EXHIBIT 10.65  
              MASTER LEASE AGREEMENT FOR EQUIPMENT
                                
      THIS  AGREEMENT  dated  September 7,  1995,  between  SALEM
CAPITAL  CORPORATION, having its principal place of  business  at
482 Lowell Street, Lynnfield, Massachusetts 01940-1621 ("Lessor")
and ELECTROSOURCE, INC. having its principal place of business at
3800 B Drossett Drive, Austin, Texas  78744-1131 ("Lessee").

     Lessor agrees to lease to Lessee, and Lessee agrees to lease
from  Lessor the machines and features (the "Equipment" described
in the Equipment Schedules now or hereafter executed and attached
from  time  to time by Lessor and Lessee covering such  items  of
Equipment as are delivered to and accepted by Lessee on or  prior
to  the  Final  Delivery Date for each item of  Equipment.   Each
Equipment  Schedule, with Attached Certificate of Acceptance  and
such  other  attachments  as are referred  to  in  the  Equipment
Schedule shall constitute a separate Lease incorporation all  the
terms and conditions of this Agreement.

The  terms "Date of Certificate of Acceptance," "Daily Lease Rate
Factor," "Basic Lease Rate Factor," "Overdue Rate," "Interim Rent
Date,"   "First  Basic  Rent  Date,"  "Last  Basic  Rent   Date,"
"Expiration  Date," "Casualty Value," and "lessor's  Cost"  shall
have the meaning set forth in the relevant Equipment Schedule.

Section 1.     TERM OF LEASE

      Upon  delivery of the Equipment, Lessee shall inspect  such
Equipment  and, if it is found to be in good order,  execute  and
deliver  to  Lessor  a  Certificate of  Acceptance  in  the  form
attached  to  the  Equipment Schedule.  All  items  of  Equipment
listed on such Certificate of Acceptance shall be deemed accepted
by  lessee  and  shall  be deemed to conform  to  this  Agreement
despite any defect.  The Lease term shall commence on the date of
Lessee's execution of such Certificate of Acceptance.  The  Lease
term shall end on the Expiration Date unless otherwise terminated
or extended pursuant to the provisions of this Agreement.

Section 2 RENTAL CHARGES AND OTHER REQUIRED PAYMENTS

     (a)  Lessee shall pay to Lessor as Basic Rent ("Basic Rent")
          for each item of equipment, the following:
     
          (i)   On  the Interim Rent Date, an amount equal  to  the
          Daily  Lease  Rate Factor multiplied by  the  Lessor's
          Cost  of each item of equipment for each day from  and
          including  the  date of the Certificate of  Acceptance
          to  and  including the day immediately  preceding  the
          Interim Rent Date;
        
          (ii)  On  the First Basic Rent Date, and on each Basic
          Rent  Date thereafter, to and including the Last Basic
          Rent  Date,  an amount equal to the Basic  Lease  Rate
          Factor  multiplied by the Lessor's Cost of  each  item
          of equipment.

     (b)  Lessee  shall pay the following amounts (herein  referred
          to  as "Supplemental Rent" and, together with Basic Rent,
          as "Rent"):
     
          (i)   On  or  before  the  applicable due date,  all  taxes,
          however  designated, which are levied  or  imposed  by
          any  governmental authority upon the Equipment or  its
          sale,  purchase,  ownership or use, or  upon  Rent  on
          this Agreement, including but not limited to sales  or
          use  taxes,  personal  property  taxes,  privilege  or
          excise  taxes,  franchise taxes ad valorem  or  value-
          added  taxes, leasing taxes, and stamp taxes, together
          with   any   penalties,  fines  or  interest  thereon,
          excluding,  however, income taxes measured  solely  by
          the net income of Lessor.  To the extent permitted  by
          applicable  law, Lessee shall prepare (in such  manner
          as  will show Lessor's ownership of the Equipment) and
          timely  file  all tax returns required  in  connection
          with  taxes payable by Lessee hereunder.  With respect
          to  any  such  tax  return required  to  be  filed  by
          Lessor,  Lessee shall notify Lessor of such  equipment
          and  furnish  Lessor  with all forms  and  information
          necessary  for  proper  and  timely  filing  of   such
          returns.   Lessee  shall  inform  Lessor  as  to   any
          governmental  jurisdiction imposing personal  property
          taxes  on the Equipment, and as to the amount of  such
          taxes.
        
