AMENDMENT
                                       TO
                                 LOAN AGREEMENT
                                 --------------

     This  Amendment to Loan  Agreement is entered into as of July 23, 1999 (the
"Amendment") by and between SILICON VALLEY BANK ("Agent" or "Bank") and CREDENCE
SYSTEMS CORPORATION, a Delaware corporation ("Credence" or "Borrower").

                                    RECITALS

     Borrower,  Credence Korea,  Credence  Systems K.K., Bank and Bank of Hawaii
are parties to that certain Loan Agreement dated as of July 26, 1996, as amended
by an Amendment  to Loan  Agreement  dated as of July 25, 1997,  an Amendment to
Loan  Agreement  dated as of July 24, 1998,  and an Amendment to Loan  Agreement
dated as of  February  5, 1999.  Bank of  Hawaii,  Credence  Korea and  Credence
Systems K.K. have elected not to continue to be parties to the  Agreement.  Bank
and Borrower  desire to amend the Agreement to reflect such  withdrawals  and to
reflect  certain  other  changes,  all in  accordance  with  the  terms  of this
Amendment.

     NOW, THEREFORE, the parties agree as follows:

     1. Bank of Hawaii, Credence Korea and Credence Systems, K.K. shall cease to
be parties to the  Agreement.  All  references to such entities in the Agreement
are deleted.

     2. The  following  definitions  in Section 1.1 are amended and  replaced in
their entirety to read as follows:

          a.   "Collateral"  means the  property of each  Borrower  described on
               Exhibit D attached hereto.

          b.   "Committed Line" means Twenty Million Dollars ($20,000,000)

          c.   "Maturity Date" means July 22, 2000.

     3. The defined terms "Optional Currency", "Optional Currency Rate Advance",
"Optional  Currency Rate" and "Optional  Currency Rate  Instruments" are deleted
from the Agreement.

     4. The first paragraph of Section 2.1 (a) is amended to read as follows:

          "Subject to the terms and conditions of this Agreement, Bank will make
          Advances to Borrower in United  States  Dollars in an amount that does
          not exceed the Committed Line minus the face amount of all outstanding
          Letters  of Credit  (including  undrawn  and  drawn  but  unreimbursed
          Letters of Credit)  minus the  reserve,  if any,  taken under  Section
          2.1.1(d).  Notwithstanding  the foregoing,  if the aggregate amount of
          outstanding  Advances plus Letters of Credit plus the reserve, if any,
          taken  under  Section   2.1.1(d)   exceed  Fifteen   Million   Dollars
          ($15,000,000),  then  Bank  will  make  Advances  to  Borrower  in  an
          aggregate amount not to exceed the lesser of (i) the Committed Line or
          (ii) the Borrowing  Base plus one hundred  percent  (100%) of Accounts
          that are  supported  by one or more letters of credit in an amount and
          of a tenor, and issued by a financial institution, acceptable to Bank.
          Subject  to the  terms  and  conditions  of  this  Agreement,  amounts
          borrowed  pursuant to this Section 2.1 may be repaid and reborrowed at
          any time during the term of this Agreement."

     5. Section 2.1(c) is deleted. All references to Optional Currency, Optional
Currency  Rate  Advance,  Optional  Currency  Rate and  Optional  Currency  Rate
Instrument  are  deleted.  All  Advances  shall be made  only in  United  States
Dollars.



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<PAGE>

     6. The  reference  in Section  2.1(c) to " 150 basis  points" is amended to
read "200 basis points".

     7. The first  sentence  in Section  2.1.1(c) is amended to read as follows:
"The  maximum  aggregate  obligation  at any one time for  undrawn and drawn but
unreimbursed Letters of Credit shall be Fifteen Million Dollars ($15,000,000).

     8. The  reference in the last  paragraph of Section 5.3 to "Twenty  Million
Dollars   ($20,000,000)"   is  amended   to  read   "Fifteen   Million   Dollars
($15,000,000)".

     9. Section 5.8 is deleted in its entirety.

     10. Section 5.9 is deleted in its entirety and replaced with the following:

          "5.9 Tangible Net Worth.  Maintain, on a consolidated basis, as of the
          last day of each  fiscal  quarter,  a Tangible  Net  Worth,  excluding
          Subordinated  Debt,  of not less than One Hundred  Twenty Five Million
          Dollars ($125,000,000)."

