAID  CONTINGENT $0.5 MILLION IS TO BE PAID TO LANXIDE K.K.
         BY LEC OR DHB IN THE EVENT ANY RIGHT TO SELL  PRODUCTS  LICENSED TO LEC
         IS TRANSFERRED TO SUMITOMO ELECTRIC OR ANY SUMITOMO  AFFILIATE WITHIN A
         FIVE YEAR PERIOD.
 
     6)  [LICENSE RIGHT OF LANXIDE K.K. ]
         KANEMATSU  AND  LANXIDE  AGREE TO CAUSE  LANXIDE  K.K.  TO SELL BACK TO
         LANXIDE ALL TECHNOLOGY  LICENSE RIGHTS CURRENTLY GRANTED BY LANXIDE AND
         ITS  SUBSIDIARIES TO LANXIDE K.K. EXCEPT THOSE  PREVIOUS1Y  LICENSED TO
         NIHON CEMENT CO., LTD., AKN  CORPORATION  AND CELANX KK, FOR THE SUM OF
         ONE DOLLAR,  BY REVISING  LANXIDE K.K.'S LICENSE TO NARROW ITS SCOPE TO
         THAT OF ITS PRESENT SUB1ICENSES.

     7)  [10% INTEREST IN DUPONT LANXIDE COMPOSITES INC.] 
         ANY PROCEEDS PAID BY DUPONT COMPANY OR DUPONT LANXIDE  COMPOSITES  INC.
         FOR THE PURCHASE OF LANXIDE'S 10% INTEREST IN DUPONT LANXIDE COMPOSITES
         INC.,  WHICH IS  CONTRACTUALLY  COMMITTED TO BE  TRANSFERRED TO LANXIDE
         K.K. IN SATISFACTION OF THE $1.8M L0AN MADE BY LANXIDE K.K. TO LANXIDE,
         WILL BE REMITTED TO LANXIDE K.K. SUCH  PROCEEDS  SHALL BE DEEMED AS NET
         ASSETS OF  LANXIDE  K.K.  AND 65% OF SUCH  PROCEEDS  SHALL BE  CREDITED
         AGAINST THE $10 MI1LION  L0AN  OBLIGATION  OF LANXIDE TO  KANEMATSU  IN
         ACCORDANCE  WITH NO.1  ABOVE.  KANEMATSU  AGREES THAT  LANXIDE  K.K. IS
         WILLING TO ACCEPT $1.5  MIL1ION OR MORE FROM ANY  PURCHASER  OF THE 10%
         DUPONT LANXIDE COMPOSITES INC. INTEREST.

     8)  [BALANCE OF $10 MI1LION L0AN]
         ANY  PROCEEDS  WHICH SHALL BE CREDITED  AGAINST THE $10 MIL1ION LOAN IN
         ACCORDANCE  WITH THIS MEMORANDUM  SHALL BE FIRSTLY  APPROPRIATED TO THE
         OUTSTANDING INTERESTS, AT THE RATE OF 2% ABOVE LIBOR PER ANNUM, ACCRUED
         FROM 1 JANUARY  1998  THROUGH 30 JUNE  1998,  AND  THEREAFTER  SHALL BE
         APPROPRIATED TO THE PRINCIPAL OF THE $10 MILLION LOAN.

         ANY BALANCE REMAINING OF THE $10 MILLION LOAN OBLIGATION  FOLL0WING THE
         ABOVE  CREDITS  SHALL BE PAID OVER A SEVEN  YEAR  PERIOD BY  LANXIDE TO
         KANEMATSU  FOLL0WING A ONE YEAR  MORATORIUM ON THE PAYMENT OF PRINCIPA1
         AND INTERESTS, EXCEPT THAT LANXIDE SHALL MAKE PARTIAL INTEREST PAYMENTS
         OF $5000 PER MONTH ON THE 1ST DAY
 
         OF EACH  MONTH  BEGINNING  ON 1  AUGUST  1998  THROUGH  1  MARCH  1999.
         COMMENCING  1 JU1Y 1998,  THE  INTEREST  RATE  APPLYING TO SUCH BALANCE
         SHALL BE THE JAPANESE YEN'S L0NG TERM PRIME RATE AT THE INDUSTRIAL BANK
         OF JAPAN P1US 1% PER ANNUM.  ANY UNPAID  ACCRUED  INTEREST  FROM 1 JU1Y
         1998 THROUGH 28 FEBRUARY 1999 SHA1L BE ADDED ONTO THE PRINCIPAL  AMOUNT
         OF THE REMAINING $10 MILLION L0AN.  FULL  INSTALLMENTS  COMPRISING BOTH
         PRINCIPA1 AND INTEREST SHALL BE PAID MONTH1Y COMMENCING 1 APRI1 1999.
<PAGE>
     9)  [LANXIDE LICENSE IN JAPAN]
         IF 1ANXIDE  LICENSES  ANY  ADDITIONAL  LICENSEES  IN JAPAN BASED ON THE
         LICENSE RIGHTS SOLD BACK TO LANXIDE BY LANXIDE K.K. IN ACCORDANCE  WITH
         NO. 6 ABOVE,  25% OF ANY FRONT END PAYMENT FROM SUCH LICENSEES SHALL BE
         PAID BY LANXIDE AGAINST THE NEXT  INSTALLMENTS  DUE UNDER THE LOAN, AND
         25% F ANY SUCH FRONT END  PAYMENT  SHALL BE PAID  LANXIDE  AGAINST THE
         LAST  INSTALLMENT  DUE UNDER THE LOAN, UP TO THE EXTENT  BALANCES STILL
         EXIST UNPAID UNDER THE INSTALLMENTS PROVIDED IN ABOVE NO . 8.