          (ii)   On  or  before the date required  by  the  terms
          hereof  (or  upon Lessor's demand if no such  date  is
          specified  herein), any other amount which the  Lessee
          is  obligated  to  pay hereunder,  including  but  not
          limited   to   indemnity  payments  and  payments   of
          Casualty Value.
        
     (c)  On  any  payment of Basic Rent, Supplemental Rent,  Other
          Required  Payment  and Casualty Value Payment,  which  is
          not  paid  on  its due date, Lessee shall pay  to  Lessor
          late  charges computed from such payments due date  until
          paid,  all the overdue Rate (computed on the basis  of  a
          360-day year).
     
Section 3.     NET LEASE

     This lease is a net lease and Lessee's obligation to pay all
Rent shall be absolute and unconditional and, except as expressly
provided   herein,  shall  not  be  subject  to  any   abatement,
reduction,   defense,   counterclaim,  setoff,   or   recoupment,
including  any  present  or future claim against  Lessor  or  the
manufacturer  of  the  Equipment.   Except  as  expressly  proved
herein,  this Lease shall not terminate for any reason, including
any  defect  in  the Equipment or Lessor's title thereto  or  any
destruction or loss of use of any item of Equipment.

Section 4.     OWNERSHIP OF EQUIPMENT

      The  Equipment  shall at all times remain the  property  of
Lessor and may be removed by Lessor at any time after termination
of this Agreement.

      Lessee  shall affix tags, decals or plates to the Equipment
indicating Lessor's ownership, which type of tag, decal or  plate
and  location  may be specified by Lessor, and Lessee  shall  not
permit  their  removal or concealment.  Lessee shall  cause  each
item  of  Equipment  to be kept numbered with the  serial  number
specified  in  the Equipment Schedule.  Lessee shall  provide  to
Lessor  any  document  (including UCC  financing  statements  and
landlord or mortgagee waivers) reasonably requested by Lessor for
the  purpose  of  evidencing  or protecting  Lessor's  title  and
interest  in  the  Equipment.  Lessee shall, at its  own  expense
protect  and  defend Lessor's title in the Equipment against  all
claims  and  liens of Lessee's creditors and keep  the  Equipment
free and clear of all claims, liens and encumbrances except those
resulting from the agreements or acts of Lessor and not resulting
from  Lessee's  failure  to perform its  obligations  under  this
Agreement.

Section 5.     POSSESSION

      Lessor warrants to Lessee that Lessee shall be entitled, as
against  all  persons claiming by, through or  under  Lessor,  to
possess  the Equipment subject to the terms of this Agreement  so
long as Lessee is not in default hereunder.

      Upon expiration or termination of this Lease, Lessee at its
sole cost and expense shall return the Equipment to Lessor at the
place  within the continental United States designated by  Lessor
and  in as good condition as when delivered to Lessee, reasonable
wear  and  tear excepted, subject to the terms of this Agreement.
At  the  time  of  such return, Lessee shall at its  own  expense
effect  such repairs including any necessary engineering  changes
as  are  required  for  the  Equipment to  remain  qualified  for
manufacturer's contract maintenance at then standard rates.

Section 6.     MAINTENANCE

     (a)  Lessee  shall either enter into and maintain in  force  a
          manufacturer's     maintenance     agreement     covering
          maintenance  of the Equipment, or maintain the  Equipment
          under    manufacturer's   specifications.    Upon   Lease
          Expiration  or  any  other surrender  of  the  Equipment,
          Lessee   will  provide  to  Lessor,  its  successors   or
          assigns,  evidence that the Equipment complies  with  all
          maintenance  standards of the Manufacturer and  that  the
          Equipment  meets all current Manufacturer  specifications
          for  this  equipment type (this will include but  not  be
          limited  to such engineering changes and improvements  to
          the  equipment  which  are available  without  additional
          charge).   Lessee  shall bear all  expenses  involved  in
          producing  such evidence from the Manufacturer.   In  the
          event   that   the   Equipment   does   not   meet    the
          Manufacturer's  standards and specifications  the  Lessee
          shall  immediately cause the Manufacturer  to  bring  the
          equipment  up to said standards and specifications.   All
          expenses  involved in bringing the Equipment up  to  said
          standards  and  specifications shall be paid  by  Lessee.
          Lessee  shall  also pay to the Lessor, it  successors  or
          assigns,  any economic loss in the value of the Equipment
          that  may result from the Equipment not being up  to  the
          Manufacturer's  standards  and  specifications  and   any
          delay involved in causing the Equipment to be brought  up
          to said standards and specifications.
     
     (b)  All  maintenance  and  service  charges  related  to  the
          Equipment shall be borne by Lessee.
     