     11.  Section  5.10  is  deleted  in its  entirety  and  replaced  with  the
following:

          "5.10  Profitability.  Beginning  the fiscal  quarter  ending July 31,
          1999, on a consolidated  basis,  have a minimum net profit of at least
          One Dollar ($1.00) for the  four-quarter  period  beginning the fiscal
          quarter ending July 31, 1999.  Borrower may suffer losses in up to two
          quarters,  provided  that  Borrower may suffer a loss from  continuing
          operations in only one quarter."

     12. Article 11 is deleted in its entirety and replaced with the following:

          "11.  Springing  Lien.  Borrower  grants  Bank a  continuing  security
          interest in all currently  existing and hereafter  acquired or arising
          Collateral in order to secure Prompt  repayment of all Obligations and
          in order to secure prompt performance by Borrower of its covenants and
          duties under the Loan Documents.  Except as set forth in the Schedule,
          such security  interest  constitutes a valid,  first priority security
          interest in the  Collateral.  Borrower shall from time to time execute
          and deliver to Bank, at the request of Bank, all financing  statements
          and  other  documents  that  Bank  may  reasonably  request,  in  form
          satisfactory  to  Bank,  to  perfect  and  continue  perfected  Bank's
          security interest in the Collateral.  Notwithstanding any provision of
          this  Section  11 to the  contrary,  the  grant of  security  interest
          hereunder  shall not be  effective  unless at any time the  balance of
          Borrower's unrestricted cash and marketable securities is below Ninety
          Million  Dollars  ($90,000,000),   at  which  time  such  grant  shall
          automatically  be effective and Bank shall have the right to file with
          the California Secretary of State or such other appropriate government
          office, the financing statements on Form UCC-1 delivered in connection
          with this  Amendment.  Bank  shall  otherwise  retain  such  financing
          statements in its offices."

     13. The attached  Exhibit C is hereby added and  incorporated  by reference
into the Agreement.

     14. As a  condition  to the  effectiveness  of this  Amendment,  Bank shall
receive a fee of Seventy-Five Thousand Dollars ($75,000),  payable upon the date
hereof,  plus all Bank Expenses  incurred in connection  with the preparation of
this Amendment.

     15. As a condition to the effectiveness of this Amendment,  Bank shall have
received, in form and substance satisfactory to Bank, the following:

          a.  resolutions by Borrower  authorizing the execution and delivery of
          this Amendment;

          b. executed financing statement on Form UCC-1; and

PA\932979.1
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                                       30
<PAGE>

          c. such other documents, and completion of such other matters, as Bank
          may reasonably deem necessary or appropriate.

     16. Unless otherwise defined, all capitalized terms in this Amendment shall
be as defined in the Agreement. Except as amended, the Agreement remains in full
force and effect.

     17.  Borrower   represents  and  warrants  that  the   Representations  and
Warranties  contained  in the  Agreement  are true and correct as of the date of
this Amendment, and that no Event of Default has occurred and is continuing.

     18. This  Amendment  may be executed in two or more  counterparts,  each of
which shall be deemed an original,  but all of which together  shall  constitute
one instrument.

     IN WITNESS WHEREOF,  the undersigned have executed this Amendment as of the
first date above written.

                          CREDENCE SYSTEMS CORPORATION


                          By:
                          --------------------------------------------

                          Title:
                          --------------------------------------------




                          SILICON VALLEY BANK


                          By:
                          --------------------------------------------

                          Title:
                          --------------------------------------------












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<PAGE>

                                   EXHIBIT C
                             COMPLIANCE CERTIFICATE

TO:               SILICON VALLEY BANK

FROM:             CREDENCE SYSTEMS CORPORATION


The  undersigned  authorized  officer of  CREDENCE  SYSTEMS  CORPORATION  hereby
certifies  that in  accordance  with the  terms and  conditions  of the Loan and
Security Agreement between Borrower and Bank (the "Agreement"),  (i) Borrower is
in  complete  compliance  for the  period  ending  with all  required  covenants
except as noted below and (ii) all  representations  and  warranties of Borrower
stated in the Agreement are true and correct in all material  respects as of the
date hereof.  Attached herewith are the required documents  supporting the above
certification.  The  Officer  further  certifies  that  these  are  prepared  in
accordance  with  Generally  Accepted  Accounting   Principles  (GAAP)  and  are
consistently  applied  from one  period to the next  except as  explained  in an
accompanying letter or footnotes.