    10)  [LANXIDE K.K.'S ACTION]
         LANXIDE K.K. SHALL TAKE NO ACTION AGAINST LANXIDE IN  CONSIDERATION  OF
         ANY OF THE ABOVE.

    11)  [ROYALTY TO BE PAID BY AKN CORPORATION]
         ON FULL  PAYMENT OF THE ABOVE  AMOUNTS  A1L  FINANCIAL  OBLIGATIONS  OF
         LANXIDE TO KANEMATSU AND LANXIDE K.K. SHALL BE DEEMED FULLY  SATISFIED,
         EXCEPT FOR PAYMENT TO  KANEMATSU OF THE FIRST  $1,384,615  OF ROYALTIES
         RECEIVED  FROM LANXIDE K.K. IN  CONNECTION  WITH ITS  SUB1ICENSE TO AKN
         CORPORATION IN  ACCORDANCE  WITH 12.2(b)(ii) OF THE SECOND AMENDMENT TO
         THE LANXIDE K.K. JOINT VENTURE  AGREEMENT  ("AMENDMENT").  THIS PAYMENT
         SHA1L  BE MADE BY  LANXIDE  K.K.  ON  BEHALF  OF  LANXIDE  DIRECTLY  TO
         KANEMATSU.

    12)  [PAYMENT OF ROYALTY SPLIT]
         KANEMATSU  AND LANXIDE  AGREE THAT WITH  RESPECT TO THE  ROYALTY  SPLIT
         ARRANGEMENT  REFERRED TO IN 12.2(b)(i)  OF THE  AMENDMENT  LANXIDE K.K.
         SHALL  DIRECTLY  REMIT TO KANEMATSU  ITS 48% SHARE ON BEHALF OF LANXIDE
         AND SHALL REMIT TO LANXIDE  ITS 52% SHARE OF THE ROYALTY  RECEIPTS FROM
         THE AKN SUBLICENSE.

    13)  [AMENDMENT OF LICENSE AGREEMENT]
         LANXIDE SHALL AGREE, AND SHALL CAUSE LANXIDE  TECHNOLOGY  COMPANY L.P.,
         LANXIDE  DEVE10PMENT  CO. L.P. AND ALANX  PRODUCTS,  L.P. TO AGREE,  TO
         AMEND THE LICENSE AGREEMENT EXECUTED AMONG THEM ON APRIL 24, 1992 SO AS
         TO  ELIMINATE  CLAUSE  5.2(ii)  IMMEDIATELY  AFTER  EXECUTION  OF  THIS
         MEMORANDUM AND NOT LATER THAN 30 APRIL, 1998.

    14)  [CONFIDENTIALITY]
         EXCEPT AS REQUIRED BY  AUDITORS,  GOVERNMENT  REPORTING  AND  FINANCIAL
         REPORTING  REQUIREMENTS,  THE  ABOVE  INFORMATION  SHALL BE  CONSIDERED
         CONFIDENTIAL AMONG THE PARTIES.

    15)  [DOWNSIZE OF LANXIDE K.K.]
         BOTH LANXIDE AND  KANEMATSU  AGREE TO DOWNSIZE  LANXIDE K.K. AS SOON AS
         POSSIBLE TO ELIMINATE CASH BURN OF LANXIDE K. K.

    16)  [SECURITY INTEREST FOR THE REMAINING $10 MILLION LOAN]
         IN ORDER TO SECURE THE BA1ANCE OF THE INSTALLMENTS REFERRED TO IN NO. 8
         ABOVE  KANEMATSU  SHALL  RETAIN A SECURITY  INTEREST IN THE  TECHNOLOGY
         RIGHTS  SOLD TO  LANXIDE IN NO. 6 ABOVE,  AND  AGREES TO  RELEASE  SUCH
         SECURITY  INTEREST  TO THE  EXTENT OF ANY  LICENSE  BY  LANXIDE OF SUCH
         RIGHTS TO THIRD PARTIES, AND TO RELEASE ANY REMAINING SECURITY INTEREST
         IN FULL UPON FINAL PAYMENT OF THE BA1ANCE OF THE INSTALLMENTS  REFERRED
         TO IN NO. 8 ABOVE.

    17) [FORMAL AGREEMENT]
         LANXIDE AND KANEMATSU  SHALL EXECUTE A FORMAL  AGREEMENT  REGARDING THE
         TRANSACTIONS  REFERRED IN THIS MEMORANDUM BY 10 JULY,  1998. IF LANXIDE
         FAILS TO EXECUTE SUCH AGREEMENT,  THE INSTALLMENT SALE OF THE EQUIPMENT
         IN ACCORDANCE WITH THIS MEMORANDUM SHALL BE TERMINATED.
<PAGE>
LANXIDE CORPORATION                   KANEMATSU CORPORATION       
                                                                  
                                                                  
                                                                  
                                                                  
                                        
BY:     /S/MARC S. NEWKIRK            By      /S/YOSHIKAZU IKEHATA 
        ------------------                    -------------------- 
NAME:   MARC S. NEWKIRK               NAME:   YOSHIKAZU IKEHATA  
TIT1E:  PRESIDENT AND CEO             TITLE:  DIRECTOR           
                                      



LANXIDE K.K.

BY:     /S/MARC S. NEWKIRK   
        ---------------   
NAME:   MARC S. NEWKIRK                    
TITLE:  PRESIDENT