     (c)  The  required  suitable electric current to  operate  the
          Equipment and a suitable place of installation  shall  be
          furnished  by Lessee.  The installation facilities  shall
          be   as  specified  in  the  manufacturer's  installation
          manual  and shall at all times meet the minimum  standard
          of  the  National  Board  of Fire  Underwriters  for  the
          protection  of Electronic Computer Systems as recommended
          by  the Nation Fire Protection Association.  All supplies
          consumed  or required by the Equipment shall be furnished
          by Lessee.
     
Section 7.     LOCATION AND USE OF EQUIPMENT
     
     (a)  During  the  term  of the lease, the Equipment  shall  be
          located  at  the address indicated in the Certificate  of
          Acceptance.   No  Equipment shall  be  removed  from  the
          above  address  without  the  prior  written  consent  of
          Lessor.  Any relocation of the Equipment shall be at  the
          risk  and  the  expense of the Lessee and  in  accordance
          with the Manufacturer's specifications.
     
     (b)  Lessee  covenants  and warrants that  during  the  period
          that  any  Equipment is leased to Lessee hereunder,  such
          Equipment  will  at  all times be used  and  operated  in
          compliance  with the laws of the jurisdictions  in  which
          it  is  located, and in compliance with all acts,  rules,
          regulations,  and  orders  of any  commission,  board  or
          other  legislative, administrative, or judicial  body  or
          officer having power to regulate or supervise the use  or
          operation of the Equipment.  Lessee shall not install  or
          use   the   Equipment   in  such  manner   or   in   such
          circumstances  that any part of the Equipment  is  deemed
          to  be  an accession to other personal property or deemed
          to be real property or a fixture thereon.
     
Section 8.     INSURANCE

      During  the period that any Equipment is leased  to  Lessee
hereunder, Lessee will at all times and at its expense carry  and
maintain or cause to be carried and maintained insurance for loss
of  or  damage  to  the  Equipment caused  by  fire,  lightening,
sprinkler breakage, tornado and windstorms, explosion, smoke  and
smudge,  aircraft  and motor vehicle damage, strikes,  riots  and
civil  commotion,  burglary and theft,  vandalism  and  malicious
mischief,  and other casualty events customarily insured  against
with respect to similar equipment, in an amount not less than the
Casualty  Value  of the Equipment.  Lessee shall also  carry  and
maintain  or  cause to be carried and maintained at  its  expense
public  liability  insurance  covering  the  Equipment,  in  such
amounts  and against such risks as is customary with  respect  to
similar equipment.  Lessee shall furnish appropriate evidence  of
such  insurance to Lessor naming Lessor as an additional  insured
and  naming  Lessor's  Assignee  as  loss  payee.   All  required
insurance  shall provide for ten (10) days' notice to Lessor  and
its  assign of any cancellations and shall not modify  nor  alter
said  insurance without prior written consent of Lessor  and  its
Assignee.

Section 9.     RISK OF LOSS, EVENT OF LOSS

     Lessee hereby assumed and shall bear the entire risk of loss
or  damage  including but not limited to destruction,  theft,  or
governmental taking of any item of Equipment ("Event  of  Loss"),
whether  partial  or  complete and  whether  or  not  covered  by
insurance.  No such loss or damage shall relieve Lessee of any of
its  obligations  under  this Lease.   Lessee  shall  immediately
notify Lessor of any Event of Loss involving the Equipment.

      If  an  Event of Loss occurs with respect to  any  item  of
Equipment, Lessee, at the option of Lessor, shall:
     
     (a)  repair   or   restore  the  equipment  to  good   repair,
          condition and working order; or
     
     (b)  replace  the Equipment with identical equipment  in  good
          repair, condition and working order; or
     
     (c)  pay  Lessor in cash the Casualty Value for such  item  as
          set forth in the relevant Equipment Schedule.
     
     Upon payment of the Casualty Value and all other amounts due
hereunder  with respect to such, this Lease shall terminate  with
respect  to  the item of Equipment for which Lessor has  received
payment,  and  Lessee  shall become  entitled  to  such  item  of
equipment  AS-IS,  WHERE-IS, without  any  warranty,  express  or
implied,  with respect to any matter whatsoever.  If  Lessee  has
paid  the  Casualty Value and such other amounts with respect  to
such item of Equipment and if Lessee is not in default hereunder,
property damage insurance proceeds from such Event of Loss  shall
be paid to Lessee up to the amount of said Casualty Value.