  Please indicate compliance status by circling Yes/No under "Complies" column.
<TABLE>
<CAPTION>

Reporting Covenant                                 Required                               Complies
------------------                                 --------                               --------
<S>                                                <C>                                   <C>       <C>


Form 10-K                                          Annually within 5 days                 Yes      No
Form 10-Q                                          Quarterly within 5 days                Yes      No
A/R & A/P Agings, BBC                              Monthly within 20 days                 Yes      No
                                                   if outstanding Advances
                                                   exceed $15,000,000
</TABLE>
<TABLE>
<CAPTION>

Financial Covenant                                 Required                  Actual       Complies
<S>                                                <C>                       <C>         <C>      <C>

Maintain on a Quarterly Basis:
   Minimum Quick Ratio                             2.0:1.0                        :1.0    Yes      No
   Tangible Net Worth, excluding Sub Debt          $125,000,000              $            Yes      No

   Profitability                                   1                         $            Yes      No
</TABLE>

1. Borrower,  on a consolidated  basis, to have a minimum net profit of at least
$1.00 for the four-quarter  period that begins with the fiscal quarter ending on
July 31, 1999. Borrower may suffer losses in up to 2 quarters, provided only one
such loss is from continuing operations.

Comments Regarding Exceptions: See Attached.


Sincerely,



SIGNATURE
----------------------------------------------


TITLE
----------------------------------------------


DATE
----------------------------------------------


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<PAGE>

                                    EXHIBIT D


     The Collateral  shall consist of all right,  title and interest of Borrower
in and to the following:

(a) All goods and equipment now owned or hereafter acquired,  including, without
limitation,  all machinery,  fixtures,  vehicles  (including  motor vehicles and
trailers),  and any  interest  in any of the  foregoing,  and  all  attachments,
accessories,   accessions,   replacements,    substitutions,    additions,   and
improvements to any of the foregoing, wherever located;

(b)  All  inventory,  now  owned  or  hereafter  acquired,   including,  without
limitation,  all  merchandise,  raw  materials,  parts,  supplies,  packing  and
shipping  materials,  work in  process  and  finished  products  including  such
inventory  as is  temporarily  out of  Borrower's  custody or  possession  or in
transit and including any returns upon any accounts or other proceeds, including
insurance  proceeds,  resulting  from  the  sale  or  disposition  of any of the
foregoing  and  any  documents  of  title  representing  any of the  above,  and
Borrower's Books relating to any of the foregoing;

(c) All contract rights and general intangibles now owned or hereafter acquired,
including, without limitation, goodwill, trademarks, servicemarks, trade styles,
trade names, patents, patent applications, leases, license agreements, franchise
agreements,  blueprints, drawings, purchase orders, customer lists, route lists,
infringements,  claims,  computer  programs,  computer  discs,  computer  tapes,
literature,  reports,  catalogs,  design rights, income tax refunds, payments of
insurance and rights to payment of any kind;

(d) All now existing and hereafter arising accounts, contract rights, royalties,
license rights and all other forms of obligations  owing to Borrower arising out
of the sale or lease of goods,  the  licensing of technology or the rendering of
services  by  Borrower,  whether or not earned by  performance,  and any and all
credit  insurance,  guaranties,  and  other  security  therefor,  as well as all
merchandise  returned to or reclaimed by Borrower and Borrower's  Books relating
to any of the foregoing;

(e) All documents,  cash,  deposit accounts,  securities,  investment  property,
financial  assets,  securities  entitlements,  securities  accounts,  letters of
credit,  certificates  of deposit,  instruments  and chattel  paper now owned or
hereafter acquired and Borrower's Books relating to the foregoing;

(f) All copyright rights,  copyright  applications,  copyright registrations and
like protections in each work of authorship and derivative work thereof, whether
published  or  unpublished,  now owned or hereafter  acquired;  all trade secret
rights,  including  all rights to  unpatented  inventions,  know-how,  operating
manuals, license rights and agreements and confidential  information,  now owned
or  hereafter  acquired;  all mask  work or  similar  rights  available  for the
protection of semiconductor  chips, now owned or hereafter acquired;  all claims
for damages by way of any past,  present and future  infringement  of any of the
foregoing; and

     Any and all  claims,  rights  and  interests  in any of the  above  and all
substitutions for, additions and accessions to and proceeds thereof.

     Inclusion of any property in the  description of Collateral in this Exhibit
shall not imply any  obligation  to maintain  any license or retain any property
that  would  otherwise  expire  or be  disposed  of in the  ordinary  course  of
Borrower's business in compliance with the Loan Agreement.









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                                       33
<PAGE>

                        CORPORATE RESOLUTIONS TO BORROW

--------------------------------------------------------------------------------
Borrower:           CREDENCE SYSTEMS CORPORATION
--------------------------------------------------------------------------------


     I, the  undersigned  Secretary or Assistant  Secretary of Credence  Systems
Corporation  (the  "Corporation"),   HEREBY  CERTIFY  that  the  Corporation  is
organized and existing under and by virtue of the laws of the State of Delaware.

     I  FURTHER  CERTIFY  that  the  Certificate  of  Incorporation  and  Bylaws
previously  delivered  to Bank are in full  force and  effect  and have not been
amended, modified or restated.

     I FURTHER CERTIFY that at a meeting of the Directors of the Corporation (or
by other duly authorized corporate action in lieu of a meeting), duly called and
held, at which a quorum was present and voting,  the following  resolutions were
adopted.

     BE IT  RESOLVED,  that  any  one  (1)  of  the  following  named  officers,
employees,  or agents of this  Corporation,  whose actual  signatures  are shown
below:

       NAMES                          POSITION                 ACTUAL SIGNATURES

                              Office of the President
    Dennis P. Wolf                   EVP & CFO               /s/  Dennis P. Wolf
    --------------            -----------------------        -------------------

    John Detwiler             VP Corporate Controller        /s/  John Detwiler
    -------------             -----------------------        -------------------

    Suguna Vepa               Director of Treasury           /s/  Suguna Vepa
    -----------               -----------------------        -------------------

acting for an on behalf of this Corporation and as its act and deed be, and they
hereby are, authorized and empowered:

     Borrow  Money.  To  borrow  from  time to time  from  Silicon  Valley  Bank
("Bank"),  on such terms as may be agreed upon between the officers,  employees,
or agents  and Bank,  such sum or sums of money as in their  judgment  should be
borrowed,  without  limitation,  including  such sums as are  specified  in that
certain Loan Agreement  dated as of July 26, 1996, as amended from time to time,
including the Amendment to Loan  Agreement  dated as of July 23, 1999 (the "Loan
Agreement").

     Execute Loan Agreement.  To execute and deliver to Bank the Loan Agreement,
any amendment  thereto,  and one or more  renewals,  extensions,  modifications,
refinancing,  consolidations,  or substitutions for one or more of the notes, or
any portion of the Loan Agreement.

     Grant  Security.  To grant a security  interest  to Bank in the  Collateral
described in the Loan Agreement, which security interest shall secure all of the
Corporation's Obligations, as described in the Loan Agreement.

     Negotiate Items. To draw, endorse, and discount with Bank all drafts, trade
acceptances,  promissory notes, or other evidences of indebtedness payable to or
belonging to the  Corporation or in which the  Corporation may have an interest,
and either to receive cash for the same or to cause such proceeds to be credited
to the account of the Corporation with Bank, or to cause such other  disposition
of the proceeds derived therefrom as they may deem advisable.

     Letters of  Credit.  To execute  letters of credit  applications  and other
related documents pertaining to Bank's issuance of letters of credit.


PA\932979.1
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                                       34
<PAGE>

     Foreign Exchange Contracts.  To request Bank to enter into foreign exchange
contracts on its behalf.

     Further  Acts. In the case of lines of credit,  to designate  additional or
alternate individuals as being authorized to request advances thereunder, and in
all cases, to do and perform such other acts and things, to pay any and all fees
and costs,  and to execute and deliver such other  documents  and  agreements as
they may in their  discretion  deem  reasonably  necessary or proper in order to
carry into effect the provisions of these Resolutions.

     BE IT FURTHER RESOLVED,  that any and all acts authorized pursuant to these
resolutions and performed  prior to the passage of these  resolutions are hereby
ratified and  approved,  that these  Resolutions  shall remain in full force and
effect  and Bank may rely on these  Resolutions  until  written  notice of their
revocation  shall have been  delivered to and received by Bank.  Any such notice
shall not affect any of the Corporation's agreements or commitments in effect at
the time notice is given.