Section 10.    ENFORCEMENT OF WARRANTY

     (a)  Upon  receipt of written request from Lessee, and so long
          as  this  Agreement shall remain in force,  Lessor  shall
          take  all  reasonable  action  requested  by  Lessee   to
          enforce  any manufacturer's warranty, express or implied,
          issued  on  or  applicable  to the  Equipment,  which  is
          enforceable   by  Lessor  in  its  own  name,   provided,
          however, that Lessor shall not be obligated to resort  to
          litigation  to  enforce any such warranty  unless  Lessee
          shall pay all expenses in connection therewith.
     
     (b)  Similarly,  if  any  warranty  shall  be  enforceable  by
          Lessee  in  its  own  name, Lessee  hereby  agrees,  upon
          receipt  of  written request from lessor and so  long  as
          this  Agreement  shall  remain  in  force,  to  take  all
          reasonable  action  requested by Lessor  to  enforce  any
          such warranty.
     
     (c)  Lessor  hereby  assigns  to Lessee  any  warranty  rights
          which  Lessor  may  have  against the  manufacturer  with
          respect  to  the Equipment, to the extent  such  warranty
          rights  are  assignable,  which assignment  shall  remain
          effective  so long as Lessee is not in default hereunder.
          With   respect  to  such  warranty  rights  as  are   not
          assignable,  Lessor hereby appoints Lessee as  its  agent
          and   attorney-in-fact  for  purpose  of  enforcing  such
          warranty rights at Lessee's expense.
     
Section 11.  DISCLAIMER OF WARRANTIES
     
      LESSOR  LEASES THE EQUIPMENT AS-IS, WHERE-IS,  IN  WHATEVER
CONDITION   IT  MAY  BE,  WITHOUT  ANY  AGREEMENT,  WARRANTY   OR
REPRESENTATION,  EXPRESS  OR  IMPLIED.   WITHOUT   LIMITING   THE
GENERALITY  OF  THE  FOREGOING, LESSOR  EXPRESSLY  DISCLAIMS  ANY
IMPLIED WARRANTY OR MERCHANTABILITY, FITNESS OR ADEQUACY FOR  ANY
PARTICULAR  PURPOSE OR USE, QUALITY, PRODUCTIVENESS OR  CAPACITY.
LESSOR HEREBY ASSIGNS TO LESSEE (TO THE EXTENT TO WHICH THE  SAME
MAY BE ASSIGNABLE), ANY WARRANTY OF THE MANUFACTURER RELATIVE  TO
THE EQUIPMENT.

Section 12     INDEMNIFICATION

     Lessor and its successors and assigns shall not be liable to
Lessee  for, and Lessee shall indemnify and hold Lessor  and  its
successors and assigns harmless with respect to any third  party,
from  any liability (including liability for negligence),  claim,
loss,  damage  or expense (including litigation expense)  of  any
kind or nature caused, directly or indirectly, by

     (i)     the inadequacy of any Equipment for any purpose,

     (ii)    any deficiency or defect in any Equipment,

     (iii)   the use or performance of any Equipment,

     (iv)    any interruption or loss of service, use or performance
             of any Equipment,

      (v)    any  patent,  trademark,  or  copyright  infringement
             relating to the Equipment, or

      (vi)   any  loss  of business of other consequential  damage
             whether or not resulting from any of the foregoing.

      IN  PARTICULAR, LESSOR AND ITS SUCCESSORS AND ASSIGNS SHALL
NOT BE LIABLE FOR INJURIES TO PERSONS OR DAMAGES TO THE EQUIPMENT
OR  OTHER PROPERTY UNDER ANY THEORY OF STRICT LIABILITY, AND LESS
SHALL  INDEMNIFY AND SAVE  LESSOR AND ITS SUCCESSORS AND  ASSIGNS
HARMLESS  FROM ANY SUCH LIABILITY AND ALL COSTS AND  EXPENSES  IN
DEFENDING THE SAME.

      All  of Lessor's rights under this Section 12 shall survive
the  termination of this Agreement, however, Lessee shall not  be
required to indemnify Lessor for claims arising from events which
occur after the Equipment has been redelivered to Lessor.