     I FURTHER CERTIFY that the officers,  employees, and agents named above are
duly elected,  appointed, or employed by or for the Corporation, as the case may
be, and occupy the positions set forth opposite their respective names; that the
foregoing  Resolutions now stand of record on the books of the Corporation;  and
that the  Resolutions are in full force and effect and have not been modified or
revoked in any manner whatsoever.

     IN WITNESS  WHEREOF,  I have  hereunto  set my hand on August 12,  1999 and
attest that the signatures set opposite the names listed above are their genuine
signatures.

                           CERTIFIED AND ATTESTED BY:



                           X
                           -------------------------------------















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                                       35
<PAGE>

FINANCING STATEMENT - FOLLOW INSTRUCTIONS CAREFULLY
This  Financing  Statement  is  presented  for filing  pursuant  to the  Uniform
Commercial Code and will remain effective, with certain exceptions,  for 5 years
from date of filing.

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

A. NAME & TEL. # OF CONTACT AT FILER           B. FILING OFFICE ACCT. #
(optional)                                     (optional)

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

C. RETURN COPY TO:  (Name and Mailing Address)


          SILICON VALLEY BANK,  ATTN: LOAN SERVICES
          ADMINISTRATION
          3003 TASMAN DRIVE
          SANTA CLARA, CA 95054-1191


--------------------------------------------------------------------------------
D. OPTIONAL DESIGNATION (if applicable):   LESSOR/LESSEE    CONSIGNOR/CONSIGNEE
                                           NON-UCC FILING
--------------------------------------------------------------------------------
1.  DEBTOR'S EXACT FULL LEGAL NAME - insert only one debtor name (1a or 1b)
--------------------------------------------------------------------------------
   1a.  ENTITY'S NAME
         Credence Systems Corp
--------------------------------------------------------------------------------
   1b.  INDIVIDUAL'S LAST NAME        FIRST NAME        MIDDLE NAME       SUFFIX
--------------------------------------------------------------------------------
1c.  MAILING ADDRESS            CITY          STATE      COUNTRY     POSTAL CODE
    215 FOURIER AVENUE         FREMONT         CA          USA          94539
--------------------------------------------------------------------------------
1d.  S.S. OR TAX I.D.#       OPTIONAL                 1e.  TYPE OF ENTITY
                            ADD'NL INFO RE
                            ENTITY DEBTOR

1f.  ENTITY'S STATE OR             1g.  ENTITY'S ORGANIZATIONAL I.D.#, if any
     COUNTRY OR ORGANIZATION
--------------------------------------------------------------------------------
2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME
    insert only one debtor name (2a or 2b)
--------------------------------------------------------------------------------
   2a.  ENTITY'S NAME
--------------------------------------------------------------------------------
   2b.  INDIVIDUAL'S LAST NAME      FIRST NAME          MIDDLE NAME       SUFFIX
--------------------------------------------------------------------------------
2c.  MAILING ADDRESS            CITY         STATE       COUNTRY     POSTAL CODE
--------------------------------------------------------------------------------
2d.  S.S. OR TAX I.D.#       OPTIONAL                2e.  TYPE OF ENTITy
                         ADD'NL INFO RE
                         ENTITY DEBTOR

2f.  ENTITY'S STATE OR            2g.  ENTITY'S ORGANIZATIONAL I.D.#, if any
     COUNTRY OR ORGANIZATION
--------------------------------------------------------------------------------
3.  SECURED PARTY'S (ORIGINAL S/P or ITS TOTAL ASSIGNEE) EXACT FULL LEGAL NAME
    insert only one secured party name (3a or 3b)
--------------------------------------------------------------------------------
   3a.  ENTITY'S NAME
         Silicon Valley Bank
--------------------------------------------------------------------------------
   3b.  INDIVIDUAL'S LAST NAME       FIRST NAME          MIDDLE NAME      SUFFIX
--------------------------------------------------------------------------------
3c.  MAILING ADDRESS           CITY            STATE     COUNTRY     POSTAL CODE
     3003 TASMAN DRIVE         SANTA CLARA       CA        USA           95054
--------------------------------------------------------------------------------
4.  This FINANCING STATEMENT covers the following types or items of property:
  SEE EXHIBIT A ATTACHED HERETO FOR COLLATERAL DESCRIPTION.