Section 13.    MODIFICATIONS OF EQUIPMENT

     (a)  Provided  the  manufacturer permits changes, alterations,
          modifications    or   attachment   to    the    Equipment
          (hereinafter called "Equipment Change") and  consents  to
          the  Equipment  Change  in  writing  and  such  Equipment
          Change  does  not adversely affect the operation  of  the
          Equipment  in relation to its normal use and purpose  and
          a  copy  of  the  approval  of the  Equipment  Change  is
          delivered to Lessor and its Assignee, the Lessee may,  at
          its own expense, make or cause to be made alterations  or
          attachments   to   the  Equipment,  so   long   as   such
          alternations  or  attachments do not interfere  with  the
          normal  operation of the Equipment.  Any such  alteration
          or  attachment, if Lessor so directs in writing, shall be
          removed by Lessee and the Equipment shall be restored  to
          its   original  condition,  reasonable  wear   and   tear
          excepted,  upon  termination of this  Agreement.   If  an
          alteration  or attachment interferes with the normal  and
          satisfactory operation or maintenance of any part of  the
          Equipment, Lessee shall, upon notice from Lessor to  that
          effect, promptly remove the alteration or attachment  and
          restore the Equipment to its normal condition.
     
     (b)  If  Lessee  desires  to  add special  features  or  model
          changes  ("Additional Special Features") to the Equipment
          subsequent  to  the  commencement of this  Lease,  Lessee
          shall either:
     
         (i)  give  Lessor an opportunity to obtain such  Additional
         Special  Features at Lessor's expense and  lease  such
         Additional Special Features to Lessee upon such  terms
         and  conditions  as  Lessor and Lessee  agree  to  (it
         being  understood  that the monthly  rental  for  such
         Additional  Special  Features must  be  sufficient  to
         cover  Lessor's  related monthly debt  payments,  that
         any  such  Additional  Special  Features  obtained  by
         Lessor  shall  be deemed to be part of the  Equipment,
         and  that Lessee shall be responsible for all  related
         transportation  and  installation  charges,   to   the
         extent provided in Section 14); or
        
         (ii)      upon  Lessor's  prior  written  consent  (which
         consent  will not be unreasonably withheld),  purchase
         and  install  such  Additional  Special  Features   at
         Lessee's own expense with no rend due Lessor for  such
         Additional   Special  Features,  but  such  Additional
         Special  Features shall be subject to  the  provisions
         of  this  Section 13, as if they were  alterations  or
         attachments.   Upon  termination  of  this  Agreement,
         Lessor  may direct in writing that Lessee remove  such
         Additional Special Features
        
     (c) All   alterations,  attachments  and  Additional  Special
         Features shall become the property of Lessor.
     
Section 14.    TRANSPORTATION EXPENSES

      All  transportation and installation expenses  incurred  in
connection  with delivery of the Equipment to Lessee  are  to  be
paid  by Lessee.  Necessary packing cases for the return  of  the
Equipment,  and  such labor as may be necessary for  packing  and
unpacking  the Equipment when in the possession of Lessee,  shall
be  furnished by Lessee at its expenses.  Transportation expenses
incurred in connection with redelivery to Lessor shall be paid by
Lessee.

Section 15.    INSPECTION AND REPORTS

     (a)  Upon  request,  Lessee  shall permit  Lessor  or  persons
          designated by Lessor to inspect the Equipment.
     
     (b)  Lessee  shall  immediately notify Lessor of any  accident
          arising   out   of  the  alleged  or  apparent   improper
          manufacturing,   functioning   or   operation   of    the
          Equipment,  the  time, place and nature of  the  accident
          and  damage, the names and addresses of parties  involved
          persons   injured,  witnesses  and  owners  of   property
          damaged,  and such other relevant information as  may  be
          known,   and   shall  promptly  advise  Lessor   of   all
          correspondence,  papers, notices and  documents  received
          by  Lessee in connection with any claim or demand related
          to  improper  manufacturing, functioning or operation  of
          the  Equipment  or  charging Lessor with  liability,  and
          shall  aid in the investigation and defense of  all  such
          claims  and  shall aid in the recovery  of  damages  from
          third persons.
     
     (c)  Lessee  shall  furnish  to Lessor  and  any  assignee  of
          Lessor
     
          (i)  within one hundred twenty (120) days after the end  of
          each  of  Lessee's fiscal years, the annual  financial
          statement of Lessee, including a balance sheet and  an
          income  and retained earnings statement for the fiscal
          year  covered  thereby, setting forth  in  comparative
          form,  the  figures for the previous fiscal year,  all
          in  reasonable detail and duly certified  by  Lessee's
          independent certified public accountant,
        
          (ii)  copies of such financial statements and  reports
          as  Lessee shall send to its stockholders or file with
          the   Securities  and  Exchange  Commission   or   any
          governmental agency substitute therefor, and
        
          (iii)    such  other information respecting the financial
          condition  and affairs of Lessee as may  be  necessary
          to  determine compliance with the terms and conditions
          of this Lease.
        
Section 16.    EVENTS OF DEFAULT AND LESSOR'S REMEDIES

     (a)  Should
     
         (i) Lessee  fail  to pay any Basic Rent or  other  amount
         due  under this Agreement within ten (10) days of the
         applicable due date;
        
         (ii)  Lessee  attempt to remove, sell, transfer,  encumber,
         part with possession of, assign or sublet (except  as
         expressly  permitted  by the provisions  hereof)  the
         Equipment or any part thereof;
        
         (iii)     any  representation or warranty made by  Lessee
         in  this  Agreement or in any document or certificate
         furnished to Lessor in connection herewith  prove  to
         have  been  incorrect  in any material  respect  when
         made;
        
         (iv)  Lessee  fail in the performance of any other  of  its
         obligations  under this Agreement  for  a  continuous
         period  of  thirty (30) days after receipt by  Lessee
         of written notice thereof from Lessor;
        
         (v)  Lessee cease doing business as a going concern;
        
         (vi)  a  petition be filed by or against Lessee  under  the
         Federal  Bankruptcy  Act  or  any  amendment  thereto
         (including   a   petition   for   reorganization   or
         arrangement)  which  shall not have  been  discharged
         within sixty (60) days after such filing.
        
         (vii)      a  receiver  be appointed for  Lessor  or  its
         property;
        
         (viii)    Lessee  commit  an  act of  bankruptcy,  become
         insolvent,  make  an assignment for  the  benefit  of
         creditors,  or  offer a composition  of  any  of  its
         indebtedness;
        
         (ix)  the  issuance  of any writ or order of attachment  or
         execution   or  other  legal  process   against   any
         Equipment   which  is  not  discharged  or  satisfied
         within fifteen (15) days; or
        
         (x) to  the  extent  that Lessee is a corporation,  if  a
         controlling  interest  of  the  stock  of  Lessee  is
         transferred  (whether  in  increments   or   on   one
         occasion)  to  persons or other legal entities  other
         than  those holding said controlling interest at  the
         date of execution of this Agreement,
        
     then  in any such event (herein referred to as an  "Event
     of  Default"),  Lessor may, at its option,  exercise  any
     one  or more of the remedies set forth in subsection  (b)
     of  this  Section  16 (in addition to  any  other  remedy
     Lessor  may  have  under  applicable  law).   Failure  of
     Lessee  to  pay  or  perform  any  obligation  under  any
     Agreement  with Lessor shall constitute a default  as  to
     all Agreements between Lessor and Lessee.
     
     (b)  Upon  the  occurrence or continuation  of  any  Event  of
          Default  as  specified in subsection (a) of this  Section
          16, Lessor may
     
          (i)  declare  immediately  due and payable  by  Lessee,  as
          liquidated  damages for loss of a bargain,  an  amount
          equal  to the Casualty Value of the Equipment  at  the
          date of the occurrence of any event of default,
        
          (ii)    terminate this Agreement;
        
          (iii)    take possession of the Equipment during Lessee's
          normal   working  hours  without  demand  or   notice,
          wherever  the Equipment may be located, without  court
          order  or other process of law (Lessee hereby  waiving
          any  right  it  may have to notice and hearing  before
          repossession).   Lessee  hereby  waives  any  and  all
          damages occasioned by such taking of possession.   Any
          taking  of  possession  pursuant  to  this  subsection
          16(b)  shall not in itself constitute termination  of
          this  Agreement  and shall not, in any event,  relieve
          Lessee of its obligations hereunder.
        
     Lessee  shall  reimburse Lessor for all reasonable  expenses
     (including attorney's fees) incurred by Lessor in  enforcing
     its rights under this Section 16.  Any overdue rent, and any
     unpaid Casualty Value payable as liquidated damages pursuant
     to  clause (i) of this subsection 16(b), shall bear interest
     at  the  Overdue  Rate  until paid  in  full.   Upon  taking
     possession  of the Equipment, Lessor may, at its option  and
     without notice to Lessee lease the repossessed Equipment  to
     any  third party on such terms and conditions as Lessor  may
     determine,  or sell said Equipment at public auction  or  at
     private sale.