--------------------------------------------------------------------------------
5.  CHECK               This FINANCING STATEMENT is signed by the Secured Party
     BOX                instead  of  the  Debtor to perfect a security interest
    (if applicable)     (a) in collateral already subject to a security interest
                        in another  jurisdiction when it was  brought into this
                        state, or when the debtor's location was changed to this
                        state, or (b) in   accordance   with   other   statutory
                        provisions (additional date may be required)
--------------------------------------------------------------------------------
6.  REQUIRED SIGNATURE (S)


--------------------------------------------------------------------------------
7.  If filed in Florida (check one)
      Documentary stamp tax paid       Documentary stamp tax not applicable
--------------------------------------------------------------------------------
8.       This FINANCING STATEMENT is to be filed (for record)
         (or recorded) in the REAL ESTATE RECORDS
          Attach Addendum             (if applicable)
--------------------------------------------------------------------------------
9. Check to REQUEST SEARCH CERTIFICATE(S) on Debtor(s)
   [ADDITIONAL FEE]
   (optional)          All Debtors       Debtor 1       Debtor 2
--------------------------------------------------------------------------------

CREDENCE SYSTEMS CORPORATION

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

                                       8

                                       36
<PAGE>

DEBTOR:                     CREDENCE SYSTEMS, INC.
SECURED PARTY:              SILICON VALLEY BANK

                                    EXHIBIT A
                                    ---------



     The Collateral  shall consist of all right,  title and interest of Borrower
in and to the following:

     (i) All goods and  equipment  now owned or hereafter  acquired,  including,
without limitation, all machinery,  fixtures, vehicles (including motor vehicles
and trailers),  and any interest in any of the foregoing,  and all  attachments,
accessories,   accessions,   replacements,    substitutions,    additions,   and
improvements to any of the foregoing, wherever located;

     (ii) All inventory,  now owned or hereafter  acquired,  including,  without
limitation,  all  merchandise,  raw  materials,  parts,  supplies,  packing  and
shipping  materials,  work in  process  and  finished  products  including  such
inventory  as is  temporarily  out of  Borrower's  custody or  possession  or in
transit and including any returns upon any accounts or other proceeds, including
insurance  proceeds,  resulting  from  the  sale  or  disposition  of any of the
foregoing  and  any  documents  of  title  representing  any of the  above,  and
Borrower's Books relating to any of the foregoing;

     (iii) All contract  rights and general  intangibles  now owned or hereafter
acquired,  including, without limitation,  goodwill,  trademarks,  servicemarks,
trade  styles,  trade  names,  patents,  patent  applications,  leases,  license
agreements,   franchise  agreements,   blueprints,  drawings,  purchase  orders,
customer lists, route lists, infringements,  claims, computer programs, computer
discs, computer tapes, literature,  reports, catalogs, design rights, income tax
refunds, payments of insurance and rights to payment of any kind;

     (iv) All now existing and  hereafter  arising  accounts,  contract  rights,
royalties,  license rights and all other forms of obligations  owing to Borrower
arising out of the sale or lease of goods,  the  licensing of  technology or the
rendering of services by Borrower, whether or not earned by performance, and any
and all credit insurance,  guaranties,  and other security therefor,  as well as
all  merchandise  returned to or  reclaimed  by Borrower  and  Borrower's  Books
relating to any of the foregoing;

     (v) All documents, cash, deposit accounts, securities, investment property,
financial  assets,  securities  entitlements,  securities  accounts,  letters of
credit,  certificates  of deposit,  instruments  and chattel  paper now owned or
hereafter acquired and Borrower's Books relating to the foregoing;

     (vi) All copyright rights, copyright applications,  copyright registrations
and like  protections in each work of authorship  and  derivative  work thereof,
whether  published or unpublished,  now owned or hereafter  acquired;  all trade
secret  rights,  including  all  rights  to  unpatented  inventions,   know-how,
operating manuals,  license rights and agreements and confidential  information,
now owned or hereafter  acquired;  all mask work or similar rights available for
the protection of  semiconductor  chips,  now owned or hereafter  acquired;  all
claims for damages by way of any past, present and future infringement of any of
the foregoing; and

     Any and all  claims,  rights  and  interests  in any of the  above  and all
substitutions for, additions and accessions to and proceeds thereof.

     Inclusion of any property in the  description of Collateral in this Exhibit
shall not imply any  obligation  to maintain  any license or retain any property
that  would  otherwise  expire  or be  disposed  of in the  ordinary  course  of
Borrower's business in compliance with the Loan Agreement.







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<PAGE>