     In  the  event  that  Lessor  leases  or  sells  repossessed
     Equipment,  the Net Proceeds (as defined below) shall  first
     be  credited to amounts due and owing by Lessee,  and  shall
     then  be used to reimburse Lessee for any liquidated  damage
     payment  made  by  Lessee pursuant to  clause  (i)  of  this
     subsection 16(b).  Any surplus shall be retained by  Lessor.
     Lessee  shall  remain  liable for an  amount  equal  to  the
     Casualty Value of the Equipment at the date of an occurrence
     of  an  Event of Default less the Net Proceeds.  As used  in
     this  subsection 16(b), "Net Proceeds" shall mean  the  cash
     sale  price of the Equipment, or the aggregate rent  payable
     pursuant to a lease of the Equipment discounted at the  rate
     of   twelve  (12%)  percent  less  all  costs  and  expenses
     (including  reasonable  attorneys' fees  and  disbursements)
     incurred  by  Lessor  as a result of  Lessee's  default  and
     Lessor's  exercise  of  its remedies with  respect  thereto.
     Lessor's rights and remedies in respect of any of the  terms
     and  conditions of this Lease shall be cumulative  and  non-
     exclusive  and  shall be in addition to any  and  all  other
     rights and remedies which may be provided by law.

     Lessee  acknowledges  and agrees, for  itself  and  for  all
     successors and assigns including any bankruptcy trustees  of
     Lessee   (hereinafter  collectively  referred  to   as   the
     "Benefited    Parties"),    knowingly,    voluntarily    and
     intentionally  stipulate and agree, to  the  fullest  extent
     allowed  by  law  and  with  the full  intention  that  such
     stipulation  and agreement shall survive the filing  of  any
     bankruptcy, that, in the event any of the Benefited  Parties
     become a debtor or debtor in possession in a case under  the
     United  States  Bankruptcy Code (11  U.S.C.  101  et  seq.),
     then  pursuant to 11 U.S.C. 362(d)(1) and (2)  Lessor  shall
     be  entitled  to the immediate termination of the  automatic
     stay  to  permit  Lessor to exercise all of  Lessor's  legal
     rights   and  remedies  against  Lessee  under  the   lease,
     including,  without limitation, the right to  repossess  the
     leased equipment and to setoff and apply to any amounts owed
     by  lessee  to  Lessor any security deposit  or  other  sums
     delivered to Lessor by Lessee from time to time as  security
     for the Lessee's performance under the lease.

Section 17.    SUBLEASES AND ASSIGNMENTS

     (a)  Lessee  may  sublet  the  Equipment  if  Lessee  notifies
          Lessor of the proposed new location of the Equipment  and
          receives  Lessor's  prior  written  consent.    No   such
          sublease  shall in any way discharge or diminish  any  of
          Lessee's   obligations   under  this   Agreement.    Each
          sublease shall be approved in form and content by  lessor
          (including,  without limitation, any provisions  granting
          such sublessee an option to terminate such sublease)  and
          shall   expressly  provide  that  it   is   subject   and
          subordinate  to this Lease.  No amendment or modification
          of  any  of  the  terms and conditions of  such  sublease
          shall  be  made  without  the prior  written  consent  of
          Lessor.
     
     (b)  This  Agreement shall be binding upon and  inure  to  the
          benefit  of  the  parties  hereto  and  their  respective
          successors   and   (to  the  extent  specified   in   any
          assignment)  assigns.   Lessee  shall  not  assign   this
          Agreement  without the prior written consent  of  Lessor.
          Lessor  may  assign any or all of its rights  under  this
          Agreement,  and Lessee agrees to acknowledge  in  writing
          any  such  assignment within five (5) days after  receipt
          of written notice thereof.
     
     (c)  So  long as Lessor's rights hereunder are assigned to any
          Assignee,  Lessee  may  not  assert  against   any   such
          Assignee any defense, counterclaim, recoupment,  or  set-
          off  Lessee may have against Lessor.  Lessee agrees  that
          it  will  not seek to cancel or terminate this  Agreement
          (except  as  expressly permitted in  this  Agreement)  or
          otherwise  avoid  its  obligations hereunder  as  against
          such  Assignee, and further agrees that it  will  pay  to
          such  Assignee  all Rent Due hereunder  and  assigned  to
          such  Assignee,  without  regard  to  any  such  defense,
          counterclaim, recoupment, or set-off, and will  not  seek
          to  recover  any  part  of the same from  such  Assignee.
          However,  nothing  herein shall be construed  to  prevent
          Lessee  from  exercising against  Lessor  any  claim  for
          damages  or  injunctive  relief  which  Lessee  may  have
          against Lessor.
     
Section 18.  LESSEE'S AND LESSOR'S WARRANTIES

     (a)  Lessee  hereby  warrants and represents  to  Lessor,  its
          successors and assigns:
     
         (i)  that   Lessee's  execution  and  performance  of  this
         Agreement  have been duly authorized by all  necessary
         corporate   action  and  are  not  in  conflict   with
         Lessee's  charter  or bylaws, or with  any  indenture,
         contract  or agreement by which it is bound,  or  with
         any  statute,  judgment, decree,  rule  or  regulation
         binding upon it;
        
         (ii)     that  no  consent or approval of any trustee  or
         holder  of  any indebtedness or obligation of  Lessee,
         and   no  consent  or  approval  of  any  governmental
         authority,  is  necessary (or, if required,  has  been
         obtained)  for  Lessee's execution or  performance  of
         this Agreement; and
        
         (iii)    that  this  Agreement is valid and  binding  and
         enforceable  against  Lessee in  accordance  with  its
         terms,  subject to enforcement limitations imposed  by
         rules of equity or by bankruptcy or similar laws.
       
         Upon  Lessor's request, Lessee shall submit to Lessor  an
         opinion  of  Lessee's counsel that the  above  warranties
         and representations are true.
     
    (b)  Lessor  hereby  warrants  and represents  to  Lessee,  it
         successors and assigns:
     
        (i)  that   Lessor's  execution  and  performance  of  this
        Agreement  have been duly authorized by all  necessary
        corporate  or  partnership  action  and  are  not   in
        conflict   with   Lessor's  charter  and   bylaws   or
        partnership   agreement,  or   with   any   indenture,
        contract  or agreement by which it is bound,  or  with
        any  statute,  judgment, decree,  rule  or  regulation
        binding upon it;
        
        (ii)  that  no  consent or approval of any trustee  or
        holder  of  any indebtedness or obligation of  Lessor,
        and   no  consent  or  approval  of  any  governmental
        authority,  is  necessary for  Lessor's  execution  or
        performance of this Agreement;
        
        (iii)    that  this  Agreement is valid and  binding  and
        enforceable  against  Lessor in  accordance  with  its
        terms,  subject to enforcement limitations imposed  by
        rules of equity or by bankruptcy or similar laws; and
        
        (iv)     Lessor  is the owner of the Equipment  and  said
        Equipment   is  free  and  clear  of  all  liens   and
        encumbrances,   except  the  lien  of   and   security
        interest granted by Lessor to its Assignee.
        
     Upon  Lessee's  request, Lessor shall submit  to  Lessee  an
     opinion  of  Lessor's counsel that the above warranties  and
     representations are true.
     
Section 19.    GOVERNING LAW

      This  Agreement  shall  be governed  by  and  construed  in
accordance  with  the laws of and jurisdiction shall  be  in  the
Commonwealth of Massachusetts.

Section 20.    AMENDMENTS

      This  Agreement  constitutes the entire  agreement  between
Lessor  and  Lessee  with respect to the  Equipment  and  may  be
amended  or  modified  only by a writing signed  by  the  parties
hereto or their respective successors and assigns.

Section 21.    ADDRESS FOR COMMUNICATIONS

     Any communication in connection with this Agreement shall be
made  in  writing to the address shown in the first paragraph  of
this  Agreement,  or  to  such other address  as  has  been  most
recently designated in writing by one party to the other.  Unless
otherwise  specified  herein any notice  or  communication  shall
become  effective  when  deposited  in  the  United  States  mail
properly  addressed  with  proper postage  for  first-class  mail
prepaid.

Section 22.    UNIFORM COMMERCIAL CODE DOCUMENTATION

      Lessee  agrees  to  execute such  Uniform  Commercial  Code
("UCC") financing statements and other documents deemed necessary
by  Lessor  or its Assignees to perfect and protect the interests
of Lessor and its Assignees in the Lease and the Equipment.  With
respect  to each Lease, there shall be a single executed original
Equipment  Schedule,  which shall be marked  "Original"  and  all
other  counterparts  shall be marked "Conformed  Copy".   To  the
extent  that this Lease may constitute chattel paper (as  defined
in  the  Uniform  Commercial Code) no security  interest  may  be
created  through  the  possession  of  any  counterpart  of   the
Equipment Schedule other than the Original.


      IN  WITNESS WHEREOF, the parties have caused this Agreement
to be executed.

SALEM CAPITAL CORPORATION               ELECTROSOURCE, INC.
      (Lessor)                                 (Lessee)

By        /s/                           By        /s/
        Ellen F. Kennedy                     Michael Rosen
Title   President                            CFO

Date    10/17/95                        Date 9/19/95